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Preferred Care

Federal Employees Health Benefits Program
2004 Plan Brochure
Accessible Version

Document Outline

Table of Contents
Introduction
Plain Language
Stop Health Care Fraud!
Preventing Medical Mistakes
Section 1. Facts about this HMO plan
- How we pay providers
- Your Rights
- Service Area
Section 2. How we change for 2004
- Program-wide changes
- Changes to this Plan
Section 3. How you get care
- Identification cards
- Where you get covered care
  - � Plan providers
  - � Plan facilities
- What you must do to get covered care
- Circumstances beyond our control
- Services requiring our prior approval
Section 4. Your costs for covered services
- � Copayments
- � Deductible
- � Coinsurance
- Your catastrophic protection out-of-pocket maximum
Section 5. Benefits
- Overview
- (a) Medical services and supplies provided by physicians and other health care professionals
- (b) Surgical and anesthesia services provided by physicians and other health care professionals
- (c) Services provided by a hospital or other facility, and ambulance services
- (d) Emergency services/accidents
- (e) Mental health and substance abuse benefits
- (f) Prescription drug benefits
- (g) Special features
- (h) Dental benefits
- (i) Non-FEHB benefits available to Plan members
Section 6. General exclusions � things we don�t cover
Section 7. Filing a claim for covered services
Section 8. The disputed claims process
Section 9. Coordinating benefits with other coverage
- When you have other health coverage
Section 10. Definitions of terms we use in this brochure
Section 11. FEHB facts
- Coverage information
- When you lose benefits
Two new Federal Programs complement FEHB benefits
- The Federal Flexible Spending Account Program � FSAFEDS
- The Federal Long Term Care Insurance Program
Index
Summary of benefits
Rates

Pages 1--58 from Preferred Care

Page 1 2

2004 Preferred Care 36 Section
Preferred Care 2004
Serving: Greater Rochester and Surrounding Counties
Enrollment in this Plan is limited. You must live or work
in our Geographic service area to enroll.
See page 7 for requirements.

Enrollment codes for this Plan: GV1 Self Only
GV2 Self and Family

A Health Maintenance Organization
This Plan has excellent accreditation
from the NCQA. See the 2004 Guide
for more information on accreditation.

http:// www. preferredcare. org

RI 73-467
For changes
in benef
its

see page
8. 1.
1 Page 2 3

2004 Preferred Care 36 Section
UNITED STATES
OFFICE OF PERSONNEL MANAGEMENT
WASHINGTON, DC 20415-0001

CON 131-64-4
September 1993

OFFICE OF THE DIRECTOR
Dear Federal Employees Health Benefits Program Participant:
I am pleased to present this 2004 Federal Employees Health Benefits (FEHB) Program plan
brochure. The brochure describes the benefits this plan offers you for 2004. Because benefits vary
from year to year, you should review your plan's brochure every Open Season � especially Section
2, which explains how the plan changed.

It takes a lot of information to help a consumer make wise healthcare decisions. The information in
this brochure, our FEHB Guide, and our web-based resources, make it easier than ever to get
information about plans, to compare benefits and to read customer service satisfaction ratings for
the national and local plans that may be of interest. Just click on www. opm. gov/ insure!

The FEHB Program continues to be an enviable national model that offers exceptional choice,
and uses private-sector competition to keep costs reasonable, ensure high-quality care, and spur
innovation. The Program, which began in 1960, is sound and has stood the test of time. It enjoys
one of the highest levels of customer satisfaction of any healthcare program in the country.

I continue to take aggressive steps to keep the FEHB Program on the cutting edge of employer-sponsored
health benefits. We demand cost-effective quality care from our FEHB carriers and we
have encouraged Federal agencies and departments to pay the full FEHB health benefit premium
for their employees called to active duty in the Reserve and National Guard so they can continue
FEHB coverage for themselves and their families. Our carriers have also responded to my request
to help our members to be prepared by making additionl supplies of medications available for
emergencies as well as call-up situations and you can help by getting an Emergency Preparedness
Guide at www. opm. gov. OPM's Healthier Feds campaign is another way the carriers are working
with us to ensure Federal employees and retirees are informed on healthy living and best-treatment
strategies. You can help to contain healthcare costs and keep premiums down by living a healthy
life style.

Open Season is your opportunity to review your choices and to become an educated consumer to
meet your healthcare needs. Use this brochure, the FEHB Guide, and the web resources to make
your choice an informed one. Finally, if you know someone interested in Federal employment, refer
them to www. usajobs. opm. gov.

Sincerely,

Kay Coles James
Director 2.
2 Page 3 4
2004 Preferred Care 36 Section
By law, the Office of Personnel Management ( OPM) , which administers the Federal Employees Health Benefits
( FEHB) Program, is required to protect the privacy of your personal medical information. OPM is also required to
give you this notice to tell you how OPM may use and give out ( disclose ) your personal medical information held
by OPM.

OPM will use and give out your personal medical information:
To you or someone who has the legal right to act for you ( your personal representative) ,
To the Secretary of the Department of Health and Human Services, if necessary, to make sure your privacy is
protected,
To law enforcement officials when investigating and/ or prosecuting alleged or civil or criminal actions, and
Where required by law.

OPM has the right to use and give out your personal medical information to administer the FEHB Program.
For example:

To communicate with your FEHB health plan when you or someone you have authorized to act on your behalf asks
for our assistance regarding a benefit or customer service issue.
To review, make a decision, or litigate your disputed claim.
For OPM and the General Accounting Office when conducting audits.

OPM may use or give out your personal medical information for the following purposes under limited circumstances:
For Government healthcare oversight activities ( such as fraud and abuse investigations) ,
For research studies that meet all privacy law requirements ( such as for medical research or education) , and
To avoid a serious and imminent threat to health or safety.

By law, OPM must have your written permission ( an authorization ) to use or give out your personal medical
information for any purpose that is not set out in this notice. You may take back ( revoke ) your written permission
at any time, except if OPM has already acted based on your permission.

Notice of the Office of Personnel Management's
Privacy Practices

THIS NOTICE DESCRIBES HOW MEDICAL INFORMATION ABOUT YOU MAY BE USED
AND DISCLOSED AND HOW YOU CAN GET ACCESS TO THIS INFORMATION.
PLEASE REVIEW IT CAREFULLY. 3.
3 Page 4 5

Section 36 2004 Preferred Care
By law, you have the right to:
See and get a copy of your personal medical information held by OPM.
Amend any of your personal medical information created by OPM if you believe that it is wrong or if information
is missing, and OPM agrees. If OPM disagrees, you may have a statement of your disagreement added to your
personal medical information.
Get a listing of those getting your personal medical information from OPM in the past 6 years. The listing will not
cover your personal medical information that was given to you or your personal representative, any information that
you authorized OPM to release, or that was given out for law enforcement purposes or to pay for your health care or
a disputed claim.
Ask OPM to communicate with you in a different manner or at a different place ( for example, by sending materials
to a P. O. Box instead of your home address) .
Ask OPM to limit how your personal medical information is used or given out. However, OPM may not be able to
agree to your request if the information is used to conduct operations in the manner described above.
Get a separate paper copy of this notice.

For more information on exercising your rights set out in this notice, look at www. opm. gov/ insure on the web. You may
also call 202-606-0191 and ask for OPM s FEHB Program privacy official for this purpose.

If you believe OPM has violated your privacy rights set out in this notice, you may file a complaint with OPM at the
following address:

Privacy Complaints
Office of Personnel Management
P. O. Box 707
Washington, DC 20004-0707

Filing a complaint will not affect your benefits under the FEHB Program. You also may file a complaint with the
Secretary of the Department of Health and Human Services.

By law, OPM is required to follow the terms in this privacy notice. OPM has the right to change the way your personal
medical information is used and given out. If OPM makes any changes, you will get a new notice by mail within 60
days of the change. The privacy practices listed in this notice are effective April 14, 2003. 4.
4 Page 5 6

Table of Contents 2 5.
5 Page 6 7

Table of Contents 3 6.
6 Page 7 8

2004 Preferred Care 36 Section
Introduction
Preferred Care
259 Monroe Avenue
Rochester, New York 14607

This brochure describes the benefits of Preferred Care under our contract ( CS 2371) with the United States Office
of Personnel Management ( OPM) , as authorized by the Federal Employees Health Benefits law. The address for
Preferred Care administrative offices is:

Preferred Care
259 Monroe Avenue
Rochester, New York 14607

This brochure is the official statement of benefits. No oral statement can modify or otherwise affect the benefits,
limitations, and exclusions of this brochure. It is your responsibility to be informed about your health benefits.

If you are enrolled in this Plan, you are entitled to the benefits described in this brochure. If you are enrolled for Self
and Family coverage, each eligible family member is also entitled to these benefits. You do not have a right to benefits
that were available before January 1, 2004, unless those benefits are also shown in this brochure.

OPM negotiates benefits and rates with each plan annually. Benefit changes are effective January 1, 2004, and
changes are summarized on page 54. Rates are shown at the end of this brochure.

Plain Language
All FEHB brochures are written in plain language to make them responsive, accessible, and understandable to the
public. For instance,

Except for necessary technical terms, we use common words. For instance, you means the enrollee or
family member; we means Preferred Care. .

We limit acronyms to ones you know. FEHB is the Federal Employees Health Benefits Program. OPM is the
Office of Personnel Management. If we use others, we tell you what they mean first.

Our brochure and other FEHB plans brochure have the same format and similar descriptions to help you
compare plans.

If you have comments or suggestions about how to improve the structure of this brochure, let OPM know. Visit OPM s
Rate Us feedback area at www. . opm. gov/ insure or e-mail OPM at fehbwebcomments@ opm. gov. You may also write
to OPM at the Office of Personnel Management, Insurance Services Program, Program Planning and Evaluation

Group, 1900 E Street, NW Washington, D. C. 20415-3650.

Section 1 Introduction/ Plain Language 4 7.
7 Page 8 9
Section 36 2004 Preferred Care
Stop Health Care Fraud!
Fraud increases the cost of health care for everyone and increases your Federal Employees Health Benefits ( FEHB)
Program premium. OPM s Office of the Inspector General investigates all allegations of fraud, waste and abuse in the
FEHB Program regardless of the agency that employs you or from which you retired.

Protect Yourself From Fraud Here are some things you can do to prevent fraud: :
Be wary of giving your plan identification ( ID) number over the telephone or to people you do not know, except to
your doctor, other provider, or authorized plan or OPM representative.

Let only the appropriate medical professional review your medical record or recommend services.
Avoid using health care providers who say that an item or service is not usually covered, but they know how to bill
us to get it paid.

Carefully review explanations of benefits ( EOBs) that you receive from us.
Do not ask your doctor to make false entries on certificates, bills or records in order to get us to pay for an item or
service.

If you suspect that a provider has charged you for services you did not receive, billed you twice for the same
service, or misrepresented any information, do the following:

Call the provider and ask for an explanation. There may be an error.
If the provider does not resolve the matter, call us at ( 585) 325-3113 and explain the situation.
If we do not resolve the issue:

CALL � THE HEALTH CARE FRAUD HOTLINE
202/ 418-3300

OR WRITE TO:
The United States Office of Personnel Management
Office of the Inspector General Fraud Hotline
1900 E Street, NW, Room 6400
Washington, DC 20415

Do not maintain as a dependent family member on your policy:
Your former spouse after a divorce decree or annulment is final ( even if a court order stipulates otherwise) ; or
Your child over age 22 ( unless he/ she is disabled and incapable of self support) .
If you have any questions about eligibility of a dependent, check with your personnel office if you are employed,
with your retirement office ( such as OPM) if you are retired or with the National Finance Center if you are
enrolled under temporary continuation of coverage.

You can be prosecuted for fraud and your agency may take action against you if you falsify a claim to obtain FEHB
benefits or try to obtain services for someone who is not an eligible family member or who is no longer enrolled
in the Plan.

Stop Health Care Fraud! 5 8.
8 Page 9 10

2004 Preferred Care 36 Section
Preventing Medical Mistakes
An influential report from the Institute of Medicine estimates that up to 98,000 Americans die every year from medical
mistakes in hospitals alone. That s about 3,230 preventable deaths in the FEHB Program a year. While death is the
most tragic outcome, medical mistakes cause other problems such as permanent disabilities, extended hospital stays,
long recoveries, and even additional treatments. By asking questions, learning more and understanding your risks, you
can improve the safety of your own health care, and that of your family members. Take these simple steps:

1. Ask questions if you have doubts or concerns.
Ask questions and make sure you understand the answers.
Choose a doctor with whom you feel comfortable talking.
Take a relative or friend with you to help you ask questions and understand answers.
2. Keep and bring a list of all the medicines you take.
Give your doctor and pharmacist a list of all the medicines that you take, including non-prescription
medications.
Tell them about any drug allergies you have.
Ask about side effects and what to avoid while taking the medicine.
Read the label when you get your medicine, including all warnings.
Make sure your medicine is what the doctor ordered and know how to use it.
Ask the pharmacist about your medicine if it looks different than you expected.
3. Get the results of any test or procedure.
Ask when and how you will get the results of tests or procedures.
Don t assume the results are fine if you do not get them when expected, be it in person, by phone, or by mail.
Call your doctor and ask for your results.
Ask what the results mean for your care.
4. Talk to your doctor about which hospital is best for your health needs.
Ask your doctor about which doctor has the best care and results for your condition if you have more than one
hospital to choose from to get the health care you need.
Be sure you understand the instructions you get about follow-up care when you leave the hospital.
5. Make sure you understand what will happen if you need surgery.
Make sure you, your doctor, and your surgeon all agree on exactly what will be done during the operation.
Ask your doctor, Who will manage my care when I am in the hospital?
Ask your surgeon:
Exactly what will you be doing?
About how long will it take?
What will happen after surgery?
How can I expect to feel during recovery?
Tell the surgeon, anesthesiologist, and nurses about any allergies, bad reaction to anesthesia, and any
medications you are taking.

Want more information on patient safety?
www. ahrq. gov/ consumer/ pathqpack. htm. The Agency for Healthcare Research and Quality makes available a wide

ranging list of topics not only to inform consumers about patient safety but to help choose quality healthcare
providers and improve the quality of care you receive.
www. npsf. org. The National Patient Safety Foundation has information on how to ensure safer healthcare for you

and your family.
www. talk aboutrx. org/ consumer. htm1. The National Council on Patient Information and Education is dedicated to

improving communication about the safe, appropriate use of medicines.
www. leapfroggroup. org. The Leapfrog Group is active in promoting safe practices in hospital care.
www. ahqa. org. The American Health Quality Association represents organizations and healthcare professionals
working to improve patient safety.
www. quic. gov/ report. Find out what federal agencies are doing to identify threats to patient safety and help prevent

mistakes in the nation s healthcare delivery system.

Preventing Medical Mistakes 6 9.
9 Page 10 11

Section 36 2004 Preferred Care
Section 1. Facts about this HMO plan
This Plan is a health maintenance organization ( HMO) . We require you to see specific physicians, hospitals, and other
providers that contract with us. These Plan providers coordinate your health care services. The Plan is solely responsible
for the selection of these providers in your area. Contact the Plan for a copy of the most recent provider directory.

HMOs emphasize preventive care such as routine office visits, physical exams, well-baby care, and immunizations, in
addition to treatment for illness and injury. Our providers follow generally accepted medical practice when prescribing
any course of treatment.

When you receive services from Plan providers, you will not have to submit claim forms or pay bills. You only pay the
copayments or coinsurance described in this brochure. When you receive emergency services from non-Plan providers,
you may have to submit claim forms.

You should join an HMO because you prefer the plan's benefits, not because a particular provider is available.
You cannot change plans because a provider leaves our Plan. We cannot guarantee that any one physician,
hospital, or other provider will be available and/ or remain under contract with us.

How we pay providers
We contract with individual physicians, medical groups, and hospitals to provide the benefits in this brochure. These Plan
providers accept a negotiated payment from us, and you will only be responsible for your copayments or coinsurance.

Your Rights
OPM requires that all FEHB Plans provide certain information to their FEHB members. You may get information
about us, our networks, providers, and facilities. OPM s FEHB website ( www. opm. gov/ insure) lists the specific types
of information that we must make available to you. Some of the required information is listed below.

More than 3,500 doctors and area health professionals participate with Preferred Care to provide primary care as well
as specialty services to the membership. In addition to doctors, the Plan has arranged for hospital, skilled nursing
facility, home health, and other covered health services.

All members must choose a primary care doctor who will provide, arrange, and coordinate all medically necessary
services. All female members are strongly encouraged to select an obstetrician/ gynecologist in addition to a primary
care doctor. The obstetrician/ gynecologist will treat you for any gynecological or obstetrical condition. Members do
not need a referral from their primary care doctor to see their obstetrician/ gynecologist. A women s obstetrician/
gynecologist is considered an additional primary care doctor. New York State law does provide coverage with Nurse
Midwives and the Plan maintains Nurse Midwives on the provider panel. Plan members may elect a Nurse Midwife
instead of an obstetrician/ gynecologist.

If you want more information about us, call us at ( 585) 325-3113, toll free at ( 800) 950-3224 or write to 259 Monroe
Avenue, Rochester, New York, 14607. You may also contact us by fax at ( 585) 327-2298, or our e-mail address at
memberservices@ preferredcare. org, or visit our website at www. preferredcare. org.

Service Area
To enroll in this plan, you must live or work in our Service Area. This is where our providers practice. Our service area
is: Monroe, Genesee, Livingston, Ontario, Orleans, Seneca, Wayne, Wyoming, and Yates Counties in New York State.

Ordinarily, you must get care from providers who contract with us. If you receive care outside our service area, we
will pay only for urgent or emergency care benefits. Students attending school or college outside of the service area
are covered for follow up care if required after emergency or urgent care treatment. With prior authorization from the
student s primary care physician and Plan, follow up care for students is covered.

If you or a covered family member move outside of our service area, you can enroll in another plan. If your depen-
dents live out of the area ( for example, if your child goes to college in another state) , you should consider enrolling in a
fee for service plan or an HMO that has agreements with affiliates in other areas. If you or a family member move,
you do not have to wait until Open Season to change plans. Contact your employing or retirement office.

Section 1 7 10.
10 Page 11 12
2004 Preferred Care 36 Section
Section 2. How we change for 2004
Do not rely on these change descriptions; this is not an official statement of benefits. For that, go to Section 5 Benefits.
Also, we edited and clarified language throughout the brochure; any language change not shown here is a clarification
that does not change benefits.

Program-wide changes
We added information regarding two new Federal Programs that complement FEHB benefits, the Federal Flexible
Spending Account Program FSAFEDS and the Federal Long Term Care Insurance Program. . See page 49.

We added information regarding Preventing medical mistakes. See page 6.
We added information regarding enrolling in Medicare. See page 39.
We revised the Medicare Primary Payer Chart. See page 41.

Changes to this Plan
Your share of the non-Postal premium will increase by 9.8% for Self Only or 9.8% for Self and Family.
Your copayment for adult influenza shots has been reduced from $ 15 to $ 0.
Your Primary Care Physician ( PCP) copayment for sick child visits for children ages 5 through 18 has been
reduced from $ 15 to $ 10.

You will be required to pay a $ 15 copayment for provider administered prescription medications if a separate
charge is made by the provider for that medication. This copayment will be in addition to any copayment applied
for that day.

For approved medications purchased through the mail order program, you will be responsible for a $ 25 tier 1
generic prescription or refill, or a $ 50 tier 2 brand name prescription or refill, or a $ 87.50 tier 3 brand name
prescription or refill, for each 90 day supply that you purchase.

Your benefit for durable medical equipment will be subject to a $ 15,000 annual maximum.

You are not covered for smoking cessation deterrents such as Zyban, Nicotrol, and Habitrol, which may be purchased over the counter without a prescription from your doctor.

Section 2 8 11.
11 Page 12 13

Section 36 2004 Preferred Care
Section 3. How you get care
Identification cards We will send you an identification ( ID) card when you enroll. You should carry your ID card with you at all times. You must show it whenever you
receive services from a Plan provider, or obtain a prescription at a Plan
pharmacy. Until you receive your ID card, use your copy of the Health
Benefits Election Form, SF-2809, your health benefits enrollment confirma-
tion ( for annuitants) , or your Employee Express confirmation letter.

If you do not receive your ID card within 30 days after the effective date of
your enrollment, or if you need replacement cards, call us at ( 585) 325-3113
or ( 800) 950-3224, or if you have access to TTY equipment ( 585) 325-2629,
or write to us at 259 Monroe Avenue, Rochester, NY 14607.

Where you get covered care You get care from Plan providers and Plan facilities. You will only pay copays and/ or coinsurance, and you will not have to file claims.

Plan providers Plan providers are physicians and other health care professionals in our
service area that we contract with to provide covered services to our members.
We credential Plan providers to ensure that they meet strict standards of
quality.

We list Plan providers in the provider directory, which we update periodically.
This list is also on our website at www. preferredcare. org.

Plan facilities Plan facilities are hospitals and other facilities in our service area that we
contract with to provide covered services to our members. We list these in the
provider directory, which we update periodically. The list is also on our
website.

It depends on the type of care you need. First, you and each family member
must choose a primary care physician. This decision is important since your
primary care physician provides or arranges for most of your health care.

To select a primary care physician, either choose one from our provider
directory or contact a Preferred Care Member Services representative
who will assist you.

Primary care Your primary care physician can be a family or general practitioner, an
internist or a pediatrician. Your primary care physician will provide most of
your health care, or give you a referral to see a specialist when a referral is
required. Women may choose an obstetrician/ gynecologist in addition to their
primary care physician.

If you want to change primary care physicians or if your primary care
physician leaves the Plan, call us. We will help you select a new one.

Specialty care Your primary care physician will refer you to a specialist for needed care ( you
may see an obstetrician/ gynecologist without a referral) . When you receive a
referral from your primary care physician, you must return to the primary care
physician after the consultation, unless your primary care physician authorized
a certain number of visits without additional referrals. The primary care
physician must provide or authorize all follow-up care. Do not go to the
specialist for return visits unless your primary care physician gives you a
referral. However, you may see an optometrist or opthamologist for routine
eye exams without referral.

What you
What you must do to get covered care

Section 3 9 12.
12 Page 13 14
2004 Preferred Care 36 Section
Here are other things you should know about specialty care:
If you need to see a specialist frequently because of a chronic, complex,
or serious medical condition, your primary care physician will develop a
treatment plan that allows you to see your specialist for a certain number
of visits or a certain period of time without additional referrals. Your
primary care physician will use our criteria when creating your treatment
plan ( the physician may have to get an authorization or approval before-
hand) .

If you are seeing a specialist when you enroll in our Plan, talk to your
primary care physician. Your primary care physician will decide what
treatment you need. If he or she decides to refer you to a specialist, ask if
you can see your current specialist. If your current specialist does not
participate with us, you must receive treatment from a specialist who
does. Generally, we will not pay for you to see a specialist who does not
participate with our Plan.

If you are seeing a specialist and your specialist leaves the Plan, call your
primary care physician, who will arrange for you to see another specialist.
You may receive services from your current specialist until we can make
arrangements for you to see someone else.

If you have a chronic or disabling condition and lose access to your
specialist because we:

-terminate our contract with your specialist for other than cause; or
-drop out of the Federal Employees Health Benefits ( FEHB) Program
-reduce our service area and you enroll in another FEHB Plan,
you may be able to continue seeing your specialist for up to 90 days after
you receive notice of the change. Contact us, or if we drop out of the
Program, contact your new plan.

If you are in the second or third trimester of pregnancy and you lose access to
your primary care physician or obstetrician/ gynecologist based on the above,
you can continue to see your primary care physician or obstetrician/ gynecolo-
gist until the end of your postpartum care, even if it is beyond the 90 days.

� Hospital care Your Plan primary care physician or specialist will make necessary hospital
arrangements and supervise your care. This includes admission to a skilled
nursing or other type of facility.

If you are in the hospital when your enrollment in our Plan begins, call
Preferred Care s Member Services Department immediately at ( 585) 325-3113.
If you are new to the FEHB Program, we will arrange for you to receive care.

If you changed from another FEHB plan to us, your former plan will pay for
the hospital stay until:

You are discharged, not merely moved to an alternative care center; or
The day your benefits from your former plan run out; or
The 92nd day after you become a member of this Plan, whichever
happens first.

These provisions apply only to the hospital benefit of the hospitalized person.
If your plan terminates participation in the FEHB Program in whole or in
part or if OPM orders an enrollment change, this continuation of coverage
provision does not apply. In such a case, the hospitalized family member s
benefits under the new plan begin on the effective date of enrollment.

Section 3 10 13.
13 Page 14 15
Section 36 2004 Preferred Care
Circumstances beyond Under certain extraordinary circumstances, such as natural disasters, we may our control have to delay your services or we may be unable to provide them. In that case,
we will make all reasonable efforts to provide you with the necessary care.
Services requiring our Your primary care physician has authority to refer you for most services. prior approval For certain services, however, your physician must obtain approval from us.

Before giving approval, we consider if the service is covered, medically
necessary, and follows generally accepted medical practice.

We call this review and approval process precertification . Your primary care
physician is familiar with the procedures that require a prior approval and will

make all necessary arrangements on your behalf.

We call this review and approval process precertification . Your primary care
physician is familiar with the procedures that require a prior approval and will
make all necessary arrangements on your behalf.

Section 4. Your costs for covered services
You must share the cost of some services. You are responsible for:
Copayments A copayment is a fixed amount of money you pay to the provider, facility,
pharmacy, etc.

Example: When you see your primary care physician, you pay a copayment of
$ 15 per office visit.

Deductible We do not have a deductible.
Coinsurance Coinsurance is the percentage of our negotiated fee that you must pay for your
care.

Example: In our Plan, you pay 20% of our allowance for durable medical
equipment.

Your catastrophic protection After your copayments and coinsurance total $ 3,300 per person or $ 8,400 out-of-pocket maximum per family enrollment in any calendar year, you do not have to pay any more
for coinsurance and for covered services. However, copayments for the following services do not copayments count toward your out-of-pocket maximum, and you must continue to pay
copayments for this service:
Prescription Drugs .
Be sure to keep accurate records of your copayments since you are responsible
for informing us when you reach these maximums.

11 Section 4 14.
14 Page 15 16

2004 Preferred Care 36 Section
Section 5. Benefits � OVERVIEW
(See page 8 for how our benefits changed this year and page 54 for a benefits summary.)

NOTE This benefits section is divided into subsections. Please read the important things you should keep in mind at
the beginning of each subsection. Also read the General Exclusions in Section 6; they apply to the benefits in the
following subsections. To obtain claims forms, claims filing advice, or more information about our benefits, contact
us at ( 585) 325-3113 or ( 800) 950-3224 or if you have access to TTY equipment ( 585) 325-2629 or visit our website at
www. preferredcare. org.

( a) Medical services and supplies provided by physicians and other health care professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13-20
Diagnostic and treatment services
Lab, , X-ray, and other diagnostic tests
Preventive care, , adult
Preventive care, , children
Maternity care
Family planning
Infertility services
Allergy care
Treatment therapies
Physical and occupational therapies

( b) Surgical and anesthesia services provided by physicians and other health care professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21-23
Surgical procedures
Reconstructive surgery
Oral and maxillofacial surgery

( c) Services provided by a hospital or other facility, and ambulance services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24-25
Inpatient hospital
Outpatient hospital or ambulatory
surgical center

( d) Emergency services/ accidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26-27
Medical emergency

( e) Mental health and substance abuse benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29
( f) Prescription drug benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30-32
( g) Special features . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Flexible Benefits Option
Services for Deaf and Hearing Impaired
Travel Benefits/ / Services Overseas

( h) Dental benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
( i) Non-FEHB benefits available to Plan members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

Summary of benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

Speech therapy
Hearing services ( ( testing, treatment, and supplies)
Vision services ( ( testing, treatment, and supplies)
Foot care
Orthopedic and prosthetic devices
Durable medical equipment ( ( DME)
Home health services
Chiropractic
Alternative treatments
Educational classes and programs

Organ/ / tissue transplants
Anesthesia

Extended care benefits/ / skilled nursing care
facility benefits
Hospice care
Ambulance

Ambulance

Section 5 12 15.
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Section 36 2004 Preferred Care
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$ 15 per visit ( no primary care
physician copay for sick child
visits under the age of 5; $ 10
primary care physician copay
for sick child visits ages 5
through 18)

Section 5( a)

Section 5( a). Medical services and supplies provided by physicians and
other health care professionals

Here are some important things to keep in mind about these benefits:
Please remember that all benefits are subject to the definitions, limitations, and
exclusions in this brochure and are payable only when we determine they are medically
necessary.

Plan physicians must provide or arrange your care.
We have no deductible.
Be sure to read Section 4, Your costs for covered services for valuable information about
how cost sharing works. Also read Section 9 about coordinating benefits with other
coverage, including with Medicare.

Diagnostic and treatment services
Professional services of physicians
In physician s office

In an urgent care center Nothing
During a hospital stay

In a skilled nursing facility

Office medical consultations $ $ 15 per visit
Second surgical opinions
At home $ $ 15 per visit

Lab, X-ray and other diagnostic tests
X--rays $ 15 per visit
CAT Scans/ / MRI
Ultrasound

13 16.
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2004 Preferred Care 36 Section
Lab, X-ray and other diagnostic tests (Continued) You Pay
Tests, such as: Nothing
Blood tests
Urinalysis
Non--routine pap tests
Pathology
Non--routine Mammograms

Preventive care, adult
Periodic Adult Physicals $ 10 per visit
Routine screenings, such as: Nothing
Complete Blood Count
Total Blood Cholesterol
Colorectal Cancer Screening, , including
-Fecal occult blood test
-Sigmoidoscopy Screenings every five years starting at age 50 $ $ 15 per visit
-Colonoscopy Screenings every ten years $ 15 per visit
Prostate Specific Antigen ( ( PSA test) Nothing
Two gynecological visits per year $ $ 10 per visit
Routine pap test ( ( annually) Nothing
Routine mammograms covered for women age 35 and older, , as follows: Nothing
From age 35 through 39, , one during this five year period
At age 40 and older, , one every year

Not covered: Physical exams required for obtaining or continuing All charges
employment or insurance, attending schools or camp, or travel.

Routine Immunizations, limited to: $ 15 per visit
Tetanus--diphtheria ( Td) booster once every 10 years, , ages 19 and
over ( except as provided for under childhood immunizations)

Pneumococcal vaccines, , annually, age 65 and over
Influenza vaccines, , annually No copay

Section 5( a) 14 17.
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Section 36 2004 Preferred Care Section 5( a)
Preventive care, children You Pay
Childhood immunizations recommended by the American Academy Nothing
of Pediatrics

Well-child care charges for routine examinations, immunizations and Nothing
care ( through age 18)

Examinations, such as:
Eye exams to determine the need for vision correction. . $ 15 per visit
Ear exams as part of a well-child care visit through age 18 to Nothing
determine the need for hearing correction.

Examinations done on the day of immunizations ( ( through age 18) Nothing

Maternity care
Complete maternity ( obstetrical) care, such as: $ 50 per pregnancy
Prenatal care
Delivery
Postnatal care
Note: Here are some things to keep in mind:
You may remain in the hospital up to 48 hours after a regular delivery
and 96 hours after a cesarean delivery. We will extend your inpatient
stay if medically necessary.

We cover routine nursery care of the newborn child during the covered
portion of the mother s maternity stay. We will cover other care of an
infant who requires non-routine treatment only if we cover the infant
under a Self and Family enrollment.

We pay hospitalization and surgeon services ( delivery) the same as for
illness and injury. See Hospital benefits ( Section 5c) and Surgery
benefits ( Section 5b) .

Not covered: Routine sonograms to determine fetal age, size or sex All charges

Family planning
A broad range of voluntary planning services, limited to: $ 15 per visit
Voluntary sterilization ( See Surgical Procedures Section 5( b) )
Surgically implanted contraceptives ( such as Norplant)
Injectable contraceptive drugs ( such as Depo Provera)
Intrauterine devices ( IUDs)
Diaphragms

Note: You must be between the ages of 21 and 44 to be covered for
Note: infertility benefits.
Note: We cover oral contraceptives under the prescription drug benefit.

Not covered: reversal of voluntary surgical sterilization, genetic counseling All charges
15 18.
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2004 Preferred Care 36 Section
$ 15 per visit
Section 5( a)

Infertility services You Pay
Diagnosis and treatment of infertility, such as:
Artificial insemination: :
intravaginal insemination ( IVI)
intracervical insemination ( ICI)
intrauterine insemination ( IUI)

Fertility drugs
Note: Self-administered and oral fertility drugs are covered under the
prescription drug benefit. Drugs for infertility treatment after a medical
condition has been corrected. Pergonal/ Metrodin and other FDA
approved drugs, only after unsuccessful treatment with Clomiphene and
only when very specific clinical indications are met.

Not covered: All charges
� Assisted reproductive technology (ART) procedures, such as:
� in vitro fertilization
� embryo transfer, gamete GIFT and zygote ZIFT
� zygote transfer
� Services and supplies related to excluded ART procedures
� Cost of donor sperm
� Cost of donor egg

Allergy care
Testing and treatment $ 15 per visit
Allergy injection

Allergy serum Nothing
Not covered: provocative food testing and sublingual allergy desensitization All charges

16 19.
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Section 36 2004 Preferred Care
$ 15 per office or outpatient
visit

Nothing during covered
inpatient admission

Section 5( a)

Treatment therapies You Pay
Chemotherapy and radiation therapy. . $ 15 per visit
Note: High dose chemotherapy in association with autologous bone
marrow transplants is limited to those transplants listed under
Organ/ Tissue Transplants on page 23.

Respiratory and inhalation therapy
Dialysis--Hemodialysis and peritoneal dialysis
Growth hormone therapy ( ( GHT)
Note: Growth hormone is covered under the prescription drug benefit.
Note: We will only cover GHT when your physician pre-approves the
treatment. Your physician will submit information that establishes that
the GHT is medically necessary. Your physician must authorize GHT
before you begin treatment. If your physician does not pre-approve or if
we determine GHT is not medically necessary, we will not cover the GHT
or related services and supplies.

Intravenous ( ( IV) / Infusion Therapy Home IV and antibiotic therapy Nothing

Physical and occupational therapies
60 visits per therapy per calendar year for the services of each of the
following:

-qualified physical therapists and
-occupational therapists.
Note: We only cover therapy to restore bodily function when there has
been a total or partial loss of bodily function due to illness or injury.

Cardiac rehabilitation following a heart transplant, bypass surgery or $ 15 per visit
a myocardial infarction, is provided for up to 36 visits.

Not covered: All charges
� Long-term rehabilitative therapy
� Exercise programs

Speech therapy
60 visits per therapy per calendar year for medically necessary speech
therapy to restore or acquire functional speech
$ 15 per office visit

Nothing for outpatient visit
Nothing per visit during
covered inpatient admission

17 20.
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2004 Preferred Care 36 Section
Hearing services (testing, treatment, and supplies) You Pay
Hearing aids for children through age 18, up to $ 600 once every Nothing
three years

Hearing screenings as part of a well-child care visit through age 18. Nothing
Not covered: All charges
� all other hearing testing
� hearing aids for adults over age 18.

Vision services (testing, treatment, and supplies)
One pair of eyeglasses or contact lenses to correct impairment directly 20% of plan allowance
caused by accidental ocular injury or intraocular surgery ( such as for
cataracts) .

One pair of prescription eyeglasses ( frames and lenses) or prescription
daily-wear contact lenses, per member once every year at Plan
providers. Children under age 12 may obtain eyewear as required by
prescription change of at least . 5 diopter.

Annual eye refraction, including lens prescriptions. $ 15 per visit

Not covered: All charges
� Radial keratotomy and other refractive surgery.
� Eye exercises and orthoptics.

Foot care
Routine foot care when you are under active treatment for a metabolic $ 15 per visit
or peripheral vascular disease, such as diabetes.

See orthopedic and prosthetic devices for information on podiatric
shoe inserts.

Not covered: All charges
� Cutting, trimming or removal of corns, calluses, or the free edge of
toenails, and similar routine treatment of conditions of the foot, except
as stated above

� Treatment of weak, strained or flat feet or bunions or spurs; and of
any instability, imbalance or subluxation of the foot (unless the
treatment is by open cutting surgery)

Section 5( a)

The remaining cost after a
discount of 20% and a credit
of $ 60

18 21.
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Section 36 2004 Preferred Care
Orthopedic and prosthetic devices You Pay
Custom made shoe inserts up to $ 250 ( One pair every three years) Nothing
Internal prosthetic devices, such as artificial joints, pacemakers, Nothing
cochlear implants, and surgically implanted breast implant following
mastectomy. Note: See 5( b) for coverage of the surgery to insert
the device

Orthotic devices 20% of plan allowance
Artificial limbs and eyes; stump hose
Corrective orthopedic appliances for non-dental treatment of
temporomandibular joint ( TMJ) pain dysfunction syndrome.

Orthopedic devices, such as braces.
Note: External prosthetic and orthopedic devices are covered up to a
maximum per person payment of $ 15,000 per calendar year.

Externally worn breast prostheses and surgical bras, including 20% of plan allowance
replacements following a mastectomy with no maximums

Not covered: All charges
� arch supports
� heel pads and heel cups
� lumbosacral supports
� corsets, trusses, elastic stockings, support hose, and other supportive
devices

Durable medical equipment (DME)
Rental or purchase, at our option, including repair and adjustment, of 20% of plan allowance up to a
durable medical equipment prescribed by your Plan physician, such as $ 15,000 annual maximum
oxygen and dialysis equipment. Under this benefit, we also cover:

hospital beds; ;
wheelchairs; ;
walkers; ;
insulin pumps. .

Not covered: All charges
� Motorized wheel chairs, unless medically necessary
� Air conditioners, dehumidifiers, humidifiers
� Breast pumps
� Electric hospital bed (unless medically necessary)
� Hypo-allergenic bedding
� Visual aids (e. g., CCTV, magnifying glasses)
� Environmental control units, such as control units to turn on a
television or air conditioner, etc.

Section 5( a) 19 22.
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2004 Preferred Care 36 Section Section 5( a)
Home health services You Pay
Home health care ordered by a Plan physician and provided by a $ $ 15 per day
registered nurse ( R. N. ) , licensed practical nurse ( L. P. N. ) , licensed
vocational nurse ( L. V. N. ) , or home health aide.

Services include oxygen therapy, , intravenous therapy, and medications.

Not covered: All charges
� Nursing care requested by, or for the convenience of, the patient or the
patient's family;

� Home care primarily for personal assistance that does not include a
medical component and is not diagnostic, therapeutic, or rehabilitative.

Chiropractic
The detection and correction by manual or mechanical means of $ 15 per visit
structural imbalance, distortion or subluxation in the human body for the
purposes of removing nerve interference, and the effects thereof, where
such interference is the result of or related to distortion, misalignment
or subluxation or in the vertebral column.

Not covered: All charges
� Maintenance treatment for conditions that does not result in significant
clinical improvement or lead toward resolution of the condition.

Alternative treatments
Acupuncture by a doctor of medicine or osteopathy for: : anesthesia, pain 50% of plan allowance
relief up to 10 visits per calendar year

Not covered: All charges
� naturopathic services
� hypnosis

Educational classes and programs
Smoking Cessation
Professional services for outpatient nicotine dependency, including $ 15 per visit
diagnostic evaluations to determine the nature and extent of illness,
counseling and therapy.

Diabetes self management $ 15 per visit

20 23.
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Section 36 2004 Preferred Care Section 5( b)
You Pay Benefit Description
Section 5( b). Surgical and anesthesia services provided by physicians
and other health care professionals

The amounts listed below are for the charges billed by a physician or other health care
professional for your surgical care. Look in Section 5( c) for charges associated with the
facility ( i. e. hospital, surgical center, etc. ) .

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Surgical procedures
A comprehensive range of services, such as:
Operative procedures
Treatment of fractures, , including casting
Normal pre--and post-operative care by the surgeon
Correction of amblyopic and strabismus
Endoscopy procedures
Biopsy procedures
Removal of tumors and cysts
Correction of congenital anomalies ( ( see reconstructive surgery)
Surgical treatment of morbid obesity a condition in which an
individual weighs 100 pounds or 100% over his or her normal weight
according to current underwriting standards; eligible members must
be age 18 or over.

Insertion of internal prosthetic devices. . See 5( a) Orthopedic braces
and prosthetic devices for device coverage information.

Voluntary sterilization
Treatment of burns

Not covered: All charges
� Reversal of voluntary sterilization
� Routine treatment of conditions of the foot; see Foot care.

$ 15 per office visit; nothing
for inpatient or outpatient
hospital procedures

$ 15 per office visit; nothing
for inpatient or outpatient
hospital procedure

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2004 Preferred Care 36 Section
Reconstructive surgery You Pay
Surgery to correct a functional defect
Surgery to correct a condition caused by injury or illness if:
the condition produced a major effect on the member s appearance and
the condition can reasonably be expected to be corrected by
such surgery

Surgery to correct a condition that existed at or from birth and is a
significant deviation from the common form or norm. Examples of
congenital anomalies are: protruding ear deformities; cleft lip; cleft
palate; birth marks; webbed fingers; and webbed toes.

All stages of breast reconstruction surgery following a mastectomy, Nothing
such as:

surgery to produce a symmetrical appearance on the other breast; ;
treatment of any physical complications, , such as lymphoedemas;
breast prostheses and surgical bras and replacements ( ( see Prosthetic 20% of plan allowance
devices)

Note: If you need to have a mastectomy, you may choose to have this
procedure performed on an inpatient basis and remain in the hospital up
to 48 hours after the procedure.

Not covered: All charges
� Cosmetic surgery -any surgical procedure (or any portion of a
procedure) performed primarily to improve physical appearance
through change in bodily form, except repair of accidental injury

� Surgeries related to sex transformation

Oral and maxillofacial surgery
Oral surgical procedures, limited to:
Reduction of fractures of the jaws or facial bones; ;
Surgical correction of cleft lip, , cleft palate or severe functional
malocclusion;

Removal of stones from salivary ducts; ;
Excision of leukoplakia or malignancies; ;
Excision of cysts and incision of abscesses when done as independent
procedures; and

Other surgical procedures that do not involve the teeth or their
supporting structures.

Not covered: All charges
� Oral implants and transplants
� Procedures that involve the teeth or their supporting structures (such
as the periodontal membrane, gingiva, and alveolar bone)

$ 15 per office visit.
Nothing for inpatient/ outpatient
surgery

$ 15 per outpatient surgery
Nothing for inpatient surgery

Section 5( b) 22 25.
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Section 36 2004 Preferred Care Section 5 (b)
Organ/ tissue transplants You Pay
Limited to: Nothing
Cornea
Heart
Heart/ / lung
Kidney
Kidney/ / Pancreas
Liver
Lung: : Single Double
Pancreas
Allogeneic bone marrow transplants
Autologous bone marrow transplants ( autologous stem cell and peripheral
stem cell support) for the following conditions: acute lymphocytic or
non-lymphocytic leukemia; advanced Hodgkin s lymphoma; advanced
non-Hodgkin s lymphoma; advanced neuroblastoma; breast cancer;
multiple myeloma; epithelial ovarian cancer; and testicular, mediastinal,
retroperitoneal and ovarian germ cell tumors.

Intestinal transplants ( small intestine) and the small intestine with the
liver or small intestine with multiple organs such as the liver, stomach,
and pancreas

Limited Benefits Treatment for breast cancer, multiple myeloma, and
epithelial ovarian cancer may be provided in an NCI-or NIH-approved
clinical trial at a Plan-designated center of excellence and if approved by
the Plan s medical director in accordance with the Plan s protocols.

Note: We cover related medical and hospital expenses of the donor when
we cover the recipient.

Not covered: All charges
� Donor screening tests and donor search expenses, except those
performed for the actual donor

� Implants of artificial organs
� Transplants not listed as covered

Anesthesia
Professional services provided in Nothing
Hospital ( inpatient)
Hospital outpatient department
Skilled nursing facility
Ambulatory surgical center
Office

Section 5 (b) Section 5( b) Section 5( b) 23 26.
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2004 Preferred Care 36 Section
You Pay Benefit Description
Section 5( c). Services provided by a hospital or other facility,
and ambulance services

Plan physicians must provide or arrange your care and you must be hospitalized in a
Plan facility.

We have no deductible.
Be sure to read Section 4, Your costs for covered services for valuable information about
how cost sharing works. Also read Section 9 about coordinating benefits with other
coverage, including with Medicare.

The amounts listed below are for the charges billed by the facility ( i. e. , hospital or
surgical center) or ambulance service for your surgery or care. Any costs associated with
the professional charge ( i. e. , physicians, etc. ) are covered in Section 5( a) or ( b) .

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Inpatient hospital
Room and board, such as Nothing
Ward, semiprivate, or intensive care accommodations;
General nursing care; and
Meals and special diets.

NOTE: If you want a private room when it is not medically necessary,
you pay the additional charge above the semiprivate room rate.

Other hospital services and supplies, such as: Nothing
Operating, recovery, maternity, and other treatment rooms
Prescribed drugs and medicines
Diagnostic laboratory tests and X-rays
Administration of blood and blood products
Blood or blood plasma, if not donated or replaced
Dressings, splints, casts, and sterile tray services
Medical supplies and equipment, including oxygen
Anesthetics, including nurse anesthetist services
Medical supplies, appliances, medical equipment, and any covered
items billed by a hospital for use at home.

Not covered: All charges
Custodial care
Non-covered facilities, such as nursing homes and schools
Personal comfort items, such as telephone, television, barber services,
guest meals and beds

Private nursing care

Section 5( c) 24 27.
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Section 36 2004 Preferred Care
Outpatient hospital or ambulatory surgical center You Pay
Operating, recovery, and other treatment rooms Nothing
Prescribed drugs and medicines
Diagnostic laboratory tests, X-rays, and pathology services
Administration of blood, blood plasma, and other biologicals
Blood and blood plasma, if not donated or replaced
Pre-surgical testing
Dressings, casts, and sterile tray services
Medical supplies, including oxygen
Anesthetics and anesthesia service

NOTE: We cover hospital services and supplies related to dental
procedures when necessitated by a non-dental physical impairment.
We do not cover the dental procedures.

Extended care benefits/ skilled nursing care facility benefits
Skilled nursing facility ( SNF) : 120 days per calendar year. Nothing
Covered services include:
Bed, board, and general nursing care.
Drugs, biologicals, supplies, and equipment.

Not covered: custodial care All charges

Hospice care
Care for terminally ill patients ( life expectancy of 6 months or less) . Nothing
Covered services include dietary counseling, home health aid,
occupational therapy, speech therapy, and skilled nursing.

Drugs and medical supplies.

Not covered: Independent nursing, homemaker services All charges

Ambulance
Local professional ambulance service when medically appropriate $ 15 per visit

Section 5( c) 25 28.
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2004 Preferred Care 36 Section
What is a medical emergency?
A medical emergency is the sudden and unexpected onset of a condition or an injury that you believe endan-
gers your life or could result in serious injury or disability, and requires immediate medical or surgical care.
Some problems are emergencies because, if not treated promptly, they might become more serious; examples
include deep cuts and broken bones. Others are emergencies because they are potentially life-threatening,
such as heart attacks, strokes, poisonings, gunshot wounds, or sudden inability to breathe. There are many
other acute conditions that we may determine are medical emergencies what they all have in common is the
need for quick action.

What to do in case of emergency:
Emergencies within/ outside our service area: Emergencies, as defined above, do not require prior authori-
zation. Even so, we encourage you to always contact your primary care physician for direction and advice
before seeking medical treatment. In the event, however, that you are faced with a situation you are sure is an
emergency as defined above, you should go directly to the emergency room.

In the event that you are faced with a situation that you are not sure is an emergency as defined above, you
should contact your primary care physician first. Your primary care physician will help you determine the
most appropriate course of treatment. As your partner in health care, your primary care physician needs to be
kept informed of any health care services that you receive. We require that you contact your primary care
physician to facilitate his or her ability to oversee your health care and ensure that you may receive any
necessary follow-up treatment in connection with your emergency room visit.

Urgent Care within/ outside our service area: Urgent care is intended to treat minor illness or injury a
sprain, a minor cut or burn, the flu, or other ailment that is not quite an emergency but does require prompt
care. It differs from emergency care, which is designed to treat sudden, serious health problems ( for example,
a heart attack or stroke) . When used correctly, urgent care is an appropriate, convenient, and affordable
alternative to emergency care.

You are required to obtain a referral from your primary care physician before going to an urgent care center.
Without a referral, you may be responsible for all costs incurred.

Section 5( d). Emergency services/ accidents
Here are some important things to keep in mind about these benefits:
Please remember that all benefits are subject to the definitions, limitations, and
exclusions in this brochure.

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Section 36 2004 Preferred Care
You Pay Benefit Description
Emergency within our service area
Emergency care at a doctor s office $ 15
Emergency care at an urgent care center $ 25
Emergency care as an outpatient at a hospital, $ 50 ( waived if admitted)
including doctors services

Not covered: Elective care or non-emergency care All charges

Emergency outside our service area
Emergency care at a doctor s office $ 15
Emergency care at an urgent care center $ 25
Emergency care as an outpatient at a hospital, including $ 50 ( waived if admitted)
doctors services

Not covered: All charges
Elective care or non-emergency care
Emergency care provided outside the service area if the need for
care could have been foreseen before leaving the service area

Medical and hospital costs resulting from a normal full-term delivery
of a baby outside the service area

Ambulance
Professional ambulance service when medically appropriate $ 15 per visit
See 5 ( c) for non-emergency service

Not covered: Air ambulance, unless determined to be medically All charges
necessary and approved by our medical director

Section 5( d) 27 30.
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2004 Preferred Care 36 Section
You Pay Benefit Description
Section 5( e). Mental health and substance abuse benefits
When you get our approval for services and follow a treatment plan we approve, cost
sharing and limitations for Plan mental health and substance abuse benefits will be no
greater than for similar benefits for other illnesses and conditions.

Here are some important things to keep in mind about these benefits:
All benefits are subject to the definitions, , limitations, and exclusions in this brochure.
We have no deductible. .
Be sure to read Section 4, , Your costs for covered services for valuable information about
how cost sharing works. Also read Section 9 about coordinating benefits with other
coverage, including with Medicare.

YOU MUST GET PREAUTHORIZATION OF THESE SERVICES. See the instructions
after the benefits description below.

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Mental health and substance abuse benefits
All diagnostic and treatment services recommended by a Plan provider and
contained in a treatment plan that we approve. The treatment plan may
include services, drugs, and supplies described elsewhere in this brochure.

Note: Plan benefits are payable only when we determine the care is
clinically appropriate to treat your condition and only when you receive
the care as part of a treatment plan that we approve.

Professional services, including individual or group therapy by $ 15 per visit
providers such as psychiatrists, psychologists, or clinical social workers

Medication management

Diagnostic tests Nothing
Services provided by a hospital or other facility Nothing
Services in approved alternative care settings such as partial
hospitalization, full-day hospitalization, and facility based intensive
outpatient treatment

Not covered: Services we have not approved. All charges
Note: OPM will base its review of disputes about treatment plans on the
treatment plan's clinical appropriateness. OPM will generally not order
us to pay or provide one clinically appropriate treatment plan in favor
of another.

Your cost sharing
responsibilities are no
greater than for other
illnesses or conditions

Section 5( e) 28 31.
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Section 36 2004 Preferred Care
Preauthorization To be eligible to receive these benefits you must obtain a treatment plan and follow all of the following authorization processes:
For mental health treatment, you or your primary care physician are required
to contact Preferred Care s Behavioral Health Services Unit and speak with a
mental health specialist who will ask basic information about your mental
health history to determine the need for a referral for outpatient care. For
inpatient care, your primary care physician makes a referral to Preferred
Care s Preauthorization Department for inpatient hospitalization or partial
hospitalization ( day treatment) .

For chemical dependency treatment, you are required to contact the Preferred
Care Behavioral Health Services Unit and speak with an intake coordinator
who will ask basic information about your chemical dependency history to
determine the need for an assessment. If an assessment is appropriate, an
appointment for you will be arranged with an independent Preferred Care
Chemical Dependency Assessor. Once the assessment is completed, a clinical
quality coordinator will contact you to make specific recommendations for
treatment, and will arrange inpatient or outpatient services as needed.

The Behavioral Health Services Unit telephone number is ( 585) 327-2477 or
( 800) 836-1430 ext. 477. For the names of plan providers or a provider
directory, contact a Preferred Care Member Services representative at
( 585) 325-3113 or ( 800) 950-3224 or visit our website at
www. preferredcare. org.

Limitation We may limit your benefits if you do not follow your treatment plan.

Section 5( e) 29 32.
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2004 Preferred Care 36 Section
Section 5( f). Prescription drug benefits
Here are some important things to keep in mind about these benefits:
We cover prescribed drugs and medications, , as described in the chart beginning on the
next page.

All benefits are subject to the definitions, , limitations and exclusions in this brochure
and are payable only when we determine they are medically necessary.

We have no deductible. .
Be sure to read Section 4, , Your costs for covered services for valuable information about
how cost sharing works. Also read Section 9 about coordinating benefits with other
coverage, including with Medicare.

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There are important features you should be aware of. These include:
Who can write your prescription. A licensed physician must write the prescription.
Where you can obtain them. You may fill the prescription at a Plan pharmacy, a non-network pharmacy, or by
mail for medications that are available through the mail order program.

We use a formulary. A formulary is a list of selected FDA approved prescription medications. Use of
formulary helps control out of pocket costs. The Preferred Care formulary is an open, clinically comprehensive
guide that was developed by a nationally recognized independent group of clinicians and reviewed by Preferred
Care s P & T Committee ( a group of local physicians, pharmacists, and Preferred Care clinical pharmacy and
medical personnel) . Our formulary provides access to all FDA approved drugs with various coverage levels.

These are the dispensing limitations. You may purchase up to a 90-day supply at a Plan or non-network
pharmacy and are required to pay a copayment for each 30-day supply you purchase. The amount you pay is
based upon a three-tier copayment structure. The tiers determine the amount you pay for each 30-day supply
purchased. The three tiers are categorized as: Tier 1 Generic; Tier 2 Brand Name; and Tier 3 Brand Name.

You may purchase certain medications for up to a 90-day supply through the mail order pharmacy. A list of
therapeutic categories of prescriptions, that may be purchased through the mail order program, is available by
contacting Medco Health at ( 800) 233-7063 or a Preferred Care Member Services Representative at
( 585) 325-3113 or ( 800) 950-3224, or by visiting our website at www. preferredcare. org.

You are required to pay a copayment for each 90-day supply purchased through the mail order pharmacy. The
amount you pay for medications purchased through the mail order pharmacy is also based upon the three-tier
copayment structure. You may obtain a list of the medications covered through the mail order program by
contacting Medco Health at ( 800) 233-7063 or a Preferred Care Member Services Representative at ( 585) 325-
3113 or ( 800) 950-3224 or by visiting our website at www. preferredcare. org.

When an A-rated generic drug can be substituted for a name brand drug, the patient s drug benefit will be
based upon the cost of the generic drug. If the name brand drug is dispensed, the patient will pay the generic
copayment plus the difference in cost between the lower priced generic drug and the higher priced name brand
drug. If there is no A-rated generic substitute, the patient s drug benefit will be based upon the cost of the name
brand drug less the name brand copayment.

We reserve the right to determine Medical Necessity for all drugs, and may require Prior Justification of certain
drugs. Prior justification may occur prior to the drug being dispensed in any amount or only if more than a
standard quantity limit is prescribed. To learn more about this process you may contact Medco Health at ( 800)
233-7063 or a Preferred Care Member Services Representative at ( 585) 325-3113 or ( 800) 950-3224.

Plan members called to active military duty ( or members in time of national emergency) who need to obtain
prescribed medications, should call Medco Health at ( 800) 233-7063.

Why use generic drugs? Generic drugs are typically lower priced drugs that are the therapeutic equivalent to
more expensive name brand drugs. They must contain the same active ingredients and must be equivalent in
strength and dosage to the original brand name product. Generics cost less than the equivalent name brand drug.

The U. S. Food and Drug Administration sets quality standards for generic drugs to ensure that these drugs meet
the same standards of quality and strength as name brand drugs.

Section 5( f) 30 33.
33 Page 34 35
Section 36 2004 Preferred Care Section 5( f)
You Pay Benefit Description
At a Pharmacy
(for each 30 day supply)
$ 10 per tier 1 generic prescription
$ 20 per tier 2 brand name
prescription
$ 35 per tier 3 brand name
prescription

At Mail Order Pharmacy
(for each 90 day supply)
$ 25 per tier 1 generic prescription
$ 50 per tier 2 brand name
prescription
$ 87.50 per tier 3 brand name
prescription

Note: If there is no generic
equivalent available, you will still
have to pay the brand name copay

$ 15 for each 30-day supply
$ 15 for each 90-day supply
from the mail order pharmacy

When you have to file a claim. If you use a non-Plan pharmacy or do not present your identification card at a
Plan pharmacy, you are required to submit a claim. You must submit original receipts along with a claim form.
You will be reimbursed at the network rate less the applicable copayment.

31
Covered medications and supplies
We cover the following medications and supplies prescribed by a licensed
physician and obtained from a Plan pharmacy or non-network pharmacy, or
through our mail order program:

FDA approved medications for FDA approved indications that by Federal
law of the United States require a physician s prescription for their purchase.

Compounded prescriptions are a covered item only if the main therapeutic
ingredient is a Federal Legend Drug with a National Drug Code ( NDC)
Number.

Disposable needles and syringes for the administration of covered
medications.

Drugs for sexual dysfunction have dispensing limits. Contact us for details.
Contraceptive drugs.
Drugs for infertility treatment after a medical condition has been
corrected. Pergonal/ Metrodin and other FDA approved drugs, only after
unsuccessful treatment with Clomiphene and only when very specific
clinical indications are met.

Growth hormone.

Diabetic Drugs & Supplies:
Insulin and oral agents
Supplies, , including disposable needles and syringes

Diabetes education ( see Educational Classes and Programs, Page 20) $ 15 per session
Diabetic medical equipment ( ( including glucose monitors) $ 15 per unit
Provider Administered Medications (if a separate charge is made by the $15 per medication
provider for that medication; this copay will be in addition to any other
applicable physician copay made for that day.)

Not covered: All Charges
� Drugs and supplies for cosmetic purposes
� Vitamins and nutritional supplements that can be purchased without
a prescription.

� Nonprescription medicines
� Drugs to enhance athletic performance
� Non-FDA approved medications (i. e. foreign medications, etc.)
� Prescriptions that may be obtained without a prescription 34.
34 Page 35 36
2004 Preferred Care 36 Section Section 5( g)
Section 5( g). Special features
Feature Description

Flexible benefits option Under the flexible benefits option, we determine the most effective way
to provide services.

We may identify medically appropriate alternatives to traditional care
and coordinate other benefits as a less costly alternative benefit.

Alternative benefits are subject to our ongoing review. .
By approving an alternative benefit, , we cannot guarantee you will get
it in the future.

The decision to offer an alternative benefit is solely ours, , and we may
withdraw it at any time and resume regular contract benefits.

Our decision to offer or withdraw alternative benefits is not subject to
OPM review under the disputed claims process.

Services for deaf and If you have access to TTY equipment, you may contact us at
hearing impaired ( 585) 325-2629.

Travel benefits/ services Urgent and emergency care only.
overseas

32 35.
35 Page 36 37
Section 36 2004 Preferred Care
Section 5( h). Dental Benefits
Here are some important things to keep in mind about these benefits:
Please remember that all benefits are subject to the definitions, limitations, and
exclusions in this brochure and are payable only when we determine they are medically
necessary.

We have no deductible.
We cover hospitalization for dental procedures only when a nondental physical
impairment exists which makes hospitalization necessary to safeguard the health of the
patient. See Section 5( c) for inpatient hospital benefits. We do not cover the dental
procedure unless it is described below.

Be sure to read Section 4, Your costs for covered services for valuable information about
how cost sharing works. Also read Section 9 about coordinating benefits with other
coverage, including with Medicare.

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Section 5( h)
You Pay Benefit Description
Accidental injury benefit
We cover restorative services and supplies necessary to promptly repair ( but $ 15 per visit
not replace) sound natural teeth. The need for these services must result from
an accidental injury. Benefits are provided only for a course of treatment that
has begun within 12 months of the injury.

Dental Benefits
We have no other dental benefits.

33 36.
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2004 Preferred Care 36 Section
The benefits on this page are not part of the FEHB contract or premium, and you cannot file an FEHB
disputed claim about them Fees you pay for these services do not count toward FEHB out-of-pocket
maximums.

You're In Charge! ssm from Preferred Care are courses, resources, and discounts available to all members of
the Plan. You're In Charge! ssm provides connections to traditional and complimentary providers, all geared to
giving Plan members tools to make appropriate health and wellness decisions for themselves and their
families. Our You're In Charge! ssm program was developed to encourage appropriate participation in health-
ful activities focusing on preventive care to aid in improving the health status of our members.

You're In Charge! Health Partners
CPR & First Aid,
Diet & Nutrition,
Smoking Cessation,
Women s Issues, and
Childbirth & Parenting.

You're In Charge! Community discounts are provided for purchasing health related, recreation or leisure
merchandise or services from:

Weight Watchers,
Play It Again Sports,
Muxworthy s,
G& G Fitness,
Lori s Natural Foods,
and Rock Ventures to name a few.

Over twenty clubs provide plan members discounted arrangements. Discounts and schedules vary by
participating vendor.

Additional programs are:
Discounts on massage therapy,
20% discount on LASIK laser eye surgery at select locations,
Safe driving and safe boating courses at select locations,
20% discount on teeth whitening at participating dentists,
20% discount on sunglasses and safety glasses at select locations.

To receive You're In Charge! ssm information, call Preferred Care s Member Services Department at ( 585)
325-3113 or toll free at ( 800) 950-3224. Members with access to TTY equipment may call ( 585) 325-2629.
www. preferredcare. org Preferred Care s website provides valuable health information, frequently asked
questions, physician listings, and important links to other sites that can provide you with the most up to date
information on health and wellness.

Programs are subject to change.

Section 5( i). Non-FEHB benefits available to Plan members

Section 5( i) 34 37.
37 Page 38 39
Section 36 2004 Preferred Care
Section 6. General exclusions � things we don't cover
The exclusions in this section apply to all benefits. Although we may list a specific service as a benefit, we will not
cover it unless your Plan doctor determines it is medically necessary to prevent, diagnose, or treat your illness,
disease, injury, or condition.

We do not cover the following:
Care by non-Plan providers except for authorized referrals or emergencies ( see Emergency Benefits) ;
Services, drugs, or supplies you receive while you are not enrolled in this Plan;
Services, drugs, or supplies that are not medically necessary;
Services, drugs, or supplies not required according to accepted standards of medical, dental, or psychiatric
practice;

Experimental or investigational procedures, treatments, drugs or devices;
Services, drugs, or supplies related to abortions, except when the life of the mother would be endangered if the
fetus were carried to term or when the pregnancy is the result of an act of rape or incest;

Services, drugs, or supplies related to sex transformations;
Services, drugs, or supplies you receive from a provider or facility barred from the FEHB Program;
Services, drugs, or supplies you receive while in active military service.

Section 6 35 38.
38 Page 39 40
2004 Preferred Care 36 Section
Section 7. Filing a claim for covered services
When you receive services from Plan physicians, receive services at Plan hospitals and facilities, or obtain your
prescription drugs at Plan pharmacies, you will not have to file claims. Just present your identification card and pay
your copayment or coinsurance.

You will only need to file a claim when you receive emergency services from non-Plan providers. Sometimes these
providers bill us directly. Check with the provider. If you need to file the claim, here is the process:

Medical and hospital In most cases, providers and facilities file claims for you. Physicians must benefits file on the form HCFA-1500, Health Insurance Claim Form. Facilities will
file on the UB-92 form. For claims questions and assistance, call us at
( 585) 325-3113.

When you must file a claim such as for out--of-area care submit it on the
HCFA-1500 or a claim form that includes the information shown below. Bills
and receipts should be itemized and show:

Covered member s name and ID number;
Name, address, and Federal Tax ID # of the physician or facility that
provided the service or supply;

Dates you received the services or supplies;
Diagnosis;
Type of each service or supply;
The charge for each service or supply;
A copy of the explanation of benefits, payments, or denial from any
primary payer such as the Medicare Summary Notice ( ( MSN) ; and

Receipts, if you paid for your services.

Submit your claims to:
Preferred Care, 259 Monroe Avenue, Rochester, New York, 14607

Prescription drugs Submit your claims to:
Medco Health Solutions
P. O. Box 2187
Lee s Summit, MO 64063-2187

Deadline for filing your Send us all of the documents for your claim as soon as possible. You must claim submit the claim by December 31 of the year after the year you received the
service, unless timely filing was prevented by administrative operations of
Government or legal incapacity, provided the claim was submitted as soon as
reasonably possible.

When we need more Please reply promptly when we ask for additional information. We may delay information processing or deny your claim if you do not respond.

Section 7 39.
39 Page 40 41
Section 36 2004 Preferred Care
Section 8. The disputed claims process
Follow this Federal Employees Health Benefits Program disputed claims process if you disagree with our decision on
your claim or request for services, drugs, or supplies including a request for preauthorization: :

Step Description
Ask us in writing to reconsider our initial decision. You must:
( a) Write to us within 6 months from the date of our decision; and
( b) Send your request to us at: 259 Monroe Avenue, Rochester, N. Y. 14607; and
( c) Include a statement about why you believe our initial decision was wrong, based on specific benefit
provisions in this brochure; and

( d) Include copies of documents that support your claim, such as physicians letters, operative reports, bills,
medical records, and explanation of benefits ( EOB) forms.

We have 30 days from the date we receive your request to:
( a) Pay the claim ( or, if applicable, arrange for the health care provider to give you the care) ; or
( b) Write to you and maintain our denial go to step 4; ; or
( c) Ask you or your provider for more information. If we ask your provider, we will send you a copy of our
request go to step 3. .

You or your provider must send the information so that we receive it within 60 days of our request. We will
then decide within 30 more days.

If we do not receive the information within 60 days, we will decide within 30 days of the date the information
was due. We will base our decision on the information we already have.

We will write to you with our decision.

If you do not agree with our decision, you may ask OPM to review it.
You must write to OPM within:
90 days after the date of our letter upholding our initial decision; or
120 days after you first wrote to us if we did not answer that request in some way within 30 days; ; or
120 days after we asked for additional information.

Write to OPM at: United States Office of Personnel Management, Insurance Services Programs, Health
Insurance Group 3, 1900 E Street, NW, Washington, D. C. 20415-3630.

Send OPM the following information:
A statement about why you believe our decision was wrong, based on specific benefit provisions in this
brochure;

Copies of documents that support your claim, such as physicians letters, operative reports, bills,
medical records, and explanation of benefits ( EOB) forms;

Copies of all letters you sent to us about the claim;
Copies of all letters we sent to you about the claim; and
Your daytime phone number and the best time to call.

1
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Section 8 37 40.
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2004 Preferred Care 36 Section
Note: If you want OPM to review different claims, you must clearly identify which documents apply to
which claim.

Note: You are the only person who has a right to file a disputed claim with OPM. Parties acting as your
representative, such as medical providers, must include a copy of your specific written consent with the
review request.

Note: The above deadlines may be extended if you show that you were unable to meet the deadline because
of reasons beyond your control.

OPM will review your disputed claim request and will use the information it collects from you and us to
decide whether our decision is correct. OPM will send you a final decision within 60 days. There are no
other administrative appeals.

If you do not agree with OPM s decision, your only recourse is to sue. If you decide to sue, you must file the
suit against OPM in Federal court by December 31 of the third year after the year in which you received the
disputed services, drugs, or supplies or from the year in which you were denied precertification or prior
approval. This is the only deadline that may not be extended.

OPM may disclose the information it collects during the review process to support their disputed claim
decision. This information will become part of the court record.

You may not sue until you have completed the disputed claims process. Further, Federal law governs your
lawsuit, benefits, and payment of benefits. The Federal court will base its review on the record that was
before OPM when OPM decided to uphold or overturn our decision. You may recover only the amount of
benefits in dispute.

NOTE: If you have a serious or life threatening condition ( one that may cause permanent loss of bodily
functions or death if not treated as soon as possible) , and

( a) We haven t responded yet to your initial request for care or preauthorization/ prior approval, then call us
at ( 585) 325-3113 and we will expedite our review; or

( b) We denied your initial request for care or preauthorization/ prior approval, then:
If we expedite our review and maintain our denial, we will inform OPM so that they can give your
claim expedited treatment too, or

You can call OPM s Health Insurance Group 3 at ( 202) 606-0737 between 8 a. m. and 5 p. m.
eastern time.

Section 8 38 41.
41 Page 42 43
Section 36 2004 Preferred Care
Section 9. Coordinating benefits with other coverage
When you have other You must tell us if you are covered or if a family member has coverage under health coverage another group health plan or has automobile insurance that pays health care
expenses without regard to fault. This is called double coverage.
When you have double coverage, one plan normally pays its benefits in full as
the primary payer and the other plan pays a reduced benefit as the secondary
payer. We, like other insurers, determine which coverage is primary according
to the National Association of Insurance Commissioners guidelines.

When we are the primary payer, we will pay the benefits described in this
brochure.

When we are the secondary payer, we will determine our allowance. After the
primary plan pays, we will pay whatever is left up to the Plan allowance or our
regular benefit, whichever is less. We will not pay more than our allowance. If
we are the secondary payer, we may be entitled to receive payment from your
primary plan.

What is Medicare? Medicare is a Health Insurance Program for:
People 65 years of age and older.
Some people with disabilities, under 65 years of age.
People with End Stage Renal Disease ( permanent kidney failure requiring
dialysis or a transplant) .

Medicare has two parts:
Part A ( Hospital Insurance) . Most people do not have to pay for Part A. If
you or your spouse worked for at least 10 years in Medicare-covered
employment, you should be able to qualify for premiums-free Part A
insurance. ( Someone who was a Federal employee on January 1, 1983 or
since automatically qualifies. ) Otherwise, if you are age 65 or older, you
may be able to buy it. Contact 1-800-MEDICARE for more information.

Part B ( Medical Insurance) . Most people pay monthly for Part B. Generally,
Part B premiums are withheld from your Social Security or retirement check.

� Should I enroll in The decision to enroll in Medicare is yours. We encourage you to apply for
Medicare? Medicare benefits 3 months before you turn age 65. It s easy. Just call the Social Security Administration toll-free number 1-800-772-1213 to set up an

appointment to apply. If you do not apply for one or both Parts of Medicare,
you can still be covered under the FEHB Program.

If you can get premium free Part A coverage, we advise you to enroll in it.
Most Federal employees and annuitants are entitled to Medicare Part A at age
65 without cost When you don t have to pay premiums for Medicare Part A,
it makes good sense to obtain the coverage. It can reduce your out-of-pocket
expenses as well as costs to the FEHB, which can help keep premiums down.

Everyone is charged a premium for Medicare Part B coverage. The Social
Security Administration can provide you with premium and benefit informa-
tion. Review the information and decide if it makes sense for you to buy the
Medicare Part B coverage.

Section 9 39 42.
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2004 Preferred Care 36 Section Section 9
If you are eligible for Medicare, you may have choices in how you get your
health care. Medicare+ Choice is the term used to describe the various health
plan choices available to Medicare beneficiaries. The information in the next
few pages shows how we coordinate benefits with Medicare, depending on
the type of Medicare managed care plan you have.

The Original The Original Medicare Plan ( Original Medicare) is available everywhere in Medicare Plan the United States. It is the way everyone used to get Medicare benefits and
(Part A or Part B) is the way most people get their Medicare Part A and Part B benefits now. You may go to any doctor, specialist, or hospital that accepts Medicare. The
Original Medicare Plan pays its share and you pay your share. Some things
are not covered under Original Medicare, like prescription drugs.

When you are enrolled in Original Medicare along with this Plan, you still
need to follow the rules in this brochure for us to cover your care. You must
use our providers.

When Medicare is the primary payer, we will waive some of your out-of-
pocket costs, such as copays and coinsurance.

Claims process when you have the Original Medicare Plan You probably
will never have to file a claim form when you have both our plan and the
Original Medicare Plan.

When we are the primary payer, we process the claim first.
When Original Medicare is the primary payer, Medicare processes your
claim first. In many cases, your claims will be coordinated automatically
and we will then provide secondary benefits for covered charges. To find
out if you need to do something to file your claims, call us at ( 585) 325-
3113 or visit our website at www. preferredcare. org.

Section 9. Coordinating benefits with other coverage, continues on page 42.
Primary Payer Chart appears on the next page.

40 43.
43 Page 44 45
Section 36 2004 Preferred Care
1) Are an active employee with the Federal government and . . .
You have FEHB coverage on your own or through your spouse who is also an active employee

You have FEHB coverage through your spouse who is an annuitant
2) Are an annuitant and . . .
You have FEHB coverage on your own or through your spouse who is also an annuitant

You have FEHB coverage through your spouse who is an active employee
3) Are a reemployed annuitant with the Federal government and your position is excluded from
the FEHB ( your employing office will know if this is the case) *

4) Are a reemployed annuitant with the Federal government and your position is not excluded from
the FEHB ( your employing office will know if this is the case) and . . .
You have FEHB coverage on your own or through your spouse who is also an active employee

You have FEHB coverage through your spouse who is an annuitant
5) Are a Federal judge who retired under title 28, U. S. C. , or a Tax Court judge who retired under
Section 7447 of title 26, U. S. C. ( or if your covered spouse is this type of judge) , *

6) Are enrolled in Part B only, regardless of your employment status for Part B for other
services services

7) Are a former Federal employee receiving Workers Compensation and the Office of Workers
Compensation Programs has determined that you are unable to return to duty * *

B. When you or a covered family member . . .
1) Have Medicare solely based on end-stage renal disease ( ESRD) and . . .
It is within the first 30 months of eligibility for entitlement to Medicare due to ESRD
( 30-month coordination period)

It is beyond the 30-month coordination period and you or a family member are still entitled
to Medicaredue to ESRD

2) Become eligible for Medicare due to ESRD while already a Medicare beneficiary . . .
This Plan was the primary payer before eligibility due to ESRD for 30-month
coordination period

Medicare was the primary payer before eligibility due to ESRD

C. When you or a covered family member have FEHB and...
1) Are an active employee with the Federal government and . . .
You have FEHB coverage on your own or through your spouse who is also an active employee

You have FEHB coverage through your spouse who is an annuitant
2) Are an annuitant and . . .
You have FEHB coverage on your own or through a spouse who is also an annuitant

You have FEHB coverage through your spouse who is an active employee

D. Are covered under the FEHB Spouse Equity provision as a former spouse

Medicare always makes the final determination as to whether they are the primary payer. The following chart illustrates whether
the Original Medicare Plan or this Plan should be the primary payer for you according to your employment status and other factors
determined by Medicare. It is critical that you tell us if you or a covered family member has Medicare coverage so we can
administer these requirements correctly.

Primary Payer Chart
Then the primary payer for the
individual with Medicare is . . .

Medicare This Plan
A. When either you � or your covered spouse � are age 65 or over and have Medicare and you . . .

* * Unless you have FEHB coverage through your spouse who is an active employee
* * Workers Compensation is primary for claims related to your condition under Workers Compensation

Section 9 41

*
*
* * 44.
44 Page 45 46

2004 Preferred Care 36 Section 42
� Medicare + Choice plan If you are eligible for Medicare, you may choose to enroll in and get your Medicare benefits from a Medicare + Choice plan. These are health care
choices ( like HMOs) in some areas of the country. In most Medicare + Choice
plans, you can only go to doctors, specialists, or hospitals that are part of the
plan. Medicare + Choice plans provide all the benefits that Original Medicare
covers. Some cover extras, like prescription drugs. To learn more about
enrolling in a Medicare + Choice plan, contact Medicare at 1-800-
MEDICARE ( 1-800-633-4227) or at www. medicare. gov.

If you enroll in a Medicare + Choice plan, the following options are
available to you:

This Plan and another Plan's Medicare + Choice plan: You may enroll in
another plan s Medicare + Choice plan and also remain enrolled in our FEHB
plan. We will still provide benefits when your Medicare + Choice plan is
primary, even out of the Medicare + Choice plan s network and/ or service
area ( if you use our Plan providers) . We will waive our copayments, and/ or
coinsurance when we are the secondary payer. You are required to use Plan
providers. If you enroll in a Medicare + Choice plan, tell us. We will need to
know whether you are in the Original Medicare Plan or in a Medicare +
Choice plan so we can correctly coordinate benefits with Medicare.

Suspended FEHB coverage � to enroll in a Medicare + Choice plan:
If you are an annuitant or former spouse, you can suspend your FEHB
coverage to enroll in a Medicare + Choice plan, eliminating your FEHB
premium. ( OPM does not contribute to your Medicare + Choice plan
premium) . For information on suspending your FEHB enrollment, contact
your retirement office. If you later want to re-enroll in the FEHB Program,
generally you may do so only at the next open season unless you involuntarily
lose coverage or move out of the Medicare + Choice plan s service area.

TRICARE and CHAMPVA TRICARE is the health care program for eligible dependents of military persons, and retirees of the military. TRICARE includes the CHAMPUS
program. CHAMPVA provides health coverage to disabled veterans and their
eligible dependents. If TRICARE or CHAMPVA and this Plan cover you, we
pay first. See your TRICARE or CHAMPVA health benefits advisor if you
have questions about these programs.

Suspended FEHB coverage � to enroll in Medicare or CHAMPVA: If you
are an annuitant or former spouse, you can suspend your FEHB coverage to
enroll in one of these programs, eliminating your FEHB premium. ( OPM does
not contribute to any applicable plan premiums. ) For information on suspend-
ing your FEHB enrollment, contact your retirement office. If you later want
to re-enroll in the FEHB Program, generally you may do so only at the next
Open Season unless you involuntarily lose coverage under the program.

Section 9

Section 9. Coordinating benefits with other coverage, continued 45.
45 Page 46 47
Section 36 2004 Preferred Care
Worker's Compensation We do not cover services that:
You need because of a workplace-related illness or injury that the Office of
Workers Compensation Programs ( OWCP) or a similar Federal or State
agency determines they must provide; or

OWCP or a similar agency pays for through a third party injury settlement
or other similar proceeding that is based on a claim you filed under OWCP
or similar laws.

Once OWCP or similar agency pays its maximum benefits for your treatment,
we will cover your care. You must use our providers.

Medicaid When you have this Plan and Medicaid, we pay first.
Suspended FEHB coverage � to enroll in Medicaid or a similar State-approved
program of medical assistance: If you are an annuitant or former
spouse, you can suspend your FEHB coverage to enroll in one of these State
programs, eliminating your FEHB premium. For information on suspending
your FEHB enrollment, contact your retirement office. If you later want to
re-enroll in the FEHB Program, generally you may do so only at the next Open
Season unless you involuntarily lose coverage under the State program.

When other Government We do not cover services and supplies when a local, State, or Federal agencies are responsible for Government agency directly or indirectly pays for them.
your care

When others are responsible When you receive money to compensate you for medical or hospital care for for injuries injuries or illness caused by another person, you must reimburse us for any
expenses we paid. However, we will cover the cost of treatment that exceeds
the amount you received in the settlement.

If you do not seek damages you must agree to let us try. This is called
subrogation. If you need more information, contact us for our subrogation
procedures.

43 Section 9 Section 9 46.
46 Page 47 48
2004 Preferred Care 36 Section Section 9 44 Section 10
Calendar year January 1 through December 31 of the same year. For new enrollees, the calendar year begins on the effective date of their enrollment and ends on
December 31 of the same year.
Coinsurance Coinsurance is the percentage of our allowance that you must pay for your care. See page 11.

Copayment A copayment is a fixed amount of money you pay when you receive covered services. See page 11.
Covered services Care we provide benefits for, as described in this brochure.
Custodial care Care that could be provided safely and reasonably by people without professional skills or training that is primarily to help the member with daily
living activities or meet personal needs.
Experimental or This Plan considers a drug, device, treatment, or procedure to be experimental investigational or investigational if it meets one or more of the following criteria:

1. It cannot be lawfully marketed without the approval of the FDA and such
approval has not been granted at the time of its use.

2. It is the subject of a current investigational new drug or device application
on file with the FDA.

3. It is being provided pursuant to a Phase I or Phase II clinical trial or as the
experimental or research arm of a clinical trial.

4. It is being provided pursuant to a written protocol which describes among
its objectives, determination of safety, or efficacy in comparison to
conventional alternatives.

5. The predominant opinion among experts as expressed in the published
peer review literature is that further research is necessary in order to
define safety compared with conventional alternatives.

6. It is not experimental or investigational in itself, but is being used in
conjunction with a drug, device, treatment, or procedure that is experimental
or investigational.

Group health coverage Health care coverage that a member is eligible for because of employment by, membership in, or connection with, a particular organization or group that
provides payment for hospital, medical, or other health care services or
supplies.

Medically necessary Medically necessary means that the use of services and supplies required to diagnose or treat you are:

Consistent with the symptoms or diagnosis and treatment of your
condition, disease, ailment or injury, supported by a thorough
examination, history, and tests;

Appropriate, safe, and effective with regard to generally accepted
standards of medical or surgical practice prevailing nationally or in the
geographic locality, where and when the service or item is ordered;

Section 10. Definitions of terms we use in this brochure 47.
47 Page 48 49
Section 36 2004 Preferred Care
Supported by a thorough, reasonable consideration of the treatment
options available and a reasonable potential for therapeutic gain, and not
solely for appearance or recreation, or for your convenience, the convenience
of your health professional, hospital, or other provider; and

Furnished in the least intensive, most cost effective health care setting
required. When applied to inpatient care, it further means that your
medical symptoms or condition require that the diagnosis or treatment
cannot be safely provided to you as an outpatient or in a less intensive
environment.

Plan allowance Plan allowance is the amount we use to determine our payment and your coinsurance for covered services. Our plan allowance is generally based upon
a fee we negotiate with Plan providers. In some instances, our plan allowance
may be based upon submitted charges or reasonable and customary charges.

Us/ We Us and we refer to Preferred Care.
Yo u You refers to the enrollee and each covered family member.

Section 10 45 48.
48 Page 49 50

2004 Preferred Care 36 Section 46 Section 11
Coverage Information
No pre-existing condition We will not refuse to cover the treatment of a condition that you had before limitation you enrolled in this Plan solely because you had the condition before you
enrolled.
Where you can get See www. opm. gov/ insure. Also, your employing or retirement office can information about enrolling answer your questions, and give you a Guide to Federal Employees Health
in the FEHB Program Benefits Plans brochures for other plans, and other materials you need to make an informed decision about:

When you may change your enrollment;
How you can cover your family members;
What happens when you transfer to another Federal agency, go on leave
without pay, enter military service, or retire;

When your enrollment ends; and
When the next Open Season for enrollment begins.
We don t determine who is eligible for coverage and, in most cases, cannot
change your enrollment status without information from your employing or
retirement office.

Types of coverage available Self Only coverage is for you alone. Self and Family coverage is for you, your for you and your family spouse, and your unmarried dependent children under age 22, including any
foster children or stepchildren your employing or retirement office authorizes
coverage for. Under certain circumstances, you may also continue coverage
for a disabled child 22 years of age or older who is incapable of self-support.

If you have a Self Only enrollment, you may change to a Self and Family
enrollment if you marry, give birth, or add a child to your family. You may
change your enrollment 31 days before to 60 days after that event. The Self
and Family enrollment begins on the first day of the pay period in which the
child is born or becomes an eligible family member. When you change to Self
and Family because you marry, the change is effective on the first day of the
pay period that begins after your employing office receives your enrollment
form; benefits will not be available to your spouse until you marry.

Your employing or retirement office will not notify you when a family
member is no longer eligible to receive health benefits, nor will we. Please
tell us immediately when you add or remove family members from your
coverage for any reason, including divorce, or when your child under age 22
marries or turns 22.

If you or one of your family members is enrolled in one FEHB plan, that
person may not be enrolled in or covered as a family member by another
FEHB plan.

Children's Equity Act OPM has implemented the Federal Employees Health Benefits Children s Equity Act of 2000. This law mandates that you be enrolled for Self and
Family coverage in the Federal Employees Health Benefits ( FEHB) Program,
if you are an employee subject to a court or administrative order requiring you
to provide health benefits for your child( ren) .

If this law applies to you, you must enroll for Self and Family coverage in a
health plan that provides full benefits in the area where your children live or
provide documentation to your employing office that you have obtained other
health coverage for your children. If you do not do so, your employing office
will enroll you involuntarily as follows:

Section 11. FEHB facts 49.
49 Page 50 51
Section 36 2004 Preferred Care
If you have no FEHB coverage, your employing office will enroll you for
Self and Family coverage in the Blue Cross and Blue Shield Service
Benefit Plan s Basic Option.

If you have a Self Only enrollment in a fee-for-service plan or in an HMO
that serves the area where your children live, your employing office will
change your enrollment to Self and Family in the same option of the same
plan; or

If you are enrolled in an HMO that does not serve the area where your
children live, your employing office will change your enrollment to Self
and Family in the Blue Cross and Blue Shield Service Benefit Plan s
Basic Option.

As long as the court/ administrative order is in effect, and you have at least one
child identified in the order who is still eligible under the FEHB Program, you
cannot cancel your enrollment, change to Self Only, or change to a plan that
doesn t serve the area in which your children live, unless you provide docu-
mentation that you have other coverage for the children. If the court/ adminis-
trative order is still in effect when you retire, and you have at least one child
still eligible for FEHB coverage, you must continue your FEHB coverage into
retirement ( if eligible) and cannot cancel your coverage, change to Self Only,
or change to a plan that doesn t serve the area in which your children live as
long as the court/ administrative order is in effect. Contact your employing
office for further information.

When benefits and The benefits in this brochure are effective on January 1. If you joined this premiums start Plan during Open Season, your coverage begins on the first day of your first
pay period that starts on or after January 1. If you changed plans or plan
options during Open Season and you receive care between January 1 and the
effective date of coverage under your new plan or option, your claims will be
paid according to the benefits of your old plan or option. However, if your old
plan left the FEHB Program at the end of the year, you are covered under that
plan s 2003 benefits until the effective date of your coverage with your new
plan. Annuitant s coverage and premiums begin on January 1. If you joined at
any other time during the year, your employing office will tell you the
effective date of coverage.

When you retire When you retire, you can usually stay in the FEHB Program. Generally, you must have been enrolled in the FEHB Program for the last five years of your
Federal service. If you do not meet this requirement, you may be eligible for
other forms of coverage, such as Temporary Continuation of Coverage ( TCC) .

When you lose benefits
� When FEHB You will receive an additional 31 days of coverage, for no additional
coverage ends premium, when:

Your enrollment ends, unless you cancel your enrollment, or
You are a family member no longer eligible for coverage.
You may be eligible for spouse equity coverage or Temporary Continuation
of Coverage ( TCC) , or a conversion policy ( a non-FEHB individual policy) .

� Spouse equity If you are divorced from a Federal employee or annuitant, you may not
coverage continue to get benefits under your former spouse s enrollment. This is the
case even when the court has ordered your former spouse to supply health
coverage to you. But, you may be eligible for your own FEHB coverage under
the spouse equity law, or Temporary Continuation of Coverage ( TCC) . If you
are recently divorced or are anticipating a divorce, contact your ex-spouse s
employing or retirement office to get RI 70-5, the Guide to Federal Employees

47 Section 11 50.
50 Page 51 52

2004 Preferred Care 36 Section 48 Section 11
Health Benefits Plans for Temporary Continuation of Coverage and Former
Spouse Enrollees or other information about your coverage choices. You can
also download the guide from OPM s website, www. opm. gov/ insure.

� Temporary If you leave Federal service, or if you lose coverage because you no longer
Continuation of qualify as a family member, you may be eligible for Temporary Continuation
Coverage (TCC) of Coverage ( TCC) . For example, you can receive TCC if you are not able to
continue your FEHB enrollment after you retire, if you lose your job, if you
are a covered dependent child and you turn 22 or marry, etc.

You may not elect TCC if you are fired from your Federal job due to gross
misconduct.

Enrolling in TCC. Get the RI 79-27, which describes TCC, and the RI 70-5, the Guide to Federal Employees Health Benefits Plans for Temporary Continuation of Coverage and
Former Spouse Enrollees from your employing or retirement office or from
www. opm. gov/ insure. It explains what you have to do to enroll.

You may convert to a non-FEHB individual policy if:
Your coverage under TCC or the spouse equity law ends. ( If you canceled
your coverage or did not pay your premium, you cannot convert) ;

You decided not to receive coverage under TCC or the spouse equity law;
or

You are not eligible for coverage under TCC or the spouse equity law.
If you leave Federal service, your employing office will notify you of your
right to convert. You must apply in writing to us within 31 days after you
receive this notice. However, if you are a family member who is losing
coverage, the employing or retirement office will not notify you. You must
apply in writing to us within 31 days after you are no longer eligible for
coverage.

Your benefits and rates will differ from those under the FEHB Program;
however, you will not have to answer questions about your health, and we will
not impose a waiting period or limit your coverage due to pre-existing
conditions.

Getting a Certificate of The Health Insurance Portability and Accountability Act of 1996 is a Federal Group Health Plan Coverage law that offers limited Federal protections for health coverage availability and
continuity to people who lose employer group coverage. If you leave the
FEHB Program, we will give you a Certificate of Group Health Plan Coverage
that indicates how long you have been enrolled with us. You can use this
certificate when getting health insurance or other health care coverage. Your
new plan must reduce or eliminate waiting periods, limitations, or exclusions
for health related conditions based on the information in the certificate, as
long as you enroll within 63 days of losing coverage under this Plan.

If you have been enrolled with us for less than 12 months, but were previously
enrolled in other FEHB plans, you may also request a certificate from those
plans.

For more information, get OPM pamphlet RI 79-27, Temporary Continuation
of Coverage ( TCC) under the FEHB Program. See also the FEHB web site
( www. opm. gov/ insure/ health) ; refer to the TCC and HIPPA frequently asked
questions. These highlight HIPPA rules, such as the requirement that Federal
employees must exhaust any TCC eligibility as one condition for guaranteed
access to individual health coverage under HIPPA, and have information about
Federal and State agencies you can contact for more information.

� Converting
to individual
coverage 51.
51 Page 52 53

Section 36 2004 Preferred Care
Two new Federal Programs complement FEHB benefits
Important Information OPM wants to be sure you know about two new Federal programs that complement the FEHB Program. First, the Flexible Spending Account (FSA)
Program, also known as the FSAFEDS lets you set aside tax-free money to
pay for health and dependent care expenses. The results can be a discount of
20 to more than 40 percent on services you routinely pay for out-of-pocket.
Second, the Federal Long Term Care Insurance Program ( FLTCIP) covers
long term care costs not covered under the FEHB.

The Federal Flexible Spending Account Program � FSAFEDS
What is an FSA? It is a tax-flavored benefit that allows you to set aside pre-tax money from your paychecks to pay for a variety of eligible expenses. By using an FSA, you
can reduce your taxes while paying for services you would have to pay for
anyway, producing a discount that can be over 40%!!

There are two types of FSAs offered by the FSAFEDS Program:
Health Care Flexible Covers eligible health care expenses not reimbursed by this Plan, or any Spending Account other medical, dental, or vision care plan you or your dependents may have
(HCFSA) Eligible dependents for this account for this account include anyone you claim on your Federal income tax return as a qualified dependent under
the U. S. Internal Revenue Service ( IRS) definition and/ or with whom you
jointly file your Federal income tax return, even if you don t have Self and
Family health benefits coverage. Note: The IRS has a broader definition
than that of a family member than is used under the FEHB Program to
provide benefits by your FEHB Plan.
The maximum amount that can be allotted for the HCFSA is $ 3,000
annually. The minimum amount is $ 250 annually.

Dependent Care Flexible Covers eligible dependent care expenses incurred so you can work, or if Spending Account (DCFSA) you are married, so you and your spouse can work, or your spouse can look
for work or attend school full time.
Eligible dependents for this account include anyone you claim on your
Federal income tax return as qualified IRS dependent and/ or with whom
you jointly file your Federal income tax return.
The maximum that can be allotted for the DCFSA is $ 5,000 annually. The
minimum amount is $ 250 annually. Note: The IRS limits contributions to a
Dependent Care FSA. For single taxpayers and taxpayers filing a joint
return, the maximum is $ 5,000 per year. For taxpayers who file their taxes
separately with a spouse, the maximum is $ 2,500 per year. The limit
includes any childcare subsidy you may receive.

� Enroll during Open You must make an election to enroll in an FSA during the FEHB Open Season. Season Even if you enrolled during the initial Open Season for 2003, you must make
a new election to continue participating in 2004. Enrollment is easy!
Enroll online anytime during Open Season ( November 10 through December
8, 2003) at www. fsafeds. com.
Call the toll-free number 1-877-FSAFEDS ( 372-3337) Monday through
Friday, from 9 a. m. until 9 p. m. eastern time and a FSAFEDS Benefit
Counselor will help you enroll.

What is SHPS? SHPS is a third party administrator hired by OPM to manage the FSAFEDS Program. SHPS is the largest FSA administrator in the nation and will be

49 Two new Federal Programs complement FEHB benefits 52.
52 Page 53 54

2004 Preferred Care 36 Section 50
responsible for enrollment, claims processing, customer service, and day-to-
day operations of FSAFEDS.

Who is eligible to enroll? If you are a Federal employee eligible for FEHB-even if you re not enrolled in FEHB-you can choose to participate in either, or both, of the flexible spending
accounts. If you are not eligible for FEHB, you are not eligible to enroll for a
Health Care FSA. However, almost all Federal employees are eligible to enroll
for the Dependent Care FSA. The only exception is intermittent ( also called
when actually employed ( WAE) ) employees expected to work less than 180
days during the year.

Note: FSAFEDS is the FSA Program established for all Executive Branch
employees and Legislative Branch employees whose employers signed on.
Under IRS Law, FSAs are not available to annuitants. In addition, the U. S.
Postal Service and the Judicial Branch, among others, are Federal agencies
that have their own plans with slightly different rules, but the advantages of
having an FSA are the same no matter what agency you work for.

How much should I Plan carefully when deciding how much to contribute to an FSA. Because of contribute to my FSA? the tax benefits of an FSA, the IRS places strict guidelines on them. You need
to estimate how much you want to allocate to an FSA because current IRS
regulations require you forfeit any funds remaining in your account( s) at the
end of the FSA plan year. This is referred to as the use it or lose it rule. . You
will have until April 29, 2004 to submit claims for your eligible expenses in-
curred if you enrolled in FSAFEDS when it was initially offered. You will have
until April 30, 2005 to submit claims for your eligible expenses incurred from
January 1 through December 31, 2004 if you elect FSAFEDS this Open Season.

The FSAFEDS Calculator at www. fsafeds. com will help you plan your FSA
allocations and provide an estimate of your tax savings based upon your
individual situation.

What can my HCFSA Every FEHB health plan includes cost sharing features, such as coinsurance pay for? or copayments that you must pay when you and the Plan share costs, and
medical services and supplies that are not covered by the Plan and for which
you must pay. These out-of-pocket costs are summarized on page 54 and
detailed throughout this brochure. Your HCFSA will reimburse you for such
costs when they are for tax deductible medical care for you and your dependents
that is NOT covered by this FEHB Plan or any other coverage that you have.
Under this Plan, typical out of pocket expenses include:

Prescription Drug Copayments
Specialist Copayments
Primary Care Physician Copayments
Non-Covered Eyewear Expenses
Dental Expenses
Laser Eye Surgery
Massage Therapy

The IRS governs expenses reimbursable by a HCFSA. See Publication 502
for a comprehensive list of tax-deductible medical expenses. Note: While you
will see insurance premiums listed in Publication 502, they are NOT a
reimbursable expense for FSA purposes. Publication 502 can be found on
the IRS Website at http: / / www. irs. gov/ pub/ irs-pdf/ p502. pdf. If you do not see
your service or expense listed in Publication 502, please call a FSAFEDS
Benefit Counselor at 1-877-FSAFEDS ( 372-3337) , who will be able to answer
your specific questions.

Two new Federal Programs complement FEHB benefits 53.
53 Page 54 55

Section 36 2004 Preferred Care
� Tax Saving with an FSA An FSA lets you allot money for eligible expenses before your agency deducts taxes from your paycheck. This means the amount of income that your taxes
are based on will be lower, so your tax liability will also be lower. Without an
FSA, you would still pay for these expenses, but you would do so using money
remaining in your paycheck after Federal ( and often state and local) taxes are
deducted. The following chart illustrates a typical tax savings example:

Annual Tax Savings Example With FSA Without FSA
If your taxable income is: $ 50,000 $ 50,000
And you deposit this amount into a FSA: $ 2,000 -$ 0-
Your taxable income is now: 48,000 $ 50,000
Subtract Federal & Social Security taxes: $ 13,807 $ 14,383
If you spend after-tax dollars for expenses: -$ 0-$ 2,000
Your real spendable income is: $ 34,193 $ 33,617
Your tax savings: $576 -$ 0-

Note: This example is intended to demonstrate a typical tax savings based on
27% Federal and 7.65% FICA taxes. Actual savings will vary based upon in
which retirement system you are enrolled ( CSRS or FERS) , as well as your
individual tax situation. In this example, the individual received $ 2,000 in
services for $ 1,424, a discount of almost 36% ! You may also wish to consult a
tax professional for more information on the tax implications of an FSA.

Tax credits and You cannot claim expenses on your Federal income tax return if you receive deductions reimbursement for them from your HCFSA or DCFSA. Below are some
guidelines that may help you whether to participate in FSAFEDS.

Health care expenses The HCFSA is tax-free from the first dollar. In addition, you may be reim-bursed from the HCFSA at any time during the year for expenses up to the
annual amount you ve elected to contribute.
Only health care expenses exceeding 7.5% of your adjusted gross income are
eligible to be deducted on your Federal income tax return. Using the example
listed in the above chart, only health care expenses exceeding $ 3,750 ( 7.5% of
$ 50,000) would be eligible to be deducted on your Federal income tax return.
In addition, money set aside through a HCFSA is also exempt from FICA
taxes. This exemption is not available on your Federal income tax return.

Dependent care expenses The DCFSA generally allows many families to save more than they would with the Federal tax credit for dependent care expenses. Note that you may
only be reimbursed from DCFSA up to your current account balance. If you
file a claim for more than your current balance, it will be held until additional
payroll allotments have been added to your account.

Visit www. fsafeds. com and download the Dependent Care Tax Credit
Worksheet from the Quicklinks box to help you determine what is best for
your situation. You may also wish to consult a tax professional for more details.

7 51 Two new Federal programs complement FEHB benefits 54.
54 Page 55 56

2004 Preferred Care 36 Section 52
Does it cost me Probably not. While there is an administrative fee of $ 4.00 per month for an anything to participate HCFSA and 1.5% of the annual election for a DCFSA, most agencies have
in FSAFEDS? elected to pay these fees out of their share of employment tax savings. To be
sure, check the FSAFEDS. com website or call 1-877-FSAFEDS ( 372-3337) .
Also, remember that participating in FSAFEDS can cost you money if you
don t spend your entire account balance by the end of the plan year and wind
up forfeiting your end of year balance, per the IRS use-it-or-lose-it rule. .

Contact us To find out more or to enroll, please visit the FSAFEDS Website at www. fsa. feds. com, or contact SHPS by email or by phone. SHPS Benefit
Counselors are available from 9: 00 a. m. until 9: 00 p. m. eastern time, Monday
through Friday.

E-mail: fsafeds@ shps. net
Telephone: 1-877-FSAFEDS ( 372-3337)
TTY: 1-800-952-0450 ( for hearing impaired individuals that would like to
utilize a text messaging service)

The Federal Long Term Care Insurance Program
It's important protection Here s why you should consider enrolling in the Federal Long Term Care Insurance Program:

� FEHB plans do not cover the cost of long term care. Also called
custodial care, long term care is help you receive when you need assis
tance performing activities of daily living-such as bathing or dressing
yourself. This need can strike anyone at any age and the cost of care can be
substantial.

� The Federal Long Term Care Insurance Program can help the
potentially high cost of long term care This coverage gives you control
over the type of care you receive and where you receive it. It can also help
you remain independent, so you won t have to worry about being a burden
to your loved ones.

It's to your advantage to apply sooner than l ater. Long term care insur
ance is something you must apply for, and pass a medical screening ( called
underwriting) in order to be enrolled. Certain medical conditions will pre
vent some people from being approved for coverage. By applying while
you re in good health, you could avoid the risk of having a change in health
disqualify you from obtaining coverage. Also, the younger you are when
you apply, the lower your premiums.

You don't have to wait for an open season to apply. The Federal Long
Term Care Insurance Program accepts applications from eligible persons at
any time. You will have to complete a full underwriting application, which
asks a number of questions about your health. However, if you are a new or
newly eligible employee, you ( and your spouse, if applicable) have a limited
opportunity to apply using the abbreviated underwriting application) ,
which asks few questions. If you marry, your new spouse will also have a
limited opportunity to apply using abbreviated underwriting. Qualified
relatives are also eligible to apply with full underwriting.

To find out more and to request Call 1-800-LTC-FEDS ( 1-800-582-3337) ( TTY 1-800-843-3557) or visit
an application www. ltcfeds. com.

Two new Federal programs complement FEHB benefits 55.
55 Page 56 57
Section 36 2004 Preferred Care 7 53
Index
Do not rely on this page; it is for your convenience and does not explain your benefit coverage.
A injury 33
Allergy tests 16
Allogeneic ( donor) bone marrow
transplant 23
Alternative treatment 20
Ambulance 27
Anesthesia 23, 24, 25
Autologous bone marrow
transplant 23
B 21
Blood and blood plasma 24, 25
C 24, 25
Catastrophic protection 11
Changes for 2004 8
Chemotherapy 17
Childbirth 15
Children s Equity Act 46
Chiropractic 20
Cholesterol tests 15
Claims 36
Coinsurance 11
Colorectal cancer screening 14
Congenital anomalies 21, 22
Contraceptive devices
and drugs 15, 31
Coordination of benefits 39
Covered services 44
D 11
Definitions 44
Dental care 33
Diagnostic services 13
Disputed claims process 37
Donor expenses ( transplants) 23
Dressings 24, 25
Durable medical equipment
( DME) 19
E classes and
programs 20
Effective date of enrollment 47
Emergency Benefits 26
Experimental or investigational 44

Eyeglasses 18
F planning 15
Fecal occult blood test 14
Fraud 5
G Exclusions 35
H services 15, 18
Home health services 20
Hospice care 25
Hospital 10
I 14, 15
Infertility services 16
In-hospital physician care 21
Inpatient Hospital Benefits 24
Insulin 31
L and pathology
services 13, 14
Long Term Care Insurance 52
M Resonance Imagings
( MRIs) 13
Mail Order Prescription
Drugs 30, 31
Mammograms 14
Maternity Benefits 15
Medicaid 43
Medically necessary 44
Medicare 39
Members 7
Mental Conditions/ Substance
Abuse Benefits 28
N care 15
Non-FEHB Benefits 34
Nurse
Licensed Practical Nurse 20
Nurse Midwife 7
Registered Nurse 20
Nursery Care 15
O care 15
Occupational therapy 17
Ocular injury 18
Office visits 13
Oral and maxillofacial surgery 22

Orthopedic devices 19
Out-of-pocket maximum 11
Outpatient facility care 25
Oxygen 19
P test 14
Physical therapy 17
Physician services 13
Precertification 11
Preventive care, adult 14
Preventive care, children 15
Prescription drugs 30
Prior approval 11
Prostate cancer screening 14
Prosthetic devices 19
Psychologist 28
R therapy 17
Renal dialysis 17
Room and board 24
S surgical opinion 13
Skilled nursing facility care 25
Smoking cessation 20, 34
Speech therapy 17
Splints 24
Sterilization procedures 15, 21
Subrogation 43
Substance abuse 28
Surgery 21
Anesthesia 23, 24, 25
Oral 22
Outpatient 21
Reconstructive 22
Syringes 31
T continuation
of coverage 48
Transplants 23
Treatment therapies 17
V services 18
W child care 15
Wheelchairs 19
Workers compensation 43
X rays 13

Index 56.
56 Page 57 58
2004 Preferred Care 36 Section
Summary of Benefits for Preferred Care -2004
Do not rely on this chart alone. All benefits are provided in full unless indicated and are subject to the defini-
tions, limitations, and exclusions in this brochure. On this page we summarize specific expenses we cover; for
more detail, look inside.
If you want to enroll or change your enrollment in this Plan, be sure to put the correct enrollment code from the
cover on your enrollment form.
We only cover services provided or arranged by Plan physicians, except in emergencies.

Benefits You Pay Page
Medical services provided by physicians: Office visit copay:
Diagnostic and treatment services provided in the office . . . . . . . . . . . . . . . . $ 15 primary care; $ 15 specialist 13

Services provided by a hospital:
Inpatient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nothing 24
Outpatient . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nothing 25

Emergency benefits:
In-area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 copay ( waived if admitted) 27
Out-of-area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 copay ( waived if admitted) 27

Mental health and substance abuse treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Regular cost sharing 28
Prescription drugs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . At a Pharmacy 30
(for each 30 day supply)
$ 10 per generic prescription
$ 20 per preferred brand name
prescription
$ 35 per other brand name
prescription
At Mail Order Pharmacy
(for each 90 day supply)
$ 25 per generic prescription
$ 50 per preferred brand name
prescription
$ 87.50 per other brand name
prescription

Dental Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Limited benefits 33
Vision Care: 18
Annual eye refraction, including lens prescriptions $ 15 per visit
One pair of prescription eyeglasses or contact lenses The remaining cost after a discount
of 20% and a credit of $ 60

Special features: 32
Flexible benefits option
Services for deaf and hearing impaired
Travel benefits/ services overseas

Protection against catastrophic costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nothing after $ 3,300 per person
( your out-of-pocket maximum) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . or $ 8,400 per family enrollment 11
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . per year
Some costs do not count toward
this protection

Summary of Benefits 54 57.
57 Page 58
Section 36 2004 Preferred Care
Non-postal rates apply to most non-Postal enrollees. If you are in a special enrollment category, refer to the FEHB
Guide for that category or contact the agency that maintains your health benefits enrollment.

Postal rates apply to career Postal Service employees. Most employees should refer to the FEHB Guide for United
States Postal Service Employees, RI 70-2. Different postal rates apply and a special FEHB guide is published for
Postal Service Inspectors and Office of Inspector General ( OIG) employees ( see RI 70-2IN) .

Postal rates do not apply to non-career postal employees, postal retirees, or associate members of any postal employee
organization who are not career postal employees. Refer to the applicable FEHB Guide.

2004 Rate Information for
Preferred Care

Type of Gov't Your Gov't Your USPS Your
Enrollment Code Share Share Share Share Share Share

Biweekly Monthly Biweekly

Self Only
Self and Family
GV1 $ 89.67 $ 29.89 $194.29 $ 64.76 $106.11 $ 13.45
GV2 $239.41 $ 79.80 $518.72 $172.90 $283.30 $ 35.91

Non-Postal Premium Monthly
Serving Greater Rochester and Surrounding Counties 58.

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