County September 4, 2007 Copy # 2 FARA Benefit Services, Inc 1625 West Causeway Approach Mandeville, LA 70471 (800) 259-8388 (985) 624-3354 www.farabenefitservices.com Kerr County September 4, 2007 copy # 2 FARA Benefit Services, Inc 1625 West Causeway Approach Mandeville, LA 70471 (800) 259-8388 (985) 624-3354 www.farabenefitservices.com ~ ~~ ,.~~ v _ ~e _ ~..~~ o7to7 part # 15629'X-~'-3-i` RIT `~ f Q ~ r~ Li• X j _ H Z :~ : ~ ~ ~ a ~, o ~ ` 'a >- ~ H -- ~~ ~~ -~~~ = H F-~ ~ '; ~; ~ `I ~ ~~ ~ _,a ._ i ., ~ r ~j r t N; h S~ C 3 ~ --.11-~ cn ~ ~ ~~ i ' ~ ~ ~__ r ~ r ~_ ~ ~ ~~ W N to V ~y ~ ---- ~~ ~ ~ , # m d '~ ~ ~ # Q E N ~ ~ ~( ti : ... ~.. E p ~ O I v., ~.. ~ I ~ I O ~ ~ -..~ 5 I I . ~_-1 } '~ nn O y ~~ W ^ u ~ S T Y ~ ~'e ~ N ~ w. " 1. ,. 4 N ~. ~' ~,~ ~ m L . .„,.... { c a l ~ ~ r ,~ a . ~° °~ '~ Zen i` 7n ,, e..,...~ m ~ ` , ,~ "~, f d ~ ^` d , # ,7 r^' 1 .6 ~ p r j .__.- .I ~ ~~ a. ~ ~ . ~ ~ ~ E ®~ ~ ~ x u1 ~;" ` L m d mE, ~ sa~3 ale ~ 1 ~ of o~ ~,zl E c ~ a e ' Y rx2 U N M ~~ ~ 3a3H '133d ~iN3-d1 _. _ ._ ~3a 008 L W0~'X0p2} o g ,£ E9ti 0081 X3Pa~ :_~~ JENNIFER L. SMITH ~~~~. 1 r^SMAlKE i;ru~ a ti' - %'93 694 40(78 800 253 8388 F 504 2E35 0:;35 '- ~ WVVVtiI rAR~1 LOM 'al. `1i.. _, ~A,,:H i MANC~E~ ~ ~A iD~171 iil b~, if s~ ,.. it -'8' HCII-.i~~.j_ TX ~,04~' ~ FRRR. September 4, 2007 Kerr County County Judge Pat Tinley's office County Courthouse, 700 Main Kerrville, TX 78028 RE: Kerr County On behalf of myself and our entire organization, I sincerely appreciate this opportunity to offer the expertise of FARA Benefit Services, Inc. to Kerr County and its employees. We are committed to your satisfaction and the integrity of our services. FARA employs over 500 full time personnel in eleven states. FARA has Branch Offices in Alabama, California, Florida, Georgia, Louisiana, Mississippi, New Jersey, South Carolina, Tennessee, Texas, and Virginia; with our Corporate Offices located in Mandeville, LA. FARA's Third Party Administration of Group Health Plans combines Flexibility, Advanced Technology, Experienced Health Care Advisors and the Creativity to meet the special needs of Kerr County's employees. Ask your consultant or FARA Representative about Customizing your Benefits and Wellness Program to maximize your health care dollars. FARA Benefit Services, Inc. looks forward to a strong partnership with Kerr County. Sincerely, ~fi~~ Jennifer L. Smith Sales and Marketing Manager FARA Benefit Services, Inc. FARA BENEFIT SERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WWW.FARA.COM Executive Overview Lafayette -Louisiana Unlike any other vendor under consideration, FARA Benefit Services, Inc. is the only Louisiana owned and operated company. All Claims, Customer Service and Account Management are performed right here in Louisiana. FARA employs over 500 professionals. We have served our members in Texas since 1979. At FARA Benefit Services, Inc. we are proud of our reputation for professionalism, dedication to service and value to our clients. F. A. Richard and Associates, Inc. Founded in 1978, in Opelousas, Louisiana, F. A. Richard and Associates, Inc. (FARA) is one of the nation's largest Insurance Services organizations. FARA's capabilities include: Group Health Claims Administration, Claims Adjusting, Loss Prevention & Control, the FARA PPO Network, Healthcare Management, Cost Containment, Special Investigations, Claims Management, Risk Management Information System Sales and Catastrophe Adjusting Services. FARA has Branch Offices in Alabama, California, Florida, Georgia, Louisiana, Mississippi, New Jersey, South Carolina, Tennessee, Texas, and Virginia. FARA's corporate offices are located in Mandeville, LA. Company expansions are based upon client needs, volume and contract opportunities. FARA is licensed to do business in 36 states and annually administers and adjudicates over $500 million in medical claims. FARA's national presence, serving over 375,000 lives, has earned the company a reputation for outstanding administrative and risk management practices, quality customer service and solid business principles. FARA Benefit Services, Inc. ~„r FARA Benefit Services, Inc. offers only trained and qualified personnel and the very latest in systems and technology. Our claims and customer service personnel average 10+ years in the industry. FARA demands the execution of timely and accurate claims processing, record keeping (including COBRA and HIPAA administration). We have earned some of the highest auditing grades in the industry. FARA's clients appreciate our flexibility in administering numerous group products. Our Wellness and Education programs are extensive. FARA believes that the education of each member is key to a longer healthier life, resulting in a better quality of life and reduction in claims costs. FARA designs and administers Medical, Dental, Vision and Prescription Drug Programs. As an organization specializing in the administration of self-insured and partially self-funded Benefit Plans, FARA is able to help its clients create customized programs that fit the clients needs, not those of an "insurance company". All of our services are performed with one goal in mind... "To reduce and control the cost of our client's Health Plan!" FARA offers its clients unique technology in e-customer service and claims adjudication systems. Web-enabled services include: • On-line enrollment • On-line Eligibility • On-line Content Management • On-line Customer Service • On-line Paid Claims • On-line EOB s • Customized Client Branding • Health Search Portals • Custom Reporting • EDI and Auto Adjudication Our claims adjudication system significantly reduces claims processing costs while maximizing productivity. Our systems are designed to process health claims including membership, provider files, plan of benefits, definitions, and re-insurance. Our high-speed, automated transaction processing is an extremely flexible system that offers our clients simple high speed, efficient and accurate claims adjudication and payment services. After Cost Control, Customer Service becomes a major focus of FARA. All calls are accepted by "live" knowledgeable service representatives. At FARA we do not use phone prompts, call stacking or voice ~rrr' mail. 2 "~~' rA~~.. ~""" FARA Health Care Management The FARA Health Care Management Division, based in Lafayette, Louisiana, was established to assure the delivery of the highest quality and most appropriate medical treatment in an atmosphere of cost control. FARA Health Care Management monitors appropriate medical care before services are rendered, and are highly focused on providing utilization review services including Pre-admission Certification, Second Surgical & Medical Opinions, Continued Stay Review, Discharge Planning and Large Case Management. Software utilized by FARA supports the staff of licensed registered nurses (RNs) who are experts in the areas for which they monitor medical or other treatment determinations. FARA's aggressive Coordination of Benefits and Subrogation efforts add even more value to containing our client's medical claims expenditures. CONCLUSION FARA Benefit Services, Inc. "best of the best" approach provides our clients with a team that cannot be rivaled by any other entity. It provides our clients with the best of all worlds in terms of stability, experience, efficiency, cost controls, flexibility and technological innovation. A claim paid accurately and timely, eliminates nearly all potential Health Plan issues. Our clients will not find another team as well prepared to take them into the future of group health care benefits as the FARA team. The employee and their family must feel positive about their experience in dealing with FARA. We accept nothing less. 3 ~-~- r- A~~.. PLAN MECHANICS Kerr County will partially self-fund its medical plan up to a predetermined loss level which represents your maximum claims liability. Claims administration will be han- dled in a conventional manner by FARA Benefit Services, Inc. FARA Benefit Ser- vices, Inc. will also arrange for the insurance agreement between Kerr County and a reinsurance carrier. FARA Benefit Services, Inc. will assist in establishing a Plan Document and will ad- minister claims based on the Plan. Claims are paid from a claim loss fund which you will establish. This claim loss fund is not apre-paid monthly cost, but only used when medical claims are actually received and processed for payment. However, a predetermined monthly contribution can be arranged to fund for fixed costs and ex- pected claims. Estimated Maximum Loss Fund is determined by the number of covered employees at the beginning of your Plan year. Once established, this fund will be prorated as your enrollment fluctuates during the twelve month benefit year. These funds are not insurance premiums and do not require reserves. They are used to pay self- aunded claims on an "as needed" basis. Any unused funds represent an immediate savings to the Plan. Specific Stop-Loss: will lend stability to the Plan by assuring that large claims will not have a serious impact on the claims fund. If eligible Plan benefit payments reach your selected specific amount for each covered person in any benefit year, individual stop-loss insurance will pay 100% of additional covered benefits up to the lifetime maximum. Aggregate Stop-Loss: Should the amount of claims paid by the plan exceed the sum of the monthly increments at any given point in the Plan year; your liability for payment will be limited to the sum of these monthly increments. This is based on the number of single employees and the number of employees with family cover- age. The maximum annual attachment point is determined by you as are the monthly increments. ~~~. SPECIFIC INSURANCE $ 1 MILLION ~r $ 50,000 $ 60,000 INSURANCE COMPANY PAYS PLAN/FUND PAYS INSURED PAYS Partially Self Funded Health Plans ~FRriR. PER PERSON COVERAGE AGGREGATE INSURANCE MAXIMUM EXPOSURE PLAN COVERAGE COVERED EMPLOYEE; X's AGGREGATE FACTORS `~ Partially Self Funded Health Plans ~FRaR. Kerr County Request for Proposals September 4, 2007 Table of Contents Section I. fir' RFP Questions and Answers Section II. Exhibits 1. Exhibit I E&O Certificate 2. Exhibit II Sample Stop Loss Specimen Contract 3. Exhibit III Centers of Excellence Schedule 4. Exhibit IV Stop Loss Carriers List 5. Exhibit V Trizetto Article 6. Exhibit VI Sample Reporting Package 7. Exhibit VII Sample Claims Administration Agreement 8. Exhibit VIII Sample Plan Document 9. Exhibit IX Implementation 10 . Exhibit X Online Capabilities 11 . Exhibit XI Wellness Report 12 . Exhibit XII Phone Loc Section III. Cost Exhibits Section IV. Benefits Section V. HRA 1. DataPath Administrative Proposal 2. HRA Implementation Workbook 3. Fee Sheet 4. Account Balance Report Section VI. Pharmacy: WellDyneRx 1. Benefit Summary 2. Formulary 3. Kerr County Pricing Proposal 4. Sample Mail Service Order Form 5. Sample Reports a. Drug Utilization b. Top Pharmacies by Dollar Amount c. Totals by Members d. Monthly Drug Cost e. Max Benefits f. Cumulative Plan Paid Total Members g. Claims for a Specific Drug h. Member Claims 6. Specialty Drug Report 7. Sample Standard Contract Section VII. PPO Networks 1. Viant (formerly BeechStreet/Concentra) 2. Texas True Choice REQUEST FOR PROPOSALS ~P) SPECIFICATIONS Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (Ills code 125) Administration Prescription Benefit Management Kerr County Courthouse 700 Main Kerrville, Texas 78028 EFFECTIVE DATE: January 1, 2008 Page 1 of 45 Kerr County REQUEST FOR PROPOSAL TABLE OF CONTENTS Page Request for Proposal Legal Notice ................................................................................................. 3 Acknowledgement of Receipt of RFP, Certifications,C~flict of Interest Questionnaire ................ 4 - 7 Notice to Proposers ........................................................................................................................ 8 General Information, Timetable .................................................................................................... 9 - 13 Background ................................................................................................................................... 14 RFP Assumptions, Questionnaires, and Submission Forms .......................................................... 15 -27 Attachments: The following files are also included on CD Claim Experience ................................................................................................................... Summary Plan Documents ..................................................................................................... Census .................................................................................................................................... ASO Agreement ............................................................................................... If you do not have access to an intemet system you may obtain a hard copy of the Request for Proposal from: Gary R Looney, 3201 Cherry Ridge Rd, Suite D 405, San Antonio, Texas 78230 Ph: 210-930-6665 Page 2 of 45 `err Kerr County Request for Proposal Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&I7 Health Reimbursement Arrangement Cafeteria Plan (IIZS code 125) Administration Prescription Benefit Management Ken County will accept sealed proposals for listed items individually or corporately until 11:00 A.M. local time, September 4, 2007 County Judge Pat Tinley's office, County Courthouse 700 Main Kerrville, Texas 78028. Proposals will be opened and acknowledged publicly on September 4, 2007. This is a procurement of insurance through the competitive sealed proposal procedure outlined in the Texas Local Government Code Chapter 252, Subchapter B, Sections 252,021 (c); 252,041 (b); 252.042 (a), (b); 252,043 (b); and 252.049 (b). At the proposal opening, only the identity of the proposers will be disclosed by KERR COUNTY. The proposals will be forwarded to KERR COUNTY'S insurance consultant for review, tabulation and analysis. The contents of each proposal will not be disclosed in order to protect the integrity of the negotiation process. To obtain the best final offer(s), revisions by short-listed candidates may be permitted after original proposal submission, and before contract award. All proposals will be later made available to the public for inspection after the contract is awarded, if a proposer indicates and justifies in his proposal(s) that certain information is proprietary, KERR COUNTY will not release the materials for public inspection after the contract award. Detailed specifications, including the criteria for proposal evaluations, maybe obtained from: Gary R Looney, 3201 Cheny Ridge Rd, Suite D 405, San Antonio, Texas 78230 Ph: 210-930-6665 glooney @ alamoinsgrp.com Please mark on the outside of the submitted envelope/box: "SEALED PROPOSAL FOR KERR COUNTY MEDICAL STOP LOSS, TPA SERVICES, LIFE INSURANCE AND AD&D, September 4, 11:00 AM" and send or deliver to the attention of "Kerr County Commissioner's Court, C/O County Judge Pat Tinley County Courthouse 700 Main Kerrville, Texas 78028" KERR COUNTY reserves the right to reject any or all competitive sealed proposals and waive any irregularities contained therein and to accept any competitive sealed proposals deemed most advantageous to KERR COUNTY, any competitive sealed proposal received after 11:00 am., local time, September 4, 2007, will be automatically rejected and returned to the proposer unopened. KERR COUNTY will not be responsible in the event that the U.S. Postal Service or any other carrier system fails to deliver the sealed proposal to KERR COUNTY by the given deadline above. ~'~+` Page 3 of 45 <~lrr' Kerr County Specific and Aggregate Stop Ltns Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (IRS code 125} Administration Prescription Benefit Management PI:E:ASE ~,het'3+~NC3~;4'f?~I~G~~'b~t'~:I+4~1~'r TI-I~S 'RA'P I'3~' RETGRNINU TI1IS F~QIZ~~4~ ; In order to allow a fair and competitive bid process proposer will not be allowed to access markets prior to the release date of this RT'P. The official date and time of release is Monday, August 6, 2(>n7, 10:(}q AM. Any agent contacting markets prior to this date will not be allowed to present a proposal. If it is determined that markets were approached in advance of the release date, then, that vendor shall immediately notify our insurance consultant of the date and time of receipt of the request. Failure to disclose the early request will result in disqualification of the vendor. Disclosure wilt result in reassignment of the vendor to another proposer. It is your responsibility to return this intent to bid with the proper means of contacting you or your organization. Communicating any questions, answers, or amendments to this RFPwill be made through the process you provide on this form. PAX or Mail TO: Gary Looney rts~c Insurance Consultant 3201 Cherry Ridge Dr Suite D 40S San Antonio, Texas 78230 Pax: 210-930-1838 _ WILL RirSPOND* WILL NOT RESPOND COMMENTS: COMPANY NAME: ~'AP~A~ev.e~v~ ~u~•vtsr.S, ~vtC COMPANY FAX: ~ g5 - ~t a~ - 33~+-1- COMPANY PHO :._ ~ gS " vg ~~'" "' ~3g3 ~. SIGNA Page 4 of 29 ~rrr Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&I7 Health Reimbursement Arrangement Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management PLEASE FILL IN THE FOLLOWING INFORMATION NEEDED AND SUBMIT WITH PROPOSAL. The undersigned proposer, by signing and executing this proposal, certifies and represents to Kerr County that proposer has not offered, conferred or agreed to confer any pecuniary benefit, as defined by (1.07 (a) (6) of the Texas Penal Code, or any other thing of value as consideration for the receipt of information or any special treatment of advantage relating to this proposal; the proposer also certifies and represents that the proposer has not offered, conferred or agreed! to confer any pecuniary benefit or other thing of value as consideration for the recipient's decision, opinion, recommendation, vote or other exercise of discretion concerning this proposal, the proposer certifies and represents that proposer has neither coerced nor attempted to influence the exercise of discretion by any officer, trustee, agent or employee of Kerr County concerning this proposal on the basis of any consideration not authorized by law; the proposer also certifies and represents that proposer has not received any information not available to other proposers so as to give the undersigned a preferential advantage with respect to this proposal; the proposer further certifies and represents that proposer has not violated any state, federal, or local law, regulation or ordinance relating to bribery, improper influence, collusion or the like and that proposer will not in the future offer, confer, or agree to confer any pecuniary benefit or other thing of value of any officer, trustee, agent or employee of Kerr County in return for the person having exercised their person's official discretion, power or duty with respect to this proposal; the proposer certifies and represents that it has not now and will not in the future offer, confer, or agree to confer a pecuniary benefit or other thing of value to any officer, trustee, agent, or employee of Kerr County in connection with information regarding this proposal, the submission of this proposal, the award of this proposal or the performance, delivery or sale pursuant to this proposal. The proposer shall defend, indemnify, and hold harmless Kerr County, all of its officers, agents and employees from and against all claims, actions, suits, demands, proceeding, costs, damages, and liabilities, arising out of, connected with, or resulting from any acts or omissions of contractor or any agent, employee, subcontractor, or Supplier of contractor in the execution or performance of this RFP. I have read all of the specifications and general proposal requirements and do hereby certify that all items submitted meet specifications. COMPANY: FARA Benefit Services, Inc. AGENT NAME: Don Wallace & Gary Looney AGENT SIGNATURE: ADDRESS: 1625 W. Causeway Anuroach CITY: Mandeville STATE: LA ZIP CODE: 70471 TELEPHONE: 800-259-8388 FAX: 985-624-3354 FEDERAL TIN#: 72-1388354 AND/OR SOCIAL SECURITY #: N/A DEVIATIONS FROM SPECIFICATIONS IF ANY (Attach documents as necessary or state No Deviations): Page 5 of 45 Kerr County Specific and Aggregate Siop boss Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Artatagement Cafeteria Plata (IRS code 125) Administration Prescription Benefit Management (:ERTIFICATION REGARDING DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS Name OfEntiry: FARA Benefit Services, Inc. The prospective participant certifies to the best of its knowledge and belief that it and its principals: a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department ar agency: b) Have not within a three year period preceding this proposal been convicted of had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; c) Are not presently indicted for or otherwise criminally or civilly charged by a government entity (Federal, State, Local) with commission of any of the offenses enumerated in paragraph (1) (b) of this certification; and d) Have not within a three year period preceding this application/proposal had one or more public transactions {Federal, State, Local) terminated for cause or default. 1 understand that a false statement on this certification may be grounds for rejection of this proposal or termination of the award. In addition, under l8 USC Section 1001, a false statement may result in a fine up to a $ 10,000.00 or imprisonment for up to five (5) years, or both. Leon A. Golemi, Vice President Name and Title of Authari~.ed Repr sentative (Typed) 1 Signature of uthori eprescntative Date September 4, 2007 I am unable to certify to the above statements. My explanation is attached. Page 6 of 45 Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Adminiistration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management CERTIFICATION REGARDING DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILTI'Y MATTERS Name Of Entity: FARA Benefit Services, Inc. The prospective participant certifies to the best of its knowledge and belief that it and its principals: a) Are not presently debarred, suspended, proposed for debarment, declared ineligible, or voluntarily excluded from covered transactions by any Federal department or agency: b) Have not within a three year period preceding this proposal been convicted of had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property; c) Are not presently indicted for or otherwise criminally or civilly charged by a government entity (Federal, State, Local) with commission of any of the offenses enumerated in paragraph (I) (b) of this certification; and d) Have not within a three year period preceding this application/proposal had one or more public transactions (Federal, State, Local) terminated for cause or default. I understand that a false statement on this certification may be grounds for rejection of this proposal or termination of the award. In addition, under 18 USC Section 1001, a false statement may result in a fine up to a $ 10,000.00 or imprisonment for up to five (5) years, or both. Name and Title of Authorized Representative (Typed) Signature of Authorized Representative Date I am unable to certify to the above statements. My explanation is attached. Page 6 of 45 Conflict of Interest Questionnaire For Vendor or Other Person Doina Business with a Local Government Entitv This questionnaire is being filed in accordance with chapter 176 of the Local Government Code by a person doing business with a government entity. `fir' By law this questionnaire must be filed with the records administrator of the local government not later than the 7`~' business day after the date the person becomes awaze of the facts that require the statement to be filed. See section 176.006, Local Government Code. A person commits an offense if the person violates Section 176.006, Local Government Code. An offense under this section is a Class C Misdemeanor. 1. Name of person doing business with local government entity. 2. ^ Check this box if you are filing an update to a previously filed questionnaire. (The law requires that you file an updated completed questionnaire with the appropriate filing auWority not later than September 1 of the year for which the activity described in Section 176.006(a) Local Government Code, is pending and not later than the T° business day after the originally filed questionnaire becomes incomplete or inaccurate.) 3. Describe each affiliation or business relationship with an employee or contractor of the local government entity who makes recommendations to a local government officer of the local government entity with respect to expenditure of money. 4. Describe each affiliation or business relationship with a person who is a local government officer and who appoints or employs a local government officer of the local government entity that is subject of this questionnaire. 5. Name of local government officer with whom filer has an affiliation or business relationship. (Complete this section only if the answer to A, B or C is YES) This section, item 5 including subparts A, B, C & D must be completed for each officer with whom the filer has affiliation or business relationship. Attach additional s as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income from the filer of this questionnaire? '~" ^ YES ^ NO B. Is the filer of the questionnaire receiving or likely to receive taxable income from or at the direction of the local government officer named in this section? ^ YES ^ NO C. Is the filer of this questionnaire affiliated with a corporation or other business entity that the local government officer serves as an officer or director or holds an ownership position of 10% or more? ^ YES ^ 1V0 D. Describe each affiliation or business relationship. 6. Describe any other affiliation or business relationship that might cause a conflict of interest. 7. Signatures N/A Signature of person doing business with the Date Governmental entity Page 7 of 45 Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&D '\rr Health Reimbursement Arrangement Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management NOTICE TO PROPOSER Infom~ation provided in these specifications is to be used for purposes of preparing a proposal detailing costs of providing the services and insurance specified. It is further expected that each proposer will read these specifications with care, since failure to meet each condition or a combination of specified conditions may disqualify proposal. Information provided by Kerr County includes: 1. Current census 2. Plan documents 3. Rate history 4. Standard Loss Information 5. High Claim Losses KERB COUNTY reserves the right to reject any or all proposals or any portion thereof and to accept the proposal deemed most advantageous to KERR COUNTY. Proposer is required to submit quotations on the basis of these specifications. Alternative quotations (for service on a basis different from requested in these specifications) will receive consideration if such alternatives are clearly explained. Any exceptions to coverage requested herein must be clearly noted in writing and be included as a part of the proposal. ~' KERR COUNTY believes that the data contained in these specifications is sufficient for preparation for a proposal. The information is believed to be accurate and is based upon the latest available information, but it is not to be considered in any way as a warranty. Requests for additional information should be directed in writing to Gary Looney REBC, Insurance Consultant, 3201 Cherry Ride Drive, Suite D 405, San Antonio, Texas, 78230, Phone (210) 930-6665 Fax (210) 930-1838 Email address lg ooney@alamoinsgrp.com ~r Page 8 of 45 ~r Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (IRS code 12~ Administration Prescription Benefit Management GENERAL INFORMATION and INSTRUCTIONS 1. The information contained in these specifications is confidential and is to be used only in connection with preparing a proposal for all or part of the following employee benefit plans: Specific and Aggregate Stop Loss Insurance, Third Party Medical Claims Admirvstration, Group Term Life and AD&D, Health Reimbursement Arrangement, Cafeteria Plan (IRS code 125) Administration, Prescription Benefit Management 2. KERB COUNTY reserves the right to accept or reject all or any part of the proposals, waive minor technicalities, and award the proposal to best serve the interest of KERR COUNTY. KERR COUNTY also reserves the right to waive or dispense with any of the formalities contained herein. 3. Proposals are to be submitted on the basis of the specifications contained herein. Alternate proposals will also be considered, if the alternatives are clearly explained. All deviations from the specifications must be cleazly identified and explained. 4. The information contained herein is believed to be accurate and up-to-date, but is not intended to be an express or implied warranty. 5. No telephone or fax proposals will be accepted. Proposals will only be accepted if delivered by U.S. Postal Service, contract carriers, hand delivery, etc. KERR COUNTY will not be responsible for missing, lost or late mail. Any proposals received after the deadline will be ,,: returned to the proposer unopened. 6. At the proposal opening, only the identity of the proposers will be disclosed by KERR COUNTY. The contents of each proposal will not be disclosed in order to protect the integrity of the follow- up negotiation process with short-listed candidates. 7. To obtain the best final offer(s), revisions by short-listed candidates may be pernutted after original proposal submission, and before contract award. 8. All proposals will later be made available to the public for inspection after the contract is awarded. If a proposer indicates and justifies in his proposal(s) that certain information in the proposal(s) is confidential or a trade secret, KERR COUNTY will review those materials with the proposer prior to releasing the materials for public inspection after the contract award. 9. Gary R Looney REBC is the independent insurance consulting agent providing technical assistance to Kerr County during the RFP process. Gary R Looney is compensated by KERR COUNTY on a fee basis, and is not compensated by the service provider. 10. Vendors are cordially invited to the proposal opening, but are not required to attend. err Page 9 of 45 Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Atrangernent Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management TIMETABLE 1. These specifications are to be released for action at 10:00 am August 6, 2007. 2. One original and two (2) copies of the proposals are to be delivered or mailed to Kerr County Courthouse, C/O Judge Pat Tinley, 700 Main, Kerrville, Texas 7802$ to arrive by September 4, 2007, 11:00 am. 3. Consideration and action on the Proposals will be presented to the Commissioner's Court on or about September 24, 2007. 4. The successful proposer will be notified on or about September 24, 2007. 5. Coverage is to be effective January 1, 2008. 6. Policies or contracts are to be provided to KERR COUNTY no later than 30 days after such effective date. 7. The contract term desired is three years with years two and three subject to County Commissioner's Court approval. PREPARATION OF PROPOSAL The proposer shall prepare their proposal in one original and two (2) copies on the attached proposal form with attachments as necessary to fulfill the specifications contained herein. Unless otherwise stated, all blank spaces on the proposal or s, applicable to the subject specification, must be correctly filled. A unit price must be stated for each item, either typed in or written in ink. Any exceptions or deviations from the requested services must be clearly indicated in writing and submitted with and form a part of the proposal form. Failure to follow these instructions will be grounds for disqualifications of aproposal. Complete and sign all documents provided including the Conflict of Interest Questionnaire (CIQ) which is included in the information you have received. -` Page 10 of 45 ~r~r Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Adm~ittistration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management WITHDRAWAL OF PROPOSAL Proposers may withdraw their proposals anytime up to the time specified as the closing time for acceptance of proposals. However, no proposer shall withdraw or cancel their proposal for a period of 60 days after said closing date for acceptance of proposal nor shall the successful proposer withdraw or cancel or modify their proposal, except at the request of KERR COUNTY, after having been notified that KERR COUNTY has accepted the said proposal. Withdrawal or cancellation of a proposal after the closing date for acceptance of proposals shall result in the forfeiture of the bid security. CRITERIA USED IN EVALUATING PROPOSALS 1. No insurance proposals will be accepted from insurers without a Best's Rating, of at least an "A-" in the most recent edition of BEST'S KEY RATING GUIDE FOR LIFE/HEALTH,. 2. Any insurers, agents or third party administrators shall be duly licensed by the state of Texas, and comply with all applicable state insurance laws and requirements or duly constituted applicable insurance regulatory authorities. A local government self-insurance pool organized under the Texas Interlocal Cooperation Act or other state law shall also be an acceptable provider. 3. 'The proposal must be in easily understood format with coverage clearly outlined. ~ 4. Proposals will be first evaluated on technical factors other than cost, including coverage, benefits, services and financial stability. After a preliminary evaluation of the technical criteria, cost will be included in the evaluation process. Cost will be evaluated on an equal basis with the technical criteria. For the evaluation of cost, fixed administrative cost for athree-year period will be considered first; followed by total first year cost for stop loss insurance premiums and maximum claim cost. For aggregate stop loss insurance maximum claim cost, additional specific deductibles (lasers) will be added to maximum claim cost, if not an allowable claim expense for aggregate maximum claim cost. ~~rw+ Page 11 of 45 Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management QUALIFICATION OF COMPANIES AND AGENTS SUBMITTING PROPOSALS. All companies and agents submitting proposals must be licensed by the state of Texas and have demonstrated level of good performance with municipalities, school district or other public entities in Texas. The company or agent must have an Errors and Omissions (E&O) policy with a minimum limit of $1,000,000. An agent submitting a proposal must maintain a fully staffed office for the servicing of the program. The agent must have been in business for at least five years and must assign a minimum of one qualified account representative to service KERR COUNTY to include assisting with enrollment responsibilities. This representative must have a minimum of five years experience in employee benefits, or hold the CLU, CEBS and or RHU designation. DEVIATION FROM SPECIFIED COVERAGE OR SERVICE err err Proposals are to be submitted on the basis of the specifications contained herein. Proposer MUST include the RFP Submission Forms with its proposal. All costs to be incurred and billed to KERR COUNTY will be firm and included in these forms. Alternative proposals will also be considered, provided the alternatives are clearly explained. All deviations from the specifications must be clearly identified and explained. UNDERWRITING DATA KERR COUNTY has assembled the underwriting exposure, and loss data included in these specifications. While every effort has been made to ensure the accuracy of this information, it cannot be guaranteed. It shall be the responsibility of the successful proposer to review this information and work with KERR COUNTY on an ongoing basis to ensure all relevant exposures are included in KERR COUNTY'S program. If it becomes necessary to revise any part of this proposal, a written addendum will be provided to-all proposers who have submitted an "Intent to Bid Form". KERR COUNTY is not bound by any oral representation, classifications, or changes made in the written specifications by KERR COUNTY employees, unless such classification or change is provided to proposers in a written addendum from an authorized representative of KERR COUNTY or KERR COUNTY's insurance consultant. COMPLIANCE WITH LAWS All proposers involved shall observe and comply with all regulations, laws ordinances, etc., of local, state, and federal government as they apply to this proposal process Page 12 of 45 Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management TERM OF CONTRACT AND EXTENSIONlRENEWAL RIGHTS The term of the contract for insurances or service shall be for not less than one year, subject to earlier termination as provided by the law and by the terms of the contract. In addition, unless otherwise specified in the proposal, the award of this proposal shall include the right at the option of KERR COUNTY, and contingent upon the agreement by both parties, to any change in premium costs or benefits to renew and extend this contract on a year to year basis as may be pemutted by applicable law and Commissioner's Court approval as may be in the best interest of KERR COUNTY; if the maximum term of this contract and all renewals of it shall be not more than three years before such contract must again be offered for competitive bidding. AUTHORIZED SIGNATURE All proposal forms must be signed by persons who have legal authority to bind the insurer and administrator to the services proposed. DISQUALIFICATION AND REJECTION OF PROPOSALS Failure to comply with the requirements or the procedures set forth herein, or to satisfy the insurance and servicing criteria as set forth in the specifications, may result in disqualification. It is not intended that exceptions to the specification will, in and of themselves, result in disqualification. CONTINUITY OF COVERAGE ''err All employees, retirees and dependents covered by the current plan are to receive immediate coverage under the new plan. Continuity of coverage for current participants is to be on a "no loss no gain" basis for all insurance coverage. In addition, proposers must waive the actively at-work provisions. In fulfilling the Continuity of Coverage requirement fair credit must be allowed for all or any part of health insurance deductibles or co-insurance satisfied, and accumulated lifetime maximum amounts before the contract effective date. Page 13 of 45 Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management Background Information Kerr County is located North West of San Antonio in the Texas Hill Country. The majority of the 200+ insured employees, retirees and COBRA participants participating in KERR County's self-funded health benefit plan use the services of providers located in Kerr County and San Antonio. Mutual of Omaha has provided Administrative Claim Services, COBRA, HIPAA administration, HRA administration for the Health Plan since January of 2005. The plan has been self-insured for several years. In 2005 the County instituted an HRA plan for all employees, changed the previous three option plan to two options both with HRA accumulation accounts. In 2007 the plan options were offered however, no employees enrolled in the $1,500 deductible plan. The HRA account expenses are not included in the losses attributed to the specific or aggregate insurance coverage. The County is very interested in providing a proactive wellness program for their employees. Be certain to provide a description of a wellness plan that you feel would impact the employees of Kerr County. The basic group term life insurance amount is $20,000 per employee and includes accidental death and dismemberment. A copy of the plan of benefits is included in the attachments. The rate is $.20/$1,000 for basic life coverage and $.02/$1,000 for accidental death and dismernberrnent. KERR COUNTY desires to receive proposals for continuation of the self-funded health plan based on duplication of existing Plan of Benefits unless other specified. KERR COUNTY currently provides medical plan benefits for retirees. The current retirees will be grandfathered for coverage. Future Retirees will be provided with a limited plan of benefits not to exceed the level of the Specific Deductible. Retirees are shown on census as Class R001. Page 14 of 45 Kerr County Specific and Aggregate Stop Loss Insurance Third Party Medical Claims Administration Group Term Life and AD&D Health Reimbursement Arrangement Cafeteria Plan (IRS code 125) Administration Prescription Benefit Management Individual Stop Loss Insurance (ISL)/Aggregate Stop Loss Insurance (ASL) Request for Proposal Submission Form RFP ASSUMPTIONS: 1. Proposal is to be based on the duplication of the existing Plan of Benefits, unless otherwise specified, Any deviations must be clearly identified and explained. All proposals will be assumed to have been submitted without any deviations unless clearly noted. 2. Proposal is to be based on the provided census. 3. Contract effective date is to be January 1, 2008. All participants enrolled in the insurance plan as of December 31, 2007 are to be covered on a "no loss/no gain" basis. "No loss/no gain" for participants are to include credit/debit for accumulated deductible, coinsurance, and lifetime maximum benefits. 4. KERR COUNTY desires to receive proposals for a three (3) year period on one of the following basis: • Fixed price for the three (3) year period, or • Two annual renewal adjustments determined by formula at the time the contract is awarded, or • One (1) year contract with two annual renewal options for rate and premiums deemed to be favorable to KERR COUNTY. Renewal rates are to be provided to KERR COUNTY by October 1 (90 days prior to anniversary date). irrrr' 5. KERR COUNTY will only consider stop loss insurance policies meeting the following: a Specific and Group Aggregate Policy on a 15/12; paid/12; 24/12 orpaid /15 basis for Medical and Drug (Rx). We do not wish to see an aggregating specific. b. Medical and Drug (RX) Specific Coverage with $40,000; $50,000; $60,000 Stop loss. c. Medical and Drug Aggregate Coverage at 120% and 125% of expected claims d Final determination on all lasers, if any, including deductible amounts and conditional lasers should be clearly identified and provided with RFP response based on provided claims data e. Insurance Company Quotation Document with all terms clearly listed f.. Waive Actively at Work Provisions 6. Renewal rate must be received by KERR COUNTY at least 90 days prior to date of rate change. 7. Any estimated savings, performance or other guarantees should be specifrc, quantifiable and should include a method for validation. Page 15 of 45 QUESTIONS: 1. Describe the business entity subrnitti a. Insurance Company Name: b. Address: c. Contact Person: d. Telephone Number: e. Year Founded (Ins. Co): ng the proposal: FARA Benefit Services, Inc. 1625 W. Causeway Approach, Mandeville, LA 70471 Jennifer L. Smith 800-259-8388 1978 Kerr County Specific and Aggregate Stop Loss Insurance f. What percentage of overall business is Health related? 31% is Life & Health g. Managing Underwriter's Name: Swiss Re takes 100% of risk. No MGU involved. h. Year Founded (Managing Underwriter): Swiss Re was founded in 1863. i. Number of Years for Representing Insurance Company: Swiss Re has been in business 144 years. ~1rr+- 2. Describe Financial Stability of Insurance Company: a. Financial Rating Service Current Rating Prior Year Rating A.M. Best A+ A+ Standard & Poors N/A N/A Moody's N/A N/A b. Is Insurance Company authorized to do business in Texas? YES 3. Provide three (3) Texas client references (preferably public entities): Company Name: Keller Independent School District Company Contact information: Penny Benz Phone Number 817-744-1077 Company Name: Livingston Independent School District Company Contact information: Denise Bienski Phone Number 936-328-2200 Company Name: West Oso ISD Company Contact information: David Palacios Phone Number 361-855-3321 4. Describe the business entity submitting the proposal: a Name of Business Entity: FARA Benefit Services, Inc. b. Current Business Address: 1625 W. Causeway Approach, Mandeville, LA 70471 c. Mailing Address: 1625 W. Causeway Approach. Mandeville. LA 70471 d Contact Person: Jennifer Smith e. Telephone Number: 800-259-8388 ~ f. Type of Business Entity: / Corporation -General Partnership Sole Proprietorship Registered Limited Liability Partnership _ Limited Liability Company Page 16 of 45 5. a. Has the business entity been a defendant in any lawsuit in any state or federal court during the preceding five (5) years? / yes No If yes, identify each lawsuit by party, case number, court, subject matter, and disposition: Pending Litigation: Gegenheimer v. FARA Benefit Services, Inc., No. 631-692, 24`h udicial District Court for the Parish of Jefferson, State of Louisiana Association Obligation Dispute, ongoing Settled: Bayou Steel v. FARA Benefit Services, Inc., ET AL. No. 03-0699, US District Court Eastern District of Louisiana Reinsurance Arbitration, settled in 2004 b. Does the business entity have any claims filed against it which are unresolved and presently pending before any State of Texas Administrative agency? _ Yes /No If yes, please provide a full description of the charges 6. Financial Information: a. Has the business entity filed a voluntary or involuntary petition in bankruptcy, obtained an order for relief, or received a discharge on any debt under the U.S. Bankruptcy laws during the preceding seven (7) years? _ Yes /No If yes, please describe: b. Has any owner, member, or partner of the business entity filed a petition in bankruptcy, obtained an order for relief, or received a discharge on any debt under the U.S. Bankruptcy laws during the preceding seven (7) years? _ Yes / No If yes, please describe: 7. Describe insurance coverage (include copy of Insurance Certificate): a. The business entity must provide satisfactory evidence of existing insurance coverage in the amount of $1,000,000.00 for Errors and Omissions or other fiduciary liability. If the business entity is selected to provide services it must provide evidence that such coverage will be in effect for the duration of the agreement. Please See Exhibit I (E & O Certificate) 8. Describe ISL and ASL claim payment: a. Where will claims be paid? FARA Benefit Services. Inc. 3838 N. Causeway Blvd. Lakewav III, Suite 2400 Metairie. LA 70002 b. What is the definition of "paid claim" to be eligible for reimbursement? Funded claim in which a check has been issued. c. Can KERR County's HR Director and consultant speak directly to claim examiner for questions related to payment of claim? Yes / No Comment: County may view system data and communicate directly with: Account Manager, Service Representative, Vice President of Claims, and Vice President of Corporate. d. What is the normal processing time for ISL claim? 15 Business Davs e. What is normal processing time for ASL claim? 15-20 Business Davs Page 17 of 45 What expenses related to investigation of claim are eligible for reimbursement (e.g. hospital audit, medical records, etc) by the stop loss carrier? ,, Anything requested by Stop Loss Carrier. Typically audits and LCM notes. g. If KERR COUNTY has negotiated with providers, will these discounts be accepted, in lieu of doing a hospital or other audit? / Yes No h. Describe documentation needed for ISL claim reimbursement: o Copv of the policyholder's Ulan document o Copv of enrollment card and verification of no other insurance coverage for spouse or dependent; a Medical Claim form completed, signed and dated by the claimant within the last twelve months, which indicates whether or not other insurance coverage is or was available o Copv of COBRA election form along with proof premium has been paid to date o Copv of Third Party Administrator's Explanation of Benefits (EUB) and bills o Copies of checks issued o Copies of all correspondence regarding Coordination of Benefits (COB) o Copv of Operative Report, Large Case Management reports, and medical reports o Copv of Hospital Audit o Subrogation documentation, ie: Police and/or accident report, signed subrogation agreement and any attorney correspondence, if applicable o Copies of any and all documentation which had an effect on the consideration and payment of this claim o Copies of mandatory pre-certification for all applicable hospital admissions o Certificate of prior coverage, if applicable 9. Describe Underwriting: a Will any claimants be excluded or assigned a higher deductible (lasered)? Yes /No If so, please describe: None known at this time. 10. Did you provide a Specimen Stop Loss Contract? /Yes No Please Seems II (SpeaRria-Cozmad) 11. Does your Stop Loss insurance contract have any exclusions or limitations that are more restrictive than those used in KERR County's booklet? Yes / No If so, please describe: 12. Are the active-at-work and disabled dependent provisions waived for the effective date of the contract? / Yes No Page 18 of 45 13. If Centers of Excellence are used for your transplant coverage, please provide specific information for facilities cost and procedures to be used: Please attach a schedule with complete information: Cartels ofExee)lenoesareusedand would besveciGctotheNetwork the Courrtv dtooses. PleaseseeFxivbitIIL (CartersofExceIlaioeSdiedule) `~rr+ 14. Please state any variations to the Request for Proposal Assumptions or other qualifications for your quote: None 15. After the ISL deductible is reached will the stop loss carrier pay claims directly to vendor or require Ken- County to pay claim and be reimbursed? Advance funding on ISL Claims is included. If reimbursed what is turnaround time? N/A 16. For what period of time are quoted rates guaranteed? Administration puotes are firm as punted for 2 years. Re-insurance is guaranteed one year from a. PHCS b. Healthsmart c. BCBS d. CNN e. Beechstreet f. Other (Name) effective date. 17. Is a longer rale guarantee available? Yes / No If so, please describe: 18. Are quoted rates net of agent commission? / Yes No / Yes No / Yes No If no, please describe: 19. Do quoted rates include advance funding for: a. Specific Claims? If no, additional cost to provide: b. Aggregate Claims? If no, additional cost to provide: 20. Is the quote based on the services of a specific provider network? 21. Please give rate differential to use the following networks: As applicable to Stop Loss Contracts and would vary by carrier. Specific Aggregate Yes / No Page 19 of 45 21. The following rate exhibit may be used for rate submission however included with the CD or available by Internet is an Excel Spreadsheet titled, "Self Funded Quote Spreadsheet". Complete this spreadsheet as it will be used for bid analysis. BASIC PLAN $ Specific Deductible Basis for Deductible: Incurred Paid Number of Rates Monthly Premium Annual Premium Partici ants Specific Premium: Single Family Com osite Aggregate Premium Com osite Aggregate Attachment Pts. Single Family HIGH PLAN $ Specific Deductible Basis for Deductible: Incurred Paid Number of Rates Monthly Premium Annual Premium Partici ants Specific Premium: Single Family Com osite Aggregate Premium Com osite Aggregate Attachment Pts. Single Family Page 20 of 45 Kerr County Third Party Administration Questionnaire err TPA Organization 1. Name, Address, City, State, Zip Code and Telephone Number of Firm. FARA Benefit Services, Inc.1625 W. Causeway Approach. Mandeville, LA 70471 Telephone Number: 800-259-8388 2. Is your firm owned or operated by a parent company? No If yes, please identify the parent and its primary business. 3. How long has your firm been in business? 29 years How long have you done claims administration? 29 years 4. Who are the principal officers in your firm? How long have they been in their positions? Primary Proposer Name of Organization: FARA Benefit Services, Inc. Address: 1625 West Causeway Approach Mandeville, LA 70471 Principles: F.A. Richard & Associates, Inc. Leon A. Golemi Date Founded: 1995 Contact Person: Leon A. Golemi Name & Title: Vice President, 1995 TelephoneJExt: 985-624-8383, Ext. 6758 Fax: 985-624-3354 Email: leon.golemi@fara.com Todd Richard President & Chief Executive Officer, 1995 Reed Bell Chief Operating Officer, 1995 Louis Dubuc Chief Financial Officer, 1995 Nena Mullen ~' Vice President of Claims, 1996 Parent Company Name of Organization: F.A. Richard & Associates, Inc. Address: 1625 West Cuaseway Approach Mandeville, LA 70471 Principles: Richard Properties Limited Partnership M. Todd Richard Reed A. Bell Daniel J. Clark David M. Richard Louis R. DuBuc Donald E. Casse Date Founded: 1978 Page 21 of 45 5. Is this a branch facility? If so, please identify the main office location. ~w No 6. How many claim processors are Full Time employees in your firm? ~Iri- All 6a. How many claim processors will be appointed to service this account? 1 Per 1,000 6b. Of those approximately how many years of experience does each have with medical claims processing? Minimum 10 vears 7. Do you have bilingual claims personnel available to plan participants who call your office for customer service and/or claims processing? Yes 8. How many clients do you perform claim administration services for? 22Clients, Membber lives of over 45,000 What is the average size? 500 9. Do you carry Errors & Omissions coverage? Yes Provide a copy of your current policy. Please see Exhibit I (E&O Certificate) Claims Administration 1. What are your claim office performance standards for claim accuracy and turnaround time? 99.7% Claim Accuracy 90% of all clean claims within 10 davs. 2. What is your average turnaround time? 8.5 davs 3. What is your current per day production minimum expected of your claims processor? Depending on plan, an average would be 120 per day. 4. What are your internal audit procedures? Carrier or County on-site claims audits would be accommodated upon request. A SAS 70 on a yearly basis and Ernst and Young annual audits. 5. What edits and controls are used to avoid duplicate payments? Edits cross checked for eligibility, date of service, provider and all codes Page 22 of 45 k~eature 1. automated; 2. manual review i a. Provides total charges against total allowable payment. Automated Checks for duplicate charges. Automated Compares number of inpatient hospital days on each claim a ainst admission and dischar e dates a roved b UR firm. Automated Compares procedure/service on bill against the procedure/service which was certified by the UR firm. Automated Assures services provided are, or are not, within the scope of a work-related injury/illness. manual review Identifies excess "usual, customary and reasonable" charges (R&C) for services. Automated Verifies that a provider is licensed to perform the type of services billed. Automated Identifies that the provider is a participant in a Preferred Provider Organization (PPO), especially one who has multiple locations or tax identification numbers. Automated Reconciles the diagnosis code to the procedure and sex code for consistency. Automated Handles pended claims. manual review Deletes upcoding. manual review COB Automated R&C Automated Du licates Automated Over/unde a ments Automated PPO fee schedules Automated Eli 'bilit Automated 6. What safeguards exist to protect against claims abuse and fraud? SEE TABLE in question 5 What program do you use to unbundle claims? Oncourse, Inc. 7. What coordination of benefits (COB) procedures do you follow? All claims are screened for possible Coordination of Benefits. Our claim processing svstem automatically detects these cases and alerts processors about the need for investigation. The claim svstem tracks the existence of other coverage per individual. We reinvestigate existing COB information annually to determine if there has been a status change. We also identify other carrier information from enrolhnent forms, notification records, individual service inquiries, claim forms or other information from physicians and other health care providers. System notes pre-x, accident and eligibility prompts. Page 23 of 45 F.A. Richard and Associates, Inc. is a leading company in the Claims; WC; and Risk Administration, as such we have built our Benefits systems to support the efforts to control and identify claims that should not be processed as regular medical claims. SEE TABLE in question 5. ~r 8. What database do you use to determine Reasonable and Customary fee allowances? How frequently do you update your R&C screens? Medical Data Research (MDR) Monthly 9. Describe your procedures for professional Medical claims review? One of our nurse managers are assigned to a Medical Claims review either by the Stop Loss Carrier, Claims Manager, or Client. If Medical Duration (MD) intervention is required the case file will be reviewed by Medical Duration to determine areas of appropriateness benefit and necessity. Peer review will also be enlisted on cases that require specialized intervention and determination. 10. Explain your hospital bill audit procedures. All hospital bill audits are performed by RN's to develop savings and necessity proformas. Both on site and office audits are available. 11. Describe your procedures for tracking and reporting excess claims? Excess claims are triggered by either dollar or diagnosis. A file is opened and procedural review is performed by supervisory personnel on a weekly basis. 12. Explain how you handle subrogation and third party disbursements? The claims processor reviews the ICD-9 code for indications of an accidental iniurv. The claim is pended and a questionnaire letter is sent to the Insured. The questionnaire letter contains a subrogation agreement which the insured signs. If the insured's response indicated a potentially liable third party, we place the third party, their insurance carrier and/or the insured's attorney on notice of the Group Plan's lien and interest in any settlement. Benefits are calculated and the action is "authorized". The claims processor maintains a log of payments and periodically advised the parties of the lien and negotiates a recovery at the appropriate time. 13. List the excess carriers which you are approved with for claims administration? Please see Exhibit IV (Stop Loss Carriers and Best Ratings) 14. Do you provide a toll free number for claim inquiries? Yes If yes, what is the cost? There is no extra cost. 15. What are your normal hours of operation to answer calls for claim inquiries? FBS will provide Kerr County with a dedicated toll-free customer service line. The hours of operation will be conducted from 8 am - 5 pm, central standard time, Monday-Friday. The e-customer service will be available via a customized Kerr County website 24 hours a day. 7 days a week. 16. Describe your customer service process when an employee calls with a claim inquiry. 17. If you have a separate customer service unit, what are your standards for: Answer Time: <30 seconds Abandon Rate: < 2 °Io Please See Exhibit XII (phone Log) 18. What submission rate has been assumed when calculating your fee? Total Employee Lives Page 24 of 45 19. Does your fee assume a first year claim lag? If so, what is the cost to purchase mature claim year administration? No, included at no additional cost 20. Does your fee assume any excess loss carrier overrides? `r.r Yes Eligibility System 1. How is an insured's eligibility assigned and maintained? Eligibility is by manual system input, by group, by division, etc. It is maintained daily. 2. How often can eligibility information be updated? Daily 3. Do you maintain information on each of the family members separately, as well as the employee? Yes 4. What is your accuracy standard and turnaround time for loading new groups, updates, and changes? Lead time is per group requirements (id cards and benefit to effective date) updates and changes are "real- time", daily. System Capabilities 1. Is your claim processing system completely automated? No 2. Are there any significant manual activities required to process claims? Yes 3. Describe your claims payment system, including hardware and software? Trizetto/RIMS Adiudication System on an ASP-PC based. Please See Exhibit V (Trizetto Article) 4. Do you own or rent your claim payment system software? Our system is accessed on an ASP Basis 5. How is a person's claim history tracked? Electronically 6. How many benefit components (IE -separate deductible, totals, lifetime benefits, etc.) can be maintained by the system? All required 7. Can the system track number of visits by procedure? Yes 8. Can the system handle different benefit levels for PPOs? ~" Yes Page 25 of 45 9. How many PPOs can the system handle for one client? As many as needed without stacking. °~ 10. Can your system accept Electronic Data interchange claim submissions? ~ Yes 11. What percentage of your claims is currently accepted on an electronic basis? 20% Banking Arrangements 1. Do you require the use of a specific bank for claim accounts? If so, please provide the name, address, and phone number of the bank. No 2. Is an initial claims payment deposit required to establish banking arrangements? No 3. Will you perform bank account reconciliations? Yes 4. Are there any additional costs to the banking? (LE.: -EFT charges, monthly charges, etc.) No 5. What is the cost of the check stock you provide? No Cost 6. How many checks are provided in your cost assumptions? As many as necessary Utilization Review 1. What U.R. services are performed in-house? Yes 2. What outside U.R. services do you use? Intracorp How long have you used them? 10 years 3. Indicate which U.R. services you have assumed in your proposal? / Pre Notification / Preadmission Review / Concurrent Review - On Site or Off Site / Retrospective Review / Laree Case Management / Discharee Plannine 4. Can you accommodate Pre-Notification for the following? Yes / Specialty Care referrals / Home Health Care / Ancillary Services / Inpatient Surgical procedures Page 26 of 45 / Outpatient Sureical procedures / Lab & X-rav procedures /Inpatient Mental Health and Substance Abuse /Outpatient Mental Health and Substance Abuse Preferred Provider Organizations 1. Do you have capabilities to process PPO discounts in-house? Yes 2. Which PPOs do you have access to processing in-house? All listed 3. Can you install PPO discounts for Direct contracts with providers? If so, what is the charge? Yes, no additional cost 4. How many different PPOs do you interface with currently? 6 Who are they? Proprietary. Will discuss at personal present option 5. Which PPOs are you currently using? (attach directory or website access) Please see attached PPO Networks section Reportin 1. Provide a list of reports available in your standard reporting package. What is the cost of these reports? Please See Exhibit VI (Reporting Package) There is no additional cost. 2. Can you generate customized reports? Yes Are reports available through Internet? Yes What is the charge? No Charge 3. How are paid claims reported? Paper, or electronically or a Web paid claims representative. 4. How does your firm report claims to Excess Loss carriers? Both Manually and Electronically 5. Can you report on PPO savings? Yes General 1. What is the cost for producing a plan document? There is no addition cost. Is it included in your cost assumptions? Yes Page 27 of 45 2. What is the cost for producing a Summary Plan Description? There is no addition cost. Is it included in your cost assumptions? Yes 3. What is the cost of having the Plan Document and SPDs changed due to regulatory changes? No Cost Is it included in your cost assumptions? Yes 4. What is the cost of printing the 500 Summary Plan Descriptions for the plan participants? No Cost Is it included in your cost assumptions? Yes 5. What is the cost for printing 1000 ID cards? No Cost Is it included in your cost assumptions? Yes 6. What is the cost of Explanation of Benefits: No Cost Is it included in you cost assumptions? Yes If so, how many do you assume? 2 per Submitted Claim 7. Is there an initial set-up fee charged for the installation of our plan? No, it will be included 8. Please disclose any additional fees or expenses that are borne by the client. 9. Do you offer assistance in the administration of COBRA benefits? Yes HIPPA Certificates? Yes Please explain the type of assistance and/or administration duties you provide. Please see Exhibit VII (Claims Administration Agreement) HRA Questionnaire 1. Do you offer HRA administration in conjunction with your claims administration? DPAS will have a direct connect with FARA. 2. How often do you reimburse a claimant for expenses incurred that are filed on a paper claim form? DPAS_ processes claims and reimbursements on a daily basis, weekly basis or payroll basis or as requested by employer (plan). 3. Do you provide a debit card for all participants? Yes, a debit card can be provided. Please refer to HRA section (fee schedule.) 4. Do you require the use of a specific banking institution? No, DPAS does not require the use of a specific banking institution. 5. Is there a minimum funding requirement? If so what? No, there is not a minimum funding requirement. We do require pre funding for debit card accounts. ~ 6. Please describe your HRA administration in relationship to your medical claims administration. DPAS will have an EOB feed from FARA. We will do an EOB crossover. Page 28 of 45 7. Identify all costs associated with your HRA administration package to include all costs and services provided. Please see HRA section (Fee Sheet.) 8. Do you include access to accounts via the Internet? At what additional cost if any? Yes, DPAS provides 24 / 7 access to account information via a comprehensive and secure Internet portal, called mvRSC.com. This service can be accessed by various websites, including www.myRSC.com and www.idpas.com. The site also has employer account features available 24 / 7. There is not an additional cost for this service. Prescription Benefit Manager Questionnaire Please find the current prescription drug plan design in the medical plan summary attachment. 1. Please describe your retail pharmacy network (number of independents and number of chains; are all chains in the network?) including its relationship to you (e.g. owned or leased). WellDvneRx owns our nationwide retail pharmacy networks consisting of approximately 56,000 pharmacies. WellDvneRx' national network of pharmacies include 85% chain pharmacies such as CVS, Walgreen's and Rite Aid, with the remaining 15% being independent pharmacies. WellDvneRx will provide a guaranteed coverage rate at the "go live" date. WellDvneRx will continually negotiate independent pharmacy agreements as needed to close regional and rural pharmacy network gaps. Network pharmacies are located within every one-half to three miles in urban areas and every five to seven miles in non-metropolitan areas. Additions to the retail pharmacy network are made as new stores open, at the request of the client, or to modify geographic coverage. WellDvneRx has the ability to customize a network to meet specific goals. We offer our clients several choices of network designs and will assist you in evaluating the most appropriate system that will support your accessibility needs. Most of our clients choose WellDvneRx' broad network of independent and chain pharmacies to provide the highest level of access for their members. 2. Please confirm that prescription drugs prescribed by any licensed health care provider, including dentists, will be covered by the pharmacy program. Yes, WellDvneRx can fill prescriptions from any licensed prescriber. 3. Is the use of a formulary mandatory? Please attach a copy of the formulary for review. No, WellDvneRx formulary is not mandatory; although, for the most cost-effective drug benefit, We1DyneRx recommends a mandatory formulary, supported by an active, local P&T Committee. Please see the attachment section for WellDvneRx' formulary in Pharmacy section. 4. Does the retail brand discount include savings from formulary, network spread, clinical savings, DUR savings? No, WellDvneRx' retail brand discount do not include formulary, network spread, clinical and DUR savin s. 5. Is the brand discount a hard discount? In accordance with the pricing provided under a traditional pricing model. WellDvneRx will be responsible for any amounts owed to participating pharmacies that exceeds the amounts it receives from the plan sponsor and will retain any amounts it receives that exceeds the amounts it is obligated to pay participating pharmacies. In accordance with the pricing proved under a transparent pricing model, WellDvneRx does not maintain differential pricing; the amount paid to the pharmacy is the same amount billed to the client. 6. Is the brand discount an average? Is it based on 11 digits NDC? Page 29 of 45 The discount is calculated by auantity times AWP. Yes, WellDvneRx' uses 11 digit NDC codes. 7. Is the brand discount at mail order based on 100 units or actual acquisition NDC? The brand discount at mail order is based the NDC submitted. fir' 8. Is the mail discount based on 11 digit NDC? Yes WellDvneRx' mail discount is based on the 11 digit NDC. 9. Is pricing for retail brand and overall generic effective rate guaranteed? Yes, WellDvneRx' guarantees the Writing for retail brand and overall generic effective rate. 10. Your quote must include a traditional pricing model and a transparency full pass-thru model. Is the pricing guaranteed? Yes, WellDvneRx' will guarantee the Writing. Please see the attachment section for WellDvneRx' Writing. 11. What is the discount for specialty drugs? What is the dispensing fee? Is the specialty drug program apass-thna under a transparency model? Are supplies included in the pricing? The discount for specialty drugs is AWP-17% and is a traditional Writing model. The dispensing fee is $2.00/retail and $0.00 for mail order. Supplies are included in the pricing. Please see the attachment section for WellDvneRx' SWecialty Drug Report. 12. Please provide your definition of "generic". Also provide a definition of the generic included in the overall generic guarantee. "Generic Drug" means a drug identified by its chemical or non-Wroprietarv name as determined by the United States Adopted Names Council (USANC) and accepted by the Federal Food and Drug Administration (FDA), of those drug products having the same therapeutically equivalent having an identical amount of active ingredients while taking into account such factors including but not limited to FDA status, exclusivity, and pricing differentials. 13. What quantity is an AWP based on for mail order? The AWP is based on the 11 digit NDC number for the specific drug, based on the auantity dispensed. We do not right size packages. 14. How are manufacturer rebates handled? Will KERR COUNTY share in the rebates? If so, what percentage? Each check received from a manufacturer is reconciled back to the original prescription filling. A report providing detail by client is requested from the manufacturer to ensure that each client receives the aWproWriate rebate amounts. Rebate reports provide the above information. Additionally, included with the rebate. payment is a statement that illustrates the plan's overall rebate performance. Yes, KERR County will share in the rebates, WellDvneRx' rebate calculations are based upon the exact drug utilization of each client, adiudicated according to the Warameters of agreements with the manufacturers. Rebates by manufacturer for each client are on a auarterly basis. 15. Do rebates have a minimum guarantee per claim? Per brand? WellDvneRx' rebate Wrovisions have a minimum guarantee per claim. A Wer brand minimum guarantee can be made available to Garland ISD as an alternative to a minimum guarantee Wer claim. 16. Are rebates paid quarterly? If not, when? Page 30 of 45 Rebate payments begin approximately 180 days after the first quarter and are then paid quarterly upon partial payment from the manufacturer. 17. Under transparency pricing model, are rebates a 100% pass thru of Gross? ~, Yes, the rebates paid are 100% of monies received, based on claims. by the manufacturers. 18. Will coverage of OTC impact rebates? If so, how much? Coverage of OTC may reduce rebates while lowering the net cost to Garland ISD. The net cost change will be favorable. 19. Do rebates survive termination? When are they paid after termination? Rebates accrued and owed will survive contract termination. Rebates after termination are paid on the same quarterly basis. 20. Are rebates paid on specialty drugs? Yes, We1lDyneRx offers rebates on select specialty products. Do you contract directly with manufacturers for formulary rebates or do you use another PBM? If yes, who handles? Yes, We1lDyneRx contracts directly with manufacturers for rebates as well as through APS. 21. Please describe how the drugs for the formulary are selected, and who is responsible for the selection. First and foremost in the formulary selection process is evaluation of the clinical appropriateness, efficacy, and safety of the selected drug. We review all new FDA-approved drugs in a timely manner. Our clinical staff prepares a comprehensive drug review, evaluating the published literature, package insert, and verifiable information available from the manufacturer. External medical opinion is sought, as necessary. After internal clinical review, the drug review is presented to the Pharmacy and Therapeutics (P&T) Committee. This committee evaluates the clinical efficacy and safety of each drug and places the drug into one of three categories• Must Add-This classification designates the drug as potentially having a new_indication(s), a unique route of administration, superior efficacy. or a superior safety profile in contrast to the comparator roduct s . May Add-This classification designates the drug as comparable to other products with respect to indications, route of administration. safety. or efficacy. Do Not Add-This classification designates the drug as potentially inferior to the comparator product(s) with respect to indication(s), route of administration, safety. or efficacy. When evaluating drugs for the formulary, the P&T Committee is not influenced by the rebate arrangements made with the manufacturers. All final price negotiations occur only after rigorous and thorough clinical evaluation of the drug. Drugs that are therapeutically similar are evaluated further by the Formulary Planning Committee from an economic perspective to determine which drugs would best serve the financial interests of our clients. However, the economics of the drugs are considered only after their clinical assessment. Drugs listed on the formulary are Further evaluated for inclusion on the Performance Drug List. This list is a guide to excellent values within selected therapeutic categories for our clients and their members. The Performance Drug List is not a formulary and purposely omits many categories. Within the categories represented. however, the drug list helps physicians identify clinically appropriate products that are also cost effective. An External Review Committee composed of independent physicians and pharmacists (a subset of the P&T Committee) reviews various documents (e.g., prior authorization criteria, guidelines, etc.) for clinical integrity. Page 31 of 45 In providine pharmacy benefit management services, We1lDvneRx furnishes its clients with administrative and clinical consultative services. While we may provide clinical advice, however, ultimate decisions regarding plan designs, client-specific formularies, and preferred drug choices are the client's alone. Delivering ahigh-auality. clinically sound pharmacy benefit service depends on carefully developed processes ,,. to ensure that clinical efficacy and safety are the primary considerations and are evaluated fully before cost is considered. Utilization of an independent panel of physicians and pharmacists to evaluate a drug clinically for inclusion on the formulary ensures the integrity of this process. After a particular drug's clinical appropriateness has been determined. cost considerations play a legitimate role in negotiations for discounts and rebate arrangements on behalf of our clients. 22. Do you own your own mail service? If not, who do you sub-contract with and do you retain revenue? Yes, We1lDvneRx owns its own mail order service located at our headauarters in Centennial, Colorado. 23. Do you own your own Specialty Pharmacy? Or subcontract? If yes, who handles specialty pharmacy? Yes, We1lDyneRx own US Specialty Care, a division of We1lDyne, Inc. 24. What is the average turnaround time for mail order pharmacy? We1lDyneRx strives to process all orders for same day shipment and consistently meets or exceeds our member's expectations for delivery of re-orders. Generally, clean prescriptions are processed and shipped within 24 hours of receipt. Average turn around time for mail order: 2006 2007 New scri is 48 hrs 48 hrs Refills 36hrs 36hrs 25. Can mail order pharmacy be ordered on-line? Yesi We1lDyneRx members can order their mail order prescriptions online at www.welldynerx.com. 26. Does the PBM allow 90-day fills at retail in addition to mail order? If so, what contracted pharmacies participate? What is the discount to KERR COUNTY fora 90-day network? What plan design is used? We1lDyneRx does not recommend 90-day fills at retail. It is recommended that maintenance drug prescriptions be placed through mail order for greater plan savings. Please see the attachment section for We1lDyneRx' pricing table. 27. Do you offer alternatives in the pharmacy program that can help control or reduce the plan costs? If so, please provide details and approximate savings for each feature. Yes, We1lDvneRx has proven that one of the best ways to control costs and improve auality of care, while maintaining employee satisfaction, is through a fully integrated, prescription drug program that incorporates both retail and mail order benefits. This benefit offers complete mail and retail integration that goes beyond the scope of the mail service program by reducing both mail and retail prescription drug costs and improving drug utilization by carving out prescription drug_ benefit from the. rest of your plan and integrating mail and retail drug data. Mail Service We1lDyneRx provides our clients with the highest auality mail service pharmacy to serve the needs of those individuals who reauire prescribed maintenance medications. WellDyneRx' mail service pharmacy is conveniently located in Centennial. Colorado. We strongly recommend that clients take full advantage of the tremendous cost savings and patient care available through the mail service benefit. Page 32 of 45 Plan participants and plan sponsors will eniov significantly reduced out-of-pocket expenses and convenient on-time delivery to their homes. Ordering and refill procedures are easy to follow, with local or toll-free telephone assistance from WellDvneRx service representatives. Registered Pharmacists fill all prescriptions and are available to answer any questions patients may have regarding their prescribed medications. Educational Materials WellDvneRx provides TPA's, members and health plans with the information and articles that can be included in their member packets, correspondence and newsletters. Many of these articles cover the topics of mail service features and compliance. Also, member materials include information describing the program and its benefits. WellDvneRx can develop specific customized patient materials that address the benefits of utilizing their mail service program. Generic Substitution WellDvneRx encourages the greater use of generic drugs through plan design features like copay differentials, DUR edits and dispensing fee incentives to pharmacies. Two of the examples would be a filling fee differential for brand and generic drugs and incentive fees for formulary products We believe the pharmacy network providers are a terrific ally in reducing costs to plans and WellDvneRx has chosen to utilize these particular incentives. With these incentives we have had a tremendous amount of success in conversion to the generic therapies. For each fifty cent incentive fee paid to the pharmacy they saved our plans $18.00. The current generic utilization rate for our plans is 86%. The formulary utilization is greater than 75%. EarIvALERTT"" Ear1vALERT is an immediate alert system for the client. This alert system provides real-time information regarding potential medical conditions of members/patients. Ear1yALERT captures information about a potential medical condition several weeks before the plan would gain notification through medical claim information. The immediate research and potential intervention of a case manager at this initial stage of an illness can mitigate the severity of certain medical conditions such as diabetes or gastro-esophageal reflux disease (GERD). Many conditions require lifestyle enhancements or changes, and the sooner they are diagnosed and proper treatment begins, the better for the member/patient. Scheduled Visits WellDvneRx will also provide clients scheduled visits to evaluate the performance. ensure cost obiectives, identify the on-going needs of the client and monitor the effectiveness of the plan. 28. Please explain your Drug Utilization Review process for these programs: Prospective To promote the most appropriate utilization, some clients/plans also designate medications that require prior authorization or that a step therapy protocol be followed before certain drugs are covered. If the plan includes astep-therapy program, the medications in the "step-therapy drug" column will not be covered under the pharmacy benefit until the member has tried the medication(s) in the "required prerequisite drug(s)" column. If it is medically necessary, members can use astep-therapy drug without truing a prereauisite drug(s) first. In this case, the physicians must request coverage fora step- therapy drug as a medical exception. b. Concurrent WellDvneRx provides its clients with concurrent, real-time DUR which includes edits for contra- ~r indications. Specifically, the system uses patient history, gender, age and a number of other criteria to ensure proper use of medications which work to help protect the patients' health and obtain the best therapeutic outcomes. Retrospective DUR is also used to notify the prescribing physician(s) of patients Page 33 of 45 using therapies that have contra-indications so that appropriate steps can be taken to ensure patient care and safety is addressed. A sample of Concurrent DUR checks currently performed includes the following: • Refill too soon -This edit is based on a percentage of previously filled medication used based on date of fill and days supply (70% retail, 75% mail). • Poly Pharmacy Check -- This check is done on the same class of drugs across all pharmacies utilized by the member. • Duplicate Claim -- Same pharmacy. same Rx Number, same day. • Duplicate Therapy -- Overlapping and duplicated active ingredients across all active drugs on the member's profile, at all pharmacies. • Drug to Drug Interactions -- Current drug is tested against all active drugs on the member's rp ofile • Dosage Checks -Minimum and maximum recommended dosage with auser-defined variance • Age Precautions -Pediatric or geriatric • Dose Duration -- Insufficient or excessive • Compliance Checking -Early and late refills • Drug to Disease Contraindications -- Inferred or indicated if an ICD-9 code is provided on the member file or on the claim • Latrogenic dosing -- A drug dispensed to counteract the side effects of another drug on the member's profile Retrospective Under WeIlDyneRx' Retrospective Case Management, the long-term patient history of past mail and retail drug usage is periodically evaluated. Retrospective analysis identifies patients who might be at risk for drug interactions or drug induced disease conditions. Retrospective analysis also identifies opportunities to reduce unnecessary prescriptions or to simplify patient therapy. _T_he_ physician is contacted in writing or by phone if the evaluating pharmacist identifies any opportunity to improve the cost or quality of patient care. Through Retrospective Case Management, prescribing choices that might prove inappropriate over the longer term are automatically identified. Letters suggesting more cost effective or clinically effective therapies are faxed to the prescribing physician following retrospective evaluation. Physician response to the alert letter is encouraged and is tracked when received. The following list is a sample of We1lDvneRx' Retrospective edits: • Prescriber Trend Reports • Patient Utilization Profiles • Patient Explanation of Benefits 29. Please submit a sample of your standard reporting package. Attach samples of your standard reporting package that is included in your quote. Please note if your paid claims numbers are based on paid or incurred claims figures. Please see the attachment section for We1lDvneRx' Sample Reports. 30. Include in your response a PPI report, a specialty drug report, and a net cost per day for mail or retail report w/ specialty and acute meds removed. Please see the attachment section for WellDvneRx' PPI report, specialty drug report and a net cost per day for mail report. 31. How do you propose getting members to look at alternative brands that have generics available and do your manufacturer contracts preclude you from providing this type of information to members? There are several ways to get members to look at alternative brands. some of which include formulary design, step therapy and NDC blocks. Other services offered by WellDyneRx include an on-line consumer drug review which outlines drug product alternatives, costs, OTC alternatives, and Micromedex' alternative Page 34 of 45 therapies. WellDvneRx does not have manufacturer contracts that preclude us from providing this type of information to members. 32. What financial advantage would KERR COUNTY gain if we limited the pharmacy network to several large chains? Could exceptions be made in outlying areas? The financial advantage of limiting the pharmacv network to large chains would be negligible. WellDvneRx' network of pharmacies is customizable to meet the needs of our clients. 33. Is electronic billing available? Reports on line? Is an interactive website available? Can members compare pricing of drugs on line? Yes electronic billing is available as well as on-line reports. WellDvneRx provides reporting capabilities that can be accessed over the Internet through the WellDvneRx web-site. WellDvneRx allows reports to be run on an as needed basis. Special reports can be reauested through WellDvneRx. Once the reports are established, they also will be available through our web-site. WellDvneRx' website is interactive and members are able to compare pricing of drugs on-line. 34. Will the PBM provide assistance with developing a communication piece? Yes WellDvneRx can provide assistance with developing a communication piece. Customized materials specific to the plan benefit, and a member welcome letter are available with our standard materials at no additional cost. 35. Provide all materials used in marketing your product. Please see attached marketing materials. 36. Do your administration fees include the following: a. Postage (in D below) No, WellDvneRx does not include postage in our administrative fees. b. Claim forms Yes electronic claims are included in WellDvneRx' administrative fees. Manual claims are $1.00/claim. c. ID cards, (medical/rx combo cards?) Yes, ID cards are included in the administrative fee. d. Mailing to participants homes Yes, mailing to participants homes is included in WellDvneRx' administrative fees. e. Participating provider directories Yes, participating provider directories are included in our administrative fees. f. Customer service representatives specific to KERR COUNTY. Yes, CSR's dedicated to Kerr Countv are included in our administrative fees. g. Mail order forms Yes, Mail Order forms are included in WellDvneRx' administrative fees. '" h. 1 - 800 number to call center Yes, an 800 number call center is included in WellDvneRx' administrative fees. Page 35 of 45 Standard report packages Yes, We1lDvneRx will include a standard reporting package in our administrative fees. 37. Does your plan currently offer on-line access to claims and eligibility information for employees? Is there a separate charge for this to the plan? Yes. WellDyneRx provides a VIPPS-certified web site where plan participants can access claims, track mail orders, and check eligibility information. The site also provides deductible tracking for families and individuals, a copav calculator, pharmacy locator for the national retail network. tools to compare drugs, and much more. There is no additional charge for these services. 38. Will any revenue be paid to a third party administrator for services, fees, disease state management or other vendor services by the PBM? Will all compensation to third parties be disclosed? Is an implementation allowance paid to the payor? If so, how much per member or head of household? Yes, We1lDyneRx has certain fee-based disease state management and educational programs available, should the Client choose to avail themselves of these programs. These programs can be provided directly through WellDvneRx or in coniunction with other third parties as designated by Client. Prior to proceeding with any of these programs, We1lDyneRx agrees to provide the client in writing the actual cost of any such programs. Examples of fee-based programs available include: • Smoking Cessation • Living with Allergies • Back Pain • Stress Management • Dependencies • Cancer Prevention • Health Pregnancy • Osteoporosis, including bone density scanning • Weight Management • Nutrition • Vision, Dental, and Hearing • Emotional and Social Health Compensation to third parties will be disclosed under contractual guidelines. Yes, We1lDyneRx will offer an implementation allowance of $4.00/member. 39. Will you audit the pharmacy data? Specifically, as a payor, what independent source will audit claims? What are the fees associated with an independent audit? Yes, We1lDvneRx will audit the pharmacy data. Plan Sponsor shall have the right to audit business records of We1lDyneRx which directly relate to invoices made to Plan sponsor for claims reimbursement through an independent accountant or an independent third party auditor agreeable to both parties who will sign a confidentiality agreement ensuring that all details and terms will be treated as confidential. Plan sponsor and We1lDyneRx shall cooperate with representatives of each other to conduct any such inspection or audit. All audits shall be at the auditing party's sole expense and shall only be made during normal business hours, following thirty (30) days written notice, and without undue interference to the audited party's business activity. If, after completion of the audit, the audit reveals a discrepancy in the results of the audit and the previous calculations of the audited party, then the auditing party shall deliver written notice which sets forth in reasonable detail the basis of such discrepancy. The parties shall use reasonable efforts to resolve the discrepancy within 30 days following delivery of such notice, and such resolution shall be final, binding and conclusive upon the parties hereto. Fees associated with an independent audit will be determined between the independent auditor and Plan Sponsor. 40. Will you provide consultative modeling and forecasting annually? Page 36 of 45 Yes, WellDvneRx' integrated approach to plan design provides maximum flexibility based on the customer's specific obiectives. Plan design and modeling that estimates the anticipated outcome from proposed plan design chances are offered by WellDvneRx to the customer at no additional cost, provided at least six months worth of historical data can be provided with which to base the review and recommendations on. In addition, WellDvneRx has the ability to provide plan modeling and predictive outcomes based on prescription data. Through this analysis, multiple plan design scenarios can be modeled so that all options can be weighted. At least one years worth of data is reauired in order to perform this service. 41. Will atrue-up of guarantees be performed annually? If so, when can KERR COUNTY expect payment of true-ups above guarantees under transparency model? Yes, WellDvneRx will provide atrue-up of guarantees to be performed annually if the transparent pricing model is chosen. 42. Will the mail service provider provide to KERR COUNTY copies of their suppliers (wholesaler or manufacturer) invoices showing net invoice for medications? Yes, WellDvneRx will provide Kerr County copies of our suppliers' invoices showing net invoice for medications. 43. Will your firm detail its total revenue from all sources for administering the KERR COUNTY pharmacy benefit plan and allow an independent audit by the KERR COUNTY? Yes, WellDvneRx will allow third party audits for client review, within contractual guidelines. The client shall have the right to audit the business records of WellDvneRx that directly relate to invoices and rebate payments made to Plan Sponsor for claims reimbursement, through an independent accountant or auditor mutually agreeable to both parties. 44. 'The 3 finalist will be required to make a presentation to KERR COUNTY and answer questions to fully explain the specifics of the program offered. Confirmed. 45. Will your firm contractually guarantee that the amount you reimburse to pharmacy providers is the exact same amount that is billed to the plan sponsor? Yes, WellDvneRx will contractually guarantee the amount we reimburse to our pharmacy providers is the exact same amount that is billed to the plan sponsor. Attach a sample draft of the PBM contract A s_a_mple of WellDvneRx' standard contract is attached. Cafeteria Plan Administration 1. Name, address, city, state, zip code and telephone number of home office of firm. Branch office location(s), if any. DataPath Administrative Services 1601 Westpark Dr. Suite 9 Little Rock, AR 72204 1-877-685-0655 2. Is your company awholly-owned subsidiary or a division of another company? If so, please identify the company name and address. In addition, please list all owners (if not publicly owned), and all affiliated companies. DataPath Administrative Services is awholly-owned subsidiary. 3. Have any principals of the firm ever been named in a lawsuit dealing with the management/administration of a Section 125 Cafeteria Plan? Page 37 of 45 No 4. How many clients are currently served? Please provide the largest group, the smallest group and the number of employees covered. Our client base has over 200 emplovers. Largest Group State of Lousiania 4200 Smallest Group Sunrise Aviation 2 5. What is the maximum processing time that will occur between receipt of claims and reimbursements to the members? Same day service if claims are received by fax, email, debit card and electronic submission before 12:00 p.m., Monday - Friday. 48 to 72 hour claim turn around is available for mail in service on Medical Reimbursement. Dependent Care Claims by payroll when claims are received before 12:00 p.m. 6. What guarantee will you provide to Kerr County that this function will be completed within this time frame? DPAS will guarantee that reimbursements will be processed within two business days. If we do not live up to this guarantee we are will to forfeit 10 % of our administration fee for that month. 7. What is the size of your staff? DPAS currently has a total of ten staff members. Although we have resources that allows use of other employees as needed. '1~rY' 8. List staff experience of the employees that will be handling Ken County's account. An Account Manager will be assigned to your group if awarded. Our Account Manager staff has an overall experience total of over 20 vears of Customer Service Background with a combined total of over 10 vears of Benefit Administration experience. 9. List the office location intended to service Kerr County. DataPath Administrative Services 1601Westpark Dr. Suite 9 Little Rock, AR 72204 10. Is there a toll free number for employees and/or Kerr County to speak to a customer service representative? If so, what are the hours? Yes, DPAS has a toll free number 1-877-685-0655 11. Does your firm perform discrimination studies as to eligibility, contributions and benefits under the plan? If so, how frequently? Yes, DPAS performs discrimination studies. 12. Does your company offer debit card services? If so, please explain in detail. mySourceCard~ is aspecial-purpose MasterCard® debit card that interfaces with Flexible Spending Accounts (FSAI Health Reimbursement Arrangements (HRAh Dependent Care Assistant Programs (DCAPh and Transportation Management Accounts. For the most part, mySourceCard~'" works iust like a debit card, except that it is limited to specific merchants and eligible expenses, which are determined by the benefit Page 38 of 45 account selected and defined by Merchant Category Codes ("MCCs"). mySourceCardTM users simply present the card at specified categories of providers, such as healthcare providers, pharmacies, dependent care, and mass transit and narking providers for payment of out-of- pocket balances such as co-payments, deductibles, and coinsurance amounts. The transaction is then processed like other debit cards, and the amount is automatically deducted - in real time -from the FSA, HRA, HSA, DCAP, or other benefit plan "purses." Non-card transactions are integrated into the account balances via the administration system for a total picture of the benefit account. Account balances and transaction information are easily accessible online. ADMINISTRATION 1. Describe the computerized system used to collect, assimilate and integrate the data of the program. RIMS/Trizetto Please see exhibit V (Trizetto) 2. Provide a sample of your Administrative Service Agreement. Please see Exhibit VII (Claims Agreement) 3. Provide a sample of your Plan Document. Please see Exhibit VIII (Sample Plan Document) 4. Describe your capabilities for Direct Deposit. FARA will accept direct deposit. draft or a paper check 5. Provide samples of worksheets and/or any materials that will be provided to Kerr County for educational purposes. ~ FARA will customize and distribute materials for Kerr County Please see Exhibit IX (Implementation) 6. Describe your process for entering enrollment information into your system. Manual input of electronic fax or paper data 7. What electronic or Web-based services does your company offer? Full access through system portal Can claims be filed via fax or through other electronic means? Yes Do you charge additional fees for this service? No 8. Does your firm provide monthly, quarterly, or annual account statements directly to the participating employees? If so, please explain in detail the process and if there are any additional fees associated with Employee Account Status statements. This information is available to employees on-line 9. Provide a sample of Section 125 reports generated for employees and Kerr County. Provide a sample of any other reports that you believe may be useful to Kerr County on a regular basis. Please provide sample reports that would be utilized for bank reconciliation. Please see HRA section for a sample of Section 125 Please see Exhibit X (Status Link) Page 39 of 45 ORGANIZATION STRUCTURE 1. Any Administrator must have filed and be approved with the State. of Texas. If a TPA is later rejected by the State, it will be considered grounds for dismissal. 2. Is your organization for profit or non-profit? Profit 3. Are you an affiliate of an insurance carrier or independently owned and managed? Independent 4. If you are a multiple site organization, are certain services delegated to specific locations or are all services available at any location? Certain services are delegated to specific locations. LIABILITY PROTECTION & BANKING REFERENCE 1. Please disclose the amount of liability insurance protection currently in force. The selected Administrator must provide confirmation of coverage. $10, 000, 000 2. Is the company and all employees bonded? If so, please provide details. Yes. All employees are covered under a "Blanket" Bond. Please see Exhibit I (E&O Certificate) 3. Are employees covered by workers compensation insurance while performing services on site at Kerr County? vim,: a. {/ }Yes { }No PRICES/FEES 1. Provide schedules of fees for each Plan. Indicate whether fees or services are contingent upon the sale of any products to Kerr County and the conditions under which the products would be sold. Please see HRA section (fee page) 2. Are the fees due payable on the first of the month, quarterly, annually or combination of these? First of the month 3. Is a fee structure available that incorporates various levels of participation? Yes 4. Do you intend to receive any commissions from the vendors servicing Kerr County? No 5. Explain any methods to be utilized to control expense. Internal Cost Controls 6. Provide a fee for administering the Medical and Dependent Care Spending Accounts with and without a Debit Card option. X111/' Please see HRA section (Account Balance Report) Page 40 of 45 HISTORY 1. Briefly explain the development of your organization and your corporate business objectives. Please see Executive Overview in the front of the proposal. 2. Explain how long you have been in business and how long you have been providing Section 125 Administration services. 29 years UNIQUE CHARACTERISTICS 1. What do you feel is unique about your firm that will offer the best value to Kerr County for Section 125 Administration services? DataPath Administrative Services, Inc. offers the personal touch of a small company and vet the efficiencies of a large comnanv. DPAS has been providing FSA administration services since for over 10 years. Our parent comnanv, DataPath, Inc., has been providing these services since 1984.Our client base of over 200 employers includes groups such as government entities, universities, hospitals, schools, oil companies, and non-profit organizations. Our clients eniov personal service, compliant solutions, and a responsive team of dedicated and educated professionals. 2. Please comment on any other characteristics of your organization that are considered unique in the industry. One of the Largest Privately Owned and Operated Third Party Administrator's. ^ Founded in 1998 ^ Accuracy adjudicates $500 million in medical claims • 181ocations nationally A Reputation Based on Excellence and Service. Live Call Acceptance!! ^ 24 hour E-customer service 98% Approval Rating from The State's Largest Employer (45,000 Members) Proactive approach to Healthcare Management ^ Fully Integrated Wellness Programs ^ All nurses and clinicians are FARA employees ^ Disease Management ^ Appropriateness of Care ^ Member Coordination of Care Advisors The RIMS Trizetto System insures Accurate timely processing of claims. ^ 99.7% Claims Accuracy with average ^ Proven Disaster Recover System ^ Human Resource and Member access via Status Link and Claims Link REFERENCES 1. Provide the names, addresses, telephone numbers and contact names for three of your clients. For each client listed, provide the number of employees covered (on your capacity as a Section 125 Administrator). Also state whether or not any of the Section 125 Administration Agreements with these firms are on a fee for services rendered basis. City of Little Rock Contact:.Iim Bradshaw 506 W. Markham "~" Little Rock. AR 72201 501-371-4578 Metropolitan National Bank Contact: Katina Riggs 425 W. Capitol Ave Little Rock, AR 72203 501-505-5124 University of Central Arkansas Contact: Rhonda Roberts 201 Donaghey, Lib 321 Conway, AR 72032 501-450-5052 Page 41 of 45 2. Please include a resume of the contact person responsible for this case. Leon A. Golemi FARA Benefit Services, Inc. Vice President Thirty-three years Life and Group Health Insurance experience. Began career with Pacific Mutual Life Insurance Company in 1974 as a Career Agent and became Agency Manager. He was in private practice as an Employee Benefits Consultant and Producer from 1982 until 1994. Since 1994, he has been contracted with F.A. Richard & Associates Inc. as Director of its FARA Benefit Services Division. He oversees all marketing, business development, Plan implementation and Account Management. In 2002, FARA Benefit Services, Inc. was formed as a FARA affiliate company. He is a principal and serves as its Vice President. WELLNESS AND PREVENTION QUESTIONNAIRE: 1. Provide an executive summary of the wellness services you provide. Please see Exhibit XI (Wellness Report) 2. Are wellness and prevention medical services your main line of business? If not, please explain in detail where and how wellness fits into your business plan. All of FARA Benefit Services. Inc. TPA services are coordinated to enhance wellness and prevention. FARA accomplishes this by utilizing reports from both the Claims and Prescription data to developed education programs that fit the needs of Kerr County's employees. Abase line for each employee will be established at the enrollment Health Fair . Wellness Coaches can then be utilized to deliver and build an appropriate plan with each individual. FARA will defer and coordinate all wellness programs under the direction of Kerr County. ~irr+ HEALTH RISK ASSESSMENT (HRA) SERVICES: 1. Describe the Health Risk Assessment (HRA) tool your organization offers. Please attach a sample. Please refer to the WellDvneRx RHA attachment. 2. In what languages are your HRA, website, and employee materials available? WellDvneRx' HRA and employee materials are available in English and Spanish. 3. What is the average participation rate for your clients? WellDvneRx' average client participation is 40%. 4. Explain your experience designing incentive systems to drive participation, including your most successfully designed incentive program. Our main incentive WellDvneRx offers is absolutely no cost to the members, resulting in high level member participation. 5. Please complete the grid below with a checkmark or specific answer if your HRA includes the feature described. Please see grid below 6. How often do you recommend that the members have an HRA? WellDvneRx recommends members have an HRA annually. 7. Please describe turnaround time for each of the following areas: Page 42 of 45 WellDvneRx offers several products, depending on the complexity of the product chosen the below could take anywhere from 1 to 6 weeks. a. Providing the HRA results to individuals. `wrr' b. Contacting individuals for possible interventions. c. Providing Kerr County with a summary report of the initial HRA results. Please describe how your company would communicate with individuals to assist them in understanding how to utilize the HRA and how to interpret the results. All the HRA results come with user friendly, comprehensive communications and reports. 9. Describe how your company will set and reach HRA participation goals? WellDvneRx will review the overall obiectives with the plan to help assist with a strategy based on the plans specific needs. 10. Do you recommend using incentives? If so, please describe sample incentives your company might recommend. Yes. WellDvneRx offers incentives such as reduced copay and the implementation of a point and reward system. 11. How is the individual's HRA record updated in working with the disease management staff? WellDvneRx works with the plans Disease Management staff to coordinate and determine special reporting needs. ~ 12. Do you monitor and report individual HRA changes from year to year? WellDvneRx has several different programs available to help facilitate this and we work with the plan to ensure one is chosen to reflect the plans requirements. ~++' Page 43 of 45 HRA PRODUCT FEATURE Included? Web-based HRA es Pa er-based HRA es Biometric clinic based es Provides information on confidentialit es Provides information on how data will be used es DATA COLLECTED Health status es Chronic conditions es Famil health histo es Medications es Lifest le risks es Safet es Preventive exams es Immunizations es Biometrics es Readiness to thane es INDIVIDUAL RESULTS High-risk clinical situations are identified and appropriate steps can be taken for immediate intervention. yes Score communicated es Focus/ riorit of individual's health/lifest le areas are communicated es Health im rovement recommendations are made es Action ste s rovided es Can o to s ecific to its within web site es Summ re ort is available online es Summa re ort can be rinted es Links to additional health information are available es Provides information or links to risk reduction ro ams es Employer can customize messages on their URL to include references and links to internal ro ams or other vendors ves EMPLOYER REPORTS Web-based/electronic re orts available es Re orts can be rinted es Lifest le risks are re orted es Health status are re orted es Chronic conditions are re orted es IMPLEMENTATION & COMMUNICATION STRATEGY: Please provide a proposed communication plan for introducing an onsite wellness program and reference the ongoing communication process. Outline your company's responsibilities in these processes. Please include copies of your educational materials and timelines for distribution. Enrollment /Health Fair Please see Benefit/ Wellness section On-Site Wellness Coaches** Please see Benefit/Wellness section Quarterly News Letters Educational Payroll Stuffers, Mail outs, Posters Please see Exhibit IX (Implementation) Health Care Advisors (800 number) Web based Health Information 24 hr nursing line Page 44 of 45 1. How can employees communicate with the medical team? Dedicated 800 number or 24 hr nursing line '' 2. Discuss the frequency and type of communications that eligible persons will receive throughout the program period. FARA will create a specialized program to target areas indicated through the base line information and under the direction of Kerr County 3. Provide your web address and any access codes needed to explore your services. fbs@fara.com 4. How would you suggest reaching spouses? Through mailings via web site and disease management outreach programs. *** Claims costs may be associated with usage. y Page 45 of 45 (~,,I~,~~~H CERTIFICATE OF INSURANCE CERTIFICATE NUMBER HOU-000692408-12 PRODUCER THIS CERTIFICATE IS 188UED AS A MATTER OF INFORMATION ONLY AND CONFERS Marsh USA InC. NO RIGHTS UPON THE CERTIFICATE HOLDER OTHER THAN THOSE PROVIDED IN 7HE 601 Poydras Street, Suite 1850 POLICY. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE New Orleans, LA 70130-6031 AFFORDED BY THE POLICIES DESCRIBED HEREIN. COMPANIES AFFORDING COVERAGE COMPANY ARA -All-E&0-07-08 A LLOYDS OF LONDON INSURED COMPANY F.A. Richard & Associates, Inc. B FEDERAL INSURANCE COMPANY 1625 W est Causeway Approach Mandeville, LA 70471 COMPANY C TRAVELERS CASUALTY & SURETY COMPANY OF AMERICA COMPANY D COVERAGES This certificate supersedes and replaces any previously issued certificate for the policy period noted below. 1 THIS IS TO CERTIFY THAT POLICIES OF INSURANCE DESCRIBED HEREIN HAVE BEEN ISSUED TO THE INSURED NAMED HEREIN FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACTOR OTHER DOCUMENT W ITH RESPECT TO W HICH THE CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, CONDITIONS AND EXCLUSIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOW N MAY HAVE BEEN REDUCED BY PAID CLAIMS. CO TYPE OF INSURANCE POLICY NUMBER POLICY EFFECTIVE DATE (MMIDDIYY) POLICY EXPIRATION DATE (MM/DDIYY) LIMITS LTR GENERAL LIABILITY AGGREGATE GENERAL COMMERCIAL GENERAL LIABILITY _ PRODUCTS -COMP/OP AGG ~ _ CLAIMS MADE ~ OCCUR PERSONAL & ADV INJURY OWNER'S & CONTRACTOR'S PROT EACH OCCURRENCE FIRE DAMAGE (Any one fre) MED EXP An one arson AUT OMOBILE LIABILITY COMBINED SINGLE LIMIT ANY AUTO ALL OW NED AUTOS BODILY INJURY SCHEDULED AUTOS (Per person) HIRED AUTOS BODILY INJURY (Per accident) NON-OWNED AUTOS PROPERTY DAMAGE GARAGE LIABILITY AUTO ONLY - EA ACCIDENT ANY AUTO OTHER THAN AUTO ONLY: __ EACH ACCIDENT AGGREGATE EXCESS LIABILITY EACH OCCURRENCE UMBRELLA FORM AGGREGATE OTHER THAN UMBRELLA FORM WO RKERS COMPENSATION AND ' WC STATU- OTH- TORY LIMITS ER LIABILITY EMPLOYERS EL EACH ACCIDENT THE PROPRIETOR/ INCL EL DISEASE-POLICY LIMIT PARTNERS/EXECUTIVE EL DISEASE-EACH EMPLOYEE OFFICERS ARE: EXCL A OTHER professional W15HEP07PNPM 06/01/07 06/01/08 Each Wrongful Act ' Liability Policy Aggregate 10,000,000 B Crime 6800-9133 06/01/07 06/01/08 5,000,000 C Excess Crime 104946426 06!01/07 06/01/08 5 000 000 DESCRIPTION OF OPERATIONSILOCATIONSIVEHICLES/SPECIAL ITEMS CERTIFICATE HOLDER CANCELLATION SHOULD ANY OF THE POLIClEB DESCRIBED HEREIN BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE INSURER AFFORDING COVERAGE WILL ENDEAVOR TO MAIL _~ DAYS WRITTEN NOTICE TO THE AIGRM Claims Services CERTIFICATE HOLDER NAMED HEREIN, BUT FAILURE TO MAIL SUCH NOTICE SHALL IMPOSE NO OBLIGATION OR Attn: Jayshree Kapadia 5 W ood Hollow Road, 3rd Floor LIABILITY OF ANY KIND UPON THE INSURER AFFORDING COVERAGE, ITS AGENTS OR REPRESENTATIVES, OR THE Parsippany, NJ 07054 ISSUER OF THIS CERTIFICATE: MARSH USA INC. ele ':=~1-C`~•rt,Gt- -Cl[ OuidaTurner ~ _ „ .. BY: MM7(3/02) VALID AS OF: 05/24/07 Employers Reinsurance Corporation A Stock Company 5200 Metcalf Avenue, P.O. Box 2991, Overland Park,1CS 66201-1391 (913) 676-5200 / (800) 255-6931 Excess Medical Indemnity Policy Insured: ABC, Inc. Policy Number: 1234567 Effective Date: January 1, 2001 State of Delivery: New Jersey This Policy is a legal contract. In consideration of Premium paid, Employers Reinsurance Corporation agrees to reimburse Losses in accordance with the terms of this Policy. Various provisions in this Policy restrict coverage. Read the entire Policy carefully to determine your rights, d~uf~and what is and is not covered. ~ I ;. 1 Throughout this Policy the words "you" and "your" e the s e and in the Schedule. The words "we", "us" and "our" refer to E 'n a i ther words and phrases that appear in capital letters have sp i i g e Schedule and Policy if you have questions on them in o s t This Policy is iss 'n, dal rned by, the laws of the State of Delivery shown above, unless otherwise preem e w. Acceptance of this Policy means that the Insured agrees to the terms and conditions of i This Policy is executed by printing the facsimile signatures of our President and Secretary below and on the Schedule and by the actual signature of the authorized representative on the Schedule. EMPLOYERS REINSURANCE CORPORATION President Secretary err' SP 001 236 1100 TABLE OF CONTENTS "' Page Schedule of Ins urance ............................................................................................................................. 1 Section One: Definitions ..................................................................................................................... 3 Section Two: Premium ........................................................................................................................ 4 Section Three: Specific Excess ............................................................................................................. 5 Section Four: Aggregate Excess .......................................................................................................... 6 Section Five: Amendments ................................................................................................................. 7 Section Six: Exclusions ..................................................................................................................... 8 Section Seven: Renewal and Cancellation ............................................................................................ 9 Section Eight: General Provisions ........................................................................................................ 10 sir'' SP 001 236 1100 SCHEDULE OF INSURANCE THIS IS A CLAIMS PAID POLICY PLEASE READ CAREFULLY The following insurance only applies to the Policy Period shown in this Schedule. A separate Schedule will be issued for each succeeding Policy Period. 1. INSURED: ABC, Inc. 2. ADDRESS: 123 State Street Trenton, New Jersey 10000 3. POLICY NUMBER: 1234567 4. POLICY PERIOD: Janus 5. PLAN NAME: ABC (i) (1) Claims Incurred from January 1, 2001 through December 31, 2001 (ii) (2) Claims Paid from January 1, 2001 through December 31, 2001 b. Retention each Person: $100,000.00 6. SPECIFIC EX SS: O This Policy ^ es d e not include Specific Excess coverage. a. Liability Basis: c. Indemnity Percentage: d. Lifetime Limit: e. Covered Unit(s) 100% $1,000,000.00 ABC, Inc. ABC Subsidiary, Inc. f. Non-medical Benefits covered: Dental, Vision g. Premium: ,'mow Rating Classification Employee Only Family ~~ Monthly Rate $12.98 $32.46 SP 001 236 1100 - 1 - ~rrr` 7. AGGREGATE EXCESS: This Policy ~ does ^ does not include Aggregate Excess Coverage a. Liability Basis: (i) (1) Claims Incurred from January 1, 2001 through December 31, 2001 (ii) (2) Claims Paid from January 1, 2001 through December 31, 2001 b. Loss Limit Per Person: $100,000.00 c. Attachment Point: (1) Estimated Attachment Point: $4,896,385.00 (i)(2) Factor: (ii)(3) Minimum: d. Indemnity 0 e. Indemnity L O f. Covered Un g. Non-medical Benefits covered: h. Monthly Premium Rate: 8. ADMINISTRATOR: $1,000,000.00 ABC, Inc. ABC Subsidiary, Inc. Dental, Vision $1.78 ABC Administrators Trenton, New Jersey 1.0000 EMPLOYERS REINSURANCE CORPORATION t~ t'~"~c~i~- President Secretary Countersignature Licensed Resident Agent SP 001 236 1100 Date -2- --- Authorized Representative Date ~+' SP 001 236 1100 -3- SECTION ONE: DEFINITIONS ~r 1. ADMINISTRATOR means the organization named in Schedule Item 8 and which you selected to pay Benefits under the Plan. We must approve your use of the Administrator but tThe Administrator is your contractual agent and does not represent us in any way. Unless you get written consent from us, termination of the contract between you and the Administrator named in Schedule Item 8 will automatically cancel this Policy as of the date that your contract with the Administrator terminates. You agree to: l.a. contract with the Administrator for the investigation, payment, denial or settlement of all claims for Benefits under the Plan; 2.b. hire counsel to defend all litigation arising out of denied claims, but we have the right to participate and control in the defense of any claim which might result in a Loss to us; 3.c. pay all fees charged by the Administrator for its services; 4.d. provide the Administrator with sufficient funds to pay all claims for Benefits under the Plan as they become due; and S.e. require the Administrator to pursue and take advantage of all discounts and other cost reducing procedures in paying claims for Benefits under the Plan. The Administrator must immediately notify us in writing if no discounts or other managed care opportunities are otherwise available with respect to any Losses under the Plan. 2. BENEFITS means any medical and prescription drug coverages provided by the Plan, and any non- medical coverages) provided in the Plan and described in Schedule Items 6(f) or 7(g). Dental, vision, hearing, and weekly income Benefits are examples of non-medical coverages. Any prescription drug card program(s) do not constitute Loss unless described in Schedule Items 6(f) or ~(g)• CASE MANAGEMENT FEES means fees Paid for case management for a covered Person. Coverage of Case Management Fees is limited to fees Paid to a certified case management provider (other than an employee or affiliated company of the Administrator) for the coordination and management of healthcare delivery through appropriate referral to a qualified and approved medical provider. Case Management Fees do not include fees Paid on a capitated basis (e.g., per Employee per month) by you or the Administrator. Case Management Fees are in addition to Benefits under the Plan. 4. COVERED UNIT means a particular class of Employees (and their eligible covered dependents of the Employees under the Plan) who are covered under the Plan and insured indemnified by this Policy and identified under Schedule Items 6(e) or 7(f). A Covered Unit may be identified by company name, division, location or group. EMPLOYEE means any individual who is employed by you in a Covered Unit and is eligible for coverage under the terms of the Plan. This does not include retired Employees or their dependents of retired Employees unless otherwise agreed to by us. SP 001 236 1100 - 4 - 6. ENDORSEMENT means an written alteration or amendment to the terms of this Policy issued by ;,~, us and which is made a part of this Policy. 7. INCURRED means the date on which services for covered Benefits for a covered Person are performed by a qualified medical provider. 8. LOSS means the amount Paid for claims by you or Paid by the Administrator for Benefits under the Plan. Loss includes the amount Paid by you or thePaid by the Administrator in settlement of claims for Benefits under the Plan Plan and the amount Paid by you or Paid by the Administrator in satisfaction of judgments for Benefits under the Plan. Loss also includes Case Management Fees Paid by you or the Administrator when claims exceed the Retention amount shown in Schedule Item 6(b). PAID means the date shown on each check, draft, wire or transfer of sufficient funds (which clears the financial institution) (which clears the financial institution) issued by you or the Administrator in payment of an Incurred claim, but only if the check or draft is dated, mailed or otherwise delivered during the same Policy Period. 10. PERSON means any Employee included in a Covered Unit, and their eligible covered dependents of the Employee, who are covered for Benefits under the Plan. 11. PLAN means the self-insured Employee benefit Plan named in Schedule Item 5. You agree to furnish us a copy of the Plan within 90 90 days after the beginning of the Policy Period. A copy of this Plan is attached and made a part of this Policy as Exhibit A. r 12. PLAN CHANGE means any alteration or amendment to the Plan, provisions made by you and accepted by us in writing but unless each change is sent to us and accepted in writing by us, this Policy will apply as if the change had not been made. We have the right to revise any Schedule Item(s) as of the effective date we accept the Plan Change. You agree to furnish a copy of any Plan Change to us at least 30 days before it becomes effective. 13. POLICY means this Excess Medical Indemnity Policy, and the Schedule and the Endorsements (if any). The Policy is a contract of insurance between you (the Insured shown in Schedule Item 1) and us (the Insurer named on the face page of this Policy). The terms and conditions of this Policy may not be altered or waived except by Endorsement issued by us. 14. POLICY PERIOD means the period of time shown in Schedule Item 4 and any succeeding Schedules. If this Policy is cancelled before the Policy Period expires, the Policy Period will end on the cancellation date. 15. SCHEDULE means the pages of this Policy which show your name, the name of the Plan and other terms of insurance included in the Schedule of Insurance. A separate Schedule will be issued for each succeeding Policy Period. SECTION TWO: PREMIUM 1. CALCULATION. Each month's Premium due and payable to us for coverage under this Policy must be calculated by you or the Administrator by applying the Rates shown in Schedule Items 6(g) and 7(h) to the number of Employees in each Covered Unit eligible for coverage under the `~"" Plan on the 1st day of each month. SP 001 236 1100 - 5 - 2. DUE DATE. Premium is due to us on the first day of each month during the Policy Period. Each ;~ Premium payment must be accompanied by a report showing the number of Employees as of the lstfirst day of the month who are part of each Rating Classification shown in Schedule Items 6(g) and 7(h). 3. GRACE PERIOD. Coverage under this Policy shall continue in full force and effect during the Grace Period. A Grace Period of 31 days following the Premium due date will be granted for the payment of each monthly Premium. If payment of all premium due and owing us is not made by you by the end of the Grace Period, then this Policy will terminate and you will be liable to us for any unpaid premium during which your coverage was continued in force after the due date of such premium. 4. NON-PAYMENT. This Policy will terminate automatically for non-payment of Premium 31 days after any Premium due date, except the first month of the first Policy Period. We will provide you with notice, by registered mail, stating the cancellation date of the Policy. Failure to pay any month's Premium within 31 days after the Premium due date will cancel the Policy as of the Premium due date, which will be the cancellation date of this Policy. 5. REINSTATEMENT. If any Premium that is due and owing to us is paid after the expiration of the Grace Period, we may at our sole discretion elect to reinstate of the Policy on theose terms and conditions that we may elect at that time. 6. ADJUSTMENTS. If you pay any Premium in excess of the amounts due to us, we will adjust these amounts and return the Premium back to you. Any Premium to be returned to you or any additional Premium due us, pertaining to any Policy Period will be waived after one year following ,, the end of the Policy Period unless you notify us in writing or we notify you in writing prior to this date. We are entitled to offset any reimbursements due you for Losses Paid for Plan Benefits under this Policy against Premiums or other amounts due us. SECTION THREE: SPECIFIC EXCESS RETENTION EACH PERSON. You must retain (not be reimbursed by us under the Policy) the amount of Loss shown in Schedule Item 6(b) which is Incurred during the dates shown in Schedule Item 6(a)(1) and Paid by you or Paid by the Administrator for Benefits under the Plan for each Person during the dates shown in Schedule Item 6(a)(2). 2. INDEMNITY. We will indemnify and reimburse you the percentage shown in Schedule Item 6(c) of the amount of Loss Paid by you or the Administrator during the Policy Period that exceeds the Retention. We will not indemnify reimburse you more frequently than one time each month for each Person under this Policy. 3. LIFETIME LIMIT. Regardless of the number of succeeding Policy Periods, the amount shown in Schedule Item 6(d) is the Limit of the Loss for which we will reimburse you with respect to each Person during the lifetime of the Policy. This Lifetime Limit will be decreased by the sum of the Retentions for each Person for each Policy Period in which we indemnify a Loss. This Lifetime Limit also will be decreased by all specific Loss pertaining to each Person under anyany and all previous Specific Excess indemnity policiesy we may have issued to you. Any increase in the Lifetime Limit shown in Schedule Item 6(d), which we will amend by Endorsement, does not apply to any Loss resulting from any accident taking place or sickness diagnosed prior to the Effective Date of the Endorsement. SP 001 236 1100 - 6 - `~.r 4. NOTICE. You or the Administrator will give usto us written notice (in a form satisfactory to us) within 30 days after Losses Paid for any covered Person exceeds 50% of the Retention (or may exceed the Retention due to the condition) shown in Schedule Item 6(b), or when any covered Person has been diagnosed with a condition that has been identified in an Endorsement to this Policy. You or the Administrator will give us written notice of any lawsuit, threatened lawsuit or other formal proceeding against the Plan which might result in a Loss to us. 5. LATE REPORTING. If we do not receive written Notice within 90 days after Losses Paid by you or the Administrator exceeds the Specific Excess Retention, we will reduce our reimbursements under the Policy as follows: Time Reduction 91 - 120 Days 15% 121 - 180 Days 30% ''~rw 181 - 365 Days 50% In no case will we reimburse you for Losses that are not reported to us in writing more than one year after the end of the Policy Period. 6. PROOF OF LOSS means we will reimburse you for Loss covered by this Policy after we receive satisfactory proof that you or the Administrator has Paid the Loss. Satisfactory proof includes, but is not limited to: a. our completed loss advice form; b. proof of eligibility under the Plan; c. claim payment report, including provider of services, Incurred from and to dates, Paid amount, Paid dates, and check numbers; d. itemized medical bills (as applicable); e. attending physician statements and medical narratives; f. the date the accident occurred or the date the sickness was diagnosed; and g. the date that medical care was first received. If we ask for Loss documentation that is not described above, you agree to require the Administrator to provide it to us. It is your responsibility and financial obligation to provide us with satisfactory Proof of Loss. SECTION FOUR: AGGREGATE EXCESS ATTACHMENT POINT. You must retain (not be reimbursed by us under the Policy) the amount of Loss equal to the Attachment Point indicated in Schedule Item 7(c) which is Incurred during the dates shown in Schedule Item 7(a)(1) and Paid by you or Paid by the Administrator during the dates shown in Schedule Item 7(a)(2). The Estimated Attachment Point indicated in Schedule Item 7(c)(1) is a calculation based on the number of Employees at the beginning of the Policy Period. The Attachment Point is the sum of the amounts calculated for each Policy Period, as follows: the number of Employees within each Covered Unit who are covered by the Plan on the first day of the month multiplied by the Factor shown in Schedule Item 7(c)(2). The Attachment Point will not be less than the Minimum amount shown in Schedule Item 7(c)(3). 2. INDEMNITY. We will indemnify reimburse you the IndemnityIndemnity PPercentage shown in ,,, Schedule Item 7(d) of Loss exceeding the Attachment Point. In calculating the Attachment Point and our Indemnity, Loss Limit Per Person is limited to the amount shown in Schedule Item 7(b). SP 001 236 1100 - ~ - 3. LOSS LIMIT PER PERSON means, when calculating our Indemnity to you, Loss pertaining to each Person during each Policy Period will be limited to the amount shown in Schedule Item 7(b). 4. INDEMNITY LIMIT. Our Indemnity for each Policy Period will not exceed the Indemnity Limit shown in Schedule Item 7(e). 5. NOTICE. You will require the Administrator to send us written notice (in a form satisfactory to us) within 20 days after the end of each calendar month during the Policy Period showing: (a) the number of Employees in each Covered Unit who are covered by the Plan on the first day of the month; and (b) the total amount of Losses for all covered Persons Paid by you or Paid by the Administrator during the prior precedingmonth. These reported Losses must be within the Loss Limit Per Person shown in Schedule Item 7(b). This report will identify and segregate Losses by each Covered Unit. In no case will we reimburse you for Losses that are not reported to us in writing more than one year after the end of the Policy Period. 6. PROOF OF LOSS. After the end of the Policy Period we will reimburse you for Loss covered by this Policy after we receive satisfactory Proof of Loss you or the Administrator has Paid the Loss. You or the Administrator must provide us with this satisfactory proof within 90 days after the end of the period designated in Schedule Item 7(a)(2) in order for us to consider reimbursing this Aggregate Excess claim. Satisfactory Proof of Loss includes, but is not limited to: a. our completed loss advice form; b. computer reports of total Paid claims (month-by-month} during the Policy Period showing claimant, Incurred date, Paid date, provider and amount PAH); Mrr c. computer reports showing total Employee census information (month-by-month) during the Policy Period; and d. documentation showing any voided payments, refunds, or other adjustments. If we ask for Loss documentation that is not described above, you agree to require the Administrator to provide it to us. It is your responsibility and financial obligation to provide us with the requested satisfactory Proof of Loss. 7. CANCELLATION. If you cancel this Policy before the Policy Period expires, no amounts will be reimbursed by us for Aggregate Losses under this Policy. SECTION FIVE: AMENDMENTS WE HAVE THE RIGHT TO AMEND ANY SCHEDULE ITEMS ON THE DATE THAT: l.a. we accept a Plan Change; 2.b. a Covered Unit is added or deleted; 3.c. the Policy Period expires; 4.d. you request a change in Policy terms; 5.e. state or federal law alters your obligation under the Plan; SP 001 236 1100 -8- 6.f. the total number of Employees in all Covered Units increases or decreases by more than: 'hrh- a.(1) 2525% during any month of the Policy Period; or b.(2) 10% during any three consecutive months of the Policy Period. 7.g. the average monthly claims Paid by you or the Administrator during the last two months of the Policy Period exceeds (by more than 2010%) the average monthly claims Paid during all other months of the Policy Period. 8.h. a material change in the makeup of the Employees of the Insured due to merger or acquisition, unless we have agreed in writing to such change. 9.i. you or the Administrator provided us with incomplete or inaccurate census and claim information, or any other mistake or misrepresentation, with respect to any material term of this Policy. SECTION SIX: EXCLUSIONS THIS POLICY DOES NOT APPLY: a. to Loss Paid by you or the Administrator and reported to us more than one year after the end of the Policy Period in which the Loss is Paid; to medical care provided to any Person, and their eligible covered dependents, who is not included in a Covered Unit; b. to claim expenses, including but not limited to: administrative fees, salaries paid to your Employees, performing Plan duties, investigation expenses, attorney fees and court costs; c. to fees paid to the Administrator for non-claim services or fees paid to any actuary, accountant,other consultant, or any other person or entity performing non-claim services for the Plan; d. to any Plan Change which we have not accepted in writing; to Benefits Paid by you in any one Policy Period but allocated to another Policy Period. No reimbursement will be made under both the Aggregate and Specific Excess provisions of this Policy if, by so doing, we would in any way make reimbursement more than once for any Loss; to administrative fees related to a prescription drug card program, unless otherwise agreed to by us in writing; g. to medical care involving experimental or investigational surgery or treatment which is considered experimental by the American Medical Association, the Food and Drug Administration or the Health Care Financing Administration of the Department of Health and Human Services, unless otherwise required by applicable law;; h. to Medicare Benefits, presuming that, when applying this exclusion, each Person eligible for coverage under Medicare became covered for all parts of Medicare on the earliest possible date entitled, and thereafter continuously maintained the Medicare coverage in force; SP 001 236 1100 - 9 - i. to any governmental or regulatory assessments or taxes imposed upon self-insurers, unless otherwise agreed by us in writing; j. to any Benefits with respect to an alternate treatment program that are not paid in accordance with the plan. However, this exclusion will not apply with respect to any expenses Incurred pursuant to an individual treatment plan for which we have given our specific written consent; k. to any of the following legal obligations: (1) liability arising out of the Employee Retirement Income Security Act of 1974, as amended, or out of any similar federal or state law; (b)(2) punitive, exemplary or compensatory damages; or (c)(3) fines or penalties imposed by law or regulation. SECTION SEVEN: RENEWAL AND CANCELLATION RENEWAL. We may offer to renew this Policy with you an terms and conditions that are in our sole discretion. In order for us to offer you a renewal for succeeding Policy Periods, you must provide us the following information at least two months prior to the end of the Policy Period: 1.a. a list naming each Employee and their eligible dependents of each Employee, identified by the applicable Covered Unit, showing each Person's age and gender; ~; 2.b. the total number of Employees working within each U.S. Postal Service Zip Code area for each Covered Unit; c. 3.a report summarizing claims which exceed, or may exceed, 50% of the Retention for each Person shown in Schedule Item 6(b), or any Persons who have been diagnosed with a condition that has been named in an Endorsement to this Policy, identified by the applicable Covered Unit; 4.d. any Plan Changes that are being considered by you; and S.e. any other information we may request. 2. NONRENEWAL. If we elect not to renew this Policy for any succeeding Policy Periods, we will give you written notice by registered mail at least 30 days, or longer if required by law, prior to the end of the Policy Period, by registered mail, stating our reason for the nonrenewal. 3. CANCELLATION. You may cancel and terminate this Policy at any time by giving us 30 days advance written notice stating the cancellation date. Unless you get written consent from us, termination of the contract between you and the Administrator will cancel this Policy as of the date that your contract with the Administrator terminates. We will provide you with notice , by registered mail, as required by applicable law, stating the cancellation date. If not cancelled, this Policy will remain in force until the end of the Policy Period. SP 001 236 1100 - 10 - SECTION EIGHT: GENERAL PROVISIONS 1. BANKRUPTCY. Your bankruptcy will not relieve us from the payment of any claim covered by this Policy. Nothing in the Policy will increase our liability under the Policy beyond that which it would otherwise be if you had not become insolvent or bankrupt. 2. INSPECTION OF RECORDS. We or our representatives have the right (at no cost to us) to inspect any books, records or other documentation applicable to the Plan which are kept by you and/or the Administrator. The inspection may be made by us or our representatives at any time during the normal business hours of the organization where the inspection takes place. LEGAL ACTION. No action at law or in equity will be brought byagainst us to recover on this Policy prior to the expiration of 6060 days after written proof of Loss has been furnished in accordance with the requirements of this Policy. No such action will be brought more than two years after the time written proof of Loss is required to be furnished. 4. SUBROGATION AND RIGHT OF RECOVERY. You agree to prosecute any and all valid claims against any third party that may arise from any claim for which Benefits were pPaid under the Plan. You or the Administrator will notify us of any claims and will account to us for any Losses recovered. If you or the Administrator fails to pursue any action against any third party and you have received, or are entitled to receive, reimbursements from us for Benefits Paid under the Plan, we will be subrogated to your rights and the rights of any Person under the Plan. We have the Right of Recovery to any amounts you or any Person receiving Benefits under the Plan recover from any third party who is found liable for these amounts. You will do everything necessary to r protect these rights and to help us enforce them. The recovered Loss remaining after deducting the expenses of our recovery will first be used to reduce our Loss; then we will pay the balance, if any, to you. 5. CLERICAL ERROR. This Policy will not be invalidated or terminated by Clerical Error or mutual mistake. Clerical Error or mutual mistake will not continue this Policy if it has been terminated, and it will not expand our obligations under this Policy. Upon discovery of such Clerical Error, the Policy will be restored and amended to reflect the terms and conditions that were agreed to at the time of its execution. OTHER INSURANCE. If any other insurance exists protecting you against Loss covered by this Policy, this Policy will apply in excess of the other insurance. 7. PARTIES. We are the Insurer under this Policy and you are the Insured. Your Employees and their dependents are not parties to this Policy. We do not insure or pay Benefits to your Employees or their dependents under the Plan. We are limited under the Policy to reimbursing you for Losses under this Policy that are Incurred and Paid by you as self-insurer of the Plan. 8. REPRESENTATIONS. We issued and may renew this Policy relying upon the information furnished us as to the number of your Employees and the claims experience under the Plan. If the initial or renewal underwriting information is incorrect or incomplete, we have the right to amend the Schedule to reflect what we would have shown in the Schedule using the accurate and complete information. This amendment will be effective at the beginning of the Policy Period in which we learn of the incorrect or incomplete information. SP 001 236 1100 - 11 - 9. SELF-INSURANCE. You are now and will remain until the end of the Policy Period self-insured for the Benefits provided by the Plan. It is your responsibility to make all filings required by federal and state authorities regulating self-insured plans. 10. TRANSFER. Your rights or duties under this Policy may not be transferred or assigned to anyone else without our written consent. 11. CHANGES. Notice to or knowledge possessed by any agent, broker, or other person shall not effect a change or waiver of any part of this Policy, nor prevent us from asserting any rights under this Policy. No part of this Policy can be changed or waived, except by written Endorsement issued by us. 12. HEADINGS. The descriptions in the headings and sub-headings of this Policy are solely for convenience, and form no part of the terms and conditions of coverage. 13. ENTIRE AGREEMENT. The parties agree that this Policy, including the Schedule, the Declaration Letter(s), the Binder, the Plan and any Endorsements, constitutes the entire agreement between you and us relating to this Policy. We executed this Policy by printing the facsimile signatures of our :President and Secretary on the face page and the Schedule pages and by the actual signature of our authorized representative on the Schedule pages SP 001 236 1100 - 12 - MAJOR DIAGNOSES ENDORSEMENT SECTION THREE: SPECIFIC EXCESS Paragraph 4. Notice is hereby amended to include the following language: You or the Administrator will give us written notice if any covered Person has been diagnosed with any of the following ICD-9 Codes or Diagnoses identified in Item I or otherwise identified in Item II below: I. Diagnoses ICD-9 Codes AIDS/HIV+; AIDs/HIV-related complication 007-O11, 031, 040-49, 070, 078, 079, 112-18, 130, 136 Blood Disorder (Hemophilia, aplastic anemia 271-277, 279-282, 284, 286-288 sickle cell, etc.) Burn 941-949 Cancer, Leukemia, Lymphoma, etc. 140-208, 230-239 Congenital Heart Defect or Pulmonary Defect 745-748 ~ Growth Hormone Deficiency 253 Dwarfism O High Risk Pregnancy Infections (cel ' ' , oste y ~) Digestive isor r 'order 555, 570-573, 577, 579, 581-585 (Crohn's, ci is e pancreatitis, etc.) Major Traumatic Injury (spinal cord, head, 800-809, 828-829, 850-54, 860-871, 873-875, trauma, etc.) 885-887, 895-897, 900-904, 925-929, 952-953 Nervous System Disorder 323, 335-345, 348-349, 357, 359 Premature Infant/Newborn complication or 740-742, 759-780 congenital anomalies Respiratory Problem 416 480-482, 496, 513-516, 519 Accidental Injury classified with an "E" code. Any "E" code ~,r GF 001 Page 1 of 2 SP 001 247 ll 00 II. ALSO IDENTIFY ANY OF THE FOLLOWING: • Potential transplants, except cornea (Including transplant rejection or complications). • Any Person with three or more inpatient admissions in less than six months. o (~~~~~~ ~p All other terms and conditions of this policy shall remain unchanged. This endorsement forms a part of the policy to which attached, effective on the inception date of the policy unless otherwise stated herein. (The information below is required only when this endorsement is issued subsequent to the preparation of the policy.) Endorsement Effective Named Insured Countersigned. Authorized Representative Policy No. EMPLOYERS REINSURANCE CORPORATION --:_ President GF 001 Page 2 of 2 ~- Secretary SP 001 247 1100 Standard Stop Loss Disclosure Form Instructions for Completion ~ HIPAA Privacy permits the release of Protected Health Information (PHI) for the purpose of evaluating and accepting risk associated with the Plan Sponsor as a part of "health care operations". The Company/MGU shall use the information provided solely for the purpose of evaluating the acceptability of this risk and shall not disclose any PHI collected except in performing this risk evaluation. The Company will rely upon the information provided on the attached disclosure form, which will become part of the Application for stop loss coverage. The purpose of the form is to allow the Company to take underwriting action on all known risks in the categories listed below. It is the Plan Sponsor's responsibility, either directly or through their designated representative, to accurately report all claims known as of the date of this disclosure by making a thorough review of all applicable records. Such records shall include historical claims reports, disability records, current information from administrators, insurers, utilization management companies, managed care companies, and any Agent/Broker of the Plan Sponsor. In exchange, the Company will accept the liability for any truly unknown risks. The attached disclosure form must be completed and signed by the appropriate parties no more than [thirty (30)] days prior to the proposed Effective Date of stop loss coverage and received by the Company within [five (5)] days of completion. Upon receipt of the completed disclosure, the Company will assess all data, new and previously reported, and will inform the producer in writing within [five (5)] days of any changes to the rates, factors or terms of coverage. The Company reserves the right to rescind the proposal in its entirety based upon a review of all information submitted during the proposal process. ~'` List on the Disclosure Form all risks known to: 1. Be currently disabled, confined to a Medical Facility, or have been precertified within the last three months. 2. Have received medical services during the current plan year the cost of which exceeds the lesser of, 50% of the lowest Specific Retention Amount applied for or $50,000, and for which bills have been received by the Claims Administrator and entered into their Claims System. 3. Have been identified as a candidate for Case Management and as having the potential to exceed during the policy period, the lesser of, 50% of the lowest Specific Retention Amount applied for, or $50,000. 4. Have been diagnosed, during the current plan year, with a condition represented by any of the ICD-9 codes contained in the attached list [and have also received medical services costing $5,000 during the same period]. If the Plan Sponsor fails to disclose any risk known to fall into one of the above categories, either intentionally or because a thorough review of all records was not conducted, then the Company will have no liability for claims on the risk not disclosed. Important Disclaimer Note: This standard disclosure form is endorsed by Self-Insurance Institute of America, Inc. (July 2005). In endorsing this standard disclosure form, SIIA does not provide any opinion as to the validity/legality of collecting such data by insurers or others. This endorsement is solely related to the need for a standard format in which disclosure, if enforced by the industry, will enable employers/plan sponsors the opportunity to use a single form as an industry standard. SIIA assumes no liability, implied or otherwise, with regard to the use of this form. In this regard, parties utilizing this form are encouraged to seek their own legal counsel. SIIA does not provide legal counsel. vvww.siia.org Self-Insurance Institute of American (SIIA) Endorsed -September 2005 L LL L _0 V ~_ N J Q O ~~ L .a C c~ N L C ~. V C w va C +~ C O V ~ d ~ .~ OC D N N C rte, E as r Q ~ ~ d d ~m ~ £ O :~ d Q^~j ... U ... ~ .. ... 0 W~U x N m 0 L ++ C d Y N a~ C~ ~ C N O 0 U N ~~ ~ d .C ~ ~ ~ t y ~• d t ~ 3 ,~ a~ c ~ ` ~3 m Y o 0 U Q. m ~ .-.' ~ ~ ~ C ~ ~ ~ ~~ '~ Q _~ Cn Z H O Y.C ~ ~ .y ~ ~ i O. C o d ~ ~ ~ cif U ~ >+ ~„ t~ C N N O O fl. ~ cd i . .- N C o ~~ 0 0 ~~ ~ y ~ , ~ _ •~ `` ^ W U ~ Q i U ~ c~ •p ~ ~ dj ~ • ~ ~ ~ U m ~ ~ U ~ cn Z F- ~ 0 o c ~ ~ a~ W "-' N c~ ,,,, w~ °-' ^ c ~~ x ~~o ~~ a o ~ w o ~ `~ a i Y „ ~ L ~ ~ ~ V ~ ~ , -. C "' ~ CfS y _ O +~- Q ~ ~ ~ .. ~ ~ Q ~ ~ ~ ~ C ~aea o CCF w.. td Q 7 N I- ~ v ~ cn Z F- ~ ICD-9 Codes for Disclosure Notification Please list all Plan Participants who have been diagnosed with or treated for any of the codes listed under the following categories during the current Benefit Period: '~1-139 Infectious and Parasitic Diseases V18-038.9 Septicemia 042 AIDS /HIV 070-070.9 Viral Hepatitis 460-519 Diseases of the Respiratory Svstem 480-486 Pneumonia 490-496 Chronic Obstructive Pulmonary Disease (COPD), etc. 515 Postinflammatory Pulmonary Fibrosis 518-518.89 Pulmonary Collapse and/or Respiratory Failure 140-239 Neoplasms 140-149.9 Malignant Neoplasm of Lip, Major Salivary Glands, Gum, Mouth, Oropharynx, Nasopharynx, and/or Hypopharynx 150-150.9 Malignant Neoplasm of Esophagus 151-151.9 Malignant Neoplasm of Stomach 153-153.9 Malignant Neoplasm of Colon 154-154.8 Malignant Neoplasm of Rectum 155-155.2 Malignant Neoplasm of Liver 157-157.9 Malignant Neoplasm of Pancreas 161-161.9 Malignant Neoplasm of Larynx 162-162.9 Malignant Neoplasm of Lung 170-170.9 Malignant Neoplasm of Bone 174-174.9 Malignant Neoplasm of Female Breast 179-182.8 Malignant Neoplasm of Uterus or Cervix l 83-183.9 Malignant Neoplasm of Ovary 185 Malignant Neoplasm of Prostate 186-186.9 Malignant Neoplasm of Testis 188-189.9 Malignant Neoplasm of Bladder, Kidney, Urinary 191-191.9 Malignant Neoplasm of Brain 192-192.9 Malignant Neoplasm of Nervous System 194-194.9 Malignant Neoplasm of Endocrine Glands 195-195.8 Malignant Neoplasm of Other Ill-Defined Sites 196-196.9 Secondazy Malignant Neo. Lymph Nodes 197-197.8 Secondazy Malignant Neo. Respty and Digestive Systems 198-198.89 Secondazy Malignant Neo. Other Specified Sites 200-208.9 Lymphoma and/or Leukenua 235 Neoplasm Uncertain Behavior 239.2 Neoplasm Unspecified Nature -Bone, Skin 0-279 Endocrine, Nutritional. Metabolic. Immuni 250-250.9 Diabetes 277.0 Cystic Fibrosis 278.0 Obesity/Hyperaliment 280-289 Diseases of the Blood and Blood-Forming Orxans 282.6 Sickle-Cell Anemia 284.9 Aplastic Anemia NOS 286-286.9 Coagulation Defects and/or Hemophilia 320-389 Diseases of the Nervous Svstem and Sense Or;°ans 330 Cerebral degenerations 344.0-344.09 Quadriplegia and Quadriparesis 331.0-331.9 Reye's Syndrome 344.1 Pazaplegia 348.0-348.9 Encephalopathy 357, 358 Neuropathy /Myasthenia Gravis 390-459 Diseases of the Circulatory Svstem 410-410.9 Acute Myocazdial Infazction 411-411.89 Acute and Subacute Ischemic Heart Disease 414-414.05 Coronazy Atherosclerosis (ASHD) 415-415.19 Acute Pulmonary Heart Disease 416-416.9 Chronic Pulmonazy Heazt Disease 417.1 Aneurysm of Pulmonazy Artery 421-421.9 Acute and Subacute Endocazditis 424-424.9 Valve Disorders 425-425.9 Cazdiomyopathy 426-426.9 Conduction Disorders 427-427.9 Cardiac Dysrhythmias 428-428.9 Heart Failure 430, 431 Subarachnoid / Intracerebral Hemorrhage '34.9 Occlusion of Cerebral Arteries i~,36 Acute Cerebrovascular Accident (CVA) 440-441.9 Atherosclerosis /Aortic Aneurysm 520-579 Diseases of the Digestive Svstem 555-555.9 Regional Enteritis (Crohn's Disease) 560.0-560.9 Intestinal Obstruction 562.1 Diverticulitis of Colon 567-567.9 Peritonitis 569.0-569.9 Other Disorders of Intestine 570-571.9 Liver Diseases and Cirrhosis 572.8 Other Sequels of Chronic Liver Disease 573-573.9 Other Liver Disorders 577-577.9 Pancreas Diseases 578-578.9 Gastrointestinal Hemorrhage 580-629 Diseases of the Genitourinary Svstem 584-584.9 Acute Renal Failure 585 Chronic Renal Failure 586 Renal Failure, Unspecified 588 Disorders resulting from impaired renal function 592 Calculus of Kidney & Uerter 630-677 Complications of Pre~nancv. Childbirth 641.1 Placenta Previa 642.5-642.7 Eclampsia, pre-eclampsia 644.0-644.2 Premature Labor 648.0 Gestational Diabetes 651 Multiple Gestation 654.5 Cervical Incompetence 710-739 Diseases of the Museuloskeletal Svstem and Connective Tissue 715.0-715.9 Osteoartrhosis 721.3 Lumbosacrel Spondylosis 722.0-722.9 Intervertebral Disc Disorders 730-730.9 Osteomyelitis and/or Periootitis 737.3 Kyphoscoliosis and scoliosis 740-759 Congenital Anomalies 747.2 Aortic Atresia / Stenosis 751.6 Biliary Atresia 759-759.9 Other and Unspecified Congenital Anomalies 760-779 Conditions Ori;ainatine in the Perinatal Period 765-765.1 Prematurity 769 Respiratory Distress Syndrome 770.0-770.9 Other Respiratory Conditions of Newborn 780-799 Symptoms. Si~2ns, and Ill-Defined Conditions 785-7$5.9 Symptoms Involving Cardiovascular System 786.5-786.59 Chest Pain 800-999 Iniurv and Poisoning 800-804.9 Fracture of Skull 805-805.9 Fracture of Vertebral Column 806-806.9 Fracture of Vertebral Column with Spinal Cord Injury 828-828.1 Multiple Fractures 853-854.1 [ntracrania] Injury 869-869.1 Internal Injtuy 887-887.7 Traumatic Amputation of Arm and Hand 897-897.7 Traumatic Amputation of Leg 949-949.5 Burns 952-952.9 Spinal Cord Injury 996-997.0 Complications peculiar to certain specified conditions V23 Supervision of High Risk Pregnancy V42 - V58.9 Transplants, erc Self-Insurance Institute of American (SIIA) Endorsed -September 2005 Stop Loss Carriers and Best Ratings Company Name Best Rating Ace American Insurance Company A+ American Fidelity Assurance Company A+ American National Insurance Company A Companion Life Insurance Company A+ Employers Reinsurance Company A+ Fidelity Security Life Insurance Company A- Gerber Life Insurance Company A HCC Life Insurance Company A+ HM Life Insurance Company A- Life Insurance Company of North America A Life Investors Insurance Company of America A+ Lloyd's of London A Madison National Life Company A- Mid-Atlantic Life Insurance Company A Monumental Life Insurance Company A+ Nationwide Life Insurance Company A+ Pan American Life Insurance Company A- PERICO Insurance Company A QBE Insurance Company A Standard Life and Accident Insurance Company A Standard Security Life Insurance Company A Sun Life of Canada A++ Swiss Re A+ Transamerica Insurance A+ United States Fire A- Zurich America Insurance Company A The above cafriers are all rated "Excellent" or better by A.M. BEST September 4, 2007 Welcome,.. to TnZetto Insight, a ptrblit;atic~n designed to educate and inform members of the E3enef:ts Admin,straiion industry. Industry ins'lghts 5~urviving Katrina -How One TPA Managed One New Orleans-based national TPA was able fa keep its operation running and lost only two days of service in the midst of the chaos and devastation of Hurricane Katrina. Pq. z Disasters Happen - is Your Business Prepared? The events of this p~ist year have proven that disasters • ~ can happen anywhere. anytime. Your business CAN :iii~V~vC. vvtt>yer~s FARA was also ah~~ in kee;~; i":$i.' Intranet u~~ <'?rl(l rtirlrlirlt,~ and the SCtE` t;fir;#(?ty f?UUr'.~.tiJ status .updates f=:~r tt,~sr e~rr~ployees. Alihctugh tf~o> Conapdr'y had arranged wit#; thN US Postal Servire tc~ fc,rvra; d their mail to the Hustor7 iocahon, they did nOt antic;pats that an acc;ut>+ulat+on of mailed claims world be trapped fpr two weeks on an t ~ wheel postal tru!;k that had been moved snto ~+:: Astrod~3rt^e. `~l~tev set u~.; 24-hau~- fax (roes fc~r ~;€t~w+d~;rs and enrolee€~ !, :it;rnit ~la~t~~s a~~:d fie p address it,e Skil:~t'tjil. ±??i `: ;E~".rJltE'':.1 !n a '.i~t+f°'.. "The TriZetto people were realty an the ball. 41ie made one phone call to our technical reprt~ntatlre an Tuesday; and he coordinated with alt of the ether Tri2etto departments ttt ensure that cwr operation was balk opt and running in BATH the Lafayette and Nousfon offices by Wednay.° t;~Ckl;~;~ Sitaat~vr° with rruttiplt ~iarr~, su~smisslr;rzs fir<~tra C7r~~v,~~c~~5 and e"rut'€?.E$ it,r ;<.t,o #.,,; payment. Maintaining Their Business Because FARA adrninistors it~~ operation tnraugt, a d+rect t;nnnectsOn tO the 4~Ct_ink a,la.rr, adrlrrt+strat+On system. t~nstf~;a a°. T; iZetto's sta*:e-o`-if~e-ad ds~ic. center fa"slily in Greertwc~~d Vil{age. CC}. they ,here ti~+uie ±c transfer their ope~r~t!a~s it°.:r.,k''r' ~rnCf ntlrtlm'vZe df)a4'nt!rt?c,. According to Mu='r:°=~ Tr~~~' T 1Z~iti? people '.~~ere r~3"ti C,t, tha :'ate;d. ~t tUVk Spn'~~ tsfne r~€©r~ }-r~i-?A s st-~t' ~a+~+~ r=~ _~~ tc~r~ e at ttt~ new s+fes Abt~Jt 20~~ cat 'tr?e esr:ulC~yer~s ~rr-wc;~f r{.~~n V`JF}~dr~~e.~sday; by tt~a day after LG~+I {.~. :~C(~f. *+{:y l~lsr r L~t ~l/u v, and fir: aL'.ptr:r?~t~er =`~it? tnr~y were at 4'i;''C~s t~l*~;'' '}r€+:;ii"~
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L;:~Ci ~ ,zzyu ;L 2z ;,x~w +s¢ L..fj 7~2C]~j :_f U' 4~C~zZCy' ',J` ~.~C C~UU~ 'Jw ~}iJQa~'V~-:. (.~C~Z ~ ~ ~ irr ~ a -- ~ Ci2 ~ (~' = S Gfa ~"~~.tusr-.-z ? 'L' '~' ~ Z i Q' J +1 J ...3 ~ ~, i J ~ ~ ...! .1 a U F+ ' ~ V1 ~ Z LLwau¢q' t a~~-dcaaaa>~,~,~~,z..iwuZi ~ c~~ ~ ~ ti F ~rx~.Q.a~ ~~ ,csa~ ~ ~ ~ ~~~~~~~ a~mmas 4J ._ ....~_e ___._ __.__._.~._.__.... v_, .. ~ _._..-,---- ~ 'O R ~ ro 4mornm°rma ccarscmcac~ OC? oc<:~~n^~hn o a ao, asr L^t~Y~f.fL1Nt.~ ac~a °e°~i~°aaai'vrp r>oaevw~.+nr~ '+Nh;vn'i Q'+t. 5.6 The fees paid to the Claims Administrator do not include: (a) The cost of services performed by an actuary selected by the Employer. (b) The cost of audits performed by certified public accountants and other auditors selected ' by the Employer. 7 SAMPLE ~r (c) Legal fees for services performed by attorney(s) selected by the Employer. (d) Legal fees cost and expenses incurred in the defense of claims filed against the Plan or against the Claims Administrator in such cases where the claim should have been filed against the Plan as directed by the Employer. (e) The cost of services performed by any other professional selected by the Employer. SECTION SIX MISCELLANEOUS PROVISIONS 6.1 This Agreement shall become effective on and shall end on . Such agreement shall automatically be renewed for the next twelve months and renew each succeeding year until terminated. This Agreement can be terminated at any time by either party on 90 days written notice. It shall be the responsibility of the Employer to direct the transfer of custody of records to a successor administrator. The Claims Administrator will transfer such records in such form as requested by the Employer, including computer tapes or disks and at the fir' Employer's expense. 6.2 The Agreement may be terminated in its entirety by either party upon written notice to the other party provided such notice specifies an effective date for cancellation or non-renewal not less than ninety (90) days from the date of such notice. 6.3 In the event of any termination of this Claims Service Agreement by either party hereto pursuant to the terms of Article 6.2 any and all open claims and unresolved recovery activities pending on the date of termination of this contract shall either: (a) Continue to be handled by the Claims Administrator until the expiration of the period in which Employer has paid all Fees, and thereafter at a time and expense basis at the Claims Administrator's prevailing hourly rate and expense method of billing when time and expenses are incurred, or (b) Thereafter be assumed and handled by the Employer or delegated by Employer to some third party provided that the Claims Administrator shall be entitled to all fees earned or incurred prior to the effective date of termination without offset or reduction, and 100% of Claims Administrator's administrative fees will be fully earned for the period prior to the termination date. '~iwr' 8 SAMPLE ~, The Employer shall inform the Claims Administrator prior to the termination date of the contract in writing of the selected option. Should the Employer fail to inform the Claims Administrator or should agreement not be reached for the continued handling of the open claims, then Claims Administrator, on the termination date, shall suspend all activity on Employer's files and the Claims Administrator shall thereafter have no responsibility for the proper disposition of such matters. 6.4 In addition to all other rights and remedies available to the Claims Administrator under this Claim Service Agreement and at law, the Claims Administrator may cancel this Agreement and discontinue services immediately upon notice to Employer if: (a) Employer fails to maintain sufficient balances in The Payment Account to properly and adequately fund the Payment Account. At no time shall Claims Administrator be liable or obligated to make any payments of any type or character on behalf of Employer out of its own funds. 6.5 In the event that either party shall default in the performance of the duties and the obligations rrr imposed upon pursuant to the terms of this agreement or materially breach any of the provisions contained herein, then said party shall be given five (5) days written notice thereof, to cure such breach. If said breach is not cured within that time, the other party shall be entitled to terminate this Agreement upon delivery of written notice of such termination to the defaulting party without prejudice to any other rights or remedies available to such party by reason of such default or breach. 6.6 Except for Section 6.5, any notice to be given pursuant to the terms of this Agreement may be given by mail. Notice under Section 6.5 shall be given by registered or certified, return receipt requested and postage prepaid. Mailed notices shall be sent to the parties at their respective addresses shown in Section 6.10. 6.7 In the event either Employer or Claims Administrator shall bring any action or proceeding for damages for an alleged breach of any provision or to enforce, protect or establish any right or remedy of either party hereunder, the prevailing party shall be entitled to recover as a part of such action of proceeding reasonable attorney's fees and court costs. 9 SAIV~PLE 6.8 6.9 6.10 This Agreement shall not be assigned by either party without the written consent of the other party. Except as otherwise provided by Federal Law, the terms and provisions of this Agreement shall be governed by the laws of the State of where applicable. Unless otherwise notified in writing, notice under this Agreement shall be given at the following addresses: EMPLOYER: CLAIMS ADMINISTRATOR: FARA Benefit Services, Inc. 1625 West Causeway Approach Mandeville, LA 70471 IN WITNESS WHEREOF, and in accordance with the provisions outlined above, the parties have caused this Agreement to be signed by their duly authorized officers on this _ day of , 20_ IN THE PRESENCE OF: EMPLOYER: AND: BY: Its: BY: Its: CLAIMS ADMINISTRATOR: 10 SAMPLE EXHIBIT A COBRA ADMINISTRATION DUTIES AND RESPONSIBILITIES OF CLAIMS ADMINISTRATOR 1.01 Election Notice. Claims Administrator provide Plan participants who are eligible for COBRA continuation with notice of their COBRA continuation rights upon receipt from Plan Administrator of the information required under sections 2.01 and 2.03. Notice to the Plan participants will be mailed to the address provided by the Plan Administrator. 1.02 Plan Records. Claims Administrator will maintain records of all qualifying events reported by Plan Administrator. Claims Administrator will also maintain records of all notices, acceptances or rejections of election of COBRA continuation, applicable COBRA contributions, length of COBRA coverage, and any subsequent qualifying events. 1.03 COBRA Contribution Amount. Claims Administrator will provide a calculation of COBRA r contributions for the Plan at the request of Plan Administrator. Failure of Plan Administrator to object in writing to such COBRA contribution amount within ten (10) days of notice will constitute Plan Administrator's approval of such amount. 1.04 Receipt of COBRA Contribution. Claims Administrator shall receive COBRA contributions from Plan participants who have elected COBRA continuation. COBRA contributions received by Claims Administrator will be forwarded to the Plan Administrator on a monthly basis. 1.05 COBRA Termination Notice. Claims Administrator will give notice of termination of COBRA continuation to Plan participants who are no longer entitled to receive COBRA continuation. 1.06 Plan Reports. Claims Administrator will separately account for Plan participants who have elected COBRA continuation in Plan reports provided under the Administration Agreement. Upon termination of the services provided under this Exhibit A, Claims Administrator will make available to Plan Administrator all COBRA administration records and files. Upon the request and at the expense of the Plan Administrator, Claims Administrator will arrange for the delivery of ~'` the COBRA administration records and files to Plan Administrator or its authorized agent. 11 SAMPLE 1.07 New Employee Notice. Claims Administrator will notify employees and covered dependents of their rights under COBRA when they become covered under the Plan in compliance with applicable laws and regulations. SECTION II -DUTIES AND RESPONSIBILITIES OF THE PLAN ADMINISTRATOR 2.01 Notification of Qualifying Event. (a) Plan Administrator will notify Claims Administrator within thirty (30) days of an employee's termination, reduction in work hours, death, or other qualifying event. (b) Plan Administrator will notify Claims Administrator within seven (7) days of receiving notice of a Plan participant's divorce or legal separation, a Plan Participant's dependent ceasing to satisfy the definition of dependent child under the Plan, or other qualifying event. Claims Administrator will have no obligation under this Exhibit A for COBRA Administration Services for any Plan participant not identified by Plan Administrator as required by this section. 2.02 Existing COBRA Participants. Within ten (10) business days of the effective date of this Exhibit ~ A, Plan Administrator will provide Claims Administrator with (a) information regarding each Plan Participant who has elected COBRA continuation and remains covered under the Plan, and (b) information regarding each Plan participant (i) who is eligible for COBRA continuation, (ii) whose qualifying event occurred no earlier than sixty (60) days prior to the effective date of this Exhibit A, and (iii) who has not received notice of his or her right to continue coverage under the Plan and (iv) whose continuation coverage period would begin on or after the effective date of the Policy. Claims Administrator will have no obligation under this Exhibit A for COBRA Administration services for any Plan participant not identified by Plan Administrator as required by this section. 2.03 Administrative Fees. Plan Administrator will pay Claims Administrator each month the fees described in Exhibit B for COBRA administration. All sums due to Claims Administrator are due and payable upon receipt. 2.04 Notification of Plan Changes. Plan Administrator will notify all "pending" and "enrolled" qualified `~+' 12 SA~VIPLE ~r participants of changes in the Plan which affect the benefits provided to Plan participants. SECTION III -HIPAA COMPLIANCE (HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996) 3.01 HIPAA Certificates. Included in Notice to Plan Participants under COBRA will be a creditable coverage certificate as outlined by above act. 3.02 Compliance. Claims Administrator shall provide Plan Administrator and participants all necessary notifications, certifications and reports in order to comply with HIPAA directives. Employer: Claims Administrator: 13 ~,r- SAMPLE EXHIBIT B SERVICE FEES Fee Claims Administration: $ 0.00 Per Employee Per Month Claims Processing, EOB, Subrogation, Claims Audit, Summary Plan Description Preparation, Bank Reconciliation, Account Servicing, Management Information Reports, and Other General Services as defined in the Administrative Agreement. COBRA Administration: $ 0.00 Per Employee Per Month COBRA administration as defined in Exhibit "A" of this agreement. Utilization Review: $ 0.00 Per Employee Per Month Hospital Pre-Certification, Surgical Pre-Certification and Concurrent Review. Provider Network Fee: $ 0.00 Per Employee Per Month Access to Network of Hospitals and Physicians and other health care professionals. Directories may be requested at cost of printing. Broker Fee Case Management $ 0.00 Per Employee Per Month $ 0.00 Per Hour The Case Management review program provides medical necessity review of cases which involve certain potentially high cost diseases/conditions/procedures. The program provides information regarding alternative medical treatment. Plan Administrator must authorize services provided on an hourly basis. Insurance Commissions to Claims Administrator or Its Designee: Reinsurance administration including both claims filing for recovery both on specific and aggregate reinsurance and reinsurance marketing with reinsurance company with an AM Best rating of A- or better. Employer: (Initial) Claims Administrator: (Initial) 14 SAMPLE EXHIBIT C ~r+ PERFORMANCE GUARANTEES CLAIMS PROCESSING CLAIM TURNAROUND TIME Guarantee 90% of ALL "Clean Health Claims" in 10 business days. Less than 90% of ALL "Clean Health Claims" in 10 business days. Definition Penalty 0.0% ASO Fee 3.0% of ASO Fee Claim turnaround time is calculated from the date the claim is received in the claim office to the date it is processed. Weekends and holidays are not included in turnaround time. The performance criteria is based on all claims, both "clean" and "unclean" health claims. "Clean health claims" are defined as claims received by Claims Administrator for payment from an employee or provider that contains all the necessary information to process the request and issue a payment or an Explanation of Benefits. "Unclean health claims" are defined as claims received by Claims Administrator for payment where we determine the need to obtain additional information that is not available within our claim office. In cases of "unclean health claims", the time clock is turned off until the necessary information is received by Claims Administrator. The time clock is turned back on the date the information is received by Claims Administrator, and remains on until the date it is processed. Measurement Criteria Claims turnaround time will initially be measured using Claims Administrator's Time Service report produced on a quarterly basis. Claim Administrator's turnaround time will not be measured until any existing claim backlog is processed. FINANCIAL ACCURACY Guarantee 97% to 100.0% 94% to 96.9% 90% to 93.9% Less than 90% Penalty 0.0% of ASO Fee 2.0% of ASO Fee 3.0% of ASO Fee 4.0% of ASO Fee Definition Mathematically, financial accuracy is the total audited dollars paid correctly divided by the total audited dollars paid, stated as a percentage. 15 SAMPLE PAYMENT ACCURACY* Guarantee 94% to 100.0% Less than 94.0% Definition Penal 0.0% of ASO Fee 3.0% of ASO Fee Payment accuracy is the number of audited dollars paid correctly divided by the total number of audited dollars, stated as a percentage. Payment accuracy reflects the percentage of claims that are paid correctly. NON-PAYMENT ACCURACY* Guarantee 94.0% to 100.0% Less than 94.0% Penalty 0.0% of ASO Fee 3.0% of ASO Fee Definition Non-payment accuracy is the number of audited dollars processed correctly divided by the number of claims. Non-payment accuracy reflects the percentage of claims that are processed correctly. Where payment accuracy will allow implications to be made regarding the accuracy with which claims are paid, non-payment accuracy will allow implications as to the integrity of data input into the claim system which is used for management reports. In addition to the concern regarding management reports, most data entry errors eventually lead to payment errors. Examples of this type of error occur when deductibles are applied to the incorrect family member, or when incorrect dates of service are input, facilitating duplicate payments. Measurement Criteria for Financial Accuracy, Payment Accuracy, Nan-Payment Accuracy An audit of accuracy of administrator's results will be performed via a randomly selected, statistically verifiable sample of claims by a qualified, independent third party. *Note: Performance Guarantee does not include processing of run-out claims as received from prior administrator. The Claims Administrator is reasonable for the disbursement of monies funded by the Employer in accordance with the Plan Document. If funds are, by the fault of the Claims Administrator, disbursed in error or if the benefits are quoted in error, the Claims Administrator will be responsible to and agree to reimburse the Plan or the insured in the event that benefit payments are due the insured, immediately upon discovery and determination of error. Attempts to recover such monies are the responsibility of Claims Administrator. Plan Administrator will not avail such recovery and holds Claims Administrator responsible for immediate reimbursement to Plan (or insured). *** ASO "Administration Services Only" fee as outlined in Exhibit B for Claims Administration. Employer: Claims Administrator: (Initial) (Initial) 16 ~rr+ SAMPLE PLAN DOCUMENT ~1rr" EMPLOYEE GROUP HEALTH PLAN TABLE OF CONTENTS Paae GENERAL INFORMATION ........................................................................................1 HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 ..............................................................................................................4 CLAIMS ....................................................................................................................... 6 CLAIMS DENIAL .........................................................................................................7 ELIGIBILITY ................................................................................................................ 9 EFFECTIVE DATE OF COVERAGE ........................................................................10 TERMINATION OF COVERAGE .............................................................................12 FAMILY AND MEDICAL LEAVES OF ABSENCE ....................................................14 COBRA CONTINUATION COVERAGE ...................................................................16 SCHEDULE OF MEDICAL BENEFITS ....................................................................20 VISION CARE SCHEDULE OF BENEFITS ............................................................. 24 ,,,. SCHEDULE OF DENTAL BENEFITS ...................................................................... 25 SAMPLE DRUG CARD PROGRAM ........................................................................26 FARA HEALTHCARE MANAGEMENT ....................................................................28 Pre-Admission Certification Continued Stay Review Discharge Planning HEALTH MAINTENANCE ORGANIZATION ............................................................30 MAJOR MEDICAL EXPENSE BENEFITS ...............................................................31 HOME HEALTH CARE .............................................................................................32 HOSPICE CARE PROGRAM BENEFIT ...................................................................33 ELIGIBLE CHARGES FOR MEDICAL BENEFITS .................................................. 36 LIMITATIONS & EXCLUDED CHARGES FOR MEDICAL BENEFITS ...................41 DENTAL BENEFITS ................................................................................................. 45 MODIFICATION OF PROVISIONS FOR PERSONS ENTITLED ,, TO MEDICARE BENEFITS ......................................................................................51 TABLE OF CONTENTS...Continued ,, SUBROGATION, REIMBURSEMENT AND OVERPAYMENT ................................ 52 COORDINATION OF BENEFITS ............................................................................. 54 GENERAL DEFINITIONS .........................................................................................58 ERISA RIGHTS .........................................................................................................63 `rr GENERAL INFORMATION Summary Plan Description The information contained in this booklet forms the Summary Plan Description required under the Employee Retirement Income Security Act of 1974. This booklet summarizes the group health benefits to which the person is entitled, to whom the group health benefits are payable, and the group health provisions of the Plan principally affecting the Employee. Administration of Plan The Plan is administered by the Plan Administrator, which has retained the services of an independent Plan Supervisor experienced in claims processing. The Plan Supervisor will maintain the Plan's records and supervise the operation of the plan. Legal notices may be filed with, and legal process served upon, the named fiduciaries and the Administrator. The Plan Administrator is granted the authority and discretion to interpret and construe the provisions of the Plan and to determine all questions of eligibility for participation or for benefits. Such determination shall include, but not be limited to decisions concerning whether charges are Medically Necessary and determinations of Reasonable & Customary charges. All such determinations shall be final and binding on all parties. The Plan Administrator also has the authority to adopt such rules and procedures as it deems necessary, desirable, or appropriate. The Pfan Administrator may delegate all or any portion of this authority to the Plan Supervisor, another third party administrator or an insurance company. Plan Modification and Amendment The employer may modify or amend the Plan from time to time at its sole discretion. Purpose The Employer establishes this Plan to provide benefits to its Employees and their eligible Dependents. The Plan shall be maintained for the exclusive benefit of eligible Employees and their eligible Dependents. Future of the Plan The Employer intends to continue the Plan indefinitely. However, since future changes in conditions cannot be foreseen, the Employer reserves the right to change, suspend or terminate the Plan at any time. Plan Termination The employer may terminate the Plan at any time. Upon termination, the rights of participants to benefits are limited to claims incurred and due up to the date of termination and benefits described in the section entitled "Extension of Benefits". Any termination of the Plan will be communicated to participants. GENERAL INFORMATION ...Continued ''r+r° Assignment The covered person's benefits may not be assigned except by consent of the employer, other than to suppliers of medical services. Plan Is Not A Contract The Plan shall not be deemed to constitute an employment contract between the employer and any employee or to be a consideration for, or an inducement or condition of, the employment of any employee. Nothing in the Plan shall be deemed to give any employee the right to be retained in the service of the employer or to interfere with the right of the employer to discharge any employee at any time. This Plan has been adopted by Sample Plan Sponsor effective July 1, 2005. GENERAL INFORMATION...Continued '` PLAN NAME: Employee Group Health Plan PLAN SPONSOR: Sample Plan Sponsor PLAN AFFILIATES AND SUBSIDIARIES: None PLAN ADMINISTRATOR: Sample Plan Administrator 123 ABC Street Mandeville, LA 70471 PLAN SUPERVISOR: FARA Benefit Services P. 0. Box 8770 Metairie, La. 70011-8770 800-224-3272 EMPLOYER IDENTIFICATION NUMBER: 72-0000000 PLAN NUMBER: 501 TYPE OF PLAN: Welfare PLAN YEAR ENDS: June 30th, 2006 PLAN COST: This Plan is financed by contributions from the Employer and Employees. PLAN BENEFITS PROVIDED BY: Sample Plan Sponsor PLAN ELIGIBILITY: Eligible Employees and their eligible dependents will be covered under the Plan on the first of the month coincident with or following ninety (90) days of continuous full time employment. AGENT FOR SERVICE OF LEGAL PROCESS: Sample Plan Sponsor PLAN FUNDING: This Plan is funded by Sample Plan Sponsor HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996 Sample Plan Sponsor has elected to exercise its option as anon-federal governmental plan to be exempt from certain provisions of HIPAA. For further information, please review your "Notice to Participants of the "Employee Group Health Plan". NOTICE TO PARTICIPANTS OF THE EMPLOYEE GROUP HEALTH PLAN Recent changes in Federal Laws impact group health care plans as of the plan renewal date on or after July 1, 1997. Sample Plan Sponsor's renewal date is June 30, 2006. The Laws include the following: 1. Limitations on pre-existing condition exclusion period's (146.11). 2. Special enrollment periods for individuals (and dependents) losing other coverage (146.117). 3. Prohibitions against discriminating against individual participants and beneficiaries based on health status (146.121). 4. Standards relating to benefits for mothers and newborns (section 2704 of PHS Act). 5. Parity in the application of certain limits to mental health benefits (section 2705 of the PHS Act). Federal law gives the plan sponsor of anon-Federal governmental plan the right to exempt the plan in whole or in part from the requirement (1) through (5) described above. Therefore, Sample Plan Sponsor has elected to exercise its option as anon-Federal governmental plan to be exempt from certain provisions of the "Health Insurance Portability and Accountability Act" (HIPAA). Sample Plan Sponsor will be exempt from the following requirements: 1. Limitations on pre-existing condition exclusion period's (146.11). 2. Special enrollment periods for individuals (and dependents) losing other coverage (146.117). 3. Prohibitions against discriminating against individual participants and beneficiaries based on health status (146.121). HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT OF 1996...Continued Notwithstanding an election to be exempt from the requirements (1) through (5) above, Sample Plan Sponsor, as anon-Federal governmental plan, must provide for certification and disclosure of creditable coverage under the plan with respect to participants and their dependents in accordance with Section 146.115. This exemption from these Federal requirements will be in effect for one year for the plan year beginning July 1, 2006, and it may be renewed for subsequent years. CLAIMS The following section describes procedures for filing claims for benefits: HOSPITAL AND PHYSICIAN: A separate claim form should be completed for each claimant together with an itemized statement for each physician involved. An itemized statement must include physician's name, dates of service, breakdown of services rendered and a diagnosis. Either the physician or the employee can send the form to the Plan Supervisor with the itemized bills attached. When hospitalized, the hospital has standard forms which are used. The Hospital must call the Plan Supervisor for benefit verification. CAUTION: The Employee is responsible for contacting FARA Healthcare Management for their Hospital Pre-Admission Certification. SPECIAL NOTE ALL EXPENSES FOR INJURY OR ILLNESS MUST BE RECEIVED BY THE PLAN SUPERVISOR WITHIN 90 DAYS OF THE DATE OF EACH CHARGE. ANY EXPENSES RECEIVED AFTER THE 90 DAY LIMIT WILL NOT BE COVERED UNLESS THERE IS AN ACCEPTABLE REASON FOR SUCH DELAY. IN THE EVENT THE PLAN SUPERVISOR PENDS A SUBMITTED CLAIM, A NOTIFICATION OF PENDED STATUS ALONG WITH A REQUEST FOR INFORMATION WILL BE MAILED TO THE CLAIMANT. IF THE REQUESTED INFORMATION IS NOT RECEIVED WITHIN 60 DAYS FROM THE DATE OF SUCH REQUEST, THE CLAIM WILL BE DENIED. CLAIM DENIAL ''" Notice of Denial of Claims If a claim is wholly or partially denied, a notice of the decision rendered in accordance with the rules set forth below will be furnished to the claimant not later than 90 days after receipt of the claim by the Plan Supervisor. If special circumstances require an extension of time for processing the claim, the Plan Supervisor will give a claimant a written notice of the extension prior to the end of the initial 90-day period. The extension notice will indicate the special circumstances requiring an extension of time and the date by which the Plan Supervisor expects to render the final decision. If the notice of the denial of a claim is not furnished in accordance with this procedure, the claim will be deemed denied and the claimant will be permitted to proceed to the review stage. The Plan Supervisor will provide to every claimant who is denied a claim for benefits written notice setting forth in a clear and simple manner: A. The specific reason or reasons for the denial; B. Specific reference to pertinent Plan provisions on which the denial is based; C. A description of any additional material or information the claimant must submit to perfect the claim and an explanation of why such material or information is necessary; and D. A description of the Plan's claims review procedure. Claims Review Procedure After the claimant has received written notification of the denial of the claim, the claimant or a duly authorized representative will have 60 days within which to appeal, in writing, a denied claim to the Administrator. The Administrator will afford the claimant a full and fair review of the denial of the claim. The claimant or a duly authorized representative will be permitted to submit issues and comments relevant to the claim and will be given an opportunity to review documents pertinent to the claim. The claimant should include in his written appeal the following information to support his claim for benefits: A. A list of which issues, if any, in the claim denial he chooses to contest and that he wishes reviewed on appeal; B. His position with respect to each issue; C. Any additional facts that he believes support his position with respect to each issue; and D. Any legal or other arguments he believes support his position with respect to each issue. The decision on review by the Administrator will be rendered as promptly as is feasible, but not later than 60 days after the receipt of a request for review unless special circumstances require an extension of time for processing, in which case a decision will be rendered as promptly as is feasible, but not later than 120 days after receipt of a request for review. If an extension of time for review is required because of special circumstances, written notice of the extension will be furnished to the claimant before the commencement of the extension. The decision on review will be in writing and will include specific reasons for the decision, written in a clear and simple manner, as well as specific references to the pertinent Plan provisions on which the decision is based. ~w CLAIM DENIAL...Continued If the decision on review is not furnished within the time period(s) set out above, the claim will be deemed denied on review. No legal action to recover benefits or with respect to any other matter related to this Plan may be commenced before the claimant has timely exhausted the claim and appeal procedures described above. In no event may any such action be brought more than three (3) years after the claim was first incurred or after the occurrence of the event given rise to the claim, whichever is later. ELIGIBILITY ~'""'"` Employees Eligible Employees are all actively employed employees of the employer and any named affiliates or subsidiaries who are designated by the Employer as full time employees and who are regularly scheduled to work at least twenty-eight (28) hours per week on a regular basis. Retired Employees and their dependents are not eligible for benefits. Dependents Eligible Dependents include: A. An Employee's legal spouse. B. A common-law spouse, if considered a legal spouse under the laws of the State where the Employee resides. C. Unmarried dependent children from birth to age nineteen (19), including step-children, legally adopted children and children placed with the Employee for adoption. D Other Dependent children from birth to age nineteen (19) who are related by blood or marriage, including grandchildren, where either the Employee or his Dependent spouse are financially responsible for the care of the child. Financial responsibility is defined as evidence of having included the child as an exemption on the most recent Federal Income Tax Return. r E. Unmarried dependent children who are attending full time an accredited high school, trade school, junior college, college or university and who are less than twenty-five (25) years of age. F. Unmarried dependent children, who prior to termination of benefits, were mentally or physically handicapped so as to be incapable of self-support, provided such proof is furnished to the Administrator. G. Children of an Employee who must be covered pursuant to a Qualified Medical Child Support Order. Dependent children who are eligible for coverage by this or any other group plan as an employee are not eligible as dependents under this Plan. Dependent children who would be eligible for coverage as dependents of more than one employee shall only be eligible as dependents under one employee. Where both the employee and his spouse are employees of the employer, they may each be covered as employees or one may be covered as a dependent, but they will not be covered as both. EFFECTIVE DATE OF COVERAGE Employee Eligible Employees will be covered under the Plan upon completion of the eligibility period specified in the General Information section, provided they make written application by signing an enrollment card. If application is made prior to completion of the eligibility period, coverage will be effective immediately upon completion of the eligibility date. If application is made within thirty (30) days after completion of the eligibility period, coverage will be effective on the date application is made. If application is made later than thirty (30) days after completion of the eligibility period, the Employee is considered a Late Enrollee. Coverage shall only be effective after completion and approval by the Plan Supervisor of a Statement of Health. An Employee, whose coverage terminates by reason of termination of employment and who resumes employment with the Employer within six (6) months immediately following the date of such termination, shall become eligible for reinstatement of coverage on the first of the month after he resumes employment. An Employee may change from a Health Maintenance Organization Plan, (if one has been provided by this Plan Sponsor), to this Plan, by submitting a written application within the thirty (30) day period prior to the beginning of the Plan year or within thirty (30) days after the individual Employee is no longer eligible for coverage as a result of the Health Maintenance Organization discontinuing coverage. The effective date will be the first of the month following the submission of the written application or the day following the termination of the HMO Plan, provided prior written application has been received. Coverage will be extended on the same basis as it would have been had the Employee enrolled in this Plan in lieu of the Health Maintenance Organization Plan. Any transfer from the HMO Plan during any period other than the above, will be subject to evidence of insurability and the pre-existing condition restriction described in the major medical section. Dependent Dependents of an Employee will be eligible to be covered at the same time as the Employee. Application must be made for coverage by completing an enrollment card and indicating in the appropriate place that Dependents are to be covered. If such application is made prior to the Employee completing his eligibility period, coverage shall be effective upon completion of the eligibility period. If application is made within thirty (30) days following completion of the eligibility period, coverage will be effective on the date application is made. EFFECTIVE DATE OF COVERAGE...Continued '''~"` A newborn child, adopted child or a child placed for adoption (under age 18) who applies for coverage within thirty (30) days of birth, adoption or placement for adoption will be covered from the date of birth, adoption or placement for adoption. These Dependents will not be subject to any pre-existing conditions. If application is made later than thirty (30) days after completion of the eligibility period, the Dependent is considered a Late Enrollee. Coverage shall only be effective after completion and approval by the Plan Supervisor of a Statement of Health. An Employee, who does not have eligible Dependents when he becomes eligible under the Plan and at a later date acquires one or more Dependents, has thirty (30) days from the date of acquisition in which to apply for Dependent coverage. The Dependents become effective on the date of acquisition. If application is made after thirty (30) days from the date of acquisition, dependent coverage shall only be effective after completion and approval by the Plan Supervisor of a Statement of Health. If an Employee elects not to cover his eligible Dependents and subsequently acquires a new Dependent, the new Dependent becomes effective on the date of acquisition, provided application is made within thirty (30) days of the date of acquisition. If application is made after thirty (30) days from the acquisition date of the new Dependent, the new Dependent's coverage shall only be effective after completion and approval by the Plan Supervisor of a Statement of Health. TERMINATION OF COVERAGE Employee Coverage shall terminate at the end of the month in which: A. the employee terminates his employment; B. the employee is no longer an eligible employee; C. the employee fails to make the required contribution, if any; Coverage shall terminate at the end of the day in which: A. the Plan terminates; B. the employee elects to terminate his benefits under this plan and become a participant in a HMO; C. the date the employee becomes afull-time member of the Armed Forces of any country. An employee, who ceases to be actively employed for the following reason, may continue to be covered for the time period specified. A. If an employee becomes disabled, coverage may be continued for a period not to exceed three (3) months from the beginning date of the disability (including any accumulated sick leave and/or vacation time); B. For an approved leave of absence, coverage may continue for three (3) months. If the employer elects to terminate an employee prior to or during a leave for the above purposes, the extension of the termination date will not apply. An employee may continue to be covered for an approved leave of absence as defined by the Family and Medical Leave Act of 1993 (Public Law 103-3). Dependent Coverage for a dependent shall terminate at the end of the month in which: A. the employee terminates his employment; B. the employee fails to make any required contribution; C. the dependent ceases to be an eligible dependent. Coverage for a dependent shall terminate at the end of the day in which: A. the plan Terminates; B. the employee elects to terminate his benefits under this plan and become a participant in a HMO. An extension of the employee coverage shall also extend the dependent coverage for a similar period of time. If an employee or dependent have continued to be covered under this plan as a result of remaining eligible under the COBRA Continuation Coverage, the coverage will terminate at the earliest of the following dates: TERMINATION OF COVERAGE...Continued ~,,. (1) the employer ceases to provide any group health plan to employees; (2) the qualified employee or dependent fails to pay the premiums; (3) the qualified employee or dependent becomes covered under another group plan without apre-existing clause in the policy or becomes enrolled in Medicare. FAMILY AND MEDICAL LEAVE OF ABSENCE An Employee's and his or her Dependents' coverage under the Plan will cease at the time set forth except in the case of a family or medical leave of absence (FMLA Leave). FMLA Leave time includes any accumulated sick leave and/or vacation time. If an Employee ceases to be an Eligible Employee because of FMLA Leave, his or her coverage may be continued at normal employee premium rates until the end of such leave or for twelve (12) weeks, whichever is shorter. Coverage continued during FMLA Leave is in addition to coverage continued under the Plan's COBRA continuation provisions. After the FMLA Leave, the Employee will be offered the option of electing COBRA continuation coverage. To maintain coverage during FMLA Leave, the Employee must continue to pay on time the Employee's portion of the premium for coverage, if any, that the Employee paid prior to the leave. During paid leave, premiums will be paid through normal payroll deductions. To maintain coverage during unpaid leave, the premium for each month of coverage is due on the first day of each month. Coverage will cease if the premium does not reach the Employer within thirty (30) days after the due date. During FMLA Leave, the Employee will receive written notice that the Employee's coverage is terminated for nonpayment of premiums. While on leave the Employee will be subject to premium increases and new or changed benefits to the same extent as if the Employee were not on leave. If the Employee chooses not to retain health coverage during FMLA Leave, or if coverage lapses because the Employee has not made a required premium payment during the leave, then if the Employee returned on or before the end of the FMLA Leave, the Employee will be reinstated in the Plan on the same terms as prior to taking the leave, without any qualifying period, physical examination, or pre-existing condition exclusion. By accepting employer subsidized continuation coverage during the period of the FMLA Leave, the Employee agrees to repay to the Plan the employer portion of the premium during the unpaid portion of the premium during the unpaid portion of such leave if the Employee fails to return from such leave of absence for any reason other than: A. The continuation, recurrence, or onset of the serious health condition that originally entitled the Employee to the FMLA Leave. B. Other circumstances beyond the Employee's control The Employee's repayment obligation under paragraph A, above applies unless the Employee provides to the Plan Administrator a certification issued by the health care provider of the Employee or his or her son, daughter, spouse, or parent, as the case may be, that he or she is unable to return to work because either a serious health condition prevented him or her from being able to perform the essential functions of his or her position on the date that the leave of absence expired, or that he or she is needed to care for his or her son, daughter, spouse, or parent who had a serious health condition on the date that the leave of absence expired. FAMILY AND MEDICAL LEAVE OF ABSENCE...Continued "' For purposes of this section, an "FMLA Leave" means a leave of absence granted pursuant to the Employer's FMLA Leave policy for up to twelve (12) work weeks during any twelve (12) month period for one of the following: A. Because of the birth of the Employee's son or daughter and in order to care for such son or daughter. B. Because of the placement of a son or daughter with the Employee for adoption or foster care. C. To care for the Employee's spouse, or a son, daughter, or parent, if that spouse, son, daughter, or parent has a serious health condition. D. Because of a serious health condition that made the Employee unable to perform the functions of his or her position. For purposes of this section, "serious health condition" means an illness, injury, impairment, or physical impairment, or physical or mental condition that involves: A. Inpatient care in a hospital, hospice, or residential care facility; or B. Continuing treatment by a health care provider. COBRA CONTINUATION COVERAGE The Plan offers the continuation group health coverage required by the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), as amended. The Plan does not offer continuation coverage benefits that are greater than the minimum benefits required to be offered by COBRA. Generally. If you are a Qualified Beneficiary (as defined below) who would otherwise lose coverage as a result of a Qualifying Event (as defined below) and who is actually receiving group health benefits from the Plan on the date of a Qualifying Event, you are entitled to elect continued group health coverage under the Plan. The coverage is identical to the coverage provided to similarly situated beneficiaries with respect to whom a Qualifying Event has not occurred. If an employer makes an open enrollment period available to similarly situated active employees who have not experienced a Qualifying Event, the same open enrollment period rights must be made available to each qualified beneficiary receiving COBRA continuation coverage. An open enrollment period means a period during which an employee covered under a plan can choose any of the options or plans that are available for similarly situated Non-COBRA participants, or to add or eliminate coverage of family members. 2. Qualified Beneficiary. A. You are a Qualified Beneficiary if you are an employee or a spouse or dependent of an employee and if you are covered by the Plan on the date of a Qualifying Event B. Children born to, or placed for adoption with, the employee during the period of continuation coverage will be considered "qualified beneficiaries" and may also receive continuation coverage provided they are added within the time required by the Plan after the birth or placement for adoption. C. A covered Employee who retired on or before the date of substantial elimination of Plan coverage which is the result of a bankruptcy proceeding under Title 11 of the U.S. Code with respect to the Employer, as is the Spouse, surviving Spouse or Dependent child of such a covered Employee if, on the day before the bankruptcy Qualifying Event, the Spouse, surviving Spouse or dependent child was a beneficiary under the Plan. Each Qualified Beneficiary (including a child who is born to or placed for adoption with a covered Employee during a period of COBRA continuation coverage) must be offered the opportunity to make an independent election to receive COBRA continuation coverage. 3. Qualifying Event. A Qualifying Event means any of the following events that would cause you to lose coverage under the Plan: A. The termination of the employee's employment (other than for gross misconduct) or reduction of hours worked; B. The death of the employee; C. The divorce or legal separation of the employee from his or her spouse (see paragraph 5 below about your obligation to notify the Plan within 60 days); D. The loss of coverage due to the employee becoming enrolled in Medicare; COBRA CONTINUATION COVERAGE...Continued ~r E. A dependent child ceasing to qualify as an eligible dependent under the Plan (see paragraph 5 below about your obligation to notify the Plan within 60 days); or F. If the Plan provides coverage for a retired employee and eligible dependents, a Qualifying Event also means a retired employee and eligible dependents who would lose coverage due to the employer filing for bankruptcy under Title 11 of the U.S. Code. The taking of leave under the Family and Medical Leave Act of 1993 ("FMLA") does not constitute a Qualifying Event. A Qualifying Event occurs, however, if an Employee does not return to employment at the end of the FMLA leave and all other COBRA continuation coverage conditions are present. If a Qualifying Event occurs, it occurs on the last day of FMLA leave and the applicable maximum coverage period is measured from this date (unless coverage is lost at a later date and the Plan provides for the extension of the required periods, in which case the maximum coverage date is measured from the date when the coverage is lost.) 4. Notice Requirements. The Administrator will, within 14 days of notification of a Qualifying Event, advise you of your right to continued group health coverage. Continued coverage is not automatic. You must elect coverage within 60 days of the later of the following: A. The Qualifying Event; or B. The date the Administrator sends you notice of your right to continued coverage. `~.. Notice of the right to continued coverage to the employee's spouse will be deemed notice to any dependent child residing with the employee's spouse. 5. Notice Requirements for Spouses and Children. In the case of Qualifying Events caused by the employee's divorce or legal separation or by a dependent child ceasing to qualify as a dependent under the Plan, the employee, the spouse, or child must notify the Administrator in writing within 60 days after the date of that Qualifying Event. If the Administrator is not notified within this time frame, the spouse or child may not elect continued coverage. 6. Premiums. For the continued coverage, you will be required to pay 102% of the cost to the Plan of coverage (150% for the additional 11 months under paragraph 8 below). If you elect continued coverage, you will have 45 days from the date of election to pay the initial premium due (which will cover all periods back to the date you lost coverage). All premiums for subsequent months of coverage are due on the first day of the month of coverage with a 30 day grace period. Coverage will terminate retroactively and without notice if you do not pay a required premium before the end of these grace periods. A check that is dishonored for any reason will not be considered payment. COBRA CONTINUATION COVERAGE...Continued 7. Maximum Coverage Period. Except as provided in paragraphs 8 and 9 below, the maximum period for continued coverage for a Qualifying Event is as follows: A. Termination of employment or reduced working hours, the maximum coverage period ends 18 months after the Qualifying Event. B. If a second Qualifying Event occurs within this 18 month period, the period of coverage for any affected dependent may be extended up to 36 months from the date of the initial Qualifying Event. C. If the employee becomes enrolled in Medicare in the 18-month period prior to a qualifying event that is an employment termination or reduction in hours, COBRA coverage can continue for covered dependents for up to 36 months after the employee became enrolled in Medicare. D. In the case of a bankruptcy Qualifying Event, the maximum coverage period for a Qualified Beneficiary who is the retired covered Employee ends on the date of the retired covered Employee's death. The maximum coverage period for a Qualified Beneficiary who is the Spouse, surviving Spouse or Dependent child of the retired covered Employee ends on the earlier of the date of the Qualified Beneficiary's death or the date that is 36 months after the death of the retired covered Employee. E. In the case of a Qualified Beneficiary who is a child born to or placed for adoption with a covered Employee during a period of COBRA continuation coverage, the maximum coverage period is the maximum coverage period applicable to the Qualifying Event giving rise to the period of COBRA continuation coverage during which the child was born or placed for adoption. F. For all other Qualifying Events, the maximum period is 36 months. 8. Social Security Disability. You or another qualified beneficiary may extend the 18-month period to 29 months if you or the other qualified beneficiary are determined to have been disabled under the social security laws at any time during the first 60 days of continuation coverage. If you or another qualified beneficiary has non-disabled family members who are entitled to COBRA coverage, those non- disabled family members are also entitled to the up to 11-month disability extension. To extend coverage, you or the other qualified beneficiary must notify the Administrator in writing of the Social Security Administration's determination both within 60 days after the determination and before the end of the 18-month period. If you or the other qualified beneficiary are later determined not to be disabled under the social security laws, you or the other qualified beneficiary must notify the Administrator within 30 days after the determination. 9. Events That Terminate Coverage Early. Your continued coverage will end before the end of the 18-, 29- or 36-month period if one of the following events occurs: A. You become covered by another group health plan (as an employee or otherwise) which does not exclude or limit a preexisting condition you or another qualified beneficiary have. COBRA CONTINUATION COVERAGE...Continued Under the new portability laws, your COBRA coverage may terminate when the other plan may no longer exclude coverage for any of your preexisting conditions. Under this new law, the time the other health plan can exclude coverage for preexisting conditions is generally reduced by the number of months you had coverage for the condition under a previous health plan, including other COBRA coverage; B. You become enrolled in Medicare; C. You fail to pay timely the monthly premium for your continued coverage; D. The Employer terminates the Plan; E. In the case of a Qualified Beneficiary entitled to a disability extension, the later of: (i) 29 months after the date of the Qualifying Event, or (ii) the first day of the month that is more than 30 days after the date of a final determination under Title II or XVI of the Social Security Act that the disabled Qualified Beneficiary whose disability resulted in the Qualified Beneficiary's entitlement to the disability extension is no longer disabled, whichever is earlier; or 2. the end of the maximum coverage period that applies to the Qualified Beneficiary without regard to the disability extension; or ~"'" F. Any other event occurs that would cause an active employee or dependent to lose coverage. SCHEDULE OF MEDICAL BENEFITS This Plan uses the services of SAMPLE PPO NETWORK for Preferred Provider Hospitals and Physicians. IMPORTANT -this Plan has Preferred Provider Organization (PPO) and FARA Healthcare Management Features. Please read the entire section of the Comprehensive PPO Major Medical Benefit carefully because, under certain conditions set forth, there will be a REDUCTION in benefits payable IF YOU DO NOT: 1. Go to a PPO Hospital and/or PPO Doctor; 2. Get a Second or Third Doctor's Opinion when directed; or 3. Get Authorization for Hospitalizations, Mental Disorder/Substance Abuse Treatments, Skilled Nursing Facility Stays, Home Health Care, Hospice Care, Ph sical, S eech and/or Occu ational Thera •- ~ • •- • -~ • -~ "'Lifetime Maximums Lifetime Maximum Benefit $1,000,000 $1,000,000 (For other than Chemical Dependency & Substance Abuse Lifetime Maximum Benefits $5,000 $5,000 Payable for Chemical Dependency & Substance Abuse Lifetime Maximum Duration Six (6) Months Six (6) Months For Hos ice Care Lifetime Maximum Benefit For $500 $500 Elective Sterilization Calendar Year Maximums Maximum Benefits Payable $1,000 $1,000 Per Calendar Year for Outpatient Treatment of Chemical Dependency & Substance Abuse Maximum Benefits Payable $1,000 $1,000 Per Calendar Year for Chiro ractic Care Maximum Number of Visits 20 Visits 20 Visits Per Calendar Year For Occupational Therapy (Must be Pre-certified Schedule of Benefits...Continued •- • ~ •- • -~ • -~ Maximum Number of Visits 20 Visits 20 Visits Per Calendar Year For Speech Therapy (Must be Pre-certified Calendar Year Deductible` Individual Calendar Year $ 500 $ 750 Deductible Maximum Family Deductible $1,000 $1,500 Per Calendar Year Out-Of-Pocket.. Maximum_(Excluding Deductibles, Non-Precertification Penalties and charges incurred for; Mental & Nervous Disorders, Chemical Dependency and Substance Abuse Per Individual $ 750 $1,500 Per Famil $1,500 $3,000 Benefit Percents a Pa able Eligible Expenses (other 85% after deductible 70% after deductible than those listed below) Home Health Care (Must be 100% after deductible 100% after deductible Pre-certified) Elective Sterilization 100% to maximum benefit 100% to maximum benefit of $500, deductible waived of $500, deductible waived Second Surgical Opinion 100%, deductible waived 100%, deductible waived Mandatory for Transplant Procedures Onl Outpatient Surgery 100% after deductible 70% after deductible Pre-Admission Testing 100%, deductible waived 100%, deductible waived Supplemental Accident 100% up to $300, 100% up to $300, Benefit deductible waived, deductible waived, balance subject to balance subject to deductible & payable at deductible & payable at 85% 70% Birthing Room 100% up to $600, 70% after deductible deductible waived, balance subject to deductible & payable at 85% Sr_hE±c~liilp of t3pnefits___Continued •' • • •' • ~ • Routine Nursery Care 100% to a maximum of 100% to a maximum of Initial Confinement -First $1,000, deductible waived $1,000, deductible waived Five Da s Wellness Benefit 100% up to a maximum of Not Covered (Refer to the section Eligible $300.00, deductible Charges For Medical Benefits waived, if used before for further details) March 31St of each Calendar Year Chiropractic Care 50% after deductible 50% after deductible Penalty for failure to obtain 50% after deductible 50% after deductible Pre-Certification of: Inpatient Hospital Stays, (25% after deductible for (25% after deductible for Mental Disorder/Substance Mental & Nervous Mental & Nervous Abuse Treatments, Skilled Disorders/Substance Disorders/Substance Nursing Facility Stays, Abuse Treatments) Abuse Treatments) Home Health Care, Hospice Care, Physical, Speech and /or Occupational Therapy Services For Pre-Certification Call: FARA Healthcare Management: 800-215-3272 Acupuncture (By a Licensed 80% after deductible Physician) Maximum Charge of $20 Per Treatment, One Treatment Per Week (Subject to PPO deductible and Out-Of-Pocket Limit All Other Expenses Not 80%, subject to PPO Deductible and Out-Of-Pocket Available By A PPO Provider (Other than those listed Mental & Nervous Disorders, Chemical Dependency & Substance Abuse Precertification re uired: FARA Healthcare Mana ement - 800/215-3272 In atient 50% after deductible 50% after deductible Out atient 50% after deductible 50% after deductible Dail Hos ital Room and Board Maximum Room and Board Semi-Private Semi-Private Limit Maximum ICU, CCU, Burn Reasonable & Customary Reasonable & Customary Unit and Neonatal Care Daily Extended Care Facility - 50% of Semi-Private 50% of Semi-Private Must Be Pre-certified Room Rate Room Rate (Limited to 60 days per Calendar Year Schedule ~f Benefits_..Continued Prescr tion Dru Benefit - Pharmac and Mail.:. Order Generic Dru s $10 co a er rescri tion Brand Name Drugs (When Generic is Not Available $25 co a er rescri tion Brand Name Drugs (When Generic Is Available) $40 co a er rescri tion Contract Providers Services performed by Contract Providers contracted to "In-Network" Hospitals, and performed at that Hospital, such as Anesthesiology, Radiology, Pathology and Emergency Room Physicians, shall be considered "In-Network" for the purpose of benefit application. VISION CARE SCHEDULE OF BENEFITS A. VISION EXAMINATIONS 100% TO A MAXIMUM OF $50 LIMITED TO ONE (1) EXAMINATION EVERY TWO (2) YEARS B. ACTUAL CHARGES FOR LENSES: TYPE MAXIMUM BENEFIT OF: SINGLE VISION $60 BIFOCAL $60 TRIFOCAL $60 LENTICULAR $60 CONTACT LENSES $120 LIMITED TO THE MAXIMUM BENEFIT EVERY TWO (2) YEARS C. ACTUAL CHARGES FOR FRAMES 100% TO A MAXIMUM OF $50 LIMITED TO ONE (1) FRAME EVERY TWO YEARS NOTE: BENEFIT PAYMENTS FOR LENS AND FRAME INCLUDE THE ALLOWANCE FOR DISPENSING SERVICES. SCHEDULE OF DENTAL BENEFITS ~.•- ~rw CALENDAR YEAR DEDUCTIBLE PER INDIVIDUAL TYPE I $0 TYPE II $25 TYPE III $50 MAXIMUM BENEFIT PAYABLE PER CALENDAR YEAR PER INDIVIDUAL $1,000 PREVENTIVE & GENERAL SERVICES MAJOR SERVICES DIAGNOSTIC SERVICES TYPE li TYPE Ili TYPE I (A i2 MONTH WAITING PERIO© APPLIES TO TYPE III SERVICES Plan Pays 100% Plan Pays 80% Plan Pays 50% Oral Examinations Fillings Dentures X-Rays General Anesthetics Bridges Cleaning of Teeth Extractions Crowns Space Maintainers Oral Surgery Gold Restorations Fluoride Applications for Injectable Antibiotics Replacement of damaged children a liances Emergency Office Visits Periodontics Repair of prosthetic appliances Endodontics SAMPLE DRUG CARD PROGRAM Prescription drugs necessary for the treatment of an illness or injury, if obtainable only by a physician's written prescription and dispensed by a licensed pharmacist within the Sample network of Pharmacies. Benefit is payable at 100% of negotiated cost less co-payment of: $10.00 for Generic Drugs $25.00 for Brand Name Drugs (When Generic is not available) $40.00 for Brand Name Drugs (When Generic is available) Drug Benefit Inclusions and Exclusions: 1.) Inclusions: a.) Federal legend drugs, which bear "Caution: Federal Law Prohibits dispensing without a prescription." b.) Compound medications of which at least one ingredient is a prescription legend drug. (Compound medications contain at least one Federal Legend Drug, i.e., Benadryl with Phenergan). c.) Insulin (with a prescription) and syringes d.) Oral contraceptives e.) Prenatal Vitamins f.) Imitrex g.) Diabetic Testing Strips with monitor h.) Nicotine Patches i.) Accutane through age 22 j.) Ritalin 2.) Exclusions: a.) Non-legend drugs, Over the counter (OTC), except as noted b.) Cosmetics c.) Medical Devices/Supplies d.) Immunization agents (polio, vaccines, measles, etc.) e.) Biological sera, blood, or blood plasma f.) Charges for administration or injection of a drug (administered by a physician) g.) Workers' Compensation prescriptions h.) Experimental, investigational or medication administered by a healthcare facility (experimental medications are NEVER covered, they cannot be purchased in a drug store and do not have an NDC number) i.) Non-Insulin Needles/Syringes j.) Injectables other than insulin (i.e., fertility agents, vitamin B12) k.) Fertility agents I.) Contraceptive Devices (i.e., prophylactics, diaphragms, Norplant) m.)Diabetic supplies (i.e., insulin machine, cotton balls, alcohol pads, diabetic testing strips without monitor) n.) Hair Loss Drugs (i.e., Rogaine Propecia, etc.) o.) Growth hormones (juvenile use, usually injected) p.) Vitamins and minerals, except Prenatal Vitamins SAMPLE DRUG CARD PROGRAM...Continued " q.) Drugs And Medicines to be taken or given to an Insured Individual in connection with outpatient surgical procedures or while he or she is confined in a Hospital, rest home, sanitarium, extended care facility, convalescent hospital, nursing home, or similar institution r.) Refills of any prescription if the refill has not been authorized by the Physician s.) Drugs or medicines dispensed more than one year after the date of the Prescription order t.) Anabolic Steroids u.) DESI Drugs: Drugs determined by the Food and Drug Administration as lacking Substantial evidence of effectiveness 1.) Fluoride Supplements 2.) Hematinics 3.) Smoking Deterrent Medications, except for Nicotine Patches 4.) Tretinoin, all dosage forms (e.g. Retin-A) regardless of intended use, except for dependents through age 22. v.) Anti-Obesity and Anorexiants w.) Immunosuppressives (Betaseron, etc.) x.) Immunodeficient Drugs (Immune & AIDS related drugs) y.) Viagra 3.) Dispensing Limits The quantity of medication dispensed for each covered prescription or refill of a covered prescription will be the quantity prescribed by the authorized physician, but may not exceed athirty-five (35) day supply for acute care legend drugs and may not exceed a ninety (90) day supply for maintenance legend drugs. 4.) Pricing Guidelines a.) AWP is the average wholesale price as determined by Medispan. b.) GEAP is the average AWP's for all generic products coded *A (therapeutically equivalent) not including the reference drug. 5.) Generic Availability Generic drugs must be offered to participants, if available, and permitted by the prescribed physician and allowing for the professional discretion of the dispensing pharmacist. 6.) Dispense as Written A physician dispenses, as written prescription will cost the participant the brand name or generic co-payment, as indicated. 'fir FARA HEALTHCARE MANAGEMENT (800) 215-3272 Pre-Admission Certification All hospital admissions must be authorized by FARA Healthcare Management before you enter the hospital. If admission is necessary on an emergency/urgent basis, authorization is required within forty-eight (48) hours or on the first business day following weekend or holiday admissions. In order to qualify for maximum benefits, a request to pre-certify hospital admissions must be submitted to FARA Healthcare Management and must be authorized before actual hospitalization occurs. Once the hospitalization has been pre-certified as medically necessary, your benefits will be reimbursed at their designated level for the length of time it is medically necessary to remain in the hospital. When your doctor says that you or a covered member of your family should go into the hospital for anon-emergency (elective) procedure or treatment, it is your responsibility to notify your physician that Pre-Certification is a requirement of your health plan. FARA Healthcare Management may accept your medical information and request for hospitalization from your doctor by telephone. After evaluation, you will receive aPre- Certification Authorization letter and copies will be mailed not only to your doctor but to your hospital. Once you've received FARA Healthcare Management's evaluation and certification of your hospital stay, your admission may proceed as planned. If for some reason the date of the admission changes, be sure to notify FARA Healthcare Management of this as soon as possible. In the case of an emergency hospitalization for you or a covered family member, your doctor, the hospital or a family member must telephone FARA Healthcare Management within forty-eight (48) hours or on the first business day following weekend admission or holiday admission. If you do have an emergency situation, the following information must be provided to FARA Healthcare Management: Name, address, social security number and age of the patient Employee's name, social security number and employer Date of hospital admission Admitting diagnosis, planned procedure or treatment and proposed length of stay '' Name, address and telephone number of the attending physician and the hospital. Continued Stav Review & Discharge Plannin A FARA Healthcare Management Specialist will evaluate your continuing care needs in consultation with your treating physician and match them with available community resources. This specialist will work with you and your family to arrange for necessary follow-up treatment in a setting that is appropriate for the needs of your specific condition. FARA Healthcare Management starts thinking about your discharge from the hospital and your follow-up care needs just as soon as your medical status is clarified. FARA HEALTHCARE MANAGEMENT...Continued `~' Plans for discharge will be finalized by the time you no longer need to be in the hospital. FARA Healthcare Management will work with your doctor to plan for your discharge so that you will recover as quickly and uneventfully as possible. If your medical situation requires discharge planning, FARA Healthcare Management will contact you and/or your family shortly after hospitalization occurs. FARA Healthcare Management will keep you up-to-date concerning your readiness for discharge and discuss with you the kind of care you will require and where you will be able to get it once you are discharged. The goal is to provide whatever assistance is needed to transfer you out of the hospital as soon as possible, while continuing your doctor's treatment plan in an uninterrupted manner and, of course, to get you back to your family and normal routine in the shortest time possible. The services of FARA Healthcare Management will not be required for anyone receiving medical treatment of any kind outside the Continental United States. HEALTH MAINTENANCE ORGANIZATION Effect On Benefits When either the employee or his dependents is eligible to participate in a qualified Health Maintenance Organization Plan, (hereafter referred to as "HMO"), benefits will be payable under this Plan in accordance with the following: A. If an employee participates in a "HMO" Plan provided by this plan sponsor, there will be no benefits payable under this Plan for either the employee or his eligible dependents. B. If an employee or his dependents are covered under an HMO plan provided by other than this plan sponsor and if this plan is determined to be primary (first to pay) as defined under the Coordination of Benefits provision of this plan (hereafter referred to as "COB"), then benefits will be payable only if the "HMO" provider furnishes an itemized statement for services rendered and benefits are assigned to the "HMO" provider or the "HMO" itself. C. If the employee or his dependents are covered under an HMO plan provided by other than this plan sponsor and if this plan is determined to be secondary (second to pay) as defined under the "COB" provision of this plan and if the employee or his dependents elects to avail themselves of the "HMO" facilities, then only those charges which have not been covered by the "HMO" plan will be eligible under this plan. The employee must submit an itemized copy or receipt for any charge made by the "HMO" which have not been covered by the "HMO" and a copy of the "HMO" plan of benefits subscribed for. D. If the employee or his dependents are covered under an HMO plan provided by other than this plan sponsor and if this plan is determined to be secondary (second to pay) as defined under the "COB" provision of this plan and if the employee or his dependents elects not to avail themselves of the "HMO" facilities, then the only expenses that will be eligible under this plan are those which the employee or dependent would have had to pay under the "HMO" plan if they had availed themselves of the "HMO" benefits for which they are eligible. The employee must submit an itemized copy of his medical expenses and a copy of the "HMO" plan of benefits subscribed for. MAJOR MEDICAL EXPENSE BENEFITS ''~,n 'fir Employees and Dependents accumulation period are shown in the Schedule of Benefits. This benefit will pay a percentage of your eligible charges which are greater than the deductible amount within the Deductible Accumulation Period and incurred within the benefit period. The percentage, deductible amount, benefit period, and deductible The maximum amount payable for each person is shown in the Schedule of Benefits. Coverage will terminate when the lifetime maximum benefit amount has been paid. Deductible Amount This amount consists of the cash deductible shown in the Schedule of Benefits. The cash deductible applies to each covered individual and must be satisfied within the deductible accumulation period shown in the Schedule of Benefits. Common Deductible If you or members of your family incur eligible charges as the result of the same accident occurring while covered, or because of the same disease first manifested while covered, one cash deductible wilt apply to the combined eligible charges of the family members for that accident or illness. Thereafter, benefits for each person will be determined separately. Out-of-Pocket Provision The Plan will reimburse 100% of eligible charges for the balance of the Calendar Year (January 1-December 31) after the amount excluded due to the Benefit Percentage (excluding deductible) equals: Per Individual Per Family In-Network Out-Of-Network $ 750 $1, 500 $1,500 $3,000 This provision does not apply to charges incurred for Mental & Nervous Disorders, Chemical Dependency & Substance Abuse, deductibles, or for non-precertification penalties. °~r HOME HEALTH CARE Home Health Care means the care and treatment of a Covered Person under a plan of care established and reviewed at least every two months by the attending Physician unless the attending Physician determines that a longer interval between reviews is sufficient. A Home Health Care Visit means a visit by a person providing services under a Home Health Care Plan for evaluation of the need or the development of such a Home Health Care Plan. Covered expenses under this provision are as follows: 1. The evaluation of the need for and the development of a plan, by a Registered Nurse, medical social worker, or physician extended for home health care when approved or requested by the attending Physician. 2. Part-time or intermittent home nursing care by a Registered Nurse or a Licensed Practical Nurse under the supervision of a Registered Nurse. A Home Health Care visit may consist of up to four consecutive hours in any one 24-hour period with prior approval of FARA Healthcare Management. 3. Part-time or intermittent home health aide services which are defined as medically necessary by the Physician as part of the Home Care Plan. Aide services must be under the supervision of a Registered Nurse. Each aide visit may be up to four hours in length and will be limited to no more than one visit per day in frequency. All aide visits are subject to Pre-Authorization. 4. Physical, respiratory and/or speech therapy (as described under the "Eligible Charges" section). 5. Medical supplies, drugs and medications prescribed by a Physician, and laboratory services by or on behalf of a Hospital, if necessary, under the Home Health Care Plan, and to the extent such items would be covered under the Plan if the patient has been hospitalized. Conditions and limitations that specifically apply to this provision are as follows: 1. Home Health Care shall not be reimbursed unless the attending Physician certifies that: a. Hospitalization or confinement in a Skilled Nursing Facility would otherwise be required if Home Health Care were not provided. b. The Home Health Care services shall be provided or coordinated by a State- licensed or Medicare-certified Home Health Care Agency or a certified rehabilitation agency. 2. Home Health Care benefits provided under this provision shall not be construed as an extension of benefits beyond other Plan benefits. 3. Home Health Care benefits do not include food, housing, home-delivered meals, nor any services not specifically listed in this provision. HOSPICE CARE PROGRAM BENEFIT ~r Hospice Care Program is a formal program directed by a Physician to help care for a Terminally III Covered Person. This may be through either: (1) a centrally administered, medically directed and nurse coordinated program which (a) provides a coherent system primarily of home care; (b) uses a Hospice Team; and (c) is available 24 hours a day, seven days a week; or (2) confinement in a Hospice. The program must meet standards set by the National Hospice Organization and recognized as a Hospice Care Program by the Plan Administrator. If such a program is required by the state to be licensed, certified or registered, it must also meet the requirement to be considered a Hospice Care Program. Hospice Team is a team of professionals and volunteer workers who provide care to: (1) reduce or abate pain or other symptoms of mental or physical distress; and (2) meet the special needs arising out of the stresses of the terminal illness, dying and bereavement The team includes at least a Physician, a registered social worker, aclergyman/counselor, volunteers, a clinical psychologist, physio-therapist and occupational therapist. Terminally III Person is a Covered Employee or a Covered Dependent whose life expectancy is six (6) months or less as certified by his/her attending Physician. Remission is (1) a halt in the progression of a Terminal Illness or (2) an actual reduction in the extent to which the Illness has already progressed. This Plan will consider benefits for many charges which are incurred by the Terminally III Person while in a licensed Hospice Care Program. The following Usual, Customary and Reasonable Charges made by or on behalf of the Hospice will be considered for payment. - in-patient care services provided by and billed through the Hospice - physician services provided by the Hospice Medical Director - prescription drug therapy-pain control - home health care services by the Hospice Team (R.N.-Registered Nursing Service, L.P.N.-Licensed Practical Nursing Service, and certified Home Health Aids Services) - emotional support services provided to the patient and/or family by members of the Hospice Team - physical, occupational and speech therapy (as indicated under eligible charges) provided by the members of the Hospice Team - rental and/or purchase of durable medical equipment which has been approved in advance by the Plan Supervisor HOSPICE CARE PROGRAM BENEFIT...Continued respite (continuous) care provided to covered family members by the Hospice Team on a short term basis enabling the Terminally III person to remain an out-patient. Services of the Terminally III Person's regular attending physician and the Hospital inpatient room, board and miscellaneous charges are billed separately and are not part of the Hospice Care Program Benefit. These charges are subject to the deductible and coinsurance. In order to obtain benefits for the Hospice Care Program, the Covered Person must be in a Hospice Care Program. The Covered Person will not be considered to be in a Hospice Care Program until certification of the terminal illness has been given to the Plan Administrator by the Medical Director of the Hospice Care Program and the Physician who is treating the Terminally III Person and who recommends admittance to a licensed Hospice Care Program. In addition, only services charged for by the Hospice Care Program and provided within six months from the date of the Terminally III Person's entry or re-entry (after a period of Remission) in the Hospice Care Program shall be considered for payment by this Plan. HOSPICE CARE BENEFITS (OTHER THAN BEREAVEMENT BENEFIT) Charges incurred for the Terminally III Person for the following services will be considered under the Plan: (1) Charges incurred while not an inpatient in a Hospice; Hospice Services furnished under a Hospice Care Program for any one period of Hospice Care. (2) Charges incurred while an inpatient in a Hospice; Hospice room and board and Hospice Service furnished under a Hospice Care Program for any one period of Hospice Care. For determining the benefits payable, all periods of care in a Hospice Care Program shall be considered related and to have occurred in the one period of care unless separated by at least three consecutive months. The following charges will not be considered for payment under the Hospice Care Program: (1) an injury arising out of or in the course of work for wage or profit (whether or not with the Employer); (2) an Illness covered with respect to such work by any workers compensation law, occupational disease law or similar law; (3) charges for service or supplies: (a) furnished by or for the United States Government, or HOSPICE CARE PROGRAM BENEFIT...Continued (b) furnished by or for any other government, unless a payment of the charge is required by law; or (c) to the extent that such service or supply or any benefit for the charge is provided by any law or governmental plan under which the patient is or would be covered. This (c) does not apply to a state plan under Medicaid or to any law or plan which states that its benefits are excess to those of any private insurance program or other non-governmental program. (4) Charges incurred during a period of Remission. This limitation applies if, during such Remission, the Terminally III Person is discharged from the Hospice Care Program. (5) Any charges for services performed by a person who ordinarily resides in the Terminally III Person's household or who is related to the Terminally III Person as a spouse, parent, child, brother, sister, whether such relationship is by blood or exists only in law. BEREAVEMENT BENEFITS The following charges incurred by the Covered Dependent(s) for Counseling Services (defined below) ordered and received under the Hospice Care Program will be considered for payment under this Plan. Counseling Services are supportive services provided after the death of the Terminally III Person, by members of the Hospice Team in counseling sessions with the Covered Dependents. These services are to assist the Covered Dependents in coping with that death. Benefit for Bereavement Services will be considered under this Plan if all of the following conditions are met: (1) On the day immediately prior to death, the Terminally III Person was: (a) in the Hospice Care Program; (b) a Covered Person. (2) The charges are incurred by the Covered Dependent(s) within 12 months following the date of the Terminally Ilt Person's death. (3) This benefit is limited to three chargeable bereavement visits. The following charges will not be considered for payment under this Plan: (1) Charges for the treatment of a diagnosed Illness or Injury of a Covered Dependent(s) to the extent that such charges are payable under another benefit of this Plan, whether payable partially or in full. (2) Any charges for services performed by a person who ordinarily resides in the Terminally III Person's household or who is related to the Terminally III Person as a spouse, parent, child, brother, sister, whether such relationship is by blood or law. ELIGIBLE CHARGES FOR MEDICAL BENEFITS are the Reasonable and Customary charges for medically necessary medical care and services which are ordered by or provided by a legally qualified physician, as follows: 1. Board, room, and routine nursing service during confinement in a Hospital or Skilled Nursing Facility, not to exceed the maximum amount shown in the Schedule of Benefits; Room charges made by a Hospital having only private rooms will be paid at 90% of the average private room rate. 2. Hospital charges for medical services and supplies; 3. Medical services and supplies furnished by an Ambulatory Surgical Center or a Birthing Center. 4. Intensive Care, not to exceed the maximum amount shown in the Schedule of Benefits; 5. Anesthetics and their administration by a physician or a professional anesthetist; 6. Fees of physicians and surgeons for medical care, treatment, and surgical operations; 7. Fees for private duty nursing services which require a Registered Nurse (RN) or Licensed Practical Nurse (LPN), which has been approved by FARA Healthcare Management, other than a nurse who normally resides in the patient's home or who is the patient's spouse, child, brother, sister, parents, or mother/father-in-law; 8. Fees of a licensed physical therapist for treatment, when recommended by a Physician. The physical therapy must be in accord with a Physician's exact orders as to type, frequency and duration and to improve a body function. 9. X-ray examinations (other than dental), microscopic and laboratory tests and other diagnostic services ordered by a physician. 10. X-ray and radioactive therapy; 11. Local professional land or air ambulance service. A charge for this item will be a covered charge only if the service is to the nearest Hospital or Skilled Nursing Facility where necessary treatment can be provided. 12. Medical supplies prescribed by a physician or surgeon as follows: a. Blood which is not replaced and other fluids to be injected into the circulatory system. b. Initial artificial limbs, eyes, and other necessary prostheses and subsequent replacements if proven medically necessary. c. Casts, splints, trusses, braces, crutches, surgical dressings and other necessary medical supplies. ELIGIBLE CHARGES FOR MEDICAL BENEFITS...Continued `~rw d. Rental or purchase of durable medical equipment (including wheelchair, hospital bed, iron lung or other mechanical equipment for the treatment of respiratory paralysis, and equipment for the administration of oxygen) WITH PRIOR APPROVAL of the Plan Supervisor e. Surgical hose, stump socks and mastectomy bras limited to two (2) per year. 13. Charges incurred for maternity for covered female employees and covered spouses. A child covered as a dependent is not entitled to maternity benefits. Coverage for a Hospital stay following a normal vaginal delivery may not be limited to less than 48 hours for the mother (if a Covered Person). Coverage for a Hospital stay in connection with childbirth following a Cesarean section may not be limited to less than 96 hours for the mother (if a Covered Person). 14. Charges incurred in an Extended Care Facility if such confinement is (i) preceded by at least five consecutive days of hospital confinement and (ii) is due to the injury or sickness which required the hospital confinement (iii) which commences within seven days after such hospital confinement and (iv) if such confinement is necessary for treatment of the injury or sickness and is not custodial in nature. 15. Charges made for Outpatient Treatment of Mental & Nervous Disorders, rendered by a legally qualified physician, includes a Psychologist (Ph.D.), Licensed Certified Social Worker (LCSW) and Licensed Professional Counselor (LPC), which is not in excess of (a) Reasonable and Customary allowance per visit, (b) limited to 25 visits ;,,,~ per Calendar Year. Charges for services involving persons other than the patient are not covered. 16. Charges made for Inpatient Treatment of Mental & Nervous Disorders which shall be limited to 15 Inpatient days per Calendar Year. 17. Charges made for Outpatient Treatment of Chemical Dependency and Substance Abuse, rendered by a legally qualified physician, includes a Psychologist (Ph.D.), Licensed Certified Social Worker (LCSW) and Licensed Professional Counselor (LPC), which is not in excess of (a) Reasonable and Customary allowance per visit, (b) and limited to a maximum benefit payable of $1,000 per Calendar Year. Charges for services involving persons other than the patient are not covered. 18. Charges made for Inpatient and Outpatient Treatment of Chemical Dependency and Substance Abuse combined shall be limited to $5,000 per Lifetime. 19. Charges incurred in treatment by a chiropractor, which shall be limited to (a) Reasonable & Customary allowance per visit and (b) limited to a maximum benefit payable of $1,000 per Calendar Year. 20. Charges incurred for newborn baby care will be covered for the following: a) treatment of premature birth (defined as being less than 40 weeks in gestation and less than 5 lbs. at birth), abnormal congenital conditions or an illness contracted after birth; ELIGIBLE CHARGES FOR MEDICAL BENEFITS...Continued b) Well baby newborn care for hospital and physician's charges prior to discharge of the child from the hospital, including charges incurred for a circumcision, payable as shown on the Schedule of Medical Benefits. 21. Charges incurred for voluntary sterilization for a covered employee and/or dependent spouse. 22. Charges for cardiac rehabilitation, provided services are rendered (a) under the supervision of a Physician; (b) in connection with a myocardial infarction, coronary occlusion or coronary bypass surgery; (c) initiated within 12 weeks after other treatment for the medical condition ends; and (d) in a Medical Care Facility as defined by this Plan. 23. Charges for occupational therapy by a licensed occupational therapist. Therapy must be ordered by a Physician, result from an injury or sickness that occurred while covered under the Plan and improve a body function. Covered expenses do not include recreational programs, maintenance therapy or supplies used in occupational therapy. 24. Fees of a legally qualified Physician or qualified Speech therapist for restoratory or rehabilitary speech therapy for speech loss or impairment due to an illness or injury, other than a functional nervous disorder or due to surgery performed on account of an illness or injury. If the speech loss is due to a congenital anomaly, surgery to correct the anomaly must have been performed prior to the therapy. 25. The Reasonable & Customary fee for transplants are covered. The transplant must be performed to replace an organ or tissue of the Covered Person. Such eligible expenses include the R & C fee for the following: a. A second surgical opinion by a Physician in active practice in the field of medicine pertinent to the proposed surgery. Such consulting surgeon must not be in professional practice with the Physician who would perform the surgical procedure. A SECOND SURGICAL OPINION IS REQUIRED OR NO BENEFITS WILL BE PAYABLE FOR THE SURGICAL PROCEDURE. b-1. If both the donor and the recipient are covered individuals under this Plan, eligible expenses incurred for both will be considered for benefits. b-2. If only the recipient is covered under this Plan, eligible expenses incurred for the recipient will be considered for benefits. The donor's expenses will be considered for benefits under this Plan, ONLY if there is an explicit provision under the donor's plan indicating that no benefits are payable under any circumstances. ELIGIBLE CHARGES FOR MEDICAL BENEFITS...Continued ~` b-3. If the donor is covered under this Plan and the recipient is not covered, expenses will not be considered for benefits. c. The Reasonable & Customary fee for evaluating and removing the organ from a cadaver or tissue bank; the R & C fee for the surgical procedure to implant the organ; transportation of the organ to the location of the surgery, when such location is within a 500 mile radius. Benefits will be provided for transportation of the donor organ outside the 500 mile radius, only in case of an emergency or when a suitable organ is not reasonably available within the 500 mile limit. In such cases, benefits will be payable only for the acquisition of an organ in the United States and Canada. All expenses relating to the donor and donor organ shall be limited to a maximum benefit payable of $75,000 per procedure. Charges for services related to obtaining or implanting anon-human or artificial organ are excluded. Organ Transplants, which are considered to be experimental, are excluded. 26. The discount arrangement, provided to this Plan through the Preferred Provider "` Organization, shown on the Schedule of Medical Benefits, shall be considered eligible expenses covered under the Plan. 27. Charges incurred for Annual Health Physicals performed at St. Tammany Parish Hospital, payable as shown on the Schedule of Medical Benefits. 28. Charges incurred for routine GYN exam and Pap test, payable as shown on the Schedule of Medical Benefits. 29. Charges for diabetic conditions shall include, but are not necessarily limited to: Equipment and supplies used in connection with the monitoring of blood glucose and insulin administration. Benefits for home glucose monitors will be limited to one (1) every two (2) Benefit Periods. 2. Benefits will be provided for the Self-Management Training/Education and Medical Nutrition Therapy and are limited to a maximum of $250 per Benefit Period. 3. Benefits will be provided for a dilated eye exam and are limited to one (1) per Benefit Period. 4. Benefits will be provided for preventive or routine foot care and are limited to one (1) visit per Benefit Period. ELIGIBLE CHARGES FOR MEDICAL BENEFITS...Continued 30. Charges incurred for a mastectomy, which shall include: (1) reconstruction of the breast on which the mastectomy has been performed; (2) surgery and reconstruction of the other breast to produce symmetrical appearance; and (3) coverage for prostheses and physical complications of all stages of mastectomy, including lymphedemas; in a manner determined in consultation with the attending physician and the patient. 31. Charges incurred for injury to or care of the mouth, teeth, gums and alveolar processes will be covered charges under Medical Benefits only if that care is for the following oral surgical procedures: 1. Excision of tumors and cysts of the jaws, cheeks, lips, tongue, roof and floor of the mouth. 2. Emergency repair due to injury to sound natural teeth. This repair must be made within 12 months from the date of an accident and the accident must have occurred while the person was covered under the Plan. 3. Surgery needed to correct accidental injuries to the jaws, cheeks, lips, tongue, floor and roof of the mouth when injuries occurred while covered under the Plan. 4. Excision of benign bony growths of the jaw and hard palate. 5. External incision and drainage of cellulitis. 6. Incision of sensory sinuses, salivary glands or ducts. 7. Removal of impacted teeth. No charge will be covered under Medical Benefits for dental and oral surgical procedures involving orthodontic care of the teeth, periodontal disease and preparing the mouth for the fitting of or continued use of dentures. 32. Charges incurred for a wig following chemotherapy, not to exceed a maximum benefit payable of $200. 33. Wellness Benefit -Charges incurred for routine physical exams and routine diagnostic laboratory testing are eligible. The benefit is for Employees and eligible Dependents over ten (10) years old. The benefit must be used between January 1St and March 31St of each Calendar Year. New hires will have ninety (90) days to use this benefit from their effective date of coverage. New hires who are effective in the last three (3) months of the Calendar Year must wait until January 1St of the next Calendar Year. A deductible credit in the amount of $300 will be given if the Wellness Benefit is used during the eligible period. If an employee or dependent has a routine physical exam after March 31St, it will not be a covered expense, nor will a deductible credit be given. LIMITATIONS & EXCLUDED CHARGES FOR MEDICAL BENEFITS are: 1. Charges made for treatment not included under Eligible charges. 2. Charges incurred for apre-existing condition are not covered under the Plan. A pre-existing condition means, with respect to coverage, any condition, whether physical or mental, related to, caused by or a complication of the condition, for which medical advise, diagnosis, care or treatment was recommended or received within a six (6) month period preceding the effective date of coverage. Pregnancy is not apre-existing condition. However, apre-existing condition will be covered: a. At the end of a twelve (12) month period during which the employee or his eligible dependents have been continuously covered under the Plan. b. For a newborn child or a child newly adopted or newly placed for adoption, if the child becomes covered within thirty (30) days of birth, adoption or placement for adoption. 3. Charges made for treatment resulting from an on-the-job bodily injury or sickness covered by Worker's Compensation Law or similar legislation, or made for or in connection with an injury arising out of or in the course of any employment for wage or profit. 4. Charges made for medical examinations, drugs or medicines which require a written prescription or laboratory tests which are not incident and necessary to treatment of an illness or injury, except as shown in the "Eligible Charges for Medical Benefits" section of this Plan. 5. Charges made for eye exams, eye refractions, eyeglasses or the fitting thereof (except as shown on the Vision Care Schedule of Benefits), or surgical correction of vision, except for the initial lens following cataract surgery, hearing exams, hearing aids, or the fitting thereof, 6. Charges made for oral surgery and care and treatment of teeth, gums and alveolar process, except as shown in the "Eligible Charges for Medical Benefits" section of this Plan. 7. Any charges related to cosmetic surgery or for services necessitated by or related to previous cosmetic surgery except treatment to improve a deformity arising from or directly related to: a. accidental injuries sustained while covered, where such treatment is rendered by a licensed physician and begun within six months after such accident; b. congenital anomaly in a child born while parent has dependent coverage 8. Charges for treatment of injury or sickness as a result of war, an act of war, declared or undeclared, insurrection, participation in a riot or as a result of being engaged in an illegal occupation or commission of or attempted commission of a felony or assault. LIMITATIONS & EXCLUDED CHARGES FOR MEDICAL BENEFITS ...Continued 9. Charges incurred in an institution which is primarily a rest home, or home for the aged, except as they may be eligible under the Extended Care Facility Benefit. 10. Charges incurred for voluntary or elective surgery or treatment, not incident to an illness or injury, except for elective surgery for sterilization. 11. Charges in connection with treatment due to self-inflicted injury, or attempted suicide, whether sane or insane; 12. Charges made which are in excess of Reasonable and Customary charges or, for services which are not of a medical necessity or, are of an experimental and investigative nature. 13. Charges for services related to obtaining or implanting anon-human or artificial organ. Organ Transplants, which are considered to be experimental are excluded. Charges incurred in obtaining donor organs are excluded. 14. Charges for education, training, and bed and board while confined to an institution which is primarily a school or other institution for training. 15. Charges for grafts, solely for the purpose of permanent dentures. 16. Charges made for recreational and environmental therapy. 17. Charges made for air conditioners, dehumidifiers, air purifiers, arch supports, corrective or orthopedic shoes, heating pads, hot water bottles, home enema equipment, rubber gloves and deluxe equipment. 18. Charges made for replacement of equipment with similar equipment within 5 years. 19. Charges made for electrical power, water supply, and sanitary waste disposal systems, or their installation. 20. Charges incurred for services of a surrogate mother, or any artificial means of fertilization (including but not limited to artificial insemination, in-vitro fertilization and/or gamete intrafallopian transfer). Charges incurred for all services rendered at the same time services are being performed for artificial fertilization (including but not limited to G.I.F.T.). 21. Charges for services provided by the patient's spouse, child, brother, sister, parents, mother/father-in-law, step-parents. 22. Charges for immunizations or other "preventive" medical care, except as shown on the "Schedule of Benefits" or as listed in the "Eligible Charges for Medical Benefits" section on this Plan. 23. Charges for care and treatment of obesity, weight loss or dietary control whether or not it is, in any case, a part of the treatment plan for another sickness. Medically necessary charges for Morbid Obesity will be covered. LIMITATIONS & EXCLUDED CHARGES FOR MEDICAL BENEFITS ...Continued err 24. Charges incurred for treatment of sexual dysfunction (for other than organic causes) or any procedure associated with a sex change operation. 25. Charges incurred as a result of asports-related injury in which the participant is engaged in the sport for profit. 26. Charges incurred for instruction in alternate life patterns for conditions previously diagnosed. 27. Charges for military service-related injuries or sickness (past or present) furnished by a hospital or facility operated by any foreign government agency or the United States Government or any authorized agency of the United States Government or furnished at the expense of such government or agency, unless otherwise mandated by law. 28. Charges incurred for reversal of sterilization procedures. 29. Charges in connection with learning disabilities or marriage counseling. 30. Charges incurred in a hospital where the initial confinement begins on a Friday or Saturday, and where no substantial services are rendered prior to the following Monday or where services which were rendered could have been provided on the following Monday. (Charges for the weekend only are excluded). 31. Charges for a dependent child relating to pregnancy or complications of pregnancy. 32. Charges incurred in the treatment of sterility or infertility, including fertility drugs. 33. Charges incurred for orthognathic surgery and charges incurred for medical treatment of temporomandibular joint disorder, dentofacial anomalies including malocclusion, repositioning of the jaw to correct functional problems and/or achieve facial balance. 34. Charges incurred for services, supplies, care or treatment in connection with an abortion. 35. Charges incurred for treatment of weak, strained, flat, unstable or unbalanced feet, metatarsalgia or bunions (except open cutting operations), and treatment of corns, calluses or toenails (unless needed in treatment of a metabolic or peripheral- vasculardisease). 36. Charges incurred in the care and treatment for hair loss, including hair transplants or any drug that promises hair growth, whether or not prescribed by a Physician. 37. Charges incurred in the care and treatment of sleep disorders unless deemed medically necessary. LIMITATIONS & EXCLUDED CHARGES FOR MEDICAL BENEFITS ...Continued 38. Charges incurred for the care and treatment of smoking cessation, including smoking deterrent patches (except as shown under the Prescription Drug Card Program), unless medically necessary due to a severe active lung illness such as emphysema or asthma. DENTAL BENEFITS err Date Incurred The Date Incurred for Eligible Dental Expenses will be as follows: 1. for appliances or changes to appliances - on the ate the first impression is made; 2. for a crown, a bridge or a cast restoration - on the first date the tooth or teeth are prepared; 3. for root canal therapy - on the date the pulp chamber is opened for therapy; 4. for all other dental charges - on the date the service or procedure is performed or the supply is furnished. We will use the Date Incurred in order to determine the order and level of benefits to be paid. Pre-Determination of Benefits When the total cost of Eligible Dental Expenses is expected to exceed the pre- determination limit of $200.00, the Dental Practitioner's treatment plan should be sent to us before the first date of treatment. Based on the treatment plan, we will estimate the amount of benefit available if treatment is performed. The treatment plan will be returned showing the benefit available. This provision does not apply when Eligible Dental Expenses are incurred for: 1. emergency dental care; or 2. accidental dental injuries. Benefits will be paid on the basis of the Eligible Dental Expenses which are incurred while the covered person is covered by this Benefit. Before treatment begins, the Dental Practitioner's treatment plan should be sent to us. The treatment plan should: 1. show the Dental Practitioner's proposed course of treatment; 2. show the total charge for the treatment; 3. include x-rays, study models and all other data requested by us; 4. show how long the treatment will take; or DENTAL BENEFITS ... Continued TYPEI PREVENTIVE, DIAGNOSTIC, EMERGENCY PALLIATIVE SERVICES AND SOME CORRECTIVE SURGICAL PROCEDURES 1. Oral Examinations. (a) Initial examinations, diagnosis and charting -limited to one during any 24 month period. (b) Recall examinations -will be paid for no more frequently than once in any 6 month period. (c) Emergency or specific examinations. 2. X-rays and x-ray interpretations. (a) Complete series of x-rays or panographic x-rays -limited to one during any 24-month period. (b) Sets of bitewing x-rays -will be paid for no more frequently than once in any 6 month period. (c) X-rays to diagnose a symptom or examine progress of a particular course of treatment excluding x-rays required for endodontic procedures. 3. Required consultations with another Dental Practitioner. 4. Prophylaxis -will be paid for no more frequently than once in any 6 month period. 5. Fluoride Treatment (applicable only to covered persons under age 19) -topical application of fluoride -will be paid for no more frequently than once in any 6 month period. 6. Emergency palliative services. 7. Diagnostic tests and laboratory examinations (excluding x-rays, study models or similar records prepared for orthodontic procedures). 8. Provision of space maintainers for missing deciduous teeth - includes all adjustments within 6 months after installation. 9. Charges incurred for sealants (provided only to covered Dependents who are under age nineteen (19) when treatment is received). TYPE II GENERAL SERVICES 1. Fillings -amalgam, composite, acrylic or equivalent. 2. Removal of Teeth -except removal of impacted teeth which is covered under Major Medical Benefits. DENTAL BENEFITS...Continued 3. Endodontics -root canal therapy and root canal fillings; treatment of disease of the pulp tissue. 4. Periodontics -treatment of disease of the gum and other supporting tissues of the teeth. 5. Oral surgery and related general anesthesia. 6. Preformed stainless steel crowns and repairs to preformed stainless steel crowns, for deciduous teeth only. TYPE III MAJOR SERVICES 1. Inlays, gold restorations. 2. Crowns and repairs to crowns, other than preformed stainless steel crowns. 3. Repair of bridges or dentures. 4. Rebase or reline of an existing partial or complete denture. 5. Prosthodontic Services -construction and insertion of bridges or dentures. r- EXCLUDED CHARGES FOR DENTAL BENEFITS Expenses of the type defined below will be excluded from coverage under the Plan, even if they are otherwise included as Covered Dental Expenses. 1. Charges for Dental Care not included as Covered Dental Procedures. 2. Charges for Dental Care for which the covered person would not be required to pay if there were no coverage, including but not limited to charges for Dental Care furnished: (a) while the covered person is confined in a hospital operated by the United States Government or any agency thereof. (b) by a Health Maintenance Organization or similar organization. (c) By Employer-related facilities. 3. Dental Care which is: (a) provided solely for improving appearance, when form and function of the teeth are satisfactory and no pathological condition exists. (b) for facings on crowns/pontics posterior to the second bicuspid. 4. Charges for Dental Care which does not meet the standards of dental practice accepted by the American Dental Association. 5. Any charges in excess of the Reasonable and Customary charge of the least expensive alternate service or material consistent with adequate Dental Care, when such alternate service or material is customarily provided. 6. Charges for appointments not kept or for completion of claim forms. 7. Expenses related to services or supplies of the type normally intended for sport or home use. 8. Charges in respect of any Dental Care due to or resulting from: (a) war, insurrection or the hostile action of the armed forces of any country, upon notice to the company of entry into such service, the pro-rata unearned premiums shall be refunded. (b) any cause for which indemnity or compensation is provided under any Workers' Compensation or similar law. 9. Charges for: (a) replacement of an appliance or prosthetic device, crown, cast restoration or a fixed bridge within five (5) years of the date it was last placed. This exclusion will not apply, if replacement is needed due to an accidental injury received while covered. EXCLUDED CHARGES FOR DENTAL BENEFITS...Continued °w' (b) initial installation of bridgework or dentures whose sole purpose is to replace natural teeth extracted, prior to becoming covered under the Plan. (c) replacement of bridges or dentures lost, misplaced or stolen. (d) duplicate bridges or dentures or any other duplicate dental appliances. For permanent appliances that replace temporary appliances -the total charges for both are limited to the maximum Reasonable and Customary charge for the permanent appliance. 10. Charges for Periodontal splinting. 11. Implants and transplants or repositioning of the jaw. 12. Charges for education or training in and supplies used for dietary or nutritional counseling, personal oral hygiene or dental plaque control. 13. Charges for drugs administered by the attending Dental Practitioner. 14. Charges for treatment by other than a Dental Practitioner. 15. Services received or supplies purchased outside the United States or Canada, unless the covered person is a resident of the United States or Canada and the charges are incurred while traveling on business or extended vacation. 16. Charges for appliances or restorations to increase the vertical dimensions or restore occlusion or splinting. 17. Charges for Dental Care to correct congenital or developmental malformation. 18. Charges incurred for orthognathic surgery and charges incurred for medical treatment of temporomandibular joint disorder, dentofacial anomalies including malocclusion, repositioning of the jaw to correct functional problems and/or achieve facial balance. 19. Charges incurred for Orthodontia Treatment. ~`r- DENTAL DEFINITIONS 1. Dental Care Provider - A dentist, dental hygienist, physician or nurse as those terms are specifically defined in this section. 2. Dental Hygienist - A person trained and licensed to perform dental hygiene services, such as prophylaxis (cleaning of teeth), under the direction of a licensed dentist. 3. Dentist - A person acting within the scope of his/her license, holding the degree of Doctor of Medicine (M.D.), Doctor of Dental Surgery (D.D.S.) or Doctor of Dental Medicine (D.M.D.) and who is legally entitled to practice dentistry in all its branches under the laws of the state or jurisdiction where the services are rendered. 4. Expense Incurred -The date a dental service or treatment is performed, except for the following services or treatments: (a) Dentures or bridgework -the date the impressions are taken. (b) Crowns, inlays, onlays -the date the teeth are first prepared. (c) Root canal therapy -the date the pulp chamber is opened. (d) Active orthodontic care -the date the appliances are inserted. 5. General Anesthesia - An agent introduced into the body which produces a condition of loss of consciousness. 6. Oral Surgery -Necessary procedures for surgery in the oral cavity, including pre- and post-operative care. MODIFICATION OF PROVISIONS FOR PERSONS ENTITLED TO MEDICARE BENEFITS The Plan will not take into account that you (or your spouse) who are covered under the Plan by virtue of your current employment status are entitled to benefits under Medicare. The Plan will pay primary and Medicare will pay secondary. However, if you (or a dependent) are covered by Medicare because of end stage renal disease, the rule stated above will not apply and the Plan will generally pay primary only during the first 30 months during which you or your dependent are covered by Medicare. Thereafter, the Plan will pay secondary. All Other Cases In all other cases, Medicare will pay primary and the Plan will pay secondary. In addition, the Plan will pay secondary to Medicare in any other situation permitted under federal law. Entitlement to Medicare An individual is considered entitled to benefits under Medicare for purposes of these rules if the individual: 1. is covered under Medicare Part A or Part B; or 2. is not covered under Medicare because of having refused it, having dropped it, or having failed to make proper request for it. `fir SUBROGATION, REIMBURSEMENT, AND OVERPAYMENT Reimbursement and Subro_ ag tion The Plan does not cover medical expenses or other benefits if a person (other than the person for whom a claim is made) is considered responsible for the injury or illness giving rise to the expenses or benefits, irrespective of whether litigation has been initiated. This exclusion only applies to the extent that payment for the injury or illness is made or may be made in the future by or for that responsible person (through settlement, judgment, or in any other way). The Plan will advance to the Employee or Dependent benefits otherwise payable if, at the time the claim is received, payment by or for the responsible person has not yet been made and the Employee, the Dependent, and their attorney, if any, observe and agree to the terms and conditions of this section. By accepting this payment, the injured Employee or Dependent agrees to reimburse the Plan out of any recovery from the responsible party or insurance carrier. This includes recoveries by judgment, settlement, under an automobile insurance policy, under "no fault" automobile legislation, or from the Employee's or Dependent's own uninsured motorist carrier. This also applies to recoveries even if they do not provide a complete recovery of all the relief sought and even if they do not separate medical expenses from other items of damages, including pain and suffering. Attorney's fees, expenses, and costs incurred to obtain any such recovery shall not be deducted from the amounts paid to reimburse the Plan fully. Notwithstanding any allocation made in a settlement agreement or court judgement, for purposes of this Plan, any monies recovered from any responsible person shall be deemed to reimburse the Employee or Dependent first for medical expenses incurred and paid by the Plan. As security for its rights to such reimbursement, the Plan will be subrogated to all rights of recovery the Employee or Dependent has against the responsible person to the extent the Plan has paid benefits. Amounts due to the Plan to repay benefits (under this provision, as an overpayment, or under any other Plan provision) may, at the Plan's option, be deducted from other benefits payable by this Plan to the Employee, the Dependent or any other Dependent of the Employee. The Employee, Dependent, and/or their attorney, if any, must agree to take such action, give such information and assistance, and sign (within sixty (60) days of the Plan's request) any subrogation or reimbursement agreements or any other documents the Plan requests to help enforce its rights. However, even if the Plan fails to obtain any such agreement or assignment, the Plan's rights to recover benefits paid shall not be affected. Further, the Employee or Dependent's attorney must keep the Plan apprised of the status of all proceedings and settlement negotiations to protect the Plan's interest in any settlement or judgement. The Employee or Dependent must tell the Plan about any claim he or she may have against any responsible party. The Employee or Dependent must also tell the responsible person or its insurer about the Plan's subrogation and reimbursement rights. No benefits will be paid by the Plan for the illness, injury or for any other reason if the Employee, the Dependent, and/or their attorney, if any, fail to cooperate with the Plan in enforcing its rights. SUBROGATION, REIMBURSEMENT, AND OVERPAYMENT...Continued ~'"' No waiver, release of liability, or other documents executed without the consent of the Plan will be binding on the Plan and will not prejudice the Plan's right to recover such against any third party. Overpayments If benefits are paid in error to any participant or provider of service, the Plan reserves the right to have the overpayment refunded. This right to recovery applies when benefits have been paid by the Plan in excess of the amount the Plan is obligated to pay. The Plan shall have the right to recover such payments to the extent of such excess from any one or more of the following: any persons to, for, or with respect to whom such payments were made, any insurance companies or any other organizations. The Plan Supervisor shall have the right to make payment of any amounts it determines to be warranted by the Plan to any organizations making payments under other plans. The Plan Supervisor shall have the right to take such action it deems necessary and advisable in order to recover such excess payments, and the participant shall cooperate with the Plan Supervisor in this regard. If any Plan participant or provider of service does not promptly refund an overpayment to the Plan on request, the Plan reserves the right to reduce any future benefit payments to or on behalf of the covered person or another covered member of that person's family until "~"` the full amount of the overpayment is recovered. Waiver of Deductibles and Co-payments If a provider of service waives any or all of a deductible or copayment, the Employee is required to notify the Plan. If the Employee does not do so, the entire amount paid by that Plan for the claim will result in an overpayment and the Employee will be required to refund the overpayment to that Plan. In addition, if a provider waives a deductible or copayment, and the Employee or the provider (with the Employee's knowledge) submits a claim to the Plan for an amount that includes the deductible or copayment, the Employee and all Dependents' coverage under the Plan will be terminated, effective as of the date the claim was submitted, and both the Employee and the provider may be subject to criminal prosecution. COORDINATION OF BENEFITS Coordination Of The Benefit Plans. Coordination of benefits sets out rules for the order of payment of Covered Charges when two or more plans including Medicare are paying. When a Covered Person is covered by this Plan and another plan, or the Covered Person's Spouse is covered by this Plan and by another plan or the couple's Covered children are covered under two or more plans, the plans will coordinate benefits when a claim is received. The plan that pays first according to the rules will pay as if there were no other plan involved. The secondary and subsequent plans will pay the balance due up to 100% of the total allowable expenses. Benefit Plan. This provision will coordinate the medical benefits of a benefit plan. The term benefit plan means this Plan or any one of the following plans: 1. Group or group type plans, including franchise or blanket benefit plans. 2. Blue Cross and Blue Shield group plans. 3. Group practice and other group prepayment plans. 4. Federal government plans or programs. This includes Medicare. 5. Other plans required or provided by law. This does not include Medicaid or any benefit plan like it that, by its terms, does not allow coordination. 6. No Fault Auto Insurance, by whatever name it is called, when not prohibited by law. Allowable Charge. For a charge to be allowable it must be a Usual and Reasonable Charge and at least part of it must be covered under this Plan. In the case of HMO (Health Maintenance Organization) plans: This Plan will not consider any charges in excess of what an HMO provider has agreed to accept as payment in full. Also, when an HMO pays its benefits first, this Plan will not consider as an allowable charge any charge that would have been covered by the HMO had the Covered Person used the services of an HMO provider. In the case of service type plans where services are provided as benefits, the reasonable cash value of each service will be the allowable charge. Automobile Limitations. When medical payments are available under vehicle insurance, the Plan shall pay excess benefits only, without reimbursement for vehicle plan deductibles. This Plan shall always be considered the secondary carrier regardless of the individual's election under PIP (personal injury protection) coverage with the auto carrier. Benefit Plan Payment Order. When two or more plans provide benefits for the same allowable charge, benefit payment will follow these rules. COORDINATION OF BENEFITS...Continued ~ 1. Plans that do not have a coordination provision, or one like it, will pay first. Plans with such a provision will be considered after those without one. 2. Plans with a coordination provision will pay their benefits by the following rules, up to the Allowable Charge: a. The benefits of the plan which covers the person directly (that is, as an employee, member or subscriber) ("Plan A") are determined before those of the plan which covers the person as a dependent ("Plan B"). Special Rule. If: (i) the person covered directly is a Medicare beneficiary, and (ii) Medicare is secondary to Plan B, and (iii) Medicare is primary to Plan A (for example, if the person is retired), THEN Plan B will pay before Plan A. b. The benefits of a benefit plan which covers a person as an Employee who is neither laid off nor retired are determined before those of a benefit plan which covers that person as a laid off or Retired Employee. The benefits of a benefit plan which covers a person as a Dependent of an Employee who is neither laid off nor retired are determined before those of a benefit plan which covers a person as a Dependent of a laid off or Retired Employee. If the other benefit plan does not have this rule, and if, as a result, the plans do not agree on the order of benefits, this rule does not apply. c. The benefits of a benefit plan which covers a person as an Employee who is neither laid off nor retired or a Dependent of an Employee who is neither laid off nor retired are determined before those of a plan which covers the person as a COBRA beneficiary. d. When a child is covered as a Dependent and the parents are not separated or divorced, these rules will apply: (i) The benefits of the benefit plan of the parent whose birthday falls earlier in a year are determined before those of the benefit plan of the parent whose birthday falls later in that year; (ii) If both parents have the same birthday, the benefits of the benefit plan which has covered the patient for the longer time are determined before those of the benefit plan which covers the other parent. e. When a child's parents are divorced or legally separated, these rules will apply: (i) This rule applies when the parent with custody of the child has not remarried. The benefit plan of the parent with custody will be considered before the benefit plan of the parent without custody. COORDINATION OF BENEFITS...Continued (ii) This rule applies when the parent with custody of the child has remarried. The benefit plan of the parent with custody will be considered first. The benefit plan of the stepparent that covers the child as a Dependent will be considered next. The benefit plan of the parent without custody will be considered last. (iii) This rule will be in place of items (i) and (ii) above when it applies. A court decree may state which parent is financially responsible for medical and dental benefits of the child. In this case, the benefit plan of that parent will be considered before other plans that cover the child as a Dependent. (iv) If the specific terms of the court decree state that the parents shall share joint custody, without stating that one of the parents is responsible for the health care expenses of the child, the plans covering the child shall follow the order of benefit determination rules outlined above when a child is covered as a Dependent and the parents are not separated or divorced. f. If there is still a conflict after these rules have been applied, the benefit plan which has covered the patient for the longer time will be considered first. (3) Medicare will pay primary, secondary or last to the extent stated in federal law. When Medicare is to be the primary payer, this Plan will base its payment upon benefits that would have been paid by Medicare under parts A and B, regardless of whether or not the person was enrolled under both of these parts. (4) If a Plan Participant is under a disability extension from a previous benefit plan, that benefit plan will pay first and this Plan will pay second. Claims Determination Period. Benefits will be coordinated on a Calendar Year basis. This is called the claims determination period. Right to Receive or Release Necessary Information. To make this provision work, this Plan may give or obtain needed information from another insurer or any other organization or person. This information may be given or obtained without the consent of or notice to any other person. A Covered person will give this Plan the information it asks for about other plans and their payment of allowable charges. Facility of Payment. This Plan may repay other plans for benefits paid that the Plan Administrator determines it should have paid. That repayment will count as a valid payment under this Plan. COORDINATION OF BENEFITS...Continued ~ Right of Recovery. This Plan may pay benefits that should be paid by another benefit plan. In this case this Plan may recover the amount paid from the other benefit plan or the Covered Person. That repayment will count as a valid payment under the other benefit plan. Further, this Plan may pay benefits that are later found to be greater than the allowable charge. In this case, this Plan may recover the amount of the overpayment from the source to which it was paid. GENERAL DEFINITIONS "Actively Employed" means the active expenditure of time and energy in the service of the employer, except that an employee shall be deemed actively at work on each day of a regular paid vacation, or on a regular non-working day, on which he is not disabled provided he was actively at work on the last preceding regular work day. 2. "Adopted Children Coverage". In compliance with the Omnibus Budget Reconciliation Act of 1993, a child under the age of eighteen (18), placed in an employee's home for adoption on August 10, 1993 or later, shall have the same rights of enrollment as a natural child. "Placement for adoption" means that the employee has assumed the legal obligation for the total or partial support of the child to be adopted in connection with adoption proceedings. Any pre-existing condition limitation shall not apply to such child. 3. "Cosmetic Procedure" means a procedure performed solely for the improvement of a Covered Person's appearance rather than for the improvement or restoration of bodily function. 4. "Creditable Coverage" means coverage of an individual under another group health plan, an individual health insurance policy, COBRA, Medicare, Medicaid or a public health program as defined in 92 CFR # 146.113 (a), that is not followed by a Significant Break in Coverage. 5. "Dependent" is defined under the section "Eligibility-Dependents". 6. "Disability or Disabled" shall mean the inability to perform the normal duties and functions of one's occupation. A disability status must be verified by the individual's physician. "Total disability or Totally Disabled" means the complete and total inability to perform the normal duties of one's occupation or of a similar occupation for which the individual is reasonably capable due to education and training. A disabled dependent is one which renders a dependent incapable of engaging in the normal activities of a person in good health of the same age and sex. 7. "Employee" means a person directly employed in the regular business of and compensated for service by the employer and classified by the Employer as an employee. An employee of the subsidiaries and affiliates of the employer shall be deemed an employee of the Employer and service with any such subsidiaries and affiliates in all matters pertaining to this Plan and every act done by, agreement made with or notice given to the employer shall be binding on such subsidiaries and affiliates. 8. "Employer" means the company identified in the General Information section as the Plan Sponsor and any affiliates and subsidiaries of the Plan Sponsor which are listed in the General Information section. 9. "FRIBA" refers to 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. GENERAL DEFINITIONS...Continued 10. "Experimental and Investigative" means services and supplies which are experimental or investigational in nature; meaning any treatment, procedure, facility, equipment, drugs, drug usage, devices or supplies not generally recognized as accepted medical practice and including any such services or supplies requiring federal or other governmental agency approval not granted at the time services were rendered. 11. "Extended Care Facility" means an institution which is licensed as an extended care facility or long-term facility by the state in which it is located, and which is qualified to participate in and eligible to receive payments under and in accordance with the provisions of the Medicare Program, but which is not, other than incidentally, a home for the aged or a domiciliary care home. 12. "Full-Time Student" means a Participant's dependent child who is enrolled in and regularly attending 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. If a full-time student subsequently drops below the minimum number of credit hours during a semester, he will be covered until the beginning of the next semester. A dependent enrolled in school will be covered until the beginning of the next semester unless graduation occurs. 13. "Health Insurance Portability and Accountability Act (HIPAA) of 1996" also known as the Kennedy-Kassebaum Act, HIPAA intends to provide better portability of employer-sponsored insurance from one job to another, thus preventing "job 'ter lock", or the need to stay in the same position because of its health care benefits. The Act also outlaws excluding people from obtaining health insurance because of pre-existing conditions and offers tax deductions to those who are self-employed to help pay for their health benefits. It is widely viewed as a first step in the federal initiative to significantly reduce the number of uninsured people in this country. 14. "He/His/Him" whenever a personal pronoun in the masculine gender is used, it shall be deemed to include the feminine also, unless the context clearly indicates the contrary. 15. "Hospital" means an institution legally operating as a hospital which: a. is mainly engaged in providing inpatient medical care for diagnosis and treatment of an injury or illness, and routinely makes a charge for such care; b. is supervised by a staff of physicians on the premises; c. provides on the premises 24 hour nursing services by graduate registered nurses; and d. is operated with organized facilities for operative surgery on the premises, except that benefits for ~. psychiatric disorders; ~~. mental or nervous conditions; iii. alcoholism; iv. drug dependency; or ~.- GENERAL DEFINITIONS...Continued v. the medical complications of mental illness or mental retardation; shall not be denied because of confinement in a particular facility if the facility has a bona fide arrangement with a hospital that has facilities for operative surgery on the premises. In no event will "Hospital" include any institution: a. which is run mainly as a rest, nursing or convalescent home or residential treatment center; b. for which any part is mainly for the care of the aged; or c. which is engaged in the schooling of its patients. 16. "Illness" means a sickness or disease, including mental disease, which requires treatment by a Physician. Illness includes pregnancy and complications of pregnancy with respect to a female employee and a dependent spouse. However, elective abortions are not included unless the life of the mother would be in danger if pregnancy continued. 17. "Injury" means a condition caused by accidental means which results in damage to the Covered Person's body from an external force. 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. 18. "Inpatient" means a person who is admitted to a Hospital and who is confined to bed for health care. 19. "Late Enrollee" means an individual who is enrolled for coverage after the initial eligibility date. 20. "Lifetime" means while covered under this Plan. 21. "Maternity" means pregnancy, childbirth, miscarriage, or complications arising therefrom. 22. "Medical Necessity" means medically necessary services or supplies provided by a hospital, physician or other provider to identify or treat an illness or injury and which, as determined by the Plan Supervisor, are: a. Consistent with the symptom or diagnosis and treatment of the condition, disease, ailment or injury; b. Appropriate with regard to standards of good medical practice; c. Not primarily for the convenience of the patient, his physician, or other provider; GENERAL DEFINITIONS...Continued ~w° THE FACT THAT A PHYSICIAN MAY PRESCRIBE, ORDER, RECOMMEND, OR APPROVE A SERVICE OR SUPPLY DOES NOT, OF ITSELF, MAKE IT MEDICALLY NECESSARY OR MAKE THE CHARGE AN ALLOWABLE EXPENSE, EVEN THOUGH IT IS NOT SPECIFICALLY LISTED AS AN EXCLUSION. 23. "Non-PPO Provider" means a legally, licensed, health care provider which provides, within the scope of its authority, services and supplies that are covered under this Plan but which has not entered into a contract with the Preferred Provider Organization. 24. "Nurse" means a graduate of an accredited school of nursing who holds current licensure in the state in which he/she practices. 25. "Nurse-Midwife" means a duly licensed, registered graduate, professional nurse, who is: ~„- a. Certified as aNurse-Midwife, according to the requirements of the American College of Nurse-Midwives; and b. Recognized by the law of the state in which treatment is received. 26. "Outpatient" means a person who is not admitted as an In-patient but who receives health care. 27. "Physician" means a licensed Doctor of Medicine (M.D.). Including but limited to: a licensed Doctor of Dental Surgery (D.D.S.), a licensed Doctor of Podiatry (D.P.M.), a licensed Doctor of Osteopathy (D.O.) or a Licensed Optometrist (O.D.), practicing in his respective field and performing a procedure listed in the Reasonable and Customary profiles. "Physician" does not include interns, residents, fellows or others enrolled in a residency training program. 28. "PPO Provider" means a legally, licensed, health care provider which provides, within the scope of its authority, services that are covered under this Plan and which has entered into a contract with the Preferred Provider Organization. 29. "Qualified Beneficiary" is the spouse and other dependents of the Employee who are covered under this plan at the time a qualifying event occurs and any child born to or placed for adoption with the Employee during extended coverage elected by the Employee after a qualifying event. 30. "Qualified Medical Child Support Order". A child, who is the subject of a "Qualified Medical Child Support Order" as described in Social Security Act Section 1908 and as added by the Omnibus Budget Reconciliation Act of 1993, Section 13822, shall be considered to be an "alternate recipient" under the Plan having the same rights of enrollment as an eligible dependent GENERAL DEFINITIONS...Continued 31. "Reasonable and Customary" charges shall be defined as a fee that is within a given percentile of the range of usual charges for a given service or supply billed by most physicians or providers with like training and experience within a geographical area. 32 "Second Surgical Opinion" shall mean one which is provided by a board certified surgeon in active practice in the field of medicine pertinent to the proposed surgery. The Consulting Surgeon cannot be housed with or in professional association with the physician originally proposing the surgery. 33. "Significant Break In Coverage" means a period of 63 (or more) consecutive days without Creditable Coverage. Periods of no coverage during an HMO affiliation period or a waiting period shall not be taken into account for purposes of determining whether a Significant Break in Coverage has occurred. 34. "Special Enrollee" means an employee or dependent who is entitled to and requests Special Enrollment within 30 days of losing other health coverage; or for a newly acquired dependent, within 30 days of the marriage, birth, adoption or placement for adoption. 35. "Well-Baby Care" means medical treatment, services or supplies rendered to a child or newborn solely for the purpose of health maintenance and not for the treatment of an illness or injury. ERISA RIGHTS ``~"' Employee's in this Plan are entitled to certain rights and protection under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA specifies that all Plan participants shall be entitled to: 1. Examine, without charge, at the Plan Administrator's office, all Plan documents and copies of all documents filed by the Plan with the U. S. Department of Labor, such as detailed annual reports and Plan description. 2. Obtain copies of all Plan Documents and other Plan information upon written request to the Plan Administrator. The Plan Administrator may make a reasonable charge for the copies. 3. Receive a summary of the Plan's annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report. In addition to creating rights for Plan participants, ERISA imposes obligations upon the individuals who are responsible for the operation of the Plan. The individuals who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so prudently and in the interest of the Plan participants and beneficiaries. No one, including the Employer or any other person, may fire a participating Employee or otherwise discriminate against a participating Employee in any way to prevent the Employee from obtaining a benefit under the Plan or from exercising his rights under ERISA. If a participant's claim for a benefit is denied, in whole or in part, the participant must receive a written explanation of the reason for the denial. The participant has the right to have the Plan review and reconsider his claim. Under ERISA there are steps that the participant can take to enforce the above rights. For instance, if the participant requests materials from the Plan and does not receive them within thirty (30) days, he may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and to pay the participant up to $100 a day until he receives the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator. If it should happen that the Plan fiduciaries misuse the Plan's money, or if a participant is discriminated against for asserting his rights, he may seek assistance from the U. S. Department of Labor, or may file suit in a federal court. The court will decide who should pay court costs and legal fees. If the participant is successful, the court may order the person sued to pay these costs and fees. If the participant loses, the court may order him to pay these costs and fees, for example, if it finds the claim or suit frivolous. If you should have any questions about this statement or about your rights under ERISA, you should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210. Kerr County 'err IMPLEMENTATION & TRANSITION OUTLINE PHASE PROJECTED DATE 1. Contract Award Day 1 2. Completion of: •Administration Contract Day 5 •Deposit Check 3. Human Resources/ Day 5 Benefits Personnel Orientation and Set-up 4. Benefit Booklet/Plan Document Day 10 First Draft Available 5. Benefit Booklet/Plan Document Day 15 Second Draft Available 6. Benefit Booklet/Plan Document Day 20 Final Approval for Printing 7. Receipt of Eligibility Listing Day 15 8. Delivery of Benefit Booklet for Enrollment Meetings Distribution Prior to Effective Date 9. ID Cards Ready for Distribution Prior to Effective Date 10. Employee Meetings Begin As Agreed upon with HR 11. Plan Year Begins January 1, 2008 12. Dedicated, Customer Service January 1, 2008 Representative(s) On Phone and Data Line 13. Human Resources Personnel January 15, 2008 On-line with Claims System *"All dates subject to client approval and may be altered at client request** `~-r-r~~r~® FARA BENEFIT SERVICES, INC. V .~ ~ V ~ ~ 0 h rte, ^ 0 ~ ~ Q ~~ ~- ~- ~ ~ ~~ ~ ~ v i ~ ~ ~ ~ ~ z ~_~,~ ~ =~o~ ~ ~ao_~ ~ ~~~~ ,~ ~ ~ ~ V ~ . . . 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W Z '. ~. 3 ~ CO ~ A O ~ O '. ~ ~ . ~ ~' CA J Q J y'. 41 ~ 1~r1 ~ N J M y ~ pO~ U C O _ O ~ p n ~ E o ~ ~ ~ ~ 4 C W O ~ w ~ y F ~ ~ ~ ~ a ~ W LL'..LL N ~ ~ ~ LL..LL D a \J~ O ~~ E 0 M N d LL 7 N C Q M N C ~ a 0 ~ ~ Ur 0 t ~~~ N ~ 1 ` = F m8€ ti Y O ~ U O ~~~~ oi~;~~ a U d R L m ~ ~ L H w a `o d w C U C a r~- 4 ~~. !4 i# `ti1111r~ J ~~ ~~ J • x -I ~I a ~I a S D N a m +ir C C as al ,t i ~ T.. 4 L ~ ~ ~~ ~g"'1 ~ y~ 4 h, g s g u ~ '~ $$~ ,ti x of ~' ~ o 4 ~~s ~~~ y, ~~a~ ~gP A_.ua N d ~ U ~a~ oa!~ 4 G ~ T ~ FiiRR. WELLNESS COACHES USA OUTCOMES ANALYSIS AUGUST, 2007 FARA BENEFIT SERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WWW.FARA.COM ~Ff1riH. Table of Contents Section 1: Introduction ............................................................................................. 1 Section 2: Study 1: Coaching Activity ...................................................................... 2 Section 3: Study 2: Changes in Health Risk Factors ............................................ 10 FP.RA BENEFIT SERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ W W W.FARA.COM ~FHriii. SECTION 1: INTRODUCTION Wellness Coaches USA is a team of health care professionals strategically deployed directly to workplaces throughout America to personally coach employees, each according to their own needs, through the stages of change to improved health behaviors and health status. That is, "we take wellness to the people"...right where they spend the majority of their waking hours...the workplace. We do so by seamlessly and synergistically integrating personal coaching and workplace deployment to create the most powerful workplace wellness model available. This means that, unlike the telephonic and internet platforms, or group seminar based models, utilized by virtually all other wellness vendors, we take wellness coaching directly to employees. We don't wait for them to come to us, or hope they'll engage with us telephonically or through the internet. We go to them where they work, one-on-one and face-to-face, to proactively and personally engage them in our "coach powered" workplace wellness process...providing them with all of the essential educational, promotional and supportive elements of wellness. As a result of the combined power of personal coaching to improve health and lives, and of workplace deployment to stimulate participatian, our wellness outcomes are consistently outstanding, and include: • The highest levels of employee participation available in the wellness industry X95%). • Best-in-class improvement in employee population health risks -across the board. Please see Sections 2 and 3 of this presentation for studies (utilizing data compiled from our Coaching Database and HRA Aggregate Client Reports) which demonstrate these results. These studies are based upon actual results from a broad cross section of our customers. Section 2 presents Coaching Activity statistics from our Coaching Database (including employee participation and coaching interactions), and Section 3 presents Changes in Health Risk Factors and the "Stages of Change" as measured by year over year HRA Aggregate Client Reports. 725 Skippack Pike, Suite 300. Blue Bell, PA 19422 • 866-894-1300 . fax 215-628-3262 • www.WellnessCoachesUSA.com FARA BENEFI7ISERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8386 F ~ 985 624 3354 ~ WWW.FARA.COM ~FRRR. SECTION 2: COACHING ACTIVITY A. Study Parameters • Data -Compilation of all interaction data is from our Coaching Database. • # and Size of Clients/Locations -Study covers 18 clients, with 29 different client locations, in 13 states. Clients have at least 200 employee lives and the lives per client location range from 100 to 3,500. • Years of Service - We have provided service to the 29 client locations an average of 2.5 years; years of service per location range from 1 year to 6 years. • Employee Lives - 13,600 employee lives; average lives is 469 per client location. • Business Classifications - Covers broad cross-section of business classifications, including manufacturing, transportation, office, bottling, distribution, construction and government. • # of Wellness Coaches - 23.25 full time equivalents included in study. • Lives per Coach -The average number of lives each Coach services is 585. • Date Range - 12 months; July 1, 2006 to June 30, 2007. 725 Skippack Pike. Suite 300, Blue Bell, PA 19422 • 866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARA BENEFIQSERUICES 1625 W.CAUSEWAY APPROACH I MANDEVILLE, LA 70471 P ( 985 624 8383 T 1 800 259 8388 F 1985 624 3354 I WWW.FARA.COM ~FRRR. SECTION 2: COACHING ACTIVITY (continued) B. One-on-one Coaching Interactions # of Eli ible Em to ees 13,50#} # of Full Time Wellness Coaches 23.25 Proactive Coaching Totals Health Promotion Information 64,429 Injury Prevention Education 32,898 Job Coaching 9,322 Safety Observations & Consults 5,015 Stretch Leader 4 015 ~ Total 113,6T9 Personal Risk Coaching Wellness Consults 49,023 Musculoskeletal Disorder Consults 7 343 Total 56,386 Total One-on-One Interactions 1711,045 Interactions per Eligible EE i2.5 Interactions er Wellness Coach ;_..7,314 725 Skippack Pike, Suite 300, Blue Bell, PA 19422 • 866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARA BENEFI?35ERVICES 1625 W.CAUSEWAY APPROACH ~ MAfVDEVILLE, LA 70471 P ( 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ W W W.FARA.COM ~ FARR. SECTION 2: COACHING ACTIVITY tcontinued) C. Coaching Trends C1: Employee Participation # Participating # Coaching % of Employees Em to ees Interactionst'~ Partici atin c2) Proactive Coaching 13,328 113,679 98% Personal Risk Coaching Wellness Consults 9,073 49,023 67% MSD Consults 1,895 7` 343 14% Total -Wellness or MSD 9,431 56,366 69% Health Testing Blood Pressure 5,041 1:9,026 37% Body Composition 4 070 10,,166 30% Total - BP or Body Comp 6,481 29;192 48% ~'~ Represents number of interactions for participating employees. c2> Percentage employee participation calculated using an average eligible employee count of 13,600. 725 Skippack Pike. Suite 300, Blue Bell, PA 19422 • 866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARR BENEFI~,SERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WWW.FARA.COM ~ FRr3R. SECTION 2: COACHING ACTIVITY (continued) C2: # Proactive Coaching Interactions for Participating Emplovees Em to ees with: # EE's 1 - 3 Interactions 5,071 4 - 6 Interactions 2,925 7 - 9 Interactions 2,677 10 or more Interactions ..4,143 Total Partici atin Em to ees 13,328* * 8.5 Proactive Coaching Interactions per Participating Employee C3: # Personal Risk Coaching Interactions for Participating Emplovees Em to ees with: # EE's 1 - 3 Interactions 4,801 4 - 6 Interactions 1,934 7 - 9 Interactions 1,024 10 or more Interactions ...1,672 Total Partici atin Em to ees 9,431 * 6.0 Personal Risk Coaching Interactions per Participating Employee 725 Skippack Pike, Suite 300, Blue Bell, PA 19422 • 866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARA BENEF1fJSERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WWW.FARA.COM •Fiirlfi. SECTION 2: COACHING ACTIVITY (continued) D: Most Common Wellness Coaching Topics Rank Wellness Topics 1 Blood Pressure 2 Conditioning/Exercise 3 Body Comp 4 Nutrition 5 Weight Control 6 Hydration 7 Cholesterol 8 Tobacco Use 9 Stress 10 Personal Counseling 11 Stretching 12 Cardio/Heart Disease 13 Special Programs 14 Nutritional Supplements 15 NSAIDS/Medications 16 Medical Procedure Info 17 Diabetes 18 Fatigue/Sleep 19 HRA 20 Cold/Flu 21 Fitness Center Consult 22 Men's Health 23 Women's Health 24 Cancer 25 Blood Work 26 Life on the Road 27 Arthritis 28 Footwear 29 Allergies 30 Ergonomics 31 Alcohol 32 Headaches 33 Mental Health 34 RICE/Moist Heat 35 GI Disorders 36 Depression 37 Health Care Credit 38 Healthcare Benefits 39 Skin Care 40 Pregnancy 41 Heartburn/Acid Reflux 42 Weather Safety 43 Wound Care 44 Bronchitis/Emphysema 45 Dizziness 725 Skippack Pike. Suite 300, Blue Bell, PA 19422 • 866-894-1300 • fax 215-628-3262 • w~vw.WellnessCoachesUSA.com FARA BENEFI~SERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ( 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WWW.FARA.COM • Fiir3R. SECTION 2: COACHING ACTIVITY (continued) E. Most Common Musculoskeletal Disorder Coaching Topics by Bodv Part Rank Bodv Part 1 Lumbar 2 Shoulder 3 Knee 4 Foot 5 Wrist 6 Elbow 7 Ankle 8 Lower Leg 9 Neck 10 Fingers 11 Hand 12 Hip 13 Thoracic 14 Cervical 16 Thigh 17 Chest 18 Forearm 19 Abdomen 20 Eye 21 Toes 22 Ear 23 Upper Arm 24 Sacral 25 Groin 725 Skippack Pike, Suite 300, Blue Bell, PA 19422 • 866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARA BENEFITjSERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ W W W.FARA.COM ~ FRRR. SECTION 2: COACHING ACTIVITY (continued) F. Selected Health Improvement "Highlights" The following information is only based upon employees we have tested and retested during the 12 month period covered by this study. The information does not take into consideration employees who have made improvements but have not reported their successes to their Wellness Coaches during this period. 1. Nutrition/Exercise/VVeight Control • Developed personalized Nutrition plans and/or had coaching interactions regarding improving Nutrition related behaviors with 3,264 employees (24% of the eligible employee population). • Developed personalized Exercise plans and/or had coaching interactions regarding improving Exercise related behaviors with 3,808 employees (28% of the eligible employee population). • Developed personalized Weight Loss plans and/or had coaching interactions discussing various Weight Loss options with 4,080 employees (30% of the eligible employee population). Of the 4,080 employees: 0 39%, or 1,591 employees, lost weight, with 756 losing 1-4 lbs., 397 losing 5- 91bs., and 438 losing 10 lbs. or more. ^ Average weight loss was 9.8 pounds per employee ^ Total weight loss was 15,530 lbs. 2. Blood Pressure/Heart Disease • Had coaching interactions regarding Heart Disease with 816 employees (6% of the eligible employee population). • Performed a Blood Pressure Screening and/or had coaching interactions regarding Blood Pressure with 5,304 employees (39% of the eligible employee population). Of the 5,304 employees: 0 25%, or 1,326 employees, reduced their Blood Pressure from above 140/90 (High Risk) to either Borderline or Low Risk levels. 725 Skippack Pike. Suite 300, Blue Sell, PA 19422 • 866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARA BENEFIBSERVIGES 1625 W.CAUSEWAY APPROACH ~ MANDEViLLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WWW.FARA.COM • Fp~FI. 3. Tobacco Use • Had Tobacco Cessation coaching interactions with 850 employees (representing 25% of the current tobacco users). Of the 850 employees: 0 32%, or 272 employees self-reported quitting 4. Stress • Had Stress reduction/management coaching interactions with 952 employees (7% of the eligible employee population). Referred many of these employees to employer sponsored EAP programs or community resources. 725 Skippack Pike. Suite 300, Blue Bell, PA 19422 .866-894-1300 • fax 215-628-3262 • Www.WellnessGoachesUSA.com FARA BENEFI~SERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ( 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WWW.FARA.COM ~ FARR. SECTION 3: CHANGES IN HEALTH RISK FACTORS & "STAGES OF CHANGE" A. Studv Parameters • Data -Compiled from HRA Aggregate Reports for clients in the study (Trale is the HRA vendor). • # and Size of Clients/Locations -Study covers 8 customers, with 11 different locations in 10 states. Clients have at least 250 employee lives and the lives per client location range from approximately 150 to 1,000. • Years of Service - We have provided service to the 11 client locations an average of 2.25 years; years of service per location range from 1.5 years to 3.5 years. • Employee Lives - 4,000 employee lives; an average of approximately 364 lives per client location. • HRA Participation -Approximately 3,500 employees completed the HRA in Year 1, and approximately 3,000 in Year 2. No incentives were used as part of this study. • # Wellness Coaches - 10 full time equivalents. • Lives per Coach -Approximately 400 employee lives per coach. • Business Classifications -Covers broad cross section of business classifications, including manufacturing, transportation, office, bottling, distribution and heavy machinery. • Date Range -Analysis is based upon a year over year comparison of HRAs. Base year HRAs were generally administered from 2004 through 2006, and comparison year HRAs from 2005 through mid 2007. Employers in the study group were limited to only those customers who were committed to offering their employees annual HRAs as an integral part of their wellness process, and who have been our customers long enough to permit the administration and scoring of year over year HRAs. i25 Skippack Pike. Suite 300, Blue Bell, PA 19422 • 866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARR BENEFt}'~ERVICES 1625 W.CAUSEWAY APPROACH ~ MANOEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ W W W.FARA.COM •Fiiaii. SECTION 3: CHANGES IN HEALTH RISK FACTORS (continued) B. HRA Results: Improvement in Health Risk Factors Baseline Current Total Employees Completing HRA 3,500 3,000 S ecific Risk Factors Baseline ___ Current % Im rov. Exercising less than 2 days per week 43.7% 34.3% 22% That are Obese (BMI >30) 35.3% 34.0% 4°l°< That are at High Risk for Stress 32.5% 26.7% fi8% That are at High Risk for Depression 10.4% 7.1% 32°to With High Risk Nutrition Behaviors 67.0% 61.1% 9% With High Risk Alcohol Use 13.7% 8.0% 42% At High Risk for Diabetes 31.1% 24.9% 20% At High Risk for Drinking and Driving 12.5% 7.1 % 43% That are Current Tobacco Users 26.6% 24.4% 8% HRA Outcome Analysis: As reflected above, the percentage of employees at risk for the various specific risk factors measured by the HRA analyses declined in every risk category, with the reduction in risk ranging from approximately 4% to 43%. Though certain risk categories have a more profound impact upon employee healthfulness than others, the average reduction across all categories was approximately 22%. 725 Skippack Pike. Suite 300, Blue Bell, PA 19422 • 866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARA BENEFt~~ERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WW W.FARA.COM ~ FRRR. SECTION 3: CHANGES IN HEALTH RISK FACTORS (continued) C. HRA Results: Stages of Change Analysis Sta es of Chan a Anal sis Baseline vs. Current Readiness to: Baseline Current Readiness to: Baseline Current Improve Physical Activity Maintain Healthy Nutrition A. Contemplation Stages 30.5% 28.4% A. Contemplation Stages 33.4% 29.9% B. Preparation 39.1 % 24.9% B. Preparation 36.7% 22.5% C. Action 10.4% 15.2% C. Action 12.0% 18.2% D. Maintenance 20.0% 31.5% D. Maintenance 17.9% 29.4% Maintain Healthy Weight Reduce Alcohol Use A. Contemplation Stages 36.1% 30.6% A. Contemplation Stages 66.9% 50.4% B. Preparation 34.6% 20.4% A. Preparation 7.0% 5.2% C. Action 9.7% 15.7% B. Action 3.5% 4.8% D. Maintenance 19.6% 33.3% C. Maintenance 22.6% 39.6% Improve Stress Levels Reduce Tobacco Use A. Contemplation Stages 45.1 % 38.5% A. Contemplation Stages 59.1 % 57.0% B. Preparation 30.0% 15.0% B Preparation 19.2% 12.5% C. Action 6.3% 10.5% C. Action 4.9% 4.9% D. Maintenance 18.6% 38.0% D. Maintenance 16.8% 25.6% Stages of Change Definitions: (Note -employees in categories B, C and D below are considered to be "participating in the change process" and in categories C and D, "actively engaged in the change process") A. Contemplation Stages -Means not yet ready to make behavior changes. B. Preparation -Means ready to change and planning the behavior change within the next 30 days. C. Action -Means effort to improve health behavior have been occurring for 6 months or less. D. Maintenance -Means positive behavior change has been occurring for 6 months or more. Stages of Change Outcome Analysis: As reflected above, employees' attitudes and behaviors regarding "change" improved meaningfully in every health risk category measured, with the number of employees "participating in the change process" increasing by an average of approximately 13%, and the number of employees "actively engaged in the change process" increasing by an average of 63%. 725 Skippack Pike, Suite 300, Blue Bell, PA 19422 •866-894-1300 • fax 215-628-3262 • www.WellnessCoachesUSA.com FARA. BENEFI~~ERVICES 1625 W.CAUSEWAY APPROACH I MANDEVILLE, LA 70471 P ( 985 624 8383 T 1 800 259 8388 F I 985 624 3354 I WWW.FARA.COM FARA Benefit Services Customer Service Phone Log ~ Manager ~r MON TUES WED THUR FRI WEEKLY 7/9/07 7/10/07 7/11 /07 7/12/07 7/13/07 ROSE 2 10 10 17 42 81 DBC 74 53 0 0 0 127 Marion 38 31 47 39 26 181 Marilyn 0 0 0 0 0 0 CC 94 83 98 91 97 463 JGM 62 45 23 130 PJF 89 93 88 73 75 418 WVR 74 77 90 84 107 432 KD 59 89 83 87 0 318 Total 492 481 439 391 347 2150 TIME ACCEPTED CALLS ANSWERED CALLS ABANDONED CALLS 8:00-9:00 33 32 1 9:00-10:00 54 51 3 10:00-11:00 64 64 0 11:00-12:00 36 34 2 12:00-1:00 36 36 0 1:00-2:00 38 38 0 2:00-3:00 46 46 0 3:00-4:00 29 29 0 4:00-5:00 18 17 1 TOTAL 354 347 7 7/13/2007 TIME AVG ANS TIME CALLS 8:00-9:00 :08 9:00-10:00 :23 10:00-11:00 :14 11:00-12:00 :12 12:00-1:00 :21 1:00-2:00 :39 2:00-3:00 :22 3:00-4:00 :09 4:00-5:00 :07 ABANDON WAIT TIME CALLS :04 :02 :00 :28 :00 :00 :00 :00 :28 Confidential 7/23/2007 ~~ ~~~~• Bid Spreed Sheet Self-Funded Welfaze Plan Stop-Loss Proposal Comparison Reinsurance Carrier Semp Fee *: $ 7,000.00 -waived Waived Waived Waived Waived Renewal Fee N/A N/A N/A N/A Run-hJRan-Out Administration Fee Waived Waived Waived Waived Estimated run out claim liabililty $221,201.67 $22L541.37 $212,886.37 $213,213.73 Specific Lifetittte Maxittwm 1,000,000 1,000,000 1,000,000 1.000,000 Aggregate Plan Year Annual Maximum 1,000,000 1,000,000 1,000,000 1,000,000 * Note: These rates are not included in totals below. STOP-LOSS BASIS Number of Employees: 165 165 165 165 Number of Spouse Only l l 11 11 1 l Number of Ctdld(ren) only 15 1 S 15 15 Number of Family Units 10 10 10 10 Number of Dependent Units: 36 36 36 36 Specific Deductible: $ SQ000 $ 60,000.. $ SQ000 $ 60,000 Specific Contract 24/12 24/12 15/12 15/12 Specific Contract Includes Medical & RX Medical & RX Medical & RX Medical & RX Aggregate Contract: 24/12 24/12 15/12 15/12 Maximum Aggregate Run Tn No Limit No Limit No Litnil No Limit A e ate Contract Includes Medical & RX Medical & RX Medical & RX Medical & RX MONTHLY FIXED COSTS Specific Premium Ett>ployee: $75.40 $65.48 $72.44 $62.91 Employee and Spouse $150.80 $130.96 $144.88 $125.82 Employee and Child(ren) $120.64 $104.76 $115.91 $100.66 Dependent Unit: $106.89 $92.83 $102.69 $89.18 pamily: $226.20 $196.43 $217.33 $188.73 Composite: $90.41 $78.51 $86.86 $75.43 Aggregate Premium Corr~tosite: $4.46 $4.97 $4.28 $4.77 MontlilyCap $896.50 $999.0() $860.25 $958.75 Administration( all fees per unit per month) Claims Cost PerEmployee: $13.50 $13.50 $13.50 $13.50 Claims Cost Per Dependent : Included Included Included Included Utilization Review per EE $2.00 $2.00 $2.00 $2.00 PPO Network Per EE: $4.50 $4.50 $4.50 $4.50 Rx Program Fees(Describe) None None None None COBRA per EE $1.00 $L00 $1.00 $1.00 HIPAA Per EE N/C N/C N/C N/C Broker Fee: $2.00 $2.00 $2.00 $2.00 Cafeteria Plan FSA Account Per Participant $3.00 $3.00 $3.00 $3.00 Child Care Per Participant Included Included Included Included Debit card expense Included Included Included Included Stan up expense Included in HRA Other Cafeteria Plan Fees: See HRA Section of ro osal HRA/HSA Start up expense $1,500.00 $1,500.00 $1.500.00 $1,500.00 Per Account Fee $4.00 $4.0O $4.00 $4.00 Debit card expense Included Included Included Included Other HRA Plan fees: See HRA Section of ro osal Wellness Plan Cost N/C N/C N/C N/C Disease Management • N/C N/C N/C N/C Dental Dental Adtnin Fee per EFJMth $4.50 $4.50 $4.50 $4.50 Dental Admin Fee per Dep/Mth • Dental Administration ee a lies only to !hose em loyees who are not partici ation in the Grou Health Plan. DenW Network Access Fee N/A N/A N/A N/A Positive Pay Banking System N/A N/A N/A N/A Broker Fee: Total Per Employee: $2.00 $2.00 $2.00 $2.00 Total Per Dependent Unit: N/A N/A N/A N/A ToW Per Farnil Unit: N/A N/:\ N/A N/A AGGREGATE FACTORS E~loyee Only: $426.03 $438.08 $409.32 $420.90 Dependent Unit: $639.87 $651.13 $613.98 $631.36 Patnily. $1,065.90 $1.095.21 $1,023.30 $1.052.26 Composite: $540.48 $555.77 $519.29 $533.98 Attachment Points Monthly: $108.637.08 $111.710.75 $104,376.58 $107,329.83 Aan~; $1,303,645.00 $1,340,529.00 $1.252,519.00 $1,287.958.00 Co osite: TOTAL ANNUAL COSTS Stop Loss Premium $218,060.00 $189,361.OG $209,504.00 $181,935.00 Aggregate Premium $10.758.00 $11.988.00. $10.323.00 $11,505.00 Adntinisuatlon $32,562.00 $32,562.00 $32,562.00 $32,562.00 Adtninistrafion as % of Maximum Annual Cost 2% 2'~0 2% 2% UR, PPQ Rx, Broker, and all other $22.914.00 $22,974.00 $22.914.00 $22,914.00 Total Fixed $284,294.00 $256.825.00 $275.303.00 $248,916.00 Expected: $1,327,210.00 $1,329,248.20 $1,277,318.20 $1,279,282.40 Maximune $1,587,939.00 $1,597.354.00 $L527,822.00 $1.536,874.00 t Total Fixed Increase in Cost as percent of current Expected Maximum Notes: Describe covered Disease Management expenses Best's Rating Center -Company Information for Swiss Re America Group Center ~ Industry Research ~ Search Best's Ratings Press Releases Related Products Industry R Regional Country Risk How to Get Rated Contact an Ahalyst ~r ~.+~ View Ratings: Financial Strencrth Issuer Credft Securities Advanced Search Swiss Re America Group (a member of Swiss Re Group A.M.Best #: 18346 Address:175 King Street Armonk, NY 10504 Best's Ratings Pagelofl Other Web Centers: Select One ~j Print this page Assigned to companies that ~~~~~ ~~p have, in our opinion, a superior , ~ ability to meet their ongoing ~ OE'8'T Phone: 914-828-8000 obligations to policyholders. 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Best Worldwide Headquarters, Ambest Road, Oldwick, New Jersey, 08858, U.S.A. http://www3.ambest.corn/ratings/Fu1lProfile.asp?B1=0&AMBNum=18346&A1tSrc=1 &AltNum=&URA... 9/5/2007 c~r•RR~. ~wr•- Kerr County Cost Exhibits Summary of Administrative Services Only Fees Monthl ASO Fees MedicaURx Per EE Per Month $13.50 $13.50 Utilization Review Per EE Per Month $ 2.00 $ 2.00 PPO Network Per EE Per Month $ 4.50 $ 4.50 Broker Fee Per EE Per Month $ 2.00 $ 2.00 Total ASO Fee Per EE Per Month $22.00 $22.00 One-Time Set-Up Fee ~ ~ WAIVED ~ $ 7,000.00 The followin services are included Claim Administration in our administr X ative fees: Dental Administration X $4.50* PPO Access Fee X Pre-admission Review X Concurrent Review X Discharge Planning X High Risk Pregnancy X Second Surgical Option X Large Case Management X $96 /hour Establishment of Banking Arrangements X Hospital Bill Audits X Identification Cards X Enrollment Forms X Claims Forms X Plan Document X SPD Preparation and Printing X Toll Free Inquiry X E-Customer Service X Eligibility Verification X COBRA Administration X $1.00 HIPAA Administration X Check Printing X Bank Reconciliation X Medical Underwriting of Late Applicants X Standard Reports X Status/ClaimsLink (on-line claims access) X WELLNESS NO ADDITION AL COST See NEXT PAG E for services menu Wellness Coaches (Face to Face interaction) X To Be Determined * Dental Administration fee applies only to those employees who are not participation in the Group Health Plan. September 4, 2007 Kerr County c~r•A~A. Health Fair Services Offered (Minimum 25 Participants) Available Tests: • Blood Glucose • Blood Pressure • Body Fat and/or Body Mass Index (BMI) • Bone Density o Results include "T Factor" Risk Analysis / Requires Bare Feet (no socks or stockings) • Cholesterol and Blood Glucose (Fasting) o Results include LDL, HDL, Triglycerides and Glucose / Requires Fasting with hydration / Finger Stick test - no blood draw required / Minimum of 25 people being tested • H. Pylori o Tests for the presence of bacteria that can cause ulcers / Finger Stick test - no blood draw required ~ / May help reduce the number of "GERD" prescriptions • Individual Test Result Counseling • Aggregate Test Results Report for the Employer o Includes anonymous test results for all participants / With written employee consent, specific results can be shared with the Health Plan and/or TPA • Personalized Wellness Profile o Each participant fills out a confidential Wellness Questionnaire prior to testing o Wellness coaches deliver and discuss results of Wellness •'• Reports include: • o Confidential Individual report mailed to participants home / Identifies Risk Factors based upon test results / Suggestions for Improving Health o Anonymous 50+ Page Executive Summary / Identifies Number of Risk Factors / Reports Number of Participants with each factor We recommend offering health fairs during benefits enrollment and offering a snack tray of fruits and juices since fasting is required for some testing. Charges may be applicable depending on the size of group and aggressiveness of r program chosen and can be passed through as wellness benefit. September 4, 2007 Kerr County Wellness Coaches usA~` Improving health in the workplace ...face to fate Pricing Schedule (Network Partner) # of EE's Min. Recommended Service Fre uenc # Coaching Interactions er Year 0 - 99 4 Hours per Month 210 100 - 199 8 Hours per Month 425 200 - 299 4 Hours per Month 850 300 - 399 8 Hours per Month 1,700 400 - 499 12 Hours per Month 2,500 500 - 599 16 Hours per Month 3,400 600 - 699 20 Hours per Month 4,200 700 - 799 24 Hours per Month 5,000 800 - 899 28 Hours per Month 5,900 900 - 999 32 Hours per Month 6,700 1,000 - 1,099 36 Hours per Month 7,500 1,100 - 1,199 40 Hours er Month 8,400 Start-up Fee = A one time Start-up Fee may apply at the start of our coaching service. Minimum Recommended Service Frequency: Employer engagements at a service frequency below the Minimum Recommended Service Frequency must be approved in advance by a Wellness Coaches USA business development manager. **Be sure to ask your Consultant or FARA Representative about these custom options and the costs that my be associated ** `~rrr September 4, 2007 Kerr County Kerr County ,;; FARA OFFERS A DUPLICATION OF CURRENT BENEFITS WITH THE FOLLOWING MODIFICATIONS: • $150 DECREASE IN ANNUAL DEDUCTIBLE • ~ OTC DRUGS -ZERO ($00.00) CO-PAY -100% COVERED (PLEASE REFER TO THE LIST OF SELECTED MEDICATIONS PROVIDED IN OUR PROPOSAL) ~r •- • •- • -~ • -~ Lifetime Maximums Lifetime Maximum $1,000,000 $1,000,000 Annual Deductible Individual Calendar $ 1,000 $ 2,000 $ 850 / $2,000 Year Deductible Maximum Family $ 3,000 $ 6,000 Deductible Per Calendar Year Out-Of-Pocket Maximum Per Individual $ 2,000 $ 5,000 Per Famil $ 6,000 $15,000 Benefit Percenta a __ Physician's Office $30 Co-payment per 70% Services visit _ RX - Prescri tion Dru s Generic $10 co-pay 50% Non-Brand $20 co-pay Brand $35 co-pay OTC -Over the $ ZERO Co-Pay Counter Drugs * for OTC's 100% Covered on Listed OTC's PLEASE ASK ABOUT FARA'S CUSTOMIZED WELLNESS PLAN FARA Benefit Services, Inc. September 4, 2007 Over The Counter (OTC) Medication Coverage Dear Member, Your employer has elected to cover certain Over The Counter (OTC) medications for you at a $0 COpayas part of your prescription drug benefit plan. OTC medications do not legally require a prescription, but to have OTC medications covered under your prescription drug benefit plan, you must obtain a written prescription from your doctor and present it to a pharmacist to be filled. This document will tell you which OTC medications are covered and how to go about getting a prescription filled for these OTC medications with your prescription drug card. How do I aet an OTC medication filled with my prescription drug card? ~"" 1 ] Tell your doctor that your prescription drug plan covers the OTC medications listed below. 2] Obtain a written prescription from your doctor for the OTC medications below 3] Take the OTC prescription to a pharmacy to have it filled. 4] Tell the pharmacist that your prescription drug plan does offer coverage for OTC medications on the list below. Which OTC medications are covered? Allergy medications: Claritin OTC (10mg) Alavert OTC (10mg) Loratidine OTC (10mg) Gastrointestinal medications: Prilosec OTC (20mg) Pepcid AC OTC (10mg and 20mg) Pepcid Complete OTC (10mg) Zantac OTC (75mg and 150mg) Tagamet HB (200mg) Axid AR (75 mg) 3.~ '_.,~a~-'E 3 ~y~ ~ aY ~.' a ray tE '~i i - '` rxai ~,~ ^?'~,,.- ~ :~- ~ ~ v ~F ~ ~ ~ -,.- ~[~~ z, ~ i ~ Tr r~ ~ ° r"I~ 'tt >r : a r ors k >t« r ~ ~ ~a ~;~ i t rt ee e_~ ~ ~ c i ~'fi"~~ >' 4 ~rzs~. 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'fit ~~$' .k x ~ nth- v ADMINISTRATION PROPOSAL 'i) DataPath Administrative serivices Benefit Administration You Can Depend On Executive Summary For more than 10 years, DataPath Administrative Services (DPAS) has been a leader in the employee benefits arena with a commitment to customer service through creative and cost efficient benefit plan design. We are not just an administration company, but rather an "Employee Benefits Delivery Organization" established to provide employers, agents, brokers, and participants with the most efficient and effective benefit package available. Over the last few years, our focus has been on Consumer Driven Health Plan (CDHP) which can encompass a variety of plan options including Health Savings Accounts (HSA), Health Reimbursement Arrangements (HRA), Medical Expense Reimbursement Plans (MERP), and both General Use and Limited Purpose Flexible Spending Accounts (FSA). When properly designed, a comprehensive CDHP can enhance the value of the employee benefit package while allowing the employer to create and maintain a healthcare budget. We are also a company dedicated to compliance. Many companies view IRS and DOL regulations as "Guidelines" as opposed to law. We do not share that point of view and will work diligently to manage your plan in compliance with all applicable laws. We do this by staying abreast of the latest in regulatory updates by subscribing to the various publications produced by the Employee Benefits Institute of America (EBIA) and maintaining our membership in the Employer's Council on Flexible Compensation (ECFC) where many of our employees are "Certified" and still others are "Instructors". DPAS is your solution if you are looking for a simple Cafeteria Plan connected to a Debit Card to give your participants easy access to their plan or a comprehensive CDHP with multiple options, variable roll-over & spend down provisions, and complex contribution matching programs. We have seen it all and can help you gain control over your healthcare spending and still provide your employee that are affordable and valuable. We look forward to serving you and your employees for years to come. '1rI CDHP Overview Consumer Driven Health Plans come in all shapes and sizes; and DPAS can help design yours. Our experience has helped us to become one of the premier CDHP administrators in our market and we can put that experience to work for you in plan design and consultation, employee education and enrollments, and of course on-going benefit administration. The primary component of any successful CDHP is to establish a goal for the plan. That goal could be the reduction of annual healthcare spending, establishment of a manageable annual budget, or increased appreciation of the benefit package by the employee participants. Without a goal, success of the CDHP can never be achieved. After establishing the goal, then comes plan design and the incorporation of the different plan elements. Will a simple Cafeteria Plan using a Flexible Spending Account meet your goal or will a Health Reimbursement Arrangement need to be incorporated for a successful plan, what about a Health Savings Account? Whatever the situation calls for, DPAS can help. DPAS is the administration company of DataPath, Inc, a leading CDHP Administration Software development company in the country. Using the DPI- Suite, DPAS has the greatest of software systems to support your custom CDHP and deliver services with an army of technical support staff. The best designed plan in the world would be nothing without education and communication, and that is where DPAS incorporates the Resource Service Center (RSC). Through a single secure web portal (www.myRSC.com) your employee will have access to their plan information including claims detail, payment history, debit / credit card transactions, account balances, and even mutual fund investments associated with their Health Savings Account. Best of all, the employer has access too. Reports, documents, and much more is at your finger tips and accessible 24 / 7 / 365. We might be more expensive than some other administration companies, but with the added services, plan functionality, and experience we are a better value. See for yourself what a difference a qualified and experienced benefits administration company can do for you. DataPath Administrative Services 'fir Plan Design Consultation Plan design is the first, and probably most important, step in creating an effective employee benefit program. Each worksite situation is unique, so the key is to design a plan to achieve your specific goals. The options can seem endless, and understanding your needs is the best place to start. Whether you choose plans that are fully-insured, self-insured, company provided, traditional, or consumer-driven, DPAS representatives have proven and effective skills to develop an "employee benefit strategy" that reflects your organizational objectives. For instance, you may want to offer an FSA, HRA, or HSA as a standalone plan. Or you may see the benefit of stacking the plans to include a combination of the three. You may even offer a "menu" of plans from which your employees can choose. Our consultants will complete an analysis of your benefits program to determine how it relates to your total compensation package, philosophy, employee needs, and budget. We will then formulate a plan that provides access to a variety of options for you and your employees. Benefit Administration Cafeteria Plans (POP /FSA / DCAP) 4rr.~ A 125 Cafeteria Plan allows employees to pay for their employer-sponsored health, dental, supplemental, and group term life premiums plus set up flexible spending accounts to pay for medical expenses, dependent care expenses, and personally owned health policies with before-tax rather than after-tax dollars. This reduces taxable compensation. A 125 Cafeteria Plan is a benefit that both employers and employees will appreciate. Why? Because this benefit increases employees' take-home pay and reduces employer payroll taxes. Both the employers and the employees profit! Employees benefit by paying less tax and taking home more pay. Employers benefit by paying less payroll taxes; by increasing the efficiency of payroll dollars... by getting more money into employees' take-home pay without having to increase their gross pay; and because a cafeteria plan is the simplest and most economical form of flexible benefits that can be offered by a Plan Sponsor. HRA A properly designed HRA encourages the employees to conserve healthcare costs by allowing unused employer contributions to be rolled over to be used in future years or at retirement. While employers can achieve savings the first year by purchasing High Deductible Health Policies and creating different levels of coverage through HRAs, the savings incurred through employee choices will build over years. COBRA ~.. COBRA policies and procedures are a standard component of any IRS corporate audit. At DPAS, we understand that one small mistake can spell disaster. Every single detail must be handled correctly the first time, every time. Avoiding these risks that are involved in keeping compliant with one of the federal government's most complex laws is an enormous responsibility. DPAS can eliminate this time- consuming task from your duties and give you more time to focus on your overall corporate needs. HSA An HSA is a tax-free savings account used to save money to help pay for qualified health care expenses. Combined with a High Deductible Health Plan, the HSA pays for qualified and routine health care expenses until the individual has met the deductible, then the insurance coverage takes over. Plus, unused funds roll over from year to year and continue to earn tax-free interest, increasing the benefit of today's savings. Your employees get a triple dose of tax benefits: Tax-Free Contributions -Tax-Free Disbursements -Tax-Free Interest Electronic Payment Cards (Credit & Debit) b,rr Electronic payment cards are becoming more prevalent and vital in a successful benefit plan offering. Introducing an electronic payment card into a reimbursement account plan empowers employees and gives them an option to inconvenient out- of-pocket expenses. With DPAS, you have a choice of offering either a debit OR a credit card that integrates with a variety of benefit plans ... HSAs, FSAs, HRAs, and Dependent Care. `~r.r References City of Little Rock Contact: Jim Bradshaw 506 W. Markham Little Rock, AR 72201 501-371-4578 Hendrix College Contact: Vicki Lynn or Rita Gipson 1600 Washington Ave Conway, AR 72032 501- 450-1494 Metropolitan National Bank Contact: Katina Riggs 425 W. Capitol Ave Little Rock, AR 72203 501-505-5124 Nabholz, Inc. Contact: Wanda Simmons P.O. Box 2090 Conway, AR 72033 501- 505-5124 Southwest Power Pool Contact: Linda Helms 415 N. McKinley Suite 140 Plaza West Little Rock, AR 72205-3020 501-614-3307 State of Arkansas Contact: Jason Lee 501 Woodlane, Suite 500 Little Rock, AR 72201 (501) 683-5690 University of Central Arkansas Contact: Rhonda Roberts 201 Donaghey, Lib 321 Conway, AR 72032 501-450-5052 Administration Proposal Summary Initial Plan Consultation & Setup $1500.00 Employer Setup Document Setup Enrollment Materials Templates Employee Benefit Setup (Electronic Payroll Feed Only) Web Setup (Employer and Employee) Customized Web Portal One Debit Card per employee Annual Plan Renewal $500.00 Customized Re-enrollment Materials Online Re-enrollment setup Status Letters to participants Amendments to Plan documents (if needed) Monthly Administration Fee Flexible Spending Account (FSA) Per Participant $3.00 Health Reimbursement Account (HRA) Per Participant $4.00 Health Savings Account (HAS) Per Participant $4.00 COBRA Administration $1.00 Minimum Monthly Fee $500.00 Monthly Fee Includes: Online Account Balances, Payment History, Documents and forms Claim Adjudication Reimbursement via Direct Deposit Debit Card Reimbursement Discrimination Testing Payroll Reconciliation Reporting Additional Fees: Paper Check fee if mailed to employees home $1.00 Additional Debit Card $5.00 Enrollment Fee Travel Expenses Rates based on 2007 Plan Effective Date { a ~ ti. ~; ¢y t y . ~i ii `'Sl yw ~~k~ fiy G ,.l , F` ~ x ~ , J ~ ^ t h i - ~ t~ h k N ~[ t 1 ~ [ 1 vs 'r ' j.v p ~y ~ 1~51~Y„}L ia'hY%3a E. ~.1 ~ ei~ , ~ ~. •. ~ e e~~~ `, :.~ .. ] , 1 ~ 4; ~ 4 ~~ ~. ~ f r ~ 7 4~ V +' ~ ~ ~ t ~'+cy r g ~ + c ~` ~ ~ '. i'ri "" ~ 1 ~ ~ K~r a'. z~ ~ n~ ~ - r ~ ^ ~ n p"s eiEx ,~' '',~}'3 ~ "'jt,,c r ~ r, ~z -'{~ ~" f1 , 3 + S 4 'fit ~ - 'n T .~ 3,~i• }- P'f f i -• - d ' - .~ ~~" ~r ~ ~. r ~ ~ i rt 3 ~ ., f ls. ~ r '~ ~z r P E W C _~;a,~~ '~'S-.F yr,t ~~"ygp ~' ~: N .~,' r r P ~,~t~a ° s ¢~yci ~ `' tF _~x+v. ~~ i xr_ ~ ,_ b ark ~. 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F ~ ~.+ ~' y ~ ~ )>'~ ~i a '' ~ x t ~ ~ i a R t *~"~ ,r - ~'{ -r: ,~,~ ~z~s~ a 1~~~C ~ ~ rf*r~'~'~Yc ' . 7 ~ ~ ti- ++ -~. - a" 'r xi `'' # 9~.~ ~ .~ .a .,t-^cs.~ s :~. - _ ~. .,~-~s Lr~,a t d ~ -''' ~' ?r ~' '. ~~ c ~ ~~ F y ~C-, ~ ry'~z3 biz, ~ ~"'~ ~ ~~'Y i 2 l' . :o T ` ~ £ ~' ~~ocess Works iNC.~ !'`right source to out source° Health Reimbursement Arrangement (HRA) Implementation Workbook SECTION I: Employer Information Legal Company Name Kerr County DIB/A Name - (ifapplicable) Presidant/Owner Decision Maker Mutual Group ID G000487A Federal Tax ID # 74-600494 General Phone Number .830 792-2211 Street Address 700 Main Street City Kerrville State TX Zip Code 78028 Primary Contact Barbara Nemec Dept/Title County Treasurer Phone Number 830-792-2275 Fax Number 830-792-2277 Contact E-mail bnemecC~co.kerr.tx.us Secondary Contact Jacqui Magenheimer DepUTitle Secretary for County Treasurer Phone Number 830-792-2275 Fax Number 830-792-2277 .tact E-mail jmagenheimerC«~co.kerr.tx.us Nature of Business County Administration NAtCS Code 921000 usiness Entity Type - ^ Corporation ^ S-Corp (Individuals owning more than 2% and/or family members cannot participate in the plan) ^ LLC (For income tax purposes, treated as a partnership: members cannot participate in the plan) ^ LLP (Partners cannot participate in the plan, nor can their spouses) ^ Partnership (Partners cannot participate in the plan) ^ Non-Profit ^ Church ® Municipality ^ Sole Proprietorship (Owner cannot participate in the plan) Legal Company Name Federal Tax ID Number Affi late/Subsid iary Companies 8/31 /2007 SECTION II: Effective Date/Plan Year Information/Plan Eligibility Effective Date with 7/1/06 Nutttber of Eligible 270 ProcessWorks Employees - i Year Begin Date 1 /1 End Date 12/31 Short Plan Year Begin Date End Date (if applicable) *Mid-year Takeover Takeover Date 7/1/2006 Plan Year Dates 1/1/2006-12/31/2006 (if applicable) xistin Information (if applicable Original Effective Date 1/1/05 Plan Number 502 of your existing Plan - ~ Plan Number is a 3-digit 500 series number assigned to welfare and fringe benefit plans beginning with 501. Numbers should be assigned to your benefit programs sequentially and plan numbers should not be reused. Be sure to check other benefit plans and assign the three-digit number accordingly. ror existing plans, this number and your original effective date can be found in the Summary Plan Description or previously filed Form 5500 return(s). Plan Flinihility Paramatprc Eligible Class of All full-time employees enrolled in the health plan exlcuding temporary employees Employees Ex: All employees enrolled in high deductible health plan ^ Date of Hire New Hire ®First of the month following day(s) or 1 month(s) of employment Waiting Period ^ Following day(s) or month(s) of employment ^ Other (please provide details): Rehires receive one riHH amount per plan year ano corresponos ro me meoica~ oeoucno~e nanonng ror me pan year. ~r meuicai cuveraye ~s tennrnaieu anu reir~tated in the same plan year, the deductible left to satisfy and the HRA remaining balance at termination will be reinstated. STION III: Checking Account Information Reimbursements are issued from an employer checking account. To avoid trust requirements, use a'general asset account or establish an account (a sweep or controlled disbursement account) in the employer name, not theplan name. ProcessWorks willprovide the necessary forms to capture the checking account information. Account Information ^ Same as Legal Name Other, please list name (Client owned bank account ACCOUnt Name ®Use PW I Account (if daily processing and/or debit card feature are selected this eheckirag information) option will require pre-funding of a ProcessWorks owned account.) The forms listed below will be provided by ProcessWorks. Please complete and return along with a voided check or MICR check layout no later than two (2) weeks prior to the-plan effective date. If :debit card feature F s e is offered bankin forms should be returned no later than four 4 weeks rior to the Ian effective date. orm Requir d 1. Authorization toDebit/Glient Requirements 2. Check Signature Form (hat required for PWI Account) 3. Debit Card Client Requirements & ACH Authorization Form {if applicable) Emaiflnformation Contact Name Barbara Nemec Email. bnemec@co.kerr.tx.us (Check registers are emaled weekly o one or iwa individuals. Please indicate to whom these Contact Name Email .should be directed. fir" 2 &/31/2007 SECTION IV: Debit Card Information (if applicable) Card transactions occur daily and debits for total daily transactions wilt be made from the employer checking account. each day. Employee ~ ~~munication and employer;understanding and support of the substantiation process are crticalta the success of the program. Cards will 'r~rdered once we receive the. signed employer authorization form/agreement and the enrollment data has been loaded into the ProcessWorks system. Allow a minimum of four (4) weeks after data has been. received far delivery of cards. If participants ordered a second card, it will arrive in a separate .envelope. Indicate below if the card option is elected. tf the card option is elected, please attach a schedule of benefits clearly indicating the prescription drug antl office co-pay amounts. ^ No Debit Card Offered ®Y@S "Debit card services are available for HRA plans that reimburse all Internal Revenue Code 213 expenses, provided the HRA plan is the first level of reimbursement with no employee cost share responsibility prior to HRA benefits. The debit card is not available for any other type of HRA plan design. SECTION V: HRA Plan Benefits Plan Year HRA $ /Per Eligible Employee Contribution Amount $600/Single $ / EE +1 $1800/Family Expenses eligible under the HRA ^ All code 213 expenses (includes dental, vision, RX and over-the-counter) (Employees are reimbursed foc (1) all Internal Revenue Code 2i3 expense,. or ®Health plan out-of-pocket (deductible, co-insurance & copays (2) health plan deductible expenses inlcuding RX) only, or (3} a specific type of health related expenses up to an allowable ^ Specific expense, please list maximum amount each Afar) year.} (i.e. dental only, vision only) ^ No ®Yes, if yes will prescription expenses appear on EOB Prescription Expenses allowed for reimbursment under'the HRA ^Yes (EOB will be required as documentation. Pharmacy RX plan receipts will be denied.) ®No (EOB will be not be required. Pharmacy RX receipts will be HRA Plan Desi n accepted as documentation.) g HRA Alen designs Insurance Premiums allowed for ^ No .must be apprpved by imbursement under the HRA pl ®Yes, if yes please check all that apply PfOCeSSWOPICS In a ^ Medicare Part B ®Retiree Medical ^ COBRA ^ Long Term Care advance of plan ®Yes implementetion. HRA reimbursement funds .available from 18t dollar of ^ No, if no list employee responsibility below incurred eligible;expense $ /Sin le $ / EE +1 $ /Famil ^ No Unused Funds Carryover from ®Yes, please list carryover amount Year to Year ®~oo°i° ^ 75% ^ 5o°i° ^ 25% ^ Other $3000.00 Maximum Account Balance or ^ Unlimited Employee Access of HRA Contribution ®Start of Plan Year ^ Monthly ^ Per Pay Period ® No Do you also sponsor an FSA ^Yes, if yes and your HRA plan design is "All 213 expenses" please program indicate will account should be accessed first. ^ HRA pays 1ST/FSA pays 2nd ^ FSA a S is`/HRA a S 2nd 8/31 /2007 SECTION V1: Claim Processing Parameters .Standard service includes reimbursements issued weekly; however you may elect daily reimbursements. Reimbursements are made from an emaloyer checking account by 1) check sent to the participant home or 2) by direct depositto a bank account of the participant's choice. mbursement Frequency:: ®Weekly on Thursday ^ Daily Run-out Period Run-out period Run-out period (# of days allowed to submit Active em to ees Terminated em fo ees claims after the end of the plan year. This does not apply to accounts with balance carryover ^ 30 days ^ 60 days ®90 days ^ 30 days ®90 days ^ End of plan year + Active run-out feature: Incur Period #or Terminated. Employees (# of days aNowedto incur claims ^ 0 days ^ 30 days ^ 60 days ^ 90 days ®End of month employee terminates afterYermination date *Interface between Mutual's rnedicaU Rx claim system and FSA system for automatic payment of deductible, co-insurance andlor capays The claim rollover applies to covered employees andfordependents that area. enrolled in both the medical plan and FSA and do not have coverage through another health plan.-COB (if FSA funds available Claim Rollover interface"' ®No ^ Yes, if yes and also offering an FSA option, the FSA must include the claim rollover interface for coordination between accounts to work effectively. Debit card is not available when a claim rollover interface is selected. ® No Health Savings ACCOUnt Do you SponSOr amHSA? ^ Yes (If employees participate in both HRA and HSA, the HRA musf be considered one of the following: limited purpose HRA, post-deductible HRA, suspended HRA or retirement HRA SECTION VII: Management Reporting ~rlges (new employees, change In election amounts, terminations) are reported via paper form (provided by ProcessWorks) or by electronic file feed. Management reports are available online 24f7. Following receipt of the executed documents, you will be provided a User name/Password to access the employer portal Reports ate available in alphabetical order, or by divisional reporting. Report Format ^ Alphabetical ®Divisional (Please provide division listing below. Enrollment data must contain divisions.) Division Active Employees Division A0001 Name Code Division Retirees Division R0001 Name Code Division Division Name Code Division Information Division Division Name Code Division Division Name Code Division Division Name Code 5tt:l IVN VIII: Implement y~ Fi<~ .~.~ kt n,} y ;''t$ r `' i ° ~ ~'cnrr Y r,i; ` J #' i ~ ' 4 zy€ ~, { + `~ p # > TS Std .. ~ #,: ~ ~~~ ~ ~ ~, ~ 1 ~~ ~ 7'~ ~ ~}~ ~ B ~~4 ~' .rte .~* r 4 ~ ,,: ~:~ h .,~ Y 3 4 y t ~~ a _T SL t ° ~ ~ m t f _ f r ~ ' ~a F _: 4 ~: 'q" r +. ~ w ~,7t 7: a ,~ ~ ~ '~ -~' ,. 'bL ~~ "~ « ~ 'W t~ a+ s ~ 1`r ~ tr s~[~ t r r } ~.t ly j 'f r5 }t~~ ~ ) ~ ~,},~ ~ '~` ~ Vii ~ L A i ~~ 4 ~~, t T. ' P ~~" ~ ~~ s' K~ a; ~. r :.~ ' } j.. S ~ S }. r, . ~ ~ ~ S a~ ~ ~ y t ~;. r E E i Y Y a~4 ~ r.. lat ~3 s~, ,fin _ a ._h _. ~-6` - ~` s - v ~ , 2 ..t ~; z - c - 1 "S- ~k 4 ~ x _'~ 5~ s a ~ ' _ i ., 3,. CCC~ ( ~ ri F ~ i~..~ j~ ``J~ ~~ h~ t~ A '` ~,,. 't t i ~ S R F ~~ .y, ~ ~, _ V r nF r %-.vYl~ ,~ ' 4 TR ~FyY4`v n4 lei i N '~' ~ L ~~ ~J7 ; •~ t 4 h't 4t t4#~. Y 'Y i ;r.~ ~ i ~ v ~' ~ r~ y + ;_< `~' 1( Y 7R' ,+ i ~ i... ~C; h 1 :.r ~.~ " a ~ ,g ~, ~_t ^. s i~ ~y ~. -.. 5 ~~ a ~ r ?' < ~:, y e~ ,~ #~ x~ `" ! t 3 ~ 1Fp S " Y N y ~` ~ t , ' ~ ~,~ ? ,,~, ~ -. ~. ~ ~r r _ 44 ~~ t s ~ ~ l 4 ~i t ~5 -i '' F v l . x~ ~ .~~-,~ -ate h~{ ~,~. F" ~ .'!'~t~ ~ ~ ~:x~,~ ~~ l *s ` . .ham 4 ~ wr. yt~ 4~~ L 7i t'' .~~~.+',t ~ Cd r i~~l, Y j' t T1 k ~ T ~ fvf ~ :~ ~L~ ~~ T i 1^ :F}riyY _ r a u -a t ° i, Yr ~ 'f ~ 1 t ~ ~ s n ~ ~ ~ ~ ~r ti ~~ ~ `~~ ~,~ ~ 3: ~ a "' ~ a~` 2 ~ ,, ' r - ~ a . ~': ~ ~ t ',' _ ~ ' ~: • 5 j l { ~" S ~ 1 ~ ' ~ x1 • ! ' { std b C k..~~ # ~yy ~? _ ~ 4 R 3~ y - ,~ tir ,. _ > "'~~t~~'~t'~`~~ ,r ~~~ a i''} ~~` ~~tvb,~'dt~.~sy .~"?.^s~ key U~ I} ~ ~ ~ - _ r ~r FEE SHEET Initial Plan Consultation & Setup $1500.00 Employer Setup Document Setup Enrollment Materials Templates Employee Benefit Setup (Electronic Payroll Feed Only) Web Setup (Employer and Employee) Customized Web Portal One Debit Card per employee Annual Plan Renewal $500.00 Customized Re-enrollment Materials Online Re-enrollment setup Status Letters to participants Amendments to Plan documents (if needed) Monthly Administration Fee Flexible Spending Account (FSA) Per Participant $3.00 Health Reimbursement Account (HRA) Per Participant $4.00 Health Savings Account (HSA) Per Participant $4.00 COBRA Administration $1.00 Minimum Monthly Fee $500.00 Monthly Fee Includes: Online Account Balances, Payment History, Documents and forms Claim Adjudication Reimbursement via Direct Deposit Debit Card Reimbursement Discrimination Testing Payroll Reconciliation Reporting Additional Fees: Paper Check fee if mailed to employees home $1.00 Additional Debit Card $5.00 Enrollment Fee Travel Expenses Rates based on 2007 Plan Effective Date rrr '~ u ~ Diu r ~ i ''-~ h 6 `. 3 fi Y t ~ is S ' „ ~ ~. a ti ~s"~j~'~'-ate" ~~~' er .~a~.` 'x si _ ~ ~'~+'~w~ ~ ~ r . x a S ~ r +* , ~ 4 3v .~,r ~ r ~. ~~r , aY e l 3 , ~ . ~ .~ h .s=.+y}, ~ ly ~, t` l4 1t ~- ~ }- : ,~~ r y s t !z ~t _r e`~., z *i s, a ,~? - +1 < 4Y _ s ~~ ~ 4 ~` ~ 3 ~~ r ' t ~' , X- ~ ~ i . s i F.~ :~ ~y ~ St ~ ,L t~ i ~ '~' ~ t ~ i b t >{; i :J i ) ~ r x ~i ~. V s. c r T s. t <-, rS.'~ ~, ~~ r 4 F i ~~` ` ~3~ .yI ~ ~.v, ti~ ,,~;, ;~~ ~ _ ~ ~b 4..•-. .Y . ~ f .- t _ " j, 1 e~ ;.;. '>u? 1 t ry~ # ^ ~ ~ S ~t t~ ,.' ~ A _ r_ 4 ~ `~ '~~ f fi ~~ x ti ~~~? >S ~ s t t a r tf '~~,u 3 ~ _. tig ~,_. ,~ ki. ,T ~~ ~ ~tYY 1' [ ~ '-~. 1 S Z r~ - yy{Y~ -rX ~ ~ tic §' _ ~ h, t ~ y ~~ ~, _.. T ~' i it y '. ~ ~~ ~ K 1) ~ F ~ i K~r~ ~ , y ~ ~~ ~ ' f ~. 4 ~ 2 ~ a 4~ k x ~~,_ a~- ~r ~~ Hw ~ _ - a :r"r,; - fk ~. § ~`' '~~~ ~~~ ~ ` 1 ~ ( F W ~ V "i 1t. 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E w w o ~ .. w c = = 0 o 7 0 0 V ri V 0 0 vi 0 m T O a E w ti v u~ v 0 0 N M O a~ C .C a .~.. O N Q ~FiiriR. September 4, 2007 RE: Pharmacy Benefit Management Kerr County will be able to realize a 15-20 % savings on their pharmacy benefit. FARA BENEFIT SERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ~ 985 624 8383 T ~ 800 254 8388 F ~ 985 624 3354 ~ WWW.FARA.COM Pharmacy Benefit Summary For ABC COMPANY 1 /1 /2007 - 3/31 /2007 "~~ PLAN STATISTICS CURRENT MEMBERSHIP # OF MONTHS IN PERIOD # OF GROUP MEMBERS # RECEIVING RXS DURING PERIOD #RXS PER MEMBER OF GROUP ACTIVE PRESCRIPTION STATISTICS TOTAL RXS PATIENT PAID $ PLAN PAID $ TOTAL PAID $ PATIENT PAID PLAN PAID ABC COMPANY PRESCRIPTION STATISTICS FOR 1/1/2007 - 3/31/2007 WELLDYNE PLAN RXWEST MONTH YEAR DATA AVE 3 MEMBER'S COST $ 8.07 $ 96.83 154 PLAN'S COST $ 21.19 $ 254.34 53 TOTAL COST $ 29.26 $ 351.17 1.34 1.48 34% 32% PLAN COST SHARING 206 2896 3,728.01 9,791.91 13,519.92 2q6 28% 28% 72% 72% MAINTENANCE DRUG INFORMATION RXS MAINTENANCE RXS NON-MAINTENANCE RXS MAINTENANCE RXS NON-MAINTENANCE # OF MAINTENANCE °fi RXS - .. `~ 3396 68 138 33% 39% ~'7°~ 67% 61% GENERIC UTILIZATION Tots I Rx's M= Brand with Other Brand Competing N= Brand with no Generic Available 0= Brand with Generic Available Y= Generic Product Generic Usage by Total IZx's Generic Usage When Generic is Available GENERIC UTILIZATION BY DOLLAR TOTAL Dollars -All 12x TOTAL Dollars - M TOTAL Dollars - N TOTAL Dollars - O TOTAL Dollars - Y Generic % Based on Total $ GENERIC UTILIZATION ABC COMPANY FOR 1 /1 /2007 - 3/31 /2007 WeIlDyne # of RX IzxWEST Avg 206 M 0 N 61 O 1 Y 144 70 % 59 99 % 95 WeI (Dyne RxWEST Avg ~ $ $ 13,519.92 M $ 0.00 N $ 9,927.51 O $ 100.92 Y $ 3,491.49 26 % 26 # of R}('s in Each Category ',Y_ ` „"~; 3046 tx~:~. 046 X046 Generic Utilization by $ 2646 - °~ ~^~~ r~,. ;;, 19+° ,, .~~`~ "'~~ v~ ~-~," f ~ 346 GENERIC UTILIZATION BY AVERAGE PRESCRIPTION PRICE AVERAGE PLAN PAID M $ 0.00 N $ 127.77 O $ 60.92 Y $ 13.45 AVERAGE COPAY PAID M N O Y AVERAGE TOTAL PAID M N O Y Avg Plan Paid ~~ 304E ^~, <:~ , =z~ • M ~ '~F~ S ~_.~.: '; "' 345 Avg CoPay Paid $ 0.00 134b ~~ ~ $ 34.98 '''~ ' $ 40.00 ~~r-;, $ 10.79 ~ ~ "~'` 4745 Avg Tokal Paid $ 0.00 $ 162.75 $~ $ 100.92 ' ~'' ~ $ 24.25 579,x -35'% " r ~;,=;. '~irr- Drug Utilization by Class 12345678 For 1/1/2007 - 3/31/2007 TOP 10 BY $ BY CLASS ^ Proton-pump Inhibitors ^ HMG-CoA Reductase Inhibitors ^ Allylamines ^ Insulins ^ Contraceptives ^ Thiazolidinediones ^ Antidepressants ^ Penicillins ^ Angiotensin II Receptor Antagonists ^ Antipsychotics 2D im ~ ~ 1® 121n 1im 1~ 1a~ ~ PRODUCT DESCRIPTION TOTAL # GENERIC DRUG CLASS OFRX CODE DOLLARS AMISIL TAB 250MG 757.56 2 N Allylamines REVACID CAP 30MG DR 720.05 5 nJ Proton-pump Inhibitors PROTONIX TAB 40MG 677.24 4 nJ Proton-pump Inhibitors LANTUS INJ 100/ML 634.63 1 N Insulins NEXIUM CAP 40MG 574.16 4 N Proton-pump Inhibitors LIPITOR TAB 80MG 441.53 2 N HMG-CoA Reductase Inhibitors AVANDIA TAB 2MG 385.91 1 nJ Thiazolidinediones SEROQUEL TAB 25MG 341.39 1 N Antipsychotics LIPITOR TAB 20MG 327.29 1 N HMG-CoA Reductase Inhibitors EFFEXOR XR CAP 75MG 290.02 1 N Antidepressants MINOCYCLINE CAP 100MG 264.68 1 Y Tetracyclines AMOX/K CLAY TAB 875MG 245.91 4 Y Penicillins LEVAQUIN TAB 500MG 224.66 2 N Quinolones PROMETRIUM CAP 200MG 224.19 1 N Progestins HYZAAR TAB 100-25 213.22 1 N Angiotensin II Receptor Antagonists METFORMIN TAB 500MG 159.47 4 Y Biguanides PENLAC SOL 8% 152.21 1 N Antifungals DIOVAN HCTTAB 160/25MG 151.66 2 nJ Angiotensin II Receptor Antagonists ORTHO TRI-CY TAB LO 149.97 3 N Contraceptives DUAC GEL 1-5% 124.64 1 N Antibacterials TOPROL XL TAB 100MG 115.34 1 N Beta-Adrenergic Blocking Agents HALOBETASOL OIN 0.05% 110.30 2 Y Anti-inflammatory Agents METFORMIN TAB 1000MG 109.83 1 Y Biguanides GLIPIZIDE ER TAB 10MG 107.58 3 Y Sulfonylureas .. Pharmacy WELLDYNE RXWEST - 0614708 JACKS MARKET PHARMACY - 0618857 WALGREEN DRUG STORE 9912 - 0619722 LA JARA PHARMACEUTICAL C - 0608438 SAFEWAY 1681 - 0617348 PAMIDA PHARMACY 376 - 2815376 CITY MARKET 625022 - 0609543 SAN LUIS VALLEY PHARMACY - 0618326 WAL-MART PHARMACY 869 - 0611459 WALGREEN DRUG STORE 4721 - 0615849 TOP TEN PHARMACIES BY DOLLAR AMOUNT ABC COMPANY FOR 1/1/2007 - 03/31/2007 # RX'S M N O Y TOTAL BRAND WITH BRAND BRAND WITH GENERIC OTHER BRAND GENERIC AVAILABLE AVAIL. 21 0 3,981 0 474 4,455 91 0 1,860 0 1,322 3,182 32 0 1,340 99 388 1,827 8 0 1,027 0 62 1,089 8 0 429 0 105 534 10 0 123 0 351 474 9 0 292 0 165 456 6 0 365 0 10 375 12 0 232 0 71 303 1 0 99 0 0 99 TOP TEN PHARIUTACIES BY $ 0 500 1000 1500 2000 2500 3000 3500 4000 4500 ^ VvELLDYNE RXWEST - 0614706 ^ JACKS MARKET PHARMACY - 061... ^ V'JALGREEN DRUG STORE 9912 - 06... ^ LA JARA PHARMACEUTICA... ^ SAFEV'JAY 1681 - 0617348 ^ PAMIDA PHARMACY 376 - 2815376 ^ CITY MARKET 625022 - 0609543 ^ SAN LUIS VALLEY PHARMACY - 061 ... ^ VVAL-MART PHARMACY 669 -... tALGREEN DRUG STORE 4721 - 06... "~~ Utilization Distribution By Number of Claims ABC COMPANY FOR 1 /1 /2007 - 3/31 /2007 L a--~ L Z ~rr+ 45 as +05 JU 25 ~~ 15 10 5 0 ~,~, # of Claims # Of Claims 01 - 05 06-10 11 - 15 16-20 > 20 Number of Percentage of Plan Paid Percentage of Plan Utilizers Utilizers Amount Paid Amount 44 83 $4,807.59 49 6 11 $1,352.52 14 2 4 $2,047.50 21 0 0 $0.00 0 1 2 $1,584.30 16 53 100 $9,791.91 100 '`wr+° _"~~ FORMULARY/PREFERRED DRUG PROPOSED SAVINGS ABC COMPANY January 1, 2007 -March 31, 2007 FORMULARY/PREFERRED DRUG LIST Number of Prescriptions Total -Total of all Tiers TOTAL 1 =First Tier, usually generic products 1 2 =Second Tier, preferred brand names 2 3 =Third Tier, nonpreferred products 3 Formulary Stats by Dollar Total Dollars -Total of all Tiers TOTAL Total Dollars -First Tier 1 Total Dollars -Second Tier 2 Total Dollars -Third Tier 3 °~6 Of Prescriptions in Each Category 206 Tier3Claims 72°r6 144 37 Tier2Claims 784'0 25 TierlClaims 7D4U °~6 Of Reuenue In Each Category 13 520 $3,491 ier7GrandTotal264~ $7,306 $2,723 Tier3GrandTotal 2046 ier2GrandTotal 544 '~' ~, Another factor that contributes to utilization is the prevalence of members to utilize the benefit. 38%of the ABC CO plan participants accessed the prescription benefit. This figure is higher than the WeIlDyne RxWEST book of business percentage of 26%. Another factor closely associated with prevalence is the intensity of these participants; or, for every person that accessed the benefit, the number of medications each used for the time period: 1.98 scripts. Average Drua Cost: The average ingredient cost for the time period (generic and brand combined) was $66.57 per script. WeIlDyne RxWEST's book of business is $73.43 per script. Average drug cost is affected by several different factors: 1) Inflation. AWP costs, determined by manufacturers, increased approximately 6% over the last year. This inflation is directly reflected in the average drug cost per script. 2) Therapeutic mix. Therapeutic mix is comprised of medication share within therapeutic classes, changes in use due to new drugs entering the market, medications coming off patent and new generic medications becoming available, and new drug strengths or indications of existing medications. Noticeably, specialty pharmaceuticals contributed to a significant amount of the total dollar spend of the plan. Medications used to treat multiple sclerosis; rheumatoid arthritis and cancer averaged over $1,000 per 30 day supply, accounting for over 10% of total drug spend. This percentage is typical of therapeutic mix, and is expected to continue to grow due to the introduction of new specialty pharmacy products to the marketplace. Utilization in newer therapeutic classes that have little or no generic alternatives, such as lipase inhibitors and proton pump inhibitors, and are ranked among the top therapeutic classes by number of scripts and dollars spent contribute heavily to the average drug cost. 3) Brand to generic utilization. Another important component which is significant in determining average drug cost is the amount of generic products used. The ABC CO plan had an incredible 67%generic use and 96% generic opportunity. This is much better than the book of business average of 55%generic use and 96% generic opportunity. National average for generic utilization is 44°/a 4) Units per prescription. Historically, units per prescription have changed little which slight adjustments that have contributed to only 0.2% of average drug costs. ~r- Cost Sharing: The percent of total drug costs shared by participants was 33%, or an average of $21.64 per script. This number is greater than the book of business cost sharing average, which was 27.8% per script and national averages, which is 19.5% per script. Targeted Plan Options Review of the ABC CO plan's top therapeutic categories and medications by number and cost allow WeIlDyne RxWEST to view outliers of utilization patterns. Using this data, clinicians have further defined areas of the prescription benefit where specific programs could be implemented that produce savings for the plan, reduce the misuse or abuse of specific drug products, and increase the value of the prescription benefit. Programs targeted affect four of the top ten therapeutic categories and 15 (60%) of the 25 most utilized and costly medications. Targeted programs include step therapy and quantity limits, defined as follows: ~ Definitions Quantity Limits: Quantity limits restrict select medications to a limited quantity per days supply. This type of program is commonly used where dependency, addiction or safety is problematic, where overuse of a particular medication produces a negative therapeutic effect, or where the manufacturer or FDA has recommended limited use. Quantity limits are specific to each medication and dose. Step Therapy: Step therapy is designed to promote responsible use of medications and plan assets by requiring use of first line, or first step medications before second line or secondary medications are used. This program targets medication classes that treat chronic conditions where clinical effectiveness of first line products often achieve the desired therapeutic objectives and where there exist large differences in product cost between first and second line products. Typically, a 30 day trial of a first line product must be used and therapeutic results evaluated by the prescribing physician before a second line product is approved for payment. Select step therapy programs may include a PA with-in the program in order to verify clinical outcomes of first line products with the prescribing physician. Specialty Pharmacy: Many of the top drugs by cost are comprised of specialty pharmaceutical products, accounting for over 10% of overall plan costs. Further review of the top drug products by dollar amount showed the products in this category as: Copaxone, Enbrel, Avonex, Rebif, and Betaseron. WeIlDyne RxWEST recommends a mandatory specialty pharmacy program for these specific medications as well as other potential specialty pharmacy drugs that may be used. This program improves plan savings and member benefits by providing enhanced clinical programs through compliance monitoring, proactive refill services, educational programs, and payment services for participants who have chronic conditions such as hepatitis B and C, solid organ transplant, and multiple sclerosis. This program helps to further manage the most costly areas of the ABC CO. Specialty pharmacy services provide improved discounts over retail producing immediate hard savings as well as soft savings through improved clinical outcomes. A specialty mandatory program would affect 7 participants. While hard savings would be nominal, the soft savings associated with these medications and conditions they are used to treat far outweighs hard savings. HMG-COa Inhibitor Programs: The third most utilized therapeutic category accounting for $26,272.29 in plan costs and includes the top medication by total cost, Lipitor. WeIlDyne RxWEST recommends targeting these products through either a step therapy program which would require the use of Lovastatin prior to a second line product, or a lower copay along with targeted member communication materials in order to improve utilization of this product. The average cost of a branded HMGCOa inhibitor was $110.00 per script, while Lovastatin was $44.00, a difference of $66.00 per script. Step therapy would affect 84 members with potential savings estimated of $9301.31 with a 65% conversion rate. Use of lower copays and target mailings will produce approximately $2,842.00 or a 15-25% conversion rate dependent upon copay differential. OTC PPI Program: The anti-ulcer therapeutic category was the sixth top therapeutic category accounting for $20,935, with PPI's accounting for $15,994.60 in casts and included two of the top 25 drugs by total cost. Recently, the PPI medication Prilosec not anly became available generically, but also became available over the counter (OTC). Before it was made available generic and OTC, Prilosec was the most widely used legend PPI medication and remains therapeutically equivalent to its legend counterparts. OTC Prilosec/ Omeprazole can save as much as $85.00 per script over legend products. In addition, the exact same medication remains available as a legend product; however, the cost discrepancy is considerable. WeIlDyne RxWEST recommends targeting this therapeutic class through a step therapy program which would require the OTC product to be tried for 30 days before a legend product may be used ,, (legend Prilosec would have an NDC block), or covering OTC Prilosec with a significantly reduced copay with targeted participant mailings. An OTC PPI step therapy program would affect 41 participants and produce a potential savings of $8,995.35 (estimated 75% conversion to an OTC product. The OTC PPI program would affect 11 participants if just the OTC was added with potential savings of $2327.98 (estimated 20% conversion to an OTC product). OTC NSA Program: The low and non-sedating antihistamine program included one of the top therapeutic classes by cost. Recently, the non-sedating medication Claritin not only became available generically, but also became available over the counter (OTC). Before it was made available generic and OTC, Claritin was the most widely used legend non-antihistamine medication and remains therapeutically equivalent or superior to its legend counterparts. OTC Claritin/Loratadine/Alavert can save as much as $55.00 per script over legend products. WeIlDyne RxWEST recommends targeting this therapeutic class through a step therapy program which would require the OTC product to be tried for 30 days before a legend product may be used, or covering OTC Claritin/ Loratadine/ Alavert with a significantly reduced copay with targeted participant mailings. The OTC NSA step therapy program would affect 26 participants and produce a potential savings of $2,758.62 (estimated 75% conversion to an OTC product). The OTC NSA Program would affect 0 participants if just the OTC was added with potential savings of $899.55 (estimated 20% conversion to an OTC product). Sedative Hypnotic Program: Ambien is a commonly used sedative/ hypnotic and is ranked as the11~h most highly used medication for ABC CO. Ambien, and other medications in its therapeutic class such as Sonata, are used for insomnia and are indicated for short term use (14 days or 1 tablet/ day) due to high instance or risk of dependence. Review of utilization data showed that the majority of scripts were filled for an average quantity of 32 for 30 days. In order to minimize abuse and risk of potential dependence on this medication, WeIlDyne RxWEST recommends placing quantity limits on medications in this class so that dispensing is in accordance with FDA or manufacturer guidelines. There were a total of 138 scripts filled for sedatives/ hypnotics in the first quarter, totaling $11,846.57. Quantity limits would produce a savings of $6,278.68 and impact 52 participants. 'This program has a high level of member impact associated with it. Total recommended program plan savings: $27,333.96 ($109,335.84 annually) or 8.3% Other Plan Options WeIlDyne RxWEST provides standard clinical recommendations far plan design features that promote safety, prevent misuse or abuse, and optimize responsible use of medications. Recommended plan design features include quantity limits, prior authorization, step therapy programs, three tier formulary, generic promoting programs, deductibles, maximum out of pocket, maximum benefit, copay alternatives, discount programs, and specialty pharmacy: Prior Authorization (PA): PA's are used to limit medication use where multiple indications exists and where only select indications are covered by the plan; where other medications may have off label uses that are not covered by the plan; or where medications are often misused or abused. Medications that are processed through the PA program may require pharmacist or physician contact in order to determine if the criteria for coverage are met before the medication is approved for payment. Maximum out of Pocket: Maximum out of pocket options include individual and family total out of packet maximum where anything over the maximum is paid by the plan sponsor at 100%. Maximum out of pocket programs can be set-up to roll-over at a specified time period. Maximum Benefit: Maximum benefit programs limit the risk the plan sponsor has at an individual, family or combined individual/ family basis. Benefits are covered up to a specified dollar amount, and once reached, copays are increased to a specified amount up to 100%. Maximum benefit out of pocket programs can be set-up to roll-over at a specified time period. Generic promoting Fograms: WeIlDyne RxWEST promotes the use of AB rated generic products whenever available. Programs that include copay differentials between brand and generic medications Ixoduce the best generic use. Generic programs include generic incentive, where the difference in cost between the brand and generic medication is added to either the brand or generic copay. Generic incentive programs can include the option of penalty overrides for dispense as written (DAW) overrides, typically for physician mandated branded products. WeIlDyne RxWEST also offers a mandatory generic program, where only the generic product is covered when available. Branded products with generic alternatives are not covered unless there is reason of medical necessity due to allergic reactions to inert ingredients of the generic product determined through a PA process. DAW codes are not overridden in the mandatory generic program. Generic utilization can be improved through WeIlDyne RxWEST's pharmacy incentive program. This program provides generic dispensing whenever possible (with physician and patient consent) at retail pharmacies with a slightly higher dispense fee to the retail pharmacy for this service. This program is automatic through the mail facility, WeIlDyneRx, at not additional cost. Copay alternatives: Multiple options exist for copay alternatives including flat dollar amounts, percentage copays, greater of or lesser than a flat dollar or percentage copay, flat dollar plus copays etc. Discount programs: Plan sponsors have the option of providing benefits to participants for medications that may not be covered under the plan, but are still eligible for a discounted rate through WeIlDyne RxWEST's pharmacy program, at 100% copay. Examples of medications that may not be covered but could be included in the discount program are fertility medications and contraceptives. All WeIlDyne RxWEST clinical programs have been developed under the guidance and direction of independent licensed doctors, pharmacists, and other medical experts. We will work with plan sponsors to develop customized implementation materials and notification to all participants and specifically those participants affected by the programs implemented. Plan options for quantity limits, prior authorization, and step therapy programs can include grandfathering. Grandfathering permits patients who have used a second line product 180 days prior to the implementation date to continue using the second line product ongoing. Grandfathering is recommended in certain programs in order to avoid interruption of current patient treatment. WeIlDyne RxWEST provides predictive modeling capabilities on all plan design options that demonstrate expected savings and member impact based on plan specific historical data. At least three months of data needs to be made available in order to provide this service. Six months of data or more is optimal. ~.r Stadol (butorphanol) 3 packages (7.5mL) Pain Prevention of addiction due to Management opioid composition Reduce risk of dependency, qty Ambien 14 tablets Insomnia Per mfg recommendation. PA outlet for 30/30, chronic indication Reduce risk of dependency, qty Ambien CR 14 tablets Insomnia Per mfg recommendation. PA outlet for 30/30, chronic indication Reduce risk of dependency, qty Sonata 14 tablets Insomnia Per mfg recommendation. PA outlet for 30/30, chronic indication Reduce risk of dependency, qty Lunesta 14 tablets Insomnia Per mfg recommendation. PA outlet for 30/30, chronic indication ~~ ~ • • • • Potentially high risk due to Provigil Sleep apnea or shift work disorder misuse or abuse; approved with verification of indicated uses Wellbutrin SR/ XL Same active ingredient as Zyban 150mg Depression (smoking cessation); approved for depression indication Growth Hormone (Nurtopin, Saizen, Use for aging or off label use for Genotropin, muscle bulk; approved for Humatripe, Hypopituitarism indication hypopituitarism if Norditropin, covered by the plan. Serostim, Tev- tro in Celebrex >200mg Doses > 200mg have not been daily Osteoarthritis, Rheumatoid arthritis tested for safety; approved with physician review Onychomycosis due to dermatophytes (tinea unguium); body General use for nail infection is Sporanox immune or systemic fungal infections cosmetic. Approved for system of the toenail with or without fungal infections. fin ernail involvement onychomycosis of the toenail or General use for nail infection is Lamisil fingernail due to dermatophytes (tinea cosmetic. Approved for system unguium) fungal infections. Extremely expensive injection as a last stage use. Require use of Xolair Asthma/ Allergic Rhinitis long acting steroid for maintenance. Review of age restrictions (<12 safety risk) -• ~ . • • • ~. Formulary alternatives for therapeutic equivalent or exact PPI's (Protonix, Anti-ulcer GERD Zollinger Ellison same medications. Step therapy- Prilosec, Prevacid, , , Syndrome OTC Prilosec/ Omeprazole 30 Aciphex) day trial before other PPI use. History used to identify compliance with 30 day trial. Formulary alternatives for Non/ low-sedating therapeutic equivalent antihistamines Allergic rhinitis chronic idiopathic medications. Step therapy- OTC (Allegra, Zyrtec , urticaria Claritin/ Loratadine/ Alavert 30 including "D„ day trial before other NSA use. counterparts) History used as to identify com liance with 30 da trial. Very expensive when used as a first line agent for allergic rhinitis. Step therapy requires use of non or low sedating Singulair Chronic asthma, allergic rhinitis antihistamine and nasal steroid (Flonase, Rhinocort, Nasonex, Nasarel, etc.) combination. Approved for asthma indication and auto look Use of other NSAID prior to COX 1 or COX 2- 30 day trial unless Mobic/ Celebrex Osteoarthritis, rheumatoid arthritis Prior history of GI bleed (H2, PPI, or Carafate WITH NSAID) glucocorticoid, Warfarin use, or over a e 60. Use of Lovastatin prior to other HMG-COa (Zocor, legend alternatives. Member Lipitor, Lovastatin, Hyperlipidemia must have tried and failed Crestor, Vytorin, Lovastatin in the previous 180 Caduet, Lescol, days prior to second line Pravachol) medciation use SSRI (Cymbalta, Use of generic prior to legend Desyrel, Effexor branded products. Generics (XR), Lexapro, Paxil include: Bupropion (SR), CR , Zoloft, Pexeva, ( ) Depression/ variable Citalopram, Fluoxetine, Luvox, Prozac, Remeron, Mirtazapine, Paroxetine, Wellbutrin (SR, XL), Trazadone, Fluvoxamine. Celexa, Luvox ~'` ~xV~/ ~ STS A Subsidiary of WeilQyne RxWEST is pleased to announce enhancemertta to our W ,.~f and our Automated ~r~crlp#lon L.Ine. Our new Website will altow you to: + View your current Explanation of Benefits (EUB} • Review Your Plan Summary including: • Your Co-Pay • Deductibles • Maximums • Plan Exclusions Access order refills and detailed drug information with "one click" It's Easy !a Ae~lsterl 1. Log an to www.rxwest.com 2. Click on Member Services 3. Click an New User Registration 4. Complete all requested information. For your security, a. you wilt need a unique user name for each member of your family b. you will also need an existing prescription number from 2004 c. it you da not have a prescription number, click on Plan Benefits to access your Plan Summary Our Automated Prescription Line is also available for your prescription refill requests 7' days a week, 24 hours a riay. We have recently made additional enhancements. CaN 888-479-~t70U and Choose Option 2 • Order your refill and receive a confirmation • Choose your delivery method Cheek the status of your refill request • Find out the copay far the refill you're calling about Check the number of refills remaining www. rxwest.cam rnertlberservices ~rxwsst_com Toll Free. 8f3$-47$-2D~ Automated Rx Line - :Option 2 Member Services-Option ~ ~.. WellDyne ' Opt-e-scripT"" Optimize Drug Therapy! EVERY PATIENT IS UNIQUE- AND SO IS EVERY PATIENT'S RESPONSE TO DRUGS Objective Opt-e-scripT"' is a single patient clinical program designed to assist physicians in optimizing drug therapy for each individual member, and is provided through a first ever, self-contained drug testing system. How It Works The patient begins taking a series of look-alike capsules on a specific schedule, and then answers a symptom and side effect questionnaire that can be telephoned, mailed or emailed. An analysis is performed on the date and a report delivered to the treating physician. This program utilizes a randomized, double blind, multi-crossover design that provides sufficient statistical power to determine the most efficacious and safe drug treatment for the member. Physicians are provided with statistically valid information on each member's response to a specific drug compared to a placebo, an alternative drug, or a different strength of the same drug. Savins~ Potential • Up to $80 savings PMPY on widely used prescription medications! Kev Features • Individual member testing and analysis minimizes guesswork in prescribing decisions Reduces rising drug costs with appropriate therapeutic substitution ~r • Rapidly identifies adverse events on recently approved drugs • Provides a new testing tool to improve clinical outcomes Available Kits Future Kits 4 Allergic Rhinitis a ADHD ~ Heartburn (GERD) 4 Diabetes a Osteoarthritis ~ Hypertension To learn more about how WeIlDyneFb(s Opt-e-scripT"^ program can benefit your company call 888-479-2000 or visit our website at www.rxwest.com. '~r+' ~..r _ ~, "~ ~ a u~ ~ ~ a~ ~ ~ ~ 2 a~i o ° a E ~ Q ~ ~ Q~ ~ v O ~ . Q L ~ ro m ~ c o . "= ~- ~ 0 ~ ~ ~~ O cn ~~~ ~ ~ O 'c~ ~ o U = ~ ~ t~ (3 ~ , rn a ~ oc~ v -~ ~~~ Z ~ ~~~ 0 0 ~ ~~~ ~ m F- a ro c ~ c c ~ owww U ~ . 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S~~y+~ .~+.~sT S~ T , t ~ j::._ t~.. ip~ F~;. ~ ~ rain r b ~ ~_ ~'~' ft ~ ~ 1.. h ~Y, ,~ rj~ .~ ,~~ ~~ ~~y~~.x X"Sa~ ' u. ~ ~> ~ ~ 9 r n ~ ~ ,~ y i ~~4s~~ ~ ~' ~~ V g r.,, zr {r- a ~ ~ s ~ ~ ~ y ~` s. _ i s ~Y ~ ~ a _: + r ~ ~G~ ~`~ ~ ~ P 'f~ r ~r~ 4, ~ ~ ~ ' '~ bt= a ~~ ~! v r ~ h~k ~'~ r~~r`,,, r ~'. ;..-i of S.M,.tY ~-• dar 1 ;~-: r`, x.3K~t ~;,k -aua s ~T_. s~` ~F'f~~ ~ y ~ ~ ~~~ ~ ~r~ ~ ~' 4~~ ~ '~ r ~'i ~-~f PVC -~ ~ ~'r f ~~ ?h ~~' Y a~ ~ y '~ ? # ~ o- n2, v '~ {~ ~~,.~ ~, ~_ g ~ ., r k ~ Y l t b i\ k ~ ~ ~ a.E~4.. l 1 ~ hit _ V lY {y h t ter' Y f r~ ~ h'~ ~~ • ~~ ~y ~; 4^ £ ~ ~ ~ { FT ~ Y .t ~ ~ \ _ I Y h`, a~.ci s'tY~ a` ~ ,~ ~~~ t f i~ 1 4-~ ~ ~\ ~ S, 'r ~F t Y t WellDyne' Prescription Drug Management Pricing Proposal (Fixed Model) ~~ Type Pricing Formula AWP + %, MAC, etc. Retail Brand Lesser of AWP - 16% Ingredient costs Generic AWP-16% or MAC Mail Order Brand AWP - 23% Generic AWP- 50% or MAC T e Cost er Prescri tion Dispensing fee Retail $2.00 per Brand Rx $2.00 er Generic Rx Mail Order $0.00 T e Cost er Prescri tion Administrative Retail $0.00 fee Mail Order $0.00 Additional fees Start U Fee $0.00 not included in Securit De osits $0.00 above ID Card New or Re lacement $0.00 Paver Claims $1.00/Rx Cost WeIlDyneRx' MAC is approximately 45% - 65% below the generic Average Wholesale Price depending on the generic drug mix. The above pricing is based on the client adopting the WeIlDyneRx 2007 Drug Management Program. Rebates: WeIlDyneRx will offer rebates of $3.00 for retail claims and $6.00 for mail service claims based on participation in WeIlDyneRx' drug management program. Rate Guarantee We agree to the above rates for a minimum of one year. This does not preclude, (minimum two years) however, the negotiation of a more favorable agreement on behalf of the client at an earlier date. Kerr County CONFIDENTIAL 1 WellDyne' TM Prescription Drug Management Pricing Proposal (Transparent Pricing Model) Type Pricing Formula AWP + %, MAC, etc. Retail Brand WeIlDyneRx Transparent Pricing Ingredient costs Generic WeIlDyneRx Transparent Pricing Mail Order Brand AWP - 23% Generic AWP - 50% or MAC T e Cost er Prescri tion Dispensing fee Retail WeIlDyneRx Transparent Pricing Mail Order WeIlDyneRx Transparent Pricing T e Cost er Prescri tion Administrative Retail $1.85/Rx fee Mail Order $1.85/Rx Description Cost Additional fees Start U Fee $0.00 not included in Securit De osits $0.00 above ID Card New or Re lacement $0.00 Parer Claims $1.00/Rx WeIlDyneRx' MAC is approximately 45% - 65% below the generic Average Wholesale Price depending on the generic drug mix. The above pricing is based on the client adopting the WeIlDyneRx 2007 Drug Management Program. Rebates: WeIlDyneRx will pass-through 100% of rebates. Rate Guarantee We agree to the above rates for a minimum of one year. This does not preclude, (minimum two years) however, the negotiation of a more favorable agreement on behalf of the client at an earlier date. 2 W ~•~~`~~ ~3s r xT " ~ - ~~ ~ ~ F~ ~~~ ~ zA ~+r { s S x r. tip: t T F ~~ X i~t ~ Y ~ $~~ 4t i. ,3...' s, C ~ a k. ~ ' 4 i -~ ~ r i r ~~ k ~a of ,.~ ~,. ~ ~,~ .' .,(~ 4>i; ~ -~ ,y~ ~~a' ~ tyd v - ~ - ~ ~ } 'jt , t~i,c LJ Y `f ~ 1 ~ ~ t ~' t -l - L ~A+~ ~„~~ * y g'" yrA ~n~'~ua ~~t mac' ~ ° >>i ~+ ~ {Y ~ ~ 1- ~ a N ~ n~ ~ ~`h r!`x~~2~, "1~3 k p~~a'c~.',yC~"t` ~ _.: .p - + >~~ } o. v~ ' n~ r ' r;. ~ ~`~ Marc 'F' j 't~ 2~ x e321 'y '~~f ~. ; 4_. L t • ,~ ~ 3 t-1 -'~,, }.f~r« t': y s i`a ~ ~ ~. 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X44 j7 t+iG 't ~i y~. s r r * :. _ ~ i w n T ~~ 1h k4 'fi - _ ~ 1 -, t ~ „r # ~. !~, r tai r~ ~ ~ ~ 5' r ~ '~ 3' '.~~` {~i+ >~ ' Y t Y' `-.-~l. f •`'~.~ ~`.' ~ ~ ~;~`...,ti~F t~{zbti ~~'`'` „rni y4`,f ~-' tEk" I a.. yr~ 4 ~,; ., u i t ;~, .1 ;r 2 3 s -jt 4 { i f i} \ T - t ~• + ~ r ,K'4 } ~+' F °tr ~' ~ : ~a s~ z r a r ; i a y ~ ~r ~ '.~ t F~~ x ~ ~ ~ ~ ~ f ! R~ r~ r ; a" ' i d' i ' ~~ ;e t ~.y°. ~C jar ~. 7 : E y 9 k r ~ ' t ~~d' Y `r. V !1 ' ~ ~ r ~. f ~ C L tY-; 1~ t i~ 4 1 .{ fY L y~y ~' rte, ~ Y °- ~, ~~~~ ~2~~. ° ~'~1~E~, t< ~ t~ i+r~ta' ~a ~~ r'~ry~j~ C.. ~+r e r s,~'~~.. ..k~. ~.3i _ .'S. r'e>w. f. #~. i.1~~j ~ i.+ .~- it J~ . Y` - . ~ ~t .1c .. ,_ i~ _, .- ~ .- _ Y n „ . f 4 2 ~ '+ . _. . ,. I,t { (a i Group Name Group Number Cardholder's Last Name Middle Initial First Name Address City State Zip Code ~ ) Cardholder ID# Home Phone t ) Email Address Work Phone Please Charge My: Visa MasterCard Discover American Express Credit Card #: _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -. Expiration Date Cardholder's Name: Signature " '' Credit Card Will Be Used For All Future Orders. Complete this section only if transferring prescriptions from another pharmacy. Once We1lDyne RxWest has received all necessary, correct information, orders will ship within 48 business hours. Patient and Prescription Information 7. Patient's Name ____._ Prescription Number _ Drug Name Pharmacy Telephone Number_ _______ V~ Pharmacy Name Doctor's Telephone Number Doctor's Name __ Date of Last Fill 2. Patient's Name Prescription Number Drug Name Pharmacy Telephone Number Pharmacy Name Doctor's Telephone Number Doctor's Name Date of Last Fill __._____ 3. Patient's Name Prescription Number Drug Name Pharmacy Telephone Number ___ Pharmacy Name ____ Doctor's Telephone Number Doctor's Name Date of Last Fill_ _____.. 4. Patient's Name - Prescription Number Drug Name Pharmacy Telephone Number___ ~. Pharmacy Name_ Doctor's Telephone Number Doctor's Name Date of last Fill Acknowledgement: I understand that when permitted by law, WeIlDyne RxWest will substitute an FDA approved generic equivalent drug for any brand name medications enclosed with this order unless prohibited by me in writing or the prescriber. For all prescriptions submitted, I certify that I or my family members are eligible to receive prescriptions under this plan. I will take personal responsibility for payment of all medications that I or my family members receive. ^ Check here if you want brand with a higher copay. ^ Check here if you want Easy Open Caps. Signature Date f~_ _ '~~~ ~ PATIENT # 1 INFORMATION ~_/~/ ^ Male G Female i FIRST NAME MIDDLE INITIAI-. BIRTHDATE LAST NAME ~ Indicate Drug Allergies ^ None (~ Aspirin ^ Codeine [~i Erythromycin ^ Penicillin ^ Sulfa OTHER DRUG ALLERGIES --- ----_-_-----._ _--_-....____-_.,-_. 7 -~_~ 1 - PHYSICIAN LAST NAME FIRST NAME PHONE ~. _.....__._.._.._..~~...__._..__.-...___.__..____z~,_..__..._ _._.__-____w.~-....___._._...__..._~ _...._~~...__....__..._.___ PATIENT # 2 INFORMATION LAST NAME Indicate Drug Allergies OTHER DRUG ALLERGIES. None ^ Aspirin _ _/ _ / FIRST NAME MIDDLE INITIAL BIRTHDATE ~ Codeine !=_I Erythromycin ~!- J Penicillin ^l Sulfa PHYSICIAN LAST NAME LAST NAME Indicate Drug Allergies OTHER DRUG ALLERGIES, FIRST NAME PATIENT # 3 INFORMATION FIRST NAME MIDDLE INITIAL BIRTHDATE ^ None C7 Aspirin ^ Codeine C'. Erythromycin ~ Penicillin ~ Sulfa PHYSICIAN LAST NAME FIRST NAME 1. Complete the attached form to begin ordering your maintenance prescription medications from WeIlDyne RxWesYs mail service pharmacy.This form is only needed for new members, first time orders, or dependents that have been added since the last order. When the form is thoroughly completed, WeIlDyne RxWest makes switching your prescriptions from another pharmacy hassle free! Be sure to complete both sides of the form, including your method of copay. 2. Include the form and any prescriptions you may have in the attached envelope. To place a refill order, please visit www.ncwest.com or call 888-479- 2000 prompt 2, approximately three weeks prior to depletion of your medication supply. Please provide us with your: .Name ^WeIlDyne RxWest prescription number ^ Daytime phone, including area code ^ Mailing address PHONE C ]Male [-! Female ,. ? f [li~ (~'. ')i 111 xltl !'." nu Once WeIlDyne RxWest has received all necessary, correct information, orders will ship within 48 business hours via US Mail, UPS, or FedEx. Please allow additional time for delivery. If it is necessary for WeIlDyne RxWest to contact you or your physician for further clarification, your order may be delayed. y JY f !f l i ri ! ,k:` f'n a1:>a; ~,~,,'1r f- r,., ~, 1, .:tit 1 ~ i ~~ dll , ;1~a•.~"'' Ask your doctor for two prescriptions, one fora 30-day supply and one for your mail order supply with refills. Please check your current pharmacy benefits for specific plan coverage, as each plan may vary. Fill the 30-day supply at your local network Retail Pharmacy and send the mail order prescription to the WeIlDyne RxWest Mail Service Pharmacy. Mail Completed Form with Original Prescriptions to: rrr WellDyae RxWEST 7472 S. Tucson Way Centennial, CO 80112 ~-- ----- PHONE J Male C.' Female w .- o ~~ ~ ~ ~ ~ x ~~ '~ ~ > U , ~Q =' ~ .~ ~ , ~ (n ~ G w ~ ~~ ~ N .~ o ° `" ~ L ~ ~ w ~,•~ y X p U O W `" ~ ~ N ~ ~ .~ ~ ~ N Q ~ V] ~ ~ a~ .-. ~ A a`i ~ p ~ V N ~ . ~ ~ ~ 7 f~ ~ ~ ~ ~ c o ~ ;; z o ~ z ;,; z o z ~ z „ z .. ~~ ~ o a .o o ~ p o a y ~ ,~ :~ ~ ~ ~ a ~ a ~, ~ ~ a , ~ ~ ~ ~ ~ H ~ o ~~ ~ o ~" h . 0. 0 '~ p o '~ ~ p ~~ ~ o ~ 3 ~ ' N G ~ ' o ~_ V] O ~ o s. ~ ~ W ~ 0.. a L Lt, o Q ~ a, M1. ~ .~ Lt. ~ p a ti Cl+ ~ ,L a+ Ca a ~ M X N W o 3 N ~ ~ o ~ j O W ~ ~, W 4'", ~ O a a "~ •o ~' o ~ U " a~ ~ o >, 0 3 v c C ...+ ti ,L ~ U •~ . 3 ~, ~ v `° ~ ~ a~ ~ '' ~ . r''~ o ~ ~ p ~ ~ m z ~ w ~ ~ z ~ w v ~ ~ w ` ~ ~ cC ~ ~ Z ~ Q N p~ ~ v Z v, ~ w ~ ~ z ~ ~ m ~ Z, ~ z ~ "' -r , , Q~ ~'' ~., f G " Q z `~ ~ "~ O p Z 04 ~ "tl .. o z bq F "o U ~ .. 0 ~ N ~ 'b ~ '~ ~ ~ tU'] ~ ~ U n at ~ 'd n a .+ Ri .~ ~ ~'~ ~ ` n„ f P ~ Y ^S ~4 •f5~ ~ 1 3 r- r y ~ ! ~ ~~f 1~} 4 ` ` s N ~ y sti ~ ~ ~n. ~'ldo; ~ ~ ,_ ~ t ~ 5,~ rw sue, ~ ~t a t ~ '~^~4Y^StoK ~ i a ~' S ' ~ R~" ti' i - ' 5i ,~ ~ y y 4 } r a a ~" y ?} .~ _L t _ .I 1' -~.~ f ~5t ~ A S~' .F 1s'i"` V f5I ~; ~, n ~ T.Y F s ~~ k y r r -p ~ t .: ,: ~xr .c. k- t c r ~ U, i x. - rt~ ',-P~y ~ ~~ f`d ~: 7 L ~ 4 ±.., 0 1 tY r ~~ a ~~ ~' ~i ro x f k ~ Y ~ {3~F3 't.1 ~h ~ ~ z t ~;; n -- f , ~"i y'~ ~A1 ter.` ,`,, ~' r Y~ F . ~ K.; i r ~ ~'s~4~ N ~ ~: ~ ,~+ ra,: ,~`~ ~t ::~} : 4 ,.~~ + 1, .M 3.r'" fi>~.: - y, ~ t i ^ _ r" nom;' .E Y ~ y '~ {Fi a ~ i i ~t ,; t J . ~, ~ ,j i ~ ~'~ ~. ~~~ ~ r t ~rl. _i~ ~r ~' ~ 3t . " Y . ~~ ~ ~ r ~ r of ~ ~~ fi~ ~ 8 fr, R3 ,i r ~ a~ ~+ N r~ r i x w ~ 1" ~7 ~ v~ Y t ~ y i T r ~ F` 4 J ~ * ~ ~ ,~` r~ zt ~F ~ ~' ; 4ff~irW ~ _f s. n. a T k ° x a ~cva r ~ ~ fi ~.~4 ~. < _ 4F,?,F~ $,r ', r x t. c., tom' .J, ' ip~'$~ 4..- sY ; r ~ 3', ~h"CL'.4 f ~4 ~.~" 1 J 1 ~f V; ~'~ 4 ~ i '~ 1 i ~ a S- .Ktz i i .S-^ - ~ S J f {~ l r `a. -. f ~ - ,~' ~s~ _F'r r .~ ~ ,~ 'r -~.~ r , ~ i ~ „a t } y ~.~#.~ .~_ ~ f x tt ~ - , a" ~y ,~ ' r .t Ray ~ A ~~ ~ ' o t '. r., _ - a'~ ~~ ,u", ~. e r ~ t"r~ s 1 ~`~t~~~nyt4 ~ rt~~~a~~ iz~ l.F a ~~ ~' ~t f ~Y K # lj t y }. ~ i Y {l~`'r. $6? ,yt~.c b h. ~;, ~~ :.last t t xz, r ,~ M +4 s -Lr E{; s; ~~~ f-F ~~ ~ ~~ i 4;t, b S ~~ x ~ 1 ~~~'ji~tj- ~ ~ , ~~e ~ ~ a, 4 b ~ ~j7 ~ ~E +~~ ~ - ' ~- x s ~ ' ' ~f ~' ~" ~ ,~~': s x~lrp j 'c ,~ t .Y ' s e,~. stiff ~~ a r ~~ ~ 1 4 Y t 2 ~~~~ ~ ~ C1 ~bC R t ~~ ~ ~ ~'` _ ~ A. ~ nY^ 5 .t w~ .~ rv r+, t S~ s ./ `' WellDyne COMPANY NAM E DRUG UTILIZATION /TOTAL DOLLARS 06/05 THROUGH 11/05 DRUG i Rx COUNT TOTAL~ bOLLARS 1 ML ALLERGY SYRINGE PERM NEEDLE REG 2 37.08 ABI LI FY 13 5,43867 ACCU-CHEK ACTIVE STRIPS ~ 4 ~ 110.47 ACCU-CHEK AVIVA 3 84.08 ACCU-CHEK COMFORT CURVE TEST STRIPS 7 1,539.33 ACCU-CHEK COMPACT CARE _3 58.84 ACCU-CHEK COMPACT STRIPS ',eA000-CHEK COMPACT TEST DRUM _5 13 959.09. 1,304.77 (ACCU-CHEK MULTICLIX LANCETS 1 ~ _ 12.63 'ACCUPRIL ~ 2 _ ~~~ 201.50 ~ACEBUTOLOL HCL 2 248.74 ACETAMINOPHEN/CODEINE 13 377.87 ACETAMINOPHEN/CODEINE #3 ~.m 38 178.22 ACETASOL HC 1 ~ ~ 2_ 3.49 ACETAZOLAMIDE 1 ~ ~~_ 7.39 ACIPHEX 57 _ 15_,100 09 ~ ACLOVATE 1 1.17 2 ACTIO 4 10,399.27 ACTIVELLA 6 603.42 ACTONEL g _ 37 6,653.39 ACTOS 45 16,196.65 ACULAR LS 7 315.10 ACYCLOVIR _ 16 ~~ ~,.~.,_~. _ _251.05 ADALAT CC 3 585.06 ADDERALL XR ...,. 51 _ _w 5,264.01 ADOXA 3 a._,. 1,204.83 ADVAIR DISKUS _ 49 12,922.60 ADVICOR 12 2,081.00 AGGRENOX 6 ~_ 1,046.23 AK-TOB 3 _ _ ~ 2.74. ALBUTEROL ~ 126 1,492.88 ALBUTEROL SULFATE 51 720.66 ALBUTEROL SULFATE HFA 7 99.33 ~ ALCORTIN 1 60.3 ALDACTAZIDE ALDARA 3 3 183.45. 513.95 ALESS E-28 2 72.42 ~ ALLEGRA 19 1,595.80 ALLEGRA 63 7,948.02 ALLEGRA-D 12 HOUR 34 3,543.30 ALLEGRA-D 24 HOUR 6 457.47 WeIlDyneRx Drug Utilization Report 1 e.l-.~~. err COMPANY NAME DRUG UTILIZATION /TOTAL DOLLARS 06/05 THROUGH 11/05 DRUG Rx COUNT TOTAL_ DOLLARS VOLTAREN _ 4 0.00 VYTORIN 57 9,450.72 WARFARIN SODIUM 75 1,489.15 WELCHOL 6 1,171.69 W ELLBID-D 3 23.11 WELLBID-D 1200 1 14.15 WELLBUTRIN XL 52 8,145.90 XALATAN 27 3,093.81 XANAX 14 2,311.55 XANAX XR 6 1,942.90 XIBROM 3 81.94 XIFAXAN 3 1,035.43 XIRAHISTDM 1 74.13 XODOL 1 14.29 XOPENEX 2 122.22 YASMIN 28 25 1,402.30 ZADITOR 2 117.79 ZANAFLEX 3 14.06 ZANAFLEX 4 0.00 ZANTAC 6 178.44 ZEBUTAL 1 72.68 ZELNORM 9 2,437.48 ZESTORETIC 2 0.00 ZESTRIL 2 281.66 ZETIA 55 9,630.94 ZITHROMAX 1 46.01 ZITHROMAX 27 803.80 ZITHROMAX TRI-PAK 15 584.33 ZITHROMAX Z-PAK 81 3,22251 ZITHROMAX Z-PAK 1 46.01 ZMAX 2 92.12 ZOCOR 119 33,394.24 ZOFRAN 5 1,465.29 ZOFRAN ODT 3 1,156.91 ZOLOFT 85 13,561.27 ZOMIG 15 718.25 ZONEGRAN 1 126.36 ZOVIA 1/50E 2 156.70 ZYMAR 2 99.94 ZYMINE-D 1 16.58 ZYPREXA 9 3,747.27 ZYRTEC 117 12,876.47 WeIlDyneRx Drug Utilization Report 24 -~ , ~', r " _~.~: COMPANY NAME DRUG UTILIZATION /TOTAL DOLLARS 06/05 THROUGH 11/05 n~~ Er: Rx COUNT TOTAL_DULLAftS ZYRTEC-D '~ 18 1,290.31 ,~ .~._ _._ __ _________. _. ~ ~ __. a. W -..~ -__.. _ _ ~~_. ~ __~. _ _..~ ,_ -__ ,_ _. _~ - E .. ~ - h ....-.., ........................._,. _.... ~....,~__.~... ~~.._, ._..,.~-.A. -... r...~..~..____ . ,m .,. a.__.a,e e...N....a.~ ........ _._a_.__.- - - 09 rows affected ~ _,~ a___ 10 ~ . _ .._ .... ~ __~~ _......_ . .- _. ~~. _ _m. __ ~ ._-_ ~._..__. ~_ W.n_ s...~ .... , ~. _..._. _ _. _ _.._ _ . WeIlDyneRx Drug Utilization Report 25 ~~~~ M ~el1D~Tne COMPANY NAM E TOP PHARMACIES BY DOLLAR AMOUNT 05/05 THROUGH 07/05 harm name ; nabp_num i Patient_Paid Plan_Paid { In redient_Cost CITY MARKET PHARMACY 35 0614342 368.20 2,062.27 2,362.97 WAL-MART PHARMACY 10-1095 0612110 301.84 1,313.91 1,555.75 HOLDER SNYDER DRUG 2415443 274.98 1,226.57 ~ 1,413.04 CITY MARKET PHARMACY 7 0613097 136.86 635.65 _ 740.01 WAL-MART PHARMACY 10-1315 5202382 45.00 583.05 620.55 CITY MARKET PHARMACY 41 0615293 110.00 519.49 606.99 WALGREEN DRUG STORE 05838 5203663 139.14 407.46 514.10 RITE AID PHARMACY 6180 0613299 67.74 362.93 418.17 VILLAGE APOTHECARY 2403486 98.84 309.52 379.86 SAFEWAY PHARMACY 2469 5201796 105.00 287.46 372.46 RXWEST INC 0614708 55.00 321.51 364.01 SAFEWAY PHARMACY 1132 0612982 48.97 314.85 353.82 CITY MARKET PHARMACY 28 0614950 109.48 263.68 345.66 HOYS DRUG 5200251 ~ 40.00 299.27 331.77 ALBERTSONS PHARMACY 8847 5203396 80.00 168.15 233.15 CITY MARKET PHARMACY 34 0615027 85.41 135.17 198.08 EAGLE VALLEY PHARMACY AT 0614063 30.00 118.75 _143.75 WAL-MART PHARMACY 10-1412 5202421 40.00 50.70 83.20 TARGET T-1813 0618491 23.06 49.39 67.45 THRIFTY WHITE DRUG 735 2404983 26.43 17.89 36.11 VANDEL DRUG COMPANY 5200922 10.00 25.69 33.19 WAL-MART PHARMACY 10-1688 4825886 19.80 0.76 15.56 ALBERTSONS PHARMACY 830 5203423 10.00 3.77 11.27 COLUMBINE MARKETS INC 0619176 16.11 0.00 8.61 WeIlDyneRx Top Pharmacies by Dollar Amount Report 'sr c ~ ti ""r~'3 9 ~t ~ ~ _ - ',tea ~ z r"' ~ 3~i7~ r `~ r. 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T y64w ~ ) `rg ~r~ ~'.f~ ~ ~ ~=f~~~ ~,v EE ~` ' ~ a y'. ~ :,+a. y ,` ~~~ r ?fi ~:# ~.._ -f ~E3,. ~ ~ K ~ fie ' ~ t r ' 4 y ~> ~ a ~ C,ft ti ~lw ~~s1.~ _ '~ ~~~ ~ Y 1: ~ _ ' ~ - Y ~-. ' _-f \ t r -R{ ~ r d t _ 1 S , ~ {{ Z ~ ~ r 1 3 y~~~' a r~ ~ ~ 't~.ks + ~a ~' x ~ 1 ~.: trx.~ = r ~ ~ '~~~ ,t~~~., ~, E r t _ ; c; - _ i f L 4 C i J ~ L ~ F~ S .~ ~ ~` ~ ~ ' .' ~ ° ~h*` y~ r+ k1 i Ala r ?i r h - r ~ _ - "z .r ~}~~~~ ~~~ r ~ ~ 1 ~ L . ~ r ~ y ,~ k ~a3R.~ >t ~' , ,~ ~ r; ~~ ~ ~ .' r ~ r? u'~~ '` ~~~ ti ~ r:~ to Ott y# ~ ry{5 L ~~"5~~~ ` r 4 5 tity ~ . ~ # ~t~ c -u } ~Yee :.~ ,. 1 x ~.~ ~ c Rey $,.t ~ s, - ~ ~ J ''-F ~~ a>~.~ ~ t ~.~' l'+.' t. is t t ~ f ~ R 4 ~ ' d r ~. ' .n~ r 7 _ .~ ,h 3, 'J 13' ~~ - -0~ ~Y,~'t • r ~: ~ -,1 i ~ r ~ .,- +", , t~}~ n ~r'CC ~~ 1 ~ ~-kr'rotz ,rt ~ s. ~~ ~~. ,~ t ~~yE~, k-rta ,c r T ,~ c: 5 ~ , F -w r... WellDyne' COMPANY NAME DRUG COSTS JUNE 2006 ~GRUUPTID ~ PATIEN7__PAID l PLAN_PAID '°ib PATIENT PAID %PLAN PAID RXW2299A 15,133.14 91,828.15 14.15% 85.85% RXW2299B 1,557.99 6,402.70 19.57% 80.43% RXW2299C 383.12 585.48 39.55% 60.45% RXW2299H 7,944.23 19,478.13 28.97% 71.03% ~r++ WeIlDyneRx Monthly Drug Costs Report G Z Z a O V O O 2 O ix H 0 0 F LL W Z W m O °o 0 W O w m W f !~ ~~ ~~ ty 0. O O ~ O O ~ O O q O O N O O O OH O O~ O O O O O ~ M M ~" t n ~j 0 n ~ N O ~ O M ~~ O n ~ ~ G7 s! 04 O O O ~ aA ~ t0 n M O O O O O O O O O n ~n M N 33 ~ a COO O aMC) O O, O O' a.[) d' ~ W Q N N t N~ N ~ Oa T ~ ~ O O N O a O r~ O ~ ~'a7' t O 3 M ~ ~ O T N O N O N O M N~ ~ ~ ~ O O O O~ O O O f0~ O O O On~ O M O O O O O~ O~ O O j n. 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O N n N ° r, ~ O S O N O) O ti O O N CA O ~ O O ~ N ~ (A O n O O N ~ O O ~ N ~ N ~ O O N ~ N r.~ + O~ O N O ~ ~ O ~ O to O ~ O O O t!7 O ~ ~ O ~ CO O CO O CO O CO O CD O O O ~ O} Q O ~ M O ~ M O ~ M O ~ ~ M O ~ M O ~ M O ~ M O ~ ~ M O ~ M 4 ~ O ~ M O ~ ~ ~ M O ~ M O ~ M O ~~ M ~ N N N N ~ N N N ~ N r N N N N N O ~ O ~ O) ~ CA ~ O ~ O ~ CA r (P ~ O ~ O) ~ D1 n CA ti O ~ O) ~ ~ „~ ~ M ~ M ~ M ~ ~ M In M ~ M ~ M ~ ° M ~ M ~ M ~ M Lf) M ~ M ~ M _'. 0 CO N N O N N CO N N CO N N CO N N CO N N O N N CO N N CO N N CD N N CO N N CO N N O N N CD N N O O O O O O O O O O O O O O O O O O O O O O O O O O O O E ' ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ c~ .__ ~ ~ ~ ~ ~ ~ ~ ~. ~ L~.JJ 1~ ......_. ~ 1~ ~ . ~ ~ . ~ ~ L.. ~ r a N N .~ U N N X N >. 0 a~ w ~ o°o ca0o ~ O 0 0 o U oo ~ U ~ N M C ~ ~ ~ M ~,~ C r. ~ ~_ N ~ ~ op >~ ~ ~ ~ X > f~- V oo ~ O L ~+ .~ d Q. /O MV W V Q T CONFIDENTIAL AND PROPRIETARY TO We1lDyneRx \wellDvn ' MANAGED PHARMACY BENEFIT SERVICES This Managed Pharmacy Benefit Services Agreement effective as of Delaware corporation, a wholly owned subsidiary of WeIlDyne, Inc. ("WeIlDyneRx") and PRELIMINARY S EMENT ENT and between WeIlDyneRx, Inc., a ~, ("Plan Sponsor'). Pursuant to the terms and conditions of this Agreement, Plan Sponsor desires to ret yn, ide, and WeIlDynef°desires to provide for Plan Sponsor, pharmacy benefit management services including, without limitation (i) ma ~ and specialty drug pharmacy, (ii) claims processing, (iii) retail pharmacy network management, (iv) formulary m Bement and (v) payment o to Participants for prescription drugs furnished to Participants (collectively, the "PBM Services'). Plan modificati be identified and detailed'` Ian Setup. w TERMS AGR ~' ~ ~:~,. w ~:, `~rilr` NOW THEREFORE, in consideration and the mutual co is herein contaid, the parties, intending to be legally bound, agree as follows: 1. Definitions. Unless the context o'1 this Agreement, including singular and Claims" shall me im wh ication system. terms defined in thi ion 1 shall have the meanings herein specified for all purposes of ein defined. Benefit Serv s Agreement. `all required data elements necessary for processing through WeIlDyneRx's online AWP"sha the average pri a prescription drug as determined by WeIlDyneRx from the most current information provided by drug pricing service s Medispan scription Pricing Guide or other generally recognized pricing sources determined by WeIlDyneRx. The applicable AWP fo iption din the mail service pharmacy will be the AWP for the lesser of: i) the eleven (11) digit NDC code for the package size sub package sizes of 100 units or 16 ounce quantities, or the next smaller quantity if such specified quantities are not available. If Me an or other generally recognized pricing source changes the economics of this Agreement or the pricing terms, the parties agree to mo ify the pricing terms to preserve the parties' relative economics before such changed methodology. "Commencement Date"shall mean the date that WeIlDyneRx actually begins to provide services for Plan Sponsor. "DUR"shall mean concurrent drug utilization review. Managed Pharmacy Benefit Services Agreement Page 2 "Eligibility List"shall have the meaning assigned to such term in Section 3(a) hereof. "Generic Drug" means a drug identified by its chemical or non-proprietary name as determined by the United States Adopted Names Council (USANC) and accepted by the Federal Food and Drug Administration (FDA), of those drug products having the same therapeutically equivalent having an identical amount of active ingredients while taking into account such factors including but not limited to FDA status, exclusivity, and pricing differentials. , "Integrated Drug Management ("IDM') shall mean activities and special programs designe romote patient safety, improve outcomes, educate Participants, promote appropriate utilization and achieve cost effective pharmacy ing. "Identification Card shall mean a WeIlDyneRx standard single purpose printed. P;~rfant identi i and or such other card or form acceptable to WeIlDyneRx which identifies WeIlDyneRx as the provider of PBes. "~ ~r_ :~ ,~ ~, "MAC' shall mean the then current maximum allowable cost for ascription dr listed as a drug avai m ore than one manufacturer in WeIlDyneRx's pharmaceutical MAC pricing for esignation product as generic a ject to MAC is determined by WeIlDyneRx under its standard policies which take into a xclusi pricing differential be en AWP and WAC, among other elements. WeIlDyne, in its sole discretion, determines and pe dates the MAC to reflect changes in generic drug prices. 'Participant" shall mean each individual who is not en 0% copayment bane nd ' ntified on the Eligibility List, and the updates thereto, as being enrolled by Plan Sponsor and le benefits under th sor's Plan. 'ririr~ "Participating Pharmacy" shall mean each retail pharmacy pharmacy services to plan Pa ~ cordance with the 'PBM Services"shall "Pharmacy Network" shall me' services to .using thei on this in' Neiwork that has agreed to provide certain defined in the Preliminary Statements. of retail and it service pharmacies that is available to provide prescription drug want to Jan Sponsor offers prescription drug benefits to Participants which has been disclosed to I by We~DyneRx which describes Plan Sponsor's pharmacy benefit plan(s) including, but not limited prior authorization requirements, deductibles, and Participant eligibility standards. 'Prescription" sha a vali d legal order to dispense a drug legally eligible for dispensing under the laws and regulations of the United States, includin and Drug Administration and the state laws in which the dispensing facility is located. 'Prescription Drug" sha mean drugs, medicines, and biologicals, which can be dispensed only with a Prescription being authorized by a physician, or other legally authorized medical professional. `PHI"shall have the meaning set forth in Section 164.501 of the HIPAA privacy regulations for Protected Health Information. CONFIDENTIAL and PROPRIETARY - WellDyneRx Managed Pharmacy Benefit Services Agreement Page 3 f 'Therapeutic Interchange" shall mean upon approval of the prescribing physician, a process of substituting one drug for another drug that may be chemically distinct, and can be expected to have the same clinical effect when administered to patients underspecified conditions. 2. Plan Sponsor Specifications. (a) Plan Soonsor Information. At least thirty (30) days prior to the Commenceme Sponsor shall provide WeIlDyneRx with certain information regarding the identity, address, estimated size, pha service ~ ed and other Plan Sponsor specific information. WeIlDyneRx shall be entitled to use such information to ain~~ adequate and to review the proposed Plan Sponsor's financial information. ~z, (b) Plan Information. In addition to the specific Plan Sponsor i ation, at leas fourteen (14) days prior om ncement Date, Plan Sponsor shall provide WeIlDyneRx with the initia ~ which incl s Plan information nece r WeIlDyneRx to perform or provide the pharmacy benefit management service n S eluding without limit n benefit certificates, eligible drugs, capays, deductibles, maximum allowance benefits, nal drug usage, generic drug usage, and any drugs excluded under the Ran. By signing the Plan Setup, Plan Sponsor ~~ edges the accuracy of Plan Sponsors prescription benefit drug Plan design and supplementat s, fees or costs . Plan Sp responsible for any liability arising in connection with its benefit Plan design and shall hol sponsibility for all de witl~¢espect to benefit coverage including determining whether any rejected or disputed ' s ed. (c) Plan Chanaes. If Plan Sponsor elects to make b fit d cha `initial setup, including but not limited to covered items, Participant rior authorization re ants, such ch ", must be communicated to WeIlDyneRx in writing. r WeIlDyneRx wil y Pla r of any applicabl es due to WeIIC~yneRx as a result of such change. Plan Sponsor will be responsible ifying its Pa is of the change p _, to its effective date at no expense to WeIlDyneRx. Any plan design or program eci may resu changes to this Agr ~ In tl~e event actions or inactions of Plan Sponsor (i.e. incorrect eligibility; benefit han hange the Partici' ts' rights or are not adequately communicated) adversely impact We c's ability to y p ellDyneRx shall be released from compliance with such performance circums re corrected a effects therefrom have been eliminated. pharmacy benefit management services for the benefit of the Plan Sponsor in Section 3. (a) '~ ~ ~ List and U dat At least seven (7) business days prior to the earlier of Commencement Date of each Plan or Plan Sp desired date f ntification cards ,Plan Sponsor shall provide WeIlDyneRx with a complete and final electronic eligibility file, or format edia approved by WeIlDyneRx which shall list all Participants covered by such Plan Sponsor and set forth all p ity data including but not limited to Participant name, address, telephone number, member identification number, birth nd gender (the "Eligibility List'). Plan Sponsor shall provide a complete and updated Eligibility List in the approved for to WeIlDyneRx as frequently as mutually agreed to by the parties hereto. Within three (3) business days of WeIlDyneRx's receipt of such update, WeIlDyneRx shall enter the eligibility data into its online claim system and thereafter shall accept claims for covered Prescriptions fiat are dispensed to Participant after the effective date of their eligibility and deny claims for covered Prescriptions that are dispensed to terminated Participants after the effective date of their termination notice or the date of notification whichever is later. WeIlDyneRx and the Participating Pharmacies shall be entitled to rely on the accuracy and completeness of the Eligibility List and updates thereto provided by Plan Sponsor. `~" CONFIDENTIAL and PROPRIETARY - WellDyneRx Managed Pharmacy Benefit Services Agreement Page 4 '' (b) Not cation and Program Promotion. Plan Sponsor shall notify Participants that they have been enrolled in WeIlDyneRx's pharmacy benefit management program and explain its benefits. Plan Sponsor shall use its best efforts to promote utilization of WeIlDyneRx's pharmacy benefit management services to Participants. WeIlDyneRx shall be permitted to meet with or otherwise communicate directly with Participants concerning the program in a reasonable manner and at various times as mutually agreed upon by WeIlDyneRx and Plan Sponsor. Plan Sponsor is responsible to obtain any Participant authorizations required by law, that permits WeIlDyneRx to provide any PBM Services provided for Participants under this reement or any amendments to this Agreement. (c) Mail Service. WeIlDyneRx shall fill Prescriptions for Participants and shall rugs or medications to such Participants subject to the following terms and conditions: ,~<, (i) Distribution of Information. WeIlDyneRx shall provide Plan Sp +ih ies of inform aterials explaining the mail service and the forms necessary for Participants to util' ail service. Plan Sponsors ibute the mail service informational materials and forms to all Participants. (ii) Mail Service Pharmacv. WeIlDyneRx shall operate its rvic a yin compliance state and federal pharmaceutical laws and regulations and shall dispense only "scription drugs which, in its sole discretion, fulfil the requirements of the prescription 'ter and comply with appli ~ w. The licensed pharmacists employed by WeIlDyneRx in the mail service phar all have the right to refu ~ or renew a Prescription for any Participant when the Participant has not paid his ent amount or whe macist's professional judgment, the filling or renewing of s uch Prescription is in the t of the Participa the pharmacist has reason to doubt the authenticity of the Prescription. WeIlDyne ay from leme rograms through its mail service pharmacy to promote Preferr Drug L'st ("PDL") prod a ail order ~~. pecialty injectable prescriptions received by the mail service promptly and pro transferred to th~r~pecialty pharmacy for dispensing. yneRx shall dispen hrou hits mail service pharmacy new or refill Prescription orders for ip eceipt from a Particip (i) a valid Prescription order or a valid refill request and (ii) the _shall se the filled Prescriptions to be mailed to each Participant via first t forth in Est or as appearing on the face of the Prescription or order form. Special paid for by the Plan Sponsor or the Participant as specified in the Plan Setup or as mutually ~n nso nd WeIlDyneRx. Increases to published shipping rates after the effective date of include mail order dispensing fee. WeIlDyneRx shall not be liable to either Plan Sponsor or in deli resulting from circumstances beyond WeIlDyneRx's control as set forth in Section 15(j) IDyneRx shall not be required to dispense those products to which WeIlDyneRx does not have (iv) Gen s' n. If a Prescription allows, WeIlDyneRx's mail service pharmacy may fill the Prescription with a Generic Drug, n the professional judgment of the dispensing pharmac'st, fulfils the requirements of the Prescription and applica law. (v) Patient Profiles and DUR. WeIlDyneRx shall request information from each Participant to submit with his or her first mail order Prescription, a form containing information regarding, arrong other things, any drug allergies of such Participant. WeIlDyneRx shall utilize this information to develop a patient profile on each Participant which will include the information submitted by such Participant as well as a history of prescription drugs dispensed to such Participant during the term of this Agreement. Each mail order Prescription will be subject to DUR based on the patient profiles and mail service utilization CONFIDENTIAL and PROPRIETARY - We1lDyneRx Managed Pharmacy Benefit Services Agreement Page 5 ~~ (d) (e) (f) (g) history. WeIlDyneRx shall not be liable for any damages arising from the use or lack of use of such DUR services in accordance with Section 10 of this Agreement. Retail Pharmacv Network Services. WeIlDyne RxWEST agrees to provide a Pharmacy Network that is available to provide prescription drug services to Participants using their identification cards. WeIlDyne will solicit the participation of those pharmacies that are not currently a Participating Pharmacy at the request of the Plan Sponsor Sponsor, Participants, or any other person or entity for any act or omission of any pha WeIlDyne RxWEST shall provide Plan Sponsor with a reasonable number of the utilization of the Pharmacy Network and claim forms for use by Parti distribute all such information and claim forms to its Participants. current retail dispensing utilization including but not limited tc WeIlDyneRx shall have the right to modify reimbursement rat Drua Utilization Review and Clinical Suooort. WeIlDyne'iZx w~T~ programs designed to encourage patient safety, effective and programs may include calls or mailings to Participants and phi generic incentives, and mail order utilizati port. Through tl on-line concurrent DUR messaging to the We1lDyneRx shall not be liable for any darr with Section 10 of the Agreement. agencies. nsible for ~ted by pl Pharmacy of non-reimbursable claims. ind process claims submitted by Participants directly to WeIlDyne RxWEST claim form together with proof of payrrent. Manual claims which are not ig by WeIlDyne RxWEST will be subject to an additional fee. Medicaid >n behal Participants and Plan Sponsor shall reimburse WeIlDyne RxWEST for all amounts paid WeIlDyne RxWEST is responsible for processing Prescription Drug claims, Plan Sponsor shall be 3 funds for payment of Prescription Drug claims including any taxes imposed in connection with such 's, government agencies or a Participant. (h) Preferred Dru The Preferred Drug List ("PDL") is a list of FDA approved prescription drugs, medical supplies and over the counter prod for purposes of benefit design and coverage decisions. The PDL may be modified from time to time in WeIlDyne RxWEST's sole discretion. Plan Sponsor agrees that the PDL provided by WeIlDyne RxWEST will be the exclusive Formulary for covered drugs under this Agreement. Plan Sponsor agrees that, except for use in connection with this prescription drug program, that they will at no time copy, distribute, sell or provide a copy of the Formulary to any third party without WeIlDyne RxWEST's prior written consent. Upon termination of this Agreement or associated addendums, Plan Sponsor shall cease all use of the Formulary and shall destroy or return to WeIlDyne RxWEST all copies in its or a third party's possession. Upon WeIlDyne RxWEST's request, shall have no liability to Plan informational material regarding Upon receipt, Plan Sponsor will ements programs that alter the ' s or physician dispensing DUR services in accordance tem, WeIIDy~txWEST shall be responsible for (A) processing processing `claim forms submitted by Participant; (C) determining with the terms of the applicable Plan and the Eligibility List; and (D) le Plan (each such claim an 'Approved Claim ). WeIlDyne ("IDM") These and disease state education materials, health fairs, tion system, WeIlDyneRx shall provide standard opriate action based on Plan specifications. CONFIDENTIAL and PROPRIETARY - WeIlDyneRx Managed Pharmacy Benefit Services Agreement Page 6 Plan Sponsor shall provide proof to WeIlDyne RxWEST that it has complied with the terms and conditions of this section. Plan Sponsor agrees to promote the Formulary to all Plans and Participants. (i) Toll Free Plan Sponsor Service. WeIlDyneRx shall maintain, at its sole expense, toll free telephone numbers for inquiries of Plan Sponsor and Participants relating to the PBM Services. 4. Fees and Rates. (a) Fees for Services. Plan Sponsor agrees to pay WeIlDyneRx fees and other n in consideration of the PBM Services rendered by WeIlDyneRx in the amounts set forth in this Agreement. (b) Rates for Prescription Claims. During the term of this Agree IDy~eRx agrees ide Prescription services to Participants by the mail service pharmacy, or the Participating macies, as the case may be, as rates and terms set forth in the Agreement. Certain drugs, medical supplies and m services that ecome available on the ro ime to time will be priced separately and may not be included for PDL i it or guara s, based upon specific cturer availability, shipping, handling or processing requirements. Such drugs pr inclu nology drugs, com nds, injectables, and drugs that enter the market with supply limitations or competitive re "hat limit marketplace competition. All fees, rates and t guarantees are contingent upon Plan desi including adoption of WeIID PDL and IDM. (c) Associated Costs Paid by Plan Sponsor. .shall be responsible f ing costs and expenses collectively referred to as 'Associated Costs": i) Distribution Ex ens Except as otherwise s if provided" an Sponsor shall be responsible for the costs and '~~` expenses incurred ' n of forms, mater' nd documents a~the distribution thereof to Participants, and for special handling of ce ail servi riptions specified i e Plan Setup. Plan Sponsor shall be responsible for any postage costs or other pr handling o .ing costs associate ith requests for information, reports provided via paper or explanations of benefits. ii) dard or E~ ~ Service ~~ ~ s ~ In the event Plan Sponsor requests identification cards, non-standard ervice , erials or nts, or standard services, forms, materials or documents in a custom format or in an amount which WeIIDyn ' s sole di determines to be unreasonable or excessive, the additional cost of such services or materials shall be p e Plan S an additional charge to be mutually agreed upon by the parties. I; iii) S ecial or Excessi orts. Plan Sponsor shall pay for any special report requested in accordance with Section 6(b). In th i Plan Sponsor r sts special or excessive reports, Plan Sponsor shall pay an additional charge to be mutually agreed upon parties in wr ~ before such additional reports are provided. iv) S ecial min In the event Plan Sponsor requests a service which requires special computer programming, Plan Sponsor shall y for all associated costs including but not limited to WeIlDyneRx's internal programming time at a rate of $150 per hour. If WeIlDyneRx must engage an outside vendor for programming to meet Plan Sponsor's requirements, the rate will be the rate actually incurred by WeIlDyneRx for such service plus associated administration costs. v) Manaoement and Development Fees. In the event that WeIlDyneRx incurs development, management, or non-participating pharmacy fees or costs on behalf of Plan Sponsor, Plan Sponsor agrees to reimburse WeIlDyneRx for any such charges. CONFIDENTIAL and PROPRIETARY - WellDyneRx Managed Pharmacy Benefit Services Agreement Page 7 'fir vi) Implementation Fees: Plan Sponsor shall pay WeIlDyneRx an implementation fee at the rate of $2.00 per Participant to cover the costs of establishing a business relationship with the Plan Sponsor. The implementation fee shall only become payable if this Agreement is terminated less than twoyears from the Plan Sponsor's Commencement Date. vii) Administration Fees: Plan Sponsor shall pay WeIlDyneRx administrative and/or management fees as specified in this Agreement. viii) PDL Savinos Credit WeIlDyne RxWEST shall pay to Plan Sponsor an annu ~ to in the amount provided in the Agreement for each brand name formulary prescription dispensed at a participating ne cy during the prior contract year. Plan Sponsor acknowledges its responsibility to adopt WeIlDyneRx's PDL a ~ sociate rograms for formulary compliance. Payment shall be made within ninety (90) days following the submissi f th uarterly reb RxWEST shall retain rebates, if any, that exceed the rebate guarantee as per the Agreement. Rx ins PDL support to manage and promote its PDL program and may charge an administrative fee not to ex 2% of the AWP of the drugs for ates are payable under any rebate agreement as per Attachment A. Plan Sponso ~ not to ente o any contracts with with respect to the products and services cGspensed u der ement, um rebate guar (b) ~Irr+" significant change in the Plan Sponsor's benefit design, receipt of manufacturer rebates. Plan Sponsor further ackno rebates at will. If after the substantial change in the in practice regarding market t Plan Sponsor and wi guarantee and was inaccura RxW EST cooperative or manufacturers would have a agent upon no impact on the wledges that ph al manufacturers may d ue and/or reduce payments of PDL Savings or date of this Agree dustry interpretation dmin rends, formulary savin is 'tied to equitable adj e lai re adjust b ee a yn ave the sole to require that the Plan Sponsor provide to WeIlDyneRx, a deposit in the ae invoice amounts for the Plan Sponsor's billing history. WeIlDyneRx shall retain the deposit Plan S ement and until all of Plan Sponsor's obligations under this Agreement have been ryneRx shall submit to Plan Sponsor at least once each month statements of account or invoices that of the Approved Claims ,fees and costs for the Plan for the stated period. Pavment of S~ement of Account. Plan Sponsor shall) pay to WeIlDyneRx the amount due, according to the terms reflected on the Statement of Account. Upon receipt, Plan Sponsor agrees to process and forward to WeIlDyneRx such payment of the State of Account by wire or ACH transfer. If payments for amounts due are not made in accordance wth this Section 5, Plan Sponsor shall be responsible for penalties on late payments under Section 5(g). If Plan Sponsor disputes any item on any invoice, Plan Sponsor shall pay the full amount invoiced including the disputed item(s). After investigation of the disputed amount, if any refund is warranted to the Plan Sponsor, a credit will be provided on the next Statement of Account. CONFIDENTIAL and PROPRIETARY - W e1lDyneRx nts shall be dete not eligible for against future re ated by WeIID t of the adoption o ble law, regulation or guideline or any i of, or as the re of any substantial changes in drug industry coun ID RxWEST may give notice of such a change to or shall be r` d from its obligation to pay the minimum rebate ned. In the eve prescription claim data submitted on behalf of Sponsor es so as to result in an adjustment to previously paid rebates, WeIlDyne at is due to Plan Sponsor. Amounts paid by the Plan Sponsor to a eR II be paid from rebates. Managed Pharmacy Benefit Services Agreement Page 8 (d) Cessation of Services. Should Plan Sponsor, for any reason, fail to pay timely any Statement of Account in accordance with Section 5(b) hereof, become insolvent, or generally unable to pay its obligations when due, WeIlDyneRx shall he entitled to take any action it deems necessary to minimize its risk of default, up to and including the reduction of discounts provided to the Plan, and ceasing to adjudicate claims and/or the dispensing of Prescriptions under this Agreement while maintaining all of WeIlDyneRx's rights hereunder. (e) Late Payment Penalties. WeIlDyneRx may impose late payment charges if a is past due if it is not paid by the 10th day following the date of an invoice or I assessed monthly and shall not exceed one percent (1%) of the AWP value adjustments or fees shall not preclude WeIlDyneRx from initiating adjustmeriU (f) Particioant Co-aavment: Plan Sponsor's Plan shall provide that Pharmacy the co-payment amount for each Covered Prescripti " co-payment, WeIlDyneRx will use reasonable effort to obt e any amount not satisfied by their Participants. en t becomes past due. A balance f Account. Late payment charges will be amount. Any waiving of late payment s date. required t e WeIlDyneRx Mail Service t- the time of purchase. If the P t fails to pay the required >paymer~however, the Plan Spo II b es ponsible for (g) Rioht of Offset. In the event of any uncured payment or default, We 'shall be entitled to offset the amount of such payment defaults against any Plan-related amount~therwise payable to Plan Sp 6. Records and Resorts. (a) Maintenance of Records. WeIlDyneRx shall mai , in origin n computape, documentation of all Prescriptions filled. Such records shall remain accessible to regulatory ents 'xami out the term of the Agreement and thereafter for such additional peri required by Feder fate law. In ad n, WeIlDyneRx shall maintain, in original form, or on computertape, y ofthi ent in accordance 'th applicable law~.~ (b) Mana em nt Re orts. n Sponsor shall reim ellDyneRx for the cost of any special report. Any non-standard report requested by on onsidered a " cial Report." Plan Sponsor agrees that for each Special Report, Plan S all pay Well or th ministrative support necessary to produce such Special Report at a rate ouse ma f programming , or, (ii) in the event WeIlDyneRx must outsource such programming services to a software t the a t of such services plus administrative costs; and administrative costs associated with any reproduction on a nested b Sponsor will be notified of the cost of the "Special Report" before any expense is incurred. (c) and Statements. n Sponsorwill review all reports and statements provided by WeIlDyneRx and will notify WeIlDyneRx in f any errors jections within sixty days of receipt. If Plan Sponsor does not notify WeIlDyneRx of any errors or objecti in the si 60) day period, the information contained therein will be deemed accurate, complete and acceptable to Plan Spons 7. Term and Renewal. Unless otherwise terminated in accordance with Section 8 hereof, this Agreement shall commence on , 2007 and end on 2010. This Agreement shall automatically renew for a twelve (12) month period on , 2010, and on each 1st thereafter (each a "renewal date"), unless either party notifies the other in writing at least ninety (90) days prior to the renewal date of such year of its intent to terminate +"' CONFIDENTIAL and PROPRIETARY - We1lDyneRx Managed Pharmacy Benefit Services Agreement Page 9 'fir this Agreement. Plan Sponsor shall pay all costs and expenses in any way related to Plan Sponsors failure to provide written notice to WeIlDyneRx at least ninety (90) days prior to any termination by Plan Sponsor other than a termination due to WeIlDyneRx's uncured material default. Such costs and expenses shall include but not be limited to all prescriptions filled, claims adjudicated and fees incurred following the actual termination date. 8. Termination and Default. (a) Termination. In addition to WeIlDyneRx's rights under Section 5(d) hereof, this (i) Upon the mutual written consent of the parties hereto; or (ii) By either party, with or without cause, at the end of the Initial Term or ninety (90) days prior to the end of such terrr~ or (iii) At either party's option, if the other party fails to comply wi provision sixty (60) days of receipt of written notice of such failur which i take to correct such failure); or (iv) At either party's option, if the other party comes insolvent or seeks p , laws; or ~~ (v) The parties acknowledge that federal ands hE government agencies and that the relationships a litigation and govemment' vestigation. If such a pr on this Agreemen on any segment < faith for a si period th and conditions cause. If are unable ach agreement no less than thirty vs' prio tten notice to the health ~~~ sa Hatted o h litigation or investigation has a significant impact part, upon notic ,' 'om either party, the parties agree to negotiate in good Agreement to address any problems such legislation or judgment may pith uch sixty-day period, either party may terminate this Agreement upon (vi) ~ her Well or Plari mates this Agreement in accordance with the terms of Section 8(a), all unfulfille ligation d by Plan Sponsor or Participant for any of the services provided herein shall be paid within thirty (30) days Each party and its officers, s, employ ,agents, successors and assigns (each an "Indemnitee') shall be indemnified and held harmless by the other parry (the "Indemnifying t any and all claims, loss, damage, costs and expenses ("Loss'), including, without limitation, attorneys' fees and expenses, actually incu ny Indemnitee arising out of or resulting from the negligent or willful actions or omissions of the Indemnifying Party. Except with respect to th egligent acts or omissions of WeIlDyneRx, Plan Sponsor further agrees to indemnify and hold WeIlDyneRx, its officers, directors, employees, agents, successors and assigns harmless from any Loss actually suffered or incurred arising out or resulting from services performed by WeIlDyneRx in accordance with this Agreement. CONFIDENTIAL and PROPRIETARY - WellDyneRx terminated as follows: :wal term, written notice to the other party is Agreement and fails ct s h failure within all describe the action other party must voluntarily or involuntarily, under any bankruptcy measures a gislation are continuously considered by and or nizations are continuously challenged through Managed Pharmacy Benefit Services Agreement Page 10 `~~/ 10. Limitation of Liability. WeIlDyneRx will perform the services associated with this Agreement in a good and workmanlike manner in accordance with the customs, practices and standards of providers skilled in the industry. In no event shall WeIlDyneRx be liable to Plan Sponsor or any Participant for any indirect, special, or consequential damages or lost profits, arising out of or related m WeIlDyneRx's performance under this agreement or breach hereof, even if WeIlDyneRx has been advised of the possibility thereof. WeIlDyneRx's liability to Plan Sponsor under this agr ent, if any, shall in no event exceed the total amount of compensation pursuant to Section 4 (viii) due WeIlDyneRx for the prior twelve (12) mon reement. WeIlDyneRx relies on Medi-Span or industry comparable databases in providing Plan Sponsor nt with drug utilization review services. combination shall not be construed to indicate that the drug or drug combinatio fe, appropria or effective in any Parti ~. 11. Audit. ,~°~ (a) Audits of Participant and Business Records. WeIID eRx shall have the right to in nd audit, or cause to be inspected and audited, the books and records of Plan Sponsor relating to the a and number of Participa'~ the historical claims detail. If an audit reveals a breach of Plan Sponsor's obligations under this Agree ' eRx may set off again is payable to Plan Sponsor under the Agreement any amounts otherwise due to WeIlDyneRx ed onsor's breach. Sponsor shall have the right to audit the business records of WeIlDyneRx which directly relate to in es made a sor for cl s reimbursement under Section 6 (c) through ,r:;5: an independent accountant or an independent third party au r a ble to ho will sign a confidentiality agreement ensuring that all details and terms ent will be treat confidential. ~; n Sponsor and WeIlDyneRx shall cooperate with ~:>. representatives of each to con uch inspection or dit. All audits shall be at the auditing party's sole expense and shall only be made during nor 'Hess hours, wing thirty (30) da written notice, and without undue interference to the audited party's business activity. 1 ,after tion of th dit under this Section' he audit reveals a discrepancy in the results of the audit and the previous calculations of the a a iting party sh eliver written notice which sets forth in reasonable detail the basis of such discre a parties s reaso ve the discrepancy within 30 days following delivery of such notice, and such I, bindiri onclusive upon parties hereto. If WeIlDyneRx and Plan Sponsor are unable to reach a re ion within such iod, the hall resolve such dispute in accordance with Section 14 hereof . of Discre ancies. Up final and c sive determination of a discrepancy revealed by an audit procedure under this Section 11, th hich owes money ay such~ums to the other party within thirty (30} days of the delivery of the conclusive audit findings. WeIlDyneRx has utilized due diligence in collecting and reporting the databases and has obtain,;; ch data.. rom sources believed to be reliable. WeIlDyneRx, however, does not warrant the accuracy of reports, alerts, codes, prices or of r da ntained in bases. The clinical information contained in the databases and the PDL is intended as a supplement to, and not a for, he knowledg ise, skill, and judgment of physicians, pharmacists, or other health-care professionals involved in FBrticip care. The absence of a war a given drug or drug 12. Exclusivity. Plan Sponsor hereby DyneRx during the term of this Agreement, and any renewals hereof, the exclusive right to provide PBM services to Plan Sponsor 13. Confidentiality. (a) Confidential and Proprietary Information. Plan Sponsor and WeIlDyneRx each recognize and acknowledge that, by receipt and possession of certain information regarding the other's business operations, each will discover certain of the other's confidential and proprietary information, skills, know -how, technical expertise, and methods. Neither WeIlDyneRx, nor Plan Sponsor will disclose confidential information of any of the others only to its employees who have a need to know and who have agreed not to disclose it to others. This confidential and proprietary CONFIDENTIAL and PROPRIETARY - We1lDyneRx Managed Pharmacy Benefit Services Agreement Page 11 information includes, but is not limited to: (a) the terms of this Agreement, (b) the content and format of all reports furnished and generated under this Agreement, (c) details of the operation of WeIlDynelac's pharmacy benefit management program, and (d) information with respect to Plan design. Each party acknowledges and agrees that such information is confidential, valuable and proprietary to the business of each party, and that each party's success and ability to compete depends on keeping such information confidential. Each party hereto covenants and agrees not to, directly or indirectly, and agrees to cause its officers, directors, employees, agents and affiliates not to, use, publish, disseminate or otherwise disclose, any of the other party's confidential or proprietary information now later possessed by each, without prior written consent of the other party. (b) Confidentiality of Participant. The parties shall maintain the confidentiality of any infor ng to a Participant in accordance with applicable laws and regulations. Plan Sponsor shall ensure the release of infor, ~ n rela articipants to WeIlDyneRx is duly authorized. WeIlDyneRx agrees that all Eligibility Lists are the proprietary and co fide I informatio Sponsor and agrees that it will not disclose any such information. Notwithstanding the foregoing, upon rece' lidl ssued subpo rt or administrative order or the like, WeIlDyneRx shall after giving notice to Plan Sponsor of the s ena, court or administrative or entitled to release such information in accordance with the subpoena, order, or request, unl herw Ise dir ed by Plan Sponsor. U ipt a request for information signed by a Participant with respect to such Parti n , ynoRx sh a entitled to releases formation to the Participant. WeIlDyneRx shall be entitled to assume the genuineness nat uthenticity of all s requests, orders or subpoenas, the conformity of copies of such requests, orders or subpoenas t ~ ginal and that the persons executing such requests, orders and subpoenas have full power and authority deliver same '`°:r, (c) Business Associates. During the term of this Agreem onsor may direct We fro time to time to provide WeIlDyneRx's standard information that WeIlDyneRx has collected reg ~ g of Plan Sponsor. xtent possible, Plan Sponsor will limit its requests for information of patient-identifiable information the mini ation nec ary. All directives for disclosure of patient identifiable information will be in writing and will identify all icip whos Iles should be disclosed. Plan Sponsor shall be /, responsible for obtaining from 'ant his/her consent n Sponsor and . DyneRx to provide to Agent any records, reports and other data compiled or pr ed by regarding pres tion and medical information relating to him/her which are the subject of such requested infor In the event Sponsor or Plan S sor's representative requests information that has not previously been reviewed by WeIID eRx compli representative, Plan or shall pay for all associated costs including but not limited to WeIlDyneRx's internal HIPAA n Sponsor repr nts that for each Agent to which it may direct WeIlDyneRx to disclos e patient-ide i ation, Pla or has a in place prior to the directive, an agreement requiring the Agent to treat as co which ally identifes a rticipant, Participating Pharmacy or physician and prohibiting the Agent from di ing any such infor 'thout ex thorization from WeIlDyneRx or the Participant. Plan Sponsor agrees to indemnify and hold neRx, its affiliates, di officers, s, agents and parent entities harmless from any and all liability, claims, actions or de ~ eluding reasonable s' fees c ed by or in any way related to WeIlDyneRx's disclosure pursuant to a directive from Plan Spons ormation, reports ummaries to any Agent or from any Agent's use or dissemination of the information, reports or summaries. demnification s urvive this Agreement and be binding on all assigns and successors to the parties of this Agreement. 14. Arbitration. The parties shall use rea able efforts to resolve disputes within 30 days following delivery of such notice, and such resolution shall be final, binding and conclusive upon the parties hereto. Any controversy or claim arising out of or relating to this Agreement whereby WeIlDyneRx and Plan Sponsor are unable to reach a resolution within such 30-day period, shall be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association. A single arbitrator shall be appointed from Colorado and agreed upon by both parties. The arbitrator shall have the power and may render awards in support thereof, to require any party to an arbitration proceeding hereunder to produce relevant documents for inspection and copying by any other party to such arbitration proceedings. The award rendered in such arbitration may provide for equitable remedies including reimbursement for attorney's or accountant's fees, but may .fir CONFIDENTIAL and PROPRIETARY - We1lDyneRx Managed Pharmacy Benefit Services Agreement Page 12 ~Irr not provide for exemplary or punitive damages. Such award shall be final, and judgment on it may be entered in or enforced by any court, state or federal, having jurisdiction thereover. Upon mutual agreement befinreen the parties, mediation shall be used to resolve any controversy or claim arising out of or relating to this Agreement whereby WeIlDyneWc and Plan Sponsor are unable to reach a resolution within such 30 day period, instead of arbitration. 15. General. (a) Notices. Any notice required to be given pursuant to the terms and provisions of this ment shall be in waling and shall be sent by certified mail, return receipt requested, or by overnight delivery service, or by facsim' ion confirmed by telephone conversation (recorded message is not sufficient), at the addresses and facsimile numbe ow or her address or number as shall be specified by the parties by like notice. All notices shall be deemed to have en ived on th R~ day after the date said notice was mailed, or, twenty four (24) hours following the time of said notice if csi ile, or immedi on personal delivery. WellDyneRx, Inc. Attn: VP Operations 7472 South Tucson Way, #100 Centennial, CO 80112 Telephone: (303) 645-2613; Fax No.: (303) 6 at: ~lilr-' `~III/` (b) Bindin Nat ssi nment. em on and inure to the benefit of the parties hereto and their successors and assig r the rig duties stated ,may be assigned by either party provided further that no such assignment sh ve the effect o such p any of its obligations under this Agreement without the written consent of the other party. yneRx may assign thi ant to a liated with WeIlDyneRx or any entity which succeeds to its business through a sale, r other corporate tra n. For th rposes of this provision, the term "affiliated" shall mean a,y entity which controls, is contr y, or is under comm ntrol wit ellDyneRx. (c) Headin s an relation. Th adings of the various sections of this Agreement are inserted for convenience only and do not, expressly or by i ,limit, a or extend the specific terms of the section so designated. (d) Govemino Law. The va ,enforceability, and interpretation of this Agreement shall be determined and governed by the internal laws of the State of Colorado. (e) Entire Agreement. This Agreement contains all the terms and conditions agreed upon by the parties and supersedes all prior understandings, writings, proposals, representations, or communications, oral or written, of the parties hereto. This Agreement may not be modified, amended or changed except by a written agreement signed by the parties. CONFIDENTIAL and PROPRIETARY - We1lDyneRx Managed Pharmacy Benefit Services Agreement Page 13 (f) Authoritv. WeIlDyneRx and Plan Sponsor warrant that each has full power and authority to enter into and perform this Agreement, and the person signing this Agreement on behalf of each party certifies that such person has been properly authorized and empowered to enter into this Agreement on behalf of such party. (g) Non-Comoetition in Hirano. During the term of this Agreement, and for a period of one (1) year there er, Plan Sponsor shall not, without the prior written consent of WeIlDyneRx, knowingly employ or solicit for hire, or knowingly allow its o ors, agents or affiliates to employ or solicit for hire, any employees of WeIlDyneRx. (h) Relationshia of Parties. This Agreement shall not constitute or otherwise imply a j _ enture, rrangement, partnership or formal business organization of any kind. Both parties shall be considered independe ntr ors and neat shall be considered an agent of the other. Under no circumstances shall employees of one party be dee a `' loyees of the othe (i) Force Maieure. WeIlDyneRx shall not be, liable for any failure or 'n performin II or part of its obligatio a terms of this Agreement restating from unavailability of pharmaceuticals, leg ativ war, ac any person engaged i ubversive activity, sabotage, riot, strikes, slow-downs, lockouts, or labor stoppage, freight em , f , exp 'ons, flood, earthq a or other arts of God, or by reason of the judgment, filing or order of any court or agency of comp risdiction occurring subsequent to the signing of this Agreement, or any other circumstances beyond its trot. In the event that any fa WeIlDyneRx to meet any performance standard is due to a force majeure or failure of the Plan Sponsor its obligations under th ment, WeIlDyneRx shall be released from any obligations to meet performance standards until such ci ve been resdved an refrom have been eliminated. Q) Authoritv of WeIlDvneRx. Plan Sponsor acknowledges th ellDyne top rm the services under this Agreement as an independent contractor and not uciary of the Plan or a ployee or Ian Sponsor, or any Plan contract administrator. ,,s~: Nothing in this Agreement d or deemed to er upon WeIIDyt,c any responsibility for or control over the terms or validity of the Plan. W neRx shat no final discretion authority over or responsibility for the Plan's administration. Further, because WeIlDyne insurer, pla nsor, third party ad strat r, plan contract administrator, or a provider of health services to Participant, WeIlDyneRx sh no res bility for (i) any fundin Ian benefits; (ii) any insurance coverage relating to Plan Sponsor, any Plan contract administrator, "' the re or quality of professional health services rendered to Participant. (k) Su Should an or con this Agreement be declared illegal or unenforceable, or in conflict with any other laws, the ling provisions shall and not theX~by. (I) ou s. This Agreement execut to any number of counterparts, each of which shall be deemed an original and all of which taken to hall constitute one the same instrument. (m) Further Assuran rom tam time upon request and without further consideration, the parties hereto shall, and shall cause their subsidiaries, to exec acknowledge such documents and do such further acts as the other party hereto may reasonably require to effectuate its obligatio ntemplated by this Agreement. (n) Liabilities and Obligations. WeIlDyneRx shall have no responsibility, risk, liability or obligation for the funding of the Plan Sponsor. The responsibility and obligation for funding the Plan Sponsor shall be the liability solely of the Plan Sponsor. (i) WeIlDyneRx shall have no responsibility or obligation to take, or to provide for, action, legal or otherwise, against an employer or employees or other persons to enforce provisions on behalf of the Plan Sponsor. CONFIDENTIAL and PROPRIETARY - We1lDyneRx Managed Pharmacy Benefit Services Agreement Page 14 '4~r (ii) We1lDyneRx shall not be responsible or obligated for the investment of any assets or funds of the Plan Sponsor. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed and delivered by their proper and duly authorized officers on the date first above written. By executing the Agreement, the undersigned individuals hereby warrant and represent that they have read this Agreement in its entirety and agree to all its terms. WeIlDyneRx, Inc. CONFIDENTIAL and PROPRIETARY - We1lDyneRx ~FiiaR. September 4, 2007 RE: PPO Networks FARA Benefit Services, Inc. can integrate with Viant (formally Beechstreet/Concentra), and Texas True Choice, or a Network of Kerr County's choice. FARA BENEFIT SERVICES 1625 W.CAUSEWAY APPROACH ~ MANDEVILLE, LA 70471 P ( 985 624 8383 T ~ 800 259 8388 F ~ 985 624 3354 ~ WWW.FARA.COM HEALTH PAYMENT SOLUTIONS Heathcare Economics- Geographic Information Systems Geographical Analysis August 31, 2007 A report on the accessibility of the Beech Street Nationwide HB for the employees of Kerr County Requested By: FARA Benefit Services, Inc. '~.- Beech Street Nationwide HB -Kerr County 1 Table of Contents PCP Accessibility Summary 1 PCP: Employee Detail Information by City 2 PCP: Employee Detail Information by State 3 PCP: Employee Detail Information by Zip Code 4 PCP: Employees Not Meeting The Access Standard by Zip Code 5 Hospital Network Accessibility Summary 6 Hospital: Employee Detail Information by City 7 Hospital: Employee Detail Information by State 8 Hospital: Employee Detail Information by Zip Code 9 Hospital: Employees Not Meeting The Access Standard by Zip Code 10 Specialist Network Accessibility Summary 11 Specialist: Employee Detail Information by City 12 Specialist: Employee Detail Information by State 13 Specialist: Employee Detail Information by Zip Code 14 Specialist: Employees Not Meeting The Access Standard by Zip Code 15 Beech Street Nationwide HB -Kerr County PCP Accessibility Summary Accessibility analysis specifications Provider grcrup:{,f : ,_ PCP ,, ~ , ~ 362,147 providers at 131,6661ocations (based on 362,147 records) Effip~O~let' ~'Qll~} ~~ t All Employees 243 employees Access Standard:. 2 within 20 Miles Elnplayets WIt~h 241 (99.2%) desired. access: Average distance to a choice of providers for employees with desired access Number o~ ~ ~ ~ Q 5 providers ATiles: 2.4 3.2 3.7 4.1 4.3 Key geographic areas Employees with desired access Total number of Average distance Cfity emplQyee~ Number Percent to 2 providers ICERRVILLE, TX 160 160 100 1.4 INGRAM, TX 18 18 100 5.3 CENTER POINT, TX 15 15 100 6.3 COMFORT, TX I 1 11 100 2.4 MOUNTAIN HOME, TX 8 8 100 12.9 BANDERA, TX 7 7 100 4.6 HARPER, TX 5 5 100 14.5 FREDERICKSBURG, TX 4 4 100 2.9 HUNT, TX 4 4 100 15.4 BOERNE, TX 2 2 100 2.3 Beech Street Nationwide HB -Kerr County 2 PCP: Employee Detail Information by City .411 Employees Employees with desired' aeeess Total Totat Average distance number of number of to providers Cite entpioyees providers vumber Pct ) 2- BANDERA, TX 7 5 7 100 3.7 4.Ci BOERNE; T~ 2 23 Z 140 2.I 2.3 CENTER POINT, TX 15 l l5 100 5.8 6.3 COMI±ORT, TX 11 3 1 l 100. 1.6 ' 2:4 FREDLRICKSBURG, TX 4 30 4 100 2.8 2.9 HARPER, TX S 0 5 100 ....13.5. 14.5 HUNT, TX 4 0 4 100 10.3 15.4 INGRAM,_TX 18 0 18 100 2.0 S.3 KERRVILLE, TX 160 90 l60 100 I.l 1.4 LAKEHIL.LS,TX 2 5 2 104 _2;6 6.2 MEDINA, TX 2 0 2 100 12.4 14.4 atiiOUNTAFI~HOME,TX 8 0 8 100 10._ 12.9 PASADENA, TX 1 243 1 100 0.~ 0.4 SAN ANTONIO, TX 1 2,234- l I00 0.1 '', 4.1 WAKING, TX l 0 1 100 0. 6.l TOTALS 2~1 2,634 241. 100 2.4 3.2 Access standard: 2 within 20 Miles Provider group: PCP Beech Street Nationwide HB -Kerr County 3 PCP: Employee Detail Information by State t ~, All ~mployc . -; ~~ ~~-~:~ - ;~~ a r x ~ . Etupieyeea witk't. - desirrd access ,.f-. _~r::; ~ 'A,-_ r.,y ar .~„1r~- r .~'c '3i' t.--~' .`~R-v~{ wek:t,,: -.., _ +t ..~ _.: Teter- ` Total< - ~ Average dlstaec~ f ~.~ ~~~, ~ , to praviden~.: 51IIfC': -~lY^v~~ ~11'QYit{ti'~;'.: ~Yn117FC PCC;.-.. - ~~'~ ~ ~ _.. TES:\S '_-t ; l ,-30~ ~-t l 9y ~. ~ ?.? TOTALS 2•t3 3I,4A~ 24t 9~ 2.4 3.2 Access standard: 2 within 20 Miles Provider group: PCP Beech Street Nationwide HB -Kerr County 4 PCP: Employee Detail Information by Zip Code All Employees Employees with 'desired access= Total Total Avera,gs distance ZIi' numberrof numberot. to providers ...City Cude emptayeesl providers ti'umber Pct 1 2 BANDERA. TN 78003 7 5 7 l00 _. 4.6 Bo~RN>, r ~ 7aoo6 2 21 2 log z.i ~ 2.3 CENTER POINT, TX 78010 I ~ I I ~ 100 ~.8 6.3 C©MPORT, TX 78013 1 t 3 11 100 1.6 2.4 FR~D6RICKSBURG, TX 78624 4 30 4 100 2.8 2.9 HARPER, TX 78631 ~ 0 5 100' 13.5 i4.5 HUNT, TY 78024 4 0 4 100 10.3 1 S.4 1NGRAM, TX 78025 18 0 18 100. 2.0 i 5.3 KERRVILLE. TX 78028 139 82 139 100 1.3 1.6 78029 21 8 2l 100 0.0 0.0 LAKEHILLS, TX 78063 2 5 2 100 2.6 6.2 MLDIN~: TX 78055 2 0 2 100 12.5 14.4 MOUNTnIN I-IOMI-. l~V 78058 8 ~~ 8 100 10.2 12.9 PASADPNA, TX' 77502 1 24 t 100 0.4 0.4 SAN ANTONIO, TX 78248 1 l5 1 l00 0.1 0.1 WAKING, TX 7$074 1 0 1 100'. 0.7 ' 6.1 TOTALS 241 199 241 100 2.4 3.2 Access standard: 2 within 20 Miles Provider group: PCP Beech Street Nationwide HB -Kerr County ~ PCP: Employees Not Meeting The Access Standard by Zip Code AIEEmp~'oyee~ ~' Empfoyees~withtnt~~.: ~~y,.= aesir~d ~~~ ,~~. Total ., Total Average distance' ,. ZIB~ , ,' to provident.: - .. Cite bode, employees `providers: ilambeg :. Pd ~' # 2 `. , JUt`C`flUti, T\ ,65-19 ~ I 100 ~.~ 6.? TOTALS< 2: i 2 10~' S.2 i 36.7 Access standard: 2 within 20 Miles Provide, group: PCP Beech Street Nationwide HB -Kerr County 6 Hospital Network Accessibility Summary Accessibility analysis specifications Provider gr©up: Rospital 4,168 providers at 3,9281oeations (based on 4,168 records) Employee gT'dU~7: All Employees 243 employees Access Standard: 1 within 20 Miles Employees with desired' access: 27 (11.1%> Average distance to a choice of providers far employees with desired access Number o1' 1 2 ~ 4 ~ providers 1ltiles 14.8 38.3 41.9 43.8 44.8 Key geographic areas En~playees with desired access Total . number al' ._ Average. distance City employees Number Percent to 1 provider KERRVILLE, TX 160 15 9 18.6 FREDERICKSBURG, TX 4 4 100 5.8 COMFORT, TX 11 2 18 18.6 JUNCTION, TX 2 2 100 8.2 BOERNE, TX 2 1 50 19.0 LAKEHILLS, TX 2 1 50 19.1 PASADENA, TX 1 1 100 1.7 SAN ANTONIO, TX 1 1 100 3.2 i Beech Street Nationwide HB -Kerr County ~~ Hospital: Employee Detail Information by City ~h~r 3k, ~ ~L~~ 3 ~~ ` ` y :1 i ... ~ _. .. , .. _ Tout 2 Tota1~ verage dsstanc® ~,.-~~ nureb~r o€ . nnmtx~' o~ 4 to ~ cbsiee o>~ . _ City-~ employees providers;- Num6et' 'Pct': 1 pravid~t BOLRNE, ['X ~ 0 I ~i) 19.0 COMPORT. TX t1 Q 2 ltd;' 18.6<: FREDLRICKSBLRG, CX ~ I -1 100 ~.S lL~NC"TION, TX 2 1 2 100 S.~<` KERR~'ILL~. T~ tr,0 0 I~ y 1~.6 LAKEHILLS, TX 2 0 i SU 19.1 PASADLti,~~, T~ I l I 100 L7 SAI~F ~iNTOMO, TX 1 "'6 F 10U 3.2 TOTALS 183 29 27 15 14.8 Access standard: 1 within 20 Miles Provider group: Hospital Beech Street Nationwide HB -Kerr County b Hospital: Employee Detail Information by State Access standard: 1 within 20 Miles _ __ .Ali Employees Employees with. desired access Stare Total numbei of employees Total number o€ providers Number Pct Average distance to a choice of 1 provider TEXAS 243 389 27 11 14.8 TOTALS 243 389 27 11 14.8 Provider group: Hospital Beech Street Nationwide HB -Kerr County Hospital: Employee Detail Information by Zip Code Ali EmpiQyee~ . ~~ < <: ~ } ~., , { ~ . ~; ,~, ~ , _ Empioyces wits: desired access - Totw! ~ Total Average distance ', :' ~'.;' .: ZIF - aam~er o~ . ' eambes of ._ ~: - to a choice of: Cify4 Code- emptayep provider€ `' Number Pct I pravideti~ , B©LRNF, GY ?006 ~ 0 I ~0 Iy0 CQMFORT, TX ..: 78f-13 11 p 2 18 : - 18.1s ~' FRLDER[CfiSB~~RG, T`~ ?aE,2~l -t I -l 100 ~.~ JLJNCTI©N, T?C 76849 2 1 2 10(2 8.2 KERR~~ILLE. T~ 7R02fS I ~'~ 0 I~ I I I~.b LAKEHILLS, TX 780b3 2 0 1 54 14.1 PAS:\DEN:\, T~ "~U2 l 1 I 100 IJ SAN ANTOMO, T'X 7843 1 0 1 104 3.2 TOTALS 162 3 27 17 14.8 Access standard: I within 20 Miles Provider group: Hospital Beech Street Nationwide HB -Kerr County 10 Hospital: Employees Not Meeting The Access Standard by Zip Code All Employees Employees r~~thout desired access Total Total Average distance ZIP number of number o~ to a choice of City Cade empMayees providers Number Pct's 1 provider BANDERA, TX 78003 7 0 7 100 24.5 BOERNE, TX 78006 2 ~ 0 1 5th r 22.9 CENTER POINT, T~{ 78010 IS 0 I S 100 25.9 COMFQRT, TX 780I3 t 1 0 9 $2 ? L 3 HARPER. TX 78631 5 0 5 100 22.5 HUNT, TX` 78024 4 0 4 100 37.7 INGRAM, TX 78025 l8 0 18 100 26.1 KERIZVILLE, TX 78028 139 0 124 89 22.9 78029 21 0 21 100 2 L6 LAKEHILLS, TX 78063 2 0 1 SO 21.4 MEDINA, TY 78055 2 0 2 100 35? MOUNTAIN HOME, T~ 78058 8 0 8' 100, 27.0 WAKING, TX 78074 1 0 l 100 21.3 TOTALS r Z35 0 216 9Z° Z3.7 Access standard: 1 within 20 Miles Provider group: Hospital Beech Street Nationwide HB -Kerr County 11 Specialist Network Accessibility Summary ' ~~ ~ ~ccessibili~ ai~~~ysi`~~ specificatiol> Providel± ~-f ='<° ~~- Specialist 1,487,909 providers at 220,074 locations (based on 1,487,909 records) Emplaye~ g~orrF . ° All Employees 243 employees ACC8S5 Standard:` 2 within 20 Miles E121~3~Oy0~S WIt~. ~@Slr6C~ ~3~C8Sg< 241 (99.2%) Average distance to a choice of providers' for employees with desired access Number of ~ ~ 3 4 5 provlders~ tildes 2.0 2.2 2.7 2.9 3.3 Key geographic areas: Employees with desired access TotaE- number of Average distance City employees Number Percent to 2 providers KERRVILLE, TX 160 160 100 1.3 INGRAM, TX 18 18 100 1.5 CENTER POINT, TX 15 15 100 7.7 COMFORT, TX 11 11 100 2.2 MOUNTAIN HOME, TX 8 8 100 2.6 BANDERA, TX 7 7 100 4.7 HARPER, TX 5 5 100 8.7 FREDERICKSBURG, TX 4 4 100 1.7 HUNT, TX 4 4 100 2.9 BOERNE, TX 2 2 100 1.6 Beech Street Nationwide HB -Kerr County Specialist: Employee Detail Information by City `tills ~'r Access standard: 2 within 20 Miles 12 .411 Employees ....Employees with desired access Total Total Average distance number of number of to providers City employees providers: Number Pet 1 2 BANDERA, T?C 7 8 ` 7 l00 4.7 4.7 BOERNE, TX 2 SS 2 1ft0' I,3 1.6 CENTER POINT, TX 15 I 15 l00 6.6 7.7 COMFORT TX I I _3 I i l00' 1.6 ' 2.2 FREDERICKSBURG, TX 4 l33 4 100 1.7 1.7 HARPER, TX' S 0 5 100 8.6 8.7 H[1NT. TX ~ 4 4 100 2.9 2.9 1NGRAM, TX I 18 0 18 I00 1.5 ' 1.5 KERRVILLE, TX 160 254 160 100 L2 1.3 EAKEHtf.LS, TX 2 7 2 I OQ 7.6 7.6 MEDINA, TY 2 0 2 l00 12.6 12.6 MOUNTAIN HOME, T'X 8 8 8 100, 2.(i 2:b PASADENA, TX l 803 I 100 0.3 0.4 SAN ANTONIO, TX 1 8,730 ! 100 0.1 0.2 WARING, TX 1 0 I l00 0.7 6.1 TOTALS 2~1 .10,035 24l 100 2.0 2,2 i Provider group: Specialist Beech Street Nationwide HB -Kerr County 13 Specialist: Employee Detail Information by State ,. Ail Employee . de,irea aecess ~i:~ 1r, .~,; P. •~.dirt`i. .~.s 9 - S. _,.ak a i'~. ?ic'.. +.... <.. ~.. .... ., Total: Toter AveraYc dhtaoca - ' numlbs~ o~ numb2t o1~` to providers ` State= ~ employees ~ providers islumiser Pct 1 Z TE~:~S x.33 1 I ~.6E~8 X41 99 x.0_.3 T£1TALS Z43 11I,Gb8 2dt 91 2.f1• ; 2..Z Access standard: 2 within 20 Miles Provider group: Specialist Beech Street Nationwide HB -Kerr County Specialist: Employee Detail Information by Zip Code 14 ~r~Access standard: 2 within 20 Miles Alt Empl©vees Employees Fvith desired access Total Total Average distance LIP number of number ut to proriders City Cade emp#oyees prgviders Number Pct 1 Z BANDERr1. TX 78003 7 8 7 l00 4.7 4.7 BOERNE, TX 78006 2 75 2 100 1.3 1.6 CENTERPOINT,TX 78010 IS 1 IS 100 6.6 7.7 CON11 ORT, 'TX 78013 1 I 3 1 I 1.00 1.6 2.2 FREDF.RICKSBURG, TX 78624 4 133 4 100 1.7 1.7 HARPER, TX 78631 ~ (l' S 100. 8.6 8.7 ~T. TX 78024 4 4 4 loo 2.9 2.9 INGRAM, TX' 78025 18 0 18 100' 1.5 1.5 KERRVTLLE, TX 78028 139 217 139 100 13 1.4 78029 21 37 2I 100 0.0 OA LAKEH[LL~. I".A 78063 2 7 2 l00 7.6 7.6 MEDINA, TX 7805.5 ? 0 2 100' 1 ~.6 ' 12.6 MOUNTACN Hr ~~11 . T~ 78058 8 8 8 100 2.6 2.6 PASADENA, TX 77502 I 134... l ] 0© 0. ~ 0,4 SAN ANTONIO, TX 78248 1 37 l l00 0. I 0? WAKING. TX 78074 I' 0 1 100 0.'? 6.1 TOTALS 241 664 241 100 2.0 ' 2.2 'i Provider group: Specialist Beech Street Nationwide HB -Ken County 15 Specialist: Employees Not Meeting The Access Standard by Zip Code A4 Employees desired access Total, Tot43 Average distance - Z)t~": nttmber oir nnesber o~ to providers ,; ~~ - ~ bode employees pravidels < Number; Fct 1 i Z_ JiJNCT[Oti, T`< 7C,4~19 ~ 0 ~ I110 ;3.1 ~;.~} TQTALS Z 0 Z l0A 33a !; 33.A I Access standard: 2 within 20 Miles Provider group: Specialist Kerr County Managed Care Accessibility Analysis August 2007 A report on the accessibility of the Texas True Choice/ETHIX SW Network for the employees of Kerr County Texas True Ctbice/ETHIX SW Network - Kerr County Table of Contents ~~_ Accessibility summary 1 Kerr County Acute Cane Hospitals 1 Provider within 20 miles With Texas ZIP Codes meeting the access standard Kerr County Acute Care Hospitals 1 Provider within 20 miles Wrth Texas Accessibility summary Kerr County Acute Care Hospitals 1 Provider within 20 miles Without Texas ZIP Codes not meeting the access standard Kerr County Acute Care Hospitals 1 Provider within 20 miles Without Texas Accessibility summary Kerr County Pr~nary Care Physidans = Im, Gp, Fp, Peds,Ob/Gyn 2 Providers within 20 miles With Texas ZIP Codes meeting the access standard Kerr County Primary Care Physidans = Im, Gp, Fp, Peds,C+b/Gyn 2 Providers within 20 miles With Texas 2 3 4 5 6 Texas True Choice/ETHIX SW Network -Kerr County Table of Contents Accessibility summary 7 Kerr County Primary Care Physiaans = Im, Gp, Fp, Peds,Ob/Gyn 2 Providers within 20 miles Without Texas ZIP Codes not meeting the access standard Kerr County Primary Care Physiaans = Im, Gp, Fp, Peds,OWGyn 2 Providers within 20 miles Without Texas Accessibility summary Kerr County Specialists 2 Providers within 20 miles With Texas 8 'err ZIP Codes meeting the access standard Kerr County Specialists 2 Providers within 20 miles With Texas 9 . 10 Accessibility summary 11 Kerr County Specialists 2 Providers within 20 miles Without Texas ZIP Codes not meeting the access standard Kerr County Specialists 2 Providers within 20 miles Without Texas . 12 Kerr County Managed Care Accessibility Analysis ACUTE CARE HOSPITALS A report on the accessibility of the Texas True Choice/ETHIX SW Network for the employees of Kerr County Prepared by: Texas True Choice, Inc. 5000 Legacy Drive, Suite 190 Plano, Texas 75024 Texas True Choice/ETHIX SW Network - Kerr County Accessibility summary Accessibility analysis specifications , , Provider grOUp: Acu6eCareHospitals 357 providers at 351 locations (based on 357 records) Employee group: Kerrcourriy 243 employees /~CCeSS Standard'" 1 Providerwithin 20 miles Employees, with desired access: 200 (az.3~io> Average distance to a'choice of providers .for employees with desired access Number of 1 2 3 4 5 Miles 5.9 31.9 52.9 56.0 57.3 Key geographic areas Employees with desired access Total rxrnt~r of Average distance ~Y ernplayees Nunber Percent to 1 provider KERRVILLE 160 160 100 4.7 I~,~ 18 18 100 11.0 CENTER POINT 15 7 47 16.7 ~FO~ 11 6 55 14.5 FRF~ERICKSt3URG 4 4 100 1.9 JUNCTION 2 2 100 1.9 HARPER 5 1 20 16.8 pp,Sp,pENp, 1 1 100 0.9 SAN ANTONIO 1 1 100 1.9 Texas True Ct>o~ETHIX SW Network - Kerr County ZIP Codes meeting the access standard ~ i` Kerb bounty ~ ~ : w ~xw~ awl a- ', 7~' rxn>~ vl' nin>~r ~ 1~ ~~~ AASOrC.>t~ fbdrr empfoyeea~ provident Numbr P'd f 2 3 HOUSTON, TX PASADENA, TX 77502 1 1 1 100 0.9 2.6 5.3 LION-MSA~ CEI+Cf1RPOlt+ff T7E 78010 15 0 7 47 16.7 31.1 _ 39.f3 COMFORT, TX 78013 11 0 6 55 14.5 24.9 40.5 TX 78fi24 4 1 4 1QQ t.g 29.0 43.Ct H,4RPER TX 78631 5 0 1 20 16.8 29.2 46.8 ilVGRAM, TX 7802a 18 0 18 10a 11.0 35.8 51.6 JUNCTION, TX 76849 2 1 2 100 1.9 51.7 59.4 KERRVILLE, TX 78028 139 1 138 100 4.8 32.0 54.7 78029 21 0 21 100 4.3 31.3 55.9 SAN ANT(~NlQ l'?G SAN ANTONtD TX 78248.. t 0 1 100 1.9 82 8.4 ~, Aorzss standard: 1 Provider within 20 miles Provider group: Acute Care Hospitals Texas True Choice/ETHIX SW Network -Kerr County Accessibility summary Accessibility analysis specifications Provider group: Acute Careliospirals 357 providers at 351 locations (based on 357 records) Employee group: Kerrcourrty 243 employees At:CBSS 5#a n d a rd : 1 Provider within 20 miles Employees wi#hou# desired`' access: a3 (17.7%) Average distance to a choice of providers far employees without desired access Nuof ~ ~ 3 4 5 Miles 25.0 33.1 38.3 47.1 49.3 Key geographic areas. Tom Empbyees without desired access rxrnbet' of Average ciist~ce City employees Nunb~` Percent to 7 provider CENTER POINT 15 8 53 21.6 MOUNTAIN HOME 8 8 100 26.3 ggnp~,q 7 7 100 24.3 ~FO~- 11 5 45 22.4 HARPER 5 4 80 24.5 ~ 4 4 100 32.0 gOE~E 2 2 100 25.1 MEDINA 2 2 100 31.0 PIPE CREEK 2 2 100 24.4 W,o,~~ 1 1 100 21.9 `~~ Texas True ChoioarETHIX SW Network - Kerr County ZIP Codes not meeting the access standard _ _b ~, Kerr ~ounty~~ _ ' des~rea rams resat -' e Zit" : nltn~ Ot: IUT7~ ~ , F ~ ~ . MS,q/t~y Coda e~r}~loy+rfe~ ~ pr+ovkfas Nunhsr tacE t 2 3 NON~MSA BAtdDERP~ TX 78003 7 0 7 100 24.3 32.4 35.2 Bf~ERtVE, TX 78006 2 0 2 100 29.1 29.6 30:3. CENTER POINT, TX 78010 15 0 8 53 21.6 33.9 36.1 cot~~T, Tx 7113 ~ 1 a 9 45 22.4 27.s 33:5 l-i,4RPER, TX 78631 5 0 4 80 24.5 28.6 40.5 Ht.Art'f, TX 78024 4 0 4 100.. 32.0 42.9 57.t) MEDINA, TX 78055 2 0 2 100 31.0 48.2 50.8 t~fCX111VVTA9J HC~E; TX` 7806Q 8 0'_ $' 100 2B.3 33.0 37.7 PIPE CREEK, TX 78063 2 0 2 100 24.4 28.1 28.2 WARS TX 78074 1 0 1 100 21.9 22.9 . 34.5 Access standard: 1 Provider within 20 miles Provider group: Acute Cara Hospitals ~` ., Kerr County Managed Care Accessibility Analysis PRIMARY CARE PHYSICIANS A report on the accessibility of the Texas True Choice/ETHIX SW Network for the employees of Kerr County Prepared by: Texas True Choice, Inc. 5000 Legacy Drive, Suite 190 Plano, Texas 75024 Texas True ChaoelETHO(SW NeMrork - Kerr County Accessibility summary ~~ Accessibitityr analysis specifications Provider group: Primary care Physicians= Im, Gp, Fp, Peds,otal~m 17,473 providers at 10,867 locations (based on 17,473 records) Employee group:... Kerrcor~ty 243 empbyees ACCeS5 Standard: 2 Prrnriders within 20 miles Employees with desired. access: 236 (s~.1~io) Average distance to a choice of providers for employees with desired access "`•"~~ 1 2 3 4 5 Miles 1.8 2.4 3.1 3.8 4.1 Key geographic areas ~>p pia, d~irea acc~sa Tckal rzrrtrer d Average dibtartce qty empk~yeer: I+F.tMaar Pervesk bo 2 providers KERRVILLE 160 160 100 1.0 INGRAM 18 18 100 2.2 CENTER PAINT 15 15 100 5.9 COI1AFOr~r 11 11 100 2.4 BA~pEfiA 7 7 100 6.7 MOUNTAIN HOME 8 6 75 17.4 HARPER 5 5 100 14.2 FREDERICKSBURG 4 4 100 1.3 ®OEF~ 2 2 100 4.5 JUNCTION 2 2 100 1.3 Texas True Chace/ETHIX SW Network -Kerr County ZIP Codes meeting the access standard Kerr County ,E„~ayrees w~i, desired access Total Tolai Average d3st~ce ZIP rxmber d rxrnber d to MSAICityr Code employees providers.. Nunber Pct 1 2 3 HOUSTON, TX PASADENA, TX 77502 1 14 1 100 0.4 0.4 0.5 NON~SA BANDERA, TX 78003 7 2 7 100 4.0 6.7 8.5 BOERNE, TX 78006 2 17 2 100 2.7 4.5 5.5 CENTER PINT, TX "78010 15 0 15 100 3.7 5.9 6.9 COMFORT, TX 78013 11 6 11 100 1.7 2.4 3.9 FREDEWCKSBURG<_TX 78624 4 31 4 100 0.9 1.3 1.5 HARPER, TX 78631 5 0 5 100 11.9 14.2 15.0 INGRAM, TX 78tY15 18 0 18 100 2.2 2.2 4.3 JUNCTION, TX 76849 2 6 2 100 1.3 1.3 1.3 KERRVILLE, TX 78028 139 47 139 100 0.7 1.0 1.3 78029 21 1 21 100 0.0 0.5 0.7 MEDINA, TX ` 78055 2 0 1 S0 16.2 16.2 16.2 MOUNTAIN HOtv1E, TX 78058 8 0 6 75 14.8 17.4 17.8 PIPE CREEK, TX 78063 2' 2 2 _ 100 3.5 3.5 8.5 WAKING, TX 7~'~074 1 0 1 1G0 4.2 4.2 8.6 SAN ANTONIO, TX 5ANANTONlO, TX ~ 78248 1 2 1 100 0.2 1.0 1.5 Access standard: 2 Providers within 20 miles Provider group: Primary Can; Physiaans = Im, Gp, Fp, Peds,Ob/Gyn Texas True ChaoelETHIX SW Net+nrorlc - Kerr County Accessibility summary '. AccessibiClty analysis specifications PrOVId@f ~t'Elu~` ~~ ° r . Primary Cane Physicians = Yn, GR FP. ~~~ 17,473 providers at 10,867 locations (based on 17,473 records) Er»ptoYee grouis<' , ' ~" i~r*c«xxy 243 empbyees ACCOSS Standard: 2 Providers within 20 miles EmptQyees without desired access, ` . 7 (2.9°~u> Average distance to"a choice of providers for employees without desired access rlrmber of ~ 2` ~ 4 5 Mites. -' 20:2 .24:3 25.3 25.9 27.1 Key geographic areas Tofak Ernpbyee~s witi,otrt desires acxese C1ty number of err~pio'yaea tJuribar ["erc~x Average m 2 provkiars HIaVT MOUNTAIN HOME MEp~q 4 8 2 4 2 1 100 25 50 25.8 21.2 24.6 Texas True Choice/ETHIX SW Network - Kerr County ZIP Codes not meeting the access standard ~.r ~1hr+ Kerr County ~ wit#,o~ desired access ZIP Total number of Totaf rxmber of Average distance to providers MSAIC~y Code ' employees providers Number Pct 1 2 3 t~ION-MSA HUNT, TX MEDiNA, l'X MOUNTAIN HOME, TX 78024 78055 78058 4 2 8 0 0 0 4 1 2 100 50 25 25.0 4,4 18.5 25.8 24.6 21.2 26.7 21:1 21.7 Access standard: 2 Providers within 20 miles Provider group: Primary Care Physiaans = Im, Gp, Fp, Peds,Ob/Gyn '~`Ir-" Kerr County Managed Care Accessibility Analysis SPECIALISTS A report on the accessibility of the Texas True Choice/ETHIX SW Network for the employees of Kerr County Prepared by: Texas True Choice, Inc. 5000 Legacy Drive, Suite 190 Plano, Texas 75024 Texas True Choice/ETHIX SW Network -Kerr County Accessibility summary Accessibility analysis specifications Provider group: specialists 45,467 providers at 21,272 locations (based on 45,467 records) Employee group: Kerrcourrty 243 employees Access Staftdard: 2 Providers within 20 miles Employees with desired access: 235 (96.7%> Average distance to a choice of providers for employees with desired access fVu„ber of - ~ 2 3 4 5 Pro`d~ Miles 1.6 2.2 °2.6 2.9 3.0 Key geographic areas Er-~loyees with desired access Total ntrrrber of " ' Average distance City employees Nurrther Percent to 2 providers KERRVILLE 160 160 100 0.6 INGRAM 18 18 100 2.7 CENTER POINT 15 15 100 4.3 COMFORT 11 11 100 2.4 g,4~pERA 7 7 100 5.6 MOUNTAIN HOME 8 6 75 17.3 HARPER 5 5 100 14.2 FREDERICKSBURG 4 4 100 0.5 BOERNE 2 2 100 3.2 PIPE CREEK 2 2 100 7.2 Texas True ChaoaIETHIX SW Neiwork -Kerr Courrty ZIP Codes meeting the access standard 'r ~~~ L~n~' ~~Y`` T .. +^ d 8CC8S! 'Tatait T~ _ a~- ,`~' Z~ numbs d r~nfi~ra~ r b MS~1'CRy Codi~' err~ayree~ petwid~ hlettfirat Ptt`- 1i- ~ ; HOUSTON, TX PASADENA, TX fVOf~FMSA 77502 1 37 1 100 0.0 0.5 0.5 T7C 7$003 7 8 7 100 3.9 5.6 5.6 BOERNE, TX 78006 2 86 2 100 1.3 3.2 3.3 CEN1~R PC?iNT, TX 78010 15 0 15 10(3 2.9 4.3 6.3 COMFORT, TX 78013 11 5 11 100 2.3 2.4 7.2 FREO~G, TX 78624 4 106: 4 1 W 0.5 0.5 ~ 0.'~ ~ HARPER, TX 78631 5 0 5 100 11.9 14.2 14.4 HUNT, TX 78024 4 0 1 25 5.8 19.8 19.8 INGRAM, TX 78025 18 0 18 100 2.2 2.7 2.7 I~RVtE1.E, TX 79(128`. 139. 153' 13S i00 0.4 0.7 0.8 78029 21 3 21 100 0.0 0.0 0.0 MEDINP4 TX 78055 2 0; 1 50 10.8 14.1 t4.7 MOUNTAIN HOME, TX 78058 8 0 6 75 14.8 17.3 17.5 PIPE CREEK, TX' 78063 2 D 2 100 5.0 72 9.8 WAKING, TX 78074 1 0 1 100 4.2 4.2 4.2 .:SAN pMt7f~NO, TX sav AM'ONlO, nr 78248 t 11 1 1 ott oz a3 as Acxess standard: 2 Providers within 20 miles Provider group: Specialists Texas True Choice/ETHIX SW Network - Kerr County Accessibility summary Accessibility analysis specifications Ptovider group: Specialists 45,467 providers at 21,272 locations (based on 45,467 records) Employee group::: Kerrcourriy 243 employees ACG@SS Standard: 2 Providers within 20 miles Er~~tl©yeeS Wltl'IOUt desired access: 8 (3.3%) Average distance to a choice of providers for employees without desired access roe ~ 2 3 ~ 5 Miles 21.9 29.2 29.7 30.0 30.0 Key geographic areas Err~loyees wifltatR desired access Tot~> rnmber of Average distance City. employees Nunber Percent to 2 providers ~ 4 3 75 27.1 MOUNTAIN HOME 8 2 25 21.1 JUNCTION 2 2 100 43.0 MEDINA 2 1 50 23.8 ~rr~ Texas Try Ctbioe/ETHIX SW Network - Kerr County ZIP Codes not meeting the access standard ~.... `'; ~: Kerr Caunfy ~~ . Ernc~Oyr.rss wilAoub -~. d a ` ,._ Totat _~ ~ TofaF av+rags cYst~rxxr' ~ nuntib~r of ran>br a~ ba Pronri~e+a MSAICixY Cody ` employees pravtdera; NuM~s Pct' t 2 3 NON~MSA HUNT, TX 78024 4 0 3 75 12.9 27.1 27.3 Jt.JhiCTICN, TX 76849 2 0 Z 100 42.0 43.0 43.0 MEdINA, TX 78055 2 0 1 50 15.6 23.8 27.1 iNQt~ffAlN t-IOFrE, TX 78E?58 8 0 2 25 18.5 21.1 21.2 Access standard: 2 Providers within 20 miles Provider group: Specialists 2 Kerr County September 4, 2007 Jennifer L. Smith Sales & Marketing Manager FARA Benefit Services, Inc. 1625 West Causeway Approach Mandeville, LA 70471 (800) 259-8388 (713) 614-4008 www.fa ra be n of itse rvi ces.co m ~~r-RSA.