HomeMy WebLinkAboutRES 90-201 r
R E S O L U T I O N
BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF BEAUMONT:
THAT the City of Beaumont civilian employees ' health insurance
plan, attached hereto as Exhibit "A", be, and it is hereby
approved; and,
THAT the City Manager is hereby authorized to provide health
insurance coverage for all regular, full-time, civilian employees
at no cost to the employees and that employees may obtain coverage
for their dependents at a cost to the employee of $50. 00 a month
for a single dependent or $80. 00 a month for family coverage,
regardless of the number of dependents.
PASSED BY THE CITY COUNCIL of the City of Beaumont on
this the 1AV&, day of spa a� , 1990.
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CITY OF BEAUMONT
CIVILLAN
MEDICAL PLAN DOCUMENT
Revised 1990
EXHIBIT
"An
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TABLE OF CONTENTS
Topics Page No.
Introduction iii-v
Schedule of Benefits vi-vii
SECTION 1.0 Major Medical Expense Benefit 1
1.1 Covered Expenses 1
1.2 Benefit Percentage & Deductible 3
1.3 Allocation and Apportionment of Benefits 4
1.4 Automatic Restoration/Reinstatement of Max Benefit 4
1.5 Changes in Coverage Classification 4
SECTION 2.0 General Plan Coverage Description 5
2.1 Accident Expense Benefit 5
2.2 Maternity Expense Benefit 5
2.3 Newborn Provision 6
2.4 Outpatient Surgery 6
2.5 Routine Examinations 6
2.6 Pre-Admission Testing 7
2.7 Mandatory Hospital Admission/Outpatient
Surgery Review 7
2.8 Mandatory Second Surgical Opinion g
2.9 Transplant Procedures 10
2.10 Weekend Admissions 11
SECTION 3.0 Special Provisions 11
3.1 Convalescent Nursing Facility 11
3.2 Home Health Care 12
3.3 Hospice Care 14
3.4 Mental Nervous Disorders & Alcohol/Drug Abuse 15
SECTION 4.0 Exclusions & Limitations 15
4.1 Pre-Existing Conditions 15
4.2 General Plan Exclusions & Limitations 16
SECTION 5.0 General Plan Administrative Guidelines 20
5.1 Coordination of Benefits 20
5.2 Subrogation 24
5.3 Right to Receive and Release Necessary Information 24
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TABLE OF CONTENTS (Continued)
5.4 Eligibility of Coverage 25
5.5 Effective Date of Coverage 26
5.6 Termination of Coverage 28
SECTION 6.0 GENERAL PROVISIONS 31
6.1 Notice & Proof of Claim 31
6.2 Legal Proceedings 33
6.3 Time Limitation 33
6.4 Worker's Compensation 33
6.5 Conformity With Law 33
6.6 Representations and Warranties 33
6.7 Miscellaneous 33
SECTION 7.0 Definitions 34
SECTION 8.0 ERISA Information 42
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INTRODUCTION
WHEREAS The City of Beaumont, hereinafter referred to as the "COMPANY',
hereby establishes the benefits, rights and privileges which shall pertain to Partic-
ipating Employees, hereinafter referred to as "Participants" and the Eligible
Dependents of such Participants, as herein defined, and which benefits are pro-
vided through a Fund established by the Company and hereinafter referred to
as the "Plan".
PURPOSE
The purpose of the Plan Document is to set forth the provisions of the Plan
which provide for the payment or reimbursement of all or a portion of eligible
medical expenses.
EFFECTIVE DATE
The effective date of the Plan is June 1, 1990.
PLAN SUPERVISOR
The supervisor of the Plan is GreenTree Administrators.
NAMED FIDUCIARY AND PLAN ADMINISTRATOR
The Named Fiduciary and Plan Administrator is The City of Beaumont who shall
have the authority to control and manage the operation and administration of the
Plan. The Company shall have the authority to amend the Plan, to determine its
policies, to appoint and remove other supervisors, fix their compensation (if any),
and exercise general administrative authority over them. The Administrator has
the sole authority and responsibility to review and make final decisions on all
claims to benefits hereunder.
CONTRIBUTIONS TO THE PLAN
The amount of contributions to the Plan are to be made on the following basis:
The company shall from time to time evaluate the costs of the Plan and
determine the amount to be contributed by the Company and the amount to be
contributed (if any) by each Covered Participant. Notwithstanding any other
provision of the Plan, the Company's obligation to pay claims otherwise
allowable under the terms of the Plan shall be limited to its obligation to make
contributions to the plan as set forth in the preceding paragraph. Payment of
said claims in accordance with these procedures shall discharge completely the
Company's obligation with respect to such payments.
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In the event that the Company terminates the Plan, then as of the effective date
of termination, the Company and Covered Participants shall have no further obli-
gation to make additional contributions to the Plan.
In accordance with section 503 of ERISA, the Company shall provide adequate
notice in writing to any Covered Participants whose claim for benefits under this
Plan has been denied, setting forth the specific reasons for such denial and
written in a manner calculated to be understood by the participant. Further, the
Company shall afford a reasonable opportunity to any Participant, whose claim
for benefits has been denied, for a full and fair review of the decision denying
the claim by the person designated by the Company for the purpose. Details
of the Claim Procedure which are in compliance with ERISA regulations will be
given to Plan Participants.
PROTECTION AGAINST CREDITORS
No benefit payment under the Plan shall be subject in any way to alienation,
sale, transfer, pledge, attachment, garnishment, execution or encumbrance of any
kind, and any attempt to accomplish the same shall be void.
If the Company shall find that such an attempt has been made with respect to
any payment due or to become due to any Covered Participant, the Company
in its sole discretion may terminate the interest of such Covered Participant or
former Covered Participant in such payment and in such case shall apply the
amount of such payment to or for the benefit of such Covered Participant or
former Covered Participant, his spouse, parent, adult child, guardian of a minor
child, brother or sister, or other relative of a dependent of such Covered
Participant or former Covered Participant, as the Company may determine, and
any such application shall be a complete discharge of all liability with respect to
such benefit payment.
PLAN AMENDMENTS
This Document contains all the terms of the Plan and may be amended from
time to time by the Company. Any changes so made shall be binding on each
Covered Participant and on any other Covered Persons referred to in this Plan
Document. The Company reserves the right at any time to terminate the plan by
a written instrument to that effect.
All previous contributions by the Company shall continue to be issued for the
purpose of paying benefits under the provisions of this Plan with respect to
claims arising before such termination, or shall be used for the purpose of
providing similar health benefits to Covered Participants, until all contributions are
exhausted.
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PLAN IS NOT A CONTRACT
This Plan Document constitutes the entire Plan. The Plan will not be deemed
to constitute a contract of employment or give any Participant of the Company
the right to be retained in the service of the Company or to interfere with the
right of the Company to discharge or otherwise terminate the employment of any
participant.
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SCHEDULE OF BENEFITS
FOR
ALL ELIGIBLE PARTICIPANTS AND DEPENDENTS
The pages which follow refer to this schedule
TYPE OF COVERAGE BENEFITS
ACCIDENT EXPENSE BENEFIT (Deductible Waived) . . . . . . . . . . 80%
MEDICAL EXPENSE BENEFIT*
Annual Deductible Per Covered Person . . . . . . . . . . . . . . . . . . $ 150.00
Maximum per family (cumulative) . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 300.00
Deductible Accumulation Benefit Period . . . . . . . . . . . . . . . . . . Calendar Year
BENEFIT PERCENTAGE FOR MAJOR MEDICAL EXPENSES
First $10,000 In Excess of Deductible . . . . . . . . . . . . . . . . . . . 80%
Balance of Expenses In that Benefit period . . . . . . . . . . . . . . . 100%
Hospital Services Deductible (per stay) . . . . . . . . . . . . . . . . . . . $ 100.00
Hospital Room & Board Limitation * . . . . . . . . . . . . . . . . . . . . Semi-Priv.Rm
Rate
Intensive Care Unit Limitation . . . . . . . . . . . . . . . . . . . . . . . . Actual Charge
Maximum Lifetime Benefit on
Major Medical Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . $1,000,000.00
Transplants (See section for items covered) . . . . . . . . . . . . . . . 80%
Maximum Benefit per calendar year . . . . . . . . . . . . . . . . . . . . $ 150,000.00
Outpatient Surgery (Deductible waived) . . . . . . . . . . . . . . . . . . . 80%
Routine Examinations (Subject to Deductible) 50%
Maximum Calendar Year Benefit Per Person . . . . . . . . . . . . . $ 200.00
(Employee & Covered Spouse Only)
(The above benefits do not apply to covered expenses incurred under the Special Provisions Section nor Mental/Nervous
Alcohol/Drug Abuse Sections of this plan.)
SPECIAL PROVISIONS
Covered expenses under the following provisions will not count toward satisfaction of any co-payments of this plan.
CONVALESCENT NURSING FACILITY* (Deductible Waived) 80%
Maximum Benefit per Disability . . . . . . . . . . . . . . . . . . . . . . . $ 4,000.00
HOME HEALTH CARE* (Deductible Waived) a
Maximum Calendar Year Benefit Per Person . . . . . . . . . . . . . . no limit
HOSPICE CARE EXPENSES* (Deductible Waived) . . . . . . . . . . 80%
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Maximum Calendar Year In/Out Patient Benefit . . . . . . . . . . . . no limit
*All in-patient and out-patient surgeries (except emergency surgeries), pregnancies and special services, requires pre-certification
by the designated utilization review firm.
SPECIAL PROVISIONS CONTINUED...
MENTAL NERVOUS DISORDERS - ALCOHOL AND/OR DRUG ABUSE
This plan provides no benefits for any treatment of a mental/nervous disorder or alcohol/drug
abuse until the covered person has been on the plan for 180 days. Each incident requires an
EAP Assessment. Expenses incurred will not count toward satisfaction of any co-payment of
this plan.
Outpatient Treatment
Benefit Percentage (Subj. to Calendar Yr. Ded.) 80%
Maximum Calendar Year Benefit per person . . . . . . . . . . . . . . $ 5,000.00
Inpatient Treatment
Lifetime Maximum Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,000.00
Covered as Any Illness up to Lifetime Maximum
Benefit Percentage (subject to Calendar Year &
Hospital Services Deductibles) . . . . . . . . . . . . . . . . . . . . . . 80%
PRESCRIPTION DRUG PROGRAM
This program is offered by The City of Beaumont under a separate plan. It is not included as
part of the benefits outlined herein. Contact the Employee Benefits Coordinator for more
information.
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1. MAJOR MEDICAL EXPENSE BENEFITS
1.1 COVERED EXPENSES
1.1.1 Eligibility
In order to be eligible for benefits under this provision, expenses actually incurred by a
Covered Person must meet all of the following requirements:
(1) They must be administered or ordered by a physician; and
(2) They must be medically necessary for the diagnosis and treatment of an illness
or injury unless otherwise specifically included as a Covered Expense; and
(3) They must not be in excess of reasonable and customary for such services
rendered; and
(4) They must not be excluded under any provision or section of this Plan.
1.1.2 Covered Expense
Covered expenses include, but are not limited to, the following:
1.1.2.a Charges made by a Hospital for:
(1) Daily room and board and general nursing service, or confinement in an
Intensive Care Unit, or Semi-Private Room not to exceed the applicable
maximum limits shown in the Schedule of Benefits, including nursery charges
for a healthy newborn dependent child. Charges made by a hospital having only
private rooms will be considered at 80% of the private room rate.
(2) Necessary services and supplies (other than room and board furnished by the
hospital, including inpatient miscellaneous services and supplies), outpatient
hospital treatments for chronic conditions and emergency room use, physical
therapy treatments also including charges for such miscellaneous services and
supplies of a newborn dependent child.
1.1.2.b Charges for treatment at a licensed Psychiatric Day Treatment Facility if the physician
certifies that such treatment is provided in lieu of hospitalization. The covered charge
for each day at a Psychiatric Day Treatment Facility will not exceed one-half the
average Hospital semi-private room rate in the geographic area, and the covered
charges will be processed under and subject to the Mental/Nervous conditions
Treatment Inpatient and Lifetime Maximum Benefit Limitations shown on the Schedule
of Benefits.
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1.1.2.c The services of a legally qualified physician for medical care and/or surgical
treatments including office, home visits, hospital inpatient care, hospital outpatient
visits/exams, clinic care, and surgical opinion consultations.
1.1.2.d Fees of registered graduate nurses (R.N.'s) or licensed vocational nurses (L.V.N's),
or licensed practical nurses (L.P.N.'s) and Public Health Nurses for private duty
nursing.
1.1.2.e Treatment or services rendered by a licensed physical therapist in a home setting or
at a facility or institution whose primary purpose is to provide medical care for an
illness or injury.
1.1.2.f Fees of a legally qualified physician or qualified speech therapist for restoratory or
rehabilitory speech therapy for speech loss or impairment due to an illness or injury
or due to surgery performed on account of an illness or injury sustained while
covered under this plan. If the speech loss is due to a congenital anomaly, surgery
to correct the anomaly must have been performed prior to the therapy. Coverage
under this benefit is provided as long as the covered person with the congenital
anomaly is covered under the plan from birth.
1.1.2.g Charges for a licensed professional air ambulance ordered by the authorized
authorities or land ambulance service to a local facility. Medical transfer is
appropriate when a covered person's condition indicates that the treatment needed
is medically necessary and the medical facility to provide specialized treatment for
the medical condition is within a maximum 150 mile radius of the City of Beaumont.
1.1.2.h Charges for x-rays, microscopic tests, and laboratory tests.
1.1.2.1 Charges for radiation therapy or treatment.
1.1.2.j Charges for the processing and administration of blood or blood components, but
not for the cost of the actual blood or blood components if replaced.
1.1.2.k Charges for oxygen and other gases and their administration.
1.1.2.1 Charges for electrocardiograms, electroencephalograms, pneumoencephalograms,
basal metabolism tests,or similar well-established diagnostic tests generally approved
by physicians throughout the United States.
1.1.2.m Charges for the cost and administration of an anesthetic.
1.1.2.n Charges for dressings, sutures, casts, splints, trusses, crutches, braces, or other
necessary medical supplies, with the exception of dental braces, orthotic devices, or
corrective shoes.
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1.1.2.o Charges for the rental of a wheelchair, hospital bed or iron lung or other durable
medical equipment required for temporary therapeutic use, or the purchase of this
equipment if economically justified, whichever is less.
1.1.2.p Charges for artificial limbs, eyes or larynx, but not the replacement thereof (except
as required by pathological change or growth).
1.1.2.q Services for voluntary sterilization for Participants and Dependent spouses.
1.1.2.r Charges made by an ambulatory surgical center, free-standing birthing center, or
minor emergency medical clinic when treatment has been rendered.
1.1.2.s Charges of a certified social worker or advanced clinical practitioner when referred
by a physician or the Regional Employee Assistance Program Counselor only as it
pertains to treatment for Mental/Nervous Disorders or Alcohol/Drug Abuse.
1.1.2.t Charges for routine newborn care up to fourteen (14) days or initial discharge from
the hospital.
1.2 BENEFIT PERCENTAGE AND DEDUCTIBLE
Upon receipt of Proof of Loss, the Plan will pay 80% of the first $10,000.00 of eligible
expenses incurred in each benefit period, unless otherwise stated in the Plan, which are
in excess of the $150.00 Calendar Year Deductible per Covered Person. The Hospital
Deductible will apply for each inpatient hospital confinement per illness per calendar year.
However, if the illness or injury requires multiple hospital admissions, the hospital
deductible will be charged only once, per calendar year for the initial admission.
All eligible covered expenses incurred in the benefit period in excess of the $10,000.00,
and the calendar year deductible per covered person, will be paid at 100% (except items
in the special provision section of this document.) The amount payable in no event shall
exceed the Maximum Lifetime Benefit stated in the Schedule of Benefits.
The calendar year deductible applies to the eligible charges of each benefit period,
(except hospital inpatient confinement charges.) It applies only once for each Covered
Person within a benefit period regardless of the number of illnesses. (If Covered
Expenses incurred during a benefit period by the Covered Participant and his Covered
Dependent and applied against this deductible exceed the Family Deductible Maximum
of$300.00, no further deductible applies to any members of that family during that benefit
period.) Any Covered Expenses incurred during the last three months of any Benefit
Period, and applied toward the Calendar Year Deductible Amount for that Benefit Period,
may also be applied toward satisfaction of the Calendar Year Deductible Amount during
the next Benefit Period.
If the Plan benefit period is established on a calendar year basis, charges which were
used toward satisfying the cash deductible under any prior plan of insurance coverage
for the year in which this Plan was originally effective shall be accepted by the Company
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toward satisfying the cash deductible of this Plan, upon receipt of documented proof of
such full or partial satisfaction.
1.3 ALLOCATION AND APPORTIONMENT OF BENEFITS
The Company reserves the right to allocate the deductible amount to any eligible charges
and to apportion the benefits to the Covered Person and any assignees. Such allocation
and apportionment shall be conclusive and shall be binding upon the Covered Person
and all assignees.
1.4 AUTOMATIC RESTORATION/REINSTATEMENT OF MAXIMUM BENEFIT
The total Major Madical Expense Benefits payable for all illnesses and/or injuries of a
Covered Person shall not exceed the Maximum Lifetime Benefit, as specified in the
Schedule of Benefits, even though he may not have been continuously covered.
If less than the full Major Medical Maximum Benefit applicable to the Covered Person is
available at the beginning of a benefit period (as a result of benefits paid or payable with
respect to charges previously incurred), the used portion of the Major Medical Maximum
Benefit shall automatically be restored to the extent of:
1.4.1 The amount needed to restore the full Major Medical Maximum Lifetime Benefit applicable
to the Covered Person; or
1.4.2 $1,000.00, whichever is less.
1.5 CHANGES IN COVERAGE CLASSIFICATION
If a change in the coverage classification of a Covered Person which would otherwise
increase the Maximum Benefit applicable to the Covered Person becomes effective in
accordance with the terms of the Plan, then such increase shall not apply with respect
to the Major Medical Expense Benefits applicable to the Covered Person until the first day
on which the Participant is actively at work within his eligible class, or on which the
dependent is not confined in a hospital, and the amount of Maximum Benefit applicable
to him either remains or has been re-established as the full amount of his previous
coverage classification as specified in the Schedule of Benefits, or elsewhere in the Plan.
If a change in the coverage classification of a Covered Person which would otherwise
decrease the Maximum Benefit applicable to the Covered Person becomes effective in
accordance with the terms of the Major Medical Expense Benefits applicable to the
Covered Person, such decreases shall apply immediately with respect to the Major
Medical Expense Benefits applicable to the Covered Person, except that if the Covered
Person is totally disabled on the date of change, the decrease shall not apply to the
benefits payable for eligible charges incurred during the subsequent period of continuous
total disability within the benefit period in which the change occurs and due solely to the
illness or injury which caused the total disability.
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2. GENERAL PLAN COVERAGE DESCRIPTION
2.1 ACCIDENT EXPENSE BENEFIT
The deductible will be waived on Covered Expenses and the normal co-payment
provisions will apply. If an accident results in hospital confinement, the designated
utilization firm must be contacted within 48 hours of the emergency.
2.1.1 Covered Charges
This Plan will pay benefits for the following when furnished for medical care to the
Covered Person for accidental injuries, including but not limited to:
2.1.1.a Services and supplies (including room & board), furnished by a hospital or minor
emergency medical center for medical care in that hospital;
2.1.1.b Doctor's services for surgical procedures and other medical care including treatment
for insect, and snake bites;
2.1.1.c Surgical dressings;
2.1.1.d X-ray and laboratory examinations;
2.1.1.e Private duty professional nursing services by a Registered Nurse (R.N.) or Licensed
Practical Nurse (L.P.N.);
2.1.1.f Cast, splints, trusses, braces and crutches;
2.1.1.g Ambulance Services for local travel.
2.1.2 Limitations
Injuries must be sustained subsequent to the effective date of coverage for the Covered
Person. Services and supplies must be ordered by a doctor and furnished within a ninety
(90) day period beginning with the date the Covered Person sustained those injuries.
2.2 MATERNITY EXPENSE BENEFITS
(FOR PARTICIPANTS AND DEPENDENT SPOUSES ONLY)
If a Participant or Covered Dependent Spouse becomes pregnant after the effective date
of her coverage, and if delivery occurs while the Plan is in effect, the charges incurred
will be paid the same as any illness. The designated utilization review firm must be
contacted at the time a pregnancy is confirmed and within 48 hours of any hospital
confinement.
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If a Participant or Covered Dependent Spouse becomes pregnant prior to the effective
date of the coverage, or if delivery occurs after coverage has terminated, the charges
incurred will be considered and processed the same as any illness subject to the Pre-
Existing Conditions Limitation.
Dependent children are not eligible for benefits under this provision.
2.3 NEWBORN PROVISION
The newborn child's charges are payable at 80% not subject to the calendar year or
hospital services deductibles for the first fourteen (14) days or until the initial hospital
discharge whichever occurs first.
For a baby who is hospitalized for more than 14 days, benefits for the associated
professional fees (including, but not limited to, physician, anesthesiologist, pathologist and
radiologist) will be the same as provided under the major medical provisions of the plan,
subject to all plan conditions, exclusions and limitations, including usual deductible and
co-payment provisions.
2.4 OUTPATIENT SURGERY
For outpatient surgical procedures performed in the outpatient department of a hospital,
an Ambulatory Surgical Center, Minor Emergency Medical Center, or doctor's office,
eligible charges by the facility will be payable at 80%, not subject to the deductible. The
designated utilization review firm must be contacted before the performance of an
outpatient surgical procedure (except emergency surgeries). Covered expenses shall
include reasonable and customary charges by the facility for necessary services perform-
ed and/or supplies received in connection with and on the same day as the outpatient
surgical procedure.
All associated covered professional fees (including, but not limited to, physicians,
anesthesiologist, pathologist and radiologist) will be paid at 80% and processed subject
to the usual deductible and co-payment provisions of the Plan.
If procedures are performed on an inpatient basis due to medical necessity, benefits will
be payable under the Major Medical Expense Benefit provision of the Plan subject to all
Plan conditions, exclusions and limitations, including usual deductible and co-payment
provisions, and Mandatory Hospital Admission and Outpatient Surgery Review.
2.5 ROUTINE EXAMINATIONS
This plan will pay charges for routine examinations or check-ups including associated
routine laboratory and/or x-ray services for the Participant and Covered Spouse. The
maximum benefit under this provision is $200.00 per calendar year per Participant and
Covered Spouse. Benefits will be payable at a percentage rate of 50%, subject to the
calendar year deductible.
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2.6 PRE-ADMISSION TESTING
Pre-Admission Testing, when performed on an outpatient basis, will be included as a
Covered Expense, and will be payable at 80% not subject to a deductible up to the
maximum benefit of $10,000.00. Such testing must be performed within seven (7) days
of a scheduled hospital admission, and must be performed at the same hospital where
such confinement is to occur, or a qualified facility designated by the admitting physi-
cian(s).
2.7 MANDATORY HOSPITAL ADMISSION AND OUTPATIENT SURGERY REVIEW
Under this Plan, an authorization and pre-certification of every inpatient hospital
admission'or outpatient surgery (except emergency surgery) is required. Failure to obtain
authorization will result in an additional $300.00 PENALTY DEDUCTIBLE for each inpatient
confinement charge (hospital facility) or any expenses resulting from outpatient surgery.
It is the responsibility of the Participant to make sure that the designated utilization review
firm is contacted.
2.7.1 Inpatient Admission or Outpatient Surgery Review
2.7.1.a NON-EMERGENCY(Elective)ADMISSIONS/OUTPATIENT SURGERY must be reported
to the designated utilization review firm at least 5 days prior to any scheduled con-
finement or surgery (except emergency surgeries).
2.7.1.b EMERGENCY ADMISSIONS must be reported to the designated utilization review
firm within 48 hours of the admission.
2.7.1.c HOLIDAY AND WEEKEND EMERGENCY ADMISSIONS are to be reported to the
designated utilization review firm on the next regular business day thereafter.
2.7.1.d PREGNANCY is to be reported to the designated utilization review firm as soon as
condition is confirmed. At the time of actual admission, notify the designated
utilization review firm within 48 hours.
2.7.1.e CONVALESCENT NURSING FACILITY, HOME HEALTHCARE, AND HOSPICE CARE
services are to be reported to the designated utilization review firm, before these
programs are outlined or any services rendered.
'For the purpose of clarification, hospital admission also includes special provision services
of Convalescent Nursing Facility, Home Health Care, and Hospice Care.
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2.7.2 Review Procedures
The Plan will provide Covered Participants with the designated utilization review firm
information and an 800-Toll-Free telephone number to call. To avoid penalty, the firm
must be contacted within the time limits specified above. When contacted, a Verification
Number will be issued. Retain this number which will confirm that the firm was notified
of the confinement or surgery. The Participant should retain the Verification Number until
the claim is processed,,in case proof is needed that the designated utilization review firm
was contacted.
Nurses and physicians of the designated utilization review firm are to collect any
information necessary for the review from Covered Persons, attending physicians and
hospitals to assess whether inpatient hospital care or outpatient surgery is medically
necessary and appropriate. Inpatient care or outpatient surgery will be considered "medi-
cally necessary" only if it is appropriate given the symptoms, and is consistent with the
diagnosis. "Appropriate" means that the type, level, and length of service, and the set-
ting are needed to provide safe and adequate care and treatment.
If inpatient care or outpatient surgery is approved as medically necessary, authorization
for the surgery or admission and the number of days approved for confinement, if any,
will be certified and reported to the physician, hospital, and/or Covered Person.
If the patient needs to be hospitalized longer than the originally authorized length of stay,
or must be hospitalized after an outpatient surgery, the attending physician must request
authorization from the designated utilization review firm for additional days. The request
must be made before the end of the stay originally authorized, or before admitting, if it
is an outpatient surgery, by phoning. If any days are not requested and authorized in
advance, the hospital benefits may be reduced for those days retrospectively determined
as not medically necessary and appropriate.
Authorization for inpatient care or outpatient surgery does not guarantee: (1) the payment
of benefits; or (2) the amount of benefits. Eligibility for, and payment of, benefits are
subject to all the terms and provisions of the Plan.
UNLESS THE COVERED PERSON USES THE UTILIZATION REVIEW PROGRAM, ANY
HOSPITAL BILL FOR AN INPATIENT CONFINEMENT OR OUTPATIENT SURGERY WHICH
HAS NOT BEEN AUTHORIZED UNDER THE PROGRAM WILL BE SUBJECT TO AN
ADDITIONAL $300.00 DEDUCTIBLE.
Expenses incurred but not paid due to the above penalty and/or in connection with any
days of confinement or the performance of surgery determined to be not medically
necessary will not count toward satisfaction of any deductible or co-payment of this Plan.
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2.8 MANDATORY SECOND SURGICAL OPINION
Charges by a physician for a mandatory second surgical opinion will be payable at
100%, not subject to a deductible, when any of the listed non-emergency elective surgical
procedures is recommended to a Covered Person by a surgeon. (See required list of
such procedures below). The designated utilization review firm may require a second
surgical opinion, or based upon the history of the covered person, approve the surgery
in lieu of the second surgical opinion. If the second opinion does not confirm the need
for surgery, a third consultation will be considered a covered expense. The physicians
rendering such second and third opinions must be qualified to render such a service,
either through experience, specialized training or education, or similar criteria, must not
be affiliated in any way with the physician who will be performing the actual surgery, and
does not subsequently perform the surgery or treat the Covered Person for the condition
which resulted in a request for a second opinion.
NOTE: A referral by the Covered Person's family physician to a specialist is not a request
for a second opinion--it is a referral. Such a referral will not satisfy the requirements of
this provision.
IF THIS MANDATORY SECOND SURGICAL OPINION EXPENSE BENEFIT IS NOT
UTILIZED BY A COVERED PERSON AND/OR A CONFIRMING SECOND OPINION IS NOT
OBTAINED, CHARGES FOR THE SURGERY AND ANY EXPENSES RELATED TO THE
SURGERY SHALL BE SUBJECT TO THE FOLLOWING PENALTY. ALL ASSOCIATED
CHARGES WILL BE PAID AT 50% CO-PAYMENT.
The designated utilization review firm must be contacted before any second surgical
opinion is obtained. The following are procedures which may require a second surgical
opinion:
* D & C (Dilation & Curettage)
* Hysterectomy
* Surgery of the stomach (gastric stapling not covered if for weight reduction)
* Surgery of the thyroid, tonsils or adenoids
* Surgery of the foot (ostectomy)
* Surgery of the back (laminectomy)
* Surgery of the knee (arthroplasty)
* Surgery of the gallbladder
* Surgery for hernia
* Surgery of the ear (myringotomy)
* Surgery of the nose (deviated septum; septoplasty)
* Surgery of the breast (mastectomy)
* Surgery for veins; arteries
* Surgery of the prostate
* Surgery for the heart (by-pass)
* Surgery for hemorrhoids (hemorrhoidectomy)
* Kidney Transplant
* Corneal Transplant
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* Bone Marrow Transplant
* Heart Transplant
* Lung Transplant
Expenses incurred but not paid due to non-compliance with this provision will not count
toward satisfaction of any deductible, or co-payment of this plan.
2.9 TRANSPLANTS PROCEDURE
Charges for services and supplies provided in conjunction with Bone Marrow, Kidney,
Heart, Lung and/or Corneal transplant procedures, are subject to the calendar year
deductible up to a calendar year maximum benefit of $150,000.00. Both the hospital
pre-admission and outpatient surgery for services in this section are subject to review by
the designated utilization review firm. Transplant procedures will be subject to a second
opinion and benefit eligibility conditions as follows:
2.9.1 Second Opinion
A second opinion must be obtained prior to undergoing any transplant procedure. This
mandatory second opinion (requires review by the designated utilization review firm) must
concur with the attending physician's findings regarding the medical necessity of such
procedure. The physician rendering this second opinion must be qualified to render such
a service either through experience, specialist training or education, or such similar cri-
teria, and must not be affiliated in any way with the physician who will be performing the
actual surgery.
2.9.2 Benefit Eligibility
2.9.2.a If the donor is covered under this Plan, eligible medical expenses incurred by the
donor will be considered for benefits.
2.9.2.b If the recipient is covered under this Plan, eligible medical expenses incurred by the
recipient will be considered for benefits. Expenses incurred by the donor, who is not
ordinarily covered under this Plan according to participant eligibility requirements,
will be considered eligible expenses to the extent that such expenses are not payable
by the donor's plan. In no event will benefits be payable in excess of the Maximum
Lifetime Benefit still available to the recipient.
2.9.2.c If both the donor and the recipient are covered under this Plan, eligible medical
expenses incurred by each person will be treated separately for each person.
2.9.2.d The reasonable and customary cost of securing an organ from a cadaver or tissue
bank, including the surgeon's charge for removal of the organ and a hospital's
charge for storage or transportation of the organ, will be considered a Covered
Expense.
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2.9.2.e No other replacement or transplant of tissue or organs are covered by the Plan.
2.10 WEEKEND ADMISSIONS
Expenses associated with an elective, non-emergency hospital admission on Friday,
Saturday or Sunday will not be covered expenses under the Plan. The only exception
to this exclusion shall be a medically necessary Sunday evening admission for a surgical
procedure scheduled to be performed before 9 A.M. on Monday.
Expenses incurred but not paid due to non-compliance with this provision will not count
toward satisfaction of any deductible, or co-payments of this Plan.
3. SPECIAL PROVISIONS
3.1 CONVALESCENT NURSING FACILITY
3.1.1 Definitions:
3.1.1.a The term "Convalescent Nursing Facility" means an institution, or distinct part thereof,
operated pursuant to law and one which meets all of the following conditions:
(1) It is licensed to provide, and is engaged in providing on an inpatient basis, for
persons convalescing from injury or illness, professional nursing services ren-
dered by a registered graduate nurse (R.N.) or by a licensed practical nurse
(L.P.N.) under the direction of a registered graduate nurse and physical
restoration services to assist patients to reach a degree of body functioning
to permit self-care in essential daily living activities; and
(2) Its services are provided for compensation from its patients and under the full-
time supervision of a physician or registered graduate nurse; and
(3) It provides 24-hour nursing service by licensed nurses, under the direction of
a full-time registered graduate nurse; and
(4) It maintains a complete medical record on each patient; and
(5) It has an effective utilization review plan; and
(6) It is not, other than incidentally, a place for rest, the aged, drug addicts,
alcoholics, mental retardates, custodial or educational care, or care of mental
disorders; and
(7) It is approved and licensed by Medicare.
This term shall also apply to expenses incurred in an institution referring to itself as
a Skilled Nursing Facility, Extended Care Facility, Convalescent Nursing Home, or any
such other similar nomenclature.
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3.1.1.b The term "Convalescent Period" means a period of time commencing with the date
of confinement by a Covered Person to a Convalescent Nursing Facility. Such con-
finement must meet all of the following conditions:
(1) Such confinement must commence within fourteen (14) days of being
discharged from a hospital; and
(2) Said hospital confinement must have been for a period of not less than three
(3) consecutive days; and
(3) Both the hospital and convalescent confinements must have been for the care
and treatment of the same illness or injury.
A Convalescent Period will terminate when the Covered Person has been free of
confinement in any and all institutions providing hospital or nursing care for a period
of ninety (90) consecutive days. A new convalescent period shall not commence
until a previous convalescent period has terminated.
3.1.2 Covered Expenses
3.1.2.a Covered expenses shall include charges made by a Convalescent Nursing Facility
in any one convalescent period, as follows:
(1) Room and board, including any charges made by the facility as a condition
of occupancy, or on a regular daily or weekly basis such as general nursing
services. If private room accommodations are used, the daily room and board
charge allowed will not exceed the facility's average semi-private charges or an
average semi-private rate made by a representative cross-section of similar insti-
tutions in the area.
(2) Covered expenses shall be paid at 80%, not subject to a deductible, up to a
maximum benefit of $4,000.00 per confinement. The designated utilization
review must be contacted before services are provided. Covered expenses
under this provision will not count toward satisfaction of any co payment of this
Ip an.
3.2 HOME HEALTH CARE
3.2.1 Definitions
3.2.1.a The term "Home Health Care Agency" means a public or private agency or
organization that specializes in providing medical care and treatment in the home.
Such a provider must meet all of the following conditions:
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(1) It is primarily engaged in and duly licensed, if such licensing is required, by the
appropriate licensing authority to provide skilled nursing services and other
therapeutic services.
(2) It has policies established by a professional group associated with the agency
or organization. This professional group must include at least one physician
and at least one registered graduate nurse (R.N.) to govern the services
provided and it must provide for full-time supervision of such services by a
physician or registered graduate nurse.
(3) It maintains a complete medical record on each individual.
(4) It has a full-time administrator.
3.2.1.b The term "Home Health Care Plan" means a program for continued care and
treatment of the Covered Person established and approved in writing by the Covered
Person's attending physician within seven (7) days following termination of a hospital
confinement as a resident inpatient, and is for the same or related condition for which
he was hospitalized. The attending physician must certify that the proper treatment
of the illness or injury would require continued confinement as a resident inpatient
in a hospital in the absence of the services and supplies provided as part of the
home health care plan.
3.2.2 Covered Expenses
Covered expenses shall be payable at 80%, not subject to a deductible up to the lifetime
maximum benefit. The designated utilization review firm must be contacted before
services are provided. Covered expenses under this provision will not count toward
satisfaction of any co-payment of this plan
Covered expenses shall include charges made by a Home Health Care Agency for care
in accordance with a Home Health Care Plan. Such expenses include:
3.2.2.a Part-time or intermittent nursing care by a registered graduate nurse (R.N) or a
licensed practical nurse (L.P.N.), a vocational nurse, or a public health nurse who is
under the direct supervision of a registered nurse;
3.2.2.b Home health aides;
3.2.2.c Medical supplies, drugs and medicines prescribed by a physician, and laboratory ser-
vices provided by or on behalf of a hospital, but only to the extent that they would
have been covered under this Plan if the Covered Person had remained in the
hospital.
EXCLUSIONS - Specifically excluded from coverage under this benefit are the following:
3.22d Services and supplies not included in the Home Health Care Plan.
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I
3.2.2.e Services of a person who ordinarily resides in the home of the Covered Person, or
is a close relative of the Covered Person.
3.2.2.f Services of any social worker.
3.2.2.g Transportation services.
3.3 HOSPICE CARE
3.3.1 Definition
3.3.1.a The term "Hospice" means a health care program providing a coordinated set of
services rendered at home, in outpatient settings or in institutional settings for
Covered Persons suffering from a condition that has a terminal prognosis. Such
facility must meet all of the following conditions:
(1) It must have an inter-disciplinary group of personnel which includes at least one
physician and one registered graduate nurse
(2) It must maintain central clinical records on all patients.
(3) It must meet the standards of the National Hospice Organization (NHO) and
applicable state licensing requirements.
3.3.2 Covered Expenses
3.3.2.a Covered expenses shall be paid at 80%, not subject to a deductible to the lifetime
maximum benefit for in/outpatient services. The designated utilization review firm must
be contacted before services are provided. Covered expenses under this provision
will not count toward satisfaction of any co-payment of this plan.
3.3.2.b Covered expenses shall include charges made by a hospice for:
(1) Room and board and/or nursing care by a registered graduate nurse, a licensed
practical nurse, a vocational nurse or a public health nurse who is under the
direct supervision of a registered nurse.
(2) Physical therapy and speech therapy when rendered by a licensed therapist.
(3) Medical supplies, including drugs and biological and the use of medical
appliances.
(4) Physician services.
14
(5) Services, supplies, and treatments deemed medically necessary and ordered
by a licensed physician.
3.4 MENTAL NERVOUS DISORDERS - ALCOHOL/DRUG ABUSE
This plan will pay for services pertaining to treatment on an outpatient basis in connection
with mental illness, functional nervous disorders, mental or nervous disorders of any type
or cause, for psychiatric or psychoanalytic care, or for alcohol and/or drug abuse, ordered
by a physician or certified social worker-advance clinical practitioner referred by the
Employee Assistance Program. Covered expenses shall not include charges for
psychological testing, marriage counseling, family or group therapy. Covered expenses
will be paid at 80% up to the calendar year maximum benefit of $5,000.00.
This plan will pay for services rendered on an inpatient basis in connection with mental
illness, functional nervous disorders, mental or nervous disorders of any type or cause,
psychiatric or psychoanalytic care, or for alcohol and/or drug abuse ordered by a
physician. Covered expenses will be paid at 80%, subject to the calendar year and
hospital deductibles, up to the lifetime maximum benefit of $25,000.00.
Any expenses incurred will not count toward satisfaction of any co-payment of this plan.
All participants and dependents must be effective on the Plan for 180 days before any
benefits will be paid by the plan for any treatment of a mental/nervous disorder.
Unless the covered person completes an EAP assessment prior to going to any provider,
all associated charges will be paid at 50% co-payment. Emergency admissions in
connection with mental/nervous disorders shall be covered according to the Plan as long
as the EAP Provider is notified within forty-eight (48) hours of the emergency admission.
4. EXCLUSIONS & LIMATIONS
4.1 PRE-EXISTING CONDITIONS
Claims resulting from Pre-Existing Conditions, as defined in the Plan, are excluded for 18
months from coverage under the Plan.
4.1.1 Treatment Free Period
If the Covered Person does not receive medical care or services (including prescription
drugs) or is not under a physician's care with respect to the pre-existing (or related
condition(s)) for a period of eighteen (18) consecutive months, the pre-existing conditions
limitation will no longer apply and any charges incurred for such condition(s) after the
treatment free period are allowed; or,
15
4.1.2 Waiting Period
If the Covered Person is covered under the Plan for a period of eighteen (18) consecutive
months, the,pre-existing conditions limitation will no longer apply and all charges incurred
thereafter will be considered eligible.
4.1.3 Exception to the Pre-Existing Condition
The exclusion of coverage due to the above Pre-Existing Condition provision of this Plan
shall be modified to the following extent for those persons covered on the Effective Date
of this Plan and covered on the immediately preceding day under the policy this Plan
replaced, whether such policy replaced was written by an insurer or under a similar but
not insured plan:
4.1.3.a If the Covered Person incurs expense which would be eligible for payment hereunder
except for the Pre-Existing Conditions Provision and such expense would have been
eligible for payment under the policy replaced had that policy been continued in force
rather than replaced by this plan, the Company agrees to pay the lesser of the
amount thus payable for such expenses under:
(1) The policy replaced, and
(2) This plan disregarding the Pre-Existing Conditions Provision.
4.1.3.b In no event shall the total amount payable hereunder because of this exception
exceed the maximum amount payable under this Plan if the Pre-Existing Conditions
Provision were not present.
4.1.3.c No item of expenses incurred before the Effective Date of the Plan shall be payable
under this Plan.
4.1.3.d In no event shall the term "this Plan" be construed to include the policy replaced.
4.2 GENERAL PLAN EXCLUSIONS AND LIMITATIONS
4.2.1 General Exclusions
The following exclusions and limitations apply to expenses incurred by all Covered
Persons, and Covered Expenses do not include:
4.2.1.a Charges incurred prior to the effective date of coverage under the Plan, or after
coverage is terminated;
4.2.1.b Charges incurred as a result of war or any act of war, whether declared or
undeclared, or caused during service in the armed forces of any country;
16
4.2.1.c Charges arising out of or in the course of any occupation for wages or profit, or for
which the Covered Person is entitled to benefits under any Worker's Compensation
or Occupational Disease Law, or any such similar law;
4.2.1.d Charges incurred while confined in a hospital owned or operated by the United
States Government or any Agency thereof, or charges for services,treatments or sup-
plies furnished by the United States Government or any Agency thereof for treatment
of a service-connected disability;
4.2.1.e Charges incurred for which the Covered Person is not, in the absence of this
coverage, legally obligated to pay, or for which a charge would not ordinarily be
made in the absence of this coverage;
4.2.1.f Charges resulting from or occurring:
(1) during the commission of a crime by the Covered Person; or
(2) while engaged in an illegal act, illegal occupation or felonious act or aggra-
vated assault;
4.2.1.g Charges incurred in connection with any intentionally self-inflicted injury or illness,
whether sane or insane;
4.2.1.h Charges incurred for, nutritional supplements, or immunizations not necessary for the
treatment of an injury or illness;
4.2.1.i Charges incurred for services or supplies which constitute personal comfort or beauti-
fication items, television or telephone use, or in connection with custodial care, edu-
cation or training, occupational therapy, or expenses actually incurred by other
persons;
4.2.1.j Charges incurred in connection with the care or treatment of, or surgery performed
for, a cosmetic procedure. This exclusion shall not apply when such treatment is for
reconstructive surgery for a Covered Person incidental to or following surgery
resulting from trauma, infection, or other disease (s) of the involved part which occurs
while coverage is in effect, or when rendered to correct a congenital anomaly, i.e.,
a birth defect, for a Covered dependent child;
4.2.1.k Charges incurred in connection with services and supplies which are not necessary
for treatment of the injury or illness, or are in excess of reasonable and customary
charges or are not recommended and approved by a physician, unless specifically
shown as a Covered Expense elsewhere in the Plan;
4.2.1.1 Charges for services, supplies, or treatments not recognized by the American Medical
Association as generally accepted and medically necessary for the diagnosis and/or
treatment of an active illness or injury; or charges for procedures, surgical or
17
i
otherwise,which are specifically listed by the American Medical Association as having
no medical value;
4.2.1.m Charges for services rendered by a physician, nurse, or licensed therapist if such
physician, nurse, or licensed therapist is a close relative of the Covered Person;
4.2.1.n Charges incurred outside the United States if the Covered Person traveled to such
a location for the sole purpose of obtaining medical services, drugs, or supplies;
4.2.1.o Charges for hospitalization when such confinement occurs primarily for physiotherapy,
hydrotherapy, convalescent or rest care, or any routine physical examinations or tests
not connected with the actual illness or injury;
4.2.1.p Charges for physician fees for any treatment which is not rendered by or in the
physical presence of a physician;
4.2.1.q Charges incurred in connection with eye refractions, the purchase or fitting of eye-
glasses, contact lenses, hearing aids, or such similar aid devices. This exclusion
shall not apply to the initial purchase of eyeglasses or contact lenses following cata-
ract surgery, nor does it apply to the initial purchase of a hearing aid if the loss of
hearing is a result of a surgical procedure performed while coverage is in effect;
4.2.1.r Charges incurred for treatment on or to the teeth, the nerves or roots of the teeth,
gingival tissue or alveolar processes; however, benefits will be payable for charges
incurred:
(1) for the removal of bony impacted teeth (no allowance for other extractions) on
an outpatient basis, unless hospital confinement is documented to be medically
necessary; and
(2) for treatment required because of accidental bodily injury to natural teeth
sustained while covered. Such expenses must be incurred within six(6) months
of the date of the accident. This exception shall not in any event be deemed
to include charges for treatment for the repair or replacement of a denture;
4.2.1.s Charges related to or in connection with fertility studies, sterility studies, procedures
to restore or enhance fertility, artificial insemination, or in-vitro fertilization;
4.2.1.t Charges for professional services on an outpatient basis in connection with mental
illness, functional nervous disorders, mental or nervous disorders of any type or
cause, or for psychiatric or psychoanalytic care for any reason, or for alcohol and/or
drug abuse or addiction unless such services are rendered by a physician or a
Certified Social Worker-Advance Clinical Practitioner recommended by the Employee
Assistance Program. Covered expenses shall not include charges for psychological
testing, marriage counseling, family or group therapy. Covered expenses shall not
include services rendered prior to the 181st day following the covered person's
effective date of coverage.
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1
1 ,
4.2.1.0 Charges for professional services on an inpatient basis in connection with mental
illness, functional nervous disorders, mental or nervous disorders of any type or
cause, or for psychiatric or psychoanalytic care for any reason, or for alcohol and/or
drug abuse or addiction unless such services are rendered by a physician. Covered
expenses shall not include services rendered prior to the 181st day following the
covered person's effective date of coverage.
4.2.1.v Charges for professional nursing services if rendered by other than registered
graduate nurse (R.N.) or licensed practical nurse (L.P.N.), licensed vocational nurse
(L.V.N.) or unless such care was vital as a safeguard for the life of a Covered
Person, and unless care is specifically listed as Covered Expenses elsewhere in the
Plan;
4.2.1.w Charges resulting from or in connection with the reversal of a sterilization procedure;
4.2.1.x Charges incurred as a result of or in connection with the pregnancy of a dependent
child;
4.2.1.y Charges for experimental procedures, drugs, or research studies, or for any services
or supplies not considered legal in the United States;
4.2.1.z Charges for well-baby care, including the usual, ordinary and routine care of a new-
born, and routine circumcision after 24 months, except as otherwise stated in the
plan;
4.2.1.aa Charges for elective abortions;
4.2.1.ab Charges for replacement of a lost, missing or stolen prosthetic device;
4.2.1.ac Charges for diagnosis and/or medical or surgical treatment of any type of
temporomandibular joint disorder or dysfunction, by any name called;
4.2.1.ad Charges for treatment of (a) weak, strained, flat, unstable or unbalanced feet,
metatarsalgia or bunions, except open cutting operations; (b) corns, callouses or
toenails, except removing nail roots; charges for orthotic devices; care prescribed by
a physician treating metabolic or peripheral-vascular disease;
4.2.1.ae Charges for vitamins or dietary supplements;
4.2.1.af Charges for equipment for environment control or general household use such as
air filters or food liquidizers;
4.2.1.ag Charges for biofeedback training and therapy;
4.2.1.ah Charges for sex transformation surgery and sex hormones related to such surgery;
19
4.2.1.ai Charges for treatment of obesity, including surgical procedures; treatment of eating.
disorders, including (but not limited to) anorexia nervosa and/or bulimia;
4.2.1.aj Charges for vision therapy;
4.2.1.ak Charges for radial keratotomy or keratoplasty;
4.2.1.al Charges for chelation therapy;
4.2.1.am Maximum benefits payable for any charges for eligible chiropractic services (and/or
any other professional services in connection with care for dislocations or
subluxations of the vertebrae) shall be limited to $600.00 per Calendar year. This
limitation shall not apply to charges for or in connection with diagnosis or treatment
requiring a general anesthetic, and open cutting operation, and/or a necessary hospi-
tal confinement.
4.2.1.an Charges incurred as a result of or in connection with diagnosis or treatment of a
learning disability or learning impairment, by any name called. This exclusion
includes, but is not limited to, charges for initial testing; room and board by a
Remedial Clinic; remedial education or training; Educational Therapy (including
therapeutic training exercises and multisensory teaching techniques); periodic
achievement tests; tutoring; rental or purchase of books, tools, equipment,
implements, or supplies of any kind; travel; recreational activities.
4.2.1.ao Charges for prescription drugs, insulin, and/or immunization agents; however, this
exclusion shall not apply to medication which is to be taken by or administered to
and is-billed to an individual while confined as an inpatient in a licensed hospital or
similar medical institution which operates on its premises, a facility for dispensing
pharmaceuticals nor does it apply to allergy or biological sera administered by a
licensed physician.
5. GENERAL PLAN ADMINISTRATIVE GUIDELINES
5.1 COORDINATION OF BENEFITS
The Coordination of Benefits provision is intended to prevent the payment of benefits
which exceed expenses. It applies when the Participant or any eligible dependent who
is covered by the Plan is also covered by any other plan or plans. When more than one
coverage exists, one plan normally pays its benefits in full and the other plans pay a
reduced benefit.
This Plan will always pay either its benefits in full or a reduced amount which, when
added to the benefits payable by the other plan or plans, will not exceed 100% of
allowable expenses. Only the amount paid by the Plan will be charged against the Plan
maximums.
20
1
f I I i
The Coordination of Benefits provision applies whether or not a claim is filed under the
other plan or plans. If needed, authorization must be given this Plan to obtain information
as to benefits or services available from the other plan or plans, or to recover overpay-
ments.
All benefits contained in the Plan Document are subject to this provision.
5.1.1 Definitions
5.1.1.a The term 'Plan" as used herein will mean any Plan providing benefits or services for
or by reason of medical or dental treatment, and such benefits or services are
provided by group insurance or any other arrangement for coverage for Covered
Persons in a group whether on an insured or uninsured basis, including but not
limited to:
(1) Hospital indemnity benefits; and
(2) Hospital reimbursement-type plans which permit the covered person to elect
indemnity at the time of claims; or
(3) Hospital or medical service organizations on a group basis, group practice and
other group pre-payment plans; or
(4) Hospital or medical service organizations on an individual basis having in effect
a provision similar to this provision; or
(5) A licensed Health Maintenance Organization (H.M.O.); or
(6) Any coverage for students which is sponsored by, or provided through, a
school or other educational institution; or
(7) Any coverage under a Governmental program, and any coverage required or
provided by any statute; or
(8) Group automobile insurance; or
(9) Individual automobile insurance coverage on an automobile leased or owned
by the company; or
(10) Individual automobile insurance coverage based upon the principles of "No
Fault" coverage.
The term 'Plan" will be construed separately with respect to each policy, contract, or
other arrangement for benefits or services, and separately with respect to that portion
of any such policy, contract, or other arrangement which reserves the right to take
the benefits or services of other plans into consideration in determining its benefits
and that portion which does not.
21
5.1.1.b The term "Allowable Expenses" means any necessary item of expense, the charge
for which is reasonable, regular and customary, at least a portion of which is covered
under at least one of the plans covering the person for whom claim is made.
(1) When a Plan provides benefits in the form of services rather than cash
payments, then the reasonable cash value of each service rendered will be
deemed to be both an allowable expense and a benefit paid.
5.1.1.c The term "Claim Determination Period" means a Calendar Year or that portion of a
Calendar Year during which the Covered Person for whom claim is made has been
covered under this Plan.
5.1.2 Coordination Procedures
Notwithstanding the other provisions of this Plan, benefits that would be payable under
this Plan will be reduced so that the sum of benefits and all benefits payable under all
other Plans will not exceed the total of Allowable Expenses incurred during any Claim
Determination Period with respect to Covered Persons eligible for:
5.1.2.a Benefits either as an insured person or participant or as a dependent under any
other Plan which has no provision similar in effect to this provision, or
5.1.2.b Dependent benefits under this Plan for Dependents who are also eligible for benefits:
(1) As an insured person or participant under any other Plan; or
(2) As a dependent child of an insured person or participant covered under any
other Plan; or
5.1.2.c Benefits under this Plan for Participants who are also eligible for benefits as an
insured person or participant under any other Plan and have been covered contin-
uously for a longer period of time under such other Plan.
For the purpose of determining the applicability of and for implementing this
provision, or any provision of similar purpose in any other Plan, the Company may,
without the consent of or notice to any person, release to or obtain from any other
insurance company or other organization or person any information with respect to
any person, which the Company deems to be necessary for such purposes.
Any Covered Person claiming benefits under this Plan will furnish to the Company
such information as may be necessary to implement this provision or to determine
its applicability.
22
5.1.3 Payments
Each plan makes its claim payments according to where it falls in this order, if Medicare
is not involved;
5.1.3.a If a plan contains no provision for Coordination of Benefits, then it pays before all
other plans.
5.1.3.b The plan which covers the claimant as an employee (or named insured) will pay as
though no other plan existed; remaining recognized charges are paid under a plan
which covers the claimant as a dependent.
5.1.3.c If the claimant is a dependent child, then the benefits of the Plan for the parent
whose date of birth, excluding year of birth, occurs earlier in the calendar year shall
be determined before the benefits of a Plan covering the parent whose date of birth,
excluding year of birth, occurs later in the calendar year. However, if his parents are
divorced, then,
(1) The plan of the parent with custody pays first unless a court order or decree
specifies the other parent to have financial responsibility, in which case the plan
for that parent would pay first;
(2) The plan of a step-parent with whom he lives pays second (if applicable).
5.1.3.d If the order set out in A, B, or C above does not apply in a particular case, then the
plan which has covered the claimant for the longest period of time will pay first.
5.1.3.e The Company has the right:
(1) To obtain or share information with the insurance company or other
organization regarding Coordination of Benefits without the consent of the
claimant.
(2) To require that the claimant provide the Company with information on such
other plans so that this provision may be implemented.
(3) To pay over the amount due under this Plan to an insurer or other organization
if this is necessary, in the opinion of the Company, to satisfy the terms of this
provision.
5.1.4 Facility of Payment
Whenever payments which should have been made under this Plan in accordance with
this provision have been made under any other plan or plans, the Company will have
the right, exercisable alone and in its sole discretion, to pay to any insurance company
or other organization or person making such other payments any amounts it will
determine in order to satisfy the intent of this provision, and amounts so paid will be
23
deemed to be benefits paid under this Plan and to the extent of such payments, the
Company will be fully discharged from liability under this Plan.
The benefits that are payable will be charged against any applicable maximum-payment
benefit of this Plan rather than the amount payable in the absence of this provision.
5.1.5 Coordination with Medicare
Notwithstanding all other provisions of this Plan, all Covered Persons who are eligible for
Medicare benefits will be entitled to benefits under this Plan in addition to Medicare.
However, any benefits of this Plan will be coordinated with Medicare in accordance with
the Coordination of Benefits Provision of this Plan and benefits subject to the rules and
regulations as specified by the Tax Equity and Fiscal Responsibility Act of 1982. If any
Covered Person eligible for Medicare fails to enroll thereunder, benefits will be paid as
though he had enrolled.
5.2 SUBROGATION
This Plan may withhold payment of benefits when a party other than the Covered Person
or the Plan may be liable for expenses until such liability is legally determined.
In the event of any payment for services under the Plan, the Plan Administrator shall, to
the extent of such payment, be subrogated to all the rights of recovery of the Covered
Person arising out of any claim or cause of action which may occur because of the
alleged negligent conduct of a third party. Any such Covered Person hereby agrees to
reimburse the Plan, for any benefits so paid hereunder, out of any monies recovered from
such third party as the result of judgment, settlement or otherwise; and such Covered
Person hereby agrees to take such action, to furnish such information and assistance,
and to execute and deliver all necessary instruments as the Plan Administrator may
require to facilitate the enforcement of their rights. This provision shall not apply,
however, to a recovery obtained by a Covered Person from an insurance company on
a policy under which such Covered Person is entitled to indemnity as a named insured
person.
5.3 RIGHT TO RECEIVE AND RELEASE NECESSARY INFORMATION
For the purposes of determining the applicability of implementing the terms of this
provision of the Plan or any provision of similar purpose of any other Plan the Company
may, without the consent of or notice to any person, release to or obtain from any
insurance company or other organization or person any information, with respect to any
person, which the Company deems to be necessary for such purposes.
Any person claiming benefits under this Plan shall furnish to the Company such
information as may be necessary to implement this provision.
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5.4 ELIGIBILITY OF COVERAGE
Coverage provided under this Plan for Participants and their Dependents shall be in
accordance with the Eligibility, Effective Date, and Termination provisions as stated in this
Plan Document, including any Coverage Classification stated on the Schedule of Benefits
page.
If coverage classifications are designated on the Schedule of Benefits, any change in the
amount of coverage available to a Covered Person occasioned by a change in the
classification of Participant shall become effective automatically on the classification
change date; however, if the Participant is not actively at work within the eligible class
on the date the amount of his coverage would otherwise increase, such increase shall
not become effective until the next following day on which he is actively at work within
the eligible class. If coverage for a Participant is to be continued during disability,
approved leave of absence or temporary lay-off, the amount of his coverage shall be the
amount for which he was covered on his last day of active work; in no event shall this
coverage be continued for longer than ninety (90) days, except where it conflicts with
Workers' Compensation Laws of the State of Texas.
In the case of a Dependent, such increase shall not become effective automatically if on
that date the dependent is confined in a hospital or elsewhere. Such increase will
become effective, however, on the day next following the final discharge of dependent
from the hospital. This limitation will not apply to a newborn who is hospital confined
solely because of his birth.
5.4.1 Participant Eligibility
5.4.1.a A Participant eligible for coverage under the Plan shall include only full-time
employees who have met all of the following conditions:
(1) Is employed by the Company on a permanent basis for at least 40 hours per
week.
(2) Has been actively at work for a continuous period of 90 days.
(3) Is within the classification, if any, shown in the Schedule of Benefits.
5.4.1.b With respect to such eligible person employed by the company on the effective date
of this Plan, the date of eligibility shall be the effective date of the Plan.
5.4.1.c With respect to such an eligible person who becomes employed by the Company
after the effective date of the Plan, the date of eligibility shall be:
(1) The day immediately following the date he has been actively at work for a
continuous period of 90 days.
25
[ I r
(2) The day he first comes within the Classification, if any, shown in the Schedule
of Benefits, whichever date is later.
5.4.1.d A Participant eligible for dependent coverage shall be any Participant whose
dependents meet the definition of a dependent as stated earlier in the Plan. Each
Participant will become eligible for Dependent Coverage on the latest of the following:
(1) The date he becomes eligible for participant coverage; or
(2) The date on which he first acquires a dependent; or
(3) The date he first comes within the classification, if any, eligible for dependent
coverage as stated on the Schedule of Benefits.
5.4.1.e If both the husband and wife are employed by the Company, and both are eligible
for dependent coverage, either the husband or wife, but not both, may elect
dependent coverage for their eligible dependents.
5.4.2 Dependent Eligibility
5.4.2.a A dependent will be considered eligible for coverage on the date the Participant
becomes eligible for dependent coverage, subject to all limitations and requirements
of this Plan, and in accordance with the following:
5.4.2.b Newborn children of a Covered Participant will be covered from the moment of birth
for injury or illness, including the necessary care or treatment of medically diagnosed
congenital defects, birth abnormalities or prematurity, provided the child is properly
enrolled as a dependent of the Participant within thirty (30) days of the date of birth
of the child. This provision shall not apply nor in any way affect the normal mater-
nity provisions applicable to the mother.
5.4.2.c A spouse will be considered an eligible dependent from the date of marriage,
provided the spouse is properly enrolled as a dependent of the Participant within
thirty (30) days of the date of marriage.
5.4.2.d If a dependent is acquired other than at the time of his birth, due to a court order,
decree, or marriage, that dependent will be considered an eligible dependent from
the date of such court order, decree, or marriage provided that this new dependent
is properly enrolled as a dependent of the Participant within (30) days of the court
order, decree or marriage.
5.5 EFFECTIVE DATE OF COVERAGE
5.5.1 Effective Date for Participants
5.5.1.a Participant coverage under the Plan shall become effective with respect to an eligible
person on the date of his eligibility, provided written application is made on or before
26
{
that date. If application is made within thirty (30) days after the date of eligibility, the
participant coverage for the eligible person shall become effective on the date that
application is made.
5.5.1.b The Company reserves the right to require evidence of good health satisfactory to
the Company from any eligible person who makes application for participant cover-
age under the Plan more than thirty (30) days after the date of his eligibility; his
coverage shall become effective on the date such evidence of good health is
approved by the Company.
5.5.1.c If an eligible person is not actively at work on the date this Participant coverage
would otherwise become effective, his coverage shall become effective on the day
he returns to active work.
5.5.1.d All Participant coverage under the Plan shall commence at 12:01 A.M. Standard
Time on the date such coverage is effective, provided such Participant is able to be
actively at work at such time.
5.5.1.e If the Participant is not actively at work on the date this participant coverage would
otherwise take effect, but was able to do so at 12.01 A.M. Standard Time had such
work been commenced at that time, such Participant shall be eligible for coverage
on that date.
5.5.1.f The actively at work provision is waived for Participants who are qualified beneficiaries
as defined by the Consolidated Omnibus Budget Reconciliation Act of 1985.
5.5.2 Effective Date for Dependents
Each Participant who makes written request for dependent coverage hereunder, on a form
approved by the Company, shall, subject to the further provisions of this section, become
covered for dependent coverage as follows:
5.5.2.a If the Participant makes such written request on or before the date he becomes
eligible for dependent coverage, he shall become covered, with respect to those
persons who are then his dependents, on the date he becomes covered for
participant coverage.
5.5.2.b If the Participant makes such written request after he becomes eligible for dependent
coverage within the thirty (30) day period immediately following the first day on which
he is both eligible for dependent coverage and actively at work, he shall become
covered on the date of such request or on the date he becomes covered for
participant coverage, whichever date is later, with respect to those persons who are
then his dependents.
27
5.5.2.c If dependent coverage under the Plan is requested and the participant makes such
written request after the end of the 30 day period specified in 5.5.2b immediately
above, or after previous termination of dependent coverage because of his failure to
make a contribution when due, the Participant must furnish evidence of good health,
satisfactory to the Company, of each person who is a dependent of such Participant.
Dependent coverage with respect to each dependent shall become effective on the
date such evidence of good health is approved by the Company.
5.5.2.d If a dependent has recently been confined on the date such Participant would
otherwise become covered for dependent coverage with respect to such dependent,
coverage for that dependent will be deferred until he has either been free of all
confinement (at home, in a hospital or elsewhere) for thirty-one 31 days, or until the
Company has received evidence satisfactory to it that the individual no longer has
any disease or injury.
5.5.2.e A "recent confinement" for the purposes of this provision means either that:
(1) The dependent is confined anywhere on the date coverage would otherwise
become effective, and/or
(2) The dependent has been confined in a hospital during the thirty-one 31 days
prior to that date.
This limitation shall not apply to an infant with respect to whom a Participant would
otherwise become covered for dependent coverage on the date of such birth of infant,
except for those limitations outlined in the Covered Expenses and Exclusions and Limita-
tions Sections of this Plan.
5.6 TERMINATION OF COVERAGE
5.6.1 Participant Termination
5.6.1.a Participant coverage shall automatically terminate immediately upon the earliest of the
following dates:
5.6.1.b Date of termination of employment for Participant; or
5.6.1.c Date the Participant ceases to be in a class of participants eligible for coverage; or
5.6.1.d Date the Participant fails to make any required contribution for coverage; or
5.6.1.e Date the Plan is terminated; or with respect to any participant benefits of the Plan,
the date of termination of such benefit; or
5.6.1.f Date the Company terminates coverage for Participant; or
5.6.1.g Date the Participant dies.
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5.6.2 Dependent Termination
The Dependent Coverage of a Participant shall automatically terminate immediately upon
the earliest of the following dates:
5.6.2.a Date the dependent ceases to be an eligible dependent as defined in the Plan; or
5.6.2.b Date of termination of coverage for Participant under the Plan; or
5.6.2.c Date the Participant ceases to be in a class of participants eligible for dependent
coverage; or
5.6.2.d Date the Participant fails to make any required contribution for dependent coverage;
or
5.6.2.e Date the Plan is terminated; or with respect to any benefits for dependents under the
Plan, the date of termination of such benefits; or
5.6.2.f Date the company terminated coverage for dependent; or
5.6.2.g Date the Participant dies.
5.6.3 Continuation Rights on Termination of Eligibility
Subject to the following conditions, the employee and/or his dependent will be entitled,
without evidence of good health, to continue coverage under this Plan:
5.6.3.a If the coverage of an employee terminates due to:
(1) termination of employment (other than for gross misconduct); or
(2) reduction in hours of employment; or
5.6.3.b If the coverage of a dependent terminates due to:
(1) the employee's death;
(2) the employee's divorce or legal separation from his spouse;
(3) the employee's eligibility under Medicare; or
(4) a covered child's ineligibility as a family member;
5.6.3.c The Plan Administrator must be notified within thirty (30) days in the event of
termination or reduction of hours, employee's death, or the employee's eligibility
under Medicare.
29
5.6.3.d The employee or dependent is responsible for notifying the Plan Administrator within
60 days after a divorce or legal separation, or the dependent child's loss of
dependent status.
5.6.3.e The Plan Administrator will notify the employee or dependent of continuation rights
under this plan within 14 days of the date of receipt of notification of the specific
qualifying event.
5.6.3.f Written notice which is: (a) presented to the employee; or (b) mailed to the
employee's or dependent's last known address, shall constitute proper notice.
5.6.3.g Notification to a dependent spouse eligible for continuation of coverage shall be
deemed to be notification to all other dependents residing with the spouse at the time
of notification,
(1) unless otherwise specified in the election in the event of termination or
reduction in hours, the election by the employee to continue coverage shall be
deemed election for all eligible dependents; and
(2) unless otherwise specified in the election, in the event of termination due to any
other qualifying event, election by the employee's spouse to continue coverage
shall be deemed election for all other eligible dependents. In the case of a
dependent child who has lost his dependent status the child must notify the
Plan Administrator of such election.
5.6.3.h Election to continue coverage and payment of the first contribution thereof must be
received by the Plan Administrator no later than 60 days after:
(1) the date on which coverage terminates; or
(2) the date of notification of continuation rights.
5.6.3.i If election to continue coverage is made after the qualifying event, an additional 45
days from the date of election will be allowed for payment of the contribution due for
the period from the time coverage terminates until the time election is made.
5.6.4 Termination of Continuation of Coverage Rights
Continuation of coverage under this Plan will terminate on the earliest of the following
dates:
5.6.4.a The date on which the Company ceases to provide any group health plan on any
employee;
5.6.4.b The date the required contribution ceases to be made;
30
5.6.4.c The date the employee or dependent becomes covered under any other group health
plan (as an employee or otherwise) that does not contain any exclusion or limitation
for any pre-existing condition of the covered person, or becomes entitled to benefits
under Medicare;
5.6.4.d 18 months after termination of eligibility due to termination or reduction in hours; or
5.6.4.e 36 months after termination of eligibility due to the divorce, or legal separation,
employee death, employee's eligibility for Medicare and loss of dependent status for
a dependent child; or
5.6.4.f 29 months if during the 18 month period coverage is extended because you or a
covered dependent are determined to be disabled (for Social Security purposes) at
the time of termination or reduction in hours and notification is made within 60 days
of the Social Security determination; or
5.6.4.g The date that the disabled individual is no longer disabled. Federal law requires that
you inform the Plan Administrator of any final determination that the individual is no
longer disabled.
6. GENERAL PROVISIONS
6.1 NOTICE AND PROOF OF CLAIM
Written notice of injury or of illness upon which claim may be based must be given to the
company within ninety (90) days of the date of the commencement of the first loss for
which benefits arising out of such injury or illness may be claimed.
Notice given by or in behalf of the claimant to the Company with particulars sufficient to
identify the Covered Person, shall be deemed to be notice to the Company.
Failure to furnish notice within the time provided in the Plan shall not invalidate any claim
if it shall be shown not to have been reasonably possible to furnish such notice and that
such notice was furnished as soon as was reasonably possible.
The Company, upon receipt of the notice required by the Plan, will furnish to the claimant
such forms as are usually furnished by it for filing proof of loss. If such forms are not so
furnished within fifteen (15) days after the Company receives such notice, the claimant
shall be deemed to have complied with the requirements of the Plan as to proof of loss
upon submitting, within the time fixed in the Plan for filing proofs of loss, written proof
covering the occurrence, character and extent of the loss for which claim is made.
Affirmative proof of loss of time on account of disability or of hospital confinement for
which claim is made must be furnished to the Company within ninety (90) days after the
termination of the period for which claim is made. Affirmative proof of any other loss on
which claim is made must be furnished to the Company within ninety (90) days after the
date of such loss. Failure to furnish proof within the time provided in the Plan shall not
31
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m
invalidate or reduce any claim if it shall be shown not to have been reasonably possible
to furnish such proof and that such proof was furnished as soon as reasonably possible.
However, when coverage for the Covered Person terminates for any reason, written proof
of claim must be given to the Company within ninety (90) days of the date of termination
of coverage, provided that the Plan remains in force. However, upon termination of the
Plan, final claims must be received within thirty (30) days of termination.
6.1.1 Examination
The Company shall have the right and opportunity to have the Covered Person (whose
injury or sickness is the basis of a claim hereunder) examined when and so often as it
may reasonably require during pendency of claim hereunder.
The Company shall also have the right and opportunity to have an autopsy performed
in case of death where it is not forbidden by law.
6.1.2 Payment of Claims
All Plan benefits are payable to the Participant, or subject to any written direction of the
Participant. All or a portion of any indemnities provided by the Plan on account of
hospital, nursing, medical or surgical services may, at the Participant's option and unless
Participant requests otherwise in writing not later than the time of filing proofs of such
loss, be paid directly to the hospital or person rendering such services; however, if any
benefit remains unpaid at the death of the Participant or if the Participant is a minor or
is, in the opinion of the Company, legally incapable of giving a valid receipt and
discharge for any payment, the Company may, at its option, pay such benefits to any one
or more of the following relatives of the Participant: wife, husband, mother, father, child
or children, brother or brothers, sister or sisters. Any payment so made will constitute
a complete discharge of the Company's obligation to the extent of such payment and the
Company will not be required to see the application of the money so paid.
If a claim is not paid in full, the Company will furnish notice to the Participant which will
specify the reason or describe the additional information required to perfect the claim.
Upon written request by the Participant within sixty (60) days after notice is received,
Company will review the claim in question and give a final written decision on the review
within sixty (60) days, or one hundred-twenty (120) days under special circumstances,
after such request is received.
6.1.3 Rights of Recovery
Whenever payments have been made by the Company with respect to allowable
expenses in excess of the maximum amount of payment necessary to satisfy the intent
of this Plan, the Company shall have the right, exercisable alone and in its sole discretion,
to recover such excess payments.
32
6.1.4 Free Choice of Physician
The Covered Person shall have free choice of any legally qualified physician or surgeon
and the physician-patient relationship shall be maintained.
6.2 LEGAL PROCEEDINGS
No action at law or in equity shall be brought to recover on the Plan prior to the
expiration of sixty (60) days after proof of loss has been filed in accordance with the
requirements of the Plan, nor shall such action be brought at all unless brought within
three (3) years from the expiration of the time within which proof of loss is required by
the Plan.
6.3 TIME LIMITATION
If any time limitation of the Plan with respect to giving notice of claim or furnishing proof
of loss, or the bringing of an action at law or in equity, is less than that permitted by the
law of the state in which the Plan is existent, such limitation is hereby extended to agree
with the minimum period permitted by such law.
6.4 WORKER'S COMPENSATION NOT AFFECTED
This Plan is not in lieu of, and does not affect any requirement for coverage by Worker's
Compensation Insurance.
6.5 CONFORMITY WITH LAW
If any provision of this Plan is contrary to any law to which it is subject, such provision
is hereby amended to conform thereto.
6.6 REPRESENTATIONS AND WARRANTIES
In the absence of fraud, all statements made by a Covered Person will be deemed
representations and not warranties. No such representations will void the Plan benefits
or be used in defense to a claim hereunder unless a copy of the instrument containing
such representation is or has been furnished to such Covered Person.
6.7 MISCELLANEOUS
Section titles are for convenience of reference only and are not to be considered in
interpreting this Plan. No failure to enforce any provision of this Plan shall affect the right
thereafter to enforce such provision of this Plan.
33
7. DEFINITIONS
Certain words and phrases which may be used in this Plan Document are listed below,
along with the definition or explanation of the manner in which the term is used for the
purposes of this Plan.
Masculine pronouns used in this Plan Document shall include masculine or feminine
gender unless the context indicates otherwise.
Wherever any words are used herein in the singular or plural, they shall be construed as
though they were in the plural or singular, as the case may be, in all cases where they
would so apply.
7.0.1 Actively at work-The active expenditure of time and energy in the service of the City.
A participant shall be deemed actively at work on each working day or while using
accrued leave time consistent with the City's policies.
7.0.2 Affiliate - A firm which is a subsidiary of the Company, or which is affiliated with the
Company may be an Affiliate if such affiliate, by action of its board and with the
approval of the Company, has adopted the Plan.
7.0.3 Ambulatory Surgical Center - An institution or facility, either free-standing or as part
of a hospital with permanent facilities, equipped and operated for the primary pur-
pose of performing surgical procedures and to which a patient is admitted to and
discharged from within a twenty-four (24) hour period. Any office maintained by a
physician for the practice of medicine or dentistry, or for the primary purpose of
performing terminations of pregnancy, shall not be considered to be an ambulatory
surgical center.
7.0.4 Amendment - A formal document that changes the provisions of the Plan Document,
duly signed by the authorized person or persons as designated by the Plan
Administrator.
7.0.5 Benefit Percentage - That portion of the eligible expenses to be paid by the Plan in
accordance with the coverage provisions as stated in the Plan. It is the basis used
to determine any out-of-pocket expenses in excess of the annual deductible which
are to be paid by the Participant.
7.0.6 Benefit Period - A time period of one year, as shown on the Schedule of Benefits.
Such benefit period will terminate on the earliest of the following dates:
(1) The last day of the one-year period so established; or
(2) The day the Maximum Lifetime Benefit applicable to the Covered Person
becomes payable; or
34
(3) The day the Covered Person ceases to be covered for Major Medical Expense
Benefits.
7.0.7 Benefit Year- A period of time commencing with the effective date of this Plan or the
Plan Anniversary, and terminating on the date of the next succeeding Plan
Anniversary.
7.0.8 Calendar Year-A period of time commencing on January 1 and ending on December
31 of the same given year.
7.0.9 Certified Social Worker-Advanced Clinical Practitioner - A person certified by the
Texas Department of Human Services as a Certified Social Worker with the order of
recognition of Advanced Clinical Practitioner with Private Practitioner Recognition.
In states where there is a licensure requirement,the Certified Social Worker-Advanced
Clinical Practitioner must be licensed by the appropriate state administrative agency.
7.0.10 Close Relative - The spouse, parent, brother, sister, child, or spouse's parent of the
Covered Person.
7.0.11 College - See definition of University.
7.0.12 Company - The City of Beaumont.
7.0.13 Cosmetic Procedure - A procedure performed solely for the improvement of a
Covered Person's appearance rather than for the improvement or restoration of
bodily function.
7.0.14 Covered Expenses - Any medically necessary treatments, services, or supplies, that
are not specifically excluded from coverage elsewhere in this Plan.
7.0.15 Covered Person - Any Participant or dependent of a Participant meeting the eligibility
requirements for coverage as specified in this Plan, and properly enrolled in the Plan.
7.0.16 Custodial Care - That type of care or service, wherever furnished and by whatever
name called, which is designed primarily to assist a Covered Person, whether or not
totally disabled, in the activities of daily living. Such activities include, but are not
limited to: bathing, dressing, feeding, preparation of special diets, assistance in
walking or in getting in and out of bed, and supervision over medication which can
normally be self-administered.
7.0.17 Deductible - A specified dollar amount of Covered Expenses which must be incurred
during a benefit period before any other Covered Expenses can be considered for
payment according to the applicable Benefit Percentage.
35
7.0.18 Dependent
7.0.18.a The Participant's legal spouse who is a resident of the same country in which the
Participant resides. Such spouse must have met all requirements of a valid marriage
contract in the State of marriage of such parties.
7.0.18.b The Participant's child who meets all of the following conditions:
(1) Is a resident of the same country in which the Participant resides;
(2) Is unmarried;
(3) Is a natural child, step-child, legally adopted child, or a child who has been
placed under the legal guardianship of the Participant;
(4) Is in the custody of and/or financially dependent upon the Participant. This
requirement is waived if the Participant is required to provide coverage due to
Court order or divorce decree for a natural or adopted child not in his custody
or not wholly dependent on him;
(5) Is less than nineteen (19) years of age. This requirement is waived if the child
is at least nineteen (19) years of age but less than twenty-five (25) years of age,
and is dependent upon the Participant for support, and is a regular full-time
student at a high school, college or university. The age requirement above is
also waived for any mentally retarded or physically handicapped child, provided
that the child is incapable of self-sustaining employment and is chiefly
dependent upon the Participant for support and maintenance. Proof of
incapacity must be furnished to the Company, and additional proof may be
requested from time to time.
7.0.18.c Those situations specifically excluded from the definition of a dependent are:
(1) A spouse who is legally separated or divorced from the Participant; or
(2) Any person on active military duty; or
(3) Any person eligible for coverage under this Plan as an individual Participant;
or
(4) Any person who is covered as a dependent by more than one Participant of
the same Company.
7.0.18.d If both the husband and wife are employed by the company and both are eligible
for coverage, either the husband or wife, but not both, may elect dependent coverage
for their eligible dependents.
36
7.0.19 Dependent Coverage - Eligibility under the terms of the Plan for benefits payable as
a consequence of eligible expenses incurred for an illness or injury of a dependent.
7.0.20 Durable Medical Equipment - Equipment which is:
(1) Able to withstand repeated use;
(2) Primarily and customarily used to serve a medical purpose;
(3) Not generally useful to a person in the absence of illness or injury.
7.0.21 Eligible Expenses - See Covered Expenses.
7.0.22 ERISA - The Employee Retirement Income Security Act of 1974 or any provision or
section thereof which is herein specifically referred to, as such act, provision or
section may be amended from time to time.
7.0.23 Family - A Covered Participant and his eligible dependents.
7.0.24 Free-Standing Birthing Center-An institution or facility, either free-standing or as part
of a hospital with permanent facilities, equipped and operated for the primary pur-
pose of performing surgical procedures and to which a patient is admitted to and
discharged from within a twenty-four (24) hour period. Any office maintained by a
physician for the practice of medicine or dentistry, or for the primary purpose of
performing terminations of pregnancy, shall not be considered to be an ambulatory
surgical center.
7.0.25 Full-Time Employment - A Participant actively working for the Company at least forty
(40) hours per week (exclusive of overtime) on a year-round basis.
7.0.26 Full-Time Student - A Participant's dependent child who is enrolled in and regularly
attending high school or an accredited college or university for the minimum number
of credit hours required by that college or university in order to maintain full-time
student status.
7.0.27 Hospital - An institution which meets all of the following conditions:
(1) It is engaged primarily in providing medical care and treatment to ill and injured
persons on an inpatient basis at the patient's expense; and
(2) It is constituted, licensed and operated in accordance with the laws of
jurisdiction in which it is located which pertain to hospitals; and
(3) It maintains on its premises all the facilities necessary to provide for the
diagnosis and medical and surgical treatment of an illness or an injury; and
37
r a rr
(4) Such treatment is provided for compensation by or under the supervision of
physicians with continuous twenty-four hour nursing services by registered
graduate nurses (R.N.'s); and
(5) It qualifies as a hospital, a psychiatric hospital, or a tuberculosis hospital and
is accredited by the Joint Commission on the Accreditation of Hospitals (JCAH);
and
(6) It is a provider of services under Medicare; and it is not, other than incidentally,
a place for rest, a place for the aged, a place for drug addicts, a place for
alcoholics, or a nursing home.
7.0.28 Hospital Miscellaneous Expenses - The actual charges made by a hospital in its
own behalf for services and supplies rendered to the Covered Person which are
medically necessary for the treatment of such Covered Person. Hospital mis-
cellaneous expenses do not include charges for room and board or for professional
services (including intensive nursing care by whatever name called), regardless of
whether the services are rendered under the direction of the hospital or otherwise.
7.0.29 Illness - A bodily disorder, disease, physical sickness, mental infirmity, or functional
nervous disorder of a Covered Person. A recurrent illness will be considered one ill-
ness. Concurrent illnesses will be considered one illness unless the concurrent
illnesses are totally unrelated. All such disorders existing simultaneously which are
due to the same or related causes shall be considered one illness.
7.0.30 Incurred Expenses - Those services and supplies rendered to a Covered Person.
Such expenses shall be considered to have occurred at the time or date the service
or supply is actually provided.
7.0.31 Injury - A condition caused by accidental means which results in damage to the
Covered Person's body from a sudden, violent, unexpected and external event. Any
loss which is caused by or contributed to by a hernia of any kind will be considered
a loss under the definition of illness, and not as a loss resulting from accidental
injury.
7.0.32 Inpatient - The classification of a Covered Person when that Person is admitted to
a hospital, convalescent facility, or hospice for treatment, and charges are made for
room and board to the Covered Person as a result of such treatment.
7.0.33 Intensive Care Unit - A section, ward, or wing within the hospital which is separated
from other facilities that meet all of the following conditions:
(1) Is operated exclusively for the purpose of providing professional medical
treatment for critically ill patients;
(2) Has special supplies and equipment necessary for such medical treatment
available on a standby basis for immediate use; and
38
(3) Provides constant observation and treatment by registered nurses (R.N.'s) or
other highly trained hospital personnel.
7.0.34 Licensed Practical Nurse-An individual who has received specialized nursing training
and practical nursing experience, and is duly licensed to perform such nursing
services by the state in which the individual performs such services.
7.0.35 Medically Necessary - Health care services, supplies or treatment which, in the
judgment of the attending physician, are appropriate and consistent with the
diagnosis and which, in accordance with generally accepted medical standards,
could not have been omitted without adversely affecting the patient's condition or the
quality of medical care rendered.
7.0.36 Medicare - The programs established by Title I of Public Law 89-98 (79 Statutes
291) as amended entitled "Health Insurance for the Aged Act," and which includes
Parts A and B and Title XVIII of the Social Security Act (as amended by Public Law
89-98, 79) as amended from time to time.
7.0.37 Mental/Nervous Disorder - Any neurosis, psychoneurosis, psychopathy, psychosis,
personality disorder, or any other Mental, Nervous or Emotional disease or disorder
of any kind.
7.0.38 Minor Emergency Medical Clinic - A free-standing facility which is engaged primarily
in providing minor emergency and episodic medical care to a Covered Person. A
Board-Certified Physician, a Registered Nurse, and a Registered X-Ray Technician
must be in attendance at all times that the clinic is open. Clinic facilities must include
x-ray and laboratory equipment and a life support system. For the purposes of this
Plan a clinic meeting these requirements will be considered to be a minor emergency
medical clinic, by whatever actual name it may be called; however, a clinic located
on or in conjunction with or in any way made a part of a regular hospital shall be
excluded from the terms of this definition.
7.0.39 Named Fiduciary - The City of Beaumont, which has the authority to control and
manage the operation and administration of the Plan.
7.0.40 Newborn - An infant from the date of his birth until the initial hospital discharge or
until the infant is fourteen (14) days old, whichever occurs first.
7.0.41 Occupational Therapy - Treatment which is rendered for reasons other than
restoration of bodily function and the prevention of disability. Such treatment is
usually rendered by the use of work-related skills and leisure time tasks for the
evaluation of an individual's behavior and/or abilities for self-care, work or play.
7.0.42 Outpatient - The classification of a Covered Person when that Covered Person
received medical care, treatment, services or supplies at a clinic, office of a physician,
39
s x d
or at a hospital if not a registered bed patient at that hospital, and outpatient
psychiatric facility or an outpatient alcoholism treatment facility.
7.0.43 Outpatient Alcoholism Treatment Facility - An institution which provides a program
for diagnosis, evaluation, and effective treatment of alcoholism; provides detoxification
services needed with its effective treatment program; provides infirmary-level medical
services or arranges with a hospital in the area for any other medical services that
may be required; is at all times supervised by a staff of physicians; provides at all
times skilled nursing care by licensed nurses who are directed by a full-time
registered graduate nurse (R.N.); prepares and maintains a written plan of treatment
for each patient based on medical, psychological and social needs which is
supervised by a physician; and meets licensing standards.
7.0.44 Outpatient Psychiatric Facility - An administratively distinct governmental, public,
private or independent unit or part of such unit that provides outpatient mental health
services and which provides for a psychiatrist who has regularly scheduled hours in
the facility, and who assumes the overall responsibility for coordinating the care of
all patients.
7.0.45 Participant - A person permanently and directly employed full time in the regular
business of, and compensated for services by, the Company. The term "Participant"
shall also include a person who is a qualified beneficiary as defined by the
Consolidated Omnibus Budget Reconciliation Act of 1985.
7.0.46 Participant Coverage - Coverage hereunder providing benefits payable as a
consequence of an injury or illness of a Participant.
7.0.47 Physical Therapy - Treatment which is rendered to restore a certain degree of bodily
function or prevent disability following illness, injury, or loss of a body part. Physical
therapy shall not include any occupational therapy.
7.0.48 Physician - A legally licensed medical or dental doctor or surgeon, chiropractor,
osteopath, chiropodist, podiatrist, optometrist, Certified Social Worker-Advanced
Clinical Practitioner, or certified consulting psychologist to the extent that same, within
the scope of their license, are permitted to perform services provided in this Plan.
A Physician shall not include the Covered Person or any close relative of the Cov-
ered Person.
7.0.49 Plan - Without qualification, this Plan Document.
7.0.50 Plan Administrator- The Company, which is responsible for the day-to-day functions
and management of the Plan. The Plan Administrator may employ persons or firms
to process claims and perform other Plan connected services.
7.0.51 Plan Supervisor-The person or firm employed by the Company to provide consulting
services to the Company in connection with the operation of the Plan and any other
functions, including the processing and payment of claims.
40
7.0.52 Pre-Admission Testing - The procedure where certain routine tests (x-ray, laboratory,
etc.) are performed on an outpatient basis within seven (7) days of a scheduled
hospital admission.
7.0.53 Pre-Existing Condition - Any condition which has been discovered during the pre-
employment process or injury or illness of a Covered Person for which the Covered
Person has been under the care of a licensed physician or has received medical care
or services within the eighteen (18) month period immediately preceding his effective
date of coverage. Claims resulting from pre-existing conditions, as defined are
excluded from coverage under the Plan for 18 months.
7.0.54 Pregnancy - That physical state which results in childbirth, abortion, or miscarriage,
and any medical complications arising out of or resulting from such state.
7.0.55 Psychiatric Care - Also known as psychoanalytic care, means treatment for mental
illness or disorder, or a functional nervous disorder.
7.0.56 Psychiatric Day Treatment Facility - A mental health facility which is: (1) accredited
by the Program for Psychiatric Facilities (or its successor) or by the Joint Commission
of Accreditation of Hospitals; and (2) provides treatment for acute mental or nervous
disorders; and (3) provides such treatment for up to 8 hours in any 24 hour period.
Treatment must be given in a structured psychiatric program using a personalized
treatment plan. The treatment plan must have specific attainable goals which are
appropriate both to the patient and the program. The treatment plan must be
supervised by a doctor of medicine who is certified in psychiatry by the American
Board of Psychiatry and Neurology.
7.0.57 Psychologist - An individual holding the degree of Ph.D. and acting within the scope
of his license.
7.0.58 Reasonable and Customary-The designation of a charge as being the usual charge
made by a physician or other providers of services, supplies, medication or
equipment that does not exceed the general level of charges made by other pro-
viders rendering or furnishing such care or treatment within the same area. The term
"area" in this definition means a county or such other area as is necessary to obtain
a representative cross-section of such charges. Due consideration will be given to
the nature and severity of the condition being treated and any medical complications
or unusual circumstances which require additional time, skill or expertise.
7.0.59 Registered Nurse - An individual who has received specialized nursing training and
is authorized to use the designation of "R.N.", and who is duly licensed by the state
or regulatory agency responsible for such licensing in the state in which the individual
performs such nursing services.
7.0.60 Room and Board - All charges by whatever name called which are made by a
hospital or convalescent nursing facility as a condition of occupancy. Such charges
41
do not include the professional services of physicians nor intensive nursing care by
whatever name called.
7.0.61 Semi-Private - A class of accommodations in a hospital or convalescent nursing
facility in which at least two patient beds are available per room.
7.0.62 TEFRA - Tax Equity and Fiscal Responsibility Act of 1982, as amended from time
to time.
7.0.63 Total Disability (Totally Disabled) - A physical state of a Covered Person resulting
from an illness or injury which wholly prevents:
In the case of a Participant, from engaging in any and every business or occupation
and from performing any and all work for compensation or profit; and
In the case of a Dependent, from performing the normal activities of a person of like
age and sex in good health; however, a dependent who is normally gainfully
employed will not be deemed totally disabled if he is engaging in any occupation or
employment for which he is or becomes qualified by education, training, or
experience; and a dependent who is normally a student will not be deemed totally
disabled if he is attending an educational institution on a full-time or part-time basis.
7.0.64 University - An institution accredited in the current publication of accredited
institutions of higher education.
ERISA REQUIREMENTS
The following information is required to be in the PLAN by Federal Law and Regulation (ERISA):
Name and type of administration of the Plan:
The City of Beaumont Employee Benefit Plan Providing Benefits for Reimbursement of Medical
Expenses.
Name and address of the person designated as agent for the service of legal process:
City of Beaumont
801 Main Street
Beaumont, Texas 77701
Attn: MAYOR
Name and address of the Plan Administrator/Sponsor and Named Fiduciary:
City of Beaumont
801 Main Street
Beaumont, Texas 77701
42
i 6
Name and address of Plan Supervisor:
GreenTree Administrators
P. O. Box 7306
Beaumont, TX 77726-7306
Name and address of the Trustee:
City of Beaumont
801 Main Street
Beaumont, Texas 77701
Contributions are made to the fund by the COMPANY AND COVERED EMPLOYEES, and are
held by the Trustee. Contributions are calculated and based upon the cost of coverages and
benefits. Benefits for covered expenses are provided directly from the Plan, through the Plan
Supervisor and under the direction of the Plan Administrator. Insurance is provided to cover
larger claims.
Date of the end of the Plan year: September 30.
Internal Revenue Service Identification Number: 74-6000278.
Remedies available under the Plan for the redress of claims which are denied in whole or in
part:
In the event a claim is denied by the Plan Supervisor, the denial shall be in writing, delivered
to the claimant, and shall set forth the reasons for denial and specify the pertinent Plan
provisions upon which denial is based.
If additional information is necessary to process a claim, the denial shall state and/or describe
any additional material or information needed to process the claim. Any denial shall also
advise the claimant of the review procedure below.
Written application for review or denial of a claim must be received in the office of the Plan
Sponsor not later than sixty (60) days following receipt by the claimant of the denial of his
claim, or no appeal will be allowed.
The Plan Administrator/Sponsor shall decide the appeal within sixty (60) days after receipt of
the appeal by the Plan Supervisor, unless special circumstances (such as the need to hold a
hearing) cause delay. In such case, a decision shall be rendered as soon as possible, but in
no event more than one-hundred-twenty (120) days after receipt of the application for review.
The decision on review shall be in writing, stating the reasons for the decision, and referring
to the pertinent Plan provisions upon which the decision is based.
All written decisions by the Plan Administrator/Sponsor shall be written in Plain English.
43
Additional Information:
Any person aggrieved by the decision at the conclusion of the review process may then take
any legal action deemed appropriate. The court may assess penalties against the Plan
Administrator/Sponsor for improperly failing to provide information, documents or payment of
legitimate claims, and may assess court costs and reasonable legal fees against either party,
according to the circumstances.
Service of process may be made on the designated agent or on the Plan
Administrator/Sponsor, the Plan Supervisor, or on the Trustee.
The Plan must be managed fairly and in the interest of all participants. No one may be fired
or in any way discriminated against because of a disputed claim or due to the exercise of any
rights under the law.
Participants may examine, without charge, at the office of the Plan Supervisor and other
specified locations, such as worksites, all documents pertaining to the Plan, including reports,
insurance contracts and the like. Copies of any such documents are available from the Plan
Supervisor, for which a reasonable charge may be made. Participants will also receive a
summary of the annual financial report, as required by law.
Participants in the Plan are entitled to the assistance of the local area office of the Labor-
Management Services Administration, U.S. Department of Labor.
It is the intention of The City of Beaumont to hereby establish a program of benefits constituting
an "Employee Welfare Benefit Plan" under the Employee Retirement Income Security Act of 1974
(ERISA) and any amendments thereto.
IN WITNESS WHEREOF, the Company has executed, and the Plan Supervisor has
acknowledged, this Plan Document as of the Plan Effective Date shown herein.
Signed by:
Title:
Date:
44
m
AMENDMENT 1
EFFECTIVE DATE: January 1, 1991
The following sections of the Civilian Medical Plan Document are to be amended as stated below:
SCHEDULE OF BENEFITS
FOR
ALL ELIGIBLE PARTICIPANTS AND DEPENDENTS
MEDICAL EXPENSE BENEFIT*
Annual Deductible Per Covered Person...........................$ 250.00
Maximum per family (cumulative)......................................$ 500.00
Deductible Accumulation Benefit Period............................ Calendar Year
1.2 BENEFIT PERCENTAGE AND DEDUCTIBLE
Upon receipt of Proof of Loss, the Plan will pay 80% of the first $10,000.00 of eligible
expenses incurred in each benefit period, unless otherwise stated in the Plan, which are
in excess of the $250.00 Calendar Year Deductible per Covered Person. The Hospital
Deductible will apply for each inpatient hospital confinement per illness per calendar year.
However, if the illness or injury requires, multiple hospital admissions, the hospital
deductible will be charged only once, per calendar year for the initial admission.
All eligible covered expenses incurred in the benefit period in excess of the $10,000.00,
and the calendar year deductible per covered person, will be paid at 100% (except items
in the special provision section of this document.) The amount payable in no event shall
exceed the Maximum Lifetime Benefit stated in the Schedule of Benefits.
The calendar year deductible applies to the eligible charges of each benefit period,
(except hospital inpatient confinement charges.) It applies only once for each Covered
Person within a benefit period regardless of the number of illnesses. (If Covered Expenses
incurred during a benefit period by the Covered Participant and his Covered Dependent
and applied against this deductible exceed the Family Deductible Maximum of $500.00,
no further deductible applies to any members of that family during that benefit period.)
Any Covered Expenses incurred during the last three months of any Benefit Period, and
applied toward the Calendar Year Deductible Amount for that Benefit Period, may also be
applied toward satisfaction of the Calendar Year Deductible Amount during the next Benefit
Period.
1
If the Plan benefit period is established on a calendar year basis, charges which were
used toward satisfying the cash deductible under any prior plan of insurance coverage
for the year in which this Plan was originally effective shall be accepted by the Company
toward satisfying the cash deductible of this Plan, upon receipt of documented proof of
such full or partial satisfaction.
Authorized by:
Title:
Date:
.0
2