ORDER N0.28912 EMPLOYEE HEALTH BENEFITS PROGRAM Came to be heard this the 22nd day of November 2004 with a motion made by Commissioner Letz seconded by Commissioner Williams. The Court unanimously approved by vote 4-0-0 to authorize our risk management consultant, Gary Looney to proceed with negotiations with Employee Benefit Administrators, Inc.; Mutual of Omaha; Group and Pension Administrators, Inc.; and Benefit Planners, and in a effort to continue work towards our insurance -- county health insurance. COMMISSIONERS' COURT AGENDA REQUEST PLEASE FURNISH ONE ORIGINAL AND NINE COPIES OF THIS :EOUEST AND DOCUMENTS TO BE REVIEWED BY THE COU~3'. MADE BY: Pat Tinley MEETING DATE: November 22, 2004 OFFICE: County Judge TIME PREFERRED: ~.AO 4: ~5 SUBJECT: Consider and discuss plan design for Employee Health Benefits Program and determination of proposals which may potentially be acceptable for further negotiations between Proposers and Employee Health Benefits Consultant. EXECUTIVE SESSION REQUESTED: (PLEASE STATE REASON) NAME OF PERSON ADDRESSING THE COURT: County Judge/Gary Looney ESTIMATED LENGTH OF PRESENTATION: IF PERSONNEL MATTER -NAME OF EMPLOYEE: Time for submitting this request for Court to assure that the matter is posted in accordance with Title 5, Chapter 551 and 552, Government Code, is as follows: Meeting scheduled for Mondays THIS REQUEST RECENED BY: THIS REQUEST RECEIVED ON: 5:00 P.M. previous Tuesday. All Agenda Requests will be screened by the County Judge's Office to determine if adequate information has been prepared for the Court's formal consideration and action at time of Court Meetings. Your cooperation will be appreciated and contribute towards you request being addressed at the earliest opportunity. See Agenda Request Rules Adopted by Commissioners' Court. :'age '. o:::. Kerr County Judge/Commissioners' Court From: "Gary Looney" To: "Pat Tinley" Sent: Thursday, November 18, 2004 11:04 AM Attach: Memo to court on final four selection.doc; SCHEDULE OF BENEFITS sample.doc; Kerr County Specimen spd.doc Subject: Court meeting Information Judge, Here is the information for the court session on Monday. Gary Gary R. Looney Catto &Catto Benefits Group LLC San Antonio, Texas Tel: (210) 222-2161 ext. 240 Fax: (210) 222-1618 This electronic transmission (and any attached document or file) is confidential and intended for the sole use of the individual(s) to whom it is addressed. Any further distribution or copying of this message is strictly prohibited. If you received this message in error, please notify the sender, and destroy the message (and attached files) immediately. Catto & Catto LLP is not liable for any use or misuse contrary to these directions. 11 /18/2004 Gary R. Looney, RESc 110 E Crockett San Antonio, Texas 78205 Phone: (210) 222-2161 Fax: (210) 227-5006 Memorandum Date :November 17, 2004 TO :Judge Pat Tinley From :Gary Looney RE :Health Care Bids Judge Tinley, I have made my initial examination of the proposals offered to Kerr County for the Group Life and Accidental Death and Dismemberment contracts and the combined Third Party Administration, Stop Loss contracts. Based on my initial examination I request the Court's permission to negotiate with the following four Third Party Administrators/Insurance Companies to obtain optional benefit plan proposals and best and final insurance rates and fees: • Employee Benefits Administrators, Inc. • Mutual of Omaha • Group and Pension Administrators, Inc • Benefit Planners I have attached a summary outline of the benefit plans that I suggest be reviewed for possible introduction in January 2005. It is necessary to determine if the selected Third Party Administrator is capable of administering the plan designs suggested. The Life Insurance and Accidental Death and Dismemberment contract will be a separate negotiation. All companies submitting proposals for life insurance will be given an opportunity to make a best and final offer. Sincerely, Gary R. Looney Risk Management Consultant, REBC SCHEDULE OF BENEFITS Major Medical Benefits for Covered Persons Benefit Levels for services rendered in the geographical area serviced by the Preferred Provider Organization (PPO): The "PPO Benefit' level applies to services rendered by a Participating Provider in the designated PPO Network; the "Non-PPO Benefit' level applies to services rendered by providers other than Participating Providers (Non- Network). In addition, the "PPO Benefit' level applies to the following situations: 1. If a Participating Provider refers a Covered Person to a facility which is not a Participating Provider because no appropriate Participating Provider facility is available; 2. If a Participating Provider refers a Covered Person to a Physician who is not a Participating Provider because there is no appropriate specialist available among Participating Providers; and 3. If a Medical Emergency or initial treatment of an Accidental Injury requires services of aNon-participating Provider. PPO Benefit Non-PPO Benefit Lifetime Major Medical Maximum Benefit Per Covered Person $1,000,000 $1,000,000 Calendar Year Deductible (No Last Quarter Deductible Carryover) Per Covered Person $1000 $ 2000 Family Limit' $ 2000 $4000 Benefit Percentage 90°~ of $10,000 75% of $10,000 (Unless otherwise noted) 100% thereafter 100% thereafter Annual Out-0f-Pocket Maximum (In addition to Deductible and Co-pays) Per Covered Person $1,000 $2,500 Family Limit' $3,000 $7,500 Inpatient Hospital Services 90 % after 75°~ after (All related charges) Deductible Deductible Pre-certification required Room and Board Limit Semi-Private Average Semi-Private Intensive Care Limit Negotiated PPO Usual and Customary Fee Schedule Hospital Emergency Room 90°~ after 90% after Medical Emergency Deductible Deductible (see Medical Emergency, Page 60) Hospital Emergency Room 90% after $50 Co-pay 90% after $50 Co-pay Non-Medical Emergency Deductible Applies Deductible Applies (see Medical Emergency, Page 60)1 Pre Admission Testing 100% 100% (with 10 days of Hospital Confinement) Deductible Waived Deductible Waived NOTE: The Calendar Year Deductible and Annual Out-0f-Pocket Maximum are determined by combining both PPO and Non-PPO Covered Charges. Upon reaching the Annual Out-0f--Pocket Maximum, Covered Medical Expenses are payable at 100% for the remainder of the Calendar Year. The Lifetime and Calendar Year Maximum Benefits are also combined for PPO and Non-PPO Covered Charges. "Applies collectively to all Covered Persons in the same family. Accidental Injury Deductible waived first 90 days Ambulance Service SCHEDULE OF BENEFITS (Cont'd) PPO Benefit 90°~ after Deductible 90% after Deductible Outpatient SurgerylAmbulatory 90% after Surgical Center Deductible (All related charges) Outpatient Hospital Lab/X-ray (All related charges) Outpatient Independent Lab/X-ray (All related charges) Physician Services Office Visit (Includes examination, treatment, surgery, lab, x-ray, chemotherapy/radiation therapy tests and supplies provided and billed by Physician at the time of the office visit, except infusion therapy and physical therapy. I n-Office Services (without Office Visit billed) "If charges are less than $20, Co-pay is actual charge. Allergy Testing Allergy Serum and Injections Second Surgical Opinion Voluntary Second Surgical Opinion Maximum benefit payable per occurrence Call the Utilization Review Company before surgery is scheduled. All Other Physician Services 90°~ after Deductible 90% after Deductible 100% after S20 Co-pay* 100°k Deductible Waived 100% after S20 Co-pay* 100% Deductible Waived 100% Deductible Waived $100 90°h after Deductible Non-PPO Benefit 75% after Deductible 75% after Deductible 75% after Deductible 75% after Deductible 75% after Deductible 75% after Deductible 75% after Deductible 75% after Deductible 75% after Deductible 100% Deductible Waived x100 75% after Deductible SCHEDULE OF BENEFITS (Cont'd.) PPO Benefit Maternity 90°~ after (Employees & Covered Dependents) Deductible (Including prenatal, delivery and postnatal care) Office Visit Co-pay does not apply Alternative Birthing Center Routine Newborn Care Inpatient Hospital nursery charges and pediatric care. Payable under covered mother's claim. Baby must be added as a Dependent within thirty (30) days of birth to be eligible for this benefit Maximum Number of Days Dialysis/lnfusion Therapy Wig following Chemotherapy/Radiation Therapy Lifetime Maximum Maximum Benefit Physical Therapy Occupational Therapy Speech Therapy Restorative on the same basis as an Illness Maximum Lifetime Benefit for Down Syndrome Durable Medical Equipment (DME)/ Medical Supplies Orthotics Chiropractic Expense Benefits Calendar Year Maximum Benefit ( Includes x-rays) Office Visit Co-pay does not apply Chiropractic Benefits do not apply to Annual Out-of-Pocket Maximum. 100% Deductible Waived 90% after Deductible 5 90% after Deductible 1 5125 90% after Deductible 90% after Deductible 90°~ after Deductible 55,000 90% after Deductible 90% after Deductible 90% after Deductible 55,000 Non-PPO Benefit 75% after Deductible 75% after Deductible 75°~ after Deductible 5 75% after Deductible 1 5125 75% after Deductible 75% after Deductible 75% after Deductible 55,000 75% after Deductible 75% after Deductible 75% after Deductible 55,000 SCHEDULE OF BENEFITS (Cont'd.) PPO Benefit Non-PPO Benefit Long Term Care* Rehabilitation Facility 90% after 75% after Pre-certification required Deductible Deductible Skilled Nursing Facility 90% after 75% after Pre-certification required Deductible Deductible Maximum Benefit per confinement 180 Days 180 Days Lifetime Maximum 365 Days 365 Days Home Health Care 90% after 75% after Deductible Deductible Lifetime Maximum Benefit $10,000 510,000 Hospice 90°~ after 75% after Pre-certification required Deductible Deductible Lifetime Maximum Benefit X5,000 X5,000 Private Duty Nursing 90°~ after 75% after Deductible Deductible Lifetime Maximum Benefit x10,000 510,000 "Prior authorization from the Utilization Review Company is required for al t Long Term Care. The Plan's internal Lifetime and Calendar Year Maximum Benefits for Long Term Care may be waived if Medical Case Management or the Utilization Review Company directs the treatment. Organ and Tissue Transplants 90°k after 75°k after Non~xperimental transplants only Deductible Deductible (See page 31 for Coverage for Organ and Tissue Transplants) Donor Expenses" 90°~ after Deductible Maximum Donor Benefit 55,000 Payable under recipient's claim. Note: Donor Expenses do not apply to the Annual Out-Of-Pocket Maximum. Mentat 8~ Nervous Conditions, Chemical Dependency, Drug and Substance Abuse Inpatient and Psychiatric Day Treatment Facility Inpatient Maximum Number of Days per Calendar Year 90% after Deductible 30 75% after Deductible 55,000 75% after Deductible 30 Psychiatric Day Treatment Facility Maximum Number of Days per Calendar Year 60 60 Office Visit 90% after 75°~ after Office Visit Co-pay does not apply Deductible Deductible SCHEDULE OF BENEFITS (Cont'd.) PPO Benefit Non-PPO Benefit Maximum Benefit Payable per Visit 5100 5100 Mental 8~ Nervous Conditions; Chemical Limited to 3 Series of Dependency; Drug and Substance Abuse Treatment Treatments per Lifetime" Mental & Nervous Conditions; Chemical Dependency; Drug and Substance Abuse Benefits do not apply to Annual Out-of-Pocket Maximum. " A series of treatments is a planned, structured, organized program which may include inpatient or outpatient treatment and is complete when the covered individual is discharged on medical advice from inpatient care, day treatment, or outpatient treatment without lapse in treatment or when a person fails to materially comply with the treatment program for a period of thirty (30) days. A separate series of treatments commences when a period of six (6) months has lapsed since last occurrence. Temporomandibularpoint Syndrome (TMJ) 90% after Deductible Lifetime Maximum Benefit 52,500 Sleep Disorders 90% after Covered on the same basis as any Illness Deductible Preventive and Wellness Care Benefits This benefit is payable for Covered Procedures incurred as part of a Preventive and Wellness Care Program and is not payable for treatment of a diagnosed Illness or Injury. Services must be identified and billed as routine or part of a routine physical exam. Covered Wellness Procedures: 1. Annual Routine Physical Exam (including lab, x-ray and other medical screening procedures) 2. Annual Pap Smear/Gynecological Exam 3. Annual Mammography (routine) -age thirty-five (35) and older 4. Annual PSA test (routine) 5. Well-Baby Care/Well-Child Care (other than Routine Newborn) 6. Routine Immunizations Maximum Wellness Benefit Per Calendar Year Per Covered Person 5500 Preventive and Wellness Expenses in excess of Calendar Year Maximum Benefit Not covered Office Visit for Covered Wellness Procedures 100% after 520 Co-pay All Other Covered Medical Expenses, not 90% after listed in the Schedule of Benefits (subject Deductible to Plan Maximums and Limitations), are payable at applicable Benefit Percentage after satisfying the Calendar Year Deductible. 75% after Deductible 52,500 75% after Deductible 5500 Not covered 75% 75% after Deductible OUT-OF-AREA BENEFIT The "Out-of-Area" Benefit applies to Covered Charges for a Covered Person living or traveling outside of the geographical zip code area serviced by the Preferred Provider Organization (PPO). Out-of Area Benefit Calendar Year Deductible Per Covered Person 6300 Family Limit* $900 Benefit Percentage 80°h (unless otherwise noted) Benefit Percentage/Annual Stop Loss Maximum 80% of 610,000 (unless otherwise noted) 100% thereafter Annual Out-of-Pocket Maximum (In Addition to Deductible) Per Covered Person 62,000 Family Limit"" 66,000 Physician Office Visit 80% after Deductible Accidental Injury 80% after Deductible Deductible Waived first 90 days Hospital Emergency Room 90°~ after Deductible Medical Emergency Hospital Emergency Room 90% after 650 Co-pay Non-Medical Emergency Deductible Applies Routine Newborn Care 80% after Deductible Mental 8 Nervous Conditions, Chemical Dependency, Drug and Substance Abuse Inpatient/Outpatient Treatment Facility 80% after Deductible Office Visit 80°~ after Deductible (see page 10 for Benefits) Chiropractic Care 80% after Deductible (see page 9 for Benefits) Preventive and Wellness Care 80% after Deductible Calendar Year Maximum Wellness Benefit 6500 (see page 11 for Covered Procedures) Out~of-Area Covered Expenses are listed in The Plan's Schedule of Benefits and are subject to all Plan Maximums and Limitations as previously outlined in the Schedule of Benefits. *Applies collectively to all Covered Persons in the same family. NOTE: The Calendar Year Deductible, Annual Out-0f--Pocket Maximum, Calendar Year Maximum Benefit and Lifetime Maximum Benefit are combined for PPO, Non-PPO and Out-of-Area Covered Charges. HRA105 HEALTH REIMBURSEMENT ARRANGEMENT S UMMAR Y PLAN DESCRIPTION AS ADOPTED BY KERB COUNTY EFFECTIVE 01/01/2005 TABLE OF CO1~1TE~'~I'I'S PART 1. GENERAL INFORMATION ABOITI' THE HEALTH R EIMBIIRSEMENT PLAN ...................................................1 1.01 What is the purpose of the Plan? .................................................................................................... 1 1.02 Who can participate in the Plan? .................................................................................................... 1 1.03 When does coverage under the Plan end? ...................................................................................... 1 1.04 What happens if I take a leave of absence? .................................................................................... 2 1.05 How do I pay for coverage under the HRA thai I receive during the Year? .................................. 2 1.06 What amount of "Eligible Medical Expenses" may be reimbursed by the Plan each Year? .......... 2 1.07 What happens if I do not use the maximum Annual Reimbursement Amount made available dur ing the Plan Year? ..................................................................................................................................... 2 1.08 What is an "Eligible Medical Expense"? ....................................................................................... 3 1.09 How do I receive Benefits (or reimbursements) under the Plan? ................................................... 3 1.10 How long do I have to submit claims for reimbursement? ............................................................. 3 1.11 What happens if my claim for benefits is denied'' .......................................................................... 3 1.12 Does my coverage under this Plan end when my employment terminates? .................................... 4 PART 2. COBRA CONTIN[TATION COVERAGE ..........................................................................................................5 2.01 What is "Continuation Coverage" and how does it work? ............................................................. 5 2.02 When can I continue coverage? ..................................................................................................... 5 2.03 What type of coverage can be continued? ...................................................................................... 5 2.04 Do I have any other options? .......................................................................................................... 6 2.05 What should I do if I have a change in my status? ......................................................................... 6 2.06 How and when do i elect COBRA continuation coverage? ........................................................... 6 2.07 How much will COBRA continuation coverage cost? ................................................................... 6 2.08 How long can I continue the coverage? ......................................................................................... 6 PART 3. SPEND-DOWN OPTION .............................................................................................................................7 3.01 What is the "Spend-Down" option and does it apply to me? ......................................................... 7 3.02 What is the Spend-Down Coverage Period? .................................................................................. 7 3.03 Who are my Eligible Dependents? ................................................................................................. 7 3.04 When do I qualify for the Spend-Down option? ............................................................................ 7 3.05 For what amount may I be reimbursed under the Spend-Down Option? ........................................ 7 3.06 Do I have to pay premiums to participate in the Spend-Down Option? ......................................... 7 3.07 What are Eligible Spend-Down Expenses't .................................................................................... 8 3.08 How is my HRA handled for the Plan Year in which I terminate? ................................................. 8 3.09 If I am eligible for the Spend-Down option, how and when do I elect it? ...................................... 8 3.10 If I elect COBRA, can I also elect the Spend-Down option? ......................................................... 8 3.11 What happens if I am rehired or become eligible again after my Spend-Down coverage begins?. 8 PART 4. OTHER IMPORTANT' INFORMATION ..............................................................................................................8 4.01 Unclaimed Reimbursement Payments ............................................................................................ 8 4.02 Plan Administrator ......................................................................................................................... 8 4.03 Type of Funding ............................................................................................................................. 8 4.04 Plan Year ........................................................................................................................................ 9 4.05 Identifying Your Employer ............................................................................................................ 9 4.06 Official Plan Name and Plan Number ............................................................................................ 9 4.07 Agent for Service of Legal Process ................................................................................................ 9 4.08 Employment ................................................................................................................................... 9 4.09 Effective Date of the Plan .............................................................................................................. 9 4.10 Coordination of Benefits ................................................................................................................ 9 ERISA RIGHTS ...........................................................................................................................................................9 APPENDIX ...............................................................................................................................................................11 KERR COL/I~rT~" Health Reimbursement Arrangement Summary Plan Description Your Employer (the "Employer") has established a plan known as a "Health Reimbursement Arrangement" (the "Plan"), with one or more underlying health reimbursement accounts ("HRAs") for its Employees to reimburse eligible Employees for Eligible Medical Expenses incurred by them, their Spouses and eligible Dependents. This Summary Plan Description ("SPD") describes the basic features of the Plan, how it operates, and how you can get the maximum advantage from it. Attached to this SPD is an Adoption Agreement that describes information specific to your Plan. The Plan is intended to qualify as an Internal Revenue Code Section 105 medical reimbursement arrangement. Part 1. General Information about the Health Reimbursement Plan 1.01 What is the purpose of the Plan? The purpose of the Plan is to reimburse eligible employees for "Eligible Medical Expenses" that they or their Eligible Dependents incur during the Coverage Period set forth in the .Adoption Agreement. 1.02 Who can participate in the Plan? You may participate in the Plan if you meet the requirements of an "Eligible Employee" set forth in the Adoption Agreement. Once you become a participant in the Plan, you enroll in one of the HRAs offered under the Plan. Each HRA will be categorized as "linked" or "non-linked" in the Adoption Agreement. A `Linked HRA" is paired (or linked) with a Group Health Plan. You cannot participate in a linked HRA unless you participate in the Group Health Plan. A "non-Linked HRA" does not require participation in a Group Health Plan. For Linked HRAs, your enrollment period is the same as the enrollment period for the Group Health Plan. You may be automatically enrolled in a Linked HRA when you participate in the linked Group Health Plan. Your enrollment materials will state if you are automatically enrolled or if you need to submit an enrollment form. If you wish to enroll in anon-Linked HRA (if offered under the Plan}, the enrollment period will be set forth in your enrollment material. The scope and level of reimbursement of Eligible Medical Expenses under the Plan varies by HRA. Each HRA offered under the Plan may impose additional eligibility requirements. These additional eligibility requirements will be described in Item 9 of the Adoption Agreement. Your participation in the Plan and the underlying HRA will begin on the date set forth in the Adoption Agreement. Once you become a Participant, you may also receive reimbursements for Eligible Medical Expenses incurred by your "Eligible Dependents". Generally, "Eligible Dependents" means an employee's legal spouse (as defined by state law to the extent consistent with the federal Defense of Marriage Act) and any other individual who is a tax dependent as defined under Code Section 152, except that a child of divorced parent, is considered a dependent of both parents. Additional requirements for dependent eligibility may be set forth in the Adoption Agreement for one or more ofthe HRAs offered under the Plan and such requirements may be more narrow (for instance, if it is a Linked HRA, only those dependents who meet the general requirements discussed above and are covered under the Group Health Plan may become covered under the HRA). See Item 9 ofthe Adoption Agreement for additional information). If the Plan Administrator receives a qualified medical child support order relating to the Plan, the Plan will provide the health benefit coverage specified in the order to the person or persons ("alternate recipients") named in the order. "Alternate recipients" include any child of the participant who the Plan is required to cover pursuant to a qualified medical child support order. A "qualified medical child support order" is a legal judynent, decree or order relating to medical child support that clearly specifies the type of coverage that is to be provided to one or more alternate recipients (or the manner in which such type of coverage is to be provided). Before providing any coverage to an alternate recipient, the Plan Administrator must determine whether the medical child support order is qualified. If the Plan Administrator receives a medical child support order relating to your HRA, it will notify you in writing, and after receiving the order, it will inform you of its determination of whether or not the order is qualified. Upon request to the Plan Administrator, you may obtain, without charge, a copy ofthe Plan's procedures governing qualified medical child support orders. 1.03 When does coverage under the Plan end? Your Participation in the Plan shall terminate on the earliest of: SPD (REV. 11/25/02) PAGE t EFFECTIVE 01/01!2003 KERB COUNTY HEALTH REIMBURSEMENT ARRANGEMENT (a) the date you cease to be an Employee; (b) the date you cease to meet the eligibility requirements for an "Eligible Employee" as set forth in the Adoption Agreement; or (c) the date this Plan is terminated or amended to exclude you or the class of employees of which you are a member. You may be able to temporarily continue your coverage under the Plan if you lose coverage for certain reasons. See Part 2 and 3 for more information on continuation coverage. Coverage for yow Eligible Dependents ends on earliest of the following to occur: (a) the date yow coverage ends; (b) for your spouse, the date that you and your spouse divorce or legally separate (or receive an annulment); (c) the date the individual ceases to meet the requirements of an Eligible Dependent as set forth in the Adoption Agreement; or (d) the date the Plan is terminated or amended to exclude the individual or the class of dependents of which the individual is a member. Your eligible dependents may also be entitled to temporarily continue coverage if coverage is lost for certain reasons. See Part 2 and 3 below for more information on continuation coverage. In addition, your coverage under an HRA will end on the earlier of the date your participation in the Plan ceases or the date you cease to satisfy the eligibility requirements of the HRA. 1.04 What happens if I take a leave of absence? If you are in a Linked HRA (as set forth in the Adoption Agreement), then your coverage under the HRA during a leave of absence is treated the same as it is under the Group Health Plan to which the HRA is linked, to the extent such treatment is consistent with the employer's applicable leave policies and applicable federal and/or state law. If you are in anon-Linked HRA (as set forth in the Adoption Agreement), then your coverage under the HRA ceases if the leave is unpaid (except as provided below for Family and Medical Leave Act of 1993 (FMLA) and certain military leaves) and continues during a paid leave. If you are in anon-Linked HRA and you take an unpaid leave that qualifies for protection under the FMLA, then yow coverage will continue during the leave to the extent required under FMLA. If you take a military leave expected to last less than 3 I days, then your coverage under the HRA continues on the same basis as before the leave. If the military leave is expected to last 3 I days or longer, your coverage under the HRA ends; however, you may be entitled to continuation coverage. See COBRA Continuation of Coverage section (Part 2) and Spend-Down Option (Part 3) below. 1.05 How do I pay for coverage under the HRA that I receive during the Year? You do not have to pay for your HRA coverage; HRA coverage is paid for solely by the Employer. However, if you lose coverage under the HRA and you are eligible to elect COBRA continuation coverage described in Part 2 below, you will have to pay the applicable premium for the continued coverage. See Part 2 below for more information on COBRA continuation coverage. 1.06 What amount of "Eligible Medical Expenses" may be reimbursed by the Plan each Year? Each year you will be eligible to receive reimbursements equal to the maximum Annual Reimbursement Amount. The maximum Annual Reimbursement Amount that you may receive as reimbursement for Eligible Medical Expenses equals the sum of the employer's annual contribution ("Annual Employer Contribution") amount and the Carry Over amount, subject to any limitations and/or Cap set forth in the Adoption Agreement. The Annual Employer Contribution may be made periodically and the most that you can receive in reimbursement at one time will be your HRA balance at that time (subject to overall Cap), which is the sum of your accumulated employer contributions and the Carry Over amount. See Item 9 of your Adoption Agreement for more information. 1.07 What happens if I do not use the maximum Annual Reimbursement Amount made available during the Plan Year? All or a portion of the annual contribution amount that you do not use for expenses incwred during the Coverage Period and submitted for reimbursement during the Plan Year before the end of the closing period may be carried over subject to limitations set forth in the Adoption Agreement for reimbursement of Eligible Medical Expenses incurred during subsequent SPD (REV. l1/25/02) PAGE 2 EFFECTIVE 01/01/2003 KERB COUNTY HEALTP REIMBURSEMENT ARRANGEMENT years. You forfeit the remainder of your annual contribution amount that you are not permitted to carry over. Any unused amounts that are eligible to be carried over into a subsequent year and used for reimbursement of Eligible Medical Expenses are called "Carry Over Amounts." A non-interest bearing Carry Over account will be set up to keep a record of the unused amounts that you are able to carry over each year pursuant to the terms of the Adoption Agreement. No actual account is established; it is merely a bookkeeping account and it is considered part of your overall HRA balance. Annual contribution amounts are used fast to pay approved expenses and then Carry Over amounts are used to the extent necessary. Unused Carry Over amounts are carried over for reimbursement of Eligible Medical Expenses incurred during subsequent Plan Years. 1.08 What is an "Eligible Medical Ezpense"? "Eligible Medical Expenses" are expenses incurred by you or your Eligible Dependents that satisfy the following conditions: a) the expenses are medical care expenses that would otherwise qualify for a deduction under Code § 213 (irrespective of the income threshold set forth in Code § 213); b) the expenses have not been or will not be reimbursed by any other source; c) the expenses must have been incurred during the Coverage Period set forth in the Adoption Agreement; and d) the expenses satisfy any additional conditions and/or limitations for an Eligible Medical Expense set forth in the Adoption Agreement. Coverage of Eligible Medical Expenses may vary under each HRA option. The following expenses are not eligible for reimbursement under the Plan under any circumstance: i) Qualified Long Term Care Services and ii) health insurance premiums (including COBRA premiums) other than premiums for individual insurance policies that do not require health underwriting. For purposes of this Plan, an expense is "incurred" when the Participant or beneficiary is furnished the medical care or services giving rise to the claimed expense. In addition, you may not be reimbursed for any expenses arising before the Plan became effective, before you became a participant in the Plan, or for any expenses incurred after your participation in the Plan terminates except to the extent provided in Part 2 and Part 3 below. 1.09 How do I receive Benefits (or reimbursements) under the Plan? You will receive reimbursement forms to submit to the Plan Administrator (or Plan Service Provider designated by Employer). You must complete the reimbursement form and submit it with the necessary documentation described in the Adoption Agreement. The Plan Administrator (or Plan Service Provider) will review the claim and supporting documentation and determine the amount, if any, that is payable under the HRA (See 1. I I below for your rights if a claim is denied). Your Plan Administrator will advise you how often the payments are processed. If your claim for Eligible Medical Expenses is less than the Minimum Reimbursement Amount set forth in the Adoption Agreement, reimbursement for such expenses will be suspended until your approved expenses exceed the Minimum Reimbursement Amount. In addition, if your reimbursement is limited to your HRA balance at that time, then the amount of Eligible Medical Expenses that exceeds your HRA balance will be suspended until such time as the total outstanding Eligible Medical Expenses submitted for reimbursement is equal to or less than the HRA balance. You will not be reimbursed for Eligible Medical Expenses if the reimbursement exceeds the Annual Reimbursement Amount (or the Cap) set in the Adoption Agreement. The Adoption Agreement will state how the excess amount that is not reimbursed will be handled. 1.10 How long do I have to submit claims for reimbursement? If you are currently a participant (active Employee or COBRA participant), you must submit an expense incurred during a Coverage Period no later than the end of the Closing Period set forth in the Adoption Agreement following the end of that Coverage Period. If you are no longer a participant, you have until the end of the Claims Submission Grace Period set forth in the Adoption Agreement to submit claims for reimbursement. If a Claims Submission Grace Period has not been established in the Adoption Agreement, then you have until the end of the Closing Period to submit claims. 1.11 What happens if my claim for benefits is denied? If you are denied a benefit under the Plan, you should proceed in accordance with the following claims review procedures. Step 1: Notice is received from the Plan Service Provider. If your claim is denied, you will receive written notice from the Plan Service Provider that your claim is denied as soon as reasonably possible but no later than 30 days after receipt of the claim. For reasons beyond the control of the Plan Service Provider, the Plan Service Provider may take up to an additional I S SPD (REV. 11/25/02) PAGE 3 EFFECTIVE 01/01/2003 KERR COUNTY HEALTH REIMBURSEMENT ARRANGEMENT days to review your claim. You will be provided written notice of the need for additional time before the end of the 30-day period. If the reason for the additional time is that you need to provide additional information, you will have 45 days from the notice of the extension to obtain that information. The time period during which the Plan Service Provider must make a decision will be suspended until the earlier of the date that you provide the information or the end of the 45-day period. Step 2: Review your notice carefully. Once you have received your notice from the Plan Service Provider, review it carefully. The notice will contain: • the reason(s) for the denial and the Plan provisions on which the denial is based; • a description of any additional information necessary for you to perfect your claim and, why the information is necessary; • a description of the Plan's appeal procedures and the time limits applicable to such procedures; • whether an internal rule or guideline was relied on in making the determination and a statement that you may request a copy of the guidelines or protocol; and • a statement reminding you of your right to request all documentation relevant to your claim; Step 3: If you disagree with the decision, you may file an Appeal. If you do not agree with the decision of the Plan Service Provider, you may file a written appeal. You should file your appeal no later than 180 days of receipt of the notice described in Step 1. If the Plan has established only one level of appeal, you should file your appeal with the Plan Administrator. If the Plan has established two levels of appeal, you should file your appeal with the Plan Service Provider. The notice of denial referenced in Step 1 above will indicate whether the plan has 1 or 2 levels of appeal and where you should file your appeal. Regardless, you should submit all information identified in the notice of denial as necessary to perfect your claim and any additional information that you believe would support your claim. Step 4: Notice of Denial is received from claims reviewer. If the claim is again denied, you will be notified in writing. if the plan has established two levels of appeal as set forth in the notice of denial, the notice will be sent no later than 30 days after receipt of the appeal by the Plan Service Provider. Otherwise, notice of the denial will be sent no later than 60 days after the appeal is received by the Plan Administrator. Step 5: Review your notice carefully. You should take the same action that you take in Step 2 described above. The notice will contain the same type of information that is provided in the fast notice of denial provided by the Plan Service Provider. Step 6 (if there is a second level of appeal as indicated in the notice of denial): If you still disagree with the Plan Service Provider's decision, file a 2"~ Level Appeal with the Plan Administrator. If you still do not agree with the Plan Service Provider's decision, you may file a written appeal with the Plan Administrator within the allotted number of days set forth in the denial notice after receiving the first level appeal denial notice from the Plan Service Provider. You should gather any additional information that is identified in the notice as necessary to perfect your claim and any other information that you believe would support your claim. If the Plan Administrator denies your 2°d Level Appeal, you will receive notice within 30 days after the Plan Administrator receives your claim. The notice will contain the same type of information that was referenced in Step 2 above. Other important information regarding your appeals: • Each level of appeal will be independent from the previous level (i.e. the same person(s) or subordinates of the same person(s) involved in a prior level of appeal will not be involved in the appeal); On each level of appeal, the claims reviewer will review relevant information that you submit even if it is new information; • You cannot file suit in federal court until you have exhausted these appeals procedures. 1.12 Does my coverage under this Plan end when my employment terminates? Yes. Your normal participation will cease at the end of the day that your employment with the Employer terminates. However, you and your covered family members may have the opportunity to continue to be covered under the Plan pursuant to the Continuation Coverage provisions described in Part 2 below. SPD (REV. 11/25/02) PAGE 4 EFFECTIVE Ol/Ol/2003 KERB COUNTY HEALTH RE~VIBUR$EMENT ARRANGEMENT In addition to COBRA continuation coverage, your Employer may elect to have aSpend-Down option for you to use your HRA amounts (or a portion thereof) for Eligible Expenses after your employment ends. The Spend-Down option is explained in Part 3 below, and the Adoption Agreement will indicate whether or not the Spend-Down option is offered. Part 2. COBRA Continuation Coverage 2.01 What is "Continuation Coverage" and how does it work? Federal law requires most employers sponsoring group health plans to offer employees and their families the opportunity for a temporary extension of health care coverage (called "continuation coverage") in certain instances where coverage under the Plan would otherwise end. These rules apply to the Plan unless the Employer is a "small employer" as defined under applicable law. The Plan Administrator can tell you whether your Plan is subject to these rules. 2.02 When can I continue coverage? If you are a participant in the Plan, then you have a right to choose continuation coverage under the Plan if you lose your coverage because of: • Reduction in your hours of employment, • Voluntary or involuntary termination of your employment (for reasons other than gross misconduct), or • You take a military leave of absence that lasts 3 I days or longer (in accordance with USERRA). If you are the covered Spouse of a participant, then you have the right to choose continuation coverage for yourself if you lose coverage under the Plan for any of the following reasons: • Death of your Spouse, • Voluntary or involuntary termination of your Spouse's employment (for reasons other than gross misconduct) or reduction in your Spouse's hours of employment, • Divorce or legal separation from your Spouse, • Yow spouse goes on military leave of absence that lasts 31 days or longer (in accordance with USERRA), or • Your Spouse becomes entitled to Medicaze. In the case of a covered Dependent child, the Dependent child has the right to choose continuation coverage if coverage under the Plan is lost for any of the following reasons: • Death of the employee, • Voluntary or involuntary termination of the employee's employment (for reasons other than gross misconduct) or reduction in the employee's hours of employment, • Divorce or legal separation of child's pazents, • Employee becomes entitled to Medicare (only in limited situations as described below), • Employee goes on military leave of absence that lasts 31 days or longer (as required under USERRA), or • Child ceases to be an eligible Dependent child. A child who is born to, or placed for adoption with, the employee during a period of continuation coverage is also entitled to continuation coverage. Each person who is entitled to continuation coverage is called a "Qualified Beneficiary." 2.03 What type of coverage can be continued? If you choose continuation coverage, you are entitled to the level of coverage in effect under your HRA immediately preceding the qualifying event. If coverage is modified for similarly situated active employees, then it will be modified for you. You will be eligible to make a change in your coverage upon the occurrence of any event that permits a similarly situated active employee to make a benefit change during a Plan Year. Each year that COBRA continuation coverage is in effect, you are entitled to the same amount of Annual Employer Contribution provided to similazly situated active employees plus any applicable Carry Over amounts from the previous year. SPD (REV. 11/25!02) PAGES EFFECT[vE 01/01/2003 KERR COUNTY HEALTH REIMBURSEMENT ARRANGEMENT If you do not choose continuation coverage, your participation in the Plan will end on the date coverage ends in accordance with the qualifying event. 2.04 Do I have any other options? If offered by your Employer, you may wish to elect the Spend-Down Option described in Part 3 as opposed to COBRA continuation coverage. However, if you elect the Spend-Down option, you waive your right to COBRA continuation coverage. You may, however, revoke that waiver prior to end of the original 60-day COBRA election period. 2.05 What should I do if I have a change in my status? You (or your covered spouse and/or dependent children) must notify the Plan Administrator of a divorce, legal separation, or a child losing Dependent status under the Plan within 60 days of the later of the date of the event or the date on which coverage is lost because of the event. When the Plan Administrator is notified that one of these events has occurred, the Plan Administrator will in turn notify the affected Qualified Beneficiary that he or she has a right to choose continuation coverage. Notice to an employee's Spouse is treated as notice to any covered Dependents who reside with the Spouse. An employee, covered spouse, or covered Dependent child is responsible for notifying the Plan Administrator if he or she becomes covered under another group health plan or Medicare. 2.06 How and when do I elect COBRA continuation coverage? You, your covered Spouse, and covered Dependent child(ren) are each entitled to make a separate election for continuation coverage under the Plan. If this is a Linked HRA as identified in the Adoption Agreement, you must elect to continue coverage under the Group Health Plan to which the HRA is linked in order to continue coverage under the HRA. If you are in a non-Linked HRA, you may elect the HRA and/or any other group health plans sponsored by your employer in which you participate, to the extent subject to COBRA. In order to elect continuation coverage, you must complete the election form(s) provided to you by the Plan Administrator. You have 60 days from the date you would lose coverage for one of the reasons described above or the date you are sent notice of your right to elect continuation coverage, whichever is later, to inform the Plan Administrator that you wish to continue coverage. Failure to return the election form within the 60-day period will be considered a waiver, and you will not be allowed to elect COBRA continuation coverage. 2A7 How much will COBRA continuation coverage cost? You will have to pay the entire cost of your continuation coverage. The cost of your continuation coverage will not exceed 102% of the "applicable premium" for the period of continuation coverage. However, if you extend coverage due to a disability (see 2.08 below), you may have to pay 150% of the applicable premium. The first premium payment after electing continuation coverage will be due 45 days after making your election. Subsequent premiums must be paid within a 30-day grace period following the due date. Failure to pay premiums within this time period will result in automatic termination of your continuation coverage. If you pay a premium that is insufficient by an insignificant amount (the lesser of $50 or (0% of the premium), you will be given additional time to pay the remainder of the premium. Claims incurred during any period will not be paid until your premium payment is received for that period. If you timely elect continuation coverage and pay the applicable premium, continuation coverage will relate back to the fast day on which you would have lost regular coverage. 2.08 How long can I continue the coverage? The maximum period that you may continue coverage depends on the type of Qualifying Event that has caused you to lose coverage. If your spouse and/or dependent child lose coverage as a result of a qualifying event other than your termination of employment or reduction in hours of employment, your spouse and dependent child may elect COBRA continuation coverage for 36 months beginning on the date of the Qualifying Event. If you, your spouse, and your dependent children lose coverage as a result of your termination of employment or reduction in hours of employment (including a military leave of absence that is expected to last 31 days or longer), COBRA continuation coverage will continue for 18 months beginning on the date of your qualifying event. If either you, your spouse, or your dependent child was disabled (as determined by the Social Security Administration under Title II or Title XVI of the Social Security Act) at the time of or within 60 days of the Qualifying Event, then the 18-month continuation coverage period for each covered family member may be extended by 11 months to 29 months. To preserve your right to additional coverage by reason of disability, you must inform the Plan Administrator of the determination of disability within 60 days of the date it was made, and within the 18-month period after the Qualifying Event that caused you to lose coverage. Additional Qualifying Events may occur while the 18-month (or 29 month) continuation coverage period is in effect that will allow your covered spouse and/or dependent children to continue coverage for 36 months from the original Qualifying Event. These include your divorce or legal separation from your spouse, your death, your becoming entitled to Medicare, or your dependent child ceasing to be a dependent child. In addition, if you become entitled to SPD (REV. 11/25/02) PAGE6 EFFECI'IVE01/Ol/2003 KERR COUNTY HEALTH REIMBURSEMENT ARRANGEMENT Medicare and then you lose coverage as a result of a termination of employment or reduction in hours of employment within 18 months of becoming entitled to Medicare, your spouse and dependent children are entitled to 36 months of continuation coverage beginning on the date that you became entitled to Medicare. However, continuation coverage may end earlier in the following circumstances: • the last day of the month for which the last premium for your continuation coverage was timely paid; • the date, after you elect continuation coverage, that you fast become covered under another group health plan under which you are not subject to apre-existing condition exclusion or limitation (this does not apply to those continuing coverage as a result of a military leave of absence); • the date, after you elect continuation coverage, that you first become entitled to Medicare (this does not apply to those continuing coverage as a result of a military leave of absence); or • the date employer no longer provides group health coverage to any of its employees For those taking an applicable military leave, the continuation coverage will end on the date that you do not return to work in accordance with the rules and regulations under USERRA (if required to return to work prior to the end of the 18 month period). Part 3. Spend-Down Option 3.01 What is the "Spend-Down" option and does it apply to me? The Spend-Down option is not offered by all Employers. See the attached Adoption Agreement to see whether the Spend- Down Option is offered by your Employer. The Spend-Down Option is designed to give you an alternative to COBRA continuation coverage. After you experience one of the Qualifying Spend-Down Events (set forth in the Adoption Agreement), all or a portion of your HRA balance not used for expenses incurred prior to the date coverage is lost as a result of a Qualifying Spend-Down Event may be used for Eligible Spend-Down Expenses incurred during the Spend-Down Period by you and your Eligible Dependents (as defined for purposes of the Spend-Down Period) (see 3.03 below). 3.02 What is the Spend-Down Coverage Period? The Spend-Down Coverage Period begins on the date that you lose coverage under the Plan as the result of a Qualifying Spend-Down Event and ends on the date set forth in the Adoption Agreement. You can be reimbursed for Eligible Spend- Down Expenses incurred during the Spend-Down Period until your Spend-Down Amounts are exhausted or the Spend-Down Period ends. Any Spend-Down Amounts not used for expenses incurred during the Spend-Down Period will be forfeited except as set forth in 3.11 below. 3.03 Who are my Eligible Dependents? For the purpose of the Spend-Down option, your Eligible Dependents include (a) legal spouse, (b) any tax dependent defined under Code Section 152 (except that a child of divorced parents is considered a dependent of both parents), and (c) any child for whom you are required to provide health coverage pursuant to a Qualified Medical Child Support Order. 3.04 When do I qualify for the Spend-Down option? You may become eligible for the Spend-Down Option if you experience a "Qualifying Spend-Down Event." If your employer offers the Spend-Down option, the specific Qualifying Spend-Down Events that entitle you to the Spend-Down Option will be listed in the attached Adoption Agreement. 3.05 For what amount may I be reimbursed under the Spend-Down Option? The maximum amount of your HRA balance that may be used during the Spend-Down Period will be stated in the Adoption Agreement. The Spend-Down Option only allows you to use all or a portion of your HRA balance as of the date you lose coverage as a result of a Qualifying Spend-Down Event. Unlike COBRA, you will not be eligible for any future employer contributions under the Spend-Down Option. 3.06 Do I have to pay premiums to participate in the Spend-Down Option? You will not have to pay any premiums to participate in the Spend-Down Option; however, the Employer may charge a nominal amount for administration of the Spend-Down option. SPD (REV. 11/25/02) PAGE ~ EFFECTIVE 01/01/2003 ~~ CoUNTy HEALTH REIMBURSEMENT ARRANGEMENT 3.07 What are Eligible Spend-Down Expenses? Unless otherwise stated in the Adoption Agreement, Eligible Spend-Down Expenses under the Spend-Down option will be any medical care expenses incurred by you or your Eligible dependents during a Coverage Period that would otherwise qualify for a deduction under Code § 213 (irrespective of the income limitations set forth in Code § 213) and have not been or will not be reimbursed by any other source. Notwithstanding the preceding sentence, health insurance premiums (including COBRA premiums) other than those for individual health insurance policies that do not require medical underwriting, and qualified long term caze services are ineligible for reimbursement. For purposes of this Plan, an expense is "incurred" when the Participant or beneficiary is furnished the medical care or services giving rise to the claimed expense. 3.08 How is my HRA handled for the Plan Year in which I terminate? If you elect the Spend-Down option, the Employer contributions to your HRA will cease as of the date your coverage ceases as a result of the Qualifying Spend-Down Event. You will continue submitting claims (in the same manner as before) for Eligible Medical Expenses incurred before the date that coverage would otherwise end as a result of the Qualifying Spend- Down Event until the end of the Claims Submission Grace Period. Once the Claims Submission Grace Period is over, you may use the unused HRA amounts for reimbursement of Eligible Spend-Down Expenses in accordance with the Spend-Down rules set forth in the Adoption Agreement. If Eligible Medical Expenses incurred before the termination date are not reimbursed as a result of the Cap limitations on HRA amounts (as set forth in the Adoption Agreement), the unreimbursed Eligible Medical Expenses can be paid out of the Spend-Down funds. 3.09 If I am eligible for the Spend-Down option, how and when do I elect it? Election is made by completing the election form given you. You have the same period of time to elect the Spend-Down option as you do to elect COBRA. While you can submit the election form any time during that period, the Spend-Down option will not become effective until the COBRA election period expires. When your election becomes effective, you can submit claims for Eligible Spend-Down Expenses incurred during the Spend-Down Period to the extent eligible. (See 3.02 above). 3.10 If I elect COBRA, can I also elect the Spend-Down option? No. If you elect COBRA, you are not eligible to elect the Spend-Down option. 3.11 What happens if I am rehired or become eligible again after my Spend-Down coverage begins? If you are rehired or otherwise become eligible again after your Spend-Down coverage begins, you will be able to participate in an HRA as an active employee as if you were a new employee. Your remaining Spend-Down amount (or a portion thereof) may be applied toward your new HRA balance according to the provisions set forth in the Adoption Agreement. Part 4.Other Important Information 4.01 Unclaimed Reimbursement Payments Any reimbursement benefit payments that are unclaimed (e.g., uncashed benefit checks) by the close of the Plan Year following the Plan Year in which the eligible expenses were incurred shall be forfeited. 4.02 Plan Administrator The Plan Administrator's name, address and telephone number appear in the Adoption Agreement to this Summary. The Plan Administrator shall have the exclusive right to interpret the Plan and to decide all matters arising under the Plan, including the right to make determinations of fact, and construe and interpret the terms of the Plan, including possible ambiguities, inconsistencies, or omissions in the Plan and the Summary Plan Description issued in connection with the Plan. The Plan Administrator may designate certain claims processing (including the initial determination as to whether a claim is payable) and day-to-day administrative responsibilities to a Plan Service Provider identified in the Adoption Agreement. Nevertheless, the Plan Administrator reserves final discretionary authority for all matters arising under the Plan. 4.03 Type of Funding The Plan is funded solely by your Employer (except during a period of COBRA continuation coverage described above). Benefits are paid as set forth in the Adoption Agreement. SPD (REV. 11/25/02) PAGE 8 EFFECTTVE 01/01/2003 KERB COUNTY HEALTH REIMBURSEMENT ARRANGEMENT However, your Employer may establish one or more trusts (e.g. a voluntary employee beneficiary association (VEBA) trust) to fund benefits provided under this Plan. 4.04 Plan Year The date of the end of the year for purposes of maintaining the fiscal records of each of the plans is set forth in the Adoption Agreement to this Summary. 4.05 Identifying Your Employer The official name, business address, telephone number, and employer identification number (EIN) of the Plan sponsor appear in the Adoption Agreement to this Summary. The names of any other employers who have adopted the Plan are set forth in the Adoption Agreement. 4.06 Official Plan Name and Plan Number The official name of the Plan, and the number assigned to it for identification purposes, appear in the Adoption Agreement attached to this Summary. 4.07 Agent for Service of Legal Process Legal process may be served on the Plan Administrator. 4.08 Employment Participation in the Plan does not give any participant the right to be retained in the employ of his or her employer or any other right not specified in those plans. 4.09 Effective Date of the Plan The effective date of the Plan is set forth in the Adoption Agreement. 4.10 Coordination of Benefits Only medical care expenses that have not been or will not be reimbursed by any other source may be Eligible Medical Expenses (to the extent all other conditions for Eligible Medical Expenses have been satisfied). However, the Adoption Agreement may require that expenses that are otherwise covered under this Plan and under an employee funded Health FSA maintained by the Employer must be paid fu•st by the Health FSA to the extent of any available funds in the Health FSA. ERISA Rights As a participant in the Plan, you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all plan participants shall be entitled to: Receive Information about Your Plan and Benefits You are entitled to: • Examine, without charge, at the Plan Administrator's office and at other specified locations, such aswork-sites and union halls, all documents governing the plan, including insurance contracts, collective bargaining agreements and, if applicable, a copy of the latest annual report (Form 5500 series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Pension and Welfare Benefit Administration. • Obtain, upon written request to the Plan Administrator, copies of all documents governing the operation of the plan, including insurance contracts and collective bargaining agreements, and, if applicable, copies of the latest annual report (Form 5500 series) and updated summary plan description. The Plan Administrator may make a reasonable charge for the copies. • Receive a summary of the Plan's annual financial report (if applicable). The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report. Continue Group Health Plan Coverage You can continue health coverage for yourself, Spouse, or Dependents if there is a loss of coverage under the plan because of a qualifying event. You or your Dependents may have to pay for such coverage. Review this summary plan description and the documents governing the plan on the rules governing your COBRA continuation coverage rights. SPD (REV. 11/25/02) PAGE 9 Ee~'ECTIYE 01/01/20113 t{ERR COUNTY HEALTH REIMBURSEMENT ARRANGEMENT (This section applies only if the Plan is subject to HIPAA) Exclusionary periods of coverage for preexisting conditions under your group health plan may be reduced or eliminated if you have creditable coverage under another plan. You should be provided a certificate of creditable coverage, free of charge, from your group health plan or health insurance issuer when you lose coverage under the plan, when you become entitled to elect COBRA continuation coverage, when your COBRA continuation coverage ceases, if you request it before losing coverage, or if you request it up to 24 months after losing coverage. Without evidence of creditable coverage, you may be subject to a preexisting condition exclusion for 12 months (l8 months for late enrollees) after your enrollment date in your coverage. Prudent Actions by Plan Fiduciaries In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your plan, called "fiduciaries" of the plan, have a duty to do so prudently and in the interest of the plan participants and beneficiaries. No one, including your employer, your union, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit from the Plan, or from exercising your rights under ERISA. Enforce Your Rights If your claim for a benefit under the Plan is denied in whole or in part, you must receive a written explanation of the reason for the denial. You have the right to have the Plan review and reconsider your claim. Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If you have a claim for benefits that is denied or ignored in whole or in part, you may file suit in a state or federal court. In addition, if you disagree with the Plan's decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in federal court. If it should happen that plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court. The court will decide who should pay court costs and legal fees. If you are successful, the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it fmds your claim is frivolous. What to do if I have questions about the Plan? If you have any questions about the Plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance obtaining documents from the Plan Administrator, you should contact the nearest office of the U.S. Department of Labor, Pension and Welfare Benefits Administration listed in your telephone directory, or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Ave., N.W., Washington, D.C., 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Pension and Welfare Benefits Administration. SPD (REV. 11/25/02) PAGE 10 E~'ECTIVE01/Ol/2003 KERR COUNTY HEALTR REIMBURSEMENT ARRANGEMENT APPENDIX Attachment 1: Adoption Agreement SPD (REV.11/25/02) PAGE l I EFF'EC'rrvE 01/01/2003 Gary R. Looney, RESc 110 E Crockett San Antonio, Texas 78205 Phone: (210) 272-2161 Fax: (210) 227-5006 FINAL RECOMMENDATION REPORT Date :12/1 /2004 TO :Kerr County Commissioners Court From :Gary Looney REI3c RE : RFP Analysis -Medical and Life Insurance Plans Dear Sirs: I have completed my review of the proposals submitted to Ken• County for Third Party Administrative Services, Medical Aggregate and Specific Stop Loss Insurance and Group Term Life Insurance. There were two objectives of the bid request. The first objective was to examine the cost of the current plan of benefits in relationship to the proposals received and the renewal offered by the can-ent carrier to determine if the current plan was cost effective. The second objective was to determine if the current plan of benefits should be changed. If the plan were to be changed, what plan of benefits would be offered to employees and what would the cost differential be to the County. Contingent with the two objectives, it was also necessary to examine the services of the current Third Party Administrator. Current: A summary of the current plan of benefits offered to employees is included under Tab 1. The benefit plan offered to employees and paid for by Kerr County is plan A. Plan A is selected by 63% of your employees with 29% in Plan B and 8% in Plan C. Currently the County pays 100% of the employee cost for Plan A with premium credit offered to employees who select Plans B or C. A bid summary sheet assuming the current plan of benefits as described is included under Tab 2. The current stop loss contract is a 12/12 contract. For a claim to be eligible to be paid the claim... must be incurred and paid within a 12 month period. The proposals I have illustrated are 15/12 contracts. Claims incurred in the last 3 months of the plan year will be included in the specific and aggregate contracts for reimbursement for 12 months of the next plan year. Optional Plans: I have included an Optional Plan utilizing a Health Reimbursement Arrangement for your employees. The plan design is intended to closely match Plan A. These are a few of the primary differences in the new plan design: 1. The deductible has been increased from $400 to $1,000. 2. The Physician Office Co-pay has been increased to $30.00 3. The Maximum Out-of-Pocket cost has increased from $2,400 to $3,000. 4. The $300 supplemental Accident benefit is removed 5. Physician office Co-pays include x-ray, lab, and in office surgery performed in physicians office. Lab services performed by an in network Lab are not subject to deductible. f December 1, 2004 FINAL RECOMMENDATION REPORT Page 2 of 2 6. A Health Reimbursement Arrangement is added to provide each covered employee and covered dependent a $ 600 per year reimbursement for medical expenses eligible to be paid under the medical plan. The reimbursement arrangement will allow reimbursements for eligible deductible expenses, coinsurance expenses, and other out of pocket expenses eligible for benefit under the plan. It does not include reimbursement for co-payments made at the doctors' office orfor co-payments made for prescription drugs. 7. The year end carry over for unused deductibles is eliminated. A "Sample Plan" benefit summary is included under Tab 3. The pricing model for the Optional plan is included under Tab 4. The projected plan costs are estimated based on the proposals submitted. A "Sample" lower priced optional plan is shown under Tab 5. The lesser benefit plan would be made available to employees who wish to have a lower premium cost. This option has substantially reduced benefits. The premium cost is shown under Tab 4. Since the County is funding the plan with greater benefits a credit is generated for those who wish to participate in the lesser benefit plan. I do not recommend the lesser benefit plan to be provided as the County sponsored plan. The life insurance benefits are at a very low level for each employee ($10,000). I recommend an increase in the basic life insurance coverage paid by the County. The current rate and bid results are shown on the spreadsheet under Tab 6. As a result of a rate decrease for the life insurance plan, it is possible to increase each employee to $20,000 of life insurance with a net result of an increase in premium of approximately $4,000'.. per year. It is my recommendation: 1. That the County change the medical plan design and adopt a Health Reimbursement Arrangement. The intent of the plan design is to provide additional benefit to those employees who are prudent in the utilization of the medical benefit plan. 2. That the County provide an optional plan for those employees who wish to have a plan' with lesser benefits at a reduced cost. 3. That the County increase the basic Life and Accidental Death and Dismemberment policy to $20,000 per active employee. 4. That the County select Mutual of Omaha as the carrier for 2005. I sincerely appreciate your confidence in our efforts to provide you and your employees with the very best in employee benefits. ~~ . ~C ~- .....~.. Gary R Looney REec Risk Management Consultant 1V/ 11.i V'Z ti. uv y..av ~... v..vv v.... ~.. -- ------ v ____ .,.,_ ~~ SCHEDULE OF BENEFITS SELF FUNDED IN NETWORK NON-NETWORK TYPE OF SERVICE PROVIDERS PROVIDERS Calendar Year Benefit Plan A Plan B 1'!an C Plan A Plan B Plan C r deductible d l C ar yea a en Family Maximum Unit - 3 Persons $400 $750 $1,200 $800 $1500 82,000 Last 3 month carry-over $1,200 52,250 $3,600 82,400 84,500 $6,000 Coinsurance Maximum $2,000 $3,000 $4,000 $4,000 $5,000 $8,000 Family Maximum Unit - 3 Person $6,000 $9,000 'S 12,000 $12,000 $15,000 $24,000 Total Out of Pocket Maximum $2,400 $3,750 $5,200 $4,800 $6,500 ' $10,000 Family Maximum Unit - 3 Pctzon 87,200 $11,250 '$15,b00 14,400 $19,500 $30,000 Lifetime Maximum Per Person $1,000,000 CO-INSURANCE CO•~INSURANCE BENEFITS DED PPO IvON PPO LIMITATIONS Physician Office Visit excludes x-ray, lab and Waived $10 co-pay Plan A $20 oo-pay Plan A surgery done at the time of (For Kerrville the office visit.' Co-Pay Providers Only) Waived $20 co-pay Plan B $30 co-pay Plan B will only apply to CPT codes 99201-99215 & Waived $30 co-pay Plan C $40 co-pay Plan C 99241-99245 excludes x-ray, lab and Physic- Office Visit 1Naived $20 co-pay Plan A S20 co-pay Plan A surgery done at the timr of the office visit... Co-Pay (Fore Outtide~3~errviille ~ Waived $20,co-pay Plan B~' • $30 co-pay Plan•B will only apply to CPT Providers Only) codes 99201-99215 & . Waived $30 co-pay Plan C $40 co-pay Plan C 99241-99245 PLAN PLAN PLAN PLAN PLAN PLAN OT)E~R BENEFITS DED A B C A 8 C LIMITATIONS Physician Inpatient Applies 90% 80% 80% 70% 60% 60% Physician Surgery Applies 90% 80% 80% 70% 60% 60% *For Inpatient Anesthesiology Applies 90% 80% 80% 70% 60% 60% *For Inpatient Allergy testing, scrum & injections Applies 90% 80% $0% 70% b0% 60% X-ray, Radiologist Applies 90% 80% 80% 70% 60% 60% Lab. Pathologist Applies 70°/0 70% 70% 70% 60% 60% 1'ref~rred Lab - L,abOne 1~•'aived L00°% 100°io 100% N/.A- N/A N/A After $300 max per accident subject to the rlecidental Injurirs Waived 100% 100% 100% N/A, N/A N/A ded and co-insurance Kerr C;ounly I'lasi llocutnenl ,January 1, 2003 5 CO-INSURANCE CO-INSURANCE PPO NON-PPO PLAN PLAN PLAN PLAN PLAN PLAN BENEFITS DED A B C A B C LIMITATIONS Services do not include Outpatient Services Applies 90% 80% 80% 70% 60% 60% outpatient surgery AfE services related to the outpatient surgical procedure to include Anesthesia, Lala/Path, xray, Outpatient Surgery waived 90% 80% 80% 70% 60% 60% etc. Lifetime max for all levels Home Health Care Services Applies 90% 80% 80% 70% 60% 60% 810,000 Limited to facility's semiprivate room rate with 7 days of the a 3 day Skilled Nursing Facility Applies 90% 80% 80% 70% 60% 60% hospital stay life time max for all levels Hospice Care Applies 90% 80% 80% 70% 60% 60% 820,000 Spinal Manipulation 81,500 calendar year max Chiropractic Applies 90% 80% 80% 70% 60% 60% for all levels $1,500 calendar year max Physical Therapy Applies 90% 80% 80% 70% 60% 60% for all levels Medical necessity must be Spccch Therapy Applies 90% 80% 80% 70% 60% 60% documented for all levels For emergency transport Ambulance Services Applies 90% 80% 80% 70% 60% 60% to a covered facility If New Born not added in Routine New Born Care first 31 days coverage will (Inpatient Nursery) Waived 90% 80% 80% 70% 60% 60% terminate If New Born not added in New Born Care (Sick Baby) first 31 days coverage will (Inpatient Nursery) Applies 90% 80% 80% 70% 60% 60% terminate Maternity Benefits Initial office visit Applies Delivery related fees Applies Dependent Daughters are Other OB related fens Applies 90% 80% 80% 70% 60% 60% not wvcred Preventive Care Services include but not Calendar Year Max of limited to, OfFce visits, -8200 (Adult, Well Baby, pap smear, mammogram, Well Child} ~ prostate screening, (Does not include physicals Routine GYN exams, for camp, school, pre- routine x-ray/lab, employment, and school immunizations, flu shots, slx~nsored sports activity) routine eye and hearing Waived 100"/° 100% 100% N/A N/A N/A exams. Kerr County Plan I)ocumcnt ,January 1, 2003 co_INSVIZANCE co.~NSVRANCE PP0 NON-PPO BENEFITS DED PLAN A PLAN B PLAN C PLAN A PLAN B PLAN C LIMITATIONS Durable Medical Requires doctor's Equipment Applies 90% 80% 80% 70% 60% 60% prescription Per-certification is required Hospital inpatient ASP room & board limit Applies 90% 80% 80% 70% 60% 60% 1500 penalty if none Emergency Room & Treatment for a medical Physician Applies 90% 80% 80% 70% 60% 60% emergency Mental Disorders Inpatient - 7 days per Applies 50% 50% 50% 50% 50% 50% Co-insurance for Inpatient calendar year max or Outpatient does not apply towards the out-of- Outpatient - 20 visits per calendar year max Applies 50% 50% 50% 50% 50% 50% pocket maximum See Definition of "Serious Mental Illness in the Plan $erioas Mental Illness same as any other illness Document Substance Abuse Inpatient - 7 days per d Applies 50% 50°10 50% 50% 50 /° ° 50% Co-insurance for Inpatient ar year max calen or Outpatient does not apply towards the out-of- Outpatient - 20 visits per lies A 50% 50% 50% 50% 50% 50% pocket maximum calendar year max pp Removal of partial or fully Dental Oral Surgery Waived 90% 80% 80% N/A N/A N/A impacted teeth See details under All other Professional lies A 90% 80% 80% 70% 60% 60% "Covered Expenses" ~~~ pp PRESCRIPTION DRUG B'.ENEFIT PLAN A P4armacy Option Co-payment, per Prescription ............ $35.00 .... Multiple source Brand .................................................. ........ 820.00 Singlc Source Brand ................................................... ~............ f 5.00 .... Generic Drugs ........................................................ Mail Order (90 Day) Co-payment, per Prescription , , S40.OU ..... . . )\Quktiple source Br~arid ................................................... ........ 525.00 Singlc Source Br:tnd ................................................................... 510.00 . Generic Drugs ........................................................... Kerr County Plan Document January 1, 2003 PRESCRII'TION DRUG BI~NEFIT PLANB&C PLAN B AND C Pharmacy Dptdoa Co-payment, per Prescription Multiple source Brand .................................................................. 1145.00 Single Source Brand ..........................:........................................ $30.00 Generic Drvgs ........................................................................ 510.00 Mai[ Order (90 Day} Co-payment, per Prescription Multiplesourct Brand .................................................................. 550.00 Single Source Brand ................................................................... $35.00 Generic Drugs ........................................................................ Y15.(10 HUMAN ORGAN AND TISSUE TRANSPLANT BENEFIT lifetime maximum .................................................................................. $250,000 Plan A co-insurance in network ............................................................................. 90% Plan A co-insurance out of network .......................................................... ................ 70% Plan B 8tB co-insurance in networi; .. ....................................................................... 80% Plan B & C co-insurance out of network .................................................... . ................. 60% Maximum payable for: Transportation, Lodging, and Meals ............................................................... 8 t 0,000 Maximum per day for lodging and meals .......................:................................... 8 200 Pre-Authorization Renuired for Transpla,at Evaluation -Expenses incurred in connection t~7th the evaluation of a Covered Participant for an~• human organ or tissue tru~splant will be covered, but onl}• after referral [o and pre-authorization through Employee Benefit Administrators, Inc.(EBA), the TPA Contract Administrator haz occurred. The Covered Participant or his physician should contact EBA, Inc. for pre-authorization of an evaluation for transplant prior to the: referral to a transplant physician. EBA will assign Interlink Health Services as the case manager to work with the Covered Participant closely through out the transplant process. pre-Authorizattion Reeiuirement for Trans,_plant Procedure- Expenses incurred in connection with any organ or tissue transplant listed in this provision will be covered subject to referral to and pre-authorization by the Plan Administrator's authorized review specialist, Interlink Health Services. Transplant coverage is offered under this plan through a preferred provider network ofspccialized professionals and facilities. Coverage is also provided for Transplant services obtained outside of the preferred network at a reduced benefit level. As soon az reasonably possible, but in no event more than ten (10) days after a Covered Member's attending physician has indicated that the Covered Member is a potential candidate for a transplant, the Covered iV[cmber or his Physician should contact the Plan Administrator for referral to the net~~•ork's medical review specialist for evaluation :end pre-authorization. A comprehensive treatment plan must be developed for this plan's medical review, and must include such information as diagnosis, the nature of the transplant, the setting of the procedure, (i.c. name and address of the hospital), any secondary rrtedical complications, a five yea prognosis, two (2) qualified opinions confirming the need for the procedure, az wee az a description anti the estimated cost of the proposed treatment. (One or both confirming Physician's statements may also be required. The Covered Me~rbcr may provide a comprehensive treatment plan independent of the prefc:rrcd provider network, bul this wil(be subject to medical ah?ropriatencss review and may result in non-network benefit coverage. $ Kcrr C~xutty Plan Dpcnnnr„t ,January I, 2003 All potential transplant cases will be assessed for their appropriateness for Large Case Management. ['•nv~r~d Tratnstalaat Extxsutes The term "covered expanses" with respect to transplants includes the reasonable and customary expenses For services and supplies which are covered under this plan (or which are specifically identified as covered only under this provision) and which are medically necessary and appropriate to the Transplant. (A) Charges incurred in the evaluation, screening, and candidary determination process. (B) Charges incurred for organ transplantation. (C) Charges for organ procurement, including donor expenses not covered under the donor's. plan of benefits. • Coverage for organ procurement from anon-living donor will be provided for costs involved in removing, preserving and transporting the organ. • Charges for organ procurement for a living donor will be provided for the cost involved in screening the potential donor, transporting the donor to and from the site ofthe transplant, as well as for medical expenses associated with removal of the donated organ and the medical services provided to the donor in the interim and for follow up cart. • If the transplant procedure is a bone marrow transplant, coverage will be provided for the cost involved in the removal of the patient's bone marrow (autologous) or donated marrow (allogcneic). Coverage will also be provided for search charges to identify and unrelated match, treatment and storage costs of the marrow, to the time of reinfusion. (The harvesting of the marrow need not be performed within the transplant benefit penod) (D) Charges incurred for follow up cart, including immuno-suppressant therapy. (E) Charges for transportation to and from the site of the covered organ transplant procedure for the recipient and one • other individuals. In addition, al! reasonable and necessary lodging and meal expenses incurred during the transplant benefit period will be covered up to a maximum of 810,000.00 per transplant period. Re-transplantation Re-transplantation will be covered up to two re-transplants, for a total of three transplants per person, per lifetime. Each transplant and re-transplant will have a new benefit period and a new maximum lifetime benefit. DEFINITIONS Covered Tries Proeednres-Covered Transplant Procedures are any of t}te following adult or pediatric human organ and tissue trarxtsplant procedures determined to be Medically Necessary: Heart Lung Simultaneous Heart/L~rng Bone Marrow liver Kidney Simultaneous Pancreas/Kidney Transplant Network Providers-Transplant Network Providers are those Hospitals and Physicians that arc under contract with the Plan to provide Transplant Services. Benefits Paid are enhanced when the Covered Partidpant uses Transplant Networl: Prodders. Noa~Traaspla~at Network Providers- Non-Transplant Network Providers are those Hospitals and Physicians that arc not under contract with the Plan to provide Transplant Services and have been approved by Intcrlink Services. Transplant Services that have been approved for anon-transplant facility or by anon-transplant provider will be eligible for benefits under this plan at a reduced rate. Transplant Serviices-Transplant Services means any services directly related to a Covered Transplant Procedure including, but not limited to, inpatient and outpatient Hospital services, physician services for diagnosis, treatment and surgery for a Covcrcd Transplant Procedure, diagnostic services, and procurement of an organ or tissue, including services provided to a living donor of an organ or tissue for procurement of an organ or tissue. Transplant Services also includes but is not limited to, durable medical equipment rental outside of the hospital, prescription drugs including immunosuppressives; surgical suppli<~s and dressings, and home health care. BENEFITS PAID Transplant Network Provider- Covered expenses will be reimbursed at the slated to-insurance rates listrd abo~•r for 71•;uispfaiSt Services provided through a Transplant Network Provider with respect to the type of Covered Transplant Procedw•e performed. 100°.'0 of reasonable and necessary transportation, lodging, and meal costs for the Covered Participant and one significant other are covered for travel related to the initial evaluation prior to transplant, and subsequent admission for a Covered Transplant Procedure performed by a Transplant Network Provider. If the recipient is a minor, transportation costs for two companions may he covered. Kerr County Plan Document ~am~ary 1, 2003 1V/ 1L./ V"t 11. VV V,.1V ,.... vvvV ~ v[la av N va.a ~v y. ."~~, „~.- Non-Transplant NetwarkProvider-90%ofcoveredchargcs(subjectto reasonableandcustomary)forTransplantSetvicesprovided through aNon-Transplant Network Provider with respect to the type of Covered Transplant Procedure performed that have been approved by Interlink Health Services. 60% of covered charges (subject to reasonable and carstomary) for Transplant Services provided through aNon-Transplant Network Provider not approved by Interlink Health Servicxs. Transportation, lodging, and meal costs for travel related to the initial' evaluation, ongoing evaluations prior to transplant and subsequent admission for a Covered Transplant Procedure performed by aNon-Transplant Network Provider are not covered under this Plan. MAXIMUMS Transportation. Lodgi~rg, and Meals-><10,000.00 for all travel, lodging, and meals related to Transplant Services performed by a Transplant Network Providtr. $200.00 per day maximum for lodging and meals. Itemized receipts in a form satisfactory to the TPA Contract Administrator must be submitted by the Covered Participant when claims are filed for reimbursement. Organ and/or Tissue ~"racurement- The payments for procurement expenses for a donor organ are covered at 100% when the Covered Transp{ant Procedure is performed by a Transplant Network Provider. However, the payments for procurement expenses for bone marrow associated with allogtneic bone marrow transplant may not exceed l£ 10,000.00. The payment for procurement expenses for adonor organ or tissue when the Covered Transplant Procedure is performed by a Transplant NctworkProvider orNon-Transplant Network Provider arc covered at 100% but may not exceed the following Maximums, per Covered Procedure: Lung a 10,000.00 Heart/Lung ;10,000.00 Heart $10,000.00 Kidney/Pancreas ~ 10,000.00 Liver $10,000.00 Allogeneic BMT $10,000.00 Maximum for all Transplant Services-The total dollaz amount to be paid to or on behalf of Covered Participant for all Transplant Services including the Covered Transplant Procedure shall be included in and subject to the Plan Benefit Maximum. The maximums shown for Transportation, Lodging, Meals, and Procurement are excluded in this maximum. Special Rules for Oman Transplants- The Covered Participant must havr" been covered under the Plan for at least six (6) consecutive months immediately prior to the date of transplant. Covered Participants who are Newborns need not meet this requirement. The six (6}month waiting period is waived when any organ transplant for a Covered Participant is the direct result of a covered accident Exclusions There are no benefits for: (A.). services and supplies of any provider located outside the United States of America, except for procurement services (subject to the amounts shown in the Maximum section). (B.l services and supplies which are eligible to be repaid under any private or public research fund, whether or not such funding was applied for or received. (C.} implant of an artificial or mechanical heart or part thereof, this does not inclade r~lacement of a heart valve. (D.) services for non-human organ transplants. (E.) all other exclusions, limitations or conditions set forth in this Plan shall apply to Transplant Services unless otherwise provided in this Transplant Services section. OUT-OF POCKET MAXIMUM The Plan will pay the prescribed coinsurance on covered medical expenses for each covered Participant's bills until the out-of-pocket maximum has been reached as outlined in the Schedule of Benefits, including the ~,lendar year deductible. Covered expenses incurred for the rest of the calendar year will be payable at 100%. The office visit co-pa~will still apply after the co-insurance has been met. PRE-EXISTING CONDITIONS MAXIMUM Replacement of Coverage .......................................................... Pre-Existing limitation is waived New Hire -Maximum payable ...................................................................... 8 1000.00 Late Enrollces ................................................................................... S 0.00 WAITING PERIOD "I~hc first (lsl} day of the month following the compleliori of the Employee's 30 day waiting period. The waiting period will not apply to .ui emlrlnyec covered on the original effectivr. date of this flan. 10 ticrr County flan Document ,January I, 2003 ~ ~, /'D ~ PUBLIC PARTICIPATION FORM ~ FOR -- ,KERB COUNTY COMMISSIONERS' COURT Instructions: Flll out all appropriate blanks. Please print or write legibly. Present to the County Clerk prior to the time that the A/genda Item (or Items) you wish to address are discussed. address: ~ O O ~O ~, ©~-~c c~~-Gc-~-~4-~-~-- Telephone: Place of Employment: ~CC u 12 ~ ~ ~ ~~ ~~~~ Employment Telephone: 0 ~l ~- 33 T- 3 6 Do you represent any particular group or organization? Yes ~ No ^ If you represent a group or organization, please state the name, address and telephone number of such group or organization. l~ m o ~iJ . ©r~{-c C ~~f--~Z s~k-c__~ f 11~ Which agenda Item (or Items) do you wish to address? j In general, are you for or against such Agenda Item (or Items)? For ^ Against ^ Sigt ature NOTE: This Public Participation Form must be presented to the County Clerk prior to the time the agenda item(s) are discussed. Once you reach the podium, please state your name and who/what you represent clearly for the court reporter to accurately record who you are. /~I~~~r 1~I~~ L1P Insurance Since 1935 ..an Assurex Glohal Partner Kerr County December 1, 2004 Prepared by: Gary R. Looney, REBC Catto & Catto Benefits Group, LLP This Proposal describes the insurance benefits in an easily understood manner. They do not create or confer any rights. The exact terms of the plan are outlined in the detailed provisions of the policies issued by the insurance carvers. The following was prepared for the purpose of outline presentation only. Gary R. Looney, REBC 110 E Crockett San Antonio, Texas 78205 Phone: (210) 222-2161 Fax: (210) 227-5006 i'''r` FINAL RECOMMENDATION REPORT Date :12/1 /2004 TO :Kerr County Commissioners Court From :Gary Looney REBC RE : RFP Analysis -Medical and Life Insurance Plans Dear Sirs: I have completed my review of the proposals submitted to Kerr County for Third Party Administrative Services, Medical Aggregate and Specific Stop Loss Insurance and Group Term Life Insurance. There were two objectives of the bid request. The first objective was to examine the cost of the current plan of benefits in relationship to the proposals received and the renewal offered by the current carrier to determine if the current plan was cost effective. The second objective was to determine if the current plan of benefits should be changed. If the plan were to be changed, what plan of benefits would be offered to employees and what would the cost differential be to the County. Contingent with the two objectives, it was also necessary to examine the services of the current Third Party Administrator. Current: A summary of the current plan of benefits offered to employees is included under Tab 1. The benefit plan offered to employees and paid for by Kerr County is plan A. Plan A is selected by 63% of your employees with 29% in Plan B and 8% in Plan C. Currently the County ~'"` pays 100% of the employee cost for Plan A with premium credit offered to employees who select Plans B or C. A bid summary sheet assuming the current plan of benefits as described is included under Tab 2. The current stop loss contract is a 12/12 contract. For a claim to be eligible to be paid the claim must be incurred and paid within a 12 month period. The proposals I have illustrated are 15/12 contracts. Claims incurred in the last 3 months of the plan year will be included in the specific and aggregate contracts for reimbursement for 12 months of the next plan year. Optional Plans: I have included an Optional Plan utilizing a Health Reimbursement Arrangement for your employees. The plan design is intended to closely match Plan A. These are a few of the primary differences in the new plan design: 1. The deductible has been increased from $400 to $1,000. 2. The Physician Office Co-pay has been increased to $30.00 3. The Maximum Out-of-Pocket cost has increased from $2,400 to $3,000. 4. The $300 supplemental Accident benefit is removed 5. Physician office Co-pays include x-ray, lab, and in office surgery performed in physicians office. Lab services performed by an in network Lab are not subject to deductible. December 1, 2004 FINAL RECOMMENDATION REPORT Page 2 of 2 6. A Health Reimbursement Arrangement is added to provide each covered employee and covered dependent a $ 600 per year reimbursement for medical ~r expenses eligible to be paid under the medical plan. The reimbursement arrangement will allow reimbursements for eligible deductible expenses, coinsurance expenses, and other out of pocket expenses eligible for benefit under the plan. It does not include reimbursement for co-payments made at the doctors' office or for co-payments made for prescription drugs. 7. The year end carry over for unused deductibles is eliminated. A "Sample Plan" benefit summary is included under Tab 3. The pricing model for the Optional plan is included under Tab 4. The projected plan costs are estimated based on the proposals submitted. A "Sample" lower priced optional plan is shown under Tab 5. The lesser benefit plan would be made available to employees who wish to have a lower premium cost. This option has substantially reduced benefits. The premium cost is shown under Tab 4. Since the County is funding the plan with greater benefits a credit is generated for those who wish to participate in the lesser benefit plan. I do not recommend the lesser benefit plan to be provided as the County sponsored plan. The life insurance benefits are at a very low level for each employee ($10,000). I recommend an increase in the basic life insurance coverage paid by the County. The current rate and bid results are shown on the spreadsheet under Tab 6. As a result of a rate decrease for the life insurance plan, it is possible to increase each employee to $20,000 of life insurance with a net result of an increase in premium of approximately $4,000 per year. It is my recommendation: 1. That the County change the medical plan design and adopt a Health Reimbursement Arrangement. The intent of the plan design is to provide additional benefit to those employees who are prudent in the utilization of the medical benefit plan. 2. That the County provide an optional plan for those employees who wish to have a plan with lesser benefits at a reduced cost. 3. That the County increase the basic Life and Accidental Death and Dismemberment policy to $20,000 per active employee. 4. That the County select Mutual of Omaha as the carrier for 2005. I sincerely appreciate your confidence in our efforts to provide you and your employees with the very best in employee benefits. e f Gary R Looney REBC Risk Management Consultant ~Irr-' ~/ KERR COUNTY . SCHEDULE OF BENEFITS SELF FUNDED IN NETWORK NON-NETWORK TYPE OF SERVICE PROVIDERS PROVIDERS Calendar Year Benefit Plan A Plan $ Plan C Plan A Plan B Plan C Calendar year deductible Family Maximum Unit - 3 Persons $4.00 $750 $1,200 $800 $1500 $2,000 Last 3 month carry-over $1,200 $2,250 $3,600 $2,400 84,500 $6,000 Coinsurance Maximum $2,000 $3,000 $4,000 $4,000 $5,000 $8,000 Family Maximum Unit - 3 Person $6,000 $9,000 'S12,flOfl $12,000 $15,000 $24,000 Total Out of Pocket Maximum E2,400 $3,750 $5,200 $4,800 $6,500 $10,000 Family Maximum Unit - 3 Person $7,200 $11,250 '$15,b00 14,400 $19,500 $30,000 Lifetime Maximum Per Person $1,000,000 CO-INSURANCE CO•~INSURANCE BENE)HTTS DED PPO 3vON PPO LIMITATIONS Physician Ofl-ice Visit excludes x-ray, lab and Waived $10 co-pay Plan A $20 co-pay Plan A surgery done at the time of (For Kerrville the office visit. Co-Pay Providers Daly) Waived $20 co-pay Plan B $30 co-pay Plan B will only apply to CPT codes 99201-99215 8~ Waived $30 co-pay Plan C $40 co-pay Plan C 99241-99245 excludes x-ra}~, lab and Physici-uti Office Visit \Naived $20 co-pay Plan A $20 co-pay Plan A surgery done at the time of the office visit. Co-Pay (For Outside •Kerrville• Waived $20, co-pay Plan B •• ' $30 co-pay Plan•B will only apply to CPT Providers Only) codes 99201-99215 & . Waived $30 co-pay Plan C $4fl co-pay Plan C 99241-99245 PLAN PLAN PLAN PLAN PLAN PLAN OTHER BENEFITS DED A B C A B C LIMTTATIONS Physician Inpatient Applies 90% 80% ,40% 70% 60% 60% Physician Surgery Applies 90% 80% 80% 70% 60% 60% *For Inpatient Anesthesiology Applies 90% 80% 80% 70% 60% 60% *For Inpatient Allergy testing, serum & injections Applies 90% 80% 80% 70% 60% 60% -ray, Radiologist Applies 90% 80% 80% 70% 60% 60% l.ab, Pathologist Applies 70% 70% 70% 70% 60% 60% ['referred l.ab - LabOne 11'aived 100°~0 100°/o iU0°i° !~'/.A N/A N/A After $300 mauc per accident subject to the Accidental Injuries 1Naived !00% 100% 100% N/A _ N/A N/A ded and co-insurance Kerr Courtly flan llocument January 1, 20U3 y„", CO-INSURANCE CO-~INSUItANCE PPO l'~ON-PPO PLAN PLAN PLAN PLAN PLAN PLAN BENEFITS DED A B C A B C LIMITATIONS Services do not include Outpatient Services Applies 90% 80% 80% 70% 60% 60% outpatient surgery All services related to the outpatient surgical procedure to include Anesthesia, lab/Path, xray, Outpatient Surgery waived 90% 80% 80% 70% 60% 60% etc. Lifetime max for all levels Home Health Care Services Applies 90% 80% 80% 70% 60% 60% 810,000 Limited to facility's semiprivate room rate with 7 days of the a 3 day Skilled Nursing Facility Applies 90% 80% 80% 70% 60% 60% hospital stay Life time max for all levels Hospice Care Applies 90% 80% 80% 70% 60% 60% $20,000 Spinal Manipulation $1,500 calendar year max Chiropractic Applies 90% 80% 80% 70% 60% 60% for all levels $1,500 calendar year max Physical Therapy Applies 90% 80% 80% 70% 60% 60% for all levels Medical necessity must be Speech Therapy Applies 90% 80% 80% 70% 60% 60% documented for all levels For emergency transport Ambulance Services Applies 90% 80% 80% 70% 60% 60% to a covered facility If New Born not added in Routine New Born Care first 31 days coverage will (Inpatient Nursery} Waived 90% 80% 80% 70% 60% 60% terminate If New Born not added in New Born Care (Sick Baby} Grst 31 days coverage will (Inpatient Nursery) Applies 90% 80% 80% 70% 60% 60% terminate Maternity Benefits Initial office visit Applies Delivery related foes Applies Dependent Daughters are Other OB related fees Applies 90% 80% 80% 70% 60% 60% not covered Preventive Care Services include but not Calendar Year Max of limited to, Office visits, $200 (Adult, Well Baby, pap smear, mammogram, Well Child} ~ prostate screening, (Does not include physicals Routine CYN exams, far camp, school, pre- routine x-ray/lab, employment, and school immunizations, flu shots, slx~nsored sports activity) routine eye and hearing Waived 100"/0 100% 100% N/A N/A N/A exams. Kerr County flan I)ocumem January 1,2003 `~1rr+ CO-INSURANCE COINSURANCE pP0 IKON-PPO PLAN PLAN PLAN PLAN PLAN PLAN BENEFITS DED A B C A B C LINDTATION5 Durable Medical Requires doctor's Equipment Applies 90% 80% 80% 70% 60% 60% prescription Hospital Inpatient Per-urti6cation is required ASP room & board limit Applies 90% 80% - 80% 70% 60% 60% $500 penalty if none Emergency Room & Treatment for a medical Physician Applies 90% 80% 80% 70% 60% 60% emergency Mental Disorders Inpatient - 7 days per Applies 50% 50% 50% 50% 50% 50% Co-insurance for Inpatient calendar year max or Outpatient dots not Outpatient - 20 visits per apply towards the out-of- calendar year max Applies 50% 50% 50% 50% 50% 50% pocket maximum See Definition of "Serious Mental Illness in the Plan Seriions Mental Illness same as any other illness Document Substance Abuse Inpatient - 7 days per calendar year max Applies 50% 50% 50% 50% 50% 50% Co-insurance for Inpatient or Outpatient does not apply towards the out-of- Outpatient - 20 visits per calendar year max Applies 50% 50% 50% 50% 50% 50% pocket maximum Removal of partial or fully Dental Oral Surgery Waived 90% 80% 80% N/A N/A N/A impacted teeth All other Professional See details under " Services Applies 90% 80% 80% 70% 60% 60% "Covered Expenses PRESCRIPTION DRUG BENEFIT PLAN A Pharmacy Opdoa Co-payment, per Prescription $35.00 ..... Multiple source Brand ............................................................. 820.00 .... Single Source Brand ................................................... ........ . $ 5.00 ... .... Generic Drugs ............................................................... Mail Order (90 Day) Co-payment, per Prescription - S40 ~0 .. A~fultiplesource Brand ............................................................. . 525.00 ...... Single Sou-•ecl3r~tnd ............................................................. ...... S10.00 Generic Drugs .................................................................. Kerr County Plan Document ~anuary I, 2003 ~Illlrr Non-Transplant NetwarkProvider- 90% of covered charges (subject to reasonable and customary) forTransplant Services provided through aNon-Transplant Network Provider with respect to the type of Covered Transplant Procedure performed that have been approvtd by Interlink Health Services. 60% of covered charges (subject to reasonable and customary) for Transplant Services provided through aNon-Transplant Network Provider not approved by Interlink Health Services. Transportation, lodging, and meal casts for travel related to the initial evaluation, ongoing evaluations prior to transplant and subsequent admission for a Covered Transplant ~r Procedure perfotYrted by aNon-Transplant Network Provider are not covered under this Plan. MAXIMUMS ', Transportation. Lod~in~, and Meals- $10,000.00 for all travel, lodging, and meals related to Transplant Services performed by a Transplant Network Provider. $200.00 par day maximum for lodging and meals. Itemized receipts in a form satisfactory to the TPA Contract Administrator must be submitted by the Covered Participant when claims are filed for reimbursement. Organ and/or Tissue Procurement- The payments for procurement expenses for a donor organ are covered at 100% when the Covered Transplant Procedure is performed by a Transplant Network Provider. However, the payments for procurement expenses for bone marrow associated with allogeneic bone marrow transplant may not exceed $10,000.00. The payment for procurement expenses for adonor organ or tissue when the Covered Transplant Procedure is performed by a Transplant Network Provider orNon-Transplant Network Provider are covered at 100% but may not exceed the following Maximums, per Covered Procedure: Lung $10,000.00 Heart/Lung $10,000.00 Heart $10,000.00 Kidney/Pancreas $ i 0,000.00 Liver $10,000.00 AllogeneicBMT $10,000.00 Maximum for all Trans Iant Services-The total dollar amount to be paid to or on behalf of Covered Participant for all Transplant Services including the Covered Transplant Procedure shall be included in and subject to the Plan Benefit Maximum. The maximums shown for Transportation, Lodging, Meals, and Procurement are excluded in this maximum. Special Rules for Or~a,a Traasplants- The Covered Participant must have: been covered under the Plan for at least six {6) consecutive months immediately prior to the date of transplant. Covered Participants who are Newborns need not meet this requirement. The six (6}month waiting period is waived when any organ transplant for a Covered Participant is the direct result of a covered accident Exclusions There are no benefits for: (A.). services and supplies of any provider located outside the United States of America, except far procurement services (subject to the amounts shown in the Maximum section). (B.} services and supplies which are eligible to be repaid under any private or public research fund, whether or not such funding was applied for or received. (C.} implant of an artificial or mechanical heart or part thereof, this does not include replacement of a heart valve. (D.} senrices far non-Truman organ transplants. (E.) all other exclusions, limitations or conditions set forth in this Plan shall apply to Transplant Services unless otherwise provided in this Transplant Services section. OUT-OF POCKET MAXIMUM The Plan will pay rho prescribed coinsurance on covered medical expenses for eat:h covered Participant's bills until the out-of-pocket maximum has been reached as outlined in the Schedule of Benefits, including the ~aendar year deductible. Covered expenses incurred for the rest of the calendar year will be payable at 100%. The offtce visit co-»;y will still apply after the co-insurance has been met. pRE-~EXI5TING CONDITIONS MAXIMUM Replacement of Coverage .......................................................... Pre-Existing Limitation is waived New Hire -Maximum payable ...................................................................... $ 1000.00 I~tc Cnrollces ................................................................................... S 0.00 WAITING PERIOD 'fhe first (!st} day of thc• month following the completion of the F,mployee's 30 day waiting period. "f he waiting period will not apply to .ui employee covered on the original e~ffcctive dale of this Plan. 1~ I~crr Cnunry I'1an Dcx;umcnt January I, 2003 lU/1L/U4 11:57 C~L1ULL7 SUUti l:A'1'1'U do GA'1'1'U PRESCRIPTION DRUG BENEFIT PLAN B & C ' PLAN B AND G Pharmacy Option Co-payment, per Prescription Multiple source Brand .................................................................. $45.00 Single Source Brand ................................................................... $30.•10 Generic Dn,gs ...............•--...................................................... $10.00 Mails Order {90 Day} Co-payment, per Prescription Multiple source Brand .................................................................. $50.00 Single Source Brand ................................................................... $35.00 Generic Drugs ........................................................................ $15.00 HUMAN ORGAN AND TISSUE TRANSPLANT BENEFIT lifetime maximum .................................................................................. $250,000 Plan A co-insurance in network ............................................................................. 90% Plan A co-insurance out of network .......................................................................... 70% Plan B 8tB co-insurance in nehvork ............................................................-.••.•...-... 80% ~ Plan B & C co-insurance out of network ...................................................................... 60% Maximum payable for: Transportation, Lodging, and Meals ............................................................... 810,000 Maximum per day for lodging and meals .......................:................................... $ 200 Pre-Authorization Required for Transplant Evaluation -Expenses incurred in connection ~+7th the evaluation of a Covered Participant for an}• human organ or tissue transplant will be covered, but onl}• after referral to and pre-authorization through Employee Benefit Administrators, Inc.(EBA), the TPA Contract Administrator has occurred. The Covered Participant or his physician should contact EBA, Inc. for pre-authorization of an evaluation for transplant prior to the: referral to a transplant physician. EBA will assign Interlink Health Services as the case manager to work with the Covered Participant closely through out the transplant process. Pre~Authorization Repuiirement for Transplant Procedure-Expenses incurred in connection with any organ or tissue transplant listed in this provision will be covered subject to referral to and pre-authorization by the Plan Administrator's authorized review specialist, Interlink Health Services. Transplant coverage is offered under this plan through a preferred provider network ofspecialized professionals and facilities. Coverage is also provided for Transplant services obtained outside of the preferred network at a reduced benefit level. As soon as reasonably possible, but in no event mare than ten (10) days after a Covered Member's attending physician has indicated that the Covered Member is a potential candidate for a transplant, the Covered lb[ember or his Physician should contact the Plan Administrator for referral to the net++•ork's medical review specialist for evaluation and pre-authorization. A comprehensive treatment plan must be developed for this plan's medical review, and must include such inforr.~ation as diagnosis, the nature of the transpl~uit, the setting of the procedure, (i.e. name and address of the hospital), any secondary rriedical complications, a five yea prognosis, two (2) qualified opinions confirming the need Cor the procedure, as wee as a description and the estimated cost of the proposed treatment. (One or both confirming Physician's statements may also be required. The Covered Me~~ber may provide a comprehensive treatment plan independent of the preferred provider network, but this wiI(be suhjccl to medical ah,~ropriateness review and may result in non-network benefit coverage. $ Kcrr Cpu~tty !'tan I~ncwu~:m ~anuary I, 200:3 All potential transplant cases wilt be assessed for their appropriateness for Large Case Management. Covered Tratnsplanir Exyent;es The term "covered expenses" with respect to transplants includes the reasonable and customary expenses For services and supplies which are covered under this plan (or which are specifically identified as covered only under this provision) and which are medically necessary `qty,,,.' and appropriate to the Transplant. (A) Charges incurred in the evaluation, screening, and candidacy determination process. (B) Charges incurred for organ transplantation. (C) Charges for organ procurement, including donor expenses not covered under the donor's. plan of benefits. • ' Coverage for organ procurement from anon-living da or will be provided for costs involved in removing, preserving and transporting the organ. • Charges for organ procurement for a living donor will be provided for the cost involved in screening the potential donor, transporting the donor to and from the site o#'the transplant, as well as for medical expenses associated with removal of the donated organ and the medical services provided to the donor in the interim and for follow up care. • If the transplant procedure is a bone marrow transplant, coverage will be provided for the cost involved in the removal of the patient's bonc marrow (autologous) or donated marrow {allogeneic}. Coverage wil! also be provided for search charges to identify and unrelated match, treatment and storage costs of the marrow, to the time of reinfusion. (The harvesting of the marrow need not be performed within the transplant benefit period) (D) Charges incurred for follow up care, 'including immuno-suppressant therapy. (E) Chazges for transportation to and from the site of the covered organ transplant procedure for the recipient and one • other individuals. In addition, all reasonable and necessary lodging and meal expenses incurred during the transplant benefit period will be covered up to a maximum of $10,000.00 per transplant period. Re-traasolantadon Re-transplantation wi19 be covered up to two re-transplants, for a total of three transplants per person, per lifetime- Each transplant and re-transplant will have a new benefit period and a new maximum lifetime benefit. DEFINITIONS Covered Transnl~t Proeednres-Covered Transplant Procedures are any of the following adult or pediatric human organ and tissue ''~trrr transplant procedures determined to be Medically Necessary: Heart Lung Simultaneous Heart/Lung Bone Marrow liver Kidney Simultaneous Pancreas/Kiclney Transplant Network Providers- Transplant Network Providers are those Hospitals and Physicians that are under contract with the Plan to provide Transplant Services. Benefits Paid are enhanced when the Covered Participant uses Transplant I~'etwork Providers. Non~Transplant Network Providers- Non-Transplant Network Providers are those Hospitals and Physicians that are not under contract with the Plan to provide Transplant Services and have been approved by Interiink Services. Transplant Senrices that have been approved for anon-transplant facility or by anon-transplant provider wilt be eligible for benefits under this plan at a reduced rate. Trans lent Servie s-Transplant Services means any services directly related t« a Covered Transplant Procedure including, but not limited to, inpatient and outpatient Hospital services, physician services for diagnosis, treatment and surgery for a Covcrcd Transplant Procedure, diagnostic services, and procurement of an organ or tissue, including services provided to a living donor of an organ or tissue for procurement of an organ or tissue. Transplant Services also includes hilt is not limited to, durable medics! equipment rental outside of the hospital, prescription drugs including imrrtunosuppressives; surgical supplies and dressings, and home health care. BENEFITS PAID Trans last Netwo k Provider- Covered expenses will be reimbursed at the stated co-insurance rates listi d abo~~r for 7~r;ulspL•rnt Services provided through a Transplant Network Provider with respect to the type of Covered Transplant Procedure performed. I00°.'0 of reasonable and necessary transportation, lodging, and meal casts for the Covered Participant and one significant other are covered for travel related to the initial evaluation prior to transplant, and subseyucnt admissie•n for a Covered Transplant Procedure performed by a Transplant Network Provider. If the recipient is a minor, transportation casts for two companions may be covered. Kerr County Plan Document January 1, 2003 County of Kerr Bid Spread Sheet TPA Oroat Waat firoup 8 Pmelon Admin. EBA MuWd of OmaM BeneM Planners Optlon S Opton 2 Reinsurance Carrier Great Wed Hedtllcare S Ira American United Life Ina Co United Of Om~a Setup Fee •: Waived $ 2,800 None Renewal Fee Nane Rm-Irr/Run-Out: Administration Fee Charged by EBA(?) 10% $10.00 per claim Fstimared run out claim liabitilty $ 145,000 $ 145,000 $ 145,000 $ 145,000 Spedfic Lifetime Maximum Reimbursement $ 1,000,000 $ 1,000,000 $ 1,000,000 S 960,000 Aggregate PlanYearAmual Maximum Rreimburserneot $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 PPO Network TTC GPA HeaBhamarl TTC TiC 125%coMda 125%oaddor 125%corddar 125%coridor • Nate: These fees are one time annual and are not included in totals below. STOP-LOSS BASIS Number of Employees: Plao 1 265 265 265 265 Number of Spousal Units Number of Dependent Units: or Children Number of Family UniU Number of Employees: Plan 2 induded'n above count Number of Spousal Units Quote Is based on blended rates Number of Dependent Units: or Children Number of Family Units Number of Employees: Plan 3 Mduded in above corurt Number of Spousal Uruts Ouole Is based on Wended roles Number of Dependent Utts: or Children Number of Family Units Specific lkductible: $ 40,000 $ 40,000 $ 40,000 S 40,000 Specifc Contract: 1912 12/15 1912 1912 Specific Contract Lrdudes Medical g Rx Medical g Rx Medial Medal 8 Rx Aggregate C~tract: 1912 12.115 1912 1912 Maximum Aggregate Run N 226,750 A ate Coatrarr Includes Medical 8 Pot Medical g Rx Medical 8 Pot Medial 8 Rx MONTHLY FIXED COSTS Spedfic Premium Composite: $ 62.13 S 110.48 $ 74.55 $ 43.78 Aggregate Premium Composite: $ 8.95 $ 9.75 $ 5.58 $ 4.31 Mondiy Cap Na $ S Administration( all fees per unit per month) Claims Cost Per Employee :Composite rare $ 19.45 $ 16.50 $ 12.50 $ 19.90 Utiliration Review $ $ 2.00 $ 1.85 $ 2.40 Disease Management Opdon 1 $ 3.25 $ 1.00 E 1.91 Disease Marugemea[ Option 2 Na nla Disease Management Option 3 da Na $ 3.00 PPO Netvrork Access Fees Included $ 5.50 $ 3.00 $ 2.49 PPO Network: Out of Area N rrehvork fee Included None rJa Rx Program Fees induct Non nl Web Based Access Included .15 PEPM Ban Yes COBRA included $ 2.25 $ 0.20 $ 0.50 I-BPAA krduded S 0.20 $ 0.30 Positive Pay Banking System inducted Na Total Per Em to $ 19.45 $ 26.25 $ 17.75 $ 27.50 AGGREGATE FACTORS Composite: $ 594.83 $ 577.29 $ 554,04 $ 452.64 Monthly: $ 157,630 $ 148,940 $ 146,821 $ 119,950 Awual: $ 1,891,559 $ 1,787,282 $ 1,761,847 $ 1,439,395 TOTAL ANNUAL COSTS Specific Stop Loss Premium $ 197,573 $ 351,326 $ 237,069 S 139,220 Aggregate Stop Loss Premium $ 28,461 $ 31,005 $ 17,744 $ 13,706 Administration -COBRA FIeAA (Broker) $ 61,851 $ 59,625 $ 41,022 $ 65,826 UR, PPO, Rx Included in AdministraAOn $ 23,850 $ 15,423 $ 15,550 Disease Management $ 10,335 $ 9,540 $ 6,074 Taal Fixed $ 298,220 $ 465,806 $ 311,258 $ 234,302 Expected Claims Cost excluding Fixed Cost: $ 1,418,670 $ 1,340,462 S 1,321,385 $ 1,079,546 Maximum Claims Costs excluding Fixed Cost: $ 1,891,559 S 1,787,282 $ 1,161,847 $ 1,439,395 Expected Claims Cost including Fixed Cost $ 1,716,890 $ 1,806,268 $ 1,632,644 $ 1,313,849 Maximum Claims Costs inclu " Fixed Cost $ 2,189,780 $ 2,253,089 $ 2,073,106 $ 1,673,698 Notes: Pass Through and for prindng, ID cards, enrollment meetings $250 day for BPI ees Plan Booklets are pees through acct County of Kerr With HRA Bid Spread Sheet TPA EBA Mutual of Omaha ~~ Plan Changes Reinsurance Cartier American United Life Ins Co United Of Omaha Setup Fee ": None Initial Deposit Required Renewal Fce None Run-In/Run-Out: Administration Fee Charged by EBA(?) $10.00 per daim Estimated run out claim liability $ 145,000 $ 145,000 Specific Lifetime Maximum Reimbursement $ 1,000,000 $ 960,000 Aggregate Plan Year Annual Maximum Rreimbursement $ 1,000,000 $ 1,000,000 PPO Network TTC TTC 125%corridor 125%wrridor " Note: These fees am one time annual and are not included in Totals bebw. STOP-LOSS BASIS Number of Employees: Plan 1 265 265 Number of Spousal Units Number of Dependent Units: or Children Number of Family Units Number of Employces: Plan 2 Number of Spousal Units Number of Dependent Units: or Children Number of Family Units Number of Employees: Plan 3 Number of Spousal Units Number of Dependent Units: or Children Number of Family Units Specific Deductible: $ 40,000 $ 40,000 Specific Contract: 15/12 15112 Specific Contract Includes Medical Medical & Rx Aggregate Contract: 15/12 15/12 Maximum Aggregate Run In 226,750 Aggregate Contract Includes Medical 8 Rx Medical & Rx MONTBLY FIXED COSTS Specific Premium Composite: $ 68.05 $ 43.78 Aggregate Premium Composite: $ 5.58 $ 4.31 Monthly Cap Admioistration(eil fees per unit per roooth) Claims Cost Per Employee :Composite rate $ 12.50 $ 19.90 Utilization Review S 1.85 $ 2.40 Disease Management Option 1 $ 1.00 $ 1.91 Disease Management Option 2 Disease Management Option 3 $ 3.00 PPO Network Access Fees $ 3.00 $ 2.49 PPO Network: Out of Area in network fee None Ma Rx Program Fees Non N Web Based Access .15 PEPM (OptionaQ Yes COBRA S 0.20 S 0.50 HIPAA $ 0.20 $ 0.30 Positive Pay Banking System n/a Total Per Em loyee: $ 17.75 $ 27.50 AGGREGATE FACTORS Composite: $ 520.00 $ 439.53 Monthly: $ 137,800 $ 116,475 Annual: S 1,653,600 E 1,397,705 TOTAL ANNUAL COSTS Specific Stop Loss Premium $ 216,399 $ 139,220 Aggregate Stop Loss Premium $ 17,744 $ 13,706 Administration - COBRA HIPAA (Broker) $ 41,022 $ 65,826 UR, PPO, Rx $ 15,423 S 15,550 Disease Management $ 9,540 $ 6,074 Total Fixed $ 290,588 5 234,302 Expected Claims Cost excluding Fixed Cost: $ 1,240,200 $ 1,048,279 Maximum Claims Costs excluding Fixed Cost: $ 1,653,600 $ 1,397,705 Expected Claims Cost including Fixed Cost: E 1,530,788 $ 1,282,581 Maximum Claims Costs includin Fixed Cost: $ 1,944,188 $ 1,632,008 Notes: Does not include $200,000 estimated HRA reimbursement Does not include $200,000 estimated HRA reimbursement Does Not Include Disease Mgmnt SAMPLE SCHEDULE OF BENEFITS Major Medical Benefits for Covered Persons Benefit Levels for services rendered in the geographical area serviced by the Preferred Provider ~"' Organization (PPO): The "PPO Benefit" level applies to services rendered by a Partiapating Provider in the designated PPO Network; the "Non-PPO Benefit" level applies to services rendered by providers other than Partiapating Providers (Non- Network). In addition, the "PPO Benefit" level applies to the following situations: 1. If a Partiapating Provider refers a Covered Person to a facility which is not a Participating Provider because no appropriate Partiapating Provider facility is available; 2. If a Participating Provider refers a Covered Person to a Physiaan who is not a Participating Provider because there is no appropriate specialist available among Partiapating Providers; and 3. If a Medical Emergency or initial treatment of an Accidental Injury requires services of a Non-partiapating Provider. PPO Benefit Non-PPO Benefit Lifetime Major Medical Maximum Benefit Per Covered Person $1,000,000 $1,000,000 Health Reimbursement Arrangement See Separate Contract for Specifics In General -Each covered employee and dependent will receive an annual credit of $ 600 to be used to offset co-insurance, deductible, and other non reimbursed expenses eligible for benefit under this plan. Unused amounts will be carried forward. The maximum accumulation will be equal to the maximum out of pocket expense under the plan for in network expenses. Calendar Year Deductible (No Last Quarter Deductible Carryover) Per Covered Person $ 1000 $3000 Family Limit* $ 3000 $ 9000 Benefit Percentage 90% of $20,000 70°!° of $20,000 (Unless otherwise noted) 100%thereafter 100%thereafter Annual Out-of-Pocket Maximum (In addition to Deductible and Co-pays) Per Covered Person $ 2,000 $ 6,000 Family Limit'` $ 4,000 $ 12,000 Inpatient Hospital Services 90 % after 70% after (All related changes) Deductible Deductible Pre-notification required Room and Board Limit Semi-Private Average Semi-Private Intensive Care Limit Negotiated PPO Usual and Customary Fee Schedule Hospital Emergency Room 90% after 90% after Medical Emergency Deductible Deductible (See Medical Emergency definition in plan document, Page --) Hospital Emergency Room 90% after $ 75 Co-pay 90% after $ 75 Co-pay Non-Medical Emergency Deductible Applies Deductible Applies (See Medical Emergency definition in plan document, Page ---) Pre Admission Testing 100% 100% (Within 10 days of Hospital Confinement) Deductible Waived Deductible Waived NOTE: The Calendar Year Deductible and Annual Out-of-Pocket Maximum are determined by in network PPO Covered Charges. Upon reaching the Annual Out-of-Pocket Maximum, Covered Medical Expenses are payable at 100% for the remainder of the Calendar Year. The Lifetime and Calendar Year Maximum Benefits are PPO Covered Charges. Non-PPO out of pocket maximums are determined separately. ~r- *Applies collectively to all Covered Persons in the same family. SCHEDULE OF BENEFITS (Cont'd) Accidental Injury Deductible NOT waived Ambulance Service Minor Emergency Medical Clinic Outpatient Surgery/Ambulatory Surgical Center (All related charges) Outpatient Hospital Lab/X-ray (All related charges) Outpatient Independent Lab/X-ray (All related diarges) Physician Services Office Visit (InGudes examination, treatment, in office surgery, lab, x-ray, chemotherapy/radiation therapy, tests and supplies provided and billed by Physician at the time of the office visit, except infusion therapy and physical therapy. In-Office Services (Without Office Visit billed) PPO Benefit Non-PPO Benefit 90% after 70% after Deductible Deductible 90% after 70% after Deductible Deductible $ 75 Co-pay $ 75 Co-pay Then 90% after Then 70% after Deductible Deductible for non emergency care 90% after 70% after Deductible Deductible 90% after 70% after Deductible Deductible 90% after 70% after Deductible Deductible 100% after 70% after $30 Co-pay* Deductible 100% 70% after Deductible Waived Deductible *If charges are less than $30, Co-pay is actual charge Allergy Testing 100% after 70% after $30 Co-pay* Deductible Allergy Serum and Injections Second Surgical Opinion Volurrtary Second Surgical Opinion Maximum benefit payable per occurrence All Other Physician Services 100% 70% after Deductible Waived Deductible 100% 100% Deductible Waived Deductible Waived $100 $100 90% after 70% after Deductible Deductible SCHEDULE OF BENEFITS (Cont'd.) Maternity (Employees & Covered Dependents) ~•~° (Including prenatal, delivery and postnatal care) Office Visit Co-pay does not apply Alternative Birthing Center PPO Benefit NQn-PPO Benefit 90% after 70% after Deductible Deductible 100% 70% after Deductible Waived Deductible Routine Newborn Care Inpatient Hospital nursery charges and pediatric care. Payable under covered mother's claim. Baby must be added as a Dependent within thirty (30) days of birth to be eligible for this benefit Maximum Number of Days Dialysis/Infusion Therapy Wig following Chemotherapy/Radiation Therapy Lifetime Maximum Maximum Benefit Physical Therapy Occupational Therapy Speech Therapy Restorative on the same basis as an Illness Maximum Lifetime Benefit for Down Syndrome Durable Medical Equipment (DME)/ Medical Supplies Orthotics Chiropractic Expense Benefits Calendar Year Maximum Benefit (Includes X-rays) Office Visit Co-pay does not apply Chiropractic Benefits do not apply to Annual Out-of-Pocket Maximum. 90% after 70% after Deductible Deductible 5 5 90% after 70% after Deductible Deductible 1 1 $125 $125 90% after 70% after Deductible Deductible 90% after 70% after Deductible Deductible 90% after 70% after Deductible Deductible $5,000 $5,000 90% after 70% after Deductible Deductible 90% after 70% after Deductible Deductible 90% after 70% after Deductible Deductible $5,000 $5,000 SCHEDULE OF BENEFITS (Cont'd.) PPO Benefit Non-PPO Benefit ~yrr Long Term Care* Deductible Deductible Maximum Donor Benefit $5,000 $5,000 Payable under recipient's claim. * Note: Donor Expenses do not apply to the Annual Out-Of-Pocket Maximum. Rehabilitation Faality 90% after 70% after Pre-certification required Deductible Deductible Skilled Nursing Facility 90% after 70% after Pre-certification required Deductible Deductible Maximum Benefit per confinement 180 Days 180 Days Lifetime Maximum 365 Days 365 Days Home Health Care 90% after 70% after Deductible Deductible Lifetime Maximum Benefit $20,000 $10,000 Hospice 90% after 70% after Pre-certification required Deductible Deductible Lifetime Maximum Benefit $10,000 $5,000 Private Duty Nursing 90% after 70% after Deductible Deductible Lifetime Maximum Benefit $10,000 $10,000 *Prior authorization from the Utilization Review Company is required for all Long Term Care. The Plan's internal Lifetime and Calendar Year Maximum Benefits for Long Term Care may be waived if Medical Case Management or the Utilization Review Company directs the treatment. Organ and Tissue Transplants 90% after 70% after Non-experimental transplants only Deductible Deductible (See plan document for Coverage of Organ and Tissue Transplants) Donor Expenses* 90% after 70% after Mental & Nervous Conditions, Chemical Dependency, Druq and Substance Abuse Inpatient and Psychiatric 90% after 70% after Day Treatment Facility Deductible Deductible Inpatient Maximum Number of Days per Calendar Year 30 30 Psychiatric Day Treatment Faality Maximum Number of Days per Calendar Year 60 60 Office Visit 90% after 70% after Office Visit Co-pay does not apply Deductible Deductible err' SCHEDULE OF BENEFITS (Cont'd.) PPO Benefit Non-PPO Benefit Maximum Benefit Payable per Visit $100 $100 Mental 8~ Nervous Conditions; Chemical Limited to 3 Series of Dependency; Drug and Substance Abuse Treatment Treatments per Lifetime* Mental & Nervous Conditions; Chemical Dependency; Drug and Substance Abuse Benefits do not apply to Annual Out-of-Pocket Maximum. * A series of treatments is a planned, structured, organized program which may include inpatient or outpatient treatment and is complete when the covered individual is discharged on medical advice from inpatient care, day treatment, or outpatient treatment without lapse in treatment or when a person fails to materially comply with the treatment program for a period of thirty (30) days. A separate series of treatments commences when a period of six (6) months has lapsed since last occurrence. TemporomandibularJcint Syndrome (TMJ) 90% after 70% after Deductible Deductible Lifetime Maximum Benefit $2,500 $2,500 Sleep Disorders 90% after 70% after Covered on the same basis as any Illness Deductible Deductible Preventive and Wellness Care Benefits This benefit is payable for Covered Procedures incurred as part of a Preventive and Wellness Care Program and is not payable for treatment of a diagnosed Illness or Injury. Services must be identified and billed as routine or part of a routine physical exam. Covered Wellness Procedures: 1. Annual Routine Physical Exam (including lab, x-ray and other medical screening procedures) 2. Annual Pap Smear/Gynecological Exam 3. Annual Mammography (routine) -age thirty-five (35) and older 4. Annual PSA test (routine) 1. Well-Baby CareJVllell-Child Care (other than Routine Newborn) 6. Routine Immunizations Maximum Wellness Benefit Per Calendar Year Per Covered Person $500 $500 Preventive and Wellness Expenses in excess of Calendar Year Maximum Benefit Not covered Not covered Office Visit for Covered Wellness Procedures 100% after 70% $30 Co-pay All Other Covered Medical Expenses, not 90% after 70% after listed in the Schedule of Benefits (subject Deductible Deductible to Plan Maximums and Limitations), are payable at applicable Benefit Percentage after satisfying the Calendar Year Deductible. OUT-OF-AREA BENEFIT The "Out-of--Area" Benefit applies to Covered Charges for a Covered Person living or traveling outside of the geographical zip code area serviced by the Preferred Provider Organization (PPO). Out-of-Area Benefit Calendar Year Deductible Per Covered Person $500 Family Limit* $1,000 Benefit Percentage 80% (ur~ess otherwise noted) Benefit Percentage/Annual Stop Loss Maximum 80% of $10,000 (unless otherwise noted) 100% thereafter Annual Out-of-Pocket Maximum (In Addition to Deductible) Per Covered Person $2,000 Family Limit* $6,000 Physician Office Visit 80% after Deductible Accidental Injury 80% after Deductible Deductible Waived first 90 days Hospital Emergency Room 90% after Deductible Medical Emergency Hospital Emergency Room 90% after $50 Co-pay Non-Medical Emergency Deductible Applies Routine Newborn Care 80% after Deductible Mental & Nervous Conditions, Chemical Dependency, Drug and Substance Abuse Inpatierrt/OutpatientTreatrnent Facility 80% after Deductible Office Visit 80% after Deductible (see page 10 for Benefits) Chiropractic Care 80% after Deductible (see page 9 for Benefits) Preventive and Wellness Care 80% after Deductible Calendar Year Maximum Wellness Benefit $500 (see page 11 for Covered Procedures) Out-of--Area Covered Expenses are listed in The Plan's Schedule of Benefits and are subject to all Plan Maximums and Limitations as previously outlined in the Schedule of Benefits. "Applies collectively to all Covered Persons in the same family. NOTE: The Calendar Year Deductible, Annual Out-of-Pocket Maximum, Calendar Year Maximum Benefrt and Lifetime Maximum Benefrt are combined for PPO, Non-PPO and Out-of-Area Covered Charges. PRESCRIPTION DRUG PLAN Prescription Card Service Supply Limit Generic Drugs Brand Name Drugs Brand Name Drugs not on formulary Mail Order Service Supply Limit Generic Drugs Brand Name Drugs Brand Name Drugs not on formulary 30 days 100% after ~ 5 Co-pay 100% after ~ 35 Co-pay 100% after ~ 50 Co-pay 100 days 100% after ~ 15 Co-pay 100% after ~ 70 Co-pay 100% after ~ 100 Co-pay If the Pharmacy charge is less than the Generic or Brand Co-pay, then the actual charge will become the Co-pay. Generic and Brand Name Co-payments apply separately to each prescription and refill and do not apply to the Calendar Year Deductible or Annual Out-of-Pocket Maximum. To be covered, prescription drags must be: 1. Purchased from a partiapating licensed pharmaast; and 2. Dispensed to the Covered Person for whom they are prescribed. Definitions Brand Name Drugs Trademark drugs or substances marketed by the original manufacturer whose patent rights are still in effect. Generic Drugs Drugs or Substances which: 1. Are not trademark drugs or substances; 2. Are legally substituted for trademark drugs or substances; and 3. Are legally prescribed by a Qualified Prescriber. Prescription Drugs 1. Drugs or medicines which are prescribed by a Qualified Prescriber for the treatment of Illness, injury, or pregnancy; 2. Injectable insulin; 3. Oral contraceptives; and 4. Prenatal vitamins. Qualified Prescriber A licensed Physician, Dentist, or other health care Practitioner who may, in the legal scope of hill her practice, prescribe drags or medicnes. Drus~ Utilization Review The Plan includes a Drug Utilization Review program which is automatically administered by the pharmadst through a nationwide computer network that verifies the eligibility of each Covered Person's card and protects the Covered Person from conflicting prescriptions which might prove harmful if taken at the same time. This program also guarris against duplication of medications and incorrect dosage levels. Prescription Drus~ Plan - Druos Covered 1. Legend drugs (drugs requiring a prescription by federal taw). See Exclusion list below for exceptions. 2. Insulin on prescription. 3. Disposable insulin needles/syringes and other necessary diabetic supplies on prescription. 4. Tretinoin, all dosage forms (e.g. Retin-A), for individuals to the age of twenty-six (26) years. 5. Compounded medication of which at least one ingredierrt is a prescription legend drug. 6. Any other drug which under the applicable state law may only be dispensed upon the written prescription of a Physidan or other lawful prescriber. 7. Legend oral contraceptives. 8. Prenatal vitamins. 9. ADD (Attention Defidt Disorder~ADHD (Attention Defidt Hyperactivity Disorder) drugs. 10. Drugs prescribed for impotence/sexual dysfunction. 11. Imitrex, pill and injectable. Prescription Drug Plan -Exclusions 1. Interferon Beta -1 B (Betaseron) 2. Prescription vitamins except prenatal. 3. Contraceptive patches. 4. Stadol. 5. Injectable form of legend drugs. 6. Contraceptive devices. 7. Anorectics (any drug used for the purpose of weight loss). 8. Growth hormones. 9. Immunization agents, biological sera, blood or blood plasma. 10. Infertility medications. 11. Levonorgestrel (Norplarrt). 12. Drugs for the treatment of alopecia (baldness). 13. Non-legend drugs other than those listed above. 14. Smoking deterrent medications or any other smoking cessation aids, all dosage forms. 15. Tretinoin, all dosage forms (e.g. Retin-A), for individuals twenty-six (26) years of age or older. 16. Therapeutic devices or appliances, including needles, syringes, support garments and other non-medical substances, regardless of intended use, except those listed above. 17. Charges for the administration or injection of any drug. 18. Prescriptions which a Covered Person is entitled to receive without charge from any Worker's Compensation laws. 19. Drugs labeled "Caution-limited by federal law to investigational use," or experimental drugs, even though a charge is made to the individual. 20. Medication which is to be taken by or administered to an individual, in whole or in part, while he/she is a patient in a licensed Hospital, rest home, sanitarium, extended care fadlity, convalescent Hospital, nursing home or similar institution which operates on its premises, or allows to be operated on its premises, a fadlity for dispensing pharrnaceutical. 21. Any prescription refilled in excess of the number specified by the Physidan, or any refill dispensed after one year from the Physidan's original order. NOTE: Drugs excluded from the Prescription Drug Plan, such as injectables, which are determined to be Covered Charges under Major Medical Expense Benefits, are subject to the Calendar Year Deductible and payable at 75%. Prescription drugs covered under the Prescription Drug Plan are not subject to the Pre-existing Condition Exclusion Limitation of the Plan. Prescription Drugs purchased outside of the Prescription Drug Plan will not be eligible for benefits under the Plan. SAMPLE SCHEDULE OF BENEFITS Major Medical Benefits for Covered Persons Benefit Levels for services rendered in the geographical area serviced by the Preferred Provider ~rr+ Organization (PPO): The "PPO Benef~" level applies to services rendered by a Partiapating Provider in the designated PPO Network; the "Non-PPO Benefitt" level applies to services rendered by providers other than Partiapating Providers (Non- Network). In addition, the "PPO Benefit" level applies to the following situations: 1. If a Partigpating Provider refers a Covered Person to a facility which is not a Partiapating Provider because no appropriate Partiapating Provider facility is available; 2. If a Partiapatirxl Provider refers a Covered Person to a Physiaan who is not a Participating Provider because there is no appropriate speaalist available among Participating Providers; and 3. If a Medical Emergency or initial treatment of an Acadental Injury requires services of a Non-partiapating Provider. PPO Benefit Non-PPO Benefit Lifetime Major Medical Maximum Benefit Per Covered Person $1,000,000 $1,000,000 Health Reimbursement Arrangement Not Applicable Calendar Year Deductible (No Last Quarter Deductible Carryover) Per Covered Person $ 1,500 $ 4,000 Family Limit* $ 4,000 $ 12,000 Benefit Percentage 80°l° of $20,000 60% of $20,000 (Unless otherwise noted) 100% thereafter 100% thereafter Annual Out-of-Pocket Maximum ~"'' (In addition to Deductible and Co-pays) Per Covered Person $ 4,500 $12,000 Family Limit* $ 9,000 $36,000 Inpatient Hospital Services 80 % after 60% after (All related charges) Deductible Deductible Pre-notification required Room and Board Limit Semi-Private Average Semi-Private Intensive Care Limit Negotiated PPO Usual and Customary Fee Schedule Hospital Emergency Room 80% after 80% after Medical Emergency Deductible Deductible (See Medical Emergency definition in plan document, Page --) Hospital Emergency Room 80% after $100 Co-pay 80% after $100 Co-pay Non-Medical Emergency Deductible Applies Deductible Applies (See Medical Emergency definition in plan document, Page --) Pre Admission Testing 100% 100% (Within 10 days of Hospital Confinement) Deductible Waived Deductible Waived NOTE: The Calendar Year Deductible and Annual Out-of-Pocket Maximum are determined by in network PPO Covered Charges. Upon reaching the Annual Out-of-Pocket Maximum, Covered Medical Expenses are payable at 100% for the remainder of the Calendar Year. The Lifetime and Calendar Year Maximum Benefits are PPO Covered Charges. Non-PPO out of pocket maximums are determined separately. *Applies collectively to all Covered Persons in the same family. SCHEDULE OF BENEFITS (Cont'd) Accidental Injury Deductible NOT waived Ambulance Service Minor Emergency Medical Clinic Outpatient SurgerylAmbulatory Surgical Center (All related charges) Outpatient Hospital Lab/X-ray (All related charges) Outpatient Independent Lab/X-ray (All related charges) Physician Services Office Visit (Includes examination, treatment, in office surgery lab, x-ray, chematfierapy/radiation therapy, tests and supplies provided and billed by Physician at the time of the office visit, except infusion therapy and physical therapy. In-Office Services (Without Office Visit billed) ''If changes are less than $60, Co-pay is actual charge Allergy Testing Allergy Serum and Injections Second Surgical Opinion Voluntary Second Surgical Opinion Maximum benefit payable per occurrence All Other Physician Services PPO Benefit 80% after Deductible 80% after Deductible $ 100 Co-pay Then 80% after Deductible 80% after Deductible 80% after Deductible 80% after Deductible 100% after $ 40 Co-pay'` 100% Deductible Waived 100°/. after $60 Co-pay* 100% Deductible Waived 100% Deductible Waived $100 80°!° after Deductible Non-PPO Benefit 60% after Deductible 60% after Deductible $ 100 Co-pay Then 60% after Deductible for non emergency care 60% after Deductible 60% after Deductible 60% after Deductible 60% after Deductible 60% after Deductible 60% after Deductible 60% after Deductible 100% Deductible Waived $100 60% after Deductible SCHEDULE OF BENEFITS (Cont'd.) Maternity (Employees 8 Covered Dependents) (Including prenatal, delivery and postnatal care) Office Visit Co-pay does not apply Alternative Birthing Center PPO Benefit Non-PPO Benefit 80% after 60% after Deductible Deductible 100% 60% after Deductible Waived Deductible Routine Newborn Care Inpatient Hospital nursery charges and pediatric care. Payable under covered mother's claim. Baby must be added as a Dependent within thirty (30) days of birth to be eligible forthis benefd Maximum Number of Days Dialysis/lnfusion Therapy Wig following Chemotherapy/Radiation Therapy Lifetime Maximum Maximum Benefit Physical Therapy Occupational Therapy Speech Therapy Restorative on the same basis as an Illness Maximum Lifetime Benefit for Down Syndrome Durable Medical Equipment (DME)/ Medical Supplies Orthotics Chiropractic Expense Benefits Calendar Year Maximum Benefit (Includes X-rays) Office Visit Co-pay does not apply Chiropractic Benefits do not apply to Annual Out-of-Pocket Maximum. 80°!° after 60% after Deductible Deductible 5 5 80% after 60% after Deductible Deductible 1 1 $125 $125 80% after 60% after Deductible Deductible 80% after 60% after Deductible Deductible 80% after 60% after Deductible Deductible $5,000 $5,000 80% after 60% after Deductible Deductible 80% after 60% after Deductible Deductible 80% after 60% after Deductible Deductible $5,000 $5,000 SCHEDULE OF BENEFITS (Cont'd.) PPO Benefit Non-PPO Benefit Long Tenn Care* ~,, Rehabilitation Faality 80% after 60% after Pre-certification required Deductible Deductible Skilled Nursing Faality 80% after 60% after Pre-certification required Deductible Deductible Maximum BenefR per confinement 180 Days 180 Days Lifetime Maximum 365 Days 365 Days Home Health Care 80% after 60% after Deductible Deductible Lifetime Maximum Benefit $20,000 $10,000 Hospice 80% after 60% after Pre-certification required Deductible Deductible Lifetime Maximum Benefit $10,000 $5,000 Private Duty Nursing 80% after 60% after Deductible Deductible Lifetime Maximum Benefd $10,000 $10,000 *Prior authorization from the Utilization Review Company is required for all Long Term Care. The Plan's internal Lifetime and Calendar Year Maximum Benefits for Long Term Care may be waived if Medical Case Management or the Utilization Review Company directs the treatment. Organ and Tissue Transplants 80% after 60% after Non-experimental transplants only Deductible Deductible (See plan document for Coverage of Organ and ~,,,,, Tissue Transplants) Donor Expenses* 80% after 60% after Deductible Deductible Maximum Donor Benefit $5,000 $5,000 Payable under recipient's Gaim. * Note: Donor Expenses do not apply to the Annual Out-Of-Packet Maximum. Mental & Nervous Conditions, Chemical Dependency, Drug and Substance Abuse Inpatient and Psychiatric 80% after 60% after Day Treatment Faality Deductible Deductible Inpatient Maximum Number of Days per Calendar Year 30 30 Psychiatric Day Treatment Facility Maximum Number of Days per Calendar Year 60 60 Office Visit 80% after 60% after Office Visit Co-pay does not apply Deductible Deductible SCHEDULE OF BENEFITS (Cont'd.) PPO Benefit Non-PPO Benefit Maximum Benefit Payable per Visit $100 $100 Mental & Nervous Conditions; Chemical Limited to 3 Series of Dependency; Drug and Substance Abuse Treatment Treatments per Lifetime* Mental & Nervous Conditions; Chemical Dependency; Drug and Substance Abuse Benefits do not apply to Annual Out-of-Pocket Maximum. * A series of treatments is a planned, structured, organized program which may indude inpatient or outpatient treatment and is complete when the covered individual is discharged on medical advice from inpatient care, day treatment, or outpatient treatment without lapse in treatment or when a person fails to materially comply with the treatment program for a period of thirty (30) days. A separate series of treatments commences when a period of six (ti) months has lapsed since last occurrence. TemporomandibularJomt Syndrome (TMJ) 80% after 60% after Deductible Deductible Lifetime Maximum Benefit $2,500 $2,500 Sleep Disorders 80% after 60°l° after Covered on the same basis as any Illness Deductible Deductible Preventive and Wellness Care Benefits This benefit is payable for Covered Procedures incurred as part of a Preventive and Wellness Care Program and is not payable for treatment of a diagnosed Illness or Injury. Services must be identified and billed as routine or part of a routine physical exam. Covered Wellness Procedures: 1. Annual Routine Physical Exam (induding lab, x-ray and other medical screening procedures) 2. Annual Pap Smear/Gynecological Exam 3. Annual Mammography (routine) -age thirty-five (35) and older 4. Annual PSA test (routine) 1. Well-Baby CareNVell-Child Care (other than Routine Newborn) 6. Routine Immunizations Maximum Wellness Benefit Per Calendar Year Per Covered Person $500 $500 Preventive and Wellness Expenses in excess of Calendar Year Maximum Benefit Not covered Not covered Office Visit for Covered Wellness Procedures 100% after 60% $ 40 Co-pay All Other Covered Medical Expenses, not 80% after 60% after listed in the Schedule of Benefits (subject Deductible Deductible to Plan Maximums and Limitations), are payable at applicable Benefit Percentage after satisfying the Calendar Year Deductible. OUT-0F-AREA BENEFIT The "Out-of--Area Benefd applies to Covered Charges for a Coverod Person living or traveling outside of the geographical zip code area serviced by the Preferred Provider Organization (PPO). Out~f--Area Benefit Calendar Year Deductible Per Covered Person $1,500 Family Limit* $ 3,000 Benefit Percentage 80% (unless otherwise noted) Benefit Percentage/Annual Stop Loss Maximum 80% of $20,000 (unless otherwise noted) 100% thereafter Annual Out-of-Pocket Maximum (In Addition to Deductible) Per Covered Person $ 4,500 Family Limit' $ 9,000 Physician Office Visit 80% after Deductible Accidental Injury 80% after Deductible Deductible Waived first 80 days Hospital Emergency Room 80% after Deductible Medical Emergency Hospital Emergency Room 80% after $10000-pay Non-Medical Emergency Deductible Applies Routine Newborn Care 80% after Deductible Mental & Nervous Conditions, Chemical Dependency, Drug and Substance Abuse Inpatierrt/Outpatient Treatment Faality 80% after Deductible Office Visit 80% after Deductible (see Plan Document for Benefrts) Chiropractic Care 80% after Deductible {see Plan Document for Benefits) Preventive and Wellness Care 80% after Deductible Calendar Year Maximum Wellness Benefit $500 (see Plan Document for Covered Procedures) Out-of--Area Covered Expenses are listed in The Plan's Schedule of Benefits and are subject to all Plan Maximums and Limitations as previously outlined in the Schedule of Benefits. "Applies collectively to all Covered Persons in the same family. NOTE: The Calendar Year Deductible, Annual Out-of-Pocket Maximum, Calendar Year Maximum Benefd and Lifetime Maximum Benefd are combined for PPO, Non-PPO and Out-of-Area Covered Charges. PRESCRIPTION DRUG PLAN Prescription Card Service Supply Limit Generic Drugs Brand Name Drugs Brand Name Drugs not on formulary Mail Order Service Supply Limit Generic Drugs Brand Name Drugs Brand Name Drugs not on formulary 30 days 100% after ~ 15 Co-pay 100% after ~ 45 Co-pay 100% after ~ 60 Co-pay 100 days 100% after ~ 30 Co-pay 100% after ~ 90 Co-pay 100% after ~ 120 Co-pay If the Pharmacy charge is less than the Generic or Brand Co-pay, then the actual charge will become the Co-pay. Generic and Brand Name Co-payments apply separately to each prescription and refill and do not apply to the Calendar Year Deductible or Annual Out-of-Pocket Maximum. To be covered, prescription drugs must be: 1. Purchased from a partiapating licensed pharmaast; and 2. Dispensed to the Covered Person for whom they are prescribed. Definitions Brand Name Drugs Trademark drugs or substances marketed by the original manufacturer whose patent rights are still in effect. Generic Drugs Drugs or Substances which: 1. Are not trademark drugs or substances; 2. Are legally substituted for trademark drugs or substances; and 3. Are legally prescribed by a Qualified Prescriber. Prescription Drugs 1. Drugs or medicines which are prescribed by a Qualified Prescriber for the treatment of Illness, injury, or pregnancy; 2. Injectable insulin; 3. Oral contraceptives; and 4. Prenatal vitamins. Qualified Prescriber A licensed Physician, Dentist, or other health care Practitioner who may, in the legal scope of his/ her practice, prescribe drugs or medicines. Drug Utilization Review The Plan inGudes a Drug Utilization Review program which is automatically administered by the pharmaast through a nationwide computer network that verifies the eligibility of each Covered Person's card and protects the Covered Person from conflicting prescriptions which might prove harmful if taken at the same time. This program also guarrJs against duplication of medications and incorrect dosage levels. Prescription Druta Plan - Druos Covered ~w 1. Legend drugs (drugs requiring a prescription by federal law). See Exclusion list below for exceptions. 2. Insulin on prescription. 3. Disposable insulin needles/syringes and other necessary diabetic supplies on prescription. 4. Tretinoin, all dosage forms (e.g. Retin-A), for individuals to the age of twerrty-six (26) years. 5. Compounded medication of which at least one ingredient is a prescription legend drug. 6. Any other drug which under the applicable state law may only be dispensed upon the written prescription of a Physiaan or other lawful prescriber. 7. Legend oral contraceptives. 8. Prenatal vitamins. 9. ADD (Attention Defeat Disorder)/ADHD (Attention Defeat Hyperactivity Disorder) drugs. 10. Drugs prescribed for impotencelsexual dysfunction. 11. Imitrex, pill and injectable. Prescription Drusl Plan -Exclusions 1. Interferon Beta -1 B (Betaseron} 2. Prescription vitamins except prenatal. 3. Contraceptive patches. 4. Stadol. 5. Injectable form of legend drugs. 6. Contraceptive devices. 7. Anorectics (any drug used forthe purpose of weight loss}. 8. Growth hormones. 9. Immunization agents, biological sera, blood or blood plasma. 10. Infertility medications. 11. Levonorgestrel (Norplant). 12. Drugs for the treatment of alopeaa (baldness). 13. Non-legend drugs other than those listed above. 14. Smoking deterrent medications or any other smoking cessation aids, all dosage forms. 15. Tretinoin, all dosage forms (e.g. Retin-A), for individualstwenty-six (26) years of age or older. 16. Therapeutic devices or appliances, including needles, syringes, support garments and other non-medical substances, regardless of intended use, except those listed above. 17. Charges for the administration or injection of any drug. 18. Prescriptions which a Covered Person is entitled to receive without change from any Worker's Compensation laws. 19. Drugs labeled "Caution-limited by federal law to investigational use," or experimental drugs, even though a charge is made to the individual. 20. Medication which is to be taken by or administered to an individual, in whole or in part, while he/she is a patient in a licensed Hospital, rest home, sanitarium, extended care faality, cornalescent Hospital, nursing home or similar institution which operates on its premises, or allows to be operated on its premises, a facility far dispensing pharmaceutical. 21. Any prescription refilled in excess of the number specified by the Physiaan, or any refill dispensed after one year from the Physiaan's original order. NOTE: Drugs excluded from the Prescription Drug Plan, such as injectables, which are determined to be Covered Charges under Major Medical Expense Benefits, are subject to the Calendar Year Deductible and payable at 75%. Prescription drugs covered under the Prescription Drug Plan are not subject to the Pre-existing Condition Exclusion Limitation of the Plan. Prescription Drugs purchased outside of the Prescription Drug Plan will not be eligible for benefits under the Plan. 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Employers may choose from our broad portfolio of products and services to develop an employee benefit package meeting their specific needs and budget requirements. Our people are dedicated to serving you with innovative, cost-effective products and superior, personalized service. We welcome the opportunity to introduce you to Mutual of Omaha's products and services. Please remember, as amulti-product carrier, Mutual of Omaha can simplify your benefit administration requirements as the single-source provider of your employee benefits program. Broad Array we offer you the convenience and efficiency of buying from one source. Mutual of Omaha's portfolio of group products includes: of Products • Term Life -Basic, Supplemental & Voluntary ~ Services Options include: - AD&D - Dependent Life • Dental - PPO & Indemnity Options include: - Comprehensive or preventive benefits - Adult and child orthodontia - Scheduled or U&C plans • Medical - PPO, Indemnity, POS & HMO Options include: - Vision - Prescription Drugs - Flexible Spending Accounts (FSA) m - Consumer Driven Health Plans (CDHP) available for PPO/Indemnity only • Disability -Short Term & Long Term (STD & LTD) Options include: - Coordinated STD & LTD claims management - "Back to work" programs • Employee Assistance Program (EAP) • Worksite Marketing -Voluntary products with complete enrollment services. Options include: - Life -Universal & Term - AD&D - Dental - PPO & Indemnity - Criticallllness - Disability -Short Term & Long Term Retirement Plans Options include: - 401 (k) - Defined Benefit Plans - Group Annuities - Separate Accounts - Guaranteed Investment Contracts (GICs) cirri Mutual of Omaha t 1003 Mutual of Omaha continues People Meeting Employee Benefit Needs Sales c& With sales and service offices nationwide, Mutual of Omaha responds quickly to your benefit questions and service needs. Service Leadership & Experience Financial Strength & Security Mutual of Omaha Group Benefit Services is one of the leading providers and administrators of group plans in America. • Annual group revenues of approximately $2.5 billion • Group benefits paid each working day total nearly $5.9 million • Currently administer over 12,300 plans • Assets exceed $15.4 billion • Policyholder surplus of $1.65 billion Group Benefit Services is backed by the financial strength of Mutual of Omaha Insurance Company and United of Omaha Life Insurance Company. Both consistently eam high ratings from national financial ratings agencies, illustrating our financial stability and sound operating performance. A.M. Best Company, Inc. A (Excellent) February, 2003 (for overall financial strength and Third highest of 15 abili to meet contractual obli ations Moody's Investors Service Aa3 (Excellent) August, 2002 (for long-term financial performance, Fourth highest of 21 including improving operational trends, excellent asset quality and investment mans ement, and stron ca italization Standard & Poor's AA- (Very Strong) September, 2003 (for financial ability to meet the Fourth highest of 18 obligations of our insurance policies and their terms Mutual of Omaha 1003 Product Overview -Basic Life and AD&D Providing the Protection You Expect Class(es) 01 Alternate 1 Mutual of Omaha is pleased to present this proposal designed to meet your Group Life Insurance needs. When comparing our product, service and cost, we believe you'll find our Basic Life offers great value. Coverages) This information applies to: • Basic Life and AD&D Accelerated For qualified persons with a terminal illness we pay: Death Benefit A sum equal to 50% of the basic life insurance benefit • Up to a maximum of $100,000 This amount is subtracted from the principal sum prior to payment of a death benefit. Grief and Beneficiaries will receive information that will help them cope with the loss of a loved one. This brochure discusses difficult issues like feelings or how Healing to help a grieving child. We will provide this to all beneficiaries who receive an interest free checking account, as outlined above. Layoff/Leave Life insurance will be continued to the end of the month following the individual's layoff or leave of absence approved by the employer. of Absence Conversions Individuals covered under this plan, who cease to be eligible for coverage, may convert to an individual policy. The conversion policy: • Does not require evidence of good health • May contain limitations • Must be applied for within 31 days of becoming ineligible • Can be any of our individual life insurance policies offered, except term insurance, up to the terminated amount of coverage =,'rr~'' Mutual of Omaha 2100 Plan Summary -Basic Life and AD&D Class(es) Ol Employee - Basic Life fiat) Guarantee Issue Age Reductions Waiver of Premium Accelerated Death Benefit Employee - Basic ADD Alternate 1 Amount of Basic Life Insurance: class ol: $lo,ooo • In the event of death, the Basic Life Insurance benefit will equal the amount of Basic Life Insurance after any age reductions minus any accelerated death benefits previously paid under this plan. Basic Life: All amounts of Life Insurance are Guarantee Issue. No evidence of insurability will be required because of the Amount of Life Insurance. At A¢e 65 70 75 80 85 90 Benefits reduce to: 65% 45% 30% 20% 15% 10% Benefits terminate at retirement. Life insurance continues for totally disabled employees without payment of premium if: • Disability begins while the employee is insured by us • Disability begins prior to age 60 and terminates at age 65 • Proof of disability is given to us, prior to the end of the Disability Elimination Period (first 9 months of disability) • Proof of continued disability is verified periodically, according to the terms of the contract Amount of Accelerated Death Benefit: 50% of the amount of Life Insurance in force, but not to exceed $100,000. The Accidental Death & Dismemberment (AD&D) Principal Sum amount is: • Equal to the amount of Basic Life Insurance excludes retired covered persons. This proposal does not illustrate state-mandated benefits. They will be included in your plan as required. ~rrr' 4 Mutual of Omaha 3110 Plan Summary -Basic Life and AD&D continued Class(es) 01 Alternate 1 AD&D The AD&D benefit is paid if an employee is injured as a result of an accident, and that injury is independent of sickness and all other causes. We will pay the benefit shown in the Table indicated below (according to the following losses): ADD Benefit Schedule Loss Benefit Life Principal Sum Both Hands Both Feet Entire Sight of Both Eyes. One Hand and One Foot One Hand and Entire Sight of One Eye One Foot and Entire Sight of One Eye Speech and Hearing (both ears) Entire Sight of One Eye One-half Principal Sum Speech or Hearing (both ears) One Hand or One Foot Loss of Thumb & Index Finger of same One-fourth Principal Sum Hand AD&D we will not pay for any loss which: • results from intentionally self-inflicted injury or sickness, suicide or Exclusions attempted suicide • results from participation in a riot or in the commission of a felony • results from an act of declared or undeclared war or armed aggression • is incurred while the covered person is on active duty or training in the Armed Forces, National Guard or Reserves of any state or country and for which any governmental body or its agencies are liable • is caused by intentional, self-infliction of carbon monoxide poisoning emanating from a motor vehicle • is caused by the covered person while intoxicated or under the influence of any controlled drug • results in injuries the covered person receives while riding in any aircraft engaged in racing, endurance tests, or acrobatic or stunt flying For a complete list of exclusions, please contact your representative. This proposal does not illustrate state-mandated benefits. They will be included in your plan as required. Mutual of Omaha 3110 Eligibility -Basic Life and AD&D Class(es) 01 Alternate 1 ,~, Who is Eligible? Employees All active, permanent full-time persons may be covered. We require a minimum number of 30 hours per work week. When Coverage Begins Current Employees New Hires Evidence of Good Health Policy Issuance Exceptions are shown in this table. Coverage for most employees insured under the current plan of life insurance begins on the effective date of the plan. Employees who are: Coverage begins... Confined when confinement ends. • in a hospital • in an institution • in a care facility • at home not at work due to injury or sickness when the employee returns to work. a late applicant when we approve the application. Coverage for employees hired after the effective date of the plan will be effective either on: • First day following the completion of any qualifying period • First of the month following the completion of any qualifying period Evidence of good health is required if • Enrollment is received after 31 days of becoming eligible • You apply for reinstatement of coverage after the policy has lapsed We provide the following for your group: • Master document for the plan sponsor • Administrative supplies • Benefits document for employees Mutuat of Omaha 6 2000 Claims Processing -Life and AD&D Timely, Accurate and Cost-Effective Mutual of Omaha's group life claim processing and customer services consistently meets or exceeds industry standards for timeliness and accuracy. These services are greatly appreciated at a difficult time when employees and beneficiaries need it the most. Service we set high standards for processing claims right the first time. These standards assure you of accurate and efficient claims processing with every Warranty claim submission. Measurements we measure: • Payment Accuracy • Time Service Payment Payment accuracy measures if the benefit amount and beneficiary was paid correctly. Our payment accuracy standard is 98%. Accuracy Time Service Time Service measures indicate speed of handling a claim. Our claims processing standard is: ^ 95% within 5 business days ^ 100% within 10 business days Customer- Mutual of Omaha has alleviated the notification burden that employers and the disabled employees must initiate to waive premium. Customers who centric Life have both Long-Term Disability and non-contributory Basic Term Life Waiver coverages receive seamless transition of information between the LTD claims area to the Life claims area. This allows our Life claims area to Notaficatl'on initiate the Waiver of Premium process with the customer directly. Process Qllallty We have set high standards: Assurance To process your claims right the first time • To assure you we are consistently accurate and efficient • All claims are reviewed by a supervisor • All claims over $100,000 are reviewed by an Officer • Perform quality reviews Mutual of Omaha 7000 Quality Assurance Monitoring the Performance of Our Services Our Medical Management Quality Assurance staff provides ongoing evaluation of all our services. Goals we reach and continually improve upon the following goals: • Monitoring member and provider satisfaction • Initiation of staff development programs • Communication of results to internal committees and departments Guidelines Guidelines enable us to monitor appropriateness in areas such as: • Time service requirements • Policies and procedures SatlSfaCtlOn Member and Provider satisfaction is monitored through annual surveys. Training we monitor our staffs training and re-training needs through: • Survey responses • Quality assurance review • National accreditation requirements Communication we have a corporate quality committee that utilizes results to assure quality improvements are made. Mutual of Omaha 8 5002 Quality Assurance ~o>~t~>~ued Our Claims Quality Assurance staff provides ongoing evaluation of claim processing. Review Quality Assurance Reviews affirm and measure our commitments. The types of reviews we use are: Types • Pre-disposition • Post-disposition • Systems • Audits Pre Depositl'on The unit claims supervisor conducts this review and includes: • 100% review for all new examiners • Claims which exceed a specified dollar limit for all examiners Post-Dispositl'ou Post-disposition review includes: • 2% of each examiners daily production • 1 % of each analyst's and specialist's daily production • At least one claim per week for each supervisor, manager and customer service representative • Random review of electronic claims each week • Case-specific and focused re-audits as needed System Senior Quality Assurance Specialists compare system data to: • Policy language • Legislative mandates Audits we perform: • Daily quality reviews of selected claims • Annual operational reviews to monitor office performance and identify potential process improvements. Mutual of Omaha 9 5002 Customer Service Overview -Life and AD&D Providing Service You Expect Class(es) 01 Alternate 1 Each client has requirements that are specific to their own organization. Our dedicated service team works with you to meet your requirements. Services You can count on us to: • Be accessible • Document your calls • Respond accurately and promptly • Provide trained personnel • Dedicate a team to your account Toll-Free we provide atoll-free customer service line. It is available from 8:00 a.m to 4:30 p.m. (CST). 1 (800) 775-8805. Llne If more information is needed to answer an inquiry, we call back within 24 hours. Dedicated we dedicate a service team with on-line access to your account. This approach provides: Team • Person to person customer service and claim analyst • Familiarity and knowledge of your plan • Accurate and consistent responses Mutual of Omaha l0 5100 Rate Summary -Life and AD&D Alternate 1 CIaSS Class O1:A11 eligible employees Description Fully Insured we are proposing afully-insured program for: Rates Life Class(es) O1 • AD&D Class(es) O1 Life AD&D err' Unit Lives Monthly Rate Volume Monthly Total Annual Total Per $1000 260 $.20 2,520,500 $ 504.10 $6,049.20 Per $1000 260 $.02 2,520,500 $ 50.41 $ 604.92 Mutual of Omaha li 8100 Rating Criteria -General We have made some assumptions in the preparation of this quote. Changes in these assumptions may impact the rates or fees. These assumptions apply to all coverages quoted unless otherwise noted. Effectl've Date Our proposal assumes an effective date no later than 01/01/2005. Acceptance This proposal is contingent upon Home Office review and acceptance of the completed application for coverage. We recommend you do not cancel or drop existing coverage until you receive notification of our acceptance. State Our proposal assumes the sites state is Texas. SIC We have assumed the applicable Standard Industry Code (SIC) for this group is 9111. Expiratl'on This proposal expires 01/01/2005. LlnZltatlOnS This proposal is subject to our standard product terms, limitations, and exclusions. Please refer to a sample booklet or contract for these details. A sample standard booklet or contract is available upon request. Proposal Our quote is based on our standard product and services. We reserve the right to re-rate or withdraw our proposal prior to the effective date if any of Conditl'ons the following changes: • SIC code • Employer contributions • Information regarding disabled or COBRA participants • For cases that are experience rated - -risk increases based on review of current carrier's claims experience including open or pended claims • Demographics (age, gender, occupation, earnings, location and size) • Plan participation -increase/decrease of 10% or more lives • Laws, regulations and judicial and administrative orders and decisions affecting: - benefits - cost of administration - cost of health care services • Proposed effective date • Benefits or eligibility • Premium tax Mutual of Omaha 12 8000 Rating Criteria -General continued Change in - After the effective date, we reserve the right to change rates or fees on or after the date there is a change in any of these factors resulting from Rates/Fees or relating to: • Any modification or amendment of the plan or our administrative duties • An increase or decrease of 10% or more lives in the number of participants enrolled • An increase in premium tax, guarantee or uninsured fund assessment or other governmental charge based upon or related to premium • A merger or consolidation, or an acquisition or divestiture (through stock, assets or exchange) of all or part of a business enterprise affecting the customer's employee population • The enactment, issuance, amendment, or enforcement of any law, regulation, judicial or administrative order or decision, including, without limitation, any law allowing competing health care providers to bargain collectively with health plans, insurance carriers or health maintenance organizations - In addition to the right to change rates or fees in accordance with the preceding paragraph, we may change rates or fees any time after the most recent Rate Guarantee Date, provided the Company has given at least 30 days advance written notice of the rate or fee increase. Booklets This proposal includes charges for booklet printing in our standard format. Claim Claim processing is handled by: Processing United of Omaha Life Insurance Company Mutual of Omaha 13 8000 Additional Rating Criteria -Life and AD&D Class(es) Ol Alternate 1 We have made some assumptions in the preparation of this quote. Changes in these assumptions may impact the rates or fees. These additional assumptions apply to Basic Life and AD&D. Standard This proposal requires use of our standard system-compatible benefits and contract provisions. Contract • Applicable Federal and State mandates are added at issuance • A sample standard contract, certificate booklet and/or subscription agreement documents are available upon request Underwriting This quote assumes the underwriting company for Life and AD&D will be United of Omaha Life Insurance Company. Company Rate Guarantee Basic Life and AD&D rates are guaranteed for 24 months. r, unding Our quote assumes this coverage is Fully-Insured. This coverage is not eligible for refunds. Section 125 The Certificate will not include complete information regarding the election changes which may be permissible under the employer's Internal Revenue Code Section 125 cafeteria plan. The employer is responsible for establishing and maintaining a written cafeteria plan document and communicating the terms of the plan, including permitted elected changes, to their plan participants. The employer should consult their own legal counsel regarding these issues Ehgll)lhty Requirement Employees --We require employees to work a minimum of 30 hours per work week in order to be eligible. Participation Assumptions -Employee Coverage Minimum Participation Eligible Covered Plan Sponsor Contribution Basic Life & AD&D 100% 260 260 100% Mutual of Omaha 14 8101 ~"~~~ ~erv~ew - ~onsurner-Driven ~iealth Flan Empowering People to Take Personal Responsibility for Their Health Care Health care benefit costs are increasing annually at a double-digit pace, causing employers difficulty in offering benefits necessary to amact and retain the best workforce possible. Mutual of Omaha's Consumer-Driven Health Plan combines high-quality benefits with features designed to engage employees in becoming active consumers of their own health care. The Consumer-Driven Health Plan has web-based tools that help employees make better consumer decisions. Included is access to information on: choosing plan options that fit their lifestyle and budget; provider quality information; status of claims; health and wellness education; and access to personal health reimbursement account activity. What is the Mutual of Omaha's Consumer-Driven Health Plan is apatient-directed health plan that encourages employees to participate more in the cost of Consumer- their health care, become more involved in their personal health care DrlVen Health decisions and come to a higher appreciation of their benefits. Plan ? The plan includes three components: • Group health coverage • A Health Reimbursement Account (HRA) • Web-based tools Benefits to Increased employee satisfaction with health benefits. • Plan design flexibility allows employers to tailor benefit plans to their Employers needs. • Employees see true costs of their health care rather than being insulated through flat dollar copays. • Analysis shows that employees incepted to choose health care services wisely contribute to lower plan utilization without sacrificing their health. • To reduce the potential for adverse selection, we can assist in selecting appropriate plan options and price tags. • If the employer replaces their current plans with our Consumer-Driven Health Plan, all employees will be in one risk pool that may translate into more control in curbing health care costs. • Our Total Care Management programs help manage the care of the small percentage of employees with the highest percentage of claims. • Provides an innovative and attractive benefit package for recruiting and retaining good employees. Mutual of Omaha 7 3810 P'I"~~i~t~~ ~~v~~'~Tiew - Consn~ner-Driven ~eal~l~ Plan continued Empowering People to Take Personal Responsibility for Their Health Care Benefits to The freedom to choose from a menu of benefit options rather than being limited to one pre-determined benefits package. Employees More control over how health care dollars are spent- they appreciate the opportunity to spend their health care dollars their way. • Satisfaction of becoming more personally involved with health care choices and decisions. • Preventive/Routine benefits generally are payable at 100% (up to a predetermined amount), encouraging employees to receive routine care and stay healthy. • Unused HRA funds rollover to future years, building savings for future covered health care expenses when needed (while covered under the plan). • Consumer-friendly web support tools and information that help members make effective and informed benefit decisions. • The freedom to see any provider, but also the benefit of lower out-of- pocket expenses by using preferred providers. • Plan option may realize lower employee premium contributions than the current plan. 'Olrr' Mutual of Omaha 3810 ~irn- ~~'®c~uCt ~w~r~i~w - Consumer-Driven Health Plan continued Empowering People to Take Personal Responsibility for Their Health Care Group Health Mutual of Omaha's Consumer-Driven Health Plan provides: • Health coverage for expenses that exceed the plan's deductible. COVeYage A plan deductible that is generally a high value (e.g., $1,000 - $5,000). • A wide range of deductible, coinsurance and out-of-pocket limits. • Preventive/routine services that can be paid at 100% (up to a predetermined maximum). • A separate prescription drug plan deductible, coinsurance and out-of- pocket limit that - better supports people with chronic conditions - while still involving them in the cost of the prescriptions. Health The HxA is: • Offered in conjunction with the high deductible health coverage plan ReimbursemefZt option. Account (HRA) Funded by the employer with apre-determined amount. • Used by an employee to cover out-of-pocket medical expenses. • Set up so leftover funds roll over from year-to-year as an incentive to employees to use their funds prudently. Flexible In addition to the HRA, our Consumer-Driven Health Plan can also offer a traditional Flexible Spending Account (FSA) option for an additional cost. Spending Account (FSA) Initial Set-Up Fee: $500 Communication Material: $1.55 per eligible employee, as requested annually FSA Fee: $3.75 per participating employee per month (no commission) $4.20 per participating employee per. month (with commission) .r+" Debit Card Fee (optional): $1.50 per participating employee per month Web-Based ~ addition to printed communication materials, Mutual of Omaha's Consumer-Driven Health Plan offers several web-based tools to assist the T'OOIS - employee in making a plan option decision and manage the use of health Pre-enYOllment care expenditures. Included are: • An overview of the Consumer-Driven Health Plan, including how the HRA works. • Sample claim examples to compare against your employee's claim experience. • A worksheet to assist employees in determining which plan option (if applicable) would best meet their needs. • Plan summary information detailing covered services for your company's plan options. • Online provider directory. • Access to health and wellness information, including a health risk assessment. Mutual of Omaha 3810 P~'®duCt ~ve~View -Consumer-Driven Health Plan continued Empowering People to Take Personal Responsibility for Their Health Care • Provider quality of care (through Healthgrades link). • Glossary of commonly used terms. • Frequently Asked Questions about health care coverage. ~rr-' Web Based After enrolling in the Consumer-Driven Health Plan plan, the employee will be able to: Tools - Post-enrollment Access the same information available during pre-enrollment (as described above). • Check medical claims status through online inquiry. • Access their HRA account balances and activity. • Print forms (e.g., full-time student, other insurance). • Access prescription drug information and a list of drug formularies. Value Added Our product offering includes a full array of value-added services that all medical products benefit from: SeYVICG'S A nation-wide network of preferred providers in more than 300 metropolitan areas. • Total Care Management, which integrates all components of health coverage to improve quality of care and help keep costs down with medical management, cost management and pharmacy intervention processes that seek the highest quality health care for the most sensible use of health care dollar. Programs included: / Healthy Pregnancy / Utilization Management / Case Management / Disease Management / Medical Specialty Network / National Ancillary Network ~ptlonS We also offer the option to purchase additional services for your employees: • Web enrollment • Nurse triage services • Debit card option for point-of-service payment of out-of-pocket expenses from the plan member's HRA account • Employee Assistance Program • Behavioral Health Management Mutual of Omaha 10 3810 ~'r®duet overview -Consumer-Driven Health Plan The Health Reimbursement Account ~r-: The Health Reimbursement Account (HRA) is offered in conjunction with a high deductible medical plan and is funded by the employer. Sales/Service Our experienced, professional staff can assist you with: Team Administration • Communications • Enrollment meetings • Compliance with laws affecting HRAs Track A dedicated staff, certified in Flexible Compensation Instruction and members in Employers Council on Flexible Compensation (ECFC), is Record assigned to your HRA account. They bring with them a track record demonstrating: • Quick turnaround of reimbursement checks • Accuracy in administrative services • Experience in administering similar programs since 1986 '' Service The key features of our HRA services are: Features Employee communication packets • Prompt claims reimbursement • Automated medical claim interface • Debit card option • Toll free customer service line • Web site self-service • Automated information line • Administration manual • Prototype plan document and summary plan description • Employer and employee reporting • Data protection 11 Mutual of Omaha 3820 Pr®+~uct (~vervie~v -Consumer-Driven Health Plan continued The Health Reimbursement Account Employee four employees receive a communication packet that helps them understand the HRA program. The packet includes: Communicatz'on • An introduction letter explaining the program • A brochure summarizing how the plan works • An enrollment form • An envelope Prompt Claims Claims are processed daily with a five workday average turnaround from receipt of request to claim payment. CheckslExplanafion of Benefits Reimbursement (EOBs>: • Are mailed directly to the employee's homes. • Can be direct deposited to employee's bank account. rrr` Automated An automated claim interface process is in place to pass eligible medical plan expenses (i.e., deductibles, copays, coinsurance) to the HRA system for Claim Interface automatic processing and payment. This reduces the employee's manual filing for reimbursement of eligible out-of-pocket expenses from the medical plan. Debit Card The debit card option automates the process of paying for eligible expenses at point of service. The debit card: Uptl'On Is loaded with the employee's annual election for each account. • Enables employees to use the debit card only at eligible reimbursement account locations wherever MasterCard is accepted -such as a pharmacy. • _. Allows approved expenses to be automatically deducted from the employees account. • Reduces paperwork and administrative hassles for the employee. Toll Free Line we provide a toll free line for employees to call for claims inquiries. Benefit counselors can assist employees from 8:00 a.m. to 6:00 p.m. ET (Monday through Friday, except holidays). Web site Employees have access to their HRA 24 hours a day, 7 days a week. The website offers: • Secure access to account information, including balance and claim history. • Submission of questions or address changes on line. • Claim forms and other documents for downloading and printing. Mutual of Omaha 12 3820 P~'OC~~Ct ~ve~-v~e~v -Consumer-Driven Health Plan continued The Health Reimbursement Account Automated An automated telephone system provides employees with instant access to their current account information 24 hours a day, 7 days a week, including: Information Llne Total claims and payments • Account balances Administration Our administration manual gives the plan sponsor information on: Manual Enrollment processes and use of forms • Reports • Claims processing Plan Document we provide a prototype plan document upon your request. The plan sponsor is responsible for having their legal counsel customize the plan document. Reports we deliver a full array of standard reports to meet your needs and the needs of your employees. Data Protection Maximum protection of data is provided through full daily backups. Mutual of Omaha 13 3820 Proci~c~ Overview -Consumer-Driven Health Plan continued The Health Reimbursement Account How the HRA Works Prior to the The Plan Sponsor determines the xRA amount to be funded for each employee electing the high deductible medical plan in conjunction with the Plan Year xRA. The Plan Sponsor prefunds our bank account with 4% of estimated annual paid claims. If a debit card option is selected, the plan sponsor will also be required to prefund an amount equivalent to 4% of the cumulative plan elections for a prefunding total of 8%. RelmburSement ~ automated claim interface process is in place to pass eligible medical plan expenses (i.e., deductibles, copays, coinsurance) to the HRA system for Requests automatic processing and payment. This reduces the employee's manual filing for reimbursement of eligible out-of-pocket expenses from the medical plan. To receive payment from the HRA account, employees can manually submit: • Proof of their expense • A completed reimbursement request form Minimum A minimum reimbursement amount of $25 is recommended. Expenses must reach the minimum amount before they can be reimbursed. Reimbursement Time Service Reimbursement requests are processed daily and reimbursed within five workdays of receipt of the request. Mutual of Omaha 14 3820 P~OduCt ®vervieW -Consumer-Driven Health Plan continued The Health Reimbursement Account Employer Reports Type of Reports our reports assist you in completing Part III Schedule A, Form 5500. Employer reports include: • Activity Summary report • Check History report • Detail report • Year-End Report Reports are available electronically via File Transfer Protocol (FTP), a-mail or in hard copy format. ~lrrrr' f~CtlVlty We provide a quarterly activity summary report for the plan sponsor. This report summarizes: Summary Report Year-to-date account information at the company level. • employer risk based on annual elections, contributions, reimbursements and balances. Check History A fax or e-mail is sent every week detailing: Report Checks issued • A request for authorization for a funds transfer to cover the amount of checks issued A monthly check register is also provided to the plan sponsor. Detail Report The detail report is distributed quarterly. This report includes year-to-date: • account status for each employee • claims paid • account balances Year End A year-end report is provided following the close of the plan year via a final: Report Activity Summary Report • Detail Report Mutual of Omaha 15 3820 Product ®verview -Consumer-Driven I~ealth Plan continued The Health Reimbursement Account Employee Reports Type of Reports your employees are informed regarding their HRA account through the following reports: • Checks and EOB • Detailed account statement Check/EOB Checks/EOBs are mailed to the employee's home (unless a direct deposit option is elected). Each check issued includes an EOB indicating: • Year-to-date payment • Remaining account balance EOBs can be provided via mail or a-mail. Detailed An account statement is sent via mail or a-mail to employees following the third quarter as a reminder of their remaining balance. , Account Statement Mutual of Omaha 16 3820 Product Overview -Consumer-Driven Health Plan ~rr-' `rrr~' continued The Health Reimbursement Account How Administrative Responsibilities are Shared ~ltY We are responsible for: Responsibilities Processing and paying eligible expense reimbursements weekly. • Requesting funds be transferred from the plan sponsor's bank account to cover the amount of reimbursement checks issued (e.g., automatic debit against the plan sponsor's account). • Faxing a weekly check history to you for bank account reconciliation. • Providing standard reports. • Providing a detailed Administration Manual. • Assisting you with enrollment meetings on a fee for service basis. • Providing a prototype plan document and swnmary plan description, upon request. ~, mplOyej.• You are responsible for: Responsibilities Making plan provision decisions, including the HRA amount to be funded and eligible expenses. • Completing the preliminary application and service agreement. • Customizing the plan document and summary plan description. • Prefunding our bank account with 4% of estimated annual paid claims (If a debit card option is selected, the plan sponsor will also be required to prefund an amount equivalent to 4% of the cumulative plan elections for a prefunding total of 8%). • Authorizing ACH transfers out of your bank account to cover reimbursement checks. • Notifying us of any additions, terminations or changes. Banking we need the following information on your bank account: InfoYmatl'on Name and address of bank • Account number • Transit number Mutual of Omaha 17 3820 Product Overview -Consumer-Driven Health Plan continued The Health Reimbursement Account Implementation Schedule Planning and Thorough planning and preparation prior to the effective date assures successful plan operation. Our experience and implementation process: Preparah'on • Identifies each step of implementation • Assigns tasks to responsible persons • Ensures requirements are met or exceeded Time Table We recommend using the following implementation milestones prior to the effective date: 60 days 60 days before the effective date you: • Make decisions on plan provisions by completing our case detail brief document • Distribute enrollment packets • Begin open enrollment period • Hold group employee meetings 35 days 35 days before the effective date you: • Close the open enrollment • Review enrollment forms 30 days 30 days before the effective date you: • Submit enrollment data to us 20 days 20 days before the effective date we: • Have enrollment data on the system • Send administrative materials to you 5-10 days 5-10 days before the effective date you: • Distribute reimbursement request forms to employees • Provide web site information to employees Mutual of Omaha 18 3820