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1. Overview

HSA Compatible Medical Plans

On August 21, 1996, the President signed into law the Health Insurance Portability and Accountability Act. A key provision of the act was the creation of Health/NO "Medical" Savings Accounts (MSA). In general, MSA allows an individual to use pre-tax dollars to pay for qualified medical expenses beginning with tax year 1997.

On December 8, 2003, Congress passed the Medicare Modernization Act of 2003, which established the Health Savings Account. This allowed health expenses not covered under the medical plan to be reimbursed with HSA funds (subject to IRS regulations-see Publication 502 Medical and Dental Expenses). Unlike a Flexible Savings Account, unused HSA funds can be rolled over into subsequent years or used by the insured to pay for non-medical items (subject to taxes and a penalty).

An HSA must be used with a qualified, high-deductible health plan in order to receive favorable federal tax treatment. Our insurance carriers offer health insurance plans that have been specifically designed to meet the federal guidelines. All are conventionally funded plans.

Regardless of whom you choose to administer your HSA, the administrator is an independent contractor and the insurance company shall have no liability whatsoever with respect to claims arising from or in connection with the acts or omissions of such administrator.

A High-Deductible Health Plan (HDHP) has:

• A higher annual deductible than typical health plans, and
• A maximum limit on the annual out-of-pocket medical expenses that you must pay for covered expenses.

Out-of-pocket expenses include deductibles, coinsurance, and other amounts you must pay for covered benefits.

Real Benefits Association offers the following HSA high deductible plan. (A complete list of plans available from Real Benefits is available by calling 800-769-8900, option # 3.)

	Annual Deductible		Coinsurance
	Single/ Family		In Network	Out-of Network
	$5000/$10,000		0%	70%

3. Medical Features

Deductible

Single deductible: this is the amount of eligible expenses that the insured must incur each year before the plan pays benefits.

Family deductible: this is the amount of eligible expenses that all the insured family members must incur each year before the plan pays benefits. Federal guidelines require that covered expenses for all insured family members be added together and applied toward the family deductible before benefits are paid. When the family deductible applies, the single deductible does not apply. The family deductible is an aggregate amount that can be satisfied by one or any combination of family members incurring expenses toward this yearly amount.

Coinsurance

Individual coinsurance: after the deductible is satisfied, the plan pays a percentage of the eligible expenses up to the coinsurance limit (the insured also shares in this expense up to the out-of-pocket maximum). Then the plan pays 100% of eligible expenses for the balance of that calendar year.

Family coinsurance: the coinsurance limit for all family members combined is two times the individual coinsurance maximum. Then the plan pays 100% of eligible expenses for the rest of that calendar year.

Maximum Benefit

The lifetime maximum benefit for all injuries, sicknesses or pregnancies is $2,000,000. Psychiatric and alcohol and drug abuse benefits are limited. See Eligible Expenses.

Eligible Expenses

Eligible expenses include medical expenses incurred as a result of an injury, sickness or pregnancy for the following supplies and services received while insured under the plan.

• Hospital expenses:
  • Hospital room and board up to the semi-private room rate.
  • Hospital supplies and services.
  • Intensive care.
• Services of a licensed doctor, anesthetist, or a licensed or board certified psychologist. In-hospital doctors' visits are limited to four visits per two days.
• Services of a licensed physiotherapist or licensed occupational therapist, but only to restore or improve lost function following an injury or sickness.
• Services of a licensed physical therapist.
• Services of a qualified speech therapist for certain conditions.
• Services of a certified nurse-midwife under qualified medical direction, affiliated or practicing in conjunction with a facility licensed pursuant to Article 28 of the New York Public Health Law.
• Private duty nursing services. The maximum eligible expense is limited to $125 per day. And such services provided by a person who is also an employee of or affiliated with the Hospital or similar place in which the insured is an in-patient will not be an Eligible Expense.
• Services provided as a hospital out-patient in connection with an injury or sickness in a medical emergency.
• Services and medications used for non-experimental cancer chemotherapy and cancer hormone therapy.
• Preadmission tests performed as a hospital outpatient prior to scheduled surgery.
• Treatment of correctable medical conditions causing infertility, except for in vitro fertilization, gamete intrafallopian tube transfers (GIFT) or zygote intrafallopian tube transfers (ZIFT), reversal of elective sterilizations; sex change procedures; cloning; or medical or surgical services or procedures deemed experimental by the guidelines and standards established by the New York Superintendent of Insurance and Commissioner of Health.
• Second surgical opinion by a qualified doctor on the need for surgery.
• Equipment and supplies for the treatment of diabetes, if recommended or prescribed by a doctor or other licensed health care provider.
• Diabetes self-management education, including education relating to proper diets.
• Nutritional supplements (formula) as medically necessary for the treatment of phenylketonuria, branched-chain ketonuria, galactosemia, and homocystinuria when administered under the care of a doctor.
• Allergy tests for diagnosing disease.
• Lab tests.
• Mastectomy or lymph node dissection, on the same basis as any other surgical procedure. Eligible Expenses include in-patient care and reconstructive surgery.
• For pregnancy on the same basis as an illness, including in-patient care and post-discharge care.
• Adult Preventive Care services for doctors' office visits for routine physical exams, including routine injections, inoculations, immunizations, routine x-rays, laboratory tests and multiphasic screening.
• Mammography screening - Upon the recommendation of a physician, a mammogram at any age for women having a prior history of breast cancer or who have a first degree relative with a prior history of breast cancer; and - a baseline mammogram for women age 35 but under 40 years; and - a mammogram once a year for women 40 years of age or older.
• An annual cervical cytology screening for women age 18 or older.
• An annual colorectal cancer screening starting at age 50.
• Preventive and Primary Care Services from birth up to age 19 for an initial hospital checkup and well child visits in accordance with the recommendations of the American Academy of Pediatrics. The visits include a medical history, a complete physical examination, development assessment, anticipatory guidance, and appropriate immunizations and laboratory tests. Necessary immunizations as follows: diphtheria, pertussis, tetanus, polio, measles, rubella, mumps, hemophilus influenza type b, and hepatitis b. are also covered. The plan pays 100%. No deductible or Coinsurance Percent applies to any of these services.
• Bone density tests, drugs and devices approved by the Federal Food and Drug Administration for the detection of osteoporosis for women at significant risk of osteoporosis.
• Diagnostic x-ray exams.
• X-ray, radium and radioactive isotope therapy.
• Prescription drugs and prescription medicines.
• Artificial limbs and eyes, and their repair or (at our option) replacement.
• Casts, splints and surgical dressings.
• Orthopedic appliances (such as trusses, crutches and braces).
• Rental or purchase (at our option) of medical appliances and durable medical equipment up to $10,000 during the insured’ s lifetime.
• Whole blood or blood plasma, unless it is replaced by or for the insured.
• Oxygen and the rental of equipment for giving it.
• Anesthesia and fluids needed for surgery.
• Local ambulance services.
• Transportation by rail, ambulance, or plane to the nearest hospital for specialized treatment up to $2,500 per confinement.
• Services provided by an Ambulatory Surgical Center.
• Services provided by a Birthing Center.
• Home Health Care if a doctor prescribes home care in lieu of a hospital confinement.
• Convalescent Facility Care for up to 90 days, and limited to 50% of the daily semi-private room rate of the Hospital in which the insured was previously confined. This care is eligible if the admission is within 14 days of a 3-day minimum hospital confinement, and the insured continues to remain under the doctor’ s care.
• Hospice Care benefits for a maximum of 210 days for inpatient and outpatient care, and up to 5 visits for all family members combined for bereavement counseling.
• Psychiatric Care.
  • Inpatient Care for 30 days per year. Each day of covered inpatient care may be exchanged for 2 days of intensive, outpatient psychiatric care.
  • Outpatient Care for up to 52 visits per year. We pay $40 or the actual charge, if less, for each visit.
  • Out-patient crisis intervention services for up to 3 emergency visits per year. We pay $60 or the actual charge, if less, for each visit.
• Alcoholism and Drug Abuse.
  • Inpatient Care for 30 days plus 7 days detoxification per year.
  • Outpatient Care for 60 visits per year. 20 of the visits may be for family members.
• Foot Care up to $2,000 per year for an open cutting operation to treat weak, strained, flat, unstable or unbalanced feet, metatarsalgia or bunions, and/or the removal of nail roots, and the treatment of corns, calluses or toenails in connection with a systemic disease.

Extension of Benefits

If a person is totally disabled when insurance terminates, he or she remains protected for the illness or injury causing the total disability while the disability continues up to a period of 12 months.

Coverage Continuation

The continuation of coverage required by New York law is provided for groups not subject to the requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). The continuation of coverage required by COBRA is provided for all other groups.

Conversion privilege: A conversion privilege is available for insured employees and dependents except on plan termination when the plan is replaced by similar group coverage.

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4. Reimbursement Methodology

Negotiated Fee Reimbursement - PPO

As with traditional PPO plans, medical care rendered by PPO providers will be reimbursed based on the negotiated fee established for that care. The negotiated fee is the amount the PPO provider has agreed with PerfectHealth to charge and reflects a discount from the PPO provider's standard charge. Once the negotiated fee has been determined, benefits will be paid at the plan's selected in-network coinsurance level. Utilization of PPO providers results in less out-of-pocket expenses incurred by the insured.

Emergency Medical Care

Emergency medical care rendered by PPO providers will continue to be reimbursed based on the negotiated fee established for such care. Emergency medical care rendered by non-PPO providers will be reimbursed based on the UCR level. All emergency medical care will be paid at the plan's selected out-of-network coinsurance level, unless state regulations demand otherwise.

Freedom of Choice

Insureds have the freedom to choose any provider at the time of service. However, insureds will have much greater out-of-pocket expenses when they use the services of a non-PPO provider. To enjoy higher levels of benefits and reduce out-of-pocket expenses, insureds are encouraged to use the services of PPO providers at all times.

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5. Managing Healthcare

Mandatory Pre-Authorization Review

Unnecessary tests, surgery and treatment overuse occur regularly within the health care system and can increase costs without improving health. By evaluating the medical necessity of an inpatient confinement for proposed treatment and determining the appropriate length of stay, it is possible to lower medical costs. This ensures that insureds are in the hospital only when they need to be.

For non-emergency confinement, a insured must notify his or her doctor of participation in this program and request that the doctor call our toll-free number to obtain authorization for a predefined number of hospital days prior to any admission. The insured can also initiate the review process by calling the toll-free number.

In case of emergency, the doctor, insured or family member must call for a review within 48 hours (72 hours on holidays and weekends) after admission.

Prenatal Program

Our prenatal program is designed to assist the insured in having a healthy full-term baby and avoiding a problem pregnancy. Besides providing prenatal education and a health screening to determine risk, we provide high-risk mothers individualized attention and case management services to encourage a healthy delivery.

Medical Case Management

A terrible accident or devastating illness can turn a person's life upside down. Our case management program is available to deal with medical catastrophes. It's in place to help insured employees and dependents at times when they need special assistance. Something as simple as teaching a spinal cord injury victim, who is paralyzed, how to care for his or her skin, will avoid unnecessary complications. When needed, a rehabilitation specialist will assist the patient in receiving the best care in the most appropriate facility to ensure that available benefits are used efficiently.

Transplant Program

We hope your employees are never faced with the need for a transplant. However, if they do have a medical condition that might require an organ transplant, we have a program to assist them.

Our Transplant Program can help identify benefits that may be available to your employees. We can also assist them in seeking appropriate medical care.

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6. Claims Management

Fraud Detection

Health care fraud increasingly contributes to the cost of health care benefits. To combat fraud, this plan is monitored for fraud. We investigate potential fraud by individuals on their claims to obtain benefits, and potential fraud by providers who falsify patient claims in order to increase their own income.

Right of Recovery

A third party may be liable or legally responsible for expenses incurred by a insured for an injury or a sickness. If this plan has paid benefits, then the amount of benefits paid may be recovered up to the amount of the third party's liability for those expenses.

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7. Medical Exclusions and Limitations

Pre-existing Conditions

This plan contains a 12 month Pre-existing Condition Limitation period during which time pre-existing conditions are excluded from coverage. A pre-existing condition is any injury or sickness for which the insured received medical advice or treatment from a physician within the 6 months immediately prior to their first day of coverage, or if there is a waiting period, the first day of the waiting period. The pre-existing condition limitation does not apply to pregnancy, newborns or adopted children or children placed for adoption enrolled within 30 days of birth, adoption or placement for adoption. If an employee or dependent enrolls as a Late Enrollee, or during a Special Enrollment Period, for the purpose of reducing the pre-existing condition limitation period, any period before such late or Special Enrollment Period is not a waiting period and the pre-existing condition limitation period will not be reduced by any such period.

Full or partial credit will be given towards the satisfaction of the pre-existing condition exclusion period, for the period of time a person was covered under prior creditable coverage. In order to receive credit, a person must have had no break or gap in coverage of 63 days or more prior to the person enrolling in this plan. This applies to all employees on the date of transfer as well as to new enrollees.

Prior Creditable Coverage

Creditable coverage is prior coverage a person had under: any group health plan (including FEHBP, COBRA, Peace Corps etc.), an individual health plan, Medicare, Medicaid, CHAMPUS, a state risk pool, Indian Health Service or tribal organization coverage, or any public health plan, as defined in the regulations. The employee must enroll for coverage in this plan within 30 days of becoming eligible, subject to the satisfaction of any waiting period. Any waiting period included in this plan must be met before the employee becomes insured. Any such waiting periods run concurrently with the pre-existing condition limitation period.

Deductible Transfer Credit

Credit for the amount of deductible satisfied under the prior carrier's group plan will be given to all employees and dependents on the date of transfer.

Other Exclusions and Limitations

No payment will be made for the following unless otherwise noted:

• Medical care not approved by a doctor, received in a U.S. Government facility, or for which the insured without this insurance would not be legally obligated to pay.
• Cosmetic treatment, except under certain conditions.
• Dental care or treatment, but we do cover:
  • hospital services provided while hospital confined.
  • dental care or treatment up to 24 months for injury to the jaw or sound natural teeth, and
  • doctors charges for the removal of up to 4 impacted teeth.
• Hearing aids, eye refractions, surgery to correct a refractive eye disorder, eyeglasses, contact lenses or their fittings, except for the first pair of eyeglasses or contact lenses prescribed after cataract surgery.
• Any injury or sickness due to war or armed conflict.
• Medical care of an injury due to taking part in a felony.
• Any injury or sickness sustained in the course of employment or covered by Workers' Compensation or a similar law, unless the insured is not eligible for coverage under such law.
• Services furnished by a person who is the insured or insured's spouse, or a member of the insured's immediate family.
• Care provided by the insured's or dependent's employer, labor union or similar group, for which no charge would normally be made in the absence of this insurance.
• Experimental, investigative, developmental or educational medical care.
• Reversal of surgical sterilization, embryo transplant services (including but not limited to GIFT and In Vitro fertilization). Infertility services except those included under eligible expenses.
• Sex change operations.
• Orthognathic surgery to correct malalignment of the jaw due to skeletal deformity.
• Custodial care.
• Adult routine health exams or preventive care except those services included under eligible expenses.

This is a summary of the Plan's highlights. All coverage is subject to the terms of the group policy. Full details of benefits and limitations are described in the booklet-certificate.