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HomeMy WebLinkAboutHR1989-0087 - Original - Blue Cross of Washington and Alaska - Administrative Service Contract - 01/01/1989 Blue Cross r BLUE CROSS OF WASHINGTON AND ALASKA 15700 Dayton Avenue North a P. 0. Box 327 Seattle, Washington 98111 APPLICATION for GROUP HEALTH CARE CONTRACT Application is hereby made to Blue Cross of Washington and Alaska for a Group Health Care Contract in the form attached hereto, the provisions of which are to be made available to all eligible classes of Employees as defined in the Eligibility provisions of this Contract. The Applicant, in the event this Application is accepted and the Group Health Care Contract is issued, agrees to the methods and practices outlined in the Contract relative to submission of monthly Subscription Charges and information as may be required for the Blue Cross of Washington and Alaska to adequately administer its obligations. Coverage under the Contract shall be effective at 12:01 a.m. , on the first day of January, 1989, in Seattle, Washington, and such coverage shall continue until terminated in accordance with the Contract. The Applicant agrees to promptly deliver to all covered employees the individual identification cards, descriptive booklets or notifications or modifications thereto, received from Blue Cross of Washington and Alaska. Applicant's CITY OF KENT Address (Applicant) 220 4th Avenue South Kent, Washington 98032 By itle• 1,�// By Title: `3 By (Date) Title: Contract No. 00828-01, -02, -04 Blue Cross BLUE CROSS OF WASHINGTON AND ALASKA i In response to the Application made by { CITY OF KENT (Called the Group in this Contract) a copy of which is attached and made part of this Contract and in consideration of the advance payment of the Subscription Charges made by the Group, BLUE CROSS OF WASHINGTON AND ALASKA AGREES TO PROVIDE the benefits described in this Contract for the term of this Contract, as stated in Part Nine, beginning at 12:01 a.m. , in Seattle, Washington on January 1, 1989. This Contract is entered into and delivered in the State of Washington, and is governed by the laws of that State, subject to the conditions specified on the following pages. This Contract is effective only when signed by the Blue Cross of Washington and Alaska signatory whose name appears below. Any existing Health Care Contract or Agreement between the Group and us which is being replaced by this Contract is cancelled when this one becomes effective. Stephe P. Clark Executive Vice President Chief Operating Officer Date January 28, 1989 Contract No. 00828-01. -02, -04 SUMMARY OF CONTENTS Page PART ONE DEFINITIONS . . . . . . . . . . . . . . . . . 2 PART TWO COVERAGE: ELIGIBILITY, TERMINATION . . . . . 11 AND CONTINUATION PART THREE PROVISIONS THAT AFFECT BENEFITS . . . . . . . 20 PART FOUR PLAN RIGHTS AND MEMBER OBLIGATIONS. . . . . . 21 UNDER THIS CONTRACT PART FIVE BENEFITS. . . . . . . . . . . . . . . . . . . 25 PART SIX EXCLUSIONS AND EXCEPTIONS . . . . . . . . . . 72 PART SEVEN BENEFITS AFTER TERMINATION. . . . . . . . . . 87 PART EIGHT GENERAL PROVISIONS. . . . . . . . . . . . . . 88 PART NINE EMPLOYER INFORMATION. . . . . . . . . . . . . 89 PART ONE DEFINITIONS 1.1 Definitions ACCIDENTAL BODILY INJURY Accidental bodily injury, or injury, means physical harm or disability sustained by the Member which is the direct result of an accident, independent of disease or bodily infirmity or any other cause. The accidental bodily injury must have occurred at an identifiable time and place. Accidental bodily injuries do not include illness or infection, except infection of a cut or wound resulting from an accident. APPROVED HOME HEALTH AGENCY A private or public agency or organization that administers and provides Home Health Care and is certified by the Department of Social and Health Services or approved by Medicare as a Home Health Care Agency. APPROVED HOSPICE A private or public agency or organization that administers and provides hospice care and is certified by the Department of Social and Health Services or approved by Medicare as a hospice agency. APPROVED TREATMENT FACILITY A facility approved in the State of Washington pursuant to RCW 70.96A.020(2) or RCW 69.54.030, in the State of Alaska pursuant to Chapter 47.37 AS, or an approved facility in any other state in accordance with the licensing or certification requirements in the jurisdiction where services are rendered which provides an organized program of treatment for Chemical Dependency. BASIC BENEFITS All benefits of this Contract, except Major Medical. BLUE CROSS PLAN An approved Blue Cross Plan licensed in the States of Washington and Alaska. BLUE CROSS OF WASHINGTON AND ALASKA An approved Blue Cross Plan licensed in the States of Washington and Alaska. CALENDAR YEAR A period of twelve (12) consecutive months beginning on January 1 and ending on December 31 of a given year. CHEMICAL DEPENDENCY An illness characterized by a physiological or psychological dependency, or both, on a controlled substance regulated under Chapter 69.50 RCW and/or alcoholic beverages. It is further characterized by a frequent or intense pattern of pathological use to the extent the user exhibits a loss of self-control over the amount and circumstances of use; develops symptoms of tolerance or physiological and/or psychological withdrawal if use of the controlled substance or alcoholic beverage is reduced or discontinued; and the user's health is substantially impaired or endangered or his or her social or economic function is substantially disrupted. - 2 - PART ONE DEFINITIONS 1.1 Definitions . . . (continued) CLAIM (Proof of Loss) A form obtained from us which the Subscriber or physician or other provider completes and submits to us along with a copy of the itemized billing containing at least the following information: Name of the Subscriber; Name of the patient; Subscriber Identification Number; Name and tax number of the physician or provider; Other insurance information; Diagnosis or ICDA code; Itemized charges of the services rendered; and If an accident, the date, time, location and brief description of the accident need to be included. COMMUNITY MENTAL HEALTH AGENCY A community mental health agency which is licensed by the Washington State Department of Social and Health Services and which has in effect a plan for quality assurance, peer review, and supervision by a licensed physician or licensed psychologist. CONTRACT The completed Group application for health care coverage; This document between the Group and us, which includes any documents (Endorsements and Addenda) from us that change it; and The completed Enrollment Application form of the Subscriber indicating participation in this Group coverage. CUSTODIAL CARE Any portion of a service, procedure, or supply which, in our judgment, is provided primarily: For ongoing maintenance of the Member's health and not for its therapeutic value in the treatment of an illness or injury. To assist the Member in meeting the activities of daily living. Examples are help in walking, bathing, dressing, eating, preparation of special diets, and supervision over self-administration of medication not requiring constant attention of trained medical personnel. DEDUCTIBLE The amount of included medical expense for which the Member is responsible before we provide benefits. DENTIST One who is licensed to provide services in the state where the services are rendered as a: Doctor of Medical Dentistry; and Doctor of Dental Surgery. 3 - PART ONE DEFINITIONS 1.1 Definitions . . . (continued) DURABLE MECHANICAL MEDICAL EQUIPMENT Equipment which can stand repeated use and is used in the direct treatment of a covered illness or injury. It is not useful to a person in the absence of illness or injury. EFFECTIVE DATE The date on which the Member's coverage starts under this Contract. This date is established by and appears on the records of the Plan. EXCEPTION An exclusion with partial restoration of benefits; or a provision reducing benefits. EXCLUSION A provision that states that this Plan has no obligation under this Contract to provide any benefits. EXPERIMENTAL OR INVESTIGATIVE Any treatment, procedure, facility, equipment, drug, drug usage, device or supply which, at the time rendered, does not meet the criteria listed below: Approval has been granted by the Federal Food and Drug Administration, or by another United States governmental agency, for general public use for treatment of a condition; or It has been scientifically demonstrated by the medical profession to have efficacy in terms of: When the prognosis for the patient's condition is death, that the treatment substantially extends the probabilities of the person's survival for five (5) or more years; When deterioration of a body system is progressive and reasonably certain to (or has) disabled or incapacitated the patient, that the treatment can be substantially expected to improve the probabilities of arresting the condition's progress for five (5) or more years; or When the body function has been lost by the patient, that the treatment has been shown to restore the body function to usefulness at least sixty (60%) percent of the time treatment has been utilized; and Services and supplies are rendered or provided by an institution or provider within the United States that has scientifically demonstrated proficiency in such treatment. FAMILY MEMBER The lawful spouse of the Subscriber or any eligible child. 4 - PART ONE DEFINITIONS 1.1 Definitions . . . (continued) HOME HEALTH AIDE An individual employed by an Approved Home Health Agency or Approved Hospice who provides intermittent care such as ambulation and exercise, assistance with medications, reporting changes in the Member's condition and needs, completing appropriate records, and personal care or household services that are needed to achieve the medically desired results. The home health aide must be under the supervision of a registered nurse, a physical therapist, occupational therapist, or speech therapist. HOME HEALTH CARE PLAN OF TREATMENT A written plan of treatment established and periodically reviewed by the attending physician who must be licensed as a Doctor of Medicine (M.D.) or Doctor of Osteopathy (D.O.). Such physician must certify that the Member is homebound and that Hospital confinement would be required in the absence of the Home Health Care Plan of Treatment. The plan of treatment shall also describe the services and supplies for the medically necessary home health care to be provided to the Member by the Approved Home Health Agency for treatment of an illness or injury. Such plan of care is subject to utilization review performed by us. HOMEBOUND When the Member's condition is such that leaving home would not be medically advisable. HOSPICE PLAN OF CARE A written plan of care established and periodically reviewed by the attending physician who must be licensed as a Doctor of Medicine (M.D.) or Doctor of Osteopathy (D.O.) . Such physician must certify that the Member is terminally ill and that Hospital confinement would be required in the absence of the Hospice Plan of Care. The plan of care shall also describe the services and supplies for the palliative care and medically necessary treatment to be provided to the Member by the Approved Hospice. Such plan of care is subject to utilization review performed by us. HOSPITAL An institution which: Is licensed; and For compensation from its patients and on an Inpatient basis is primarily engaged in providing diagnostic and therapeutic facilities for the surgical and medical diagnosis, treatment and care of injured and ill persons by or under the supervision of a staff of physicians; and Continuously provides twenty-four (24) hour-a-day nursing service by or under the supervision of registered graduate nurses; or Is any other licensed institution with which the plan has an agreement to render Hospital service. 5 - PART ONE DEFINITIONS 1.1 Definitions . . . (continued) HOSPITAL . . . (continued) The following are not considered "hospitals" unless specified as such in this Contract: Skilled Nursing Facilities; Nursing Homes; Convalescent Homes; Custodial Homes; Health Resorts; Hospices; Places for rest; Places for the aged; Places for the treatment of drug abuse; Places for the treatment of alcoholism; or Places for the treatment of pulmonary tuberculosis. IDENTIFICATION CARD The card issued by us to the Subscriber containing his or her Name, Group Number, Identification Number and Plan Number. INPATIENT A registered bed-patient in a hospital for whom the hospital makes a daily room charge. LIMITATION The exclusion or reduction of an exception to a specific benefit. MEDICAL EMERGENCY Sudden illness or injury that requires immediate attention to prevent death or impairment of health. MEDICALLY NECESSARY/MEDICAL NECESSITY Indispensable in the sense that in the reasonable opinion of this Plan, an illness, injury or condition harmful to or threatening to the patient's life or health, or a direct effect of such, could not have been diagnosed or relieved without the medical service, supply or setting in question. The mere fact that it was furnished, prescribed or approved by a physician or other qualified provider does not in itself mean that it was medically necessary. A medical service, supply or setting may be medically necessary in part only. 6 - PART ONE DEFINITIONS 1.1 Definitions . . . (continued) MEDICARE The programs established by Title XVIII of Public Law 89-97 (79 Statutes 286-343), as amended, "Health Insurance for the Aged and Disabled." It includes Part A "Hospital Insurance Benefits for the Aged and Disabled"; Part B - "Supplementary Medical Insurance Benefits for the Aged and Disabled"; and Part C - "Miscellaneous Provisions." MEMBER The Subscriber and eligible Family Members enrolled for coverage under this Contract. MENTAL NEUROPSYCHIATRIC OR PERSONALITY DISORDERS A condition listed in the current edition of "Diagnostic and Statistical Manual of Mental Disorders," except for those conditions classified as: Alcoholic psychoses; Drug psychoses; Alcohol dependence syndrome; Drug dependence; or Nondependent abuse of drugs. MILIEU THERAPY Treatment designed to provide a change in environment or a controlled environment. NON-PARTICIPATING HOSPITAL A hospital which does not have an agreement in effect with any Blue Cross Plan to furnish hospital care to Members. ORTHODONTICS That branch of dentistry which deals with the development, prevention and correction of irregularities of the teeth and bite (malocclusion). Malocclusion is the abnormal position and contact of the upper and lower teeth which may affect chewing or cause facial, jaw and/or joint pain. OUTPATIENT One who receives treatment in a hospital while he or she is not registered as a bed-patient of that hospital. - 7 - PART ONE DEFINITIONS 1.1 Definitions . . . (continued) PALLIATIVE CARE A form of treatment directed toward relief or control of distressing symptoms without attempting to be curative. PARTICIPATING DENTIST A dentist who, at the time services are rendered, has an agreement in effect with this Blue Cross Plan to furnish dental services to Members. PARTICIPATING HOSPITAL A hospital or other institution which, at the time of admission, has an agreement in effect with this Blue Cross Plan to furnish hospital care to Members. PARTICIPATING SKILLED NURSING FACILITY A facility which, at the time of admission, has an agreement in effect with this Blue Cross Plan to furnish certain services to Members. PARTICIPATING VISION CARE PROVIDER One who, at the time services were rendered, has an agreement in effect with this Blue Cross Plan to furnish Vision services to Members. PHYSICIAN AND OTHER PROVIDERS OF SERVICE One of the following who is licensed to provide medical services in the state where those services are received: Doctor of Medicine and Surgery (M.D) Doctor of Osteopathy and Surgery (D.O.) Doctor of Podiatry (D.P.M.). In the event that health care services are performed by one of the following providers and such services would have been covered if performed by a physician (M.D. , D.O. , or D.P.M.), then such services will be covered when performed by a: Psychologist Chiropractor (D.C.) Registered Nurse (R.N.) licensed in the State of Washington. This Contract also includes the services of physician extenders (employees of a physician such as a nurse) when the physician bills for these services. Other health care providers may also be included for certain services under this Contract but only under the benefits which say so. The above physicians and health care providers must perform services within the lawful scope of their licenses. - 8 - PART ONE DEFINITIONS 1.1 Definitions . . . (continued) PLAN, THE An approved Blue Cross Plan licensed in the States of Washington and Alaska. PRESCRIPTION DRUG Any medical substance, the label of which, under the Federal Food, Drug and Cosmetic Act, as amended, is required to bear the legend: "Caution: Federal Law prohibits dispensing without a prescription." REASONABLE AND CUSTOMARY CHARGE* Reasonable and Customary (or R&C) Charge means a charge that is, in the reasonable opinion of the Blue Cross Plan: Within the range of usual charges for the same or a similar service or supply billed by most providers within a given area; or Justified by all the attending circumstances, including but not limited to, the time required to perform the service or procedure, the severity of the condition treated, and the complexity of treatment of a particular case. *With respect to benefits for the treatment of Chemical Dependency at an Approved Treatment Facility as provided under the Chemical Dependency Benefit, Reasonable and Customary Charges will be taken into account only on specific components of such treatment for which a Reasonable and Customary Charge has been established based on the Plan's statistically reliable measures as determined by the criteria set forth above in this Reasonable and Customary Charge definition. RESPITE CARE For a homebound Member requiring continuous attendance, care of the Member for a period of time for the purpose of relieving all persons caring for and residing with the Member from their duties. SERVICE AREA The States of Alaska and Washington, except Clark County. SUBSCRIBER The individual in whose name the coverage is established and to whom we issue the Identification Card. SUBSCRIPTION CHARGES The monthly rates established by us as consideration for the benefits offered in this Contract. 9 - PART ONE DEFINITIONS 1.1 Definitions . . . (continued) TERMINALLY ILL The Member's illness, disease or injury has reached a point where recovery can no longer be expected and the attending physician certifies that the Member is facing imminent death. TOTAL DISABILITY Inability of the Subscriber due to disease, illness, injury or pregnancy to engage in any occupation or employment for wage or profit; or, in the case of a Family Member, the inability due to disease, illness, injury or pregnancy to engage in all regular and customary activities usual for a person of that age and family status. VISION CARE PROVIDER An ophthalmologist, optometrist or optician. WE, US AND OUR An approved Blue Cross Plan licensed in the States of Washington and Alaska. - 10 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION A. Who May Be Covered 1. The Subscriber An employee who has met the eligibility requirements specified below. The following employees of CITY OF KENT are eligible to enroll as Subscribers under this Contract: An active full-time employee who regularly works a minimum of forty (40) hours a week. An active part-time employee who regularly works a minimum of twenty-one (21) hours a week. A retired employee, provided such employee: Has attained age 55; Has at least 25 or more years of credited service with the employer; and Transfers directly from active employee status on the employer's group medical program with the Plan to retiree status on the employer's group medical program with the Plan within 30 days of retirement; and Is eligible to receive a retirement benefit under the LEOFF I Retirement Plan. All retired, disabled employees who are eligible to receive a retirement benefit under the LEOFF I Retirement Plan. LEOFF I Employees - Full-time active law enforcement officers or fire fighters who established membership in the LEOFF system as defined in Sections (3) and (4), CH131, Law of 1972 1st Ex. Sess. prior to October 1, 1977. LEOFF II Employees - Full-time active law enforcement officers or fire fighters who established membership in the LEOFF System as defined in Sections (3) and (4), CH131, Law of 1972 1st Ex. Sess. on or after October 1, 1977. If an employee becomes permanently disabled, the employer must maintain medical insurance coverage for the employee, applicable to LEOFF I Employees only. Eligible dependents of LEOFF I retired or retired disabled employees must self-pay monthly subscription charges directly to the Group. The following employees are ineligible to enroll and become covered under this Contract: All temporary or seasonal employees. Employees who are covered through any Health Maintenance Organization (HMO) sponsored by the Group. - 11 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION A. Who May Be Covered . . . (continued) 2. Dependent Eligibility An employee's family member who is one of the following is eligible to be enrolled as a dependent: The lawful spouse of the Subscriber, unless legally separated. The Subscriber's or spouse's unmarried natural child, adopted child, or child physically placed with the Subscriber in accordance with state law for the purpose of legal adoption. Eligible children must also be under twenty-three (23) years of age, primarily dependent on the Subscriber for support and qualify as dependents on the Subscriber's federal income tax return. However, if an otherwise eligible child does not qualify to be claimed as a dependent on the Subscriber's federal income tax return, that child will be eligible if the Subscriber or Subscriber's eligible spouse is required by court order to provide health care coverage for that child. B. Application for Coverage and Effective Date 1. Enrollment When the employee becomes eligible to enroll, he or she completes an enrollment application for himself or herself and any eligible dependents. An applicant becomes eligible to enroll in this program on the following dates: For the employee and existing eligible family members, the date the employee meets the Subscriber eligibility requirements. For a spouse and eligible children acquired through marriage, the date of marriage. For a natural newborn child, the child's birthdate. For an adoptive child, the date the child is physically placed with the Subscriber for the purpose of legal adoption. . The Plan must receive the completed enrollment application and required Subscription Charges from the Group within thirty (30) days of the date the applicant becomes eligible to enroll, or in the case of adoptive and natural newborn children, sixty (60) days from the date they become eligible to enroll. - 12 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION B. Application for Coverage and Effective Date (continued) 2. When Coverage Begins Provided timely application and Subscription Charge payment are made, coverage will become effective on the date the employee or dependent became eligible to enroll. The employee must be actively at work, performing the usual duties of his or her job, on his or her effective date. An employee will be considered actively at work on each regular nonwork day on which he or she is not disabled, provided he or she was actively at work on the last regularly scheduled work day. If an employee is not actively at work on the date coverage is to take effect, the effective date for that employee and any enrolled dependents will be the first Subscription Charge due date on or after the date the employee returns to active work. If a dependent, other than a Subscriber's natural newborn child, is confined in a medical facility on his or her effective date, no benefits will be available for expenses incurred prior to his or her discharge from that facility or from any other facility to which he or she is transferred. A Subscriber's natural newborn child who is born on or after the subscriber's effective date and enrolled within 60 days of birth will be covered from birth even if the child is an inpatient in a medical facility. C. Other Provisions Affecting Eligibility and Effective Date 1. Late Enrollment If the employer pays one hundred percent (100%) of the cost of the employees and/or dependents coverage, eligible employees and/or dependents who are not enrolled when first eligible or who fail to maintain continuous coverage, may be retroactively enrolled at any later date provided application is made and full retroactive Subscription Charges are paid by the Group on the employees and/or dependents behalf from the later of the following: a. The date the employees and/or dependents were first eligible; or b. Retroactively sixty (60) days. If the employer does not pay one hundred percent (100%) of the cost of the employees and/or dependents coverage, eligible employees and/or dependents who are not enrolled when first eligible or who fail to maintain their coverage may be enrolled only during an open enrollment period which is determined by the Plan. Provided proper application has been made, coverage will begin on the effective date of the Group's open enrollment. - 13 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION C. Other Provisions Affecting Eligibility and Effective Date. . . (continued) 2. HMO Option Employees who have elected coverage through an HMO may change coverages and enroll under this Contract only during an open enrollment period which is determined by the Plan. When a Member transfers from the Group's HMO program to this program with no lapse in coverage, any waiting periods required by this program will be reduced by the length of time the Member was continuously covered under the other program. D. When Coverage Ends - Circumstances That End Coverage Except as provided in Part Two Section E. , Continuation of Coverage - Under This Contract, and in Part Seven (Benefits After Termination), coverage will terminate at the end of the period for which Subscription Charges were paid when the first of the following occurs: 1. For the Subscriber and all dependents covered under this Contract when this Contract is terminated by the Group or Plan or when: a. The Subscriber dies or ceases to meet the eligibility requirements of the Group as set forth in Section A. ; or b. The next monthly Subscription Charge is not paid when due or within the grace period; or 2. For a spouse when he or she becomes legally separated or divorced from the Subscriber. 3. For a child when he or she is no longer eligible as a dependent. - 14 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION E. Continuation of Coverage - Under This Contract 1. Continued Eligibility for a Disabled Child Coverage may continue past the limiting age for an unmarried dependent child who cannot support himself or herself because of a developmental or physical disability. The child will continue to be eligible if all the following are met: The child became disabled before reaching the limiting age. The child is incapable of self-sustaining employment by reason of developmental disability or physical handicap and is chiefly dependent upon the Subscriber for support and maintenance. The Subscriber remains covered under this program. The child's Subscription Charges, if any, continue to be paid. Within 31 days of the child reaching the limiting age, the Subscriber furnishes the Plan with a "Statement of Disability" form. The Plan must approve the statement of disability for coverage to continue. The Subscriber provides the Plan with proof of the child's disability and dependent status when the Plan requests it. The Plan will not ask for proof more often than once a year after the two-year period following the child's attainment of the limiting age. 2. Leave of Absence Coverage may be continued for up to ninety (90) days if the employer grants the Subscriber a leave of absence. The required Subscription Charges must be submitted with the employer's regular monthly remittance to the Plan. This period of coverage will be concurrent with the period of continued coverage provided under Part Two Section E.4. 3. Labor Dispute A Subscriber may pay Subscription Charges through the Group to keep coverage in effect for up to six months in the event of suspension of compensation due to a lockout, strike or other labor dispute. This period of coverage will be concurrent with the period of continued coverage provided under Part Two Section E.4. 15 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION E. Continuation of Coverage - Under This Contract . . . (continued) 4. COBRA Continuation of Group Coverage When coverage ends because of a "qualifying event" shown below, Members who are not entitled to Medicare may continue their Group coverage for a limited time. Continued coverage is not automatic. A qualified Member must apply for continued coverage within a certain time period and may also have to pay the Subscription Charges for it. a. Qualifying Events The continuation periods described below extend from the date of the qualifying event. (1) The Subscriber and covered dependents may continue coverage for up to eighteen (18) consecutive months if the qualifying event is: Reduction of the Subscriber's work hours; or Termination of the Subscriber's employment, except for discharge due to actions defined by the employer as gross misconduct. A second qualifying event during this eighteen (18) month period may extend the continuation period. The extended period will end no later than thirty-six (36) months from the date the continued coverage first began. (2) The covered spouse or children may continue coverage for up to thirty-six (36) consecutive months if the qualifying event is: The Subscriber's death; The spouse's divorce or legal separation from the Subscriber; The Subscriber's election of Medicare as his or her primary health coverage; or A child's loss of eligibility for dependent coverage. The Subscriber must notify the employer when one of these events occurs. 16 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION E. Continuation of Coverage - Under This Contract . . . (continued) 4. COBRA Continuation of Group Coverage . . . (continued) (3) The retired Subscriber and covered dependents may continue their retiree coverage, when included in the Group program, if the qualifying event is that the Subscriber's former employer filed for Chapter 11 bankruptcy. The retired Subscriber and covered spouse may continue for up to the rest of the Subscriber's life. The covered children may continue for up to the rest of the Subscriber's life or until they lose eligibility as dependents, whichever occurs first. If the retired Subscriber's spouse or child has a second qualifying event, the affected dependents may continue coverage for up to thirty-six (36) additional months. Eligible family members may be added after the continuation period begins. However, those added dependents are not eligible for further coverage if they later have a qualifying event. Continued coverage is subject to all other terms and limitations of this program. b. Notification Continued coverage is not automatic. The following steps must be taken in order for continuation to become effective for the eligible continuee: (1) The Group must notify the qualified Member of his or her rights under COBRA within 14 days of the date the Group received notice of the qualifying event. (2) The Group must allow the qualified Member a continued coverage election period of no more than 60 days from either the date coverage was to end because of the qualifying event, or from the date the Group notified the Member of rights under COBRA, whichever is the later. (3) The Group must allow the qualified Member no more than 45 days after the date the Member elected continued coverage in which to send the initial Subscription Charges to the Group. (4) The Group must send the qualified Member's COBRA application and Subscription Charges for continued coverage to the Plan with its next billing and delete from this program any Member who does not choose to continue coverage. Subsequent Subscription Charges for a qualified Member must be submitted to the Plan with the Group's monthly Subscription Charge payments. - 17 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION E. Continuation of Coverage - Under This Contract . . . (continued) 4. COBRA Continuation of Group Coverage . . . (continued) C. When COBRA Continued Coverage Ends (1) Continued coverage under this Contract will end on the last day of the monthly period for which Subscription Charges have been paid in which the first of the following events occurs: The applicable continuation period expires; The next required Subscription Charge payment is not made when due; The Member becomes covered under another group health care program; The Member becomes entitled to Medicare. This does not apply to retirees and their dependents who are continuing retiree coverage as a result of a Chapter 11 filing; or The Contract between the Group and the Plan is terminated. (2) Continued coverage through the employer will end when the employer ceases to offer Group health coverage to any employee. When continued coverage ends, the Member may be eligible for nongroup medical coverage as explained in "Conversion to Nongroup Programs." Applications for nongroup medical coverage may be submitted up to one hundred eighty (180) days before the date continued coverage ends. However, the Plan will not consider the Member eligible if the Plan receives the application for nongroup coverage more than thirty-one (31) days after the date continued coverage has ended. See "Conversion to Nongroup Programs" for details on other eligibility requirements. - 18 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION F. Conversion to Nongroun Programs Members who lose their eligibility for coverage under this Contract may be eligible to transfer to a Conversion or Medicare Supplement Program designated by the Plan without meeting medical underwriting requirements, provided the Member: Submits a completed application and the required Subscription Charges to the Plan within thirty-one (31) days from the date the Member's coverage under this Contract terminates; and Meets the specific eligibility requirements described under the nongroup program. The rates and benefits of these nongroup programs are different from the rates and benefits provided under this Contract; and in some cases, the benefits provided under these nongroup programs will be more limited than the benefits provided under this Contract. G. Deletion of Ineligible Members The Group will promptly delete any employee or dependent who ceases to meet the above eligibility requirements and will so notify the Plan on a timely basis. 19 - PART THREE PROVISIONS THAT AFFECT BENEFITS The following provisions affect the way benefits are provided. 3.1 Changes To This Contract After the initial term of this Contract as stated in Part Nine 9.1, the benefits of this Contract may be changed provided we notify the Group of any change at least thirty (30) days in advance of the date the change is to be effective. Payment of Subscription Charges after notification constitutes acceptance of the change. No agent of this Plan is authorized to make any oral changes, additions or deletions to this Contract. Changes can be done only by endorsement, riders or an acceptance form issued over the signature of an officer of this Plan. If a Member is confined in a Hospital, Skilled Nursing Facility or Approved Treatment Facility at the time a change in benefits is made, he or she will continue to receive the benefits in effect at the time of admission. The changed benefits will be available after discharge. 3.2 Prior Blue Cross Coverage If the Member was hospitalized while enrolled under a prior Contract, Certificate or Agreement with this Plan which is replaced by this Contract, these provisions will apply: The days of hospital care provided under the prior coverage will be deducted from the days available under this Contract if a Member is readmitted within ninety (90) days after discharge. The days of hospital care will not be deducted if: The Subscriber has gone back to work on a full-time basis; or The hospitalization of a Member is due to an accident. 3.3 Filing of Claims Benefits will be provided under this Contract only if a claim, see Part One - Definitions, is filed with us. Time Limit for Filing Claims The claim must be received by us within one (1) year from the date: Of admission to a Hospital, Skilled Nursing Facility or Approved Treatment Facility; or On which the professional expenses were incurred. This time limit does not apply to claims for services furnished by providers, other than hospitals, who have participating agreements with us. - 20 - PART FOUR PLAN RIGHTS AND MEMBER OBLIGATIONS UNDER THIS CONTRACT This Plan has certain rights under this Contract. These rights appear below. 4.1 SUBROGATION A. Notification The Subscriber has a legal obligation to notify the Plan if a Member (Subscriber and/or Dependent) has a potential or actual legal action against a "third party" for recovery of any health care expenses incurred as a result of an injury or condition for which benefits were paid under the terms of this Contract. A "third party" is any person or entity, other than the injured person, who is liable for the injury or condition. As a condition of receiving benefits under this Contract, the Member must promptly give the Plan, in writing, all facts related to the injury or condition and provide complete information regarding such potential or actual legal action, including the identities of the "third party," the "third party's" insurance carrier and any other information reasonably requested by the Plan. The Member must also provide the Plan with prior notice of any intended settlement. B. The Plan's Right to Recover Payments The Plan has the right to be reimbursed for benefits paid under this Contract for health care services incurred as a result of an injury or condition for which a "third party" is liable. The Member must include, as part of any legal action against a "third party," the amount of benefits paid under this Contract, unless the Plan elects to assert its right to recover directly against the "third party." Any person or entity with funds payable to the Member as a result of such legal action must hold for and pay to the Plan that portion of funds to which the Plan is entitled. The Plan has the right to intervene as a party in any legal action by or on behalf of the Member against a "third party." The Plan reserves the right to hire its own attorney or to be represented by the Member's attorney. The Plan will pay, on a contingent basis, a reasonable portion of attorney's fees for asserting the Plan's right to recover, usually not to exceed twenty percent of our subrogated interest. The Plan will not pay any portion of the costs incurred by or on behalf of the Member. The Member's attorney shall uphold the terms of this paragraph. - 21 - PART FOUR PLAN RIGHTS AND MEMBER OBLIGATIONS UNDER THIS CONTRACT 4.1 SUBROGATION . . . (continued) C. Collection by the Member If the Member obtains a settlement or judgement for less than the amount of the "third party's" policy limits or reachable assets, the Member is considered as having been fully compensated and is obligated to reimburse the Plan for the full amount of benefits paid under this Contract. If a settlement is made or a judgement is recovered that is equal to, or greater than, the amount of the "third party's" policy limits or reachable assets, the Plan's subrogation rights shall be limited to the excess of the amount necessary to fully compensate the Member. D. Agreement to Arbitrate Any dispute arising under this provision will be resolved by binding arbitration conducted in accordance with the rules prescribed by the American Arbitration Association, as amended from time to time. All such disputes will be resolved by a single arbitrator. The Member or the Plan may demand arbitration by serving notice of intention to arbitrate upon the other party. Each party shall bear its own arbitration costs with the parties equally sharing the fees of the arbitrator. The Member and the Plan are bound by the decisions of the arbitration proceedings. This agreement to arbitrate commences from the effective date of this Contract and continues until any controversy or dispute involving the Plan's subrogation claim has been resolved. 4.2 RIGHT TO RECEIVE AND RELEASE NECESSARY INFORMATION When a Member applies for benefits under this Contract, he or she authorizes health care providers to release to us information and records about services that have been given. Also, the Member authorizes any person, organization or insurance company to furnish to or to obtain from us any information regarding his or her benefits. If a Member does not authorize access to his or her records, benefits will not be provided. 4.3 EVIDENCE OF MEDICAL NECESSITY We have the right to require proof of medical necessity from a Member receiving benefits under this Contract. This proof may be submitted by a Member or on his or her behalf by providers. No benefits will be available under this Contract if the proof is not provided or acceptable to us. We shall not request such proof more often than at ten (10)-day intervals. - 22 - PART FOUR PLAN RIGHTS AND MEMBER OBLIGATIONS UNDER THIS CONTRACT 4.4 LIMITATIONS OF LIABILITY The Plan is not liable for any of the following: Situations such as epidemics or disasters that prevent Members from getting the care they need. The quality of services or supplies received by Members, since all those who provide care do so as independent contractors. We are not responsible for, nor do we regulate, the amounts charged to Members by providers. However, we reserve our right to reimburse a provider at certain amounts and to require that Members be held harmless in certain instances for certain amounts. Providing any type of hospital, medical, dental, vision, or similar care. Harm that comes to a Member while in a provider's care. Amounts in excess of the actual cost of services and supplies. Amounts in excess of this program's maximums. This includes recovery under any claim of breach. General damages including, without limitation, alleged pain, suffering or mental anguish. 4.5 VENUE All suits or legal proceedings brought against us by a Member or anyone claiming any right under this Contract must be filed: Within fifteen (15) months of the date we denied in writing the rights claimed under this Contract; and In the State of Washington or the State in which the Member resides or is employed. All suits or legal proceedings brought by us against a Member shall be filed within the appropriate statutory period of limitation. In all suits or legal proceedings brought by us venue may lie, at our option, in: King County, State of Washington; or The third Judicial District, Anchorage, State of Alaska, if the Member is a resident of that State. - 23 - PART FOUR PLAN RIGHTS AND MEMBER OBLIGATIONS UNDER THIS CONTRACT 4.6 RIGHT OF RECOVERY This Plan will have the right, upon demand, to recover overpayments or payments obtained through fraud, error, mistake or payments made in excess of the maximum amount necessary to satisfy the intent of the Coordination of Benefits provision in Part Six 6.2.9. , made to: Other insurers; Any service plans; Any other organization, or on behalf of a Member; or Someone who is not eligible to receive benefits. If reimbursement is not made, such overpayments or payments will be deducted from future claims. 4.7 TRANSFER OF BENEFITS: ASSIGNMENT GARNISHMENT AND ATTACHMENT All rights to benefits under this Contract are personal and available only to the Member. They may not be transferred to anyone else. No benefits or other rights arising in favor of the Member under this Contract are assignable, or subject to garnishment or attachment by creditors. We are not obligated by any attempted or purported assignment, garnishment or attachment. In paying under this Contract for services or supplies to a Member, we may, at our option, remit funds to the Member, the provider of the services or supplies, the Group, other carrier or jointly to any of these. Remittance as aforesaid in good faith shall discharge our obligation to the extent of the remittance amount so that we will not be liable to anyone aggrieved by our selection of payee. 4.8 FRAUDULENT CLAIMS If the Member claims benefits for which no care, service or supply is received, the claims will be denied. 4.9 SUBSCRIBER COOPERATION The Subscriber, his or her eligible spouse and all eligible dependent children are under a duty to cooperate in a timely and appropriate manner with this Blue Cross Plan in its administration of benefits or in the event of a lawsuit. - 24 - PART FIVE BENEFITS 5.1 BASIC BENEFITS: INSTITUTIONAL CARE Institutional care, services and supplies shall be provided for disabilities arising from illness, disease, injury or pregnancy as indicated in the specific benefits that follow, provided: They are medically necessary, see Part One - Definitions; The Member is under constant care and treatment of a physician; and Admission to such institution occurs after the Member's effective date of coverage under this Contract. A. Inpatient Care Participating Hospital In or Out of the Service Area and a Legally Operated Hospital Out of the Service Area Basic Institutional Care benefits for service rendered, furnished and billed by a hospital are subject to the following provisions: 1. The Number of Inpatient Days Available Inpatient hospital care is available up to: a. An aggregate (total) of three hundred sixty-five (365) days per confinement; including b. one hundred twenty (120) days each calendar year for mental, neuropsychiatric or personality disorders; 2. Inpatient Services and Supplies The following inpatient services and supplies are available for inpatient care subject to the number of days available. a. Daily hospital services in a semi-private room. b. Use of an intensive care unit, includes coronary and constant-care units. Services in an intensive care unit include nursing services provided by hospital employees as a regular service. C. Use of operating, recovery, isolation, cystoscopic and cast rooms. d. Anesthetic supplies and use of hospital anesthetic equipment. Administration of anesthesia when administered by a hospital employee as a regular hospital service. - 25 - PART FIVE BENEFITS 5.1 BASIC BENEFITS: INSTITUTIONAL CARE . . . (continued) A. Inpatient Care - Participating Hospital In or Out of the Service Area and a Legally Operated Hospital Out of the Service Area . . . (continued) 2. Inpatient Services and Supplies . . . (continued) e. Casts, splints, and surgical dressings. f. X-ray and radium therapy. g. Oxygen and all drugs and medicines prescribed and used while the Member is in the hospital which are listed and accepted in the: "United States Pharmacopoeia"; "National Formulary"; or "AMA Drug Evaluations" published by the American Medical Association. h. Blood, blood plasma, blood derivatives and their administration. i. Physiotherapy and hydrotherapy. J . Diagnostic laboratory and x-ray services. k. Electrocardiograms. 1. Respiratory and other gas therapy. 3. Limitations In addition to Exclusions and Exceptions of Part Six, these limitations apply to this inpatient hospital care benefit. a. We do not provide benefits for convalescent care when: The need for definitive medical treatment no longer exists; or Acute care provided as an inpatient is no longer necessary. b. If the Member occupies a private room, we provide benefits only for the hospital's charge for a semi-private room. If the hospital has only private room accommodations, we will determine the amount of expenses to be allowed. - 26 - PART FIVE BENEFITS 5.1 BASIC BENEFITS: INSTITUTIONAL CARE . . . (continued) A. Inpatient Care - Participating Hospital In or Out of the Service Area and a Legally Operated Hospital Out of the Service Area . . . (continued) 3. Limitations . . . (continued) C. We do not provide benefits for any other room reserved for the Member during a period he or she may be confined in an intensive care unit. d. We do not provide benefits for personal items, such as: Meals for guests; Long distance telephone charges or telegraph charges; Radio or television charges; or Barber or beautician charges. e. Successive hospital confinements are considered one confinement if they are not separated by a period of ninety (90) days unless: The patient is the Subscriber and proof is furnished that he or she has returned to full-time work; or Readmission by a Member to a hospital is required as a result of an accident. f. We do not provide benefits for admission to a hospital for diagnostic purposes only. g. We do not provide benefits for admission to a hospital for dental procedures except as stated in Part Six 6.2.4. B. Emergency Inpatient Care - Non-Participating Hospital in the Service Area 1. Amount of Benefit Provided Benefits for the number of inpatient hospital days stated in 5.1.A.1. and the services stated in 5.1.A.2. are available for services rendered, furnished and billed by a Non-Participating Hospital in the service area up to the Reasonable and Customary Charge, but only when the condition being treated is a medical emergency. 2. Limitations In addition to the Exclusions and Exceptions of Part Six, all limitations of 5.1.A.3. will apply. - 27 - PART FIVE BENEFITS 5.1 BASIC BENEFITS: INSTITUTIONAL CARE . . . (continued) C. Outpatient Care Participating Hospital In or Out of the Service Area and a Legally Operated Hospital Out of the Service Area This outpatient hospital care benefit is available subject to these provisions: 1. When Services Are Provided Outpatient services are provided in a Participating Hospital for these situations only: a. Accidental Injury We provide benefits for treatment of an accidental injury rendered within seven (7) days of the accident. b. Medical Emergency We provide benefits for treatment for an injury or illness that is a medical emergency (see Part One - Definitions) including but not limited to: Heart attacks, Cardiovascular accidents, Poisonings, Loss of consciousness, or Respiration. C. Minor Surgery d. X-Ray Therapy and Radium Therapy Treatments e. Chemotherapy Treatments - 28 - PART FIVE BENEFITS 5.1 BASIC BENEFITS: INSTITUTIONAL CARE . . . (continued) C. Outpatient Care - Participati a Hospital In or Out of the Service Area and a Legally Operated Hospital Out of the Service Area . . . (continued) 1. When Services Are Provided . . . (continued) f. Preadmission Tests Certain diagnostic services are covered in this benefit when rendered in the outpatient department within seventy-two (72) hours of admission to that hospital. These services must be related to the condition the Member is admitted for and are: Laboratory examinations, Electrocardiograms, and X-ray examinations. 2. Outpatient Services and Supplies Only the outpatient services below are available when the Member receives care for the situations named in Part Five 5.1.C.1. a. Use of operating, recovery, isolation, cystoscopic and cast rooms. b. Anesthetic supplies and use of hospital anesthetic equipment; administration of anesthesia by a hospital employee as a regular hospital service. C. Casts, splints and surgical dressings. d. X-ray therapy and radium therapy. e. Oxygen and all drugs and medicines, prescribed and used while the Member is in the hospital, listed and accepted in the: "United States Pharmacopoeia"; "National Formulary"; or "AMA Drug Evaluations" published by the American Medical Association. - 29 - PART FIVE BENEFITS 5.1 BASIC BENEFITS: INSTITUTIONAL CARE . . . (continued) C. Outpatient Care - Participating Hospital In or Out of the Service Area and a Legally Operated Hospital Out of the Service Area . . . (continued) 2. Outpatient Services and Supplies . . . (continued) f. Blood, blood plasma and blood derivatives and their administration. g. Chemotherapy for malignancies only. h. Diagnostic laboratory and x-ray services and electrocardiograms. i. Physiotherapy and hydrotherapy. 3. Limitations In addition to the Exclusions and Exceptions of Part Six, the following limitations apply to this outpatient hospital care benefit. a. We do not provide benefits for outpatient care received in a Non-Participating Hospital within our service area except as described in 5.1.D. b. We do not provide hospital outpatient benefits for the services of a physician. D. Emergency Outpatient Care - Non-Participating Hospital in the Service Area 1. Amount of Benefit Provided The benefits stated in 5.1.C. are available up to the Reasonable and Customary Charge, but only when the condition being treated is a medical emergency. 2. Limitations In addition to the Exclusions and Exceptions of Part Six, the limitations of 5.1.C.3. will apply. - 30 - PART FIVE BENEFITS 5.1 BASIC BENEFITS• INSTITUTIONAL CARE . . . (continued) E. Skilled Nursing Facility Participating In the Service Area and Medicare-Approved Out of the Service Area This benefit is available in a participating Skilled Nursing Facility for skilled nursing services that must include direct medical supervision of the treatment provided each Member. It must also include nursing service under the supervision of a registered nurse, plus other therapeutic services. This service is designed for the patient who does not need care in an acute facility, yet is at a point in his or her illness or disability which requires care in a facility offering lesser services subject to these provisions. 1. The Number of Days of Skilled Nursing Care Available Each day of care received in a Skilled Nursing Facility will be charged as one-half (1/2) day of inpatient hospital care against the maximum benefit as specified in Part Five 5.1.A.l.a. 2. Skilled Nursing Services and Supplies Only the services listed below are available for skilled nursing care: a. Skilled nursing services in a semi-private room. b. Use of special treatment rooms. C. Routine laboratory tests and examinations. d. Physical, occupational or speech therapy treatments. e. Respiratory and other gas therapy. f. Drugs, biologicals and solutions used while the Member is in the Skilled Nursing Facility. g. Gauze, cotton, fabrics, solutions, plaster and other materials used in dressings and casts. - 31 - PART FIVE BENEFITS 5.1 BASIC BENEFITS: INSTITUTIONAL CARE . . . (continued) E. Skilled Nursing Facility - Participating In the Service Area and Medicare-Approved Out of the Service Area . . . (continued) 3. Limitations In addition to the Exclusions and Exceptions of Part Six, these limitations apply to this Skilled Nursing Facility care benefit. a. We do not provide benefits for skilled nursing care received in a Non-Participating Skilled Nursing Facility within our service area, except as described in 5.1.F. b. We do not provide benefits for custodial care, see Part One - Definitions. C. We do not provide benefits for care which is for: Senile deterioration; Mental deficiency; Mental retardation; or Mental illness. F. Skilled Nursing Facility - Non-Participating in the Service Area 1. Amount of Benefit Provided Benefits for the number of days stated in 5.1.E.1. and the services stated in 5.1.E.2. are available up to the Reasonable and Customary Charge, but only when the condition being treated is a medical emergency. 2. Limitations In addition to the Exclusions and Exceptions of Part Six, the limitations of 5.1.E.3. will apply. - 32 - PART FIVE BENEFITS 5.1 BASIC BENEFITS: INSTITUTIONAL CARE . . . (continued) G. Treatment of Chemical Dependency This chemical dependency benefit is available subject to these provisions: 1. Amount of Benefits Provided Benefits for medically necessary covered services received by the Member and rendered by an Approved Treatment Facility for the treatment of Chemical Dependency, including detoxification services, will be provided at one hundred percent (100%) of the provider's charge, not to exceed the Reasonable and Customary Charge, up to a maximum benefit of $5,000 per Member during any 24-consecutive-month period, subject to a lifetime maximum benefit of $10,000. Benefits for medically necessary covered therapeutic and supporting services provided to enrolled Family Members to assist in the patient's diagnosis and treatment will be subject to the benefit maximum(s) of the patient undergoing treatment for Chemical Dependency. 2. Limitations In addition to the Exclusions and Exceptions of Part Six, Chemical Dependency Benefits will not be provided for: a. Voluntary support groups such as Alanon, Alcoholics Anonymous, Narcotics Anonymous, and Cocaine Anonymous; b. Separate charges for transportation, records and reports; C. Court ordered services, services related to deferred prosecution, deferred sentencing, suspended sentencing, or services related to motor vehicle driving rights unless deemed medically necessary by the Plan. In such instances, the Member must, at the Member's expense, furnish the Plan, no less than ten (10) and no more than thirty (30) days before treatment is to begin, an initial assessment of the need for Chemical Dependency treatment and a treatment plan. Such assessment and treatment plan must be made by a qualified alcoholism and/or drug treatment counselor who is employed by an Approved Treatment Facility or by a physician (M.D. or D.O.) . - 33 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES This benefit will be provided for professional services by a physician qualified to diagnose and treat an illness, disease, injury or pregnancy only as indicated in the specific benefits that follow, provided that: They are medically necessary, see Part One - Definitions, and are received in a medically necessary setting; and They are received on or after the Member's Effective Date of coverage under this Contract. 5.2.1 Surgical and Medical Benefits (Subscriber and Family Member) The basic benefits for professional surgical and medical services are listed below. A. Surgical Benefits This surgical benefit is available subject to these provisions: 1. Amount of Benefits Provided This benefit provides payment at 100% of the provider's charge, not to exceed the Reasonable and Customary Charge, see Part One - Definitions, for an included service. If more than one surgical procedure is performed, benefits will be provided as follows: At different times due to entirely unrelated causes, benefits will be provided for each procedure; At the same time in the same operative area, benefits will be provided only for the procedure with the largest allowance; At the same time in different operative areas, full benefits will be provided for the procedure with the largest allowance plus one-half (1/2) of the allowance for each additional procedure. 2. Surgical Services and Supplies This surgical benefit covers only the providers and services stated below: a. Services of a physician and assistant surgeon for surgical services (operating and cutting procedures for the treatment of disease, illness or injury and treatment of fractures and dislocations.) Services of an assistant surgeon are included for major surgery only. - 34 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES . . . (continued) 5.2.1 Surgical and Medical Benefits . . . (continued) A. Surgical Benefit . . . (continued) 2. Surgical Services and Supplies . . . (continued) b. Services of a dentist (D.D.S. or D.M.D.) for only the non-dental surgical procedures in the oral region listed below: Excision of tumors or cysts of the jaw, tongue, roof and floor of the mouth; Excision of exostoses of the jaw and hard palate; Incision and drainage of cellulitis; Incision or excision of accessory sinuses, salivary glands or ducts; or Surgical procedures required due to an injury involving oral conditions such as fractured jaw, lacerations and dislocations. - 35 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES . . . (continued) 5.2.1 Surxical and Medical Benefits . . . (continued) B. Anesthesia Benefit (Subscriber and Family Member) This anesthesia benefit is available subject to these provisions. 1. Amount of Benefit Provided This benefit provides payment at 100% of the provider's charge, not to exceed the Reasonable and Customary Charge, see Part One - Definitions, for an included service. 2. Anesthesia Services This benefit covers only the services of an anesthesiologist or Registered Nurse Anesthetist (R.N.A.). 3. Limitations In addition to the Exclusions and Exceptions of Part Six, these limitations apply: a. We provide this benefit only when hospital and surgical benefits are being provided to the Member. b. We do not provide benefits for administration of anesthesia by the operating surgeon; or for a hospital employee when the hospital bills for his or her services as a hospital benefit. - 36 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES . . . (continued) 5.2.1 Surgical and Medical Benefits . . . (continued) C. Physician Hospital or Skilled Nursing Facility Visit Benefit (Subscriber and Family Member) This physician hospital or Skilled Nursing Facility benefit is available subject to these provisions: 1. Amount of Benefit Provided This benefit provides payment at 100% of the provider's charge, not to exceed the Reasonable and Customary Charge, see Part One - Definitions, for an included service. 2. Physician Visit Services This benefit covers only one visit by a physician for each day the Member is confined in a hospital or Skilled Nursing Facility. 3. Limitations In addition to the Exclusions and Exceptions of Part Six, these limitations apply: a. We provide this benefit only when inpatient hospital or skilled nursing facility benefits are being provided to the Member. b. We do not provide this benefit during a hospital stay in which basic surgical benefits are paid. - 37 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES . . . (continued) 5.2.1 .Surgical and Medical Benefits . . . (continued) D. Consultation Service Benefit (Subscriber and Family Member) This consultation service benefit is available subject to these provisions. 1. Amount of Benefit Provided This benefit provides payment at 100% of the provider's charge, not to exceed the Reasonable and Customary Charge, see Part One - Definitions, for an included service. 2. Consultation Services This benefit covers only professional consultation services by a physician when a Member is confined in the hospital. This is opinion or advice provided in the evaluation or treatment of a patient. 3. Limitations In addition to the Exclusions and Exceptions of Part Six, these limitations apply: Consultation services must be requested by the attending physician. - 38 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES (continued) 5.2.1 Surgical and Medical Benefits . . . (continued) E. Physician Medical Emergency Benefit - Outpatient Hospital Only (Subscriber and Family Member) This physician medical emergency benefit is available subject to these provisions. 1. Amount of Benefit Provided This benefit provides payment at 100% of the provider's charge, not to exceed the Reasonable and Customary Charge, see Part One - Definitions, for an included service. 2. Physician Services This benefit covers only treatment by a physician in connection with a medical emergency, see Part One - Definitions. 3. Limitations In addition to Exclusions and Exceptions of Part Six, these limitations apply: a. We provide this benefit only when the outpatient hospital medical emergency benefit in Part Five 5.1.C.l.b. is being provided to a Member. b. We do not provide this benefit for treatment that is paid with basic surgical, physician hospital visit, or physician home and office visit benefits. - 39 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES . . . (continued) 5.2.1 Surgical and Medical Benefits . . . (continued) F. Physician Radiotherapy Benefit (Subscriber and Family Member) This physician radiotherapy benefit is available subject to these provisions: 1. Amount of Benefit Provided This benefit provides payment at 100% of the provider's charge, not to exceed the Reasonable and Customary Charge, see Part One - Definitions, for an included service. 2. Physician Radiotherapy Services This benefit covers only the services of a physician for radiotherapy treatments. 3. Limitations The Exclusions and Exceptions of Part Six apply to this benefit. G. Physician Home and Office Benefit Physician home and office visits are not covered as Basic Benefits under this Contract. - a0 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES . . . (continued) 5.2.1 Surgical and Medical Benefits . . . (continued) H. Second Surgical Opinion Benefit 1. Amount of Benefit Provided When surgery is recommended to the Member by a physician for a non-emergency surgical procedure stated in paragraph 2 below, the Plan will pay up to the Reasonable and Customary Charge for the professional services of a physician, other than the operating surgeon, for a second surgical opinion consultation prior to the Member undergoing surgery, including necessary x-ray and laboratory tests required by the physician as a part of the consultation. The term "non-emergency surgical procedure" shall mean one of the elective surgical procedures stated in paragraph 2 below, that may be scheduled at the Member's convenience without Jeopardizing the Member's life or causing serious impairment to the Member's bodily functions. 2. Procedures Requiring a Second Physician's Opinion The following elective surgical procedures, as listed in the Physician's Current Procedure Terminology, Fourth Edition, require a second physician's opinion when surgery has been recommended by a physician on a non-emergency basis as defined in paragraph 1 above: Procedures and CPT 4 Codes: Hysterectomy, 58150, 58180 Surgery on the Spine, 22555 58260 through 58270, 58275 through 22735 and 62295 & 58280 through 63076 Surgery on the Knee, 27373 Surgery on the Heart, 33510 through 27379, 27405 through 33528, 33405, 33430 through 27425, 27444 and 93570 through 27447, 27487 Surgery on the Nose, 30140 and 27488 through 30160 and 30400 Surgery on the Hip, through 30520 27130 and 27135 Gallbladder Surgery, 47600 Surgery on the Foot, 28080 through 47620 through 28299 Tonsils and Adenoids, 42820 through 42836 - 41 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES . . . (continued) 5.2.1 Surgical and Medical Benefits . . . (continued) A. Second Surgical Opinion Benefit (continued) 3. Limitations In addition to the Exclusions and Exceptions of Part Six, this benefit does not include: a. Consultation services performed by the operating surgeon. b. Consultation services for procedures not listed in paragraph 2 above. C. Diagnostic tests which are not directly related to the condition being treated. d. Consultation services where the Member is not personally examined by the physician. e. Consultation services when the Member has already been admitted to the hospital for the surgical procedure. - 42 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES (continued) 5.2.1 Surgical and Medical Benefits . . . (continued) I. Professional Nervous and Mental Benefit This Contract does not provide a Basic professional nervous and mental outpatient benefit. However, benefits for mental, neuropsychiatric and personality disorders are provided for under the Major Medical Benefit, if available. - 43 - PART FIVE BENEFITS 5.2 BASIC BENEFITS: PROFESSIONAL SERVICES (continued) 5.2.2 Diagnostic X-ray and Laboratory (Subscriber and Family Member) This diagnostic x-ray and laboratory benefit is available subject to these provisions: 1. Maximum Amount of Benefit Provided This benefit provides payment of the provider's charge, not to exceed the Reasonable and Customary Charge, see Part One - Definitions, for an included service, subject to the limitations set forth below: for each accident, up to one hundred dollars ($100.00). for all illnesses, up to an aggregate of one hundred dollars ($100.00) in any Calendar Year. 2. Diagnostic X-ray and Laboratory Services This benefit covers only diagnostic x-ray and laboratory services medically necessary in the diagnosing or treatment of: Illness, Injury, or Disease. 3. Limitations In addition to the Exclusions and Exceptions of Part Six, the following limitations apply to this diagnostic x-ray and laboratory benefit. a. We do not cover services under this benefit while a Member is receiving services provided while in an institution. b. We do not provide benefits for eye examinations or treatments. C. We do not provide benefits for dental examinations or treatments. d. We do not provide benefits for routine physical examinations. e. We do not provide benefits for mental, neuropsychiatric or personality disorders. - 44 - PART FIVE BENEFIT 5.2 BASIC BENEFITS: PROFESSIONAL SER l§ 1S cantinued) 5.2.3 Ambulance Benefit (Subscriber and Family IMember;t This licensed ambulance benefit Is available subject to these provisions. 1. Maximum Amount of Benefit erovi4e9. We provide licensed ambulance services up to an aggregate of fifty dollars ($50.00) for each accident or for each hospital confinement , not to exceed the Reasonable and Customary Charge, see. Part One - Definitionsw for are included service 2 . Ambulance Sere'_ ce This ambulance benetit covers an`Jy Services to the nearest liosp! ta equipped to provide treatment . 3. Limitations In addition to the Exclusions and Exceptions of Part Six, the following limitations apply in i4n arrhulance benefit: a. We provide benefits only for licensed ambulance service. An ambulance must: be licensed by the Federal Government , State or Municipality in which ir operates , b. We do not pro0de this h rye » [cr Private automobiles i Tax sere I a: ES PART FIVE BENEFITS 5.3 BASIC BENEFITS: SUPPLEMENTAL ACCIDENT BENEFIT (Subscriber and Family Member) We pay up to the Reasonable and Customary Charges, see Part One - Definitions, for services rendered to a Member as the result of an accident subject to these provisions: The services received are medically necessary as defined in Part One - Definitions; The services are prescribed by a physician; and The accident occurs while the Member is covered under this Contract. 1. Maximum Amount of Benefits Provided We provide Supplemental Accident Benefits up to three hundred dollars ($300.00) for each accident, in addition to the benefits provided elsewhere in this Contract. 2. Supplemental Accident Services and Supplies This benefit covers only the services listed below in connection with an accident: a. Services furnished and billed by a legally operated hospital up to a semi-private room except as stated in 5.3.3.a. and 5.3.3.b. b. Professional services of a licensed physician. This benefit is not available if the services are rendered by a physician who: Ordinarily resides in the Subscriber's home; or Is related by blood or marriage. When a physician performs more than one surgical procedure the following will apply: At different times due to entirely unrelated causes, benefits will be provided for each procedure; At the same time in the same operative area, benefits will be provided only for the procedure with the largest allowance; or At the same time in different operative areas, full benefits will be provided for the procedure with the largest allowance plus one-half (1/2) of the allowance for each additional procedure. C. Necessary laboratory and x-ray examinations. - 46 - PART FIVE BENEFITS 5.3 BASIC BENEFITS: SUPPLEMENTAL ACCIDENT BENEFIT (Subscriber and Family Member) . . . (continued) 2. Supplemental Accident Services and Supplies (continued) d. Acute nursing services of a Registered Nurse when ordered by a physician. This benefit is not available if the services are rendered by a registered nurse who: Ordinarily resides in the Subscriber's home; or Is related by blood or marriage. e. Professional services rendered by a physician or dentist (D.M.D. or D.D.S.) for: Treatment of a fractured jaw; or Accidental injury to functionally sound natural teeth. In addition to the Exclusions and Exceptions of Part Six, benefits will not be provided for injuries caused by biting or chewing. f. Anesthetic supplies and administration of anesthesia by: An anesthesiologist; or A registered nurse anesthetist. g. Services of a physician or a licensed or registered physical therapist for physical therapy treatments. This benefit is not available if the services are rendered by a physician or a licensed or registered physical therapist who: Ordinarily resides in the Subscriber's home; or Is related by blood or marriage. h. Licensed ambulance services to the nearest facility equipped to render treatment of the condition. Licensed ambulance service is not available unless other means of transportation would endanger the health and safety of the Members. This benefit is not available for: Private automobiles; or Taxi services. i. Drugs and medicines when: Directly related to the treatment of an injury; Requiring a written prescription; and Dispensed by a licensed pharmacist or physician. - 47 - PART FIVE BENEFITS 5.3 BASIC BENEFITS: SUPPLEMENTAL ACCIDENT BENEFIT (Subscriber and Family Member) . . . (continued) 2. Supplemental Accident Services and Supplies . . . (continued) J. Medical supplies and prosthetic devices directly required for the appropriate treatment of an accidental injury, such as: Casts; Splints; Trusses; Braces; Crutches; or Prosthetic devices to replace all or part of an absent body organ or to aid in its function when impaired, except that only the initial charge for the first such prosthetic device will be included. Benefits will not be provided for the replacement of prosthetic devices, except when the existing device cannot be repaired and replacement is recommended by a physician due to a change in the Member's physical condition (growth or physical deterioration). Covered prosthetic devices include, but are not limited to: artificial limbs or eyes, and contact lens(es) to replace a missing portion of the eye. k. Rental or, at our option, the initial purchase of durable mechanical medical equipment, see Part One - Definitions, which is prescribed by a physician and required for therapeutic use in the direct treatment of an accidental injury, such as: Wheelchair; Hospital-type bed; or Intermittent Positive Pressure Breathing Apparatus. Special or extra-cost features and options which are convenience items and do not primarily serve a medical purpose will not be covered. In cases where there is an appropriate alternative type of equipment that is less costly and serves the same medical purpose, the Plan will provide benefits for the equipment carrying the lesser charge. 1. Blood transfusions, including the cost of blood and blood derivatives. - 48 - PART FIVE BENEFITS 5.3 BASIC BENEFITS: SUPPLEMENTAL ACCIDENT BENEFIT (Subscriber and Family Member) . . . (continued) 3. Limitations In addition to the Exclusions and Exceptions of Part Six, the following limitations will apply: a. We do not provide benefits for items of a personal nature billed by a legally operated hospital such as: Meals for guests; Long distance telephone charges or telegraph charges; Radio or television charges; or Barber or beautician charges. b. If a Member uses a private room, he or she is responsible for the difference in cost between the private room and the hospital's most common semi-private room rate. If the hospital has only private rooms, we will determine a room allowance based upon semi-private room charges of other hospitals in the area. C. The amount of charges for care, services or supplies paid under other benefits of this Contract are not included under this benefit. d. We do not provide benefits for treatment received more than ninety (90) days after the date of the accident. e. We do not provide benefits for disease or infection, except for infection occurring as a result of an accidental cut or wound. f. We do not provide benefits for the services of a dentist, except as specifically provided in 5.3.2.e. g. We do not provide benefits for eye refraction, eye glasses or their fitting, or contact lens(es) due to an accident, except as specifically provided in 5.3.2.3. h. We do not provide benefits for food poisoning. i. We do not provide benefits for an accident that occurred before a Member's effective date under this Contract. Termination of the Member's coverage under this Contract will not affect any claim under this Supplemental Accident Benefit. See Part Seven for benefits after termination. - 49 - PART FIVE BENEFITS 5.4 MAJOR MEDICAL BENEFIT (Subscriber and Family Member) We provide benefits up to the Reasonable and Customary Charge, see Part One - Definitions, for services rendered in the treatment of illness, injury or pregnancy as indicated below, provided: It is medically necessary (see Part One - Definitions); The Member is under the care and treatment of a physician; and Services are received on or after the Member's Effective Date of coverage under this Contract. A. Major Medical Deductible Before Major Medical Benefits are provided, a required deductible must be met. The deductible is the first $50.00 of expenses incurred for covered services by each Member. The deductible amount is applied as follows: 1. The deductible amount must be satisfied once each calendar year, as long as the Member remains continuously covered. If a Member's coverage lapses for any period of time, a new deductible must be satisfied upon renewal of coverage under this group Contract. 2. A family unit will be required to satisfy an aggregate (total) of only $150.00 in deductible amounts during a Calendar Year. Once this amount is satisfied, the deductible for all Family Members is satisfied for that Calendar Year, as long as the Subscriber remains continuously covered. If the Subscriber's coverage lapses for any period of time, the family unit will be required to satisfy a new aggregate deductible upon renewal of coverage under this Contract. 3. If two or more Family Members suffer bodily injury as a result of the same accident, only one deductible amount needs to be satisfied before the Major Medical Benefits of this Contract will be provided for covered expenses as the result of that accident during the year in which the accident occurs. 4. When expenses incurred in the last quarter of the year are used to satisfy that year's deductible, the amount applied to the deductible also applies to the following year's deductible. If the expenses carried forward are in connection with an accident involving two (2) or more Family Members, the expenses incurred by these Members as a result of that accident are subject to only one deductible amount in the next year. - 50 - PART FIVE BENEFITS 5.4 MAJOR MEDICAL BENEFIT . . . (continued) B. Maximum Amount of Benefits Provided We provide Major Medical Benefits for covered services up to the following maximum amounts: 1. When a Member remains continuously covered and incurs expenses for covered services that exceed any applicable deductible amounts stated in Part Five 5.4.A. , we will pay up to a lifetime maximum of two hundred fifty thousand dollars ($250,000.00) at the following percentages except where a different percentage is stated for specified benefits under 5.4.C. : (a) eighty percent (80%) until two thousand dollars ($2,000.00) has been paid for expenses incurred during any Calendar Year on a Member's behalf; and (b) one hundred percent (100%) of the charges for all other covered expenses incurred during the remainder of that Calendar Year. If a Member's coverage lapses for any period of time, the Member will return to the 80% level of coverage, as stated in (a), above, upon renewal of coverage under this group Contract. After fifty thousand dollars ($50,000.00) have been paid under this Major Medical Benefit for a Member, payment will be made by the Plan for one hundred percent (100%) of the Major Medical expenses for that Member, without further requirements of a Deductible Amount or co-insurance, up to a lifetime maximum of two hundred fifty thousand dollars ($250,000.00) . 2. Each Calendar Year the Member is covered under this Contract we will restore up to five thousand dollars ($5,000.00) of a Member's benefit that has been paid by us. The restored amounts will be added to the two hundred fifty thousand dollar ($250,000.00) lifetime maximum. 3. If this group coverage is replaced by a new Contract, any amounts of the lifetime maximum which have been used will transfer to the new Contract as long as the Member remains continuously covered under the same group. If the Member's coverage lapses, or he or she transfers to other Blue Cross group coverage, a new lifetime maximum will be reinstated upon renewal. - 51 - PART FIVE BENEFITS 5.4 MAJOR MEDICAL BENEFIT . . . (continued) C. Major Medical Services and Supplies This Major Medical Benefit includes only these services and supplies: 1. Services furnished and billed by a legally operated hospital up to a semi-private room except as stated in Part Six 6.1.14. and 6.1.15. Use of an intensive care unit (includes coronary and constant care units) is included in this benefit. Services in an intensive care unit including nursing services provided by hospital employees as a regular service are also included in this benefit. 2. Professional services of a licensed physician. This benefit is not available if the services are rendered by a physician who: Ordinarily resides in the Subscriber's home; or Is related by blood or marriage. When a physician performs more than one surgical procedure, the following will apply: a. At different times due to entirely unrelated causes, benefits will be provided for each procedure; b. At the same time in the same operative area, benefits will be provided only for the procedure with the largest allowance; C. At the same time in different operative areas, full benefits will be provided for the procedure with the largest allowance plus one-half (1/2) of the allowance for each additional procedure. - 52 - PART FIVE BENEFITS 5.4 MAJOR MEDICAL BENEFIT . . . (continued) C. Maior Medical Services and Supplies . . . (continued) 3. Professional services rendered by a dentist for: Treatment of a fractured jaw; Accidental injury to functionally sound natural teeth if the Member is covered at the time of the accident and services are rendered within twelve (12) months of the accident; Excision of tumors or cysts of the jaw, tongue, roof and floor of the mouth; Excision of exostosis of the jaw and hard palate; Incision and drainage of cellulitis; Incision or excision of accessory sinuses, salivary glands or ducts; or Surgical procedures required due to an injury involving oral conditions such as fractured jaw, lacerations and dislocations. In addition to the Exclusions and Exceptions of Part Six, benefits will not be provided for injuries caused by biting or chewing. 4. Acute nursing services of a Registered Nurse in the home when such services are ordered by a physician. The maximum amount of benefits payable on a Member's behalf is two thousand five hundred dollars ($2,500.00) for such services during any Calendar Year. This benefit is not available if the services are rendered by a Registered Nurse who: Ordinarily resides in the Subscriber's home; or Is related by blood or marriage. 5. Anesthetic supplies and administration of anesthesia by: An anesthesiologist; or A registered nurse anesthetist. 6. X-ray therapy, radium therapy and radioactive isotope therapy. 7. Services of a physician or a licensed or registered physical therapist rendered in connection with physical therapy treatments. This benefit is not available if the services are rendered by a physician or a licensed or registered physical therapist who: Ordinarily resides in the Subscriber's home; or Is related by blood or marriage. - 53 - PART FIVE BENEFITS 5.4 MAJOR MEDICAL BENEFIT . . . (continued) C. Major Medical Services and Supplies . . . (continued) 8. Diagnostic x-ray and laboratory services. 9. Licensed ambulance service to the nearest facility equipped to render treatment of the condition. Licensed ambulance service is not available unless other means of transportation would endanger the health and safety of the Members. This benefit is not available for: Private automobiles; or Taxi services. 10. Drugs and medicines lawfully obtainable when: Directly required for the treatment of an illness, injury or condition of pregnancy; and Requiring a written prescription; and Dispensed by a licensed pharmacist or physician. 11. Medical supplies and prosthetic devices directly required for the appropriate treatment of illness, injury or conditions of pregnancy, such as: Casts; Splints; Trusses; Braces; Crutches; Prosthetic devices to replace all or part of an absent body organ or to aid in its function when impaired, except that only the initial charge for the first such prosthetic device will be included. Benefits will not be provided for the replacement of prosthetic devices, except when the existing device cannot be repaired and replacement is recommended by a physician due to a change in the Member's physical condition (growth or physical deterioration) . Covered prosthetic devices include, but are not limited to: artificial limbs or eyes, and contact lens(es) following cataract surgery or to replace a missing portion of the eye (conditions of aphakia). - 54 - PART FIVE BENEFITS 5.4 MAJOR MEDICAL BENEFIT (continued) C. Ma9or Medical Services and Supplies . . . (continued) 12. Rental or, at our option, the initial purchase of durable mechanical medical equipment, see Part One - Definitions, which is prescribed by a physician and required for therapeutic use in the direct treatment of illness, injury or conditions of pregnancy, such as: Wheelchair; Hospital-type bed; Intermittent Positive Pressure Breathing Apparatus. Special or extra-cost features and options which are convenience items and do not primarily serve a medical purpose will not be covered. In cases where there is an appropriate alternative type of equipment that is less costly and serves the same medical purpose, the Plan will provide benefits for the equipment carrying the lesser charge. 13. Blood transfusions, including the cost of blood and blood derivatives. 14. Services of a Chiropractor (D.C.) as those of any other physician, within the scope of the D.C. license. See Part One - Definition of a Physician. 15. Services for a mental, neuropsychiatric, or personality disorder. Benefits are limited to: a. Inpatient care received during a medically necessary Hospital stay, payable at the percentages stated in 5.4.B.1. ; and b. A maximum of twenty (20) visits in any one Calendar Year for treatment received while a Member is not confined in a Hospital, payable at fifty percent (50%) of the covered expenses instead of the percentages stated in Part Five 5.4.B.1. C. Services must be rendered by a legally operated hospital, a physician, licensed psychologist or a Community Mental Health Agency. Benefits are subject to any applicable waiting periods as stated in Part Six 6.2.12. - 55 - PART FIVE BENEFITS 5.4 MAJOR MEDICAL BENEFIT . . . (continued) C. Major Medical Services and Supplies . . . (continued) 16. Services provided by a Skilled Nursing Facility are not covered under this Major Medical Benefit. However, skilled nursing services are covered as Basic Benefits in Part Five 5.1.E. and 5.1.F. 17. Treatment for Chemical Dependency is not covered under this Contract's Major Medical Benefits. However, services for the treatment of Chemical Dependency are covered as a Basic Benefit in Part Five - Section 5.1.G. 18. Home Health Care is not covered under this Major Medical Benefit. However, Home Health Care is covered as a Basic Benefit under Part Five 5.10. 19. Hospice care is not covered as a Major Medical Benefit in this Contract. However, hospice care is covered as a Basic Benefit under Part Five 5.11. 20. The Second Surgical Opinion is not covered under this Major Medical Benefit. However, the Second Surgical Opinion Benefit is covered as a Basic Benefit under Part Five 5.2.1.H. , if available. D. Limitations In addition to the Exclusions and Exceptions of Part Six, we do not provide Major Medical Benefits for services or supplies that are provided for under other benefits of this Contract. Basic Benefits, if any, will be provided before Major Medical Benefits. - 56 - PART FIVE BENEFITS 5.5 BASIC BENEFITS: VISION CARE (Subscriber and Family Member) This Contract does not provide a vision benefit. - 57 - PART FIVE BENEFITS 5.6 BASIC BENEFITS: DENTAL CARE (Subscriber and Family Member) A. When Benefits Are Available 1. The Plan will provide the benefits described below for covered services and supplies incurred in connection with necessary dental care. Necessary dental care means, that in the reasonable opinion of this Plan, the disease, injury or condition cannot be diagnosed, prevented or relieved without the dental service, treatment or supply. The mere fact that the service or supply was approved by a qualified provider does not in itself mean that the service or supply constituted necessary dental care. A service or supply may be necessary in part only. All benefits are subject to the limitations, exceptions, and exclusions and other provisions set forth in this Contract. 2. The Subscriber or Family Member is responsible for furnishing to the Plan all diagnostic evaluative material, such as study models, dental x-rays and charts, which we may require to determine available benefits. We will not provide benefits for those dental services which we are unable to verify as covered services when any necessary material is not furnished upon our request. 3. In providing benefits under this Contract we have the right to have a dentist of our choice examine a Member. This will be done upon our request and at our expense. Failure to comply will result in denial of claims. B. Alternate Benefits The Plan will determine benefits available under this Contract taking into account alternate procedures or services carrying different fees which are, in the reasonable opinion of the Plan, consistent with acceptable standards of dental practice. In all cases where there are alternate courses of treatment carrying different fees, the Plan will only provide benefits for the treatment carrying the lesser fee. If the Member and the dentist decide upon a more costly treatment, then the Member is responsible for the additional charges beyond those for the less costly alternate treatment and for which benefits have been provided by the Plan. - 58 - PART FIVE BENEFITS 5.6 BASIC BENEFITS: DENTAL CARE (Subscriber and Family Member) . . . (continued) C. Predetermination of Benefits With respect to any proposed dental service or series of dental services for which the total charge(s) will exceed three hundred dollars ($300.00), the dentist may submit a predetermination request to this Blue Cross Plan showing the treatment plan and fees. The Plan will then review the predetermination request to determine the estimated dental benefit under this Contract, and notify the dentist and the Member accordingly. If the dentist submits a treatment plan for Predetermination of Benefits and then changes the Plan, this Blue Cross Plan will adjust its payments accordingly. If the dentist makes a major change in the treatment plan, the dentist may submit a revised Plan. A Predetermination of Benefits is an estimate only and not a guarantee of coverage or payment. Benefits provided to the Member will be subject to the specific benefits, exceptions, exclusions, limitations and eligibility provisions set forth in this Contract in effect at the time the services are rendered. D. Amount of Dental Benefits Provided Benefits are provided at the percentages specified below for all covered dental services (subject to the Reasonable and Customary Charge, see Part One - Definitions), rendered during any benefit year for any Member up to a maximum benefit of one thousand dollars ($1,000.00). A benefit year is a period of twelve (12) consecutive months beginning on the Member's Effective Date of coverage under this Contract and each period of twelve (12) consecutive months thereafter. Type A Dental Services First Benefit Year . . . . . . . . . . . . . . . 70% Second Benefit Year . . . . . . . . . . . . . . 80% Third Benefit Year . . . . . . . . . . . . . . . 90% Fourth and Each Succeding Benefit Year . . . . . 100% The benefit percentage will be reduced by ten percent (10%) each successive benefit year Type A dental services are not utilized; however, the benefit payment percentage will not be reduced to less than seventy percent (70%) . Type B Dental Services . . . . . . . . . . . . . . . 50% - 59 - PART FIVE BENEFITS 5.6 BASIC BENEFITS: DENTAL CARE (Subscriber and Family Member) . . . (continued) E. Covered Dental Services 1. Type A Dental Services a. Routine oral examinations (for diagnosing the oral health of the patient and determining the dental care required), limited to two (2) each benefit year. b. Prophylaxis (cleaning, scaling and polishing of teeth), limited to two (2) each benefit year. C. Topical application of fluoride, for Members under age twenty (20), limited to two (2) treatments each benefit year. d. Dental x-rays. e. Space maintainers, for Members under age twenty (20). f. Sealants, for Members under age fourteen (14), limited to use on permanent teeth. g. Simple extractions. h. Oral surgery consisting of surgical extractions, fracture and dislocation treatment, alveolar ridge augmentation, and diagnosis and treatment of cysts or abscesses. i. Fillings, consisting of silver amalgam, silicate and plastic restorations. For other types of fillings, such as gold foils, the allowance will be limited to what would have been otherwise allowed for amalgam fillings. J. Treatment of periodontal and other diseases of the gums and tissues of the mouth. k. Endodontic treatment. 1. Repair or recementing of crowns, inlays, bridgework or dentures. M. Emergency palliative treatment. - 60 - PART FIVE BENEFITS 5.6 BASIC BENEFITS: DENTAL CARE (Subscriber and Family Member) . . . (continued) E. Covered Dental Services . . . (continued) 2. Type B Dental Services a. Inlays, onlays, or the initial placement of crowns, when in the reasonable opinion of the Plan, amalgam fillings would not adequately restore the teeth. b. Replacement crowns, but only when: The existing crown was seated at least five (5) years prior to replacement; or Repreparation of the natural teeth is required as a result of an accidental injury. C. Initial installation of dentures (including adjustments during the first six (6) month period following installation) or fixed bridgework (including inlays and crowns to form abutments). d. Replacement dentures or fixed bridgework, but only when: The existing denture or bridgework was installed at least five (5) years prior to replacement; The replacement or addition of teeth is required to replace one or more additional teeth extracted after initial placement; or Repreparation of the natural teeth in the existing fixed bridgework is required as a result of an accidental injury. e. Relining of dentures. - 61 - PART FIVE BENEFITS 5.6 BASIC BENEFITS: DENTAL CARE (Subscriber and Family Member) . . . (continued) F. Limitations Exceptions and Exclusions In addition to the Exclusions and Exceptions of Part Six, the following limitations, exceptions and exclusions shall apply to this benefit: 1. We provide benefits as if only one dentist provided the service or supply if: The Member transfers from the care of one dentist to that of another dentist during the course of his or her treatment; or More than one dentist renders services for one dental procedure. 2. Benefits for restorative or prosthetic dental services are limited to standard techniques regardless of whether the Member and the dentist decide: On personalized restoration; or To employ special techniques, such as precision attachments. 3. Except for extractions incidental to orthodontic services, we do not provide benefits for services or supplies related to orthodontia (see Part One - Definitions). 4. Except for a child covered under this Contract from birth, we do not provide benefits for the treatment of congenital malformations. 5. We do not provide benefits for expenses incurred after termination of a Member's coverage under this Contract except for prosthetic devices, crowns, or root canals which: Were fitted, prepared, started or ordered prior to the date of termination of the Member's coverage under this Contract; and Were delivered to the Member, completed or seated within thirty (30) days after the date of the termination of the Member's coverage under this Contract. - 62 - PART FIVE BENEFITS 5.6 BASIC BENEFITS: DENTAL CARE (Subscriber and Family Member) . . . (continued) F. Limitations, Exceptions and Exclusions . . . (continued) 6. In all cases where there are, in the reasonable opinion of this Plan, alternate courses of treatment carrying different fees, the Plan will only provide benefits for the treatment carrying the lesser fee. 7. This Contract must be in effect at the time the Member receives services or supplies, except as provided in Part Five 5.6.F.5. , above. 8. We do not provide benefits for dental services received from a: Dental or medical department maintained for employees by or on behalf of an employer; or Mutual benefit association, labor union, trustee or similar person or group. 9. We do not provide benefits for facility charges for dental procedures. 10. We do not provide benefits for services or supplies which: Are not customary and accepted by the dental profession in the States of Washington or Alaska; Are for the purpose of research; or Are experimental. 11. We do not provide benefits for dietary planning for the control of dental caries, oral hygiene instruction and training in preventive dental care. 12. We do not provide benefits for charges for services or supplies for implantology (tooth implantation). 13. We do not provide benefits for charges for broken appointments. 14. We do not provide benefits for services or supplies to increase or alter the vertical dimension. 15. We do not provide benefits for services or supplies not necessary, in the reasonable opinion of the Plan, for proper dental care. - 63 - PART FIVE BENEFITS 5.6 BASIC BENEFITS: DENTAL CARE (Subscriber and Family Member) . . . (continued) F. Limitations, Exceptions and Exclusions . . . (continued) 16. We do not provide benefits for separate charges for study models or casts. 17. We do not provide benefits for extra dentures or other covered appliances, including replacements due to loss or theft. 18. We do not provide benefits for drugs and medicines, whether or not they require a prescription. However, benefits for prescription drugs and medicines are provided for under the Major Medical Benefit, if available. 19. We do not provide benefits for braces, banding or retainers. 20. Dental services, supplies and treatment must be provided by a dentist performing within the scope of his or her license. Dental services, supplies and treatment may also be provided by a licensed dental hygienist or other individual performing within the scope of his or her responsibilities as allowed by Washington or Alaska law if the treatment is rendered under the supervision and guidance of the dentist. - 64 - PART FIVE BENEFITS 5.7 BASIC BENEFITS: PRESCRIPTION DRUGS (Subscriber and Family Member) Prescription Drugs are not covered as a Basic Benefit under this Contract. See, however, 5.4.C.10. for related Major Medical Benefits, if available. 5.8 BASIC BENEFITS: HEARING AIDS This Contract does not provide a hearing aid benefit. 5.9 BASIC BENEFITS: ORTHODONTIA This Contract does not provide an orthodontia benefit. - 65 - PART FIVE BENEFITS 5.10 BASIC BENEFITS: HOME HEALTH CARE 1. Amount of Benefit Provided This benefit provides payment at 100% of the Approved Home Health Agency's charge, not to exceed the Reasonable and Customary Charge (see Part One - Definitions) for an included service or supply, subject to the conditions and limitations set forth herein. 2. Home Health Care Services and Supplies This home health care benefit covers only the services and supplies listed below for home health care which is provided and billed by an Approved Home Health Agency (see Part One - Definitions), included in the Home Health Care Plan of Treatment (see Part One - Definitions), and provided to a Member who is homebound (see Part One - Definitions) in lieu of hospitalization. The Home Health Care Plan of Treatment must be established and periodically reviewed by a physician licensed as a Doctor of Medicine (M.D.) or Doctor of Osteopathy (D.O.) and must describe the medically necessary treatment of an illness or injury to be provided. a. Covered Services Covered expenses include visits by each of the following for intermittent care, not to exceed four (4) hours in duration per visit: A registered or licensed practical nurse; A licensed physical therapist; A certified respiratory therapist; An American Speech and Hearing Association certified speech therapist; A certified occupational therapist; or A home health aide (see Part One - Definitions), limited to a Calendar Year maximum of one hundred thirty (130) visits. Each visit by an employee of the Approved Home Health Care Agency shall be counted against the one hundred thirty (130)-visit maximum. - 66 - PART FIVE BENEFITS 5.10 BASIC BENEFITS: HOME HEALTH CARE 2. Home Health Care Services and Supplies . . . (continued) b. Covered Supplies Benefits for the following covered supplies shall be limited to $500 per Calendar Year. (1) Drugs or medicines directly required for the treatment of the Member's illness that are legally obtainable only upon a physician's written prescription, and insulin. (2) Medical supplies normally used for Hospital inpatients, such as oxygen, catheters, needles, syringes, dressings, materials used in aseptic techniques, irrigation solutions, and intravenous solutions. (3) Rental of durable medical apparatus and medical equipment such as wheelchairs, Hospital beds, respirators, splints) trusses, braces, or crutches needed for treatment. 3. Exclusions In addition to the Exclusions and Exceptions of Part Six, we do not provide benefits for the following: a. Services provided to other than the homebound Member; b. Social services; C. Services performed by Family Members or volunteer workers; d. Services or supplies that are non-medical or custodial in nature; homemaker and housekeeping services, except by home health aides to achieve the medically desired results; e. Supportive environmental materials, including but not limited to, handrails, ramps, air conditioners and telephones; f. Expenses for the normal necessities of living, including but not limited to, food, clothing, and household supplies; - 67 - PART FIVE BENEFITS 5.10 BASIC BENEFITS: HOME HEALTH CARE 3. Exclusions . . . (continued) g. Dietary assistance (e.g. , "Meals on Wheels") or nutritional guidance; h. Separate charges for reports, records or transportation; i. Services and supplies not included in the home health plan of treatment, or not specifically set forth as a covered expense; J. Services and supplies in excess of the specified limitations; or k. Services provided during any period of time in which the Member is receiving benefits under Part Five 5.11. - 68 - PART FIVE BENEFITS 5.11 BASIC BENEFITS: HOSPICE CARE 1. Amount of Benefit Provided This benefit provides payment at 100% of the Approved Hospice's charge, not to exceed the Reasonable and Customary Charge (see Part One - Definitions) for an included service or supply, subject to the conditions and limitations set forth herein. 2. Hospice Care Services and Supplies This hospice care benefit covers only the services and supplies listed below, for a six (6)-month period of hospice care, when provided and billed by an Approved Hospice (see Part One - Definitions), included in the hospice plan of care (see Part One - Definitions), and provided to a terminally ill Member in lieu of hospitalization. The hospice plan of care must be established and periodically reviewed by a physician licensed as a Doctor of Medicine (M.D.) or Doctor of Osteopathy (D.O.) and must describe the Palliative Care and medically necessary treatment to be provided. a. Home Care Covered expenses include only those services listed below, limited to a maximum benefit of $5,000, or a six month period, whichever is greater: (1) Visits by each of the following for intermittent care, not to exceed four (4) hours in duration per visit: A registered or licensed practical nurse; A licensed physical therapist; A certified respiratory therapist; An American Speech and Hearing Association certified speech therapist; A certified occupational therapist; A master of social work; or A home health aide (see Part One - Definitions). (2) Drugs or medicines for the terminal illness that are legally obtainable only upon a physician's written prescription, and insulin. (3) Medical supplies normally used for Hospital inpatients, such as oxygen, catheters, needles, syringes, dressings, materials used in aseptic techniques, irrigation solutions, and intravenous solutions. - 69 - PART FIVE BENEFITS 5.11 BASIC BENEFITS: HOSPICE CARE 2. Hospice Care Services and Supplies . . . (continued) a. Home Care . . . (continued) (4) Rental of durable medical apparatus and medical equipment such as wheelchairs, Hospital beds, respirators, splints, trusses, braces, or crutches needed for treatment. b. Short Term Care in an Approved Hospice Inpatient services and supplies provided by an Approved Hospice when ordered by the attending physician, limited to a maximum of ten (10) days. C. Respite Care Respite care (see Part One - Definitions) for a homebound Member, limited to one hundred twenty (120) hours in each three (3)-month period of hospice care. The three (3)-month period shall commence on the initial date of hospice care covered under this Contract. 3. Exclusions In addition to the Exclusions and Exceptions of Part Six, we do not provide benefits for the following: a. Services provided to other than the terminally ill Member, including bereavement counseling; b. Pastoral and spiritual counseling; C. Services performed by Family Members or volunteer workers; d. Homemaker or housekeeping services, except by home health aides as ordered in the hospice plan of care; e. Supportive environmental materials, including but not limited to, handrails, ramps, air conditioners and telephones. - 70 - PART FIVE BENEFITS 5.11 BASIC BENEFITS: HOSPICE CARE 3. Exclusions . . . (continued) f. Expenses for the normal necessities of living, including but not limited to, food, clothing, and household supplies. g. "Meals on Wheels" or similar food services; h. Separate charges for reports, records or transportation; i. Legal and financial counseling services; J. Services and supplies not included in the hospice plan of care, or not specifically set forth as a covered expense. k. Services and supplies in excess of the specified limitations. 1. Services provided during any period of time in which the Member is receiving benefits under Part Five 5.10 - Home Health Care. 5.12 BASIC BENEFITS: PKU DIETARY FORMULA This benefit provides payment at one hundred percent (100%) of the provider's charge, not to exceed the Reasonable and Customary charge (see Part One - Definitions) for the dietary formula which is Medically Necessary for the treatment of phenylketonuria (PKU), not to exceed an order for five cases in any calendar month. If more than five cases are required for use in any calendar month, benefits will be provided for the additional amount of formula Medically Necessary to treat the Member. - 71 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.1 Exclusions In addition to the limitations listed in Part Five - Benefits, we do not provide benefits for the following: 1. Routine Examinations, X-Ray and Laboratory Testing Physical examinations, including screening examinations, tests, x-ray, laboratory, pathological services, and machine diagnostic tests if they are not directly related to an: Illness; Disease; Injury; Pregnancy; or Definitive set of symptoms. 2. Treatment for Obesity Treatment for obesity, including: Surgery; or Complications of surgery. 3. Routine Foot Care Routine foot-care procedures such as, but not limited to: Trimming of nails, corns or calluses; or Routine hygienic care. 4. Symptomatic Complaints of the Feet and Orthotics Services and supplies for: Fallen arches; Other symptomatic complaints of the feet; or Impression casting for prosthetics and appliances (orthotics) including the prescriptions needed to make them. 5. Milieu Therapy Milieu Therapy, see Part One - Definitions. - 72 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.1 Exclusions . . . (continued) 6. Conditions Resulting From War Conditions caused by or arising out of the following: An act of war; or Armed invasion or aggression. 7. Services or Procedures Not Accented by the Medical Profession Services or procedures which are not generally performed or accepted by the medical profession in the States of Washington and Alaska; any treatment, procedure, facility, equipment, drug, drug usage, device or supply which is considered experimental or investigative at the time rendered. See Part One - Definitions. 8. Reproductive and Sexual Disorders and Defects Services, supplies and procedures for reproductive and sexual disorders and defects, whether or not the consequences of illness, disease or injury, including but not limited to the following conditions and procedures: Impotency; Frigidity; Infertility; Reversal of surgical sterilization; or Artificial insemination and in-vitro fertilization. 9. Sex Transformations Services and supplies or drugs for sex transformations. 10. Services or Supplies Not Medically Necessary Services or supplies not medically necessary, see Part One - Definitions, even if ordered by a court of law. - 73 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.1 Exclusions . . . (continued) 11. Services or Sunulies Not Charged For Any services or supplies for which no charge is made, or: That would not have been made if this Contract were not in effect; or For services or supplies for which a Member is not legally liable. 12• Work-Related Conditions and Workers' Com ensation Any illness, condition or injury for which an employer is required or has the option to furnish coverage under any legislative act that provides for compensation or benefits because of illness, condition or injury arising out of or in the course of employment, such as Workers' Compensation. (This Exclusion does not apply to the illnesses, conditions or injuries of the Group's sole proprietor or partners that arise solely from their occupations with the Group, if they are exempt from the above laws and if the Group does not furnish them Workers' Compensation coverage.) This Exclusion applies whether or not a proper and timely claim for such benefits has been made. However, LEOFF I employees of Group # 00828-04 covered under the Law Enforcement Officers and Fire Fighters Act of 1969, will be covered under this Contract for: Non-occupational injuries, condition or ailments; and Conditions, injuries or ailments connected with their occupation as law enforcement officers or firefighters. 13. Counseling or Training Services Services or supplies for: Learning disabilities; Marital, family or sexual counseling; or Other counseling or training services. - 74 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.1 Exclusions . . . (continued) 14. Personal Charges Billed By An Institution We do not provide benefits when billed by an institution for services of a personal nature such as: Meals for guests; Long-distance telephone charges; Radio or television charges; or Barber or beautician charges. 15. Private Room Charges - Inpatient Hospital We do not provide benefits for the use of private rooms during an inpatient Hospital stay. If a Member uses a private room, he or she is responsible for the difference in cost between the private room and the Hospital's most common semi-private room rate. If the Hospital has only private rooms, we will determine a room allowance based upon the semi-private room charges of other Hospitals in the area. 16. Rehabilitative Care See the exception in Part Six, 6.2.6. 17. Convalescent or Custodial Care See the exception in Part Six, 6.2.1. 18. Motor Vehicle, Liability, or Personal Injury Protection Insurance Services and supplies to the extent that benefits are payable under the terms of any automobile medical, automobile no-fault, automobile uninsured motorist and/or underinsured motorist, personal injury protection (PIP), commercial liability, homeowner's policy, or other similar type of insurance or Contract. 19. Hearing Aid Services or Supplies We do not provide services for: Hearing examinations; or Hearing aids, new or replacement. - 75 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.1 Exclusions . . . (continued) 20. Vision Care, Services or Supplies We will not provide benefits for: Eye examinations; Eye glasses; Visual analysis; Vision therapy; Training relating to muscular imbalance of the eye (or thoptics); Pleoptics; Services, supplies and procedures relating to altering the refractive character of the cornea, and their results, both direct and indirect, including, but not limited to radial keratotomy, corneal modulation, keratomileusis, or refractive keratoplasty; or Services of an optometrist. 21. Orthodontia We do not provide benefits for services and supplies for orthodontia (see Part One - Definitions) . - 76 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions This Contract does not provide benefits for treatment, care, services or supplies except as stated in the paragraphs below or in the specific Benefits of Part Five. 1. Convalescent or Custodial Services Unless stated in Part Five 5.1.E. or 5.1.F. , we do not provide benefits for convalescent or custodial services no matter where the services are rendered, for any portion of a Hospital stay that becomes convalescent or custodial care, or for services furnished by an institution that is: A Skilled Nursing Facility; A place of rest; A place for the aged; A nursing home; or A convalescent home. 2. Well Baby Care We do not provide benefits for well baby care except for Hospital infant nursery care for the newborn infant. The mother must also be hospitalized and receiving benefits for maternity care under this Contract. 3. Dental Care, Services or Supplies We do not provide benefits for dental services or services of a dentist unless stated in Part Five: 5.2.1.A.2.b. - Surgical Benefit; 5.3.2.e. - Supplemental Accident; 5.4.C.3. - Major Medical; or 5.6. - Dental Benefit. 4. Inpatient Hospital Care for Dental Procedures We do not provide inpatient hospital care for dental procedures unless: Adequate treatment cannot be provided without the use of Hospital facilities; and There is a co-existing medical condition, other than the condition for which the Member requires treatment, that makes hospitalization necessary for health and safety. - 77 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 5. Cosmetic Services, Supplies and Procedures Services, supplies and procedures for cosmetic, plastic and reconstructive purposes and their results, direct or indirect, are not included benefits, except: To repair a defect caused by an accidental injury occurring while covered under this Contract; To repair a dependent child's congenital anomaly; For the initial reconstruction of the involved breast following a mastectomy necessitated by disease, illness or injury. Benefits will also be provided for all stages of one reconstructive breast reduction on the non-diseased breast to make it equal in size with the diseased breast after definitive reconstructive surgery on the diseased breast has been performed; or When incidental to or following a covered surgery which resulted from disease of the involved body part and necessary to improve or correct the function of the involved body part. Below are some examples of what are not included benefits: Surgery for sagging skin of the eyelids (blepharochalasis), face, neck, abdomen, hips or extremities (meloplasty, rhytidectomy or lipectomy); Breast enlargement, reduction or uplift procedures (except as stated above); or Reshaping of the nose (rhinoplasty) . 6. Rehabilitative Care Unless stated in Part Five 5.4.C.7. , admissions or treatment for rehabilitative care, including but not limited to, speech and occupational therapy, are not included benefits. - 78 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 7. Hospital Admissions for Testing or Physical Examinations We do not provide inpatient Hospital care for diagnostic studies, physical examinations, check-ups, medical evaluations or observations unless: The services cannot be provided without the use of inpatient Hospital facilities; or There is a medical condition that makes hospitalization necessary for the Member's health and safety. 8. Care Received in a County. State or U.S. Government Hospital We do not provide benefits for care, services or supplies received in a Non-Participating Hospital owned or operated by a county, state or federal agency, except: For treatment of a medical emergency (See Part One - Definitions) ; or As otherwise required by state or federal law. All services and supplies must be furnished and billed by the Hospital. - 79 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 9. Coordination of Benefits A. Benefits Subject to This Provision All of the benefits provided under this Contract are subject to these provisions. B. Definitions 1. Program means the following sources of benefits which will be recognized for coordination of benefits purposes: (a) Group or blanket disability insurance or health care program issued by insurers, health care services contractors and health maintenance organizations; (b) Labor-management trustee plans, labor organization plans, employer organization plans or employee benefit organization plans; (c) Governmental Programs which provide benefits for their own civilian employees or their dependents. This does not include Medicare. (d) Coverage required or provided by any statute. (e) Group student coverage provided or sponsored by a school or other educational institution which includes medical benefits for illness or disease. The term "Program" will be separately understood to mean each program which does or which does not provide for coordination of benefits. Each portion of a Program which separately states whether it is or is not subject to this provision will also be determined to mean a separate "Program." 2. Allowable Expense means any necessary, reasonable and customary item of expense at least a portion of which is covered by at least one of the Programs covering the Member for whom the claim is made. When a Program provides benefits in the form of services rather than cash payments, the reasonable cash value of the service will be considered as both an allowable expense and a benefit paid. 3. Claim Determination Period means a Calendar Year. - 80 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 9. Coordination of Benefits . (continued) C. Effect on Benefits Coordination of Benefits comes into effect when a Member has health care coverage under more than one Program. If, in the absence of this provision, the sum of the benefits available under this Program and the benefits available under all other Programs covering the Member, would be greater than the total amount of Allowable Expenses incurred by that Member during the Claim Determination Period, the Programs involved will coordinate their benefits acd°ording to this provision. In order to coordinate benefits, it must be determined which Program will be responsible for providing benefits first. Such Program is determined to be "Primary." The Primary Program is responsible for paying available Program benefits as if the coordination of benefits provision did not exist„ The remaining Programs are determined to be "Secondary." The Secondary Programs will reduce the benefits that would have been paid in the absence of this provision, so that the sum of the benefits paid by all the Programs covering the person will not exceed the total amount of Allowable Expenses incurred. Benefits payable under another Program include the benefits that would have been payable whether or not a claim was actually submitted to the Program. The following rules will apply in determining which Program will. be Primary: 1. A Program which does not provide for coordination of benefits will always be Primary over a Program which includes a coordination of benefits provision. 2. When a Member is covered by more than one Program and each Program involved includes this provision, the following rules shall apply in determining which Program is Primary: (a) Non-Dependent/Dependent The Program which covers the Member as other than a dependent shall be Primary over the Program which covers the Member as a dependent. (b) Dependent Child/Parents Not Separated or Divorced If the Member is a dependent Child and the parents of the Child are not separated or divorced, the following rules will apply , _.. S PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 9. Coordination of Benefits (continued) C. Effect on Benefits (continued) (i) The Program which covers the Member as the dependent of the parent whose birthday falls earlier in a year will be Primary over the Program which covers the Member as the dependent of the parent whose birthday falls later in that year. (ii) If the other Program does not have the rule described in (i) immediately above regarding dependents, which results in each Program determining its benefits before the other or in each Program determining its benefits after the other, the provisions of subsection (i) above shall not apply, and the rule set forth in the Program which does not have the provisions of subsection (i ) above shall determine the order of benefits . (c) Dependent Child/Separated or Divorced Parents However, if the Member is a dependent Child and the parents of the Child are separated or divorced, the following rules will apply:. (i) If the parent with custody of the Child has not remarried, the Program which covers the Child as a dependent of the parent with custody of the Child will be Primary over the Program which covers the Child as a dependent of the parent without custody.. (ii) If the parent with custody has remarried, the Program which covers the Child as the dependent of the parent with custody will be Primary over the Program which covers the Child as the dependent of a step-parent. Also, the Program which covers the Child as the dependent of the step-parent will be Primary over a Program which covers the Child as a dependent of the parent without custody. 82 PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 9. Coordination of Benefits . . . (continued) C. Effect on Benefits . . . (continued) (iii) If there is a court decree which establishes financial responsibility for the health care expenses of the Child, this will take precedence over (i) and (ii), above. In this case, the Program which covers the Child as the dependent of the parent with such financial responsibility will be Primary over any other Program which covers the Child as a dependent. (d) Active/Inactive Employee When rules (a), (b) or (c) do not determine which Program has responsibility for Primary payment of benefits, the Program which has covered the Member for the longer period of time will be Primary over the Program which has covered the Member for the shorter period of time provided that: (i) The benefits of a program covering the person on whose expenses claim is based as a laid off or retired employee, or dependent of such person, shall be determined after the benefits of any other program covering such person as an employee, other than a laid off or retired employee, or dependent of such person; and (ii) If either program does not have a provision regarding laid off or retired employees, which results in each program determining its benefits after the other, then the provisions of (i) above of this subsection shall not apply. (e) Longer/Shorter Length of Coverage If none of the above rules determines the order of benefits, the benefits of the program which covered an employee, Member or Subscriber longer are determined before those of the program which covered that person for the shorter time. - 83 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 9. Coordination of Benefits . . . (continued) C. Effect on Benefits (continued) 3. When this provision operates to reduce the total amount of benefits otherwise payable as to a Member covered under this Program during any Claim Determination Period, each benefit that would be payable in the absence of this provision shall be reduced proportionately, and the amount reduced will be applied toward any Allowable Expense incurred during a Claim Determination Period. The Member shall not be entitled to benefits in excess of the total maximum benefits of the Program during the Claim Determination Period. D. Determination of Other Coverage This Plan will not be required to determine the existence or extent of any other group coverage. The benefits payable under this Program shall be affected by coordination of benefits only to the extent that other Program information is supplied to the Plan by the Member, the other group, the provider of services, or any other organization or person. E. Facility of Payment Whenever payments which should have been made under this Program in accordance with this provision have been made under any other Program, the Plan shall have the right, exercisable alone and in its sole discretion, to pay over to any Program making such other payments any amounts it shall determine to be warranted in order to satisfy the intent of this provision, and amounts so paid shall be considered benefits paid under this Program and, to the extent of such payments, the Plan shall be fully discharged from liability under this Program. - 84 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 10. Rights to Benefits After Termination Unless provided in Part Seven 7.1. , we do not provide benefits under this Contract for services, treatment, medical attention or care which a Member received after his or her termination date. No rights are vested under this Contract. 11. Contract Must Be In Effect Unless stated in Part Seven 7.1 - Benefits After Termination, this Contract must be in effect at the time a Member receives services. 12. Waiting Periods Waiting periods do not apply to this Contract. 13. Upper or Lower Augmentation or Reduction Procedures Except for Members continuously covered by this Plan from date of birth, upper or lower jaw augmentation or reduction procedures, orthognathic surgery, are not covered. 14. Mental, Neuropsvchiatric, Personality, or Eating Disorders Treatment of nervous and mental disorders including eating disorders such as anorexia nervosa, bulimia, or any similar conditions, except as specified under Part Five 5.1.A. , and 5.4.C.15; services and supplies related to a specialized inpatient eating disorder program. 15. Treatment of Chemical Dependency Treatment for alcohol or drug use, abuse or dependency, except as specifically defined under the definition of Chemical Dependency and as provided under Part Five 5.1.G. 16. Charges Over Reasonable and Customary We do not provide benefits for charges or fees in excess of the Reasonable and Customary Charge. See Part Eight 8.3 for information regarding the Member's financial responsibility with regard to services rendered, furnished and billed by a participating provider. - 85 - PART SIX EXCLUSIONS AND EXCEPTIONS 6.2 Exceptions . . . (continued) 17. Governmental Plan or Program Services and supplies for which the Member is entitled to receive benefits from any federal, state, or governmental program, including Medicare (even though the Member fails to make timely application for or waives rights to such benefits), except as otherwise required by law. Effect of Medicare: If the employer is subject to federal "working aged" laws, this Contract provides benefits primary over Medicare for covered, active employees or their covered spouses, who are sixty-five (65) or older and have elected primary coverage under this Contract. This Contract also provides benefits primary over Medicare, to the extent that an employer-sponsored health care program is required to do so by federal law, for Members who are entitled to Medicare because of a kidney transplant or renal dialysis, and for covered active employees or their dependents when the employee or dependent is under age sixty-five (65), disabled, and covered by Medicare. In all other instances, benefits payable by Medicare will be subtracted from total covered expenses before the benefits of this Contract are calculated, whether or not such Medicare benefits have been claimed. 18. Mandatory Second Surgical Opinion Unless stated in 5.2.1.H. , we do not provide benefits for Second Surgical Opinion Benefit. 19. Home Health Care Unless stated in Part Five 5.10. , we do not provide benefits for services and supplies furnished and billed by a Home Health Care Agency. 20. Hospice Care Unless stated in Part Five 5.11. , we do not provide benefits for services and supplies furnished and billed by a Hospice. 21. Chiropractic Services Unless the definition of a Physician includes a chiropractor (D.C.), see Part One - Definitions, we do not provide benefits for care, services and supplies furnished by a chiropractor. - 86 - PART SEVEN BENEFITS AFTER TERMINATION As stated in Part Two 2.1.D. , the benefits of this Contract may continue after termination or cancellation subject to the following provisions: 7.1 Individual and Group Cancellation of Coverage Under This Contract Coverage under this Contract shall terminate automatically upon termination of the Member's eligibility or upon Group cancellation of this Contract unless: 1. Coverage terminates while a Member is confined in a Hospital, Skilled Nursing Facility or Approved Treatment Facility. Inpatient benefits specified in this Contract will continue to be available until the first of the following occurs: The Member is discharged; The Member no longer requires such care; or We have provided the maximum amount of benefits. 2. The Member is receiving the Supplemental Accident Benefit outlined in Part Five 5.3. Such benefits will continue until the first of the following occurs: The end of ninety (90) days from the date of the accident; or We have provided the maximum Supplemental Accident Benefit. 3. The Member is receiving the Hospice Care Benefit outlined in Part Five 5.11. Such benefits will continue until the first of the following occurs: We have provided the maximum Hospice Care Benefit; or The Member no longer requires such care or such care is not in lieu of hospitalization. 7.2 Continuation of Employment - Nonpayment of Subscription Charges If the Subscriber or the Group ceases to pay the Subscription Charges required by this Contract while he or she remains employed or connected with the Group, the coverage terminates automatically. - 87 - PART EIGHT GENERAL PROVISIONS 8.1 Notice Any notice this Plan is required to submit to the Group will be considered delivered if mailed to the Group at the address appearing on the records of the Plan. The Plan may submit notices, including individual identification cards and descriptive benefit booklets or notifications of modifications thereto, to covered employees by the same means. The Group agrees to receive and promptly deliver all notices on behalf of the covered employees. 8.2 Claim Appeal Procedure Upon our final review and denial of a specific claim, the Plan will send the Member an Explanation of Benefits (E.O.B.) form explaining how the claim was processed. If the Subscriber disagrees with our denial in whole or in part, and the Plan's Customer Service Department confirms the original denial, the aggrieved Subscriber or his or her authorized representative must request a formal review in writing within sixty (60) days of receipt of the E.O.B. form. This written request must be received by us within the sixty (60)-day period and contain the following information: Subscriber name; Subscriber Identification number; Other identifying information found on the face of the E.O.B. form; A concise statement of issues; and Any data, document(s) or comments the Subscriber wants to have considered. We will notify the appealing Subscriber of our determination within sixty (60) days following our receipt of the Subscriber's request. If special circumstances require an extension of time, the Subscriber will be notified of the delay and the reasons therefor. The delay will be no more than an additional sixty (60) days. Our determination in response to an appeal will be final in the opinion of the Plan. 8.3 Payment to Participating Providers Participating providers will seek payment solely from the Plan for the provision of covered services, and accept such payment as full and final payment for such services. Participating providers may seek payment from the Member only for the following: Services not covered by this Contract; Deductibles; Co-payments; and Amounts in excess of stated benefit maximums. - 88 - PART NINE EMPLOYER INFORMATION 9.1 Subscription Charges and Grace Period A. The Group shall pay to this Plan monthly the following Subscription Charges: For Group 828-01: Employee $143.83 Employee and Spouse $247.72 Employee, Spouse and Children $312.04 Employee and Children $208.15 For Group 828-02, -04: Employee $177.31 Employee and Spouse $281.20 Employee, Spouse and Children $345.52 Employee and Children $241.63 Subscription Charges are initially due in advance of the Effective Date as stated on the first page of this Contract. Thereafter, periodic payment(s) of Subscription Charges are due each month by the day preceding the day of the month corresponding with said effective date. However, a grace period of ten (10) days from each due date is allowed to the Group for payment of any periodic payment. No benefits are payable for claims incurred during any time period for which Subscription Charges have not been paid. The initial term and Subscription Charges of this Contract shall be for twelve (12) months from its effective date as stated on the first page and monthly thereafter, unless changed or terminated as stated in 9.3. However, if any government imposes or changes any tax on Plan revenue or mandates a change in benefits, the Plan may then adjust Subscription Charges at any time to offset the effect on its revenue. B. After the expiration of the term of the Contract stated in 9.1.A. above, the amount of the monthly Subscription Charges may be changed by the Plan. The Plan shall notify the Group of any change at least thirty (30) days before the date the change is to be effective. Payment of the revised Subscription Charges constitutes acceptance of the change. - 89 - PART NINE EMPLOYER INFORMATION 9.2 Records A record of all employees and their dependents shall be maintained by the Group and shall contain all information the Plan may require to administer the provisions of the Contract. Such records shall be open for inspection by the Plan at any reasonable time. 9.3 Termination By Group or Plan A. By the Group The Group may terminate this Contract at any time by giving at least thirty (30) days' advance written notice to the Plan. B. By the Plan The Plan may terminate this Contract at the end of the initial term, or at the end of any subsequent term, by giving at least thirty (30) days advance written notice to the Group. The Plan reserves the right to cancel the Contract at any time, by written notice as specified above, on any monthly Subscription due date, if the Group fails to maintain the enrollment requirements as specified or fails to administer the provisions of the Contract. - 90 - Blue Cross -I +{y ''it. 73 $ of Washington and Alaska 15700 Dayton Avenue North/P.O. Box 327 Seattle, Washington 98111-0327 206/361-3000 October 7 , 1988 Mr. Michael R. Webby :rl 'C� Director of Personnel � 1 City of Kent p 088 220 4 th Avenue South RSpyN�� DE,pr Kent, Washington 98032 RE: City of Kent Group #828 Dear Mike: It was so good to finally make the NCAS visit a reality, and we hope we demonstrated the significant possibilities available through NCAS . We are anxious to pursue the matter as it is appropriate. However, the more pressing matter is the renewal for the upcoming year. In that regard Underwriting has reviewed experience for the period January 1, 1988 through September 30, 1988 . During that period of time the group has accrued a gain of $16, 013 . 52 . Combined with the prior gain of $35, 592 . 30 we show a cumulative gain of $51, 606. 82 . During this year the retention was 12 . 77% which included 1. 54% for brokerage and . 5% for late premium payments. Based on the above, our calculations indicate the need for a 12 . 64% rate increase to the current medical rates and a 31. 93% dental rate increase. This renewal includes increasing the $25, 000 pooling point to the $50, 000 level, since a $25, 000 pooling point is no longer available to groups of your size. The medical and dental rate increase could be combined for an overall 15. 22% rate increase if you prefer. The rates are as follows: Employee Employee Spouse & Employee & Medical Employee & Spouse Child(ren) Child(ren) 828-01 Current Rates: $103 . 85 $182 . 11 $230 . 56 $152 . 30 Renewal Adjustment: $ 13 . 13 $ 23 . 03 $ 29 . 16 $ 19 . 26 Renewal Rates: $116. 98 $205 . 14 $259 . 72 $171 . 56 Page 2 Mr. Michael R. Webby RE: City of Kent, #828 Employee Employee Spouse & Employee & Medical Employee & Spouse Child(ren) Childlren) 828-02 , -04 Current Rates: $133 .57 $211. 83 $260 . 29 $182 . 02 Renewal Adjustment: $ 16. 89 $ 26. 79 $ 32 . 91 $ 23 . 02 Renewal Rates: $150 . 46 $238 . 62 $293 . 20 $205. 04 Employee Employee Spouse & Employee & Dental Employee & Spouse Child(ren) Child(ren) Current Rates: $ 20. 35 $ 32 . 27 $ 39 . 65 $ 27 . 73 Renewal Adjustment: $ 6. 50 $ 10 . 31 $ 12 . 67 $ 8 . 84 Renewal Rates: $ 26. 85 $ 42 . 58 $ 52 . 32 $ 36. 59 As you requested Underwriting has provided benefit modifications which could be instituted. These changes are as follows: Add Utilization Management to the Plan. Rates could be reduced 2% with an $ . 85 charge per subscriber per month added to the retention. Add a $50/$150 deductible to the current dental plan. Rates could be reduced 12 . 7% on the dental. In addition we evaluated the possibility of offsetting rates by holding any surplus. However, at this time there is only $6, 000 available in addition to the required rate stabilization of one month of revenue and it appears that could be depleted before year end. Also, the $6, 000 available would not result in enough rate credit to make it practical. Mike, we believe the renewal accurately portrays our position and we look forward to discussing it with you. In order to complete the renewal the attached packet must be returned by December 10, 1988 . Group Name : CITY OF KENT Group Number : 00323 RENEWAL EXHirBi,r BASE Pc:RIOD ME;) I E;:aI, DENTAL 1 EARNED REVENUE ADJUSTED TO CURRENT RATE 71EVET, $755 , 087 Si16 1i2 2 . ADJUSTED PAID CLAIMS S518 , 332 S107 , 555 ENDING RESERVES $51 , 093 $6 , 407 BEGINNING RESERVES 'RUNOUT $30 , 685 $3 , 928 TOTAL ADJUSTED INCURRED CLAIMS S538 , 741- $ 110 , 03-1 3 . TREND COMPOUNDED TO XTD,POT NT OF THE RENEWAL PERIOD 1.3701 , 710 $123 , 971 1 . MARGIN 4 5 . Oo $738 , 642 S135 . 759 5 . RETENTION 12 . 77% S333 , 493 $150, , 192 G . ADJUSTED FOR $50 , 000 INDIVIDUAL STOP LOSS $350 , 566 NiA 7 . EXPENSE RATIO 112 . 34% 131 . 93 Page 3 Mr. Michael R. Webby RE: City of Kent, #828 We consider the City of Kent a valuable client and we look forward to continuing our association in 1989 . If you have any questions, please feel free to contact me at (206) 361-3609 . Sincerely, Barbara B. Russell, CLU Sales Executive BBR:mb T. :7. RENEWAL E 1.I \717 R ED JAN UATRY 1 , 19881 THROUGH SEPTEMBER 30 , 1988 AVERAGE NUMBER OF MON'7':jT C ON T-P A S 5 A . REVENUE 5338 , 601 - 35 1 Gross Paid Clams S 2 5 1 9"';6 - 4 2 2 Less : Medical Claims in Excess of $25 , 000 Per Member $0 . 00 0 . Add : Charge for Large Claims S222 , 259-15 1 4 . Add : Reserve for Unpaid and Unreported Claims as of September 30 , 1988 $57 , 500 . 00 5 . Less : Reserve for Unpaid and Unreported Claims as of December 31 , 1987 ( 552 , 0340 . 00 ) 6 . Incurred Claims -Expense ( 1 - 2 3 - 4 -- 5 ) $2T9 , 0­43 . 87 C . RETENTION EXPENSE 5403 , 239 - 446 D . CURRENT GAIN' OR ( LOSS ) 516 , 013 . 521 E . PRIOR GAIN OR ( LOSS ) FOR PERIOD ENDED DECEMBER 31 , 1987 $35 , 590- 30 F . CUMULATIVE GAIN OR ( LOSS ) FOR PERIOD ENDED SEPTEMBER 30 , 1983 551 , 605,. 82 tic 'I udes estimated ,-ev(-?n,,ie for the mon, n Augusi and September . 1 938 - TABLE OF CONTENTS SECTION I — CONFIRMATION OF RENEWAL ACTION A. Eligibility Update B. Renewal Confirmation SECTION II — CONTRACT CHANGES A. Boilerplate Changes B. Optional Benefits D. State Legislative Changes: Mandated Benefits SECTION I CONFIRMATION OF RENEWAL ACTION Return this section to Blue Cross of Washington and Alaska. Group Name: CITY OF KENT Group Number(s) : 00828 Renewal Date: January 1. 1989 ELIGIBILITY UPDATE Attached for your review is a copy of your current eligibility provisions. The Eligibility section of your renewal document will be reformatted and certain of your existing provisions will be restated to clarify intent. Please indicate on the attached copy any eligibility changes that have occurred since your last renewal; initial this form below and return it together with the eligibility provisions to Blue Cross. I have reviewed the attached eligibility provisions. No changes are to be made at this time. _ I have reviewed the attached eligibility provisions. Include the changes indicated on the attached eligibility. Br ker or Group Date Marketing Representative Date Underwriter Date RETURN THIS FORM AND ATTACHED ELIGIBILITY PROVISIONS TO BLUE CROSS OF WASHINGTON AND ALASKA PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION A. Who May Be Covered 1. The Subscriber An employee who has met the eligibility requirements specified below. a. Eligible Classes of Employees The following employees of CITY OF KENT are eligible to enroll and become covered under this Contract: All regular full-time active employees working a minimum of forty (40) hours a week. All regular part-time active employees working a minimum of twenty-one (21) hours a week. A retired employee, provided such employee: has attained age fifty-five (55) ; has at least twenty-five (25) years of service with the employer; and is eligible to receive a retirement benefit under the LEOFF I Retirement Plan. All retired, disabled employees who are eligible to receive a retirement benefit under the LEOFF I Retirement Plan. LEOFF I Employees - Full-time active law enforcement officers or fire fighters who were hired prior to October 1, 1977, and who were members of the LEOFF system as defined in Sections (3) and (4) , CH131, Law of 1972 1st Ex. Sess. prior to October 1, 1977. LEOFF II Employees - Full-time active law enforcement officers or fire fighters who were hired after October 1, 1977, and were not members of the LEOFF System as defined in Sections (3) and (4) , CH131, Law of 1972 1st Ex. Sess. prior to October 1, 1977. If an employee becomes permanently disabled, the employer must maintain medical insurance coverage for the employee, applicable to LEOFF I Employees only. - 11 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION A. Who May Be Covered . . . (continued) 1. The Subscriber . . . (continued) b. Ineligible Classes of Employees The following employees are ineligible to enroll and become covered under this Contract: All temporary or seasonal employees. Employees who are covered through GROUP HEALTH COOPERATIVE or any other employer-sponsored Health Maintenance Organization (HMO) . 2. Eligible Dependents a. The Lawful Spouse of the Subscriber b. Children The lawful offspring of either or both the Subscriber or spouse and legally adopted children if they meet all of the following requirements: The child is unmarried; and The child is under twenty-three (23) years of age; and The Subscriber provides the main support for the child and could claim him or her as a dependent under the United States Internal Revenue Code, for tax purposes. - 12 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION B. Application for Coverage and Effective Date 1. The Subscriber and Existing Dependents The Subscriber must submit a completed Enrollment Application through the Group within thirty (30) days following the date of hire. All dependents to be enrolled must also be listed on the Enrollment Application. Upon timely receipt of the Subscriber's Enrollment Application and payment of the required Subscription Charges by the Group, coverage will begin for the Subscriber and all enrolled dependents as set forth below. a. Subscriber Employees in an eligible class may enroll and have an effective date of coverage on the latest to occur of: The effective date of this Contract; The date the employee enters an eligible class; The first day of employment; provided such employee is actively at work (performing the duties of his or her occupation at his or her place of employment) on such coverage date. If the employee is not actively at work on such date, coverage for the employee and his or her enrolled dependents will not begin until the employee returns to active work. b. Retirees Retirees in an eligible class will be eligible to enroll and have an effective date of coverage on the first day of the Coverage Period coinciding with or next following date of retirement. "Coverage Period" means that period for which the Group has paid, in advance, the required Subscription Charges on behalf of eligible Members in consideration for the benefits offered in this Contract. - 13 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION B. Application for Coverage and Effective Date . . . (continued) 1. The Subscriber and Existing Dependents . . . (continued) C. Dependents Coverage for eligible dependents (other than those acquired after the Employee's effective date) will become effective on the same date as the employee's coverage provided proper application has been made. Eligible dependents are defined in Part Two Section A.2. 2. Natural Newborn Children Children of the Subscriber or spouse born while the Subscriber is covered under this Contract are covered from date of birth. The Subscriber must make application for coverage of the newborn infant within sixty (60) days from date of birth. If an additional Subscription Charge is required, it will begin on the first billing cycle following date of birth. 3. Dependents Newly Acquired Through Marriage Application for the addition of a spouse and children newly acquired through marriage must be made within thirty (30) days of marriage. Upon timely receipt of the completed Enrollment Application and required Subscription Charges, if any, coverage will begin on the first day of the first billing cycle following the date of marriage. 4. Adopted Children Newly Acquired Newly acquired adopted children physically placed with the Subscriber on or after the Subscriber's effective date are covered from the date of such physical placement with the Subscriber provided application is made within sixty (60) days of said placement. If an additional Subscription Charge is required, it will begin on the first billing cycle following the date of physical placement. Eligible dependents of LEOFF I retired or retired disabled employees must, self-pay monthly Subscription Charges directly to the Group. - 14 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION C. Other Provisions Affecting Eligibility and Effective Date 1. Late Enrollment Eligible employees who are not enrolled when first eligible or who fail to maintain continuous coverage, may be retroactively enrolled at any later date provided application is made and full retroactive Subscription Charges are paid by the Group on the employee's behalf from the later of the following: a. the date the employee was first eligible; or b. retroactively sixty (60) days. Eligible dependents who are not enrolled when first eligible or who fail to maintain their coverage may be enrolled only during an Open Enrollment period which is determined by the Plan. Provided proper application has been made, coverage will begin on the effective date of the Group's Open Enrollment. 2. HMO Option Employees who have elected coverage through an HMO may change coverages and enroll under this Contract only during an Open Enrollment period which is determined by the Plan. 3. If an Enrolled Dependent is Institutionalized On the Effective Date If an enrolled dependent is institutionalized on the date his or her coverage becomes effective, he or she will not receive any benefits of this Contract for any services or supplies provided prior to discharge from the facility. This provision does not apply to services provided for properly enrolled newborn dependents born on or after the Subscriber's effective date. - 15 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION D. When Coverage Ends - Circumstances That End Coverage Except as provided in Part Two Section E. , Continuation of Coverage - Under This Contract, and in Part Seven (Benefits After Termination) , coverage will terminate at the end of the period for which Subscription Charges were paid when the first of the following occurs: 1. For the Subscriber and all Dependents covered under this Contract when this Contract is terminated by the Group or Plan; or 2. For the Subscriber when: a. the Subscriber ceases to meet the eligibility requirements of the Group as set forth in Section A. ; or b. the Subscriber's employment or connection with the Group terminates; or C. the Group fails to pay Subscription Charges for the Subscriber; or 3. For the spouse when: a. the Subscriber is no longer covered under this Contract; or b. his or her marriage to the Subscriber terminates due to divorce or annulment or, if earlier, when the Subscriber is no longer legally responsible for covered expenses incurred by the spouse; or C. the Group fails to pay Subscription Charges for the spouse; or 4. For the children when: a. the Subscriber is no longer covered under the Contract; or b. they reach age 23, marry or can no longer be claimed as a dependent by the Subscriber under the United States Internal Revenue Code; or C. the Group fails to pay Subscription Charges for the children. Members who lose coverage for reasons set forth in Part Two - Section D.2. , 3. or 4. above, may be eligible to continue their coverage under one of the provisions of Part Two, Section E. - Continuation of Coverage Under This Contract. When coverage under this Contract ends, conversion to a nongroup program is available, subject to the terms and limitations of Part Two - Section F. - 16 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION E. Continuation of Coverage - Under This Contract 1. Incapacitated Child A dependent child may continue coverage under this Contract upon reaching twenty-three (23) years of age if: the Subscriber remains covered under this Contract; and the appropriate Subscription Charges, if applicable, are paid; and the child is incapable of self-sustaining support by reason of developmental disability or physical handicap and was incapacitated before reaching age twenty-three (23) ; and the child continues to be eligible as a dependent within the definition of the United States Internal Revenue Code; and the Subscriber furnishes us with written certification acceptable to the Plan, completion of form 711-2450, that the incapacity exists within thirty-one (31) days of the child reaching twenty-three (23) years of age; and the Subscriber re-submits proof acceptable to the Plan of the incapacity at periodic intervals, upon our request, but not more frequently than annually after the two (2)-year period following the child's attainment of age twenty-three (23) . 2. Leave of Absence Coverage may be continued for up to ninety (90) days if the employer grants the Subscriber a leave of absence. The required Subscription Charges must be submitted with the employer's regular monthly remittance to the Plan. This period of coverage will be concurrent with the period of continued coverage provided under Part Two Section E.4. 3. Labor Dispute In the event that a Subscriber's compensation or wage is suspended or terminated by the Group, directly or indirectly, as a result of a strike, lockout, or other labor dispute, the Subscriber may pay the Subscription Charges, subject to the terms on the application, directly to the Group for a period not exceeding six (6) months from the date of such suspension or termination. This period of coverage will be concurrent with any period of continued coverage provided under Part Two Section E.4. When the Subscriber's compensation or wage is so suspended or terminated, the Subscriber shall be notified immediately in writing by the Group. A notice will be mailed to the address last on record with the Group, that the Subscriber may pay Subscription Charges to the Group as they are due as provided in this section. - 17 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION E. Continuation of Coverage - Under This Contract . . . (continued) 4. COBRA Continuation of Group Coverage Public Law 99-272, also known as the Consolidated Omnibus Reconciliation Act of 1985 (COBRA) was signed into Law on April 7, 1986. The intent of this section is to summarize the provisions of the Law, and its amendments, regarding rights for certain Subscribers and their dependents who are eligible for continuation of coverage under COBRA as a result of a "qualifying event." a. Qualifying Events The continuation periods described below extend from the date of the qualifying event. (1) The Subscriber and covered dependents may continue coverage for up to eighteen (18) months if coverage ends due to: Reduction of the Subscriber's work hours; or Termination of the Subscriber's employment, except for discharge due to actions defined by the employer as gross misconduct. A second qualifying event during this eighteen (18) months may extend the continuation period. The extended period will end no later than thirty-six (36) months from the date the continuation period for the first qualifying event began. (2) The covered Spouse or children may continue coverage for up to thirty-six (36) months if coverage ceases due to: The Subscriber's death; Divorce or legal separation from the Subscriber; The Subscriber's entitlement to and election of Medicare as his or her primary health coverage; or Loss of eligibility as a dependent child, as specified in Part Two Section D.4.b. or Section E.1. (3) The retired Subscriber and covered dependents may continue their retiree coverage for up to the rest of the Subscriber's life if that coverage ends due to the former employer's filing of Chapter 11 bankruptcy. If a subsequent qualifying event stated in (2) above occurs, the affected dependents may continue coverage for up to thirty-six (36) additional months, even if entitled to Medicare. - 18 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION E. Continuation of Coverage - Under This Contract . . . (continued) 4. COBRA Continuation of Group Coverage . . . (continued) a. Qualifying Events . . . (continued) Dependents who are enrolled on the continuing Member's continued coverage after the initial election are not eligible for further coverage if they subsequently have a qualifying event. b. Notification Continued coverage is not automatic. The following steps must be taken in order for continuation to become effective for the eligible continuee: (1) The employer must notify those eligible for continued coverage of their rights under COBRA within fourteen (14) days of receiving notice of a qualifying event. (2) The Member must elect continued coverage within sixty (60) days from the date coverage would have terminated because of a qualifying event, or from the date the employer gave notice of continuation rights, whichever is later. (3) The completed application and initial Subscription Charges must be submitted to the employer no later than forty-five (45) days after the continuing Member elected continuation. (4) The employer will forward all applications and Subscription Charges to the Plan with its next billing and delete from the group health program any continuing Member who does not elect to continue coverage. (5) Subsequent Subscription Charges must be paid to the employer and submitted to the Plan with the employer's regular monthly billings. Continued coverage is subject to all other terms and limitations of this Contract. - 19 - PART TWO COVERAGE: ELIGIBILITY, TERMINATION AND CONTINUATION E. Continuation of Coverage - Under This Contract . . . (continued) 4. COBRA Continuation of Group Coverage . . . (continued) C. When COBRA Continued Coverage Ends (1) Continued coverage under this Contract will end at the end of the period for which Subscription Charges are paid in which the first of the following events occurs: The applicable continuation period expires; The next required Subscription payment is not made when due; The Member enrolls in another group health care program; The Member becomes entitled to Medicare, except for retirees and their dependents who are continuing coverage as a result of a Chapter 11 filing; or The Contract between the Group and the Plan is terminated. (2) Continued coverage through the employer will end when the employer ceases to make any health program available to any employee. When the continued coverage described in the provisions of Part Two - Section E. ends, conversion to a nongroup program is available, subject to the terms and limitations of Part Two - Section F. F. Conversion to Nongroup Programs Members who lose their eligibility for coverage under this Contract for the reasons set forth in Section D. may be eligible to transfer to a Conversion or Medicare Supplement Program designated by the Plan without meeting medical underwriting requirements, provided the Member: submits a completed application and the required Subscription Charges to the Plan within thirty-one (31) days from the date the Member's coverage under this Contract terminates; and meets the specific eligibility requirements described under the nongroup program. The rates and benefits of these nongroup programs are different from the rates and benefits provided under this Contract; and in some cases, the benefits provided under these nongroup programs will be more limited than the benefits provided under this Contract. G. Deletion of Ineligible Members The Group will promptly delete any employee or dependent who ceases to meet the above eligibility requirements and will so notify the Plan on a timely basis. - 20 - Group Name: CITY OF KENT Group Number(s) : 00828 Renewal Date: January 1. 1989 RENEWAL CONFIRMATION The following benefit changes (described in Section II) are being presented with your renewal. Please indicate below which optional items you wish included in your contract and sign and return this form with your completed Eligibility Update form. YES SECTION II. A. BOILERPLATE CHANGES X All of the boilerplate contract changes presented in Part A of Section II will be included in your contract. YES NO SECTION II. B. OPTIONAL CONTRACT CHANGES B-5 Add Utilization Management with $500 penalty. (Replaces SSOP) B-9 Add Emergency Room Deductible B-10 Add Organ Transplants Benefit B-11 Add Exclusion for Dependent Obstetrics SECTION II. C. FEDERAL LEGISLATIVE CHANGES Not applicable at this time YES NO SECTION II D. STATE LEGISLATIVE CHANGES: MANDATED BENEFITS X All of the State Legislative changes (Mandated Benefits) presented in Part D of Section II will be included in your contract. If there are any other changes you wish to make to your existing contract at renewal, please indicate below. roker or Group Aate Marketing Representative Date Underwriter Date RETURN THIS FORM TO BLUE CROSS OF WASHINGTON AND ALASKA SECTION II CONTRACT CHANGES A. BOILERPLATE CONTRACT HORDING A-1 Funding arrangement language will be revised to clarify intent. A-15 INJURY TO FUNCTIONALLY SOUND NATURAL TEETH Your medical program will be revised to exclude professional services of a dentist for treatment of an injury to functionally sound natural teeth caused by biting or chewing. A-16 MENTAL, NEUROPSYCHIATRIC OR PERSONALITY DISORDERS The provisions pertaining to mental, neuropsychiatric or personality disorders will be revised to clarify coverage for the treatment of eating disorders, such as anorexia nervosa, bulimia or any similar conditions. A-17 CUSTODIAL CARE The definition of Custodial Care will be revised as follows to clarify intent: "Custodial Care Any portion of a service, procedure, or supply which, in our judgement, is provided primarily: For ongoing maintenance of the Member's health and not for its therapeutic value in the treatment of an illness or injury. To assist the Member in meeting the activities of daily living. Examples are help in walking, bathing, dressing, eating, preparation of special diets, and supervision over self-administration of medication not requiring constant attention of trained medical personnel." A-18 SEMI-PRIVATE ROOM References to "a room of two (2) or more beds" or the "average or most common" hospital room charges will be replaced with "semi-private room." A. BOILERPLATE CONTRACT WORDING A-22 LIMITATIONS OF LIABILITY The following contract provisions will be combined and reworded to clarify intent: 4.4 - Limit of Our Liability, 8.1.- Availability of Health Care, 8.2. - Hospitals Furnishing Care - Independent Contractors. The new provision will read as follows: "4.4 LIMITATIONS OF LIABILITY The Plan is not liable for any of the following: Situations such as epidemics or disasters that prevent Members from getting the care they need. The quality of services or supplies received by Members, since all those who provide care do so as independent contractors. We are not responsible for, nor do we regulate, the amounts charged to Members by providers. However, we reserve our right to reimburse at certain amounts and to require that Members be held harmless in certain instances for certain amounts. Providing any type of hospital, medical, dental, vision, or similar care. Harm that comes to a Member while in a provider's care. Amounts in excess of the actual cost of services and supplies. Amounts in excess of this program's maximums. This includes recovery under any claim of breach. General damages including, without limitation, alleged pain, suffering or mental anguish." A. BOILERPLATE CONTRACT WORDING A-24 BENEFITS AFTER TERMINATION Part Seven, 7.1.2. of your contract provides extended major medical benefits in the event a Member is totally disabled and no longer employed or connected with the Group at the time coverage ends. These benefits are available only for the condition which caused the disability. Because medical benefits for all covered conditions are available under the continuation of group coverage provisions of your contract (COBRA) and/or a totally disabled Member is eligible to transfer to one of our group conversion programs, the total disability benefits set forth in section 7.1.2. of your contract will be deleted at time of renewal. B. OPTIONAL CONTRACT CHARGES B-5 UTILIZATION MANAGEMENT A new Utilization Management Program is being added to your contract. The attached cost containment provisions will be incorporated in Part Three of your contract. The Mandatory Second Surgical Opinion (SSOP) provisions currently in your contract will be deleted. If you elect to d e the Utilization Management Program and retain the Second Surgical Opinion (SSOP) provisions, the following rate adjustments will apply: /G = <� �' l"l j F PART THREE PROVISIONS THAT AFFECT BENEFITS 3.4 UTILIZATION MANAGEMENT All benefits of this Contract are provided only for services and supplies that are medically necessary as determined by the Plan. The services and supplies must be ordered by the attending physician for the direct care and treatment of a covered illness, disease, accidental bodily injury or condition. A. Inpatient Hospital Care Deductible In addition to any Major Medical deductible set forth in Part Five 5.4.A. , a required five hundred dollar ($500.00) deductible must be met for each inpatient hospital admission before benefits for inpatient hospital care are provided. This requirement may be waived as set forth in Part Three 3.4.B. B. Inpatient Hospital Utilization Review Program All inpatient hospital admissions are subject to review by the Plan for medical necessity. the review may be undertaken: Before or during a hospital stay; or Following discharge from the hospital. The Subscriber or Member must initiate Preadmission Review or Admission Review by having his or her physician or hospital contact the Plan. However, in the event appropriate Utilization Review is not initiated prior to or upon admission, the Plan will determine whether an inpatient level of care was medically necessary at the time the claim is received and reviewed by the Plan. The Plan's Inpatient Hospital Utilization Review Program includes: 1. Preadmission Review Preadmission Review will be conducted to determine whether, in the reasonable opinion of the Plan, a scheduled inpatient hospital admission is medically necessary. If Preadmission Review is requested, the five hundred dollar ($500.00) Inpatient Hospital Care Deductible, as stated in Part Three 3.4.A. , will be waived. PART THREE PROVISIONS THAT AFFECT BENEFITS 3.4 UTILIZATION MANAGEMENT . . . (continued) B. Inpatient Hospital Utilization Review Program . . . (continued) 1. Preadmission Review . . . (continued) Preadmission Review is not required and the Inpatient Hospital Care Deductible, as stated in Part Three 3.4.A. , will be waived: For admission for obstetrical delivery or scheduled cesarean section; or For admission for treatment of a medical emergency; or For admission for treatment of an accidental bodily injury the day of or within the next two (2) days following the accident; or For admission to a hospital located outside of the United States of America or to a hospital located within United States territories. Prior to admission under other circumstances, the Subscriber or Member is responsible for assuring that the admitting physician requests Preadmission Review. Upon receipt of the request for Preadmission Review, the Plan will determine whether, in our reasonable opinion, an inpatient level of care is medically necessary. The Plan may, at the time Preadmission Review is initiated for a surgical admission, recommend that the Member obtain a second surgical opinion. If, as a result of our preadmission review, we determine that an inpatient level of care is not medically necessary, we will notify the Member, the Subscriber, the physician and the hospital. Preadmission authorization is not a guarantee of payment. Preadmission authorization means, only that the Plan recognizes an inpatient level of care is medically necessary for the condition described by the physician. 2. Admission Review Review upon an inpatient hospital admission will be conducted to determine if an unscheduled admission or an admission not subject to Preadmission Review is medically necessary. PART THREE PROVISIONS THAT AFFECT BENEFITS 3.4 UTILIZATION MANAGEMENT . . . (continued) B. Inpatient Hospital Utilization Review Program . . . (continued) 2. Admission Review . . . (continued) In the event of an admission to a non-participating hospital or a hospital outside of the service area, it is the Member's responsibility to notify the Plan of the admission within forty-eight (48) hours of the first weekday following the admission. When admission is to a participating hospital, that hospital will contact the Plan for verification of medical necessity. 3. Length of Stay Review A specific length of stay for inpatient hospitalization may be authorized at the time of Preadmission Review or Admission Review, then monitored to the designated discharge date. Additional inpatient days may be authorized or denied as the Plan's review of the Member's condition warrants. 4. Concurrent Review Concurrent Review may be conducted by the Plan to determine if continued inpatient hospital stay is medically necessary. If, during the Concurrent Review process, the Plan determines that the Member no longer requires the level of care only available in an inpatient hospital setting, written notice may be given to the attending physician, hospital billing office, Subscriber and Member specifying the date after which benefits for inpatient hospital services will no longer be provided. 5. Retrospective Review Claims for inpatient hospital admissions are subject to Retrospective Review by the Plan. That review may be result in a determination that part, or all, of the hospital stay was not medically necessary. Payment of benefits is subject to all terms, conditions, limitations and exclusions of this Contract. Preadmission Review, Admission Review, Length of Stay Review and Concurrent Review do not guarantee payment of benefits. PART THREE PROVISIONS THAT AFFECT BENEFITS 3.4 UTILIZATION MANAGEMENT . . . (continued) C. Individual Case "Benefits" Management (ICM) The Plan may, at its discretion, provide benefits for medically necessary, cost effective medical alternatives to high cost care and/or long term hospitalization which would otherwise be covered. ICM is designed to offer alternatives to inpatient care for patients who otherwise require inpatient care in a hospital or skilled nursing facility. ICM will not provide alternative benefits in facilities that are not licensed or do not have appropriate medical supervision. The program will not provide benefits for alternative care to persons who have simply exhausted their benefits. Acceptance of alternative benefits by the Subscriber and/or patient is voluntary. The Subscriber or person legally qualified and authorized to act for him or her will be required to sign a written consent which sets forth terms under which benefits will be provided. The Plan may cease to allow alternative benefits at any time at the Plan's sole discretion by sending written notice to the Subscriber. The Plan's decision to provide such benefits will be made on an individual basis and will only be available to that patient, subject to the terms set forth in the written consent. Any such decision shall not be construed to alter or change all other provisions of the Contract, nor shall it be construed as a waiver of the Plan's right to administer the Contract in strict accordance of its terms in other situations. B. OPTIONAL CONTRACT CHANGES B-9 EMERGENCY ROOM DEDUCTIBLE You may elect to add a $50 Emergency Room Deductible for each hospital emergency room visit. This deductible must be satisfied before benefits for covered emergency room services can be provided. However, this deductible need not be satisfied if: The Member is admitted as an inpatient directly from the emergency room. Emergency room care is for treatment of an accidental injury which is received on the day of the accidental injury or within the next two days after that date. The accidental injury must have occurred on or after the Member's effective date. If you elect to add this optional deductible, the following rate adjustments will apply: B. OPTIONAL CONTRACT CHARGES B-10 ORGAN TRANSPLANTS You may elect to add the following "Organ and Bone Marrow Transplants" benefit to your program: "Organ and Bone Marrow Transplants Subject to prior approval of the Plan, benefits for the following services will be provided for a Member who is the recipient of a liver, kidney, heart, bone marrow, or pancreas transplant, up to a maximum lifetime limit of $150,000 for all transplants combined (any benefits provided for donor costs shall be charged against the recipient's benefits) : A clinical evaluation at the transplant facility. Surgical removal of donor organ or bone marrow from the donor who is an inpatient in a hospital, beginning with the day of surgical removal and continuing to a maximum of ten consecutive days while the donor remains in the hospital. Hospital room, plus services and supplies furnished by and used while the recipient is confined in a hospital which is the nearest facility qualified to perform the transplant. Physician and professional fees. Follow-up care within one year of surgical implantation. Transportation, for the recipient only, to and from the nearest hospital qualified to perform the transplant. In addition to "Exclusions and Exceptions" found in your contract, we will not provide this benefit for: Donor costs if the donor is a Member but the recipient is not. However, complications and unforeseen effects from a Member's organ donation will be covered as any other illness. Donor costs for which benefits are available under other group coverage. Organ search or selection, transportation, or storage costs. Nonhuman organs or manufactured organs, except as specifically authorized by the Plan. Services and supplies for which government funding of any kind is available. Drugs and medicines, such as anti-rejection agents, which are dispensed for use after discharge from the facility. Services furnished by a provider that has not, in the reasonable opinion of the Plan, demonstrated proficiency in such services." B. OPTIONAL CONTRACT CHANGES B-11 DEPENDENT OBSTETRICS You may elect to exclude charges for a dependent child's pregnancy, except for complications of pregnancy. If you elect to include this optional exclusion, the following Definition will be added to your contract: "Complication Of Pregnancy Only the following conditions which are related to or result from a pregnancy: Ectopic pregnancy which is terminated. Conditions requiring intra-abdominal surgery after the end of pregnancy. Toxemia with convulsions (eclampsia of pregnancy) . Nonelective abortion when a viable birth is not possible. Nonelective, emergency cesarean section. Conditions distinct from pregnancy that are caused or worsened by pregnancy and that require surgery or inpatient hospital care during pregnancy. Examples are acute nephritis, nephrosis, cardiac decompensation, missed abortion, and any similar condition of like severity. A complication of pregnancy does not include: false labor; occasional spotting; prescribed or recommended rest; morning sickness; pre-eclampsia; or any similar condition associated with the management of a difficult pregnancy that does not constitute, in our judgement, a medically distinct complication of pregnancy." D. STATE LEGISLATIVE CHANGES: MANDATED BENEFITS D-11 HOSPICE CARE In order to bring your health care coverage into compliance with RCW 48.44.320, hospice care coverage is being revised to provide Home Care benefits for up to $5 000 or a six month period, whichever is greater. D. STATE LEGISLATIVE CHARGES: MANDATED BENEFITS D-14 PKU DIETARY FORMULA PROVISION To comply with a new Washington State law mandating coverage for PKU Dietary Formula, the following benefit will be added to your Contract: "Dietary formula which is Medically Necessary for the treatment of phenylketonuria (PKU), not to exceed an order for five cases in any calendar month. If more than five cases are required for use in any calendar month, benefits will be provided for the additional amount of formula Medically Necessary to treat the Member." This benefit is not subject to the waiting period for preexisting conditions if one is applicable to your program.