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United of Omaha Life Insurance Company
Home Office: Mutual of Omaha Plaza, Omaha, Nebraska 68175
A Stock Company
(herein called Company)
has issued this Policy to Kerr County (herein called Policyholder)
This Policy is issued in consideration of the terms, conditions and limitations of this Policy.
This Policy is effective January 1, 2007 , at 12:01 a.m., Standard Time, at the main office of the
Policyholder.
The Company agrees to reimburse the Policyholder for excess Eligible Losses, in accordance with the
terms, conditions and limitations of this Policy. This Policy is issued in and is subject to Texas law.
THIS IS NOT A POLICY OF WORKERS' COMPENSATION INSURANCE. THE EMPLOYER DOES NOT
BECOME A SUBSCRIBER TO THE WORKERS' COMPENSATION SYSTEM BY PURCHASING THIS
POLICY, AND IF THE EMPLOYER IS A NONSUBSCRIBER, THE EMPLOYER LOSES THOSE BENEFITS
WHICH WOULD OTHERWISE ACCRUE UNDER THE WORKERS' COMPENSATION LAWS. THE
EMPLOYER MUST COMPLY WITH THE WORKERS' COMPENSATION LAW AS IT PERTAINS TO
NONSUBSCRIBERS AND THE REQUIRED NOTIFICATIONS THAT MUST BE FILED AND POSTED.
The Employer understands the liability assumed under the portion of the employee benefit plan which
he is self-insuring and further understands that he is exempted from Chapter 101 of the Texas Insurance
Code only if a qualified employee benefits plan has been filed and meets the requirements of ERISA.
UNITED OF OMAHA LIFE INSURANCE COMPANY
,~,~,/P
Chairman of the Board and Chief Executive Officer
~~
Murua~~Omaxa
5654GM-A-U-EZ 03
POLICY NO. UP-487A
(herein called Policy)
Corporate Secretary
ASO
TX
SCHEDULE OF INSURANCE
This Schedule of Insurance is incorporated into and is made a part of this Policy. Insurance coverage
herein applies only during the Policy period specified, except that the Maximum Specific
Reimbursement applies to reimbursements made during the Policy period specified in the Schedule of
Insurance and any prior Policy period. Except as otherwise described in this Policy, the coverage herein
follows the benefit exclusions and provisions in the Plan.
Terms shown in the Schedule of Insurance will be used throughout the Policy and will have the value or
meaning shown herein.
1. POLICY PERIOD: Begins January 1, 2007 and ends December 31, 2007
2. COVERED UNITS:
(a) COBRA, FMLA, USERRA, and other continuees described in the Plan document;
(b) Your eligible retired employees; or
(c) Your full-time eligible employees described in the Plan document.
3. SPECIFIC STOP LOSS INSURANCE
(a) Specific Deductible: $50,000
(b) Specific Reimbursement Percentage: 100%
(c) Maximum Specific Reimbursement: $950,000
(d) Specific Benefit Period:
Plan benefits Paid from January 1, 2007 to January 1, 2008, for Expenses incurred from
October 1, 2006 to January 1, 2008.
(e) Specific Stop Loss Insurance provides reimbursement for Eligible Losses for medical and
prescription drug cazd program Expenses.
(fj Specific Monthly Premium Rates:
Covered unit ............................................................................................................................$52.77
Covered unit and one (1) or more dependents .....................................................................$129.65
4. AGGREGATE STOP LOSS INSURANCE
Covered unit ..............................................................................	............................................$408.59
Covered unit and spouse ...........................................................	............................................$781.26
Covered unit and child(ren) .......................................................	...........................................$609.44
Covered unit, spouse and child(ren) ..........................................	.........................................$1062.00
(a) Minimum Monthly Aggregate Deductible: The sum of the Monthly Aggregate Deductible
factors applicable to each Covered Unit under the Plan during the first month of this Policy,
$128,428.80.
(b) Aggregate Reimbursement Percentage: 100%
(c) Maximum Annual Aggregate Reimbursement: $1,000,000
(d) Aggregate Stop Loss Insurance provides reimbursement for Eligible Losses for medical and
prescription drug card program Expenses.
(e) Aggregate Benefit Period:
Plan benefits Paid from January 1, 2007 to January 1, 2008, for Expenses incurred from
October 1, 2006 to January 1, 2008.
(f) Aggregate Monthly Premium Rates:
Covered unit with or without dependents ...............................................................................$14.00
5. SPECIAL UNDERWRITING TERMS: The following special underwriting terms apply to all
provisions of the Policy, including any Riders:
Not Applicable
DEFINITIONS
ELIGIBLE PARTICIPANT means any individual covered under the Plan, except as otherwise noted
in the Special Underwriting Terms in the Schedule of Insurance.
ELIGIBLE LOSS means a Loss that shall be considered toward the satisfaction of deductibles and/or
subject to reimbursement under this Policy. Eligible loss does not, however, include any Loss described
in the Exclusions provision.
EXPENSE means the charge incurred by an Eligible Participant for a service or supply which has been
ordered, prescribed or rendered by a dentist, physician or hospital. An expense is considered incurred
on the date the service or supply is received.
LOSS means an amount Paid by You or the Plan
(a) for Plan benefits for Expenses;
(b) in settlement of claims for benefits under the Plan; or
(c) in satisfaction of judgments for benefits under the Plan.
OUR, WE, US means the Company shown on the face page of this Policy.
PAY, PAID, PAYMENT means a drafr/check for Plan benefits has been issued.
PERFORMING NORMAL ACTIVITIES means physically or mentally able to perform all of the
usual and customary duties and activities of a person of the same age and sex, who is in good health. An
individual is not perfonning normal activities if he/she is:
(a) hospital confined;
(b) confined to an institution;
(c) confined to a facility other than a hospital;
(d) confined at home; or
(e) confined elsewhere due to an injury or sickness.
PLAN means Your self-insured health Gaze plan for the benefit of Eligible Participants.
RIDER means a document that is added to and made a part of the Policy. A rider amends, limits,
restricts or otherwise changes the provisions of the Policy.
YOU, YOUR means the Policyholder shown on the face page of this Policy.
BENEFIT DEFINITIONS
Aggregate Reimbursement Percentage means the percentage of Eligible Losses in excess of the
Annual Aggregate Deductible that We agree to reimburse You, subject to the terms and conditions of
the Policy.
Annual Aggregate Deductible means an amount equal to the greater of:
(a) Your minimum annual aggregate deductible; or
(b) the sum of Your Monthly Aggregate Deductible factors applicable to each covered unit under the
Plan for each month of the Policy period.
Experimental Service or Supply means a drug, device, treatment or procedure which:
(a) cannot be lawfully marketed without approval of the U.S. Food and Drug Administration and
which has not been so approved for marketing at the time the drug, device, treatment or
procedure is famished;
(b) was reviewed and approved (or which is required by federal law to be reviewed and approved)
by the treating facility's Institutional Review Boazd or other body serving a similar function or a
drug, device, treatment or procedure which is used with a patient informed consent document
which was reviewed and approved (or which is required by federal law to be reviewed and
approved) by the treating facility's Institutional Review Board or other body serving a similaz
function;
(c) Reliable Evidence shows is the subject of on-going phase I, II or III clinical trials or is under
study to determine its maximum tolerated dose, its toxicity, its safety, its efficacy or its efficacy
as compazed with a standazd means of treatment or diagnosis; or
(d) the prevailing opinion among experts, as shown by Reliable Evidence, is that further studies or
clinical trials aze necessary to determine its maximum tolerated dose, its toxicity, its safety, its
efficacy or its efficacy as compared with a standard means of treatment or diagnosis.
Reliable Evidence means published reports and articles in peer-reviewed medical and scientific
literature; the written protocol or protocols used by the treating facility or the protocol(s) of
another facility studying substantially the same drug, device, treatment or procedure; or the
patient informed consent document used by the treating facility or by another facility studying
substantially the same drug, device, treatment or procedure.
Healthcare Charges Database means a commercially available chazge information database selected
by Us that provides historical information about the charges of physicians and other professional service
providers by procedure code and geographic categories, all as determined and adjusted by the database
supplier. The healthcare charges database will be updated by Us as information becomes available from
the database supplier, up to twice each yeaz. We may also modify the database, in Our discretion, to
reflect Our experience. We have the right, in Our discretion, to substitute or replace the selected
database with a database or databases of comparable purpose, with or without notice.
Maximum Allowable Amount means the total chazge considered as an Eligible Loss before the
applicable deductibles and coinsurance amounts are applied. In cases where the Usual and Customary
Chazge is less than the maximum allowable amount, the Usual and Customary Chazge applies.
The maximum allowable amount is the amount otherwise payable under the Policy, adjusted as follows:
(a) Chages of professional service providers for multiple and bilateral surgeries: For multiple or
bilateral surgeries performed during the same operative session, the maximum allowable amount
for charges of professional service providers will be:
(1) 100% of the Usual and Customary Charge for the primary procedure;
(2) 50% of the Usual and Customary Charge for the secondary procedure; and
(3) 25% of the Usual and Customary Charge for each additional procedure.
(b) Surgical Assistants: For surgical assistance by a physician, the maximum allowable amount will
be 20% of the Usual and Customazy Chazge for the surgery for which the assistance is provided.
(c) Facility chazges for outpatient surgery and high end radiology: For surgery and high end
radiology procedures performed on an outpatient basis, the maximum allowable amount will be
no higher that the 75% percentile identified on the Outpatient Charges Database. In no event
will the maximum allowable amount exceed the amount billed by the outpatient facility or the
amount for which the Eligible Participant is responsible. For multiple or bilateral surgeries and
high end radiology procedures performed during the same operative session, the maximum
allowable amount will be:
(1) 100% of the maximum allowable amount for the highest cost procedure;
(2) 25% of the maximum allowable amount for the second highest cost procedure; and
(3) 10% of the maximum allowable amount for each additional procedure.
(d) Covered Services Billed Sepazately or Together: We will determine whether it is appropriate for
services and supplies to be billed together as a single service or supply, or billed separately. For
example, We may determine that the evaluation, treatment, management and supplies normally
fiu~nished before, during and afrer surgical and medical procedures should be billed together. Or,
We may determine that services or supplies that were billed together should be billed separately.
The maximum allowable amount will not exceed the amount payable in accordance with Our
determination of which services or supplies should appropriately be billed separately or together.
Maximum Annual Aggregate Reimbursement means Our maximum liability for aggregate stop loss
insurance reimbursement for the Policy period.
Maximum Specific Reimbursement means Our maximum liability for all specific stop loss insurance
reimbursements for Eligible Losses of a Covered Unit, including reimbursements made under this
Policy, or any prior stop loss insurance policy issued by Us.
Medically Necessary means a service or supply that is ordered, prescribed or rendered by a physician or
hospital and is determined by Us, or a qualified party or entity selected by Us, to be:
(a) provided for the diagnosis or direct treatment of an injury or sickness;
(b) appropriate and consistent with the symptoms and findings or diagnosis and treatment of the
Eligible Participant's injury or sickness;
(c) provided in accordance with generally accepted professional standazds and/or medical practice;
and
(d) the most appropriate supply or level of service which can be provided on a cost effective basis
(including, but not limited to, inpatient vs. outpatient care, electric vs. manual wheelchair,
surgical vs. medical or other types of care).
The fact that an Eligible Participant's physician or a hospital orders, prescribes or renders services or
supplies does not automatically mean such services or supplies aze medically necessary.
Monthly Aggregate Deductible means an amount equal to the greater of:
(a) Your minimum monthly aggregate deductible; or
(b) the sum of Your monthly aggregate deductible factors applicable to each covered unit under the
plan on the first day of each month.
Outpatient Charges Database means a commercially available chazge information database selected
by Us which uses a chazge information database that provides historical information about the chazges
of providers of outpatient surgery and high end radiology by selected procedure codes and geographic
categories, all as determined and adjusted by the database supplier, up to twice each year. We may, in
Our discretion, determine to increase the amount otherwise payable to reflect Our experience, or
discontinue use of, or substitute or replace the selected service or database with a service or database of
comparable purpose, with or without notice.
Specific Deductible means the amount of Your liability for Eligible Losses of each Eligible Participant
during a Policy period. The specific deductible applies separately to each Eligible Participant during a
Policy period.
Specific Reimbursement Percentage means the percentage of Eligible Losses in excess of the Specific
Deductible that We agree to reimburse You subject to the terms and conditions of the Policy.
Usual and Customary Charge means a charge by a professional service provider for a service or
supply which is no higher than the 90th percentile identified on the Healthcaze Chages Database
(HCD). When there is, in Our determination, minimal data available from the HCD for a service or
supply, We will determine the Usual and Customary Charge by calculating the unit cost for the
applicable service category using the HCD, and multiplying that by the relative value of the service or
supply assigned by the Medicaze Resource Based Relative Value Scale (supplemented with a
commercially available relative value scale selected by Us where one is not available from Medicare).
In the event of an unusually complex service or supply, a service or supply that is a new procedure or an
Eligible Loss that otherwise does not have a relative value that is in Our determination applicable, We
will assign one. In no event will the usual and customary chazge exceed the amount billed by the
professional service provider or the amount for which the Eligible Participant is responsible. The term
"usual and customary chazge" may not reflect the actual chazges of the professional service provider,
and does not take into account the professional service provider's training, experience or category of
licensure.
EXCLUSIONS
Eligible Loss does not include any Loss:
(a) or an Expense for a service or supply which is not Medically Necessary;
(b) which exceeds the Maximum Allowable Amount for an Expense;
(c) for Experimental Services or Supplies;
(d) for any Expense which is not incurred during the benefit period described in the Schedule of
Insurance;
(e) for Plan benefits which are not Paid during the benefit period described in the Schedule of
Insurance;
(f) related to Eligible Participants that We require You to report on the Select Risk Questionnaire,
unless those Eligible Participants aze approved in writing by Us;
(g) which does not strictly comply with the terms and conditions of the Plan;
(h) which You may recover under any Plan coordination of benefits or non-duplication of benefits
provision;
(i) related to exemplary, extra-contractual, compensatory or punitive damages or liabilities,
including but not limited to those resulting from the Plan's, Your, or Your agent's, employee's or
representative's gross negligence, intentional wrongs, fraud, bad faith or strict liability;
(j) related to any settlement or litigation costs and expenses;
(k) related to the services of (or provided by) a third party administrator or other party, including but
not limited to subrogation recovery fees, unless approved in writing by Us;
(1) arising out of, or resulting as a consequence of, or related to declazed or undeclared war, civil
war, wazlike action, insurrection, rebellion, or usurped power, or any action taken by a military
force or government using military personnel to defend against any of these;
(m) resulting from nuclear accidents;
(n) which arises out of, or in the course of, any employment with any employer; or for which the
Eligible Participant receives any settlement from a workers' compensation carrier, or is entitled
to benefits under any workers' compensation or occupational disease law, employer's liability or
similaz laws regardless of whether such coverage is in force;
(o) resulting from the commission of, or attempted commission of, a felony, or participation in a
riot;
(p) related to an Eligible Participant's detention or incarceration in a jail, penitentiary, correctional
facility or correctional hospital;
(q) related to an Eligible Participant's active duty or training in the Armed Forces, National Guard or
Reserves of any state or country;
(r) for Expenses for which You received a specific stop loss insurance reimbursement from Us for a
prior Policy period, but for which Plan benefits were not issued until this Policy period; or
(s) related to surchazges assessed by any governmental authority.
GENERAL PROVISIONS
AMENDMENTS TO THE PLAN - No Plan change will affect this Policy or Our rights or obligations
without Our written consent. Written notice of Plan changes must be sent to Our Home Office, at least
31 days prior to the effective date of the change. We will provide reimbursement under this Policy as if
the Plan has not been amended if such advance written notice is not received and the change is not
accepted in writing by one of Our officers. We will provide reimbursement under this Policy based
upon the amended Plan only after such notice is received by, and the change is accepted in writing by
one of Our officers.
AMENDMENTS TO THIS POLICY -Only one of Our officers may change this Policy. No change
will be valid unless made in writing and accepted in writing by Us. No agent has authority to change this
Policy or waive any of its provisions.
ASSIGNMENT -You may not assign this Policy or Your rights or obligations under this Policy.
CLERICAL ERROR - A clerical error will not invalidate insurance otherwise in effect; nor will it
continue insurance validly terminated. If an error is discovered, an equitable adjustment in premium will
be made. If a premium adjustment involves the return of unearned premium, the amount of the return
will be limited to the unearned premium for the Policy period during which We receive proof such an
adjustment is necessary.
CONFORMITY WITH LAW - If, on the effective date of this Policy, any provision of this Policy
conflicts with any applicable law, then the provision will be deemed to conform to the minimum
requirements of the law.
INSURANCE CONTRACT -The entire contract between the parties shall consist of
(a) this Policy;
(b) Your Select Risk Questionnaire;
(c) Your application for this Policy; and
(d) Riders added to this Policy that are approved by Us.
EXAMINATION OF RECORDS -Your books, records and procedures pertaining to the Plan or this
Policy (and those of all Your agents, employees and representatives) will be open to inspection by Our
employees and/or representatives during Your regular business hours.
HEADINGS -The headings of the various provisions of this Policy aze inserted merely for convenience
and do not, expressly or by implication, limit, define or extend the terms of the provisions so designated.
LEGAL ACTIONS - No legal action to recover any reimbursement under this Policy may be brought
earlier than 60 days after the date written claim for reimbursement has been given to Us. No legal action
may be brought more than 3 yeazs, or the date of any applicable state law, after the date any Expense has
been incased for which reimbursements are claimed.
LIABILITY - We will have neither the right nor obligation under this Policy to directly pay any person
or provider of professional or medical services. Our sole liability is to You, subject to the terms and
conditions of this Policy. Nothing in this Policy shall be construed to permit anyone, other than You, to
have a direct right of action against Us. We will not be considered a party to Your Plan or to any
supplement or amendment to that Plan.
MISSTATED DATA - We have relied upon the information, including, without limitation, the Select
Risk Questionnaire and Your application, provided by You or Your agents, employees or
representatives, in the issuance of this Policy. If, before or after, making any reimbursement, We
determine that You or Your agent, employee or representative provided inaccurate information or
misstated, omitted, concealed or misrepresented any material fact or circumstance concerning this Policy
or the Plan, including any Loss or other items that You were required to disclose to Us on Your
application or the Select Risk Questionnaire, or there was fraud by You or Your agent, employee or
representative relating to this Policy, We may:
(a) deny stop loss reimbursements for Losses related to (or the adjustment of Specific Deductibles
for) certain individuals, notwithstanding any other provision of the Policy;
(b) revise the terms or conditions of the Policy, including, without limitation, the premium rates;
(c) rescind the stop loss insurance; or
(d) void the Policy.
PARTIES TO THIS POLICY -The parties to this Policy are You and Us. This Policy does not create:
(a) any right or legal relationship between Us and the Plan or between Us and any Eligible
Participant;
(b) any responsibility or obligation that We directly reimburse the Plan; or
(c) any responsibility or obligation that We directly reimburse any Eligible Participant, or any health
care provider for benefits provided under the Plan.
REIMBURSEMENT OF PLAN LOSSES - We shall have the sole authority under this Policy to
approve or deny reimbursement for any Loss. All reimbursements provided under this Policy will be
Paid to You.
NEW POLICY - At the end of the Policy period, but only by mutual written agreement between You
and Us, a new stop loss policy may be issued for another Policy period. The new policy may be subject
to new premium rates, new special underwriting terms, new benefit periods and other new terms and
conditions.
SEVERABILITY CLAUSE - If any clause in this Policy is deemed void, voidable, invalid, or
otherwise unenforceable, whether or not such a provision is contrary to public interest, voiding that
clause will not render any of the remaining provisions of this Policy invalid.
SET-OFF - We aze authorized to set-off and apply any and all amounts due to You from Us under this
Policy to any and all obligations or indebtedness You may have to Us. This right of set-off does mt
require Us to make any prior demand upon You and the this right exists irrespective of whether Your
obligations are contingent or unmatured. Our rights under this provision aze in addition to any other
rights and remedies which We may have under the Policy or otherwise.
DUTIES OF THE POLICYHOLDER
In addition to all other duties and obligations described in this Policy, the parties agree that You shall
have the duties and obligations described herein.
DEFENSE -You agree to defend any claim made, suit brought or proceeding instituted against You or
the Plan or relating to payment or non-payment of Plan benefits.
PROOF OF PLAN LOSS -You agree to maintain (and make available at all times) such information
as We may reasonably require to reimburse Eligible Losses.
PAYING AND FUNDING PLAN LOSSES -You agree to Pay all Losses within 15 days of receiving
adequate proof. If You fail to Pay any Losses within the 15 day time limit, We may:
(a) immediately terminate coverage under this Policy; and
(b) consider any Policy deductible unsatisfied.
REPAYMENT AND REFUND -You agree to repay Us for any voided Payments, refunds or other
recoveries received by You or the Plan if You previously received any stop loss insurance
reimbursements from Us for the Losses. You also agree to provide such repayments to Us within 45
days afrer You or the Plan:
(a) receives a refund or recovery; or
(b) voids any Payment.
The amount You must repay Us shall not exceed the amount of Our stop loss reimbursements. You also
agree to refund to Us or repay Us other amounts due to Us as described in any Riders or any other
provisions of the Policy. If You fail to repay or refund Us within 45 days, or within the time period
specified in any Rider or other provision of the Policy, You will be liable for all expenses We incur,
including reasonable attorneys' fees, as a result of Our collection efforts.
We have preference over all other claimants for the repayment or refund of any amount due.
REPORTING COVERED UNITS -You agree to prepare and submit to Us by the 15th day of each
month, a report of the total number of covered units under the Plan during each month of the Policy
period.
Upon Our request, You shall also provide a report showing covered units by city, state, and ZIP code of
primary residence and any other pertinent data regarding Eligible Participants.
RECORDS -You agree to maintain records reasonably required by Us:
(a) during the term of this Policy; and
(b) for seven (7) years afrer termination of this Policy.
NOTIFICATION -You agree to immediately notify Us of Plan termination.
PLAN DOCUMENT -You agree to provide Us with a copy of Your Plan document describing Your
Plan's benefits.
PRIVACY OFFICER -You agree to designate a HIPAA privacy officer for the Plan.
USE OF GENERAL ASSETS -You agree to use only Your assets to fund premiums for this Policy.
Neither Plan assets nor employee contributions shall be used to fund these premiums.
SUBROGATION
You may have a subrogation or right of recovery from third parties for Losses. If We have reimbursed
You under this Policy for all or part of a Loss which is later recovered from a third party, You will repay
Us to the extent of Our reimbursement, regazdless of whether this Policy is in force on the date of
recovery. You shall notify Us of, and account to Us, for all amounts recovered from third parties. Our
rights hereunder shall constitute, impress and impose both a trust and fast priority lien against any
proceeds of any recovery obtained by You or the Plan from a third party.
If You fail to appropriately pursue any action against a third party for Losses, as determined by Us at
Our sole discretion, and We have reimbursed You under this Policy for such Losses, We will be
subrogated to all of Your rights to make recoveries for such Losses, including without limitation, the
right to bring an action in Your name to enforce Your or the Plan's rights. You will fully cooperate with
Us and do all things necessary and required for Us to pursue any action to recover against the third
party. We may contract with a third party to pursue any recovery action on Our behalf.
We, at Our sole discretion, may pursue any action against any third party for Losses for which We aze
liable under this Policy, regardless of the subrogation provision in Your Plan.
Any amounts recovered by You, Your Plan, or Us shall be distributed as follows:
(a) first, an amount payable to Us to reimburse Us for expenses and fees that We incur in pursuing
any recovery action, including, without limitation, attorneys' fees and fees of any third party
retained by Us to pursue a recovery action on Our behalf. Such expenses and fees will be shared
between You and Us in the same proportion as any funds recovered and distributed between You
and Us in accordance with this provision;
(b) second, an amount payable to Us for reimbursement of any payments made by Us under this
Policy or any amount that We aze liable to reimburse You under the terms of this Policy. Any
reimbursement to Us shall not be reduced by Your, attorneys' fees, unless We have agreed in
writing to such reduction in advance of any such attorney's or other third party's engagement;
(c) third, a fee to Us for Our services in obtaining the recovery equal to 35% of the gross recovery
(unless (a) and (b) above apply, in which case Our fee shall be 35% of the recovered funds)
remaining afrer deduction of the amounts described in (a) and (b) above. Our fee shall not
exceed $20,000; and
(d) finally, the remaining amount shall be distributed to, or retained by, You
PREMIUMS AND FACTORS
PAYMENT OF PREMIUMS -The first premium is due the first day of the Policy period. Subsequent
premium payments are due the first day of each month ("Premium Due Date") during the Policy period.
Payment should be made to Us at Our Home Office, unless one of Our officers authorizes payment to be
made somewhere else.
If this Policy terminates for any reason, You are liable for all premiums to the date of termination.
PREMIUM AMOUNT -The premium for the Policy will be calculated on the basis of premium rates
shown in the Schedule of Insurance. The amount of premium due each month will be equal to the sum
of the products obtained by multiplying each premium rate shown in the Schedule of Insurance by the
corresponding number of covered units under the Plan for that premium rate category on the first day of
each month.
GRACE PERIOD -Except for the first premium payment, a grace period of 31 days from the premium
due date will be allowed for the payment of premiums. Coverage will automatically terminate on the
premium due date if premium has not been received by Us when the grace period ends.
PREMIUM RATES, DEDUCTIBLES AND FACTOR CHANGES - We may change premium rates,
deductible factors, or any Policy deductible on:
(a) the date the Plan or Policy is changed, including, but not limited to, any change that is required
by law;
(b) the date You add or eliminate a subsidiary, affiliated company or division; or
(c) the date that the number of covered units under the Plan increases or decreases more than 10%
compared to the number of covered units under the Plan on the effective date of this Policy.
If We give at least 60 days advance written notice, We have the right to adjust premium rates when
premium taxes or other changes assessed by any governmental authority and payable by Us increases
(but only to the extent of the increase). If We do not adjust the premium rate, We may bill you directly
for charges assessed by any governmental authority and payable by Us. Amounts billed directly for
charges assessed by any governmental authority and payable by Us are due within 60 days of written
notice given by us.
Any submission of incorrect premium or number of covered units under the Plan during a Policy period
must be reported to Us no later than 60 days after the Policy period ends.
If, in addition to this Policy, You have any other insurance policy ("Insurance Policy"), group health
maintenance organization contract ("HMO Contract"), or administrative services agreement or other
type of service agreement ("Service Agreement") with Us or any affiliate of Ours, and an administration
fee or other payment described in a Service Agreement ("Fee") is not paid in full by the required dre
date, or premium is not paid in full during the grace period for this Policy or an Insurance Policy or
HMO Contract, the total amount of premium and Fees paid for this Policy and each Insurance Policy,
HMO Contract and Service Agreement during the month in which the premium or Fee is not paid in full
("the Delinquent Month") will be allocated to this Policy and each Insurance Policy, HMO Contract or
Service Agreement on a pro-rata basis.
The amount of premium and Fees allocated to this Policy and each Insurance Policy, HMO Contract,
and Service Agreement will be determined by multiplying:
(a) the amount of premium due for this Policy and each Insurance Policy and HMO Contract during
the Delinquent Month and the amount of Fees due for each Service Agreement during the
Delinquent Month by:
(b) the percentage equal to:
(I) the total amount of premium and Fees paid for this Policy and each Insurance Policy, HMO
Contract, and Service Agreement during the Delinquent Month divided by;
(2) the total amount of premium and Fees due for this Policy and each Insurance Policy, HMO
Contract and Service Agreement during the Delinquent Month.
You and We acknowledge and agree that the method of allocating premium and Fees described in this
provision will result in:
(a) the full amount of premium not being paid during the grace period for the Policy and each
Insurance Policy or HMO Contract; and
(b) the full amount of Fees not being paid by the required due date for each Service Agreement.
Accordingly, notwithstanding anything to the contrary in this Policy or any Insurance Policy, HMO
Contract or Service Agreement, the following will occur:
(a) this Policy and any other Insurance Policy or HMO Contract will automatically terminate on the
date described in this Policy and such other Insurance Policy or HMO Contract for non-payment
of premium; and
(b) any Service Agreement will automatically terminate at the end of the Delinquent Month.
TERMINATION OF INSURANCE
This Policy will continue in effect until the end of the Policy period, unless coverage is terminated as set
forth below.
The Policy will terminate on the earliest oŁ
(a) the date the Plan terminates;
(b) the date You dissolve Your company, suspend active business operations, or aze placed in
bankruptcy or receivership;
(c) the later of the date We receive written notice of termination from You, or the termination date
requested by You;
(d) the date described in the Premium Rates, Deductibles and Factor Changes provision of this
Policy;
(e) the date a change in any Policy deductible, deductible factor, or premium rate is effective, but
has not been accepted in writing by You; or
(f) the premium due date if premium is not paid by the end of the grace period.
The Policy may also be terminated, at Our option, on the earliest of:
(a) the date You fail to fund the benefits provided by the Plan;
(b) the date You amend the Plan without Our written consent;
(c) the date the number of covered units under the Plan is less than 50;
(d) the date You fail to perform any of the duties described in this Policy; or
(e) the date any administrative services agreement between You and Us is terminated.
We will not refund any premiums Paid by You in the event coverage terminates during a Policy period.
However, if the Policy is rescinded by Us, all premiums received for that Policy period will be refunded
to You.
REINSTATEMENT AFTER THE POLICY ENDS
If this Policy terminates for any reason, it may be reinstated at Our option. It can be reinstated only in
writing by one of Our officers and subject to any written conditions of reinstatement imposed by Us.
SPECIFIC STOP LOSS INSURANCE
Benefits
If Eligible Losses for an Eligible Participant exceed the Specific Deductible, We will reimburse You an
amount equal to the total Eligible Losses for the Eligible Participant minus the Specific Deductible
multiplied by the Specific Reimbursement Percentage, and minus any previous specific stop loss
insurance reimbursements and other amounts paid to You under any other Policy provisions in force
during this Policy period for that Eligible Participant.
Conditions
1. Specific stop loss insurance reimbursements may not exceed the Maximum Specific Reimbursement.
2. If the Policy terminates during the Policy period, the Specific Deductible will be determined as if
this Policy had remained in effect for the full Policy period. Plan benefits Paid after the Policy
termination date are not Eligible Losses.
AGGREGATE STOP LOSS INSURANCE
Benefits
We will reimburse You if Eligible Losses below any Specific Deductible exceed the Annual Aggregate
Deductible. We will reimburse You an amount equal to the total Eligible Losses minus the total Eligible
Losses in excess of any Specific Deductible, minus the Annual Aggregate Deductible, multiplied by the
Aggregate Reimbursement Percentage, and minus any previous aggregate stop loss insurance
reimbursements and other amounts paid to You under any other Policy provisions in force during this
Policy period.
Conditions
1. Aggregate stop loss insurance reimbursements may not exceed the Maximum Annual Aggregate
Reimbursement.
2. If the Policy terminates during the Policy period:
(a) the Annual Aggregate Deductible will be considered not satisfied; and
(b) We will not be liable for any aggregate stop loss insurance reimbursements.