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R-02-10-10-13E1 - 10/10/2002
7202 amendment City of Round Rock, Texas AMENDMENT TO BE ATTACHED TO AND MADE A PART OF THE GROUP INSURANCE POLICY OR POLICIES IDENTIFIED BELOW ISSUED TO HEREIN CALLED THE POLICYHOLDER Effective on and after December 1, 2003, the attached booklet- certificates EDB(7202)(12 -03) and EDA(7202)(12 -03) are added to and made a part of Group Policy MCP -7202 and will take the place of any and all booklet- certificates issued to you at a prior time under the above policy. 66A, A(G)(9 -96) (F/L6,o) (R -(9a - /o -w-13E j ) GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY ST. LOUIS, MISSOURI 63128 Assistant Group Secretary Accepted by (date of acceptance) (place of acceptance) authorized signature and title) iv y LE //W6/.L M9)/0/2) KJD030104(7202) Amendment Plan Doc -Misc Changes -1 Amendment (lo be attached to and made a part of the) Plan of Medical, Dental, Prescription Drug, and Vision Benefits (herein called the Plan) For Employees of City of Round Rock, Texas (herein called the Employer) and therefore any Contracts and/or Policies to which the Plan serves as an attachment for purposes of properly administering the Plan Effective on and after December 1, 2003, the Plan is changed as follows: The Contribution Basis provision is deleted and the following is substituted therefor: Contribution Basis 1. For Employee's Coverage: Contributions are required from employees for personal coverage for the High Plan. 2. For Dependent's Coverage: Contributions for all medical plans are required from employees for dependent coverage in accordance with the rules established by the Employer. 3. For Retired Employee Coverage: Contributions are required from Retired Employees for coverage in accordance with the rules established by the Employer. ized Signature o the Employer) m M yo,e, {Official Title) 07202 Plan Doc (20) 1.1 PLAN DOCUMENT Article I. Establishment of the Plan The Plan. CITY OF ROUND ROCK, TEXAS (the Employer) hereby establishes a Plan of Medical Care, Dental Care, Vision Care and Prescription Drug Benefits for its Employees, Retirees and Dependents. This plan will be known as the CITY OF ROUND ROCK, TEXAS Employee Welfare Benefit Plan (the Plan) and is effective as of December 1, 2002. This Plan is designed to provide Employees and their Eligible Dependents with significant financial protection against the economic strain that might result from Illness or Injury. The terms and provisions relating to the Medical Care, Dental Care, Vision Care and Prescription Drug Benefits, as described in the Summary Plan Description, EDA(7202)(12- 02)20, form a part of the Plan. 1.2 Legal Status. This Plan will constitute an Employee Welfare Benefit Plan under the Employee Retirement Income Security Act of 1974 and has been reduced to writing in order to comply with ERISA Section 402. 1.3 Plan Document. The plan document consists of two parts: Part One includes Articles I through V; the "APPLICABILITY OF COVERAGE DOCUMENT' page, the "ELIGIBLE CLASS OR CLASSES" page, the PROVISIONS RELATING TO INDIVIDUAL COVERAGE" pages and any amendments thereto; Part Two includes the attached Summary Plan Description of Medical Care, Dental Care, Vision Care and Prescription Drug Benefits for its Employees bearing an Effective Date of December 1, 2002, together with any amendments thereto. Article II. Definitions 2.1 Employee means any individual employed by the Employer and to the extent necessary, a retired or terminated employee entitled to receive Benefit payments under this Plan. 2.2 Participant means an employee who has elected to participate in the Plan. 2.3 Eligible dependent means an individual defined under the Plan as an eligible dependent. 2.4 Plan Claim Administrator means the entity designated by the Employer to pay claims for Benefits. 2.5 Plan Administrator means the Employer. Article III. Funding 3.1 Source of Funds. The funding medium for the Plan is funds contributed by the Employer from its general assets and by Participants. The amount of Participant contributions shall be as determined by the Employer from time to time. PlanDoc(112089)(7202) 1 (10- 09 -02) 07202 Plan Doc (20) Article IV. Payment of Claims 4.1 Submission of Claims. Claims for benefits under the Plan shall be submitted to the Plan Claim Administrator and in accordance with the procedures described in the Summary Plan Description in effect at the time claim is submitted. 4.2 Appeal of Denied Claim. An employee or eligible dependent whose claim is denied in whole or in part may appeal such denial in accordance with the claim review procedures described in the Summary Plan Description. Article V. General Provisions 5.1 Plan Administrator. The Plan shall be administered by the Employer, which shall have the authority to construe and interpret the terms of the Plan, and resolve any disputes which may arise with regard to the rights of persons covered under the Plan, including but not limited to eligibility for participation and claims for benefits. The Administrator shall be responsible for maintaining all records relating to the administration of the Plan and for complying with all reporting, filing and disclosure requirements established by the Internal Revenue Service and Department of Labor applicable to Employee Welfare Benefit Plans. 5.2 Rules and Decisions. The Administrator may adopt such rules as it deems necessary, desirable or appropriate. All rules and decisions of the Plan Administrator shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Plan Administrator shall be entitled to rely upon information furnished by a Participant, the Plan Claim Administrator, or legal counsel. 5.3 Nonalienation of Benefits. Benefits payable under this Plan shall not be assigned, transferred, or pledged as collateral prior to their actual receipt by the person entitled thereto under the terms of the Plan. 5.4 Termination and Amendments. The Employer intends that this Plan will continue in effect indefinitely, but reserves the right to amend, modify, revoke or terminate the Plan, in whole or in part, at any time. IN WITNESS WHEREOF, F, Y the Employer has caused this Plan to be executed by its duly authorized officers on this / uT day of / n? &5 205 Title: PlanDoc(112059)(7202) 2 (10- 09 -02) �, � , o� RESOLUTION NO. R- 02- 10- 10 -13E1 WHEREAS, the City of Round Rock desires to retain professional services to provide independent third -party administration of the City's self- funded health plan, and WHEREAS, Great -West Life & Annuity Insurance Company has submitted an Administrative Services Contract to provide said services, and WHEREAS,the City Council desires to enter into said Administrative Services Contract with Great -West Life & Annuity Insurance Company, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City an Administrative Services Contract with Great -West Life & Annuity Insurance Company to provide independent third -party administration of the City's self- funded health plan, a copy of said Contract being attached hereto as Exhibit "A" and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, Chapter 551, Texas Government Code, as amended. RESOLVED this 10th day of October, 2002. ST:, NY Cit CHRISTINE R. MARTINEZ, City Secretar 0: \wdox \xESOLUTt \R21000E1.000 WELL, Mayor of Round Rock, Texas OCT -07- 2002 09:50 CITY OF ROUND ROCK SPECIMEN ADMINISTRATIVE SERVICES CONTRACT BY AND BETWEEN CITY OF ROUND ROCK (Herein called the Client) AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY (Herein called the Service Contractor) d. "Plan Month" shall mean a calendar month. Whereas, the Client desires to provide benefits for certain lasses of individuals (hereinafter called "Members ") in accordance with a written employee welfare benefit plan established by the Client as described in Appendix .1: Whereas. under said plan the Client will bear all liabilities, except as otherwise specifically provided for herein, but desires that the Service Contractor provide certain services in connection with the administration and operation of the plan (hereinafter called "the Plan "); Whereas, the Plan is an employee welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 ( "ERISA') and the Client, who is both the fiduciary of the Plan and the Plan Administrator. hereby retains the Service Contractor to provide services for the Plan in accordance with the following terms and conditions: Now, therefore, in consideration of the paymentsio the Service Contractor as provided in the Payment Schedule, Appendix A, and subject to the terms and conditions contained herein, it is hereby agreed as follows: Section 1. Definitions As used in this Contract, its Appendices and Attachments: a. "Affiliate' means a person or entity within the same common control group as determined under Internal Revenue Code section 414(c) and the regulations thereunder, and for Service Contractor includes a person or entity with whom the Service Contractor operates under a joint marketing or joint venture contract. b. "Health Information" means any information related to health care treatment, payment or operations that identifies or could reasonably be used to identify a member. c. `Plan Administrator" shall have the meaning ascribed to the term "administrator" as defined in ERISA and shall have a comparable meaning for non -ERISA plans. e. "Plan Quarter" shall mean a three calendar months period, with the first Plan Quarter beginning on the first day of the first Plan Year. f. The first "Plan Year shall begin on December 1. 2002 and shall continue until the beginning of the second Plan Year. The second Plan Year shall begin on December 1, 2003 and successive Plan Years shall begin with the anniversary of such date. 1 EXHIBIT n 5122187097 P.04/62 OCT -07 -2002 0950 CITY OF ROUND ROCK SPECIMEN 2 5122187097 P.05/52 Section 2, Services The Service Contractor will provide the services listed in Appendices B through I subject to modification as provided herein, for the administration and operation of the Plan; such services will be coordinated by a representative of the Service Contractor to assure effective and efficient operation of the Plan. It is understood that the Service Contractor performs purely non - discretionary and ministerial functions for the Client within a framework of policies, interpretations, rules. practices and procedures made by the Client. The Service Contractor shall perform Services in accordance with the teens of the Plan. including but not limited to the terms of the summary plan description (SPD). Any review by the Service Contractor of a claim, or of charges declined, is made as a service for the Client, who retains the final responsibility for determining its liability under the Plan. If the Client has not adopted a final SPD, the Service Contractor will process benefit payments in accordance with r its standard policies and procedures for the benefits selected by the l ntset forth o r prior th o r computer readable records of Client's information maintained by the with appropriate modifications. When following such standard policies and procedures, the Service Contractor will not be responsible for any act taken that may conflict with the terms of the SPD that is ultimately adopted. However, in the event that the Client amends its Plan to include items that the Service Contractor either cannot or said will not administer. nothing amendments but, rather, herein this Contract shall require Service hall rema n in full force and effectass if Contractor said amendm nts not been made. Section 3. Banking Arrangements The Client shall establish a separate Benefit Plan Account In a bank as the depository for funds to be used by the Service Contractor to make payments pursuant to this Contract and the Plan. The Client shall notify said bank that It has authorized the Service Contractor, by execution of this of benefits under the Plan and ecks drawn on n such account on behalf of the Client for the purpose of payments to and cover all checks validly issued by the Service Contractor's authorized employees. funds in this Account sufficient Section 4. Payments to the Service Contractor 4.1 service fees and other l service fees and expenses as set forth in thee in Schedule t in Appendix monthly Charges for hourly services will be determined in accordance with the Service Contractor's established time allocation procedures, and those of other organizations from whom hourly services are purchased. These charges will be made only 11 both parties agree on the Service Contractor's providing any hourly services, Printed material created at the Client's request and not listed in Appendix A will be billed for separately when furnished. 4.1.1 The Client acknowledges that the Payment Schedule is based on information provided by the Client including but not limited to the number of employees and dependents that the Plan will cover. The Service Contractor has the right to revise any Payment Schedule retroactively to the effective date or the anniversary date, as applicable. to reflect actual participation in the Plan. Any difference between payments made under the Payment Schedule and the Revised Payment Schedule will be collected from or credited to the Client. 4.1.2 Any proposed Payment Schedule will become final when the Service Contractor delivers a final written schedule. signed by its officer, to the Client. OCT -07 -2002 09:50 CITY OF ROUND ROCK SPECIMEN 5122187097 P.06/62 4.2 Amendment of Fees. 4.2.1 The Service Contractor may propose changes to the fees under this Contract: a_ if the Client amends its Plan to modify benefits; or b. upon modification of the Service Contractor's administrative duties; or c. if the Service Contractor's cost of operation is increased by virtue of a change in charges to the Service Contractor by a governmental unit, but such adjustment shall be limited to the amount of the change; or d. on the third anniversary of the Plan Year and annually thereafter, or e. on any Plan Month subsequent to a Plan Year anniversary. provided that either no renewal was presented to the Client or no required renewal adjustments were made at the time of such anniversary; or f. upon addition or deletion of coverage for any subsidiary or Affiliate or corporate division of Client; or g. if the excess loss policy or stop -loss contract, if any, between the Service Contractor and Client is terminated; or h. if there is a change in the number of employees and/or dependents covered under the Client's Plan for any benefit coverage provided under the Client's Plan which equals or exceeds: i. 10% in any Plan Month when compared to the previous Plan Month; or ii. 25% during any period of three consecutive Plan Months. The Client agrees to make available to the Service Contractor all information necessary to determine whether the changes set forth In i. or ii. above have occurred. If the change in the number of employees and/or dependents covered under the Plan is such that a change in fees results, then the Service Contractor will advise the Client of its intention to change the fees. The effective date of the change in fees under subsections a. through h. above will be the effective date of the event that causes such change. 4.2.2 Modification of fees may be made by written notice to the Client by the Service Contractor. If the Client pays such revised fees or fails to object to such revision in writing within 15 calendar days of receipt, this Contract shall be deemed modified to reflect the fees as communicated by the Service Contractor. 3 OCT-07-2002 09:51 CITY OF ROUND ROCK SPECIMEN 5122187097 P.07/62 Section 5. Client Res onsibilitias 5.1 P ens to ervice Contrac r. The Client shall make all payments as set forth in this Contract. 5.2 Enrollment and Determination of Eligibility. 5,2.1 The Client shall: a, handle routine inquiries from Members and prospective Members, including inquiries concerning enrollment in the Plan; and b. handle enrollment activity and c. notify prospective Members of their right to enroll in the Plan. 52.2 In determining any person's right to benefits under the Plan, the Service Contractor shall rely on eligibility information consistent with the description in the Plan and information provided by the Client. It is mutually understood that the effective performance of this Contract by the Service Contractor will require that it be advised on a timely basis by the Client of the identity of persons covered under purpose of determining the fees under this b Contrract, a Member shall be co considered to be: For the a. enrolled on the first day of the first month following the month in which the Member is eligible to receive benefits under the Plan or on the first day of the first month in which the Member Is eligible to receive benefits under the Plan if the Member Is first eligible to receive benefits on such day; and b. terminated on the last day of the last month in which the Member is eligible to receive benefits under the Plan. Retroactive adjustments for Member enrollment or termination will be allowed for periods not exceeding sixty (60) days unless approved by the Service Contractor. Retroactive adjustments for termination are limited to Basic ASO Service Fees as set forth in Appendix A. 5.3 Plan Benefits. Except as otherwise explicitly provided in this Contract. the Client shall retain the responsibility for all Plan benefit claims and all expenses incident to the Plan. The Client shall be responsible for. a. Any state premium or similar tax. however denominated. including any penalties and interest payable with respect thereto. assessed against the Service Contractor on the basis of and/or measured by the amount of Plan benefits administered by the Service Contractor pursuant to this Contract; b. The consequence of any acts or omissions occurring during the operation of this Contract alleged to be a breach of fiduciary duty under ERISA if applicable, or a breach of duty or trust, or other contractual duty regardless of the source of law serving as a basis for such allegation; and c. Any amounts determined to be Service Contractors liability arising from any legal action or proceeding to recover benefits under the Plan. 4 OCT-07 -2002 09:51 CITY OF ROAD ROCK SPECIMEN 5 5122187097 P. 08/62 5.4 COBRA. 11 COBRA is applicable to the Client, the Client is responsible for performing the duties required by the Consolidated Omnibus Budget Reconciliation Act of 1985. as amended (COBRA), including but not limited to a. notifying employees and covered spouses and dependents at their last known address of their rights under COBRA when they first become covered under the Plan; b. notifying qualified beneficiaries of their continuation rights upon occurrence of qualifying events; c. notifying Service Contractor of COBRA- related eligibility changes as they occur. This includes but is not limited to termination of coverage under the Plan as a result of a qualifying event, subsequent election of coverage and payment of premiums and reinstatement of coverage; d, processing elections from continuants; and e. biting and collection. At the Clients' option and for a fee payable to the Service Contractor, the Service Contractor will arrange to perform some or all of the required duties, as set forth in a separate Continuation of Coverage (COBRA) Premium Collection Service Contract, Whether the Client or the Service Contractor performs COBRA administration, the Service Contractor shall have no liability resulting from the failure of the Client, Including its employees, directors. or officers. or a third party administrator to full any obligations under COBRA or this Contract. • 5.5 privacy of Health Information. The Client will protect the privacy of all Health Information of which it becomes aware that relates to this Contract and Client will: a. not use or disclose such Health Information other than as permitted or required under this Contract; b. not use or further disclose the Health Information in a manner that would violate the requirements of any state or federal law or regulation; c. implement and utilize appropriate safeguards to prevent use or disclosure of the Health Information as provided for by law: d. report to Service Contractor any use or disclosure of the Health Information not provided for by taw of which Client becomes aware; e. not disclose any Health Information to any subcontractor or agent without the prior express written consent of Service Contractor, and if such consent is granted, Client will ensure that any subcontractor or agent to whom 1t provides the information agrees to the same restrictions and conditions relating to protected Health Information as are contained herein; OCT -07 -2002 09:51 CITY OF ROUND ROCK SPECIMEN 6 5122187097 P.09/52 f. make its internal practices, books and records relating to the dell disclosure of Health Information available to Service Contractor or any party 9 by the Service Contractor: g. incorporate any amendments or corrections to any plan participant's protected Health Information as directed by Service Contractor_ 5.5.1 The Service Contractor may terminate this Contract if the Service Contractor reasonably determines that the Client or any of its subcontractors or agents, to whom Health information has been disclosed under this Contract, has materially violated any provision of this Section. 5.6 Del>;tvs_ It is mutually agreed that the Service Contractor shall not be responsible for delay in the performance of its duties under this Contract or for non - performance hereunder, if such delay or non- performance is caused or contributed to in whole or in part by the failure of the Client to promptly any required information. • 5.7 5500 Forms. The Client shall be solely responsible for the submission of 5500 Forms. However, the Service Contractor shall be responsible for providing the Client with any applicable Schedule A and Schedule C information necessary to submit said forms. 5.8 Furnishing of Information. The Client shall furnish the Service Contractor with correct and complete information required by the Service Contractor to provide services in accordance with this Contract, including, but not limited to, eligibility information, identity of agents and brokers, and information to verify contribution and participation requirements with respect to insurance policies issued by the Service Contractor. The information will be furnished at the times and In such manner as the Service Contractor may request. The Service Contractor will assume that all such information is complete and accurate and will be under no duty to question the accuracy of such Information. The Service Contractor, at its discretion, may charge additional reasonable fees to the extent additional services are required because information Is not fumished, is incomplete or inaccurate or is not furnished at the time or in the manner as requested. 5.9 Member Appeals. The Client acknowledges that its Plan provides Members with the right to appeal benefit claims that have been denied and file other complaints and grievances with the Plan Administrator. The Client shall encourage Members to exhaust their opportunity to resolve such matters under the internal grievance and complaint procedure described in the SPD. The Client shall notify the Service Contractor of any appeal that the Client receives and shall notify the Service Contractor of the resolution of such appeal. The Service Contractor shall not be responsible for any costs related to such appeal and shall not be required to process any benefit payments approved by the Client as the result of an appeal by or on behalf of any Member without written direction from the Client. In the event Plan Administrator determines claims should be paid which are not considered covered benefits under the Plan, and Client has purchased excess loss coverage from Service Contractor, such amounts shall be paid outside of such agreements, and shall be the Client's full liability. The Client shall offer all appeals and make all appeal decisions with due regard for state and federal law to the extent it may apply including but not limited to Internal Revenue Code section 105(h), and ERISA if the Client's Plan is an ERISA plan. 5.10 Disclosure to Members. The Client will distribute SPDs to all Members as required by law. The Client will make ell disclosures to employees and dependents under its Plan as required by applicable law including but not limited to the Health Insurance Portability and Accountability Act, the Newborn's And Mother's Health Protections Act, the Women's Health and Cancer Rights Act and COBRA. OCT -07 -2002 09:52 CITY OF ROUND ROCK SPECIMEN 7 5122187097 P.10/62 5.11 Legal Proceedings. The Service Contractor shall consult with the Client or legal counsel designated by the Client in claim matters that are beyond the ordinary. Client shall be responsible for its own defense of any legal action brought by a third party related to the Plan. Nothing herein shall require the Client to defend the Service Contractor in an action in which the Service Contractor is a named party. Nothing herein shall require the Service Contractor to defend the Client. The Service Contractor and the Client shall cooperate in the defense of any legal proceeding and each party will furnish the other and its legal counsel with all pertinent information regarding the proceeding. Section 6. Indemnification and Limitation of Liability 6.1 Client's lndemniti ration. The Client shall indemnify, protect and hold the Service Contractor harmless from any and all loss, liability, claim, damage or expense (including attorneys fees, court costs and expenses of litigation) arising out of any act or omission of the Client. its Affiliates or subcontractors in connection with the Plan or in connection with this Contract. including compensatory, punitive, or other damages. ' 62 Service Contractor's Indemnification. The Service Contractor will not be liable for any act or failure to act e on the part of itself or any of its Affiliates in the performance of Its duties hereunder, if and hold or failu ent act is performed in good faith. The Service Contractor agrees to indemnify, protect harmless from any and all extra - contractual (non- benefit} costs, loss; liability, claim, damage or expense (including attomeys' fees, court costs and expenses of litigation) arising out of gross negligence, dishonest, fraudulent or criminal acts of the Service Contractor's employees and Affiliates acting alone or in collusion with others. The Service Contractor's duty to indemnify and hold the Client harmless shall not extend to acts Of omissions of providers who render health care services with respect to Members. 6.3 Exclusion from Indemnification_ The Service Contractor shall not be responsible for Client's lost profits, exemplary, special, punitive or consequential damages or be liable to the Client for the same. 6.4 Survival. The terms of this Section shall survive the termination of this Contract. Section 7. Authority to Control and Manage the Plan 7.1 Agency Relationship. The Service Contractor In performing its duties under this Contract is acting only as an agent of the Client, and the rights and responsibilities of the parties shall be determined in accordance with the law of agency except as othenvlse herein provided. 72 Service Contractor's Control and Authority. 721 The Service Contractor and the Client agree that while this Contract is in effect the Service Contractor and its delegates shall have exclusive authority to provide the Plan with the services listed in the attached Appendices, and that during such time the Client shall not undertake on its own nor shall it authorize or allow any other person or entity to provide any of those services without the prior written consent of the Service Contractor. 7.22 The Service Contractor and the Client agree that the Service Contractor shall have no liability under this or any other agreement between the said parties with respect to any payment of benefits or other act that violates the provisions of subsection 7.2,1 above. OCT -07- 2002 09:52 CITY OF ROUND ROCK SPECIMEN 5122187097 P.11/62 7.3 Client's Control and Auth . The parties acknowledge that the Client and the Plan Administrator have the exclusive authority to control and manage the Plan. The Client expressly agrees that the Service Contractor is not Contractor is not the the named fiduciary. or a fiduciary of the Plan and that neither the Client, a or the Plan will designate the Service Contractor as the named fiduciary, or a fiduciary of the Plan for any other purpose. The Service Contractor shall have no power, discretion, authority or control over the Plan, or Plan assets, or responsibility for the terms or validity of the Plan or to alter, modify, or waive any terms or conditions of the Plan, or to waive any breach of any such terms or conditions, or to bind the Client, or to waive any of its rights, by making any statement or by receiving at any time any notice or information. on ent The Service Contractor shall have no power, discretion greater authority e oact for or sn beha ha of the e Clli other than as herein expressly granted, and no other or g a grant or denial of power or authority specifically mentioned herein. 7.4 Plan Docu ants. The Client acknowledges that the Plan Administrator has the responsibility to provide Members with a summary plan description (°SPD ° ) and to make available to Members certain other materials and information. To the extent that the Client uses documents. including but not limited to the SPD, or other materials or information provided to the Client by the Service Contractor for the purpose of satisfying the Plan Administrator's obligations, the Client acknowledge§ that it adopts such documents and other material and information as its own as if they were drafted and made available to Members solely by the Client and under the authority of the Plan Administrator. The fact that the Service Contractor has drafted or assisted in drafting any document, including but not limited to the SPD, or provided any other materials or information to the Client, shall not be construed as the exercise of any discretion, authority or any control cia bythe a trust, other similar respect telll onsh p whatsoeve tween the Service Contractor and fiduciary, any ciary, Member. 7.5 Relationship to Members. Nothing herein will be deemed to impose upon the Service Contractor any obligation to any Member under the Plan. Section 8. Right to Audit Upon forty -five (45) days advance written notice, each party shall have the right to inspect and copy the records of the other that are pertinent to the operation of the Plan- regular business hours. c o sc audit office of the he party being inspected where the records are kept during g sh o l imit s The audit to scope of inspection the au of must be set forth in a documented audit plan. The party conducting the audit and shall not contact the other party's customers. Members or vendors. If the audit pertains to claims matters, the parties agree that the claim sample will be limited to a maximum of 200 claims to be reviewed during a maximum period of five (5) days within any twelve (12) month period. Any costs of such inspection shall be bome by the inspecting Party. The parties shall cooperate with each other. The parties agree that no proprietary materials may be copied or removed from the audit site and further, all audit results and related documents are considered confidential and shall not be disclosed to third parties. Section 9, Service Contractor's Use and Disclosure of Records 9.1 Confidentiality. The Service Contractor shalt maintain confidentiality. In accordance with applicable law, with respect to all Health Information of Members, including but not limited to medical records, in its possession pertaining to Members under the Plan. 8 0CT -07 -2002 0952 CITY OF ROUND ROCK SPECIMEN 9 5122187097 P.12/62 9.2 Use and Disclosure of Medic Rec rds. The Service Contractor will use Health Information solely for the purpose of fulfilling its duties under this Contract, and will not disclose such information to anyone other than its officers, employees, its delegates, Affiliates, those parties with whom the Service Contractor has a contract or other arrangement whereby that third party assists the Service Contractor in performing its duties under this Contract and upon lawful order of a court or public agency with appropriate jurisdiction over the subject matter; provided, however, that such disclosure shall not exceed the extent reasonably necessary for that third party to provide such assistance, and further provided, that the Service Contractor shall require that third party maintain those medical records as strictly confidential. 9.3 Custody of Records, The Service Contractor shall hold all papers, books, files, correspondence and records of all kinds which at any time shall come into its possession or under its control relating to the transactions performed by the Service Contractor for the Client under this Contract, and shall, to the extent permitted by taw, surrender them to the Client upon prior request, except the Service Contractor may periodically destroy such material as it would usually destroy in the normal course of business. Section 10. Term and Termination of Contract 10.1 s Term. This Contract shall be effective on December 1, 2002, (the 'Effective Date'), and shall continue in force for one year (the "Initial Term "), unless terminated earlier pursuant to this Section. This Contract shall expire at the end of the Initial Term, subject to the right of the parties to renew the Contract as set forth herein, in which case, the Contract shall remain in force until the expiration of the period for which the Contract was renewed (the "Renewal Term "), unless terminated earlier pursuant to this Section_ 10.2 Contract Renewal. The Service Contractor shall submit to the Client, not later than one hundred and twenty (120) days prior to the expiration of the Initial Term and any Renewal Term, the Service Contractor's proposed terms and conditions for the renewal of the Contract (the "Renewal Proposal "). If prior to the expiration of the Contract, the parties do not agree on the terms and conditions under which the Contract will be renewed, unless expressly directed by the Client to discontinue service as of the expiration date, the Service Contractor may elect to continue providing Services beyond the expiration data in order to facilitate continuity of service for Members. In that case, this Contract shall be deemed to have been renewed under the terms and conditions of the Renewal Proposal as if the Client had affirmatively assented to the Renewal Proposal and this Contract shall be deemed to have been renewed. Notwithstanding anything above to the contrary, the Service Contractor shall not be obligated to provide services after the expiration of this Contract, except to the extent expressly required to do so under another provision of this Contract. Once this Contract is renewed, whether by express agreement or deemed renewal, this Contract may be terminated only es set forth below in this Section. In the event Service Contractor does not provide Client with a timely Renewal Proposal, the current Contract terms shall apply until 30 days after such Renewal Proposal is sent. 10.3 Termination Upon Notice. This Contract may be terminated: a. at any time by either the Service Contractor or the Client, provided written notice of such termination is given at least thirty (30) days In advance of the effective date of the termination; b. upon amendment of the Plan in a manner deemed unsatisfactory by the Service Contractor, and on notice to the Client, such termination shall be effective on the effective date of such amendment. OCT -07 -2002 09:53 CITY OF ROUND ROCK SPECIMEN 5122187097 P.13/62 10.4 Immediate Termination. This Contract shall terminate immediately and without notice: a. loss cont if any, between Contractor upon ont excess loss policy or stop - Contractor and the Client; b. upon failure of the Client to compty with any material term or condition of this Contract such as but not limited to, failure to: i. make the payments as specified in Section 4 of this Contract, entitled Payments to the Service Contractor"; or ii. deposit funds in the Benefit Plan Account to cover checks issued by the Service Contractor pursuant to Section 3 of this Contract. 10.5 Reinstatement after Termination. If the Service Contractor terminates this Contract under Section 10.3 or 10.4, and the Client desires to reinstate this Contract, it will be reinstated only if; a. the Service Contractor agrees; and b. at the Client at pays of the lesser of one amounts plus (1�.5 %) per month date the maximum allowed pursuant to state law; and c. the Client reimburses the Service Contractor for any network access fees required to be paid by the Service Contractor on behalf of the Client following termination of this Contract. 10.6 Termination by Law. If any state or other jurisdiction enacts a law which prohibits or effectively prevents the continuance of this Contract, or the existing law is Interpreted to so prohibit or effectively prevent the continuance of this Contract, the Contract shall terminate automatically as to such time or jurisdiction on the effective date of such taw or interpretation. 10.7 Termination for Breach. In addition to the foregoing, if one party has materially breached this Contract (the "Breaching Party") and the other party (the 'Nonbreaching Party") desires to terminate this Contract, he Nonbreaching Party shall give the Breaching Party specific written notice of the nature of the breach. The Breaching Party shall have 30 days to cure such breach. If the breach remains uncured 30 days following the notice of breach, this Contract shall terminate as of the end of such 30-day cure period. This section shall not apply to immediate breaches as set forth in section 10.4 above. 10.8 Effect of Termination. 10.8.1 If on the date this Contract terminates he Client has not made all payments then due under this Contract, the Service Contractor will have the right to immediately stop providing the Services, including but not limited to processing claims, on the effective date of such termination. In this case, information regarding all outstanding claims which are unpaid (regardless of when the claim was incurred and regardless of when the Service Contractor received the claim) or received after such date will be returned by the Service Contractor to the Client. In addition, the Client will notify each Member covered under the Plan of such termination. 10 OCT-07 -2002 09:53 CITY OF ROUND ROCK SPECIMEN 11 5122187097 P.14/62 10.8.2 With respect to claims incurred prior to and not processed before termination of this Contract, the Service Contractor shall not be responsible for adjudicating the claims unless Service Contractor agrees in writing to do so and the Client pays the terminal fee either set forth in Appendix A or mutuatty agreed upon by the Client and the Service Contractor. Such adjudication shall be limited to claims incurred prior to the termination of this Contract and submitted for consideration within the 12 -month period immediately following the termination date. If the Service Contractor does not process such claims, the Service Contractor. will send the claims to the Client or to Client's designated representative upon request. Section 11. Subcontractin The material and significant duties to be performed by the Service Contractor under this Contract may, with the an organization of the prior approval of the Client, be performed Y not l be unreasonably withheld. Excepd, under a contract provided above, the Service e Contractor's ca t it Such approval shall Service Contractor mayy, , et its discretion, ap etion, contract with any organization to perform any other duties under this Contract. Section 12. Compensation to Agents or Brokers The Client acknowledges that Service Contractor may pay reasonable compensation to the agent or broker of record_ Any and all agent and brokers are hereby declared to be (an) agent(s) of the Client and not of the Service Contractor. The Client shall notify the Service Contractor, in writing, if the Client changes Its agent or broker. Section 13. Advertising The Client will not use Service Contractor's name in any release or printed forms unless approved in advance by the Service Contractor. Section 14. Other Financial Provisions to the 14.1 Savings Initiatives. In Its sale discretion, Service Contractor ad money the Plana E of services described in this Contract for the purpo se of saving such initiatives might include, but are not limited to provider and incentive bonus arrangements, and provider bill /fee negotiation and discounts on claims from providers outside of the Service Contractor's primary network of providers. 14.1.1 For purposes of pursuing savings under this provision, the Service Contractor may retain third party vendors. 14.1.2 For its services in obtaining savings for the Plan. Service Contractor shall be entitled to retain 25% of the savings realized. 14.2 Compensation from Others. The Client acknowledges that in addition to the fees charged to the Client under this Contract, the Service Contractor may receive compensation from health care providers and vendors that contract with the Service Contractor. Such compensation may be paid to Service Contractor to defray its expenses in performing its duties under this Contract and for providing services for the providers or vendors in accordance with their contractual arrangements. The Service Contractor shall be entitled to receive and retain such compensation from the providers or vendors regardless of the form or manner in which it is received. 14.3 Access Fees. The Service Contractor may negotiate arrangements with third parties to provide Members services and benefits that are not otherwise covered under the Plan. The Service Contractor may retain any fees received from the third parties pursuant to their contractual arrangements. OCT -07 -2002 09:54 CITY OF ROUND ROCK SPECIMEN 12 5122187097 P.15/62 14.4 Surcharge Payment. 14.4.1 For any state in which a surcharge payment is required to be made to that state, to fund medical care for uninsured populations, finance the operation of risk pools or other purposes required by the state, the Service Contractor shall render such payments pursuant to the payment method elected or deemed elected by the Client and in accordance with that state's requirements. The Service Contractor shall draw such funds from the Clients bank account 14.4.2 Upon termination, Service Contractor shall calculate the amount of surcharge payment owed by the Client and shall bill Client accordingly. Within fourteen (14) days of the date of such bill, Client shall pay Service Contractor such amount In full so that Service Contractor can pay the surcharge payment on Client's behalf in a timely manner. OCT -07- 2002 09:54 15.2.2 To the Client: CITY OF ROUND ROCK SPECIMEN 13 5122187097 P.16/62 Section 15. Miscellaneous. 15.1 Reliance. The Service Contractor shall be entitled to rely upon any communication believed by the Service Contractor to be genuine and to have been signed or presented by the proper party or parties. For verification of persons eligible for the coverages provided under the Plan, the Service Contractor will rely solely upon information in its computer records at the time eligibility verification is requested. These records will be based upon eligibility information provided to the Service Contractor by the Client. 15.2 per Any noed, sent which registered s ered or certified this ail through shall be in writing and may States Postal Service, return receipt requested, deliver ed , o or sy by 9 reipt rest, r by reputable overnight carrier, delivered prepaid, addressed as follows. A notice so delivered shall be deemed given on the date of delivery if personally delivered or delivered by overnight carrier, and on the date indicated on the return receipt 0 delivered by the United States Postal Service. 15.2.1 To the Service Contractor. GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY SL Louis Administrative Office Attn: Associate Manager of Contracts, Mail Code: FO-13 13045 Tesson Ferry Road - St. Louis, MO 63128 Mrs, Linda Gunther HR Benefits Manager CITY OF ROUND ROCK The City of Round Rock 221 East. Main Street Round Rock, TX 78664 Facsimile number: 152.3 A party's address may be changed by notice to the other in accordance with this section. 15.2.4 Delivery of notices to the Client's broker shall constitute delivery to the Client unless the Client instructs the Service Contractor otherwise in writing. 15.3 Waiver. Failure by the Client or the Service Contractor to insist upon compliance with any provision of this Contract at any given time or under any given set of circumstances shall not operate to waive or modify such provision or in any manner render it unenforceable, as to any other time or as to any other occurrence, and no waiver of any of the terms or conditions of this Contract shall be valid or of any force or effect unless contained in a written instrument specifically expressing such waiver and signed by a person duly authorized to sign such waiver. 15.4 Amendments. Except with respect to modification of fees as described in Section 4 of this Contract, no alteration or modification of the terms and conditions of this Contract shall be valid or of any force or effect unless in each instance it is contained in a written instrument expressing such alteration or modification and executed for the Client and the Service Contractor by their officers duly authorized to execute such alteration or modification. OCT -07 -2002 09:54 CITY OF ROUND ROCK SPECIMEN 15.5 Assignment. Other than assigning the right as receive money, nei neither t party shall ct the express or delegate its duties under this Contract except this portion written consent of the other party; provided. however. that the Service Contractor may transfer any p ss of its rights or delegate any portion of its duties under this Contract to its Affiliate. The Chants reorganization, any merger in which the Client is not the surviving company. and any transfer of the Clients assets whether by bulk sale or otherwise, shall be deemed to be a transfer or delegation by Client. Any transfer or delegation by a party in violation of this Section shall be void and of no force or effect and shall entitle the other party to immediately terminate this Contract. 15.6 Inurement. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their permitted respective successors and permitted assigns and delegates. 15.7 Force Maieure. In the event that either party is unable to perform under this Contract on account of strikes, accidents, acts of Nature, severe weather conditions, fire, governmental restrictions. computer system failure or any other reason which Is beyond the reasonable control of the parties, then performance under this Contract shall be excused for a reasonable period of time to enable the parties to resume performance. If a party is unable to resume its performance within such reasonable period of time the other party may terminate this Contract as provided herein. 15.8 Entire Contract. This Contract, including any schedules, appendices or supplements thereto, together with the attached copy of the Clients Offer to Contract for ASO Services ( "Offer") and other attached papers, if any shall constitute the entire contract between the parties and shall govern the rights, liabilities and obligations of the parties hereto, except as it may be modified in accordance with the provisions of this Contract. This Contract supersedes all prior proposals, representations, communications, negotiations and Contracts between the parties, whether oral or written. 15.9 Controlling Law. This Contract shall be construed and enforced according to the laws of the state of Texas to the extent that such laws are not preempted by N 15.10 Provisions Separable, The provisions of this Contract are Independent of and separable from each other. In the event any provision of this Contract shall be held illegal, invalid or unenforceable in whole or in part, for any reason by law or a court of competent jurisdiction, said illegality or invalidity shall not affect the remaining parts of this Contract, but it shall be construed and enforced as if said illegal or invalid provisions had not been included herein either initially, or beyond the date It is first held to be illegal or invalid if after the effective dale of this Contract, provided the basic purposes hereof can be effectuated through the remaining valid and legal provisions. 15.11 Gender and Number. Any reference In the masculine gender herein shall be deemed to also Include the feminine gender, unless expressly provided otherwise. Wherever appropriate, any reference in this Contract in the singular shall include the plural, and any references in the plural shall include the singular. 15.12 Counterparts. This Contract may be executed in any number of counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument. 15.13 Currency and Piece of Payments. All sums payable to, or payable by. the Service Contractor pursuant to this Contract shall be payable in the lawful currency of the United States of America at its St. Louis, Missouri office. 15.14 Headings, Section. sub - section or paragraph headings contained In this Contract are for reference purposes only and shall not affect the meaning or interpretation of this Contract. 14 5122187097 P.17/52 0CT -07 -2002 09:54 CITY OF ROUND ROCK IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their respective officers duly authorized to do so, to be effective as of December 1, 2002. Dated at day of (Month) (City) SPECIMEN (Year) CITY OF ROUND ROCK By: 15 , this (State) (Date) SPECIMEN (Signature of Authorized Representative) (Official Title) Assistant Group Secretary (Official Title) (Date) 5122187097 P.18/62 GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY SPECIMEN (Signature of Authorized Representative) 0CT -07 -2002 0955 CITY OF ROUND ROCK SPECIMEN Appendix A Payment Schedule To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY Service Fees Schedule. The Service Contractor shall have the right to adjust the fees listed below as specked under Section 4 of the Contract. A. The Client shall make payments to the Service Contractor in advance for service fees listed below by the first day of each Plan month In which the Service Contractor dr date. ors h e amoune ds erVic be determined period of 30 days is granted after such monthly payment as follows: Services Provided: a Actuarial and Underwriting Services and Basic Claims Adjudication Services and Direct Claim and Verification Service? ( "Basic ASO Service Fee ") All other Services Provided b. Care Management (includes Utilization Management and Case Management), Disease Management, Maternity Management and Access to Managed Health Care Network c. Electronic Services, Electronic Services Initial Eligibility Loading Charge, I.D. Cards and Special Reports d. Document Preparation e. Pharmacy Benefit Manager (PBM) 5122107097 P.19/62 Monthly Amount per Employee Covered Under the One Health PPO Plan To be determined' To be determined Monthly Total The Basic ASO Service Fee is subject to the Performance Standards Program as described in a separate Appendix. 16 OCT -07- 2002 09:55 CITY OF ROUND ROCK SPECIMEN 5122187097 P.20/62 Monthly Amount per Employee Covered Under Dental Services Provided: Basic Claims Adjudication Services and Direct Claim and Verification Service ( "Basic ASO Service Fee ") To be determined' and Actuarial and Underwriting Services Monthly Total To be determined The Basic ASO Service Fee is subject to the Performance Standards Program as described in a separate Appendix. B. The Client agrees to compensate the Service Contractor for services listed below as follows: 17 Amount Due 1. Subrogation and Recovery 33.3% of all recovered amounts The Service Contractor reserves the right to offset the amount due for this service against recovery amounts. 2. Claim Reduction Negotiation 25% of all amounts saved Multiplan or Other Negotiation Service The Service Contractor reserves the right to charge the amount due for this service as part of the benefit payment under the Plan. 3. Hospital Bill and Credit Balance Audits, and Overcharge Billing 33% of audit savings amounts Recovery Service The Service Contractor reserves the right to offset the amount due for this service against audit savings amounts. 4. The cost of customized or bulk printing will be billed as charged to the Service Contractor for any documents not specifically fisted in Appendix B. 5_ The cost of any mass mailings to plan participants will be billed separately. OCT-07 -2002 09:55 CITY OF ROUND ROCK SPECIMEN Appendix B Services to be Provided by the Service Contractor To be attached to and made a pact of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 5122187097 P.21/62 The Servia ontractor will • erform the followin, services whit are nclude in e B sic ASO Service Fee: Basic Claims Adjudication Services and Direct Claim and Verification Service These Basic Services provide for the processing of all claims incurred and received while this Contract is in force. The services to be performed by the Service Contractor are: 1. Preparation of claim checks and Explanation of Benefit forms on a universal check form on the bank chosen by the Client; such claim checks are to be mailed by the Service Contractor on Wednesday of each week or on the following business day if that day is a holiday; 2, Claims and inquiries come directly to the Service Contractor: claim checks and correspondence are mailed directly to employees and/or assignees; copies of Explanation of Benefit forms are sent to the Client if desired; copies of declination letters are sent to the Client; 3. Maintenance of individual benefit records for determination of plan benefits and satisfaction of deductibles; 4_ Request /additional medical or service information from provider; 5. Coordinate benefit payments with other employee plans; 6. Maintenance of records for determination of ovenitilization or plan abuse by users and providers; 7. Preparation of annual statistical claim reports for valuation of "Incurred but not Received'; 8. Preparation of IRS Reports (1099) Medical Provider Fees: 9. Claim control practices; and 10. Verification of employee eligibility as to coverage and benefits. 18 OCT -07 -2002 09:55 CITY OF ROUND ROCK SPECIMEN 5122187097 P.22/62 Actuarial and Underwriting Services This includes those services which concern the pricing of benefit types and the actuarial estimate of the incurred but unreported claim reserve. Such services include: 1. Benefit design advice; 2. Annual re -rating of the existing plan; 3. Pricing proposed benefit plan alternatives; and 4. Advice on the expected financial results of plan changes. The Service Contractor will perform the following services which are not included in the Basic ASO Service Fee• I.D. Cards Identification cards will be prepared for enrolled employees based on eligibility information provided by the Client. Electronic Services Electronic Services are available as described in a separate Appendix. - Certificates of Creditabte Coverage In accordance with federal regulations. Individuals will be provided with Certificates of Creditable Coverage at specified times which will contain documentation of prior coverage including coverage period. Document Preparation Document Preparation Includes basic drafting which consists of preparation of the employee Summary Plan Description and provision of a "wrap" Plan Document (stating the Clients intent to establish the Plan in writing pursuant to ERISA regulations). The cost of printing the Summary Plan Description and other documents is included. 19 OCT -07 -2002 09 55 CITY OF ROUND ROCK SPECIMEN Appendix C Claims Processing and Payment Services (Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December t, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 5122187097 P.23/62 The Service Contractor shall accept for processing and payment or denial, all claims presented under the Plan. The examination, investigation, review, calculation, approval and disapproval of all such claims by the Service Contractor shall be in accordance with the Service Contractor's claim cost control standards, audit procedures, and claim practices, as agreed to by the Client. The Service Contractor shall investigate the validity of each claim and each recurring benefit payment and shall compute the benefits payable, if any, on each such claim. The Service Contractor shall pay all claims which it has determined to be payable under the Contract, except the following: a. All contested or doubtful claims or benefit amounts shall be referred to the Client for its determination of liability and instruction to the Service Contractor. Claims with respect to which there is legal action against the proceeds, such as suit, attachment, or restraining order; on such claims the Service Contractor will consult with the Counsel of the Client and shall proceed to pay or deny the claim or tum the file over to the Client for further processing, as set forth in written advice from the Client's Counsel. b. The Service Contractor will take appropriate action, such as denial, holding in pending, or turning over to the Client If the claim becomes involved In legal action or proceedings; such instances would include but not be limited to where the claimant or his representative has filed a claim or an appeal under any law applicable to benefit entitlement, including but not limited to workmen's compensation, unemployment compensation, disability or cash sickness law of any state. It is understood that the duties of the Service Contractor under this Contract shall not involve insurance department proceedings, tax proceedings, proceedings before quasi - judicial boards. medical proceedings, the furnishing of legal advice, or participation in any function or activity prohibited to the Service Contractor, provided, however, the Service Contractor will provide to the Client its files and any other records of action that it has taken with respect to any claim. 20 OCT-07 -2002 09:56 CITY OF ROUND ROCK SPECIMEN 5122187097 P.24/62 Subject to and except as otherwise provided in any set of rules of administrative procedure agreed to in writing by the Client and the Service Contractor with respect to the administration of benefits pursuant to this Contract, each individual administrative act, decision and interpretation by the Service Contractor (including any errors, clerical or otherwise) shall be binding upon the Client with respect to past performance or completed action. In addition, the Service Contractor shall not be responsible for errors in eligibility information and COBRA qualified beneficiaries information provided to it by the Client or the Client's agent. (ii) . if after any payment has been made hereunder (i) tc or on behalf of an ineligible individual, or { a it is determined that more or less than the correct amount has been paid by the Service Contractor. the Service Contractor will attempt to recover the payment made to an ineligible person, or the overpayment, or will adjust the underpayment, but the Service Contractor will not be required to initiate court proceedings for any such recovery. If the Service Contractor is unsuccessful, the Service Contractor shall so notify the Client in order that the Client may take such action as may be available to It. Accounting for Claim Payment During the continuance of the Service Contractor's claims processing and payment of benefits pursuant to this Contract, the Service Contractor shalt render an accounting monthly unless otherwise agreed upon by the Service Contractor and the Client In writing. Such accounting details may be set forth in a separate written statement, but shall include the following: Monthly Accounting Within 30 days following the end of a Plan month, the Service Contractor will furnish to the Client a list of claims paid, showing the coverage(s) under which the claim was paid and the amount paid on each claim, the totals paid under each coverage, and the grand total of payroents for the month. 21 OCT -07 -2002 0956 CITY OF ROUND ROCK SPECIMEN 5122187097 P.25/62 Appendix D Subrogation and Recovery Services (Not Included In the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 ay and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 1. The Service Contractor agrees to provide, on behalf of and as agent of the Client, subrogation and recovery services to the Client's Plan. Such services are limited to those cases in which the Service Contractor has identified the Clients possible rights of subrogation, reimbursement or recovery (hereafter, "Claim "). The Service Contractor will use its good faith efforts to recover Claims for the Plan, arising out of or in connection with health care benefit payments for injuries or illness of any Covered Person, against tort- feasors, their insurers or any other sources of payment liable or responsible for such injuries or sickness, or for the treatment or service costs thereof. The Service Contractor will not be required to pursue any subrogation or recovery that is reasonably expected to result in a recovery of $1,000 or less. The Service Contractor is given full, exclusive and discretionary authority to settle any Claim that could reasonably result in: (I) a maximum recovery of $5,000 or less: or (ii) a maximum recovery of more than $5,000. provided that the settlement offered represents at least 70% of the maximum possible recovery of such Claim 2. The Service Contractor is expressly authorized to take all actions contemplated herein, including, but not limited to. the authority to pursue subrogation, reimbursement, recovery and other related rights through any legal means, to retain counsel on behalf of the Client, to settle and compromise Claims, and to delegate and subcontract the responsibilities of such subrogation and recovery services to third party vendors. 3. Subject to the Client's payment of compensation as provided In 4 below, the Service Contractor shall be responsible for all ordinary and necessary expenses of recovery incurred by it or its delegate in connection with the performance of its duties, as set forth in Exhibit 1, attached hereto. 22 OCT -07 -2002 09:56 CITY OF ROUND ROCK SPECIMEN 23 5122187097 P.26/62 4. The Client agrees to pay the Service Contractor, as compensation for services, fees equal to 33.3% of all Claims recovered following the commencement of any collection or recovery effort taken by the Service Contractor, whether such Claims are paid to or recovered by the Service Contractor. its delegate, the Client, or its delegate or assignee. The Service Contractor has the right to offset any fees owed to it against any recovery amounts belonging to the Client. The Service Contractor reserves the right to change the rate of the fees charged by giving the Client at least four months advance notice. If the Client does not exercise its right to terminate this Appendix within 20 days after the notice of changes in the fees, the new fees as changed shall become effective as of the date stated in the advance notice. 5. Upon termination of this Contract or Appendix, for any reason other than breach, the Service Contractor shall continue to be authorized to pursue recovery of Claims unrecovered, in whole or in part, on the termination date, and shall be entitled to be compensated for the recovery pursuant to the fees in effect as of the termination date. OCT -07 -2002 09:56 CITY OF ROUND ROCK SPECIMEN EXHIBIT 1 (to Appendix D) Ordinary and Necessary Expenses 1. Ordinary and Necessary Expenses include costs for the following: A. File Handling Costs; B. Outside Copy Services; C. Outside Investigations; D. Expert Witness Evaluations; and E. Legal Services necessary to make recovery on the Claims. 5122187097 P.27/62 11. Not Included as Ordinary and Necessary Expenses are, but not limited to: A. Any commitments by the Client or Plan to pay fees and expenses to attorneys representing Beneficiaries; and B. Any payments that are required by any federal, state or local law to be paid to attorneys representing Beneficiaries. Attorneys' fees and expenses described In paragraphs ILA. and B. shall be paid solely from the case recoveries, and the amount of recovery for purpose of computing the Service Contractor's service fees will be net of any payments of such amounts. The Service Contractor will comply with any withholding requirements on any applicable sales and use taxes, and will withhold such amounts from cash recoveries. as required, and in addition to Fees due to the Service Contractor. 24 OCT -07 -2002 0956 CITY OF ROUND ROCK SPECIMEN Appendix E Managed Care Services (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 5122187097 P.28/62 1. Managed Care Programs. The Service Contractor agrees to provide services to allow the Client to establish the following programs under its Plan: a. Provider Network. A Provider Network consisting of participating hospitals, physicians, other health care professionals and other types of providers as appropriate (collectively called "Providers "). A higher level of benefits is typically paid when the Member receives covered health care services from the Provider Network or as otherwise set forth in the Plan. b. Medical Management. A medical management program known as Care Management ( "CM "). A care manager will assess the health care needs of a Member with a long -term and/or complex illness or injury, develop appropriate discharge plans, and coordinate needed medical services. A care manager will also review medical necessity and appropriateness of care through pre- treatment authorization of inpatient hospitalization and certain outpatient procedures, review of continuing hospital stays, and an appeal process. Written notice will be promptly provided to the Member, the hospital where appropriate, and the treating physician of the status of each authorization. c_ Subcontractors, The Service Contractor may occasionally utilize services of subcontractors to assist with assessment of the case. Payment of said subcontractor fees will be the responsibility of the Client. However, the Service Contractor will be liable for payment of the subcontractor fees if the benefits payable exceed the applicable amounts pursuant to the excess loss policy. The Service Contractor will develop mechanisms for early identification of potential cases to benefit from the CM Program. In the CM Program, the Members' individual needs are assessed with both the Member and the attending physiden. An alternative treatment plan to traditional care is developed and presented to the Member and family members and the physician h yl l ian for approval. The altemative treatment plan is implemented via coordination by h professionals. Claims reflective of the altemative treatment plan are submitted and reviewed by the CM Program. The CM Program monitors the medical necessity of the care until case closure. 25 OCT-07 -2002 . 09:57 CITY OF ROUND ROCK SPECIMEN 5122187097 P.29/52 The Service Contractor is not required to seek Client's approval prior to the implementation of any alternative treatment plan where: i, all expenses to be payable under the alternative treatment plan are normally covered under the Client's Plan; or with respect to the Client who has a separate stop -loss or excess loss policy in effect with the Service Contractor covering Its excess loss under the Plan, expected benefits payable outside or within the altemative treatment plan exceed the applicable stop -loss or excess loss protection paint. In all cases, the Client agrees that expenses for the alternative treatment plan shall be included as eligible expenses even if they are not included as such under the Clients Plan - d, Adverse Determination/Additional Review. if a Member receives an adverse determination under one of these programs and seeks additional review (as entitled by law or by the terms of the Plan), by a third party or an independent utilization review organization, any cost or fee for such additional review shall be billed to the Client or charged against the Client's Benefit Plan Account. 2. Provider Network Producttsl a. Ne rks. The Service Contractor shall contract with one or more networks of Providers to furnish health care services In conjunction with the Provider Network Product. b. Availability and Incentives to Members. The Service Contractor shall offer and the Client shall make the Networks available to Members. It is the duty and responsibility of the Client to include in the Plan incentives and /or disincentives to Members to encourage use of the services of the Networks. c. Provider Network Directories. The Service Contractor shall provide the Client with access to a directory listing of Network Providers and shall provide periodic updates of same. The Service Contractor reserves the right to revise the directory at least once a year to reflect changes in the participation of Providers. d. Standard and Character of Performance. The Service Contractor, through its contracts with Networks, shall use customary and reasonable care and proper diligence in the performance of its of services nder this 1974, 29 Ss 1001, Appendix. ( "ERISA "), the wil be deemed eemed the "Administrator" and "Named Fiduciary" of the Plan. 26 OCT-07 -2002 09:57 CITY OF ROUND ROCK SPECIMEN 27 5122167097 P.30/62 3. Disease Management Program for Chronic Medical Conditions a. The Service vendor(s), will its own gement n to o Memberrs id contracted entifi das and third -party (). provide to be service recipients under the program. b. The Service Contractor, through its own employees, Affiliates and/or employees of contracted third -party vendor(s), will perform an initial identification of Members meeting predetermined medical criteria indicating the potential to be service recipients. This Identification process will be based on Information legally obtained through claims, Members' self - referral or other valid sources. c. The Member who consents and is accepted into the program ("Participant") will receive services consisting of assessment and education for targeted diseases. The services are designed to enable the Participant to gain knowledge and skills necessary to prevent severe chronic medical conditions. manage his or her life -long condition and improve quality of life. The program does not provide medical treatment, therapeutic services or hands -on home nursing. The program neither warrants nor guarantees the wall -being or improvement of the Participant's chronic medical condition. d. The Client agrees to provide 100% benefit reimbursement under its Plan, without application of the deductible or copayment, for educational services received under the disease management program. The benefit reimbursement amount does not apply to the Members lifetime maximum under the self-funded plan. "Chronic Medical Condition" means an illness for which there is no cure; however, medical treatment is available. It is a long -term illness that does not ordinarily pose an immediate threat to one's life. Chronic medical conditions covered under this program may include, but are not limited to, intense diabetes, asthma or cardiac conditions. 4. Maternity Management Care Program This program monitors the health and well-being of pregnant mothers. Care managers are trained to identify potential difficulties and maintain regular phone contact with pregnant mothers. checking the status of their pregnancy and answering questions about pregnancy and delivery. The program neither warrants nor guarantees a normal or safe pregnancy or delivery. Nor does it guarantee the health or well- being of pregnant mothers or their newbom child(ren). OCT -07- 2002 09:57 CITY OF ROUND ROCK SPECIMEN 5122187097 P.31/62 APPENDIX F Hospital Bill & Credit Balance Audits and Overcharge Billing Recovery Services (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 1. The Service Contractor agrees to provide. on behalf of and as agent of the Client, through its employees and /or subcontractor(s), hospital bill audits, overcharge billing recovery services and credit balance account audits for the Clients Plan. Such services are limited to those inpatient, outpatient, emergency and trauma hospitalization claims which the Service Contractor has identified as meeting its auditing guidelines (hereafter, "Claim "). Each hospital bill audit entails a comparison of billed services to services ordered and/or documented in Me medical record. Upon conclusion of each hospital Gill audit, the Service Contractor will present the applicable medical provider with a billing listing the net overcharges due and will employ commercially reasonable efforts to recover the overcharges from the provider. 2. As compensation for services, the Client agrees to the following terms regarding the rate of service fees and its payment to the Service Contractor of such fees: a. Fees equal to 33% of all audit savings which are recovered following the commencement of any hospital bill audit, overcharge billing recovery effort. or credit balance account audit undertaken by the Service Contractor, whether such savings are paid to or recovered by the Service Contractor, its subcontractor(s), the Client. or its delegate or assignee. The Service Contractor has the light to offset any fees owed to it against any audit savings recovery amounts. b. Fees equal to 33% of the identified audit savings should the Client request the Service Contractor to forego recovery of a specific overpayment or positive balance after the audit process is complete. c. The Service Contractor reserves the right to change the rate of the fees by giving the Client at least 60 day advance notice. If the Client does not exercise its right to terminate this Appendix within 30 days after the notice of changes in the fee rate, the new fee rate shall become effective as of the Client's ASO Ser ice Contract anniversary date following the advance notice. The fees stated above are inclusive of the Service Contractors handling and transactional charges and subcontractors' fees. "Audit Savings" means the net dollar amount of the overcharges less the undercharges as identified in the final audit summary report with respect to a hospital bill audit, or a dollar amount consented by a hospital as a positive balance at the conclusion of a credit balance account audit. 28 OCT -07 72002 0958 CITY OF ROUND ROCK SPECIMEN 29 5122187097 P.32/62 3. Upon termination of this Contract ar Appendix, for any reason other than breach, the Service Contractor shall continue to be authorized to provide auditing and overcharge billing recovery services with respect to all Claims in process on the termination date- Claims are considered in process if the Service Contractor or its subcontractor has evaluated, screened, audited or in any way processed, including all Claims inventoried in auditing database. 0CT -07 -2002 0958 CITY OF ROUND ROCK SPECIMEN 30 5122187097 P.33/62 Appendix G Performance Standards Program (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY A. Operational Performance Standards Program Operational Performance Standards pertain to Service Contractor's administration of Clients Plan and includes the following standards: Claim Turnaround, Financial Accuracy. Total Quality. Claims Analysis Reports and Health Plan Management Reports, Telephone Response Time, Telephone Abandonment. 1. Prerequisite for the Initiation of Operational Performance Standards An executed copy of the Administrative Services Contract is required in order for the Service Contractor to process the payment of any Operational Performance Penalty. 2. Effective Date The effective date of the Operational Performance Standards Program is January 1, 2003 due to a three month moratorium from the effective date of the Contract with regard to the initiation of the program, provided the Service Contractor has received all necessary information from the Client or its designee by the effective date of the Contract, or other agreed upon date needed tc meet such standards. 3. Reporting and Settlement a. Reporting: Service Contractor shall provide Client with a report consisting the results of Service Contractor's performance in comparison to the applicable Operational Performance Standards within 45 days after the end of each Calendar Quarter. b. Settlement Service Contractor shall pay the cumulative quarterly penalties, if applicable, to Client as set forth below, for each Operational Performance Standard that is not met, within 90 days after the end of the Calendar Year subject to the Maximum Operational Penalty set forth in B.6. OCT-07 -2002 09:58 CITY OF ROUND ROCK SPECIMEN 4. Operational Penalty Calculation The operational penalty percentages shown below reflect a percentage of the Basic ASO Service Fee as set forth In Appendix A. To calculate an operational penalty, the penalty percent is multiplied by the Basic ASO Service Fee and multiplied by the number of employees and dependent units covered under the Plan on the last day of each Plan Month within the applicable Calendar Quarter. Except for Claim Analysis Reports and Health Plan Management Reports. performance will be measured for the claim office assigned to the Client. When calculating actual results to determine whether standards have been met. all percentages will be rounded to the nearest tenth of a percent. 5. Operational Performance Standards and Corresponding Penalties a. Claim Tumaround: Standard: Eighty-elght percent (88 %) of claims will be Processed during the Calendar Quarter by the Service Contractor within ten (10) working days of the Service Contractors receipt of the claim at its designated national Imaging Center in Kennett. Missouri. Penalty: If the standard Is not achieved, the penalty will be determined by the percentage of claims Processed by the Service Contractor within ten (10) working days f receipt, su to the Maximum Operational Penalty. Only one (1) penalty percentage amount below will be applicable for any given Calendar Quarter. Percentage Processed 86.0 %- 87.9% 83.0% -85.9% <83.0% 31 Penalty Percentage 1% 3% 5% Percentage Processed 96.0% -96.9% 94.0% -95.9% <94.0% Penally Percentage 1% 3% 5% 5122187097 P.34/62 Standard: Ninety -seven percent (97 %) of claims will be Processed during the Calendar Quarter by the Service Contractor within twenty (20) working days of the Service Contractor's receipt of the claim at its designated National Imaging Center in Kennett, Missouri. Penalty: If the standard is not achieved, the penalty will be determined by the percentage of claims Processed by the Service Contractor within twenty (20 working d amount days of receipt, subject to the Maximum Operational Penalty. Only one (1) penalty p e below will be applicable for any given Calendar Quarter. Total Quality Percentage Penalty Percentage 94.0%-94.9% 93.0 % -93.9% 2% 92.0% -92.9% 3% 91.0%-91.9% 4% <90.9% 5% OCT -07 -2002 09:58 CITY OF ROUND ROCK SPECIMEN 5122187097 P.35/62 b. Financial Accuracy Paid: Standard: The Financial Accuracy for the Calendar Quarter shall be at least ninety-nine percent (99 %)_ Formula: The Financial Accuracy Percentage is calculated by dividing the dollar amount of audited claims paid accurately for the Calendar Quarter by the total audited claim dollars paid for the Calendar Quarter. Penalty: If the Standard is not achieved, the penalty will be determined by the actual Financial Accuracy Percentage for applicable Calendar Quarter, subject to the Maximum Operational Penalty. Only one (1) penalty percentage amount below will be applicable for any given Calendar Quarter. Financial Accuracy Percentage 98.0% -98.9% 97.0 % -97.9% 96.0% -96.9% 95-0%-95.9% <94.9% Penalty Percentage 1% 2% 3% 4% - 5% 1 c. Total Quality: Standard: The Percent of Audited Claims Processed Accurately for the Calendar Quarter shall be at least ninety- five percent (95 %). Formula: The Total Quality Percentage is calculated by dividing the number of audited claims Processed accurately for the Calendar Quarter by the total number of claims audited for the Calendar Quarter. Penalty: If the Standard is not achieved. the penalty will be determined by the actual Total Quality percentage for the applicable Calendar Quarter, subject to the Maximum Operational Penalty. Only one (1) penalty percentage amount below will be applicable for any given Calendar Quarter. 32 OCT -07- 2002 09:59 CITY OF ROUND ROCK SPECIMEN 33 5122187097 P.36,62 d. Claims Analysis Reports and Health Plan Management Reports: Standard: Monthly Claims Analysis Reports shall be available to the Client within fifteen (15) working days of the end of the reporting period. Penalty: If the Monthly laims Analysis the Penalty shall lhbe days s of of the end of the e reporting p tY for the Plan Month measured 550.00 per day for each working day that a report is late . with a maximum Penalty of 5300.00 per report, subject to the Maximum Operational Penalty. Standard: Quarterly and Year End Claims Analysis Reports or Health days Management of nagement the reporting shall orting p eel d. This the measured sured by the date (45) the Service Contractor sends the the p reports. Penalty: If Quarterly and Year end Claims Analysis Reports or Health Plan Management Reports are not sent within forty-five (45) calendar days of the end of the reporting period. the Penalty shall be $50.00 per day for each day a report is late , with a maximum Penalty of 5300.00 per report, subject to the Maximum Operational Penalty. e. Telephone Response Time: Standard: The telephone response time standard shall be an average speed of answer of thirty (30) seconds as measured by the Service Contractor, using a computer system that monitors calls that are received on the Service Contractor's phone lines. Tracking begins when the caller exits (or is transferred from) the automated system to speak to a customer service representative. Penalty: If the telephone response time standard is not achieved during a Calendar Quarter, the Penalty will be 1% for such Calendar Quarter, subject to the Maximum Operational Penalty. f. Telephone Abandonment: Standard: The telephone abandonment rate standard shall be less than or equal to five percent (5 %) of the telephone calls received by the Service Contractor, as measured by a computer system that monitors calls received on the Service Contractor's phone tines. Tracking begins when the caller exits (or is transferred from) the automated system to speak to a customer service representative. Penalty: If the telephone call abandonment rate standard is not achieved during a Calendar Quarter, the Penalty will be $500.00 for such Calendar Quarter. subject to the Maximum Operational Penalty. OCT -07- 2002 09:59 CITY OF ROUND ROCK SPECIMEN 34 5122187097 P.37/62 6. Maximum Operational Penalty The overall maximum penalty for the Operational Performance Standards Program is the lesser of the sum of the penalties calculated in B.S. above, or twelve percent (12 %) or $25,000.00 per Calendar Quarter. 7. Definitions a. "Calendar Quarter" means January through March, April through June, July through September and October through December. A partial Calendar Quarter will be used to calculate the first quarter Operational Penalty if the effective date of the Operational Performance Standards Program is not either January 1, April 1, July 1 or October 1. b. "Calendar Year means January through December. Calendar Year settlements will occur within 90 days alter the end of the applicable Calendar Year, including partial Calendar Years. c. "Financial Accuracy" means the total value of underpayments and overpayments as a percent of total claim dollars paid in an audit sample. d. "Processed" means that a complete claim has been paid or denied, or notification has been sent to the member or provider advising that a claim is not complete and that more information is required. • Claims Processed will include those for medical and dental benefits on or after March 1. 2003. e. "Total Quality" means the number or claims Processed accurately in an audit sample, including both financial and nonfinancial measures. 8. Termination of Program The Program will end the earlier of the effective date of the Contract termination pursuant to the Term and Termination of Contract provision of this Contract or on the date that the employee welfare benefit plan ends. OCT -07 -2002 0959 CITY OF ROUND ROCK SPECIMEN Appendix H License Agreement for Electronic Services (Not Included in the Basic ASO Service Fees) The components of this appendix will become effective upon the completion of each components transition. To be attached to and made a part of the Administrative Services Contract By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 5122187097 P.38/62 1. Grant of License The Service Contractor agrees to grant Client a non - exclusive, non - transferable, non - assignable license to use the Service Contractor's proprietary Electronic Services solely for Clients internal purposes in connection with its administration of the Plan. 2. Definitions For purposes of this Appendix the following terms shall have the meanings set forth below: a. "Data° means: i. the pertinent identifying information about each employee and dependent whom Client reports as eligible for coverage through the Plan (Including coverage under COBRA), the dates these individuals' coverage begins and ends, and the class and type of coverage for which each such individual is enrolled; ii. the amount of creditable coverage attributable to each enrolled ble for care for who a is subject preexisting to any waiting period before Plan benefits will be n condition; and iii. the number of employees and COBRA contuluees enrolled for each class and type of coverage, the amount of life insurance, if any, applicable to each enrolled individual, and all other information necessary for Service Contractor to be able to verify the amount of premium andlor other fees due from Client. b. "Electronic Services" means any one or combination of the following applications, as selected by Client: Financial Reporting — Provides access to financial information associated with the payment of claims pursuant to the Plan. The following reports will be available through this service: Check Register, Stop Loss, Control Pay, PDEC Report, Same Cycle Void, Draft Register, and Claim History. 35 OCT -07 -2002 09:59 CITY OF ROUND ROCK SPECIMEN 36 5122187097 P.39/62 ii. Billing - Provides the ability to request and run billing statements for the Plan utilizing the eligibility information and the billing standard billing reports el be aila v available. Turnaround Document d and billing systems. The following 9 Reports, w rts, Life Detail Reports. Document Report, Detail Reports, Product Summary Po Eligibility Management - Allows Client to perform the following eligibility maintenance functions: Add new employees and /or dependents, update information on existing employees and dependents, including but not limited to terminations, reinstatements, COBRA election, FSA o view current a d benefit and/or update products, u this service. D cards. Members will have the ability iv. Eligibility Reporting - Allows Client to report on Member eligibility utilizing Service Contractors eligibility system. Client will have access to standard reports Including: Family Report, Coverage Report, FSA Report, Mailing Labels, Birthday Report, and Codes Tables. Client will also have the ability to generate its own custom reports. v, Claim Status information - Allows Members and Client the ability to view processed, pended claim information, and control pay claim information. Claim data will be updated nightly. Claim history will be available for up to three years. Explanation Of Benefit -type copies will be printable from this application. vi. Health Plen Management Reports - Provide Client with periodic Health Plan Management Reports and Managed Care Reports. vii. MyCare - A comprehensive, web -based interactive wellness and health management program. MyCare offers these features: personal wellness assessment, activity logging system, body data monitoring, fitness tests, a "virtual" health coach, a medical self -care guide, healthy recipes, and health and nutrition data bases. c. "Documentation" means the User Guidelines manual which Service Contractor makes available to Client through the Electronic Services. d. "Member" means a person who meets the eligibility requirements of the Plan and Is enrolled for coverage under the Plan. 3. Client's Responsibilities a. The Electronic Services are accessible via computer transmissions for use on compatible personal, home or business computers. Including Internet appliances with modems, and network computers. Client agrees that in order for the Electronic Services to perform to its own or its Members' satisfaction, or at all, it and its Members are solely responsible for procuring, setting up, maintaining and paying the charges for the hardware, software and other technology they use to access the Electronic Services. Service Contractor shall have no liability for any service difficulties resulting from Client's or its Members' failure to possess and correctly utilize technology adequate to use the Electronic Services. b. Client and its Members shall be solely responsible for any communication charges, including but not limited to local and long distance telephone charges, cable and satellite television subscription charges, and Internet service provider charges. they incur in connection with their use of the Electronic Services. c. Client shall pay Service Contractor a monthly fee for use of the Electronic Services. This fee shall be payable as part of the ASO service fees set forth in Appendix A of the Administrative Services Contract. As provided In the Administrative Services Contract, the Service Contractor has the right to change the fee for Client's use of the Electronic Services. OCT -07 -2002 10:00 CITY OF ROUND ROCK SPECIMEN 5122187097 P.40/62 4. Client's Use of Electronic Services a. Client shall permit only its bona fide employees responsible for benefit administration to utilize the Electronic Services. Client may permit Members to utilize the Electronic Services only if Client has selected Claim Status Information and Eligibility Management services. b. Except for applications commonly known as web browser software, Client on its own behalf and on behalf of its Members agrees not to use any software, program, application or any other device to access or log on to Service Contractor's computer systems or website or to automate the process of obtaining, downloading, transferring or transmitting any content or information to or from Service Contractor's computer systems or website. Client on its own behalf and on behalf of its Members agrees to refrain from all use of indecent or profane language when making any electronic communication by means of the Electronic Services. c. Client on its own behalf and on behalf of its Members acknowledges that electronic communications may be accessed by unauthorized third parties when communicated between Client or Members and Service Contractor using the Internet, and agrees to use software produced by third parties, including but riot limited to what Is commonly known as web browser software that supports a data security protocol compatible with the protocol used by Service Contractor. Unless otherwise notified by Service Contractor, Client on its own behalf and on behalf of its Members shall use software that supports the Secure Socket Layer (SSL) protocol and follow Service Contractor's log-on procedures for the Electronic Services. Client on its own behalf and on behalf of its Members agrees that Service Contractor is not responsible for notifying it of any upgrades, fixes or enhancements to any such software or for any compromise of data transmitted across computer networks or telecommunications facilities, including but not limited to the Internet. d, Service Contractor shall issue Client at least one unique user ID and password to enable use of the Electronic Services. Service Contractor shall issue Client additional unique user IDs and passwords to (I) enable additional employees of Client to make use of the Electronic Services and (it) replace user IDs and passwords assigned to individuals who leave Clients employ or whose job duties no longer require use of the Electronic Services. If Client has MyCare or has selected Open Enrollment, Claim Status Information, or Eligibility Management services. Service Contractor will enable Members to create individual unique user IDs, and Service Contractor will issue each Member a unique password. Client shall immediately notify Service Contractor when any of its employees to whom a user ID and password was issued terminates his or her employment or is transferred to a position that does not require use of the Electronic Services. Client on its own behalf and on behalf of its Members agrees that it will be responsible for the confidentiality and use of user IDs and passwords, and to not hold Service Contractor liable for any damages of any kind resulting from Clients or its Member's decision to disclose its user ID or password to any third party. Client on its own behalf and on behalf of its Members agrees to immediately notify Service Contractor (i) If it becomes aware of any Toss or theft or unauthorized use of Clients or any Member's user ID or password or any unauthorized use of the Electronic Services. e. All use of the Electronic Services by Client and its Members is subject to the terms of this Appendix and the Disclosure Statement and Terms of Use, Privacy and Security notice, and Legal Notice posted on the Service Contractor's website. In the event of any conflict between the terms of this Appendix and the provisions of such Disclosure Statement and Terms of Use, Privacy and Security notice, and Legal Notice, this Appendix shall control. 37 OCT-07 -2002 , 10:00 CITY OF ROUND ROCK f. Any failure by Client to comply with the provisions of this Section 4 shall be a material breach of this Agreement and may constitute misappropriation of Service Contractors intellectual property rights. Client shall assume all responsibility and liability, and agrees to indemnify, defend, and hold Service Contractor harmless for any liability, which arises out of any use of the Electronic Services contrary to any provision of this Section 4. Client acknowledges and agrees that any violation of any term, condition or provision of this Section 4 would cause Service Contractor Irreparable harm for which there would be no adequate remedy at law, and that Service Contractor shall be entitled to preliminary and other injunctive relief against any such violation. Such injunctive relief shall be in addition to, and in no way shall limit, any other rights or remedies which Service Contractor may have at law or in equity including, but not limited to, damages. h. Service Contractor may, in its sole discretion. suspend or terminate access to the Electronic Services by Client or any Member who violates any term, condition or provision of this Section 4. Such suspension or termination of access shall not entitle Client, Member. or any other person to any compensation or damages of any kind. 5. Data Accuracy; Confidentiality; Proprietary Information a. Client acknowledges that Service Contractor will rely on the Data Client submits to Service Contractor through use of the Electronic Services for the purposes of maintaining records of Members' eligibility and underwriting and administering the provisions of the Plan. Client hereby warrants that the Data it submits to Service Contractor through its use of the Electronic Services shall be complete and factually accurate in all respects, shall conform to and be consistent with the Plan's terms and provisions and shall be sufficient to enable Service Contractor to accurately calculate premium and /or other fees due in connection with the Plan. In particular, Client warrants that individual persons will be enrolled and disenrolled in strict accordance with the eligibility and other applicable provisions of the Plan. b. Client acknowledges that the Electronic Services are confidential and proprietary products and processes, that they embody valuable trade secrets, and that Service Contractor has certain intellectual property rights in and to the Electronic Services. Client acknowledges that no right, title or interest, except for the limited license set forth herein, is conveyed or transferred to Client by this Agreement. c. Client on its own behalf and on behalf of its Members agrees to indemnify and hold Service Contractor and its officers, directors, shareholders. employees and agents harmless from and against any and all claims, losses, liability costs and expenses (including but not limited to attorneys' fees) arising out of or in any way related to Client's providing or failing to provide Data through Client's use of the Electronic Services, or Service Contractor's use of Data in reliance upon its accuracy and completeness and/or consistency with the Plan's provisions, or from Client's violation of any of the terms of this Appendix. These obligations shall survive the termination of this Appendix and /or the Administrative Services Contract. g. SPECIMEN 38 5122187097 P.41/62 6. Support Services Service Contractor will provide Client with Documentation and other assistance in accessing the Electronic Services. Such assistance may be by telephone or through on -site training as Service Contractor in its sole discretion deems appropriate. For any on -site training, Client shall pay all Service Contractor's travel, reasonable living and other out -of- pocket expenses. and daily rates for Service Contractor's employees' time. Service Contractor shall provide Client's Members only with telephonic assistance in interpreting information provided through the Electronic Services. OCT -072002 , 10:00 CITY OF ROUND ROCK SPECIMEN 39 512218709? P.42/62 7. Limited Warranties a. For the term of this license. Service Contractor warrants that the Electronic Services will perform substantially in accordance with Service Contractor's specifications when properly accessed. Service Contractor's warranty obligations under this Appendix are specifically and expressly limited to providing access to and proper function of the Electronic Services. Service Contractor's warranty shall not apply to operator errors, Client or Member hardware or software defects, failure of or incompatibility with the Electronic Services. or telephone, cable or satellite television, or Internet service provider failures. b. There is no warranty of merchantability, no warranty of fitness for a particular use and no warranty of information or any aspect of the Electronic Sery of ices. ces. pbutsno implied. mired to informal on access. 8. Limitation of Liabilities Notwithstanding anything to the contrary in the Administrative Services Contract, under no circumstances shall Service Contractor be liable to Client or any other party for damages of any kind. whether arising in tort, contract, negligence, strict products liability, statutory or regulatory violation or any other legal theory, in connection with or in any way arising out of Service Contractor's provision of Electronic Services i to Client. Service Contractor will not be liable to Client or any other party for any type of damages, g but not limited to loss of data or software programs, business interruption. loss of use, loss of profits, invasion of privacy, or the like, even if Service Contractor has been advised in advance of the possibility of such losses or damages. If Service Contractor is found liable for any loss or damage which arises out of or in connection with this Appendix, then the liability of Service Contractor shall not exceed the Electronic Services fee and other charges Client has paid pursuant to this Appendix. The terms and provisions of this Section 8 shall survive the termination of this Appendix and/or the Administrative Services Contract. 9. Termination a. This Appendix may be terminated at any time upon fifteen (15) days prior written notice by Service Contractor to Client. In addition, this Appendix shalt terminate automatically at the time: I, the Administrative Services Contract ends; li. the Plan terminates; N. the Service Contractor no longer insures or administers the Plan; iv. Client commits a material breach of this Appendix x or efaults in the or default cance of any of f or a its duties or obligations under this Appendix and period of fifteen (15) days after Service Contractor gives Client written notice specifying the nature of the breach or default. b. Ninety (90) days after the terrnination of this Appendix, Service Contractor shall immediately deactivate all user IDs and passwords Service Contractor has issued to Client and its Members in connection with the Electronic Services. However Client's access to Eligibility Management will terminate one day after this Appendix terminates and Billing will terminate forty -five (45) days after this Appendix terminates. Member access to MyCare shall terminate one day after this Appendix terminates. c. Fourteen (14) days after a Member's coverage under the Plan terminates. Service Contractor shall deactivate that Member's user ID and password, except access to MyCare shall terminate one day after Member's coverage under the Plan terminates. I. Stop -Loss Premium Costs Current (IfeolthFir8lwiIh51. David's network & ACE Slop- bas) potion l- Heall0First with FRCS Network and High mark Stop-loss Option 2- Great West with Excess, Inc (AIG) Stop-loss AND Two-Tier Option 3- Great West with Exec., Inc (AIG) Stop -loss AND Three- Tier Pa (510/915/830) Option d - Nomanawi[hownsrop- loss A. Specific Deductible: $50,000 $50,000 $50,000 $50,000 $50,000 Specific Premium - Single (365 Lives): $33.95 $38.02 543.92 $43.92 168.37 - Family (182 Lives): 586.85 $97.86 5108.56 $108.56 568.37 Projected Annual Premium: $383,360 8424,945 $478,936 $478,938 $477,496 r B. Aggregate Premium; 03.04 53.61 $3.33 5333 $5.88 Projected Annual Premium'. $21,231 525,212 523,257 523,257 541,066 Net Projected Stop -Loss Premiums: 3404, 592 6450,158 $502,195 $502,195 5518,562 Cosd(Saviogs) vs Current: $45,566 $97,603 397,603 5113970 1I. Stop -loss Aggregate Factors: Single 0276.66 $336.95 $355.91 5355.91 5537.59 Family 5725.70 $84238 8903.61 5903.61 5537.59 Expected Aggregate Deductible: 53,128,436 $3,699,724 $3,944,748 03,944.748 03,754,529 III. Administration Fees 011 a PEPM basis: - Administration'. 511.00 512.00 $26.60 52350 $29.06 - COBRA & HIPAA Administration: $1.50 10.72 50.45 $0.45 Included - Prescription Drug Admin. Costs (including dispensing fees): 114.08 $13.93 814.27 $13.66 50.00 - Dental Administration: $1.50 52.00 53.50 53.50 $3.52 • Utilization Review: 11.35 $1.70 Included Included $3.00 - PPO Network Access Fee: $1.50 14.15 86.20 $6.20 $3.00 - FSA Administration 53.00 53.00 $5.05 15.05 33.00 Total TPA Admin. Fees, PMPM: $33.93 337.50 556.08 $5236 541.58 Administrative Fees Total $236968 5261,907 5391,635 5365,694 5290 ,395 1V. Net Projected MAXIMUM Liability to Ci y of Round Ruck (12/02 -11/03 Net Premiums t• Expected Aggregate Deductible 4- TPA Admin. Costs: $3, 769, 996 $4, 411,789 04,838,579 04,812,637 $4,563,485 As % change over Current Costs: 17.0% 28.3.% 27.7% 21.0% V. Net Projected Aggregate Actual Liability o City of Round Rock (12/02 -1 /03) (based an esdmares of network claim sa10gs and administration rasa) 1 $3,857,7661 53,677,4061 03,662,7871 03,592,3661 $3,690,712 V1. Differential in Acticipated Aggregate Liability and MAXIMUM calculated Liabilty: (587,770)1 0734,7831 51,175,7921 01,220,2711 0872,773 City of Round Rock Stop -Loss Marketing - Effective Date 1211102 Cost and Savings Matrix DATE: October 4, 2002 SUBJECT: City Council Meeting — October 10, 2002 Resource: Teresa Bledsoe, Human Resources Director Funding: General Fund, Water /Waster Utility Fund Public Comment: N/A Sponsor: N/A ITEM: 13.E.1. Consider a resolution authorizing the Mayor to execute an Administrative Services Contract with Great -West Insurance Company for the administration of the City's self - funded health plan. History: This agreement with Great -West provides for independent third -party administration of the City's self- funded health plan which includes the payment of medical, dental, and vision claims, administration of the Flexible Spending Accounts for medical and dependent care reimbursement, monthly and quarterly reports and the coordination of benefits within the plan document. Cost: The cost of this insurance is a function of the number of employees and dependent units covered. Source of funds: City contribution and Employee paid premiums for dependent health care. Impact: The select of Great West that brings its own Provider network allows for greater provider discounts that should result greater ease of administration. Benefit: This agreement provides skilled medical plan claims administration in an efficient manner. 07202 Plan Doc (20) 1.1 The Plan. CITY OF ROUND ROCK, TEXAS (the Employer) hereby establishes a Plan of Medical Care, Dental Care, Vision Care aid Prescription Drug Benefits for its Employees, Retirees and Depen.;,, .ts. This plan will be known as the Cll Y OF ROUND ROCK, TEXAS Employee Welfare Benefit Plan (the Plan) and is effective as of December 1, 2002. This Plan is designed to provide Employees and their Eligible Dependents with significant financial protection against the economic strain that might result from Illness or Injury. The terms and provisions relating to the Medical Care, Dental Care, Vision Care and Prescription Drug Benefits, as described in the Summary Plan Description, EDA(7202)(12- 02)20, form a part of Mt) Plan. 1.2 Legal Status. This Plan will constitute an Employee Welfare Benefit Plan under the Employee Retirement Income Security Act of 1974 and has been reduced to writing in order to comply with ERISA Section 402. 1.3 Plan Document. The plan document consists of two parts: Part One includes Articles I through V; the "APPLICABILITY OF COVEFAGE DOCUMENT" page, the "ELIGIBLE CLASS OR CLASSES" ,:age, the "PROVISIONS RELATING TO INDIVIDUAL COVERAGE" pages and any amendments thereto; Part Two includes the attached Summary Plan Description of Medical Care, Dental Care, Vision Care and Prescription Drug Benefits for its Employees bearing an Effective Date of December 1, 2002, together with any amendments thereto. 2.1 Employee means any individual employed by the Employer and to the extent necessary, a retired or terminated employee entitled to receive Benefit payments under this Plan. 2.2 Participant means an employee who has elected to participate in the Plan. 2.3 Eligible dependent means an individual defined under the Plan as an eligible dependent. 2.4 Plan Claim Administrator means the entity designated by the Employer to pay claims for Benefits. 2.5 Plan Administrator means the Employer. 3.1 Source of Funds. The funding medium for the Plan is funds contributed by the Employer from its general assets and by Participants. The amount of Participant contributions shall be as determined by the Employer from time to time. /2- 09- /0- /D - /31; II PLAN DOCUMENT Article I. Establishment of the Plan Article II. Definitions Article III. Funding PlanDoc(112089)(7202) 1 (10- 09 -02) 07202 Plan Doc (20) Article IV. Payment of Claims 4.1 Submission of Claims. Claims for benefits under the Plan shall be submitted to the Plan Claim Administrator and in accordance with the procedures described in the Summary Plan Description in effect at the time claim is submitted. 4.2 Appeal of Denied Claim. An employee or eligible dependent whose claim is denied in whole or in part may appeal such denial in accordance with the claim review procedures described in the Summary Plan Description. Article V. General Provisions 5.1 Plan Administrator. The Plan shall be administered by the Employer, which shall have the authority to construe and interpret the terms of the Plan, and resolve any disputes which may arise with regard to the rights of persons covered under the Plan, including but not limited to eligibility for participation and claims for benefits. The Administrator shall be responsible for maintaining all records relating to the administration of the Plan and for complying with all reporting, filing and disclosure requirements established by the Internal Revenue Service and Department of Labor applicable to Employee Welfare Benefit Plans. 5.2 Rules and Decisions. The Administrator may adopt such rules as it deems necessary, desirable or appropriate. All rules and decisions of the Plan Administrator shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Plan Administrator shall be entitled to rely upon information fumished by a Participant, the Plan Claim Administrator, or legal counsel. 5.3 Nonalienation of Benefits. Benefits payable under this Plan shall not be assigned, transferred, or pledged as collateral prior to their actual receipt by the person entitled thereto under the terms of the Plan. 5.4 Termination and Amendments. The Employer intends that this Plan will continue in effect indefinitely, but reserves the right to amend, modify, revoke or terminate the Plan, in whole or in part, at any time. IN WITNESS WHEREOF, the Employer has caused this Plan to be executed by its duly authorized officers on this D day of C r.JL 20 0c2-/ Title: Plan Doc(112089)(7202) 2 (10- 09 -02) 07202 Plan Doc (20) PLAN OF MEDICAL CARE, DENTAL CARE, VISION CARE AND PRESCRIPTION DRUG BENEFITS (herein called the Plan) FOR EMPLOYEES OF CITY OF ROUND ROCK, TEXAS (herein called the Employer) Effective: December 1, 2002 Appendix K 07202 Plan Doc (20) 88- WRAP- I(7202) APPLICABILITY OF COVERAGE DOCUMENT The terms and provisions relating to the Medical Care, Dental Care, Vision Care and Prescription Drug Benefits, as described in the Summary Plan Description, EDA(7202)(12- 02)20, form a part of the Plan. 07202 Plan Doc (20) Eligible Class or Classes of Employees ELIGIBLE CLASS OR CLASSES Eligible employees are all employees of the Employer (or an associated company included for coverage under the plan) if: 1. they have begun work an average of 30 hours or more per week, excluding overtime; 2. they are at least 18 years of age; and 3. they are not independent contractors, contract workers, temporary, seasonal, casual or leased employees as interpreted by the Employer using Internal Revenue standards. A Retired Employee and his or her eligible dependents are included in an Eligible Class for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages. "Retired Employee" means a person who meets the rules and regulations of the Employer's Retirement Plan at the time of the retirement: Twenty years of service or Retirees with 5 years of service at age 60. List of Associated Companies None Employees of each Associated Company will be considered employees of the Employer. Service with an Associated Company shall be considered service with the Employer. If an Associated Company ceases to be under common control with the Employer, the coverage of employees of the Associated Company shall end on the date of such change. The inclusion of any Associated Company shall not affect the ownership of the Plan by the Employer or the rights of ownership of the Plan by the Employer. 88- EC(7202) ii (10- 09 -02) 07202 Plan Doc (20) Contribution Basis 1. For Employee's Coverage: Contributions are not required from employees for personal coverage. 2. For Dependent's Coverage: Contributions are required from employees for dependent coverage in accordance with the rules established by the Employer. 3. For Retired Employee Coverage: Contributions are required from Retired Employees for coverage in accordance with the rules established by the Employer. Employee Eligibility Date Each employee is eligible for coverage under this Plan on the date he or she enters an eligible class, or the effective date of the Plan, if later. Reinstatement 88 -PRI- 2(7202) PROVISIONS RELATING TO INDIVIDUAL COVERAGE An employee who re- enters an Eligible Class not later than six months after the date his or her coverage ends because he or she no longer performs Active Work on a Full -Time Basis in an eligible class shall be eligible on the date he or she re- enters such class. iii (10- 09 -02) 07202 ASO Contract(23) -1 ADMINISTRATIVE SERVICES CONTRACT BY AND BETWEEN CITY OF ROUND ROCK (Herein called the Client) AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY (Herein called the Service Contractor) Whereas, the Client desires to provide benefits for certain classes of individuals (hereinafter called "Members ") in accordance with a written employee welfare benefit plan (hereinafter called the Plan ") established by the Client as described in Appendix K; Whereas, under said plan the Client will bear all liabilities, except as otherwise specifically provided for herein, but desires that the Service Contractor provide certain services in connection with the administration and operation of the Plan; Whereas, the Plan is an employee welfare benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 ( "ERISA ") and the Client, who is both the fiduciary of the Plan and the Plan Administrator, hereby retains the Service Contractor to provide services for the Plan in accordance with the following terms and conditions; Now, therefore, in consideration of the payments to the Service Contractor as provided in the Payment Schedule, Appendix A, and subject to the terms and conditions contained herein, it is hereby agreed as follows: Section 1. Definitions As used in this Contract, its Appendices and Attachments: a. "Affiliate" means a person or entity within the same common control group as determined under Internal Revenue Code section 414(c) and the regulations thereunder, and for Service Contractor includes a person or entity with whom the Service Contractor operates under a joint marketing or joint venture contract. b. "Health Information" means any information related to health care treatment, payment or operations that identifies or could reasonably be used to identify a member. c. "Plan Administrator" shall have the meaning ascribed to the term "administrator" as defined in ERISA and shall have a comparable meaning for non -ERISA plans. d. "Plan Month" shall mean a calendar month. e. "Plan Quarter" shall mean a three calendar months period, with the first Plan Quarter beginning on the first day of the First Plan Year. The first "Plan Year" shall begin on December 1, 2002 and shall continue until the beginning of the second Plan Year The second Plan Year shall begin on December 1, 2003 and successive Plan Years shall begin with the anniversary of such date. 1 07202 ASO Contract(23) -2 Section 2. Services The Service Contractor will provide the services listed in Appendices B through J subject to modification as provided herein, for the administration and operation of the Plan; such services will be coordinated by a representative of the Service Contractor to assure effective and efficient operation of the Plan. It is understood that the Service Contractor performs purely non - discretionary and ministerial functions for the Client within a framework of policies, interpretations, rules, practices and procedures made by the Client. The Service Contractor shall perform Services in accordance with the terms of the Plan, including but not limited to the terms of the summary plan description (SPD). Any review by the Service Contractor of a claim, or of charges declined, is made as a service for the Client, who retains the final responsibility for determining its liability under the Plan. If the Client has not adopted a final SPD, the Service Contractor will process benefit payments in accordance with its standard policies and procedures for the benefits selected by the Client as set forth on the magnetic or computer readable records of Client's information maintained by the Service Contractor or prior carrier booklet with appropriate modifications, When following such standard policies and procedures, the Service Contractor will not be responsible for any act taken that may conflict with the terms of the SPD that is ultimately adopted. However in the event that the Client amends its Plan to include items that the Service Contractor either cannot or will not administer, nothing herein shall be construed to require the Service Contractor to so administer said amendments but, rather, this Contract shall remain in full force and effect as if said amendments had not been made. Section 3. Banking Arrangements The Client shall establish a separate Benefit Plan Account in a bank as the depository for funds to be used by the Service Contractor to make payments pursuant to this Contract and the Plan. The Client shall notify said bank that it has authorized the Service Contractor, by execution of this Contract, to issue and accept checks drawn on such account on behalf of the Client for the purpose of payments of benefits under the Plan and other expenses and fees related to such benefits. It shall be the Client's responsibility to maintain funds in this Account sufficient to cover all checks validly issued by the Service Contractor's authorized employees. Section 4. Payments to the Service Contractor 4.1 Service Fees. The Client shall make payments to the Service Contractor of amounts due for monthly service fees and other service fees and expenses as set forth in the Payment Schedule in Appendix A. Charges for hourly services will be determined in accordance with the Service Contractor's established time allocation procedures, and those of other organizations from whom hourly services are purchased. These charges will be made only if both parties agree on the Service Contractor's providing any hourly services. Printed material created at the Client's request and not listed in Appendix A will be billed for separately when furnished. 4.1.1 The Client acknowledges that the Payment Schedule is based on information provided by the Client including but not limited to the number of employees and dependents that the Plan will cover. The Service Contractor has the right to revise any Payment Schedule retroactively to the effective date or the anniversary date, as applicable, to reflect actual participation in the Plan. Any difference between payments made under the Payment Schedule and the Revised Payment Schedule will be collected from or credited to the Client. 4.1.2 Any proposed Payment Schedule will become final when the Service Contractor delivers a final written schedule, signed by its officer, to the Client and the Client accepts said Payment Schedule, as indicated by the Client's signature. 2 07202 ASO Contract(23) -3 4.2 Amendment of Fees. 4.2.1 The Service Contractor may propose changes to the fees under this Contract: a. if the Client amends its Plan to modify benefits; or b. upon modification of the Service Contractor's administrative duties; or c. if the Service Contractor's cost of operation is increased by virtue of a change in charges to the Service Contractor by a governmental unit, but such adjustment shall be limited to the amount of the change; or d. on the third anniversary of the Plan Year (with 120 days prior notice to the Client) and thereafter at the expiration of any agreed upon arrangement (annually second anniversary or third anniversary); e. on any Plan Month other than the Plan Year anniversary, if the change in fees is due to a change that was requested by the Client. f. upon addition or deletion of coverage for any subsidiary or Affiliate or corporate division of Client; or g. if the excess loss policy or stop -loss contract, if any, between the Service Contractor and Client is terminated; or h. if there is a change in the number of employees and /or dependents covered under the Client's Plan for any benefit coverage provided under the Client's Plan which equals or exceeds: 15% in any Plan Month when compared to the previous Plan Month; or 25% during any period of three consecutive Plan Months. The Client agrees to make available to the Service Contractor all information necessary to determine whether the changes set forth in i. or ii. above have occurred. If the change in the number of employees and /or dependents covered under the Plan is such that a change in fees results, then the Service Contractor will advise the Client of its intention to change the fees. The effective date of the change in fees under subsections a. through h. above will be the effective date of the event that causes such change. 4.2.2 Modification of fees may be made by written notice to the Client by the Service Contractor. If the Client fails to object to such revision in writing within 30 calendar days of receipt, this Contract shall be deemed modified to reflect the fees as communicated by the Service Contractor. 3 07202 ASO Contract(23) -4 Section 5. Client Responsibilities 5.1 Payments to Service Contractor. The Client shall make all payments as set forth in this Contract. 5.2 Enrollment and Determination of Eligibility. 5.2.1 The Client shall: a. handle routine inquiries from Members and prospective Members, including inquiries concerning enrollment in the Plan; and b. handle enrollment activity; and c. notify prospective Members of their right to enroll in the Plan. 5,2.2 In determining any person's right to benefits under the Plan, the Service Contractor shall rely on eligibility information consistent with the description in the Plan and information provided by the Client. It is mutually understood that the effective performance of this Contract by the Service Contractor will require that it be advised on a timely basis by the Client of the identity of persons covered under the Plan, and the effective date or the termination date of their coverage. For the purpose of determining fees under this Contract, a Member shall be considered to be: a. enrolled on the first day of the first month following the month in which the Member is eligible to receive benefits under the Plan or on the first day of the first month in which the Member is eligible to receive benefits under the Plan if the Member is first eligible to receive benefits on such day; and b. terminated on the last day of the last month in which the Member is eligible to receive benefits under the Plan. Retroactive adjustments for Member enrollment or termination will be allowed for periods not exceeding sixty (60) days unless approved by the Service Contractor. Retroactive adjustments for termination are limited to Basic ASO Service Fees as set forth in Appendix A. 5.3 Plan Benefits. Except as otherwise explicitly provided in this Contract, the Client shall retain the responsibility for all Plan benefit claims and all expenses incident to the Plan. The Client shall be responsible for: a. Any state premium or similar tax, however denominated, including any penalties and interest payable with respect thereto, assessed against the Service Contractor on the basis of and /or measured by the amount of Plan benefits administered by the Service Contractor pursuant to this Contract; b. The consequence of any acts or omissions occurring during the operation of this Contract alleged to be a breach of duty or trust, or other contractual duty regardless of the source of law serving as a basis for such allegation; and c. Any amounts determined to be Service Contractor's liability arising from any legal action or proceeding to recover benefits under the Plan. 4 07202 ASO Contract(23) -5 5.4 COBRA. If COBRA is applicable to the Client, the Client is responsible for performing the duties required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), including but not limited to: a. notifying employees and covered spouses and dependents at their last known address of their rights under COBRA when they first become covered under the Plan; b. notifying qualified beneficiaries of their continuation rights upon occurrence of qualifying events; c. notifying Service Contractor of COBRA- related eligibility changes as they occur. This includes but is not limited to termination of coverage under the Plan as a result of a qualifying event, subsequent election of coverage and payment of premiums and reinstatement of coverage; d. processing elections from continuants; and e. billing and collection. At the Clients' option and for a fee payable to the Service Contractor, the Service Contractor will arrange to perform some or all of the required duties, as set forth in a separate Continuation of Coverage (COBRA) Premium Collection Service Contract. Whether the Client or the Service Contractor performs COBRA administration, the Service Contractor shall have no liability resulting from the failure of the Client, including its employees, directors, or officers, or a third party administrator to fulfill any obligations under COBRA or this Contract. 5,5 Privacy of Health Information. The Client will protect the privacy of all Health Information of which it becomes aware that relates to this Contract and Client will: a. not use or disclose such Health Information other than as permitted or required under this Contract; b. not use or further disclose the Health Information in a manner that would violate the requirements of any state or federal law or regulation; c. implement and utilize appropriate safeguards to prevent use or disclosure of the Health Information as provided for by law; d. report to Service Contractor any use or disclosure of the Health Information not provided for by law of which Client becomes aware; e. not disclose any Health Information to any subcontractor or agent without the prior express written consent of Service Contractor, and if such consent is granted, Client will ensure that any subcontractor or agent to whom it provides the information agrees to the same restrictions and conditions relating to protected Health Information as are contained herein; 5 07202 ASO Contract(23) -6 9 make its internal practices, books and records relating to the use and disclosure of Health Information available to Service Contractor or any party designated by the Service Contractor; incorporate any amendments or corrections to any plan participant's protected Health Information as directed by Service Contractor. 5.5.1 The Service Contractor may terminate this Contract if the Service Contractor reasonably determines that the Client or any of its subcontractors or agents, to whom Health Information has been disclosed under this Contract, has materially violated any provision of this Section. 5.6 Delays. It is mutually agreed that the Service Contractor shall not be responsible for delay in the performance of its duties under this Contract or for non - performance hereunder, if such delay or non- performance is caused or contributed to in whole or in part by the failure of the Client to promptly furnish any required information provided that the Client has received prompt and timely requests for said information. 5.7 5500 Forms. The Client shall be solely responsible for the submission of 5500 Forms. However, the Service Contractor shall be responsible for providing the Client with any applicable Schedule A and Schedule C information necessary to submit said forms. 5.8 Furnishing of Information. The Client shall furnish the Service Contractor with correct and complete information required by the Service Contractor to provide services in accordance with this Contract, including, but not limited to, eligibility information, identity of agents and brokers, and information to verify contribution and participation requirements with respect to insurance policies issued by the Service Contractor. The information requested will be mutually agreed upon with respect to timing and manner of both content and delivery between the Service Contractor and Client. The Service Contractor will assume that all such information is complete and accurate and will be under no duty to question the accuracy of such information. The Service Contractor, at its discretion, may charge additional reasonable fees to the extent additional services are required because information is not furnished, is incomplete or inaccurate or is not furnished at the time or in the manner as requested. 5.9 Member Appeals. The Client acknowledges that its Plan provides Members with the right to appeal benefit claims that have been denied and file other complaints and grievances with the Plan Administrator. The Client shall encourage Members to exhaust their opportunity to resolve such matters under the internal grievance and complaint procedure described in the SPD. The Client shall notify the Service Contractor of any appeal that the Client receives and shall notify the Service Contractor of the resolution of such appeal. The Service Contractor shall not be responsible for any costs related to such appeal and shall not be required to process any benefit payments approved by the Client as the result of an appeal by or on behalf of any Member without written direction from the Client. In the event Plan Administrator determines claims should be paid which are not considered covered benefits under the Plan, and Client has purchased excess loss coverage from Service Contractor, such amounts shall be paid outside of such agreements, and shall be the Client's full liability. The Client shall offer all appeals and make all appeal decisions with due regard for state and federal law to the extent it may apply including but not limited to Internal Revenue Code section 105(h), and ERISA if the Client's Plan is an ERISA plan. 5.10 Disclosure to Members. The Client will distribute SPDs to all Members as required by law, The Client will make all disclosures to employees and dependents under its Plan as required by applicable law including but not limited to the Health Insurance Portability and Accountability Act, the Newborn's Arid Mother's Health Protections Act, the Women's Health and Cancer Rights Act and COBRA. 6 07202 ASO Contract(23 )-7 5.11 Legal Proceedings. The Service Contractor shall consult with the Client or legal counsel designated by the Client in claim matters that are beyond the ordinary. Client shall be responsible for its own defense of any legal action brought by a third party related to the Plan. Nothing herein shall require the Client to defend the Service Contractor in an action in which the Service Contractor is a named party. Nothing herein shall require the Service Contractor to defend the Client. The Service Contractor and the Client shall cooperate in the defense of any legal proceeding and each party will furnish the other and its legal counsel with all pertinent information regarding the proceeding. Section 6. Indemnification and Limitation of Liability 6.1 Client's Indemnification. To the extent permitted by law, the Client shall indemnify, protect and hold the Service Contractor harmless from any and all loss, liability, claim, damage or expense (including attorney's fees, court costs and expenses of litigation) arising out of any act or omission of the Client, its Affiliates or subcontractors in connection with the Plan or in connection with this Contract, including compensatory, punitive, or other damages. 6.2 Service Contractor's Indemnification. The Service Contractor will not be liable for any act or failure to act on the part of itself or any of its Affiliates in the performance of its duties hereunder, if such act or failure to act is performed in good faith. The Service Contractor agrees to indemnify, protect and hold the Client harmless from any and all extra - contractual (non - benefit) costs, loss, liability, claim, damage or expense (including attorneys' fees, court costs and expenses of litigation) arising out of gross negligence, dishonest, fraudulent or criminal acts of the Service Contractor's employees and Affiliates acting alone or in collusion with others. The Service Contractor's duty to indemnify and hold the Client harmless shall not extend to acts or omissions of providers who render health care services with respect to Members. 6.3 Exclusion from Indemnification. The Service Contractor shall not be responsible for Client's lost profits, exemplary, special, punitive or consequential damages or be liable to the Client for the same. 6.4 Survival. The terms of this Section shall survive the termination of this Contract. Section 7. Authority to Control and Manage the Plan 7.1 Agency Relationship. The Service Contractor in performing its duties under this Contract is acting only as an agent of the Client, and the rights and responsibilities of the parties shall be determined in accordance with the law of agency except as otherwise herein provided. 7.2 Service Contractor's Control and Authority. 7.2.1 The Service Contractor and the Client agree that while this Contract is in effect the Service Contractor and its delegates shall have exclusive authority to provide the Plan with the services listed in the attached Appendices, and that during such time the Client shall not undertake on its own nor shall it authorize or allow any other person or entity to provide any of those services without the prior written consent of the Service Contractor, 7.2.2 The Service Contractor and the Client agree that the Service Contractor shall have no liability under this or any other agreement between the said parties with respect to any payment of benefits or other act that violates the provisions of subsection 7.2.1 above. 7 07202 ASO Contract(23) -8 7.3 Client's Control and Authority. The parties acknowledge that the Client and the Plan Administrator have the exclusive authority to control and manage the Plan. The Client expressly agrees that the Service Contractor is not the Plan Administrator. The Client expressly agrees that the Service Contractor is not the named fiduciary, or a fiduciary of the Plan and that neither the Client, nor the Plan Administrator, will designate the Service Contractor as the named fiduciary, or a fiduciary of the Plan for any other purpose. The Service Contractor shall have no power, discretion, authority or control over the Plan, or Plan assets, or responsibility for the terms or validity of the Plan or to alter, modify, or waive any terms or conditions of the Plan, or to waive any breach of any such terms or conditions, or to bind the Client, or to waive any of its rights, by making any statement or by receiving at any time any notice or information. The Service Contractor shall have no power, discretion or authority to act for or on behalf of the Client other than as herein expressly granted, and no other or greater power or authority shall be implied by the grant or denial of power or authority specifically mentioned herein. 7.4 Plan Documents. The Client acknowledges that the Plan Administrator has the responsibility to provide Members with a summary plan description ( "SPD ") and to make available to Members certain other materials and information. To the extent that the Client uses documents, including but not limited to the SPD, or other materials or information provided to the Client by the Service Contractor for the purpose of satisfying the Plan Administrator's obligations, the Client acknowledges that it adopts such documents and other material and information as its own as if they were drafted and made available to Members solely by the Client and under the authority of the Plan Administrator. The fact that the Service Contractor has drafted or assisted in drafting any document, including but not limited to the SPD, or provided any other materials or information to the Client, shall not be construed as the exercise of any discretion, authority or control by the Service Contractor with respect to the Plan, and shall not be construed as establishing any fiduciary, agency, trust, or other similar relationship whatsoever between the Service Contractor and any Member. 7.5 Relationship to Members. Nothing herein will be deemed to impose upon the Service Contractor any obligation to any Member under the Plan. Section 8. Right to Audit Upon forty -five (45) days advance written notice, each party shall have the right to inspect and copy the records of the other that are pertinent to the operation of the Plan. Such inspection shall be conducted at the office of the party being inspected where the records are kept during regular business hours. The scope of the audit must be set forth in a documented audit plan. The party conducting the audit shall limit the audit to inspection of records and shall not contact the other party's customers, Members or vendors. If the audit pertains to claims matters, the parties agree that the claim sample will be limited to a maximum of 200 claims to be reviewed during a maximum period of five (5) days within any twelve (12) month period. Any costs of such inspection shall be borne by the inspecting Party. The parties shall cooperate with each other. The parties agree that no proprietary materials may be copied or removed from the audit site and further, all audit results and related documents are considered confidential and shall not be disclosed to third parties. Section 9. Service Contractor's Use and Disclosure of Records 9.1 Confidentiality. The Service Contractor shall maintain confidentiality, in accordance with applicable law, with respect to all Health Information of Members, including but not limited to medical records, in its possession pertaining to Members under the Plan. 8 07202 ASO Contract(23) -9 9.2 Use and Disclosure of Medical Records. The Service Contractor will use Health Information solely for the purpose of fulfilling its duties under this Contract, and will not disclose such information to anyone other than its officers, employees, its delegates, Affiliates, those parties with whom the Service Contractor has a contract or other arrangement whereby that third party assists the Service Contractor in performing its duties under this Contract and upon lawful order of a court or a public agency with appropriate jurisdiction over the subject matter; provided, however, that such disclosure shall not exceed the extent reasonably necessary for that third party to provide such assistance, and further provided, that the Service Contractor shall require that third party maintain those medical records as strictly confidential. 9.3 Custody of Records. For a period of seven (7) calendar years, the Service Contractor shall hold all papers, books, files, correspondence and records of all kinds which at any time shall come into its possession or under its control relating to the transactions performed by the Service Contractor for the Client under this Contract, and shall, to the extent permitted by law, surrender them to the Client upon prior request, except the Service Contractor may periodically destroy such material as it would usually destroy in the normal course of business. Section 10. Term and Termination of Contract 10.1 Contract Term. This Contract shall be effective on December 1, 2002, (the "Effective Date "), and shall continue in force for one year (the "Initial Term "), unless terminated earlier pursuant to this Section. This Contract shall expire at the end of the Initial Term, subject to the right of the parties to renew the Contract as set forth herein, in which case, the Contract shall remain in force until the expiration of the period for which the Contract was renewed (the "Renewal Term "), unless terminated earlier pursuant to this Section. 10.2 Contract Renewal. The Service Contractor shall submit to the Client, not later than one hundred and twenty (120) days prior to the expiration of the Initial Term and any Renewal Term, the Service Contractor's proposed terms and conditions for the renewal of the Contract (the "Renewal Proposal "). If prior to the expiration of the Contract, the parties do not agree on the terms and conditions under which the Contract will be renewed, unless expressly directed by the Client to discontinue service as of the expiration date, the Service Contractor may elect to continue providing Services beyond the expiration date in order to facilitate continuity of service for Members. In that case, this Contract shall be deemed to have been renewed under the terms and conditions of the Renewal Proposal as if the Client had affirmatively assented to the Renewal Proposal and this Contract shall be deemed to have been renewed. Notwithstanding anything above to the contrary, the Service Contractor shall not be obligated to provide services after the expiration of this Contract, except to the extent expressly required to do so under another provision of this Contract. Once this Contract is renewed, whether by express agreement or deemed renewal, this Contract may be terminated only as set forth below in this Section. In the event Service Contractor does not provide Client with a timely Renewal Proposal, the current Contract terms shall apply until: a. the date the Service Contractor and the Client agree on the terms and conditions under which the Contract will be renewed; b. 120 days after such Renewal Proposal is sent to the Client; or c. 60 days prior to the termination date of the Contract. 9 07202 ASO Contract(23) -10 10.3 Termination Upon Notice. This Contract may be terminated: a. at any time by either the Service Contractor or the Client, provided written notice of such termination is given at least sixty (60) days in advance of the effective date of the termination; b. upon amendment of the Plan in a manner deemed unsatisfactory by the Service Contractor, and on notice to the Client, such termination shall be effective on the effective date of such amendment. 10.4 Immediate Termination. This Contract shall terminate immediately and without notice: a. at the option of the Service Contractor upon termination of the excess loss policy or stop - loss contract, if any, between the Service Contractor and the Client; b. upon failure of the Client to comply with any material term or condition of this Contract such as but not limited to, failure to: i. make the payments as specified in Section 4 of this Contract, entitled "Payments to the Service Contractor "; or deposit funds in the Benefit Plan Account to cover checks issued by the Service Contractor pursuant to Section 3 of this Contract. 10.5 Reinstatement after Termination. If the Service Contractor terminates this Contract under Section 10.3 or 10.4, and the Client desires to reinstate this Contract, it will be reinstated only if; a. the Service Contractor agrees; and b. the Client pays all outstanding amounts plus interest accruing from the date of termination at the rate of the lesser of one and one -half percent (1.5 %) per month or the maximum allowed pursuant to state law; and c. the Client reimburses the Service Contractor for any network access fees required to be paid by the Service Contractor on behalf of the Client following termination of this Contract. 10.6 Termination by Law. If any state or other jurisdiction enacts a law which prohibits or effectively prevents the continuance of this Contract, or the existing law is interpreted to so prohibit or effectively prevent the continuance of this Contract, the Contract shall terminate automatically as to such time or jurisdiction on the effective date of such law or interpretation. 10.7 Termination for Breach. In addition to the foregoing, if one party has materially breached this Contract (the "Breaching Party ") and the other party (the "Nonbreaching Party ") desires to terminate this Contract, the Nonbreaching Party shall give the Breaching Party specific written notice of the nature of the breach. The Breaching Party shall have 30 days to cure such breach. If the breach remains uncured 30 days following the notice of breach, this Contract shall terminate as of the end of such 30 -day cure period. This section shall not apply to immediate breaches as set forth in section 10.4 above. 10 07202 ASO Contract(23) -11 10.8 Effect of Termination. 10.8.1 If on the date this Contract terminates the Client has not made all payments then due under this Contract, the Service Contractor will have the right to immediately stop providing the Services, including but not limited to processing claims, on the effective date of such termination. In this case, information regarding all outstanding claims which are unpaid (regardless of when the claim was incurred and regardless of when the Service Contractor received the claim) or received after such date will be returned by the Service Contractor to the Client. In addition, the Client will notify each Member covered under the Plan of such termination. 10.8.2 With respect to claims incurred prior to and not processed before termination of this Contract, the Service Contractor shall not be responsible for adjudicating the claims unless Service Contractor agrees in writing to do so and the Client pays the terminal fee either set forth in Appendix A or mutually agreed upon by the Client and the Service Contractor. Such adjudication shall be limited to claims incurred prior to the termination of this Contract and submitted for consideration within the 12 -month period immediately following the termination date. If the Service Contractor does not process such claims, the Service Contractor, will send the claims to the Client or to Client's designated representative upon request. 10.9 Non - Appropriation. This Contract is a commitment of the Client's current revenues only It is understood and agreed that the Client shall have the right to terminate this Contract at the end of any fiscal year if the governing body of the Client does not appropriate funds sufficient to pay the contractual charges as stated herein above or attached hereto coming due in the next fiscal year, as determined by the Client's budget for the fiscal year in question. Such Contract termination, however, will not in any way adversely affect the Service Contractor's rights to receive service fees and expenses or other contractual rights becoming due or accrued under the Contract prior to the termination. Section 11. Subcontracting The material and significant duties to be performed by the Service Contractor under this Contract may, with the prior approval of the Client, be performed directly, wholly or in part, under a contract with an organization of the Service Contractor's choosing. Such approval shall not be unreasonably withheld. Except as provided above, the Service Contractor may, at its discretion, contract with any organization to perform any other duties under this Contract. Section 12. Compensation to Agents or Brokers The Client acknowledges that Service Contractor may pay reasonable compensation to the agent or broker of record. Any and all agent and brokers are hereby declared to be (an) agent(s) of the Client and not of the Service Contractor. The Client shall notify the Service Contractor, in writing, if the Client changes its agent or broker. Section 13. Advertising The Client will not use Service Contractor's name in any release or printed forms unless approved in advance by the Service Contractor. Section 14. Other Financial Provisions 14.1 Savings Initiatives. In its sole discretion, Service Contractor may undertake initiatives in addition to the services described in this Contract for the purpose of saving additional money for the Plan. Examples of such initiatives might include, but are not limited to provider and incentive bonus arrangements, and provider bill /fee negotiation and discounts on claims from providers outside of the Service Contractor's primary network of providers. 11 07202 ASO Contract(23) -12 14.1.1 For purposes of pursuing savings under this provision, the Service Contractor may retain third party vendors. 14.1.2 For its services in obtaining savings for the Plan, Service Contractor shall be entitled to retain 25% of the savings realized. 14.2 Compensation from Others. The Client acknowledges that in addition to the fees charged to the Client under this Contract, the Service Contractor may receive compensation from heath care providers and vendors that contract with the Service Contractor. Such compensation may be paid to Service Contractor to defray its expenses in performing its duties under this Contract and for providing services for the providers or vendors in accordance with their contractual arrangements. The Service Contractor shall be entitled to receive and retain such compensation from the providers or vendors regardless of the form or manner in which it is received. 14.3 Access Fees. The Service Contractor may negotiate arrangements with third parties to provide Members services and benefits that are not otherwise covered under the Plan. The Service Contractor may retain any fees received from the third parties pursuant to their contractual arrangements. 14.4 Surcharge Payment. 14.4,1 For any state in which a surcharge payment is required to be made to that state, to fund medical care for uninsured populations, finance the operation of risk pools or other purposes required by the state, the Service Contractor shall render such payments pursuant to the payment method elected or deemed elected by the Client and in accordance with that state's requirements. The Service Contractor shall draw such funds from the Client's bank account. 14.4.2 Upon termination Service Contractor shall calculate the amount of surcharge payment owed by the Client and shall bill Client accordingly. Within thirty (30) days of the date of such bill, Client shall pay Service Contractor such amount in full so that Service Contractor can pay the surcharge payment on Client's behalf in a timely manner. 12 07202 ASO Contract(23) -13 Section 15. Miscellaneous. 15.1 Reliance. The Service Contractor shall be entitled to rely upon any communication believed by the Service Contractor to be genuine and to have been signed or presented by the proper party or parties. For verification of persons eligible for the coverages provided under the Plan, the Service Contractor will rely solely upon information in its computer records at the time eligibility verification is requested. These records will be based upon eligibility information provided to the Service Contractor by the Client. 15.2 Notices. Any notice which may be given under this Contract shall be in writing and may either be personally delivered, sent by registered or certified mail through the United States Postal Service, return receipt requested, or by reputable overnight carrier, delivered prepaid, addressed as follows. A notice so delivered shall be deemed given on the date of delivery if personally delivered or delivered by overnight carrier, and on the date indicated on the return receipt if delivered by the United States Postal Service. 15.2.1 To the Service Contractor: GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY St. Louis Administrative Office Attn: Associate Manager of Contracts, Mail Code: F0 -13 13045 Tesson Ferry Road St. Louis, MO 63128 15.2.2 To the Client: Mrs. Linda Gunther HR Benefits Manager CITY OF ROUND ROCK 221 East Main Street Round Rock, TX 78664 Facsimile number: (512) 218 -7097 15.2.3 A party's address may be changed by notice to the other in accordance with this section. 15.2.4 Delivery of notices to the Client's broker shall not constitute delivery to the Client unless the Client instructs the Service Contractor in writing. 15.3 Waiver. Failure by the Client or the Service Contractor to insist upon compliance with any provision of this Contract at any given time or under any given set of circumstances shall not operate to waive or modify such provision or in any manner render it unenforceable, as to any other time or as to any other occurrence, and no waiver of any of the terms or conditions of this Contract shall be valid or of any force or effect unless contained in a written instrument specifically expressing such waiver and signed by a person duly authorized to sign such waiver. 15.4 Amendments. Except with respect to modification of fees as described in Section 4 of this Contract, no alteration or modification of the terms and conditions of this Contract shall be valid or of any force or effect unless in each instance it is contained in a written instrument expressing such alteration or modification and executed for the Client and the Service Contractor by their officers duly authorized to execute such alteration or modification. 13 07202 ASO Contract(23) -14 15.5 Assignment. Other than assigning the right to receive money, neither party shall transfer its rights or delegate its duties under this Contract except as permitted elsewhere in this Contract, without the express written consent of the other party. However, that the Service Contractor may transfer any portion of its rights or delegate any portion of its duties under this Contract to its Affiliate upon written notice to the Client. The Client's reorganization, any merger in which the Client is not the surviving company, and any transfer of the Client's assets whether by bulk sale or otherwise, shall be deemed to be a transfer or delegation by Client. Any transfer or delegation by a party in violation of this Section shall be void and of no force or effect and shall entitle the other party to immediately terminate this Contract. 15.6 Inurement. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their permitted respective successors and permitted assigns and delegates. 15.7 Force Maieure. In the event that either party is unable to perform under this Contract on account of strikes, accidents, acts of Nature, severe weather conditions, fire, governmental restrictions, computer system failure or any other reason which is beyond the reasonable control of the parties, then performance under this Contract shall be excused for a reasonable period of time to enable the parties to resume performance. If a party is unable to resume its performance within such reasonable period of time, the other party may terminate this Contract as provided herein. 15.8 Entire Contract. This Contract, including any schedules, appendices or supplements thereto, together with the attached copy of the Client's Offer to Contract for ASO Services ( "Offer ") and other attached papers, if any shall constitute the entire contract between the parties and shall govern the rights, liabilities and obligations of the parties hereto, except as it may be modified in accordance with the provisions of this Contract. This Contract supersedes all prior proposals, representations, communications, negotiations and Contracts between the parties, whether oral or written. Thls Contract includes the appendices listed below. These appendices may be amended. Appendix A: Payment Schedule; Appendix B: Services to be Provided by the Service Contractor; Appendix C: Claims Processing and Payment Services; Appendix 0: Subrogation and Recovery Services; Appendix E: Managed Care Services; Appendix F: Hospital Bill & Credit Balance Audits and Overcharge Billing Recovery Services; Appendix G: Performance Standards Standards Program; Appendix H: License Agreement for Electronic Services; Appendix I: License Agreement for Pharmacy Benefit Manager Service; and Appendix J: Plan Document. 15.9 Controlling Law. This Contract shall be construed and enforced according to the laws of the state of Texas to the extent that such laws are not preempted by ERISA. 15.10 Provisions Separable. The provisions of this Contract are independent of and separable from each other. In the event any provision of this Contract shall be held illegal, invalid or unenforceable in whole or in part, for any reason by law or a court of competent jurisdiction, said illegality or invalidity shall not affect the remaining parts of this Contract, but it shall be construed and enforced as if said illegal or invalid provisions had not been included herein either initially, or beyond the date it is first held to be illegal or invalid if after the effective date of this Contract, provided the basic purposes hereof can be effectuated through the remaining valid and legal provisions. 15.11 Gender and Number. Any reference in the masculine gender herein shall be deemed to also include the feminine gender, unless expressly provided otherwise. Wherever appropriate, any reference in this Contract in the singular shall include the plural, and any references in the plural shall include the singular. 14 07202 ASO Contract(23) -15 15.12 Counterparts. This Contract may be executed in any number of counterparts, each of which shall be deemed an original, and said counterparts shall constitute but one and the same instrument. 15.13 Currency and Place of Payments. All sums payable to, or payable by, the Service Contractor pursuant to this Contract shall be payable in the lawful currency of the United States of America at its St. Louis, Missouri office. 15.14 Headings. Section, sub - section or paragraph headings contained in this Contract are for reference purposes only and shall not affect the meaning or interpretation of this Contract. IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their respective officers duly authorized . t , g, r do so, t as of December 1, 2002. �`/ Dated at ©i2/)L ] / ` / Y , this r. (City) (State) (Date) day of c th) (Year) CITY OF ROUND ROCK By: • • '%'•r e• •epresentative) Type ( fficial Title) GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY By: 15 (Signature of Authorized Representative) Assistant Group Secretary (Official Title) April 7, 2003 (Date) 07202 ASO Contract(23) -16 Services Provided: Appendix A Payment Schedule To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY Service Fees Schedule. The Service Contractor shall have the right to adjust the fees listed below as specified under Section 4 of the Contract. A. The Client shall make payments to the Service Contractor in advance for service fees listed below by the first day of each Plan month in which the Service Contractor performs the listed services. A grace period of 40 days is granted after such monthly payment due date. The amount due will be determined as follows: a. Actuarial and Underwriting Services and Basic Claims Adjudication Services and Direct Claim and Verification Service ('Basic ASO Service Fee ") $19.35* b. Care Management (includes Utilization Management and Case Management), Disease Management, Maternity Management and Access to Managed Health Care Network $6.20 c. All other Services Provided Includes: Electronic Services, Electronic Services Initial Eligibility Loading Charge, I.D. Cards and Special Reports (includes Lag and Monthly Reports), Document Preparation, Pharmacy Benefit Manager (PBM), and Certificates of Creditable Coverage $2.40 Monthly Total $27.95 *The Basic ASO Service Fee is subject to the Performance Standards Program as described in a separate Appendix. 16 Monthly Amount per Employee Covered Under the Medical Plan 07202 ASO Contract(23) -17 Services Provided: Basic Claims Adjudication Services and Direct Claim and Verification Service ('Basic ASO Service Fee") and Actuarial and Underwriting Services Monthly Amount per Employee Covered Under the Dental Plan $3.50* Monthly Total $3.50 The Basic ASO Service Fee is subject to the Performance Standards Program as described in a separate Appendix. Positive Pay (Data Extract) Service Initial set -up fee $1,800 B. The Client agrees to compensate the Service Contractor for services listed below as follows: Amount Due 1. Subrogation and Recovery 33.3% of all recovered amounts The Service Contractor reserves the right to offset the amount due for this service against recovery amounts. 2. Claim Reduction Negotiation Multiplan or Other Negotiation Service 25% of all amounts saved The Service Contractor reserves the right to charge the amount due for this service as part of the benefit payment under the Plan. 3. Hospital Bill and Credit Balance Audits, and Overcharge Billing Recovery Service 33% of audit savings amounts The Service Contractor reserves the right to offset the amount due for this service against audit savings amounts. 4. The cost of customized or bulk printing will be billed as charged to the Service Contractor for any documents not specifically listed in Appendix B. 5. The cost of any mass mailings to plan participants will be billed separately. 17 07202 ASO Contract(23) -18 Appendix B Services to be Provided by the Service Contractor To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY The Service Contractor will perform the following services which are included in the Basic ASO Service Fee: Basic Claims Adjudication Services and Direct Claim and Verification Service These Basic Services provide for the processing of all claims incurred and received while this Contract is in force. The services to be performed by the Service Contractor are: 1. Preparation of claim checks and Explanation of Benefit forms on a universal check form on the bank chosen by the Client; such claim checks are to be mailed by the Service Contractor on Wednesday of each week or on the following business day if that day is a holiday; 2. Claims and inquiries come directly to the Service Contractor; claim checks and correspondence are mailed directly to employees and /or assignees; copies of Explanation of Benefit forms are sent to the Client if desired; copies of declination letters are sent to the Client; 3. Maintenance of individual benefit records for determination of plan benefits and satisfaction of deductibles; 4. Request additional medical or service information from provider; 5. Coordinate benefit payments with other employee plans; 6. Maintenance of records for determination of overutilization or plan abuse by users and providers; 7. Preparation of annual statistical claim reports for valuation of "Incurred but not Received "; 8. Preparation of IRS Reports (1099) Medical Provider Fees; 9. Claim control practices; and 10. Verification of employee eligibility as to coverage and benefits. 18 07202 ASO Contract(23) -19 Actuarial and Underwriting Services This includes those services which concern the pricing of benefit types and the actuarial estimate of the incurred but unreported claim reserve. Such services include: 1. Benefit design advice; 2. Annual re- rating of the existing plan; 3. Pricing proposed benefit plan alternatives; and 4. Advice on the expected financial results of plan changes. The Service Contractor will perform the following services which are not included in the Basic ASO Service Fee: I.D. Cards Identification cards will be prepared for enrolled employees based on eligibility information provided by the Client. Electronic Services Electronic Services are available as described in a separate Appendix. Certificates of Creditable Coverage In accordance with federal regulations, individuals will be provided with Certificates of Creditable Coverage at specified times which will contain documentation of prior coverage including coverage period. Document Preparation Document Preparation includes basic drafting which consists of preparation of the employee Summary Plan Description and provision of a "wrap" Plan Document (stating the Client's intent to establish the Plan in writing pursuant to ERISA regulations). The cost of printing the Summary Plan Description and other documents is included. Reports The Service Contractor will provide the following reports to the Client: Lag Report; and Monthly Stop Loss Report. Positive Pay (Data Extract) Service The Service Contractor shall send "issue and void" data from the Client's claim history to the Client or Client's bank on a batch cycle. The bank will match this data to what is being cashed at the bank for detection of possible fraud. It is Client's responsibility to ensure that its bank uploads the data file appropriately once it is received from the Service Contractor and to monitor the exception report received from the bank and provide appropriate direction to the bank. The Client shall make payments to the Service Contractor as shown on the Payment Schedule under Appendix A. 19 07202 ASO Contract(23) -20 Appendix C Claims Processing and Payment Services (Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY The Service Contractor shall accept for processing and payment or denial, all claims presented under the Plan. The examination, investigation, review, calculation, approval and disapproval of all such claims by the Service Contractor shall be in accordance with the Service Contractors claim cost control standards, audit procedures, and claim practices, as agreed to by the Client. The Service Contractor shall investigate the validity of each claim and each recurring benefit payment and shall compute the benefits payable, if any, on each such claim. The Service Contractor shall pay all claims which it has determined to be payable under the Contract, except the following: a. All contested or doubtful claims or benefit amounts shall be referred to the Client for its determination of liability and instruction to the Service Contractor. Claims with respect to which there is legal action against the proceeds, such as suit, attachment, or restraining order; on such claims the Service Contractor will consult with the Counsel of the Client and shall proceed to pay or deny the claim or turn the file over to the Client for further processing, as set forth in written advice from the Client's Counsel. b. The Service Contractor will take appropriate action, such as denial, holding in pending, or turning over to the Client if the claim becomes involved in legal action or proceedings; such instances would include but not be limited to where the claimant or his representative has filed a claim or an appeal under any law applicable to benefit entitlement, including but not limited to workmen's compensation, unemployment compensation, disability or cash sickness law of any state. It is understood that the duties of the Service Contractor under this Contract shall not involve insurance department proceedings, tax proceedings, proceedings before quasi - judicial boards, medical proceedings, the furnishing of legal advice, or participation in any function or activity prohibited to the Service Contractor; provided, however, the Service Contractor will provide to the Client its files and any other records of action that it has taken with respect to any claim. Subject to and except as otherwise provided in any set of rules of administrative procedure agreed to in writing by the Client and the Service Contractor with respect to the administration of benefits pursuant to this Contract, each individual administrative act, decision and interpretation by the Service Contractor (including any errors, clerical or otherwise) shall be binding upon the Client with respect to past performance or completed action. In addition, the Service Contractor shall not be responsible for errors in eligibility information and COBRA qualified beneficiaries information provided to it by the Client or the Client's agent. 20 07202 ASO Contract(23) -21 If after any payment has been made hereunder (i) to or on behalf of an ineligible individual, or (ii) it is determined that more or less than the correct amount has been paid by the Service Contractor, the Service Contractor will attempt to recover the payment made to an ineligible person, or the overpayment, or will adjust the underpayment, but the Service Contractor will not be required to initiate court proceedings for any such recovery. If the Service Contractor is unsuccessful, the Service Contractor shall so notify the Client in order that the Client may take such action as may be available to it. Accounting for Claim Payment During the continuance of the Service Contractor's claims processing and payment of benefits pursuant to this Contract, the Service Contractor shall render an accounting monthly unless otherwise agreed upon by the Service Contractor and the Client in writing. Such accounting details may be set forth in a separate written statement, but shall include the following: Monthly Accounting Within 30 days following the end of a Plan month, the Service Contractor will furnish to the Client a list of claims paid, showing the coverage(s) under which the claim was paid and the amount paid on each claim, the totals paid under each coverage, and the grand total of payments for the month. 21 07202 ASO Contract(23) -22 Appendix D Subrogation and Recovery Services (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 1. The Service Contractor agrees to provide, on behalf of and as agent of the Client, subrogation and recovery services to the Client's Plan. Such services are limited to those cases in which the Service Contractor has identified the Client's possible rights of subrogation, reimbursement or recovery (hereafter, "Claim "). The Service Contractor will use its good faith efforts to recover Claims for the Plan, arising out of or in connection with health care benefit payments for injuries or illness of any Covered Person, against tort- feasors, their insurers or any other sources of payment liable or responsible for such injuries or sickness, or for the treatment or service costs thereof. The Service Contractor will not be required to pursue any subrogation or recovery that is reasonably expected to result in a recovery of $1,000 or less. The Service Contractor is given full, exclusive and discretionary authority to settle any Claim that could reasonably result in: (i) a maximum recovery of $5,000 or less; or (ii) a maximum recovery of more than $5,000, provided that the settlement offered represents at least 70% of the maximum possible recovery of such Claim 2. The Service Contractor is expressly authorized to take all actions contemplated herein, including, but not limited to, the authority to pursue subrogation, reimbursement, recovery and other related rights through any legal means, to retain counsel on behalf of the Client, to settle and compromise Claims, and to delegate and subcontract the responsibilities of such subrogation and recovery services to third party vendors. 3. Subject to the Client's payment of compensation as provided in 4 below, the Service Contractor shall be responsible for all ordinary and necessary expenses of recovery incurred by it or its delegate in connection with the performance of its duties, as set forth in Exhibit 1, attached hereto. 4. The Client agrees to pay the Service Contractor, as compensation for services, fees equal to 33.3% of all Claims recovered following the commencement of any collection or recovery effort taken by the Service Contractor, whether such Claims are paid to or recovered by the Service Contractor, its delegate, the Client, or its delegate or assignee. The Service Contractor has the right to offset any fees owed to it against any recovery amounts belonging to the Client. The Service Contractor reserves the right to change the rate of the fees charged by giving the Client at least four months advance notice. If the Client does not exercise its right to terminate this Appendix within 20 days after the notice of changes in the fees, the new fees as changed shall become effective as of the date stated in the advance notice. 5. Upon termination of this Contract or Appendix, for any reason other than breach, the Service Contractor shall continue to be authorized to pursue recovery of Claims unrecovered, in whole or in part, on the termination date, and shall be entitled to be compensated for the recovery pursuant to the fees in effect as of the termination date. 22 07202 ASO Contract(23) -23 EXHIBIT 1 (to Appendix D) Ordinary and Necessary Expenses Ordinary and Necessary Expenses include costs for the following: A, File Handling Costs; B. Outside Copy Services; C. Outside Investigations; D. Expert Witness Evaluations; and E. Legal Services necessary to make recovery on the Claims. II. Not included as Ordinary and Necessary Expenses are, but not limited to: A. Any commitments by the Client or Plan to pay fees and expenses to attorneys representing Beneficiaries; and B. Any payments that are required by any federal, state or local law to be paid to attorneys representing Beneficiaries. Attorneys' fees and expenses described in paragraphs II.A. and B. shall be paid solely from the case recoveries, and the amount of recovery for purpose of computing the Service Contractor's service fees will be net of any payments of such amounts. The Service Contractor will comply with any withholding requirements on any applicable sales and use taxes, and will withhold such amounts from cash recoveries, as required, and in addition to Fees due to the Service Contractor. 23 07202 ASO Contract(23) -24 Appendix E Managed Care Services (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 1. Manacled Care Programs. The Service Contractor agrees to provide services to allow the Client to establish the following programs under its Plan: a. Provider Network. A Provider Network consisting of participating hospitals, physicians, other health care professionals and other types of providers as appropriate (collectively called "Providers "). A higher level of benefits is typically paid when the Member receives covered health care services from the Provider Network or as otherwise set forth in the Plan. b. Medical Management. A medical management program known as Care Management ( "CM "). A care manager will assess the health care needs of a Member with a long -term and /or complex illness or injury, develop appropriate discharge plans, and coordinate needed medical services. A care manager will also review medical necessity and appropriateness of care through pre- treatment authorization of inpatient hospitalization and certain outpatient procedures, review of continuing hospital stays, and an appeal process. Written notice will be promptly provided to the Member, the hospital where appropriate, and the treating physician of the status of each authorization. c. Subcontractors. The Service Contractor may occasionally utilize services of subcontractors to assist with assessment of the case. Payment of said subcontractor fees will be the responsibility of the Client. However, the Service Contractor will be liable for payment of the subcontractor fees if the benefits payable exceed the applicable amounts pursuant to the excess loss policy. The Service Contractor will develop mechanisms for early identification of potential cases to benefit from the CM Program. In the CM Program, the Members' individual needs are assessed with both the Member and the attending physician. An alternative treatment plan to traditional care is developed and presented to the Member and family members and the physician for approval. The alternative treatment plan is implemented via coordination by the CM medical professionals. Claims reflective of the alternative treatment plan are submitted and reviewed by the CM Program. The CM Program monitors the medical necessity of the care until case closure. 24 07202 ASO Contract(23 )-25 The Service Contractor is not required to seek Client's approval prior to the implementation of any alternative treatment plan where: all expenses to be payable under the alternative treatment plan are normally covered under the Client's Plan; or with respect to the Client who has a separate stop -loss or excess loss policy in effect with the Service Contractor covering its excess loss under the Plan, expected benefits payable outside or within the alternative treatment plan exceed the applicable stop -loss or excess loss protection point. In all cases, the Client agrees that expenses for the alternative treatment plan shall be included as eligible expenses even if they are not included as such under the Client's Plan. The Service Contractor will seek the Client's approval prior to implementation of an alternative treatment plan when expenses to be payable under such plan are not covered under the Client's Plan. d. Adverse Determination /Additional Review. If a Member receives an adverse determination under one of these programs and seeks additional review (as entitled by law or by the terms of the Plan), by a third party or an independent utilization review organization, any cost or fee for such additional review shall be billed to the Client or charged against the Client's Benefit Plan Account. 2. Provider Network Product(s) a. Networks. The Service Contractor shall contract with one or more networks of Providers to furnish health care services in conjunction with the Provider Network Product. b. Availability and Incentives to Members. The Service Contractor shall offer and the Client shall make the Networks available to Members. It is the duty and responsibility of the Client to include in the Plan incentives and/or disincentives to Members to encourage use of the services of the Networks. c. Provider Network Directories. The Service Contractor shall provide the Client with access to a directory listing of Network Providers and shall provide periodic updates of same. The Service Contractor reserves the right to revise the directory at least once a year to reflect changes in the participation of Providers. d. Standard and Character of Performance. The Service Contractor, through its contracts with Networks, shall use customary and reasonable care and proper diligence in the performance of its services under this Appendix. For purposes of the Employee Retirement Income Security Act of 1974, 29 USC Ss 1001, et seq. ( "ERISA "), the Client will be deemed the "Administrator" and "Named Fiduciary" of the Plan. 25 07202 ASO Contract(23) -26 3. Disease Management Program for Chronic Medical Conditions a. The Service Contractor, through its own employees, Affiliates and /or employees of contracted third -party vendor(s), will provide Disease Management services to Members identified as and consenting to be service recipients under the program. b. The Service Contractor, through its own employees, Affiliates and /or employees of contracted third -party vendor(s), will perform an initial identification of Members meeting predetermined medical criteria indicating the potential to be service recipients. This identification process will be based on information legally obtained through claims, Members' self - referral or other valid sources. c. The Member who consents and is accepted into the program ( "Participant ") will receive services consisting of assessment and education for targeted diseases. The services are designed to enable the Participant to gain knowledge and skills necessary to prevent severe chronic medical conditions, manage his or her life -long condition and improve quality of life. The program does not provide medical treatment, therapeutic services or hands -on home nursing. The program neither warrants nor guarantees the well -being or improvement of the Participant's chronic medical condition. d. The Client agrees to provide 100% benefit reimbursement under its Plan, without application of the deductible or copayment, for educational services received under the disease management program. The benefit reimbursement amount does not apply to the Member's lifetime maximum under the self- funded plan. "Chronic Medical Condition" means an illness for which there is no cure; however, medical treatment is available. It is a long -term illness that does not ordinarily pose an immediate threat to one's life. Chronic medical conditions covered under this program may include, but are not limited to, intense diabetes, asthma or cardiac conditions. 4. Maternity Management Care Program This program monitors the health and well -being of pregnant mothers. Care managers are trained to identify potential difficulties and maintain regular phone contact with pregnant mothers, checking the status of their pregnancy and answering questions about pregnancy and delivery. The program neither warrants nor guarantees a normal or safe pregnancy or delivery. Nor does it guarantee the health or well -being of pregnant mothers or their newborn child(ren). 26 07202 ASO Contract(23) -27 4. It is agreed that: Appendix F Client Specific PPO /UR Vendor (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY The Client's Plan contains health care benefit features which require the provision of certain managed care products to Members. The Client desires to directly contract with the organization(s) listed below to provide the managed care products under the Plan. To facilitate the Client's such stated intent, both parties named above agree to the following: 1. Name(s) of Client's contracted organization(s): Round Rock Hospital and Oakwood Surgery Center — OHP (hereafter, "Client Specific PPO "). 2. The managed care products to be provided by the Client Specific PPO include: the provision and maintenance of a provider network. 3. The Client requests and the Service Contractor agrees: a. that the Service Contractor recognize the Client Specific PPO as an agent of the Client fully authorized to perform for the Plan all functions relating to the provision of the above specified managed care products; b. that the Service Contractor pay benefits for Plan claims in accordance with rates, prices, charges and directives of the Client Specific PPO; and c. that the Service Contractor cooperate with the Client Specific PPO to obtain effective and efficient operation of the Plan. a. the Service Contractor does not assume any responsibility or liability to the Client, any Member, or any other person for the selection, decisions, acts, or omissions of the Client Specific PPO; b. the Client will make its best efforts to meet the Service Contractor's claim, data processing, and other requirements related to the calculation, processing and payment of benefits; c. the Client shall hold harmless and indemnify the Service Contractor from any claims, losses, damages, judgments, liabilities, costs, expenses or obligations (including but not limited to, attorneys' fees and expenses) arising out of, or resulted from, any decisions, directives, acts or omissions of the Client Specific PPO; 27 07202 ASO Contract(23) -28 d. the Client shall ascertain that the Client Specific PPO, at all times for the term of this Appendix, maintain in effect professional liability insurance with liability limits of at least $1,000,000 per person per occurrence which lists the Service Contractor as an additional named insured; the Client shall obtain from the Client Specific PPO and provide to the Service Contractor a Certificate of Insurance evidencing said insurance; and said certificate shall provide for cancellation only upon ten days prior written notice to the Service Contractor. 28 07202 ASO Contract(23) -29 APPENDIX G Hospital Bill & Credit Balance Audits and Overcharge Billing Recovery Services (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY The Service Contractor agrees to provide, on behalf of and as agent of the Client, through its employees and /or subcontractor(s), hospital bill audits, overcharge billing recovery services and credit balance account audits for the Client's Plan. Such services are limited to those inpatient, outpatient, emergency and trauma hospitalization claims which the Service Contractor has identified as meeting its auditing guidelines (hereafter, "Claim "). Each hospital bill audit entails a comparison of billed services to services ordered and /or documented in the medical record. Upon conclusion of each hospital bill audit, the Service Contractor will present the applicable medical provider with a billing listing the net overcharges due and will employ commercially reasonable efforts to recover the overcharges from the provider. 2. As compensation for services, the Client agrees to the following terms regarding the rate of service fees and its payment to the Service Contractor of such fees: a. Fees equal to 33% of all audit savings which are recovered following the commencement of any hospital bill audit, overcharge billing recovery effort, or credit balance account audit undertaken by the Service Contractor, whether such savings are paid to or recovered by the Service Contractor, its subcontractor(s), the Client, or its delegate or assignee. The Service Contractor has the right to offset any fees owed to it against any audit savings recovery amounts. b. Fees equal to 33% of the identified audit savings should the Client request the Service Contractor to forego recovery of a specific overpayment or positive balance after the audit process is complete. c. The Service Contractor reserves the right to change the rate of the fees by giving the Client at least 60 day advance notice. If the Client does not exercise its right to terminate this Appendix within 30 days after the notice of changes in the fee rate, the new fee rate shall become effective as of the Client's ASO Service Contract anniversary date following the advance notice. The fees stated above are inclusive of the Service Contractor's handling and transactional charges and subcontractors' fees. 29 07202 ASO Contract(23) -30 "Audit Savings" means the net dollar amount of the overcharges less the undercharges as identified in the final audit summary report with respect to a hospital bill audit, or a dollar amount consented by a hospital as a positive balance at the conclusion of a credit balance account audit. 3. Upon termination of this Contract or Appendix, for any reason other than breach, the Service Contractor shall continue to be authorized to provide auditing and overcharge billing recovery services with respect to all Claims in process on the termination date. Claims are considered in process if the Service Contractor or its subcontractor has evaluated, screened, audited or in any way processed, including all Claims inventoried in auditing database. 30 07202 ASO Contract(23) -31 Appendix H Performance Standards Program (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY A. Operational Performance Standards Program Operational Performance Standards pertain to Service Contractor's administration of Client's Plan and includes the following standards: Claim Turnaround, Financial Accuracy, Total Quality, Claims Analysis Reports and Health Plan Management Reports, Telephone Response Time, Telephone Abandonment. Prerequisite for the Initiation of Operational Performance Standards An executed copy of the Administrative Services Contract is required in order for the Service Contractor to process the payment of any Operational Performance Penalty. 2. Effective Date The effective date of the Operational Performance Standards Program is March 1, 2003 due to a three month moratorium from the effective date of the Contract with regard to the initiation of the program, provided the Service Contractor has received all necessary information from the Client or its designee by the effective date of the Contract, or other agreed upon date needed to meet such standards. 3. Reporting and Settlement a. Reporting: Service Contractor shall provide Client with a report consisting of the results of Service Contractor's performance in comparison to the applicable Operational Performance Standards within 45 days after the end of each Calendar Quarter. b. Settlement: Service Contractor shall pay the cumulative quarterly penalties, if applicable, to Client as set forth below, for each Operational Performance Standard that is not met, within 90 days after the end of the Calendar Year, subject to the Maximum Operational Penalty set forth in B.6. 31 Percentage Processed Penalty Percentage 86.0% -87.9% 1% 83.0%-85.9% 3% <83.0% 5% Percentage Processed Penalty Percentage 96.0 % -96.9% 1% 94.0 % - 95.9% 3% <94.0% 5 07202 ASO Contract(23) -32 4. Operational Penalty Calculation The operational penalty percentages shown below reflect a percentage of the Basic ASO Service Fee as set forth in Appendix A. To calculate an operational penalty, the penalty percent is multiplied by the Basic ASO Service Fee and multiplied by the number of employees and dependent units covered under the Plan on the last day of each Plan Month within the applicable Calendar Quarter. Except for Claim Analysis Reports and Health Plan Management Reports, performance will be measured for the claim office assigned to the Client. When calculating actual results to determine whether standards have been met, all percentages will be rounded to the nearest tenth of a percent. 5. Operational Performance Standards and Corresponding Penalties a. Claim Turnaround: Standard: Eighty -eight percent (88 %) of claims will be Processed during the Calendar Quarter by the Service Contractor within ten (10) working days of the Service Contractor's receipt of the claim at its designated national Imaging Center in Kennett, Missouri. Penalty: If the standard is not achieved, the penalty will be determined by the percentage of claims Processed by the Service Contractor within ten (10) working days of receipt, subject to the Maximum Operational Penalty. Only one (1) penalty percentage amount below will be applicable for any given Calendar Quarter. Standard: Ninety -seven percent (97 %) of claims will be Processed during the Calendar Quarter by the Service Contractor within twenty (20) working days of the Service Contractor's receipt of the claim at its designated National Imaging Center in Kennett, Missouri. Penalty: If the standard is not achieved, the penalty will be determined by the percentage of claims Processed by the Service Contractor within twenty (20) working days of receipt, subject to the Maximum Operational Penalty. Only one (1) penalty percentage amount below will be applicable for any given Calendar Quarter. 32 Total Quality Percentage Penalty Percentage 94.0% -94.9% 1% 93.0 % -93.9% 2% 92.0 % - 92.9% 3% 91.0% -91.9% 4% <90.9% 5% Financial Accuracy Percentage Penalty Percentage 98.0%-98.9% 1% 97.0% -97.9% 2% 96.0%-96.9% 3% 95.0% -95.9% 4% <94.9% 5% 07202 ASO Contract(23) -33 b. Financial Accuracy Paid: Standard: The Financial Accuracy for the Calendar Quarter shall be at least ninety -nine percent (99 %). Formula: The Financial Accuracy Percentage is calculated by dividing the dollar amount of audited claims paid accurately for the Calendar Quarter by the total audited claim dollars paid for the Calendar Quarter. Penalty: If the Standard is not achieved, the penalty will be determined by the actual Financial Accuracy Percentage for applicable Calendar Quarter, subject to the Maximum Operational Penalty. Only one (1) penalty percentage amount below will be applicable for any given Calendar Quarter. c. Total Quality: Standard: The Percent of Audited Claims Processed Accurately for the Calendar Quarter shall be at least ninety- five percent (95 %). Formula: The Total Quality Percentage is calculated by dividing the number of audited claims Processed accurately for the Calendar Quarter by the total number of claims audited for the Calendar Quarter. Penalty: If the Standard is not achieved, the penalty will be determined by the actual Total Quality percentage for the applicable Calendar Quarter, subject to the Maximum Operational Penalty. Only one (1) penalty percentage amount below will be applicable for any given Calendar Quarter. 33 07202 ASO Contract(23) -34 d. Claims Analysis Reports and Health Plan Management Reports: Standard: Monthly Claims Analysis Reports shall be available to the Client within fifteen (15) working days of the end of the reporting period. Penalty: If the Monthly Claims Analysis Reports are not sent within fifteen (15) working days of the end of the reporting period, the Penalty for the Plan Month measured shall be $50.00 per day for each working day that a report is late , with a maximum Penalty of $300.00 per report, subject to the Maximum Operational Penalty. Standard: Quarterly and Year End Claims Analysis Reports or Health Plan Management Reports shall be available to the Client within forty -five (45) calendar days of the end of the reporting period. This will be measured by the date the Service Contractor sends the reports. Penalty: If Quarterly and Year end Claims Analysis Reports or Health Plan Management Reports are not sent within forty -five (45) calendar days of the end of the reporting period, the Penalty shall be $50.00 per day for each day a report is late , with a maximum Penalty of $300.00 per report, subject to the Maximum Operational Penalty. e. Telephone Response Time: Standard: The telephone response time standard shall be an average speed of answer of thirty (30) seconds as measured by the Service Contractor, using a computer system that monitors calls that are received on the Service Contractor's phone lines. Tracking begins when the caller exits (or is transferred from) the automated system to speak to a customer service representative. Penalty: If the telephone response time standard is not achieved during a Calendar Quarter, the Penalty will be 1% for such Calendar Quarter, subject to the Maximum Operational Penalty. f. Telephone Abandonment: Standard: The telephone abandonment rate standard shall be less than or equal to five percent (5 %) of the telephone calls received by the Service Contractor, as measured by a computer system that monitors calls received on the Service Contractor's phone lines. Tracking begins when the caller exits (or is transferred from) the automated system to speak to a customer service representative. Penalty: If the telephone call abandonment rate standard is not achieved during a Calendar Quarter, the Penalty will be $500.00 for such Calendar Quarter, subject to the Maximum Operational Penalty. 34 07202 ASO Contract(23) -35 6. Maximum Operational Penalty The overall maximum penalty for the Operational Performance Standards Program is the lesser of the sum of the penalties calculated in B.5. above, or twelve percent (12 %) or $25,000.00 per Calendar Quarter. 7. Definitions a. "Calendar Quarter' means January through March, April through June, July through September and October through December. A partial Calendar Quarter will be used to calculate the first quarter Operational Penalty if the effective date of the Operational Performance Standards Program is not either January 1, April 1, July 1 or October 1. b. "Calendar Year" means January through December. c. "Financial Accuracy" means the total value of underpayments and overpayments as a percent of total claim dollars paid in an audit sample. d. "Processed" means that a complete claim has been paid or denied, or notification has been sent to the member or provider advising that a claim is not complete and that more information is required. e. "Total Quality" means the number of claims Processed accurately in an audit sample, including both financial and non - financial measures. 8. Termination of Program Calendar Year settlements will occur within 90 days after the end of the applicable Calendar Year, including partial Calendar Years. Claims Processed will include those for medical and dental benefits on or after March 1, 2003. The Program will end the earlier of the effective date of the Contract termination pursuant to the Term and Termination of Contract provision of this Contract or on the date that the employee welfare benefit plan ends. 35 07202 ASO Contract(23) -36 1. Grant of License Appendix I License Agreement for Electronic Services (Not included in the Basic ASO Service Fees) The components of this appendix will become effective upon the completion of each components transition. To be attached to and made a part of the Administrative Services Contract By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY The Service Contractor agrees to grant Client a non - exclusive, non - transferable, non - assignable license to use the Service Contractor's proprietary Electronic Services solely for Client's internal purposes in connection with its administration of the Plan. 2. Definitions For purposes of this Appendix the following terms shall have the meanings set forth below: a. "Data" means: the pertinent identifying information about each employee and dependent whom Client reports as eligible for coverage through the Plan (including coverage under COBRA), the dates these individuals' coverage begins and ends, and the class and type of coverage for which each such individual is enrolled; the amount of creditable coverage attributable to each enrolled individual who is subject to any waiting period before Plan benefits will be payable for care for a preexisting condition; and the number of employees and COBRA continuees enrolled for each class and type of coverage, the amount of life insurance, if any, applicable to each enrolled individual, and all other information necessary for Service Contractor to be able to verify the amount of premium and /or other fees due from Client. b. "Electronic Services" means any one or combination of the following applications, as selected by Client: Financial Reporting — Provides access to financial information associated with the payment of claims pursuant to the Plan. The following reports will be available through this service: Check Register, Stop Loss, Control Pay, PDEC Report, Same Cycle Void, Draft Register, and Claim History. 36 07202 ASO Contract(23) -37 ii. Billing— Provides the ability to request and run billing statements for the Plan utilizing the eligibility information and the billing capabilities residing on Service Contractor's eligibility and billing systems. The following standard billing reports will be available: Turnaround Document Report, Detail Reports, Product Summary Reports, Life Detail Reports. Eligibility Management — Allows Client to perform the following eligibility maintenance functions: Add new employees and /or dependents, update information on existing employees and dependents, including but not limited to terminations, reinstatements, COBRA election, FSA options, add and/or update products, request ID cards. Members will have the ability to view current benefit elections through this service. iv. Eligibility Reporting — Allows Client to report on Member eligibility utilizing Service Contractor's eligibility system. Client will have access to standard reports including: Family Report, Coverage Report, FSA Report, Mailing Labels, Birthday Report, and Codes Tables. Client will also have the ability to generate its own custom reports. v. Claim Status Information — Allows Members and Client the ability to view processed, pended claim information, and control pay claim information, Claim data will be updated nightly. Claim history will be available for up to three years. Explanation Of Benefit -type copies will be printable from this application. vi. Health P /an Management Reports — Provide Client with periodic Health Plan Management Reports and Managed Care Reports. vii. MyCare — A comprehensive, web -based interactive wellness and health management program. MyCare offers these features: personal wellness assessment, activity logging system, body data monitoring, fitness tests, a "virtual" health coach, a medical self -care guide, healthy recipes, and health and nutrition data bases. c. "Documentation" means the User Guidelines manual which Service Contractor makes available to Client through the Electronic Services. d. "Member" means a person who meets the eligibility requirements of the Plan and is enrolled for coverage under the Plan. 3. Client's Responsibilities a. The Electronic Services are accessible via computer transmissions for use on compatible personal, home or business computers, including Internet appliances with modems, and network computers. Client agrees that in order for the Electronic Services to perform to its own or its Members' satisfaction, or at all, it and its Members are solely responsible for procuring, setting up, maintaining and paying the charges for the hardware, software and other technology they use to access the Electronic Services. Service Contractor shall have no liability for any service difficulties resulting from Client's or its Members' failure to possess and correctly utilize technology adequate to use the Electronic Services. b. Client and its Members shall be solely responsible for any communication charges, including but not limited to local and long distance telephone charges, cable and satellite television subscription charges, and Internet service provider charges, they incur in connection with their use of the Electronic Services. Client shall pay Service Contractor a monthly fee for use of the Electronic Services. This fee shall be payable as part of the ASO service fees set forth in Appendix A of the Administrative Services Contract. As provided in the Administrative Services Contract, the Service Contractor has the right to change the fee for Client's use of the Electronic Services, 37 07202 ASO Contract(23) -38 4. Client's Use of Electronic Services a. Client shall permit only its bona fide employees responsible for benefit administration to utilize the Electronic Services. Client may permit Members to utilize the Electronic Services only if Client has selected Claim Status Information and Eligibility Management services. b. Except for applications commonly known as web browser software, Client on its own behalf and on behalf of its Members agrees not to use any software, program, application or any other device to access or log on to Service Contractor's computer systems or website or to automate the process of obtaining, downloading, transferring or transmitting any content or information to or from Service Contractor's computer systems or website. Client on its own behalf and on behalf of its Members agrees to refrain from all use of indecent or profane language when making any electronic communication by means of the Electronic Services. c. Client on its own behalf and on behalf of its Members acknowledges that electronic communications may be accessed by unauthorized third parties when communicated between Client or Members and Service Contractor using the Internet, and agrees to use software produced by third parties, including but not limited to what is commonly known as web browser software that supports a data security protocol compatible with the protocol used by Service Contractor. Unless otherwise notified by Service Contractor, Client on its own behalf and on behalf of its Members shall use software that supports the Secure Socket Layer (SSL) protocol and follow Service Contractor's log -on procedures for the Electronic Services. Client on its own behalf and on behalf of its Members agrees that Service Contractor is not responsible for notifying it of any upgrades, fixes or enhancements to any such software or for any compromise of data transmitted across computer networks or telecommunications facilities, including but not limited to the Internet. d. Service Contractor shall issue Client at least one unique user ID and password to enable use of the Electronic Services. Service Contractor shall issue Client additional unique user IDs and passwords to (i) enable additional employees of Client to make use of the Electronic Services and (ii) replace user IDs and passwords assigned to individuals who leave Client's employ or whose job duties no longer require use of the Electronic Services. If Client has MyCare or has selected Open Enrollment, Claim Status Information, or Eligibility Management services, Service Contractor will enable Members to create individual unique user IDs, and Service Contractor will issue each Member a unique password. Client shall immediately notify Service Contractor when any of its employees to whom a user ID and password was issued terminates his or her employment or is transferred to a position that does not require use of the Electronic Services. Client on its own behalf and on behalf of its Members agrees that it will be responsible for the confidentiality and use of user IDs and passwords, and to not hold Service Contractor liable for any damages of any kind resulting from Client's or its Member's decision to disclose its user ID or password to any third party. Client on its own behalf and on behalf of its Members agrees to immediately notify Service Contractor (i) if it becomes aware of any loss or theft or unauthorized use of Client's or any Member's user ID or password or any unauthorized use of the Electronic Services. e. All use of the Electronic Services by Client and its Members is subject to the terms of this Appendix and the Disclosure Statement and Terms of Use, Privacy and Security notice, and Legal Notice posted on the Service Contractor's website. In the event of any conflict between the terms of this Appendix and the provisions of such Disclosure Statement and Terms of Use, Privacy and Security notice, and Legal Notice, this Appendix shall control. 38 07202 ASO Contract(23) -39 f. Any failure by Client to comply with the provisions of this Section 4 shall be a material breach of this Agreement and may constitute misappropriation of Service Contractor's intellectual property rights. Client shall assume all responsibility and liability, and agrees to indemnify, defend, and hold Service Contractor harmless for any liability, which arises out of any use of the Electronic Services contrary to any provision of this Section 4. g. Client acknowledges and agrees that any violation of any term, condition or provision of this Section 4 would cause Service Contractor irreparable harm for which there would be no adequate remedy at law, and that Service Contractor shall be entitled to preliminary and other injunctive relief against any such violation. Such injunctive relief shall be in addition to, and in no way shall limit, any other rights or remedies which Service Contractor may have at law or in equity including, but not limited to, damages. h. Service Contractor may, in its sole discretion, suspend or terminate access to the Electronic Services by Client or any Member who violates any term, condition or provision of this Section 4. Such suspension or termination of access shall not entitle Client, Member, or any other person to any compensation or damages of any kind. 5. Data Accuracy; Confidentiality; Proprietary Information a. Client acknowledges that Service Contractor will rely on the Data Client submits to Service Contractor through use of the Electronic Services for the purposes of maintaining records of Members' eligibility and underwriting and administering the provisions of the Plan. Client hereby warrants that the Data it submits to Service Contractor through its use of the Electronic Services shall be complete and factually accurate in all respects, shall conform to and be consistent with the Plan's terms and provisions and shall be sufficient to enable Service Contractor to accurately calculate premium and /or other fees due in connection with the Plan. In particular, Client warrants that individual persons will be enrolled and disenrolled in strict accordance with the eligibility and other applicable provisions of the Plan. b. Client acknowledges that the Electronic Services are confidential and proprietary products and processes, that they embody valuable trade secrets, and that Service Contractor has certain intellectual property rights in and to the Electronic Services. Client acknowledges that no right, title or interest, except for the limited license set forth herein, is conveyed or transferred to Client by this Agreement. c. Client on its own behalf and on behalf of its Members agrees to indemnify and hold Service Contractor and its officers, directors, shareholders, employees and agents harmless from and against any and all claims, losses, liability costs and expenses (including but not limited to attorneys' fees) arising out of or in any way related to Client's providing or failing to provide Data through Client's use of the Electronic Services, or Service Contractor's use of Data in reliance upon its accuracy and completeness and/or consistency with the Plan's provisions, or from Client's violation of any of the terms of this Appendix. These obligations shall survive the termination of this Appendix and /or the Administrative Services Contract. 6. Support Services Service Contractor will provide Client with Documentation and other assistance in accessing the Electronic Services. Such assistance may be by telephone or through on -site training as Service Contractor in its sole discretion deems appropriate. For any on -site training, Client shall pay all Service Contractor's travel, reasonable living and other out-of-pocket expenses, and daily rates for Service Contractor's employees' time. Service Contractor shall provide Client's Members only with telephonic assistance in interpreting information provided through the Electronic Services. 39 07202 ASO Contract(23) -40 7. Limited Warranties a. For the term of this license, Service Contractor warrants that the Electronic Services will perform substantially in accordance with Service Contractor's specifications when properly accessed. Service Contractor's warranty obligations under this Appendix are specifically and expressly limited to providing access to and proper function of the Electronic Services. Service Contractor's warranty shall not apply to operator errors, Client or Member hardware or software defects, failure of or incompatibility with the Electronic Services, or telephone, cable or satellite television, or Internet service provider failures. b. There is no warranty of merchantability, no warranty of fitness for a particular use and no warranty of non - infringement. There is no other warranty of any kind, express or implied, regarding the information or any aspect of the Electronic Services, including but not limited to information access. 8. Limitation of Liabilities Notwithstanding anything to the contrary in the Administrative Services Contract, under no circumstances shall Service Contractor be liable to Client or any other party for damages of any kind, whether arising in tort, contract, negligence, strict products liability, statutory or regulatory violation or any other legal theory, in connection with or in any way arising out of Service Contractor's provision of Electronic Services to Client. Service Contractor will not be liable to Client or any other party for any type of damages, including but not limited to loss of data or software programs, business interruption, loss of use, loss of profits, invasion of privacy, or the like, even if Service Contractor has been advised in advance of the possibility of such losses or damages. If Service Contractor is found liable for any loss or damage which arises out of or in connection with this Appendix, then the liability of Service Contractor shall not exceed the Electronic Services fee and other charges Client has paid pursuant to this Appendix. The terms and provisions of this Section 8 shall survive the termination of this Appendix and /or the Administrative Services Contract. 9 Termination a. This Appendix may be terminated at any time upon thirty (30) days prior written notice by Service Contractor to Client. In addition, this Appendix shall terminate automatically at the time: i. the Administrative Services Contract ends; the Plan terminates; iii. the Service Contractor no longer insures or administers the Plan; iv. Client commits a material breach of this Appendix or defaults in the performance of any of its duties or obligations under this Appendix and such breach or default continues for a period of thirty (30) days after Service Contractor gives Client written notice specifying the nature of the breach or default. Ninety (90) days after the termination of this Appendix, Service Contractor shall immediately deactivate all user IDs and passwords Service Contractor has issued to Client and its Members in connection with the Electronic Services. However Client's access to Eligibility Management will terminate one day after this Appendix terminates and Billing will terminate forty -five (45) days after this Appendix terminates. Member access to MyCare shall terminate one day after this Appendix terminates. c. Fourteen (14) days after a Member's coverage under the Plan terminates, Service Contractor shall deactivate that Member's user ID and password, except access to MyCare shall terminate one day after Member's coverage under the Plan terminates. 40 07202 ASO Contract(23) -41 Appendix J License Agreement for Pharmacy Benefit Manager Service To be attached to and made a part of the Administrative Services Contract Effective Date: December 1, 2002 By and Between CITY OF ROUND ROCK AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 1. Services to be provided by PBM The Service Contractor shall arrange for services to be provided by the pharmacy benefit manager (PBM) identified in this Appendix in support of the prescription drug benefit provided under the Client's Plan as follows: a. The PBM services shall be provided by Express Scripts Inc. b. The PBM shall perform pharmacy services for Members through its network of participating pharmacies. c. The PBM shall adjudicate claims for prescription drugs covered under the Plan submitted by participating pharmacies using the PBM's electronic on -line claim adjudication system. The PBM's claim adjudication system will include all Plan information regarding deductibles, copayments, coinsurance, Member out -of- pocket maximums, benefit maximums and any other features of the Plan to be used in processing claims. Participating pharmacies may collect from Members at point of sale the amount specified in the Plan. The PBM shall reimburse participating pharmacies for such claims according to the terms of the PBM's contract with the participating pharmacy. d. The PBM shall accept claims submitted by Members directly to the PBM on the PBM's standard claim form, or otherwise agreed upon form, together with proof of payment. The PBM shall process such claims and produce and mail to the Member an explanation of benefits and, if any payment is due the Member, a check for the reimbursement amount specified in the Plan. e. The PBM shall make available to Members a toll free telephone number during the PBM's hours of operation. The PBM's staff shall be available to answer Members' questions about Plan prescription drug benefits, deductibles, copayments, coinsurance, maximum benefits, instructions for completing a standard claim form, and status of Member - submitted claims. 2. Services to be provided by Service Contractor The Service Contractor shall provide the following support for the prescription drug benefit provided under the Client's Plan: a. Based on information it receives from Client, timely notify PBM of the identity of each Member eligible for prescription drug benefits under the Plan, the date the Member becomes eligible, and the date the Member's eligibility ends. 41 07202 ASO Contract(23) -42 b. Reimburse PBM for the total of (i) the amount of all payments due pursuant to Section 8 of this Appendix for drugs provided to Members during the preceding billing period, plus (ii) dispensing fees PBM charged for prescriptions filled for Members by participating and mail order pharmacies during the preceding billing period. Within five (5) working days after the date on which it reimburses PBM, Service Contractor shall be entitled to initiate recovery to its own account from Client's claim account the full amount of its reimbursement to PBM. c. Support Client's efforts to improve the cost - benefit relationship of its prescription drug benefit plan through regular consultation with Client and PBM. d. Make available to Client the advisory and consulting services of Service Contractor's pharmacy services support unit. e. Provide Client with standard reports consisting of data provided by the PBM describing claims, utilization, and other pertinent information. 3. Third -Party Litigation Neither the Service Contractor nor the PBM shall have any duty on Client's behalf to participate in or in any way pursue any claim in any class action or other litigation commenced by a third -party to recover damages of any type whatsoever in connection with drugs provided to Members. 4 Mail Service Program The PBM shall administer the Plan's provisions whereby certain prescription drugs may be provided through the PBM's mail order pharmacy service. a. The PBM shall provide Client with appropriate numbers of its standard information material explaining its mail service and the forms necessary for Members to utilize the service. The PBM shall make available to Members toll -free telephone access to a pharmacist and customer service representative. Access to a pharmacist shall be available 24 hours per day, seven days per week. b. Subject to and in accordance with the Plan and applicable law, the PBM shall dispense through its mail service pharmacy new or refill prescription drug orders upon receipt from a Member of a valid prescription order or a completed refill order form, and the applicable copayment or coinsurance amount. The PBM shall cause the filled prescriptions to be mailed to each Member via common carrier at the address shown on the PBM's records, so long as such address is in the United States. Neither Service Contractor nor the PBM shall have any liability to Client or any Member for any delay in delivery due to circumstances beyond the PBM's control. 42 07202 ASO Contract(23) -43 c. PBM shall at all times while this Appendix is in effect operate its mail service pharmacy in compliance with all applicable state and federal laws and regulations, and shall dispense only those prescription drugs which, in its sole discretion, fulfill requirements of the prescription writer and comply with such laws. The PBM shall have the right to refuse to fill or renew a prescription for any Member when, in the participating pharmacist's professional judgment, the filling or renewing of such prescription is not in the best interest of the Member, or the pharmacist has reason to doubt the authenticity of the prescription. The PBM may from time to time implement programs through its mail service pharmacy to promote certain prescription drugs. d. Client acknowledges that the PBM's mail service pharmacy may from time to time engage in therapeutic interchanges. e. The PBM's mail service pharmacy may dispense drugs to Members even if the prescription is not accompanied by the correct copayment, coinsurance or deductible amount. If Service Contractor is charged for any uncollectible copayment, coinsurance or deductible amount, Client shall be liable to Service Contractor for such amount if reasonable collection efforts by the PBM fail. 5. Plan Changes If Client elects to change the prescription drug benefits of the Plan, including but not limited to covered drugs, copayment, coinsurance or deductible amounts, Client shall advise Service Contractor in writing, and Service Contractor shall inform PBM. Whether the changes can be implemented, and /or implemented by the date Client requests, will be determined at least in part by the PBM. 6. Proprietary Rights The format of all reports, printouts and copies therefrom, and any prior and future versions thereof by any name, are the property of the PBM and are protected by copyright which the PBM owns. Limitations The Service Contractor does not direct or exercise any control over the professional judgment exercised by any pharmacist in dispensing prescriptions or providing pharmaceutical - related services at a PBM participating pharmacy. Participating pharmacies are independent contractors, not subcontractors or agents of the Service Contractor, and the Service Contractor shall not have any liability to Client or any Member for any loss or damage related to or in any way growing out of any act or omission of any PBM participating pharmacy or its agent or employee. 8. Payments For the PBM's services, Client shall pay Service Contractor: The amounts Service Contractor bills for (a) drugs provided to Members during the preceding billing period, plus (b) dispensing fees PBM charged for prescriptions filled for Members by participating and mail order pharmacies during the preceding billing period. Charges for drugs provided to Members may be based on the average wholesale price of a prescription drug as calculated by the PBM using a variety of factors, including but not limited to the First DataBank National Drug Data File or other nationally recognized pricing source. The PBM's method of calculating the average wholesale price of a prescription drug may change from time to time, as the PBM shall determine. Service Contractor shall have no duty to notify Client of any such change. Client acknowledges that the Service Contractor's net cost to provide the pharmacy benefit management services described in this Appendix might be more or less than the payments called for by this section, and Client agrees that the Service Contractor is at risk for such difference. 43 07202 ASO Contract(23) -44 a Termination a. This Appendix may be terminated at any time upon thirty (30) days prior written notice by either party to the other. In addition, this Appendix shall terminate automatically when the first of the following events occurs: the Administrative Services Contract ends; the Plan terminates; the Service Contractor no longer administers the Plan; iv. the Plan no longer includes a prescription drug benefit that utilizes a PBM; v. Client commits a material breach of this Appendix or defaults in the performance of any of its duties or obligations under this Appendix and such breach or default continues for a period of thirty (30) days after Service Contractor gives Client written notice specifying the nature of the breach or default. b. Termination of this Appendix while the Administrative Service Contract continues in effect shall be a modification of the Service Contractor's administrative duties for purposes of Section 4.2.1.b of the Contract. 44 07202 ASO Contract(23) -45 Appendix K Plan Document 45 07202A(21) ROUND ROCK, TEXAS PURPOSE ION. PROSPERITY, WELFARE BENEFIT PLAN FOR EMPLOYEES AND RETIREES OF CITY OF ROUND ROCK, TEXAS (herein called the Plan Sponsor) Summary Plan Description OF MEDICAL CARE, DENTAL CARE, VISION CARE AND PRESCRIPTION DRUG BENEFITS FOR EMPLOYEES, RETIREES AND DEPENDENTS (The Benefits described in this Summary Plan Description are provided and funded by CITY OF ROUND ROCK, TEXAS) Effective: December 1, 2002 EDA (7202) (12 -02)20 (12- 17 -02) SECTION PAGE Plan Information iii Introduction v Eligibility 1 When Coverage Begins 3 When Coverage Ends 5 Medicare 6 Pre - Existing Conditions 7 Medical Care Benefits 8 Medical Care Exclusions and Limitations 18 Medical Care Benefit Provisions 20 Wellness Care Benefits 23 Home Health Care Benefits 24 Private Duty Nursing Care Benefit 25 Hospice Care Benefits 26 Managed Health Care 27 Coordination of Benefits (COB) 32 Prescription Drug Benefits 34 Dental Care Benefits 37 Vision Care Benefits 41 Claims and Other General Provisions 43 General Definitions 48 Federal Continuation Coverage (COBRA) 55 Termination or Amendment of Plan 58 Notice 59 Confidentiality of Health Information 60 TABLE TABLE OF CONTENTS Plan Administrator and Plan Sponsor: City of Round Rock, Texas Employee Benefit Plan 221 E. Main Street Round Rock, TX 78664 (512) 218 -5490 PLAN INFORMATION Employer Identification Number: 74- 6017485 Plan Number: 7202 Plan Employee Contributions: The Plan Sponsor will determine the contributions required of the Employees on an annual basis. PLAN DE BENEFICIOS DE EMPLEADOS DE CITY OF ROUND ROCK Este folleto contiene un resume en Ingles de sus derechos del Plan y beneficios bajo el City of Round Rock Plan de Beneficios del Empleado. Si usted tiene dificultad para entender cualquier parte de este folleto, contacte Great -West Lite & Annuity Insurance Company at 1 -800- 541 -3234. This book contains a brief summary in English of Your rights in the Benefits plan under the City of Round Rock. If You have any questions or difficulty in understanding part of this book contact Great -West Life & Annuity Insurance Company at 1- 800 -541 -3234. FOREWORD City of Round Rock has elected to provide group medical and dental Benefits to Employees on a self- funded basis. We have selected Great -West Life & Annuity Insurance Company as Our Plan Claims Administrator. Their claims mailing address is: Great -West Life & Annuity Insurance Company 1000 Great -West Drive Kennett, MO 63857 -3749 This Summary Plan Description describes the main features of Your Benefits. It is not meant to change or extend the coverage provided for in the Plan Document and should be used only as a general guide. The entire legal document is available to You for review in our office. If discrepancies arise, the Plan Document will govern. This Summary Plan Description takes the place of any other issued to You on a prior data All claims must be filed within 365 days from the date of service. Introduction The City of Round Rock Employee Benefit Plan The City of Round Rock Employee Benefit Plan is primarily a self - funded Plan. The employer shall, from time to time, evaluate the costs of the Plan and determine the amount to be contributed by each covered employee, if any, and any Plan revisions or modifications. In addition to this Summary Plan Description describing Your medical, dental, vision and prescription drug Benefits, You will receive a wallet -sized card that identifies You and Your enrolled dependents as eligible for medical and prescription drug Benefits. This card contains Your personal identification number, name, plan number, benefits, effective date, and Your group plan name. The reverse of Your card contains claim filing information. Always carry this card with You when You or Your dependents visit the Hospital or Doctor. The card is proof of coverage and contains information that must be on every claim form submitted for consideration of payment. The information on the reverse of the card is necessary for proper submission of claims and provides telephone numbers for inquiries. If You lose Your card, contact the Human Resources Department at the City of Round Rock at 512 - 218 -5490 for a replacement card. The purpose of this Summary Plan Description/Plan Document, initially effective December 1, 2002 and as subsequently amended, is to set forth the provisions of the Benefits plan (the `Plan ") which provide for the payment of all or a portion of covered medical and prescription drug expenses the employer agrees to pay, subject to all the provisions of the Plan, including amendments, to the person entitled to such Benefits while covered hereunder, provided claim is duly made. This Summary Plan Description/Plan Document supersedes all other documents and previously issued amendments and shall be the sole document used in determining Benefits to which Covered Persons are eligible. It may be amended from time -to -time by the employer to reflect changes in Benefits or eligibility requirements. It is not in lieu of and does not affect any requirements for coverage by Workers' Compensation. Any amendments shall be binding on each participation covered and on any other person or persons referred to in this Summary Plan Description /Plan Document. The Benefits described in this Summary Plan Description have been designed to pay a large portion of the Reasonable and Customary fees for a broad range of Medically Necessary services, treatments, and supplies and will give You substantial protection against the cost of serious Illness and Injury. The employer intends to continue the Plan indefinitely, but reserves the right to amend or terminate the Plan in whole or in part, at any time. Such action may include, but not be limited to the type of Benefit, deductible, copays, percentage payable, out -of- pocket maximums, maximum Benefits, limitations and exclusions, and monthly contribution. Any such action will be communicated to participants in writing as soon as reasonably possible. The Plan is intended to be consistent with any Plan which the employer makes contributions, and with any contracts for medical and prescription drugs review services. To the extent the terms of this Plan are inconsistent with such Plan, the terms of such Plan shall prevail. Please read this document carefully to familiarize Yourself with the Benefits it describes and the procedures for filing claims. If You have any questions about Your coverage, please contact the plan representative. There are terms in this Summary Plan Description that have a special meaning under this Plan. When used in the Plan, unless otherwise stated, the terms are as defined in: 1. the General Definitions section, or 2. the specific Benefits sections. Becoming familiar with the defined terms will give You a better understanding of the procedures and Benefits described. 88E -GI 88E -E ELIGIBILITY Eligible Employees You are in an Eligible Class for coverage under the Plan if You are an employee, at least 18 years of age, and have begun to work an average of 30 hours or more per week, excluding overtime, for Your Employer. Eligible Employees do not include independent contractors, contract workers, temporary, seasonal, casual or leased employees as interpreted by the Employer using Internal Revenue standards. A Retired Employee and his/her Eligible Dependents are included in an Eligible Class for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages. "Retired Employee" means a person who meets the rules and regulations of the Employer's Retirement Plan at the time of the retirement: Twenty years of service or Retirees with 5 years of service at age 60. You will be eligible for coverage under the Plan on the date You enter an Eligible Class, or the Effective Date of the Plan, if later. Eligible Dependents To be eligible for Dependent Coverage under the Plan, Your dependent(s) must be eligible. Your Eligible Dependents are: 1. Your lawful spouse or common -law spouse; 2. Your unmarried dependent Child less than age 25; 3. Your Child with a mental or physical handicap who is over the age limit, if a) the Child becomes and remains Disabled while covered under the Plan, or b) was covered under the Prior Plan that this Plan replaces and, in either case, all of the following conditions are met: a. the Child has not been married; b. cannot hold a self- supporting job due to the handicap; and c. depends on You for main support and care. First proof of incapacity must be given to Us (at Your expense) within 31 days of the Child's limiting birthday. No person may be covered as a dependent of more than one employee. An employee may not be covered as a dependent. "Child" means Your natural Child; Your stepchild; an adopted Child; a Child who has been Placed For Adoption with You; a Child for whom You have been appointed legal guardian; a Child who is recognized under a qualified medical child support order as having a right to enrollment under the Plan (hereafter "QMCSO- child "). In all cases the Child must depend upon You for his/her main support and care. However, when a court recognizes a Child as a QMCSO- child, the Child will be considered Your Eligible Dependent regardless of whether the Child is living with You or receiving his/her main support and care from You "Common -law marriage" means a marriage between a man and woman who: 1. declare common -law marriage; 2. are both age 18 or older; 3. file both federal and state taxes as married; 4. provide evidence of cohabitation as husband and wife, and by general reputation the two individuals are living together as husband and wife and claiming to be such; and "By general reputation" means the understanding among neighbors and acquaintances with whom the parties associate in their daily lives is that they are living together as husband and wife, and not that they are merely living together. 5. submit a notarized affidavit verifying common -law marriage status. Common -law marriage does not include a domestic same -sex partnership. Coverage for Newborns - Well Baby Care A newborn Child will be covered f rom the moment of birth provided You already have Dependent Child(ren) Coverage or You Enroll the newborn Child for coverage within 31 days of the birth of the newborn Child. Such newborn Child will be eligible for the following Covered Expenses: a) Hospital room and board (or nursery) charges; b) routine Doctor visits while Hospital confined; and c) circumcision while Hospital confined. This coverage will end on the earlier of: 1. the date the newborn Child is discharged or 2. the date the newborn Child is 31 days old. Coverage for Newborns - Sick Baby Care A newborn Child is covered from the moment of birth for Covered Expenses due directly to: 1. Injury or Illness; 2. premature birth; or 3. a condition which exists at birth. ELIGIBILITY - Continued If You do not have Dependent Coverage in force, this coverage (including any Extended Benefits) will end 31 days after the date Your Child is born. If You Enroll the Child within this 31 day period and make the required retroactive Contributions, coverage on the Child may continue. Modification of Coverage for Newborns - Well and Sick Baby Care When charges for delivery are considered a Covered Expense for an expectant mother eligible for coverage under this Plan, any and all charges incurred by the newborn under the Well and Sick Baby Care provisions as shown above are to be considered as charges incurred by the mother. 88E - NC 2 88E -EFFD WHEN COVERAGE BEGINS For Eligible Employees: Your Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages will be made effective on the date You are eligible if that date is the first day of the calendar month. If not, on the first day of the calendar month that next follows the date You are eligible. For Eligible Retired Employees: If You are retiring, Your coverage will be made effective on the first day of the calendar month that falls on or next follows: 1. the date You retire if You Enroll on or before that date; or 2. the date You Enroll, if You do so within 31 days after Your retirement date. If You do not Enroll within 31 days after You retire, You will not be eligible for coverage. For Eligible Dependents: Dependent Coverage cannot become effective prior to the date Your coverage is effective. Dependent Coverage will be effective with respect to each Eligible Dependent You then have on the first day of the calendar month that falls on or next follows: 1. the date You are eligible for coverage if You Enroll Your dependents on or before that date; or 2. the date You Enroll Your dependents. If You do not Enroll Your dependents for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages within 31 days after You are eligible for coverage, please refer to the provision on Late Enrollees below. Late Enrollees If You do not Enroll within 31 days after You are eligible for Health Care coverage, You may be a Late Enrollee. If: 1. You do not Enroll Your dependents within 31 days after You are eligible for such coverage or Your dependent was not Enrolled within 31 days after he /she became eligible; or 2. You wish to restore Dependent Health Care Coverage which ended because You did not make required Contributions, Your dependent may be considered a Late Enrollee. (Please refer to the General Definitions section.) A Late Enrollee may Enroll only during the open enrollment period of November 1 through November 30. A Late Enrollee's coverage will be made effective on the first day of the calendar month following the open enrollment period and will be subject to the Pre- Existing Conditions Limitations for Late Enrollees provision. Other Enrollment Periods You or Your Eligible Dependent may only request enrollment under the Health Care coverage: 1. during the initial enrollment period or subsequent open enrollment periods; or 2. during the Special Enrollment Periods. Additional Dependents WHEN COVERAGE BEGINS - Continued You or an Eligible Dependent may Enroll for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages during Special Enrollment Periods without being considered a Late Enrollee under the following circumstances: 1. Loss of Other Coverage. If You or an Eligible Dependent: a. was covered under another group health plan (including COBRA continuation) or had other medical insurance coverage at the time enrollment was declined; and b. has lost or will lose coverage under the other plan as a result of loss of eligibility (due to such reasons as termination of employment, change of employment status, death of a spouse, divorce, legal separation or cessation of the Employer's contributions to such coverage) or have exhausted COBRA continuation coverage, You or an Eligible Dependent may Enroll within 31 days after loss of coverage. Coverage will be effective on the first day of the month following enrollment. 2. Acquisition of Dependents. If You did not Enroll when first eligible and acquire a dependent through marriage, birth, adoption or Placement For Adoption, You and the newly acquired dependent(s) may Enroll within 31 days of the date of marriage, birth, adoption or Placement For Adoption. In the case of the birth, adoption or placement of a Child, Your spouse may also be Enrolled as Your dependent if otherwise eligible for coverage. Coverage will be effective on the date of birth, adoption or Placement For Adoption. In the case of marriage, coverage will be made effective on the first day of the month following enrollment. 1. If You are covered with respect to yourself only, You and Your Child(ren) only, or You and Your spouse only, Dependent Health Coverage may be extended to cover Your spouse or Your first Eligible Child, as the case may be. You must apply to cover such new dependent within 31 days after the dependent is first eligible. If You do not apply within 31 days, Your dependent may be a Late Enrollee. (Please refer to the General Definitions section.) Coverage with respect to a Late Enrollee will be made effective on the first day of the calendar month which falls on or after the date You Enroll the dependent and coverage will be subject to the Pre- Existing Conditions Limitations for Late Enrollees. 2. If You have at least one dependent Child covered, each new dependent Child will be covered on the date he/she becomes eligible. You must Enroll each new Dependent in order for them to be covered under the Plan. 88E -EFFD 4 WHEN COVERAGE ENDS For Employees: Your coverage will end on the date of the first of these events: 1. If You are covered as an Active Employee, the end of the month in which You stop Active Work in an Eligible Class, except that: a. if You stop Active Work due to Injury, Illness, or Qualified Leave of Absence for personal Injury or Illness, Your Employer will continue Your Health coverage subject to payment of Contributions. Such coverage will continue only while You are unable to return to work because of the Injury, Illness or Qualified Leave of Absence. This coverage continuance will be on a basis precluding individual selection; b. if You stop Active Work to take a qualified military leave of absence (pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994) You may elect to continue coverage subject to payment of Contributions. Such coverage will continue only while You are unable to return to work because of the qualified military leave of absence. Such continuance will be on a basis precluding individual selection; c. if You stop Active Work to take a Qualified Leave of Absence (pursuant to the Family and Medical Leave Act of 1993 or other applicable state's leave law, if any such law applies to Your Employer), for reasons other than personal Illness or Injury, Your Employer will continue coverage subject to payment. Such coverage will continue only while You are unable to return to work because of the Qualified Leave of Absence. Such continuance will be on a basis precluding individual selection; d. if You stop Active Work due to other leave of absence, or due to temporary layoff, Your Employer may elect to continue coverage subject to payment. Such coverage may be continued to the end of the second Plan Month following the Plan Month in which such leave or layoff took place. This coverage continuance will be on a basis precluding individual selection. 2. You stop making Contributions, if required. 3. As to any one coverage or class, the date the Plan is amended or changed to exclude that coverage or class. 4. The Plan ends. If You cease Active Work due to eligible retirement, coverage will be continued in accordance with the rules established by the Plan Sponsor. For Dependents: A dependent's coverage will end on the earlier of: 1. the date Your coverage ends; or 2. the end of the month in which the dependent ceases to be eligible as defined by the Plan. 88E -TERMD 5 MEDICARE This section applies to a Covered Person who is eligible for Medicare coverage. It provides rules for determining the order of benefit payments between coverage under this Plan and those of Medicare. The intent of this section is to conform the Plan to the requirements of the federal Medicare Secondary Payer law. Accordingly, the section and its stated rules will be adjusted, if We deem necessary, so that the Plan's liability for Benefit payment is neither greater nor Tess than those required under the law. 1. If, pursuant to the rules: a. this Plan is determined to be secondary to Medicare, it will pay secondary to and coordinate its Benefits with Medicare; b. this Plan is determined to be primary to Medicare, it will pay Benefits without regard to Medicare benefits. 2. The order of benefit payments rules are outlined below. a. Rules applicable to a person covered under the Plan by virtue of that person's "Current Employment Status" with an Employer or as a dependent of such person: Basis of Medicare Eligibility: This Plan Will: Old -Age (attaining age 65)* Be primary. Disability (other than ESRD) Be primary. End Stage Renal Disease Be primary for the first 30 months of ESRD (ESRD) Medicare coverage; be secondary thereafter. Old -Age or Disability, preceding Continue to be primary until the end of the first 30 months of ESRD or beginning concurrently Medicare coverage; be secondary thereafter. with ESRD *If a Covered Person elects to have Medicare as primary coverage, such person's Health Care coverage (including any Dental Care, Prescription Drug or Vision Care coverage), under this Plan will terminate. If the employee's Health Care coverage terminates in accordance with this provision, coverage on the employee's covered dependents will cease on the same date. b. Rules applicable to a person covered under the Plan as a Retired Employee, a dependent of such employee, or on any basis other than those stated in 2.a. above: Basis of Medicare Eligibility: This Plan Will: - Old -Age (attaining age 65) Be secondary. - Disability (other than ESRD) Be secondary. - End Stage Renal Disease Be primary for the first 30 months of ESRD (ESRD) Medicare coverage; be secondary thereafter. - Old -Age or Disability, Continue to be secondary. preceding ESRD For purposes of this section, "Current Employment Status": a person is considered to have Current Employment Status with an Employer if the person is an employee, is the Employer (including self - employed person), or is associated with the Employer in a business relationship. REMEMBER: The Medicare section outlined above applies from the date a Covered Person is first ELIGIBLE for Medicare (either Part A or Part B), whether or not the Covered Person is Enrolled and is receiving Medicare benefits. N- MEDICARE -100 6 You or Your Eligible Dependent has a "Pre- Existing Condition" if the Covered Person: 1. has consulted a Doctor; 2. has taken prescribed medicine; 3. is receiving or has received medical care; for that condition in the 6 months before his/her Enrollment Date (as defined by the Plan). Pregnancy, including Complications of Pregnancy, is not a Pre - existing Condition. Genetic information, in the absence of a diagnosis of a resulting condition, will not be considered a Pre - Existing Condition. Pre - Existing Conditions Limitations for Late Enrollees PRE - EXISTING CONDITIONS A Late Enrollee, who is otherwise eligible for Health Care coverage, is subject to the following Pre - existing Conditions Limitations provision if the person becomes covered under the Plan and does not have Creditable Coverage or has Creditable Coverage that is less than the Pre - Existing Conditions Limitations period. Benefits will not be payable for a Pre - Existing Condition until 12 consecutive months have elapsed from the Covered Person's Enrollment Date. (Please refer to the General Definitions section for an explanation of Enrollment Date.) Modification of Pre - Existing Conditions Limitations The Pre - Existing Conditions Limitations provision is modified to provide credit toward satisfaction of the Pre - Existing Conditions Limitations period for the time covered under previous Creditable Coverage. Credit for previous Creditable Coverage will not be given if a 63 day or greater period (a break in Creditable Coverage) has occurred from the time the person was covered under previous Creditable Coverage until the Covered Person's Enrollment Date under the Plan. Time served during a Waiting Period does not count as a break in Creditable Coverage and does not count as Creditable Coverage. To be eligible for this credit, the Covered Person must present documentation of previous Creditable Coverage. Documentation of previous Creditable Coverage is not required if: 1. the Covered Person was covered under Your Employer's previous medical plan on the day prior to this Plan's Effective Date; or 2. if You are changing to another health plan option offered by Your Employer. After consideration of the documentation of Creditable Coverage, You will be notified of the remaining months in Your or Your dependents Pre - existing Conditions Limitations period. The Plan will not impose Pre - existing Conditions Limitations on a Child who was covered by Creditable Coverage within 30 days of his/her birth, adoption, or Placement For Adoption provided the Child has not been without Creditable Coverage for more than 62 days. Modification of Pre - Existing Conditions Limitations The Pre - Existing Conditions Limitations provision will not apply if the Covered Person becomes covered under this Plan on its Effective Date. 88E- PRE- X(7 -95) 7 Important Notice MEDICAL CARE BENEFITS SCHEDULE Your medical coverage includes one or more features to help control medical care costs. Some features will affect the amount of Benefits payable for Your medical care. PLEASE REFER TO THE MANAGED HEALTH CARE SECTION FOR ALL SERVICES THAT REQUIRE PRE - TREATMENT AUTHORIZATION. PENALTIES MAY BE ASSESSED FOR FAILURE TO COMPLY WITH PRE - TREATMENT AUTHORIZATION REQUIREMENTS. Two different levels of Benefits are being provided under the Plan: 1. The "PPO" Benefit level will be payable for services rendered by a Participating Provider, and 2. The "Non -PPO" Benefit level will be payable for services rendered by a provider who is not a Participating Provider. Employee and Dependent Amounts Applicable To Medical Care Coverage You or a Dependent Lifetime Maximum For all Covered Expenses $1,000,000 Lifetime Maximum for Covered Expenses Incurred for: 1. Hospice Care PPO $20,000 Non -PPO $15,000 2. Treatment of Temporomandibular Joint Disorders $5,000 3. Inpatient Treatment of Alcoholism and Drug Abuse (Combined) 30 days or $25,000, whichever occurs first Calendar Year Maximum for Covered Expenses Incurred for: 1. Skilled Nursing Facility Charges PPO $10,000 Non -PPO $7,000 2. Inpatient Treatment of Mental Health Conditions 30 days 3. Inpatient Doctor Visits for Mental Health Conditions, Alcoholism and Drug Abuse (Combined) 1 visit per day 4. Outpatient Doctor visits for Mental Health Conditions 30 visits 5. Outpatient Treatment of Alcoholism and Drug Abuse (Combined) $1,000 6. Outpatient Doctor visits for Alcoholism and Drug Abuse (Combined) 30 visits 7. Home Health Care PPO $10,000 Non -PPO $7,000 8. Wellness Benefit $350 9. Chiropractic Benefit $500 88E- MEDSCH 8 Calendar Year Deductible An amount of Covered Expenses to which the Deductible Requirement applies equal to: PPO Non -PPO the Individual Deductible of: $250 $750 or the Family Unit Deductible of: $750 $2,250 Covered Expenses used to satisfy the Calendar Year Deductible amount when services of a Participating Provider are used may also be applied toward satisfaction of the Calendar Year Deductible amount when services of a provider other than a Participating Provider are used, and vice versa. The Family Unit Deductible must be satisfied by You and Your Family Unit members who are covered as dependents. No part of any Covered Expenses for which Benefits are paid or payable by the Plan may be used to satisfy the Family Unit Deductible. Additional Deductible PPO Non -PPO For each visit to a Hospital emergency room. MEDICAL CARE BENEFITS - Continued $50 $50 This Additional Deductible will not apply if the Covered Person is admitted to the Hospital immediately after the emergency room visit. 88E- MEDSCH 9 ALL COVERED EXPENSES, OTHER THAN EMERGENCY ROOM CHARGES, INCURRED AT ROUND ROCK HOSPITAL OR OAKWOOD SURGICAL CENTER FACILITY WILL BE PAID AT 100% AFTER THE DEDUCTIBLE APPLIES. Services 1. Hospital charges for Inpatient Hospital Confinement, including charges for confinements following an emergency room visit. 2. Charges of a radiologist, a pathologist, an anesthesiologist or an Assistant Surgeon if services are performed: a. at a PPO facility. b. at a Non -PPO facility. 3. Hospital charges for emergency room care. 4. Doctor's charges for emergency room care. 5. Pre - admission testing. 6. Outpatient Hospital charges (unless shown otherwise in this schedule). 7. Outpatient Hospital charges when surgery is performed. 8. Ambulance charges for air or ground transportation. MEDICAL CARE BENEFITS - Continued 88E- MEDSCH 10 Deductible applies; payable at 80%. Deductible applies; payable at 80%. Deductible applies; payable at 80%. The Plan Will Pay PPO Non -PPO Deductible applies; payable at 80% after the Covered Person pays an Additional Deductible of $50 per visit. Deductible applies; payable at 50%. Deductible applies; payable at 80%. Deductible applies; payable at 50 %. Deductible applies; payable at 80% after the Covered Person pays an Additional Deductible of $50 per visit. This Additional Deductible will be waived if the Covered Person is admitted to the Hospital immediately after the emergency room visit. Deductible applies; Deductible applies; payable at 80%. payable at 80 %. Deductible applies; Deductible applies; payable at 80%. payable at 50%. Deductible applies; Deductible applies; payable at 80 %. payable at 50 %. Deductible applies; Deductible applies; payable at 80%. payable at 50%. Deductible applies; Deductible applies; payable at 80 %. payable at 80 %. Services 9. Charges of a Doctor (unless shown otherwise in this Schedule) for: MEDICAL CARE BENEFITS - Continued a. an office visit or a visit to a Covered Person's home (excludes visits for Mental Health Conditions, alcoholism and drug abuse). b. allergy treatment; testing, injections, nebulizer, etc. c. surgical procedures performed during the visit. d. all other covered services performed during the visit. 10. Charges of a Doctor for surgery performed in the outpatient department of a Hospital or other outpatient facility. 11. Charges incurred for manual manipulations, lab and x -ray which are billed by a Doctor or chiropractor. 12. Charges incurred for outpatient physical, speech and occupational therapy, limited to one visit per day. 13. Charges incurred for durable medical equipment. 14. Charges for services performed by a private duty nurse. 15. Organ transplant. 16. Hospice Care. 88E- MEDSCH 11 No Deductible applies; payable at 100% after the Covered Person pays a $15 Per Visit Fee. Deductible applies; payable at 80%. Deductible applies; payable at 80%. No Deductible applies payable at 100 %. Deductible applies; payable at 80%. Deductible applies; payable at 80%. Please refer to Medical Care Benefit Provisions for additional information. Deductible applies; payable at 80%. Deductible applies; payable at 80%. Deductible applies; payable at 80%. Please refer to Medical Care Benefit Provisions for additional information. Deductible applies; payable at 80 %. Deductible applies; payable at 80%. Please refer to Medical Care Benefit Provisions for additional information. The Plan Will Pay PPO Non -PPO Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. 17. Home Health Care. Services Deductible applies; payable at 80%. Please refer to Medical Care Benefit Provisions for additional information. 18. Skilled Nursing Facility Char 19. After Hours Care, performed at an Urgent Care Facility. 20. Wellness Care* for: MEDICAL CARE BENEFITS - Continued a. childhood examination and immunizations. c. physical examinations. d. annual prostate exam and prostate specific antigen (PSA) testing. a. b. Inpatient Hospital or other inpatient facility charges. Inpatient Doctor charges. ges. Deductible applies; b. gynecological exam including pap smear and mammograms. Any charge in excess of the $350 Benefit limit will not be considered a Covered Expense. Non -PPO Lab and x -ray charges related to Wellness Care will be paid at 100 %* when referred by a PPO provider. 21. Treatment of Mental Health Conditions: c. Outpatient Hospital or other outpatient facility charges. d. Doctor's charges for a visit to the office or a Covered Person's home. 88E MEDSCH 12 payable at 80 %. No Deductible applies; payable at 100% after the Covered Person Pays a $15 Per Visit Fee. No Deductible applies; payable at 100 %.* No Deductible applies; payable at 100 %.* No Deductible applies; payable at 100%.* No Deductible applies; payable at 100 %.* Deductible applies; payable at 80 %. Deductible applies; payable at 80%. Deductible applies; payable at 80 %. The Plan Will Pay PPO Non -PPO No Deductible applies; payable at 80%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies, payable at 50 %. No Benefits. ** No Benefits. ** No Benefits ** No Benefits. ** Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Deductible applies; payable at 50%. Services 24. Charges for services performed at a Birthing Center. 25. Charges for X -rays or laboratory specimens that are performed on an outpatient basis, (i.e. Doctor's office, freestanding facility or outpatient facility). MEDICAL CARE BENEFITS - Continued 26. Charges of a Deductible applies; Dietician or Nutritionist for diet counseling. payable at 80%. *Subject to reasonable and customary fees. 27. All other Covered Expenses. Deductible applies; payable at 80%. 88E MEDSCH 13 The Plan Will Pay PPO Non -PPO 22. Treatment of alcoholism and drug abuse (combined): a. Inpatient Hospital or other inpatient facility Deductible applies; Deductible applies; charges. payable at 80%. payable at 50%. b. Inpatient Doctor charges. Deductible applies; Deductible applies; payable at 80%. payable at 50%. c. Outpatient Hospital or other outpatient facility Deductible applies; Deductible applies; charges. payable at 80%. payable at 50%. 23. Treatment of Temporomandibular Joint Disorders Deductible applies; Deductible applies; (TMJ) payable at 80%. payable at 50%. Please refer to Medical Care Benefit Provisions for additional information. Deductible applies; payable at 80%. No deductible applies; payable at 100%. Deductible applies; payable at 50 %. Deductible applies; payable at 50 %. Deductible applies; payable at 80 %.* Deductible applies; payable at 50%. When it is not reasonably possible for a Covered Person to get access to a Participating Provider in the network of an eligible service or supply, The Plan Will Pay Benefits at 80% and the PPO deductible will apply. "Additional Deductible" means that portion of covered Hospital expenses a Covered Person is required to pay out of his/her pocket before The Plan Will Pay Benefits for any remaining portion. Additional Deductibles may apply even if no Deductible applies. The Additional Deductible does not apply toward the Deductible or any out -of- pocket amounts. Per Visit Fee" means that portion of covered Doctor expenses a Covered Person is required to pay out of his/her pocket before The Plan Will Pay Benefits for any remaining portion. "Deductible" means that portion of Covered Expenses a Covered Person is required to pay out of his/her pocket each calendar year before The Plan Will Pay Benefits for any remaining portion. The Deductible does not apply toward any out -of- pocket amounts. A Covered Person will not be reimbursed for any Per Visit Fee or Additional Deductible nor do they apply toward any Deductible or his/her Out -of- Pocket amount. MEDICAL CARE BENEFITS - Continued Out -of- Pocket Expense Maximum When $1,000 in Out -of- Pocket Expenses has been paid by one Covered Person during a calendar year, the 80% level of Benefit payments for PPO services will automatically increase to 100% for any additional eligible Covered Expenses Incurred by that same person during the remainder of that calendar year. When $7,500 in Out -of- Pocket Expenses has been paid by one Covered Person during a calendar year, the 50% and 80% levels of Benefit payments will automatically increase to 100% for any additional eligible Covered Expenses Incurred by that same person during the remainder of that calendar year. When $3,000 in Out -of- Pocket Expenses has been paid on behalf of all the covered members of Your Family Unit during a calendar year, the 80% level of Benefit payments for PPO services will automatically increase to 100% for any additional eligible Covered Expenses Incurred by any covered family member during the remainder of that calendar year. When $22,500 in Out -of- Pocket Expenses has been paid on behalf of all the covered members of Your Family Unit during a calendar year, the 50% and 80% levels of Benefit payments will automatically increase to 100% for any additional eligible Covered Expenses Incurred by any covered family member during the remainder of that calendar year. An "Out -of- Pocket Expense" is the 20% and 50% shares of any otherwise eligible (Reasonable and Customary) expense which You pay. Per Visit Fees, Additional Deductibles, Pre - Treatment Authorization Penalties, Concurrent Review Penalties and Deductibles are not considered eligible Out -of- Pocket Expenses. These increases will not apply to wellness charges or charges incurred for the treatment of Mental Health Conditions, alcoholism and drug abuse. 88E- MEDSCH 14 Room and Board Maximum 1. Private room accommodation 2. Ward or semiprivate accommodation 3. Intensive Care Unit accommodation Skilled Nursing Facility Benefit 1. Daily Benefit 2. Maximum Benefit Medical Care Benefits MEDICAL CARE BENEFITS - Continued Maximum Covered Expense 88E- MEDSCH 15 Average Semiprivate Room Charge the Covered Expense Incurred the Covered Expense Incurred the Room Charge in the Skilled Nursing Facility. PPO - $10,000 per calendar year. Non -PPO - $7,000 per calendar year. When Injury or Illness causes You or Your dependent, while covered under this Plan, to incur Covered Medical Care Expenses, the Plan will determine Benefits according to the Schedule and the limitations and exclusions outlined in the Plan. Benefits for each Covered Expense will be calculated as follows: 1. The Reasonable and Customary fee will be determined. 2. The amount will be reduced by any applicable Deductible. 3. The remaining amount will be multiplied by the appropriate Covered Percentage, resulting in the Benefit payable. 4. The Benefit payable will be subject to the maximums shown on the Schedule. Deductible Requirement Your or Your dependents Deductible Requirement will be met when the Covered medical Expenses Incurred while covered during each calendar year equal the Deductible Amount shown on the Schedule. You are required to pay this amount, the Plan will not reimburse You for this expense. The following special Deductible provisions are included to help You and Your covered dependents meet this Deductible Requirement. 1. Carry Over If You or Your dependent incurred Covered medical Expenses during the last three months of the calendar year and they were applied to meet that year's Deductible, those same expenses may be used again, "carried over" to help meet the Deductible Requirement of the next year. 2. Family Unit Deductible: The Family Unit Deductible Requirement will be met when all Covered Expenses applied to individual Deductibles for covered members of Your family, in a calendar year, equal the Family Unit Deductible shown on the Schedule. 3. Common Accident Feature: If two or more Covered Persons in Your Family Unit are injured in the same accident, only one Individual Deductible amount will apply to the total of all Covered Expenses Incurred (by all covered and injured Family Unit members) as the result of that accident. This applies during the calendar year in which the accident occurs. This does not apply to Expenses Incurred for any other Illness or Injury. Covered Expenses MEDICAL CARE BENEFITS - Continued The Plan Will Pay Benefits as shown on the Schedule for the following Medical Care expenses of a Covered Person if the expenses are considered Covered Expenses as defined in General Definitions: 1. Hospital daily room and board, general nursing care, and Intensive Care Unit, to the Maximum Amounts shown on the Schedule. 2. All other Medically Necessary miscellaneous services and supplies furnished by a Hospital during covered Inpatient Hospital Confinement, but not for private duty nursing care. 3. Pre- admission testing performed before a scheduled Inpatient Hospital Confinement. 4. Outpatient Hospital charges for medical care and supplies used on the premises of a Hospital. 5. Medically Necessary services and supplies furnished in a licensed Ambulatory Surgical Center. 6. Medically Necessary services and supplies furnished in a lawfully operating Birthing Center. 7. Skilled Nursing Facility charges for: a. daily room and board up to the maximum shown on the Schedule; or b. a confinement beginning within 7 days of discharge from an Inpatient Hospital Confinement of at least 1 day. 8. Professional service charges of a Doctor (other than psychiatric /psychological service charges). 9. Professional psychiatric /psychological service charges of a Doctor for treatment of Mental Health Conditions, subject to the maximums shown on the Schedule. 10. Professional service charges of a Doctor for surgery. 11. Professional service charges of a Doctor for the giving of anesthesia. 12. Professional service charges made of a Doctor, or by a laboratory for diagnostic laboratory and x -ray exams. 13. Private duty nursing charges for services performed by an R.N. or L.P.N., as defined by the Plan. 14. Physiotherapy services of a physiotherapist. 15. Charges for services of a qualified speech therapist or audiologist for speech therapy and audio therapy, including audio diagnostic testing, to provide developmental and rehabilitative care where there is a reasonable expectation that the services will produce significant improvement in the Covered Person's condition in a reasonable period of time. 16. Charges for anesthesia when given by a Doctor. 17. Durable medical equipment as defined by the Plan. 18. Travel: a. by train, bus or commercial airline in the continental U.S. and Canada to, but not from, a Hospital for needed special care; b. by professional ambulance used locally to a Hospital. 19. Routine mammographic screening as defined in the Wellness Care Benefit section. 20. Expenses for pregnancy will be payable on the same basis as any Illness for a female employee or covered dependent wife. No Benefits will be payable for expenses which relate to the pregnancy of a dependent Child except for Complications of Pregnancy, as defined in General Definitions. 21. Expenses Incurred for the treatment of alcoholism, drug abuse and Mental Health Conditions as defined by the Plan. 88E -CE 16 MEDICAL CARE BENEFITS - Continued 22. Charges incurred for Wellness Care expenses as shown on the Schedule and as defined in the Wellness Care section. 23. Home Health Care as defined in the Home Health Care section. 24. Hospice Care as defined in the Hospice Care section. 25. Treatment of Temporomandibular Joint Dysfunction, subject to the maximum shown on the Schedule. 26. Manual Manipulation as defined by the Plan. 27. Organ Transplants as defined by the Plan. 28. Oral surgery. 29. Amniocentesis testing for high risk pregnancy or when mother is 35 years of age or older. 30. Treatment of chronic pain and pain management, including services for pain rehabilitation. 31. Diagnosis of infertility. 32. Elective sterilization. 33. Group therapy. 34. Counseling. 35. Diet counseling services, performed by a Dietician or Nutritionist. If any of the preceding Covered Expenses are incurred during a covered Inpatient Hospital Confinement or as a covered outpatient Hospital charge, they will be paid as covered Hospital charges or outpatient Hospital charges, as the Plan determines appropriate, and not as a separate Benefit. 88E -CE 17 MEDICAL CARE EXCLUSIONS AND LIMITATIONS Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Medical Care Benefits. These are: 1. Charges not included as Covered Expenses. 2. Blood or plasma when a refund or credit is made for those items. 3. Cosmetic or plastic surgery and related charges, unless due to: a. an accidental Injury; or b. a birth defect; and which interferes with a normal function of the body or causes physical pain. 4. Hearing aids and their fitting. 5. Eyeglasses or contact lenses and the fitting of such (except the first pair after cataract surgery). These items are covered under the Vision Care Benefit. Refer to the Vision Care Benefit section for coverage information. 6. Eye refractions. 7. Care or supplies furnished due to: a. an act of war (declared or undeclared); b. insurrection or Riot. 8. Care or supplies which are furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place unless: a. for Emergency treatment when You or Your dependent must pay for those services; b. for non - service connected disabilities in a Veterans Administration Hospital; c. incurred by a U.S. military retiree (covered by this Plan) and his/her covered dependents, while confined in a military medical facility. 9. Care and services to the extent furnished or payable under: a. a plan or program operated by a National Government or one of its agencies; b. a state cash sickness or similar law. 10. Care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage (except as may be required to fulfill any Participating Provider contractual obligations). 11. Injury or Illness resulting from taking part in the commission of an assault or felony or being engaged in an illegal occupation. 12. Injury or Illness arising out of employment, whether or not You or Your dependent is covered by Workers' Compensation or similar laws. 13. Exercise for the eyes (orthoptics). 14. Psychological testing. 15. Nerve stimulators. 16. Services or supplies for obesity, weight reduction or dietary control, except when provided for treatment of morbid obesity. 17. The following types of care: a. Custodial Care; b. care to assist the Covered Person in the activities of daily living; c. maintenance care, not expected to improve the Covered Person's medical condition. 88E -EX 18 MEDICAL CARE EXCLUSIONS AND LIMITATIONS - Continued 18. Charges incurred by other than the diagnosed patient except as provided in the Organ Transplant benefit. 19. Orthodontic treatment, or any other non - surgical procedure, care, or supply to correct a malocclusion of the teeth. 20. Treatment of teeth or nerves connected to teeth, except: a. oral surgery; b. treatment of an accidental Injury to natural teeth; or c. covered Hospital charges (as defined) when needed for dental care. 21. Any service rendered by a Close Relative or someone having the same legal residence as the Covered Person. 22. Expenses which relate to the pregnancy of a dependent Child except for Complications of Pregnancy, as defined under General Definitions. 23. In -vitro fertilization, artificial insemination, infertility treatment and all related expenses (except necessary care and supplies needed to diagnose infertility), family planning or contraceptive services. 24. Reversal of an elective sterilization procedure. 25. Surgical correction of eye refraction which can be corrected by eyeglasses or lenses (radial keratotomy, keratectomy, keratoplasty). 26. Purchase or rental of luxury medical equipment when standard equipment is Appropriate for the Covered Person's condition (e.g., motorized wheelchairs or other vehicles, bionic or computerized artificial limbs). 27. Education or training of any type for the treatment of learning disabilities and attention deficit disorders; I.Q. testing except in connection with assessment or treatment of a speech, language or hearing disorder. 28. Thermograms, temperature gradient studies. 29. Any care or supplies received prior to the Effective Date or after the Termination Date of this coverage (unless coverage is continued according to some Plan provision). 30. Any service rendered by a person who is not legally qualified to perform that service. 31. Sex transformations and hormones related to such. 32. Elective induced abortion, unless carrying the fetus to full term would seriously endanger the life of the mother. If complications arise after the performing of an abortion, any Covered Expenses Incurred to treat those complications will be considered under this Plan; but the initial costs relating to the abortion will not be covered. 33. Charges for or in connection with smoking cessation and nicotine withdrawal, Prescriptions for smoking cessation or nicotine withdrawal are covered under the Prescription Drug Benefit. Refer to the Prescription Drug Benefit section for coverage information. 34. Charges for or in connection with acupuncture. 35. Charges made by a Doctor for his/her time on "standby" status if he /she performs no actual service. 88E -EX 19 MEDICAL CARE BENEFIT PROVISIONS Conditions and Maximums for Treatment of Non - Serious and Serious Mental Health Conditions The Plan Will Pay Benefits for the treatment of a Non - Serious Mental Health Condition while confined in a Hospital. Coverage is limited to 30 days in any calendar year. Medical Care Benefits for psychiatric /psychological services of a Doctor for the treatment of a Non - Serious Mental Health Condition received while confined as an inpatient in a Hospital are limited to the Covered Expense Incurred for up to 30 inpatient Hospital visits per calendar year. As an alternative to inpatient Hospital days, medical Benefits for Partial Hospitalization, Residential Treatment or crisis respite care for the Covered Person may also be provided. Two alternate days will reduce, by one day, the 30 days available for inpatient Hospital treatment. Medical Care Benefits for psychiatric /psychological services of a Doctor for the treatment of a Non - Serious Mental Health Condition received while not so confined are limited to the Covered Expense Incurred for up to 30 visits per calendar year. For Plan purposes, a "Non- Serious Mental Health Condition" means any of the following conditions or diagnosis; anxiety disorders, somatotorm disorders, autism and other disorders of infancy, childhood and adolescence and all other diagnoses as presented in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders as published by the American Psychiatric Association, including such disorders which are biologically or organically based or due to biochemical imbalances but excluding Serious Mental Health Disorders such as paranoid and other psvchologic disorders. schizophrenia, bipolar disorders (mixed manic and depressive). major depressive disorders (single episode or recurrent) and schizo-affective disorders (bipolar or depressive) which will be paid as any other Illness. and NOT under the Non - Serious Mental Health provision. Conditions of alcoholism and drug abuse are excluded. "Partial Hospitalization" means continuous treatment for at least three hours, but not more than 12 hours, in any 24 hour period, in a licensed facility by a licensed health care professional acting within the scope of his/her license for the treatment of Mental Health Conditions. This may be referred to as a Partial Hospitalization Program (PHP) or Day program. "Residential Treatment " means a 24 hour a day program under the clinical supervision of a mental health professional, in a community residential setting other than an acute care hospital, for the active treatment of mentally ill persons, including a residential treatment center (RTC). Conditions & Maximums for Treatment of Alcoholism and Drug Abuse (Combined) The Plan Will Pay Benefits for the treatment of alcoholism and drug abuse while confined in a Hospital. Coverage is limited to a combined 30 days in any calendar year and includes a lifetime maximum of $25,000. Medical Care Benefits for psychiatric/psychological services of a Doctor for the treatment of alcoholism and drug abuse received while confined as an inpatient in a Hospital are limited to the Covered Expense Incurred for up to a combined 30 inpatient Hospital visits per calendar year. Medical Care Benefits for psychiatric /psychological services of a Doctor for the treatment of alcoholism and drug abuse received while not so confined are limited to the Covered Expense Incurred for up to a combined 30 visits per calendar year and include a $1,000 maximum. 88E -N &M 20 MEDICAL CARE BENEFIT PROVISIONS - Continued Durable Medical Equipment The Plan Will Pay for durable medical equipment (including orthopedic and prosthetic devices) which can withstand repeated use, is not disposable, is prescribed by a Doctor only when Medically Necessary, is appropriate for use in the home, and is not useful in the absence of an Illness or Injury, including but not limited to the following: 1. man -made limbs or eyes to replace natural limbs or eyes; 2. casts, orthopedic splints or crutches; 3. trusses or braces needed because of: a. an Injury or Illness; b. a disabling condition existing since birth; 4. oxygen; 5. rental of equipment for giving oxygen or to aid in breathing if the equipment has a mouthpiece, hose and compressor; 6. temporary rental of wheelchairs or hospital bed, or purchase of wheelchairs or hospital beds if the Covered Person's condition requires an indefinite, prolonged period of use; 7. dialysis equipment rental, supplies, upkeep and training for You or Your dependents to use this equipment; 8. ostomy bags and supplies; 9. glucometers, dextrometers, dextrostix, and rental of infusion pumps and supplies; 10. burn pressure garments or dressings; 11. breast prostheses (as defined under the Post - Mastectomy Coverage provision) and initial post- mastectomy holding bra. 12. adaptive equipment or modifications to wheelchairs or hospital beds which are prescribed by a Doctor as necessary for the treatment of the Injury or Illness. 13. Jobst stockings, when prescribed by a Physician, limited to 3 pair per year. Benefits will also be provided for adjustments, repair and replacements of covered prosthetic devices, special appliances and surgical implants when required because of wear or change in a Covered Person's condition (excluding dental appliances and post- mastectomy holding bra). Specifically excluded from coverage are items such as bandages, diapers, formula, toilets, shower or bath equipment, air conditioners or air filters, exercise equipment, whirlpools, hot tubs, and splinting of teeth. Covered Expenses for the rental of durable medical equipment will not exceed the purchase price for such equipment. 88E -N &M 21 MEDICAL CARE BENEFIT PROVISIONS - Continued Newborns' and Mothers' Post - Delivery Coverage The Plan Will Pay Benefits for post - delivery inpatient Hospital care for a mother and her newly born Child, regardless of whether or not the birth occurred in a Hospital. Such inpatient care will be in accordance with the guidelines recommended by the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists which is 48 hours following a vaginal delivery, or 96 hours following a caesarean section. A decision to shorten the above length of stay may be made by the attending Physician in consultation with the mother. The Plan Will Pay Benefits described in this provision on the same basis as any Illness for a Covered Person eligible for pregnancy Benefits under the Plan. The number of hours of Hospital length of stay provided above are not subject to the Concurrent Review or Pre- Treatment Authorization requirements of the Managed Health Care section. Hospital length of stays extending beyond the above number of hours are subject to the Concurrent Review requirements of the Managed Health Care section. Post - Mastectomy Coverage Coverage of a Medically Necessary mastectomy will also include coverage of the following: 1. physical complications during any stage of the mastectomy, including lymphedemas; 2. reconstruction of the breast; 3. surgery on the non - diseased breast to attain the appearance of symmetry between the two breasts; and 4. breast prostheses. The Plan Will Pay Benefits on the same basis as for similar services. This coverage will be provided in consultation with the attending Physician and the Covered Person. Benefits are subject to the Pre - Treatment Authorization requirements of the Managed Health Care section. Conditions and Maximums for Manual Manipulation Benefit Charges for services provided by a Doctor or chiropractor involving manual manipulation of the spinal skeletal system including the surrounding tissue to restore proper articulation of joints and alignment of bones or nerve functions, also to include Lab and x -ray. In no event shall the calendar year Maximum Benefit exceed $500. Charges in excess of this maximum will not be included as Covered Expenses under the Plan. This limitation will not apply if such services are rendered: 1. during general anesthesia; 2. during a surgical cutting procedure; or 3. while a Covered Person is confined as an inpatient in a Hospital. 88E -BP 22 Wellness Care Benefits MEDICAL CARE BENEFIT PROVISIONS - Continued Organ Transplants The Plan Will Pay Benefits for Hospital and Doctors' services for the surgical removal of human organ or tissue from a living donor to a transplant recipient as follows: 1. when the transplant recipient and donor are both Enrolled for coverage under the Plan, Benefits for Covered Expenses will be provided for both patients under the recipient's coverage; 2. when only the transplant recipient is Enrolled for coverage under the Plan, Benefits for Covered Expenses will be provided for the recipient. Benefits may also be provided for the donor for Covered Expenses under the recipients coverage, but only if those services are not eligible under any other coverage available to the donor; 3. when the donor is Enrolled for coverage under the Plan but the transplant recipient is not, Benefits for Covered Expenses rendered to the donor will not be provided. Benefits will not be provided for services rendered to the transplant recipient; provided the transplant has been reviewed and approved by Us and the Utilization Management Organization (UMO). Temporomandibular Joint Dysfunction Benefit Covered Expenses Incurred for treatment of Temporomandibular Joint Dysfunction (TMJ) are payable on the same basis as any Illness. Benefits payable for Covered Expenses will not exceed a Lifetime Maximum Benefit of $5,000. Wellness medicine emphasizes treatment to avoid possible health problems as an alternative to postponing treatment until symptoms appear. The Plan includes Benefits to help You and Your covered dependents avoid future health problems by providing Benefits for care that can prevent Illness or detect it in its early stages. This can often result in more cost - effective treatment and make recovery from Illness more likely. 1. The Plan Will Pay 100% (without application of the Deductible) of Covered Expenses for immunizations, office visit, Lab and x -ray for Your covered dependent child(ren). 2. The Plan Will Pay 100% (without application of the Deductible) of Covered Expenses for pap smear, office visit, mammogram, physical examination, PSA/prostate test, Lab, x -ray and immunizations for You and Your covered dependent spouse. All Wellness Care charges are subject to a per person calendar year maximum of $350. One routine pap smear, physical examination or PSA/prostate test will be allowed per person, per calendar year. 88E -BP 23 Home Health Care Benefits MEDICAL CARE BENEFIT PROVISIONS - Continued If You or Your covered dependent is confined in a Hospital (and Benefits are payable under this Plan for the Hospital confinement), but: 1. the attending Physician certifies that the Covered Person could go home if certain medical services were provided there for continued care of the same Illness or Injury; and 2. the Physician provides a written plan for such home care, to be administered by a licensed Home Health Care Agency; The Plan Will Pay Benefits at the level shown on the Schedule (subject to the Deductible) of all Covered Expenses (as defined in the Medical Care Benefits section) Incurred as part of the home care plan. Benefits are limited to a calendar year PPO - $10,000 Maximum Benefit of: Non -PPO $7,000 Subject to any applicable Maximum Benefits and to Our prospective and retrospective review of the treatment plan, Home Health Care coverage will continue as long as the Covered Person's Physician continues to certify the need for such care. If Benefits are paid for a Covered Expense under this provision, payment will not be made for that same expense under any other Plan provision. Home Health Care Benefits are not payable for: 1. Custodial Care; 2. transportation service; 3. services of someone who lives with the Covered Person; 4. services not included in the written home care plan of the Physician of record; 5. services rendered at a time when the Covered Person is not under the care of the Physician who set up the home care plan; 6. any items excluded under the Medical Care Exclusions section of the Plan. 88E -HHC 24 MEDICAL CARE BENEFIT PROVISIONS - Continued Private Duty Nursing Care Benefit If You or Your Covered Dependent requires skilled nursing care for an Injury or Illness, in lieu of an inpatient Hospital stay or for the prevention of an acute Hospital or Skilled Nursing Facility stay, and the Covered Person's attending Physician prescribes a skilled nursing treatment plan, The Plan Will Pay Benefits for the Reasonable and Customary charges at the level shown on the Schedule (subject to the Deductible) for: 1. the private duty nursing services of an R.N. or L.P.N.; and 2. the nursing supplies used by the nurse to treat the Illness or Injury as prescribed in the treatment plan, except: 1, visits by a nurse (R.N. or L.P.N.) are limited to one a day and may not exceed four hours per day; 2. services and supplies must be Medically Necessary and Appropriate and are subject to Our prospective and retrospective review of the treatment plan. The Physician's treatment plan must be submitted to Us for Our review and must be updated every 30 days by the Physician. If Benefits are paid for a Covered Expense under this provision, payment will not be made for that same expense under any other Plan provision. Private Duty Nursing Care Benefits are not payable for: 1. Custodial Care; 2. services not included in Your Physician's skilled nursing care treatment plan; 3. any items excluded under the Medical Care Exclusions section of the Plan. 88E -SN 25 Hospice Care Benefits MEDICAL CARE BENEFIT PROVISIONS - Continued When Your or Your covered dependents Physician recommends (in writing) on or before Hospice care is started a plan of Hospice care for: 1. palliative care of a terminal Illness (where life expectancy is less than six months); and 2. You or Your dependent elects (in writing to Us) to follow the Physician's proposed treatment plan; The Plan Will Pay Benefits at the level shown on the Schedule (subject to the Deductible) of all Covered Expenses (as defined in the Medical Care Benefits section) Incurred as part of the Hospice care plan, not to exceed: 1. pre -death and bereavement counseling for the family, limited to immediate family during the 3 month period after death; 2. a Lifetime Maximum Benefit of: PPO - $20,000 Non -PPO - $15,000 If Benefits are paid under this provision for any Covered Expense, payment for that same expense will not be duplicated under any other Plan provision. These Benefits are in lieu of any other Plan coverage for treatment related to the terminal Illness while the Covered Person is confined in a Hospice. Coverage under this provision ends if You or Your dependent elects (in writing to Us) to discontinue Hospice care, or the Maximum Benefit has been paid. Hospice Care Benefits are not payable for: 1. services provided by persons who do not regularly charge for their services; 2. counseling which is not provided as part of the Hospice care plan; 3. services provided by homemakers, caretakers and the like; 4. funeral expense; 5. treatment intended to cure the terminal Illness. 88E -HC 26 Pre - Treatment Authorization MANAGED HEALTH CARE This MANAGED HEALTH CARE section applies to Covered Persons whose Medical Identification card indicates the following as their Participating Provider Organization: One Health Plan READ THIS SECTION CAREFULLY FAILURE TO USE THESE PROVISIONS MAY COST YOU MONEY All Inpatient Hospital Confinements, except for Emergency confinements, and all surgical procedures that are performed outside of a Doctor's office must be reviewed and authorized PRIOR to admission or surgery in order to determine the Medical Necessity of care. The Utilization Management Organization (UMO) must be contacted as soon as Hospital confinement or a surgical procedure to be performed outside a Doctor's office is recommended. Emergency confinements must be reported to the UMO within 48 hours of the Emergency admission. The telephone number for the UMO is shown on a Covered Person's medical identification card. If the UMO's procedures for requesting Pre - Treatment Authorization are not followed, the Doctor or Hospital will be notified of the proper procedures to follow for requesting Pre- Treatment Authorization within five days after the initial contact was made (within 24 hours if Urgent Care is involved). The UMO will obtain all information, including pertinent clinical information, necessary to make a decision regarding authorization. Requests for information will be limited to those necessary to make a determination. The Covered Person will be notified of the UMO's decision no later than 15 days after the date the UMO is contacted for the authorization request. If a decision cannot be made due to matters beyond the control of the UMO, the Covered Person will be notified, within the initial 15 day decision period, of the reason for the extension and the date by which a decision is anticipated. If additional information is needed, the Doctor or the Hospital will be notified within the initial 15 day decision period and will have at least 45 days from receipt of the notice to return the requested information. If the information is received within the 45 day time frame, the UMO will render a decision no later than 15 days after the date the information is received. If the Doctor or Hospital fails to provide the necessary information, the UMO will not be able to authorize the services and the penalties shown herein may be applied to a Covered Person's Benefits. The UMO will make a determination on requests for Pre - Treatment Authorizations involving Urgent Care conditions no later than 72 hours after receipt of the request. If additional information is needed in order to make a determination, the Doctor or Hospital will be notified within 24 hours of receipt of the request and will have at least 48 hours from receipt of the notice to provide the necessary information. The UMO will inform the Covered Person and Doctor or Hospital of the decision the earlier of 48 hours after receipt of the necessary information or 48 hours after the end of the time period for providing the necessary information. "Urgent Care" means that the standard 15 day decision - making time period would place the life or health of a Covered Person in serious jeopardy, the Covered Person's ability to regain maximum function would be jeopardized or, in the Doctor's opinion would subject the Covered Person to unmanageable pain. A Doctor may determine whether Urgent Care is involved. If a Doctor has not made that determination, the determination may be made by a representative of the Plan, applying the judgment of a prudent layperson possessing an average knowledge of health and medicine. 88- MHCA(G)(10 -02) 27 MANAGED HEALTH CARE - Continued If a Covered Person utilizes a Participating Provider, the Participating Provider is responsible for contacting the UMO. If the Participating Provider does not contact the UMO, the Covered Person will not be responsible for a Pre- Treatment Authorization Penalty. If a Covered Person DOES NOT utilize a Participating Provider, he /she is responsible for contacting the UMO. If the UMO is not contacted, a Pre - Treatment Authorization Penalty of $500 will apply to covered Hospital charges and any related expenses incurred during an eligible but unauthorized Hospital admission before normal Benefits of the Plan are calculated. If a Covered Person DOES NOT utilize a Participating Provider, he /she is responsible for contacting the UMO. If the UMO is not contacted, a Pre - Treatment Authorization Penalty of $500 will apply to surgeon's charges and any related expenses for surgical procedures that are performed outside of a Doctor's before normal Benefits of the Plan are calculated. If the Inpatient Hospital Confinement occurs for surgical treatment, only one penalty will be imposed. Regardless of the participation status of the provider, if a Covered Person fails to comply with the UMO's determination, a Pre- Treatment Authorization Penalty of $500 will apply to covered Hospital charges and /or surgeon's charges and any related expenses incurred as a result of such confinement and /or surgery before normal Benefits of the Plan are calculated. If the Inpatient Hospital Confinement occurs for surgical treatment, only one penalty will be imposed. Concurrent Review In addition to having Hospital admissions authorized prior to admission, a Concurrent Review of treatment (again for Medical Necessity) will be conducted throughout the period of confinement. If additional days of confinement are requested beyond those initially authorized by the UMO, the UMO must be contacted to obtain authorization for the continued stay. If the request involves Urgent Care and is made to the UMO at least 24 hours before the end of the initially authorized days, the Covered Person will be notified within 24 hours as to whether the continued stay will be authorized. If the request is not made at least 24 hours before the end of the initially authorized days, the Urgent Care time periods described in the Pre - Treatment Authorization provision will apply. If the UMO's procedures for requesting Concurrent Review authorization are not followed, the Doctor or Hospital will be notified of the proper procedures to follow for requesting Concurrent Review authorization within five days after the initial contact was made (within 24 hours if Urgent Care is involved). If the request does not involve Urgent Care, the Covered Person will be notified of the UMO's decision no later than 15 days after the date the UMO is contacted for the authorization request. If a decision cannot be made due to matters beyond the control of the UMO, the Covered Person will be notified, within the initial 15 day decision period, of the reason for the extension and the date by which a decision is anticipated. If additional information is needed the Doctor or the Hospital will be notified within the initial 15 day decision period and will have at least 45 days from receipt of the notice to return the requested information. If the Doctor or Hospital fails to provide the necessary information, the UMO will not be able to authorize the services and the penalties shown herein may be applied to a Covered Person's Benefits. If the information is received within the 45 days, the UMO will render a decision no later than 15 days after the date the information is received. If, prior to the end of an authorized stay, the UMO finds the stay is no longer Medically Necessary, the Covered Person will be notified in advance that the stay will not be covered by the Plan. If a Covered Person utilizes a Participating Provider, the Participating Provider is responsible for contacting the UMO. If the Participating Provider does not contact the UMO, the Covered Person will not be responsible for a Concurrent Review Penalty. 88- MHCA(G)(10 -02) 28 Out -of -Town Care MANAGED HEALTH CARE - Continued If a Covered Person DOES NOT utilize a Participating Provider, he /she is responsible for contacting the UMO. If the UMO is not contacted, a Concurrent Review Penalty of $100 will be imposed for each day of unapproved confinement before normal Benefits of the Plan are calculated. Regardless of the participation status of the provider, if the Covered Person fails to comply with the UMO's determination, a Concurrent Review Penalty of $100 will be imposed for each day of unapproved confinement before normal Benefits are calculated. "Concurrent Review" means the UMO will evaluate the medical need for continued hospitalization. This will involve consultation with the Covered Person's Doctor and comparison of clinical information to professionally developed medical standards of care. If a Covered Person is out of town and needs non - Emergency Care, he /she may be able to locate a Participating Provider by calling the phone number indicated on his/her medical identification card or by using the Internet web address, www.gwla.com /nationalaccounts. Since the PPO network is nationwide, a Covered Person may be able to utilize a Participating Provider and receive a higher level of Benefits. Retrospective Review The Utilization Management Organization (UMO) may evaluate the medical record of those Covered Persons who were not reviewed under Pre- Treatment Authorization or Concurrent Review. If the UMO is unable to authorize any portion of the stay or treatment, the Doctor will be contacted to provide additional information. No Benefits will be paid for any days of the Hospital stay or treatment that would not have been authorized by the UMO. The decision concerning authorization will be made within 30 days after the claim that is the subject of the Retrospective Review is received. If additional information is needed, the Covered Person or his/her Doctor or Hospital will be notified within 30 days of receipt of the claim and will have at least 45 days from receipt of the notice to provide the information. If the information is received within 45 days, a decision will be made within 15 days of the day the UMO receives the additional information. If the additional information is not received within the 45 day period, the Covered Person should consider the claim, or portion thereof that is under review, to be denied. The claim will be reconsidered if the information is subsequently received. Written notice of the decision will be sent to the Covered Person. "Retrospective Review" means the UMO will review the medical need for hospitalization or treatment after such hospitalization or treatment has taken place. This will involve consultation with the Covered Person's Doctor and comparison of clinical information to professionally developed medical standards of care. Benefits For Services of a Participating Provider The Plan provides different levels of Benefits depending on whether or not a Covered Person uses the services of a Participating Provider. Generally, Benefits will be payable at a higher level if services of a Participating Provider are used; although there may be additional Plan requirements. Participating Providers will submit claims on the Covered Person's behalf and will contact the UMO to obtain necessary approvals. Covered Persons may utilize the provider of their choice. If a Covered Person selects a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. If a Covered Person chooses not to use a Participating Provider, he /she may be responsible for filing his/her own claims and obtaining the proper Utilization Management approvals. If a Covered Person receives Emergency Care and cannot reasonably reach the Participating Provider, The Plan Will Pay Medical Care Benefits as if services were performed by a Participating Provider. 88- MHCA(G)(10 -02) 29 Emergency Services Emergency Room Deductible MANAGED HEALTH CARE - Continued Emergency Care is covered for Emergency Medical Conditions (as defined in the General Definitions section). If You or Your dependent has an Emergency Medical Condition, go directly to the nearest Hospital. Refer to the Pre - Treatment Authorization provision for information on contacting the UMO in the event of an Emergency Hospital admission. The Plan Will Pay Medical Care Benefits as shown on the Schedule. In addition to any other Deductible, an Additional Deductible as shown on the Schedule will be imposed before Benefits are payable for Covered Expenses Incurred during a visit to an emergency room of a Hospital. This Additional Deductible will not apply if the Covered Person is confined in the Hospital immediately after the visit. Disease Management for Chronic Medical Conditions Disease Management is a program which provides specialized education to a Covered Person with a Chronic Medical Condition to improve his/her health. The Plan will provide Disease Management Program ( "Program ") services if the Covered Person meets the Program's predetermined medical criteria and is expected to benefit from the Program. Under this Program, the Covered Person will receive services, coordinated by an R.N., consisting of assessment and educational materials for targeted diseases. There is no charge to the Covered Person for these services. Utilization of the Program's services is voluntary; a Covered Person is not required to participate in the Program. By providing these services, neither the Plan nor its contracted provider promises or guarantees that any intended results will be obtained. The Program does not provide any medical treatment, therapeutic or Home Health Care. It provides for assessment and education in self- management of Chronic Medical Conditions. To participate in the Program, a Covered Person may call the toll -free member services telephone number shown on his/her medical identification card or access the Internet web address: www.gwla.com/nationalaccounts. Appeals Procedure A Covered Person or his/her Doctor, or other Authorized Representative has the right to appeal an Adverse Determination. The address to which to send an appeal and any other contact information will be included with an Adverse Determination. If a Covered Person or his /her Doctor or other Authorized Representative does not agree with an Adverse Determination, a Covered Person or his/her Doctor or other Authorized Representative may initiate the appeal by telephoning, faxing or submitting a written request to the UMO. Additional evidence may be presented for consideration on appeal. Initial appeal requests must be received within 180 days of the initial Adverse Determination. "Authorized Representative" means the Covered Person's spouse, parent, Doctor or Hospital. It will also include any other person who submits proof that he or she has been designated by the Covered Person or a court of law to act on such person's behalf. 88- MHCA(G)(10-02) 30 The appeal will be reviewed by a Doctor who: MANAGED HEALTH CARE - Continued "Adverse Determination" means that the Covered Person's Hospital admission, continued hospital stay or other health care service has been reviewed and, based upon the information provided, does not meet the UMO's requirements for being Medically Necessary, Appropriate, effective or in the proper setting and may result in noncoverage of the health care service. In connection with Our review of the appeal, You have the right to 1) see the Plan and other relevant papers affecting the claim, 2) argue against the denial in writing, 3) have a representative act on Your behalf in the appeal. All comments, documents, records and other information submitted in connection with the claim being reviewed will be considered. Standard Appeal Within 15 days of receiving the appeal request, the UMO will notify the person who submitted the appeal of its decision in writing. The appeal will be reviewed by a Doctor who: 1. has appropriate training and experience in the field of medicine involved in the medical judgment; 2. was not previously involved with the Adverse Determination; and 3. is not the subordinate of the person previously involved with the Adverse Determination. Expedited Appeal If the Standard Appeal process would place the life or health of a Covered Person in serious jeopardy or the Covered Person's ability to regain maximum function would be jeopardized, a request for an expedited appeal may be phoned in by the Covered Person, a Doctor with knowledge of the Covered Person's medical condition or other Authorized Representative (if any). The UMO will conduct the review by telephone or through the exchange of written information. The Covered Person, his/her Authorized Representative (if any), and his/her Doctor will be informed of the decision by telephone or fax within 72 hours of the UMO's receipt of the appeal request. 1. has appropriate training and experience in the field of medicine involved in the medical judgment; 2. was not previously involved with the Adverse Determination; and 3. is not the subordinate of the person previously involved with the Adverse Determination. You may request information regarding voluntary appeals procedures. Second Appeal A Covered Person or his/her Doctor or other Authorized Representative may initiate a second appeal of the Adverse Determination by submitting a written request to the UMO within 60 days of the date of the Adverse Determination received as a result of an initial standard or expedited appeal. An independent external reviewer will evaluate all relevant information and render a decision that will be binding on the Plan. The decision will be rendered within 15 days of the date the UMO receives the appeal request. A second Expedited Appeal will be considered a voluntary appeal. Decisions regarding a second Expedited Appeal will be rendered within a time frame appropriate to the medical condition of the patient. There are no other voluntary appeal rights available with respect to the Pre- Treatment Authorization, Concurrent Review or Retrospective Review for Medical Necessity. You may request information regarding voluntary appeals procedures. 88- MHCA(G)(10 -02) 31 COORDINATION OF BENEFITS If this is not Your only Health coverage, the Benefits payable under this Plan, and any other group plan for the Allowable Expense Incurred during any Benefit Determination Period will be coordinated so that the combined Benefits paid or provided by all plans equal that amount which would be paid if this Plan were the only coverage. You must inform Us if You have other coverage (for example, through Your spouse's employer); and give Your consent to the release of information so that We may use this provision. You should first file Your claim with the primary plan (as determined below). When the claim is paid, send a copy of the charges and a copy of the Explanation of Benefits Statement from the first plan to the secondary plan (as determined below). This will accelerate the processing of Your claim. One of Your plans will be determined to be primary (using the rules below). The primary plan pays its full benefits first. If this Plan is deemed to be the secondary plan, the Benefits paid in addition to the benefits paid under the primary plan will not be an amount more than You would have received had this Plan been Your only coverage. A plan is primary when: 1. the plan does not have a COB provision; 2. the plan designates itself as an "excess" or "always secondary" plan; or 3. if both plans have a COB provision, under the rules it is determined to be primary. When both plans have a COB provision, the order in which the plans provide benefits is determined using the first of the following rules which applies: 1. Employee /dependent. The plan which covers the person as an active employee is primary. If You or Your dependent is also covered by Medicare, the plan covering the person as an active employee is primary, the plan covering the person as a dependent of an active employee is secondary, and then Medicare. Medicare is primary for Medicare eligible retired employees and their Medicare eligible dependents. 2. Dependent children. a. If the parents are not separated or divorced, the plan which covers the parent whose birthday (month and day) falls earlier in the calendar year is primary. If both parents have the same birthday (month and day), the plan which covered the parent longer is primary. If the other plan does not have the "birthday rule ", the rule in the other plan will determine the primary plan. b. If the parents are separated or divorced, the plan which covers the natural parent with custody is primary; followed by the plan which covers the step - parent who has married the natural parent with custody; and finally, the plan which covers the natural parent without custody. However, if the court decrees one of the parents responsible for health care expenses, the plan which covers that parent is primary. If the decree names the parent other than the natural parent with custody, We must be notified and have actual knowledge of those terms. Any Benefits paid prior to actual knowledge will not be affected. The plan of the other parent and the plan of the spouse of the parent with custody will be secondary and third, respectively. If joint custody is granted by the court, the rules pertaining to parents who are not separated or divorced apply. 3. Active /inactive employee. The plan covering the employee who is neither laid off or retired is primary. If the other plan does not have this rule, this rule is ignored. 4. Continuation coverage. Continuation coverage provided under either federal or state law is secondary. If the other plan does not have this rule, this rule is ignored. 5. Length of coverage. If the primary plan cannot be determined using any of the rules above, the plan which has covered the person for the longest period of time will be considered primary. 88E -COB 32 If this Plan is determined to be secondary, We will reduce Benefits payable so that the combined benefits provided by all plans during a claim determination period are not more than that amount which would be paid if this was the only Benefit Plan for the Covered Person. The actual benefit amounts available are determined by each plan's benefit provisions. Benefits payable under this Plan will never exceed the amount which would have been paid if there were no other plans involved. If Benefit payments under this Plan are reduced by COB, only the reduced amounts will be charged against Your Plan maximums. If during Coordination of Benefits, payments are made in error, the plans will have the right to adjust payments among themselves. Such payments satisfy Our liability. If We overpay a claim, We will have the right to recover such overpayments from any person for, to whom, or with respect to whom such payments were made, any other insurance company, or any other organization. Definitions An "Allowable Expense" is the Reasonable and Customary amount for any necessary medical, dental, vision, or health care service which is covered (at least in part) by one of the plans. If a health plan provides services (rather than cash payments) a dollar value will be assigned in order to use this provision. When the primary plan penalizes You for not complying with plan provisions, such as failing to pre - certify, the amount of the reduction is not considered an Allowable Expense. A "Benefit Determination Period" means from January 1 of one year to December 31 of the same year. A "plan" as used in this provision, is any of the following which provides health benefits or services: 1. a group or group blanket plan on an insured basis; 2. other plans which cover people as a group; 3. a self - insured or non - insured plan or other plan which is arranged through an employer, trustee or union; 4. a pre - payment plan which provides medical, vision, dental or health service; 5. government plans, except Medicaid; 6. group auto insurance, but only to the extent medical benefits are payable under group auto insurance; 7. no -fault auto insurance on an individual basis, except where not allowed by the state in which this Plan is issued; B. single or family subscribed plans issued under a group or blanket type plan; but the definition of plan shall not include: 1. hospital indemnity type plans; 2. school accident -type coverage. COORDINATION OF BENEFITS - Continued 88E -COB 33 Employee and Dependent Prescription Drug Expense Benefit Multi -Tier Copayment Copayment Amount for each purchase of a Prescription Drug or injectable insulin or Prescription refill: Participating Home Delivery Pharmacy Participating Pharmacy Participating Home Delivery Pharmacy Participating Pharmacy PRESCRIPTION DRUG BENEFITS SCHEDULE 88E- PD(01 -00) 34 Generic Preferred All Other Brand Brands $15.00 $20.00 $35.00 $10.00 $15.00 $30.00 After the applicable Copayment is satisfied, The Plan Will Pay 100% 100% 100% The Medical Pre - Existing Conditions Limitations shall not apply to Prescription Drug Expenses. Unit Dose Limit -- the greater of 100 dose units or the following Day Supply Maximums: 90 day supply 30 day supply Drug charges which are covered to any extent under this Prescription Drug Expense Benefit are not covered under any other Medical or Dental Care Benefits of this Plan. The Copayment for Prescription Drugs may not be used toward satisfaction of the Medical Care or Dental Care Deductible or any out -of pocket maximums. When Injury or Illness causes You or Your dependent, while covered under the Plan, to incur Covered Prescription Drug Expenses, The Plan Will Pay Benefits for those Covered Expenses that exceed the Copayment Amount. These Prescription Drugs and medicines must be prescribed by a Doctor and obtained from a licensed Pharmacist or Doctor operating within the scope of his/her license. You or Your dependent incurs an expense on the date the drug or medicine is furnished. PRESCRIPTION DRUG BENEFITS - Continued Prescription Drug Generic Option If a Brand Name drug does have a generic equivalent and You receive the Brand Name drug, You are required to pay the applicable Brand Name Copayment. If You receive the Generic Drug, You pay only the Generic Copayment. If a Brand Name drug does not have a generic equivalent, You pay only the Generic Copayment. Preferred Brand Option If Your Doctor prescribes a name brand drug that has been selected as a Preferred Brand, You pay the Preferred Brand Copayment. Your Employer will provide You with an initial list of Preferred Brands. This list is reviewed annually and can change. You may check whether a Brand Name drug is still on the list or if new Brand Name drugs have been added by referring to the current year's listing available from Your Employer. If Your Prescription is not for a drug on this list, You will pay the appropriate All Other Brands or Generic Copayment. Home Delivery Maintenance Prescription Drug Option Most Maintenance Prescription Drugs are available through the Home Delivery Pharmacy. You pay a Copayment based upon whether the drug is a Generic, a Preferred Brand or All Other Brands Prescription Drug. The list of Preferred Brands is the same for both retail Pharmacies and the Home Delivery Pharmacy. Prescription Drug Definitions 1. "Generic Drug" means a Prescription Drug known by its chemical name rather than by Brand Name. 2. "Home Delivery" means the Maintenance Prescription Drugs are delivered directly to You or Your dependent by mail. 3. "Home Delivery Pharmacy" means a U.S. Pharmacy that has a written contract with Us or Our authorized representative for Home Delivery of Maintenance Prescription Drugs. 4. "Maintenance Prescription Drug" means a Prescription Drug that You or Your dependent will take or use for more than 30 days. 5. "Pharmacy" means a licensed establishment where drugs are dispensed by a Pharmacist licensed in that state. "Pharmacy' also includes a Hospital Pharmacy. "Participating Pharmacy" means a U.S. Pharmacy that has a written contract with Us or Our authorized representative. 6. "Preferred Brand" means Brand Name Prescription Drugs selected by Our authorized representative for their high degree of overall clinical and cost effectiveness prescribed for use in treating common health conditions. 7. "Prescription" means the request for a drug by a Doctor licensed to prescribe drugs and each authorized ref ill. 8. "Prescription Drug" means a prescription legend drug that is: a. medicine required by federal law to bear the legend, "Caution: Federal law prohibits dispensing without a Prescription"; b. any other drug which, under the applicable state law, may only be dispensed upon the Prescription order of a Doctor. 88E- PD(01 -00) 35 Prescription Drug Exclusions PRESCRIPTION DRUG BENEFITS - Continued We will also consider the following to be Prescription Drugs: a. needles and syringes; b. Tretinoin and Difterin, all dosage forms (e.g. Retin -A), for persons through the age of 22 years; c. injectable insulin; d. injectable Prescription Drugs; e. birth control pills, contraceptive devices, injections and implants; f. Prescription vitamins; g. diabetic supplies such as glucose strips, glucose monitors, ketone test tablets, and lancets; h. Adderall, Dexedrine and Desoxyn for persons through the age of 19 years; i. Viagra, limited to 6 pills per month; j. drugs approved by the FDA for use in treating AIDS; k. drugs used in the treatment of migraine therapy; I. prescription medications for smoking cessation, including nicotine patches; and m. growth hormones. Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Prescription Drug Benefits. These are: 1. Drugs or medicines prescribed for Injury or Illness arising out of employment, whether or not You or Your dependent is covered by Workers' Compensation or similar laws. 2. Drugs or medicines which can be legally obtained without a Prescription, except those items included in the definition of "Prescription Drug." 3. Drugs or medicines provided without charge. 4. The administration of drugs or insulin. 5. Drugs or medicine marked "Caution: Limited by federal law to investigational use." 6. Experimental drugs or medicines. 7. Drugs or injectable insulin in a quantity greater than that prescribed by a Doctor. 8. Drugs or injectable insulin purchased more than one year after the date of the Prescription. 9. Drugs or insulin while confined in a Hospital, Skilled Nursing Facility or a similar facility. 10. Healing devices; immunization agents; organic serum, blood or blood plasma; non - prescription vitamins, diet aids, health or beauty aids and delivery charges. 11. That part of one purchase of a drug or medicine that exceeds the Unit Dose Limit specified on the Schedule. 12. The following items (whether Brand Name or Generic) will not be covered regardless of the reason prescribed: a. tretinoin, all dosage forms (e.g. Retin -A), for individuals 23 years of age or older; b. minoxidil (Rogaine) for the treatment of alopecia; c. Nicorette, nicotine gum, patches or other over - the - counter smoking deterrent medications; d. anorectics (any drug or medicine used for the purpose of weight loss); e. diet supplements; f. infertility drugs or medicines; and g. Viagra in excess of 6 units per month. 13. Drugs, medicine and/or injectable insulin purchased at a non - participating pharmacy. 88E- PD(01 -00) 36 Employee and Dependent Dental Care Expense Benefit Calendar Year Deductible DENTAL CARE BENEFITS SCHEDULE The Individual Deductible equals Covered Expenses in the amount of $50. The Family Unit Deductible equals Covered Expenses in the amount of $150. The Family Unit Deductible equals the amounts applied towards the Individual Deductibles until 3 family members satisfy their Individual Deductibles. The amount of actual Deductible satisfied may vary each year. The Family Unit Deductible must be satisfied by You and Your Family Unit members who are covered as dependents. No part of any Covered Expenses for which Benefits are paid or payable by the Plan may be used to satisfy the Family Unit Deductible. The Plan Deductible Services Will Pay Applies Preventive and Diagnostic Care 100% No Basic Dental Care 80% Yes Prosthetic Care 50% Yes Orthodontic Care for dependent Children under age 19 50% Yes Maximum Benefit for Covered Dental Care Expenses Incurred in any Calendar Year excluding Orthodontic Care $1,000 Maximum Lifetime Benefit for Covered Orthodontic Care $1,000 When You or Your dependent incurs Covered Dental Care Expenses exceeding the Deductible, The Plan Will Pay Benefits for those expenses up to the maximums shown on the Schedule. 88E -DSCH 37 Voluntary Pre - Determination of Dental Benefits Pre - Determination of Dental Benefits may be requested by a Covered Person when the estimated amount of charges will be $300 or more We will review the description of planned treatment and expected charges, including those for diagnostic x- rays. This information should be sent to Us before the dental work is started if the Covered Person requests the Pre - Determination of Benefits. If there is a major change in the treatment plan, a revised plan should be submitted for review. When more than one dental service could provide suitable treatment based on common dental standards, We will recommend alternate methods of treatment which produce a satisfactory result. When there has not been a Pre - Determination of Benefits, We will determine the expenses that will be included as Covered Dental Care Expenses at the time the claim is received. Pre - Determination of Benefits does not guarantee payment. The estimate of Benefits payable may change based on the Benefits, if any, for which a Covered Person qualifies at the time services are completed. Deductible Requirement 88E -DSCH 36 DENTAL CARE BENEFITS - Continued Your or Your dependent's Deductible Requirement will be met when the Covered Dental Care Expenses Incurred while covered during each calendar year equal the Deductible shown on the Schedule. You are required to pay this amount, the Plan will not reimburse You for this expense. The following special Deductible provision is included to help You and Your dependents meet this Deductible Requirement. Family Unit Deductible: The Family Unit Deductible Requirement will be met when all Covered Expenses applied to Individual Deductibles for covered members of Your family, in a calendar year, equal the amount shown on the Schedule. DENTAL CARE BENEFITS - Continued Covered Dental Care Expenses The Plan Will Pay Benefits as shown on the Schedule for the following Covered Dental Care Expenses: 1. Preventive and Diagnostic Care which means: a. oral inspection; oral examination; b. exams including x -ray exams; c. diagnosis; d. Prophylaxis; e. Fluoride treatment to age 19. 2. Basic Dental Care which means remedial and restorative care and supplies for: a. necessary examinations and diagnostic services (including x -ray and laboratory tests) when such services are not covered as Preventive and Diagnostic Care; b. extractions of erupted teeth and unerupted teeth; c. fillings (amalgams); d. space maintainers; e. root canal therapy (endodontic care); f. treatment of the gums and tissues of the mouth (periodontic treatment); g. emergency care for the relief of pain (palliative care); h. the giving of anesthesia in connection with dental care; i. repair and /or relining of complete or partial dentures; j. Replacement of Dentures ,subject to the Pre - Existing Conditions Limitations,; (use if plan imposes pre- existing on Dental) if required due to: i, removal of natural teeth while covered under the Plan; ii. the initial placement of an opposing full denture; and Replacement of Dentures for any other reason will be covered only as described under Prosthetic Care below; k. sealants to age 19. 3. Prosthetic Care which means: a. inlays and onlays; b. initial installation of full or partial dentures; c. bridgework; d. crowns; e. crowns or Replacement of Dentures for reasons other than those stated as Basic Dental Care but only if the crowns or dentures that need replacing are more than five years old. 4. Orthodontic Care for dependent children to age 19 which means: a. preparing teeth and jaw for orthodontic treatment; b. furnishing orthodontic devices; and c. installing the devices. 88E -DCE 39 Dental Care Exclusions DENTAL CARE BENEFITS - Continued Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Dental Care Benefits. These are: 1. Dental care or supplies which are not included under Covered Dental Care Expenses. 2. Dental care or supplies furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place. 3. Dental care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage. 4. Dental care or supplies furnished as a result of taking part in the commission of an assault or felony or being engaged in an illegal occupation. 5. Dental care or supplies furnished as a result of an Illness covered by Workers' Compensation, occupational disease law or similar laws; or Injury if it arises out of or during the course of employment for pay or profit. 6. Dental care or supplies payable under another part of the Plan. 7. Dental care or supplies furnished as a result of: a. act of war (declared or undeclared); b. insurrection or Riot. 8. Charges incurred after the Covered Person is no longer covered for this Dental Care Benefit. 9. Supplies for dental care other than those used in a Doctor's office; or instructions in dental hygiene. 10. Oral care and supplies which are used to change vertical dimension or closure. These include but are not limited to: a. diagnostic procedures; b. balance procedures; c. restoration; d. fixed devices; e. movable devices. 11. Any service rendered by a Close Relative or someone having the same legal residence as the Covered Person. 12. Dental implants. 88E -DEX 40 Employee and Dependent Vision Care Expense Benefits Complete Examination Supplies: Per Lens Single Vision Prescription Bi -focal Prescription Tri -focal Prescription Lenticular Prescription Contact Lenses Scratch Resistant Lens Treatment Contact Lens Solution Frames Vision Care Exclusions VISION CARE BENEFITS SCHEDULE Maximum Benefit Amount $200 per calendar year for all vision care expenses When You and Your covered dependents incur Covered Vision Care Expenses, The Plan Will Pay Benefits for those expenses up to the maximums shown on the Schedule. The Plan Will Pay Benefits for the following covered Vision Care expenses: 1. One Complete Eye Examination and History performed by a licensed optometrist or Physician. 2. Contact or eye glass lenses prescribed by a licensed optometrist or Physician. The Plan Will Pay for more than two lenses if required after cataract surgery. 3. Eye glass frames. Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Vision Care Benefits. These are 1. Care and supplies: a. for special procedures, such as orthoptics and visual training; b. for medical or surgical treatment; c. provided under Workers' Compensation, or similar laws; d. needed for an Injury or Illness arising out of employment. 2. Non - prescription glasses or sunglasses. 3. Vision care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage. 4. Vision care and supplies furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place unless: a. for emergency treatment when You or Your dependent must pay for those services; b. for non - service connected disabilities in a Veteran's Administration Hospital; c. incurred by a U.S. military retiree (covered by this Plan) or his/her covered dependents, while confined in a military medical facility. 88E -VC 41 VISION CARE BENEFITS - Continued 5. Vision care and supplies to the extent furnished or payable under: a. a plan or program operated by a National Government or one of its agencies; b. a State Cash Sickness or similar law including any group insurance policy approved under such laws; c. another plan of Your Employer. 6. Vision care and supplies required as a result of: a. an intentionally self - inflicted Injury; b. taking part in the commission of an assault or felony or being engaged in an illegal occupation; c. an act of war declared or undeclared; d. surgery to correct vision. Vision Care Definitions 1. Complete Examination: means an eye examination that includes a new prescription if needed. 2. Orthoptics: means the teaching and training process for the improvement of visual perception and coordination of the two eyes for efficient and comfortable binocular vision. 88E.VSP 42 CLAIMS AND OTHER GENERAL PROVISIONS Notice and Proof of Claim You must give Us a written notice of claim for a medical or health claim (including vision and dental claims, if any), within 12 months after a Covered Expense is incurred. Within 15 days after We receive the notice of claim, We will send claim forms to You for giving proof of claim. If You do not receive these forms, You will satisfy the proof of claim requirement by giving Us a written statement of the nature and extent of the loss within the time limit provided below. You must give positive proof of claim to Us or Our authorized claim office for a medical or health claim (including vision and dental claims, if any) within 15 months after a Covered Expense is Incurred. You must give Us proper written notice and proof of loss before We will be liable for any loss. If You send Us proof as soon as reasonably possible, We will not reduce or deny claims merely because You cannot reasonably give notice and proof in writing within the time required. We may, as required by law, accept claims submitted by a third -parry custodial parent or a provider (with the custodial parent's approval) for Covered Expenses Incurred by a covered dependent Child who is also eligible for a state medical assistance program (i.e., Medicaid). We have the right to require additional information in order to determine Dental Care Benefits payable under the Plan. Additional information may include, but is not limited to: 1. a completed dental chart indicating all extractions, missing teeth, fillings, prostheses, periodontal pocket depths, orthodontic relationships and the dates of any services provided; 2. an itemized bill for dental services rendered; 3. x -rays, study models, laboratory and Hospital reports; 4. a clinical exam. Any cost incurred for providing the above information will be Your responsibility. Claims must be submitted to the address shown on Your identification card. The time periods shown in the Claim Decisions provision will begin to apply when the claim is received by Us or Our authorized claim office after being filed according to these Notice and Proof of Claim procedures. Payment of Claims 1. All Benefits due and not validly assigned will be paid to You as soon as We receive due proof. 2. If You die before The Plan Pays all of the Benefits to You, the Plan may pay any remaining Benefits in this order: a to Your spouse, if living; b. to Your surviving children, in equal shares: c. to Your parents, in equal shares, or to the survivor; or d. to Your estate. 3. In any case where the person to whom We would pay Benefits cannot give a valid release, The Plan Will Pay any remaining Benefits in this order: a. to Your spouse, if living; b. to Your surviving children, in equal shares; c. to Your parents, in equal shares, or to the survivor; or d. to Your estate. If no person listed above survives You, the Plan may pay Benefits to the person or institution it determines gave the Covered Person care. 88- GP(G)(10 -02) 43 4. The Plan may, to the extent required by law, pay Benefits for claims incurred by a covered dependent Child directly to a custodial parent, a state agency or a provider. 5. Benefit payments pursuant to a qualified medical child support order (QMCSO) in reimbursement for expenses paid by a QMCSO -child or his /her legal representative (custodial parent or legal guardian) will be made to the QMCSO -child or his/her legal representative. 6. If You use a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. 7. The Plan may pay Benefits to the person or institution who gave You care. 8. Any payments We make under the above, will discharge Our liability to the extent of Our payment. We are not responsible for how the Benefits We pay are used. CLAIMS AND OTHER GENERAL PROVISIONS - Continued Legal Actions You may not sue Us for Benefits under the Plan: 1. before 60 days following the date You send Us proof of claim; 2. after 3 years following the end of the period required for giving proof of claim. Claim Decisions 1. Decisions on medical, dental or vision claims will be made within 30 days of the date We receive the claim. If a decision cannot be made for reasons beyond control of the Plan, We will notify You of: a. the reason for the delay; b. any information needed to perfect the claim; and c. the date by which We expect to make a decision. You will have 45 days from the date You receive the notice to provide the requested information. If We receive the necessary information within the 45 day time frame, a decision will be made within 15 days of Our receipt of the information, unless You agree to a longer period of time. If You do not provide the requested information within this time period, You should consider the claim to be denied. This denial will be reconsidered if the information is subsequently received. 2. Decisions on claims involving Pre - Treatment Authorization, Concurrent Review or Retrospective Review will be made in accordance with the procedures shown in the Managed Health Care section of the Plan. In the event a claim (other than a request for Pre - Treatment Authorization or Concurrent Review) is denied in whole or in part You will be notified in writing of the following: 1. the reason for denial; 2. specific reference to the Plan provisions on which the denial was based; 3. any additional material or information needed for further review of the claim; 4. an explanation of the Plan's review procedure and time limits; 5. with respect to medical, dental or vision claims, the specific rule, guideline, protocol or similar criterion, if any, that was relied upon in deciding the claim, or a statement that such was relied upon and is available upon request; 6. with respect to medical, dental or vision claims, an explanation of the scientific or clinical judgment for determining a denial based on a medical judgment, Medical Necessity, or treatment that is Experimental, Investigational or Unproven, or a statement that such explanation is available free of charge upon request. 88- GP(G)(10 -02) 44 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Appeals Process If a claim is denied in whole or in part, You, the Covered Person's Doctor or other Authorized Representative may appeal the denial by making a written request for review to Us within: 1. 180 days of the time You receive the notice of denial of the initial claim , or within 60 days of the time You receive the notice of denial of a first appeal with respect to medical, dental or vision claims; 2. 60 days of the time You receive the denial notice of a second appeal for the purpose of submitting a voluntary appeal. "Authorized Representative" means the Covered Person's spouse, parent (if Covered Person is a minor), or any person who submits proof that he /she has been designated by the Covered Person or a court of law to act on such person's behalf. It will also include the Covered Person's Doctor or Hospital for the purposes of requesting Pre - Treatment and Concurrent Review Authorizations, and submitting claims and appeals on the Covered Person's behalf. In connection with Our review of the appeal, You have the right to 1) see the Plan and other relevant papers affecting the claim, 2) argue against the denial in writing, 3) have a representative act on Your behalf in the appeal. All comments, documents, records and other information submitted in connection with the claim being reviewed will be considered. The decision on the appeal shall be in writing, and shall be made within 30 days of the date We receive the request for review with respect to medical, dental or vision claims. The decision shall include specific reasons for the denial, written in a manner understandable to You and contain specific reference to the pertinent Plan provisions on which the decision was based. With respect to medical, dental or vision claim reviews, the review will be conducted by someone other than the person who made the initial determination. If the initial denial was based on a medical judgment, Medical Necessity or treatment that is Experimental, Investigational or Unproven, a health care professional with appropriate training in the field of medicine that is the subject of the claim will be consulted. If the claim is still denied in whole or in part, You will again be advised as per items 1 through 6, of the Claim Decisions provision along with Your right to request information regarding any voluntary appeals provided under Your Plan once the required appeals have been exhausted. Once the required appeals have been exhausted, additional appeals are allowed on a voluntary basis upon request when new and substantial information is presented. Voluntary appeals are not applicable to decisions involving medical judgement, Medical Necessity or treatment considered to be Experimental, Investigational or Unproven. You may request information regarding voluntary appeals procedures. Refer to the MANAGED HEALTH CARE section of the Plan for information about Pre - Treatment Authorization, Concurrent Review and Retrospective Review claim denials and appeals. Assignment of Benefits You may assign Medical or Health Care Benefits directly to the Doctor, Hospital or an appropriate state agency. You may assign Dental Care Benefits directly to the provider. You can either sign the necessary forms given to You by the provider of services or sign the designated assignment on Your claim form. Otherwise, Benefits will be paid according to the Payment of Claims provision. If You use a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. We will not be responsible for the validity of any assignment. Nor will We be liable for any action, payment or other settlement made before We receive such assignment. To the extent permitted by law, neither the Benefits nor payments under the Plan will be subject to the claim of creditors or to any legal process. 88- GP(G)(10•02) 45 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Physical Examinations We may have a Doctor of Our choice examine You, at Our expense, as often as is reasonably necessary while Your claim is pending. We may also have an autopsy performed, at Our expense, except if prohibited by law. Incontestability and Misstatement We cannot contest Your or Your dependent's coverage after it has been in effect for two years during a Covered Person's lifetime unless required Contributions are not paid. However, no provision of this Plan shall make the coverage of an ineligible person valid. Any statement about Your age made in writing and signed by You may be used to contest Your coverage. If You misstate Your age, The Plan Will only Pay Benefits based on Your correct age. The Plan wit a) adjust required Contributions, b) validate, or c) void coverage as necessary. Refund to Us for Overpayment of Benefits If You or Your dependent recovers money for medical, Hospital, dental, prescription drug or vision Expenses Incurred due to an Illness or Injury for which a Benefit has been paid under the Plan, We will have the right to a refund from You or Your dependent. The amount refunded to Us wit be the lesser of: 1. the amount You or Your dependent recovers; 2. the amount of Benefits We have paid. You or Your dependent (or a parent or legal guardian, if required) will help Us do whatever else may be reasonably needed to obtain this refund. Right of Subrogation If You or Your covered dependent has a claim for damages or a right to recover damages from another party or parties for any Illness or Injury for which Benefits are payable under this Plan, We are subrogated to such a claim or right of recovery. Our right of subrogation will be to the extent of any Benefits paid or payable under this Plan, and shall include any compromise settlements. We may assert this right independently of the Covered Person. Acceptance of Benefits is constructive notice of this provision in its entirety. If a Covered Person, or legal representative, estate or heir of the Covered Person, recovers damages, by settlement, verdict or otherwise, for an Illness or Injury for which a Benefit has been paid under this Plan, the Covered Person, or legal representatives, estate or heirs of the Covered Person, agrees to promptly reimburse Us for Benefits paid. Our right to receive reimbursement applies to the Covered Person's recovery from any source, including but not limited to any parry's liability and medical pay insurance, uninsured and underinsured motorist coverage, no -fault automobile coverage and Workers' Compensation coverage. We will have a first lien upon any recovery, whether by settlement, judgment, arbitration or mediation, that the Covered Person receives or is entitled to receive from any source, regardless of whether the Covered Person receives a full or partial recovery. Any settlement or recovery received shall first be deemed to be reimbursement of medical expenses paid under this Plan. Our first priority rights will not be reduced due to the Covered Person's own negligence. 88- GP(G)(10 -02) 46 CLAIMS AND OTHER GENERAL PROVISIONS - Continued We are entitled to reimbursement even if the Covered Person is not made whole or fully compensated by the recovery. Any share of attorney fees or costs or Common Fund fees shall not reduce Our recovery unless agreed to by Us in writing. If the injured person is a minor, any amount recovered by the minor, the minors trustee, guardian, parent, or other representative, shall be subject to this provision regardless of whether the minors representative has access to or control of any recovery funds. The Covered Person (or parent or legal guardian) will cooperate with Us and Our agents and help Us do what may be reasonably needed to protect the Plan's subrogation rights and obtain the refund. This includes furnishing all relevant information, making assignments in Our favor and signing and delivering any documents needed to protect Our rights. The Covered Person shall not take any action that prejudices Our rights. If the Covered Person makes a recovery from any source and fails to reimburse Us the lesser of: 1, the amount recovered, (including amounts to be recovered through future installment payments); or 2. the amount of Benefits paid related to this Illness or Injury, the Covered Person will be personally liable to Us for this amount. We may also offset future Benefits up to the amount due to Us. The terms of this subrogation and right of reimbursement provision shall apply regardless of state laws to the contrary. 88- GP(G)(10-02) 47 GENERAL DEFINITIONS When these terms are used in the Plan, they will have the following meanings unless otherwise noted: 1. Active Work: means You work for Your Employer at his/her place of business (or such other places as required by Your Employer) in accordance with his/her established employment practices. 2. Average Semiprivate Room Charge: means a) the standard charge by the Hospital for semiprivate room and board accommodations, or the average of such charges where the Hospital has more than one level of such charges, or b) 80% of the Hospital's lowest charge for single bed room and board accommodations when the Hospital does not provide any semiprivate accommodations. 3. Benefit(s): means the amount The Plan Will Pay for Covered Expenses after You or Your covered dependents have met the Deductible, if any. 4. Birthing Center: means a licensed place with the primary purpose of providing a place for live births operating within the scope of its license. 5. Chronic Medical Condition: means an Illness for which there is no cure; however, medical treatment is available. It is a long -term Illness that does not ordinarily pose an immediate threat to one's life. Chronic Medical Conditions covered under the Disease Management program may include, but are not limited to, diabetes, asthma or cardiac conditions. 6. Close Relative: means You, Your spouse, and Your or Your spouse's brother, sister, parent, or Child. 7. Complications of Pregnancy: means a disease, disorder or condition which is diagnosed as distinct from normal pregnancy but adversely affected by or caused by pregnancy. This includes: a. inter - abdominal surgery, including cesarean section; b. pernicious vomiting (hyperemesis gravidarum); c. toxemia with convulsions (eclampsia); d. extra- uterine pregnancy (ectopic); e. postpartum hemorrhage; f. rupture or prolapse of the uterus; g. spontaneous termination of pregnancy during a period of gestation in which a viable birth is not possible; h. similar medical and surgical conditions of comparable severity. Complications of Pregnancy will not include: a. elective abortion; b. false labor; c. occasional spotting; d. Physician prescribed rest; e. morning sickness; f. similar conditions associated with the management of a difficult pregnancy. Services and supplies rendered at the termination of pregnancy will not be considered treatment of Complications of Pregnancy. 8. Contributions: mean the amount You are required to pay for the coverage provided under the Plan. 88E -GD 48 GENERAL DEFINITIONS - Continued 9. Covered Expense: means a listed Covered Expense under a Benefit description which will be paid under the Plan if it is: a prescribed by a Doctor or Dentist for the therapeutic treatment of Injury, Illness or pregnancy; b. Medically Necessary; c. not more than what We determine as Reasonable and Customary; and d. not excluded under any exclusions of the Plan. If You use a Participating Provider, Covered Expense means the agreed upon rate set between Us and such provider for services which meet all of the above standards. 10. Covered Person: means an Enrolled person meeting the eligibility requirements of the Plan. 11. Creditable Coverage: means any of the following coverages a Covered Person had prior to enrollment under the Plan: a a group health plan; b. health insurance coverage, individual and group, including coverage through a Health Maintenance Organization (HMO); c. Medicare; d. Medicaid; a military health care; f. a medical care program of the Indian Health Service or of a tribal organization; g. a state health risk pool; h. a health plan offered under the Federal Employee Health Benefits Program; i. a public health plan established or maintained by a political subdivision of a state to provide insurance coverage; j. a health benefit plan established by the Peace Corps Act. 12. Custodial Care: means services, provided by a licensed, skilled nurse or a non - skilled person, for: a. a person with a Chronic Medical Condition; or b. a convalescent person. This care basically provides assistance to a person in daily living; it does not require technical skills or qualifications. This care is not reasonably expected to improve the underlying medical condition of a person even though it may relieve symptoms or pain. Custodial Care includes, but is not limited to: a. help in grooming, bathing, dressing, walking; b. help in getting in and out of bed; c. help in housekeeping, preparing meals, and eating; d. giving or helping to use or apply medications, creams and ointments; e. administering medical gasses after a therapy program has been set up; f. changing dressings, diapers and protective sheets; g. periodic turning and positioning in bed; h. routine care of casts, braces and other like devices; i. routine care of colostomy and ileostomy bags; j. routine tracheostomy care; k. routine care of catheters and other like equipment; and I. supervising exercise programs that do not need the skills of a therapist. Care that does require the technical skills of a licensed medical professional, who is acting within the scope of his/her license, is not considered to be Custodial Care. 88E -GD 49 GENERAL DEFINITIONS - Continued 13. Dentist: means an individual who is duly licensed to practice dentistry or perform oral surgery in the state where the dental service is performed and who is operating within the scope of that license. For the purpose of this definition, a Physician will be considered to be a Dentist when he /she performs any of the dental services included under Covered Dental Care Expenses and is operating within the scope of his/her licenses. 14. Disabled: means that due to Illness or Injury You cannot perform the material and substantial duties of Your regular occupation or Your covered dependent cannot perform normal activities, except as provided elsewhere in the Plan. 15. Doctor: means a medical practitioner licensed to perform surgery and administer drugs acting in the scope of that license. It will also include any other licensed practitioner of the healing arts required to be recognized by law, when that person is acting within the scope of his/her license and is performing a service for which Benefits are provided under the Plan. 16. Emergency: means an accidental Injury or Emergency Medical Condition which reasonably requires You or Your dependent to seek immediate medical care within 48 hours after the Injury or the onset of the Emergency Medical Condition. 17. Emergency Care: means covered services furnished or required to screen and stabilize an Emergency Medical Condition, which may include but shall not be limited to, health care services that are provided in a Hospital's emergency facility. 18. Emergency Medical Condition: means the sudden onset of a health condition that manifests itself by symptoms of sufficient severity, including but not limited to severe pain or acute symptoms developing from a Chronic Medical Condition, that would lead a prudent lay person, possessing an average knowledge of medicine and health, to believe that immediate medical care is required and that lack of such care could reasonably be expected to result in: a. placing the patient's health in serious jeopardy; b. serious impairment of bodily functions; c. serious dysfunction of any bodily organ or part; d. with respect to a pregnant woman, placing the woman's health, or that of her unborn Child, in serious jeopardy. 19. Employer: means the entity to which the Plan is issued. 20. Enroll: means completion of all forms required for coverage under the Plan and agreement to make any required Contribution. 21. Enrollment Date: means the first day of coverage or, if there is a Waiting Period, the first day of the Waiting Period. 22. Expense Incurred: means each expense is considered to be incurred on the date the care, service or supply is received. 23. Experimental, Investigational or Unproven: means care and treatment for which We determine that one or more of the following is true: a. The service or supply is under study or in a clinical trial to evaluate its toxicity, safety or efficacy for a particular diagnosis or set of indicators. Clinical trials include but are not limited to phase I, II and III clinical trials. 88E -GD 50 GENERAL DEFINITIONS - Continued b. The prevailing opinion within the appropriate specialty of the United States medical profession is that the service or supply needs further evaluation for the particular diagnosis or set of indications before it is used outside clinical trials or other research settings. We determine if this item b. is true based on: i. published reports in authoritative medical literature; and ii. regulations, reports, publications and evaluations issued by government agencies such as the Agency for Health Care Policy and Research, the National Institutes of Health, the federal Food and Drug Administration (FDA), the Health Care Financing Administration (HCFA), or any other appropriate technological assessment body. c. In the case of a drug, a device or other supply that is subject to FDA approval: i. it does not have FDA approval; or ii. it has FDA approval only under its Treatment Investigational New Drug regulation or a similar regulation; or iii. it has FDA approval, but it is being used for an indication or at a dosage that is not an Accepted Off -Label Use. An "Accepted Off -Label Use" is a use that is: a) included and favorably recognized for treatment of the indication in one or more of the following medical compendia: The American Medical Association Drug Evaluations, the American Hospital Formulary Service Drug Information, and The United States Pharmacopoeia Information; or b) established based on supportive clinical evidence in peer - reviewed medical publications. d. The providers institutional review board acknowledges that the use of the service or supply is Experimental, Investigational, or Unproven and subject to that board's approval. e. Research protocols indicate that the service or supply is Experimental, Investigational, or Unproven. This item e. applies for protocols used by the Covered Person's provider as well as for protocols used by other providers studying substantially the same service or supply. 24. Family Unit: means You and all of Your dependents who are covered under the Plan. 25. Full -Time Basis: means You work Your full number of hours for Your full rate of pay as required by Your Employer. The amount of required work time per week may never be less than 20 hours. 26. Home Health Care Agency: means a home health service or agency operating under a valid certificate of approval issued under the statutes of the state where services are provided. 27. Hospice: means an agency that provides counseling and incidental medical services and may provide room and board to a terminally ill person and meets all of the following tests: a. it has obtained any required governmental Certificate of Need approval; b. it provides service for a period of 24 hours per day on every day of the week; c. it is operated under the direct supervision of a duly qualified Doctor; d. it has a nurse coordinator who is a registered graduate nurse with four years of full -time clinical experience, at least two of which involved caring for terminally ill patients; e. it has a social service coordinator who is licensed in the jurisdiction in which it is located; f. it is an agency that has as its primary purpose the provision of Hospice services; g. it has a full -time administrator; h. it maintains written records of services provided; i. its employees are bonded, and it provides malpractice and malplacement insurance; j. it is established and operated in accordance with the applicable laws in the jurisdiction in which it is located and, where licensing is required, has been licensed and approved by the regulatory authority having responsibility for licensing under the law. 88E -GD 51 GENERAL DEFINITIONS - Continued 28. Hospital: means a place which meets all of the standards below: a. has permanent and full -time care for bed patients; b. is under the supervision of a Physician; c. has an R.N. on duty or call 24 hours a day; d. is mainly engaged in giving medical care and services for Injuries or Illness but not including: i. rest homes; i, nursing homes; convalescent homes; iv. homes for the aged; e. has surgical facilities except that this standard does not apply to such place operated mainly for treatment of the chronically ill; f. is operated lawfully in its area. "Hospital" also means such place which is mainly engaged in treating alcoholism and drug abuse if it meets the standards below: a. has permanent and full -time care for at least 15 bed patients; b. has a Doctor in regular attendance; c. provides 24 hour per day care by R.N.s; d. has a full -time psychiatrist or psychologist on the staff. Hospital also means and will include an "Ambulatory Surgical Center" which meets all of the standards below: a. is a licensed public or private place; b. has an organized medical staff of Doctors; c. has permanent facilities that are equipped and operated mainly for doing surgery and giving skilled nursing care; d. has R.N. services when a patient is in the facility; and e. does not provide services or beds for patients to stay overnight. 29. Illness: means sickness, or a covered dental infirmity, a covered bodily or mental infirmity. 30. Injury: means a covered accidental bodily Injury. 31. Inpatient Hospital Confinement: means a confinement in a Hospital as a bedpatient for which room and board charges are made by the Hospital to the Covered Person. 32. Intensive Care Unit: means a specifically named area in a Hospital operated only to give care to critically ill patients, with special supplies and equipment available for immediate use, providing room and board and bedcare under the constant watch of a highly trained Hospital staff. Normal post- operative or recovery room care is not intensive care no matter where located. 33. Late Enrollee: means an Eligible Employee or Dependent who requests Enrollment in the Employer's health benefit plan other than during the initial enrollment period, during an open enrollment period or during the Special Enrollment Periods provided under the terms of the Plan. 34. L.P.N.: means a licensed practical nurse acting in the scope of his /her license. 35. L.V.N.: means a licensed vocational nurse acting in the scope of his/her license. 88E -GD 52 36. Managed Care: means the determination of availability of coverage through the use of clinical standards to determine the Medical Necessity of an admission or treatment, and the level and type of treatment, and Appropriate setting for treatment, with required pre- treatment authorization, concurrent review or retrospective review, which sometimes involves case management. 37. Medical Necessity/Medically Necessary: means that We determine that the care and treatment given meets all of the following conditions: a. it is Appropriate care and consistent with the diagnosis and symptoms. "Appropriate" means the type, level and length of service and setting are needed to provide safe and adequate care and treatment and are provided by the Appropriate provider acting within the scope of his/her license; b. it is generally accepted medical practice and meets professionally recognized standards; c. it is not deemed to be Experimental, Investigational or Unproven as defined herein; d. it is not furnished in connection with medical or other research; e. it is specifically allowed by the licensing statutes which apply to the provider who renders the service; and 1. it is at least as medically effective as any standard care and treatment. We will use Our programs, or one established by Our authorized representative to determine whether care is needed and Appropriate. The program may include but is not limited to: a. Pre - Treatment Authorization; b. Concurrent Review; and c. Retrospective Review. GENERAL DEFINITIONS - Continued 38. Medicare: means the plan of benefits provided by Title XVIII of the U.S. Social Security Act of 1965 as amended from time to time. 39. Participating Provider: means a Doctor or a Hospital that agrees with Us to provide Medically Necessary care and treatment at set rates. 40. Preferred Participating Provider Organization (PPO): means a Managed Care arrangement consisting of a network of Participating Providers that are available to provide medical services to Covered Persons. 41. Pharmacist: means a person who is licensed and trained to compound and dispense drugs and medicines acting within the scope of that license. 42. Physician: means a person licensed to practice medicine. 43. Placed For Adoption: means the assumption and retention of a legal obligation for the total or partial support of a Child in anticipation of the adoption of such Child. The Child's placement with You is considered terminated upon the termination of such legal obligation. 44. Plan: means the Benefits described in this summary plan description as provided by the Self- funded Plan including all endorsements and amendments. 45. Plan Claim Administrator: means the entity designated by the Plan Sponsor to pay claims for Benefits under this Plan. 46. Plan Month: means the first day of the month to the last day of the same month. 47. Plan Year: means from December 1 of one year to November 30 of the next year. 58E -GD 53 GENERAL DEFINITIONS - Continued 48. Plan Sponsor: means CITY OF ROUND ROCK, TEXAS which has established this employee welfare benefits plan for the purpose of providing health care coverage to its employees and dependents of such employees. 49. Qualified Leave of Absence: means leave of absence period approved by the Employer pursuant to the Family and Medical Leave Act of 1993, or other applicable Texas leave law that applies to the Employer. 50. Reasonable and Customary: means, with regard to charges for medical and dental services or supplies, the lowest of: a. the usual charge by the provider for the same or similar medical and dental services or supplies; b. the usual charge of most providers of similar training and experience in the same or similar geographic area for the same or similar medical and dental service or supplies; c. the actual charge for the medical and dental services or supplies; or d. the negotiated rate a provider has agreed to accept. "Area" means a region We determine to be large enough to obtain a representative sample of providers of medical and dental care or supplies. 51. Replacement of Dentures: means to substitute a different denture for one previously used. (This includes dentures that were lost, stolen or not in use.) 52. Riot: means all forms of violence, disorder, or disturbance of the public peace by three or more persons assembled together, whether or not acting with common intent or whether or not damage to persons or property or unlawful act or acts is the intent or the consequence of such disorder, violence or disturbance. 53. R.N.: means a licensed registered nurse acting in the scope of his/her license. 54. Skilled Nursing Facility: means a place other than a Hospital that: a. can provide permanent full -time care for 10 or more resident patients; b. has a Physician who prescribes medications and treatment; c. has an R.N. on full -time duty in charge of patient care; d. has L.P.N.s or L.V.N.s on duty at all times under the supervision of an R.N.; e. keeps a daily medical record for each patient; f. is not mainly a rest home or a home for Custodial Care of the aged; g. is not mainly engaged in treatment of drug addicts or alcoholics; h. is operating lawfully as a nursing home. 55. The Plan Will Pay: means that when You send Us proof of claim, the Plan Claim Administrator will determine the Benefits payable and make payment, if any, according to the Payment of Claims provisions, as detailed in this document. 56. Urgent Care Facility: means a freestanding facility which is engaged primarily in providing minor emergency and episodic medical care and which has: a. a board - certified Physician, a registered nurse (R.N.) and a registered x -ray technician in attendance at all times; b. has x -ray and laboratory equipment and a life support system. 57. We, Us and Our: means the Plan Sponsor (as represented by the Plan Claim Administrator). 58. You and Your: means an employee covered under the Plan. 88E•GD 54 FEDERAL CONTINUATION COVERAGE (also known as COBRA) In some circumstances, federal law requires that persons who lose group health plan coverage be given the chance to continue that coverage for a period of time. Right to COBRA Continuation Coverage 1. You have a right to choose COBRA continuation coverage if You lose group health plan coverage because of: a. a reduction in Your hours of employment; or b. the voluntary or involuntary termination of Your employment (for any reason except Your gross misconduct). 2. Your spouse has the right to choose COBRA continuation coverage if he /she loses group health plan coverage for any of the following reasons: a. Your death; b. the termination of Your employment (except as a result of Your gross misconduct) or Your reduction in hours; c. Your divorce; d. Your becoming entitled to Medicare. 3. Your dependent Child has the right to continuation coverage if he /she loses his/her group health plan coverage due to one of the four reasons described in 2. above or if he /she ceases to be an Eligible Dependent under the terms of the Plan's Health Care coverage. A dependent child born to or Placed For Adoption with You during Your COBRA continuation coverage period has the right to COBRA continuation coverage if You notify the Plan Administrator of the child's birth or Placement For Adoption within the time frame as prescribed by law. Length of COBRA Continuation Coverage 1. Generally a. If, as a result of termination of Your employment or reduction in Your hours, You, Your spouse and /or Your dependents lose the Plan's Health Care coverage, those who do lose coverage may elect continuation coverage for up to 18 months after the date Your employment terminates or hours reduce. b. If Your spouse or dependents lose the Plan's Health Care coverage due to any of the other events described in 2. or 3. above (other than Your employment termination or hours reduction), they may elect continuation coverage for up to 36 months from the date they experience such event. c. If Your spouse or dependents become entitled to continuation coverage because of termination of Your employment or reduction in Your hours and Your spouse or dependent then experiences another of the events which would entitle such person to continued coverage, he /she may extend the 18 month continuation period to 36 months from the date of the event that first made him /her eligible for continuation coverage. A notice of a Social Security determination is given to the Plan Administrator before the end of the initial 18 -month period and within 60 days after the date of such determination. An Employer may require payments of up to 150 percent of the applicable group rate for the cost of coverage for these 11 additional months. N- FCC(10 -98) 55 FEDERAL CONTINUATION COVERAGE - Continued b. Employee's Medicare Entitlement Prior to COBRA Event If You become entitled to Medicare within 18 months prior to Your employment termination (or work hours reduction), Your spouse and dependents who are entitled to COBRA continuation coverage will become eligible for a continuation period of not shorter than 36 months from the date You become entitled to Medicare. This continuation period is measured from the time You are entitled to Medicare. The maximum continuation period for Your spouse or dependents will not exceed 36 months. However, unless You are entitled to an extended continuation period as described in 2.a. above, You yourself will only be eligible for a continuation period of up to 18 months from the date of Your employment termination (or work hours reduction). 3. If, after the occurrence of any event described in Right to COBRA Continuation Coverage above, You, Your spouse and/or Your dependents are allowed to continue Health Care coverage under the Plan (whether or not premium payment(s) are required) beyond the Plan's Termination of Coverage provision for any reason other than to comply with the federal law (i.e., the Plan's special provisions), such continuation period(s) will be used to reduce the maximum length of COBRA continuation coverage period otherwise available to such person under this section. Notification Requirements 1. If Your spouse or dependent becomes eligible for continuation coverage due to divorce or the end of dependency status, the Plan Administrator must be notified within 60 days after Your spouse or dependent becomes eligible. That person will distribute necessary forms and explain this continuation in more detail. If the Plan Administrator is not notified within 60 days of the event that makes Your spouse or dependent eligible for continuation coverage, Your spouse or dependent will lose the right to such coverage. In order for a child born to or Placed For Adoption with You during Your COBRA continuation coverage to have the right to COBRA continuation coverage, You must notify the Plan Administrator of the child's birth or Placement For Adoption within the time frame as prescribed by law. 2. In order for a Disabled person and such person's family members continuing under the 18 -month continuation coverage to be entitled to an extended continuation period of 11 additional months, such person must meet the notice requirements and all other conditions described under Extensions of Continuation Coverage in 2.a. above. A person continuing under the 11 -month extended continuation coverage must notify the Plan Administrator within 30 days if the Social Security Administration determines that the disability ceases to exist. N- FCC(10 -98) 56 General Information FEDERAL CONTINUATION COVERAGE - Continued Termination of COBRA Continuation Coverage Your Employer may require You, Your spouse and Your dependents to pay for the cost of the continuation coverage. If these amounts are not paid within the time allowed, the continuation coverage will end. Four other reasons that this continuation coverage may terminate before the full maximum continuation period runs out are: 1. the continued person first becomes, after the date of COBRA continuation coverage election, entitled to Medicare benefits; 2. the Employer stops providing any group health plan benefits program for employees; 3. the continued person first becomes, after the date of COBRA continuation coverage election, covered under another group health plan, and any preexisting conditions exclusions or limitations of that plan do not apply to or are satisfied by such person; 4. with respect to any person continuing under the 11 -month extended continuation coverage (as described under Extensions of Continuation Coverage in 2.a. above), when the Social Security Administration determines that the disability ceases to exist (the termination becomes effective as of the first day of the month which is at least 31 days after the Social Security determination). This Federal Continuation Coverage section does not amend or change the Plan's Termination of Coverage provision. It simply provides a continuation of coverage right Your Employer is required to offer by law. N- FCC(10 -95) 57 Termination or Amendment of Plan The Plan Sponsor intends that this Plan will continue indefinitely, but reserves the right to amend, modify, revoke or terminate the Plan, in whole or in part, at any time. The authority to make any such changes to the Plan is vested in the Association's governing body and shall be made via adoption of a written amendment by the Association's governing body. N-ERISA(08-02) 58 Plan Claims Administrator: Benefits under this Plan are paid by: Great -West Life & Annuity Insurance Company Quality Management, F1 -22 13045 Tesson Ferry Road St. Louis, MO 63128 NOTICE In compliance with the Federal Health Insurance Portability and Accountability Act (HIPAA), the following information is provided. The Medical Care, Dental Care, Vision Care, and Prescription Drug Coverages for employees and dependents are funded and provided by CITY OF ROUND ROCK, TEXAS. If You have any questions about Your Plan, You should contact the Plan Administrator. 68E- NOTICE 59 Confidentiality of Health Information Your Rights Under the Health Insurance Portability and Accountability Act 1 The Privacy Rule of the Health Insurance Portability and Accountability Act (HIPAA) places restrictions on when the Plan Sponsor may have access to certain health care information about You known as Protected Health Information (PHI). Generally, PHI is information from which Your individual identity can be discerned that is transmitted or maintained in any form (e.g., electronic, paper, oral) and that is created or received by a provider, health plan or health care clearing house. In accordance with HIPAA, the City of Round Rock, Texas agrees not to use or disclose Your PHI for purposes other than: For treatment, payment or health care operations, As permitted or required by law, or As authorized by You. You will receive a Notice of Privacy Practices that describes the Plan's policies, practices and Your rights with respect to Your PHI under HIPAA. For more information regarding this Notice, please go to www.ci.round.rock.tx.us or telephone (512) 218 -5490. 88E- NOTICE 60 0003 ROUND ROCK, TEXAS PURPOSE. PASSION. PROSPERITY. EMPLOYEE BENEFIT PLAN HIGH PLAN WELFARE BENEFIT PLAN FOR EMPLOYEES AND RETIREES OF CITY OF ROUND ROCK, TEXAS (herein called the Plan Sponsor) Summary Plan Description This Summary Plan Description (SPD) describes the High Plan PPO Option under the group health plan of benefits. The group health plan of benefits also offers a Low Plan PPO Option. A separate SPD was prepared for this option. Effective: December 1, 2003 SECTION PAGE Plan Information vii Introduction ix Eligibility 1 When Coverage Begins 6 When Coverage Ends 10 Medicare 12 Pre - Existing Conditions 14 Medical Care Benefits 17 Medical Care Exclusions and Limitations 36 Medical Care Benefit Provisions 40 Wellness Care Benefits 48 Home Health Care Benefits 49 Private Duty Nursing Care Benefit 51 Hospice Care Benefits 52 Managed Health Care 54 Coordination of Benefits (COB) 66 Prescription Drug Benefits 71 Dental Care Benefits 78 Vision Care Benefits 86 Claims and Other General Provisions 89 General Definitions 99 Federal Continuation Coverage (COBRA) 116 Termination or Amendment of Plan 121 Notice 122 Confidentiality of Health Information 123 TABLE TABLE OF CONTENTS SUMMARY PLAN DESCRIPTION OF MEDICAL CARE, DENTAL CARE, VISION CARE AND PRESCRIPTION DRUG BENEFITS FOR EMPLOYEES, RETIREES AND DEPENDENTS OF CITY OF ROUND ROCK, TEXAS (herein called the Plan Sponsor) (The Benefits described in this Summary Plan Description are provided and funded by CITY OF ROUND ROCK, TEXAS) v PLAN INFORMATION Plan Administrator and Plan Sponsor: City of Round Rock, Texas Employee Benefit Plan 221 E. Main Street Round Rock, TX 78664 (512) 218-5490 Employer Identification Number: 74 6017485 Plan Number: 7202 Plan Employee Contributions: The Plan Sponsor will determine the contributions required of the Employees on an annual basis. vii PLAN DE BENEFICIOS DE EMPLEADOS DE CITY OF ROUND ROCK Este folleto contiene un resume en Ingles de sus derechos del Plan y beneficios bajo el City of Round Rock Plan de Beneficios del Empleado. Si usted tiene dificultad para entender cualquier parte de este folleto, contacte Great -West Life & Annuity Insurance Company at 1 -800- 541 -3234. This book contains a brief summary in English of Your rights in the Benefits plan under the City of Round Rock. If You have any questions or difficulty in understanding part of this book contact Great -West Life & Annuity Insurance Company at 1- 800 -541- 3234. FOREWORD City of Round Rock has elected to provide group medical and dental Benefits to Employees on a self - funded basis. We have selected Great -West Life & Annuity Insurance Company as Our Plan Claims Administrator. Their claims mailing address is: Great -West Life & Annuity Insurance Company 1000 Great -West Drive Kennett, MO 63857 -3749 This Summary Plan Description describes the main features of Your Benefits. It is not meant to change or extend the coverage provided for in the Plan Document and should be used only as a general guide. The entire legal document is available to You for review in our office. If discrepancies arise, the Plan Document will govern. This Summary Plan Description takes the place of any other issued to You on a prior date. All claims must be filed within 365 days from the date of service. viii Introduction The City of Round Rock Employee Benefit Plan The City of Round Rock Employee Benefit Plan is primarily a self- funded Plan. The employer shall, from time to time, evaluate the costs of the Plan and determine the amount to be contributed by each covered employee, if any, and any Plan revisions or modifications. In addition to this Summary Plan Description describing Your medical, dental, vision and prescription drug Benefits, You will receive a wallet -sized card that identifies You and Your enrolled dependents as eligible for medical and prescription drug Benefits. This card contains Your personal identification number, name, plan number, benefits, effective date, and Your group plan name. The reverse of Your card contains claim filing information. Always carry this card with You when You or Your dependents visit the Hospital or Doctor. The card is proof of coverage and contains information that must be on every claim form submitted for consideration of payment. The information on the reverse of the card is necessary for proper submission of claims and provides telephone numbers for inquiries. If You lose Your card, contact the Human Resources Department at the City of Round Rock at 512 - 218 -5490 for a replacement card. The purpose of this Summary Plan Description /Plan Document, initially effective December 1, 2003 and as subsequently amended, is to set forth the provisions of the Benefits plan (the "Plan ") which provide for the payment of all or a portion of covered medical and prescription drug expenses the employer agrees to pay, subject to all the provisions of the Plan, including amendments, to the person entitled to such Benefits while covered hereunder, provided claim is duly made. This Summary Plan Description /Plan Document supersedes all other documents and previously issued amendments and shall be the sole document used in determining Benefits to which Covered Persons are eligible. It may be amended from time -to- time by the employer to reflect changes in Benefits or eligibility requirements. It is not in lieu of and does not affect any requirements for coverage by Workers' Compensation. Any amendments shall be binding on each participation covered and on any other person or persons referred to in this Summary Plan Description /Plan Document. The Benefits described in this Summary Plan Description have been designed to pay a large portion of the Reasonable and Customary fees for a broad range of Medically Necessary services, treatments, and supplies and will give You substantial protection against the cost of serious Illness and Injury. The employer intends to continue the Plan indefinitely, but reserves the right to amend or terminate the Plan in whole or in part, at any time. Such action may include, but not be limited to the type of Benefit, deductible, copays, percentage payable, out - of- pocket maximums, maximum Benefits, limitations and exclusions, and monthly contribution. Any such action will be communicated to participants in writing as soon as reasonably possible. The Plan is intended to be consistent with any Plan which the employer makes contributions, and with any contracts for medical and prescription drugs review services. To the extent the terms of this Plan are inconsistent with such Plan, the terms of such Plan shall prevail. Please read this document carefully to familiarize Yourself with the Benefits it describes and the procedures for filing claims. If You have any questions about Your coverage, please contact the plan representative. There are terms in this Summary Plan Description that have a special meaning under this Plan. When used in the Plan, unless otherwise stated, the terms are as defined in: 1. the General Definitions section, or 2. the specific Benefits sections. Becoming familiar with the defined terms will give You a better understanding of the procedures and Benefits described. 88E -GI ELIGIBILITY Eligible Employees You are in an Eligible Class for coverage under the Plan if You are an employee, at least 18 years of age, and have begun to work an average of 30 hours or more per week, excluding overtime, for Your Employer. Eligible Employees do not include independent contractors, contract workers, temporary, seasonal, casual or leased employees as interpreted by the Employer using Internal Revenue standards. A Retired Employee and his/her Eligible Dependents are included in an Eligible Class for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages. "Retired Employee" means a person who meets the rules and regulations of the Employer's Retirement Plan at the time of the retirement: Twenty years of service or Retirees with 5 years of service at age 60. You will be eligible for coverage under the Plan on the date You enter an Eligible Class, or the Effective Date of the Plan, if later. 88E -E ELIGIBILITY - Continued Eligible Dependents To be eligible for Dependent Coverage under the Plan, Your dependent(s) must be eligible. Your Eligible Dependents are: 1. Your lawful spouse or common -law spouse; 2. Your unmarried dependent Child less than age 25; 3. Your Child with a mental or physical handicap who is over the age limit, if a) the Child becomes and remains Disabled while covered under the Plan, or b) was covered under the Prior Plan that this Plan replaces and, in either case, all of the following conditions are met: a. the Child has not been married; b. cannot hold a self- supporting job due to the handicap; and c. depends on You for main support and care. First proof of incapacity must be given to Us (at Your expense) within 31 days of the Child's limiting birthday. No person may be covered as a dependent of more than one employee. An employee may not be covered as a dependent. "Child" means Your natural Child; Your stepchild; an adopted Child; a Child who has been Placed For Adoption with You; a Child for whom You have been appointed legal guardian; a Child who is recognized under a qualified medical child support order as having a right to enrollment under the Plan (hereafter " QMCSO- child "). In all cases the Child must depend upon You for his /her main support and care. However, when a court recognizes a Child as a QMCSO- child, the Child will be considered Your Eligible Dependent regardless of whether the Child is living with You or receiving his /her main support and care from You. 88E -E 2 ELIGIBILITY - Continued "Common -law marriage" means a marriage between a man and woman who: 1. declare common -law marriage; 2. are both age 18 or older; 3. file both federal and state taxes as married; 4. provide evidence of cohabitation as husband and wife, and by general reputation the two individuals are living together as husband and wife and claiming to be such; and By general reputation" means the understanding among neighbors and acquaintances with whom the parties associate in their daily lives is that they are living together as husband and wife, and not that they are merely living together. 5. submit a notarized affidavit verifying common -law marriage status. Common -law marriage does not include a domestic same -sex partnership. 88E -E 3 ELIGIBILITY - Continued Coverage for Newborns - Well Baby Care A newbom Child will be covered from the moment of birth provided You already have Dependent Child(ren) Coverage or You Enroll the newborn Child for coverage within 31 days of the birth of the newborn Child. Such newbom Child will be eligible for the following Covered Expenses: a) Hospital room and board (or nursery) charges; b) routine Doctor visits while Hospital confined; and c) circumcision while Hospital confined. This coverage will end on the earlier of: 1. the date the newborn Child is discharged or 2. the date the newborn Child is 31 days old. Coverage for Newboms - Sick Baby Care A newborn Child is covered from the moment of birth for Covered Expenses due directly to: t Injury or Illness; 2. premature birth; or 3. a condition which exists at birth. If You do not have Dependent Coverage in force, this coverage (including any Extended Benefits) will end 31 days after the date Your Child is bom. If You Enroll the Child within this 31 day period and make the required retroactive Contributions, coverage on the Child may continue. 88E -NC 4 ELIGIBILITY - Continued Modification of Coverage for Newborns - Well and Sick Baby Care When charges for delivery are considered a Covered Expense for an expectant mother eligible for coverage under this Plan, any and all charges incurred by the newborn under the Well and Sick Baby Care provisions as shown above are to be considered as charges incurred by the mother. 88E - NC 5 WHEN COVERAGE BEGINS For Eligible Employees: Your Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages will be made effective on the date You are eligible if that date is the first day of the calendar month. If not, on the first day of the calendar month that next follows the date You are eligible. For Eligible Retired Employees: If You are retiring, Your coverage will be made effective on the first day of the calendar month that fats on or next follows: 1. the date You retire if You Enroll on or before that date; or 2. the date You Enroll, if You do so within 31 days after Your retirement date. If You do not Enroll within 31 days after You retire, You will not be eligible for coverage. For Eligible Dependents: Dependent Coverage cannot become effective prior to the date Your coverage is effective. Dependent Coverage will be effective with respect to each Eligible Dependent You then have on the first day of the calendar month that falls on or next follows: 1. the date You are eligible for coverage if You Enroll Your dependents on or before that date; or 2. the date You Enroll Your dependents. If You do not Enroll Your dependents for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages within 31 days after You are eligible for coverage, please refer to the provision on Late Enrollees below. 88E -EFFD 6 WHEN COVERAGE BEGINS - Continued Late Enrollees If You do not Enroll within 31 days after You are eligible for Health Care coverage, You may be a Late Enrollee. If: 1. You do not Enroll Your dependents within 31 days after You are eligible for such coverage or Your dependent was not Enrolled within 31 days after he/she became eligible; or 2. You wish to restore Dependent Health Care Coverage which ended because You did not make required Contributions, Your dependent may be considered a Late Enrollee. (Please refer to the General Definitions section.) A Late Enrollee may Enroll only during the open enrollment period of November 1 through November 30. A Late Enrollee's coverage will be made effective on the first day of the calendar month following the open enrollment period and will be subject to the Pre- Existing Conditions Limitations for Late Enrollees provision. Other Enrollment Periods You or Your Eligible Dependent may only request enrollment under the Health Care coverage: t during the initial enrollment period or subsequent open enrollment periods; or 2. during the Special Enrollment Periods. 88E -EFFD 7 WHEN COVERAGE BEGINS - Continued You or an Eligible Dependent may Enroll for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages during Special Enrollment Periods without being considered a Late Enrollee under the following circumstances: 1. Loss of Other Coverage. If You or an Eligible Dependent: a. was covered under another group health plan (including COBRA continuation) or had other medical insurance coverage at the time enrollment was declined; and b. has lost or will lose coverage under the other plan as a result of loss of eligibility (due to such reasons as termination of employment, change of employment status, death of a spouse, divorce, legal separation or cessation of the Employer's contributions to such coverage) or have exhausted COBRA continuation coverage, You or an Eligible Dependent may Enroll within 31 days after loss of coverage. Coverage will be effective on the first day of the month following enrollment. 2. Acquisition of Dependents. If You did not Enroll when first eligible and acquire a dependent through marriage, birth, adoption or Placement For Adoption, You and the newly acquired dependent(s) may Enroll within 31 days of the date of marriage, birth, adoption or Placement For Adoption. In the case of the birth, adoption or placement of a Child, Your spouse may also be Enrolled as Your dependent if otherwise eligible for coverage. Coverage will be effective on the date of birth, adoption or Placement For Adoption. In the case of marriage, coverage will be made effective on the first day of the month following enrollment. 8 E -EFFD 8 WHEN COVERAGE BEGINS - Continued Additional Dependents 1. If You are covered with respect to yourself only, You and Your Child(ren) only, or You and Your spouse only, Dependent Health Coverage may be extended to cover Your spouse or Your first Eligible Child, as the case may be. You must apply to cover such new dependent within 31 days after the dependent is first eligible. If You do not apply within 31 days, Your dependent may be a Late Enrollee. (Please refer to the General Definitions section.) Coverage with respect to a Late Enrollee will be made effective on the first day of the calendar month which falls on or after the date You Enroll the dependent and coverage will be subject to the Pre- Existing Conditions Limitations for Late Enrollees. 2. If You have at least one dependent Child covered, each new dependent Child will be covered on the date he/she becomes eligible. You must Enroll each new Dependent in order for them to be covered under the Plan. 88E -EFFD 9 WHEN COVERAGE ENDS For Employees: Your coverage will end on the date of the first of these events: 1. If You are covered as an Active Employee, the end of the month in which You stop Active Work in an Eligible Class, except that: a. if You stop Active Work due to Injury, Illness, or Qualified Leave of Absence for personal Injury or Illness, Your Employer will continue Your Health coverage subject to payment of Contributions. Such coverage will continue only while You are unable to return to work because of the Injury, Illness or Qualified Leave of Absence. This coverage continuance will be on a basis precluding individual selection; b. if You stop Active Work to take a qualified military leave of absence (pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994) You may elect to continue coverage subject to payment of Contributions. Such coverage will continue only while You are unable to retum to work because of the qualified military leave of absence. Such continuance will be on a basis precluding individual selection; c. if You stop Active Work to take a Qualified Leave of Absence (pursuant to the Family and Medical Leave Act of 1993 or other applicable state's leave law, if any such law applies to Your Employer), for reasons other than personal Illness or Injury, Your Employer will continue coverage subject to payment. Such coverage will continue only while You are unable to return to work because of the Qualified Leave of Absence. Such continuance will be on a basis precluding individual selection; 88E-TERMD 10 WHEN COVERAGE ENDS - Continued d. if You stop Active Work due to other leave of absence, or due to temporary layoff, Your Employer may elect to continue coverage subject to payment. Such coverage may be continued to the end of the second Plan Month following the Plan Month in which such leave or layoff took place. This coverage continuance will be on a basis precluding individual selection. 2. You stop making Contributions, if required. 3. As to any one coverage or class, the date the Plan is amended or changed to exclude that coverage or class. 4. The Plan ends. If You cease Active Work due to eligible retirement, coverage will be continued in accordance with the rules established by the Plan Sponsor. For Dependents: A dependent's coverage will end on the earlier of: 1. the date Your coverage ends; or 2. the end of the month in which the dependent ceases to be eligible as defined by the Plan. 88E -TERMD MEDICARE This section applies to a Covered Person who is eligible for Medicare coverage. It provides rules for determining the order of benefit payments between coverage under this Plan and those of Medicare. The intent of this section is to conform the Plan to the requirements of the federal Medicare Secondary Payer law. Accordingly, the section and its stated rules will be adjusted, if We deem necessary, so that the Plan's liability for Benefit payment is neither greater nor less than those required under the law. 1. If, pursuant to the rules: a. this Plan is determined to be secondary to Medicare, it will pay secondary to and coordinate its Benefits with Medicare; b. this Plan is determined to be primary to Medicare, it will pay Benefits without regard to Medicare benefits. 2. The order of benefit payments rules are outlined below. a. Rules applicable to a person covered under the Plan by virtue of that person's "Current Employment Status" with an Employer or as a dependent of such person: Basis of Medicare Eligibility: - Old -Age (attaining age 65)` - Disability (other than ESRD) - End Stage Renal Disease (ESRD) Old -Age or Disability, preceding or beginning concurrently with ESRD N MEDICARE - 100 12 This Plan Will: Be primary. Be primary. Be primary for the first 30 months of ESRD Medicare coverage; be secondary thereafter. Continue to be primary until the end of the first 30 months of ESRD Medicare coverage; be secondary thereafter. MEDICARE - Continued *If a Covered Person elects to have Medicare as primary coverage, such person's Health Care coverage (including any Dental Care, Prescription Drug or Vision Care coverage), under this Plan will terminate. If the employee's Health Care coverage terminates in accordance with this provision, coverage on the employee's covered dependents will cease on the same date. b. Rules applicable to a person covered under the Plan as a Retired Employee, a dependent of such employee, or on any basis other than those stated in 2.a. above: Basis of Medicare Eligibility: - Old -Age (attaining age 65) - Disability (other than ESRD) - End Stage Renal Disease (ESRD) - Old -Age or Disability, preceding ESRD This Plan Will: Be secondary. Be secondary. Be primary for the first 30 months of ESRD Medicare coverage; be secondary thereafter. Continue to be secondary. For purposes of this section, "Current Employment Status": a person is considered to have Current Employment Status with an Employer if the person is an employee, is the Employer (including self - employed person), or is associated with the Employer in a business relationship. REMEMBER: The Medicare section outlined above applies from the date a Covered Person is first ELIGIBLE for Medicare (either Part A or Part B), whether or not the Covered Person is Enrolled and is receiving Medicare benefits. N- MEDICARE -100 13 PRE - EXISTING CONDITIONS You or Your Eligible Dependent has a "Pre- Existing Condition" if the Covered Person: 1. has consulted a Doctor; 2. has taken prescribed medicine; 3. is receiving or has received medical care; for that condition in the 6 months before his/her Enrollment Date (as defined by the Plan). Pregnancy, including Complications of Pregnancy, is not a Pre - existing Condition. Genetic information, in the absence of a diagnosis of a resulting condition, will not be considered a Pre - Existing Condition. Pre - Existing Conditions Limitations for Late Enrollees A Late Enrollee, who is otherwise eligible for Health Care coverage, is subject to the following Pre - existing Conditions Limitations provision if the person becomes covered under the Plan and does not have Creditable Coverage or has Creditable Coverage that is less than the Pre - Existing Conditions Limitations period. Benefits will not be payable for a Pre- Existing Condition until 12 consecutive months have elapsed from the Covered Person's Enrollment Date. (Please refer to the General Definitions section for an explanation of Enrollment Date.) 8BE- PRE- X(7 -97) 14 PRE - EXISTING CONDITIONS - Continued Modification of Pre - Existing Conditions Limitations The Pre- Existing Conditions Limitations provision is modified to provide credit toward satisfaction of the Pre - Existing Conditions Limitations period for the time covered under previous Creditable Coverage. Credit for previous Creditable Coverage will not be given if a 63 day or greater period (a break in Creditable Coverage) has occurred from the time the person was covered under previous Creditable Coverage until the Covered Person's Enrollment Date under the Plan. Time served during a Waiting Period does not count as a break in Creditable Coverage and does not count as Creditable Coverage. To be eligible for this credit, the Covered Person must present documentation of previous Creditable Coverage. Documentation of previous Creditable Coverage is not required if: 1. the Covered Person was covered under Your Employer's previous medical plan on the day prior to this Plan's Effective Date; or 2. if You are changing to another health plan option offered by Your Employer. After consideration of the documentation of Creditable Coverage, You will be notified of the remaining months in Your or Your dependent's Pre- existing Conditions Limitations period. The Plan will not impose Pre- existing Conditions Limitations on a Child who was covered by Creditable Coverage within 30 days of his/her birth, adoption, or Placement For Adoption provided the Child has not been without Creditable Coverage for more than 62 days. 88E- PRE- X(7 -97) 15 PRE - EXISTING CONDITIONS - Continued Modification of Pre - Existing Conditions Limitations The Pre - Existing Conditions Limitations provision will not apply if the Covered Person becomes covered under this Plan on its Effective Date. 88E- PRE- X(7 -95) 16 MEDICAL CARE BENEFITS SCHEDULE Important Notice Your medical coverage includes one or more features to help control medical care costs. Some features will affect the amount of Benefits payable for Your medical care. PLEASE REFER TO THE MANAGED HEALTH CARE SECTION FOR ALL SERVICES THAT REQUIRE PRE - TREATMENT AUTHORIZATION. PENALTIES MAY BE ASSESSED FOR FAILURE TO COMPLY WITH PRE - TREATMENT AUTHORIZATION REQUIREMENTS. Two different levels of Benefits are being provided under the Plan: 1. The "PPO" Benefit level will be payable for services rendered by a Participating Provider, and 2. The "Non -PPO" Benefit level will be payable for services rendered by a provider who is not a Participating Provider. Employee and Dependent Amounts Applicable To Medical Care Coverage You or a Dependent Lifetime Maximum For all Covered Expenses $1,000,000 88E- MEDSCH 17 MEDICAL CARE BENEFITS - Continued Lifetime Maximum for Covered Expenses Incurred for: 1. Hospice Care PPO $20,000 Non -PPO $15,000 2. Treatment of Temporomandibular Joint Disorders $5,000 3. Inpatient Treatment of Alcoholism and Drug Abuse (Combined) 30 days or $25,000, whichever occurs first Calendar Year Maximum for Covered Expenses Incurred for: 1. Skilled Nursing Facility Charges PPO $10,000 Non -PPO $7,000 2. Inpatient Treatment of Mental Health Conditions 30 days 3. Inpatient Doctor Visits for Mental Health Conditions, Alcoholism and Drug Abuse (Combined) 1 visit per day 4. Outpatient Doctor visits for Mental Health Conditions 30 visits 5. Outpatient Treatment of Alcoholism and Drug Abuse (Combined) $1,000 6. Outpatient Doctor visits for Alcoholism and Drug Abuse (Combined) 30 visits 7. Home Health Care PPO $10,000 Non -PPO $7,000 8. Wellness Benefit $350 9. Chiropractic Benefit $500 68E- MEDSCH 16 MEDICAL CARE BENEFITS - Continued Calendar Year Deductible - an amount of Covered Expenses to which the Deductible Requirement applies equal to: PPO Non - PPO the Individual Deductible of: $250 $750 or the Family Unit Deductible of: $750 $2,250 Covered Expenses used to satisfy the Calendar Year Deductible amount when services of a Participating Provider are used may not be applied toward satisfaction of the Calendar Year Deductible amount when services of a provider other than a Participating Provider are used, and vice versa. The Family Unit Deductible must be satisfied by You and Your Family Unit members who are covered as dependents. No part of any Covered Expenses for which Benefits are paid or payable by the Plan may be used to satisfy the Family Unit Deductible. Additional Deductible For each visit to a Hospital emergency room. This Additional Deductible will not apply if the Covered Person is admitted to the Hospital immediately after the emergency room visit. 88E- MEDSCH 19 PPO Non -PPO $100 $100 MEDICAL CARE BENEFITS - Continued ALL COVERED EXPENSES, OTHER THAN EMERGENCY ROOM CHARGES, INCURRED AT ROUND ROCK HOSPITAL OR OAKWOOD SURGICAL CENTER FACILITY WILL BE PAID AT 100% AFTER THE DEDUCTIBLE APPLIES. Services 2. Charges of a radiologist, a pathologist, an anesthesiologist or an Assistant Surgeon if services are performed: 88E MEDSCH 20 The Plan Will Pay PPO Non -PPO 1. Hospital charges for Deductible Deductible Inpatient Hospital applies; applies; Confinement, payable at payable at including charges for 80 %. 50 %. confinements following an emergency room visit. In- Patient Lab & X -ray at Round Rock Hospital is paid at 100% after the deductible. a. at a PPO facility. Deductible Deductible applies; applies; payable at payable at 80 %. 80 %. b. at a Non -PPO Deductible Deductible facility. applies; applies; payable at payable at 80 %. 50 %. MEDICAL CARE BENEFITS — Continued Services 88E MEDSCH 21 The Plan Will Pay PPO Non -PPO 3. Hospital charges for Deductible Deductible emergency room applies; applies; care. payable at payable at 80% after the 50% after the Covered Covered Person pays Person pays an Additional an Additional Deductible of Deductible of $100 per visit. $100 per visit. This Additional Deductible will be waived if the Covered Person is admitted to the Hospital immediately after the emergency room visit. In a true emergency (i.e. heart attack, stroke) any facility will be paid as in- network. 4. Doctor's charges for Deductible Deductible emergency room applies; applies; care. payable at payable at 80 %. 50 %. In a true emergency (i.e. heart attack, stroke) any emergency room physician will be paid as in- network. 5. Pre - admission Deductible Deductible testing. applies; applies; payable at payable at 80 %. 50 %. If Pre - admission testing is done at Round Rock Hospital, benefit is 100% after deductible. MEDICAL CARE BENEFITS - Continued Services 6. Outpatient Hospital charges (unless shown otherwise in this schedule). 7. Outpatient Hospital charges when surgery is performed. Outpatient hospital charges for Round Rock Hospital and Oakwood Surgical Center are payable at 100% after the deductible. 8. Ambulance charges for air or ground transportation. 9. Charges of a Doctor (unless shown otherwise in this Schedule) for: a. an office visit or a visit to a Covered Person's home (excludes visits for Mental Health Conditions, alcoholism and drug abuse). 88E MEDSCH 22 The Plan Will Pay PPO Non -PPO Deductible Deductible applies; applies; payable at payable at 80 %. 50 %. Deductible Deductible applies; applies; payable at payable at 80 %. 50 %. Deductible applies; payable at 80 %. No Deductible applies; payable at 100% after the Covered Person pays a $15 Per Visit Fee. Deductible applies; payable at 80 %. Deductible applies; payable at 50 %. MEDICAL CARE BENEFITS - Continued The Plan Will Pay Services PPO Non -PPO b. allergy Deductible Deductible treatment; applies; applies; testing, payable at payable at injections, 80 %. 50 %. nebulizer, etc. c. surgical Deductible Deductible procedures applies; applies; performed payable at payable at during the visit. 80 %. 50 %. d. all other covered No Deductible Deductible services applies applies; performed payable at payable at during the visit. 100 %. 50 %. 10. Charges of a Doctor Deductible Deductible for surgery performed applies; applies; in the outpatient payable at payable at department of a 80 %. 50 %. Hospital or other outpatient facility. 11. Charges incurred for Deductible Deductible manual applies; applies; manipulations, lab payable at payable at and x -ray which are 80 %. 50 %. billed by a Doctor or chiropractor. Please refer to Medical Care Benefit Provisions for additional information. 88E- MEDSCH 23 MEDICAL CARE BENEFITS - Continued Services The Plan Will Pay PPO Non -PPO 12. Charges incurred for Deductible Deductible outpatient physical, applies; applies; speech and payable at payable at occupational therapy, 80 %. 50 %. limited to one visit per day. 13. Charges incurred for Deductible Deductible durable medical applies; applies; equipment. payable at payable at 80 %. 50 %. 14. Charges for services Deductible Deductible performed by a applies; applies; private duty nurse. payable at payable at 80 %. 50 %. Please refer to Medical Care Benefit Provisions for additional information. 15. Organ transplant. Deductible Deductible applies; applies; payable at payable at 80 %. 50 %. 16. Hospice Care. Deductible Deductible applies; applies; payable at payable at 80 %. 50 %. Please refer to Medical Care Benefit Provisions for additional information. 88E- MEDSCH 24 MEDICAL CARE BENEFITS - Continued 17. Home Health Care. Please refer to Medical additional information. 18. Skilled Nursing Facility Charges. 19. After Hours Care, performed at an Urgent Care Facility. 20. Wellness Care* for: a. childhood examination and immunizations. b. gynecological exam including pap smear and mammograms. 88E- MEDSCH Services 25 The Plan Will Pay PPO Non -PPO Deductible applies; payable at 80 %. Deductible applies; payable at 50 %. Care Benefit Provisions for Deductible applies; payable at 80%. No Deductible applies; payable at 100% after the Covered Person Pays a $15 Per Visit Fee. Deductible applies; payable at 50 %. Deductible applies, payable at 50 %. No Deductible No Benefits. ** applies; payable at 100%.* No Deductible No Benefits. ** applies; payable at 100 %.* MEDICAL CARE BENEFITS - Continued The Plan Will Pay Services PPO Non -PPO c. physical No Deductible No Benefits ** examinations. applies; payable at 100 %.* d. annual prostate No Deductible No Benefits." exam and applies; prostate specific payable at antigen (PSA) 100 %.* testing. Any charge in excess of the $350 Benefit limit will not be considered a Covered Expense. Non -PPO Lab and x -ray charges related to Wellness Care will be paid at 100 %` when referred by a PPO provider. 21. Treatment of Mental Health Conditions: a. Inpatient Deductible Deductible Hospital or other applies; applies; inpatient facility payable at payable at charges. 80 %. 50 %. b. Inpatient Doctor Deductible Deductible charges. applies; applies; payable at payable at 80 %. 50 %. 88E- MEDSCH 26 MEDICAL CARE BENEFITS - Continued Services 88E MEDSCH 27 The Plan Will Pay PPO Non -PPO c. Outpatient Deductible Deductible Hospital or other applies; applies; outpatient facility payable at payable at charges. 80 %. 50 %. d. Doctor's charges No Deductible Deductible for a visit to the applies; applies; office or a payable at payable at Covered 80 %. 50 %. Person's home. 22. Treatment of alcoholism and drug abuse (combined): a. Inpatient Deductible Deductible Hospital or other applies; applies; inpatient facility payable at payable at charges. 80 %. 50 %. b. Inpatient Doctor Deductible Deductible charges. applies; applies; payable at payable at 80 %. 50 %. c. Outpatient Deductible Deductible Hospital or other applies; applies; outpatient facility payable at payable at charges. 80 %. 50 %. MEDICAL CARE BENEFITS - Continued Services 23. Treatment of Temporomandibular Joint Disorders (TMJ) Please refer to Medical additional information. 24. Charges for services performed at a Birthing Center. 25. Charges for X -rays or laboratory specimens that are performed on an outpatient basis, (i.e. Doctor's office, freestanding facility or outpatient facility). 27. All other Covered Deductible Expenses. applies; payable at 80 %. 88E MEDSCH 28 The Plan Will Pay PPO Non -PPO Deductible Deductible applies; applies; payable at payable at 80 %. 50 %. Care Benefit Provisions for Deductible Deductible applies; applies; payable at payable at 80 %. 50 %. No deductible Deductible applies; applies; payable at payable at 100 %. 50 %. 26. Charges of a Deductible Deductible Dietician or applies; applies; Nutritionist for diet payable at payable at counseling. 80 %. 50%.* 'Subject to reasonable and customary fees. Deductible applies; payable at 50 %. MEDICAL CARE BENEFITS - Continued When it is not reasonably possible for a Covered Person to get access to a Participating Provider in the network of an eligible service or supply, The Plan Will Pay Benefits at 80% and the PPO deductible will apply. "Additional Deductible" means that portion of covered Hospital expenses a Covered Person is required to pay out of his/her pocket before The Plan Will Pay Benefits for any remaining portion. Additional Deductibles may apply even if no Deductible applies. The Additional Deductible does not apply toward the Deductible or any out -of- pocket amounts. Per Visit Fee" means that portion of covered Doctor expenses a Covered Person is required to pay out of his /her pocket before The Plan Will Pay Benefits for any remaining portion. "Deductible" means that portion of Covered Expenses a Covered Person is required to pay out of his/her pocket each calendar year before The Plan Will Pay Benefits for any remaining portion. The Deductible does not apply toward any out -of- pocket amounts. A Covered Person will not be reimbursed for any Per Visit Fee or Additional Deductible nor do they apply toward any Deductible or his /her Out -of- Pocket amount. Out - of - Pocket Expense Maximum When $1,000 in Out -of- Pocket Expenses has been paid by one Covered Person during a calendar year, the 80% level of Benefit payments for PPO services will automatically increase to 100% for any additional eligible Covered Expenses Incurred by that same person during the remainder of that calendar year. 88E- MEDSCH 29 MEDICAL CARE BENEFITS - Continued When $7,500 in Out -of- Pocket Expenses has been paid by one Covered Person during a calendar year, the 50% levels of Benefit payments will automatically increase to 100% for any additional eligible Covered Expenses Incurred by that same person during the remainder of that calendar year. When $3,000 in Out-of-Pocket Expenses has been paid on behalf of all the covered members of Your Family Unit during a calendar year, the BO% level of Benefit payments for PPO services will automatically increase to 100% for any additional eligible Covered Expenses Incurred by any covered family member during the remainder of that calendar year. When $22,500 in Out -of- Pocket Expenses has been paid on behalf of all the covered members of Your Family Unit during a calendar year, the 50% levels of Benefit payments will automatically increase to 100% for any additional eligible Covered Expenses Incurred by any covered family member during the remainder of that calendar year. An "Out -of- Pocket Expense" is the 20% and 50% shares of any otherwise eligible (Reasonable and Customary) expense which You pay. Per Visit Fees, Additional Deductibles, Pre - Treatment Authorization Penalties, Concurrent Review Penalties and Deductibles are not considered eligible Out -of- Pocket Expenses. These increases will not apply to wellness charges or charges incurred for the treatment of Mental Health Conditions, alcoholism and drug abuse. 88E- MEDSGH 30 MEDICAL CARE BENEFITS - Continued Room and Board Maximum 1. Private room accommodation* the Covered Expense Incurred 2. Ward or semiprivate accommodation the Covered Expense Incurred 3. Intensive Care Unit accommodation the Covered Expense Incurred *Private Room will be allowed when documented in writing from the physician as medically necessary for treatment of the condition or when the hospital only has private rooms. Skilled Nursing Maximum Covered Expense Facility Benefit 1. Daily Benefit 2. Maximum Benefit Medical Care Benefits 88E- MEDSCH 31 the Room Charge in the Skilled Nursing Facility. PPO - $10,000 per calendar year. Non -PPO - $7,000 per calendar year. When Injury or Illness causes You or Your dependent, while covered under this Plan to incur Covered Medical Care Expenses, the Plan will determine Benefits according to the Schedule and the limitations and exclusions outlined in the Plan. Benefits for each Covered Expense will be calculated as follows: 1. The Reasonable and Customary fee will be determined. 2. The amount will be reduced by any applicable Deductible. 3. The remaining amount will be multiplied by the appropriate Covered Percentage, resulting in the Benefit payable. 4. The Benefit payable will be subject to the maximums shown on the Schedule. MEDICAL CARE BENEFITS - Continued Deductible Requirement Your or Your dependent's Deductible Requirement will be met when the Covered medical Expenses Incurred while covered during each calendar year equal the Deductible Amount shown on the Schedule. You are required to pay this amount, the Plan will not reimburse You for this expense. The following special Deductible provisions are included to help You and Your covered dependents meet this Deductible Requirement. 1. Carry Over: If You or Your dependent incurred Covered medical Expenses during the last three months of the calendar year and they were applied to meet that year's Deductible, those same expenses may be used again, "carried over" to help meet the Deductible Requirement of the next year. 2. Family Unit Deductible: The Family Unit Deductible Requirement will be met when all Covered Expenses applied to individual Deductibles for covered members of Your family, in a calendar year, equal the Family Unit Deductible shown on the Schedule. 3. Common Accident Feature: If two or more Covered Persons in Your Family Unit are injured in the same accident, only one Individual Deductible amount will apply to the total of all Covered Expenses Incurred (by all covered and injured Family Unit members) as the result of that accident. This applies during the calendar year in which the accident occurs. This does not apply to Expenses Incurred for any other Illness or Injury. 88E- MEDSCH 32 MEDICAL CARE BENEFITS - Continued Covered Expenses The Plan Will Pay Benefits as shown on the Schedule for the following Medical Care expenses of a Covered Person if the expenses are considered Covered Expenses as defined in General Definitions: 1. Hospital daily room and board, general nursing care, and Intensive Care Unit, to the Maximum Amounts shown on the Schedule. 2. All other Medically Necessary miscellaneous services and supplies furnished by a Hospital during covered Inpatient Hospital Confinement, but not for private duty nursing care. 3. Pre- admission testing performed before a scheduled Inpatient Hospital Confinement. 4. Outpatient Hospital charges for medical care and supplies used on the premises of a Hospital. 5. Medically Necessary services and supplies furnished in a licensed Ambulatory Surgical Center. 6. Medically Necessary services and supplies furnished in a lawfully operating Birthing Center. 7. Skilled Nursing Facility charges for: a. daily room and board up to the maximum shown on the Schedule; or b. a confinement beginning within 7 days of discharge from an Inpatient Hospital Confinement of at least 1 day. 8. Professional service charges of a Doctor (other than psychiatric /psychological service charges). 9. Professional psychiatric/psychological service charges of a Doctor for treatment of Mental Health Conditions, subject to the maximums shown on the Schedule. 88E -CE 33 MEDICAL CARE BENEFITS - Continued 10. Professional service charges of a Doctor for surgery. 11. Professional service charges of a Doctor for the giving of anesthesia. 12. Professional service charges made of a Doctor, or by a laboratory for diagnostic laboratory and x -ray exams. 13. Private duty nursing charges for services performed by an R.N. or L.P.N., as defined by the Plan. 14. Physiotherapy services of a physiotherapist. 15. Charges for services of a qualified speech therapist or audiologist for speech therapy and audio therapy, including audio diagnostic testing, to provide developmental and rehabilitative care where there is a reasonable expectation that the services will produce significant improvement in the Covered Person's condition in a reasonable period of time. 16. Charges for anesthesia when given by a Doctor. 17. Durable medical equipment as defined by the Plan. 18. Travel: a. by train, bus or commercial airline in the continental U.S. and Canada to, but not from, a Hospital for needed special care; b. by professional ambulance used locally to a Hospital. 19. Routine mammographic screening as defined in the Wellness Care Benefit section, 20. Expenses for pregnancy will be payable on the same basis as any Illness for a female employee or covered dependent wife. No Benefits will be payable for expenses which relate to the pregnancy of a dependent Child except for Complications of Pregnancy, as defined in General Definitions. 21. Expenses Incurred for the treatment of alcoholism, drug abuse and Mental Health Conditions as defined by the Plan. 88E -GE 34 MEDICAL CARE BENEFITS - Continued 22. Charges incurred for Wellness Care expenses as shown on the Schedule and as defined in the Wellness Care section. 23. Home Health Care as defined in the Home Health Care section. 24. Hospice Care as defined in the Hospice Care section. 25. Treatment of Temporomandibular Joint Dysfunction, subject to the maximum shown on the Schedule. 26. Manual Manipulation as defined by the Plan. 27. Organ Transplants as defined by the Plan. 28. Oral surgery. 29. Amniocentesis testing for high risk pregnancy or when mother is 35 years of age or older. 30. Treatment of chronic pain and pain management, including services for pain rehabilitation. 31. Diagnosis of infertility. 32. Elective sterilization. 33. Group therapy. 34. Counseling. 35. Diet counseling services, performed by a Dietician or Nutritionist. If any of the preceding Covered Expenses are incurred during a covered Inpatient Hospital Confinement or as a covered outpatient Hospital charge, they will be paid as covered Hospital charges or outpatient Hospital charges, as the Plan determines appropriate, and not as a separate Benefit. 88E -CE 35 MEDICAL CARE EXCLUSIONS AND LIMITATIONS Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Medical Care Benefits. These are: 1. Charges not included as Covered Expenses. 2. Blood or plasma when a refund or credit is made for those items. 3. Cosmetic or plastic surgery and related charges, unless due to: a. an accidental Injury; or b. a birth defect; and which interferes with a normal function of the body or causes physical pain. 4. Hearing aids and their fitting. 5. Eyeglasses or contact lenses and the fitting of such (except the first pair after cataract surgery). These items are covered under the Vision Care Benefit. Refer to the Vision Care Benefit section for coverage information. 6. Eye refractions. 7. Care or supplies furnished due to: a. an act of war (declared or undeclared); b. insurrection or Riot. 8. Care or supplies which are furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place unless: a. for Emergency treatment when You or Your dependent must pay for those services; b. for non - service connected disabilities in a Veterans Administration Hospital; c. incurred by a U.S. military retiree (covered by this Plan) and his/her covered dependents, while confined in a military medical facility. 88E -EX 36 MEDICAL CARE EXCLUSIONS AND LIMITATIONS - Continued 9. Care and services to the extent furnished or payable under: a. a plan or program operated by a National Government or one of its agencies; b. a state cash sickness or similar law. 10. Care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage (except as may be required to fulfill any Participating Provider contractual obligations). 11. Injury or Illness resulting from taking part in the commission of an assault or felony or being engaged in an illegal occupation. 12. Injury or Illness arising out of employment, whether or not You or Your dependent is covered by Workers' Compensation or similar laws. 13. Exercise for the eyes (orthoptics). 14. Psychological testing. 15. Nerve stimulators. 16. Services or supplies for obesity, weight reduction or dietary control, except when provided for treatment of morbid obesity. 17. The following types of care: a. Custodial Care; b. care to assist the Covered Person in the activities of daily living; c. maintenance care, not expected to improve the Covered Person's medical condition. 88E -EX 37 MEDICAL CARE EXCLUSIONS AND LIMITATIONS - Continued 18. Charges incurred by other than the diagnosed patient except as provided in the Organ Transplant benefit. 19. Orthodontic treatment, or any other non - surgical procedure, care, or supply to correct a malocclusion of the teeth. 20. Treatment of teeth or nerves connected to teeth, except: a. oral surgery; b. treatment of an accidental Injury to natural teeth; or c. covered Hospital charges (as defined) when needed for dental care. 21. Any service rendered by a Close Relative or someone having the same legal residence as the Covered Person. 22. Expenses which relate to the pregnancy of a dependent Child except for Complications of Pregnancy, as defined under General Definitions. 23. In -vitro fertilization, artificial insemination, infertility treatment and all related expenses (except necessary care and supplies needed to diagnose infertility), family planning or contraceptive services. 24. Reversal of an elective sterilization procedure. 25. Surgical correction of eye refraction which can be corrected by eyeglasses or lenses (radial keratotomy, keratectomy, keratoplasty). 26. Purchase or rental of luxury medical equipment when standard equipment is Appropriate for the Covered Person's condition (e.g., motorized wheelchairs or other vehicles, bionic or computerized artificial limbs). 27. Education or training of any type for the treatment of learning disabilities and attention deficit disorders; I.Q. testing except in connection with assessment or treatment of a speech, language or hearing disorder. 28. Thermograms, temperature gradient studies. 88E -EX 38 MEDICAL CARE EXCLUSIONS AND LIMITATIONS - Continued 29. Any care or supplies received prior to the Effective Date or after the Termination Date of this coverage (unless coverage is continued according to some Plan provision). 30. Any service rendered by a person who is not legally qualified to perform that service. 31. Sex transformations and hormones related to such. 32. Elective induced abortion, unless carrying the fetus to full term would seriously endanger the life of the mother. If complications arise after the performing of an abortion, any Covered Expenses Incurred to treat those complications will be considered under this Plan; but the initial costs relating to the abortion will not be covered. 33. Charges for or in connection with smoking cessation and nicotine withdrawal. Prescriptions for smoking cessation or nicotine withdrawal are covered under the Prescription Drug Benefit. Refer to the Prescription Drug Benefit section for coverage information. 34. Charges for or in connection with acupuncture. 35. Charges made by a Doctor for his /her time on "standby" status if he/she performs no actual service. 88E -EX 39 MEDICAL CARE BENEFIT PROVISIONS Conditions and Maximums for Treatment of Non - Serious and Serious Mental Health Conditions The Plan Will Pay Benefits for the treatment of a Non - Serious Mental Health Condition while confined in a Hospital. Coverage is limited to 30 days in any calendar year. Medical Care Benefits for psychiatric /psychological services of a Doctor for the treatment of a Non- Serious Mental Health Condition received while confined as an inpatient in a Hospital are limited to the Covered Expense Incurred for up to 30 inpatient Hospital visits per calendar year. As an alternative to inpatient Hospital days, medical Benefits for Partial Hospitalization, Residential Treatment or crisis respite care for the Covered Person may also be provided. Two alternate days will reduce, by one day, the 30 days available for inpatient Hospital treatment. Medical Care Benefits for psychiatric/psychological services of a Doctor for the treatment of a Non- Serious Mental Health Condition received while not so confined are limited to the Covered Expense Incurred for up to 30 visits per calendar year. 88E -N &M 40 MEDICAL CARE BENEFIT PROVISIONS - Continued For Plan purposes, a "Non- Serious Mental Health Condition" means any of the following conditions or diagnosis; anxiety disorders, somatoform disorders, autism and other disorders of infancy, childhood and adolescence and all other diagnoses as presented in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders as published by the American Psychiatric Association, including such disorders which are biologically or organically based or due to biochemical imbalances, but excluding Serious Mental Health Disorders such as paranoid and other psvcholoaic disorders, schizophrenia, bipolar disorders (mixed, manic and depressive). major depressive disorders (single episode or recurrent) and schizo - affective disorders (bipolar or depressive) which will be paid as any other Illness. and NOT under the Non - Serious Mental Health provision. Conditions of alcoholism and drug abuse are excluded. "Partial Hospitalization" means continuous treatment for at least three hours, but not more than 12 hours, in any 24 hour period, in a licensed facility by a licensed health care professional acting within the scope of his/her license for the treatment of Mental Health Conditions. This may be referred to as a Partial Hospitalization Program (PHP) or Day program. "Residential Treatment " means a 24 hour a day program under the clinical supervision of a mental health professional, in a community residential setting other than an acute care hospital, for the active treatment of mentally ill persons, including a residential treatment center (RTC). 8BE -N &M 41 MEDICAL CARE BENEFIT PROVISIONS - Continued Conditions & Maximums for Treatment of Alcoholism and Drug Abuse (Combined) The Plan Will Pay Benefits for the treatment of alcoholism and drug abuse while confined in a Hospital. Coverage is limited to a combined 30 days in any calendar year and includes a lifetime maximum of $25,000. Medical Care Benefits for psychiatric/psychological services of a Doctor for the treatment of alcoholism and drug abuse received while confined as an inpatient in a Hospital are limited to the Covered Expense Incurred for up to a combined 30 inpatient Hospital visits per calendar year. Medical Care Benefits for psychiatric /psychological services of a Doctor for the treatment of alcoholism and drug abuse received while not so confined are limited to the Covered Expense Incurred for up to a combined 30 visits per calendar year and include a $1,000 maximum. 88E -N &M 42 MEDICAL CARE BENEFIT PROVISIONS - Continued Durable Medical Equipment The Plan Will Pay for durable medical equipment (including orthopedic and prosthetic devices) which can withstand repeated use, is not disposable, is prescribed by a Doctor only when Medically Necessary, is appropriate for use in the home, and is not useful in the absence of an Illness or Injury, including but not limited to the following 1. man -made limbs or eyes to replace natural limbs or eyes; 2. casts, orthopedic splints or crutches; 3 trusses or braces needed because of: a. an Injury or Illness; b. a disabling condition existing since birth; 4. oxygen; 5. rental of equipment for giving oxygen or to aid in breathing if the equipment has a mouthpiece, hose and compressor; 6. temporary rental of wheelchairs or hospital bed, or purchase of wheelchairs or hospital beds if the Covered Person's condition requires an indefinite, prolonged period of use; 7. dialysis equipment rental, supplies, upkeep and training for You or Your dependents to use this equipment; 8. ostomy bags and supplies; 9. glucometers, dextrometers, dextrostix, and rental of infusion pumps and supplies; 10. burn pressure garments or dressings; 11. breast prostheses (as defined under the Post- Mastectomy Coverage provision) and initial post- mastectomy holding bra. 88E -N &M 43 MEDICAL CARE BENEFIT PROVISIONS - Continued 12. adaptive equipment or modifications to wheelchairs or hospital beds which are prescribed by a Doctor as necessary for the treatment of the injury or Illness. 13. Jobst stockings, when prescribed by a Physician, limited to 3 pair per year. Benefits will also be provided for adjustments, repair and replacements of covered prosthetic devices, special appliances and surgical implants when required because of wear or change in a Covered Person's condition (excluding dental appliances and post - mastectomy holding bra). Specifically excluded from coverage are items such as bandages, diapers, formula, toilets, shower or bath equipment, air conditioners or air filters, exercise equipment, whirlpools, hot tubs, and splinting of teeth. Covered Expenses for the rental of durable medical equipment will not exceed the purchase price for such equipment. 88E -N &M 44 MEDICAL CARE BENEFIT PROVISIONS - Continued Newborns' and Mothers' Post - Delivery Coverage The Plan Will Pay Benefits for post - delivery inpatient Hospital care for a mother and her newly born Child, regardless of whether or not the birth occurred in a Hospital. Such inpatient care will be in accordance with the guidelines recommended by the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists which is 48 hours following a vaginal delivery, or 96 hours following a caesarean section. A decision to shorten the above length of stay may be made by the attending Physician in consultation with the mother. The Plan Will Pay Benefits described in this provision on the same basis as any Illness for a Covered Person eligible for pregnancy Benefits under the Plan. The number of hours of Hospital length of stay provided above are not subject to the Concurrent Review or Pre- Treatment Authorization requirements of the Managed Health Care section. Hospital length of stays extending beyond the above number of hours are subject to the Concurrent Review requirements of the Managed Health Care section. 58E -BP 45 MEDICAL CARE BENEFIT PROVISIONS - Continued Post - Mastectomy Coverage Coverage of a Medically Necessary mastectomy will also include coverage of the following: 1. physical complications during any stage of the mastectomy, including lymphedemas; 2. reconstruction of the breast; 3. surgery on the non - diseased breast to attain the appearance of symmetry between the two breasts; and 4. breast prostheses. The Plan Will Pay Benefits on the same basis as for similar services. This coverage will be provided in consultation with the attending Physician and the Covered Person. Benefits are subject to the Pre - Treatment Authorization requirements of the Managed Health Care section. Conditions and Maximums for Manual Manipulation Benefit Charges for services provided by a Doctor or chiropractor involving manual manipulation of the spinal skeletal system including the surrounding tissue to restore proper articulation of joints and alignment of bones or nerve functions, also to include Lab and x -ray. In no event shall the calendar year Maximum Benefit exceed $500. Charges in excess of this maximum will not be included as Covered Expenses under the Plan. This limitation will not apply if such services are rendered: 1. during general anesthesia; 2. during a surgical cutting procedure; or 3. while a Covered Person is confined as an inpatient in a Hospital. 88E -BP 46 MEDICAL CARE BENEFIT PROVISIONS - Continued Organ Transplants The Plan Will Pay Benefits for Hospital and Doctors' services for the surgical removal of human organ or tissue from a living donor to a transplant recipient as follows: 1. when the transplant recipient and donor are both Enrolled for coverage under the Plan, Benefits for Covered Expenses will be provided for both patients under the recipient's coverage; 2. when only the transplant recipient is Enrolled for coverage under the Plan, Benefits for Covered Expenses will be provided for the recipient. Benefits may also be provided for the donor for Covered Expenses under the recipient's coverage, but only if those services are not eligible under any other coverage available to the donor; 3. when the donor is Enrolled for coverage under the Plan but the transplant recipient is not, Benefits for Covered Expenses rendered to the donor will not be provided. Benefits will not be provided for services rendered to the transplant recipient; provided the transplant has been reviewed and approved by Us and the Utilization Management Organization (UMO). 68E -BP 47 MEDICAL CARE BENEFIT PROVISIONS - Continued Temporomandibular Joint Dysfunction Benefit Covered Expenses Incurred for treatment of Temporomandibular Joint Dysfunction (TMJ) are payable on the same basis as any Illness. Benefits payable for Covered Expenses will not exceed a Lifetime Maximum Benefit of $5,000. Wellness Care Benefits Wellness medicine emphasizes treatment to avoid possible health problems as an altemative to postponing treatment until symptoms appear. The Plan includes Benefits to help You and Your covered dependents avoid future health problems by providing Benefits for care that can prevent Illness or detect it in its early stages. This can often result in more cost- effective treatment and make recovery from Illness more likely. 1. The Plan Will Pay 100% (without application of the Deductible) of Covered Expenses for immunizations, office visit, Lab and x -ray for Your covered dependent child(ren). 2. The Plan Will Pay 100% (without application of the Deductible) of Covered Expenses for pap smear, office visit, mammogram, physical examination, PSA/prostate test, Lab, x -ray and immunizations for You and Your covered dependent spouse. All Wellness Care charges are subject to a per person calendar year maximum of $350. One routine pap smear, physical examination or PSA/prostate test will be allowed per person, per calendar year. 88E -BP 48 MEDICAL CARE BENEFIT PROVISIONS - Continued Home Health Care Benefits If You or Your covered dependent is confined in a Hospital (and Benefits are payable under this Plan for the Hospital confinement), but: 1 the attending Physician certifies that the Covered Person could go home if certain medical services were provided there for continued care of the same Illness or Injury; and 2. the Physician provides a written plan for such home care, to be administered by a licensed Home Health Care Agency; The Plan Will Pay Benefits at the level shown on the Schedule (subject to the Deductible) of all Covered Expenses (as defined in the Medical Care Benefits section) Incurred as part of the home care plan. Benefits are limited to a calendar year PPO - $10,000 Maximum Benefit of. Non -PPO $7,000 Subject to any applicable Maximum Benefits and to Our prospective and retrospective review of the treatment plan, Home Health Care coverage will continue as long as the Covered Person's Physician continues to certify the need for such care. If Benefits are paid for a Covered Expense under this provision, payment will not be made for that same expense under any other Plan provision. 88E -HHC 49 MEDICAL CARE BENEFIT PROVISIONS - Continued Home Health Care Benefits are not payable for: 1. Custodial Care; 2. transportation service; 3. services of someone who lives with the Covered Person; 4. services not included in the written home care plan of the Physician of record; 5. services rendered at a time when the Covered Person is not under the care of the Physician who set up the home care plan; 6. any items excluded under the Medical Care Exclusions section of the Plan. 88E -HHC 50 MEDICAL CARE BENEFIT PROVISIONS - Continued Private Duty Nursing Care Benefit If You or Your Covered Dependent requires skilled nursing care for an Injury or Illness, in lieu of an inpatient Hospital stay or for the prevention of an acute Hospital or Skilled Nursing Facility stay, and the Covered Person's attending Physician prescribes a skilled nursing treatment plan, The Plan Will Pay Benefits for the Reasonable and Customary charges at the level shown on the Schedule (subject to the Deductible) for: 1. the private duty nursing services of an R.N. or L.P.N.; and 2. the nursing supplies used by the nurse to treat the Illness or Injury as prescribed in the treatment plan, except: 1. visits by a nurse (R.N. or L.P.N.) are limited to one a day and may not exceed four hours per day; 2. services and supplies must be Medically Necessary and Appropriate and are subject to Our prospective and retrospective review of the treatment plan. The Physician's treatment plan must be submitted to Us for Our review and must be updated every 30 days by the Physician. If Benefits are paid for a Covered Expense under this provision, payment will not be made for that same expense under any other Plan provision. Private Duty Nursing Care Benefits are not payable for: 1. Custodial Care; 2. services not included in Your Physician's skilled nursing care treatment plan; 3. any items excluded under the Medical Care Exclusions section of the Plan. 88E -SN 51 MEDICAL CARE BENEFIT PROVISIONS - Continued Hospice Care Benefits When Your or Your covered dependent's Physician recommends (in writing) on or before Hospice care is started a plan of Hospice care for: 1. palliative care of a terminal Illness (where life expectancy is less than six months); and 2. You or Your dependent elects (in writing to Us) to follow the Physician's proposed treatment plan; The Plan Will Pay Benefits at the level shown on the Schedule (subject to the Deductible) of at Covered Expenses (as defined in the Medical Care Benefits section) Incurred as part of the Hospice care plan, not to exceed: 1. pre -death and bereavement counseling for the family, limited to immediate family during the 3 month period after death; 2. a Lifetime Maximum Benefit of: PPO - $20,000 Non -PPO - $15,000 If Benefits are paid under this provision for any Covered Expense, payment for that same expense will not be duplicated under any other Plan provision. These Benefits are in lieu of any other Plan coverage for treatment related to the terminal Illness while the Covered Person is confined in a Hospice. Coverage under this provision ends if You or Your dependent elects (in writing to Us) to discontinue Hospice care, or the Maximum Benefit has been paid. 88E -HC 52 MEDICAL CARE BENEFIT PROVISIONS - Continued Hospice Care Benefits are not payable for: f. services provided by persons who do not regularly charge for their services; 2. counseling which is not provided as part of the Hospice care plan; 3. services provided by homemakers, caretakers and the like; 4. funeral expense; 5. treatment intended to cure the terminal Illness. 88E -HC 53 MANAGED HEALTH CARE This MANAGED HEALTH CARE section applies to Covered Persons whose Medical Identification card indicates the following as their Participating Provider Organization: One Health Plan READ THIS SECTION CAREFULLY FAILURE TO USE THESE PROVISIONS MAY COST YOU MONEY Pre - Treatment Authorization All Inpatient Hospital Confinements, except for Emergency confinements, and all surgical procedures that are performed outside of a Doctor's office must be reviewed and authorized PRIOR to admission or surgery in order to determine the Medical Necessity of care. The Utilization Management Organization (UMO) must be contacted as soon as Hospital confinement or a surgical procedure to be performed outside a Doctor's office is recommended. Emergency confinements must be reported to the UMO within 48 hours of the Emergency admission. The telephone number for the UMO is shown on a Covered Person's medical identification card. If the UMO's procedures for requesting Pre- Treatment Authorization are not followed, the Doctor or Hospital will be notified of the proper procedures to follow for requesting Pre- Treatment Authorization within five days after the initial contact was made (within 24 hours if Urgent Care is involved). 88- MHCA(G)(10 -02) 54 MANAGED HEALTH CARE - Continued The UMO will obtain all information, including pertinent clinical information, necessary to make a decision regarding authorization. Requests for information will be limited to those necessary to make a determination. The Covered Person will be notified of the UMO's decision no later than 15 days after the date the UMO is contacted for the authorization request. If a decision cannot be made due to matters beyond the control of the UMO, the Covered Person will be notified, within the initial 15 day decision period, of the reason for the extension and the date by which a decision is anticipated. If additional information is needed, the Doctor or the Hospital will be notified within the initial 15 day decision period and will have at least 45 days from receipt of the notice to return the requested information. If the information is received within the 45 day time frame, the UMO will render a decision no later than 15 days after the date the information is received. If the Doctor or Hospital fails to provide the necessary information, the UMO will not be able to authorize the services and the penalties shown herein may be applied to a Covered Person's Benefits. The UMO will make a determination on requests for Pre- Treatment Authorizations involving Urgent Care conditions no later than 72 hours after receipt of the request. If additional information is needed in order to make a determination, the Doctor or Hospital will be notified within 24 hours of receipt of the request and will have at least 48 hours from receipt of the notice to provide the necessary information. The UMO will inform the Covered Person and Doctor or Hospital of the decision the earlier of 48 hours after receipt of the necessary information or 48 hours after the end of the time period for providing the necessary information. 88- MHCA(G)(10 -02) 55 MANAGED HEALTH CARE - Continued "Urgent Care" means that the standard 15 day decision - making time period would place the life or health of a Covered Person in serious jeopardy, the Covered Person's ability to regain maximum function would be jeopardized or, in the Doctor's opinion would subject the Covered Person to unmanageable pain. A Doctor may determine whether Urgent Care is involved. If a Doctor has not made that determination, the determination may be made by a representative of the Plan, applying the judgment of a prudent layperson possessing an average knowledge of health and medicine. If a Covered Person utilizes a Participating Provider, the Participating Provider is responsible for contacting the UMO. If the Participating Provider does not contact the UMO, the Covered Person will not be responsible for a Pre - Treatment Authorization Penalty. If a Covered Person DOES NOT utilize a Participating Provider, he/she is responsible for contacting the UMO. If the UMO is not contacted, a Pre - Treatment Authorization Penalty of $500 will apply to covered Hospital charges and any related expenses incurred during an eligible but unauthorized Hospital admission before normal Benefits of the Plan are calculated. If a Covered Person DOES NOT utilize a Participating Provider, he/she is responsible for contacting the UMO. If the UMO is not contacted, a Pre - Treatment Authorization Penalty of $500 will apply to surgeon's charges and any related expenses for surgical procedures that are performed outside of a Doctors before normal Benefits of the Plan are calculated. 88- MHCA(G)(10 -02) 58 MANAGED HEALTH CARE - Continued If the Inpatient Hospital Confinement occurs for surgical treatment, only one penalty will be imposed. Regardless of the participation status of the provider, if a Covered Person fails to comply with the UMO's determination, a Pre - Treatment Authorization Penalty of $500 will apply to covered Hospital charges and /or surgeon's charges and any related expenses incurred as a result of such confinement and/or surgery before normal Benefits of the Plan are calculated. If the Inpatient Hospital Confinement occurs for surgical treatment, only one penalty will be imposed. Concurrent Review In addition to having Hospital admissions authorized prior to admission, a Concurrent Review of treatment (again for Medical Necessity) will be conducted throughout the period of confinement. If additional days of confinement are requested beyond those initially authorized by the UMO, the UMO must be contacted to obtain authorization for the continued stay. If the request involves Urgent Care and is made to the UMO at least 24 hours before the end of the initially authorized days, the Covered Person will be notified within 24 hours as to whether the continued stay will be authorized. If the request is not made at least 24 hours before the end of the initially authorized days, the Urgent Care time periods described in the Pre - Treatment Authorization provision will apply. If the UMO's procedures for requesting Concurrent Review authorization are not followed, the Doctor or Hospital will be notified of the proper procedures to follow for requesting Concurrent Review authorization within five days after the initial contact was made (within 24 hours if Urgent Care is involved). 88- MHCA(G)(10 -02) 57 MANAGED HEALTH CARE - Continued If the request does not involve Urgent Care, the Covered Person will be notified of the UMO's decision no later than 15 days after the date the UMO is contacted for the authorization request. If a decision cannot be made due to matters beyond the control of the UMO, the Covered Person will be notified, within the initial 15 day decision period, of the reason for the extension and the date by which a decision is anticipated. If additional information is needed the Doctor or the Hospital will be notified within the initial 15 day decision period and will have at least 45 days from receipt of the notice to return the requested information. If the Doctor or Hospital fails to provide the necessary information, the UMO will not be able to authorize the services and the penalties shown herein may be applied to a Covered Person's Benefits. If the information is received within the 45 days, the UMO will render a decision no later than 15 days after the date the information is received. If, prior to the end of an authorized stay, the UMO finds the stay is no longer Medically Necessary, the Covered Person will be notified in advance that the stay will not be covered by the Plan. If a Covered Person utilizes a Participating Provider, the Participating Provider is responsible for contacting the UMO. If the Participating Provider does not contact the UMO, the Covered Person will not be responsible for a Concurrent Review Penalty. If a Covered Person DOES NOT utilize a Participating Provider, he/she is responsible for contacting the UMO. If the UMO is not contacted, a Concurrent Review Penalty of $100 will be imposed for each day of unapproved confinement before normal Benefits of the Plan are calculated. 88- MHCA(G)(10 -02) 58 MANAGED HEALTH CARE - Continued Regardless of the participation status of the provider, if the Covered Person fails to comply with the UMO's determination, a Concurrent Review Penalty of $100 will be imposed for each day of unapproved confinement before normal Benefits are calculated. "Concurrent Review" means the UMO will evaluate the medical need for continued hospitalization. This will involve consultation with the Covered Person's Doctor and comparison of clinical information to professionally developed medical standards of care. Out - of - Town Care If a Covered Person is out of town and needs non - Emergency Care, he/she may be able to locate a Participating Provider by calling the phone number indicated on his/her medical identification card or by using the intemet web address, www. greatwesthealthcare .com/nationalaccounts. Since the PPO network is nationwide, a Covered Person may be able to utilize a Participating Provider and receive a higher level of Benefits. 88- MHCA(G)(10 -02) 59 MANAGED HEALTH CARE - Continued Retrospective Review The Utilization Management Organization (UMO) may evaluate the medical record of those Covered Persons who were not reviewed under Pre - Treatment Authorization or Concurrent Review. If the UMO is unable to authorize any portion of the stay or treatment, the Doctor will be contacted to provide additional information. No Benefits will be paid for any days of the Hospital stay or treatment that would not have been authorized by the UMO. The decision concerning authorization will be made within 30 days after the claim that is the subject of the Retrospective Review is received. If additional information is needed, the Covered Person or his /her Doctor or Hospital will be notified within 30 days of receipt of the claim and will have at least 45 days from receipt of the notice to provide the information. If the information is received within 45 days, a decision will be made within 15 days of the day the UMO receives the additional information. If the additional information is not received within the 45 day period, the Covered Person should consider the claim, or portion thereof that is under review, to be denied. The claim will be reconsidered if the information is subsequently received. Written notice of the decision will be sent to the Covered Person. "Retrospective Review" means the UMO will review the medical need for hospitalization or treatment after such hospitalization or treatment has taken place. This will involve consultation with the Covered Person's Doctor and comparison of clinical information to professionally developed medical standards of care. 88- MHCA(G)(10 -02) 60 MANAGED HEALTH CARE - Continued Benefits For Services of a Participating Provider The Plan provides different levels of Benefits depending on whether or not a Covered Person uses the services of a Participating Provider. Generally, Benefits will be payable at a higher level if services of a Participating Provider are used; although there may be additional Plan requirements. Participating Providers will submit claims on the Covered Person's behalf and will contact the UMO to obtain necessary approvals. Covered Persons may utilize the provider of their choice. If a Covered Person selects a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. If a Covered Person chooses not to use a Participating Provider, he/she may be responsible for filing his/her own claims and obtaining the proper Utilization Management approvals. If a Covered Person receives Emergency Care and cannot reasonably reach the Participating Provider, The Plan Will Pay Medical Care Benefits as if services were performed by a Participating Provider. Emergency Services Emergency Care is covered for Emergency Medical Conditions (as defined in the General Definitions section). If You or Your dependent has an Emergency Medical Condition, go directly to the nearest Hospital. Refer to the Pre - Treatment Authorization provision for information on contacting the UMO in the event of an Emergency Hospital admission. The Plan Will Pay Medical Care Benefits as shown on the Schedule. 88- MHCA(G)(10 -02) 61 MANAGED HEALTH CARE - Continued Emergency Room Deductible In addition to any other Deductible, an Additional Deductible as shown on the Schedule will be imposed before Benefits are payable for Covered Expenses Incurred during a visit to an emergency room of a Hospital. This Additional Deductible will not apply if the Covered Person is confined in the Hospital immediately after the visit. Disease Management for Chronic Medical Conditions Disease Management is a program which provides specialized education to a Covered Person with a Chronic Medical Condition to improve his/her health. The Plan will provide Disease Management Program (Program") services if the Covered Person meets the Program's predetermined medical criteria and is expected to benefit from the Program. Under this Program, the Covered Person will receive services, coordinated by an R.N., consisting of assessment and educational materials for targeted diseases. There is no charge to the Covered Person for these services. Utilization of the Program's services is voluntary; a Covered Person is not required to participate in the Program. By providing these services, neither the Plan nor its contracted provider promises or guarantees that any intended results will be obtained. The Program does not provide any medical treatment, therapeutic or Home Health Care. It provides for assessment and education in self- management of Chronic Medical Conditions. 66- MHCA(G)(10 -02) 62 MANAGED HEALTH CARE - Continued To participate in the Program, a Covered Person may call the toll -free member services telephone number shown on his /her medical identification card or access the internet web address: www. greatwesthealthcare .com /nationalaccounts. Appeals Procedure A Covered Person or his/her Doctor, or other Authorized Representative has the right to appeal an Adverse Determination. The address to which to send an appeal and any other contact information will be included with an Adverse Determination. If a Covered Person or his /her Doctor or other Authorized Representative does not agree with an Adverse Determination, a Covered Person or his/her Doctor or other Authorized Representative may initiate the appeal by telephoning, faxing or submitting a written request to the UMO. Additional evidence may be presented for consideration on appeal. Initial appeal requests must be received within 180 days of the initial Adverse Determination. "Authorized Representative" means the Covered Person's spouse, parent, Doctor or Hospital. It will also include any other person who submits proof that he or she has been designated by the Covered Person or a court of law to act on such person's behalf. "Adverse Determination" means that the Covered Person's Hospital admission, continued hospital stay or other health care service has been reviewed and, based upon the information provided, does not meet the UMO's requirements for being Medically Necessary, Appropriate, effective or in the proper setting and may result in noncoverage of the health care service. 88- MHCA(G)(10 -02) 63 MANAGED HEALTH CARE - Continued In connection with Our review of the appeal, You have the right to 1) see the Plan and other relevant papers affecting the claim, 2) argue against the denial in writing, 3) have a representative act on Your behalf in the appeal. All comments, documents, records and other information submitted in connection with the claim being reviewed will be considered. Standard Appeal Within 15 days of receiving the appeal request, the UMO will notify the person who submitted the appeal of its decision in writing. The appeal will be reviewed by a Doctor who: 1. has appropriate training and experience in the field of medicine involved in the medical judgment; 2. was not previously involved with the Adverse Determination; and 3. is not the subordinate of the person previously involved with the Adverse Determination. Expedited Appeal If the Standard Appeal process would place the life or health of a Covered Person in serious jeopardy or the Covered Person's ability to regain maximum function would be jeopardized, a request for an expedited appeal may be phoned in by the Covered Person, a Doctor with knowledge of the Covered Person's medical condition or other Authorized Representative (if any). The UMO will conduct the review by telephone or through the exchange of written information. The Covered Person, his /her Authorized Representative (if any), and his/her Doctor will be informed of the decision by telephone or fax within 72 hours of the UMO's receipt of the appeal request. 88- MHCA(G)(10 -02) 64 MANAGED HEALTH CARE - Continued The appeal will be reviewed by a Doctor who: 1. has appropriate training and experience in the field of medicine involved in the medical judgment; 2. was not previously involved with the Adverse Determination; and 3. is not the subordinate of the person previously involved with the Adverse Determination. You may request information regarding voluntary appeals procedures. Second Appeal A Covered Person or his /her Doctor or other Authorized Representative may initiate a second appeal of the Adverse Determination by submitting a written request to the UMO within 60 days of the date of the Adverse Determination received as a result of an initial standard or expedited appeal. An independent external reviewer will evaluate all relevant information and render a decision that will be binding on the Plan. The decision will be rendered within 15 days of the date the UMO receives the appeal request. A second Expedited Appeal will be considered a voluntary appeal. Decisions regarding a second Expedited Appeal will be rendered within a time frame appropriate to the medical condition of the patient. There are no other voluntary appeal rights available with respect to the Pre- Treatment Authorization, Concurrent Review or Retrospective Review for Medical Necessity. You may request information regarding voluntary appeals procedures. 88- MHCA(G)(10 -02) 65 COORDINATION OF BENEFITS If this is not Your only Health coverage, the Benefits payable under this Plan, and any other group plan for the Allowable Expense Incurred during any Benefit Determination Period will be coordinated so that the combined Benefits paid or provided by all plans equal that amount which would be paid if this Plan were the only coverage. You must inform Us if You have other coverage (for example, through Your spouse's employer); and give Your consent to the release of information so that We may use this provision. You should first file Your claim with the primary plan (as determined below). When the claim is paid, send a copy of the charges and a copy of the Explanation of Benefits Statement from the first plan to the secondary plan (as determined below). This will accelerate the processing of Your claim. One of Your plans will be determined to be primary (using the rules below). The primary plan pays its full benefits first. If this Plan is deemed to be the secondary plan, the Benefits paid in addition to the benefits paid under the primary plan will not be an amount more than You would have received had this Plan been Your only coverage. A plan is primary when: 1. the plan does not have a COB provision; 2. the plan designates itself as an "excess" or "always secondary" plan; or 3. if both plans have a COB provision, under the rules it is determined to be primary. 88E -COB 88 COORDINATION OF BENEFITS - Continued When both plans have a COB provision, the order in which the plans provide benefits is determined using the first of the following rules which applies: Employee/dependent. The plan which covers the person as an active employee is primary. If You or Your dependent is also covered by Medicare, the plan covering the person as an active employee is primary, the plan covering the person as a dependent of an active employee is secondary, and then Medicare. Medicare is primary for Medicare eligible retired employees and their Medicare eligible dependents. 2. Dependent children. a. If the parents are not separated or divorced, the plan which covers the parent whose birthday (month and day) falls earlier in the calendar year is primary. If both parents have the same birthday (month and day), the plan which covered the parent longer is primary. If the other plan does not have the "birthday rule ", the rule in the other plan will determine the primary plan. b. If the parents are separated or divorced, the plan which covers the natural parent with custody is primary; followed by the plan which covers the step- parent who has married the natural parent with custody; and finally, the plan which covers the natural parent without custody. However, if the court decrees one of the parents responsible for health care expenses, the plan which covers that parent is primary. 88E -COB 67 COORDINATION OF BENEFITS - Continued If the decree names the parent other than the natural parent with custody, We must be notified and have actual knowledge of those terms. Any Benefits paid prior to actual knowledge will not be affected. The plan of the other parent and the plan of the spouse of the parent with custody will be secondary and third, respectively. If joint custody is granted by the court, the rules pertaining to parents who are not separated or divorced apply. 3. Active /inactive employee. The plan covering the employee who is neither laid off or retired is primary. If the other plan does not have this rule, this rule is ignored. 4. Continuation coverage. Continuation coverage provided under either federal or state law is secondary. If the other plan does not have this rule, this rule is ignored. 5. Length of coverage. If the primary plan cannot be determined using any of the rules above, the plan which has covered the person for the longest period of time will be considered primary. If this Plan is determined to be secondary, We will reduce Benefits payable so that the combined benefits provided by all plans during a claim determination period are not more than that amount which would be paid if this was the only Benefit Plan for the Covered Person. The actual benefit amounts available are determined by each plan's benefit provisions. Benefits payable under this Plan will never exceed the amount which would have been paid if there were no other plans involved. If Benefit payments under this Plan are reduced by COB, only the reduced amounts will be charged against Your Plan maximums. 88E-COB 68 COORDINATION OF BENEFITS - Continued If during Coordination of Benefits, payments are made in error, the plans will have the right to adjust payments among themselves. Such payments satisfy Our liability. If We overpay a claim, We will have the right to recover such overpayments from any person for, to whom, or with respect to whom such payments were made, any other insurance company, or any other organization. Definitions An "Allowable Expense" is the Reasonable and Customary amount for any necessary medical, dental, vision, or health care service which is covered (at least in part) by one of the plans. If a health plan provides services (rather than cash payments) a dollar value will be assigned in order to use this provision. When the primary plan penalizes You for not complying with plan provisions, such as failing to pre - certify, the amount of the reduction is not considered an Allowable Expense. A "Benefit Determination Period" means from January 1 of one year to December 31 of the same year A "plan" as used in this provision, is any of the following which provides health benefits or services: 1. a group or group blanket plan on an insured basis; 2. other plans which cover people as a group; 3. a self- insured or non - insured plan or other plan which is arranged through an employer, trustee or union; 4. a pre - payment plan which provides medical, vision, dental or health service; 85E -COB 69 COORDINATION OF BENEFITS - Continued 5. government plans, except Medicaid; 6. group auto insurance, but only to the extent medical benefits are payable under group auto insurance; 7. no -fault auto insurance on an individual basis, except where not allowed by the state in which this Plan is issued; 8. single or family subscribed plans issued under a group or blanket type plan; but the definition of plan shall not include: 1. hospital indemnity type plans; 2. school accident -type coverage. 85E -COB 70 PRESCRIPTION DRUG BENEFITS Employee and Dependent Prescription Drug Expense Benefit Multi -Tier Copayment Copayment Amount for each purchase of a Prescription Drug or injectable insulin or Prescription refill: SCHEDULE Generic Preferred All Other Brand Brands Participating Home Delivery Pharmacy $15.00 $30.00 $60.00 Participating Pharmacy $10.00 $20.00 $40.00 After the applicable Copayment is satisfied, The Plan Will Pay 100% 100% 100% The Medical Pre - Existing Conditions Limitations shall not apply to Prescription Drug Expenses. 88E- PD(01 -00) 71 PRESCRIPTION DRUG BENEFITS - Continued Unit Dose Limit -- the greater of 100 dose units or the following Day Supply Maximums: Participating Home Delivery Pharmacy Participating Pharmacy 90 day supply 30 day supply Drug charges which are covered to any extent under this Prescription Drug Expense Benefit are not covered under any other Medical or Dental Care Benefits of this Plan. The Copayment for Prescription Drugs may not be used toward satisfaction of the Medical Care or Dental Care Deductible or any out -of pocket maximums. When Injury or Illness causes You or Your dependent, while covered under the Plan, to incur Covered Prescription Drug Expenses, The Plan Will Pay Benefits for those Covered Expenses that exceed the Copayment Amount. These Prescription Drugs and medicines must be prescribed by a Doctor and obtained from a licensed Pharmacist or Doctor operating within the scope of his /her license. You or Your dependent incurs an expense on the date the drug or medicine is furnished. 88E- PD(01 -00) 72 PRESCRIPTION DRUG BENEFITS - Continued Prescription Drug Generic Option If a Brand Name drug does have a generic equivalent and You receive the Brand Name drug, You are required to pay the applicable Brand Name Copayment. If You receive the Generic Drug, You pay only the Generic Copayment. If a Brand Name drug does not have a generic equivalent, You pay only the Generic Copayment. Preferred Brand Option If Your Doctor prescribes a name brand drug that has been selected as a Preferred Brand, You pay the Preferred Brand Copayment. Your Employer will provide You with an initial list of Preferred Brands. This list is reviewed annually and can change. You may check whether a Brand Name drug is still on the list or if new Brand Name drugs have been added by referring to the current year's listing available from Your Employer. If Your Prescription is not for a drug on this list, You will pay the appropriate All Other Brands or Generic Copayment. Home Delivery Maintenance (Mail Order) Prescription Drug Option Most Maintenance Prescription Drugs are available through the Home Delivery Pharmacy. You pay a Copayment based upon whether the drug is a Generic, a Preferred Brand or All Other Brands Prescription Drug. The list of Preferred Brands is the same for both retail Pharmacies and the Home Delivery Pharmacy. Mail order must be used for maintenance medication. Retail is only available for the first three months supply. 88E- P0(01 -00) 73 PRESCRIPTION DRUG BENEFITS - Continued Prescription Drug Definitions 1. "Generic Drug" means a Prescription Drug known by its chemical name rather than by Brand Name. 2. "Home Delivery" means the Maintenance Prescription Drugs are delivered directly to You or Your dependent by mail. 3. "Home Delivery Pharmacy" means a U.S. Pharmacy that has a written contract with Us or Our authorized representative for Home Delivery of Maintenance Prescription Drugs. 4. "Maintenance Prescription Drug" means a Prescription Drug that You or Your dependent will take or use for more than 30 days. 5. "Pharmacy" means a licensed establishment where drugs are dispensed by a Pharmacist licensed in that state. "Pharmacy" also includes a Hospital Pharmacy. "Participating Pharmacy" means a U.S. Pharmacy that has a written contract with Us or Our authorized representative. 6. "Preferred Brand" means Brand Name Prescription Drugs selected by Our authorized representative for their high degree of overall clinical and cost effectiveness prescribed for use in treating common health conditions. 7. "Prescription" means the request for a drug by a Doctor licensed to prescribe drugs and each authorized refill. 8. "Prescription Drug" means a prescription legend drug that is: a. medicine required by federal law to bear the legend, "Caution: Federal law prohibits dispensing without a Prescription "; b. any other drug which, under the applicable state law, may only be dispensed upon the Prescription order of a Doctor. 88E- PD(01 -00) 74 PRESCRIPTION DRUG BENEFITS - Continued We will also consider the following to be Prescription Drugs; a. needles and syringes; b. Tretinoin and Differin, all dosage forms (e.g. Retin -A), for persons through the age of 22 years; c. injectable insulin; d. injectable Prescription Drugs; e. birth control pills, contraceptive devices, injections and implants; f. Prescription vitamins; g. diabetic supplies such as glucose strips, glucose monitors, ketone test tablets, and lancets; h. Adderall, Dexedrine and Desoxyn for persons through the age of 19 years; i. Viagra, limited to 6 pills per month; j. drugs approved by the FDA for use in treating AIDS; k. drugs used in the treatment of migraine therapy; I. prescription medications for smoking cessation, including nicotine patches; and m. growth hormones. 88E- PD(01 -00) 75 PRESCRIPTION DRUG BENEFITS - Continued Prescription Drug Exclusions Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Prescription Drug Benefits. These are: 1. Drugs or medicines prescribed for Injury or Illness arising out of employment, whether or not You or Your dependent is covered by Workers' Compensation or similar laws. 2. Drugs or medicines which can be legally obtained without a Prescription, except those items included in the definition of "Prescription Drug." 3. Drugs or medicines provided without charge. 4. The administration of drugs or insulin. 5. Drugs or medicine marked "Caution: Limited by federal law to investigational use." 6. Experimental drugs or medicines. 7. Drugs or injectable insulin in a quantity greater than that prescribed by a Doctor. 8. Drugs or injectable insulin purchased more than one year after the date of the Prescription. 9. Drugs or insulin while confined in a Hospital, Skilled Nursing Facility or a similar facility. 10. Healing devices; immunization agents; organic serum, blood or blood plasma; non - prescription vitamins, diet aids, health or beauty aids and delivery charges. 11. That part of one purchase of a drug or medicine that exceeds the Unit Dose Limit specified on the Schedule. 88E- PD(01 -00) 76 PRESCRIPTION DRUG BENEFITS - Continued 12. The following items (whether Brand Name or Generic) will not be covered regardless of the reason prescribed: a. tretinoin, all dosage forms (e.g. Retin -A), for individuals 23 years of age or older; b. minoxidil (Rogaine) for the treatment of alopecia; c. Nicorette, nicotine gum, patches or other over -the- counter smoking deterrent medications; d. anorectics (any drug or medicine used for the purpose of weight loss); e. diet supplements; f. infertility drugs or medicines; and g. Viagra in excess of 6 units per month. 13. Drugs, medicine and /or injectable insulin purchased at a non - participating pharmacy. 88E -PD(01 -001 77 DENTAL CARE BENEFITS SCHEDULE Employee and Dependent Dental Care Expense Benefit Calendar Year Deductible The Individual Deductible equals Covered Expenses in the amount of $50. The Family Unit Deductible equals Covered Expenses in the amount of $150. The Family Unit Deductible equals the amounts applied towards the Individual Deductibles until 3 family members satisfy their Individual Deductibles. The amount of actual Deductible satisfied may vary each year. The Family Unit Deductible must be satisfied by You and Your Family Unit members who are covered as dependents. No part of any Covered Expenses for which Benefits are paid or payable by the Plan may be used to satisfy the Family Unit Deductible. 88E -DSCH 78 DENTAL CARE BENEFITS - Continued Services 66E - DSCH 79 The Plan Deductible Will Pay Applies Preventive and Diagnostic Care 100% No Basic Dental Care 80% Yes Prosthetic Care 50% Yes Orthodontic Care for dependent Children under age 19 50% Yes Maximum Benefit for Covered Dental Care Expenses Incurred in any Calendar Year excluding Orthodontic Care $1,000 Maximum Lifetime Benefit for Covered Orthodontic Care $1,000 When You or Your dependent incurs Covered Dental Care Expenses exceeding the Deductible, The Plan Will Pay Benefits for those expenses up to the maximums shown on the Schedule. DENTAL CARE BENEFITS - Continued Voluntary Pre - Determination of Dental Benefits Pre - Determination of Dental Benefits may be requested by a Covered Person when the estimated amount of charges will be $300 or more. We will review the description of planned treatment and expected charges, including those for diagnostic x -rays. This information should be sent to Us before the dental work is started if the Covered Person requests the Pre - Determination of Benefits. If there is a major change in the treatment plan, a revised plan should be submitted for review. When more than one dental service could provide suitable treatment based on common dental standards, We will recommend alternate methods of treatment which produce a satisfactory result. When there has not been a Pre - Determination of Benefits, We will determine the expenses that will be included as Covered Dental Care Expenses at the time the claim is received. Pre - Determination of Benefits does not guarantee payment. The estimate of Benefits payable may change based on the Benefits, if any, for which a Covered Person qualifies at the time services are completed. 88E -DSCH 80 DENTAL CARE BENEFITS - Continued Deductible Requirement Your or Your dependent's Deductible Requirement will be met when the Covered Dental Care Expenses Incurred while covered during each calendar year equal the Deductible shown on the Schedule. You are required to pay this amount, the Plan will not reimburse You for this expense. The following special Deductible provision is included to help You and Your dependents meet this Deductible Requirement. Family Unit Deductible: The Family Unit Deductible Requirement will be met when all Covered Expenses applied to Individual Deductibles for covered members of Your family, in a calendar year, equal the amount shown on the Schedule. 88E -DSCH 81 DENTAL CARE BENEFITS - Continued Covered Dental Care Expenses The Plan Will Pay Benefits as shown on the Schedule for the following Covered Dental Care Expenses: 1. Preventive and Diagnostic Care which means: a. oral inspection; oral examination; b. exams including x -ray exams; c. diagnosis; d. Prophylaxis; e. Fluoride treatment to age 19. 2. Basic Dental Care which means remedial and restorative care and supplies for: a. necessary examinations and diagnostic services (including x -ray and laboratory tests) when such services are not covered as Preventive and Diagnostic Care; b. extractions of erupted teeth and unerupted teeth; c. fillings (amalgams); d. space maintainers; e. root canal therapy (endodontic care); f. treatment of the gums and tissues of the mouth (periodontic treatment); g. emergency care for the relief of pain (palliative care); h. the giving of anesthesia in connection with dental care; i. repair and /or relining of complete or partial dentures; 88E-DCE 82 DENTAL CARE BENEFITS - Continued j. Replacement of Dentures ,subject to the Pre - Existing Conditions Limitations,; (use if plan imposes pre- existing on Dental) if required due to: i. removal of natural teeth while covered under the Plan; ii. the initial placement of an opposing full denture; and Replacement of Dentures for any other reason will be covered only as described under Prosthetic Care below; k. sealants to age 19. 3. Prosthetic Care which means: a. inlays and onlays; b. initial installation of full or partial dentures; c. bridgework; d. crowns; e. crowns or Replacement of Dentures for reasons other than those stated as Basic Dental Care but only if the crowns or dentures that need replacing are more than five years old. 4. Orthodontic Care for dependent children to age 19 which means: a. preparing teeth and jaw for orthodontic treatment; b. furnishing orthodontic devices; and c. installing the devices. 88E -DCE 83 DENTAL CARE BENEFITS - Continued Dental Care Exclusions Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Dental Care Benefits. These are: 1. Dental care or supplies which are not included under Covered Dental Care Expenses. 2. Dental care or supplies furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place. 3. Dental care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage. 4. Dental care or supplies furnished as a result of taking part in the commission of an assault or felony or being engaged in an illegal occupation. 5. Dental care or supplies furnished as a result of an Illness covered by Workers' Compensation, occupational disease law or similar laws; or Injury if it arises out of or during the course of employment for pay or profit. 6. Dental care or supplies payable under another part of the Plan. 7. Dental care or supplies furnished as a result of: a. act of war (declared or undeclared); b. insurrection or Riot. 8. Charges incurred after the Covered Person is no longer covered for this Dental Care Benefit. 88E -DEX 84 DENTAL CARE BENEFITS - Continued 9. Supplies for dental care other than those used in a Doctor's office; or instructions in dental hygiene. 10. Oral care and supplies which are used to change vertical dimension or closure. These include but are not limited to: a. diagnostic procedures; b. balance procedures; c. restoration; d. fixed devices; e. movable devices. 11. Any service rendered by a Close Relative or someone having the same legal residence as the Covered Person. 12. Dental implants. 88E -DEX 85 VISION CARE BENEFITS Frames SCHEDULE Employee and Dependent Vision Care Expense Benefits Complete Examination Supplies: Per Lens Single Vision Prescription Bi -focal Prescription Tri -focal Prescription Lenticular Prescription Contact Lenses Scratch Resistant Lens Treatment Contact Lens Solution 88E -VC 86 Maximum Benefit Amount $200 per calendar year for all vision care expenses When You and Your covered dependents incur Covered Vision Care Expenses, The Plan Will Pay Benefits for those expenses up to the maximums shown on the Schedule. The Plan Will Pay Benefits for the following covered Vision Care expenses: 1. One Complete Eye Examination and History performed by a licensed optometrist or Physician. 2. Contact or eye glass lenses prescribed by a licensed optometrist or Physician. The Plan Will Pay for more than two lenses if required after cataract surgery. 3. Eye glass frames. VISION CARE BENEFITS - Continued Vision Care Exclusions Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Vision Care Benefits. These are: 1. Care and supplies: a. for special procedures, such as orthoptics and visual training; b. for medical or surgical treatment; c. provided under Workers' Compensation, or similar laws; d. needed for an Injury or Illness arising out of employment. 2. Non - prescription glasses or sunglasses. 3. Vision care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage. 4. Vision care and supplies furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place unless: a. for emergency treatment when You or Your dependent must pay for those services; b. for non - service connected disabilities in a Veteran's Administration Hospital; c. incurred by a U.S. military retiree (covered by this Plan) or his /her covered dependents, while confined in a military medical facility. 88E -VC 87 VISION CARE BENEFITS - Continued 5. Vision care and supplies to the extent furnished or payable under: a. a plan or program operated by a National Government or one of its agencies; b. a State Cash Sickness or similar law including any group insurance policy approved under such laws; c. another plan of Your Employer. 6. Vision care and supplies required as a result of: a. an intentionally self- inflicted Injury; b. taking part in the commission of an assault or felony or being engaged in an illegal occupation; c. an act of war declared or undeclared; d. surgery to correct vision. Vision Care Definitions 1. Complete Examination: means an eye examination that includes a new prescription if needed. 2. Orthoptics: means the teaching and training process for the improvement of visual perception and coordination of the two eyes for efficient and comfortable binocular vision. 88E -VSP 88 CLAIMS AND OTHER GENERAL PROVISIONS Notice and Proof of Claim You must give Us a written notice of claim for a medical or health claim (including vision and dental claims, if any), within 12 months after a Covered Expense is incurred. Within 15 days after We receive the notice of claim, We will send claim forms to You for giving proof of claim. If You do not receive these forms, You will satisfy the proof of claim requirement by giving Us a written statement of the nature and extent of the loss within the time limit provided below. You must give positive proof of claim to Us or Our authorized claim office for a medical or health claim (including vision and dental claims, if any) within 15 months after a Covered Expense is Incurred. You must give Us proper written notice and proof of loss before We will be liable for any loss. If You send Us proof as soon as reasonably possible, We will not reduce or deny claims merely because You cannot reasonably give notice and proof in writing within the time required. We may, as required by law, accept claims submitted by a third -party custodial parent or a provider (with the custodial parent's approval) for Covered Expenses Incurred by a covered dependent Child who is also eligible for a state medical assistance program (i.e., Medicaid). 88- GP(G)(10 -02) 89 CLAIMS AND OTHER GENERAL PROVISIONS - Continued We have the right to require additional information in order to determine Dental Care Benefits payable under the Plan. Additional information may include, but is not limited to: 1. a completed dental chart indicating all extractions, missing teeth, fillings, prostheses, periodontal pocket depths, orthodontic relationships and the dates of any services provided; 2. an itemized bill for dental services rendered; 3. x -rays, study models, laboratory and Hospital reports; 4. a clinical exam. Any cost incurred for providing the above information will be Your responsibility. Claims must be submitted to the address shown on Your identification card. The time periods shown in the Claim Decisions provision will begin to apply when the claim is received by Us or Our authorized claim office after being filed accords g to these Notice and Proof of Claim procedures. Payment of Claims 1. All Benefits due and not validly assigned will be paid to You as soon as We receive due proof. 2. If You die before The Plan Pays all of the Benefits to You, the Plan may pay any remaining Benefits in this order: a. to Your spouse, if living; b. to Your surviving children, in equal shares: c. to Your parents, in equal shares, or to the survivor; or d. to Your estate. 88- GP(G)(10A2) 90 CLAIMS AND OTHER GENERAL PROVISIONS - Continued 3. In any case where the person to whom We would pay Benefits cannot give a valid release, The Plan Will Pay any remaining Benefits in this order: a. to Your spouse, if living; b. to Your surviving children, in equal shares; c. to Your parents, in equal shares, or to the survivor; or d. to Your estate. If no person listed above survives You, the Plan may pay Benefits to the person or institution it determines gave the Covered Person care. 4. The Plan may, to the extent required by law, pay Benefits for claims incurred by a covered dependent Child directly to a custodial parent, a state agency or a provider. 5. Benefit payments pursuant to a qualified medical child support order (QMCSO) in reimbursement for expenses paid by a QMCSO -child or his /her legal representative (custodial parent or legal guardian) will be made to the QMCSO -child or his/her legal representative. 6. If You use a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. 7. The Plan may pay Benefits to the person or institution who gave You care. 8. Any payments We make under the above, will discharge Our liability to the extent of Our payment. We are not responsible for how the Benefits We pay are used. Legal Actions You may not sue Us for Benefits under the Plan: 1. before 60 days following the date You send Us proof of claim; 2. after 3 years following the end of the period required for giving proof of claim. 88- GP(G)(10 -02) 91 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Claim Decisions 1. Decisions on medical, dental or vision claims will be made within 30 days of the date We receive the claim. If a decision cannot be made for reasons beyond control of the Plan, We will notify You of: a. the reason for the delay; b. any information needed to perfect the claim; and c. the date by which We expect to make a decision. You will have 45 days from the date You receive the notice to provide the requested information. If We receive the necessary information within the 45 day time frame, a decision will be made within 15 days of Our receipt of the information, unless You agree to a longer period of time. If You do not provide the requested information within this time period, You should consider the claim to be denied. This denial will be reconsidered if the information is subsequently received. 2. Decisions on claims involving Pre - Treatment Authorization, Concurrent Review or Retrospective Review will be made in accordance with the procedures shown in the Managed Health Care section of the Plan. In the event a claim (other than a request for Pre - Treatment Authorization or Concurrent Review) is denied in whole or in part You will be notified in writing of the following: 1. the reason for denial; 2. specific reference to the Plan provisions on which the denial was based; 3. any additional material or information needed for further review of the claim; 88- GP(G)(10 -02) 92 CLAIMS AND OTHER GENERAL PROVISIONS - Continued 4. an explanation of the Plan's review procedure and time limits; 5. with respect to medical, dental or vision claims, the specific rule, guideline, protocol or similar criterion, if any, that was relied upon in deciding the claim, or a statement that such was relied upon and is available upon request; 6. with respect to medical, dental or vision claims, an explanation of the scientific or clinical judgment for determining a denial based on a medical judgment, Medical Necessity, or treatment that is Experimental, Investigational or Unproven, or a statement that such explanation is available free of charge upon request. Appeals Process If a claim is denied in whole or in part, You, the Covered Person's Doctor or other Authorized Representative may appeal the denial by making a written request for review to Us within: 1. 180 days of the time You receive the notice of denial of the initial claim , or within 60 days of the time You receive the notice of denial of a first appeal with respect to medical, dental or vision claims; 2. 60 days of the time You receive the denial notice of a second appeal for the purpose of submitting a voluntary appeal. "Authorized Representative" means the Covered Person's spouse, parent (if Covered Person is a minor), or any person who submits proof that he/she has been designated by the Covered Person or a court of law to act on such person's behalf. It will also include the Covered Person's Doctor or Hospital for the purposes of requesting Pre - Treatment and Concurrent Review Authorizations, and submitting claims and appeals on the Covered Person's behalf. 88- GP(G)(10 -02) 93 CLAIMS AND OTHER GENERAL PROVISIONS - Continued In connection with Our review of the appeal, You have the right to 1) see the Plan and other relevant papers affecting the claim, 2) argue against the denial in writing, 3) have a representative act on Your behalf in the appeal. All comments, documents, records and other information submitted in connection with the claim being reviewed will be considered. The decision on the appeal shall be in writing, and shall be made within 30 days of the date We receive the request for review with respect to medical, dental or vision claims. The decision shall include specific reasons for the denial, written in a manner understandable to You and contain specific reference to the pertinent Plan provisions on which the decision was based. With respect to medical, dental or vision claim reviews, the review will be conducted by someone other than the person who made the initial determination. If the initial denial was based on a medical judgment, Medical Necessity or treatment that is Experimental, Investigational or Unproven, a health care professional with appropriate training in the field of medicine that is the subject of the claim will be consulted. If the claim is still denied in whole or in part, You will again be advised as per items 1 through 6, of the Claim Decisions provision along with Your right to request information regarding any voluntary appeals provided under Your Plan once the required appeals have been exhausted. 88- GP(G)(10 -02) 94 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Once the required appeals have been exhausted, additional appeals are allowed on a voluntary basis upon request when new and substantial information is presented. Voluntary appeals are not applicable to decisions involving medical judgement, Medical Necessity or treatment considered to be Experimental, Investigational or Unproven. You may request information regarding voluntary appeals procedures. Refer to the MANAGED HEALTH CARE section of the Plan for information about Pre - Treatment Authorization, Concurrent Review and Retrospective Review claim denials and appeals. Assignment of Benefits You may assign Medical or Health Care Benefits directly to the Doctor, Hospital or an appropriate state agency. You may assign Dental Care Benefits directly to the provider. You can either sign the necessary forms given to You by the provider of services or sign the designated assignment on Your claim form. Otherwise, Benefits will be paid according to the Payment of Claims provision. If You use a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. We will not be responsible for the validity of any assignment. Nor will We be liable for any action, payment or other settlement made before We receive such assignment. To the extent permitted by law, neither the Benefits nor payments under the Plan will be subject to the claim of creditors or to any legal process. Physical Examinations We may have a Doctor of Our choice examine You, at Our expense, as often as is reasonably necessary while Your claim is pending. We may also have an autopsy performed, at Our expense, except if prohibited by law. 88- GP(G)(10 -02) 95 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Incontestability and Misstatement We cannot contest Your or Your dependent's coverage after it has been in effect for two years during a Covered Person's lifetime unless required Contributions are not paid. However, no provision of this Plan shall make the coverage of an ineligible person valid. Any statement about Your age made in writing and signed by You may be used to contest Your coverage. If You misstate Your age, The Plan Will only Pay Benefits based on Your correct age. The Plan will a) adjust required Contributions, b) validate, or c) void coverage as necessary. Refund to Us for Overpayment of Benefits If You or Your dependent recovers money for medical, Hospital, dental, prescription drug or vision Expenses Incurred due to an Illness or Injury for which a Benefit has been paid under the Plan, We will have the right to a refund from You or Your dependent. The amount refunded to Us will be the lesser of: 1. the amount You or Your dependent recovers, 2. the amount of Benefits We have paid. You or Your dependent (or a parent or legal guardian, if required) will help Us do whatever else may be reasonably needed to obtain this refund. 88- GP(G)(10 -02) 96 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Right of Subrogation If You or Your covered dependent has a claim for damages or a right to recover damages from another party or parties for any Illness or Injury for which Benefits are payable under this Plan, We are subrogated to such a claim or right of recovery. Our right of subrogation will be to the extent of any Benefits paid or payable under this Plan, and shall include any compromise settlements. We may assert this right independently of the Covered Person. Acceptance of Benefits is constructive notice of this provision in its entirety. If a Covered Person, or legal representative, estate or heir of the Covered Person, recovers damages, by settlement, verdict or otherwise, for an Illness or Injury for which a Benefit has been paid under this Plan, the Covered Person, or legal representatives, estate or heirs of the Covered Person, agrees to promptly reimburse Us for Benefits paid. Our right to receive reimbursement applies to the Covered Person's recovery from any source, including but not limited to any party's liability and medical pay insurance, uninsured and underinsured motorist coverage, no -fault automobile coverage and Workers' Compensation coverage. We will have a first lien upon any recovery, whether by settlement, judgment, arbitration or mediation, that the Covered Person receives or is entitled to receive from any source, regardless of whether the Covered Person receives a full or partial recovery. Any settlement or recovery received shall first be deemed to be reimbursement of medical expenses paid under this Plan. Our first priority rights will not be reduced due to the Covered Person's own negligence. 88- GP(G)(10 -02) 97 CLAIMS AND OTHER GENERAL PROVISIONS - Continued We are entitled to reimbursement even if the Covered Person is not made whole or fully compensated by the recovery. Any share of attorney fees or costs or Common Fund fees shall not reduce Our recovery unless agreed to by Us in writing. If the injured person is a minor, any amount recovered by the minor, the minor's trustee, guardian, parent, or other representative, shall be subject to this provision regardless of whether the minor's representative has access to or control of any recovery funds. The Covered Person (or parent or legal guardian) will cooperate with Us and Our agents and help Us do what may be reasonably needed to protect the Plan's subrogation rights and obtain the refund. This includes furnishing all relevant information, making assignments in Our favor and signing and delivering any documents needed to protect Our rights. The Covered Person shall not take any action that prejudices Our rights. If the Covered Person makes a recovery from any source and fails to reimburse Us the lesser of: 1. the amount recovered, (including amounts to be recovered through future installment payments); or 2. the amount of Benefits paid related to this Illness or Injury, the Covered Person will be personally liable to Us for this amount. We may also offset future Benefits up to the amount due to Us. The terms of this subrogation and right of reimbursement provision shall apply regardless of state laws to the contrary. 88- GP(G)(10 -02) 98 GENERAL DEFINITIONS When these terms are used in the Plan, they will have the following meanings unless otherwise noted: • 1. Active Work: means You work for Your Employer at his/her place of business (or such other places as required by Your Employer) in accordance with his /her established employment practices. 2. Average Semiprivate Room Charge: means a) the standard charge by the Hospital for semiprivate room and board accommodations, or the average of such charges where the Hospital has more than one level of such charges, or b) 80% of the Hospital's lowest charge for single bed room and board accommodations when the Hospital does not provide any semiprivate accommodations. 3. Benefd(s): means the amount The Plan Will Pay for Covered Expenses after You or Your covered dependents have met the Deductible, if any. 4. Birthing Center: means a licensed place with the primary purpose of providing a place for live births operating within the scope of its license. 5. Chronic Medical Condition: means an Illness for which there is no cure; however, medical treatment is available. It is a long -term Illness that does not ordinarily pose an immediate threat to one's life. Chronic Medical Conditions covered under the Disease Management program may include, but are not limited to, diabetes, asthma or cardiac conditions. 88E -GD 99 GENERAL DEFINITIONS - Continued 6. Close Relative: means You, Your spouse, and Your or Your spouse's brother, sister, parent, or Child. 7. Complications of Pregnancy: means a disease, disorder or condition which is diagnosed as distinct from normal pregnancy but adversely affected by or caused by pregnancy. This includes: a. inter - abdominal surgery, including cesarean section; b. pernicious vomiting (hyperemesis gravidarum); c. toxemia with convulsions (eclampsia); d. extra- uterine pregnancy (ectopic); e. postpartum hemorrhage; f. rupture or prolapse of the uterus; g. spontaneous termination of pregnancy during a period of gestation in which a viable birth is not possible; h. similar medical and surgical conditions of comparable severity. Complications of Pregnancy will not include: a. elective abortion; b. false labor, c. occasional spotting; d. Physician prescribed rest; e. morning sickness; f. similar conditions associated with the management of a difficult pregnancy. Services and supplies rendered at the termination of pregnancy will not be considered treatment of Complications of Pregnancy. 88E-GD 100 GENERAL DEFINITIONS - Continued 8. Contributions: mean the amount You are required to pay for the coverage provided under the Plan. 9. Covered Expense: means a listed Covered Expense under a Benefit description which will be paid under the Plan if it is a. prescribed by a Doctor or Dentist for the therapeutic treatment of Injury, Illness or pregnancy; b. Medically Necessary; c. not more than what We determine as Reasonable and Customary; and d. not excluded under any exclusions of the Plan. If You use a Participating Provider, Covered Expense means the agreed upon rate set between Us and such provider for services which meet all of the above standards. 10. Covered Person: means an Enrolled person meeting the eligibility requirements of the Plan. 11. Creditable Coverage: means any of the following coverages a Covered Person had prior to enrollment under the Plan: a. a group health plan; b. health insurance coverage, individual and group, including coverage through a Health Maintenance Organization (HMO); c. Medicare; d. Medicaid; e. military health care; 88E -GD 101 GENERAL DEFINITIONS - Continued f. a medical care program of the Indian Health Service or of a tribal organization; g. a state health risk pool; h. a health plan offered under the Federal Employee Health Benefits Program; i. a public health plan established or maintained by a political subdivision of a state to provide insurance coverage; j. a health benefit plan established by the Peace Corps Act. 12. Custodial Care: means services, provided by a licensed, skilled nurse or a non - skilled person, for: a. a person with a Chronic Medical Condition; or b. a convalescent person. This care basically provides assistance to a person in daily living; it does not require technical skills or qualifications. This care is not reasonably expected to improve the underlying medical condition of a person even though it may relieve symptoms or pain. Custodial Care includes, but is not limited to: a. help in grooming, bathing, dressing, walking; b. help in getting in and out of bed; c. help in housekeeping, preparing meals, and eating; d. giving or helping to use or apply medications, creams and ointments; e. administering medical gasses after a therapy program has been set up; f. changing dressings, diapers and protective sheets; 88E -GD 102 GENERAL DEFINITIONS - Continued g. periodic turning and positioning in bed; h. routine care of casts, braces and other like devices; i. routine care of colostomy and ileostomy bags; j. routine tracheostomy care; k. routine care of catheters and other like equipment; and I. supervising exercise programs that do not need the skills of a therapist. Care that does require the technical skills of a licensed medical professional, who is acting within the scope of his/her license, is not considered to be Custodial Care. 13. Dentist: means an individual who is duly licensed to practice dentistry or perform oral surgery in the state where the dental service is performed and who is operating within the scope of that license. For the purpose of this definition, a Physician will be considered to be a Dentist when he/she performs any of the dental services included under Covered Dental Care Expenses and is operating within the scope of his /her licenses. 14. Disabled: means that due to Illness or Injury You cannot perform the material and substantial duties of Your regular occupation or Your covered dependent cannot perform normal activities, except as provided elsewhere in the Plan. 15. Doctor: means a medical practitioner licensed to perform surgery and administer drugs acting in the scope of that license. It will also include any other licensed practitioner of the healing arts required to be recognized by law, when that person is acting within the scope of his/her license and is performing a service for which Benefits are provided under the Plan. 88E -GD 103 GENERAL DEFINITIONS - Continued 16. Emergency: means an accidental Injury or Emergency Medical Condition which reasonably requires You or Your dependent to seek immediate medical care within 48 hours after the Injury or the onset of the Emergency Medical Condition. 17. Emergency Care: means covered services furnished or required to screen and stabilize an Emergency Medical Condition, which may include but shall not be limited to, health care services that are provided in a Hospital's emergency facility. 18. Emergency Medical Condition: means the sudden onset of a health condition that manifests itself by symptoms of sufficient severity, including but not limited to severe pain or acute symptoms developing from a Chronic Medical Condition, that would lead a prudent lay person, possessing an average knowledge of medicine and health, to believe that immediate medical care is required and that lack of such care could reasonably be expected to result in: a. placing the patient's health in serious jeopardy; b. serious impairment of bodily functions; c. serious dysfunction of any bodily organ or part; d. with respect to a pregnant woman, placing the woman's health, or that of her unborn Child, in serious jeopardy. 19. Employer: means the entity to which the Plan is issued. 20. Enroll: means completion of all forms required for coverage under the Plan and agreement to make any required Contribution. 88E -GD 104 GENERAL DEFINITIONS - Continued 21. Enrollment Date: means the first day of coverage or, if there is a Waiting Period, the first day of the Waiting Period. 22. Expense Incurred: means each expense is considered to be incurred on the date the care, service or supply is received. 23. Experimental, Investigational or Unproven: means care and treatment for which We determine that one or more of the following is true: a. The service or supply is under study or in a clinical trial to evaluate its toxicity, safety or efficacy for a particular diagnosis or set of indicators. Clinical trials include but are not limited to phase I, II and Ill clinical trials. b. The prevailing opinion within the appropriate specialty of the United States medical profession is that the service or supply needs further evaluation for the particular diagnosis or set of indications before it is used outside clinical trials or other research settings. We determine if this item b. is true based on: i. published reports in authoritative medical literature; and ii. regulations, reports, publications and evaluations issued by government agencies such as the Agency for Health Care Policy and Research, the National Institutes of Health, the federal Food and Drug Administration (FDA), the Health Care Financing Administration (HCFA), or any other appropriate technological assessment body. 88E -GD 105 GENERAL DEFINITIONS - Continued c. In the case of a drug, a device or other supply that is subject to FDA approval: i. it does not have FDA approval; or ii. it has FDA approval only under its Treatment Investigational New Drug regulation or a similar regulation; or iii. it has FDA approval, but it is being used for an indication or at a dosage that is not an Accepted Off -Label Use. An "Accepted Off -Label Use is a use that is: a) included and favorably recognized for treatment of the indication in one or more of the following medical compendia: The American Medical Association Drug Evaluations, the American Hospital Formulary Service Drug Information, and The United States Pharmacopoeia Information; or b) established based on supportive clinical evidence in peer - reviewed medical publications. d. The providers institutional review board acknowledges that the use of the service or supply is Experimental, Investigational, or Unproven and subject to that board's approval. e. Research protocols indicate that the service or supply is Experimental, Investigational, or Unproven. This item e. applies for protocols used by the Covered Person's provider as well as for protocols used by other providers studying substantially the same service or supply. 24. Family Unit: means You and all of Your dependents who are covered under the Plan. 88E-GD 106 GENERAL DEFINITIONS - Continued 25. Full -Time Basis: means You work Your full number of hours for Your full rate of pay as required by Your Employer. The amount of required work time per week may never be less than 20 hours. 26. Home Health Care Agency: means a home health service or agency operating under a valid certificate of approval issued under the statutes of the state where services are provided. 27. Hospice: means an agency that provides counseling and incidental medical services and may provide room and board to a terminally ill person and meets all of the following tests: a. it has obtained any required governmental Certificate of Need approval; b. it provides service for a period of 24 hours per day on every day of the week; c. it is operated under the direct supervision of a duly qualified Doctor, d. it has a nurse coordinator who is a registered graduate nurse with four years of full -time clinical experience, at least two of which involved caring for terminally ill patients; e. it has a social service coordinator who is licensed in the jurisdiction in which it is located; f. it is an agency that has as its primary purpose the provision of Hospice services; 88E -GD 107 GENERAL DEFINITIONS - Continued g. it has a full -time administrator; h. it maintains written records of services provided; i. its employees are bonded, and it provides malpractice and malplacement insurance; j. it is established and operated in accordance with the applicable laws in the jurisdiction in which it is located and, where licensing is required, has been licensed and approved by the regulatory authority having responsibility for licensing under the law. 28. Hospital: means a place which meets all of the standards below: a. has permanent and full -time care for bed patients; b. is under the supervision of a Physician; c. has an R.N. on duty or call 24 hours a day; d. is mainly engaged in giving medical care and services for Injuries or Illness but not including: i. rest homes; ii. nursing homes; iii. convalescent homes; iv. homes for the aged; e. has surgical facilities except that this standard does not apply to such place operated mainly for treatment of the chronically ill; f. is operated lawfully in its area. 88E -GD 108 GENERAL DEFINITIONS - Continued "Hospital' also means such place which is mainly engaged in treating alcoholism and drug abuse if it meets the standards below: a. has permanent and full -time care for at least 15 bed patients; b. has a Doctor in regular attendance; c. provides 24 hour per day care by R.N.s; d. has a full -time psychiatrist or psychologist on the staff. Hospital also means and will include an "Ambulatory Surgical Center" which meets all of the standards below: a. is a licensed public or private place; b. has an organized medical staff of Doctors; c. has permanent facilities that are equipped and operated mainly for doing surgery and giving skilled nursing care; d. has R.N. services when a patient is in the facility; and e. does not provide services or beds for patients to stay overnight. 29. Illness: means sickness, or a covered dental infirmity, a covered bodily or mental infirmity. 30. Injury: means a covered accidental bodily Injury. 31. Inpatient Hospital Confinement: means a confinement in a Hospital as a bedpatient for which room and board charges are made by the Hospital to the Covered Person. 88E -GO 109 GENERAL DEFINITIONS - Continued 32. Intensive Care Unit: means a specifically named area in a Hospital operated only to give care to critically ill patients, with special supplies and equipment available for immediate use, providing room and board and bedcare under the constant watch of a highly trained Hospital staff. Normal post - operative or recovery room care is not intensive care no matter where located. 33. Late Enrollee: means an Eligible Employee or Dependent who requests Enrollment in the Employer's health benefit plan other than during the initial enrollment period, during an open enrollment period or during the Special Enrollment Periods provided under the terms of the Plan. 34. L.P.N.: means a licensed practical nurse acting in the scope of his /her license. 35. L.V.N.: means a licensed vocational nurse acting in the scope of his/her license. 36. Managed Care: means the determination of availability of coverage through the use of clinical standards to determine the Medical Necessity of an admission or treatment, and the level and type of treatment, and Appropriate setting for treatment, with required pre- treatment authorization, concurrent review or retrospective review, which sometimes involves case management. 88E-GO 110 GENERAL DEFINITIONS - Continued 37. Medical Necessity /Medically Necessary: means that We determine that the care and treatment given meets all of the following conditions: a. it is Appropriate care and consistent with the diagnosis and symptoms. "Appropriate" means the type, level and length of service and setting are needed to provide safe and adequate care and treatment and are provided by the Appropriate provider acting within the scope of his /her license; b. it is generally accepted medical practice and meets professionally recognized standards; c. it is not deemed to be Experimental, Investigational or Unproven as defined herein; d. it is not furnished in connection with medical or other research; e. it is specifically allowed by the licensing statutes which apply to the provider who renders the service; and f. it is at least as medically effective as any standard care and treatment. We will use Our programs, or one established by Our authorized representative to determine whether care is needed and Appropriate. The program may include but is not limited to: a. Pre - Treatment Authorization; b. Concurrent Review; and c. Retrospective Review. 38. Medicare: means the plan of benefits provided by Title XVIII of the U.S. Social Security Act of 1965 as amended from time to time. 88E -GD 111 GENERAL DEFINITIONS - Continued 39, Participating Provider: means a Doctor or a Hospital that agrees with Us to provide Medically Necessary care and treatment at set rates. 40. Preferred Participating Provider Organization (PPO): means a Managed Care arrangement consisting of a network of Participating Providers that are available to provide medical services to Covered Persons. 41. Pharmacist: means a person who is licensed and trained to compound and dispense drugs and medicines acting within the scope of that license. 42. Physician: means a person licensed to practice medicine. 43. Placed For Adoption: means the assumption and retention of a legal obligation for the total or partial support of a Child in anticipation of the adoption of such Child. The Child's placement with You is considered terminated upon the termination of such legal obligation. 44. Plan: means the Benefits described in this summary plan description as provided by the Self- funded Plan including all endorsements and amendments. 45. Plan Claim Administrator: means the entity designated by the Plan Sponsor to pay claims for Benefits under this Plan. 46. Plan Month: means the first day of the month to the last day of the same month. 47. Plan Year: means from December 1 of one year to November 30 of the next year. 88E -GD 112 GENERAL DEFINITIONS - Continued 48. Plan Sponsor: means CITY OF ROUND ROCK, TEXAS which has established this employee welfare benefits plan for the purpose of providing health care coverage to its employees and dependents of such employees. 49. Qualified Leave of Absence: means leave of absence period approved by the Employer pursuant to the Family and Medical Leave Act of 1993, or other applicable Texas leave law that applies to the Employer. 50. Reasonable and Customary: means, with regard to charges for medical and dental services or supplies, the lowest of: a. the usual charge by the provider for the same or similar medical and dental services or supplies; b. the usual charge of most providers of similar training and experience in the same or similar geographic area for the same or similar medical and dental service or supplies; c. the actual charge for the medical and dental services or supplies; or d. the negotiated rate a provider has agreed to accept. "Area" means a region We determine to be large enough to obtain a representative sample of providers of medical and dental care or supplies. 51. Replacement of Dentures: means to substitute a different denture for one previously used. (This includes dentures that were lost, stolen or not in use.) 88E-GO 113 GENERAL DEFINITIONS - Continued 52. Riot: means all forms of violence, disorder, or disturbance of the public peace by three or more persons assembled together, whether or not acting with common intent or whether or not damage to persons or property or unlawful act or acts is the intent or the consequence of such disorder, violence or disturbance. 53. R.N.: means a licensed registered nurse acting in the scope of his/her license. 54. Skilled Nursing Facility: means a place other than a Hospital that: a. can provide permanent full time care for 10 or more resident patients; b. has a Physician who prescribes medications and treatment; c. has an R.N. on full -time duty in charge of patient care; d. has L.P.N.s or L.V.N.s on duty at all times under the supervision of an R.N.; e. keeps a daily medical record for each patient; f. is not mainly a rest home or a home for Custodial Care of the aged; g. is not mainly engaged in treatment of drug addicts or alcoholics; h. is operating lawfully as a nursing home. 55. The Plan Will Pay: means that when You send Us proof of claim, the Plan Claim Administrator will determine the Benefits payable and make payment, if any, according to the Payment of Claims provisions, as detailed in this document. 88E -GD 114 GENERAL DEFINITIONS - Continued 56. Urgent Care Facility: means a freestanding facility which is engaged primarily in providing minor emergency and episodic medical care and which has: a. a board - certified Physician, a registered nurse (R.N.) and a registered x -ray technician in attendance at all times; b. has x -ray and laboratory equipment and a life support system. 57. We, Us and Our: means the Plan Sponsor (as represented by the Plan Claim Administrator). 58. You and Your: means an employee covered under the Plan. 88E -GD 115 FEDERAL CONTINUATION COVERAGE (also known as COBRA) In some circumstances, federal law requires that persons who lose group health plan coverage be given the chance to continue that coverage for a period of time. Right to COBRA Continuation Coverage 1. You have a right to choose COBRA continuation coverage if You lose group health plan coverage because of: a. a reduction in Your hours of employment; or b. the voluntary or involuntary termination of Your employment (for any reason except Your gross misconduct). 2. Your spouse has the right to choose COBRA continuation coverage if he /she loses group health plan coverage for any of the following reasons a. Your death; b. the termination of Your employment (except as a result of Your gross misconduct) or Your reduction in hours; c. Your divorce, d. Your becoming entitled to Medicare. 3. Your dependent Child has the right to continuation coverage if he /she loses his /her group health plan coverage due to one of the four reasons described in 2. above or if he/she ceases to be an Eligible Dependent under the terms of the Plan's Health Care coverage. A dependent child born to or Placed For Adoption with You during Your COBRA continuation coverage period has the right to COBRA continuation coverage if You notify the Plan Administrator of the child's birth or Placement For Adoption within the time frame as prescribed by law. N- FCC(10 -9s) 116 FEDERAL CONTINUATION COVERAGE - Continued Length of COBRA Continuation Coverage 1. Generally a. If, as a result of termination of Your employment or reduction in Your hours, You, Your spouse and/or Your dependents lose the Plan's Health Care coverage, those who do lose coverage may elect continuation coverage for up to 18 months after the date Your employment terminates or hours reduce. b. If Your spouse or dependents lose the Plan's Health Care coverage due to any of the other events described in 2. or 3. above (other than Your employment termination or hours reduction), they may elect continuation coverage for up to 36 months from the date they experience such event. c. If Your spouse or dependents become entitled to continuation coverage because of termination of Your employment or reduction in Your hours and Your spouse or dependent then experiences another of the events which would entitle such person to continued coverage, he/she may extend the 18 month continuation period to 36 months from the date of the event that first made him/her eligible for continuation coverage. A notice of a Social Security determination is given to the Plan Administrator before the end of the initial 18- month period and within 60 days after the date of such determination. An Employer may require payments of up to 150 percent of the applicable group rate for the cost of coverage for these 11 additional months. N- FCC(10-98) 117 FEDERAL CONTINUATION COVERAGE - Continued b. Employee's Medicare Entitlement Prior to COBRA Event If You become entitled to Medicare within 18 months prior to Your employment termination (or work hours reduction), Your spouse and dependents who are entitled to COBRA continuation coverage will become eligible for a continuation period of not shorter than 36 months from the date You become entitled to Medicare. This continuation period is measured from the time You are entitled to Medicare. The maximum continuation period for Your spouse or dependents will not exceed 36 months. However, unless You are entitled to an extended continuation period as described in 2.a. above, You yourself will only be eligible for a continuation period of up to 18 months from the date of Your employment termination (or work hours reduction). 3. If, after the occurrence of any event described in Right to COBRA Continuation Coverage above, You, Your spouse and/or Your dependents are allowed to continue Health Care coverage under the Plan (whether or not premium payment(s) are required) beyond the Plan's Termination of Coverage provision for any reason other than to comply with the federal law (i.e., the Plan's special provisions), such continuation period(s) will be used to reduce the maximum length of COBRA continuation coverage period otherwise available to such person under this section. N-FCC(1 0-98) 118 FEDERAL CONTINUATION COVERAGE - Continued Notification Requirements 1. If Your spouse or dependent becomes eligible for continuation coverage due to divorce or the end of dependency status, the Plan Administrator must be notified within 60 days after Your spouse or dependent becomes eligible. That person will distribute necessary forms and explain this continuation in more detail. If the Plan Administrator is not notified within 60 days of the event that makes Your spouse or dependent eligible for continuation coverage, Your spouse or dependent will lose the right to such coverage. In order for a child born to or Placed For Adoption with You during Your COBRA continuation coverage to have the right to COBRA continuation coverage, You must notify the Plan Administrator of the child's birth or Placement For Adoption within the time frame as prescribed by law. 2. In order for a Disabled person and such person's family members continuing under the 18 -month continuation coverage to be entitled to an extended continuation period of 11 additional months, such person must meet the notice requirements and all other conditions described under Extensions of Continuation Coverage in 2.a. above. A person continuing under the 11 -month extended continuation coverage must notify the Plan Administrator within 30 days if the Social Security Administration determines that the disability ceases to exist N- FCC(10 -98) 119 FEDERAL CONTINUATION COVERAGE - Continued Termination of COBRA Continuation Coverage Your Employer may require You, Your spouse and Your dependents to pay for the cost of the continuation coverage. If these amounts are not paid within the time allowed, the continuation coverage will end. Four other reasons that this continuation coverage may terminate before the full maximum continuation period runs out are: 1. the continued person first becomes, after the date of COBRA continuation coverage election, entitled to Medicare benefits; 2. the Employer stops providing any group health plan benefits program for employees; 3. the continued person first becomes, after the date of COBRA continuation coverage election, covered under another group health plan, and any preexisting conditions exclusions or limitations of that plan do not apply to or are satisfied by such person; 4. with respect to any person continuing under the 11 -month extended continuation coverage (as described under Extensions of Continuation Coverage in 2.a. above), when the Social Security Administration determines that the disability ceases to exist (the termination becomes effective as of the first day of the month which is at least 31 days after the Social Security determination). General Information This Federal Continuation Coverage section does not amend or change the Plan's Termination of Coverage provision. It simply provides a continuation of coverage right Your Employer is required to offer by law. N- FCC(10 -98) 120 Termination or Amendment of Plan The Plan Sponsor intends that this Plan will continue indefinitely, but reserves the right to amend, modify, revoke or terminate the Plan, in whole or in part, at any time. The authority to make any such changes to the Plan is vested in the Association's governing body and shall be made via adoption of a written amendment by the Association's governing body. N- ERISA(08 -02) 121 NOTICE In compliance with the Federal Health Insurance Portability and Accountability Act (HIPAA), the following information is provided. Plan Claims Administrator Benefits under this Plan are paid by: Great -West Life & Annuity Insurance Company Quality Management, F1 -22 13045 Tesson Ferry Road St. Louis, MO 63128 The Medical Care, Dental Care, Vision Care, and Prescription Drug Coverages for employees and dependents are funded and provided by CITY OF ROUND ROCK, TEXAS. If You have any questions about Your Plan, You should contact the Plan Administrator. 88E- NOTICE 122 Confidentiality of Health Information Your Rights Under the Health Insurance Portability and Accountability Act The Privacy Rule of the Health Insurance Portability and Accountability Act ( HIPAA) places restrictions on when the Plan Sponsor may have access to certain health care information about You known as Protected Health Information (PHI). Generally, PHI is information from which Your individual identity can be discerned that is transmitted or maintained in any form (e.g., electronic, paper, oral) and that is created or received by a provider, health plan or health care clearing house. In accordance with HIPAA, the City of Round Rock, Texas agrees not to use or disclose Your PHI for purposes other than: For treatment, payment or health care operations, As permitted or required by law, or As authorized by You. You will receive a Notice of Privacy Practices that describes the Plan's policies, practices and Your rights with respect to Your PHI under HIPAA. For more information regarding this Notice, please go to www.ci.round.rock.tx.us or telephone (512) 218- 5490. 88E- NOTICE 123 07202A(10) EDA (7202)(1 2- 03)500 (12- 02)800 (12- 17 -02) aW3 ROUND ROCK, TEXAS PURPOSE. PASSION. PROSPERITY. EMPLOYEE BENEFIT PLAN LOW PLAN WELFARE BENEFIT PLAN FOR EMPLOYEES AND RETIREES OF CITY OF ROUND ROCK, TEXAS (herein called the Plan Sponsor) Summary Plan Description This Summary Plan Description (SPD) describes the Low Plan PPO Option under the group health plan of benefits. The group health plan of benefits also offers a High Plan PPO Option. A separate SPD was prepared for this option. Effective: December 1, 2003 SECTION PAGE Plan Information vii Introduction ix Eligibility 1 When Coverage Begins 6 When Coverage Ends 10 Medicare 12 Pre - Existing Conditions 14 Medical Care Benefits 17 Medical Care Exclusions and Limitations 36 Medical Care Benefit Provisions 40 Wellness Care Benefits 48 Home Health Care Benefits 49 Private Duty Nursing Care Benefit 51 Hospice Care Benefits 52 Managed Health Care 54 Coordination of Benefits (COB).. 66 Prescription Drug Benefits 71 Dental Care Benefits 78 Vision Care Benefits 86 Claims and Other General Provisions 89 General Definitions 99 Federal Continuation Coverage (COBRA) 116 Termination or Amendment of Plan 121 Notice 122 Confidentiality of Health Information 123 TABLE TABLE OF CONTENTS SUMMARY PLAN DESCRIPTION OF MEDICAL CARE, DENTAL CARE, VISION CARE AND PRESCRIPTION DRUG BENEFITS FOR EMPLOYEES, RETIREES AND DEPENDENTS OF CITY OF ROUND ROCK, TEXAS (herein called the Plan Sponsor) (The Benefits described in this Summary Plan Description are provided and funded by CITY OF ROUND ROCK, TEXAS) v PLAN INFORMATION Plan Administrator and Plan Sponsor: City of Round Rock, Texas Employee Benefit Plan 221 E. Main Street Round Rock, TX 78664 (512) 218-5490 Employer Identification Number: 74 -6017485 Plan Number: 7202 Plan Employee Contributions: The Plan Sponsor will determine the contributions required of the Employees on an annual basis. vii PLAN DE BENEFICIOS DE EMPLEADOS DE CITY OF ROUND ROCK Este folleto contiene un resume en Ingles de sus derechos del Plan y beneficios bajo el City of Round Rock Plan de Beneficios del Empleado. Si usted tiene dificultad para entender cualquier parte de este folleto, contacte Great -West Life & Annuity Insurance Company at 1-800- 541 -3234. This book contains a brief summary in English of Your rights in the Benefits plan under the City of Round Rack. If You have any questions or difficulty in understanding part of this book contact Great -West Life & Annuity Insurance Company at 1- 800 -541- 3234. FOREWORD City of Round Rock has elected to provide group medical and dental Benefits to Employees on a self- funded basis. We have selected Great -West Life & Annuity Insurance Company as Our Plan Claims Administrator. Their claims mailing address is: Great -West Life & Annuity Insurance Company 1000 Great -West Drive Kennett, MO 63857 -3749 This Summary Plan Description describes the main features of Your Benefits. It is not meant to change or extend the coverage provided for in the Plan Document and should be used only as a general guide. The entire legal document is available to You for review in our office. If discrepancies arise, the Plan Document will govern. This Summary Plan Description takes the place of any other issued to You on a prior date. All claims must be filed within 365 days from the date of service. vii' Introduction The City of Round Rock Employee Benefit Plan The City of Round Rock Employee Benefit Plan is primarily a self- funded Plan. The employer shall, from time to time, evaluate the costs of the Plan and determine the amount to be contributed by each covered employee, if any, and any Plan revisions or modifications. In addition to this Summary Plan Description describing Your medical, dental, vision and prescription drug Benefits, You will receive a wallet -sized card that identifies You and Your enrolled dependents as eligible for medical and prescription drug Benefits. This card contains Your personal identification number, name, plan number, benefits, effective date, and Your group plan name. The reverse of Your card contains claim filing information. Always carry this card with You when You or Your dependents visit the Hospital or Doctor. The card is proof of coverage and contains information that must be on every claim form submitted for consideration of payment. The information on the reverse of the card is necessary for proper submission of claims and provides telephone numbers for inquiries. If You lose Your card, contact the Human Resources Department at the City of Round Rock at 512 - 218 -5490 for a replacement card. The purpose of this Summary Plan Description /Plan Document, initially effective December 1, 2003 and as subsequently amended, is to set forth the provisions of the Benefits plan (the "Plan ") which provide for the payment of all or a portion of covered medical and prescription drug expenses the employer agrees to pay, subject to all the provisions of the Plan, including amendments, to the person entitled to such Benefits while covered hereunder, provided claim is duly made. ix This Summary Plan Description/Plan Document supersedes all other documents and previously issued amendments and shall be the sole document used in determining Benefits to which Covered Persons are eligible. It may be amended from time -to- time by the employer to reflect changes in Benefits or eligibility requirements. It is not in lieu of and does not affect any requirements for coverage by Workers' Compensation. Any amendments shall be binding on each participation covered and on any other person or persons referred to in this Summary Plan Description /Plan Document. The Benefits described in this Summary Plan Description have been designed to pay a large portion of the Reasonable and Customary fees for a broad range of Medically Necessary services, treatments, and supplies and will give You substantial protection against the cost of serious Illness and Injury. The employer intends to continue the Plan indefinitely, but reserves the right to amend or terminate the Plan in whole or in part, at any time. Such action may include, but not be limited to the type of Benefit, deductible, copays, percentage payable, out - of- pocket maximums, maximum Benefits, limitations and exclusions, and monthly contribution. Any such action will be communicated to participants in writing as soon as reasonably possible. The Plan is intended to be consistent with any Plan which the employer makes contributions, and with any contracts for medical and prescription drugs review services. To the extent the terms of this Plan are inconsistent with such Plan, the terms of such Plan shall prevail. Please read this document carefully to familiarize Yourself with the Benefits it describes and the procedures for filing claims. If You have any questions about Your coverage, please contact the plan representative. There are terms in this Summary Plan Description that have a special meaning under this Plan. When used in the Plan, unless otherwise stated, the terms are as defined in 1. the General Definitions section, or 2. the specific Benefits sections. Becoming familiar with the defined terms will give You a better understanding of the procedures and Benefits described. 85E -GI xi ELIGIBILITY Eligible Employees You are in an Eligible Class for coverage under the Plan if You are an employee, at least 16 years of age, and have begun to work an average of 30 hours or more per week, excluding overtime, for Your Employer. Eligible Employees do not include independent contractors, contract workers, temporary, seasonal, casual or leased employees as interpreted by the Employer using Internal Revenue standards. A Retired Employee and his/her Eligible Dependents are included in an Eligible Class for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages. "Retired Employee" means a person who meets the rules and regulations of the Employer's Retirement Plan at the time of the retirement: Twenty years of service or Retirees with 5 years of service at age 60. You will be eligible for coverage under the Plan on the date You enter an Eligible Class, or the Effective Date of the Plan, if later. 88E -E Eligible Dependents ELIGIBILITY - Continued To be eligible for Dependent Coverage under the Plan, Your dependent(s) must be eligible. Your Eligible Dependents are: 1. Your lawful spouse or common -law spouse; 2 Your unmarried dependent Child less than age 25; 3 Your Child with a mental or physical handicap who is over the age limit, if a) the Child becomes and remains Disabled while covered under the Plan, or b) was covered under the Prior Plan that this Plan replaces and, in either case, all of the following conditions are met: a. the Child has not been married; b. cannot hold a self - supporting job due to the handicap; and c. depends on You for main support and care. First proof of incapacity must be given to Us (at Your expense) within 31 days of the Child's limiting birthday. No person may be covered as a dependent of more than one employee. An employee may not be covered as a dependent. "Child" means Your natural Child; Your stepchild; an adopted Child; a Child who has been Placed For Adoption with You; a Child for whom You have been appointed legal guardian; a Child who is recognized under a qualified medical child support order as having a right to enrollment under the Plan (hereafter "QMCSO- child "). In all cases the Child must depend upon You for his/her main support and care. However, when a court recognizes a Child as a QMCSO- child, the Child will be considered Your Eligible Dependent regardless of whether the Child is living with You or receiving his /her main support and care from You. 88E -E 2 ELIGIBILITY - Continued "Common -law marriage" means a marriage between a man and woman who: 1. declare common -law marriage; 2. are both age 18 or older; 3. file both federal and state taxes as married; 4. provide evidence of cohabitation as husband and wife, and by general reputation the two individuals are living together as husband and wife and claiming to be such; and By general reputation" means the understanding among neighbors and acquaintances with whom the parties associate in their daily lives is that they are living together as husband and wife, and not that they are merely living together. 5. submit a notarized affidavit verifying common -law marriage status. Common -law marriage does not include a domestic same -sex partnership. 88E-E 3 ELIGIBILITY - Continued Coverage for Newborns - Well Baby Care A newborn Child will be covered from the moment of birth provided You already have Dependent Child(ren) Coverage or You Enroll the newborn Child for coverage within 31 days of the birth of the newborn Child. Such newborn Child will be eligible for the following Covered Expenses: a) Hospital room and board (or nursery) charges; b) routine Doctor visits while Hospital confined; and c) circumcision while Hospital confined. This coverage will end on the earlier of: 1. the date the newborn Child is discharged or 2. the date the newborn Child is 31 days old. Coverage for Newborns - Sick Baby Care A newborn Child is covered from the moment of birth for Covered Expenses due directly to: 1. Injury or Illness; 2. premature birth; or 3. a condition which exists at birth. If You do not have Dependent Coverage in force, this coverage (including any Extended Benefits) will end 31 days after the date Your Child is born. If You Enroll the Child within this 31 day period and make the required retroactive Contributions, coverage on the Child may continue. 88E -NC 4 ELIGIBILITY - Continued Modification of Coverage for Newborns - Well and Sick Baby Care When charges for delivery are considered a Covered Expense for an expectant mother eligible for coverage under this Plan, any and all charges incurred by the newborn under the Well and Sick Baby Care provisions as shown above are to be considered as charges incurred by the mother. 88E - NC 5 WHEN COVERAGE BEGINS For Eligible Employees: Your Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages will be made effective on the date You are eligible if that date is the first day of the calendar month. If not, on the first day of the calendar month that next follows the date You are eligible. For Eligible Retired Employees: If You are retiring, Your coverage will be made effective on the first day of the calendar month that falls on or next follows: 1. the date You retire if You Enroll on or before that date; or 2. the date You Enroll, if You do so within 31 days after Your retirement date. If You do not Enroll within 31 days after You retire, You will not be eligible for coverage. For Eligible Dependents: Dependent Coverage cannot become effective prior to the date Your coverage is effective. Dependent Coverage will be effective with respect to each Eligible Dependent You then have on the first day of the calendar month that falls on or next follows: 1. the date You are eligible for coverage if You Enroll Your dependents on or before that date; or 2. the date You Enroll Your dependents. If You do not Enroll Your dependents for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages within 31 days after You are eligible for coverage, please refer to the provision on Late Enrollees below. 88E -EFFD 6 WHEN COVERAGE BEGINS - Continued Late Enrollees If You do not Enroll within 31 days after You are eligible for Health Care coverage, You may be a Late Enrollee. If 1. You do not Enroll Your dependents within 31 days after You are eligible for such coverage or Your dependent was not Enrolled within 31 days after he/she became eligible; or 2. You wish to restore Dependent Health Care Coverage which ended because You did not make required Contributions, Your dependent may be considered a Late Enrollee. (Please refer to the General Definitions section.) A Late Enrollee may Enroll only during the open enrollment period of November 1 through November 30. A Late Enrollee's coverage will be made effective on the first day of the calendar month following the open enrollment period and will be subject to the Pre - Existing Conditions Limitations for Late Enrollees provision. Other Enrollment Periods You or Your Eligible Dependent may only request enrollment under the Health Care coverage: 1. during the initial enrollment period or subsequent open enrollment periods; or 2. during the Special Enrollment Periods. 8BE -EFFD 7 WHEN COVERAGE BEGINS - Continued You or an Eligible Dependent may Enroll for Medical Care, Dental Care, Vision Care and Prescription Drug Benefit coverages during Special Enrollment Periods without being considered a Late Enrollee under the following circumstances: 1. Loss of Other Coverage. If You or an Eligible Dependent: a was covered under another group health plan (including COBRA continuation) or had other medical insurance coverage at the time enrollment was declined; and b. has lost or will lose coverage under the other plan as a result of loss of eligibility (due to such reasons as termination of employment, change of employment status, death of a spouse, divorce, legal separation or cessation of the Employer's contributions to such coverage) or have exhausted COBRA continuation coverage, You or an Eligible Dependent may Enroll within 31 days after loss of coverage. Coverage will be effective on the first day of the month following enrollment. 2. Acquisition of Dependents. If You did not Enroll when first eligible and acquire a dependent through marriage, birth, adoption or Placement For Adoption, You and the newly acquired dependent(s) may Enroll within 31 days of the date of marriage, birth, adoption or Placement For Adoption. In the case of the birth, adoption or placement of a Child, Your spouse may also be Enrolled as Your dependent if otherwise eligible for coverage. Coverage will be effective on the date of birth, adoption or Placement For Adoption. In the case of marriage, coverage will be made effective on the first day of the month following enrollment. 88E -EFFD 8 WHEN COVERAGE BEGINS - Continued Additional Dependents 1. If You are covered with respect to yourself only, You and Your Child(ren) only, or You and Your spouse only, Dependent Health Coverage may be extended to cover Your spouse or Your first Eligible Child, as the case may be. You must apply to cover such new dependent within 31 days after the dependent is first eligible. If You do not apply within 31 days, Your dependent may be a Late Enrollee. (Please refer to the General Definitions section.) Coverage with respect to a Late Enrollee will be made effective on the first day of the calendar month which falls on or after the date You Enroll the dependent and coverage will be subject to the Pre- Existing Conditions Limitations for Late Enrollees. 2. If You have at least one dependent Child covered, each new dependent Child will be covered on the date he/she becomes eligible. You must Enroll each new Dependent in order for them to be covered under the Plan. 88E -EFFD 9 WHEN COVERAGE ENDS For Employees: Your coverage will end on the date of the first of these events: 1. If You are covered as an Active Employee, the end of the month in which You stop Active Work in an Eligible Class, except that: a. if You stop Active Work due to Injury, Illness, or Qualified Leave of Absence for personal Injury or Illness, Your Employer will continue Your Health coverage subject to payment of Contributions. Such coverage will continue only while You are unable to return to work because of the Injury, Illness or Qualified Leave of Absence. This coverage continuance will be on a basis precluding individual selection; b. if You stop Active Work to take a qualified military leave of absence (pursuant to the Uniformed Services Employment and Reemployment Rights Act of 1994) You may elect to continue coverage subject to payment of Contributions. Such coverage will continue only while You are unable to return to work because of the qualified military leave of absence. Such continuance will be on a basis precluding individual selection; c. if You stop Active Work to take a Qualified Leave of Absence (pursuant to the Family and Medical Leave Act of 1993 or other applicable state's leave law, if any such law applies to Your Employer), for reasons other than personal Illness or Injury, Your Employer will continue coverage subject to payment. Such coverage will continue only while You are unable to return to work because of the Qualified Leave of Absence. Such continuance will be on a basis precluding individual selection; 88E -TERMD 10 WHEN COVERAGE ENDS - Continued d. if You stop Active Work due to other leave of absence, or due to temporary layoff, Your Employer may elect to continue coverage subject to payment. Such coverage may be continued to the end of the second Plan Month following the Plan Month in which such leave or layoff took place. This coverage continuance will be on a basis precluding individual selection. 2. You stop making Contributions, if required. 3. As to any one coverage or class, the date the Plan is amended or changed to exclude that coverage or class. 4. The Plan ends. If You cease Active Work due to eligible retirement, coverage will be continued in accordance with the rules established by the Plan Sponsor. For Dependents: A dependent's coverage will end on the earlier of 1. the date Your coverage ends; or 2. the end of the month in which the dependent ceases to be eligible as defined by the Plan. 88E -TERM MEDICARE This section applies to a Covered Person who is eligible for Medicare coverage. It provides rules for determining the order of benefit payments between coverage under this Plan and those of Medicare. The intent of this section is to conform the Plan to the requirements of the federal Medicare Secondary Payer law. Accordingly, the section and its stated rules will be adjusted, if We deem necessary, so that the Plan's liability for Benefit payment is neither greater nor less than those required under the law. 1. If, pursuant to the rules: a. this Plan is determined to be secondary to Medicare, it will pay secondary to and coordinate its Benefits with Medicare; b. this Plan is determined to be primary to Medicare, it will pay Benefits without regard to Medicare benefits. 2. The order of benefit payments rules are outlined below. a. Rules applicable to a person covered under the Plan by virtue of that person's "Current Employment Status" with an Employer or as a dependent of such person: Basis of Medicare Eligibility: - Old -Age (attaining age 65)` - Disability (other than ESRD) - End Stage Renal Disease (ESRD) - Old -Age or Disability, preceding or beginning concurrently with ESRD N MEDICARE - 100 12 This Plan Will: Be primary. Be primary. Be primary for the first 30 months of ESRD Medicare coverage; be secondary thereafter. Continue to be primary until the end of the first 30 months of ESRD Medicare coverage; be secondary thereafter. *If a Covered Person elects to have Medicare as primary coverage, such person's Health Care coverage (including any Dental Care, Prescription Drug or Vision Care coverage), under this Plan will terminate. If the employee's Health Care coverage terminates in accordance with this provision, coverage on the employee's covered dependents will cease on the same date. b Rules applicable to a person covered under the Plan as a Retired Employee, a dependent of such employee, or on any basis other than those stated in 2.a. above: Basis of Medicare Eligibility: - Old -Age (attaining age 65) - Disability (other than ESRD) - End Stage Renal Disease (ESRD) - Old -Age or Disability, preceding ESRD MEDICARE - Continued This Plan Will: Be secondary. Be secondary. Be primary for the first 30 months of ESRD Medicare coverage; be secondary thereafter. Continue to be secondary. For purposes of this section, "Current Employment Status ": a person is considered to have Current Employment Status with an Employer if the person is an employee, is the Employer (including self -employed person), or is associated with the Employer in a business relationship. REMEMBER: The Medicare section outlined above applies from the date a Covered Person is first ELIGIBLE for Medicare (either Part A or Part B), whether or not the Covered Person is Enrolled and is receiving Medicare benefits. N- MEDICARE -100 13 PRE - EXISTING CONDITIONS You or Your Eligible Dependent has a "Pre- Existing Condition" if the Covered Person: 1. has consulted a Doctor; 2. has taken prescribed medicine; 3. is receiving or has received medical care; for that condition in the 6 months before his /her Enrollment Date (as defined by the Plan). Pregnancy, including Complications of Pregnancy, is not a Pre - existing Condition. Genetic information, in the absence of a diagnosis of a resulting condition, will not be considered a Pre- Existing Condition. Pre - Existing Conditions Limitations for Late Enrollees A Late Enrollee, who is otherwise eligible for Health Care coverage, is subject to the following Pre - existing Conditions Limitations provision if the person becomes covered under the Plan and does not have Creditable Coverage or has Creditable Coverage that is less than the Pre - Existing Conditions Limitations period. Benefits will not be payable for a Pre - Existing Condition until 12 consecutive months have elapsed from the Covered Person's Enrollment Date. (Please refer to the General Definitions section for an explanation of Enrollment Date.) 88E- PRE- X(7 -97) 14 PRE - EXISTING CONDITIONS - Continued Modification of Pre - Existing Conditions Limitations The Pre - Existing Conditions Limitations provision is modified to provide credit toward satisfaction of the Pre - Existing Conditions Limitations period for the time covered under previous Creditable Coverage. Credit for previous Creditable Coverage will not be given if a 63 day or greater period (a break in Creditable Coverage) has occurred from the time the person was covered under previous Creditable Coverage until the Covered Person's Enrollment Date under the Plan. Time served during a Waiting Period does not count as a break in Creditable Coverage and does not count as Creditable Coverage. To be eligible for this credit, the Covered Person must present documentation of previous Creditable Coverage. Documentation of previous Creditable Coverage is not required if 1. the Covered Person was covered under Your Employer's previous medical plan on the day prior to this Plan's Effective Date; or 2. if You are changing to another health plan option offered by Your Employer. After consideration of the documentation of Creditable Coverage, You will be notified of the remaining months in Your or Your dependent's Pre - existing Conditions Limitations period. The Plan will not impose Pre- existing Conditions Limitations on a Child who was covered by Creditable Coverage within 30 days of his/her birth, adoption, or Placement For Adoption provided the Child has not been without Creditable Coverage for more than 62 days. 68E- PRE- X(7 -97) 15 PRE - EXISTING CONDITIONS - Continued Modification of Pre - Existing Conditions Limitations The Pre - Existing Conditions Limitations provision will not apply if the Covered Person becomes covered under this Plan on its Effective Date. 88E- PRE- X(7 -95) 16 MEDICAL CARE BENEFITS SCHEDULE Important Notice Your medical coverage includes one or more features to help control medical care costs. Some features will affect the amount of Benefits payable for Your medical care. PLEASE REFER TO THE MANAGED HEALTH CARE SECTION FOR ALL SERVICES THAT REQUIRE PRE - TREATMENT AUTHORIZATION. PENALTIES MAY BE ASSESSED FOR FAILURE TO COMPLY WITH PRE - TREATMENT AUTHORIZATION REQUIREMENTS. Two different levels of Benefits are being provided under the Plan: 1. The "PPO" Benefit level will be payable for services rendered by a Participating Provider, and 2. The "Non -PPO" Benefit level will be payable for services rendered by a provider who is not a Participating Provider. Employee and Dependent Amounts Applicable To Medical Care Coverage You or a Dependent Lifetime Maximum For all Covered Expenses $1,000,000 86E- MEDSCH 17 MEDICAL CARE BENEFITS - Continued Lifetime Maximum for Covered Expenses Incurred for: 1. Hospice Care PPO $20,000 Non -PPO $15,000 2. Treatment of Temporomandibular Joint Disorders $5,000 3. Inpatient Treatment of Alcoholism and Drug Abuse (Combined) 30 days or $25,000, whichever occurs first Calendar Year Maximum for Covered Expenses Incurred for: 1. Skilled Nursing Facility Charges PPO $10,000 Non -PPO $7,000 2. Inpatient Treatment of Mental Health Conditions 30 days 3. Inpatient Doctor Visits for Mental Health Conditions, Alcoholism and Drug Abuse (Combined) 1 visit per day 4. Outpatient Doctor visits for Mental Health Conditions 30 visits 5. Outpatient Treatment of Alcoholism and Drug Abuse (Combined) $1,000 6. Outpatient Doctor visits for Alcoholism and Drug Abuse (Combined) 30 visits 7. Home Health Care PPO $10,000 Non -PPO $7,000 8. Wellness Benefit $350 9. Chiropractic Benefit $500 88E- MEDSCH 18 MEDICAL CARE BENEFITS - Continued Calendar Year Deductible - an amount of Covered Expenses to which the Deductible Requirement applies equal to: the Individual Deductible of: $750 $2,250 or the Family Unit Deductible of: $2,250 $6,750 Covered Expenses used to satisfy the Calendar Year Deductible amount when services of a Participating Provider are used may not be applied toward satisfaction of the Calendar Year Deductible amount when services of a provider other than a Participating Provider are used, and vice versa. The Family Unit Deductible must be satisfied by You and Your Family Unit members who are covered as dependents. No part of any Covered Expenses for which Benefits are paid or payable by the Plan may be used to satisfy the Family Unit Deductible. Additional Deductible PPO Non - PPO For each visit to a Hospital emergency room. $100 $100 This Additional Deductible will not apply if the Covered Person is admitted to the Hospital immediately after the emergency room visit. 88E- MEDSCH 19 PPO Non -PPO MEDICAL CARE BENEFITS - Continued ALL COVERED EXPENSES, OTHER THAN EMERGENCY ROOM CHARGES, INCURRED AT ROUND ROCK HOSPITAL OR OAKWOOD SURGICAL CENTER FACILITY WILL BE PAID AT 100% AFTER THE DEDUCTIBLE APPLIES. Services 2. Charges of a radiologist, a pathologist, an anesthesiologist or an Assistant Surgeon if services are performed: 88E MEDSCH 20 The Plan Will Pay PPO Non -PPO 1. Hospital charges for Deductible Deductible Inpatient Hospital applies; applies; Confinement, payable at payable at including charges for 70 %. 50 %. confinements following an emergency room visit. In- Patient Lab & X -ray at Round Rock Hospital is paid at 100% after the deductible. a. at a PPO facility. Deductible Deductible applies; applies; payable at payable at 100 %. 100 %. b. at a Non -PPO Deductible Deductible facility. applies; applies; payable at payable at 100 %. 50 %. MEDICAL CARE BENEFITS - Continued Services The Plan Will Pay PPO Non -PPO 3. Hospital charges for Deductible Deductible emergency room applies; applies; care. * payable at payable at 70% after the 50% after the Covered Covered Person pays Person pays an Additional an Additional Deductible of Deductible of $100 per visit. $100 per visit. This Additional Deductible will be waived if the Covered Person is admitted to the Hospital immediately after the emergency room visit. In a true emergency (i.e. heart attack, stroke) any facility will be paid as in- network. 4. Doctor's charges for Deductible Deductible emergency room applies; applies; care. payable at payable at 70 %. 50%. In a true emergency (i.e. heart attack, stroke) any emergency room physician will be paid as in- network 5. Pre - admission Deductible Deductible testing. applies; applies; payable at payable at 70 %. 50 %. If Pre - admission testing is done at Round Rock Hospital, benefit is 100% after deductible. 68E- MEDSCH 21 MEDICAL CARE Services 6. Outpatient Hospital charges (unless shown otherwise in this schedule). 7. Outpatient Hospital charges when surgery is performed. 8. Ambulance charges for air or ground transportation. 9. Charges of a Doctor (unless shown otherwise in this Schedule) for: a. an office visit or a visit to a Covered Person's home (excludes visits for Mental Health Conditions, alcoholism and drug abuse). 88E- MEDSCH BENEFITS - Continued The Plan Will Pay PPO Non -PPO Deductible Deductible applies; applies; payable at payable at 70 %. 50 %. Deductible applies; payable at 70 %. Outpatient hospital charges for Round Rock Hospital and Oakwood Surgical Center are payable at 100% after the deductible. Deductible applies; payable at 70 %. No Deductible applies; payable at 100% after the Covered Person pays a $15 Per Visit Fee. 22 Deductible applies; payable at 50 %. Deductible applies; payable at 70 %. Deductible applies; payable at 50 %. MEDICAL CARE BENEFITS - Continued The Plan Will Pay Services PPO Non -PPO b. allergy Deductible Deductible treatment; applies; applies; testing, payable at payable at injections, 70 %. 50%. nebulizer, etc. c. surgical Deductible Deductible procedures applies; applies; performed payable at payable at during the visit. 70 %. 50 %. d. all other covered No Deductible Deductible services applies applies; performed payable at payable at during the visit. 100 %. 50 %. 10. Charges of a Doctor Deductible Deductible for surgery performed applies; applies; in the outpatient payable at payable at department of a 70 %. 50 %. Hospital or other outpatient facility. 11. Charges incurred for Deductible Deductible manual applies; applies; manipulations, lab payable at payable at and x -ray which are 70 %. 50 %. billed by a Doctor or chiropractor. Please refer to Medical Care Benefit Provisions for additional information. 88E- MEDSCH 23 MEDICAL CARE BENEFITS - Continued Services 12. Charges incurred for outpatient physical, speech and occupational therapy, limited to one visit per day. 13. Charges incurred for durable medical equipment. 14. Charges for services performed by a private duty nurse. 15. Organ transplant. 16. Hospice Care. 88E MEDSCH 24 The Plan Will Pay PPO Non -PPO Deductible applies; payable at 70 %. Deductible applies; payable at 70 %. Deductible applies; payable at 70 %. Deductible applies; payable at 70 % Deductible applies; payable at 70 %. Deductible applies; payable at 50 %. Deductible applies; payable at 50 %. Deductible applies; payable at 50 %. Please refer to Medical Care Benefit Provisions for additional information. Deductible applies; payable at 50 %. Deductible applies; payable at 50 %. Please refer to Medical Care Benefit Provisions for additional information. MEDICAL CARE BENEFITS - Continued The Plan Will Pay Services PPO Non -PPO 17. Home Health Care. Deductible Deductible applies; applies; payable at payable at 70 %. 50 %. Please refer to Medical Care Benefit Provisions for additional information. 18. Skilled Nursing Deductible Deductible Facility Charges. applies; applies; payable at payable at 70 %. 50 %. 19. After Hours Care, No Deductible Deductible performed at an applies; applies, Urgent Care Facility. payable at payable at 100% after the 50 %. Covered Person Pays a $15 Per Visit Fee. 20. Wellness Care* for: a. childhood No Deductible No Benefits. ** examination and applies; immunizations. payable at 100 %.* b. gynecological No Deductible No Benefits. ** exam including applies; pap smear and payable at mammograms. 100%.* 88E- MEDSCH 25 MEDICAL CARE BENEFITS - Continued The Plan Will Pay Services PPO Non -PPO c. physical No Deductible No Benefits ** examinations. applies; payable at 100 %.* d. annual prostate No Deductible No Benefits. ** exam and applies; prostate specific payable at antigen (PSA) 100 %.* testing. * Any charge in excess of the $350 Benefit limit will not be considered a Covered Expense. Non -PPO Lab and x -ray charges related to Wellness Care will be paid at 100W when referred by a PPO provider. 21. Treatment of Mental Health Conditions: a. Inpatient Deductible Deductible Hospital or other applies; applies; inpatient facility payable at payable at charges. 70 %. 50 %. b. Inpatient Doctor Deductible Deductible charges. applies; applies; payable at payable at 70 %. 50 %. 88E- MEDSCH 26 MEDICAL CARE BENEFITS - Continued Services 22. Treatment of alcoholism and drug abuse (combined): 88E MEDSCH 27 The Plan Will Pay PPO Non -PPO c. Outpatient Deductible Deductible Hospital or other applies; applies; outpatient facility payable at payable at charges. 70 %. 50 %. d Doctor's charges No Deductible Deductible for a visit to the applies; applies; office or a payable at payable at Covered 70 %. 50 %. Person's home. a. Inpatient Deductible Deductible Hospital or other applies; applies; inpatient facility payable at payable at charges. 70 %. 50 %. b. Inpatient Doctor Deductible Deductible charges. applies; applies; payable at payable at 70 %. 50 %. c. Outpatient Deductible Deductible Hospital or other applies; applies; outpatient facility payable at payable at charges. 70 %. 50 %. MEDICAL CARE Services 23. Treatment of Temporomandibular Joint Disorders (TMJ) Please refer to Medical additional information. 24. Charges for services performed at a Birthing Center. 25. Charges for X -rays or laboratory specimens that are performed on an outpatient basis, (i.e. Doctor's office, freestanding facility or outpatient facility). 27. All other Covered Deductible Expenses. applies; payable at 70 %. 88E- MEDSCH 28 BENEFITS - Continued The Plan Will Pay PPO Non -PPO Deductible Deductible applies; applies; payable at payable at 70 %. 50 %. Care Benefit Provisions for Deductible Deductible applies; applies; payable at payable at 70 %. 50 %. No deductible Deductible applies; applies; payable at payable at 100 %. 50 %. 26. Charges of a Deductible Deductible Dietician or applies; applies; Nutritionist for diet payable at payable at counseling. 70 %. 50%.* *Subject to reasonable and customary fees. Deductible applies; payable at 50 %. MEDICAL CARE BENEFITS - Continued When it is not reasonably possible for a Covered Person to get access to a Participating Provider in the network of an eligible service or supply, The Plan Will Pay Benefits at 70% and the PPO deductible will apply. "Additional Deductible" means that portion of covered Hospital expenses a Covered Person is required to pay out of his/her pocket before The Plan Will Pay Benefits for any remaining portion. Additional Deductibles may apply even if no Deductible applies. The Additional Deductible does not apply toward the Deductible or any out -of- pocket amounts. "Per Visit Fee" means that portion of covered Doctor expenses a Covered Person is required to pay out of his/her pocket before The Plan Will Pay Benefits for any remaining portion. "Deductible" means that portion of Covered Expenses a Covered Person is required to pay out of his /her pocket each calendar year before The Plan Will Pay Benefits for any remaining portion. The Deductible does not apply toward any out -of- pocket amounts. A Covered Person will not be reimbursed for any Per Visit Fee or Additional Deductible nor do they apply toward any Deductible or his /her Out -of- Pocket amount. Out - of - Pocket Expense Maximum When $3,000 in Out -of- Pocket Expenses has been paid by one Covered Person during a calendar year, the 70% level of Benefit payments for PPO services will automatically increase to 100% for any additional eligible Covered Expenses Incurred by that same person during the remainder of that calendar year. 88E- MEDSCH 29 MEDICAL CARE BENEFITS - Continued When $9,000 in Out -of- Pocket Expenses has been paid by one Covered Person during a calendar year, the 50% level of Benefit payments will automatically increase to 100% for any additional eligible Covered Expenses Incurred by that same person during the remainder of that calendar year When $9,000 in Out -of- Pocket Expenses has been paid on behalf of all the covered members of Your Family Unit during a calendar year, the 70% level of Benefit payments for PPO services will automatically increase to 100% for any additional eligible Covered Expenses Incurred by any covered family member during the remainder of that calendar year. When $27,000 in Out -of- Pocket Expenses has been paid on behalf of all the covered members of Your Family Unit during a calendar year, the 50% level of Benefit payments will automatically increase to 100% for any additional eligible Covered Expenses Incurred by any covered family member during the remainder of that calendar year. An "Out -of- Pocket Expense" is the 30% and 50% shares of any otherwise eligible (Reasonable and Customary) expense which You pay. Per Visit Fees, Additional Deductibles, Pre - Treatment Authorization Penalties, Concurrent Review Penalties and Deductibles are not considered eligible Out -of- Pocket Expenses. These increases will not apply to wellness charges or charges incurred for the treatment of Mental Health Conditions, alcoholism and drug abuse. 88E- MEDSCH 30 MEDICAL CARE BENEFITS - Continued Room and Board Maximum 1. Private room accommodation 2. Ward or semiprivate accommodation 3. Intensive Care Unit accommodation 88E- MEDSCH 31 The Covered Expense Incurred' the Covered Expense Incurred the Covered Expense Incurred Private room will be allowed when documented in writing from the physician as medically necessary for treatment of the condition, or when the hospital only has private rooms. Skilled Nursing Maximum Covered Expense Facility Benefit 1. Daily Benefit the Room Charge in the Skilled Nursing Facility. 2. Maximum Benefit PPO - $10,000 per calendar year. Non -PPO - $7,000 per calendar year. Medical Care Benefits When Injury or Illness causes You or Your dependent, while covered under this Plan, to incur Covered Medical Care Expenses, the Plan will determine Benefits according to the Schedule and the limitations and exclusions outlined in the Plan. Benefits for each Covered Expense will be calculated as follows: 1. The Reasonable and Customary fee will be determined. 2. The amount will be reduced by any applicable Deductible. 3. The remaining amount will be multiplied by the appropriate Covered Percentage, resulting in the Benefit payable. 4. The Benefit payable will be subject to the maximums shown on the Schedule. MEDICAL CARE BENEFITS - Continued Deductible Requirement Your or Your dependent's Deductible Requirement will be met when the Covered medical Expenses Incurred while covered during each calendar year equal the Deductible Amount shown on the Schedule. You are required to pay this amount, the Plan will not reimburse You for this expense. The following special Deductible provisions are included to help You and Your covered dependents meet this Deductible Requirement. 1. Carry Over: If You or Your dependent incurred Covered medical Expenses during the last three months of the calendar year and they were applied to meet that year's Deductible, those same expenses may be used again, "carried over" to help meet the Deductible Requirement of the next year. 2. Family Unit Deductible: The Family Unit Deductible Requirement will be met when all Covered Expenses applied to individual Deductibles for covered members of Your family, in a calendar year, equal the Family Unit Deductible shown on the Schedule. 3. Common Accident Feature: If two or more Covered Persons in Your Family Unit are injured in the same accident, only one Individual Deductible amount will apply to the total of all Covered Expenses Incurred (by all covered and injured Family Unit members) as the result of that accident. This applies during the calendar year in which the accident occurs. This does not apply to Expenses Incurred for any other Illness or Injury. 88E- MEDSCH 32 MEDICAL CARE BENEFITS - Continued Covered Expenses The Plan Will Pay Benefits as shown on the Schedule for the following Medical Care expenses of a Covered Person if the expenses are considered Covered Expenses as defined in General Definitions: 1. Hospital daily room and board, general nursing care, and Intensive Care Unit, to the Maximum Amounts shown on the Schedule. 2. All other Medically Necessary miscellaneous services and supplies furnished by a Hospital during covered Inpatient Hospital Confinement, but not for private duty nursing care. 3. Pre- admission testing performed before a scheduled Inpatient Hospital Confinement. 4. Outpatient Hospital charges for medical care and supplies used on the premises of a Hospital. 5. Medically Necessary services and supplies furnished in a licensed Ambulatory Surgical Center. 6. Medically Necessary services and supplies furnished in a lawfully operating Birthing Center. 7. Skilled Nursing Facility charges for: a daily room and board up to the maximum shown on the Schedule; or b. a confinement beginning within 7 days of discharge from an Inpatient Hospital Confinement of at least 1 day. 8. Professional service charges of a Doctor (other than psychiatric/psychological service charges). 9. Professional psychiatric/psychological service charges of a Doctor for treatment of Mental Health Conditions, subject to the maximums shown on the Schedule. 88E -CE 33 MEDICAL CARE BENEFITS - Continued 10. Professional service charges of a Doctor for surgery. 11. Professional service charges of a Doctor for the giving of anesthesia. 12. Professional service charges made of a Doctor, or by a laboratory for diagnostic laboratory and x -ray exams. 13. Private duty nursing charges for services performed by an R.N. or L.P.N., as defined by the Plan. 14. Physiotherapy services of a physiotherapist. 15. Charges for services of a qualified speech therapist or audiologist for speech therapy and audio therapy, including audio diagnostic testing, to provide developmental and rehabilitative care where there is a reasonable expectation that the services will produce significant improvement in the Covered Person's condition in a reasonable period of time. 16. Charges for anesthesia when given by a Doctor. 17. Durable medical equipment as defined by the Plan. 18. Travel: a. by train, bus or commercial airline in the continental U.S. and Canada to, but not from, a Hospital for needed special care; b. by professional ambulance used locally to a Hospital. 19. Routine mammographic screening as defined in the Wellness Care Benefit section. 20. Expenses for pregnancy will be payable on the same basis as any Illness for a female employee or covered dependent wife. No Benefits will be payable for expenses which relate to the pregnancy of a dependent Child except for Complications of Pregnancy, as defined in General Definitions. 21. Expenses Incurred for the treatment of alcoholism, drug abuse and Mental Health Conditions as defined by the Plan. 88E -CE 34 MEDICAL CARE BENEFITS - Continued 22. Charges incurred for Wellness Care expenses as shown on the Schedule and as defined in the Wellness Care section. 23. Home Health Care as defined in the Home Health Care section. 24. Hospice Care as defined in the Hospice Care section. 25. Treatment of Temporomandibular Joint Dysfunction, subject to the maximum shown on the Schedule. 26. Manual Manipulation as defined by the Plan. 27. Organ Transplants as defined by the Plan. 28. Oral surgery. 29. Amniocentesis testing for high risk pregnancy or when mother is 35 years of age or older. 30. Treatment of chronic pain and pain management, including services for pain rehabilitation. 31. Diagnosis of infertility. 32. Elective sterilization. 33. Group therapy. 34. Counseling. 35. Diet counseling services, performed by a Dietician or Nutritionist. If any of the preceding Covered Expenses are incurred during a covered Inpatient Hospital Confinement or as a covered outpatient Hospital charge, they will be paid as covered Hospital charges or outpatient Hospital charges, as the Plan determines appropriate, and not as a separate Benefit. SSE-CE 35 MEDICAL CARE EXCLUSIONS AND LIMITATIONS Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Medical Care Benefits. These are: 1. Charges not included as Covered Expenses. 2. Blood or plasma when a refund or credit is made for those items. 3. Cosmetic or plastic surgery and related charges, unless due to: a. an accidental Injury; or b. a birth defect; and which interferes with a normal function of the body or causes physical pain. 4. Hearing aids and their fitting. 5. Eyeglasses or contact lenses and the fitting of such (except the first pair after cataract surgery). These items are covered under the Vision Care Benefit. Refer to the Vision Care Benefit section for coverage information. 6. Eye refractions. 7. Care or supplies furnished due to: a. an act of war (declared or undeclared); b. insurrection or Riot. 8. Care or supplies which are furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place unless: a. for Emergency treatment when You or Your dependent must pay for those services; b. for non - service connected disabilities in a Veterans Administration Hospital; c. incurred by a U.S. military retiree (covered by this Plan) and his /her covered dependents, while confined in a military medical facility. 88E -EX 36 MEDICAL CARE EXCLUSIONS AND LIMITATIONS - Continued 9. Care and services to the extent furnished or payable under: a. a plan or program operated by a National Government or one of its agencies; b. a state cash sickness or similar law. 10. Care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage (except as may be required to fulfill any Participating Provider contractual obligations). 11. Injury or Illness resulting from taking part in the commission of an assault or felony or being engaged in an illegal occupation. 12. Injury or Illness arising out of employment, whether or not You or Your dependent is covered by Workers' Compensation or similar laws. 13. Exercise for the eyes (orthoptics). 14. Psychological testing. 15. Nerve stimulators. 16. Services or supplies for obesity, weight reduction or dietary control, except when provided for treatment of morbid obesity. 17. The following types of care: a. Custodial Care; b. care to assist the Covered Person in the activities of daily living; c. maintenance care, not expected to improve the Covered Person's medical condition. 88E -EX 37 MEDICAL CARE EXCLUSIONS AND LIMITATIONS - Continued 18. Charges incurred by other than the diagnosed patient except as provided in the Organ Transplant benefit. 19. Orthodontic treatment, or any other non - surgical procedure, care, or supply to correct a malocclusion of the teeth. 20. Treatment of teeth or nerves connected to teeth, except: a. oral surgery; b. treatment of an accidental Injury to natural teeth; or c. covered Hospital charges (as defined) when needed for dental care. 21. Any service rendered by a Close Relative or someone having the same legal residence as the Covered Person. 22. Expenses which relate to the pregnancy of a dependent Child except for Complications of Pregnancy, as defined under General Definitions. 23. In -vitro fertilization, artificial insemination, infertility treatment and all related expenses (except necessary care and supplies needed to diagnose infertility), family planning or contraceptive services. 24. Reversal of an elective sterilization procedure. 25. Surgical correction of eye refraction which can be corrected by eyeglasses or lenses (radial keratotomy, keratectomy, keratoplasty). 26. Purchase or rental of luxury medical equipment when standard equipment is Appropriate for the Covered Person's condition (e.g., motorized wheelchairs or other vehicles, bionic or computerized artificial limbs). 27. Education or training of any type for the treatment of learning disabilities and attention deficit disorders; I.Q. testing except in connection with assessment or treatment of a speech, language or hearing disorder. 28. Thermograms, temperature gradient studies. 88E -EX 38 MEDICAL CARE EXCLUSIONS AND LIMITATIONS - Continued 29. Any care or supplies received prior to the Effective Date or after the Termination Date of this coverage (unless coverage is continued according to some Plan provision). 30. Any service rendered by a person who is not legally qualified to perform that service. 31. Sex transformations and hormones related to such. 32. Elective induced abortion, unless carrying the fetus to full term would seriously endanger the life of the mother. If complications arise after the performing of an abortion, any Covered Expenses Incurred to treat those complications will be considered under this Plan; but the initial costs relating to the abortion will not be covered. 33. Charges for or in connection with smoking cessation and nicotine withdrawal. Prescriptions for smoking cessation or nicotine withdrawal are covered under the Prescription Drug Benefit. Refer to the Prescription Drug Benefit section for coverage information. 34. Charges for or in connection with acupuncture. 35. Charges made by a Doctor for his/her time on "standby" status if he /she performs no actual service. 88E -EX 39 MEDICAL CARE BENEFIT PROVISIONS Conditions and Maximums for Treatment of Non - Serious and Serious Mental Health Conditions The Plan Will Pay Benefits for the treatment of a Non - Serious Mental Health Condition while confined in a Hospital. Coverage is limited to 30 days in any calendar year. Medical Care Benefits for psychiatric/psychological services of a Doctor for the treatment of a Non - Serious Mental Health Condition received while confined as an inpatient in a Hospital are limited to the Covered Expense Incurred for up to 30 inpatient Hospital visits per calendar year. As an alternative to inpatient Hospital days, medical Benefits for Partial Hospitalization, Residential Treatment or crisis respite care for the Covered Person may also be provided. Two alternate days will reduce, by one day, the 30 days available for inpatient Hospital treatment. Medical Care Benefits for psychiatricpsychological services of a Doctor for the treatment of a Non - Serious Mental Health Condition received while not so confined are limited to the Covered Expense Incurred for up to 30 visits per calendar year. 88E -N &M 40 MEDICAL CARE BENEFIT PROVISIONS - Continued For Plan purposes, a "Non- Serious Mental Health Condition" means any of the following conditions or diagnosis; anxiety disorders, somatoform disorders, autism and other disorders of infancy, childhood and adolescence and all other diagnoses as presented in the most recent version of the Diagnostic and Statistical Manual of Mental Disorders as published by the American Psychiatric Association, including such disorders which are biologically or organically based or due to biochemical imbalances but excluding Serious Mental Health Disorders such as paranoid and other psycholooic disorders, schizophrenia, bipolar disorders (mixed, manic and depressive), maior depressive disorders (single episode or recurrent) and schizo - affective disorders (bipolar or depressive) which will be paid as any other Illness, and NOT under the Non - Serious Mental Health provision. Conditions of alcoholism and drug abuse are excluded. "Partial Hospitalization" means continuous treatment for at least three hours, but not more than 12 hours, in any 24 hour period, in a licensed facility by a licensed health care professional acting within the scope of his /her license for the treatment of Mental Health Conditions. This may be referred to as a Partial Hospitalization Program (PHP) or Day program. "Residential Treatment " means a 24 hour a day program under the clinical supervision of a mental health professional, in a community residential setting other than an acute care hospital, for the active treatment of mentally ill persons, including a residential treatment center (RTC). SSE -N &M 41 MEDICAL CARE BENEFIT PROVISIONS - Continued Conditions & Maximums for Treatment of Alcoholism and Drug Abuse (Combined) The Plan Will Pay Benefits for the treatment of alcoholism and drug abuse while confined in a Hospital. Coverage is limited to a combined 30 days in any calendar year and includes a lifetime maximum of $25,000. Medical Care Benefits for psychiatric/psychological services of a Doctor for the treatment of alcoholism and drug abuse received while confined as an inpatient in a Hospital are limited to the Covered Expense Incurred for up to a combined 30 inpatient Hospital visits per calendar year. Medical Care Benefits for psychiatric/psychological services of a Doctor for the treatment of alcoholism and drug abuse received while not so confined are limited to the Covered Expense Incurred for up to a combined 30 visits per calendar year and include a $1,000 maximum. 88E -N &M 42 MEDICAL CARE BENEFIT PROVISIONS - Continued Durable Medical Equipment The Plan Will Pay for durable medical equipment (including orthopedic and prosthetic devices) which can withstand repeated use, is not disposable, is prescribed by a Doctor only when Medically Necessary, is appropriate for use in the home, and is not useful in the absence of an Illness or Injury, including but not limited to the following: 1. man -made limbs or eyes to replace natural limbs or eyes; 2. casts, orthopedic splints or crutches; 3. trusses or braces needed because of: a. an Injury or Illness; b. a disabling condition existing since birth; 4. oxygen; 5. rental of equipment for giving oxygen or to aid in breathing if the equipment has a mouthpiece, hose and compressor; 6. temporary rental of wheelchairs or hospital bed, or purchase of wheelchairs or hospital beds if the Covered Person's condition requires an indefinite, prolonged period of use; 7. dialysis equipment rental, supplies, upkeep and training for You or Your dependents to use this equipment; 8. ostomy bags and supplies; 9. glucometers, dextrometers, dextrostix, and rental of infusion pumps and supplies; 10. burn pressure garments or dressings; 11. breast prostheses (as defined under the Post- Mastectomy Coverage provision) and initial post- mastectomy holding bra. 88E -N &M 43 MEDICAL CARE BENEFIT PROVISIONS - Continued 12. adaptive equipment or modifications to wheelchairs or hospital beds which are prescribed by a Doctor as necessary for the treatment of the Injury or Illness. 13. Jobst stockings, when prescribed by a Physician, limited to 3 pair per year. Benefits will also be provided for adjustments, repair and replacements of covered prosthetic devices, special appliances and surgical implants when required because of wear or change in a Covered Person's condition (excluding dental appliances and post- mastectomy holding bra). Specifically excluded from coverage are items such as bandages, diapers, formula, toilets, shower or bath equipment, air conditioners or air filters, exercise equipment, whirlpools, hot tubs, and splinting of teeth. Covered Expenses for the rental of durable medical equipment will not exceed the purchase price for such equipment. 88E -N &M 44 MEDICAL CARE BENEFIT PROVISIONS - Continued Newborns' and Mothers' Post - Delivery Coverage The Plan Will Pay Benefits for post - delivery inpatient Hospital care for a mother and her newly born Child, regardless of whether or not the birth occurred in a Hospital. Such inpatient care will be in accordance with the guidelines recommended by the American Academy of Pediatrics and the American College of Obstetricians and Gynecologists which is 48 hours following a vaginal delivery, or 96 hours following a caesarean section. A decision to shorten the above length of stay may be made by the attending Physician in consultation with the mother. The Plan Will Pay Benefits described in this provision on the same basis as any Illness for a Covered Person eligible for pregnancy Benefits under the Plan. The number of hours of Hospital length of stay provided above are not subject to the Concurrent Review or Pre- Treatment Authorization requirements of the Managed Health Care section. Hospital length of stays extending beyond the above number of hours are subject to the Concurrent Review requirements of the Managed Health Care section. 88E -BP 45 MEDICAL CARE BENEFIT PROVISIONS - Continued Post - Mastectomy Coverage Coverage of a Medically Necessary mastectomy will also include coverage of the following: 1. physical complications during any stage of the mastectomy, including lymphedemas; 2. reconstruction of the breast; 3. surgery on the non - diseased breast to attain the appearance of symmetry between the two breasts; and 4. breast prostheses. The Plan Will Pay Benefits on the same basis as for similar services. This coverage will be provided in consultation with the attending Physician and the Covered Person. Benefits are subject to the Pre - Treatment Authorization requirements of the Managed Health Care section. Conditions and Maximums for Manual Manipulation Benefit Charges for services provided by a Doctor or chiropractor involving manual manipulation of the spinal skeletal system including the surrounding tissue to restore proper articulation of joints and alignment of bones or nerve functions, also to include Lab and x -ray. In no event shall the calendar year Maximum Benefit exceed $500. Charges in excess of this maximum will not be included as Covered Expenses under the Plan. This limitation will not apply if such services are rendered: 1. during general anesthesia; 2. during a surgical cutting procedure; or 3. while a Covered Person is confined as an inpatient in a Hospital. 88E -BP 46 MEDICAL CARE BENEFIT PROVISIONS - Continued Organ Transplants The Plan Will Pay Benefits for Hospital and Doctors' services for the surgical removal of human organ or tissue from a living donor to a transplant recipient as follows: 1. when the transplant recipient and donor are both Enrolled for coverage under the Plan, Benefits for Covered Expenses will be provided for both patients under the recipients coverage; 2. when only the transplant recipient is Enrolled for coverage under the Plan, Benefits for Covered Expenses will be provided for the recipient. Benefits may also be provided for the donor for Covered Expenses under the recipients coverage, but only if those services are not eligible under any other coverage available to the donor; 3. when the donor is Enrolled for coverage under the Plan but the transplant recipient is not, Benefits for Covered Expenses rendered to the donor will not be provided. Benefits will not be provided for services rendered to the transplant recipient; provided the transplant has been reviewed and approved by Us and the Utilization Management Organization (UMO). 88E -BP 47 MEDICAL CARE BENEFIT PROVISIONS - Continued Temporomandibular Joint Dysfunction Benefit Covered Expenses Incurred for treatment of Temporomandibular Joint Dysfunction (TMJ) are payable on the same basis as any Illness. Benefits payable for Covered Expenses will riot exceed a Lifetime Maximum Benefit of $5,000. Wellness Care Benefits Wellness medicine emphasizes treatment to avoid possible health problems as an alternative to postponing treatment until symptoms appear. The Plan includes Benefits to help You and Your covered dependents avoid future health problems by providing Benefits for care that can prevent Illness or detect it in its early stages. This can often result in more cost - effective treatment and make recovery from Illness more likely. 1. The Plan Will Pay 100% (without application of the Deductible) of Covered Expenses for immunizations, office visit, Lab and x -ray for Your covered dependent child(ren). 2. The Plan Will Pay 100% (without application of the Deductible) of Covered Expenses for pap smear, office visit, mammogram, physical examination, PSA/prostate test, Lab, x -ray and immunizations for You and Your covered dependent spouse. All Wellness Care charges are subject to a per person calendar year maximum of $350. One routine pap smear, physical examination or PSA/prostate test will be allowed per person, per calendar year. 88E -BP 48 MEDICAL CARE BENEFIT PROVISIONS - Continued Home Health Care Benefits If You or Your covered dependent is confined in a Hospital (and Benefits are payable under this Plan for the Hospital confinement), but: 1. the attending Physician certifies that the Covered Person could go home if certain medical services were provided there for continued care of the same Illness or Injury; and 2. the Physician provides a written plan for such home care, to be administered by a licensed Home Health Care Agency; The Plan Will Pay Benefits at the level shown on the Schedule (subject to the Deductible) of all Covered Expenses (as defined in the Medical Care Benefits section) Incurred as part of the home care plan. Benefits are limited to a calendar year PPO - $10,000 Maximum Benefit of: Non -P PO $7,000 Subject to any applicable Maximum Benefits and to Our prospective and retrospective review of the treatment plan, Home Health Care coverage will continue as long as the Covered Person's Physician continues to certify the need for such care. If Benefits are paid for a Covered Expense under this provision, payment will not be made for that same expense under any other Plan provision. 88E -HHC 49 MEDICAL CARE BENEFIT PROVISIONS - Continued Home Health Care Benefits are not payable for: 1. Custodial Care; 2. transportation service; 3. services of someone who lives with the Covered Person; 4. services not included in the written home care plan of the Physician of record; 5. services rendered at a time when the Covered Person is not under the care of the Physician who set up the home care plan; 6. any items excluded under the Medical Care Exclusions section of the Plan. 88E -HHC 50 MEDICAL CARE BENEFIT PROVISIONS - Continued Private Duty Nursing Care Benefit If You or Your Covered Dependent requires skilled nursing care for an Injury or Illness, in lieu of an inpatient Hospital stay or for the prevention of an acute Hospital or Skilled Nursing Facility stay, and the Covered Person's attending Physician prescribes a skilled nursing treatment plan, The Plan Will Pay Benefits for the Reasonable and Customary charges at the level shown on the Schedule (subject to the Deductible) for: 1. the private duty nursing services of an R.N. or L.P.N.; and 2. the nursing supplies used by the nurse to treat the Illness or Injury as prescribed in the treatment plan, except: 1. visits by a nurse (R.N. or L.P.N.) are limited to one a day and may not exceed four hours per day; 2. services and supplies must be Medically Necessary and Appropriate and are subject to Our prospective and retrospective review of the treatment plan. The Physician's treatment plan must be submitted to Us for Our review and must be updated every 30 days by the Physician. If Benefits are paid for a Covered Expense under this provision, payment will not be made for that same expense under any other Plan provision. Private Duty Nursing Care Benefits are not payable for: 1. Custodial Care; 2. services not included in Your Physician's skilled nursing care treatment plan; 3. any items excluded under the Medical Care Exclusions section of the Plan. BBE -SN 51 MEDICAL CARE BENEFIT PROVISIONS - Continued Hospice Care Benefits When Your or Your covered dependent's Physician recommends (in writing) on or before Hospice care is started a plan of Hospice care for: 1 palliative care of a terminal Illness (where life expectancy is less than six months); and 2. You or Your dependent elects (in writing to Us) to follow the Physician's proposed treatment plan; The Plan Will Pay Benefits at the level shown on the Schedule (subject to the Deductible) of all Covered Expenses (as defined in the Medical Care Benefits section) Incurred as part of the Hospice care plan, not to exceed: 1, pre -death and bereavement counseling for the family, limited to immediate family during the 3 month period after death; 2. a Lifetime Maximum Benefit of: PPO - $20,000 Non -PPO - $15,000 If Benefits are paid under this provision for any Covered Expense, payment for that same expense will not be duplicated under any other Plan provision. These Benefits are in lieu of any other Plan coverage for treatment related to the terminal Illness while the Covered Person is confined in a Hospice. Coverage under this provision ends if You or Your dependent elects (in writing to Us) to discontinue Hospice care, or the Maximum Benefit has been paid. 88E -HC 52 MEDICAL CARE BENEFIT PROVISIONS - Continued Hospice Care Benefits are not payable for: 1. services provided by persons who do not regularly charge for their services; 2. counseling which is not provided as part of the Hospice care plan; 3. services provided by homemakers, caretakers and the like; 4. funeral expense; 5. treatment intended to cure the terminal Illness. 88E -HC 53 MANAGED HEALTH CARE This MANAGED HEALTH CARE section applies to Covered Persons whose Medical Identification card indicates the following as their Participating Provider Organization: One Health Plan READ THIS SECTION CAREFULLY FAILURE TO USE THESE PROVISIONS MAY COST YOU MONEY Pre - Treatment Authorization All Inpatient Hospital Confinements, except for Emergency confinements, and all surgical procedures that are performed outside of a Doctor's office must be reviewed and authorized PRIOR to admission or surgery in order to determine the Medical Necessity of care. The Utilization Management Organization (UMO) must be contacted as soon as Hospital confinement or a surgical procedure to be performed outside a Doctor's office is recommended. Emergency confinements must be reported to the UMO within 48 hours of the Emergency admission. The telephone number for the UMO is shown on a Covered Person's medical identification card. If the UMO's procedures for requesting Pre- Treatment Authorization are not followed, the Doctor or Hospital will be notified of the proper procedures to follow for requesting Pre - Treatment Authorization within five days after the initial contact was made (within 24 hours if Urgent Care is involved). 88- MHCA(G)(10 -02) 54 MANAGED HEALTH CARE - Continued The UMO will obtain all information, including pertinent clinical information, necessary to make a decision regarding authorization. Requests for information will be limited to those necessary to make a determination. The Covered Person will be notified of the UMO's decision no later than 15 days after the date the UMO is contacted for the authorization request. If a decision cannot be made due to matters beyond the control of the UMO, the Covered Person will be notified, within the initial 15 day decision period, of the reason for the extension and the date by which a decision is anticipated. If additional information is needed, the Doctor or the Hospital will be notified within the initial 15 day decision period and will have at least 45 days from receipt of the notice to return the requested information. If the information is received within the 45 day time frame, the UMO will render a decision no later than 15 days after the date the information is received. If the Doctor or Hospital fails to provide the necessary information, the UMO will not be able to authorize the services and the penalties shown herein may be applied to a Covered Person's Benefits. The UMO will make a determination on requests for Pre - Treatment Authorizations involving Urgent Care conditions no later than 72 hours after receipt of the request. If additional information is needed in order to make a determination, the Doctor or Hospital will be notified within 24 hours of receipt of the request and will have at least 48 hours from receipt of the notice to provide the necessary information. The UMO will inform the Covered Person and Doctor or Hospital of the decision the earlier of 48 hours after receipt of the necessary information or 48 hours after the end of the time period for providing the necessary information. 88- MHCA(G)(10 -02) 55 MANAGED HEALTH CARE - Continued "Urgent Care" means that the standard 15 day decision - making time period would place the life or health of a Covered Person in serious jeopardy, the Covered Person's ability to regain maximum function would be jeopardized or, in the Doctor's opinion would subject the Covered Person to unmanageable pain. A Doctor may determine whether Urgent Care is involved. If a Doctor has not made that determination, the determination may be made by a representative of the Plan, applying the judgment of a prudent layperson possessing an average knowledge of health and medicine. If a Covered Person utilizes a Participating Provider, the Participating Provider is responsible for contacting the UMO. If the Participating Provider does not contact the UMO, the Covered Person will not be responsible for a Pre - Treatment Authorization Penalty. If a Covered Person DOES NOT utilize a Participating Provider, he/she is responsible for contacting the UMO. If the UMO is not contacted, a Pre - Treatment Authorization Penalty of $500 will apply to covered Hospital charges and any related expenses incurred during an eligible but unauthorized Hospital admission before normal Benefits of the Plan are calculated. If a Covered Person DOES NOT utilize a Participating Provider, he/she is responsible for contacting the UMO. If the UMO is not contacted, a Pre - Treatment Authorization Penalty of $500 will apply to surgeon's charges and any related expenses for surgical procedures that are performed outside of a Doctor's before normal Benefits of the Plan are calculated. 88- MHCA(G)(10 -02) 56 MANAGED HEALTH CARE - Continued If the Inpatient Hospital Confinement occurs for surgical treatment, only one penalty will be imposed. Regardless of the participation status of the provider, if a Covered Person fails to comply with the UMO's determination, a Pre- Treatment Authorization Penalty of $500 will apply to covered Hospital charges and /or surgeon's charges and any related expenses incurred as a result of such confinement and /or surgery before normal Benefits of the Plan are calculated. If the Inpatient Hospital Confinement occurs for surgical treatment, only one penalty will be imposed. Concurrent Review In addition to having Hospital admissions authorized prior to admission, a Concurrent Review of treatment (again for Medical Necessity) will be conducted throughout the period of confinement. If additional days of confinement are requested beyond those initially authorized by the UMO, the UMO must be contacted to obtain authorization for the continued stay. If the request involves Urgent Care and is made to the UMO at least 24 hours before the end of the initially authorized days, the Covered Person will be notified within 24 hours as to whether the continued stay will be authorized. If the request is not made at least 24 hours before the end of the initially authorized days, the Urgent Care time periods described in the Pre- Treatment Authorization provision will apply. If the UMO's procedures for requesting Concurrent Review authorization are not followed, the Doctor or Hospital will be notified of the proper procedures to follow for requesting Concurrent Review authorization within five days after the initial contact was made (within 24 hours if Urgent Care is involved). 88- MHCA(G)(10 -02) 57 MANAGED HEALTH CARE - Continued If the request does not involve Urgent Care, the Covered Person will be notified of the UMO's decision no later than 15 days after the date the UMO is contacted for the authorization request. If a decision cannot be made due to matters beyond the control of the UMO, the Covered Person will be notified, within the initial 15 day decision period, of the reason for the extension and the date by which a decision is anticipated. If additional information is needed the Doctor or the Hospital will be notified within the initial 15 day decision period and will have at least 45 days from receipt of the notice to return the requested information. If the Doctor or Hospital fails to provide the necessary information, the UMO will not be able to authorize the services and the penalties shown herein may be applied to a Covered Person's Benefits. If the information is received within the 45 days, the UMO will render a decision no later than 15 days after the date the information is received. If, prior to the end of an authorized stay, the UMO finds the stay is no longer Medically Necessary, the Covered Person will be notified in advance that the stay will not be covered by the Plan. If a Covered Person utilizes a Participating Provider, the Participating Provider is responsible for contacting the UMO. If the Participating Provider does not contact the UMO, the Covered Person will not be responsible for a Concurrent Review Penalty. If a Covered Person DOES NOT utilize a Participating Provider, he /she is responsible for contacting the UMO. If the UMO is not contacted, a Concurrent Review Penalty of $100 will be imposed for each day of unapproved confinement before normal Benefits of the Plan are calculated. 88- MHCA(G)(10 -02) 58 MANAGED HEALTH CARE - Continued Regardless of the participation status of the provider, if the Covered Person fails to comply with the MO's determination, a Concurrent Review Penalty of $100 will be imposed for each day of unapproved confinement before normal Benefits are calculated. "Concurrent Review" means the UMO will evaluate the medical need for continued hospitalization. This will involve consultation with the Covered Person's Doctor and comparison of clinical information to professionally developed medical standards of care. Out - of - Town Care If a Covered Person is out of town and needs non - Emergency Care, he /she may be able to locate a Participating Provider by calling the phone number indicated on his/her medical identification card or by using the intemet web address, www. oreatwesthealthcare .com/nationalaccounts. Since the PPO network is nationwide, a Covered Person may be able to utilize a Participating Provider and receive a higher level of Benefits. 88- MHCA(G)(10 -02) 59 MANAGED HEALTH CARE - Continued Retrospective Review The Utilization Management Organization (UMO) may evaluate the medical record of those Covered Persons who were not reviewed under Pre - Treatment Authorization or Concurrent Review. If the UMO is unable to authorize any portion of the stay or treatment, the Doctor will be contacted to provide additional information. No Benefits will be paid for any days of the Hospital stay or treatment that would not have been authorized by the UMO. The decision concerning authorization will be made within 30 days after the claim that is the subject of the Retrospective Review is received. If additional information is needed, the Covered Person or his /her Doctor or Hospital will be notified within 30 days of receipt of the claim and will have at least 45 days from receipt of the notice to provide the information. If the information is received within 45 days, a decision will be made within 15 days of the day the UMO receives the additional information. If the additional information is not received within the 45 day period, the Covered Person should consider the claim, or portion thereof that is under review, to be denied. The claim will be reconsidered if the information is subsequently received. Written notice of the decision will be sent to the Covered Person. "Retrospective Review" means the UMO will review the medical need for hospitalization or treatment after such hospitalization or treatment has taken place. This will involve consultation with the Covered Person's Doctor and comparison of clinical information to professionally developed medical standards of care. 88- MHCA(G)(10 -02) 60 MANAGED HEALTH CARE - Continued Benefits For Services of a Participating Provider The Plan provides different levels of Benefits depending on whether or not a Covered Person uses the services of a Participating Provider. Generally, Benefits will be payable at a higher level if services of a Participating Provider are used; although there may be additional Plan requirements. Participating Providers will submit claims on the Covered Person's behalf and will contact the UMO to obtain necessary approvals. Covered Persons may utilize the provider of their choice. If a Covered Person selects a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. If a Covered Person chooses not to use a Participating Provider, he/she may be responsible for filing his /her own claims and obtaining the proper Utilization Management approvals. If a Covered Person receives Emergency Care and cannot reasonably reach the Participating Provider, The Plan Will Pay Medical Care Benefits as if services were performed by a Participating Provider. Emergency Services Emergency Care is covered for Emergency Medical Conditions (as defined in the General Definitions section). If You or Your dependent has an Emergency Medical Condition, go directly to the nearest Hospital. Refer to the Pre - Treatment Authorization provision for information on contacting the UMO in the event of an Emergency Hospital admission. The Plan Will Pay Medical Care Benefits as shown on the Schedule. 88- MHCA(G)(10 -02) 61 MANAGED HEALTH CARE - Continued Emergency Room Deductible In addition to any other Deductible, an Additional Deductible as shown on the Schedule will be imposed before Benefits are payable for Covered Expenses Incurred during a visit to an emergency room of a Hospital. This Additional Deductible will not apply if the Covered Person is confined in the Hospital immediately after the visit. Disease Management for Chronic Medical Conditions Disease Management is a program which provides specialized education to a Covered Person with a Chronic Medical Condition to improve his/her health. The Plan will provide Disease Management Program (Program") services if the Covered Person meets the Program's predetermined medical criteria and is expected to benefit from the Program. Under this Program, the Covered Person will receive services, coordinated by an R.N., consisting of assessment and educational materials for targeted diseases. There is no charge to the Covered Person for these services. Utilization of the Program's services is voluntary; a Covered Person is not required to participate in the Program. By providing these services, neither the Plan nor its contracted provider promises or guarantees that any intended results will be obtained. The Program does not provide any medical treatment, therapeutic or Home Health Care. It provides for assessment and education in self- management of Chronic Medical Conditions. 88- MHCA(G)(10 -02) 62 MANAGED HEALTH CARE - Continued To participate in the Program, a Covered Person may call the toll -free member services telephone number shown on his /her medical identification card or access the internet web address: www. areatwesthealthcare .com /nationalaccounts. Appeals Procedure A Covered Person or his/her Doctor, or other Authorized Representative has the right to appeal an Adverse Determination. The address to which to send an appeal and any other contact information will be included with an Adverse Determination. If a Covered Person or his /her Doctor or other Authorized Representative does not agree with an Adverse Determination, a Covered Person or his/her Doctor or other Authorized Representative may initiate the appeal by telephoning, faxing or submitting a written request to the UMO. Additional evidence may be presented for consideration on appeal. Initial appeal requests must be received within 180 days of the initial Adverse Determination. "Authorized Representative" means the Covered Person's spouse, parent, Doctor or Hospital. It will also include any other person who submits proof that he or she has been designated by the Covered Person or a court of law to act on such person's behalf. "Adverse Determination" means that the Covered Person's Hospital admission, continued hospital stay or other health care service has been reviewed and, based upon the information provided, does not meet the UMO's requirements for being Medically Necessary, Appropriate, effective or in the proper setting and may result in noncoverage of the health care service. 88- MHCA(G)(10 -02) 63 MANAGED HEALTH CARE - Continued In connection with Our review of the appeal, You have the right to 1) see the Plan and other relevant papers affecting the claim, 2) argue against the denial in writing, 3) have a representative act on Your behalf in the appeal. All comments, documents, records and other information submitted in connection with the claim being reviewed will be considered. Standard Appeal Within 15 days of receiving the appeal request, the UMO will notify the person who submitted the appeal of its decision in writing. The appeal will be reviewed by a Doctor who: 1. has appropriate training and experience in the field of medicine involved in the medical judgment; 2. was not previously involved with the Adverse Determination; and 3. is not the subordinate of the person previously involved with the Adverse Determination. Expedited Appeal If the Standard Appeal process would place the life or health of a Covered Person in serious jeopardy or the Covered Person's ability to regain maximum function would be jeopardized, a request for an expedited appeal may be phoned in by the Covered Person, a Doctor with knowledge of the Covered Person's medical condition or other Authorized Representative (if any). The UMO will conduct the review by telephone or through the exchange of written information. The Covered Person, his/her Authorized Representative (if any), and his /her Doctor will be informed of the decision by telephone or fax within 72 hours of the UMO's receipt of the appeal request. 88- MHCA(G)(10 -02) 64 MANAGED HEALTH CARE - Continued The appeal will be reviewed by a Doctor who: 1. has appropriate training and experience in the field of medicine involved in the medical judgment; 2. was not previously involved with the Adverse Determination; and 3. is not the subordinate of the person previously involved with the Adverse Determination. You may request information regarding voluntary appeals procedures. Second Appeal A Covered Person or his/her Doctor or other Authorized Representative may initiate a second appeal of the Adverse Determination by submitting a written request to the UMO within 60 days of the date of the Adverse Determination received as a result of an initial standard or expedited appeal. An independent external reviewer will evaluate all relevant information and render a decision that will be binding on the Plan. The decision will be rendered within 15 days of the date the UMO receives the appeal request. A second Expedited Appeal will be considered a voluntary appeal. Decisions regarding a second Expedited Appeal will be rendered within a time frame appropriate to the medical condition of the patient. There are no other voluntary appeal rights available with respect to the Pre - Treatment Authorization, Concurrent Review or Retrospective Review for Medical Necessity. You may request information regarding voluntary appeals procedures. 88- MHCA(G)(10 -02) 65 COORDINATION OF BENEFITS If this is not Your only Health coverage, the Benefits payable under this Plan, and any other group plan for the Allowable Expense Incurred during any Benefit Determination Period will be coordinated so that the combined Benefits paid or provided by all plans equal that amount which would be paid if this Plan were the only coverage. You must inform Us if You have other coverage (for example, through Your spouse's employer); and give Your consent to the release of information so that We may use this provision. You should first file Your claim with the primary plan (as determined below). When the claim is paid, send a copy of the charges and a copy of the Explanation of Benefits Statement from the first plan to the secondary plan (as determined below). This will accelerate the processing of Your claim. One of Your plans will be determined to be primary (using the rules below). The primary plan pays its full benefits first. If this Plan is deemed to be the secondary plan, the Benefits paid in addition to the benefits paid under the primary plan will not be an amount more than You would have received had this Plan been Your only coverage. A plan is primary when: 1. the plan does not have a COB provision; 2. the plan designates itself as an "excess" or "always secondary" plan; or 3. if both plans have a COB provision, under the rules it is determined to be primary. 88E -COB 68 COORDINATION OF BENEFITS - Continued When both plans have a COB provision, the order in which the plans provide benefits is determined using the first of the following rules which applies: 1. Employee/dependent. The plan which covers the person as an active employee is primary. If You or Your dependent is also covered by Medicare, the plan covering the person as an active employee is primary, the plan covering the person as a dependent of an active employee is secondary, and then Medicare. Medicare is primary for Medicare eligible retired employees and their Medicare eligible dependents. 2. Dependent children. a. If the parents are not separated or divorced, the plan which covers the parent whose birthday (month and day) falls earlier in the calendar year is primary. If both parents have the same birthday (month and day), the plan which covered the parent longer is primary. If the other plan does not have the "birthday rule ", the rule in the other plan will determine the primary plan. b. If the parents are separated or divorced, the plan which covers the natural parent with custody is primary; followed by the plan which covers the step- parent who has married the natural parent with custody; and finally, the plan which covers the natural parent without custody. However, if the court decrees one of the parents responsible for health care expenses, the plan which covers that parent is primary. 88E -COB 67 COORDINATION OF BENEFITS - Continued If the decree names the parent other than the natural parent with custody, We must be notified and have actual knowledge of those terms. Any Benefits paid prior to actual knowledge will not be affected. The plan of the other parent and the plan of the spouse of the parent with custody will be secondary and third, respectively. If joint custody is granted by the court, the rules pertaining to parents who are not separated or divorced apply. 3. Active /inactive employee. The plan covering the employee who is neither laid off or retired is primary. If the other plan does not have this rule, this rule is ignored. 4. Continuation coverage. Continuation coverage provided under either federal or state law is secondary. If the other plan does not have this rule, this rule is ignored. 5. Length of coverage. If the primary plan cannot be determined using any of the rule. above, the plan which has covered the person for the longest period of time will be considered primary. If this Plan is determined to be secondary, We will reduce Benefits payable so that the combined benefits provided by all plans during a claim determination period are not more than that amount which would be paid if this was the only Benefit Plan for the Covered Person. The actual benefit amounts available are determined by each plan's benefit provisions. Benefits payable under this Plan will never exceed the amount which would have been paid if there were no other plans involved. If Benefit payments under this Plan are reduced by COB, only the reduced amounts will be charged against Your Plan maximums. 88E -COB 68 COORDINATION OF BENEFITS - Continued If during Coordination of Benefits, payments are made in error, the plans will have the right to adjust payments among themselves. Such payments satisfy Our liability. If We overpay a claim, We will have the right to recover such overpayments from any person for, to whom, or with respect to whom such payments were made, any other insurance company, or any other organization. Definitions An "Allowable Expense" is the Reasonable and Customary amount for any necessary medical, dental, vision, or health care service which is covered (at least in part) by one of the plans. If a health plan provides services (rather than cash payments) a dollar value will be assigned in order to use this provision. When the primary plan penalizes You for not complying with plan provisions, such as failing to pre - certify, the amount of the reduction is not considered an Allowable Expense. A "Benefit Determination Period" means from January 1 of one year to December 31 of the same year. A "plan" as used in this provision, is any of the following which provides health benefits or services: 1. a group or group blanket plan on an insured basis; 2. other plans which cover people as a group; 3. a self- insured or non - insured plan or other plan which is arranged through an employer, trustee or union; 4. a pre - payment plan which provides medical, vision, dental or health service; 88E -COB 69 COORDINATION OF BENEFITS - Continued 5. government plans, except Medicaid; 6. group auto insurance, but only to the extent medical benefits are payable under group auto insurance; 7. no -fault auto insurance on an individual basis, except where not allowed by the state in which this Plan is issued; 8. single or family subscribed plans issued under a group or blanket type plan; but the definition of plan shall not include: 1. hospital indemnity type plans; 2. school accident -type coverage. 88E -GOB 70 PRESCRIPTION DRUG BENEFITS Employee and Dependent Prescription Drug Expense Benefit Multi -Tier Copayment Copayment Amount for each purchase of a Prescription Drug or injectable insulin or Prescription refill: SCHEDULE Generic Preferred All Other Brand Brands Participating Home Delivery Pharmacy $15.00 $30.00 $60.00 Participating Pharmacy $10.00 $20.00 $40.00 After the applicable Copayment is satisfied, The Plan WiII Pay 100% 100% 100% The Medical Pre - Existing Conditions Limitations shall not apply to Prescription Drug Expenses. 86E- PD(01 -00) 71 PRESCRIPTION DRUG BENEFITS - Continued Unit Dose Limit -- the greater of 100 dose units or the following Day Supply Maximums: Participating Home Delivery Pharmacy Participating Pharmacy 90 day supply 30 day supply Drug charges which are covered to any extent under this Prescription Drug Expense Benefit are not covered under any other Medical or Dental Care Benefits of this Plan. The Copayment for Prescription Drugs may not be used toward satisfaction of the Medical Care or Dental Care Deductible or any out -of pocket maximums. When Injury or Illness causes You or Your dependent, while covered under the Plan, to incur Covered Prescription Drug Expenses, The Plan Will Pay Benefits for those Covered Expenses that exceed the Copayment Amount. These Prescription Drugs and medicines must be prescribed by a Doctor and obtained from a licensed Pharmacist or Doctor operating within the scope of his/her license. You or Your dependent incurs an expense on the date the drug or medicine is furnished. 88E- PD(01 -00) 72 PRESCRIPTION DRUG BENEFITS - Continued Prescription Drug Generic Option If a Brand Name drug does have a generic equivalent and You receive the Brand Name drug, You are required to pay the applicable Brand Name Copayment. If You receive the Generic Drug, You pay only the Generic Copayment. If a Brand Name drug does not have a generic equivalent, You pay only the Generic Copayment. Preferred Brand Option If Your Doctor prescribes a name brand drug that has been selected as a Preferred Brand, You pay the Preferred Brand Copayment. Your Employer will provide You with an initial list of Preferred Brands. This list is reviewed annually and can change. You may check whether a Brand Name drug is still on the list or if new Brand Name drugs have been added by referring to the current year's listing available from Your Employer. If Your Prescription is not for a drug on this list, You will pay the appropriate All Other Brands or Generic Copayment. Home Delivery Maintenance (Mail Order) Prescription Drug Option Most Maintenance Prescription Drugs are available through the Home Delivery Pharmacy. You pay a Copayment based upon whether the drug is a Generic, a Preferred Brand or All Other Brands Prescription Drug. The list of Preferred Brands is the same for both retail Pharmacies and the Home Delivery Pharmacy. Mail order must be used for maintenance medication. Retail is only available for the first three months supply. 88E- PD(01 -00) 73 PRESCRIPTION DRUG BENEFITS - Continued Prescription Drug Definitions 1. "Generic Drug" means a Prescription Drug known by its chemical name rather than by Brand Name. 2. "Home Delivery" means the Maintenance Prescription Drugs are delivered directly to You or Your dependent by mail. 3. "Home Delivery Pharmacy" means a U.S. Pharmacy that has a written contract with Us or Our authorized representative for Home Delivery of Maintenance Prescription Drugs. 4. "Maintenance Prescription Drug" means a Prescription Drug that You or Your dependent will take or use for more than 30 days. 5. "Pharmacy" means a licensed establishment where drugs are dispensed by a Pharmacist licensed in that state. "Pharmacy" also includes a Hospital Pharmacy. "Participating Pharmacy" means a U.S. Pharmacy that has a written contract with Us or Our authorized representative. 6. "Preferred Brand" means Brand Name Prescription Drugs selected by Our authorized representative for their high degree of overall clinical and cost effectiveness prescribed for use in treating common health conditions. 7. "Prescription" means the request for a drug by a Doctor licensed to prescribe drugs and each authorized refill. 8. "Prescription Drug" means a prescription legend drug that is: a. medicine required by federal law to bear the legend, "Caution: Federal law prohibits dispensing without a Prescription"; b. any other drug which, under the applicable state law, may only be dispensed upon the Prescription order of a Doctor. 88E- PD(01 -00) 74 PRESCRIPTION DRUG BENEFITS - Continued We will also consider the following to be Prescription Drugs: a. needles and syringes; b. Tretinoin and Differin, all dosage forms (e.g. Retin -A), for persons through the age of 22 years; c. injectable insulin; d. injectable Prescription Drugs; e. birth control pills, contraceptive devices, injections and implants; f. Prescription vitamins; g. diabetic supplies such as glucose strips, glucose monitors, ketone test tablets, and lancets; h. Adderall, Dexedrine and Desoxyn for persons through the age of 19 years; i. Viagra, limited to 6 pills per month; j. drugs approved by the FDA for use in treating AIDS; k. drugs used in the treatment of migraine therapy; I. prescription medications for smoking cessation, including nicotine patches; and m. growth hormones. 88E- PD(01 -00) 75 PRESCRIPTION DRUG BENEFITS - Continued Prescription Drug Exclusions Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Prescription Drug Benefits. These are: 1. Drugs or medicines prescribed for Injury or Illness arising out of employment, whether or not You or Your dependent is covered by Workers' Compensation or similar laws. 2. Drugs or medicines which can be legally obtained without a Prescription, except those items included in the definition of "Prescription Drug." 3. Drugs or medicines provided without charge. 4. The administration of drugs or insulin. 5. Drugs or medicine marked "Caution: Limited by federal law to investigational use." 6. Experimental drugs or medicines. 7. Drugs or injectable insulin in a quantity greater than that prescribed by a Doctor. 8. Drugs or injectable insulin purchased more than one year after the date of the Prescription. 9. Drugs or insulin while confined in a Hospital, Skilled Nursing Facility or a similar facility. 10. Healing devices; immunization agents; organic serum, blood or blood plasma; non - prescription vitamins, diet aids, health or beauty aids and delivery charges. 11. That part of one purchase of a drug or medicine that exceeds the Unit Dose Limit specified on the Schedule. 88E- PD(01 -00) 76 PRESCRIPTION DRUG BENEFITS - Continued 12. The following items (whether Brand Name or Generic) will not be covered regardless of the reason prescribed: a. tretinoin, all dosage forms (e.g. Retin -A), for individuals 23 years of age or older; b. minoxidil (Rogaine) for the treatment of alopecia; c. Nicorette, nicotine gum, patches or other over -the- counter smoking deterrent medications; d. anorectics (any drug or medicine used for the purpose of weight loss); e. diet supplements; f. infertility drugs or medicines; and g. Viagra in excess of 6 units per month. 13. Drugs, medicine and/or injectable insulin purchased at a non - participating pharmacy. 88E- PD(01 -00) 77 DENTAL CARE BENEFITS SCHEDULE Employee and Dependent Dental Care Expense Benefit Calendar Year Deductible The Individual Deductible equals Covered Expenses in the amount of $50. The Family Unit Deductible equals Covered Expenses in the amount of $150. The Family Unit Deductible equals the amounts applied towards the Individual Deductibles until 3 family members satisfy their Individual Deductibles. The amount of actual Deductible satisfied may vary each year. The Family Unit Deductible must be satisfied by You and Your Family Unit members who are covered as dependents. No part of any Covered Expenses for which Benefits are paid or payable by the Plan may be used to satisfy the Family Unit Deductible. 88E -DSCH 78 DENTAL CARE BENEFITS - Continued Services 88E - DSCH 79 The Plan Deductible Will Pay Applies Preventive and Diagnostic Care 100% No Basic Dental Care 80% Yes Prosthetic Care 50% Yes Orthodontic Care for dependent Children under age 19 50% Yes Maximum Benefit for Covered Dental Care Expenses Incurred in any Calendar Year excluding Orthodontic Care $1,000 Maximum Lifetime Benefit for Covered Orthodontic Care $1,000 When You or Your dependent incurs Covered Dental Care Expenses exceeding the Deductible, The Plan Will Pay Benefits for those expenses up to the maximums shown on the Schedule. DENTAL CARE BENEFITS - Continued Voluntary Pre - Determination of Dental Benefits Pre- Determination of Dental Benefits may be requested by a Covered Person when the estimated amount of charges will be $300 or more. We will review the description of planned treatment and expected charges, including those for diagnostic x -rays. This information should be sent to Us before the dental work is started if the Covered Person requests the Pre - Determination of Benefits. If there is a major change in the treatment plan, a revised plan should be submitted for review. When more than one dental service could provide suitable treatment based on common dental standards, We will recommend alternate methods of treatment which produce a satisfactory result. When there has not been a Pre - Determination of Benefits, We will determine the expenses that will be included as Covered Dental Care Expenses at the time the claim is received. Pre - Determination of Benefits does not guarantee payment. The estimate of Benefits payable may change based on the Benefits, if any, for which a Covered Person qualifies at the time services are completed. 88E -DSCH 80 DENTAL CARE BENEFITS - Continued Deductible Requirement Your or Your dependent's Deductible Requirement will be met when the Covered Dental Care Expenses Incurred while covered during each calendar year equal the Deductible shown on the Schedule. You are required to pay this amount, the Plan will not reimburse You for this expense. The following special Deductible provision is included to help You and Your dependents meet this Deductible Requirement. Family Unit Deductible: The Family Unit Deductible Requirement will be met when all Covered Expenses applied to Individual Deductibles for covered members of Your family, in a calendar year, equal the amount shown on the Schedule. 88E -DSCH 81 DENTAL CARE BENEFITS - Continued Covered Dental Care Expenses The Plan Will Pay Benefits as shown on the Schedule for the following Covered Dental Care Expenses: 1. Preventive and Diagnostic Care which means: a. oral inspection; oral examination; b. exams including x -ray exams; c. diagnosis; d. Prophylaxis; e. Fluoride treatment to age 19. 2. Basic Dental Care which means remedial and restorative care and supplies for: a. necessary examinations and diagnostic services (including x -ray and laboratory tests) when such services are not covered as Preventive and Diagnostic Care; b. extractions of erupted teeth and unerupted teeth; c. fillings (amalgams); d. space maintainers; e. root canal therapy (endodontic care); f. treatment of the gums and tissues of the mouth (periodontic treatment); g. emergency care for the relief of pain (palliative care); h. the giving of anesthesia in connection with dental care; i. repair and /or relining of complete or partial dentures; 88E -DCE 82 DENTAL CARE BENEFITS - Continued J. Replacement of Dentures ,subject to the Pre - Existing Conditions Limitations,; (use if plan imposes pre- existing on Dental) if required due to: i. removal of natural teeth while covered under the Plan; ii. the initial placement of an opposing full denture; and Replacement of Dentures for any other reason will be covered only as described under Prosthetic Care below; k. sealants to age 19. 3. Prosthetic Care which means: a. inlays and onlays; b. initial installation of full or partial dentures; c. bridgework; d. crowns; e. crowns or Replacement of Dentures for reasons other than those stated as Basic Dental Care but only if the crowns or dentures that need replacing are more than five years old. 4. Orthodontic Care for dependent children to age 19 which means: a. preparing teeth and jaw for orthodontic treatment; b. furnishing orthodontic devices; and c. installing the devices. 88E -DCE 83 DENTAL CARE BENEFITS - Continued Dental Care Exclusions Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Dental Care Benefits. These are: 1. Dental care or supplies which are not included under Covered Dental Care Expenses. 2. Dental care or supplies furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place. 3. Dental care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage. 4. Dental care or supplies furnished as a result of taking part in the commission of an assault or felony or being engaged in an illegal occupation. 5. Dental care or supplies furnished as a result of an Illness covered by Workers' Compensation, occupational disease law or similar laws; or Injury if it arises out of or during the course of employment for pay or profit. 6. Dental care or supplies payable under another part of the Plan. 7. Dental care or supplies furnished as a result of: a. act of war (declared or undeclared); b. insurrection or Riot. 8. Charges incurred after the Covered Person is no longer covered for this Dental Care Benefit. 88E -DEX 84 DENTAL CARE BENEFITS - Continued 9. Supplies for dental care other than those used in a Doctor's office; or instructions in dental hygiene. 10. Oral care and supplies which are used to change vertical dimension or closure. These include but are not limited to: a. diagnostic procedures; b. balance procedures; c. restoration; d. fixed devices; e. movable devices. 11. Any service rendered by a Close Relative or someone having the same legal residence as the Covered Person. 12. Dental implants. 88E -DEX 85 VISION CARE BENEFITS SCHEDULE Employee and Dependent Vision Care Expense Benefits Complete Examination Supplies: Per Lens Single Vision Prescription Bi -focal Prescription Tri -focal Prescription Lenticular Prescription Contact Lenses Scratch Resistant Lens Treatment Contact Lens Solution Frames When You and Your covered dependents incur Covered Vision Care Expenses, The Plan Will Pay Benefits for those expenses up to the maximums shown on the Schedule. The Plan Will Pay Benefits for the following covered Vision Care expenses: 1. One Complete Eye Examination and History performed by a licensed optometrist or Physician. 2. Contact or eye glass lenses prescribed by a licensed optometrist or Physician. The Plan Will Pay for more than two lenses if required after cataract surgery. 3. Eye glass frames. 885 -VC 86 Maximum Benefit Amount $200 per calendar year for all vision care expenses VISION CARE BENEFITS - Continued Vision Care Exclusions Your Employer has chosen to provide many Benefits. There are some things, however, that will not be covered as Vision Care Benefits. These are: 1. Care and supplies: a. for special procedures, such as orthoptics and visual training; b. for medical or surgical treatment; c. provided under Workers' Compensation, or similar laws; d. needed for an Injury or Illness arising out of employment. 2. Non - prescription glasses or sunglasses. 3. Vision care and supplies for which: a. no charge is made; b. You or Your dependent would not have to pay if You did not have this coverage. 4. Vision care and supplies furnished by a facility operated for or by the U.S. Government (or its agency) or by a Doctor employed by that place unless: a. for emergency treatment when You or Your dependent must pay for those services; b. for non - service connected disabilities in a Veteran's Administration Hospital; c. incurred by a U.S. military retiree (covered by this Plan) or his/her covered dependents, while confined in a military medical facility. 88E -VC 87 VISION CARE BENEFITS - Continued 5. Vision care and supplies to the extent furnished or payable under: a. a plan or program operated by a National Government or one of its agencies; b. a State Cash Sickness or similar law including any group insurance policy approved under such laws; c. another plan of Your Employer. 6. Vision care and supplies required as a result of: a. an intentionally self - inflicted Injury; b. taking part in the commission of an assault or felony or being engaged in an illegal occupation; c. an act of war declared or undeclared; d. surgery to correct vision. Vision Care Definitions 1. Complete Examination: means an eye examination that includes a new prescription if needed. 2. Orthoptics: means the teaching and training process for the improvement of visual perception and coordination of the two eyes for efficient and comfortable binocular vision. 88E -VSP 88 CLAIMS AND OTHER GENERAL PROVISIONS Notice and Proof of Claim You must give Us a written notice of claim for a medical or health claim (including vision and dental claims, if any), within 12 months after a Covered Expense is incurred. Within 15 days after We receive the notice of claim, We will send claim forms to You for giving proof of claim. If You do not receive these forms, You will satisfy the proof of claim requirement by giving Us a written statement of the nature and extent of the loss within the time limit provided below. You must give positive proof of claim to Us or Our authorized claim office for a medical or health claim (including vision and dental claims, if any) within 15 months after a Covered Expense is Incurred. You must give Us proper written notice and proof of loss before We will be liable for any loss. If You send Us proof as soon as reasonably possible, We will not reduce or deny claims merely because You cannot reasonably give notice and proof in writing within the time required. We may, as required by law, accept claims submitted by a third -party custodial parent or a provider (with the custodial parent's approval) for Covered Expenses Incurred by a covered dependent Child who is also eligible for a state medical assistance program (i.e., Medicaid). 88- GP(G)(10 -02) 89 CLAIMS AND OTHER GENERAL PROVISIONS - Continued We have the right to require additional information in order to determine Dental Care Benefits payable under the Plan. Additional information may include, but is not limited to: 1. a completed dental chart indicating all extractions, missing teeth, fillings, prostheses, periodontal pocket depths, orthodontic relationships and the dates of any services provided; 2. an itemized bill for dental services rendered; 3. x -rays, study models, laboratory and Hospital reports; 4. a clinical exam. Any cost incurred for providing the above information will be Your responsibility. Claims must be submitted to the address shown on Your identification card. The time periods shown in the Claim Decisions provision will begin to apply when the claim is received by Us or Our authorized claim office after being filed according to these Notice and Proof of Claim procedures. Payment of Claims 1. All Benefits due and not validly assigned will be paid to You as soon as We receive due proof. 2. If You die before The Plan Pays all of the Benefits to You, the Plan may pay any remaining Benefits in this order: a. to Your spouse, if living; b. to Your surviving children, in equal shares: c. to Your parents, in equal shares, or to the survivor; or d. to Your estate. 88- GP(G)(10 -02) 90 CLAIMS AND OTHER GENERAL PROVISIONS - Continued 3. In any case where the person to whom We would pay Benefits cannot give a valid release, The Plan Will Pay any remaining Benefits in this order: a. to Your spouse, if living; b. to Your surviving children, in equal shares; c. to Your parents, in equal shares, or to the survivor; or d. to Your estate. If no person listed above survives You, the Plan may pay Benefits to the person or institution it determines gave the Covered Person care. 4. The Plan may, to the extent required by law, pay Benefits for claims incurred by a covered dependent Child directly to a custodial parent, a state agency or a provider. 5. Benefit payments pursuant to a qualified medical child support order (QMCSO) in reimbursement for expenses paid by a QMCSO -child or his/her legal representative (custodial parent or legal guardian) will be made to the QMCSO -child or his/her legal representative. 6. If You use a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. 7. The Plan may pay Benefits to the person or institution who gave You care. 8. Any payments We make under the above, will discharge Our liability to the extent of Our payment. We are not responsible for how the Benefits We pay are used. Legal Actions You may not sue Us for Benefits under the Plan: 1. before 60 days following the date You send Us proof of claim; 2. after 3 years following the end of the period required for giving proof of claim. 88- GP(G)(10 -02) 91 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Claim Decisions 1. Decisions on medical, dental or vision claims will be made within 30 days of the date We receive the claim. If a decision cannot be made for reasons beyond control of the Plan, We will notify You of: a. the reason for the delay; b. any information needed to perfect the claim; and c. the date by which We expect to make a decision You will have 45 days from the date You receive the notice to provide the requested information. If We receive the necessary information within the 45 day time frame, a decision will be made within 15 days of Our receipt of the information, unless You agree to a longer period of time. If You do not provide the requested information within this time period, You should consider the claim to be denied. This denial will be reconsidered if the information is subsequently received. 2. Decisions on claims involving Pre - Treatment Authorization, Concurrent Review or Retrospective Review will be made in accordance with the procedures shown in the Managed Health Care section of the Plan. In the event a claim (other than a request for Pre - Treatment Authorization or Concurrent Review) is denied in whole or in part You will be notified in writing of the following: 1. the reason for denial; 2. specific reference to the Plan provisions on which the denial was based; 3. any additional material or information needed for further review of the claim; 88- GP(G)(10 -02) 92 CLAIMS AND OTHER GENERAL PROVISIONS - Continued 4. an explanation of the Plan's review procedure and time limits; 5. with respect to medical, dental or vision claims, the specific rule, guideline, protocol or similar criterion, if any, that was relied upon in deciding the claim, or a statement that such was relied upon and is available upon request; 6. with respect to medical, dental or vision claims, an explanation of the scientific or clinical judgment for determining a denial based on a medical judgment, Medical Necessity, or treatment that is Experimental, Investigational or Unproven, or a statement that such explanation is available free of charge upon request. Appeals Process If a claim is denied in whole or in part, You, the Covered Person's Doctor or other Authorized Representative may appeal the denial by making a written request for review to Us within: 1. 180 days of the time You receive the notice of denial of the initial claim , or within 60 days of the time You receive the notice of denial of a first appeal with respect to medical, dental or vision claims; 2. 60 days of the time You receive the denial notice of a second appeal for the purpose of submitting a voluntary appeal. "Authorized Representative" means the Covered Person's spouse, parent (if Covered Person is a minor), or any person who submits proof that he/she has been designated by the Covered Person or a court of law to act on such person's behalf. It will also include the Covered Person's Doctor or Hospital for the purposes of requesting Pre - Treatment and Concurrent Review Authorizations, and submitting claims and appeals on the Covered Person's behalf. 8B- GP(G)(10 -02) 93 CLAIMS AND OTHER GENERAL PROVISIONS - Continued In connection with Our review of the appeal, You have the right to 1) see the Plan and other relevant papers affecting the claim, 2) argue against the denial in writing, 3) have a representative act on Your behalf in the appeal. All comments, documents, records and other information submitted in connection with the claim being reviewed will be considered. The decision on the appeal shall be in writing, and shall be made within 30 days of the date We receive the request for review with respect to medical, dental or vision claims. The decision shall include specific reasons for the denial, written in a manner understandable to You and contain specific reference to the pertinent Plan provisions on which the decision was based. With respect to medical, dental or vision claim reviews, the review will be conducted by someone other than the person who made the initial determination. If the initial denial was based on a medical judgment, Medical Necessity or treatment that is Experimental, Investigational or Unproven, a health care professional with appropriate training in the field of medicine that is the subject of the claim will be consulted. If the claim is still denied in whole or in part, You will again be advised as per items 1 through 6, of the Claim Decisions provision along with Your right to request information regarding any voluntary appeals provided under Your Plan once the required appeals have been exhausted. 88- GP(G)(10 -02) 94 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Once the required appeals have been exhausted, additional appeals are allowed on a voluntary basis upon request when new and substantial information is presented. Voluntary appeals are not applicable to decisions involving medical judgement, Medical Necessity or treatment considered to be Experimental, Investigational or Unproven. You may request information regarding voluntary appeals procedures. Refer to the MANAGED HEALTH CARE section of the Plan for information about Pre- Treatment Authorization, Concurrent Review and Retrospective Review claim denials and appeals. Assignment of Benefits You may assign Medical or Health Care Benefits directly to the Doctor, Hospital or an appropriate state agency. You may assign Dental Care Benefits directly to the provider. You can either sign the necessary forms given to You by the provider of services or sign the designated assignment on Your claim form. Otherwise, Benefits will be paid according to the Payment of Claims provision. If You use a Participating Provider, The Plan Will Pay Benefits, if any, to the provider of service. We will not be responsible for the validity of any assignment. Nor will We be liable for any action, payment or other settlement made before We receive such assignment. To the extent permitted by law, neither the Benefits nor payments under the Plan will be subject to the claim of creditors or to any legal process. Physical Examinations We may have a Doctor of Our choice examine You, at Our expense, as often as is reasonably necessary while Your claim is pending. We may also have an autopsy performed, at Our expense, except if prohibited by law. 88- GP(G)(10 -02) 95 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Incontestability and Misstatement We cannot contest Your or Your dependent's coverage after it has been in effect for two years during a Covered Person's lifetime unless required Contributions are not paid. However, no provision of this Plan shall make the coverage of an ineligible person valid. Any statement about Your age made in writing and signed by You may be used to contest Your coverage. If You misstate Your age, The Plan Will only Pay Benefits based on Your correct age. The Plan will a) adjust required Contributions, b) validate, or c) void coverage as necessary. Refund to Us for Overpayment of Benefits If You or Your dependent recovers money for medical, Hospital, dental, prescription drug or vision Expenses Incurred due to an Illness or Injury for which a Benefit has been paid under the Plan, We will have the right to a refund from You or Your dependent. The amount refunded to Us will be the lesser of. 1. the amount You or Your dependent recovers; 2. the amount of Benefits We have paid. You or Your dependent (or a parent or legal guardian, if required) will help Us do whatever else may be reasonably needed to obtain this refund. 88- GP(G)(10 -02) 96 CLAIMS AND OTHER GENERAL PROVISIONS - Continued Right of Subrogation If You or Your covered dependent has a claim for damages or a right to recover damages from another party or parties for any Illness or Injury for which Benefits are payable under this Plan, We are subrogated to such a claim or right of recovery. Our right of subrogation will be to the extent of any Benefits paid or payable under this Plan, and shall include any compromise settlements. We may assert this right independently of the Covered Person. Acceptance of Benefits is constructive notice of this provision in its entirety. If a Covered Person, or legal representative, estate or heir of the Covered Person, recovers damages, by settlement, verdict or otherwise, for an Illness or Injury for which a Benefit has been paid under this Plan, the Covered Person, or legal representatives, estate or heirs of the Covered Person, agrees to promptly reimburse Us for Benefits paid. Our right to receive reimbursement applies to the Covered Person's recovery from any source, including but not limited to any party's liability and medical pay insurance, uninsured and underinsured motorist coverage, no -fault automobile coverage and Workers' Compensation coverage. We will have a first lien upon any recovery, whether by settlement, judgment, arbitration or mediation, that the Covered Person receives or is entitled to receive from any source, regardless of whether the Covered Person receives a full or partial recovery. Any settlement or recovery received shall first be deemed to be reimbursement of medical expenses paid under this Plan. Our first priority rights will not be reduced due to the Covered Person's own negligence. 86- GP(G)(10 -02) 97 CLAIMS AND OTHER GENERAL PROVISIONS - Continued We are entitled to reimbursement even if the Covered Person is not made whole or fully compensated by the recovery. Any share of attorney fees or costs or Common Fund fees shall not reduce Our recovery unless agreed to by Us in writing. If the injured person is a minor, any amount recovered by the minor, the minor's trustee, guardian, parent, or other representative, shall be subject to this provision regardless of whether the minor's representative has access to or control of any recovery funds. The Covered Person (or parent or legal guardian) will cooperate with Us and Our agents and help Us do what may be reasonably needed to protect the Plan's subrogation rights and obtain the refund. This includes furnishing all relevant information, making assignments in Our favor and signing and delivering any documents needed to protect Our rights. The Covered Person shall not take any action that prejudices Our rights. If the Covered Person makes a recovery from any source and fails to reimburse Us the lesser of: 1. the amount recovered, (including amounts to be recovered through future installment payments); or 2. the amount of Benefits paid related to this Illness or Injury, the Covered Person will be personally liable to Us for this amount. We may also offset future Benefits up to the amount due to Us. The terms of this subrogation and right of reimbursement provision shall apply regardless of state laws to the contrary. 88- GP(G)(10 -02) 98 GENERAL DEFINITIONS When these terms are used in the Plan, they will have the following meanings unless otherwise noted: 1. Active Work: means You work for Your Employer at his/her place of business (or such other places as required by Your Employer) in accordance with his/her established employment practices. 2. Average Semiprivate Room Charge: means a) the standard charge by the Hospital for semiprivate room and board accommodations, or the average of such charges where the Hospital has more than one level of such charges, or b) BO% of the Hospital's lowest charge for single bed room and board accommodations when the Hospital does not provide any semiprivate accommodations. 3. Benefit(s): means the amount The Plan Will Pay for Covered Expenses after You or Your covered dependents have met the Deductible, if any. 4. Birthing Center: means a licensed place with the primary purpose of providing a place for live births operating within the scope of its license. S. Chronic Medical Condition: means an Illness for which there is no cure; however, medical treatment is available. It is a long -term Illness that does not ordinarily pose an immediate threat to one's life. Chronic Medical Conditions covered under the Disease Management program may include, but are not limited to, diabetes, asthma or cardiac conditions. 88E -GD 99 GENERAL DEFINITIONS - Continued 6. Close Relative: means You, Your spouse, and Your or Your spouse's brother, sister, parent, or Child. 7. Complications of Pregnancy: means a disease, disorder or condition which is diagnosed as distinct from normal pregnancy but adversely affected by or caused by pregnancy. This includes: a. inter - abdominal surgery, including cesarean section; b. pernicious vomiting (hyperemesis gravidarum); c. toxemia with convulsions (eclampsia); d. extra- uterine pregnancy (ectopic); e. postpartum hemorrhage; f. rupture or prolapse of the uterus; g. spontaneous termination of pregnancy during a period of gestation in which a viable birth is not possible; h. similar medical and surgical conditions of comparable severity. Complications of Pregnancy will not include: a. elective abortion; b. false labor; c. occasional spotting; d. Physician prescribed rest; e. morning sickness; f. similar conditions associated with the management of a difficult pregnancy. Services and supplies rendered at the termination of pregnancy will not be considered treatment of Complications of Pregnancy. 88E -GD 100 GENERAL DEFINITIONS - Continued 8. Contributions: mean the amount You are required to pay for the coverage provided under the Plan. 9. Covered Expense: means a listed Covered Expense under a Benefit description which will be paid under the Plan if it is: a. prescribed by a Doctor or Dentist for the therapeutic treatment of Injury, Illness or pregnancy; b. Medically Necessary; c. not more than what We determine as Reasonable and Customary; and d. not excluded under any exclusions of the Plan. If You use a Participating Provider, Covered Expense means the agreed upon rate set between Us and such provider for services which meet all of the above standards. 10. Covered Person: means an Enrolled person meeting the eligibility requirements of the Plan. 11. Creditable Coverage: means any of the following coverages a Covered Person had prior to enrollment under the Plan: a. a group health plan; b. health insurance coverage, individual and group, including coverage through a Health Maintenance Organization (HMO); c. Medicare; d. Medicaid; e. military health care; 88E -GD 101 GENERAL DEFINITIONS - Continued f. a medical care program of the Indian Health Service or of a tribal organization; g. a state health risk pool; h. a health plan offered under the Federal Employee Health Benefits Program; i. a public health plan established or maintained by a political subdivision of a state to provide insurance coverage; a health benefit plan established by the Peace Corps Act. 12. Custodial Care: means services, provided by a licensed, skilled nurse or a non - skilled person, for: a. a person with a Chronic Medical Condition; or b. a convalescent person. This care basically provides assistance to a person in daily living; it does not require technical skills or qualifications. This care is not reasonably expected to improve the underlying medical condition of a person even though it may relieve symptoms or pain. Custodial Care includes, but is not limited to: a. help in grooming, bathing, dressing, walking; b. help in getting in and out of bed; c. help in housekeeping, preparing meals, and eating; d. giving or helping to use or apply medications, creams and ointments; e. administering medical gasses after a therapy program has been set up; f. changing dressings, diapers and protective sheets; 88E -GD 102 GENERAL DEFINITIONS - Continued g. periodic turning and positioning in bed; h. routine care of casts, braces and other like devices; i. routine care of colostomy and ileostomy bags; j. routine tracheostomy care; k. routine care of catheters and other like equipment; and I. supervising exercise programs that do not need the skills of a therapist. Care that does require the technical skills of a licensed medical professional, who is acting within the scope of his/her license, is not considered to be Custodial Care. 13. Dentist: means an individual who is duly licensed to practice dentistry or perform oral surgery in the state where the dental service is performed and who is operating within the scope of that license. For the purpose of this definition, a Physician will be considered to be a Dentist when he /she performs any of the dental services included under Covered Dental Care Expenses and is operating within the scope of his/her licenses. 14. Disabled: means that due to Illness or Injury You cannot perform the material and substantial duties of Your regular occupation or Your covered dependent cannot perform normal activities, except as provided elsewhere in the Plan. 15. Doctor means a medical practitioner licensed to perform surgery and administer drugs acting in the scope of that license. It will also include any other licensed practitioner of the healing arts required to be recognized by law, when that person is acting within the scope of his /her license and is performing a service for which Benefits are provided under the Plan. 85E -GO 103 GENERAL DEFINITIONS - Continued 16. Emergency: means an accidental Injury or Emergency Medical Condition which reasonably requires You or Your dependent to seek immediate medical care within 48 hours after the Injury or the onset of the Emergency Medical Condition. 17. Emergency Care: means covered services furnished or required to screen and stabilize an Emergency Medical Condition, which may include but shall not be limited to, health care services that are provided in a Hospital's emergency facility. 18. Emergency Medical Condition: means the sudden onset of a health condition that manifests itself by symptoms of sufficient severity, including but not limited to severe pain or acute symptoms developing from a Chronic Medical Condition, that would lead a prudent lay person, possessing an average knowledge of medicine and health, to believe that immediate medical care is required and that lack of such care could reasonably be expected to result in: a. placing the patient's health in serious jeopardy; b. serious impairment of bodily functions; c. serious dysfunction of any bodily organ or part; d. with respect to a pregnant woman, placing the woman's health, or that of her unborn Child, in serious jeopardy. 19. Employer: means the entity to which the Plan is issued. 20. Enroll: means completion of all forms required for coverage under the Plan and agreement to make any required Contribution. 88E -GD 104 GENERAL DEFINITIONS - Continued 21. Enrollment Date: means the first day of coverage or, if there is a Waiting Period, the first day of the Waiting Period. 22. Expense Incurred: means each expense is considered to be incurred on the date the care, service or supply is received. 23. Experimental, Investigational or Unproven: means care and treatment for which We determine that one or more of the following is true: a. The service or supply is under study or in a clinical trial to evaluate its toxicity, safety or efficacy for a particular diagnosis or set of indicators. Clinical trials include but are not limited to phase I, II and III clinical trials. b. The prevailing opinion within the appropriate specialty of the United States medical profession is that the service or supply needs further evaluation for the particular diagnosis or set of indications before it is used outside clinical trials or other research settings. We determine if this item b. is true based on: i. published reports in authoritative medical literature; and ii. regulations, reports, publications and evaluations issued by government agencies such as the Agency for Health Care Policy and Research, the National Institutes of Health, the federal Food and Drug Administration (FDA), the Health Care Financing Administration (HCFA), or any other appropriate technological assessment body. 88E -GD 105 GENERAL DEFINITIONS - Continued c. In the case of a drug, a device or other supply that is subject to FDA approval: i. it does not have FDA approval; or ii. it has FDA approval only under its Treatment Investigational New Drug regulation or a similar regulation; or iii. it has FDA approval, but it is being used for an indication or at a dosage that is not an Accepted Off -Label Use. An "Accepted Off-Label Use" is a use that is: a) included and favorably recognized for treatment of the indication in one or more of the following medical compendia: The American Medical Association Drug Evaluations, the American Hospital Formulary Service Drug Information, and The United States Pharmacopoeia Information; or b) established based on supportive clinical evidence in peer- reviewed medical publications. d. The providers institutional review board acknowledges that the use of the service or supply is Experimental, Investigational, or Unproven and subject to that boards approval. e. Research protocols indicate that the service or supply is Experimental, Investigational, or Unproven. This item e. applies for protocols used by the Covered Person's provider as well as for protocols used by other providers studying substantially the same service or supply. 24. Family Unit: means You and all of Your dependents who are covered under the Plan. 88E -GD 106 GENERAL DEFINITIONS - Continued 25. Full - Time Basis: means You work Your full number of hours for Your full rate of pay as required by Your Employer. The amount of required work time per week may never be less than 20 hours. 26. Home Health Care Agency: means a home health service or agency operating under a valid certificate of approval issued under the statutes of the state where services are provided. 27. Hospice: means an agency that provides counseling and incidental medical services and may provide room and board to a terminally ill person and meets all of the following tests: a. it has obtained any required governmental Certificate of Need approval; b. it provides service for a period of 24 hours per day on every day of the week; c. it is operated under the direct supervision of a duly qualified Doctor; d. it has a nurse coordinator who is a registered graduate nurse with four years of full -time clinical experience, at least two of which involved caring for terminally ill patients; e. it has a social service coordinator who is licensed in the jurisdiction in which it is located; f. it is an agency that has as its primary purpose the provision of Hospice services; 88E-GD 107 GENERAL DEFINITIONS - Continued g. it has a full -time administrator; h. it maintains written records of services provided; its employees are bonded, and it provides malpractice and malplacement insurance; it is established and operated in accordance with the applicable laws in the jurisdiction in which it is located and, where licensing is required, has been licensed and approved by the regulatory authority having responsibility for licensing under the law. 28. Hospital: means a place which meets all of the standards below: a. has permanent and full -time care for bed patients; b. is under the supervision of a Physician; c. has an R.N. on duty or call 24 hours a day; d. is mainly engaged in giving medical care and services for Injuries or Illness but not including: i. rest homes; ii nursing homes; iii. convalescent homes; iv. homes for the aged; e. has surgical facilities except that this standard does not apply to such place operated mainly for treatment of the chronically ill; f. is operated lawfully in its area. 88E -GD 108 GENERAL DEFINITIONS - Continued "Hospital" also means such place which is mainly engaged in treating alcoholism and drug abuse if it meets the standards below: a. has permanent and full -time care for at least 15 bed patients; b. has a Doctor in regular attendance; c. provides 24 hour per day care by R.N.s; d. has a full -time psychiatrist or psychologist on the staff. Hospital also means and will include an "Ambulatory Surgical Center' which meets all of the standards below: a. is a licensed public or private place; b. has an organized medical staff of Doctors; c. has permanent facilities that are equipped and operated mainly for doing surgery and giving skilled nursing care; d. has R.N. services when a patient is in the facility; and e. does not provide services or beds for patients to stay overnight. 29. Illness: means sickness, or a covered dental infirmity, a covered bodily or mental infirmity. 30. Injury: means a covered accidental bodily Injury. 31. Inpatient Hospital Confinement: means a confinement in a Hospital as a bedpatient for which room and board charges are made by the Hospital to the Covered Person. 88E -GD 109 GENERAL DEFINITIONS - Continued 32. Intensive Care Unit: means a specifically named area in a Hospital operated only to give care to critically ill patients, with special supplies and equipment available for immediate use, providing room and board and bedcare under the constant watch of a highly trained Hospital staff. Normal post - operative or recovery room care is not intensive care no matter where located. 33. Late Enrollee: means an Eligible Employee or Dependent who requests Enrollment in the Employer's health benefit plan other than during the initial enrollment period, during an open enrollment period or during the Special Enrollment Periods provided under the terms of the Plan. 34. L.P.N.: means a licensed practical nurse acting in the scope of his/her license. 35. L.V.N.: means a licensed vocational nurse acting in the scope of his /her license. 36. Managed Care: means the determination of availability of coverage through the use of clinical standards to determine the Medical Necessity of an admission or treatment, and the level and type of treatment, and Appropriate setting for treatment, with required pre- treatment authorization, concurrent review or retrospective review, which sometimes involves case management. 88E -GD 110 GENERAL DEFINITIONS - Continued 37. Medical Necessity /Medically Necessary: means that We determine that the care and treatment given meets all of the following conditions: a. it is Appropriate care and consistent with the diagnosis and symptoms. "Appropriate" means the type, level and length of service and setting are needed to provide safe and adequate care and treatment and are provided by the Appropriate provider acting within the scope of his/her license; b. it is generally accepted medical practice and meets professionally recognized standards; c. it is not deemed to be Experimental, Investigational or Unproven as defined herein; d. it is not furnished in connection with medical or other research; e. it is specifically allowed by the licensing statutes which apply to the provider who renders the service; and f. it is at least as medically effective as any standard care and treatment. We will use Our programs, or one established by Our authorized representative to determine whether care is needed and Appropriate. The program may include but is not limited to: a. Pre - Treatment Authorization; b. Concurrent Review; and C. Retrospective Review. 38. Medicare: means the plan of benefits provided by Title XVIII of the U.S. Social Security Act of 1965 as amended from time to time. 88E -GD 111 GENERAL DEFINITIONS - Continued 39. Participating Provider: means a Doctor or a Hospital that agrees with Us to provide Medically Necessary care and treatment at set rates. 40. Preferred Participating Provider Organization (PPO): means a Managed Care arrangement consisting of a network of Participating Providers that are available to provide medical services to Covered Persons. 41. Pharmacist: means a person who is licensed and trained to compound and dispense drugs and medicines acting within the scope of that license. 42. Physician: means a person licensed to practice medicine. 43. Placed For Adoption: means the assumption and retention of a legal obligation for the total or partial support of a Child in anticipation of the adoption of such Child. The Child's placement with You is considered terminated upon the termination of such legal obligation. 44. Plan: means the Benefits described in this summary plan description as provided by the Self- funded Plan including all endorsements and amendments. 45. Plan Claim Administrator: means the entity designated by the Plan Sponsor to pay claims for Benefits under this Plan. 46. Plan Month: means the first day of the month to the last day of the same month 47. Plan Year: means from December 1 of one year to November 30 of the next year. 88E -GD 112 GENERAL DEFINITIONS - Continued 48. Plan Sponsor: means CITY OF ROUND ROCK, TEXAS which has established this employee welfare benefits plan for the purpose of providing health care coverage to its employees and dependents of such employees. 49. Qualified Leave of Absence: means leave of absence period approved by the Employer pursuant to the Family and Medical Leave Act of 1993, or other applicable Texas leave law that applies to the Employer. 50. Reasonable and Customary: means, with regard to charges for medical and dental services or supplies, the lowest of: a. the usual charge by the provider for the same or similar medical and dental services or supplies; b. the usual charge of most providers of similar training and experience in the same or similar geographic area for the same or similar medical and dental service or supplies; c. the actual charge for the medical and dental services or supplies; or d. the negotiated rate a provider has agreed to accept. "Area" means a region We determine to be large enough to obtain a representative sample of providers of medical and dental care or supplies. 51. Replacement of Dentures: means to substitute a different denture for one previously used. (This includes dentures that were lost, stolen or not in use.) 88E -GO 113 GENERAL DEFINITIONS - Continued 52. Riot: means all forms of violence, disorder, or disturbance of the public peace by three or more persons assembled together, whether or not acting with common intent or whether or not damage to persons or property or unlawful act or acts is the intent or the consequence of such disorder, violence or disturbance. 53. R.N.: means a licensed registered nurse acting in the scope of his /her license. 54. Skilled Nursing Facility: means a place other than a Hospital that: a. can provide permanent full -time care for 10 or more resident patients; b. has a Physician who prescribes medications and treatment; c. has an R.N. on full -time duty in charge of patient care; d. has L.P.N.s or L.V.N.s on duty at all times under the supervision of an R.N.; e keeps a daily medical record for each patient; f. is not mainly a rest home or a home for Custodial Care of the aged; g. is not mainly engaged in treatment of drug addicts or alcoholics; h. is operating lawfully as a nursing home. 55. The Plan Will Pay: means that when You send Us proof of claim, the Plan Claim Administrator will determine the Benefits payable and make payment, if any, according to the Payment of Claims provisions, as detailed in this document. 88E -GD 114 GENERAL DEFINITIONS - Continued 56. Urgent Care Facility: means a freestanding facility which is engaged primarily in providing minor emergency and episodic medical care and which has: a. a board - certified Physician, a registered nurse (R.N.) and a registered x -ray technician in attendance at all times; b. has x -ray and laboratory equipment and a life support system. 57. We, Us and Our: means the Plan Sponsor (as represented by the Plan Claim Administrator). 58. You and Your: means an employee covered under the Plan. 86E -GO 115 FEDERAL CONTINUATION COVERAGE (also known as COBRA) In some circumstances, federal law requires that persons who lose group health plan coverage be given the chance to continue that coverage for a period of time. Right to COBRA Continuation Coverage 1. You have a right to choose COBRA continuation coverage if You lose group health plan coverage because of: a. a reduction in Your hours of employment; or b. the voluntary or involuntary termination of Your employment (for any reason except Your gross misconduct). 2. Your spouse has the right to choose COBRA continuation coverage if he/she loses group health plan coverage for any of the following reasons: a. Your death; b. the termination of Your employment (except as a result of Your gross misconduct) or Your reduction in hours; c. Your divorce, d. Your becoming entitled to Medicare. 3. Your dependent Child has the right to continuation coverage if he /she loses his /her group health plan coverage due to one of the four reasons described in 2. above or if he/she ceases to be an Eligible Dependent under the terms of the Plan's Health Care coverage. A dependent child born to or Placed For Adoption with You during Your COBRA continuation coverage period has the right to COBRA continuation coverage if You notify the Plan Administrator of the child's birth or Placement For Adoption within the time frame as prescribed by law. N- FCC(10 -98) 116 FEDERAL CONTINUATION COVERAGE - Continued Length of COBRA Continuation Coverage 1. Generally a. If, as a result of termination of Your employment or reduction in Your hours, You, Your spouse and /or Your dependents lose the Plan's Health Care coverage, those who do lose coverage may elect continuation coverage for up to 18 months after the date Your employment terminates or hours reduce. b. If Your spouse or dependents lose the Plan's Health Care coverage due to any of the other events described in 2. or 3. above (other than Your employment termination or hours reduction), they may elect continuation coverage for up to 36 months from the date they experience such event. c. If Your spouse or dependents become entitled to continuation coverage because of termination of Your employment or reduction in Your hours and Your spouse or dependent then experiences another of the events which would entitle such person to continued coverage, he /she may extend the 18 month continuation period to 36 months from the date of the event that first made him /her eligible for continuation coverage. A notice of a Social Security determination is given to the Plan Administrator before the end of the initial 18- month period and within 60 days after the date of such determination. An Employer may require payments of up to 150 percent of the applicable group rate for the cost of coverage for these 11 additional months. N- FCC(10 -98) 117 FEDERAL CONTINUATION COVERAGE - Continued b. Employee's Medicare Entitlement Prior to COBRA Event If You become entitled to Medicare within 18 months prior to Your employment termination (or work hours reduction), Your spouse and dependents who are entitled to COBRA continuation coverage will become eligible for a continuation period of not shorter than 36 months from the date You become entitled to Medicare. This continuation period is measured from the time You are entitled to Medicare. The maximum continuation period for Your spouse or dependents will not exceed 36 months. However, unless You are entitled to an extended continuation period as described in 2.a. above, You yourself will only be eligible for a continuation period of up to 18 months from the date of Your employment termination (or work hours reduction). 3. If, after the occurrence of any event described in Right to COBRA Continuation Coverage above, You, Your spouse and /or Your dependents are allowed to continue Health Care coverage under the Plan (whether or not premium payment(s) are required) beyond the Plan's Termination of Coverage provision for any reason other than to comply with the federal law (i.e., the Plan's special provisions), such continuation period(s) will be used to reduce the maximum length of COBRA continuation coverage period otherwise available to such person under this section. N- FCC(10 -98) 118 FEDERAL CONTINUATION COVERAGE - Continued Notification Requirements 1. If Your spouse or dependent becomes eligible for continuation coverage due to divorce or the end of dependency status, the Plan Administrator must be notified within 60 days after Your spouse or dependent becomes eligible. That person will distribute necessary forms and explain this continuation in more detail. If the Plan Administrator is not notified within 60 days of the event that makes Your spouse or dependent eligible for continuation coverage, Your spouse or dependent will lose the right to such coverage. In order for a child born to or Placed For Adoption with You during Your COBRA continuation coverage to have the right to COBRA continuation coverage, You must notify the Plan Administrator of the child's birth or Placement For Adoption within the time frame as prescribed by law. 2. In order for a Disabled person and such person's family members continuing under the 18 -month continuation coverage to be entitled to an extended continuation period of 11 additional months, such person must meet the notice requirements and all other conditions described under Extensions of Continuation Coverage in 2.a. above. A person continuing under the 11 -month extended continuation coverage must notify the Plan Administrator within 30 days if the Social Security Administration determines that the disability ceases to exist. N- FCC(10 -98) 119 FEDERAL CONTINUATION COVERAGE - Continued Termination of COBRA Continuation Coverage Your Employer may require You, Your spouse and Your dependents to pay for the cost of the continuation coverage. If these amounts are not paid within the time allowed, the continuation coverage will end. Four other reasons that this continuation coverage may terminate before the full maximum continuation period runs out are: 1. the continued person first becomes, after the date of COBRA continuation coverage election, entitled to Medicare benefits; 2. the Employer stops providing any group health plan benefits program for employees; 3. the continued person first becomes, after the date of COBRA continuation coverage election, covered under another group health plan, and any preexisting conditions exclusions or limitations of that plan do not apply to or are satisfied by such person; 4. with respect to any person continuing under the 11 -month extended continuation coverage (as described under Extensions of Continuation Coverage in 2.a. above), when the Social Security Administration determines that the disability ceases to exist (the termination becomes effective as of the first day of the month which is at least 31 days after the Social Security determination). General Information This Federal Continuation Coverage section does not amend or change the Plan's Termination of Coverage provision. It simply provides a continuation of coverage right Your Employer is required to offer by law. N- FCC(10 -98) 120 Termination or Amendment of Plan The Plan Sponsor intends that this Plan will continue indefinitely, but reserves the right to amend, modify, revoke or terminate the Plan, in whole or in part, at any time. The authority to make any such changes to the Plan is vested in the Association's governing body and shall be made via adoption of a written amendment by the Association's governing body. N- ERISA(08 -02) 121 NOTICE In compliance with the Federal Health Insurance Portability and Accountability Act (HIPAA), the following information is provided. Plan Claims Administrator: Benefits under this Plan are paid by: Great -West Life & Annuity Insurance Company Quality Management, F1 -22 13045 Tesson Ferry Road St. Louis, MO 63128 The Medical Care, Dental Care, Vision Care, and Prescription Drug Coverages for employees and dependents are funded and provided by CITY OF ROUND ROCK, TEXAS. If You have any questions about Your Plan, You should contact the Plan Administrator. 88E- N011cE 122 Confidentiality of Health Information Your Rights Under the Health Insurance Portability and Accountability Act The Privacy Rule of the Health Insurance Portability and Accountability Act (HIPAA) places restrictions on when the Plan Sponsor may have access to certain health care information about You known as Protected Health Information (PHI). Generally, PHI is information from which Your individual identity can be discerned that is transmitted or maintained in any form (e.g., electronic, paper, oral) and that is created or received by a provider, health plan or health care clearing house. In accordance with HIPAA, the City of Round Rock, Texas agrees not to use or disclose Your PHI for purposes other than: For treatment, payment or health care operations, As permitted or required by law, or As authorized by You. You will receive a Notice of Privacy Practices that describes the Plan's policies, practices and Your rights with respect to Your PHI under HIPAA. For more information regarding this Notice, please go to www.ci.round.rock.tx.us or telephone (512) 218- 5490. 88E- NOTICE 123 07202B(10) EDB (7202)(1 2- 03)200 (12- 02)800 (12- 17 -02)