Comprehensive Medical Expense Plan Policy

Introduction

The Comprehensive Medical Expense Plan is designed to provide protection for you and your insured family members against the high cost of medical care. Covered medical expenses are separated into two types of benefits: Type A, hospital and surgical, and Type B, other covered medical expenses. The company pays the full cost of this insurance.

Eligibility and Membership

Eligibility: You are eligible for our medical plan coverage if you are a full-time, nonunion employee paid in U.S. currency or an employee covered by a collective bargaining agreement providing plan coverage.

Your eligible dependents for plan coverage are:

your spouse;
your unmarried dependent children under age 19 (including stepchildren, legally adopted children, or any children who live in your home and are dependent on you for sole support);
your unmarried children between ages 19 and 23, if they are full-time students at an accredited school and are not working full time;
dependent children over age 19 who are physically or mentally incapable of earning a living (you will need to furnish evidence of the child's incapacity within 31 days of the child's 19th birthday).

You should notify your human resources department whenever your family status changes because of marriage, birth of a child, death, divorce, or for any other reason.

Effective Date of Coverage: You will be covered under the Plan on your first day of work. Your dependents are covered on the same day. However, if a dependent is confined at home, in a hospital, or elsewhere because of an illness or injury on the date coverage would begin, coverage will become effective on the date the dependent recovers.

Enrollment: Your HR representative will ask you to complete an enrollment card when you start work. No medical exam is necessary for you or your dependents.

Cost: The company pays the entire cost of the plan.

Health Maintenance Organizations (HMOs): In compliance with federal and state laws, employees who reside in the service area of an HMO offered by the company may enroll in an HMO as an alternative to coverage under this plan. Your HR representative will advise you if you are eligible to participate in an HMO, and provide you with literature describing your options.

Covered Medical Expenses

Covered medical expenses in this plan are those reasonable, necessary, and customary expenses that you incur for the treatment of non-occupational, accidental injuries and illnesses.

“Reasonable expense” means that a charge is not excessive for the service rendered, considering the nature and severity of the patient's condition and the physician's degree of specialized knowledge and skill.
“Necessary” means that the service performed was required for treatment of the injury or illness.
“Customary” means that the service or procedure performed is normal for the patient's condition.

The medical plan covers most hospital and surgical expenses as Type A, and other covered medical expenses as Type B.

Type A Expenses – Hospital And Surgical Benefits

If you or your covered dependents require hospitalization or surgery (in or out of the hospital), the Plan pays 100 percent of the first $5,000 of any combination of covered hospital and surgical expenses, 80 percent of the next $5,000 of expenses, and 100 percent of the remaining expenses in each calendar year for each person. This means that you will never pay more than $1,000 (20 percent of $5,000) out of your own pocket for each person's covered hospital and surgical (Type A) expenses during a calendar year. The next year, you start over again with the first $5,000 paid in full.

Covered Hospital Expenses: Generally, most expenses you or one of your covered dependents incur as an inpatient in a hospital are covered. Some of these covered expenses are:

semiprivate room and board; the plan will also pay $5 a day toward the cost of a private room (room-and-board benefits for California residents will be reduced by the amount paid under the State Unemployment Compensation Disability Law);
intensive or coronary care facilities;
use of operating rooms;
drugs;
X-ray and laboratory tests;
surgical dressings, blood, and oxygen;
anesthesia and its administration; and
hospital ambulance service.

The benefits above are payable only if your confinement lasts at least 18 hours, unless surgery is performed, or if services are performed within 14 days before or after a hospital confinement.

Also covered as a Type A expense is the hospital's charge for emergency outpatient care in a hospital within 24 hours of an accidental injury. Charges for your personal physician will be covered as a Type B expense.

Treatment for alcohol or drug dependency is covered as for any other illness. However, treatment in an approved alcohol or drug rehabilitation facility is limited to four weeks for each confinement. A total of six weeks of coverage is available for each covered person during any 12-month period.

Coverage for treatment of mental illness in a hospital is provided on the same basis as for any other hospital stay. However, there are limitations on outpatient treatment (see “Outpatient psychiatric care” below.)

Covered Surgical Expenses: Covered surgical expenses for you or your insured dependents are charges for operative procedures performed by a licensed physician to treat illness, injuries, fractures, or dislocations. The procedure may be performed in a hospital or in a physician's office. The plan also covers anesthesia and its administration and the fee of an assistant surgeon who actively aids in the operation.

Although the plan generally covers only non-elective surgery, coverage is provided for voluntary sterilization procedures involving vasectomies and tubal ligation.

Type B Expenses – Other Medical Expenses

Other Covered Medical Expenses: Most reasonable and customary expenses not covered by the hospital and surgical portion of the plan are covered as Type B expenses. Benefits for these other covered medical expenses are paid by the plan at 80 percent, after you satisfy the deductible each calendar year. They include:

doctors' visits in and out of the hospital;
services of a registered or licensed practical nurse who is not a member of your family, when required by a physician;
prescription drugs and medicines;
diagnostic X-ray and laboratory examinations; X-ray, radium, and radio-isotope treatment; blood transfusions; oxygen and other gases and their administration; rental of an oxygen breather and other durable equipment; physical therapy; certain prosthetic appliances and dressings;
private ambulance service; and
any hospital services not covered as a Type A expense, or because you are confined for less than 18 hours without surgery, or because your treatment does not result from an accident.

Outpatient psychiatric care: Only treatment by a board-certified psychiatrist or psychologist is covered as a Type B expense. After meeting the deductible, the plan will pay 50 percent of the eligible expenses, up to a maximum benefit of $15 for each visit. There is an annual maximum of $700.

Deductible

Hospital and surgical benefits (Type A expenses) are covered from the first dollar of expenses you incur – there is no deductible before these plan benefits begin. However, you and each of your covered dependents must meet the deductible before plan benefits are payable for Type B expenses in each calendar year.

The deductible is equal to one percent of your annual base salary, with a $50 minimum and a $100 maximum. Annual base salary means your base salary rate in effect on your eligibility date, adjusted each subsequent January 1. If you are covered by a collective bargaining agreement, your annual base salary means the straight time rate of pay for your normal job classification or pay grade.

There are three features built into the deductible in our plan to limit your total expenses:

Family Deductible: Once three covered family members satisfy separate deductibles during a calendar year, no further deductibles will be required for any of your eligible dependents during the remainder of that year.
Carryover Deductible: Any eligible expenses incurred in the last three months of a calendar year that are applied to the deductible for that year will be applied to the deductible for the next calendar year as well.
Common Accident: If two or more covered family members are injured in the same accident, only one deductible will be required for their combined expenses each year resulting from that accident, even if those expenses continue over a number of years.

Covered Dental Expenses

Coverage is provided only for dental treatment required as a result of accidental injury to sound natural teeth.

Lifetime Maximum Benefit

Under the plan, each covered person has no limit on the amount of eligible expense that may be paid.

Coordination of Benefits

Family members are often covered under more than one medical insurance plan because both husband and wife work. To avoid duplication of benefits, your medical plan includes a coordination of benefits provision.

Under coordination of benefits, benefits payable by the medical plan will be coordinated with benefits payable by other group plans under which you are covered. Any benefit payable under this plan will be limited so that the total of all benefits received by you or your dependents under this plan and all other group plans (including state and federal disability and medical benefits and any benefits to which you are entitled under an existing no-fault law) will not exceed 100 percent of allowable expenses. Allowable expenses are any necessary, reasonable, and customary expenses at least a portion of which is covered under one of the plans involved.

One of the two or more plans involved is called the primary plan, and the others are secondary. The primary plan pays benefits first, without consideration of the other plans. The secondary plans then make up the difference up to the total allowable expenses. No plan will pay more than it would have paid without this provision.

To determine which plan is primary and which is secondary, these rules apply:

a plan without a coordination of benefits provision is always the primary plan;
if all plans have such a provision:
the plan covering the patient directly, rather than as an employee's dependent, is primary, and all others secondary;
if a child is covered under both parents' plans, the father’s is primary (special provisions apply when the parents are either separated or divorced);
if neither (1) nor (2) applies, the plan covering the patient longest is primary.

Your HR department will help you determine how coordination of benefits applies in your situation. Be sure to include full details of your other coverages on your claim form.

General Provisions

Exclusions: Certain expenses that you or your covered dependents may incur do not qualify as covered charges. Our medical plan will not pay for:

treatment or services provided in a governmental hospital or by a governmental agency for which there is no legal requirement to pay;
routine health check-ups and routine pediatric visits;
dental procedures, except those discussed in “Covered Dental Expenses.” (For more information, see the “Dental Assistance Plan” section of the handbook);
examinations for the prescription or adjustment of eyeglasses or hearing aids; the plan will cover the first pair of eyeglasses after a cataract operation;
cosmetic surgery, unless to correct an accidental injury while insured;
services rendered by an unlicensed physician, or expenses that exceed the necessary, reasonable, and customary charge for your geographic area;
a disability covered by workers' compensation or caused by an act of war;
immunizations; and
charges made by an institution not recognized as a legally constituted hospital.

Coverage during Total Disability: If you become totally disabled while you are a member of this plan, your coverage will continue during disability up to the time you are eligible for Medicare benefits. Generally, you are eligible for Medicare after you have been entitled to Social Security disability benefits for 24 straight months, even if you are under age 65.

Dependent coverage after employee's death: Coverage will be continued for eligible dependents of deceased employees for up to three months after the date of the employee's death. At the end of this period, dependents may apply for an individual policy of medical benefits from the insurance company. (See “Conversion Privilege” below).

Coverage after age 65 or retirement: If you retire early under a company retirement plan, coverage for you and your eligible dependents will continue for your lifetime. If you retire at age 65, or if you continue working and defer your retirement to a later date, coverage will be continued. In addition, the company will pay for Medicare Part B for you and your eligible spouse over age 65 during your active employment.

Any benefits payable under the plan beyond age 65 will be reduced by amounts payable under both Part A and Part B of Medicare. Therefore, you should submit claims to Medicare first, and then file under this plan. Include a copy of the Medicare payments with your claim.

Termination of Coverage: Your coverage under the company comprehensive medical expense plan, including your dependents' coverage, will end on the last day of the month in which you terminate your employment, except as specified above. Dependent coverage will end when that person no longer qualifies as an eligible dependent.

Conversion Privilege: If your coverage terminates for any reason, you may purchase an individual policy of medical insurance from the insurance company. You must apply for a converted policy within 31 days of the termination of your coverage. The application form is available from your HR department.

You should know that your premiums will be based on your age and family status, and will purchase a plan of reduced benefits. No evidence of insurability will be required.

Extended Benefits: If you become totally disabled while a plan member, your insurance (including family coverage) will be continued until you are eligible for Medicare benefits. If a covered dependent is totally disabled when your insurance terminates, benefits for expenses relating directly to treatment of the disabling condition will be extended up to the end of the year following the year of your termination.

Plan coverage will continue if you or a covered dependent is under the care of a physician for an illness or injury when your insurance terminates, even if you or your dependent is NOT totally disabled. Coverage for treatment of the specific illness or injury will continue until the earlier of these dates:

the covered person's recovery, or
three months from the date of termination of coverage.

Continuation of Plan: The company expects to continue this plan indefinitely, but reserves the right to amend or terminate it at any time.

How to File a Claim

The preceding sections have described major provisions of your medical plan. This section presents basic information you will need to know about how to claim benefits as a plan member. When you follow the claim procedures outlined here and on your claim form, you will help assure that your claims for benefits will receive fast and efficient handling. Here are some hints about filing claims:

if you have an ongoing claim, accumulate your bills and submit them all at once, rather than in small amounts;
review this section of your handbook periodically to make sure you are receiving the maximum plan coverage;
if you and your eligible dependents are covered under more than one plan, bills should be submitted to the patient's employer. Children's expenses should be submitted to their father's plan first. For more information on multiple coverage, see the “Coordination of Benefits” section.

Claim Forms: In order to receive payment of benefits for covered medical care and treatment for you or your insured dependents, you must file written claims with the insurance company.

When you were hired, you received a medical claims kit. The kit contains claims forms, instructions for filing medical claims, and preaddressed mailing envelopes which allow you to file directly with the insurance company.

After a claim is processed, the insurance company will send you a new claim form and mailing envelope. Extra claim forms and kits are available from your HR office.

About your Bills: To receive benefits under the plan, you must submit your original medical bills along with your completed claim form. Your bills serve as evidence to support your medical claims. Make sure that each bill you receive contains all the information the insurance company will require.

Bills other than those for drugs should show:

the patient's full name; the date the service was rendered;
the nature of the illness or injury;
the type of service or supply furnished; and
the itemized charges.

Drug bills must show: