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HomeMy WebLinkAboutPR 18512: THIRD PARTY, GROUP MEDICAL, WITH BLUE CROSS AND BLUE SHIELD OF TEXAS, INC. City of Port Arthur Memorandum TO: John A. Comeaux, P.E., CSP,Interim City Manager DATE: 09/10/14 FROM: Patricia Davis, Senior Human Resources Analyst Dr. Albert T. Thigpen, IPMA-CP, Director of Human Resources and Civil Service RE: P. R.No. 18512 A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE CONTRACTS BETWEEN ITS THIRD PARTY ADMINISTRATOR (ADMINISTRATIVE SERVICES ONLY) FOR THE CITY OF PORT ARTHUR GROUP MEDICAL, DENTAL INSURANCE; FOR BASIC LIFE, FOR BASIC ACCIDENTAL DEATH AND DISMEMBERMENT,AND EXCESS LOSS INDEMNITY WITH BLUE CROSS AND BLUE SHIELD OF TEXAS, INC. COMMENT RECOMMENDATION: It is recommended that the City Council adopt P. R. No. 18512 which authorizes the City Manager to execute contracts between its third party administrator (administrative services only) for the City of Port Arthur group medical, dental insurance; for basic life, for basic accidental death and dismemberment, and excess loss indemnity with Blue Cross and Blue Shield of Texas, Inc. and Dearborn National Life Insurance Company. BACKGROUND: The City of Port Arthur considers its employees to be its most valuable asset and resource. In keeping with this premise major medical health insurance, basic life insurance, basic accidental death and dismemberment are provided for employees. Additionally,the City also provides access to its major medical health insurance coverage, including prescription drug coverage, for its retirees. On last year the City bid out its major medical health insurance with the assistance of the Purchasing Division and the City's health insurance consultant. The Request for Proposal (RFP) was prepared and promulgated widely. The response to the RFP was very good from highly qualified vendors which included, but was not limited to: Humana, Blue Cross and Blue Shield of Texas, Aetna, Cigna and TML. The RFP response from Blue Cross and Blue Shield of Texas was the best and most responsive. The City of Port Arthur has a Preferred Provider Organization (PPO) insurance format which provides participants great latitude in selection of health care providers. This format has been deemed most beneficial for plan participants and most compatible with our organizational culture. The City also offers a lower cost Health Savings Account (HSA) option. The City is self-insured for major medical health insurance coverage. Each renewal year comes with additional elements of the Affordable Care Act impacting the City's health insurance must be taken into account. In the upcoming renewal year there are changes to the reporting, fees, and coverage requirements; a significant change in the eligibility requirements for employees. Although, The City of Port Arthur has enjoyed surprising price stability with BlueCross BlueShield of Texas with average rate increases of 2.3% where industry averages are significantly greater at 7%-11%. Further, the Blue Cross and Blue Shield network discounts and national availability provide not only significant plan cost savings, but also access for retirees and dependents across the nation. In the past two (2) renewal periods there has not been a cost increase for plan participants. The current year's renewal unfortunately reflects a thirteen (13%) percent increase in recommended premium funding. This is due to a significant spike in claims cost in the current year. This included a medical claim which exceeded $1.2 million dollars. Independent analysis of the renewal as presented determined that the renewal could have actually come in at a higher percentage. Dental, AD&D, and Life insurance rates remained constant with no increase. The renewal as presented does not pass on the entire increase to employees and retirees. It provides for the City to absorb a portion of the increase; therefore, employees and retirees will only realize a five(5%)percent increase over their current premium levels. Additional efforts with regard to wellness and education regarding plan usage and alternatives will be a significant initiative in the upcoming renewal year. The 2014-2015 Open Enrollment period will be from October 1 to October 31,2014. BUDGETARY/FISCAL EFFECT: Approval of P. R. No. 18512 with authorize the City Manager to execute contracts with the following budgetary impact for which funds are available: Expected claims $7,703,256 Administration/Stoploss $1,489,727 Dental .$ 332,371 Basic Life/AD&D .$ 30,000 Total $9,555,354 EMPLOYEE/STAFF EFFECT: None anticipated. SUMMARY: It is recommended that the City Council adopt P. R. No. 18512 which authorizes the City Manager to execute contracts between its third party administrator (administrative services only) for the City of Port Arthur group medical, dental insurance; for basic life, for basic accidental death and dismemberment, and excess loss indemnity with Blue Cross and Blue Shield of Texas, Inc. and Dearborn National Life Insurance Company. P.R. No. 18512 08/25/14 — ATT/pd RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE CONTRACTS BETWEEN ITS THIRD PARTY ADMINISTRATOR (ADMINISTRATIVE SERVICES ONLY) FOR THE CITY OF PORT ARTHUR GROUP MEDICAL, DENTAL INSURANCE; FOR BASIC LIFE, FOR BASIC ACCIDENTAL DEATH AND DISMEMBERMENT, AND EXCESS LOSS INDEMNITY WITH BLUE CROSS AND BLUE SHIELD OF TEXAS, INC. FUND NO. (S) : 614 — HEALTH INSURANCE FUND WHEREAS, the City Council of the City of Port Arthur deems it necessary and appropriate to provide major medical health care benefits for the City's employees, City Council appointees, and its retirees; and, WHEREAS, the City Council deems it in the best interest of the citizens of Port Arthur to be self-funded and to accept the proposal from Blue Cross and Blue Shield of Texas, Inc. as a third party administrator at an estimated cost of $390,434 per year (administrative charge based on the present number of employees and retirees) as well as at a cost of $1,099,293 per year for stop loss premium (excess indemnity), and, WHEREAS, the City's group health plan coverage encompasses the enactment of the Patient Protection and Affordable Care Act (PPACA) effectuated on March 23, 2010, with continuing provisions enacted annually, and do hereby affirm to continue to make changes to its existing health plan policies or products as required to comply with the law; and, P.R. No. 18512 08/25/14 -- ATT/pd Page 2 of 5 WHEREAS, such contracting with Blue Cross and Blue Shield of Texas, Inc. complies with Sections 252.021(b), Competitive Requirements for Certain Purchases, 252.024, Section of Insurance Broker, and 252.048, Change Orders, respectively of the Local Government Code; and, WHEREAS, the nature of the premiums to be charged by the City and the summary of benefits are as delineated in Exhibits "A-1", "A-2" , "B-1", and "B-2" which reflect the costs for administration by Blue Cross and Blue Shield of Texas, the stop loss premium, the expected reserve; and, WHEREAS, the Basic Life Insurance will also be continued per Dearborn National Life which includes provisions to provide basic life insurance coverage to Fire Civil Service personnel at a rate of one times his/her base annual salary in accordance with the 10/1/2011 Collective Bargaining Agreement between the City of Port Arthur, Texas- and Local 397 International Association of Fire Fighters, which will cost the City $.22/per thousand dollar unit, and all other eligible employees coverage will remain a $6,000 death benefit policy, which will cost the City $.19/per thousand dollar unit/per employee/per month, and, WHEREAS, as part of the Dearborn National Life proposal, the City is also obtaining Accidental Death and Dismemberment insurance on behalf of its employees which will remain at a cost of $.04/per thousand dollar unit/ per employee (for a $5,000 accidental death and dismemberment policy for all eligible employees) per month; and, P.R. No. 18512 08/25/14-- ATT/pd Page 3 of 5 WHEREAS, as part of the Blue Cross and Blue Shield of Texas, Inc. proposal, the City provides an additional benefit level which is characterized as a Health Savings Account (HSA) benefit level, however, this benefit was implemented for new employees hired on or after January 1, 2012 excluding Fire & Police civil service personnel; now, therefore, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR: THAT, the City Council of the City of Port Arthur hereby accept the following contracts to Blue Cross and Blue Shield of Texas, Inc.; attached hereto and made a part hereof, as is fully delineated herein: INSURANCE COVERAGE ADMINISTRATIVE SERVICES EFFECTIVE DATE Administrative Services Blue Cross & Blue Shield November 1, 2014 Only for the City of Port Arthur's Group Medical, Dental Basic Life & AD&D Dearborn National Life November 1, 2014 Excess Loss Indemnity Blue Cross & Blue Shield November 1, 2014 THAT, the City Manager is hereby further authorized to execute the necessary contracts and other documents on behalf of the City of Port Arthur P.R. No. 18512 08/25/14 — ATT/pd Page 4 of 5 subject to the approval of the City Attorney, and to make payment of necessary premium and administrative charges to bind coverage subject to the terms and conditions of the contract for Third Party Administrator Administrative Services and the Contracts for Insurance attached hereto as required to effectuate said services; and, THAT, the City Manager is hereby directed to take all actions necessary to ensure proper funding of the City of Port Arthur's employee health insurance Fund (pending budget approval) in substantially the same form attached to as Exhibit "C" and made part hereof; and, THAT, a copy of the caption of this Resolution be spread upon the minutes of the City Council. READ, ADOPTED, AND APPROVED this day of AD, 2014, at a Regular Meeting of the City Council of the City of Port Arthur, by the following vote: AYES: Councilmembers P.R. No. 18512 08/25/14 — ATT/pd Page 5 of 5 NOES: Deloris "Bobbie" Prince, Mayor ATTEST: Sherri Bellard, City Secretary APPROVED AS TO FORM: //Ga' Valecia Tizeno, City ' orney APPROVED FO) ADMINISTRATION: Dr. A pert T. higpen, 1.r pf % man Resources John A. Comeaux, Interim City Manager APPROVED AS TO AVAILABILITY OF FUNDS: c: ALA ice _(4) (D�. Deborah Echols, Director of Finan F.YHIBIT "A-I" 11111:11*- City of "...;9 ; orl rtjiu�� CITY OF PORT ARTHUR EMPLOYEE BENEFIT REVIEW 11/2014 J.S. Edwards & Sherlock Insurance Agency Mickey Moshier, MHP b ;..�.yy 1. IF '74 BlueCross BlueShield of Texas July 17, 2014 Dr. Albert Thigpen City of Port Arthur P. O. Box 1089 Port Arthur, Texas 77641-1089 _ Dear Dr. Thigpen: Our underwriters have evaluated the November 1,2014 renewal of the group insurance coverage for the City of Port Arthur. The current and renewal information is enclosed. This renewal reflects our continued commitment to adjusting to changes in the health insurance industry.As part of these changes, we are gathering information from groups seeking to maintain grandfathered status.If your plan(s) is eligible to Grandfather, important information and instructions regarding grandfathered status are enclosed. In addition, non-grandfathered religious or religious-affiliated plan(s)seeking to claim exemption or temporary safe- harbor from coverage of contraceptive services,must review the information in the Federal and State of Texas Legislative Updates section of the enclosed Renewal Updates letter and take appropriate actibn. ACA also provides that self-funded plan sponsors are responsible for the Reinsurance Fee. BCBS will not assist in the remittance of those fees to the federal government; however, upon request,we can make available to our self-funded/ASO customers, existing data and information that may be helpful in determining, reporting on, and remitting their Reinsurance Fee amounts. Thank you for doing business with Blue Cross and Blue Shield of Texas. We appreciate your continued trust in our organization, and will strive to continue to exceed the service needs of you and your employees. Please contact your Broker/Producer or Account Representative if you have any questions. Sincerely, Blue Cross Blue Shield of Texas Malaria Hearn Malana Hearn,Account Executive Phone: 409-896-0135 Fax: 409-896-0111 Email: Malang Hearn"it bcbst\.com cc: Mickey Moshier A Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association Dearborn National® July 22, 2014 CITY OF PORT ARTHUR ATTENTION: ELIZABETH VILLARREAL PO BOX 1089 PORT ARTHUR TX 776411089 Subject: Renewal Analysis Group Policy Number: G31118 Anniversary Date: November 1,2013 Dear Policyholder: Dearborn National would like to thank you for allowing us the opportunity to provide you and your employees with Group insurance products. We have reviewed the current demographics of your group insurance programs. As a result, we will be applying a decrease to the Basic Life rates. The AD&D rate will remain the same. Rates will be guaranteed until November 1, 2015. Products Current Rates Renewal Rates Life—Class 1 $0.24 per $1,000 $0.19 per $1,000 Life—Class 2 $0.28 per $1,000 $0.22 per $1,000 AD&D $0.04 per$1,000 $0.04 per$1,000 If you have any questions pertaining to your renewal, or would like more information including the availability of other products as well as a quote for additional benefit programs, please contact your local Dearborn National sales office or insurance broker. We value our relationship with you and look forward to providing quality service to you in the future. Sincerely, Underwriting Department In Force Team Cc 701 East 22nd Street, Lombard, IL 60148 £ Fax: 312.540.4706 Products and services marketed under the Dearborn National®brand and the star logo are underwritten and/or provided by Dearborn National®Life Insurance Company (Downers Grove.IL)in all states(excluding New York),the District of Columbia,the United States Virgin Islands.the British Virgin Islands.Guam and Puerto Rico. The Aff • Affordable Care ActBlueCs. ,�;( of ras BlueShield ��/ of?exas Understanding• • • • Affordable Care Act Fees Blue Cross and Blue Shield of Texas is committed to helping our members understand the Affordable Care Act (ACA) provisions and how they'll impact health care coverage, starting in 2014. This quick reference guide provides a high-level overview on the Annual Fee on Health Insurers ("Health Insurers Fee"),Transitional Reinsurance Program Contribution Fee("Reinsurance Fee")and Patient-Centered Outcomes Research Institute (PCORI) Trust Fund Fee,as established under ACA. Should further regulations and guidance regarding these fees become available,Blue Cross and Blue Shield will share additional information with you. Annual Fee on Health Insurers ("Health Insurer Fee") What? An annual fee on the value of health insurance premiums that will be paid by health insurers on a pro-rata basis Who is it assessed on? Health insurers When? Annually,beginning in 2014 How Much? • In 2014,the total fee(submitted by health insurers)will equal $8 billion •The total fee will increase after that until it reaches $14.3 billion in 2018 • After 2018,the total fee will increase based on the rate of premium growth • Each health insurer's portion of the total Health Insurer Fee will be determined by the federal government on a pro-rata basis and calculated based on prior year information Market Segments • Fully insured group market Markets not Affected: Affected?' • Individual, under 65 market • Long term care insurance • Medicare Advantage • Accident or disability • Medicare Part D • Specific disease or illness • Medicaid Managed Care • Hospital&fixed indemnity • Federal Employees Health • Medicare Supplement Benefits Program Plans • Self-Insured Plans • Dental •VEBAs (non-employer related) • Vision • Certain governmental entities May not represent all market segments and/or exceptions A Dubin,,of Health Care Scvvtce Corporation,a Mutual Lnpal Reserve Company,an Independent Licensee of the Blue Cross and BUM Shield Association - - -- The Affordable Care Act: o© o T SB'ues end 0 Transitional Reinsurance Program Contribution Fee ("Reinsurance Fee") What? A temporary fee assessed on insured and self-funded health plans,on a national per capita or per covered life basis.Helps fund temporary reinsurance programs(established under ACA)that would operate in each state from 2014 through 2016. Who is it assessed on? • Health insurers for fully insured coverage • Plan sponsors of self-funded plans When? ! Three(3)years:2014,2015,2016 How Much? • The federal government has issued rules to set out the amount of the reinsurance fee • States will have the ability to require additional reinsurance contributions • Final rules and guidance set the amount of the Reinsurance Fee for 2014 at$5.25 per member,per month and will also include any additional applicable federal and state taxes Market Segments I • Fully insured group market • Tribal Employee Plans Affected?' • Individual,under 65 market • COBRA • Self-insured plans • Retiree-Only Plans • Federal Employees Health Benefits (employer provided) Program Plans • State and local governmental plans Markets not Affected: • Retiree-Only Plans • Employee Assistance Programs (supplemental) (if not major medical coverage) • Tribal Member Plans • HIPAA-excepted benefits (spouses and dependents) • Medicaid • Stand-alone Dental and • Medicare Advantage Vision Coverage • Medicare Part D "May not represent all market segments and/or exceptions The Affordable Care Act: of Tee xas B1ueShield Patient-Centered Outcomes Research Institute (PCORI) Trust Fund Fee Beginning in 2012 and ending in 2019 for calendar year plans, the Affordable Care Act requires sponsors of applicable self-funded group health plans and insurers that offer health insurance coverage to pay an annual fee known as the Patient-Centered Outcomes Research Institute (PCORI) fee,to fund patient-centered outcomes (also referred to as comparative clinical effectiveness) research. Refer to the PCORI Fact Sheet for further information related to the PCORI Fee. What? A temporary fee to help fund comparative clinical effectiveness research Who is it assessed on? I • Health insurers for fully insured coverage • Plan sponsors of self-funded health plans When? Eight(8)years:2012,2013,2014,2015,2016,2017,2018 and 2019 How Much? For plan or policy years: • Ending on or after Oct. 1,2012,and before Oct. 1,2013:the fee is$1 times the average number of covered lives • Ending on or after Oct. 1,2013,and before Oct. 1,2014:the fee is$2 times the average number of covered lives • Beginning on or after Oct. 1,2014:fee amount is subject to certain adjustments including the percentage increases in the projected per capita amount of the National Health Expenditures • Ending on or after Oct. 1,2019:fee doesn't apply The PCORI fee must be reported and paid on the Form 720,"Quarterly Federal Excise Tax Return"and is payable no later than July 31 of the year following the last day of the policy or plan year.Under the current rules,the PCORI fee ceases to apply after the end of the last policy and plan year ending before Oct. 1,2019, with a fee due date of July 31,2020.Market Segments The fee applies to certain"specified health insurance policies;which are accident Affected?* or health insurance policies issued with respect to individuals residing in the U.S. (including certain prepaid health coverage arrangements). • Fully insured group market 1 • Self-insured group market • Individual • COBRA • Retiree-only plans May not represent all market segments and/or exceptions The Affordable Care Act: o Blue slueShield of Texas Patient-Centered Outcomes Research Institute (PCORI) Trust Fund Fee (cont.) Markets Not •"Excepted benefits,"such as stand-alone vision or dental Affected?* • Expatriate policies issued to an employer if designed and issued to cover employees working and residing outside the U.S. • Federal programs providing medical care(other than through insurance policies)to members of Indian tribes • Indemnity reinsurance policies • Medicare !! • Medicaid • SCHIP • Stop loss policies • Federal programs providing medical care(other than through insurance policies)to members(spouses and dependents)of the U.S.Armed Forces or veterans • Employee Assistance Program,(EAP),disease management or wellness programs-if the program does not provide significant medical care or treatment benefits "May not represent all market segments and/or exceptions. This information is a high-level summary and for general informational purposes only. The information is not comprehensive and does not constitute legal,tax,compliance or other advice or guidance. 56832.05'3 The Affordable Care Act: BlucCroct B1ucShicld kat 11111111111111111111111111111111111111111111111111111111111.111111111111111111111111%4s\ Patient-Centered Outcomes Research Institute (PCORI) Trust Fund Fee Beginning in 2012 and ending in 2019 for calendar year plans,the Affordable Care Act requires sponsors of applicable self-funded group health plans and insurers that offer health insurance coverage to pay an annual fee known as the Patient-Centered Outcomes Research Institute(PCORI)fee,to fund patient-centered outcomes(also referred to as comparative clinical effectiveness) research. Comparative Clinical Effectiveness Research:The Affordable Care Act defines comparative clinical effectiveness research as research evaluating and comparing health outcomes and the clinical effectiveness,risks and benefits of two or more of the following medical treatments,services,and items:health care interventions, protocols for treatment,care management and delivery,procedures, medical devices,diagnostic tools,pharmaceuticals(including drugs and biological),integrative health practices,and any other strategies or items being used in the treatment,management and diagnosis of, or prevention of illness or injury in individuals. Fee Reporting and..^°F^ce issaor :For specified fully insured health policies(including HMO and Cost Plus HMO policies),the fee will be reported and remitted to the IRS by the issuer of the policy(e.g., Blue Cross and Blue Shield of Texas(BCBSTX)). For applicable self-insured health policies including ASO health plans, the plan sponsor(generally the employer)will be responsible for paying the fee. A Divis cn of livakh C e y rvrce�:.olpor.rion,a Mraui,L_•a1 Resew.Company,an Independrnt License-_of the Blue("ro;.u,d 84x SIlu d A..sorMaron 577290513 The Affordable Care 3i et: BlueCross BlueShield of Texas Under the PCORI rule,health insurers and plan sponsors are required to annually file a federal excise tax return (Form 720),which will report liability and remit payment,no later than July 31 of the year following the last day of the policy or plan year.See the PCORI Fee Reporting Schedule on page 3 for more information on filing dates by plan or policy year. Plans with multiple arrangements involving different issuers or different plan sponsors are required to treat each plan separately. Specified health insurance policies Form 720 filed and fee paid by administered by BCBSTX Fully Insured BCBSTX Self-Insured Plan Sponsor(Employer) Fee Amount:The fee amount is$1 times the average number of covered lives under the plan or policy for plan or policy years ending on or after Oct. 1,2012,and before Oct. 1,2013.For plan or policy years ending on or after Oct.1,2013,and before Oct. 1,2014,the fee amount is$2 times the average number of covered lives under the policy or plan.For policy or plan years beginning on or after Oct.1,2014,the fee amount is subject to certain adjustments including the percentage increases in the projected per capita amount of the National Health Expenditures.Accordingly,if the policy year were the calendar year,the fee would apply to calendar policy years 2012-2018. Plan or Policy Year Fee Amount Ending on or after 10/1/2012 and before 10/1/2013 $1 times the average number of covered lives Ending on or after 10/1/2013 and $2 times the average number of covered lives before 10/1/2014 Fee amount is subject to certain adjustments Beginning on or after 10/1/2014 including the percentage increases in the projected per capita amount of the National Health Expenditures Ending on or after 10/1/2019 Fee does not apply Calculating the Fee:The PCORI rule describes several methods for calculating the average number of covered lives,which include 1)the actual count method;2)the snapshot method;or 3)the Form 5500 method.In addition,health insurers are permitted to use the 4)state form method and the 5)member months method. For the first year the fee is in effect,sponsors of self-insured plans may determine the average number of lives covered under the plan for a plan year using"any reasonable method." For applicable fully insured health policies,BCBSTX will calculate,report and remit the fee. For applicable self-insured health policies,the plan sponsor,generally the employer,is responsible for calculating,reporting and remitting the fee. imp 0 The Affordable Care Act: :7�� . Blu oss B1ueShield of Texas Exclusions:The PCORI fee applies to certain"specified health insurance policies,"which are accident or health insurance policies issued with respect to individuals residing in the U.S.(including certain prepaid health coverage arrangements). The PCORI fee does not apply to: "Excepted benefits,"such as stand-alone vision or dental • Employee Assistance Program,(EAP),disease management program,or wellness program if the program does not provide significant medical care or treatment benefits.Expatriate policies issued to an employer if designed and issued to cover employees working and residing outside the U.S. Federal programs providing medical care(other than through insurance policies) to members of Indian tribes • Indemnity reinsurance policies • Medicare • Medicaid • SCHIP • Stop loss policies • Federal programs providing medical care(other than through insurance policies)to members(spouses and dependents)of the U.S.Armed Forces or veterans Health FSA and HRA:An HRA is not subject to a separate fee if the plan sponsor also maintains a separate applicable self-insured health plan with a calendar year.However the regulations do not permit a plan sponsor to treat an HRA and a fully insured plan as a single plan for the purposes of the PCORI fee. =Multiple Arrangements:Two or more arrangements maintained by the same plan sponsor that provide for accident and health coverage with the same plan year,may be treated as a single applicable self-insured health plan for the purposes of the PCORI fee. In the case of multiple arrangements,BCBSTX is responsible for PCORI fee on the fully insured arrangement and the plan sponsor(generally the employer)is responsible for the self-funded arrangement. This information is a high-level summary and for general informational purposes only.The information is not comprehensive and does not constitute legal,tax,compliance or other advice or guidance. Markets Affected*: Fully insured group market Self insured group market Individual market COBRA Retiree-only plans Cost Plus HMO Plans *May not represent all market segments and/or exceptions The Affordable Care Act: Blue(�ross BlueShield � � of Teaas Patient-Centered Outcomes Research Institute (PCORI) Fee Reporting Schedule The PCORI fee must be reported and paid on the Form 720, "Quarterly Federal Excise Tax Return"and is payable on July 31 of the calendar year following the plan year end date. Under the current rules, the PCORI fee ceases to apply after the end of the last policy and plan year ending before Oct. 1, 2019, with a fee due date of July 31, 2020. Policy or Plan Year Fee per average covered life When the fee is paid Nov. 1, 2011 -Oct. 31, 2012 $1 July 31, 2013 Dec. 1, 2011 -Nov. 30, 2012 $1 July 31, 2013 Jan. 1, 2012-Dec. 31, 2012 $1 July 31, 2013 Feb. 1, 2012-Jan. 31, 2013 $1 July 31, 2014 Mar. 1, 2012- Feb. 28, 2013 $1 July 31, 2014 Apr. 1, 2012-Mar. 31, 2013 51 July 31, 2014 May 1, 2012-Apr. 30, 2013 $1 July 31, 2014 June 1, 2012 -May 31, 2013 $1 July 31, 2014 July 1, 2012-June 30, 2013 Si July 31, 2014 Aug. 1, 2012 -July 31, 2013 $1 July 31, 2014 Sept. 1, 2012 -Aug. 31, 2013 51 July 31, 2014 Oct. 1, 2012-Sept. 30, 2013 Si July 31, 2014 Nov. 1, 2012-Oct. 31, 2013 $2 July 31, 2014 Dec. 1,2012-Nov. 30, 2013 $2 July 31, 2014 Jan. 1, 2013- Dec. 31, 2013 $2 July 31, 2014 Feb. 1, 2013-Jan. 31, 2014 $2 July 31, 2015 Mar. 1, 2013- Feb. 28, 2014 $2 July 31, 2015 Apr. 1, 2013-Mar. 31, 2014 52 July 31, 2015 May 1, 2013-Apr. 30, 2014 S2 July 31, 2015 June 1, 2013- May 31, 2014 52 July 31, 2015 July 1, 2013-June 30, 2014 52 July 31, 2015 Aug. 1, 2013-July 31, 2014 52 July 31, 2015 Sept. 1, 2013-Aug. 31, 2014 S2 July 31, 2015 Oct. 1, 2013-Sept. 30, 2014 $2 July 31, 2015 After September 30, 2014 To be adjusted by the U.S. Secretary of Treasury, based on medical inflation After September 30, 2019 $0 (Fee will be phased out) This information is a high-level summary and for general informational purposes only.The information is not comprehensive and does not constitute legal,tax, compliance or other advice or guidance. December 2 013 Bl° BlueShield 967 of Texas The Affordable Care Act: This timeline explains how and when the Affordable Care Act (ACA) provisions will be implemented over the next few years. Health Insurance Marketplace of Texas: While enrollment began on Oct.1,2013,the Marketplace becomes operational on Jan. 1,2014. Individual Requirement to Have Insurance Nearly all U.S.citizens and lawfully present individuals are required to maintain qualifying health coverage or pay a penalty. Guaranteed Availability and Renewability All carriers in the individual and group markets will be required to offer all products approved for sale in a particular market and accept any individual or group that applies for any of those products. Plans and policies are guaranteed renewable Pre-existing Conditions Did You Know? Beginning on the policy/plan date on or after Sept.23, There are 10 categories of benefits 2010, pre-existing condition lin itations w ere w aived considered essential to good health. for all enrollees up to age 19. Beginning on plan Ambulatory patient services years or or after Jan.1,2014,pre-existing condition Emergency services limitations will be eliminated for enrollees of all ages Hospitalization Essential Health Benefits (EHBs) Maternity and newborn care Certain health benefits that are deemed"essential" Mental health disorder services must be offered by non-grandfathered individual Substance use disorder services plans and non-grandfathered, fully insured small Prescription drugs group plans offered both on and off the Marketplace Rehabilitative services and devices in 2014.The final rule released by the US.Department Laboratory services of Health and Human Services (HHS) provides Preventive and wellness services additional details including the benchmark plan for Chronic disease management each state. Pediatric services Deductible Limits for EHBs For plan years beginning on or after Jan. 1,2014,non-grandfathered,fully insured small group plans must limit deductibles to$2,000 for individuals and$4,000 for families.This applies only to in-network EHBs. A health plan may exceed the deductible limit if it cannot reasonably reach a given level of coverage(metallic level)without exceeding the deductible limit(see Page 2 for more on metallic levels.) Out-of-Pocket Maximums for EHBs For plan years beginning on or after Jan. 1,2014,all non-grandfathered plans that cover EHBs must limit annual out-of-pocket member expenses for in-network EHBs. Expenses for EHBs, including coinsurance,deductibles,copays and similar charges cannot exceed 2014 out-of-pocket limits set by the IRS for High Deductible Health Plans.The 2014 out-of pocket maximum for EHBs is$6,350 for self-only coverage and$12,700 for family coverage. The Affordable Care Act: () ofT ssBlueShield (COP r,NUED) A safe harbor for the 2014 plan year allows groups and issuers to maintain separate out-of-pocket maximums for EHBs administered by more than one service provider—as long as they individually do not exceed$6,350 for individual coverage and$12,700 for family coverage.Member EHB expenses for medical/surgical and mental health/substance use disorder benefits must still cross-accumulate up to a single out-of-pocket maximum to comply with the federal mental health parity law. Annual Dollar Limits For plan years on or after Jan.1,2014,restricted annual dollar limits on EHBs are no longer permitted. Actuarial Value (Metallic Levels) Non-grandfathered individual and non-grandfathered, fully insured small group plans must fit within four metallic levels that correspond to plan actuarial value in 2014.These Bronze,Silver,Gold and Platinum"metallic plans"are meant to make it easier for consumers to compare plans with similar levels of coverage.All metallic plans offered in a state must cover at least the package of EHBs set by that state's benchmark plan. Bronze • „ower monthly payments • Higher out-of-pocket costs when you receive medical care • Higher monthly payment than a Bronze plan Silver • Lower out-of-pocket coststhan a Bronze plan when you receive medical care • Silver plans eligible for cost-sharing assistance based on income Gold • Higher monthly payment than a Silver plan • Lower out-of-pocket costs than a Silver plan when you receive medical care Platinum • Highest monthly payments • Lowest out-of-pocket costs when you receive medical care Waiting Periods A group health plan cannot apply any waiting period that exceeds 90 days for plan years starting on or after Jan. 1, 2014. A waiting period is the period that must pass before coverage for an employee or dependent who is otherwise eligible to enroll under the terms of a group health plan can become effective.(The rules for this provision are still proposed and subject to change, pending final rules.) PCORI Fee The Patient-Centered Outcomes Research Institute Fee increases to $2 multiplied by the average number of lives covered under the plan or policy for plan or policy years ending on or after Oct 1,2013, and before Oct. 1,2014. Provider Non-discrimination Health care providers will not be prevented from participation in an insurer's provider network if willing to abide by the terms and conditions for participation and are acting within the limits of their medical license or certification. Coverage for Clinical Trials For plan years beginning on or after Jan. 1,2014,if a"qualified individual"is in an'approved clinical trial"the plan cannot deny coverage for related services.This only applies to non-grandfathered plans. BlueCross BlueShield The Affordable Care Act: of Texas !CONTINUED) Small Business Health Tax Credits ACA increases the small business health tax credit.Smal'group employers with 23 or fewer employees (with an average wage of less than$50,000 a year)may be eligible for a tax credit.The tax credit will cover up to 50 percent of the employer's cost(up to 35 percent for small nonprofit organizations) and is available for the first two years an employer offers coverage through the Small Business Health Options Program (SHOP Marketplace). (The rules for this provision are still proposed and subject to change,pending final rules.) Tax Credits for Individuals Premium tax credits and other cost-sharing assistance are available to qualifying individuals and families Did You Know? purchasing coverage on the Marketplace A new kind of tax credit may be Community Ratine available for individuals who Health insurance issuers can only use the following purchase individual coverage on rating factors:geographic area,family demographics, the Marketplace and whose 2013 age and tobacco use.Applies only to individual plans household income is between and sn all group plans unless large group coverage $11,490 and 545,960($23,550 is offered through the Marketplace. and$94,200 for a family of fouri. Insurer Fee Additional cost-sharing assistance The Health Insurer Fee is designed to help fund is available for those Silver plan premium tax credits and/or cost-sharing assistance enrollees whose household incomes for eligible individuals purchasing a qualified health ranges anywhere from$11,490 to plan through the Marketplace.This annual fee will $28,725($23,550 to S58s75 for a be determined by the federal government and will be based on a health insurer's premiums from the family of four). previous year. Dependent to Age 26 for Grandfathered Plans ACA requires group health plans and insurers that offer health insurance for dependent children to make coverage available for children (married or unmarried) until age 26.This provision is already effective under most policies;however, it does not fully apply to grandfathered group health plans until Jan. 1, 2014.For plan years beginning on or after Jan. 1,2014, a grandfathered group health plan that offers dependent coverage for children may no longer exclude an adult child under age 26 from coverage, even if the child is eligible for another employer-sponsored health plan other than that of a parent. Wellness Incentive Increases ACA changes the maximum reward that can be provided under HIPAA's health factor-based wellness program from 20 to 30 percent.The reward under such a program can be up to 30 percent of the cost of employee coverage.Additionally,the secretaries of Health and Human Services,Labor and Treasury can expand the reward up to 50 percent of cost of coverage if deemed appropriate. The Affordable Care Act. ofTe B1ueShield (CONT;NUFD) The 3Rs Beginning in 2014,ACA will create three risk-mitigation programs(Transitional Reinsurance,Temporary Risk Corridors and Risk Adjustment)intended to stabilize premiums in the market as insurance reforms and Marketplaces are implemented. Transitional Reinsurance is a temporary program(2014-2016)that provides partial reinsurance coverage for issuers that incur high claims costs for individual market enrollees. It will require all issuers and third-party administrators(on behalf of self-funded groups) to make contributions to a reinsurance entity to support payments to non-grandfathered individual market plans. Risk Corridors is a temporary program(2014-2016)that protects the uncertainty in rate setting by limiting health issuers'gains and losses in excess of 3 percent of target premiums.Issuers share the risk with the government and will receive either a portion of the gain or a subsidy for loss. Risk Adjustment is a permanent program that transfers funds from plans with lower-risk enrollees to plans with higher-risk enrollees(such as individuals with chronic conditions). The Risk Adjustment calculation will result in payments between insurance issuers. Risk Adjustment applies to individual and small group insured markets,on and off the Marketplace,for non-grandfathered plans. Employer Shared Responsibility Applicable large employers(generally employers with more than 50 full-time or full-time equivalent employees) face a potential penalty if they don't provide minimum essential coverage to full- time employees (generally those employees that work more than 30 hours a week or 130 hours a month)that has both minimum value(company is paying at least 60 percent of covered health care expenses for a typical population) and is affordable (full-time employees cannot pay more than 9.5 percent of their income for the lowest-cost,self-only coverage). Employer groups should continue to seek guidance from their tax,regulatory and compliance professionals to ensure they are meeting their obligations under this aspect of the health care reform law. (The rules for this provision are still proposed and subject to change,pending final rules.) Small Group Market Increases to 100 Employees Small group market definition increases to employers with up to 100 employees. Marketplace Opens to Large Group Market Large Group(100+)may be allowed to use the Marketplace beginning in 2017 if a state allows it. 'Cadillac Plan' Tax ACA imposes a 40 percent excise tax on high-cost,employer-sponsored health coverage,or plans with an annual cost exceeding$10,200 for individuals or$27,500 for a family. This communication is intended for informational purposes only.It is not intended to provide,does not constitute, and cannot be relied upon as legal,tax or compliance advice.The information contained in this communication is subject to change based on future regulation and guidance. 726260.11 13 A Division of Health Care service Corporation,a Mutual Legal Reserve Company,an Independent licensee of the Blue Cross and Blue shield Association C769 BlueCross BlueShield of Texas Dear Group Administrator, The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires employers to notify all eligible employees of two important provisions in their health care plans: • The first is the employees' right to enroll in the plan under the "special enrollment provision." • The second is to advise employees of the plan's pre-existing condition exclusion rules that may temporarily exclude coverage for certain pre-existing conditions that they, or members of their families, may have. In addition, language has been added to the notice (in compliance with other federal mandates) to advise all eligible employees of their right (under certain plans) to designate a primary care provider. Please copy and distribute the enclosed Initial Notice about Special Enrollment Rights and Pre-existing Condition Exclusion Rules in Your Group Health Plan and additional notices directly to all of your employees as soon as possible. Please Note: you must also give this notice to each new employee prior to his or her enrollment in, or declination of, health coverage and must redistribute it each year at open enrollment. Thank you in advance for your assistance in meeting this federal requirement. 1001 East Lookout Drive,Richardson,Texas 75082•bcbstx.com 10-1-2011 Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association as BlueCross BlueShield �0� of Texas Important Notices I. Initial Notice About Special Enrollment Rights and Pre-existing Condition Exclusion Rules in Your Group Health Plan A federal law called Health Insurance Portability and Accountability Act(HIPAA)requires that we notify you about two very important provisions in the plan.The first is your right to enroll in the plan under its"special enrollment provision"without being considered a late applicant if you acquire a new dependent or if you decline coverage under this plan for yourself or an eligible dependent while other coverage is in effect and later lose that other coverage for certain qualifying reasons.Second,this notice advises you of the plan's pre-existing condition exclusion rules that may temporarily exclude coverage for certain pre-existing conditions that you or a member of your family may have.Section I of this notice may not apply to certain self-insured,non-federal governmental plans.Contact your employer or plan administrator for more information. A. SPECIAL ENROLLMENT PROVISIONS Loss of Other Coverage(Excluding Medicaid or a State Children's Health Insurance Program)If you are declining enrollment for yourself or your eligible dependents(including your spouse)because of other health insurance or group health plan coverage,you may be able to enroll yourself and your dependents in this plan if you or your { dependents lose eligibility for that other coverage(or if you move out of an HMO service area,or the employer stops contributing toward your or your dependents'other coverage).However,you must request enrollment within 31 days after your or your dependents'other coverage ends(or move out of the prior plan's HMO service area,or after the employer stops contributing toward the other coverage). Loss of Coverage For Medicaid or a State Children's Health Insurance Program If you decline enrollment for yourself or for an eligible dependent(including your spouse)while Medicaid coverage or coverage under a state children's health insurance program is in effect,you may be able to enroll yourself and your dependents in this plan if you or your dependents lose eligibility for that other coverage.However,you must request enrollment within 60 days after your or your dependents'coverage ends under Medicaid or a state children's health insurance program. New Dependent by Marriage,Birth,Adoption,or Placement for Adoption If you have a new dependent as a result of marriage,birth,adoption,or placement for adoption,you may be able to enroll yourself and your dependents in this plan.However,you must request enrollment within 31 days after the marriage,birth,adoption,or placement for adoption. Eligibility for State Premium Assistance for Enrollees of Medicaid or a State Children's Health Insurance Program If you or your dependents(including your spouse)become eligible for a state premium assistance subsidy from Medicaid or through a state children's health insurance program with respect to coverage under this plan,you may be able to enroll yourself and your dependents in this plan.However,you must request enrollment within 60 days after your or your dependents'determination of eligibility for such assistance. You or your spouse or dependents may also have special enrollment rights in another group health plan at the time a claim is denied as a result of a lifetime limit on all benefits,if you request enrollment within 30 days after the claim has been denied. To request special enrollment or obtain more information,call Customer Service at the phone number on the back of your Blue Cross and Blue Shield ID card. © BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter ADMINISTRATIVE SERVICES ONLY (ASO) care management program. The program helps to identify members who could benefit from co- management of behavioral health and medical Product Changes conditions. This integrated approach to care coordination can result in improved outcomes, enhanced continuity of Benefits Value Advisor(BVA) care and reduced costs over time. This buy-up option is available to ASO groups with 250+ Some ASO accounts may select to not purchase the outpatient subscribers. BVA guides members through the health component of the Behavioral Health program. Members of these care decision process, giving them the facts they need to groups will not experience the benefits of the integrated care coordination service delivery model.Additionally, outpatient care make health care decisions. BVA offers quantifiable management services and any outpatient preauthorization savings for employers and their employees. With just requirements will not apply. one call, a BVA can provide cost information, explain member benefits, let members know about available Employee Assistance Program educational tools and schedule appointments. BVAs BCBSTX's Employee Assistance Program offers 24/7 document when they have provided members with support, seminars, coaching and interactive online tools options for lower-cost, high-quality in-network care. That for employees seeking help with personal problems. information is then compared against members' claims Getting early assistance can reduce the likelihood of data to track savings. escalated emotional and medical problems, as well as higher health care costs. Blue Care Connection`' Blue Care Connection (BCC), Blue Cross and Blue Employee Assistance Program(EAP)services are administered by Magellan Health Services,a separate company.EAP services are Shield of Texas' (BCBSTX) integrated health care available for an additional fee to groups with 151+employees enrolled management and wellness program, focuses on in a BCBSTX health plan. identifying members earlier, before their health risk factors may lead to the development of chronic 2014 HSA-compatible HDHP Requirements conditions, hospital admissions, readmissions or Each year, the U.S. Treasury Department and Internal emergency room visits. BCC programs include: CCEIsM Revenue Service determine deductible minimums and Care Coordination and Early Intervention, Web-based out-of-pocket maximums for HSA-compatible (health coaching tools, expanded member outreach and lifestyle savings account) high deductible health plans (HDHPs), management programs. as well as contribution maximums to HSAs. The rules apply to our BlueEdge HSAsM plans. Care onTargetsM This dynamic condition management tool lets members 2014 HSA and HDHP Annual Individual Family learn about and manage their health conditions. The Requirements Coverage Coverage online tool gives members an alternative way to engage Minimum Deductible in care management programs. Now available to 2014 $1,250 $2,500 members with Blue Care Connections Condition Management as part of their benefit plan, Care onTarget Maximum Out-of-Pocket complements the wide array of health and wellness tools (in network) already available to all members. 2014 $6,350 $12,700 HSA Contribution Maximum Members can access online condition assessments, 2014 $3,300 $6,550 health tutorials and other health resources, by logging in to Care onTarget directly or via the link in the MyHealth Minimum Embedded Deductible tab on Blue Access for MemberssM. 2014 $2,500* $2,500 Care onTarget is a service mark of Health Care Service Corporation,a Mutual Legal Reserve Company. * Due to BCBSTX's system limitations, embedded deductible requires an individual to meet the minimum family deductible of Behavioral Health Program $2,500 for 2014. The IRS individual minimum is$1,250 for BCBSTX's Behavioral Health program helps members 2014. 2014 HSA Catch-up Contributions (age 55 and older): access benefits for behavioral health (i.e., mental health $1,000 and substance abuse) conditions as part of an overall Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 1 B. PRE-EXISTING CONDITION EXCLUSION RULES Pre-existing condition exclusion rules do not apply to group health plans with effective dates on or after January 1,2014. Most health plans impose pre-existing condition exclusions.This means that if you have a medical condition before coming to our plan you might have to wait a certain period of time before the plan will provide coverage for that condition.This exclusion applies only to conditions for which medical advice,diagnosis,care or treatment was recommended or received within the six-month period before your enrollment date.Generally,this six-month period ends the day before your coverage becomes effective.However,if you were in a waiting period for coverage, the six-month period ends on the day before the waiting period begins."Waiting period"generally refers to a delay between the first day of employment and the first day of coverage under the plan.The pre-existing condition exclusion does not apply to pregnancy or to an individual under the age of 19. This pre-existing condition exclusion may last up to 12 months(18 months if you are a late enrollee)from your first day of coverage,or,if you were in a waiting period,from the first day of your waiting period.However,you can reduce the length of this exclusion period by the number of days you had prior"creditable coverage."Most prior health coverage is creditable coverage and can be used to reduce the pre-existing condition exclusion if you have not experienced a break in coverage of at least 63 days.To reduce the 12-month(or 18-month)exclusion period by your creditable coverage,you should give us a copy of any certificates of creditable coverage you have.If you do not have a certificate,but you do have prior health coverage,you have a right to request one from your prior plan or issuers.We will help you obtain one from your prior plan or issuer,if necessary. There are also other ways that you can show you have creditable coverage.Please contact us if you need help demonstrating creditable coverage. For more information about the pre-existing condition exclusion and creditable coverage rules affecting your plan,call Customer Service at the phone number on the back of your Blue Cross and Blue Shield ID card. II. Additional Notices Other federal laws require we notify you of additional provisions of your plan. NOTICES OF RIGHT TO DESIGNATE A PRIMARY CARE PROVIDER(FOR NON-GRANDFATHERED HEALTH PLANS ONLY) For plans that require or allow for the designation of primary care providers by participants or beneficiaries: If the plan generally requires or allows the designation of a primary care provider,you have the right to designate any primary care provider who participates in our network and who is available to accept you or your family members.For information on how to select a primary care provider,and for a list of the participating primary care providers,call Customer Service at the phone number on the back of your Blue Cross and Blue Shield ID card. For plans that require or allow for the designation of a primary care provider for a child:For children, you may designate a pediatrician as the primary care provider. For plans that provide coverage for obstetric or gynecological care and require the designation by a participant or beneficiary of a primary care provider:You do not need prior authorization from the plan or from any other person(including a primary care provider)in order to obtain access to obstetrical or gynecological care from a health care professional in our network who specializes in obstetrics or gynecology.The health care professional,however,may be required to comply with certain procedures,including obtaining prior authorization for certain services,following a pre-approved treatment plan,or procedures for making referrals. For a list of participating health care professionals who specialize in pediatrics,obstetrics or gynecology, call Customer Service at the phone number on the back of your Blue Cross and Blue Shield ID card. 1 Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 53715.0913 © BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter Pharmacy Program* Changes Effective upon ($0 cost share). (Members can still obtain these Renewal vaccines at their doctor's office with coverage applied Changes to your group's prescription drug benefit plan under the medical benefit.) must be communicated to your BCBSTX representative by the 20th of the month, two months prior to the The select vaccines include: effective date. Pharmacy benefit changes received after • Influenza (flu) the 20th of the month will take effect on the first day of • Pneumococcal (pneumonia) the third month following. For example, changes • Zoster(shingles, minimum age of 50) submitted June 20 take effect Aug.1; changes submitted • Rabies June 25 take effect Sept. 1. • Hepatitis B • T-Dap (diphtheria, tetanus and pertussis) Self-administered Specialty Drugs (Effective Jan. 1, • Tetanus 2013; expanded July 1, 2013, and Jan. 1, 2014) To receive coverage for specialty medications that are Preferred Drug List and Quantity Vs.Time Limits self-administered, members are required to use their (QVT) prescription drug benefit and acquire the medication Based on the availability of new prescription medications through a contracted pharmacy provider and not through and routine review of changes in the pharmaceuticals a medical provider. These drugs can include oral, topical market, revisions are regularly made to the preferred and self-injectable products. drug list and QVT. Both preferred drug list and QVT limit To ensure that the correct benefit is applied, BCBSTX changes take place upon an effective date across the added a system edit on Jan. 1, 2013, that redirects board. claims for various self-administered specialty drugs *Prime Therapeutics LLC is a pharmacy benefit management submitted for processing under the medical benefit to the company. PrimeMail is a mail order pharmacy owned and operated by prescription drug benefit. Prime Therapeutics. Prime Therapeutics Specialty Pharmacy LLC is a wholly owned subsidiary of Prime Therapeutics. Blue Cross and Blue The edit was expanded on July 1, 2013 to include self- Shield of Texas(BCBSTX)contracts with Prime Therapeutics to provide pharmacy benefit management,prescription home delivery administered hemophilia (i.e., factor drugs), hepatitis C and specialty pharmacy services. In addition,contracting pharmacies and multiple sclerosis drugs. On Jan. 1, 2014, the edit are contracted through Prime Therapeutics.The relationship between was further expanded to include infertility, oral oncology BCBSTX and contracting pharmacies is that of independent and various other self-administered specialty contractors. BCBSTX,as well as several other independent Blue Cross and Blue Shield Plans,has an ownership interest in Prime medications. Therapeutics. Utilization Management(UM) New drug categories being added to the standard Legislative Updates program include: Please note that these summaries are for informational • Specialty Prior Authorization (PA) — Cushing's purposes only and are not intended to be legal, tax or Disease (Jan. 1, 2014), Familial compliance advice or relied upon as such. Information is Hypercholesterolemia (Jan. 1, 2014), Short subject to change as we receive new regulations and Bowel Syndrome (Jan. 1, 2014) and Urea Cycle guidance. We will communicate updates and Disorders (Jan. 1, 2014) changes as they become available-be sure to check: ASO groups will need to provide approval before the -The weekly News From the Blues employer newsletter new drug categories can be added to their benefits, even for new information if the group currently has the standard UM. -Fact sheets, FAQs, other resources and the monthly Legislative Highlights summary in Blue Access for Vaccine Program (Effective Jan. 1, 2014) Employers"'(see Legislative Updates tab) or consult Does not apply to HMO or grandfathered groups. with your account executive. Upon your group's renewal, you can elect to add coverage of select vaccinations to the prescription drug benefit. This change allows members to obtain these vaccines at participating Prime Therapeutics vaccine network pharmacies with a $0 copay and no deductible Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 2 0, VP BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter National Health Care Reform/Affordable Care Act General Highlights of New Regulations: Preventive (ACA) services are to be covered without any cost-sharing Action Required to Maintain Grandfathered Status when using a network provider. Cost-sharing can still be Self-funded employer groups intending for one or more required when using a provider that is not in the of their benefit plans to maintain grandfathered health BCBSTX provider network. plan status must complete and return the Grandfathered Health Plan Status Certification Form(s) enclosed with New requirements can be issued at any time. As new or their renewal. updated preventive care recommendations or guidelines are issued, employers and insurers have one year to Uniform Summary of Benefits Coverage (SBC) implement the new guidelines unless otherwise specified ACA requires all health insurers and group health plans by the government. to provide consumers with an SBC at the time of application, enrollment, and yearly upon re-enrollment Plans that cover preventive services in addition to those for plan or policy years beginning on or after Sept. 23, required may apply cost-sharing requirements for the 2012. The SBC makes it easier to understand health additional services. insurance coverage and compare insurance plans. The regulation references preventive care services with The law makes it the employer's responsibility to create an A or B rating as outlined by the United States and distribute the SBC for self-insured plans. The health Preventive Services Task Force (USPSTF). They are insurer has no legal obligation to do so. listed in this fact sheet. BCBSTX will create the SBC for self-insured groups that BCBSTX will use reasonable medical management request our services per the Benefit Program techniques to determine any coverage limitations on the Applications (BPA). The group administrator will validate service, including the frequency, method, treatment or and approve the information in the SBC. The AE will setting for the service, and the use of an out-of-network provide the completed SBC electronically to the group provider. administrator, who will distribute it to members per the BPA. If an ASO client requests that BCBSTX print and Contraception coverage requirement*: Depending on mail the SBC to subscribers, a fee will be assessed as your particular health plan, coverage without cost- noted on the BPA. sharing may expand to include the following contraceptive services when provided by a health care BCBSTX will provide translation services and provide provider in the BCBSTX network. the SBC in foreign languages in accordance with the • Prescription –One or more products within regulation. The employer must request the SBC in a the categories approved by the FDA for use foreign language. A fee will be assessed. BCBSTX does as a method of contraception not automatically provide SBCs in foreign languages. • Over-the-counter–Contraceptives available Preventive Care Services Covered Without Cost- approved by the FDA for women (foam, sharing —Without Copay, Coinsurance or sponge, female condoms)when prescribed Deductible by a physician The Affordable Care Act requires non-grandfathered The morning after pill health plans and policies to provide coverage for • Medical devices such as IUD, diaphragm, "preventive care services"without cost-sharing (such as cervical cap and contraceptive implants coinsurance, deductible or copayment), when the • Female sterilization, including tubal ligation member uses a network provider. Services may include screenings, immunizations and other types of care, as *Affordable Care Act regulations provide for an recommended by the federal government. exemption from the requirement to cover contraceptive services for certain group health plans established or BCBSTX is committed to implementing coverage maintained by organizations that qualify as religious changes to meet ACA requirements as well as the needs employers. Also, federal regulatory agencies have and expectations of our members. established an accommodation for religious affiliated eligible organizations, in which case separate payment may be available for certain contraceptive services. For Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 3 r vv BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter more information about the religious employer • Any dollar limits on EHBs that may be covered exemption or eligible organization accommodation, by standard (pre-packaged) plans (51+)will be please contact your account executive. removed or converted to visit or item limits. To identify EHBs, we will follow the EHB benchmark 2014 Approach: Essential Health Benefit plan in the state in which the coverage has been "Authorized" Definition to Address Dollar Limits and issued. Out-of-Pocket Maximum (OOPM) • Contact your BCBSTX account representative Large groups regardless of funding type and with additional questions about our standard grandfathered small group plans are not required by the approach to EHB and OOPM requirements. Affordable Care Act(ACA) to cover essential health benefits (EHBs) in 2014. However, for any EHBs 'The link provided for the state benchmark plans goes to the cros.clov covered beginning with the 2014 plan year, insurers and website.The benchmark plans published on this site may not include the most current or comprehensive details for each state. self-funded plan sponsors must use an "authorized" definition when designing their benefit plans to meet the Pre-existing Condition Exclusions Eliminated following ACA requirements for these plan types: Pre-existing condition exclusions on enrollees of any age No annual or lifetime dollar limits on any EHBs must be eliminated, regardless of the plan's • that happen to be covered; and grandfathered or non-grandfathered status. • Non-grandfathered plans must set limits on Waiting Periods member cost-sharing for any in-network EHBs Waiting periods for employees eligible for group (and out-of-network emergency services) they coverage cannot be longer than 90 calendar days, cover. The out-of-pocket maximum cannot regardless of the plan's grandfathered or non- exceed $6,350 for individual coverage and grandfathered status. The effective date of coverage $12,700 for family coverage in the 2014 plan cannot exceed 90 calendar days from the date of hire year. (unless an employee or dependent is late in electing Previously, insurers and self-funded plan sponsors could coverage). use a"good faith" definition to determine which benefits For employees who are already in a waiting period when are considered EHBs for the purpose of removing the provision goes into effect, the days served prior to lifetime and annual dollar limits on EHBs. the renewal date will count toward the 90-day waiting period. Starting with the 2014 plan year, insurers and self- funded plan sponsors must use an "authorized" definition Affordable Care Act Fees to determine which benefits are EHBs. This means using Beginning in 2014, ACA requires that covered entities a definition authorized by the Secretary of the U.S. Dept. providing health insurance ("health insurer") pay an of Health and Human Services (HHS). For now, HHS annual fee to the federal government. This is commonly has indicated that a state EHB benchmark plan, as referred to as the Annual Fee on Health Insurers or supplemented (if necessary) by HHS to include "Health Insurer Fee." The amount of this fee for a coverage of all 10 EHB categories, is considered an calendar year is determined by the federal government "authorized" definition. Future guidance is expected from and involves a formula based in part on a health the federal government on this topic. insurer's net premiums from the preceding calendar year. Our standard approach to an "authorized" definition for EHBs will be to follow the benchmark plan*for the state In addition, ACA provides for the establishment of in which the coverage has been issued. temporary transitional reinsurance program(s) that will run from 2014 through 2016 and will be funded by Important notes for large accounts: reinsurance contributions ("Reinsurance Fee") from • Only custom accounts (both self-insured and health insurance issuers and self-funded group health fully insured) can select which EHBs will be plans. Federal regulations establish a flat fee per covered for their 2014 plan year. member, per month fee for each year. • Custom accounts can request an alternative ACA fees do not appear on self-funded/ASO invoices. "authorized" definition through their BCBSTX Self-funded/ASO groups are not affected by the Health account representative. Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 4 © BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter Insurer Fee, but are responsible for reporting and the fees. For purposes of the proposed rule, a stop loss remitting the Reinsurance Fee. policy is an insurance policy in which: Patient-Centered Outcomes Research Institute 1 The insurer that issues the policy to a person (PCORI) Fee establishing or maintaining a self-insured health The Affordable Care Act(ACA) established the nonprofit plan becomes liable for all, or an agreed upon PCORI Fee for overseeing and conducting comparative portion of, losses that person incurs in covering clinical effectiveness research. Beginning in 2012 and the applicable lives in excess of a specified ending in 2019, the law requires sponsors of self-funded amount; and group health plans and insurers that offer health 2 The person establishing or maintaining the self- insurance coverage to pay an annual fee to help fund insured health plan retains its liability to, and its the research. contractual relationship with, the applicable lives covered. PCORI Funding: PCORI is funded by the Patient- Centered Outcomes Research Trust Fund. The Trust Affordable Care Act(ACA) Reinsurance Fees Fund is subsidized through a combination of federal ACA provides for the establishment of temporary appropriations, transfers from the Federal Hospital transitional reinsurance program(s) that will run from Insurance and Federal Supplementary Medical 2014 through 2016 and will be funded by reinsurance Insurance Trust Funds, and annual fees assessed on contributions ("Reinsurance Fee") from health health insurance policies and self-funded health plans. insurance issuers and self-funded group health plans. Federal regulations establish a flat per member, per PCORI Fee: month fee for each year. • For plan or policy years ending on or after Oct. 1, 2013, and before Oct. 1, 2014, the fee ACA also provides that self-funded plan sponsors are amount is $2 times the average number of responsible for the Reinsurance Fee. BCBSTX will not covered lives under the policy or plan. assist in the remittance of those fees to the federal • For policy or plan years beginning on or after government; however, upon request, we can make Oct. 1, 2014, the fee amount is subject to certain available to our self-funded/ASO customers, existing adjustments, including the percentage increases data and information that may be helpful in determining, in the projected per capita amount of the reporting on, and remitting their Reinsurance Fee National Health Expenditures. amounts. Health insurers and plan sponsors will annually file a Premium Tax Credit Eligibility federal excise tax return (Form 720), which reports The fact sheet details when someone might be eligible liability, and remit payment, by July 31. Generally, the for the federal premium tax credit on the Health return covers plan or policy years that end during the Insurance Marketplace (Please log in to the secure preceding calendar year. producer portal to see the fact sheet. Look on the Training and Administration page under Affordable Care In accordance with the PCORI final rule, BCBSTX does Act Education and Training). It also includes eligibility not assume any reporting or fee-related responsibility for scenarios for employees, spouses and dependents. If its self-funded business. Self-insured clients are you have additional questions, contact your account responsible for calculating the amount of the fee for a executive or call 888-775-6892. plan year(including the average number of lives covered under the plan for the plan year). We recommend groups Clinical Trials Coverage seek the advice and counsel of qualified tax and legal The Clinical Trials provision of ACA goes into effect for professionals. plan years beginning on or after Jan. 1, 2014 (applies only to non-grandfathered plans). It requires that if a PCORI Fee Application to Stop Loss Policies: "qualified individual" is in an "approved clinical trial," then Generally, an applicable self-insured health plan is the plan may not: subject to the fee; however a stop loss policy would not be subject to the fee. In the proposed rule, a stop • Deny the individual participation in the clinical loss policy is an exception to a specified health trial insurance policy and would; therefore, be exempt from Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 5 76, BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter • Deny the coverage of routine patient costs for any changes) or approval to the draft booklet from the items and services furnished in connection with broker/consultant and/or client after 60 days, BCBSTX the trial will assume that the content has been accepted. • Discriminate against the individual on the basis BCBSTX will then make the benefit booklet available to of the individual's participation in such trial the group and members electronically via Blue Access for Employers and Blue Access for Members. Important HIPAA and Other Federal Mandates Notices Blue InsightsM Reporting The federal Health Insurance Portability and The Blue Insight reporting package provides key Accountability Act of 1996 (HIPAA) requires financial and utilization data to help you make informed, employers to notify all eligible employees of two data-driven decisions for your company. Monthly reports important provisions in their health care plans: special include varied product information that allows you to enrollment provisions and pre-existing condition compare your data across time periods and against exclusion rules benchmarks. If you are not using the Blue Insight tool, contact your BCBSTX representative to request access. For your convenience, you may distribute BCBSTX's (Note: Benchmarks are not available for HMO accounts.) Important Notices— Initial Notice about Special Enrollment Rights and Pre-existing Condition Exclusion You can find the ASO/Non-HMO report at Rules in Your Group Health Plan to your employees. blueinsightreportingtx.com. New reports, which include all claim and membership data through the end of the Note: A notice must also be given to each new employee prior month, are available around the 15th of every prior to his or her enrollment in, or declination of, health month. Reports typically remain online for 12 months. coverage, and must be redistributed each year at open enrollment. Using Social Media to Connect with Members BCBSTX communicates with members using the media they prefer to facilitate two-way conversations. Our Facebook and Latino Facebook sites provide customer Administrative Updates service support and offer wellness tips. We actively monitor Twitter to resolve members' questions or claim Recommended Timeline for Submitting Renewal issues. When personal or confidential issues arise, we Paperwork conduct private discussions with the member. Our To meet expectations for timely processing of renewals You Tube channel features educational videos about our and issuing ID cards: products and services, and includes brief insurance tips • Accounts that use the Automated Eligibility about using our self-service tools. Process (AEP) and add sections, cancel sections or make significant plan changes Reaching Members via Blue Access MobilesM should return the signed renewal paperwork at BCBSTX offers mobile features for members on-the-go. least 60 days prior to the effective date. From a mobile phone Web browser, members can: • Accounts that use any other eligibility process should submit the signed renewal • Locate an in-network doctor, hospital or facility paperwork at least 45 days prior to the effective • Register for Blue Access for Members (BAM) date. • Log in to BAM to view coverage details, access ID card information, request a new ID card, Auto Publishing for Custom Certificate Booklets check claims status and payment history, To help manage risk for BCBSTX and our group clients, contact customer service using the Message and to provide appropriate benefit booklet Center and view health and wellness information documentation to support appeals processes and other • View BCBSTX contact information legal requirements, BCBSTX has implemented an Auto- ePublishing model for custom groups. From their BAM Settings/Preferences page, members can opt-in to receive a variety of secure and helpful BCBSTX sends a draft booklet for client review. notifications for claims status and wellness updates However, if BCBSTX does not receive a response (with through emails or text alerts. Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 6 r poo BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter Go to bcbstx.com/mobile for more information. To use mobile offerings, go to bcbstx.com from a mobile phone Wellness Web browser. To opt-in for text message offerings, members must be registered for BAM and validate their Well onTargetsM mobile phone number on their BAM Settings/ BCBSTX's innovative and affordable wellness solution Preferences page. offers an expanded array of highly personalized tools and resources to help increase employee participation A free, GPS-enabled Find Doctors Android and iPhone and enrich your company's wellness culture. Use Well Application (app) is available to download at the Android onTarget to help motivate and support all employees— Market or iPhone App Store (search for Find Doctors wherever they may find themselves along the lifelong Texas). Look for enhancements this summer. path to health and wellness. Blue Access for Members (BAM) Well onTarget is a registered mark of Health Care Service Corporation, Encourage your employees to register for this secure a Mutual Legal Reserve Company. website, where they can log in to: view their claims and EOBs, find doctors and hospitals, request replacement Employer Wellness Resources ID cards, check health care account balances, and Talk to your account executive about how you can use access tools to help lead a healthier lifestyle. Recently these resources to promote health and wellness to added features help members research options for care; employees. find and organize claims; search for forms and find additional help. ondemand Employer Wellness Portal Part of the Well onTarget program, the ondemand Improved Provider Finder Now Available for PPO portal gives employer's tools you need to promote Members wellness to your employees. This new online employer BCBSTX provides information and tools to help toolkit is dedicated to helping you drive energy, members make more informed health care decisions, enthusiasm and engagement with your employees. The including selecting a network physician and determining interactive portal allows you to review reports on treatment costs. The Provider Finder tool also helps employee participation, download employee members understand the value of their employer- communications, coordinate workplace challenges, sponsored health benefits. schedule workplace events and check the calendar for upcoming national wellness events. With an improved design and easier search function, Provider Finder is accessible through Blue Access for Other Employer Wellness Resources Members (BAM). When members access Provider • Quarterly Worksite Wellness Webinars: Our Finder via BAM, they can identify health care wellness consultants discuss how to implement professionals based on their location, gender, languages wellness programs and the potential impact on spoken, independent third-party quality designations, the workplace, offer ideas and member ratings and more. Members can also share recommendations, and share best practices. feedback about their doctor experiences, and benefit from others' experiences. • Online Resources: The employer toolkit at Be Smart. Be Well.Works® addresses health and For PPO members, this easy-to-use decision-support wellness issues. Topics feature issues with tool lets them shop more than 400 inpatient, outpatient, quantifiable effect on workplace safety, diagnostic and radiological procedures. PPO members performance, absenteeism and the bottom line. receive an estimate of the treatment cost* based on Blue Use the BlueResourceSM library of wellness Cross and Blue Shield national claim data. communications to create or supplement your company's employee wellness program. Look `Cost estimates are available to PPO members only. for them under"Employer Resources" in Blue Access for Employers, or use BlueResource Online. Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 7 v BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter Member Wellness Resources such as completing their Health Assessment or tracking These resources can help members make healthier their workouts online. choices and incorporate wellness into their daily lives. Convenient and Affordable Fitness Program Well onTarget BCBSTX's Fitness Program offers unlimited access to a Part of the Blue Care Connection family, Well onTarget nationwide network of more than 8,000 fitness centers provides your company with several flexible package for a low monthly rate. The program is available to options to fit your needs. These products can be made members and their covered dependents (age 18 and available to your employees regardless of their health older), with no long-term contract. The Life Points plan affiliation. Well onTarget offers several new program complements the Fitness Program by giving capabilities and features to serve your growing wellness members ongoing incentives for working out. Members needs: earn 2,500 Life Points for enrolling and up to 500 points • Integrated onmywayTM Health Assessment a week for tracking their visits. Anyone can nominate a • Life Points Reward Program fitness center for inclusion in the network by calling 888- • Interactive Well onTarget Member Wellness 762-BLUE (2583). Portal My Blue Community® • Targeted Wellness Content and Resources Available through Blue Access for Members (BAM), this • Self-directed Online Courses new health and wellness social network is a forum for • Certified Wellness Coaching—stress members to share stories, offer support and submit tips management, nutrition and physical activity on how to live healthier. The online community shares • Self-Service ondemand Employer Wellness information and views on more than 40 health and Portal wellness topics. Also, My Blue Community has health • Workplace Competitions and nutrition experts who answer questions and • Worksite Wellness Events such as health fairs, reputable bloggers who share their thoughts on running, biometric screenings, and health education parenting, food topics and more. Members may join in by classes and workshops creating an account via BAM. • Personalized Wellness Communication BIue365®Member Discount Program Wellness Portal Simply for being a member of BCBSTX, members are The new Well onTarget Member Wellness Portal able to receive exclusive health and wellness deals from national and local retailers to help keep them healthy. offers members an enhanced wellness experience They can save money on health care products and through an expanded array of highly personalized tools services that are not always covered by their benefit plan and resources. The interactive online tool links members —such as gym memberships, vision exams and to dedicated wellness health coaches, self-directed services, hearing aids and diet-related services. courses, wellness content, trackers and health Members can access the program and discounts resources. through BAM. Health Assessment Additional Online Wellness Resources The onmywayTM Health Assessment provides a better member experience, improved reporting and • At Be Smart. Be Well.® , members can access personalized questions. After completing the Health in-depth information on many wellness and Assessment, members receive a Personal Wellness prevention topics. The site features engaging Report, which shows how they are doing and offers video documentaries of real people, video areas of improvement. Members can also download a interviews with nationally recognized subject Provider Report to take to their doctor on the next visit. matter experts and extensive health and Reward Program wellness resources. Visitors can sign up to The new Life Points program allows real-time awarding receive complimentary health News Alerts and Spotlight, a bimonthly newsletter. Be Smart. Be of points, simplified point management, wider selection Well. also provides information on Facebook, of rewards and increased redemption options. Members Twitter, Pinterest and You Tube earn Life Points for participating in healthy activities, Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 8 vov BlueCross BlueShield of Texas Renewal Updates For renewals effective July 1, 2014, and thereafter • LifeTimes® Member Newsletter: When employees register for BAM, they receive our monthly health and wellness enewsletter, which also provides plan-and product-specific information. (Note: Some groups may have chosen to exclude their employees from receiving this newsletter.) • -mbers can use motivational cards and sc en save - om eCards for HealthsM; find w- ess tips on B : - 's website, Facebo• and Latino Facebook pages; a • -••- a variety of secure and helpful health and wellness messages via Blue Access Mobile. Blue Cross®, Blue Shields and the Cross and Shield Symbols are registered service marks of the Blue Cross and Blue Shield Association,an association of independent Blue Cross and Blue Shield Plans. 51478.0714_ASO Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association 9 EXHIBIT "A-2" PPO ASO Standard- Network Deductible l;hueCrosg RlueStitekl ,f of'limas w � BENEFIT HIGHLIGHTS Prepared BlueChoice Network for City of Port Arthur Effective 11 /01 /2013 This is a general summary of your benefits.Please refer to your benefit booklet for additional details and a description of the plan requirements and benefit design.This plan does not cover all health care expenses.Upon receipt of your benefit booklet,carefully review the plan's limitations and exclusions. Overall Payment Provisions In-Network Out-of-Network y Benefits Benefits Deductibles Per-admission Deductible None $200 Calendar Year Deductible $1,000 Individual/ $2,000 Individual/ Applies to all Eligible Expenses except Inpatient Hospital Expenses(unless $3,000 Family $6,000 Family otherwise indicated) Three-month Deductible carryover applies Yes Yes Deductible credit from prior carrier(Applied on initial group enrollment only) Yes Yes CoShare Stoploss Maximum Deductibles are not applied to the Coshare Stoploss Maximum. Copayment $3,500 Individual/ $4,500 Individual/ Amounts are applied but will continue to be required after the benefit $7,000 Family $9,000 Family percentages increase to 100%. Your benefit booklet will provide more details. Network Deductible&Coshare Out-of-Network Deductible&Coshare Stoploss will only apply toward Stoploss will also apply toward Network Deductible&Coshare Network Deductible&Coshare Stoploss Maximum Stoploss Maximum Credit for Coshare Stoploss Maximum from prior carrier(Applied on initial Yes Yes group enrollment only) Copayment Amounts Required Physician office visit/consultation: Primary Care Copayment Amount for office visit/consultation when $35 Primary Care Copayment services rendered by a Family Practitioner,OB/GYN,Pediatrician,Behavioral Health Practitioner,or Internist and Physician Assistant or Advanced Practice Nurse who works under the supervision of one of these listed physicians Specialty Care Copayment Amount for office visit/consultation when services $50 Specialty Care Copayment rendered by a Specialty Care Provider Refer to Medical/Surgical Expenses section for more information Urgent Care center visit $75 Copayment Amount Refer to Urgent Care Services section for more information Outpatient Hospital Emergency Room/Treatment Room visit $150 Copayment Amount $150 Copayment Amount Refer to Emergency Room/Treatment Room section for more information Maximum Lifetime Benefits Per Partici.ant Unlimited Inpatient Hospital Expenses Inpatient Hospital Expenses All services must be preauthorized All usual Hospital services and supplies,including semiprivate room,intensive 80%of Allowable Amount 60%of Allowable Amount after per- care,and coronary care units admission Deductible ....................... Penalty for failure to preauthorize services None $250 A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-PPO-ASO-Standard-with Network Deductible,Split Copay effective 11/1/2012 Page 1 of 5 PPO ASO Standard— Network Deductible ; muecross InueShiekt rzs:� `, l of Texas Medical/Surgical Expenses in-Network Out-of-Network Benefits Benefits Medical/Surgical Expenses Services performed during the office visit/consultation when rendered by 100%of Allowable Amount after$35 70%of Allowable Amount after a Primary Care Provider,including lab and x-ray(does not include Certain Primary Care Copayment** Calendar Year Deductible Diagnostic Procedures and surgical services) Services performed during the office visit/consultation when services 100%of Allowable Amount after$50 70%of Allowable Amount after rendered by a Specialty Care Provider,including lab&x-ray(does not Specialty Care Copayment Calendar Year Deductible include Certain Diagnostic Procedures and surgical services) Lab&x-ray in other outpatient facilities(excluding Certain Diagnostic 100%of Allowable Amount 70%of Allowable Amount after Procedures) - Calendar Year Deductible -Physician surgical services performed in any setting 80%of Allowable Amount after 60%of Allowable Amount after Calendar Year Deductible Calendar Year Deductible -Physician inpatient hospital visits 80%of Allowable Amount after 60%of Allowable Amount after Calendar Year Deductible Calendar Year Deductible -Certain Diagnostic Procedures;such as Bone Scan,Cardiac Stress Test, 80%of Allowable Amount after 60%of Allowable Amount after CT-Scan(with or without contrast),MRI,Myelogram,PET Scan. Calendar Year Deductible Calendar Year Deductible -Home Infusion Therapy(Services must be preauthorized) 80%of Allowable Amount after 60%of Allowable Amount after Calendar Year Deductible Calendar Year Deductible -All other outpatient services and supplies 80%of Allowable Amount after 60%of Allowable Amount after Calendar Year Deductible Calendar Year Deductible In Vitro Fertilization Services Not Covered Extended Care Expenses Extended Care Expenses All services must be preauthorized 100%of Allowable Amount 70%of Allowable Amount after Calendar Year Deductible Skilled Nursing Facility Limited to 25 day maximum each Calendar Year* Home Health Care Limited to 60 visit maximum each Calendar Year* Hos•ice Care Unlimited Special Provisions Expenses Serious Mental Illness Mental Health Care Treatment of Chemical Dependency Inpatient Services(All services must be preauthorized) -Hospital services(facility) 80%of Allowable Amount 60%of Allowable Amount after Per (Inpatient Chemical Dependency treatment must be provided in a Admission Deductible Chemical Dependency Treatment Center) -Physician services 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Outpatient Services(Certain services must be preauthorized;refer to benefit booklet for more details) 100%of Allowable Amount after$35 70%of Allowable Amount after -Services performed during office visit/consultation when rendered by Primary Care Copayment Amount Calendar Year Deductible a Primary Care Provider(does not include psychological testing) -All outpatient services and psychological testing 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible *Benefits used In-Network and Out-of-Network will apply toward satisfying any Annual Maximum benefits indicated **Primary Care/Specialty Care copayments are defined in the Overall Payment Provisions section in this document. A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-PPO-ASO-Standard-with Network Deductible,Split Copay effective 11/1/2012 Page 2 of 5 PPO ASO Standard- Network Deductible __ BlueCross 1ftueShiekd �1j.. Ti of Texas Special Provisions Expenses, cont !n-Network Out-of-network Benefits Benefits Emergency Room/Treatment Room Accidental Injury&Emergency Care -Facility charges 80%of Allowable Amount after$150 Copayment Amount (Copayment Amount waived if admitted,Inpatient Hospital Expenses will apply) -Physician charges 80%of Allowable Amount after Calendar Year Deductible Non-Emergency Care -Facility charges 80%of Allowable Amount after$150 60%of Allowable Amount after$150 Copayment Amount(Copayment Copayment Amount&Calendar Year Amount waived if admitted, Inpatient Deductible (Copayment Amount Hospital Expenses will apply) waived if admitted,Inpatient Hospital Expenses will apply) -Physician charges 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Urgent Care Services Urgent Care center visit,including lab&x-ray services(does not include 100%of Allowable Amount after$75 70%of Allowable Amount after Certain Diagnostic Procedures and surgical services) Copayment Amount Calendar Year Deductible Certain Diagnostic Procedures;such as Bone Scan,Cardiac Stress Test, CT-Scan(with or without contrast), MRI,Myelogram,PET Scan,surgical 80%of Allowable Amount after Calendar 60%of Allowable Amount after procedures and all other services and supplies. Year Deductible Calendar Year Deductible Ground and Air Ambulance Services 80%of Allowable Amount after Calendar Year Deductible Preventive Care Routine annual physical examinations,well-baby care exams, 100%of Allowable Amount 70%of Allowable Amount after immunizations 6 years of age&over,and any other preventive health Calendar Year Deductible services as determined by USPSTF Immunizations for Dependent children through the date of the child's 6th 100%of Allowable Amount 100%of Allowable Amount birthday Speech and Hearing Services Services to restore loss of or correct an impaired speech or hearing function Covered same as any other sickness Covered same as any other sickness Hearing Aid Maximum Hearing aids are subject to a$1,000 maximum amount each 36-month period* Benefits used In-Network and Out-of-Network will apply toward satisfying any Annual Maximum benefits indicated Physical Medicine Services Chiropractic Care-Office Services 80%of Allowable Amount after 60%of Allowable Amount after Calendar Year Deductible Calendar Year Deductible Calendar Year Maximum Limited to 35 visits each Calendar Year* All other Physical Medicine Services rendered by any other eligible Provider will be allowed on the same basis as any other sickness. *Benefits used In-Network and Out-of-Network will apply toward satisfying any Annual Maximum benefits indicated A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-PPO-A SO-Standard-with Network Deductible,Split Copay effective 11/1/2012 Page 3 of 5 PPO ASO Standard- Network Deductible � Bnuecross I LueShielld cM. ', 3 ofTexas Pharmacy Benefits Participating Pharmacy* Non-Participating Pharmacy (member files claim) Drug List** Preferred Drug List 1 Vaccinations obtained through Pharmacies**** Yes - Flu vaccinations covered as follows: Select pharmacies participating in Flu 80%of Allowable Amount minus Network—100% Copayment Amount All other in-network pharmacies— appropriate tier copay applies Retail Pharmacy (Copayment amounts are based on a 30-day supply. With appropriate prescription order,up to a 90-day supply is available. Copayment amounts will not apply to Coshare Stoploss Maximum.) Generic Drug $15 Copayment Amount 80%of Allowable Amount minus Copayment Amount Preferred Brand Name Drug $35 Copayment Amount 80%of Allowable Amount minus Copayment Amount Non-Preferred Brand Name $60 Copayment Amount 80%of Allowable Amount minus Copayment Amount Specialty Drugst Available at any pharmacy at applicable generic/brand name and participating/non- participating pharmacy benefit level. Mail Order Program Yes (Copayment amounts are based on a 30-day supply. With appropriate prescription order,up to a 90-day supply is available. Copayment amounts will not apply to Coshare Stoploss Maximum.) Generic Drug $15 Copayment Amount Preferred Brand Name Drug $35 Copayment Amount Non-Preferred Brand Name Drug $60 Copayment Amount Generic Incentive-Members who purchase Preferred/Non-Preferred Brand Name Drugs when a Generic equivalent exists will be required to pay the difference between the cost of the Generic and Preferred/Non-Preferred Brand Name Drug,plus the Preferred Brand Name Copayment Amount. All medications with over-the-counter(OTC)equivalents are excluded from coverage except for Omeprazole 20 mg. *To locate a participating pharmacy in your area go to myprime.com or contact customer service at the phone number on the back of your identification card. **The preferred drug list is available at: bcbstx.com/member/rx_drugs.html ****Select pharmacies participating in the Flu Network are contracted to provide vaccination services. Flu vaccinations at all other in-network and out-of- network pharmacies are payable at the non-participating Flu Network pharmacy benefit level. Each pharmacy may have age,scheduling,or other requirements that will apply. You are encouraged to contact the store in advance. Childhood immunizations subject to state regulations are not available under this pharmacy benefit. Refer to your BCBSTX medical coverage for benefits available for childhood immunizations. tFor more information on the specialty drug program,call Prime Specialty Pharmacy at(877)627-6337. Diabetes Supplies are available under the Prescription Drug benefits of your plan. Diabetic Supplies include insulin and insulin analog preparations,insulin syringes necessary for self-administration,prescriptive and non-prescriptive oral agents,all required test strips and tablets which test for glucose,ketones,and protein,lancets and lancet devices,biohazard disposable containers,glucagon emergency kits,and other injection aids.All provisions of this portion of the plan will apply including Copayment Amounts and any pricing differences that may apply to the items dispensed. A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-PPO-ASO-Standard-with Network Deductible,Split Copay effective 11/1/2012 Page 4 of 5 PPO ASO Standard- Network Deductible .r-. l� lilt ef:rt> IitueShielct 1 of texas NON Standard Covered Benefits • Radial Keratotomy covered • Lasik surgery covered • Effective 7/1/04-Medicare Assumption/Estimation • Effective 11-1-08 -Services, supplies and prescription drugs for the reduction of morbid obesity, including surgical procedures,when medically necessary,covered same as any other illness(note:prescription drugs for morbid obesity are not subject to medical necessity) • Effective 11-1-11 -Age limit increased to age 26 for the following benefit: Reconstructive surgery performed on a covered dependent child under the age of 26 due to craniofacial abnormalities to improve the function of,or attempt to create a normal appearance of an abnormal structure caused by congenital defects, developmental deformities,trauma,tumors, infections or disease. EMPLOYEE INFORMATION This is a general Summary of your benefit design. Please refer to your benefit booklet for other details and for limitations and exclusions. The following benefits apply to dependent coverage: • Dependent children are covered to age 26. • Automatic coverage for newborns for the first 31 days following birth. Infants not enrolled for coverage within the first 31 days after birth will not be eligible for coverage until the following open enrollment period or special enrollment event. Payments: Network providers agree to accept amounts negotiated with BCBSTX and are paid according to this BCBSTX-determined Allowable Amount. Covered individuals are responsible for any required Deductibles,Coinsurance Amounts,and Copayrrtents. Plan benefits paid to Out-of-Network providers are also based on the BCBSTX-determined Allowable Amount. Covered individuals will be responsible for charges in excess of the Allowable Amount in addition to any applicable Deductibles, Coinsurance Amounts,and Copayments. For cost savings information,refer to the section on ParPlan Providers and the definition of Allowable Amount in the benefit booklet. Preexisting conditions Provision:Benefits for Eligible Expenses incurred for treatment of a Preexisting Condition will not be available during the twelve-month period following the individual's initial Effective Date,or if a Waiting Period applies,the first day of the Waiting Period. In accordance with state and federal law,certain conditions will not be considered Preexisting Conditions and the Preexisting Condition exclusion will not apply to certain individuals. Details are provided in the benefit booklet. Replacement of Medical Coverage: In compliance with the Health Insurance Portability and Accountability Act of 1996(HIPAA), the following provisions apply to each eligible participant who has health coverage under the employer's plan immediately prior to the effective date of the health contract between the employer and BCBSTX(the contract date): • Benefits for eligible expenses incurred for any service or supplies prior to the contract date,are not covered under the contract. • Eligible expenses for services or supplies incurred on or after the effective date will be considered for benefits subject to all applicable contract provisions. Members residing in other states may use that state's network through the BlueCard program.To locate a participating provider in your state,please contact 1-800-810-BLUE or visit our web site at bcbstx.com to use our Provider Finder®tool. This benefit plan design includes provisions mandated by the Affordable Care Act of 2010,and is subject to change upon direction by federal and state agencies. Group Executive Name and Title Signature Date (Please type or print) Agent of Record Name Signature Date (Please print or type) BCBSTX Representative Name Signature Date (Please print or type) A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-PPO-ASO-Standard-with Network Deductible,Split Copay effective 11/1/2012 Page 5 of 5 BlueEdge ASO HSA - Embedded Deductible - r- uihueCrom Illuesbield Integrated Rx 7§1 17 of Texas BENEFIT HIGHLIGHTS Prepared g/ueChoice Network for City of Port Arthur Effective 11 /01 /2013 This is a general summary of your benefits.Please refer to your benefit booklet for additional details and a description of the plan requirements and benefit design.This plan does not cover all health care expenses.Upon receipt of your benefit booklet,carefully review the plan's limitations and exclusions. Overall Payment Provisions In-Network Out-of-Network Benefits Benefits Calendar Year Embedded Deductible Applies to all Eligible Expenses(unless otherwise indicated) $2,500 Individual/ $5,000 Individual/ Applies to Out-of-Pocket Maximum $5,000 Family $10,000 Family Family coverage:When one family member meets the individual Deductible,benefits become available under the plan for that individual. NOTE:The individual Deductible amount must be equal to or greater than the minimum family Deductible amount. This qualification is established by the U. S. Treasury for a plan to be considered a qualified HSA plan. Deductible credit from prior carrier(Applied on initial group enrollment Yes Yes only) Out-of-Pocket Maximum Out-of-Pocket Maximum includes Deductible. $5,000 Individual/ $10,000 Individual/ $10,000 Family $20,000 Family Network Deductible&Out-of-Pocket will Out-of-Network Deductible&Out-of- only apply toward Network Out-of- Pocket will also apply toward Pocket Maximum Network Out-of-Pocket Maximum Credit for Out-of-Pocket Maximum from prior carrier(applied on initial Yes Yes group enrollment only) Maximum Lifetime Benefits Per Participant I Unlimited 11i1•f il[aila<;[• •1iY111•Z- Inpatient Hospital Expenses All services must be preauthorized Inpatient Hospital Expenses 80%of Allowable Amount after Calendar 60%of Allowable Amount after Each admission must be preauthorized Year Deductible Calendar Year Deductible All usual Hospital services and supplies,including semiprivate room, intensive care,and coronary care units. Penalt for failure to'reauthorize services None $250 Medical/Surgical Expenses Medical/Surgical Expenses -Services performed during the Physician's office visit/consultation, 80%of Allowable Amount after Calendar 60%of Allowable Amount after including lab& x-ray Year Deductible Calendar Year Deductible -Lab&x-ray in other outpatient facilities 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible -Physician surgical services performed in any setting 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible -Physician inpatient hospital visits 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible -Certain Diagnostic Procedures;such as Bone Scan,Cardiac Stress 80%of Allowable Amount after Calendar 60%of Allowable Amount after Test,CT Scan(with or without contrast),MRI,Myelogram,PET Scan. Year Deductible Calendar Year Deductible -Home Infusion Therapy(Services must be preauthorized) 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible -All other outpatient services and supplies 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible In Vitro Fertilization Services Not Covered A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-BlueEdge ASO-HSA-Embedded Deductible-Integrated Rx effective 11/1/2012 (rev 02/01/13) Page 1 of 5 BlueEdge ASO HSA - Embedded Deductible - -_ t;iuecross IlineS..I ieId Integrated Rx r-1 , , of Texas Extended Care Expenses In-Network Out-of-Network Benefits Benefits Extended Care Expenses(must be preauthorized) 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Skilled Nursing Facility Limited to 25 day maximum each Calendar Year* Home Health Care Limited to 60 visit maximum each Calendar Year* Hospice Care Unlimited Special Provisions Expenses Serious Mental Illness Mental Health Care Treatment of Chemical Dependency Inpatient Services(All services must be preauthorized) -Hospital services(facility) 80%of Allowable Amount after Calendar 60%of Allowable Amount after (Inpatient Chemical Dependency treatment must be provided in a Year Deductible Calendar Year Deductible Chemical Dependency Treatment Center) -Physician services 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Outpatient Services(Certain services must be preauthorized;refer to benefit booklet for more details) 80%of Allowable Amount after Calendar 60%of Allowable Amount after -Services performed during Physician office visit/consultation Year Deductible Calendar Year Deductible (does not include psychological testing) -All outpatient services and psychological testing 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Emergency Room/Emergency Treatment Room Accidental Injury&Emergency Care -Facility charges 80%of Allowable Amount after Calendar Year Deductible -Physician charges 80%of Allowable Amount after Calendar Year Deductible Non-Emergency Care -Facility charges 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible -Physician charges 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Urgent Care Services Urgent Care center visit,including lab&x-ray services 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Certain Diagnostic Procedures;such as Bone Scan,Cardiac Stress Test, CT Scan(with or without contrast),MRI,Myelogram,PET Scan,surgical 80%of Allowable Amount after Calendar 60%of Allowable Amount after procedures and all other services and supplies. Year Deductible Calendar Year Deductible Ground and Air Ambulance Services 80%of Allowable Amount after Calendar Year Deductible Preventive Care Routine annual physical examinations,well-baby care exams, 100%of Allowable Amount 60%of Allowable Amount immunizations 6 years of age&over,and any other preventive health services as determined by USPSTF Immunizations for Dependent children through the date of the child's 6th 100%of Allowable Amount 100%of Allowable Amount birthday *Benefits used In-Network and Out-of-Network will apply toward satisfying any Annual Maximum benefits indicated. A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-BlueEdge ASO-HSA-Embedded Deductible-Integrated Rx effective 11/1/2012 (rev 02/01/13) Page 2 of 5 BlueEdge ASO HSA - Embedded Deductible - titueCross RtueShieid Integrated Rx , of 17exas / F Special Provisions Expenses, coot. in-Network Out-of-Network Benefits Benefits Speech and Hearing Services Services to restore loss of or correct an impaired speech or hearing Covered same as any other sickness Covered same as any other sickness function Hearing Aids 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Hearing Aid Maximum Hearing aids are subject to a$1,000 maximum amount each 36-month period* Physical Medicine Services Chiropractic Care-Office Services 80%of Allowable Amount after Calendar 60%of Allowable Amount after Year Deductible Calendar Year Deductible Calendar Year Maximum Limited to 35 visit maximum each Calendar Year* All other Physical Medicine Services rendered by any other Provider will be allowed on the same basis as any other sickness. *Benefits used In-Network and Out-of-Network will apply toward satisfying any Annual Maximum benefits indicated. Pharmacy Benefits Participating Non-Participating Pharmacy* Pharmacy (member files claim) Drug List** Preferred Drug List 1 Vaccinations obtained through Pharmacies*** Yes - If yes,flu vaccinations covered as follows: Select pharmacies participating in Flu Network -100% All other pharmacies-apply appropriate tier copay Retail Pharmacy (Benefit payments are based on a 30-day supply. With appropriate $50 Copayment Amount after the Calendar Year Deductible**** prescription order,up to a 90-day supply is available.) Mail Order Program (Benefit payments are based on a 30-day supply. With appropriate $50 Copayment Amount after the Calendar Year Deductible**** prescription order,up to a 90-day supply is available.) No Penalty-Member pays no more than the applicable Generic,Preferred Drug, or Non-Preferred Drug Copayment. Product selection is permitted,even when generic equivalents are available. *To locate a participating pharmacy in your area go to myprime.com or contact customer service at the phone number on the back of your identification card. **The preferred drug list is available at: bcbstx.com/member/rx_drugs.html ***Select pharmacies participating in the Flu Network are contracted to provide vaccination services. Flu vaccinations at all other in-network and out-of-network pharmacies are payable at the applicable tier copay. Each pharmacy may have age,scheduling,or other requirements that will apply. You are encouraged to contact the store in advance. Childhood immunizations subject to state regulations are not available under this pharmacy benefit. Refer to your BCBSTX medical coverage for benefits available for childhood immunizations. Diabetes Supplies are available under the Prescription Drug benefits of your plan.Diabetic Supplies include insulin and insulin analog preparations,insulin syringes necessary for self-administration,prescriptive and non-prescriptive oral agents,all required test strips and tablets which test for glucose,ketones,and protein,lancets and lancet devices,biohazard disposable containers,glucagon emergency kits,and other injection aids.All provisions of this portion of the plan will apply including Copayment Amounts and any pricing differences that may apply to the items dispensed. All medications with over-the-counter(OTC)equivalents are excluded from coverage except for Omeprazole 20 mg. A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-BlueEdge ASO-HSA-Embedded Deductible-Integrated Rx effective 11/1/2012 (rev 02/01/13) Page 3 of 5 BlueEdge ASO HSA - Embedded Deductible - tBlueCross BlueShletd Integrated Rx Quo of Tex Non-Standard Covered Benefits Effective 11-1-2011: • Radial Keratotomy covered • Lasik surgery covered • Medicare Assumption/Estimation • Services, supplies and prescription drugs for the reduction of morbid obesity,including surgical procedures,when medically necessary, covered same as any other illness(note:prescription drugs for morbid obesity are not subject to medical necessity) • Age limit increased to age 26 for the following benefit: Reconstructive surgery performed on a covered dependent child under the age of 26 due to craniofacial abnormalities to improve the function of,or attempt to create a normal appearance of an abnormal structure caused by congenital defects, developmental deformities,trauma,tumors,infections or disease. EMPLOYEE INFORMATION • The following applies to dependent coverage: - Dependent children covered for maternity benefits. - Dependent children are covered to age 26. Disabled dependent children can be covered beyond age 26. - Automatic coverage for newborns for the first 31 days following birth. Infants not enrolled for coverage within the first 31 days after birth will not be eligible for coverage until the following open enrollment period or special enrollment event. • Payments: Network providers agree to accept amounts negotiated with BCBSTX and are paid according to this BCBSTX-determined Allowable Amount. Covered individuals are responsible for any required Deductibles,Coinsurance Amounts,and Copayments. Plan benefits paid to Out-of-Network providers are also based on the BCBSTX-determined Allowable Amount. Covered individuals will be responsible for charges in excess of the Allowable Amount in addition to any applicable Deductibles,Coinsurance Amounts,and Copayments. For cost savings information,refer to the section on ParPlan Providers and the definition of Allowable Amount in the benefit booklet. • Preexisting conditions Provision:Benefits for Eligible Expenses incurred for treatment of a Preexisting Condition will not be available during the twelve- month period following the individual's initial Effective Date,or if a Waiting Period applies,the first day of the Waiting Period. In accordance with state and federal law,certain conditions will not be considered Preexisting Conditions and the Preexisting Condition exclusion will not apply to certain individuals. Details are provided in the benefit booklet. • Replacement of Medical Coverage: In compliance with the Health Insurance Portability and Accountability Act of 1996(HIPAA)and Texas State law,the following provisions apply to each eligible Participant who has health coverage under the employer's plan immediately prior to the effective date of the health contract between the employer and BCBSTX(the Contract Date): - Benefits for eligible expenses incurred for any service or supplies prior to the contract date,are not covered under the contract. - Eligible Expenses for services or supplies incurred on or after the effective date will be considered for benefits subject to all applicable contract provisions. • Deductible:The benefits of the Plan will be available after satisfaction of the applicable Deductible. The Deductible may be increased in the future in direct proportion to the increase as determined from the cost-of-living adjustments based on the Consumer Price Index(CPI-U). The Deductibles are explained as follows: 1. The Individual Deductible amount as shown on this Benefits Highlights under°Calendar Year Deductible,"will apply to all combined Inpatient Hospital Expenses,Medical-Surgical Expenses,Extended Care Expenses,and Special Provisions Expenses you incur during a Calendar Year and must be satisfied by each Participant under your coverage each Calendar Year before any benefits are available under the Plan. This Deductible,unless otherwise indicated,will be applied to all Eligible Expenses before benefits are available under the Plan. 2. The family Deductible amount as shown on this Benefits Highlight under"Calendar Year Deductible,"will apply to all combined Inpatient Hospital Expenses,Medical-Surgical Expenses,Extended Care Expenses,and Special Provisions Expenses each Participant incurs during each Calendar Year and must be satisfied by each Participant under your coverage each Calendar Year before any benefits are available under the Plan. If you have several covered Dependents,all charges used to apply toward a"per individual"Deductible amount will be applied toward the"per family"Deductible amount. When the family Deductible is reached,no further individual Deductibles will have to be satisfied for the remainder of that Calendar Year. No Participant will contribute more than the individual Deductible amount to the'per family"Deductible amount. • Out-of-Pocket Maximum:Most of your Eligible Expense payment obligations are applied to the Out-of-Pocket Maximum. The Out-of-Pocket Maximum may be increased in the future in direct proportion to the increase as determined from the cost-of-living adjustments based on the Consumer Price Index(CPI-U). 1. The Out-of-Pocket Maximum will not include: - Services,supplies,or charges limited or excluded by the Plan; - Expenses not covered because of a benefit maximum has been reached; - Any Eligible Expense paid by the Primary Plan when BCBSTX is the Secondary Plan for purposes of coordination of benefits; - Penalties for failing to obtain preauthorization; 2. When the Out-of-Pocket Maximum for the In-Network or Out-of-Network Benefits level for a Participant in a Calendar Year equals the°per individual""Out- of-Pocket Maximum"shown on this Benefits Highlights for that level,the benefit percentage automatically increases to 100%for purposes of determining the benefits available for additional Eligible Expenses incurred by that Participant during the remainder of that Calendar Year for that level. 3. When the"Out-of-Pocket Maximum" amount for the In-Network or Out-of-Network Benefits level for all Participants under your coverage in a Calendar Year equals the "per family" "Out-of-Pocket Maximum" amount shown on this Benefits Highlights for that level, the benefit percentage automatically A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-BlueEdge ASO-HSA-Embedded Deductible-Integrated Rx effective 11/1/2012 (rev 02/01/13) Page 4 of 5 BlueEdge ASO HSA - Embedded Deductible - r-- BlueCrossilueSbielci Integrated Rx rc. of Thxas increases to 100% for purposes of determining the benefits available for additional Eligible Expenses incurred by all family Participants during the remainder of that Calendar Year for that level. No Participant will be required to contribute more than the individual Out-of-Pocket Maximum to the family Out-of-Pocket Maximum. • Members residing in states other than Texas may use that stat's network through the BlueCard Program.To locate a participating provider in your state,please contact 1-800-810-BLUE or visit our website at bcbstx.com to use our Provider Finder®tool. This benefit plan design includes provisions mandated by the Affordable Care Act of 2010,and is subject to change upon direction by federal and state agencies. • Please be reminded that Health Savings Accounts(HSA's)have tax and legal ramifications. Blue Cross and Blue Shield of Texas does not provide legal or tax advice,and nothing herein should be construed as legal or tax advice. These materials,and any tax-related statements in them,are not intended or written to be used,and cannot be used or relied on,for the purpose of avoiding tax penalties. Tax-related statements,if any,may have been written in connection with the promotion or marketing of the transaction(s)or matter(s)addressed by these materials. You should seek advice based on your particular circumstances from an independent tax advisor regarding the tax consequences of specific health insurance plans or products. Group Executive Name and Title Signature Date (Please type or print) Agent of Record Name Signature Date (Please print or type) BCBSTX Representative Name Signature Date (Please print or type) A Division of Health Care Service Corporation,a Mutual Legal Reserve Company,an Independent Licensee of the Blue Cross and Blue Shield Association NGF 151+business-BlueEdge ASO-HSA-Embedded Deductible-Integrated Rx effective 11/1/2012 (rev 02/01/13) Page 5 of 5 r. r. to La .t— c) a i = N s.° 9 MC T X m L tt o M (... 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O 'O u) 2 • N 7,..7i V O N O E L C a) O N > Q N v L O v T - - — . 6 0. ; . c E Q N V N y y r. c N C y ° O, m m O c E d N a Y V y 'U c v a m . c m x Q ° 0 a' 2Lcuc d O w ..... 70 to a. .. 4.1 ' I n.° fL fL O O IL m y.O City Of Port Arthur November 1,2014 - October 31,2015 Network Discount Guarantee Medical Claims Only Claims Paid 11/01/14 Through 10/31/15 Guaranteed Discount Percentage 60.0% Actual Discounts Admin Fee Penalty 58.00% or Higher 0.0% 57.20% to 57.99% 5.0% 56.40% to 57.19% 10.0% 55.60% to 56.39% 15.0% 54.80% to 55.59% 20.0% 54.79% or Lower 25.0% 1.The formula for the Overall Network Discount Percentage calculation is as follows: (Eligible/Covered Claims less Allowed Claims equals the Provider Savings.The Provider Savings divided by the Eligible/Covered Claims equals the Overall Network Discount%). 2.Both In-Network and Out-of-Network claims are included in the Overall Network Discount Percentage calculation. 3.Network Discount Guarantee applies only to eligible employees and retirees who enroll in the proposed BCBS benefit plans. 4.BCBS will exclude all claims in excess of$100,000,claims the Employer authorizes to be paid on an exception basis,Medicare claims,claims with COB,Prescription Drug claims,Specialty Rx,claims not covered/processed by BCBS,and claims for non-contracted providers paid at the in-network level of benefits. 5.BCBS reserves the right to re-evaluate and re-establish the Guaranteed Discount Percentage if participation changes by+/-10.0%,and/or the distribution of enrolled employees between geographic areas,the single/family mix,or age/gender composition of the group changes significantly. 6.BCBS reserves the right to void this Network Discount Guarantee if there are less than 635 employees enrolled in the plan. 7.BCBS reserves the right to re-evaluate and re-establish the Guaranteed Discount Percentage if Medicare changes its payment systems during the term of this Network Discount Guarantee. 8.BCBS reserves the right to re-evaluate and re-establish the Guaranteed Discount Percentage if there is a change in the benefit plan design. 9.BCBS reserves the right to re-evaluate and re-establish the Guaranteed Discount Percentage if a narrow or high performance network is elected. 10.Discount Guarantee is based on In-Network Utilization of 95.0%. If In-Network Utilization is not met,Discount Guarantee does not apply. 11.Administrative Fee at Risk will be finalized upon sale of the Network Discount Guarantee. 12.Administrative Fee at Risk is the Medical Administration fee only. It does not include any additional elected services such as Fiduciary,BCC,etc. 13.Any penalty paid will be dollar for dollar up to the maximum amount at risk for each tier. 14.Guaranteed Discount Percentage will be reviewed and negotiated annually at the time of renewal. 'Amount at Risk is based on current enrollment of 706 HCSC Primary employees.Actual amount at risk is subject to change based on final enrollment of employees who select BCBS coverage. A Division of Health Care Service Corporation,a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association City Of Port Arthur November 1,2014 - October 31,2015 In Network Utilization Guarantee Medical Claims Only Claims Paid 11/01/14 Through 10/31/15 Guaranteed In Network Utilization 97.0% Actual In Network Utilization Admin Fee Penalty 95.00% or Higher 0.0% 94.10% to 94.99% 5.0% 93.20% to 94.09% 10.0% 92.30% to 93.19% 15.0% 91.40% to 92.29% 20.0% 91.39% or Lower 25.0% 1.The formula for the Overall In Network Utilization Percentage calculation is as follows: (The In Network Paid Claims divided by the Total Paid Claims equals the Overall In Network Utilization%). 2.In Network Utilization Guarantee applies only to eligible employees and retirees who enroll in the proposed BOBS benefit plans. 3.BOBS will exclude all claims in excess of$100,000,claims the Employer authorizes to be paid on an exception basis,Medicare claims, claims with COB,Prescription Drug claims,Specialty Rx,claims not covered/processed by BCBS,and claims for non-contracted providers paid at the in-network level of benefits. 4.BOBS reserves the right to re-evaluate and re-establish the Guaranteed In Network Utilization Percentage if participation changes by +/-10.0%,and/or the distribution of enrolled employees between geographic areas,the single/family mix,or age/gender composition of the group changes significantly. 5.BOBS reserves the right to void this In Network Utilization Guarantee if there are less than 635 employees enrolled in the plan. 6.BOBS reserves the right to re-evaluate and re-establish the Guaranteed In Network Utilization Percentage if Medicare changes its payment systems during the term of this In Network Utilization Guarantee. 7.BOBS reserves the right to re-evaluate and re-establish the Guaranteed In Network Utilization Percentage if there is a change in the benefit plan design. 8.BOBS reserves the right to re-evaluate and re-establish the Guaranteed In Network Utilization Percentage if a narrow or high performance network is elected. 9.Administrative Fee at Risk will be finalized upon sale of the In Network Utilization Guarantee. 10.Administrative Fee at Risk is the Medical Administration fee only.It does not include any additional elected services such as Fiduciary, BCC,etc. 11.Any penalty paid will be dollar for dollar up to the maximum amount at risk for each tier. 12.In Network Utilization Percentage will be reviewed and negotiated annually at the time of renewal. Amount at Risk is based on current enrollment of 706 HCSC Primary employees.Actual amount at risk is subject to change based on final enrollment of employees who select BCBS coverage. A Division of Health Care Service Corporation,a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association • Blue Cross and Blue Shield of Texas Dental Summary of Benefits Prepared for CITY OF PORT ARTHUR—Group#31118 Effective 11/1/2013 TYPE OF SERVICE BENEFIT GENERAL PROVISIONS FOR PREVENTIVE,BASIC AND MAJOR CARE BENEFITS Calendar Year Deductible(4th quarter carryover applies) $50 Individual/$150 Family Deductible Credit from Prior Carrier N/A Calendar Year Maximum per Participant $1,000 PREVENTIVE CARE BENEFITS(deductible waived) 100% • Oral Examinations,X-Rays,Cleanings BASIC CARE BENEFITS 80% • Fillings, Extractions,Endodontics,Oral Surgery,Root Canal Therapy MAJOR CARE BENEFITS 50% • Prosthetics(dentures,bridgework),Crowns,Inlays and Onlays ORTHODONTIC BENEFITS(no deductible) No • Orthodontic Diagnostic Procedures and Treatment Available Only to Participants Under 19 Years of Age N/A Lifetime Maximum per Participant N/A TEMPOROMANDIBULAR JOINT(TMJ)BENEFITS(no deductible) No Lifetime Maximum per Participant N/A • This is a general Summary of your benefit design. Please refer to your benefit booklet for other details and for limitations and exclusions. • The following eligibility provisions apply: Dependent children are covered until age 26. Disabled dependent children can be covered beyond age 26. Retirees are not eligible for coverage. Employees may enroll dependent children up to age 5 on the first of the month following application with no late enrollment penalty. • A pre-existing condition exclusion will apply to expenses involving the replacement of teeth that were missing prior to the effective date of the dental contract. This exclusion will not apply to: Any participant who becomes effective on the dental contract date who was covered under a previous group dental care contract by the Employer. Any participant who has been continuously covered for 24 months under a group dental care contract with BCBSTX which included prosthetic benefits. • When the course of treatment will be in excess of$300, a predetermination request should be submitted to BCBSTX in advance of treatment. Please note that our dental is a "freestanding"product and can be purchased separately from the Health Care Services Corporation product, i.e., an employee can have only himself covered for health, but have dental for the family and vice versa. DENT-FRSTG-Summary of Benefits Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation,a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association s s LC) IMI T- c 0 aC M O N w o � CU 2 0 i $ , t O — ce Q. .• o 10 0 ell a a m E •8 5 0 Q 1 i O w C Qm' N CC 0 %ems O N o $ O h = ++ r 0 m u 0 L. 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T a v ° ° v CL C aC) a) (LUS ,--I N 2 d C QJ QCJ cco ,--I N 2 0 C " o� o2S o2S ❑ 0 fl -' o2S o2S o2S ❑ a) a a) v t9 Ln ° ° a) a) a) a) Q) f0 L!'7 ° ° Q) Q) a) Q) Q) W u c v v v a) W v LD r+ N v v v a W 16 •= – – – ❑ =a L – Z Ca) CZ o2S CZ a a a a) Z C) o2S o2 o v v v v C LLD LD LLD a) 0) Q) Q) v C LC) Ln L) 2 CC 2' CO LL v, -' V V V i L— ,— LL N Li) u\--/' lVD �J v 2 LL1 a) a) a) a) a) (0 (0 (a (0 I a) a) a) a) a) (0 ra (a U a) a) a) a) a) U U U U U_ a) a) a) Q) Q) U U L) U LyJ .47., }' + +, 47, Q) a) Q) Q) W +, + +, + + Q Q Q Q) V) CC = CC CC (I) CC C CC CC 2 2 2 2 F.YHIBIT "C" ASO Benefit Program Application ("ASO BPA") Application to Administrative Services Only(ASO)Group Accounts Administered by Blue Cross and Blue Shield of Texas,a Division of Health Care Service Corporation, A Mutual Legal Reserve Company, hereinafter referred to as the"Claim Administrator"or"HCSC" Group Status: Renewing ASO Account Employer Account Number(6-digits): 031118 Group (s): Section Number(s): All 031118/03118/0311 30 Effective Date: 11/01/2014 Anniversary Date (AD): 11/01 Legal Employer Name: City of Port Arthur (Specify the employer or the employee trust applying for coverage. AN EMPLOYEE BENEFIT PLAN MAY NOT BE NAMED) ERISA Regulated Group Health* Plan: ❑ Yes ® No If Yes, is your ERISA Plan Year* a period of 12 months beginning on the Anniversary Date specified above? ❑Yes ❑ No If No, please specify your ERISA Plan Year: Beginning Date_/_/_ End Date_/_/_ (month/day/year) ERISA Plan Administrator*: Plan Administrator's Address: If you maintain that ERISA is not applicable to your group health plan, please give legal reason for exemption: Non-Federal Governmental Plan (Public Entity) ; if applicable, specify other: Is your Non-ERISA Plan Year a period of 12 months beginning on the Anniversary Date specified above? ®Yes ❑ No If No, please specify your Non-ERISA Plan Year: Beginning Date_/_/_ End Date_/_/_ (month/day/year) For more information regarding ERISA, contact your Legal Advisor. *All as defined by ERISA and/or other applicable law/regulations ACCOUNT INFORMATION ❑ NO CHANGES ❑ SEE ADDITIONAL PROVISIONS Employer Identification Number: 74-6001885 SIC: 9199 Nature of Business: City Government Primary(Mailing)Address: 444 4th Street City: Port Arthur State: Texas Zip: 77641 Administrative Contact: Patricia Davis Title: Sr. HR Analyst Phone: 409-983-8214 Fax: 409-983-8282 Email: patricia.davis @portarthurtx.gov Is your Physical Address different from your Primary Address? ® No ❑ Yes (If yes, Physical Address is required): Physical Address: City: State: Zip: Administrative Contact: Patricia Davis Title: Sr. HR Analyst Phone: 409-983-8214 Fax: 409-983-8282 Email: patricia.davis @portarthurtx.gov Is your Billing Address different from your Primary Address? ❑ No ® Yes (If yes, Billing Address is required): Billing Address: P. O. Box 1089 City: Port Arthur State: Texas Zip: 77641 Billing Contact: Patricia Davis Title: Sr. HR Analyst Phone: 409-983-8214 Fax: 409-983-8282 Email: patricia.davis @portarthurtx.gov Blue Access for Employers (BAE) Contact: Title: Sr. HR Analyst (The BAE Contact is an Employee of the account who is authorized by the Employer to access and maintain the account in BAE.) Phone: 409-983-8214 Fax: 409-983-8282 Email: patricia.davis @portarthurtx.gov Subsidiary/Affiliated Company: N/A If necessary, list additional subsidiary companies and subsidiary company addresses in the Additional Provisions section. Contact: Title: Subsidiary/Affiliated Company Address: City: State: Zip: hcsc tx gen aso bpa (1.14 version) 1 Phone: Fax: Email: PRODUCER OF RECORD INFORMATION ® NO CHANGES ❑ SEE ADDITIONAL PROVISIONS Effective: If applicable, the below-named producer(s)or agency(ies) is/are recognized as Employer's Producer of Record (POR)to act as representative in negotiations with and to receive commissions from Blue Cross and Blue Shield of Texas, a division of Health Care Service Corporation (HCSC), a Mutual Legal Reserve Company, and HCSC subsidiaries for Employer's employee benefit programs. This statement rescinds any and all previous POR appointments for Employer. The POR is authorized to perform membership transactions on behalf of Employer. This appointment will remain in effect until withdrawn or superseded in writing by Employer. *Producer or Agency to whom commissions are to be paid: Tax ID Number(TIN) of ❑ Producer or ❑ Agency: Producer#: Address: City: State: Zip: Phone: Fax: Email: Is Producer/Agency appointed with BCBSTX? ❑ Yes ❑ No General Agent? ❑ Yes ❑ No Affiliated with General Agent? ❑ Yes ❑ No Is there a secondary Producer or Agency to whom commissions are to be paid? ❑ Yes ❑ No If Yes, *Producer or Agency**to whom commissions are to be paid: Tax ID Number(TIN) of ❑ Producer or❑ Agency: Producer#: Address: City: State: Zip: Phone: Fax: Email: Is Producer/Agency appointed with BCBSTX? ❑ Yes ❑ No General Agent? ❑ Yes ❑ No Affiliated with General Agent? ❑ Yes ❑ No If commission **split, designate percentage for each producer/agency(total commissions paid must equal 100%): Producer/Agency 1: % Producer/Agency 2: Multiple Location Agency(ies): If servicing agency is not listed above as primary or secondary Producer or Agency above, specify location below: *The Producer or agency name(s)above to whom commissions are to be paid must exactly match the name(s)on the appointment application(s). ** If commissions are split, please provide the information requested above on both producers/agencies. Both must be appointed to do business with BCBSTX. PRODUCER COMPENSATION The Employer acknowledges that if any producer acts on its behalf for purposes of purchasing services in connection with the Employer's Plan under the Administrative Services Agreement to which this ASO BPA is attached, the Claim Administrator may pay the Employer's producer a commission and /or other compensation in connection with such services under the Agreement. If the Employer desires additional information regarding commissions and/or other compensation paid the producer by the Claim Administrator in connection with services under the Agreement, the Employer should contact its producer. SCHEDULE OF ELIGIBILITY ❑ NO CHANGES ❑ SEE ADDITIONAL PROVISIONS 1. Eligible Person means: ® A full-time employee of the Employer. ❑ A full-time employee who is a member of: (name of union) ❑ A part-time employee of the Employer. • A retiree of the Employer. • Other: City Council Are any classes of employees to be excluded from coverage? ® Yes ❑ No hcsc tx gen aso bpa (1.14 version) 2 If yes, please identify the classes and describe the exclusion: Part-time, seasonal and temporary 2. Full-Time Employee means: ® A person who is regularly scheduled to work a minimum of 30 hours per week and who is on the permanent payroll of the Employer. ❑ Other: 3. Are Domestic Partners covered? ® No(skip to question 4) ❑ Yes: A Domestic Partner, as defined in the Plan, shall be considered eligible for coverage. The Employer is responsible for providing notice of possible tax implications to those Covered Employees with Domestic Partners. Are Domestic Partners eligible for continued coverage equivalent to COBRA continuation? ❑ Yes ❑ No Are dependents of Domestic Partners eligible for coverage? ❑ Yes ❑ No If yes: The Limiting Age for covered children of Domestic Partners is twenty-six(26)years, regardless of presence or absence of a child's financial dependency, residency, student status, employment, marital status or any combination of those factors. 4. Are children of any age who are medically certified as disabled and dependent on the employee for support and maintenance eligible for coverage? El No (skip to question 5) ® Yes (answer the question below) Are children over the Limiting Age who are medically certified as disabled and dependent on the employee for support and maintenance eligible for coverage under the plan if they were not covered under the plan prior to reaching the Limiting Age? El Yes ® No 5. Are unmarried grandchildren eligible for coverage? ❑ No (skip to question 6) ® Yes (answer the question below) Must the grandchild be dependent on the employee for federal income tax purposes at the time application is made? ® Yes ❑ No 6. What is the effective date for a newly eligible person who becomes effective after the employer's initial enrollment? (The effective date must not exceed 90 calendar days from the date that a newly eligible person becomes eligible for coverage) Are there multiple new hire waiting periods? ❑ No—select one eligibility rule to apply to all newly eligible persons. El Yes—select each eligibility rule that applies and describe eligibility and contribution details). ❑ The date of employment. ❑ The day of the month following the date of employment. ❑ The day of the month following days of employment. ❑ The day of the month following month(s) of employment. ❑ The day of employment. ® Other: Civil Service Employees - Effective the 1st day of the month following date of employment; All other employees - Effective the 1st day of the month following 60 days of employment; City Council - Effective the 1st day of the month following date of employment; Describe eligibility and contribution details (accounts with multiple new hire waiting periods only): Is the waiting period requirement to be waived on initial group enrollment? ❑ Yes ® No 7. Define the Effective Date of termination for a person who ceases to meet the definition of Eligible Person: ❑ The date such person ceases to meet the definition of Eligible Person. ® The last day of the calendar month in which such person ceases to meet the definition of an Eligible Person. ❑ Other: 8. The Limiting Age for covered children is Twenty-six(26) years, regardless of presence or absence of a child's financial dependency, residency, student status, employment, marital status or any combination of those factors. Is coverage available for children over the age of 26? ® No (skip to question c) ❑ Yes (answer question a) a. Must Children over the age of 26 be full-time students to be eligible for coverage? El No (answer the questions below) ❑ Yes (skip to question b): The Limiting Age for covered children over the age of twenty-six (26) is Select an age. Additional eligibility requirements apply as follows (select one); hcsc tx gen aso bpa (1.14 version) 3 ❑ Children must be unmarried ❑ Children may be covered regardless of marital status b. The Limiting Age for covered children who are full-time students and over the age of twenty-six(26) is Select an age. Additional eligibility requirements apply as follows (select one); ❑ Children must be unmarried ❑ Children may be covered regardless of marital status Is Student Certification required? ❑ No (skip to question c) ❑ Yes (answer the questions below) Who will certify student status? ❑ Account ❑ BCBSTX Certification Letters should be mailed: ❑ Annually(select 1 month) ❑ Semi-Annually(select 2 months) ❑ Quarterly(select 4 months) Certification Schedule: Month 1 Month 2 Month 3 Month 4 c. Automatically cancel dependents who reach the maximum limiting age? ® Yes ❑ No However, such cancellation shall be postponed in accordance with any applicable federal or state law. *Not recommended for accounts with automated eligibility. 9. Termination of coverage upon reaching the Limiting Age: ❑ Coverage is terminated on the birthday. ❑ Coverage is terminated on the last day of the month in which the Limiting Age is reached. ® Coverage is terminated on the last day of the billing month. ❑ Coverage is terminated on the last day of the year(12/31) in which the Limiting Age is reached. ❑ Coverage is terminated on the group's Anniversary Date. Will coverage for a child who is medically certified as disabled and dependent on the parent terminate upon reaching the Limiting Age even if the child continues to be both disabled and dependent on the parent? ❑ Yes ® No However, such coverage shall be extended in accordance with any applicable federal or state law. 10. Enrollment: Special Enrollment: An Eligible Person may apply for coverage, Family coverage or add dependents within thirty-one (31) days of a qualifying event if he/she did not apply prior to his/her Eligibility Date or when eligible to do so. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be the effective date of the qualifying event or, in the event of Special Enrollment due to termination of previous coverage, the first day of the Plan Month following receipt of the application. In the case of a qualifying event due to loss of coverage under Medicaid or a state children's health insurance program, however, this enrollment opportunity is not available unless the Eligible Person requests enrollment within sixty(60) days after such coverage ends. Late Enrollment: An Eligible Person may apply for coverage, Family coverage or add dependents if he/she did not apply prior to his/her Eligibility Date or did not apply when eligible to do so. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be a date mutually agreed to by the Claim Administrator and the Employer. An Eligible Person may apply for coverage, Family coverage or add dependents if he/she did not apply prior to his/her Eligibility Date or did not apply when eligible to do so, during the Employer's Open Enrollment Period. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be a date mutually agreed to by the Claim Administrator and the Employer. Such date shall be subsequent to the Open Enrollment Period. Late applicant enrollment options: ® Annual open enrollment—late applicant may apply during open enrollment. Specify Open Enrollment Period: 10/01/2014 - 10/31/2014 ❑ Late applicants may apply at any time—coverage is effective first of the month following receipt of the application. ❑ Other(describe): ❑ No Annual Open Enrollment—late applicants are never eligible for coverage (only applies to dental coverage). 11. Will extension of benefits, due to temporary layoff, disability or leave of absence, apply? ® No (skip to question 12) ❑ Yes (specify number of days, below) Temporary Layoff: days Disability: days Leave of Absence: days hcsc tx gen aso bpa (1.14 version) 4 However, benefits shall be extended for the duration of an Eligible Person's leave in accordance with any applicable federal or state law. 12. *COBRA Auto Cancel? (only applies to group administered COBRA) ® Yes ❑ No Member's COBRA/Continuation of Coverage will be automatically cancelled at the end of the member's eligibility period. *Not recommended for accounts with automated eligibility CURRENT EMPLOYEE ELIGIBILITY INFORMATION ® NO CHANGES ❑ Current number of Employees enrolled ❑ SEE ADDITIONAL PROVISIONS Current Employee Eligibility Information only applies to new accounts. If your account is renewing, please just indicate the current number of enrolled employees (above). Total number of Employees/Subscribers: 1. on payroll N/A - Renewing Account 2. on COBRA continuation coverage N/A - Renewing Account 3. with retiree coverage (if applicable) N/A - Renewing Account 4. who work part-time N/A - Renewing Account 5. serving the new hire waiting period N/A - Renewing Account 6. declining because of other group coverage (e.g., other commercial group coverage, Medicare, Medicaid, TRICARE/Champus) N/A - Renewing Account 7. declining coverage (not covered elsewhere) N/A - Renewing Account hcsc tx gen aso bpa (1.14 version) 5 LINES OF BUSINESS (Check all applicable products) ® NO CHANGES ❑ See Additional Comments Managed Health Care Coverage: ® PPO: Plan Name: PPO PLAN Plan Name: Plan Name: Plan Name: Plan Name: ❑ HMO: Plan Name: ❑ Prescription Drug Option: Select From List ❑ No Prescription Drug Option ❑ EPO: Plan Name: ❑ POS: Plan Name: ❑ Blue Directions(Private Exchange) Consumer Driven Health Plan (BlueEdge) ❑ HCA, if selected,complete separate HCA Benefit Program Application ® HSA, if selected, provide HSA Administrator or trustee name: H S A BANK El FSA(vendor: ConnectYourCare) Traditional coverage: ❑ Out-of-Area (Indemnity) ❑ Benefit Offering Prescription Drug Coverage: ® Prescription Drug Program El Stand-Alone Prescription Drug Program Dental Coverage Plan Name: Select From List Plan Name: Select From List Plan Name: Select From List Plan Name: Select From List Plan Name: Select From List El Vision Coverage El In-Hospital Indemnity(IHI) El Wellness Incentives ® Stop Loss Coverage- If selected, complete separate Stop Loss exhibit ® Dearborn National Life Insurance- If selected, complete separate Life application ® HCSC COBRA Administrative Services - If selected, complete separate COBRA Administrative Services Addendum to the BPA Additional Comments: hcsc tx gen aso bpa (1.14 version) 6 FINANCIAL DOCUMENT ADMINISTRATION Payment Specifications ® NO CHANGES ❑ SEE ADDITIONAL PROVISIONS Employer Payment Method: ❑ Online Bill Pay ® Electronic ❑ Check Employer Payment Period: ® Weekly(cannot be selected if Check is selected as payment method above) ❑ Twice-Monthly ❑ Monthly ❑ Other(please specify) Claim Settlement Period: Monthly Run-Off Period: Transfer Payments are to be made for twelve (12) months following the end of the Fee Schedule Period. Final Settlement: Final Settlement to be made within (60) days after end of Run-Off Period. Fee Schedule ❑ NO CHANGES ❑ See Additional Comments Fee Schedule Period: ® 12 Months ❑ Other: Months Fees Administrative Per Employee per Month (PEPM) Charges Product/ Service Single Family Base Administrative Charge (Medical) $30.77 $86.16 $ $ Prescription Drug Rebate Credit* $(8.31) $(23.29) $ $ Select From List $ $ $ $ Select From List $ $ $ $ Select From List $ $ $ $ Other: Product-Related Services List Service: Selective I/O $Included $Included $ $ Other: Select Service Category List Service: $ $ $ $ Other: Select Service Category List Service: $ $ $ $ Other: Select Service Category $ $ $ $ List Service: Miscellaneous: $ $ $ $ Miscellaneous: $ $ $ $ Total $22.46 $62.87 $ $ *Prescription Drug Rebate Credit per Covered Employee per month is the guaranteed Prescription Drug Rebate savings reflected as a Prescription Drug Rebate credit. Expected rebate amounts to be received by the Claim Administrator are passed back to the Employer with one hundred percent (100%) of the expected amount applied as a credit on the monthly billing statement on a per Covered Employee per month basis. Rebate credits are paid prospectively to the Employer and shall not continue after termination of the Prescription Drug Program. (Further information concerning this credit is included in the governing Administrative Services Agreement to which this ASO BPA is attached under the section titled "CLAIM ADMINISTRATOR'S SEPARATE FINANCIAL ARRANGEMENTS WITH PHARMACY BENEFIT MANAGERS.") hcsc tx gen aso bpa (1.14 version) 7 Administrative Line Item Charges Frequency Amount Other: Select Service Category Select Billing Frequency $ List Service: If applicable, describe other: Other: Select Service Category Select Billing Frequency $ List Service: If applicable, describe other: Other: Select Service Category Select Billing Frequency $ List Service: If applicable, describe other: Other: Select Service Category Select Billing Frequency $ List Service: If applicable, describe other: Miscellaneous: Select Billing Frequency $ If applicable, describe other: Miscellaneous: Select Billing Frequency $ If applicable, describe other: Total: $ Note: Additional services and/or fees may be itemized in the "Miscellaneous"fields above or in the Additional Comments section below. Product/Service • Dental: $ $ $ $ Miscellaneous: $ $ $ $ Total $ $ $ $ Additional Comments: Termination Administrative Charges ❑ NO CHANGES ❑ SEE ADDITIONAL comments The Termination Administrative Charge applicable to the Run-Off Period shall be equal to the sum of the amounts obtained by multiplying the total number of Covered Employees by category (per Covered Employee per individual or family composite) during the three (3) months immediately preceding the date of termination by the appropriate factors shown below. Product/Service Single Family Medical Run-off Administration Charge: $11.42 $31.98 $ $ Miscellaneous $ $ $ $ Total: Product/Service Dental Run-off Administration Charge $ $ $ $ • Miscellaneous $ $ $ $ Additional Comments: hcsc tx gen aso bpa (1.14 version) 8 1. BlueCard Program/Network access fee: $ (Available upon request) 2. Not applicable to Grandfathered Plans External Review Coordination: Employer acknowledges and agrees: (i) to a fee of$700 for each external review requested by a Covered Person that the Claim Administrator coordinates for the Employer in relation to the Employer's Plan; (ii)that the Claim Administrator's coordination shall include reviewing external review requests to ensure that they meet eligibility requirements, referring requests to accredited external independent review organizations, and reversing the Plan's determinations if so indicated by external independent review organizations; and (iii) that the external reviews shall be performed by an independent third party entity or organization and not the Claim Administrator. Amounts received by Claim Administrator and external independent review organizations may be revised from time to time and may be paid each time an external review is undertaken. Further, Employer elects for external reviews to be performed under the Federal Affordable Care Act external review process. 3. Reimbursement Provision: Will Claim Administrator perform third party liability recovery(Reimbursement) services? ® Yes ❑ No If yes: It is understood and agreed that in the event the Claim Administrator makes a recovery on a third-party liability case, the Claim Administrator will retain 25% of any recovered amounts other than recovery amounts received as a result of, or associated with, any Workers' Compensation Law. 4. Claim Administrator's Third Party Recovery Vendor: It is understood and agreed that in the event the Claim Administrator's Third Party Recovery Vendor makes a recovery on a claim, the Employer will pay no more than 25% of any recovered amount OTHER PROVISIONS ❑ NO CHANGES ❑ SEE ADDITIONAL PROVISIONS 1. Will BCBSTX issue Certificates of creditable Coverage (COCCs)? ® Yes ❑ No If yes: The Employer directs the Claim Administrator to issue to individuals, whose coverage under the Plan terminates during the term of the Administrative Services Agreement to which this ASO BPA is attached, a Certificate of Creditable Coverage, if required by applicable law. The Certificate of Creditable Coverage shall be based upon information required for issuance of a Certificate of Creditable Coverage to be provided to the Claim Administrator by the Employer and coverage under the Plan during the term of the Administrative Services Agreement. 2. Summary of Benefits & Coverage: a. Will Claim Administrator create Summary of Benefits & Coverage (SBC)? ® Yes. (Please answer question b. The SBC Addendum is attached.) ❑ No. If No, then the Employer acknowledges and agrees that the Employer is responsible for the creation and distribution of the SBC as required by Section 2715 of the Public Health Service Act (42 USC 300gg-15) and SBC regulations (45 CFR 147.200), as supplemented and amended from time to time, and that in no event will the Claim Administrator have any responsibility or obligation with respect to the SBC. The Claim Administrator is not obligated to respond to or forward misrouted calls, but may, at its option, provide participants and beneficiaries with Employer's contact information. A new clause (e) is added to Subsection C. in the Additional Provisions as follows: "(e)the SBC". (Skip question b.) b. Will Claim Administrator distribute the Summary of Benefits & Coverage (SBC)to participants and beneficiaries? ® No. Claim Administrator will create SBC (only for benefits Claim Administrator administers under the Agreement)and provide SBC to Employer in electronic format. Employer will then distribute SBC to participants and beneficiaries (or hire a third party to distribute) as required by law. ❑ Yes. Claim Administrator will create SBC (only for benefits Claim Administrator administers under the Agreement) and provide SBC to Employer in electronic format. Employer will then distribute to participants and beneficiaries as required by law, except that Claim Administrator will send the SBC in response to the occasional request received directly from individuals. ❑ Yes. Claim Administrator will create SBC (only for benefits Claim Administrator administers under the Agreement) and distribute SBC to participants and beneficiaries via regular hardcopy mail or electronically. Distribution Fee for hardcopy mail is $1.50 per package. The distribution fee will not apply to SBCs that Claim Administrator sends in response to the occasional request received directly from individuals. hcsc tx gen aso bpa (1.14 version) 9 3. Does Employer have any Employees that reside in Massachusetts? [' Yes ® No The Massachusetts Health Care Reform Act requires employers to provide, or contract with another entity to provide, a written statement to individuals residing in Massachusetts who had "creditable coverage" at any time during the prior calendar year through the employer's group health plan and to file a separate electronic report to the Massachusetts Department of Revenue verifying information in the individual written statements. Does the Employer direct Claim Administrator to provide written statements of creditable coverage to its Covered Employees who reside, or have enrolled dependents who reside, in Massachusetts and file electronic reports to the Massachusetts Department of Revenue in a manner consistent with the requirements under the Massachusetts Health Care Reform Act? Such written statements and electronic reporting shall be based on information provided to the Claim Administrator by the Employer and coverage under the Plan during the term of the Administrative Services Agreement. The Employer hereby certifies that, to the best of its knowledge, such coverage under the Plan is "creditable coverage" in accordance with the Massachusetts Health Care Reform Act. The Employer acknowledges that the Claim Administrator is not responsible for verifying nor ensuring compliance with any tax and/or legal requirements related to this service. The Employer or its Covered Employees should seek advice from their legal or tax advisors as necessary. ® Yes ❑ No If no: The Employer acknowledges it will provide written statements and electronic reporting to the Massachusetts Department of Revenue as required by the Massachusetts Health Care Reform Act. 4. Employer contribution: Employer Contribution — Medical Employer Contribution — Dental ** % of Employee's premium, or$ % of Employee's premium, or$ % of Dependent's premium, or$ % of Dependent's premium, or$ Comments: ** Employees hired on or after 1/1/12 will have a choice to enroll in the H S A Plan @100% employer contribution or will have to buy up to the PPO Plan. Employees hired prior to 1/1/12 are "Grandfathered" on the PPO Plan @100% employer contribution. 5. EHB Election: Employer elects EHBs based on the following: ® 1. EHBs based on a HCSC state benchmark: ❑ Illinois [' Oklahoma ❑ Montana ® Texas ❑ New Mexico ❑ 2. EHBs based on benchmark of a state other than IL, MT, NM, OK and TX If so, indicate the state's benchmark that Employer elects: ❑ 3. Other EHB, as determined by Employer. In the absence of an affirmative selection by Employer of its EHBs, then Employer is deemed to have elected the EHBs based on the Texas benchmark plan. 6. This ASO Benefit Program Application (ASO BPA) is incorporated into and made a part of the Administrative Services Agreement with both such documents to be referred to collectively as the "Agreement" unless specified otherwise. ADDITIONAL PROVISIONS: A. Grandfathered Health Plans: Employer shall provide Claim Administrator with written notice prior to renewal (and during the plan year, at least 60 days advance written notice) of any changes that would cause any benefit package of its group health plan(s) (each hereafter a "plan") to not qualify as a "grandfathered health plan" under the Affordable Care Act and applicable regulations. Any such changes (or failure to provide timely notice thereof) can result in retroactive and/or prospective changes by Claim Administrator to the terms and conditions of administrative services. In no event shall Claim Administrator be responsible for any legal, tax or other ramifications related to any plan's grandfathered health plan status or any representation regarding any plan's past, present and future grandfathered status. The grandfathered health plan form ("Form"), if any, shall be incorporated by reference and part of the BPA and Agreement, and Employer represents and warrants that such Form is true, complete and accurate. hcsc tx gen aso bpa (1.14 version) 10 B. Retiree Only Plans, Excepted Benefits and/or Self-Insured Nonfederal Governmental Plans: If the BPA includes any retiree only plans, excepted benefits and/or self-insured nonfederal governmental plans (with an exemption election), then Employer represents and warrants that one or more such plans is not subject to some or all of the provisions of Part A(Individual and Group Market Reforms) of Title XXVII of the Public Health Service Act(and/or related provisions in the Internal Revenue Code and Employee Retirement Income Security Act) (an "exempt plan status"). Any determination that a plan does not have exempt plan status can result in retroactive and/or prospective changes by Claim Administrator to the terms and conditions of administrative services. In no event shall Claim Administrator be responsible for any legal, tax or other ramifications related to any plan's exempt plan status or any representation regarding any plan's exempt plan status. C. Employer shall indemnify and hold harmless Claim Administrator and its directors, officers and employees against any and all loss, liability, damages, fines, penalties, taxes, expenses (including attorneys'fees and costs) or other costs or obligations resulting from or arising out of any claims, lawsuits, demands, governmental inquires or actions, settlements or judgments brought or asserted against Claim Administrator in connection with (a)any plan's grandfathered health plan status, (b) any plan's exempt plan status, (c) any plan's design (including but not limited to any directions, actions and interpretations of the Employer), (d) any provision of inaccurate information, (e)the SBC, and/or(f)selection of employer's EHB benchmark for the purpose of ACA. Changes in state or federal law or regulations or interpretations thereof may change the terms and conditions of administrative services. The provisions of paragraphs A-C (directly above)shall be in addition to (and do not take the place of)the other terms and conditions of administrative services between the parties. Additional provisions may apply as follows: hcsc tx gen aso bpa (1.14 version) 11 I UNDERSTAND AND AGREE THAT: 1. The proposed fees are effective for 12 months, subject to contract provisions, and are based on the information and conditions stated. Final fees are subject to review based on actual enrollment results. If there is a 10% or greater variance in the enrollment and/or less than the minimum enrollment requirement of 75%, BCBSTX reserves the right to review the final fees. The information provided in this application is complete and accurate to the best of my knowledge. If this information is incomplete or inaccurate, BCBSTX may rerate the plan, withdraw the proposal or cancel the contract. 2. Only answer for new accounts: Has there been a significant change in the claims experience previously provided? ❑ Yes ❑ No If significant changes have been made, complete and attach Account Experience (Addendum to BPA). 3. Only answer for new accounts: Have there been any significant changes in the previously provided location(s)of eligible employees? ❑ Yes ❑ No If significant changes have been made, attach new census. 4. Only complete for new accounts: Receipt by BCBSTX of the advance administrative fee (where applicable), in the amount of$ , and completed enrollment forms does not constitute approval and acceptance by the BCBSTX Home Office. 5. BCBSTX will report the value of all remuneration by BCBSTX to ERISA plans with 100 or more participants for use in preparation of ERISA Form 5500 schedules. Reporting will also be provided upon request to non-ERISA plans or plans with fewer than 100 participants. Reporting will include base commissions, bonuses, incentives, or other forms of remuneration for which your Producer/consultant is eligible for the sale or renewal of self-funded and/or insured products. Malana Hearn Authorized BCBSTX Representative Signature of Authorized Purchaser Account Executive 8/15/14 Interim City Manager Title Date Title 409-896-0135 08/75/7014 BCBSTX Telephone number Date hcsc tx gen aso bpa (1.14 version) 12 PROXY The undersigned hereby appoints the Board of Directors of Health Care Service Corporation, a Mutual Legal Reserve Company, or any successor thereof("HCSC"), with full power of substitution, and such persons as the Board of Directors may designate by resolution, as the undersigned's proxy to act on behalf of the undersigned at all meetings of members of HCSC (and at all meetings of members of any successor of HCSC) and any adjournments thereof, with full power to vote on behalf of the undersigned on all matters that may come before any such meeting and any adjournment thereof. The annual meeting of members shall be held each year in the corporate headquarters on the last Tuesday of October at 12:30 p.m. Special meetings of members may be called pursuant to notice mailed to the member not less than 30 nor more than 60 days prior to such meetings. This proxy shall remain in effect until revoked in writing by the undersigned at least 20 days prior to any meeting of members or by attending and voting in person at any annual or special meeting of members. Group No.: 031118 By: John A. Comeaux Print Signer's Name Here Interim City Manager Signature and Title Group Name: City of Port Arthur Address: 444 4th Street City: Port Arthur State: Texas Zip Code: 77640 Dated this 25th day of August 2014 Month Year hcsc tx gen aso bpa (1.14 version) 13 HCSC COBRA ADMINISTRATIVE SERVICES ADDENDUM (If applicable, attach to Benefit Program Application) ❑ NO CHANGES ACCOUNT INFORMATION Employer Name: City of Port Arthur Employer Account Number(s): 031118- Group#031118/031130/031120 COBRA Services COBRA Administrative Billing Services Only: ❑ Yes ® No COBRA Administrative Full Services: ® Yes ❑ No Notification Services included: (Full Services) ® Yes ❑ No Conversion Rights included: (Full Services) ® Yes ❑ No Monthly Reports* included: ® Yes ❑ No If Yes: Email Address: patricia.davis @portarthurtx.gov *Paper reports provided by mail/electronic reports via email Effective date(s)of services if different from ASO Effective Date of Coverage: 1/1/87 COBRA Service Charges Billing Services Fee per Participant per month: Grandfathered Pricing If Notification Services included(Full Services) Notification Fee [per Participant, per notification]: Grandfathered Pricing Monthly Administrative Fee: Grandfathered Pricing The Employer will pay HCSC a sum of One Hundred Dollars ($100.00) per hour for any system programming costs associated with non-standard administration services. COBRA Membership Number of Active Members*: 837 Number of current COBRA participants/members*: 0 Number of current COBRA retiree participants/members*: 0 *Full Service Unit(FSU)set-up of participants/members in BlueStar required FSU Location: San Angelo FSU Contact: Email Address: Is all COBRA participant census information attached? ❑ Yes ® No Is all COBRA participant coverage(s)and level elected information attached? ❑ Yes ® No Is all dependent census information attached? ❑ Yes ® No HCSC COBRA Services Addendum (NM, OK, TX)06.13 COBRA Coverage Are rates (SINGLE/FAMILY or TIERED)for all coverages attached? n Yes ® No Is 2% included in attached rates? ❑ Yes ® No Does Employer have any non-HCSC coverage? ❑ Yes ® No If Yes, Other Carrier(s): Name: Address: Email Address: City: State: Zip: Administrative Contact: Phone Number: Fax Number: Name: Address: Email Address: City: State: Zip: Administrative Contact: Phone Number: Fax Number: COBRA coverage begins: ® On date of Qualifying Event ❑ First of month following date of Qualifying Event Should 150% of the COBRA premium be charged to participants eligible for disability extension for the remaining 11 months of COBRA? ® Yes ❑ No (Extension is from 18 months to 29 months when deemed disabled by Social Security) Is contract provided and signed? ❑ Yes ® No Prior COBRA administrator info: Name: Address: Email Address: City: State: Zip: Administrative Contact: Phone Number: Fax Number: HCSC COBRA Services Addendum(NM, OK, TX)06.13 Summary of Benefits and Coverage Addendum To ASO Benefit Program Application (ASO BPA) Employer Name: City of Port Arthur Account Number: 031118 Effective/ First Date of Employer's Open Enrollment Period for the next Plan Year Renewal Date: 11-1-2014 (the"First Open Enrollment Date"): 10-01-14 The Affordable Care Act ("ACA") requires group health plans to create and distribute a Summary of Benefits and Coverage (or alternate format permitted by ACA) (the "SBC"), to participants and beneficiaries in certain specified situations (the "SBC Requirements"). In accordance with the Employer's election indicated on the most current ASO BPA, to have Blue Cross and Blue Shield of Texas (BCBSTX) create and/or distribute the SBC, as of the First Open Enrollment Date, the Employer acknowledges and agrees: 1. BCBSTX's SBC services do not include the creation or distribution of coverage information for benefits it does not administer under the Agreement, unless otherwise agreed to in the ASO BPA or this Addendum. 2. Employer is responsible for the proper synthesizing of information from its various insurers and administrative service providers it uses for its group health plan (or providing multiple partial SBCs if permitted by law). 3. The Employer is responsible for SBC services performed by Employer's third party vendors. 4. The Employer must review and approve the SBC prior to distribution and is responsible for the content of the SBC. Nothing in this Addendum or in the ASO BPA relieves the Employer or its group health plan of their respective legal and regulatory obligations with respect to the SBC. 5. ACA and the SBC regulatory and sub-regulatory guidance (the "Guidance") are new (and subject to change) and the regulatory agencies and industry interpretations thereof are evolving; therefore, BCBSTX's operations shall not be considered to be in breach of the Agreement to the extent BCBSTX has worked diligently and in good faith to implement a reasonable interpretation of then- current SBC-related ACA provisions and Guidance, in a manner consistent with the SBC Requirements. 6. Employer agrees to furnish to BCBSTX in a timely manner all information necessary for the timely distribution of SBCs, including but not limited to names and addresses for: (i) any person currently enrolled in any plan administered or insured by BCBSTX, and (ii) any person the employer tells us is eligible or may become eligible. Employer's failure to furnish such information, to agree to an implementation plan or to promptly review/approve SBCs may substantially delay and/or jeopardize BCBSTX's SBC services and BCBSTX is relieved of its SBC obligations. 7. Employer shall indemnify and hold harmless BCBSTX and its directors, officers and employees against any and all loss, liability, damages, fines, penalties, taxes, expenses (including attorneys' fees and costs)or other costs or obligations resulting from or arising out of any claims, lawsuits, demands, governmental inquiries or actions, settlements or judgments brought or asserted against BCBSTX in connection with the SBC (and Employer's or its vendors' distribution of the SBC). SBC Addendum for use with ASO business(TX) as q BlueCross BlueShield ODQa of Texas APPLICATION FOR STOP LOSS COVERAGE Employer Group Name: City of Port Arthur Employer Group Address: P. O.Box 1089 City: Port Arthur State of Situs: Texas Zip Code: 77641 Account Number: 031118 Employer Group Number(s): 031118/031130 Effective Date of Policy 11/01/2014 Policy Period: These specifications are for the Policy Period commencing on 11/01/2014 and ending on 10/31/2015 The specifications below shall become effective on the first day of the Policy Period specified above and shall continue in full force and effect until the earliest of the following dates: (1) The last day of the Policy Period; (2) The date the Policy terminates; or (3) The date this Application for Stop Loss Coverage (herein called the "Application") is superseded in whole or in part by a later executed Application. A. Aggregate Stop Loss Insurance: ® Yes ❑ No If yes, complete items 1 through 9 below. 1. ❑ New Coverage ® Renewal of Existing Coverage 2. Stop Loss Coverage Period: ❑ New Coverage (Select one from below): ❑ Standard: Claims incurred and paid during the Policy Period. ❑ "Run-in" included: Claims incurred on or after and paid during the Policy Period. "Run-in" includes claims paid by Policyholder's prior claim administrator: Yes ❑ No ❑ If yes, such claims must be reported by the Policyholder to the Company (Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company) within 12 months of the Policy Effective Date and paid by the Policyholder's prior claim administrator within 6 months after the Policy Effective Date. ® Renewal of Existing Coverage: Claims incurred on or after the original Effective Date of Policy and paid during the Policy Period. 3. Aggregate Stop Loss Insurance shall apply to: ® Medical Claims ® Outpatient Prescription Drug Claims ❑ Dental Claims ❑ Other(please specify): A Division of Health Care Service Corporation,a Mutual Legal Reserve Company an Independent Licensee of the Blue Cross and Blue Shield Association TXStopLossApp-11/10 4. Average Claim Value: $760.59 per Employee Attachment Factor: 125% of the Average Claim Value 5. Aggregate Claim Liability and Run-Off Claim Liability Factors a. Employer's Claim Liability for each Policy Period shall be the sum of the Monthly amounts obtained by multiplying the number of Coverage Units for each Month by the following factors: $PPO -$576.74-Active Employees; $251.36- Medicare Retirees; H S A-$471.68 for each Employee Coverage Unit $PPO -$1,610.00 -Active Employees; $1,141.78 Medicare Retirees; H S A- $1,320.23 for each Employee/Family Coverage Unit Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note:you can use the "return"key to create additional rows, if needed: b. Employer's Run-Off Claim Liability shall be calculated by multiplying the sum average of all Coverage Units during each of the three calendar Months immediately preceding termination by the factors shown below. Settlement for the final accounting period will be described in the section of the Policy entitled SETTLEMENTS, Run-Off Period subsection of the Policy. $PPO -$185.85 Active Employees; $81.77 - Medicare Retirees; H S A- $152.39 for each Employee Coverage Unit $PPO -$520.17 Active Employees; $368.89- Medicare Retirees; H S A-$426.53 for each Employee/Family Coverage Unit Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note:you can use the "return"key to create additional rows, if needed: 6. CAP Arrangement ® Yes ❑ No 7. Aggregate Stop Loss Claims a. The amount of Paid Claims during the current Policy Period, less: i. Individual (Specific) Stop Loss Claims ii. Any claims in excess of the Individual (Specific) Stop Loss Claims per Covered Person per Lifetime Maximum iii. Any claims in excess of the Individual (Specific) Stop Loss Claims maximum Point of Attachment that exceeds the Aggregate Point of Attachment. The Aggregate Point of Attachment shall equal the sum of the Employer's Claim Liability amounts calculated Monthly as described in Item 5.a. above for the indicated Policy Period. b. In the event of termination at the end of a Policy Period, the Final Settlement Aggregate Point of Attachment shall equal the sum of the Employer's Claim Liability amount for the Final Policy Period and the Employer's Run-Off Claim Liability calculated as described in item 5.b. above. However, for the indicated Policy Period the minimum Aggregate Point of Attachment shall be $8,666,162. c. Aggregate Stop Loss Claims shall not exceed a lifetime maximum of Unlimited for the indicated Policy Period. 8. Premium (Select one): ❑ Annual Premium (Due on the first day of the Policy Period): $ TXStopLossApp-11/10 2 ® Monthly Premium shall be equal to the amounts obtained by multiplying the number of Coverage Units for a particular Month by $2.87 for each Employee Coverage Unit $8.02 for each Employee/Family Coverage Unit Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note: you can use the "return"key to create additional rows, if needed: 9. The premium is based upon a current membership of 508 Individual Coverage Units and 336 Family Coverage Units. B. Individual (Specific) Stop Loss Insurance: ® Yes ❑ No If yes, complete items 1 through 6 below. 1. ❑ New Coverage ® Renewal of Existing Coverage 2. Stop Loss Coverage Period: ❑ New Coverage (Select one from below): ❑ Standard: Claims incurred and paid during the Policy Period. ❑ "Run-in" included: Claims incurred on or after and paid during the Policy Period "Run-in" includes claims paid by Policyholder's prior claim administrator: Yes ❑ No ❑ If yes, such claims must be reported by the Policyholder to the Company(Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company) within months of the Policy Effective Date and paid by the Policyholder's prior claim administrator within months after the Policy Effective Date. ® Renewal of Existing Coverage: Claims incurred on or after the original Effective Date of Policy and paid during the Policy Period. 3. Individual (Specific) Stop Loss Insurance shall apply to: ® Medical Claims ® Outpatient Prescription Drug Claims ❑ Dental Claims ❑ Vision Claims ❑ Other (please specify): 4. Individual (Specific) Stop Loss Claims a. For N/A who is identified by the health identification (ID) number N/A, the amount of Paid Claims during the current Policy Period in excess of the Individual Point of Attachment of$N/A. Such amount shall apply for the Policy Period. b. For each other Covered Person: The amount of Paid Claims during the current Policy Period in excess of the Individual Point of Attachment of$100,000 per Covered Person but not to exceed a maximum Point of Attachment of$ Unlimited per Policy Period. Paid Claims in excess of the maximum point of attachment shall not be eligible to satisfy the Aggregate Point of Attachment. Such amount shall apply for the Policy Period. c. Covered Person per Lifetime Maximum: TXStopLossApp-11/10 3 The Individual (Specific) Stop Loss Claims shall not exceed N/A per Covered Person per Lifetime. Paid Claims in excess of the Covered Person per Lifetime Maximum shall not be eligible to satisfy the Aggregate Point of Attachment. Point of Attachment ® Includes Claim Administrator's Provider Access Fee ❑ Excludes Claim Administrator's Provider Access Fee 5. Premium (select one): ❑ Annual Premium (Due on the first day of the Policy Period): $ ® Monthly Premium shall be equal to the amounts obtained by multiplying the number of Coverage Units for a particular Month by 163.25 for each Employee Coverage Unit $177.02 for each Employee/Family Coverage Unit Please use the continuous text field directly below for any other structure (leaving the fields above blank). Note: you can use the "return"key to create additional rows, if needed: 6. The premium is based upon a current membership of 508 Individual Coverage Units and 336 Family Coverage Units. Additional Provisions: The undersigned person represents that he/she is authorized and responsible for purchasing stop loss coverage on behalf of the Employer Group. It is understood that the actual terms and conditions of coverage are those contained in this Application the Stop Loss Coverage Policy into which this Application shall be incorporated at the time of acceptance by Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company ("HCSC"). Upon acceptance, HCSC shall issue a Stop Loss Coverage Policy to the Employer Group. Upon acceptance of this Application and issuance of the Stop Loss Coverage Policy, the Employer Group shall be referred to as the "Policyholder." Malana Hearn Sales Representative Signature of Authorized Purchaser Susan Beyer Interim City Manager Name of Underwriter Title of Authorized Purchaser 08/25/2014 Date INTERNAL USE ONLY Date Application approved by Underwriting: TXStopLossApp-11/10 4