Sponsored and administered by: The Association

Who may enroll in this Plan: Members of the Association

Annuitants (retirees) who are members of the Association may enroll in this Plan.

Identification cards

We will send you an identification (ID) card. You should carry this card with you at all times. You must show your ID card whenever you receive services from a medical or dental provider, and to fill a prescription at a participating Plan pharmacy. Until you receive your ID card, use your copy of the Health Benefits Election Form, SF2809, or your health benefits enrollment confirmation (for annuitants).

If you do not receive your card within 30 days after the effective date of your enrollment, or if you need replacement cards, call us at 1-800-634-0069.

Where you get covered care

You can get care from any "covered provider" or "covered facility." How much we pay�and you pay�depends on the type of covered provider or facility you use. If you reside in the PPO network area and use our preferred providers, you will pay less.

• Covered providers

We consider the following to be covered providers when they perform services within the scope of their license or certification:

Physician: Doctors of medicine or psychiatry (M.D.), osteopathy (D.O.), dental surgery (D.D.S.), medical dentistry (D.M.D.), podiatric medicine (D.P.M.), chiropractic (D.C.), and optometry (O.D.) when acting within the scope of their licenses or certification.

Qualified Clinical Psychologist: An individual who has earned either a Doctoral or Masters Clinical Degree in psychology or an allied discipline and who is licensed or certified in the state where services are performed. This presumes a licensed individual has demonstrated to the satisfaction of state licensing officials that he/she, by virtue of academic and clinical experience, is qualified to provide psychological services in that state.

Nurse Midwife: A person who is certified by the American College of Nurse Midwives or is licensed or certified as a nurse midwife in states requiring licensure or certification.

Nurse Practitioner/Clinical Specialist: A person who 1) has an active R.N. license in the United States, 2) has a baccalaureate or higher degree in nursing, and 3) is licensed or certified as a nurse practitioner or clinical nurse specialist in states requiring licensure or certification.

Clinical Social Worker: A social worker that 1) has a Master's or Doctoral degree in social work, 2) has at least two years of clinical social work practice, and 3) in states requiring licensure, certification or registration, is licensed, certified, or registered as a social worker where the services are rendered.

Physician Assistant: A person who is licensed, registered, or certified in the state where services are performed.

Licensed Professional Counselor or Master's Level Counselor: A person who is licensed, registered, or certified in the state where services are performed.

Audiologist: A person who is licensed, registered, or certified in the state where services are performed.

Licensed Acupuncturist (L.A.C.): A person who has completed the required schooling and licensure to perform acupuncture in the state where services are performed (see definition of acupuncture benefits, Section 5(a)).

Christian Science Practitioner: If you choose to visit a Christian Science practitioner instead of a physician, the charges are still considered allowable expenses. To qualify for benefits, you must make this choice annually. The benefits will then apply to all subsequent expenses incurred during the year. You can change your mind only at the time of your first claim each year. The practitioner you choose must be listed as such in the Christian Science Journal that is current at the time the service is provided. Your choice will not apply to, or prevent payment of, a physician's maternity charges.

Medically underserved areas: We cover any licensed medical practitioner, including chiropractors, for any covered service performed within the scope of that license in states OPM determines are "medically underserved." For 2005, the states are: Alabama, Alaska, Idaho, Kentucky, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, South Carolina, South Dakota, Texas, and Wyoming.

• Covered facilities

Hospital:

1. An institution that is accredited as a hospital under the hospital accredita­tion program of the Joint Commission on Accreditation of Healthcare Organizations (JCAHO); or
2. Any other institution that is operated pursuant to law, under the supervision of a staff of doctors and with 24-hour-a-day nursing service, and that is primarily engaged in providing:
   1. General patient care and treatment of sick and injured persons through medical, diagnostic and major surgical facilities, all of which facilities must be provided on its premises or under its control; or
   2. specialized inpatient medical care and treatment of sick or injured persons through medical and diagnostic facilities (including X-ray and laboratory) on its premises, under its control, or through a written agree­ment with a hospital (as defined above) or with a specialized provider of those facilities.
3. For inpatient and outpatient treatment of mental health and substance abuse, the term hospital also includes a freestanding residential treatment center facility approved by the JCAHO.

In no event shall the term hospital include a convalescent nursing home or institution or part thereof that:

• is used principally as a convalescent facility, rest facility, nursing facility or facility for the aged;
• furnishes primarily domiciliary or custodial care including training in the routines of daily living;
• or is operated as a school.

NursingSchool Administered Clinic: A clinic that is

1. licensed or certified in the state where the services are performed, and
2. provides ambulatory care in an outpatient setting�primarily in rural or inner city areas where there is a shortage of physicians. Services billed for by these clinics are considered outpatient �office' services rather than facility charges.

Skilled nursing facility: An institution, or that part of an institution that provides convalescent skilled nursing care 24 hours a day and is classified as a skilled nursing facility under Medicare.

Birthing Center: A licensed facility that is equipped and operated solely to provide prenatal care, to perform uncomplicated spontaneous deliveries and to provide immediate postpartum care.

Hospice: A facility that meets all of the following:

1. primarily provides inpatient hospice care to terminally ill persons;
2. is certified by Medicare as such, or is licensed or accredited as such by the jurisdiction it is in;
3. is supervised by a staff of M.D.s or D.O.s, at least one of whom must be on call at all times;
4. provides 24-hour-a-day nursing services under the direction of an R.N. and has a full-time administrator; and
5. provides an ongoing quality assurance program.

What you must do to get covered care

It depends on the kind of care you want to receive. You can go to any provider you want, but we must approve some care in advance.

• Transitional care

Specialty care: If you have a chronic or disabling condition and

• lose access to your specialist because we drop out of the Federal Employees Health Benefits (FEHB) Program and you enroll in another FEHB plan, or
• lose access to your PPO specialist because we terminate our contract with your specialist for other than cause,

you may be able to continue seeing your specialist and receiving any PPO benefits 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 specialist based on the above circumstances, you can continue to see your specialist until the end of your postpartum care, even if it is beyond the 90 days.

• Hospital care

We pay for covered services from the effective date of your enrollment. However, if you are in the hospital when your enrollment in our Plan begins, call our customer service department immediately at 1-800-634-0069.

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

• Your hospital stay

In most cases, your physician or hospital will take care of precertification. Because you are still responsible for ensuring that we are asked to precertify your care, you should always ask your physician or hospital if they have contacted us.

Warning:

We will reduce our benefits for the inpatient hospital stay or residential treatment care by $500 if no one contacts us for precertification. If the stay is not medically necessary, we will not pay any benefits.

How to precertify an admission

• You, your representative, your physician, or your hospital must call us before the admission or care. The toll-free number is 1-800-634-0069.
• Provide the following information:
  • Enrollee's name and Plan identification number;
  • Patient's name, birth date, and phone number;
  • Reason for hospitalization, proposed treatment, or surgery;
  • Name and phone number of admitting physician;
  • Name of hospital or facility; and
  • Number of planned days of hospital stay.

• We will then tell your physician and/or hospital the number of approved inpatient days and we will send written confirmation of our decision to you, your physi­cian, and the hospital.
• If you have an emergency admission due to a condition that you reasonably believe puts your life in danger or could cause serious damage to bodily function, you, your representative, your physician, or your hospital must telephone us within two business days following the day of the emergency admission, even if you have been discharged from the hospital.

Maternity care

You do not need to precertify a maternity admission for a routine delivery. However, if your medical condition requires you to stay more than 48 hours after a vaginal delivery or 96 hours after a cesarean section, then your physician or the hospital must contact us for precertification of additional days. Further, if your baby stays after you are discharged, then your physician or the hospital must contact us for precertification of additional days for your baby.

If your hospital stay needs to be extended

If your hospital stay�including for maternity care�needs to be extended, you, your representative, your physician or the hospital must ask us to approve the additional days.

What happens when you do not follow the precertification rules

• If no one contacted us, we will decide whether the hospital stay was medically necessary.
  • If we determine that the stay was medically necessary, we will pay the inpatient charges, less the $500 penalty.
  • If we determine that it was not medically necessary for you to be an inpatient, we will not pay inpatient hospital benefits. We will only pay for any covered medical supplies and services that are otherwise payable on an outpatient basis.
• If no one contacted us for specified services such as Hospice Care, Skilled Nursing Facility Care, Home Health Care, we will disqualify higher paid benefits.
• If we denied the precertification request, we will not pay inpatient hospital benefits. We will only pay for any covered medical supplies and services that are otherwise payable on an outpatient basis.
• When we precertified the admission but you remained in the hospital beyond the number of days we approved and did not get the additional days precertified, then:
  • for the part of the admission that was medically necessary, we will pay inpatient benefits, but
  • for the part of the admission that was not medically necessary, we will pay only medical services and supplies otherwise payable on an outpatient basis and will not pay inpatient benefits.

Exceptions

You do not need precertification in these cases:

• You are admitted to a hospital outside the United States.
• You have another group health insurance policy that is the primary payer for the hospital stay.
• Your Medicare Part A is the primary payer for the hospital stay. Note: If you exhaust your Medicare hospital benefits and do not want to use your Medicare lifetime reserve days, then we will become the primary payer and you do need precertification.

• Other services

Some other services require precertification or prior authorization, such as:

• Home health care (See Section 5(a))
• Hospice care (See Section 5(c))
• Skilled nursing facilities (See Section 5(c))
• Mental health and substance abuse treatment (See Section 5(e))
• Some prescription drugs (See Section 5(f))
• Organ/tissue transplants (See Section 5(b))

Copayments

A copayment is a fixed amount of money you pay to the provider, facility, pharmacy, etc., when you receive services. You will only be responsible for one copayment per day per provider.

Example: When you see your PPO physician you pay a copayment of $10 per day, and when you go in a PPO hospital, you pay a copayment of $100 per hospital stay.

Deductible

A deductible is a fixed amount of covered expenses you must incur for certain covered services and supplies before we start paying benefits for them. Copayments do not count toward any deductible

• The calendar year deductible is $300 per person. Under a family enrollment, the deductible is satisfied for all family members when the combined covered expenses applied to the calendar year deductible for family members reach $600.

Note: If you change plans during Open Season, you do not have to start a new deductible under your old plan between January 1 and the effective date of your new plan. If you change plans at another time during the year, you must begin a new deductible under your new plan.

Coinsurance

Coinsurance is the percentage of our allowance that you must pay for your care. Coinsurance doesn't begin until you meet your deductible.

Example: You pay 10% coinsurance of our allowance for an X-ray.

Note: If your provider routinely waives (does not require you to pay) your copayments, deductibles, or coinsurance, the provider is misstating the fee and may be violating the law. In this case, when we calculate our share, we will reduce the provider's fee by the amount waived.

For example, if your physician ordinarily charges $100 for a service but routinely waives your 10% coinsurance, the actual charge is $90. We will pay $81 (90% of the actual charge of $90).

Differences between our allowance and the bill

Our "Plan allowance" is the amount we use to calculate our payment for covered services. Fee-for-service plans arrive at their allowances in different ways, so their allowances vary. For more information about how we determine our Plan allowance, see the definition of Plan allowance in Section 10.

Often, the provider's bill is more than a fee-for-service plan's allowance. Whether or not you have to pay the difference between our allowance and the bill will depend on the provider you use.

When you live in the Plan's PPO area, you should use a PPO provider. The following two examples explain how we will handle your bill when you go to a PPO provider and when you go to a non-PPO provider. When you use a PPO provider, the amount you pay is much less.

• PPO providers agree to limit what they will bill you. Because of that, when you use a preferred provider, your share of covered charges consists only of your deductible and coinsurance or copayment. Here is an example about coinsurance: You see a PPO physician who charges $350, but our allowance is $300. If you have met your deductible, you are only responsible for your coinsurance. That is, you pay just 10% of our $300 allowance ($30). Because of the agreement, your PPO physician will not bill you for the $50 difference between our allowance and his bill. Follow these procedures when you use a PPO provider in order to receive PPO benefits:

• Verify with us that your address of record is in a PPO area;
• When you phone for an appointment, verify that the physician or facility is still a PPO provider and;
• Present your PPO ID card confirming your PPO participation in order to receive PPO benefits.

• Non-PPO providers, on the other hand, have no agreement to limit what they will bill you. For instance,
  • When you reside in the PPO network area and use a non-PPO provider, you will pay your deductible and coinsurance�plus any difference between our allowance and charges on the bill. Here is an example: You see a non-PPO physician who charges $350 and our allowance is again $300. Because you've met your deductible, you are responsible for your coinsurance, so you pay 30% of our $300 allowance ($90). Plus, because there is no agreement between the non-PPO physician and us, he can bill you for the $50 difference between our allowance and his bill.
  • When you reside outside the PPO network area, you will pay your deductible and coinsurance - plus any difference between our allowance and charges on the bill. As in the example above, once you have met your deductible, you are responsible for your coinsurance. You will pay 15% of our allowance ($45) and the physician can bill you for the $50 difference between our allowance and his bill.

The following table illustrates the examples of how much you have to pay out-of-pocket for services from a PPO physician vs. a non-PPO physician when you reside in the PPO network area. The table uses our example of a service for which the physician charges $350 and our allowance is $300. The table shows the amount you pay if you have met your calendar year deductible.

Physician's change

$350

$350

Our allowance

We set it at: $300

We set it at: $300

We pay

90% of our allowance: $270

70% of our allowance: $210

You owe: Coinsurance

10% of our allowance: $30

30% of our allowance: $90

+Difference up to charge?

No: 0

Yes: $50

TOTAL YOU PAY

$30

$140

Your catastrophic protection out-of-pocket maximum for deductibles, coinsurance, and copayments

For those benefits where coinsurance or deductibles apply, we pay 100% of the Plan allowance for the rest of the calendar year after your expenses total:

• PPO providers: $3,500�For you or any covered family member;
• Non-PPO providers: $7,000�For you or any covered family member;
• Out-of-network providers: $3,000�For you or any covered family member.
• Out-of-pocket expenses are:
• Your $300/$600 calendar year deductible;
• The percentage you pay for covered services after you have met your deduct­ibles;
• The percentage you pay for surgery, anesthesia and extended medical care after an accidental injury; and
• Your copayment for hospital stays.
• The following cannot be included in your out-of-pocket expenses:
• Expenses in excess of the Plan allowance or maximum benefit limitations;
• Non-covered services and supplies;
• Prescription drug copayments;
• Copayments, except for hospital admission copayments;
• Expenses for dental care including the 20% you pay for dental care after an accidental injury; or
• Any amounts you pay if benefits have been reduced because of noncompliance with our precertification, prior authorization or prior approval requirements

When Government facilities bill

Facilities of the Department of Veterans Affairs, the Department of Defense, and the Indian Health Service are entitled to seek reimbursement from us for certain services and supplies they provide to you or a family member. They may not seek more than their governing laws allow.

If we overpay you

We will make diligent efforts to recover benefit payments we made in error, but in good faith. If your claim has been paid in error for any reason, we shall make a diligent effort to recover an overpayment to you from you. If the overpayment was made to a provider, we shall make a diligent effort to recover the overpayment from the provider. We may also reduce subsequent benefit payments to you or to a provider to offset overpayments made in error.

If you....

• are age 65 or over, and
• do not have Medicare Part A, Part B, or both; and
• have this Plan as an annuitant or as a former spouse, or as a family member of an annuitant or former spouse; and
• are not employed in a position that gives FEHB coverage. (Your employing office can tell you if this applies.)

Then, for your inpatient hospital care,

• the law requires us to base our payment on an amount�the "equivalent Medicare amount"�set by Medicare's rules for what Medicare would pay, not on the actual charge;
• you are responsible for your applicable deductibles, coinsurance, or copayments you owe under this Plan;
• you are not responsible for any charges greater than the equivalent Medicare amount; we will show that amount on the explanation of benefits; and
• the law prohibits a hospital from collecting more than the Medicare equivalent amount.

And, for your physician care, the law requires us to base our payment and your coinsurance on...

• an amount set by Medicare and called the "Medicare approved amount," or
• the actual charge if it is lower than the Medicare approved amount.

Participates with Medicare or accepts Medicare assignment for the claim and is a member of our PPO network,

your deductibles, coinsurance, copayments;

Participates with Medicare and is not in our PPO network,

your deductibles, coinsurance, copayments, and any balance up to the Medicare approved amount;

Does not participate with Medicare,

your deductibles, coinsurance, copayments, and any balance up to 115% of the Medicare approved amount.

It is generally to your financial advantage to use a physician who participates with Medicare. Such physicians are permitted to collect only up to the Medicare approved amount.

Our explanation of benefits (EOB) form will tell you how much the physician or hospital can collect from you. If your physician or hospital tries to collect more than allowed by law, ask the physician or hospital to reduce the charges. If you have paid more than allowed, ask for a refund. If you need further assistance, call us.

When you have the Original Medicare Plan (Part A, Part B, or both)

We limit our payment to an amount that supplements the benefits that Medicare would pay under Medicare A (Hospital insurance) and Medicare B (Medical insurance), regardless of whether Medicare pays. Note: We pay our regular benefits for emergency services to an institutional provider, such as a hospital, that does not participate with Medicare and is not reimbursed by Medicare.

If you are covered by Medicare Part B and it is primary, your out-of-pocket costs for services that both Medicare Part B and we cover depend on whether your physician accepts Medicare assignment for the claim.

• If your physician accepts Medicare assignment, then you pay nothing for covered charges.
• If your physician does not accept Medicare assignment, then you pay the differ­ence between the "limiting charge" or the physician's charge (whichever is less) and our payment combined with Medicare's payment.

It's important to know that a physician who does not accept Medicare assignment may not bill you for more than 115% of the amount Medicare bases its payment on, called the "limiting charge." The Medicare Summary Notice (MSN) that Medicare will send you will have more information about the limiting charge. If your physician tries to collect more than allowed by law, ask the physician to reduce the charges. If the physician does not, report the physician to your Medicare carrier who sent you the MSN form. Call us if you need further assistance.

Please see Section 9, Coordinating Benefits With Other Coverage, for more information about how we coordinate benefits with Medicare.

IMPORTANT

Here are some important things you should 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.
• The calendar year deductible is: $300 per person ($600 per family). The calendar year deductible applies to almost all benefits in this Section. We added "(No Deductible)" to show when the calendar year deductible does not apply.
• PPO benefits apply only when you reside in the PPO network area and use a PPO provider. When no PPO provider is available, non-PPO benefits apply. Out-of-network benefits apply when you reside outside the PPO network area.
• Be sure to read Section 4, Your costs for covered services, for valuable information about how cost sharing works, with special sections for members who are age 65 or over. Also read Section 9 about coordinating benefits with other coverage, including with Medicare.

IMPORTANT

Note: The calendar year deductible applies to almost all benefits in this Section.

We say "(No deductible)" when it does not apply.

Professional services of physicians (not including surgery)

• In physician's office
  • office visits
  • consultations (to include second surgical opinion)
  • injections

Note: Drugs provided by the physician are covered under Section 5(f).

Note: Supplies provided by the physician are covered under Section 5(a).

PPO: $10 copayment (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Professional services of physicians (not including surgery)

• In a hospital (Inpatient or Outpatient)
• In an urgent care center
• In a skilled nursing facility
• At home

PPO: 10% of the Plan allowance

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Tests, such as:

• Blood tests
• Urinalysis
• Non-routine pap tests
• Pathology
• X-rays
• Non-routine mammograms
• CAT Scans/MRI
• Ultrasound
• Electrocardiogram and EEG
• Sonograms

PPO: 10% of the Plan allowance

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount.

Note: If your PPO provider uses a non-PPO lab or radiologist, we will pay non-PPO benefits for any lab and X-ray charges.

Routine physical examination per person to include a history and physical, chest X-ray, urinalysis, blood tests, and EKG (electrocardiogram). Up to a maximum of $500 per calendar year.

PPO: Services in physician's office Nothing up to the $500 maximum and all charges in excess of the $500 maximum (No Deductible)

PPO: Services outside physician's office Nothing up to the $500 maximum and all charges in excess of the $500 maximum (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount and all charges in excess of the $500 maximum

Out-of-Network: 15% of the Plan allowance and any difference between our allowance and the billed amount and all charges in excess of the $500 maximum (No Deductible)

The following are paid in addition to the routine physical $500 maximum:

• One annual cervical cancer screening (pap smear) for women age 18 and older. Note: if you see another physician for your pap smear, the office visit will be covered.
• One annual Prostate Specific Antigen (PSA) test (prostate cancer screening) for men age 40 and older.
• One annual fecal occult blood test (colorectal cancer screening) for members age 40 and older.
• One routine sigmoidoscopy every five years starting at age 50.

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-Network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Preventive care, adult - continued on next page

• One routine colonoscopy every ten years starting at age 50.
• One annual routine mammogram (breast cancer screening) for women age 35 and older.
• One non-fasting blood cholesterol test every three consecutive calendar years
• Chlamydial screening

Note: Your physician's bill must clearly state "Routine Physical Exam." If a medical diagnosis is provided on the bill, those services will be paid under the medical benefit.

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-Network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Routine immunizations, limited to:

• Tetanus-diphtheria (Td) booster once every 10 years, ages 22 and over
• Pneumococcal vaccine, annually, age 65 and over
• Influenza vaccine, annually

PPO: 10% of the Plan allowance

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

• Childhood immunizations recommended by the American Academy of Pediatrics (to age 22)

PPO: Nothing (No Deductible)

Non-PPO: Only the difference between the Plan allowance and the billed amount (No Deductible)

Out-of-network: Only the difference between the Plan allowance and the billed amount (No Deductible)

• Well-child care charges for routine examinations and care (to age 2):
• One annual routine physical examination (over age 2 to age 22):

PPO: $10 copayment (No Deductible)

PPO: Services outside physician's office Nothing (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount.

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount. (No Deductible)

Complete maternity (obstetrical) care such as:

• Prenatal care (to include laboratory tests)
• Amniocentesis
• Delivery
• Initial, routine examination of your newborn infant covered under your family enrollment
• Circumcision of your newborn infant
• Postnatal care
• One routine sonogram

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Note: Here are some things to keep in mind:

• You do not have to precertify your normal delivery; see page 9 for other circumstances, such as extended stays for you or your baby.
• You may remain in the hospital up to 48 hours after a regular delivery and 96 hours after a cesarean delivery. We will cover an extended stay, if medically necessary but you, your representative, your physician or your hospital must precertify.
• 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 if we cover the infant under a Self and Family enrollment. If your baby stays in the hospital after your discharge and is covered under your Self and Family enrollment, you must pay a separate hospital stay copayment. See Section 5(c).
• Bassinet or nursery charges on which you and your baby are confined are considered your maternity expenses, not your baby's.
• Sonograms and other related tests that are not included in your routine prenatal or postnatal care are covered in Lab, X-ray, and other diagnostic tests, page 20

Not covered:

• Routine sonograms to determine fetal age, size or sex; or procedures, services, drugs and 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.

All charges

A range of voluntary family planning services, limited to:

• Voluntary sterilization (See Section 5(b) for surgical procedures)
• Surgically implanted contraceptives
• Fitting, inserting or removing intrauterine devices (such as diaphragms IUDs)

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Injection of contraceptive drugs (such as Depo-Provera)

Note: We cover FDA-approved prescription drugs and devices for birth con­trol in Section 5(f).

PPO: $10 copay (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount.

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount.

Not covered:

• Reversal of voluntary surgical sterilization, genetic counseling.

All charges

Diagnosis and treatment of infertility except as shown in Not covered.

• Initial diagnostic tests and procedures done only to identify the cause of infertility
• Fertility drugs, hormone therapy and related services
• Medical or surgical procedures done to create or enhance fertility

Note: We will pay up to $5,000 per person per lifetime for covered infer tility services, including prescription drugs.

PPO: 10% of the Plan allowance and charges in excess of the $5,000 maximum

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount and charges in excess of the $5,000 maximum

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount and charges in excess of the $5,000 maximum

Not covered:

• Infertility services after voluntary sterilization
• Assisted reproductive technology (ART) procedures, such as:
  • artificial insemination
  • invitro fertilization
  • embryo transfer and gamete intrafallopian transfer (GIFT)
  • intravaginal insemination (IVI)
  • intracervical insemination (ICI)
  • intrauterine insemination (IUI)
• Services and supplies related to ART procedures
• Cost of donor sperm
• Cost of donor egg

All charges

Allergy testing, injections and treatment (including allergy serum)

PPO services in physician's office: $10 copayment (No Deductible)

PPO services outside physician's office: 10% of the Plan allowance

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Not covered:

• RAST tests
• Food tests
• End Point titration techniques
• Sublingual allergy desensitation
• Hair analysis

All charges

• Chemotherapy and radiation therapy (High dose chemotherapy in associ­ation with autologous bone marrow transplants is limited to those trans­plants listed in Section 5(b), Organ/tissue transplants.)
• Renal Dialysis
• Intravenous (IV)/Infusion Therapy Home IV and antibiotic therapy
• Respiratory and inhalation therapies
• Growth hormone therapy (GHT) (We only cover GHT when you obtain prior approval. Call 1-800-634-0069 for preauthorization. We will ask you to submit information that establishes that the GHT is medically necessary. Ask us to authorize GHT before you begin treatment; other­wise, we will only cover GHT services from the date you submit the information. If you do not ask or if we determine GHT is not medically necessary, we will not cover the GHT or related services and supplies. See Other Services under How to get approval for...in Section 3.)

Note: We cover drugs administered for the therapies listed above in Section 5(f).

PPO: 10% of the Plan allowance

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

90 total combined outpatient physical, speech and occupational therapy visits per calendar year for the following:

Visits for the services of each of the following:

• physicians
• qualified physical therapists;
• speech therapists; and
• occupational therapists

Note: 90 total combined visits not to include inpatient physical, speech and occupational therapy. Which is covered under Section 5(c) hospital or facility coverage.

PPO: 10% of the Plan

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Note: We only cover therapy when a physician:

• orders the care;
• identifies the specific professional skills you require and the medical necessity for skilled services; and
• indicates the length of time you need the services.

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

Note: Inpatient rehabilitative services are covered under Section 5(c)

Not covered:

• Long-term rehabilitative therapy
• Exercise programs

All charges

First hearing aid and testing only when necessitated by accidental injury or intra-aural surgery.

Note: Services must be received within one year of the date of the accident or surgery.

PPO: 10% of the Plan allowance

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Not covered:

• Hearing aids, testing and examinations for them, except for accidental injury or intra-aural surgery.

All charges

One pair of eyeglasses or contact lenses per incident to correct an impairment directly caused by:

• Accidental ocular injury or
• Specifically ordered by the physician in connection with a diagnosis of:
  • Cataract
  • Keratoconus or
  • Glaucoma

Note: Services must be received within one year of the date of accident or surgery.

PPO: 10% of the Plan allowance

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Not covered:

• Eyeglasses or contact lenses and examinations for them, except for accidental injury and intraocular surgery
• Eye exercises and orthoptics
• Radial keratotomy and other refractive surgery
• Eye refractions

All charges

We do not provide benefits for routine foot care, such as:

• Treatment or removal of corns and calluses, or trimming of toenails
• Orthopedic shoes, orthotics and other supportive devices for the feet

All charges

• Orthopedic braces
• Artificial limbs and eyes to replace natural limbs and eyes; stump hose
• Externally worn breast prostheses and surgical bras including necessary replacements following a mastectomy
• Internal prosthetic devices, such as artificial joints, pacemakers, cochlear implants, and surgically implanted breast implants following mastectomy.

Note: See Section 5(b) for coverage of the surgery to insert the device and Section 5(c) for hospital or facility coverage.

PPO: 10% of the Plan allowance

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Wigs up to a $300 maximum while covered under this Plan, when required due to hair loss in connection with chemotherapy or radiation treatment

Nothing up to the lifetime maximum of $300 (No Deductible). All charges over the $300 lifetime maximum.

Not covered:

• Orthopedic and corrective shoes and other supportive devices for the feet
• Arch supports
• Foot orthotics
• Heel pads and heel cups
• Corsets, trusses, elastic stockings, support hose, and other supportive devices
• Lumbosacral supports

All charges

Durable medical equipment (DME)

Durable medical equipment (DME) is equipment and supplies that:

1. Are prescribed by your attending physician (i.e., the physician who is treating your illness or injury);
2. Are medically necessary;
3. Are primarily and customarily used only for a medical purpose;
4. Are generally useful only to a person with an illness or injury;
5. Are designed for prolonged use; and
6. Serve a specific therapeutic purpose in the treatment of an illness or injury.

PPO: 10% of the Plan allowance

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

We cover purchase or rental up to the purchase price, at our option, including repair and adjustment, of durable medical equipment. Under this benefit, we also cover:

• Oxygen;
• Hospital beds;
• Dialysis equipment;
• Respirators;
• Wheelchairs, crutches, canes, walkers, casts;
• Cervical collars and traction kits; and
• Splints and trusses

PPO: 10% of the Plan allowance

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Not covered:

• Sun or heat lamps, whirlpool baths, heating pads, air purifiers, humidifiers, air conditioners, and exercise devices

All charges

For services provided on a part-time basis (less than an 8-hour shift):

If precertified, 90 visits per calendar year up to a maximum Plan payment of $80 per visit when:

• A registered nurse (R.N.) or licensed practical nurse (L.P.N.) provides the services;
• The attending physician orders the care;
• The physician identifies the specific professional skills required by the patient and the medical necessity for skilled services; and
• The physician indicates the length of time the services are needed.

If not precertified, 40 visits per calendar year up to a maximum plan payment of $40, subject to the above provisions

NOTE: Precertified and Nonprecertified visits are combined. Visit limit not to exceed 90 visits per calendar year.

NOTE: All therapy services will count toward the 90-day therapy visit limitation per calendar year, as listed under Physical, occupation and speech therapy in Section 5(a).

PPO: Charges in excess of $80 per visit (No Deductible) (90 visit maximum). All charges over the visit limit.

Non-PPO: Charges in excess of $80 per visit and any difference between the Plan allowance and the billed amount (No Deductible) (90 visit maximum). All charges over the visit limit.

Out-of-network: Charges in excess of $80 per visit and any difference between the Plan allowance and the billed amount (No Deductible) (90 visit maximum). All charges over the visit limit.

If not precertified, 40 visits per calendar year up to a maximum plan payment of $40, subject to the above provisions.

NOTE: Precertified and Nonprecertified visits are combined. Visit limit not to exceed 90 visits per calendar year.

For private duty nursing provided on a full-time basis (more than an 8-hour shift) by a Registered Nurse (R.N.) or Licensed Practical Nurse (L.P.N.) when:

• the care is ordered by the attending physician, and
• your physician identifies the specific professional nursing skills that you require, as well as the length of time needed.

PPO: 10% of the Plan allowance

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Not covered:

• 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, rehabilitative:
• Custodial care as defined in Section 10.

All charges

No Benefits

All Charges

Acupuncture when used as an anesthetic agent for covered surgery

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Not covered:

• Chiropractic services
• Chelation therapy except for acute arsenic, gold, mercury, lead, or use of Deferoxamine in iron poisoning
• Naturopathic services
• Homeopathic services and medicines

(Note: Benefits of certain alternative treatment providers may be covered in medically underserved areas)

All charges

Coverage is limited to:

• Smoking Cessation Up to $100 maximum per person per calendar year
• Individual/Group counseling and over-the-counter (OTC) drugs

PPO: 10% of the Plan allowance and all charges in excess of the $100 maximum

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount and all charges in excess of the $100 maximum

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount and all charges in excess of the $100 maximum

Office visits for Smoking Cessation

Note: Prescription drugs are covered under Section 5(f).

PPO: $10 copayment (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

IMPORTANT

Here are some important things you should 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.
• The calendar year deductible does not apply for these benefits; however, we added �"(No Deductible)" - to show that the calendar year deductible does not apply.
• PPO benefits apply only when you reside in the PPO network area and use a PPO provider. When no PPO provider is available, non-PPO benefits apply. Out-of-network benefits apply when you reside outside the PPO network area.
• Be sure to read Section 4, Your costs for covered services for valuable information about how cost sharing works, with special sections for members who are age 65 or over. Also read Section 9 about coordinating benefits with other coverage, including with Medicare.
• 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.).
• YOU MUST GET PRECERTIFICATION OF SOME SURGICAL PROCEDURES. Please refer to the precertification information shown in Section 3 to be sure which services require precertification.

IMPORTANT

Note: The calendar year deductible applies to almost all benefits in this Section.

We say "(No deductible)" when it does not apply.

A comprehensive range of services, such as:

• Operative procedures
• Treatment of fractures, including casting
• Normal pre- and post-operative care by the surgeon
• Endoscopy procedures
• Biopsy procedures
• Removal of tumors and cysts
• Correction of congenital anomalies (see Reconstructive surgery)

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Surgical procedures - continued on next page

• Surgical treatment of morbid obesity - a condition in which an individual (1) is the greater of 100 pounds or 100% over his/her normal weight (in accordance with our underwriting standards) with complicating conditions; (2) has been so for at least five years with documented unsuccessful attempts to reduce under a doctor-monitored diet and program and (3) is age 18 or older.
• Insertion of internal prosthetic devices. See Section 5(a) for device coverage information.
• Voluntary sterilization (e.g., tubal ligation, vasectomy)
• Surgically implanted contraceptives, and intrauterine devices (IUDs)
• Treatment of burns
• Surgical treatment of bunions or spurs
• Assistant surgeons - we cover up to 20% of our allowance for the surgeon's charge

Note: For related services, see applicable benefits section (i.e., for inpatient hospital benefits, see Section 5(c)).

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

When multiple or bilateral surgical procedures performed during the same operative session add time or complexity to patient care, our benefits are:

• For the primary procedure:
  • PPO: 90% of the Plan allowance or (No Deductible)
  • Non-PPO: 70% of the Plan allowance or (No Deductible)
  • Out-of-network: 85% of the Plan allowance (No Deductible)
• For the secondary procedure(s):
  • PPO: 90% of one-half of the Plan allowance or (No Deductible)
  • Non-PPO: 70% of one-half of the Plan allowance (No Deductible)
  • Out-of-network: 85% of one-half of the Plan allowance (No Deductible)

Note: Multiple or bilateral surgical procedures performed through the same incision are "incidental" to the primary surgery. That is, the procedure would not add time or complexity to patient care. We do not pay extra for incidental procedures.

PPO: 10% of the Plan allowance for the primary procedure and 10% of one-half of the Plan allowance for the secondary procedure(s) (No Deductible)

Non-PPO: 30% of the Plan allowance for the primary procedure and 30% of one-half of the Plan allowance for the secondary procedure(s); and any difference between our payment and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance for the primary procedure and 15% of one-half of the Plan allowance for the secondary procedure(s); and any difference between our payment and the billed amount (No Deductible)

Note: For certain surgical procedures, we may apply a value of less than 50% of subsequent procedures.

Not covered:

• Services of a standby surgeon, except during angioplasty or other high risk procedures when we determine standbys are medically necessary

All charges

• 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 the billed amount (No Deductible) congenital anomalies are: protruding ear deformities; cleft lip; cleft palate; birthmarks; and webbed fingers and toes.

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

• All stages of breast reconstruction surgery following a mastectomy, such as:
  • surgery to produce a symmetrical appearance of breasts;
  • treatment of any physical complications, such as lymphedemas;
  • breast prostheses; and surgical bras and replacements (see Prosthetic devices for coverage)Note: Internal breast prostheses are covered under Section 5(a).

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

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Not covered:

• 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 or sexual dysfunction

All charges

Oral surgical procedures, limited to:

• Reduction of fractures of the jaws or facial bones
• Surgical correction of cleft lip, cleft palate or severe functional and any malocclusion
• Removal of stones from salivary ducts
• Excision of leukoplakia or malignancies
• Excision of cysts and incision of abscesses when done as independent procedures
• Surgical correction of temporomandibular joint (TMJ) dysfunction
• Surgical removal of impacted teeth, including anesthesia charges
• Other surgical procedures that do not involve the teeth or their supporting structures

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Oral and maxillofacial surgery (continued)

You Pay

Not covered:

• Oral implants and transplants
• Procedures that involve the teeth or their supporting structures (such as the periodontal membrane, gingiva, and alveolar bone)
• Pre- and post-operative examinations in preparation for surgical removal of impacted teeth

All charges

Limited to the following transplants

• Cornea
• Heart
• Kidney
• Pancreas
• Kidney/Pancreas
• Heart/Lung
• Liver
• Lung: Single�only for the following end-stage pulmonary diseases: pulmonary fibrosis, primary pulmonary hypertension, or emphysema; Double�only for patients with cystic fibrosis
• Intestinal transplants (small intestine) and the small intestine with the liver or small intestine with multiple organs such as the liver, stomach and pancreas for irreversible intestinal failure
• Bone marrow and stem cell support as follows:
  • Allogeneic bone marrow transplants
  • Autologous bone marrow transplants (autologous stem support) and autologous peripheral stem cell support for

1. Acute lymphocytic or non-lymphocytic leukemia;
2. Advanced Hodgkin's and non-Hodgkin's lymphoma;
3. Advanced neuroblastoma;
4. Testicular, mediastinal, retroperitoneal and ovarian germ cell tumors;
5. Breast cancer;
6. Multiple myeloma; and
7. Epithelial ovarian cancer

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Organ/tissue transplants - continued on next page

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

Note: We have special arrangements with facilities to provide services for tissue and organ transplants�our Medical Specialty Network. The network was designed to give you an opportunity to access providers that demonstrate high quality medical care for transplant patients. Your physician can coordinate arrangements by calling us at 1-800-634-0069.

Not covered:

• Donor screening tests and donor search expenses, except those performed for the actual donor
• Transplants not listed as covered
• Implants of artificial organs

All charges

Professional services provided in:

• Hospital (inpatient)
• Hospital outpatient department
• Skilled nursing facility
• Ambulatory surgical center
• Office

PPO: 10% of the Plan allowance (No Deductible)

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

IMPORTANT

Here are some important things you should 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.
• In this Section, unlike Sections 5(a) and 5(b), the calendar year deductible applies to only a few benefits. In that case, we added "(calendar year deductible applies)".
• PPO benefits apply only when you reside in the PPO network area and use a PPO provider. When no PPO provider is available, non-PPO benefits apply. Out-of-network benefits apply when you reside outside the PPO network area.
• Be sure to read Section 4, Your costs for covered services for valuable information about how cost sharing works, with special sections for members who are age 65 or over. 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 in Section 5(a) or (b).
• YOU MUST GET PRECERTIFICATION OF HOSPITAL STAYS; FAILURE TO DO SO WILL RESULT IN A MINIMUM $500 PENALTY. Please refer to the precertification information shown in Section 3 to be sure which services require precertification.
• TO OBTAIN THE MAXIMUM BENEFITS, YOU SHOULD GET PRECERTIFICATION OF CARE YOU RECEIVE IN SKILLED NURSING FACILITIES, HOSPICE, AND ALSO HOME HEALTH CARE. Please refer to this section (Skilled nursing facility benefits and Hospice care) and Section 5(a) (Home health services) for details on how your benefits are affected if you do not certify. Also, please refer to Section 3 for additional details on precertification.

IMPORTANT

Note: The calendar year deductible applies ONLY when we say below: "(calendar year deductible applies)".

Room and board, such as

• semiprivate or intensive care accommodations;
• general nursing care; and
• meals and special diets.

Note: We only cover a private room when you must be isolated to prevent contagion. Otherwise, we will pay the hospital's average charge for semiprivate accommodations. If the hospital only has private rooms, we base our payment on the average semiprivate rate of the most comparable hospital in the area.

PPO: $100 copayment per hospital stay

Non-PPO: $300 copayment per hospital stay and 30% of the covered charges

Out-of-network: $200 per hospital stay

Inpatient hospital - continued on next page

Operating, recovery, maternity, and other treatment rooms

• Rehabilitative services
• Prescribed drugs and medicines
• Diagnostic laboratory tests and X-rays
• Blood or blood plasma, if not donated or replaced
• Dressings, splints, casts, and sterile tray services
• Medical supplies and equipment, including oxygen
• Anesthetics

Note: Take-home drugs are covered under Section 5(f).

Note: Take-home medical supplies, appliances, medical equipment, and any covered items billed by a hospital are covered under Section 5(a).

PPO: $100 copayment per hospital stay (No Deductible)

Non-PPO: $300 copayment per hospital stay and 30% of the covered charges (No Deduct­ible)

Out-of-network: $200 per hospital stay (No Deductible)

Not covered:

• Any part of a hospital admission that is not medically necessary (see definition in Section 10) such as when you do not need the acute hospital inpatient (overnight) setting but could receive care in some other setting without adversely affecting your condition or the quality of the medical care. Note: In this event, we pay benefits for services and supplies, excluding room and board and in -patient physician care, at the level of benefits that would have been covered if provided in another approved setting.
• Inpatient hospital services and supplies for surgery that we do not cover
• Custodial care (see definition) even when provided by a hospital
• Non-covered facilities, such as nursing homes, rest homes, places for the aged, convalescent homes or any place that is not a hospital, skilled nursing facility, or hospice
• Personal comfort items, such as radio, television, telephone, beauty and barber services
• Private nursing care
• Long term rehabilitative therapy

All charges

• Operating, recovery, and other treatment rooms
• Prescribed drugs and medicines for use in the facility
• X-ray, laboratory and pathology services, and machine diagnostic tests
• Administration of blood, blood plasma, and other biologicals
• Blood and blood plasma, if not donated or replaced
• Dressings, casts, and sterile tray services
• Medical supplies, including oxygen
• Anesthetics and anesthesia service
• Outpatient facility room charges

Note: Take-home drugs are covered under Section 5(f).

Note: Take-home medical supplies, appliances, medical equipment and any covered items billed by a hospital are covered under Section 5(a).

Note: We cover hospital services related to dental procedures (even though the dental procedure itself may not be covered) only when a nondental physical impairment exists that makes hospitalization necessary to safeguard your health.

PPO: 10% of the Plan allowance

Non-PPO: 30% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Skilled nursing care facility benefits

If precertified, we cover semiprivate room, board, services and supplies in a Skilled Nursing Facility (SNF) for up to 90 days when:

1. hospital stay is medically necessary and
2. when the hospital stay is under the supervision of a physician

PPO: Charges in excess of 90-day maximum (No Deductible)

Non-PPO: Charges in excess of 90-day maximum and any difference between our allowance and the billed amount (No Deductible)

Out-of-network: Charges in excess of 90-day maximum and any difference between our allowance and the billed amount (No Deductible)

If not precertified, we cover semiprivate room, board, services and supplies for up to 45 days subject to the above conditions

Note; Precertified and Nonprecertified days are combined. Day limit not to exceed 90 days per calendar year.

PPO: 20% and charges in excess of the 45-day maximum (No Deductible)

Non-PPO: 20% of the Plan allowance and any difference between our allowance and the billed amount for 45 days, then all additional charges (No Deductible)

Out-of-network: 20% of the Plan allowance and any difference between our allowance and the billed amount for 45 days, then all additional charges (No Deductible)

Not covered:

Custodial care

All charges

Hospice is a coordinated inpatient and outpatient program of maintenance and supportive care for the terminally ill provided by a medically supervised team under the direction of a Plan-approved independent hospice administration

If precertified, we pay $7,500 for inpatient or outpatient hospice care

PPO: Charges in excess of $7,500 maximum (No Deductible)

Non-PPO: Charges in excess of $7,500 maximum and the difference between the Plan allowance and the billed amount (No Deductible)

Out-of-network: Charges in excess of $7,500 maximum and the difference between the Plan allowance and the billed amount (No Deductible)

If not precertified, we pay $4,500 for inpatient or outpatient hospice care

Note: One hospice program is covered per lifetime. This benefit does not apply to services covered under any other provisions of the Plan.

PPO: Charges in excess of $4,500 maximum (No Deductible)

Non-PPO: Charges in excess of $4,500 maximum and the difference between the Plan allowance and the billed amount (No Deductible)

Out-of-network: Charges in excess of $4,500 maximum and the difference between the Plan allowance and the billed amount (No Deductible)

• Professional ambulance service (including air ambulance when medically necessary) to or from the nearest hospital equipped to handle your condition.
• Transportation by professional ambulance, railroad or commercial air line on a regularly scheduled flight to the nearest hospital equipped to furnish special and unique treatment when medically appropriate

PPO: 10% of Plan allowance

Non-PPO: 25% of Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of Plan allowance and any difference between our allowance and the billed amount

Not covered:

• Ambulance transportation from hospital to home
• Ambulance transport for you or your family's convenience

All charges

IMPORTANT

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.
• The calendar year deductible is: $300 per person ($600 per family). The calendar year deductible applies to almost all benefits in this Section. We added - (No Deductible) - to show when the calendar year deductible does not apply.
• PPO benefits apply only when you reside in the PPO network area and use a PPO provider. When no PPO provider is available, non-PPO benefits apply. Out-of-network benefits apply when you reside outside the PPO network area.
• Be sure to read Section 4, Your costs for covered services for valuable information about how cost sharing works, with special sections for members who are age 65 or over. Also read Section 9 about coordinating benefits with other coverage, including with Medicare.

IMPORTANT

What is an accidental injury?

An accidental injury is a bodily injury that requires immediate medical attention and is sustained solely through violent, exter­nal, and accidental means, such as broken bones, animal bites, insect bites and stings, and poisonings. Accidental dental injury is under Section 5(h).

Note - The calendar year deductible applies to almost all benefits in this section.

We added (No deductible) to show when the calendar year deductible does not apply.

We pay 100% of the plan allowance for the following care you receive as a result of an accidental injury:

• Emergency room (ER) facility charge and ER physician's charge or
• Initial office visit for accidental injury

Note: We pay for services performed outside the ER facility under the appropriate Plan benefit.

Note: We pay for services in the ER, but billed separately from the hospital bill such as x-ray, laboratory, pathology and machine diagnostic tests under the appropriate Plan benefit (see Section 5(a)).

Note: We pay Hospital benefits as specified in Section 5(c) if you are admitted to the hospital.

Note: We pay for services performed at the time of the initial office visit such as x-ray, laboratory tests, drugs or any supplies or other services under the appropriate Plan benefit (see Section 5(a)).

PPO: Nothing (No Deductible).

Non-PPO: Only the difference between our allowance and the billed amount (No Deductible).

Out-of-network: Only the difference between our allowance and the billed amount (No Deductible).

Regular Plan benefits apply when you receive care because of a non- accidental medical emergency. See Section 5(a).

PPO services in physician's office: $10 copayment (No Deductible)

PPO services outside physician's office: 10% of the Plan allowance

Non-PPO: 30% of Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount.

• Professional ambulance service (including air ambulance when medically necessary) to or from the nearest hospital equipped to handle your condition.
• Transportation by professional ambulance, railroad or commercial air line on a regularly scheduled flight to the nearest hospital equipped to furnish special and unique treatment when medically appropriate

PPO: 10% of Plan allowance

Non-PPO: 25% of Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of Plan allowance and any difference between our allowance and the billed amount

Not covered:

• Ambulance transportation from hospital to home
• Ambulance transport for you or your family's convenience

All charges

IMPORTANT

If you reside in the PPO Network Area, you may choose to get PPO or Non-PPO care. If you reside outside the network area, you will receive out-of-network care. PPO members who choose PPO care must get our approval for services and follow a treatment plan we approve. Cost-sharing and limitations for PPO or out-of-network 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 and are payable only when we determine they are medically necessary.
• The calendar year deductible is $300 per person ($600 per family) and applies to almost all benefits in this Section. We added - (No Deductible) - to show when the calendar year deductible does not apply.
• PPO benefits apply only when you reside in the PPO network area and use a PPO provider. When no PPO provider is available, non-PPO benefits apply. Out-of-network benefits apply when you reside outside the PPO network area.
• 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.
• PPO MEMBERS WHO CHOOSE PPO CARE MUST GET PREAUTHORIZA­TION OF THESE SERVICES. BENEFITS MAY BE REDUCED IF YOU FAIL TO GET PRECERTIFICATION OF THESE SERVICES. SEE THE INSTRUCTIONS AFTER THE BENEFITS DESCRIPTIONS BELOW.
• PPO mental health and substance abuse benefits are listed below, then Non-PPO and Out-of-network benefits begin on page 46

IMPORTANT

Note: The calendar year deductible applies to almost all benefits in this Section.

We added - (No Deductible) - to show when the calendar year deductible does not apply

All diagnostic and treatment services contained in a treatment plan that we approve. The treatment plan may include services, drugs, and supplies described elsewhere in this brochure.

Note: PPO 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 we approve.

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

• Professional services provided by a physician
• Other professional services (i.e., psychologists, clinical social workers, licensed counselors), inpatient professional services, and outpatient hospital services
• Services in approved alternative care settings, such as partial hospitalization or facility-based intensive outpatient treatment (See definitions, Section 10).
• Diagnostic tests (including psychological testing)

PPO: 10% of the Plan allowance (No Deductible)

PPO Network benefits - continued on next page

• Medical management

Note: No preauthorization is required.

PPO: $10 copayment (No Deductible)

• Inpatient hospital charges (to include residential treatment centers) and other hospital services and supplies.

PPO: $100 co-payment per hospital stay (No Deductible)

Not covered:

• Services we have not approved.
• All charges for chemical aversion therapy, conditioned reflex treatments, narcotherapy or any similar aversion treatments and all related charges (including room and board)
• Any provider not specifically listed as covered
• Counseling or therapy for marital, educational or behavioral problems, or related to mental retardation or learning disabilities
• Community-based programs such as self-help groups or 12 step program
• Services by pastoral (except in medically underserved areas), marital, or drug/alcohol counselors

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.

Preauthorization and Precertification

To be eligible to receive these enhanced mental health and substance abuse benefits, you must obtain a treatment plan and follow all of our network authorization processes. These include:

• Outpatient mental health and substance abuse benefits will be reduced by 50% if services are not preauthorized within two business days of the initial visit.
• Preauthorization and concurrent review are required for all levels of care whether in-or out-of-network.
• The medical necessity of your inpatient services (to include residential treatment care) must be precertified for you to receive full Plan benefits. Otherwise, the benefits payable will be reduced by $500. Emergency admissions must be reported within two business days following the day of admission even if you have been discharged. You, your representative, your physician, or your hospital must call Mutual of Omaha's Care Review Unit prior to admission. The toll-free number is 1-800-634-0069.

You must provide the following information: enrollee's name and Plan identification number; patient's name, birth date and phone number; reason for hospitalization, proposed treatment; name of hospital or facility; name and number of admitting physician; and number of planned days of hospital stay.

Network limitation

We will reduce your benefits if you do not follow all of our preauthorization process and your treatment plan.

Mental Health

• Professional services by physicians, psychologists, clinical social workers or licensed counselors, and inpatient professional services

Non-PPO: 50% of the Plan allowance and any difference between our allowance and the billed amount and all charges in excess of 50 visit maximum per calendar year

Out-of-network: 15% of the Plan allowance and the difference between our allowance and the billed amount

• Diagnostic testing (including psychological testing)
• Medical management

Non-PPO: 25% of the Plan allowance and the difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and the difference between our Plan and the billed amount

• Outpatient hospital charges

Non-PPO: 50% of the Plan allowance and the difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and the difference between our Plan and the billed amount

• Inpatient hospital charges (including residential treatment centers) and other hospital services and supplies.

Non-PPO: $300 copayment per hospital stay and 30% of the covered charges (No Deductible)

Out-of-network: $200 copayment per hospital stay (No Deductible)

• Services in approved alternative care settings, such as partial hospitalization or facility-based intensive outpatient treatment (See definitions, Section 10)

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Substance Abuse

• Inpatient care includes room and board and ancillary charges for hospital stays in a treatment facility for rehabilitative treatment of alcoholism or substance abuse

Non-PPO: $300 copayment per hospital stay and 30% of the covered charges up to the combined lifetime maximum of $25,000 (No Deductible) and all charges in excess of the combined lifetime maximum.

Out-of-network: $200 copayment per hospital stay (No Deductible)

Non-PPO and Out-of-network - continued on next page

Non-PPO and Out-of-network benefits (continued)

You Pay

• Outpatient benefits (including aftercare)

Non-PPO: 25% of the Plan allowance and the difference between our allowance and the billed amount up to the combined lifetime maximum of $25,000 and all charges in excess of the combined lifetime maximum.

Out-of-network: 15% of the Plan allowance and the difference between our allowance and the billed amount

• Services in approved alternative care settings, such as partial hospitalization or facility-based intensive outpatient treatment (See definitions, Section 10.)

Non-PPO: 25% of the Plan allowance and any difference between our allowance and the billed amount

Out-of-network: 15% of the Plan allowance and any difference between our allowance and the billed amount

Not covered under mental health and substance abuse:

• Services we have not approved
• All charges for chemical aversion therapy, conditioned reflex treatments, narcotherapy or any similar aversion treatments and all related charges (including room and board)
• Any provider not specifically listed as covered
• Counseling or therapy for marital, educational or behavioral problems, or related to mental retardation or learning disabilities
• Community-based programs such as self-help groups or 12 step program
• Services by pastoral (except in medically underserved areas), marital, or drug/alcohol counselors

All charges

Lifetime maximum

Non-PPO inpatient or outpatient care for the treatment of alcoholism and drug abuse is limited to a lifetime maximum of $25,000. Withdrawal from a treatment program prior to completion constitutes use of one program.

Preauthorization and Precertification

Precertification of treatment programs is not required. The medical necessity of your admission to a hospital or other covered facility must be precertified for you to receive these benefits. Emergency admissions must be reported within two business days following the day of admission even if you have been discharged. Otherwise, the benefits payable will be reduced by $500. See Section 3 for details. Precertification is not required for overseas care.

See these sections of the brochure for more valuable information about these benefits:

• Section 3, How you get care, for information about catastrophic protection for these benefits
• Section 7, Filing a claim for covered services, for information about submitting non-PPO and Out-of-network claims

IMPORTANT

Here are some important things to keep in mind about these benefits:

We cover prescribed drugs and medications, as described below.

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

Certain drugs require prior authorization or may be subject to quantity limits. If your prescription is for a drug requiring prior authorization, additional information from your physician will be needed before the medication is dispensed. Your physician may call 1-800-634-0069 to begin the review process.

The calendar year deductible does not apply to almost all benefits in this Section. We added - (No Deductible) - to show when the calendar year deductible does not apply.

Be sure to read Section 4, Your costs for covered services for valuable information about how cost sharing works, with special sections for members who are age 65 or over. Also read Section 9 about coordinating benefits with other coverage, including with Medicare.

IMPORTANT

Note: We added - (No Deductible) - to show when the calendar year deductible does not apply

You may purchase the following medications and supplies prescribed by a physician from either a pharmacy or by mail:

• Drugs, vitamins and minerals that by Federal law of the United States require a doctor's prescription for their purchase
• Insulin and diabetic supplies

Note: Members with diabetes that have Medicare B as their primary insurer, must obtain their testing supplies through a Diabetic supplier that coordinates benefits with Medicare. Please call the number on the back of your insurance card for assistance in identifying a supplier.

• FDA-approved drugs and devices requiring a physician's prescrip­tion for the purpose of birth control
• Needles and syringes for the administration of covered medications

Here are some things to keep in mind about our prescription drug program:

• A generic equivalent will be dispensed if it is available, unless your physician specifically requires a name brand. Your physician must specify "dispense as written" if a brand name drug is required.
• When purchasing drugs at a pharmacy, you must use your Prescrip­tion Drug Card. Please call us to request additional prescription drug cards for family members.
• We have an open formulary. If your physician believes a name brand product is necessary or there is no generic available, your physician may prescribe a name brand drug from a formulary list. To order a prescription drug brochure, call Customer Service at 1-800-752-0598.

Compound prescription drugs are covered as nonformulary brand name drugs.

Network Retail:

$5 generic (No Deductible)

$25 formulary brand name (No Deductible)

30% nonformulary brand name or $40, whichever is greater (No Deductible)

Network Retail when Medicare Part B is primary:

$3 generic (No Deductible)

$18 formulary brand name (No Deductible)

30% nonformulary brand name or $35, whichever is greater (No Deductible)

Network Mail Order:

$10 generic (No Deductible)

$45 formulary brand name (No Deductible)

30% nonformulary brand name or $55, whichever is greater (No Deductible)

Network Mail Order when Medicare Part B is primary:

$6 generic (No Deductible)

$27 formulary brand name (No Deductible)

30% nonformulary brand name or $38, whichever is greater (No Deductible)

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

Covered medications and supplies - continued on next page

If you reside outside of the United States and do not order prescription drugs through the Mail Order Prescription Drug Program:

If you are provided drugs directly by a physician or covered facility (not a pharmacy), including FDA-approved drugs and devices requiring a physician's prescription for the purpose of birth control:

If you do not use your prescription drug card to purchase needles and syringes for the administration of covered medications or diabetic supplies:

If you purchase colostomy or ostomy supplies:

20%

Not covered:

• Drugs and supplies for cosmetic purposes
• Nutritional supplements and vitamins (including prenatal) that do not require a prescription
• Medication that does not require a prescription under Federal law even if your physician prescribes it or a prescription is required under your State law
• Medical supplies such as dressings and antiseptics
• Medication for which there is a non-prescription equivalent available Prescriptions received from non-participating pharmacies unless overseas or through a covered physician or facility. (Call 1-800-752- 0598 to locate a participating pharmacy.)
• Drug copayments
• Fertility drugs are covered only under "Infertility services"

All charges

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.

Healthy Pregnancy Program

You have access to Mutual of Omaha's Healthy Pregnancy Program, which provides educational material and support to pregnant women. Contact Customer Service at 1-800-634-0069 for more information.

Centers of Excellence

Mutual of Omaha has special arrangements with facilities to provide services for tissue and organ transplants -- its Medical Specialty Network. The network was designed to give you an opportunity to access providers that demonstrate high quality medical care for transplant patients. For additional information regarding our transplant network, please call 1-800-634-0069.

Services Overseas

Our overseas customers receive the same out-of-network benefits and prompt customer service as their stateside counterparts. There is no additional claims processing time for foreign claims

Encompass

Encompass is a disease management program for members and covered dependents with diabetes, heart failure, asthma, coronary artery disease, or chronic obstructive pulmonary disease. Your health is important to us! If you or your covered dependent have any of the above, you will be contacted to voluntarily participate.

If you would like more information about this program, please call your plan at 1-800-280-6370.

Glucose Monitors

If you are diagnosed with diabetes, you may receive a free glucose monitor. The monitor is a small device that diabetics use to check and monitor their blood sugar. Monitoring and controlling blood sugars is essential for managing diabetes and preventing unnecessary complications.

To obtain a glucose monitor, call 1-800-634-0069.

Special Features - continued on next page

Lifestyle Prescription Medications

Many lifestyle prescription drugs are available at a discounted rate through participating pharmacies and the Plan's mail order program. You are responsible for the entire cost of the drugs; however, they are available to you at our preferred contracted rate. The following lifestyle prescription drugs are covered under this benefit:

Cosmetic: Renova, Vaniqua, Propecia

Infertility: A.P.L., Chorex-5, Chorex-10, Chronon 10, Clomid, Clomiphene, Crinone gel, Fertinex, Follistem, Gonal-F, Gonic, HCG, Humegon, Pergonal, Pregnyl, Profasi, Repronex, Serophone

Obesity: Adipost, Didrex, Ionamin, Merida, Phendimetrazine, Phenter mine, Sanorex, Tenuate, Xenical

Sexual Dysfunction: Caverject, Edex, Muse, Viagra

This list is subject to change and may be subject to medical necessity review if they are covered under another benefit provision (i.e., Infertility).

If you have a question on drug coverage, call 1-800-634-0069.

IMPORTANT

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.

The calendar year deductible does not apply to the benefits in this Section. We added - (No Deductible) - to show that the calendar year deductible does not apply.

Be sure to read Section 4, Your costs for covered services for valuable information about how cost sharing works, with special sections for members who are age 65 or over. Also read Section 9 about coordinating benefits with other coverage, including with Medicare.

Note: Even when the dental procedure itself may not be covered, we cover hospitalization for dental procedures when a non-dental physical impairment exists which makes hospitalization necessary to safeguard the health of the patient. See Section 5(c) for outpatient hospital benefits.

IMPORTANT

We cover outpatient restorative services necessary to promptly repair (but not replace) sound natural teeth until treatment is completed.

The need for these services must result from an accidental injury from an external force such as a blow or fall that requires immediate attention (not from biting or chewing). You must be enrolled in the Plan at the time of injury and must remain in the Plan until treatment is completed.

20% of the Plan allowance and any difference between our allowance and the billed amount (No Deductible)

Routine oral examinations including x-rays, cleaning, diagnosis, and preparation of a treatment plan

Dental fillings:

• One Surface
• Two Surface:
• Three or more surfaces:

$39 twice per year

$12

$19

$24

All charges in excess of the scheduled amounts listed to the left (No Deductible)

Not covered:

• Dental appliances, study models, splints, and other devices or dental services associated with the treatment of temporomandibular joint (TMJ) dysfunction
• Crowns and root canals
• Other dental services not listed as covered

Note: Surgical removal of impacted teeth is covered in Section 5(b).

How to claim benefits

To obtain claim forms or other claims filing advice or answers about our benefits, contact us at 1-800-634-0069.

In most cases, providers and facilities file claims for you. Your physician must file on the form HCFA-1500, Health Insurance Claim Form. Your facility will file on the UB-92 form. For claims questions and assistance, call us at 1-800-634-0069.

When you must file a claim�such as for services you receive overseas or when another group health plan is primary�submit it on the HCFA-1500 or a claim form that includes the information shown below. Itemized bills and receipts should be sent to Association Benefit Plan, PO Box 668587, Charlotte, NC 28266-8587

• Name of patient and relationship to enrollee;
• Plan identification number of the enrollee;
• Name and address of person or firm providing the service or supply;
• Dates that services or supplies were furnished;
• Diagnosis;
• Type of each service or supply; and
• The charge for each service or supply.

You should use the Plan's standard claim form to file dental claims. Attach the dentist's itemized bill. The bill must include the name of the patient, dates of service, itemized charges and the dentist's tax ID number.

Note: Canceled checks, cash register receipts, or balance due statements are not acceptable substitutes for itemized bills.

In addition:

• You must send a copy of the explanation of benefits (EOB) from any primary payer (such as the Medicare Summary Notice (MSN)) with your claim.
• Bills for home nursing care must show that the nurse is a registered or licensed practical nurse and must include nursing notes.
• Claims for rental or purchase of durable medical equipment; private duty nursing; and physical, occupational, and speech therapy may require a written statement from the physician specifying the medical necessity for the service or supply and the length of time needed.

Records

Keep a separate record of the medical expenses of each covered family member as deductibles and maximum allowances apply separately to each person. Save copies of all medical bills, including those you accumulate to satisfy a deductible. In most instances they will serve as evidence of your claim. We will not provide duplicate or year-end statements.

Filing a claim for covered services - continued on next page

Deadline for filing your claim

Send us all of the documents for your claim as soon as possible. You must submit the claim within 90 days after you incur the expense, but in no event later then 2 years from the date you incure the expense. We can extend this deadline if you were prevented from filing your claim timely by administrative operations of Government or legal incapacity, provided you file the claim as soon as reasonably possible. Once we pay benefits, there is a three-year limitation on the reissuance of uncashed checks.

Foreign claims

For covered services you receive in hospitals outside the United States and Puerto Rico and performed by physicians outside the United States, you must send a completed claim form and the itemized bills.

Foreign claims for prescription drugs and supplies that are not ordered through the Mail Order Prescription Drug Program must include receipts that include the prescription number, name of drug or supply, prescribing physician's name, date, and charge.

Claims for foreign services should include an English translation.

Charges should be converted to U.S. dollars using the exchange rate applicable at the time the expense was incurred.

When we need more information

Annually you may be asked to verify other health care coverage. We may delay processing or deny your claim if you do not respond.

Ask us in writing to reconsider our initial decision. You must:

1. Write to us within 6 months from the date of our decision; and
2. Send your request to us at: Association Benefit Plan, PO Box 668587, Charlotte, NC 28266- 8587; and
3. Include a statement about why you believe our initial decision was wrong, based on specific benefit provisions in this brochure; and
4. 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:

1. Pay the claim (or arrange for the health care provider to give you the care); or
2. Write to you and, if applicable, maintain our denial -- go to step 4; or
3. 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.

4

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 2, 1900 E Street, NW, Washington, D.C. 20415-3620.

5

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.

Note: If you want OPM to review more than one claim, 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 its 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.

When you have other health coverage

You must tell us if you or a covered family member has coverage under 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 what is left of our allowance, up to our regular benefit. We will not pay more than our allowance.

Please see Section 4, Your costs for covered services, for more information about how we pay claims.

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 premium-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 monthly Social Security check or your retirement check.

• Should I enroll in Medicare?

The decision to enroll in Medicare is yours. We encourage you to apply for Medicare benefits 3 months before you turn 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 FEHB, which can help keep FEHB premiums down.

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

If you are eligible for Medicare, you may have choices in how you get your health care. Medicare Advantage is the term used to describe the various private health plan choices available to Medicare beneficiaries. The information in the next few pages shows how we coordinate benefits with Medicare, depending on whether you are in the Original Medicare Plan or a private Medicare Advantage plan.

• The Original Medicare Plan (Part A and Part B)

The Original Medicare Plan (Original Medicare) is available everywhere in the United States. It is the way everyone used to get Medicare benefits and 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, such as most prescription drugs (but coverage through private prescription drug plans will be available starting in 2006).

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

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 most cases, your claims will be coordinated automatically and we will then provide secondary benefits for covered charges. You will not need to do anything. To find out if you need to do something to file your claims, call us at 1-800-634-0069.

We waive some costs when the Original Medicare Plan is your primary payer. We will waive some out-of-pocket costs, as follows:

• If you are enrolled in Medicare Part B, we will waive copayments and coinsurance for medical services and supplies provided by physicians and other health care professionals. We will also waive deductibles and coinsurance for extended dental treatment for accidental dental injuries.
• If you are enrolled in Medicare Part A, we will waive hospital copayments and coinsurance.

1. Have FEHB coverage on your own as an active employee or through your spouse who is an active employee

2. Have FEHB coverage on your own as an annuitant or through your spouse who is an annuitant

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) and you are not covered under FEHB through your spouse under #1 above

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) and you are not covered under FEHB through your spouse through your spouse under #1 above

6. Are enrolled in Part B only regardless of your employment status

for Part B services

for other 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

*

1. Have Medicare solely based on end stage renal disease (ESRD) and...

• It is within the first 30 months of eligibility for or entitlement to Medicare due to ESRD (30-month coordination period.

• It is beyond the 30-month coordination period and you are still entitled to Medicare due to ESRD

2. Become eligible for Medicare due to ESRD while already a Medicare beneficiary and...

• 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

1. Have FEHB coverage on your own as an active employee or through a family member who is an active employee

2. Have FEHB coverage on your own as an annuitant or through a family member who is an annuitant

• Medicare Advantage

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

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

This Plan and another plan's Medicare Advantage plan: You may enroll in another plan's Medicare Advantage plan and also remain enrolled in our FEHB plan. We will still provide benefits when your Medicare Advantage plan is primary, even out of the Medicare Advantage plan's network and/or service area, but we will not waive any of our copayments, coinsurance, or deductibles. If you enroll in a Medicare Advantage plan, tell us. We will need to know whether you are in the Original Medicare Plan or in a Medicare Advantage Plan so we can correctly coordinate benefits with Medicare.

Suspended FEHB coverage to enroll in a Medicare Advantage plan: If you are an annuitant or former spouse, you can suspend your FEHB coverage to enroll in a Medicare Advantage plan, eliminating your FEHB premium. (OPM does not contribute to your Medicare Advantage 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 Advantage plan's service area.

• Private contract with your physician

A physician may ask you to sign a private contract agreeing that you can be billed directly for services ordinarily covered by Original Medicare. Should you sign an agreement, Medicare will not pay any portion of the charges, and we will not increase our payment. We will still limit our payment to the amount we would have paid after Original Medicare's payment.

TRICARE and CHAMPVA

TRICARE is the health care program for eligible dependents of military persons, and the 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 TRICARE 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 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 program.

Workers' 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.

Medicaid

When you have this Plan and Medicaid, we pay first.

Suspended FEHB coverage to enroll in Medicaid or a similar State- sponsored 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 agencies are responsible for your care

We do not cover services and supplies when a local, State, or Federal Government agency directly or indirectly pays for them.

When others are responsible for injuries

When you receive money to compensate you for medical or hospital care for 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.

Admission

The period from entry (admission) into a hospital or other covered facility until discharge. In counting days of inpatient care, the date of entry and the date of discharge are counted as the same day.

Assignment

Your authorization for the Plan to issue payment of benefits directly to the provider. We reserve the right to pay the member directly for all covered services.

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. You may also be responsible for additional amounts. See page 14

Hospital stay

An admission (or series of admissions separated by less than 60 days) to a hospital as an inpatient for any one illness or injury. There is a new hospital stay when an admission is:

1. for a cause entirely unrelated to the cause for the previous admission;
2. for an enrolled employee who returns to work for at least one day before the next admission; or
3. for a dependent or annuitant when hospital stays are separated by at least 60 days.

Congenital anomalies

A condition existing at or from birth that is a significant deviation from the common form or anomaly norm. For purposes of this Plan, congenital includes protruding ear deformities, cleft lips, cleft palates, webbed fingers or toes, and other conditions that we may determine to be congenital anomalies. In no event will the term congenital anomaly include conditions relating to teeth or intra-oral structures supporting the teeth.

Copayment

A co-payment is a fixed amount of money you pay to the provider, facility, pharmacy, etc., when you receive covered services. See page 14.

Cosmetic surgery

Any operative procedure or any portion of a procedure performed primarily to improve physical appearance and/or treat a mental condition through a change in bodily form.

Covered services

Services we provide benefits for, as described in this brochure.

Custodial care

Treatment or services, regardless of who recommends them or where they are provided, that could be provided safely and reasonably by a person who is not medically skilled, or are designed mainly to help the patient with daily living activities. These activities include but are not limited to:

1. personal care such as help in: walking; getting in or out of bed; bathing; eating by spoon, tube or gastrostomy; exercising; dressing;
2. homemaking, such as preparing meals or special diets;
3. moving the patient;
4. acting as a companion or sitter;
5. supervising medication that can usually be self administered; or
6. treatment services such as recording temperature, pulse, and respirations, or administration and monitoring of feeding systems.

Custodial care that lasts 90 days or more is sometimes known as Long Term Care.

Deductible

A deductible is a fixed amount of covered expenses you must incur for certain covered services and supplies before we start paying benefits for those services. See page 14.

Effective date

The date the benefits described in this brochure are effective:

1. January 1 for continuing enrollments and for all annuitant enrollments;
2. the first day of the first full pay period of the new year for enrollees who change plans or options or elect FEHB coverage during Open Season for the first time; or
3. for new enrollees during the calendar year, but not during Open Season, the effective date of enrollment as determined by your employing office or retirement system.

Expense

The cost incurred for a covered service or supply ordered or prescribed by a covered provider. You can incur an expense on the date the service or supply is received. Expense does not include any charge:

1. for a service or supply that is not medically necessary; or
2. that is in excess of the Plan's allowance for the service or supply.

Experimental or investigational services

A drug, device, or biological product is experimental or investigational if it cannot lawfully be marketed without approval of the U.S. Food and Drug Administration (FDA), and approval for marketing has not been given at the time it is furnished. Approval means all forms of acceptance by the FDA.

A medical treatment or procedure, or a drug, device, or biological product is experimental or investigational if 1) reliable evidence shows that it is the subject of ongoing phase I, II, or III clinical trials or under study to determine its maximum tolerated dose, its toxicity, its safety, its efficacy, or its efficacy as compared with the standard means of treatment or diagnosis; or 2) reliable evidence shows that the consensus of opinion among experts is that further studies or clinical trials are necessary to determine its maximum tolerated dose, its toxicity, its safety, its efficacy, or its efficacy as compared with the standard means of treatment or diagnosis.

Reliable evidence shall mean only published reports and articles in the authoritative medical and scientific literature; the written protocol or protocols used by the treating facility or the protocol(s) of another facility studying substantially the same drug, device, or medical treatment or procedure; or the written informed consent used by the treating facility or by another facility studying substantially the same drug, device, or medical treatment or procedure.

Group health coverage

Health care coverage that you are eligible for because of employment, membership in, or connection with, a particular organization or group that provides payment for hospital, medical or other health care service or supplies, or that pays a specific amount for each day or period hospitalization

Home health care agency

A public or private agency or organization appropriately licensed, qualified and operated under the law of the state in which it is located.

Home health care plan

A written plan, approved in writing by a physician, for continued care and treatment for a Plan member who is under the care of a physician and who would need a continued stay in a hospital or skilled nursing facility with the home health care.

Hospice care program

A coordinated program of home and inpatient pain control and supportive care for the terminally ill patient and the patient's family. Care is provided by a medically supervised team under the direction of an independent hospice administration that we approve.

Intensive Outpatient Program (IOP)

A program that offers time-limited services that are coordinated, structured, and intensively therapeutic. Such programs are designed to treat a variety of individuals with moderate to marked impairment in at least one area of daily life resulting from psychiatric or addictive disorders. At a minimum, IOPs offer three to four hours of active treatment per day at least two to three days per week.

Long term rehabilitation therapy

Physical, speech, and occupational therapy which can be expected to last longer than a two-month period in order to achieve a significant improvement in your condition.

Medical necessity

Services, drugs, supplies, or equipment provided by a hospital or covered provider of health care services that we determine:

1. are appropriate to diagnose or treat your condition, illness or injury;
2. are consistent with standards of good medical practice in the United States;
3. are not primarily for the personal comfort of the patient, the family, or the provider;
4. are not a part of or associated with the scholastic education or vocational training of the patient; and
5. in the case of inpatient care, cannot be provided safely on an outpatient basis.

The fact that a covered provider has prescribed, recommended, or approved a service, supply, drug or equipment does not in itself make it medically necessary.

Mental conditions/substance abuse

Conditions and diseases listed in the most recent edition of the International Classification of Diseases (ICD) as psychoses, neurotic disorders, or personality disorders; other nonpsychotic mental disorders listed in the ICD to be determined by the Plan; or disorders listed in the ICD requiring treatment for abuse of or dependence upon substances such as alcohol, narcotics, or hallucinogens.

Partial hospitalization

A time-limited, ambulatory, active treatment program that offers therapeutically intensive, coordinated, and structured clinical services with a stable therapeutic environment. It provides 20 hours of scheduled programming, extended over a minimum of five days per week, by a licensed or JCAHO accredited facility

Plan allowance

Our Plan allowance is the amount we use to determine our payment and your coinsurance for covered services. Fee-for-service plans determine their allowances in different ways. We determine our allowance as follows:

Twice a year the Healthcare Charges Database (HCD) compiles actual claims received in each Zip Code area throughout the United States. HCD guides are applied at the 90th percentile to surgery, physician services, therapy, X-ray and lab expenses.

We generally do not reduce overseas claims to a Plan allowance. However, we reserve the right to request information that will enable us to determine an allowance on charges that we deem to be excessive.

PPO providers accept the plan allowance as payment in full.

For more information, see Section 4, Differences between our allowance and the bill.

Prosthetic device

An artificial substitute for a missing functional body part (such as an arm or leg) because the body part is permanently damaged, is absent or is malfunctioning.

Routine physical examination

A complete evaluation, including a comprehensive history and physical examination, without symptoms or illness.

Routine testing/screening

Healthcare services you receive from a covered provider without any apparent signs or symptoms of an illness, injury or disease.

Sound natural tooth

A tooth that is whole or properly restored and is without impairment, periodontal, or other conditions and is not in need of the treatment provided for any other reason other than an accidental injury.

Us/We

Us and we refer to the Association Benefit Plan

You

You refers to the enrollee and each covered family member

Coverage Information

• No pre-existing condition limitation

We will not refuse to cover the treatment of a condition that you had before you enrolled in this Plan solely because you had the condition before you enrolled.

• Where you can get information about enrolling in the FEHB Program

See www.opm.gov/insure/archive/health for enrollment information as well as:

• Information on the FEHB Program and plans available to you
• A health plan comparison tool
• A list of agencies who participate in Employee Express
• A link to Employee Express
• Information on and links to other electronic enrollment systems

Also, your employing or retirement office can answer your questions, and give you a Guide to Federal Employees Health Benefits Plans, brochures for other plans, and other materials you need to make an informed decision about your FEHB coverage. These materials tell you:

• 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 for you and your family

Self Only coverage is for you alone. Self and Family coverage is for you, your 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 FEHB Program if you are an employee subject to court or administrative order requiring you to provide health benefits for your child(ren).

If this law applies to you, you must enroll in 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 benefits coverage for your children. If you do not do so, your employing office will enroll you involuntarily as follows:

• If you have no FEHB coverage, your employing office will enroll you in 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 the 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 does not serve the area in which your children live, unless you provide documentation that you have coverage for the children. If the court/administrative 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 premiums start

The benefits in this brochure are effective on January 1. If you joined this Plan during Open Season, your coverage begins on the first day of your first 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 2005 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 2004 benefits until the effective date of your coverage with your new plan. Annuitants' 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 coverage ends

You will receive an additional 31 days of coverage, for no additional 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 coverage

If you are divorced from a Federal employee or annuitant, you may not continue to get benefits under your former spouse's enrollment. This is the case even when the court has ordered your former spouse to provide 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 former spouse's employing or retirement office to get RI 70-5, the Guide to Federal Employees 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 Continuation of Coverage (TCC)

If you leave Federal service, or if you lose coverage because you no longer qualify as a family member, you may be eligible for Temporary Continuation 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 Federal 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.

• Converting to individual coverage

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 Group Health Plan Coverage

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a Federal 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/archive/health); refer to the "TCC and HIPAA" frequently asked questions. These highlight HIPAA rules, such as the requirement that Federal employees must exhaust any TCC eligibility as one condition for guaranteed access to individual health coverage under HIPAA, and have information about Federal and State agencies you can contact for more information.

Important information

OPM wants to make sure you are aware of two Federal programs that complement the FEHB Program. First, the Federal Flexible Spending Account (FSA) Program, also known as FSAFEDS, lets you set aside pre-tax money to pay for health and dependent care expenses. The result can be a discount of 20% to more than 40% on services you routinely pay for out-of-pocket. Second, the Federal Long Term Care Insurance Program (FLTCIP) helps cover long term care costs, which are not covered under the FEHB.

• � What is an FSA?

It is a tax-favored 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 FSAFEDS:

Health Care Flexible Spending Account (HCFSA)

• Covers eligible health care expenses not reimbursed by this Plan, or any other medical, dental, or vision care plan you or your dependents may have.
• Eligible dependents 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 of a "family member" than is used under the FEHB Program to provide benefits by your FEHB Plan.
• The maximum annual amount that can be allotted for the HCFSA is $4,000. Note: The Federal workforce includes a number of employees married to each other. If each spouse/employee is eligible for FEHB coverage, both may enroll for a HCFSA up to the maximum of $4,000 each ($8,000 total). Both are covered under each other's HCFSA. The minimum annual amount is $250.

Dependent Care Flexible Spending Account (DCFSA)

• Covers eligible dependent care expenses incurred so you, and your spouse, if married, can work, look for work, or attend school full-time.
• Qualifying dependents for this account include your dependent children under age 13, or any person of any age whom you claim as a dependent on your Federal Income Tax return (and who is mentally or physically incapable of self care).
• The maximum annual amount that can be allotted for the DCFSA is $5,000. The minimum annual amount is $250. Note: The IRS limits contributions to a DCFSA. 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 child care subsidy you may receive.

• � Enroll during Open Season

You must make an election to enroll in an FSA during the 2005 FEHB Open Season. Even if you enrolled during 2004, you must make a new election to continue participating in 2005. Enrollment is easy!

• Online: visit www.FSAFEDS.com and click on Enroll.
• Telephone: call an FSAFEDS Benefits Counselor toll free at 1-877-FSAFEDS (372-3337) Monday through Friday; from 9 a.m. until 9 p.m. Eastern Time. TTY: 1-800-952-0450.

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 is responsible for the 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 FSAs. However, if you enroll in a High Deductible Health Plan (HDHP) with a Health Savings Account (HAS), you are not eligible to participate in an HCFSA.

Almost all Federal employees are eligible to enroll for a DCFSA. The only exception is intermittent (also called "when actually employed" [WAE]) employees expected to work fewer than 180 days during the year.

Note: FSAFEDS is the FSA Program established for all Executive Branch employees and Legislative Branch employees whose employers have signed on to participate. Under IRS law, FSAs are not available to annuitants. Also, the U.S. Postal Service and the Judicial Branch, among others, have their own plans with slightly different rules. However, the advantages of having an FSA are the same regardless of the agency for which you work.

• � How much should I contribute to my FSA?

Plan carefully when deciding how much to contribute to an FSA. Because of the tax benefits a FSA provides, the IRS places strict guidelines on how the money can be used. Under current IRS tax rules, you are required to forfeit any money for which you did not incur and eligible expense under your FSA account(s) during the Plan Year. This is known as the "use-it-or-lose-it" rule. You will have until April 30, following the end of the Plan Year, to submit claims for your eligible expenses incurred from January 1 through December 31. For example, if you enroll in FSAFEDS for the 2005 Plan Year, you will have until April 30, 2006, to submit claims for eligible expenses

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

• � What can my HCFSA pay for?

Every FEHB plan includes cost sharing features, such as deductibles you must meet before the Plan provides benefits, coinsurance or copayments that you 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 16 and detailed throughout this brochure. Your HCFSA will reimburse you when those costs are for qualified medical care that you, your spouse and/or your dependents receive that is NOT covered or reimbursed by this FEHB Plan or any other coverage that you have.

Typical out-of-pocket expenses include:

• your $300/$600 calendar year deductible
• your office visit copays
• your prescription copays
• your inpatient hospital deductible
• your non-covered dental procedures
• your non-covered vision procedures

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 Web site at www.irs.gov/pub/irs-pdf/p502.pdf. The FSAFEDS Web site also has a comprehensive list of eligible expenses at www.FSAFEDS.com/fsafeds/eligibleexpenses.asp. If you do not see your service or expense listed please call an FSAFEDS Benefits Counselor at 1-877-FSAFEDS (372-3337), who will be able to answer your specific questions.

• � Tax savings 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 be less. 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:

If your taxable income is:

$50,000

$50,000

And you deposit this amount into an 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 the retirement system in which you are enrolled (CSRS or FERS), your state of residence, and 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 deductions

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

Health Care Expenses

The HCFSA is Federal Income Tax-free from the first dollar. In addition, you may be reimbursed from your 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 shown above, 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 an HCFSA is also exempt from FICA taxes. This exemption is not available on your Federal Income Tax return.

Paperless Reimbursement -This plan participates in the FSAFEDS paperless reimbursement program. When you enroll for your HCFSA, you will have the opportunity to enroll for paperless reimbursement. If you do, we will send FSAFEDS the information they need to reimburse you for your out-of-pocket costs so you can avoid filing paper claims.

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 the 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 Forms and Literature page to help you determine what is best for your situation. You may also wish to consult a tax professional for more details.

• � Does it cost me anything to participate in FSAFEDS?

No.Section 1127 of the National Defense Authorization Act (Public Law 108-136) requires agencies that offer FSAFEDS to employees to cover the administrative fee(s) on behalf of their employees. However, 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, resulting in the forfeiture of funds remaining in your account (the IRS "use-it-or-lose-it" rule).

• � Contact us

To learn more or to enroll, please visit the FSAFEDS Web site at www.FSAFEDS.com, or contact SHPS directly via email or by phone. FSAFEDS Benefits Counselors are available Monday through Friday, from 9:00 a.m. until 9:00 p.m. Eastern Time.

• E-mail: FSAFEDS@shps.net
• Telephone: 1-877-FSAFEDS (1-877-372-3337)
• TTY: 1-800-952-0450

• � It's important protection

Why should you consider applying for coverage under the Federal Long Term Care Insurance Program (FLTCIP)?

• FEHB plans do not cover the cost of long term care. Also called "custodial care," long term care is help you receive to perform activities of daily living - such as bathing or dressing yourself or supervision you receive because of a severe cognitive impairment. The need for long term care can strike anyone at any age and the cost of care can be substantial.
• The Federal Long Term Care Insurance Program can help protect you from the potentially high cost of long term care. This coverage gives you options regarding the type of care you receive and where you receive it. With FLTCIP coverage, you won't have to worry about relying on your loved ones to provide or pay for your care.
• It's to your advantage to apply sooner rather than later. In order to qualify for coverage under the FLTCIP, you must apply and pass a medical screening (called underwriting). Certain medical conditions, or combinations of conditions, will prevent some people from being approved for coverage. By applying while you're in good health, you could avoid the risk of having a future change in your 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 fewer questions. Newly married spouses of employees also have a limited opportunity to apply using abbreviated underwriting.
• Qualified relatives are also eligible to apply. Qualified relatives include spouses and adult children of employees and annuitants, and parents, parents-in-law, and stepparents of employees.

• � To find out more and to request an application

Call 1-800-LTC-FEDS (1-800-582-3337) (TTY 1-800-843-3557) or visit www.ltcfeds.com.

• Medical services provided physicians:

PPO: $10 co-payment (No deductible)

Non-PPO: 30% of our allowance

Out-of-network: 15% of our allowance

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• Diagnostic and treatment services provided in the office:

PPO: $10 co-payment (No deductible)

Non-PPO: 30% of our allowance

Out-of-network: 15% of our allowance

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• Inpatient

PPO: $100 hospital stay (No deductible)

Non-PPO: $300 hospital stay and 30% of charges (No deductible)

Out-of-network: $200 hospital stay (No deductible)

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• Outpatient (Surgical and Nonsurgical)

PPO: 10% of our allowance

Non-PPO: 30% of our allowance

Out-of-network: 15% of our allowance

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• Accidental injury

PPO: Nothing (No Deductible)*

Non-PPO: Only the difference between our allowance and the billed amount (No Deductible)*

Out-of-network: Only the difference between our allowance and the billed amount (No Deductible)*

*For Emergency Room (ER) facility charge or ER physician's charge or ER physician's charge or initial office visit

Regular benefits for x-ray, lab, pathology, and machine diagnostic test

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Summary of Benefits - continued on next page

• Medical emergency

Regular benefits

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Mental health and substance abuse treatment

PPO: Regular cost sharing.

Non-PPO: Benefits are limited

Out-of-network: Regular cost sharing

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Prescription drugs

Network Retail: $5 generic, $25 formulary brand name,30% nonformulary brand name or $40, whichever is greater (No Deductible)

Network Mail Order: $10 generic, $45 formulary brand name, 30% nonformulary brand name or $55, whichever is greater (No Deductible)

Medicare Retail: $3 generic, $18 formulary brand name, 30% nonformulary brand name or $35, whichever is greater (No Deductible)

Medicare Mail Order: $6 generic, $27 formulary brand name, 30% nonformulary brand name or $38, whichever is greater (No Deductible)

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

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Dental care

Routine exams and fillings; fee schedule

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Special features

Flexible benefits option

Healthy Pregnancy Program

Center of excellence

Services overseas

Encompass

Glucose monitors

Lifestyle prescription medications

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Protection against catastrophic costs (your catastrophic protection out-of-pocket maximum)

PPO: Nothing after $3,500/Self Only or Family enrollment per year Non-PPO: Nothing after $7,000/Self Only or Family enrollment per year Out-of-network: Nothing after $3,000/ Self Only or Family enrollment per year Some costs do not count toward this protection

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