SUMMARY OF CONTRACT CHANGES

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SUMMARY OF CONTRACT CHANGES

Alaska Insured Non-Grandfathered Group Plans (51-99 employees)

For renewals from January 1, 2014 to December 1, 2014

Premera Blue Cross Blue Shield of Alaska has made changes to medical plans for Alaska groups that will take effect at your upcoming renewal. This summary lists the major changes and also shows which changes are mandated by federal or state law or regulation. Not all the changes listed may apply to your plan or plans. Please see your contract for details.

MEDICAL BOOKLETS

Location Description of Change Reason for Change

All benefits • If non-emergency care services are received from any out-of-network provider when there isn’t an in-network provider located within 50 miles of the member’s home, those services are now covered at the in-network level. The member is still responsible for any amounts over the allowable charge. We suggest that the member contact us before receiving non-emergency care from an out-of-network provider.

• We have clarified that when a member receives care from non-network providers for covered stays at in-network hospitals and has no choice as to who provides that care, those services are covered at the in-network level. The member is still responsible for any amounts over the allowable charge.

• State mandate

• Clarification

What Do I Need to Know Before I Get Care?

• The waiting period for pre-existing conditions has been removed.

• If your plan includes copays for medical services, these copays will count towards your plan’s out-of-pocket maximum. However, copays for prescription drugs, adult vision exam and hearing exam do not count towards your plan’s out-of-pocket maximum.

• Federal mandate • Premera policy

What Are My Benefits? The annual plan maximum has been removed. A few benefits will continue to have their own annual or lifetime maximums as allowed by law.

Federal mandate

Ambulance Services benefit We clarified that any air ambulance transport for a non-emergent condition is subject to the standard plan cost shares based on the whether the air ambulance is in-network or out-of-network.

Premera policy

Autism Spectrum Disorders Services benefit

The state of Alaska now requires that coverage be provided for autism spectrum disorders. A new Autism Spectrum Disorders Services benefit has been added to the plan. For members under the age of 21, coverage is provided for medically necessary treatment, services or supplies related to autism disorders and is not subject to any benefit limits. Services provided by autism service providers or a provider supervised by an autism service provider are covered under this new benefit for members under the age of 21.

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AK 51-99 Non-Grandfathered Renewal Bulletin (01-2014)

Chemical Dependency

Treatment benefit We have added specific exclusions about services and programs that don't qualify for

coverage.

Premera policy

Clinical Trials benefit

(previously Cancer Clinical

Trials)

Per the Affordable Care Act, non-grandfathered plans are required to provide coverage for national clinical trials for life-threatening conditions beginning with plan years on or after 1/1/2014.

Federal mandate

Contraceptive Management and Sterilization benefit

Medical Equipment and Supplies benefit (breast pumps

only)

Preventive Care benefit

(women's preventive care)

Prescription Drugs benefit

(prescription contraceptive drugs and devices)

Member cost-shares do not apply to preventive women's health services furnished by network providers. Member cost-shares still apply for out-of-network providers.

Federal mandate

Contraceptive Management and Sterilization benefit

Preventive Care benefit (BRCA

genetic testing and Fall Prevention)

Prescription Drugs benefit

We have added additional preventive benefits based on new guidance. Federal mandate

Diagnostic Services benefit

Surgical Services benefit We have clarified that full anesthesia delivered by an anesthesiologist is covered only if _{there are specific risk factors or likelihood of complications or intolerance to moderate}

anesthesia.

Clarification

Infertility Services benefit For plans that cover infertility testing and treatment:

We have clarified that testing prior to an infertility diagnosis is covered under the

Diagnostic Services benefit. Testing after an infertility diagnosis has been established is covered under the Infertility benefit.

Clarification

Medical Equipment and

Supplies benefit The benefit states that it will now cover sales tax on covered items.

Premera policy

Mental Health Care benefit

We have added specific exclusions about services and programs that don't qualify for coverage.

Premera policy

Preventive Care benefit _{• The benefit now covers whooping cough immunizations at a pharmacy, grocery store}

or other mass immunizer location.

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Location Description of Change Reason for Change • Clarification has been added that laboratory and pathology services related to

colonoscopy and sigmoidoscopy are covered under the Diagnostic Lab and X-ray benefit.

• Clarification has been added that generic emergency contraceptives are covered under the HCR Preventive drug list, and “Plan B” emergency contraceptives are covered and subject to the applicable Prescription Drug cost share.

• We have clarified that this benefit covers travel immunizations.

• We have clarified that when preventive care is received at a hospital based clinic or a hospital based physician’s office, the member must pay the medical cost-shares when there are any extra facility charges.

• Premera policy

• Federal mandate

• Clarification

Prescription Drugs benefit _{• All plans now include a prescription drug benefit.}

• A member can request an early refill for topical eye medication when prescribed for a chronic eye condition.

• The plans no longer limit benefits for certain specified drugs to specific pharmacies. This does not apply to specialty drugs that are required to be dispensed by specialty pharmacies.

• Premera policy • State mandate

• State mandate

Vision benefit (mandated) _{The benefits for the mandate vision benefit have changed. Please refer to the}

State-Mandated Benefit Offerings page of this document.

State mandate

Vision Hardware benefit _{We have clarified that any applicable sales tax, shipping and handling charges for}

covered items are included in the hardware benefit maximum.

Premera policy

Care Management _{• Your plan now requires Premera Blue Cross Blue Shield of Alaska to approve certain}

medical services before a member receives the care. This is called “prior

authorization”. We have added prior authorization language to the member’s benefit booklet.

• The Benefit Level Exception has been deleted and is now replaced by the Prior Authorization provision.

• We have added the Clinical Review section to outline how we determine medical necessity.

• Premera policy

BlueCard Program and Other Inter-Plan Arrangements

• We have revised our Non-Network Providers section to align with our network pricing methodology.

• Premera pricing policy

What's Not Covered? • Assisted reproduction procedures, regardless of the reason.

• We have clarified that the exclusion for felonies does not apply to a victim of domestic

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violence.

Who Is Eligible For Coverage? _{Employees and dependents do not have to be U.S. citizens or live in the U.S. to be}

eligible for coverage.

Premera policy

Subscriber Eligibility _{If your plan requires employees to wait more than 60 days for coverage to start:}

The Affordable Care Act allows a maximum of 90 calendar days. However, in order to allow for groups' enrollment options, Premera's longest probationary period option will be 60 calendar days. This is because more than just the probationary period counts toward the 90 day limit. If a plan requires employees to wait for coverage to start until the first of the month that follows the date the probationary period ended, those additional days must also be counted toward the 90-day maximum. In addition, the maximum period cannot be extended beyond 90 days to allow for 31-day months, weekends, or holidays.

The new maximum also applies to employees who started their probationary period before the group's 2014 renewal.

Federal mandate

Dependent Eligibility _{The plan can no longer exclude a child who is younger than age 26 from coverage if the}

child is eligible for other group coverage that is not through a parent.

Foster children of the subscriber or spouse are now eligible for coverage. There must be a court order or other order signed by a judge or state agency which grants guardianship of the child to the subscriber or spouse as of a specific date. When the court order terminates or expires, the child is no longer an eligible child.

• Federal mandate

Certificate of Health Coverage We have clarified that a member may receive credit toward any waiting period for pre-existing conditions if the new plan includes one.

Federal mandate

COBRA In the COBRA section, we have clarified that covered dependent grandchildren have the same rights to COBRA coverage as do covered dependent children.

Premera policy

Special Enrollment _{• The Involuntary Loss Of Other Coverage section has been changed to state that when}

we receive the employee and/or dependent’s completed enrollment application and any required subscription charges within 60 days of the date other coverage ended, coverage under this plan will become effective on the first of the month following the date the other coverage was lost.

• We have clarified who can enroll when a dependent is added through birth, adoption or marriage.

• Premera policy

• Federal mandate

What If I Have A Question or An

Appeal? We have clarified that a Level II appeal requires that the appeal reviewer must hold the _{same professional license as the treating provider.}

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EMPLOYER AGREEMENT

Location

Description of Change

Reason for Change

BlueCard Program and Other Inter-Plan Arrangements

• We have revised our Non-Network Providers section to align with our network pricing methodology.

• We have revised the Return of Overpayments section to state that the full recovery amount must be received and applied by the Host Blue as stated in the contract language. Any compensation due to third parties for the recovery must be handled in a separate transaction.

•

Premera pricing policy • Blue Cross Blue Shield

Association policy to clarify the revenue stream

Retroactive Changes To Enrollment

We revised this section to better accommodate COBRA timelines. Premera policy

Compliance With Law _{• We have added language that the group must also comply with any applicable}

requirements for distribution of any medical loss-ratio rebates and actuarial value requirements.

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STATE-MANDATED BENEFIT OFFERINGS FOR INSURED GROUPS

At each renewal, all health carriers must present the following state-mandated benefit offerings to insured groups that do not include them in their plans currently. Please review your current coverage, then indicate and initial below if you would like to upgrade to any of these optional benefits to your plan. If you would like additional information about these offerings, please contact your Premera Blue Cross representative.

Benefit

If Your Current Coverage

Is This:

You Can Upgrade Coverage To This:

Yes

No

Initials

Vision Care Not covered

or

You have elected another vision care plan option (other than the mandated offering).

• Vision Benefit Maximum - $350 per member per calendar year and includes any applicable sales tax, shipping and handling costs.

• Examinations - 90% of allowable charges; one examination per member each calendar year. • Eyeglass Lenses - 1 pair of eyeglass lenses (single

vision, bifocal, trifocal, lenticular) per member per calendar year.

• Contact Lenses – $170 per member per calendar year • Frames - one pair of frames in any 2 consecutive

calendar years up to $90 per member. Hearing Care Not covered

or

You have elected another hearing care plan option (other than the mandated offering).

• Hearing Examination - 80% of allowable charges (subject to plan coinsurance and deductible on High Deductible Health plans); one exam every 3

consecutive calendar years.

• Hearing Hardware - 80% of allowable charges (subject to plan coinsurance and deductible on High Deductible Health plans).

• Maximum Benefit - $800 in a period of 3 consecutive years.

Dental Care Not covered

or

You have elected another dental care plan option (other than the mandated offering).

• Calendar Year Deductible - None.

• Diagnostic and Preventive Services - 100% of allowable charges.

• Basic Services - 80% of allowable charges. • Major Services - 50% of allowable charges.

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PLEASE NOTE: Rates will be provided upon request.

OTHER PLAN CHANGES

In the space below, please tell us about any other changes you want to make to your plan at this year's renewal. • Please include changes in eligibility.

• If you have an IRS Section 125 cafeteria plan, please make sure your book explains any midyear family status changes that trigger enrollment or plan changes.

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SUMMARY OF CONTRACT CHANGES