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Home My WebLink About2007-12-19 Council Packet - Work Session...~ .. HEALTH w. ~ _. r 1' 1'~C 1yH1 ~i~~ilaa~e~ ~~/~~ja ~ "Vi~~a~e wit~t a bast, G~~ cvit~i a Futu~'e" '~ ~~, 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 ~,,~~,~ ~_ ~ Telephone: 907-283-7535 /FAX: 907-283-3014 , I I f I / `~- 1992 rs e t~e~,~a~ KENA~ SKA MEMO: TO: City Council FROM: Rick Koch DATE: December 19, 2007 SUBJECT: Health Insurance The purpose of this correspondence is to discuss the employee health insurance plan, including the renewal quotation, modified coverage from the same provider, and quotations from other providers. The city presently (CY07) provides health inswance coverage through Premera Blue Cross at a cost of approxmately ~ 1,227,000 per year. That cost includes aself-insurance program for $ 800 of an employees ~ 1,000 deductible ~ulministered by Flex-Ilan. hl response to a quoted rate nlcrcase of 19.77% last year, the city increased the deductible from $ 200 to $ 1,000 and self-insured the difference. This resulted in an annual savings o£ $ 176,703 from the renewal quote, and an aamual savings of $ 97,061 from the actual. cost of coverage in. CY 06. We received a renewal quote from Yxemera Blue Cross for CY 08. The quote was an increase of 18.74% over the previous year's rates. The total cost to the city, including the self-insured deductible, would bE approxmately $ 1,424,000, or an increase of $ 197,000. Admi~nistratiou wanted to bring Co Council a renewal rate no greater than 8% above the present rate. tin insurance plan meeting that budgetary criteria, resulted. in a premium of approximately $ 1,305,000, or an increase of $ 78,000. Th,e modifications in coverage nccessa~y to limit the alerease to Less than 8% were as follows: - Maximum out o£pocket for each plan participant (to a maximum of 3) was increased from $ 2,000 to $ 3,000 - Pharmaceuticals -The existing plan provided for $ 10 co-pay for generic & $ 20 co-pay for name brand.. The new plan would provide for $ l 5 co-pay for generic, $ 25 co-pay for preferred name brand, and $40 co-pay for. other name brand. - Vision -The existing plan provided for an exam paid 100% by the carrier and $ 300 for glasses/contacts annually. The new plan would provide for an exam paid for 100% by the can~ier. - Dental --The existing plan provided for preventative procedures to be paid 100%, restorative services paid 80%, and prosthetic procedures at 50%, to a. maximum of $ 2,000. The new plan would provide for preventative & restorative procedures at 80%, and prosthetic procedures at 50%, to a maximum of$ 1,500. We also looked at rates supplied by the Alaska Public L1tIlitics Trust We have been speaking with that group for some time to determine if they would allow new plan participants, and. if so, under what conditions. They were only able to provide their rata struchue for CY 07, and. were unable to give us any indication. what the expected rates would be for CY 08. Given their rates for CY 07 were comparable to the rates we presently have with Premera, and their being unable Co provide us any information. regarding rates for CY 08, we did not pursue Uus option any further. Premera 13hie Cross also mahltains a health benefit plan named. the `Political Subdivision Association" We reviewed coverage's and. rates provided under this plan. Coverage was less, and rates were higher. We did not pursue this option further. AETNA was contacted by bong Brown, our insurance broker and declined to provide a quote. Administration. met with the employee health care committee over the previous six weeks to inform them of our progress, to distribute the information on each of the plans we were considering, and to inform them as to administration's target goals. On Monday, December 17s' we held a meeting for all employees to discuss what the achnirustration's recommendations would be to Council. We informed them administration would recommend the plan with Premera Blue Cross resulting in a 7.4% increase, and a decrease in plan. benefits as described earlier in this memorandum. Yesterday, December 18`~'', we received information regarding a plan sponsored by the Alaska Municipal League and administered by AETNA. It is a plan designed for and limited to Alaska political subdivisions. Larry Semmens and I have spent the last two days calculating rates, and investigating coverage provided for render this policy. The coverage is equal to, and in some areas exceeds the coverage provided for under our current policy. The rates are not only lower than our renewal quote, but given our self insurance programfor deductible they aJe substantially lower than the rates we are presently paying. The anmial premium for this policy is approximately 3 1,056,000, or $ 171,000 less than our current rates, and $ 368,000 less than the renewal quote. This AETNA policy is a based on a July 1-7urre 30 fiscal year, and we assumed an increase of 10% for the second si'x months of the calendar year. Over the previous two years they have had. increases of seven percent and two percent. Administration recommends entering into an agreement with AETNA, through Elie Alaska Municipal League to provide employee health care insurance. It is easiest i£this change in provider takes place on January 1, 2007. This will require a special meeting of the Council to pass a resolution as required by the plan. Administration has sehediiled a meeting for this Friday at 9:00 AM with employees to discuss this new information, and recommendation. Please find the following attachments: 1. Comparison of Existing, Considered & Proposed Employee Health Beneft Plaus for CY 2008. 2. AETNA-AM,L Political Subdivision Health Plan, Benefit Summary, Plan IV. 3. Sample Resolution IVIP 1215N F EXISTING, CNSI®EE& PPG E E PLYEE HEALTH BENEFIT PLANS FR CY 200 ~RE~nER~ Cl1RRENT BENEFITS-2007 Monthly Annual Plan Component Description Charges Costs Medical HS $ 1,000/20%/$ 2,000 $ 64,490.31 $ 773,883.72 MH 12 Visits OP/6 days IP $ 236.44 $ 2,837.28 Unlimited Spinal $ 2,719.50 $ 32,634.00 Pharmacy Rx $ 0-$ 10/$ 20 $ 11,609.00 $ 139,308.00 Vision V-1 Exam PCY/$ 300 PCY $ 3,895.42 $ 46,745.04 Dental DOpt $ 0/0%/20%150%/$ 2,000 $ 9,326.42 $ 111,917.04 Sub-Total $ 92,277.09 $ 1,107,325.08 Commission Rebate $ (4,613.85) $ (55,366.25) Self Insurance Deductible $ 14,583.33 $ 174,999.96 Total $ 102,246.57 $ 1,226,958.79 PRENIERA CURRENT BENEFITS-008 ('18.74°/® Increase) Monthly Annual Plan Component Description Charges Costs Medical HS $ 1,000/20%/$2,000 $ 77,624.79 $ 931,497.48 MH 12 Visits OP/6 days IP $ 279.56 $ 3,354.72 Unlimited Spinal $ 3,273.43 $ 39,281.16 Pharmacy Rx $ 0-$ 10/$ 20 $ 13,976.25 $ 167,715.00 Vision V-1 Exam PCY/$ 300 PCY $ 4,342.31 $ 52,107.72 Dental DOpt $ 0/0%/20%/50%/$ 2,000 $ 10,076.41 $ 120,916.92 Sub-Total $ 109,572.75 $ 1,314,873.00 Commission Rebate $ (5,478.64) $ (65,743.65) Self Insurance Deductible $ 14,583.33 $ 174,999.96 Total $ 118,677.44 $ 1,424,129.31 ~REER~ I~®®IFIE® BENEFITS-2008 (7.40% Increase) Monthly Annual Plan Component Description Charges Costs Medical HS $ 1,000/20%/$ 3,000 $ 75,149.63 $ 901,795.56 MH 12 Visifs OP/6 days IP $ 283.57 $ 3,402.84 Unlimited Spinal $ 3,170.02 $ 38,040.24 Pharmacy Rx $ 0-$ 15/$ 25/$ 40 $ 11,279.37 $ 135,352.44 Vision V-1 Exam PCY $ 1,085.06 $ 13,020.72 Dental DOpt $ 0/20%/20%I50%/$ 1,500 $ 8,139.51 $ 97,674.12 Sub-Total $ 99,107.16 $ 1,189,285.92 Commission Rebate $ (4,955.36) $ (59,464.30) Self Insurance Deductible $ 14,583.33 $ 174,999.96 Total $ 108,735.13 $ 1,304,821.58 MPARISN F EXISTING, CONSI®ERE® PR OSE® EMPLOYEE HEALTH ENEFIT PLANS FOR Y 200 P~~g9G qq9 dppV~~/'i®°®B~®Li 6 ~6s P'l~ JULi i.si ib v~3~®iVe7 r ~Mltl I V Plan Component Description Medical $ 1,500120%/$ 2,000 & $10 per visit MH 25 Visits 50%/IP 21 Days 50% Spinal -included under Medical Pharmacy Deductible Applies, After Deductible $ 10 Generic, $ 20 Formulary Brand Name, $ 35 Non-Formulary (mail order is cheaper) Vision Exam 100% 1 PCY, Lenses 80% 2 PCY Frames 80% 1 P2CY Dental Preventative 80%, Restorative 80%, Prosthetic 50%, $ 50 Deductible, $ 0 Deductible for Preventative, $ 1,500 per year maximum Audio Exam 100%, $ 800 maximum for three consecutive years Sub-Total Commission Rebate Self Insurance Deductible Total Total for AETNA Plan IV 1 11 10 8-1 213110 8 Monthly 1/1108 - 6/30/08 7/1/08 - 12/31108 Charges Costs Costs' $ 67,420.40 $ 404,522.40 $ 444,974.64 $ 67,420.40 $ $ - $ $ 17,175.00 $ $ 84,595.40 $ $ 1,055,597.04 404,522.40 $ 103,050.00 $ 507,572.40 $ 444,974.64 103,050.00 548,024.64 Includes Estimated 10% Premium Increase Beginning July 1, 2008 r-- /~~~~~ PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE IN State of Alaska Political Subdivisions Proposed Effective Date, 07-01-2006 Open Choice®(PPO) - ASC Deductible (per calendar year) $1,500 Individual $2,000 Individual $3,000 Family $4,000 Family All covered expenses including prescription drugs accumulate toward both the preferred and non-preferred Deductible. Unless otherwise indicated, the Deductible must be met prior to benefits being payable. Once family deductible is met, all family members will be considered as having met their deductible for the remainder of the calendar year. There is no individual deductible to satisfy within the family deductible. Member Coinsurance 20% 40%- facility only Applies to all expenses unless otherwise stated. Payment Limit (per calendar year) $2,500 Individual $3,000 Individual $5,000 Family $7,000 Family All covered expenses including deductible and prescription drugs accumulate toward both the preferred and non-preferred Payment Limit. Certain member cost sharing elements may not apply toward the Payment Limit. Only those ouf-of-pocket expenses resulting from the application of coinsurance percentage, deductibles, and prescripfion drug copays (except any penalty amounts) may be used to satisfy the Payment Limit. Once family payment limit is met, all family members will be considered as having met their payment limit for the remainder of the plan year. There Is no Individual payment limit Yo satisfy within the family payment limit. Lifetime Maximum Certification Requirements - Certiflcation for certain types of Non-Preferred care must be obtained to avoid a reduction in benefits paid for that care, Certification for Hospital Admissions, Treatment Facility Admissions, Convalescent Facility Admissions, Home Health Care, Hospice Care and Private Duty Nursing is required -excluded amount applied separately to each type of expense is $400 per occurrence. Referral Routine Adult Physical Exams/ Covered 100%; deductible waived, Same Immunizations $500 maximum. 1 exam per 12 months for members age 18 to age 65; 1 exam per 12 months for adults age 65 and older Routine WeII Child Examsllmmunizations Covered 100%; deductible waived, same $500 maximum. 7 exams !n the first 12 months of life, 2 exams in the 13th-24th months of fife; 1 exam per 12 months thereafter to age 18. Routine Gynecological Care Exams Covered 100%; deductible waived, same Included Pap smear and related lab fees $500 maximum. Routine Mammograms Covered 100%; deductible waived, same For covered females age 40 and over. $500 maximum. Routine Digital Rectal Exam /Prostate- Covered 100%; deductible waived, same specific Antigen Test $500 maximum. For covered males age 40 and over Colorectal Cancer Screening Covered 100%; deductible waived, same For all members age 50 and over. $500 maximum. Routine Eye Exams Covered 100%, deductible waived same 1 routine exam per 12 months Routine Hearing Exams Covered 100%; deductible waived same 1 routine exam per 24 months PHYSIGI,4N SERVICES PREFERRED CARET NON-PREFERRED CARE ` 12/19/2007 Page 1 1 -+ PLAN DESIGN AND BENEFITS State of Alaska Political Subdivisions Proposed Effective Date: 07-01-2006 Open Choice® (PPO) - ASC PROVIDED BY AETNA LIFE INSURANCE COMPANY Office Visits to Non-Specialist 20% 20% Includes services of an internist, general physician, family practitioner or pediatrician. Specialist Office Visits 20% 20% Allergy Testing Covered as either PCP or specialist 20% office visit Allerav Infections 20% 20% Diagnostic Laboratory and X-ray 20% 20 If performed as a part of a physician office visit and billed by the physician, expenses are covered subject to the applicable Urgent Care Provider 20% 20% (benefit availability may vary by location) Non-Urgent Use of Urgent Care Provider Not Covered Not Covered Emergency Room 20% Same as preferred care. Non-Emergency care in an Emergency 50% 50% Inpatient Coverage 20% The member cost sharina applies to all covered benefits incurred durina a member's inpatient sta Inpatient Maternity Coverage 2C% 40% The member cost sharing applies to all covered benefits incurred during a member's inpatient stay Outpatient Hospital Expenses (including 20% 40% surgery) The member cost sharing applies to all Covered Benefits incurred durina a member's outpatient visit Inpatient 50% Limited to 30 days per calendar year. The member cost sharing applies to all covered benefits incurred durina a member's Outpatient 50% 50% Limited to 20 visits per calendar year. The member cost sharing applies to all covered benefits incurred during a member's outpatient visit Maximum are a combined limit for preferred and non-preferred services. Inpatient 20% 40% Limited to 30 days per calendar year. The member cost sharina applies to all covered benefRs incurred durina a member's Inpatent sta Outpatient 50% 50% Limited to 20 visits per calendar year. The member cost sharing applies to ail Covered Benefits incurred during a member's outpatient visit Maximums are a combined limit for preferred and non-preferred services. Convalescent Facility 20% 20% Limited to 120 days per calendar year. The member cost sharing applies to ail covered benefits incurring during a member's inpatient stay Home Health Care 20% 20% Limited to 60 visits per calendar year. Each visit by a nurse or therapist is one visit. Each visit Hospice Care -Inpatient 20% Limited to 30 days per lifetime. to 4 hours by a home health care aide is one visit. 40% 12/19/2007 Page 2 ...w State of Alaska Political Subdivisions -t~~~~ Proposed Effective Date, 07-01-2006 Open Choice®(PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY The member cost sharino applies to all covered benefits incurred durina a member's inpatient sta Hospice Care -Outpatient 20% 20% Up to a maximum benefit of $5,000 The member cost sharing applies to all covered benefits incurred during a member's outpatient visit Private Duty Nursing -Outpatient (Limited to 20% 20% 70 eight hour shifts per calendar year) Outpatient Short-Term Rehabilitation 20% 20% Includes speech, physical, and occupational therapy. Spinal Manipulation Therapy 20% 20% Limited to 25 visits per calendar year Durable Medical Equipment 20% 20% Maximum annual benefit of $10,000 per member per calendar year Diabetic Supplies Covered same as any other medical Covered same as any other medical Contraceptive drugs and devices not 20% (payable as any other covered 20% (payable as any other covered obtainable at a pharmacy (includes coverage expense) expense) for contraceptive visits) Vision Eyewear Not Covered Not covered Transplants 20% Preferred coverage is provided 40% Non-Preferred coverage is at an IOE contracted facility only provided at a Non-IOEfacility. "Other" Health Care - 20% member coinsuran ce after the preferred (per calendar year) deductible for services that are neither'breferred" nor "non-preferred" Infertility Treatment Member cost sharing is based on the Member cost sharing is based on the Diagnosis and treatment of the underlying type of service performed and the type of service performed and the medical condition. place of service where it is rendered place of service where it is rendered Voluntary Sterilization Member cost sharing is based on the Member cost sharing is based on the Including tuba) ligation and vasectomy type of service performed and the type of service performed and the place of service where it is rendered place of service where it is rendered PHARMACY ' PREFERRED CARE iNON-PREFERRED CARE The full cost of the drug is applied to the deductible before benefits are considered for p ayment under the pharmacy plan. Retail Covered 100% after combined Not Covered medicallRx plan deductible and $10 copay for generic drugs, $20 copay for formulary brand-name drugs, and $35 copay for non-formulary brand-name drugs up to a 30 day supply at participating pharmacies. Mail Order Covered 100% after combined Not Covered medical(Rx plan deductible and $20 copay for generic drugs, $40 copay for formulary brand-name drugs, and $60 copay for non-formulary brand-name drugs up to a 3?-90 day supply from Aetna Rx Home Delivery. No Ma Plan Includes. Devices obtainable from a pharmacy Oral fertility drugs, Diabetic supplies. Precert for growth hormones included GENERAL'PROVISIONS Dependents Eligibility Spouse children from birth to age 19 or to age 23 if in school. 12/19/2007 Page 3 ~~r ~ Stafe of Alaska Political Subdivisions ~~~~ ~~~ Proposed Effective Date: 07-01-2006 Open Choice®(PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY Pre-existing Conditions Rule On effective date: Waived After effective date: Full Postponement This plan imposes apre-existing condition exclusion, which may be waived in some circumstances and may not be applicable to you. Apre-existing condition exclusion means that if you have a medical condition before coming to this plan, you may have to wait a certain period of time before the plan will provide coverage for that condition. This exclusion applies only to conditions for which medical advice, diagnosis, care, or treatment was recommended or received or for which the individual took prescribed drugs within 90 days Generally, this period ends the day before your coverage becomes effective. However, if ycu were in a waiting period for coverage, 90 days ends on the day before the waiting period begins. The exclusion period, if applicable, may last up to 365 days from your frst day of coverage, or, if you were in a waiting period, from the first day of your waiting period. If you had prior creditable coverage within 90 days immediately before the date you enrolled under this plan, then the pre-existing conditions exclusion in your plan, if any, will be waived. If ycu had no prior creditable coverage within the 90 days prior to your enrollment date (either because you had no prior coverage or because there was more than a 90 day gap from the date your prior coverage terminated to your enrollment date), we wiil apply your plan's pre-existing conditions exclusion. In order to reduce or possibly eliminate your exclusion period based on your creditable coverage, you should provide us a copy of any certificates of creditable coverage you have, Please contact Aetna Member Services at 1-888-982-3862 if you need assistance in obtaining a certificate of creditable coverage from your prior carrier or if you have any questions on the information Hated above. The pre-existing condition exclusion does not apply to pregnancy nor to a child who is enrolled in the plan within 31 days of birth, adoption, or placement for adoption. Note: For late enrollees, coverage will be delayed until the plan's next open enrollment, and the pre-existing condition exclusion will be applied from the individual's effective date of coverage. This plan does not cover all health care expenses and includes exclusions and limitations. Members should refer to their plan documents to determine which health care services are covered and to what extent. The following is a partial list of services and supplies that are generally not covered, However, your plan documents may contain exceptions to this list based on state mandates or the plan design or rider(s) purchased by your employer. All medical or hospital services not specifically covered in, or which are limited or excluded in the plan documents; Charges related to any eye surgery mainly to correct refractive errors; Cosmetic surgery, including breasf reduction; Custodial care; Dental care and X-rays; Donor egg retrieval; Experimental and investigational procedures, Hearing aids; Immunizations for travel or work; Infertility services, Ir,eluding, but not limited to, artificial insemination and advanced reproductive technologies such as IVF, ZIFT, GIFT, ICSI and other related services, unless specifically listed as covered in your plan documents; Nonmedically necessary services or supplies; Orthotics, Over-the-counter medications and supplies; Reversal of sterilization; Services for the treatment of sexual dysfunction or inadeauacies, including therapy, supplies, or counseling; and special duty nursing. This material is fcr informational purposes only and is neither an offer of coverage nor medical advice, It contains only a partial, general description of plan benefits or programs and does not constitute a contract. Aetna does not provide health care services and, therefore, cannot guarantee results or outcomes. Consult the plan documents (i e. Group Insurance Certificate and/or Group Policy) to determine governing contractual provisions, including procedures, exclusions and limitation relating to the plan. With the exception of Aetna Rx Home Delivery, all preferred providers and vendors are independent contractors 'm private practice and are neither employees nor agents of Aetna or its affiliates. Aetna Rx Home Delivery, LLC, is a subsidiary of Aetna Ina The availability of any particular provider cannot be guaranteed, and provider network composition is subject to change without notice. Some benefits are subject to limitations or visit maximums. Certain services require precertification, or prior approval of coverage. Failure to precertify for these services may lead to substantially reduced benefits or denial of coverage, Some of the benefits requiring precertification may include, but are not limited to, inpatient hospital, inpatient mental health, inpatient skilled nursing, outpatient surgery, substance abuse (detoxification, inpatient and outpatient rehabilitation). When the Member's preferred provider Is coordinating care, the preferred provider will obtain the precertification. When the member utilizes anon-preferred provider, Member must obtain the precertification. Precertification requirements may vary. Dependinc on the plan selected, new prescription drugs not yet reviewed by our medication review committee are either available under plans with an open formulary or excluded from coverage unless a medical exception is obtained under plans that use a closed 12/19/2007 Page 4 - ~ SYate of Alaska Political Subdivisions ~~~~~~~~ Proposed Effective Date. 07-01-2006 Open Choice®(PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDEp BY AETNA LIFE INSURANCE COMPANY formulary. They may also be subject to precertiflcation orstep-therapy. Non-prescription drugs and drugs in the Limitations and Exclusions section of the plan documents (received after open enrollment) are not covered, and medical exceptions are not available for them. While this information is believed to be accurate as of the print date, it is subject to change. Plans are provided by Aetna Life Insurance Company. 12/19/2007 Page 5 ir~ctor~ Pharmacy Listing we want you to knaw® ~~ ~etl(~.~g In~.~rtant Inf~ratic~n Haw to Use This D'sreetory Use this directory as a reference to identify the pharmacies participating in the Aetna network. Keep Yhis directory handy so that you or your covered family members can find a participating pharmacy when you need a prescription filled. Please refer to your plan documents for information regarding your prescription drug benefits, The directory first lists all participating pharmacies alphabetically by city, both chain and independently owned. In addition, pharmacies that generally are open 24 hours are indicated in bold. tither pharmacies may have after-hours emergency coverage. You should verify participation in the Aetna network and exact operating hours directly with the pharmacy. For up-to-date listings, visit our DocFind®online provider directory at wvvw.aetna.com. Contact Member Services either online or at the toll-free number on your ID card to find pharmacies in your area. Provider Compensation Pharmacies are reimbursed based upon a combination of the following payment methodologies. Discount from Average Wholesale Price: Pharmacy receives an agreed upon percentage discount from the Average Wholesale Price of the pharmaceutical product dispensed. Fee Schedule: Pharmacy is paid a fee established by Aetna for each pharmaceutical product dispensed. Professional Dispensing Fee: Pharmacy is paid a professional fee as agreed upon by Pharmacy and Aetna for each pharmaceutical product dispensed. Prescription Drugs If your plan covers outpatient prescription drugs, your plan may include a preferred drug list (also known as a "drug formulary"}. The preferred drug list includes a list of prescription drugs that, depending on your prescription drug benefits plan, are covered on a preferred basis. Many drugs, including many of those listed on the preferred drug list, are subject to rebate arrangements between Aetrra and the manufacturer of the drugs. Such rebates are not reflected in and do not reduce the amount you pay to your pharmacy for a prescription drug. In addition, in circumstances where your prescription plan utilizes copayments or coinsurance calculated on a percentage basis or a deductible, your costs may be higher for a preferred drug than they would be for a nonpreferred drug. for information regarding how medications are reviewed and selected for the preferred drug list, please refer to Aetna's website at www.aetna.com or the Aetna Preferred Drug (Formulary} Guide. Printed Preferred Drug Guide information will be provided, upon request or it applicable, annually for current members and upon enrollment for new members. Additional information can be obtained by calling Member Services at the toll-free number listed on your ID card. The medications listed on the preferred drug list are subject to change in accordance with applicable state law. Your prescription drug benefit is generally not limited to drugs listed on the preferred drug list. Medications that are not listed on the preferred drug list (nonpreferred or nonformulary drugs) may be covered subject to the lirnitr and exclusions set forth in your plan documents Covered nonformulary prescription drugs may be subject to higher capayments or coinsurance under some benefit plans. Some prescription drug benefit plans may exclude from coverage certain nonformulary drugs that are not listed on the preferred drug list. If it is medically necessary for you to use such drugs, your physician (or pharmacist in the wse of antibiotics and analgesics) may contact Aetna to request coverage as a medical exception. Check your plan documents for details, In addition, certain drugs may require precertification or step-therapy be#ore they will be covered under some prescription drug benefit plans. Step-therapy is a different form of precertification which requires a trial of one or more "prerequisite therapy" medications before a "step therapy" medication will be covered. If it is medically necessary for you to use a medication subject to these requirements, your physician tan request coverage of such drug as a medical exception. In addition, some benefit plans include a mandatory generic drug cost-sharing requirement. In these plans, you may be required to pay the difference in cost between a covered brand name drug and its generic equivalent in addition to your copayment if you obtain the brand-name drug. Nonprescription drugs and drugs in the Limitations and Exclusions section of the plan documents {received and/or available upon enrollment) are not covered, and medical exceptions are not available for ihem.Depending on the plan selected, new prescription drugs not yet reviewed for possible addition to the preferred drug list are either available at the highest copay under plans with an "open" formulary, or excluded from coverage unless a medical exception is www,aetna.com obtained under plans that use a "closed" formulary. These new drugs may also be subject to precertification or step- therapy. You should consult with your treating physicians} regarding questions about spedfic medications. Refer to your plan documents or contact Member Services for information regarding terms, conditions and limitations of coverage. ff you use the mail order prescription program of Aetna Rx Home Delivery, LLC, or the Aetna Specialty PharmacysM specialty drug program, you will be acquiring these prescriptions through an affiliate of Aetna, Aetna's negotiated charge with Aetna Rx Hame Delivery' and Aetna Specia€ty Pharmacy may be higher than their cost of purchasing drugs and providing pharmacy services. For these purposes, Aetna Rx Home Delivery's and Aetna Specialty Pharmacy's cost of purchasing drugs takes into account discounts, credits and other amounts that they may receive from wholesalers, manufacturers, suppliers and distributors. Updates to the Drug Formulary You can obtain formulary information from the Internet at www.aetna.comfformulary/, or by calling your Member Services toll-free number. Aetna Rx Home Delivery Aetna Rx Home Delivery is Aetna's mail order prescription drug service. For those members with a mail order benefits, prescription medications can be ordered through Aetna Rx Home Delivery to treat chronic conditions or diseases such as: . Arthritis . Asthma Diabetes High cholesterol Hypertension Aetna Rx Home Delivery offers you: . Convenience -Quick, confidential shipping of your maintenance medications right to your home, place of work or any other location of your choice, Ease of Use -Aetna Rx Home Delivery's simple, two - step process makes ordering your maintenance medications easy. Quality Service -Pharmacists check orders for accuracy and are available 24 hours a day, 7 days a week in case of emergency. . Cost Savings -Depending on your Aetna pharmacy benefits plan, you could save money by using Aetna Rx Home Delivery and standard shipping is always free. To learn more about Aetna Rx Mome Delivery, visit their website at www.AetnaRxMOmeDelivery.com or please call 7-866-612-3862. Other languages are serviced including Spanish Aetna Specialty Pharmacy® Some medications used to treat chronic medical conditions Pike rheumatoid arthritis, cancer, hemophilia, multiple sclerosis and hepatitis C are not always available at retail pharmacies. These medications may also require special storage such as refrigeration. Aetna Specialty Pharmacy can deliver injectables and other specialty medications right to your home, doctor's office or location of choice. Working closely with your doctor, Aetna Specalty Pharmacy offers you access to a team of registered nurses, pharmacists, benefit specialists and patient care coordinators who know your benefits and can offer care support. To learn more about Aetna Specialty Pharmacy, please call 1-866-353-1892 or visit their website at www.Aetna Specia ItyRx.com. Aetna Specialty Pharmacy 503 Sunport Lane Orlando, FL 328p9 1.866-782-2779 (1-866-782-ASRX) Other languages serviced including Spanish. Health benefits and health insurance plans are offered, underwritten or administered by: Aetna Health Inc., Aetna Health of California Inc., Aetna Health of the Carolinas Inc., Aetna Health of Illinois Inc. and/or Aetna Life Insurance Company. Information subjecC to change. Providers are independent contractors and are not agents of Aetna. Provider participation may change without notice. Aetna does not provide care ar guarantee access to health services. Not all health services are covered. See plan documents for a compSete description of benefits, exclusions, limitations and conditions of coverage. Plan features and availability may vary by location and are subject to change. for more information about Aetna plans, refer to www.aetna.com. Participating P~armacie~ nr~sx~s ~ ~ ~ ~~~ ry CARRS PHARMACY Ketchikan COSTCO PHARMACY CARRS PHAflMACY ......................................... All locations EAGLE PHARMACY DOWMOWN DRUG STORE ............................. 300 Fronf St FRED MEYER ISLAND PHARMACY ................................ 3526 Ton9ass Ave SAFEWAY PHARMACY WA{.MART PHARMACY ................._............... A4 bcations SAM'S PHARMACY WAL-MART PHARMACY _ r + ~ ' ~~~` ~~~ ~ .. (~ '- to a. ., r~ ~ ~ Y~~ .. „ I O k ~T 'tar S A F W AY PHARMACY ... ...... .......... All Iocation5 WAt Anchorago ANCHORAGE NGHBRHD PHCY._ ............... 1217E 10th Ave BERNff$ PHARMACY ................. . 4Y00 lake OGS Pkwy N200 CARRS PHARMACY..... _........__ .._ ............._... All locations., COSTCO PHARMACY ................ ...................... All locations FRED MEYER...,.- ..................... -......,.......,..... All iaations GENEVA WOODS PHARMACY,... ,.. 1200 Aifpmt Ht5 Ste 170 GENEVA WOODS PHARMACY.,.. ....... 561 W Inlrntl Arprt Rtl GREAT LAND MN90N PHCY .... .,,.... 2427 E Tudor Rd ktOJ 1-CARE PHARMACY ................... .... 403 W Nthrn Lights 81W TAKE 0II5 PHARMACY .............. ............ 4201 take Otis Pky MEDICAL ARTS PI#ARMACY ....... ................. Po Box 166276 SAM'S PHARMACY ................... ...................... All Iocation5 WAL-MART PHARMACY..__...... _..- ................ All taraiions Eagle River CAR0.5 PHARMACY ................._ _....._............. All locatiom FAMRY PHARMACY............_ ..... .......... ii432 Business Blvd fAEP MEYER ............................ -_.............,,... All lowtiom WAL-MARL PFIAAMACY ............ .........._........., All locatrom MART PHARMACY ..........................-_.... All Iocabons a (~'r B .b.YJ 2 1 ~ `.+d. Palmer CARRS PHARMACY ................... ..............~...,... Ail !ocations FRED MEYER ............................ ...................... All locations THREE BEARS PHARMACV..._.... . 8157 E Palmer Wasilla Hvy Wasilla CARRS PHARMACY ................... ...................... Ail Locations fftED MEYER ............................ ...................... Ail tocatiotrs GENEVA WOODS MATSU PHCY,. .... 3b74 E Country field qA GENEVA WOODS PHARMACY.... ....... 36J4 ECountry Fid Cir MYDOKOTORS PHARMACY ....... ............... 450 E Bogard Rtl SUSITNA PRO PHARMACY .......... .... 1157 E Gardner Way AG TKG PHARMACY ...................... .....__._ 490 E Railroad Ave WAL-MART PHARMACY ............ ...................... All locations Fairbanks CARR$ PHARMACY .................._. .................... All Iocation5 CHIEF ANDREW ISAAC PHCY ....... ................ 1408 19th Ave DENALI PHARMACY .................... ............... 1650 Cowles Sf fAlABANK$ PAD PHARMACY ...... ................. 1007 A'able St FRED MEY£A .............................. .................._ All Iocation5 PRESCRIPTION CENTER ................ ...... 1919 Lathrop St #109 SAFEWAY PHARNACY ................. .................... All locationz SAM'S PHARMACY ..................... .................... All locations WAL-MART PHARMACY .............. .................... All (orations North Pole CARR$ PHARMACY .................._. ..............,.,... All Iocation5 Juneau CARR$ PHARMACY ......................................... All locations F'OODIAND SUPER DRUG ....................... 637 Willougby Ave fftED MEYER .................................................. Rtl locations JUNEAU DftUG ............................................... 202 Front St RONS APOTHECARY SIIOPPE........ 9101 Mendenhall Mall Rtl Fr Y' M tiYY tee Homer EAGLE PIIARMACY..._.._..._ ...... ..................... Aii locations ULMER DRUG & HARDWARE ...... ............... 3858 Lake 51 #5 Kenai CARRS PHARMACY .................... ..................... A4 bcaiions THREE BEARS PHARMACY .......... ...... tO5J5 Kenia Spur Hvry Seward SAFfWAY PHARMACY......_ ........ ..................... Ail Mcation5 Soldotna CARR$ PHARMACY .................... ........_,.......... All locations FRED MEYER ...................._.. _... ..................... All Iocation5 SOLDOTNA PRO PHARMACY ...... ............... 299 N einkley 5t Nome NORTON SND 1#LTH CORP PHCY .................. 306 W 5th Ave Barrow SAMUEL SIMMONOS MEM HOSP ................... J 296 Agvik 51 Craig WHALE TA4 PHARMACY ..............__.._......... 300 B Easy 5t Cordova COADOVA DRUG ....................... ..........~._........ S76 First 51 GlenndlieR CROSSROAD PHARMACY ........... ......... Mile 187 Glenn Hvry Valdez VILLAGE PHARMACY . .. ............. Meals & Pioneer Petersburg PETERSBURG REKAtL DRUG......._.,......__.. 215 N NoNir. Dr Open 24 hours A. 21.33.00&E (4/07) On the web You can also access iriformation about physicians' hospital affiliations, medical education, board certification ~'a status and languages spoken. $,,. Connect to the Aetna webslte ~~ ~ for fast access to other resources '~ available to our members. You'li ~ learn more about our commitment to making quality health accessible, z~ affordable and convenient. We want you to know® ~6 .~-+~trl~ t® ®zomnemamc, www.aetna,com .t~t~.ae PLAN DESIGN AND BENEFITS State of Alaska Political Subdivisions Proposed Effective Date: 07-01-2006 Open Choice® (PPO) - ASC Deductible (per calendar year} $1,500 Individual $2,000 Individual $3,000 Family $4,000 Family All covered expenses including prescription drugs accumulate toward both the preferred and non-preferred Deductible. Unless otherwise indicated, the peductible must be met prior to benefits being payable. Once family deductible is met, all family members will be considered as having met their deductible for the remainder of the calendar year. There is no individual deductible to satisfy within the family deductible. Member Coinsurance 20% 40%-facility only Applies to all expenses unless otherwise stated. Payment Limit (per calendar year) $2,500 Individual $3,000 Individual $5,000 Family $7,000 Family All covered expenses including deductible and prescription drugs accumulate toward both the preferred and non-preferred Payment Limit. Certain member cost sharing elements may not apply toward the Payment Limit. Only those out-of-pocket expenses resulting from the application of coinsurance percentage, deductibles, and prescription drug copays (except any penalty amounts) may be used to satisfy the Payment Limit. Once family payment limit is met, aII family members will be considered as having met their payment limit for the remainder of the plan year. There is no individual payment limit to satisfy within the family payment limit. Lifetime Maximum member's lifetime. Primary Care Physician Selection Not applicable Nat appl(cable Certification Requirements Certification for certain types of Non-Preferred care must be obtained to avoid a reduction in benefits paid for that care. Certification for Hospital Admissions, Treatment Facility Admissions, Convalescent Facility Admissions, Home Health Care, Hospice Care and Privato Duty Nursing is required -excluded amount applied separately to each type of expense is $400 per Routine Adult Physical Exams/ Covered 100%; deductible waived, Same Immunizations $500 maximum. 1 exam per 12 months for members age 18 to age 65; 1 exam per 12 months for adults age 65 and older. Routine Well Child Examsllmmunizations Covered 100%; deductible waived, same $500 maximum. 7 exams in the first 12 mon#hs of life, 2 exams in the 13th-24th months of life; 1 exam per 12 months thereafter to age 18. Routine Gynecological Care Exams Covered 100%; deductible waived, same Included Pap smear and related lab fees $500 maximum. Routine Mammograms Covered 100%; deductible waived, same For covered females age 40 and over. $500 maximum. Routine Digital Rectal Exam /Prostate- Covered 100%; deductible waived, same specific Antigen Test $500 maximum. For covered males age 40 and over Colorectal Cancer Scresning Covered 100%; deductible waived, same For all members age 50 and over. $500 maximum. Routine Eye Exams Covered 100%; deductible waived same 1 routine exam per 12 months Routine Nearing Exams Covered 100%; deductible waived same 1 routine exam er 24 months r ~~ ~ ,1 t «g pFI~YSICIANyS~RY1CES`.~,.~, ,. f. „ -.~'R~;F;~12RED"~CA~~t°~ °->.,~s,e' ._r,~y;~N'=, rRCaEF RREDt' pR ~sl:I h:''l~t, , 12!20/2007 Page 1 ~. `.~i~etr~a~ State of Alaska Political Subdivisions Proposed Effective Date: 07-01-2006 Open Choice® (PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY Office Visits to Non-Specialist 20% 20% Includes services of an internist, general ohvsician, family practitioner or oediatrician. _- - - iergyTesting Covered as either PCP or specialist 20% office visit Diagnostic Laboratory and X•ray 20% 20 If performed as a part of a physician office visit and billed by the physician, expenses are covered subject fo the applicable 20% Use care En an Emergency 50% Inpatient Coverage 20% 40% The member cost sharin~pplles to all covered benefits incurred during a member's inpatient stay Inpatient Makernity Coverage 20% 40% The member cost sharing appllas to a!i covered benefits incurred during a member's inpatient stay _ _ Outpatient Hospital Expenses (including 20°!0 4D% surgery) The member cost sharing applies to all Covered Benefits incurred during a member's ot,toatier,t visit Inpatient 50% 40% Limited to 30 days per calendar year. The member cost sharing appllas to all covered benefits incurred during a member's inpatient stay _ _ Outpatient 50% 50% ~ ~~ Limited to 20 visits par calendar year. The member cost sharing applies to all covered benefits incurred during a member's outpatient visit Maximum are a combined limit for preferred and non-oreferred services. inpatient 20% 40% Limited to 30 days per calendar year. The member cost sharing applies to all covered benefits incurred during a member's inpatient stay Outpatient 50% 50% Limited to 20 visits per calendar year, The member cost sharing applies to all Covered Benefits incurred during a member's outpatient visit Maximums era a combined limit for preferred and non-preferred services. Convalescent Facildty 20% 20°!0 Limited to 120 days per calendar year. The member cost sharing appllas to ail covered benefits incurring during a member's inpatient stay Home Health Care 20% 20% Limited fo 50 visits per calendar year. Eaah visit by_a nurse or therapist is one visit. Each visit up to 4 hours bV a home health care aide Is one visit. Hospice Care -Inpatient 20°l0 40% Limited to 30 days per lifetime 1 212 0/2 0 0 7 Page 2 ..,..., J~ ptyyW State of Alaska Political Subdivisions 1 ),ll .k.~. Proposed Effective Date: p7-01-2066 Open Choice® (PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY The member cost ShaClna coolies to all covered henefits innirred dnrinn a mamher!c innatinnf etav Hospice Care -Outpatient 20% 20% Up to a maximum benefit of $5,000 The member cost sharing applies to ail covered benefits incurred during a member°s outpatient visit _ Private Duty Nursing -Outpatient {Limited to 20% 20% ~ -- 70 eight hour shifts per calendar year) Outpatient Short-Term Rehabilitation 20% 20% Spinet Manipulation Therapy 20% 20% Limited to 25 visits per calendar year Durable Medical Equipment 20% 20% Maximum annual benefit of $16 000 per member per calendar Vear Diabetic Supplies Covered same as any other medical Covered same as any other medical expense expense Contraceptive drugs and devices not 20% {payable as any other covered 20% (payable as any other covered obtainable at a pharmacy (Includes coverage expense) expense) Transplants 20°I° Preferred coverage is provided 40%Non-Preferred coverage is at an IOE contracted facility only provided at a Non-IOE facility "Other" Health Care - 20% member coinsurance after the preferred (per calendar year) deductible for services that are Infertility Treatment Member cost sharing is based on the Member cost sharing is based on the Diagnosis and treatment of the underlying type of service performed and the type of service performed and the medical condition. piece of service where it is rendered place of service where ft is rendered Voluntary Sterilization Member cost sharing is based on the Member cost sharing is based on the Inc3uding tuba! ligation and vasectomy type of service performed and the type of service performed and the place of service where it is rendered niece of service where it is rendered to medical/Rx plan deductible and $10 copay for generic drugs, $20 copay for formulary brand-name drugs, and $35 copay for non-formulary brand-name drugs up to a 30 day supply at participating pharmacies. Mail Order Covered 100% after combined Not Covered medicallRx plan deductible and $20 copay for generic drugs, $40 copay far formulary brand-name drugs, and $60 copay for non-formulary brand-name drugs up to a 31-90 day supply from Aetna Rx Home Deliveryp, is or to ace 23 if in school. 12/20/2007 Page 3 .ti... t~.a° State of Alaska Political Subdivisions Proposed Effective Date: 07-01-2006 Open Choice®{PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY Pre-existing Conditions Rule On effective date: Waived After effective date: Full Postponement This plan imposes apre-existing condition exclusion, which may ba waived in some circumstances and may not be applicable to you. A pra•exis±ing condition exclusicn means that if you have a medical condition before coming to this plan, you may have to wait a certain period of time before the plan will provide coverage for that condition. This exclusion applies only to conditions for which medical advice, diagnosis, care, or treatment was recommended or received or for which the individual took prescribed drugs within 90 days.Generally, this period ands the day before your coverage becomes affective. However, if you were in a waiting period for coverage, 90 days ands on the day before the waiting period begins. The exclusion period, if applicable, may fast up to 365 days from your first day of coverage, or, if you wore in a waiting period, from the first day of your waiting period. If you had prior creditable coverage within 90 days immediately before the data you enrolled under this plan, Then the pre-existing conditions exclusion in your plan, if any, will be waived. If you had no prior creditable coverage within the 90 days prior to your enrollment date (either because you had no prior coverage or because there was more than a 90 day gap from the date your prior coverage Terminated to your enrollment date), we will apply your plan's pre-existing conditions exclusion. In order to reduce or possibly eliminate your exclusion period based on your creditable coverage, you should provide us a copy of any certificates of creditable coverage you have.Please contact Aetna Member Services at 1-888-982-3862 if you need assistance in obtaining a certificate of creditable coverage from your prior carrier or if you have any questions on the information noted above. The pre-existing condition exclusion does not apply to pregnancy nor to a child who is enrolled in the plan within 31 days of birth, adoption, or placement for adoption. Note: For late enrollees, coverage wit! be delayed until the plan's next open enrollment, and the pre-existing condition exclusion will be a lied from the individual's effective data of covera e. This plan does not cover all health care expenses and includes exclusions and limitations. Members should refer to their plan documents to determine which health care services are covered and to what extent. The following !s a partial list of services and supplies that are generally not covered. However, your plan documents may contain exceptions to this list based on state mandates or the plan design or rider(s) purchased by your employer. All medical or hospital services not specifically covered in, or which are limited or excluded in the plan documents; Charges related to any eye surgery mainly to correct refractive errors; Cosmetic surgery, including breast reduction; Custodial care; Dental care and X-rays; Donor egg retrieval; Experimental and investigational procedures; Hear(ng aids; Immunizations for travel or work; Infertility services, including, but not limited ta, artificial insemination and advanced reproductive technologies such as IVF, ZIFT, GIFT, ICS) and other relaked services, unless specifically listed as covered in your plan documents; Nonmedically necessary services or supplies; Orthotics; Over-the-counter medications and supplies; Reversal of sterilization; Services for the treatment of sexual dysfunction or Inadequacies, including therapy, supplies, or counseling; and special duty nursing. This material is for informational purposes only and is neither an offer of coverage nor medical advice. It contains only a partial, general description of plan benefits or programs and does not constitute a contract. Aetna does not provide health care services and, therefore, cannot guarantee results or outcomes. Consult the plan documents {I.e. Group Insurance Certificate and/ar Group Policy) to determine governing contractual provisions, including procedures, exclusions and limitation relating to the plan. With the exception of Aetna Rx Home Delivery, all preferred providers and vendors are independent contractors in private practice and are neither employees nor agents of Aetna or its affiliates. Aetna Rx Home Delivery, LLC, is a subsidiary of Aetna Inc. Tha availability of any particular provider cannot be guaranteed, and provider network composition is subject to change without notice. Same benefits are subject to limitations or visit maximums. Certain services require precertificatlon, or prior approval of coverage. Failure to precertify for these services may lead to substantially reduced benefits or dental of coverage. Some of the benefits requiring precertlflcation may include, but era not limited to, inpatient hospital, inpatient mental health, inpatient skilled nursing, outpatient surgery, substance abuse (detoxification, inpatient and outpatient rehabilitation). When the Member's preferred provider is coordinating care, the preferred provider will obtain the precertificatlon. When the member utilizes anon-preferred provider, Member must obtain the precartification. Precertification requirements may vary. Depending on the plan selected, new prescription drugs not yet reviewed by our medecation review committee are either available under plans with an open formulary or excluded from coverage unless a medical exception is obtained under plans that use a closed 12!20/2007 Page 4 l,~&,l~ State of Alaska Political Subdivisions Proposed Effective Date: 07-01-2006 Open Choice® (PPO) - ASC PLAN pESIGN ANR BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY formulary. They may also be subject to precertificaton or step-therapy. Non-prescription drugs and drugs in the Limitations and Exclusions section of the plan documents (received after open enrollment} are not covered, and medical exceptions are not available for them. While thls Information is believe8 o be accurate as of the print date, if is subject fo change. Plans are provided by Aetna Life Insurance Company. 12!2012007 Page 5 PPO Hosaital Overview Effective July 1, 2005, the State of Alaska Political Subdivision health plan will implement ahospital-only preferred provider organization (PPO) plan when hospital services are sought in the Municipality of Anchorage, the lower 48, and Hawaii. The PPO plan will create financial incentives and steerage to preferred hospitals in those geographical areas, but will not penalize those receiving services outside of Anchorage while still in Alaska. NOTE: The plan will reduce benefits by 20 percent if anon-preferred hospital, either in Anchorage or outside the state of Alaska, is utilized. The employee out-of-pocket coinsurance amount will double if anon-preferred facility is utilized. This arrangement will be implemented into the Economy, the Standard, and the Premium health plans. Additional Details The PPO incentives apply to all services provided by an Alaskan hospital within the Municipality of Anchorage or a hospital in the remaining 49 states. AN services provided by a hospital, including testing or outpatient surgery, are subject to this provision except for: ^ Services received when following a referral from Magellan for mental health/chemical dependency treatment, or ^ Services that can not be preformed at Providence hospital. ^ Services received for emergency treatment defined by the plan as follows: A medical emergency is the sudden and unexpected onset of a condition or an injury-including severe pain-such that a prudent layperson, who possesses average knowledge of health and medicine, could reasonably expect the absence of immediate medical attention to result in serious jeopardy to the person's health, or with respect to a pregnant woman, the health of the woman and her unborn child. There are many conditions that may determine medical emergencies-what they all have in common is the need for quick action. d C 0 r a QIQ -{._ IR N~O a~ ~ e°n v rn rn olNl~ 1~ SIN W IN Iii ~In,n rnlrnlrn I la }' OC >II >I ~I ~,.~~~ dlY 7 T N fql Cl N ~~Iml¢IGyfIY ~ Uhl '•S N ~ ICI G =IIOI~IUIY~h 2 U (OOION ~IOO M....iN l(9r COM U N O m~ I 12 Q ~c i0 O~ IN N, I I~ .1 ... dIN >. IEI~ ~~ ~zm N",.N',CO'N Mt~A V'M t9 CTiN ~~ OD N to V n n;~ n oIO oio m rn,rn',.rn Y IY';Y Y Q!QiQ~Q 0 m 3 rn u~ rn rn a~ N I~ ~ ~ S ~ Is E '~ ~ °~ d ~yQ I>I I I ~I ~ ~ ~~~0 I ~C~~ I I ~~G ~ Id OI ~iN I i~ pl I INI N Ojf~A.N m Y l ° I IC ~ N''~ l~~ L,r~c iIRIdIo Cl~lcj~?Im Imim 4oi3 I N!~I~I~>Y¢L O N ~IC N 10 .0 plt : + I ~'EIoI~IQI~I~Imlip*' ~ I ~ o Icl'"' IW oINIr ~ CIO I ~IIWIQIW, ~ 1~ w ~i~ I ®L-n 6)d)IO.~Ni~OI I~10 O ON 07 v- NO M' it O. CL]!N M rV'~ N1~'IO) ~lJiW Ili; I$ Q ~ O Old di Rlw c fly IVI~~U ~ HIV NEVI GI'S C y B j d ~I~I N^2 ~'~ N Y!aN ~i Nl~ 3 ~ ~ O I d ~ Q Y !/7 OICI~l3 I O I ~ I ~ ~I~IGIO IoIaIU ~I~IL„~ a cni~~inll> N ~ I~I~ w ~ IN~G O~ LVIEI I~IN w O IO OI I®I~I 10.0 a - I- m ~~ d ~ ylC U.. I~I~I '.~iv •' ~ I° t6 ~ tom', ~ N dINi I~.N ~ ~ ~ y ~ 'O (6 9 ~! ICI U IOr.- .041',, N "'~ c'm L'O ~- ° H'L - /vn ~ ~~srl ~ POLITICAL SUBDIVISION HEALTH PLAN BENEFIT SUMMARY PLAN YV This is a summary of covera¢e's provided by [he selected plan. Please refer to the Insurance Infomultion Booklet for State of Alaska Political Subdivisions and the addendum summary changes Medical Benefits In Network Deductibles (applies to Medical end Rx) Calendar Year Individual......._..._ ..................................................................................................................................._.....$1,500 per person Calendaz Year Family ............................._......................_..................._................,................................................................ $3,000 per family Out of Network Deductibles (applies to Hospital Expenses) Calendar Year Individual ........._ ...........................__.............._..................................,..........,...........................................$2000 per person Calendar Year Famil ..........$4,000 per family y ................................... _.................... _.., .....,................................... _.............,. ...................... . red expenses) In -Network Coinsurance (Out of Network Hospital Expenses covered at 60 % of cove Most Medical Expenses ............... ..............................._........................,........_....... g0°/ of covered expenses Second Surgical Opinions ............._........................................ ........... ....... ......... .......80°/a Of covered expenses Preoperative Testing ........................................................................................_........................................_...... ....,.,..80% of covered expenses Outpatient Testing ........................_.._....:.....................................~._...................................:.............................. .........80% of covered expenses Hospital Expenses.._ ......................................._..............................................._.._............................................ .........60°/ of covered expenses Chemical Dependency Treatment .........................................._____......................._......................................... .........80% of covered expenses Mental or Nervous Disorders ..................................._................_...................................................................... .........50% of covered expenses Out-of-Pocket Limit (includes deductible noted above) Afrer the deductible, the plan will pay the 80% in-network coinsurance shown above and the member is responsible for 20%. When an individual's 20% coinsurance, together with the deductible, reach the $2,$00 Out of Pocket limit, the plan will pay t00% of most covered medical expenses for that person for the remainder of the calendar year. Expenses paid at a coinsurance different than 80% are not credited to this limit. Note: The Out of Pocket limit when an individual is seeking out of network hospital care is $3,000 per Individual/ $7,000 for Family. Adult Physical Exams/ Immunizations Covered 100%; deductible waived, I exam per t2 months for members age 18 to age 65; I exam per 12 months For adults age 65 and older. Routine Well Child Exams/Immunizations Covered t00%; deductible waived, $500 maximum. 7 exams in the first 12 months of life, 2 exams in the 13th-24th months of life; 1 exam per 12 months thereafter to age 18. Routine Gynecological Care Exams Covered 100%; deductible waived, $500 maximum. Included Pap smear and related lab fees Routine Mammograms Covered 100%; deductible waived, $500 maximum. For covered females age 40 and over. Routine Digital Rectal Exam /Prostate-specific Antigen Test Covered 100%; deductible waived, $500 maximum. 'ror covered males age 40 and over Colorectal Cancer Screening Covered 100%; deductible waived, $500 maximum. For all members age 50 and over. Routine Eye Exams Covered 100%; deductible waived I routine exam per 12 months Routine Hearing Exams Covered 100%; deductible waived 1 routine exam per 24 months Benefit Maximums-Individual Chemical Dependency Treatment Inpatient Calendar year............ Outpatient Calendar year ......... Mental and Nervous Disorders Inpatient Calendar Year ..............._.............._....................... Outpatient Calendar Year ................__...................._.._......, mvzom ..................._................30 days .....................................20 visits ................................................~ 30 days ........._........._ ..................._.....30 visits Prescription Drugs The member is responsible for the following copay after fhe deductible is met: Retail Pharrnacy: Generic Drugs :..................................... .............$10 coaPY Formaulary Brand Name Drugs ................. ..:..........$20 copay Non-Formulary Brand Name Drug :............ .............$35 copay Mail Order Drugs up to a 90 day supply Generic Drugs :..................................... .............$20 coaPY Formaulary Brand Name Drugs :................ .............$40 copay Non-Formulary Brand Name Drug :............ .............$60 copay Dental Benefits Deductible Individual Calendar Year (Class II and III combined)....... Coinsurance Class I (preventive) services Class Ii (resforative) services Class III (prosthetic) service. Benefit Maximum Individual Calendar Year..... Vision Benefits Coinsurance Examina[ions ........................ Lenses .................................. Benefit Mazimu ms Examinations ......................................................................... Lenses ..........................__...................._............... ~................ Frames ..................:.............................................. _................ Audin Benefits Coinsurance All Covered Services .................................._..............._.._.. BeneDt Maximum Individual/3 consecutive calendar years .............................. ................. _ ............................ $ 50 ...............................:.............. 80 .............................................. 80% ............................................................. _..... $ t .500 .............................. 80 ........................... ~.. 80% .............................. 80 .......................... lper calendar year ..........................2per calendar year ........... 1 set every 2 calendar years ......................................... 80 ........ ~ ~ .................... $800 tnz/zoco ~~l/i~~a~e u~~'t~i a fast, G~~ tvi~ti a Futu~'e'~ ~~~~~ 210 Fidalgo Avenue, Kenai, Alaska 99611-7794 a~ ~~~„ -= Telephone: 907-283-7535 /FAX: 907-283-3014 ~' I~ 7992 theuyaf KENA~ SKA MEMO: TO: City Council G~,FROM: Rick Koch DATE: December 19, 2007 SUBJECT: Health Insurance The purpose of this correspondence is to discuss the employee health insurance plan, including the renewal quotation, modified coverage from the same provider, and quotations from other providers. The city presently (CY07) provides health insurance coverage through Premera Blue Cross at a cost of approximately $ 1,227,000 per year. That cost includes aself-insurance program for 3 800 of an employees $ 1,000 deductible administered byFlex-Plan. In response to a quoted rate increase of 19.77% last year, the city increased the deductible fiom $ 200 to $ 1,000 and self-insured the difference. This resulted in an amiual savings of $ 176,703 from the renewal quote, and am annual savings of $ 97,061 ~Lrom the actual cost of coverage in CY 06. We received a renewal quote from Premera Blue Cross for CY 08. The quote was an increase of 18.74% over the previous year's rates. The total cost to the city, including the self-insured deductible, would be approximately $ 1,424,000, or an increase of $ 197,000. Administration wanted to bring to Council a renewal rate no greater than 8% above the present rate. An insm-ance plan meeting that budgetary criteria, resulted in a premium of approximately $ 1,305,000, or an increase of $ 78,000. The modifications in coverage necessary to limit the increase to less tha~r 8% were as follows: Maximum out of pocket for each plan participant (to a maximum of 3) was increased from $ 2,000 to $ 3,000 Pharmaceuticals -The existing plan provided for $ 10 co-pay for generic & $ 20 co-pay for name brand. The new plan would provide for $ 15 co-pay for generic, $ 25 co-pay for preferred name brand, and $40 co-pay for other name brand. Vision -The existing plan provided for an exam paid 100°/o by the carrier and $ 300 for glasses/contacts aimually. The new plan would. provide for an exam paid for 100% by the can~ier. Dental --The existing plan provided for preventative procedures to be paid 100%, restorative services paid 80%, and prosthetic procedures at 50%, to a maximum of $ 2,000. The new plan would provide for preventative & restorative procedures at 80%, and prosthetic procedrures at 50%, to a maximum of $ 1,500. We also looked at rates supplied by the Alaska Public Utilities Trist. We have been speaking with that group for some time to determine if they would allow new plan participants, and if so, under what conditions. They were only able to provide their rate structure for CY 07, and were unabke to give us uiy nrdication what the expected rates would be for CY 08. Uiven their rates for CY 07 were comparable to the rates we presently have with Premera, and their being unable to provide us any information regarding rates for CY 08, we did not pm-sne this option any further. Premera Blue Cross also maintains a health benefit plan named the "Political Subdivision Association" We reviewed coverage's and rates provided under this plan. Coverage was less, and rates were higher. We did not pursue this option further. AETNA was contacted by Doug Brown, oru- insurance broker and declnled to provide a quote. Administration met with the employee health care committee over the previous six weeks to inform them of our progress, to distribute the information on each of the plans we were considering, and to inform them as to administration's target goals. On Monday, December 17~~' we held a meeting for all employees Co discuss what the adnrirvstration's recommendations would be to Comrcil. We infonued them administration would recommend the plan with Premera Blue Cross resulting in a 7.4% increase, and a decrease in plan benefits as described earlier in this memorandrun. Yesterday, December 18`x', we received information regarding a plan sponsored by the Alaska Municipal League and administered by AETNA. IC is a plan designed for and limited to Alaska political subdivisions. Lan-y Semmens and I have spent the last two days calculating rates, and investigating coverage provided for under this policy. The coverage is equal to, and in some areas exceeds the coverage provided for under our current policy. The rates are not only lower than our renewal quote, but given our self insurance program for deductible they are substantially Lower than the rates we are presently paying. The amlual premium for this policy is approximately $ 1,056,000, or $ 171,000 Less than our cun~ent rates, and $ 368,000 Less than the renewal quote. This AETNA policy is a based on a July 1-June 30 fiscal year, and we assumed an increase of 10% for the second six months of the calendar year. Over the previous two years they have had increases of seven percent and two percent. Administration recommends entering into an agreement with AETNA, through the Alaska Municipal League to provide employee health care insurance. It is easiest if this change in provider takes place on January 1, 2007. This will require a special meeting of flee Council to pass a resolution as required by the plan. Administration has scheduled a meeting for this Friday at 9:00 AM with employees to discuss this new information, and recommendation. Please find the following attachments: 1. Comparison of Existing, Considered & Proposed Employee Health Benef t Plans for CY ?008. 2. AETNA-AML Political Subdivision Health Plan, Benefit Summary, Plan N. 3. Sample Resolution COMPARISON OF EXISTING, CONSIDERED & PROPOSED EMPLOYEE HEALTH BENEFIT PLANS FOR CY 2008 PREMERA CURRENT BENEFITS-2007 Monthly Annual Plan Component Description Charges Costs Medical HS $ 1,000/20%/$ 2,000 $ 64,490.31 $ 773,883.72 MH 12 Visits OP/6 days IP $ 236.44 $ 2,837.28 Unlimited Spinal $ 2,719.50 $ 32,634.00 Pharmacy Rx $ 0-$ 10/$ 20 $ 11,609.00 $ 139,308.00 Vision V-1 Exam PCY/$ 300 PCY $ 3,895.42 $ 46,745.04 Dental DOpt $ 0/0%/20%/50%/$ 2,000 $ 9,326.42 $ 111,917.04 Sub-Total $ 92,277.09 $ 1,107,325.08 Commission Rebate $ (4,613.85) $ (55,366.25) Self Insurance Deductible $ 14,583.33 $ 174,999.96 Total $ 102,246.57 $ 1,226,958.79 PREMERA CURRENT BENEFITS-2008 (18.74% Increase) Monthly Annual .Plan Component Description Charges Costs Medical HS $ 1,000/20%/$2,000 $ 77,624.79 $ 931,497.48 MH 12 Visits OP/6 days IP $ 279.56 $ 3,354.72 Unlimited Spinal $ 3,273.43 $ 39,281.16 Pharmacy Rx $ 0-$ 10/$ 20 $ 13,976.25 $ 167,715.00 Vision V-1 Exam PCY/$ 300 PCY $ 4,342.31 $ 52,107.72 Dental DOpt $ 0/0%/20%/50%/$ 2,000 $ 10,076.41 $ 120,916.92 Sub-Total $ 109,572.75 $ 1,314,873.00 Commission Rebate $ (5,478.64) $ (65,743.65) Self Insurance Deductible $ 14,583.33 $ 174,999.96 Total $ 118,677.44 $ 1,424,129.31 PREMERA MODIFIED BENEFITS-2008 (7.40% Increase) Monthly Annual Plan Component Description Charges Costs Medical HS $ 1,000/20%/$ 3,000 $ 75,149.63 $ 901,795.56 MH 12 Visits OP/6 days IP $ 283.57 $ 3,402.84 Unlimited Spinal $ 3,170.02 $ 38,040.24 Pharmacy Rx $ 0-$ 15/$ 25/$ 40 $ 11,279.37 $ 135,352.44 Vision V-1 Exam PCY $ 1,085.06 $ 13,D20.72 Dental DOpt $ 0/20%/20%/50%/$ 1,500 $ 8,139.51 $ 97,674.12 Sub-Total $ 99,107.16 $ 1,189,285.92 Commission Rebate $ (4,955.36) $ (59,464.30) Self Insurance Deductible $ 14,583.33 $ 174,999.96 Total $ 108,735.13 $ 1,304,821.58 COMPARISON OF EXISTING, CONSIDERED & PROPOSED EMPLOYEE HEALTH BENEFIT PLANS FOR CY 2008 AETNA-PGLITiCAL Si1Esi5i~i1SI~N~ PLAN IV Plan Component Description Medical $ 1,500/20%/$ 2,000 & $10 per visit MH 25 Visits 50%/IP 21 Days 50% Spinal -Included under Medical Pharmacy Deductible Applies, After Deductible $ 10 Generic, $ 20 Formulary Brand Name, $ 35 Non-Formulary (mail order is cheaper) Vision Exam 100% 1 PCY, Lenses 80% 2 PCY Frames 80% 1 P2CY Dental Preventative 80%, Restorative 80%, Prosthetic 50%, $ 50 Deductible, $ 0 Deductible for Preventative, $ 1,500 per year maximum Audio Exam 100%, $ 800 maximum for three consecutive years Sub-Total Commission Rebate Self Insurance Deductible Total Monthly 1/1/08 - 6/30/08 7/1/08 - 12/31108 Charges Costs Costs* $ 67,420.40 $ 404,522.40 $ 444,974.64 $ 67,420.40 $ $ - $ $ 17,175.00 $ $ 84,595.40 $ Total for AETNA Plan IV 1/1108-12/31/08 $ 1,055,597.04 404,522.40 $ 444,974.64 103,050.00 $ 103,050.00 507,572.40 $ 548,024.64 * Includes Estimated 10% Premium Increase Beginning July 1, 2008 ~l ~r~ ~ State of Alaska Political Subdivisions Proposed Effective Date: 07-01-2006 PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY Deductible (per calendar year) $1,500 Individual $3,000 Family Open Choice®(PPO) - ASC $2,000 Individual $4,000 Family All covered expenses including prescription drugs accumulate toward both the preferred and non-preferred Ceductible. Unless otherwise indicated, the Deductible must be met prior to benefits being payable. Once family deductible is met, all family members will be considered as having met their deductible for the remainder of the calendar year. There is no individual deductible to satisfy within the family deductible. nllember Coinsurance 20% 40%- facility only Applies to all expenses unless otherwise stated. Payment Limit (per calendar year) $2,500 Individual $3,000 Individual $5,000 Family $7,000 Family All covered expenses including deductible and prescription drugs accumulate toward both the preferred and non-preferred Payment Limit. Certain member cost sharing elements may not apply toward the Payment Limit. Only those out-of-pocket expenses resulting from the application of coinsurance percentage, deductibles, and prescription drug copays (except any penalty amounts) may be used to satisfy the Payment Limit. Once family payment limit is met, all family members will be considered as having met their payment limit for the remainder of the plan year. There is no individual payment limit to satisfy within the family payment limp Lifetime iViaximum are rnvsician sere Certification Requirements - Certification for certain types of Non-Preferred care must be obtained to avoid a reduction in benefits paid for that care. Certification for Hospital Admissions, Treatment Facility Admissions, Convalescent Facility Admissions, Home Health Care, Hospice Care and Private Duty Nursing is required -excluded amount applied separately to each type of expense is $400 per occurrence. Referral Requirement None None Routine Adult Physical Exams/ Covered 100%; deductible waived, Same Immunizations $500 maximum. 1 exam per 12 months for members age 18 to age 65; 1 exam per 12 months for adults age 65 and older. Routine Well Child Examsllmmunizations Covered 100%; deductible waived, same $500 maximum. 12 months of Ilfe, 2 exams in the 13th-24th months of life; 1 exam per 12 months thereafter to age 18. Routine Gynecological Care Exams Covered 100%; deductible waived, same Included Pap smear and related lab fees $500 maximum. Routine Mammograms Covered 100%; deductible waived, same For covered females age 40 and over. $500 maximum. Routine Digital Rectal Exam (Prostate- Covered 100%; deductible waived, same specific Antigen Test $500 maximum. For covered males age 40 and over Colorectal Cancer Screening Covered 100%; deductible waived, same For all members age 50 and over. $500 maximum. Routine Eye Exams Covered 100%; deductible waived same 1 routine exam per 12 months Routine Hearing Exams Covered 100%; deductible waived same 1 routine exam per 24 months PHYSICIAN SERVICES PREFERRED CARE NON-PREFERRED CARE 12/19/2007 Page 1 ~ .~r,E'~:l 1.~~~ PROVIDED BY AETNA LIFE INSURANCE COMPANY Office Visits to Non-Specizlist 20% 20% Includes services of an internist, general physician. family practitioner or pediatrician. Specialist Office Visits 20% 20% Allergy Testing Covered as either PCP or specialist 20% office visit Allerav Infections 20% 20% Diagnostic Laboratory and X-ray 20% 20 If performed as a part of a physician office visit and billed by the physician, expenses are covered subject to the applicable ahvsician's office visit member cost sharina EMERGENCY MEDICAL DARE PREFERRED DARE "NON-PREFERRED`CARE Urgent Care Provider 20% 20% benefit availability may vary by location) Non-Emergency care in an Emergency 50% Ambulance 20% 20% HOSPITAL CARE PREFERRED CARE NON•PREFERRED CARE Inpatient Coverage 20% The member cost sharing applies to all covered benefits incurred during 40% a member's inpatient stay Inpatient Maternity Coverage 20% The member cost sharing applies to all covered benefits incurred during 40% a member's inpatient stay Outpatient Hospital Expenses (including 20% surgery) The member cost sharing applies to all Covered Benefits incurred during 40% a member's outpatient visit MENTAL HEALTH SERVICES PREFERRED CARE 'NON-PREFERRED: CARE Inpatient 50% 40% Limited to 30 days per calendar year. The member cost sharina applies to all covered benefits incurred during a member's inpatient sta PLAN DESIGN AND BENEFITS State of Alaska Political Subdivisions Proposed Effective Date. 07-01-2006 Open Choice®(PPO) - ASC as preferrea care. Outpatient 50% 50% Limited to 20 visits per calendar year. The member cost sharing applies to all covered benefits incurred during a member's outpatient visit Maximum are a combined limit for preferred and non-preferred services. Inpatient 20% 40% Limited to 30 days per calendar year. The member cost sharina applies to all covered benefits incurred durina a member's inpatient sta Outpatient 50% 50% Limited to 20 visits per calendar year. The member cost sharing applies to all Covered Benefits incurred during a member's outpatient visit Maximums are a combined limit for preferred and non-preferred services. OTHER SERVICES PREFERRED CARE `::NON-PREFERRED DARE Convalescent Facility 20% 20% Limited to 120 days per calendar year. The member cost sharina applies to all covered benefits incurrina durina a member's inpatient stav Nome Health Care 20% 20% Limited to 60 visits per calendar year Each visit by a nurse or therapist is one visit. Each visit up to 4 hours by a home health care aide is one visit. Hospice Care -Inpatient Limited to 30 days per lifetime. 20% 40% 12/19/2007 Page 2 ~?' ~y-~~~~ State of Alaska Political Subdivisions f1~ Proposed Effective Date: 07-01-2006 Open Choice®(PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY The member cost sharina applies to all covered benefits incurred durina a member's inpatient sta Hospice Care -Outpatient 20% 20% Up to a maximum benefit of $5,000 The member cost sharing applies to all covered benefits incurred during a member's outpatient visit Private Duty Nursing -Outpatient (Limited to 20% 20% 70 eight hour shifts per calendar year) Outpatient Short-Term Rehabilitation 20% 20% Includes speech, physical, and occupational therapy. Spinal Manipulation Therapy 20% 20% Limped Yo 25 visits per calendar vear Durable Medical Equipment 20% 20% Maximum annual benefit of S10.000 per member per calendar vear Covered same as any other medical Covered same as any other medical expense. expense. Contraceptive drugs and devices not 20% (payable as any other covered 20% (payable as any other covered obtainable at a pharmacy (includes coverage expense) expense) Vision Eyewear Not Covered Not covered Transplants 20% Preferred coverage is provided 4G% Non-Preferred coverage is at an IOE contracted facility only provided at a Non-IOE facility. "Other" Health Care - 20% member coinsurance after the preferred (per calendar year) deductible for services that are FAMILY PLANNING PREFERRED CARE '.NON-PREFERRED CARE Infertility Treatment Member cost sharing is based on the Member cost sharing is based on the Diagnosis and treatment of the underlying type of service performed and the type of service performed and the medical condition. place of service where It is rendered place of service where It is rendered Voluntary Sterilization Member cost sharing is based on the Member cost sharing is based on the Including tuba) ligation and vasectomy type of service performed and the type of service performed and the place of service where it is rendered place of service where it is rendered PHARMA(:V PREFERRED CARE >.NON-PREFERREb.GARE The full cost of the drug is applied to the deductible before benefits are considered for payment under the pharmacy plan. Retail Covered 100% after combined Not Covered medical/Rx plan deductible and $10 copay for generic drugs, $20 copay for formulary brand-name drugs, and $35 copay for non-formulary brand-name drugs up to a 30 day supply at participating pharmacies. Mail Order Covered 100% after combined Not Covered medicaVRx plan deductible and $20 copay for generic drugs, $40 copay for formulary brand-name drugs, and $60 copay for non-formulary brand-name drugs up to a 31-90 day supply from Aetna Rx Nome DeliveryOO. - Member is responsible to Plan Includes: Devices obtainable from a pharmacy, Oral fertility drugs; Diabetic supplies. Precert for growth hormones included GENERAL PROVISIONS Dependents Eligibility Spouse, children from birth to age 19 or to age 23 if in school. 12/19/2007 Page 3 ,~~ >' . State of Alaska Political Subdivisions ~=~~~ 3~~ Proposed Effective Date: 07-01-2006 Open Choice®(PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY Pre-existing Conditions Rule On effective date: Waived After effective date: Full Postponement This plan imposes apre-existing condition exclusion, which may be waived in some circumstances and may not be applicable to you. Apre-existing condition exclusion means that if you have a medical condition before coming to this plan, you may have to wait a certain period of time before the plan will provide coverage for that condition. This exclusion applies only to conditions for which medical advice, diagnosis, care, or treatment was recommended or received or for which the individual took prescribed drugs within 90 days.Generally, this period ends the day before your coverage becomes effective. However, if you were in a waiting period for coverage, 90 days ends on the day before the waiting period begins. The exclusion period, if applicable, may last up to 365 days from your first day of coverage, or, if you were in a waiting period, from the first day of your waiting period. If you had prior creditable coverage within 90 days immediately before the date you enrolled under this plan, then the pre-existing conditions exclusion in your plan, if any, will be waived. If you had no prior creditable coverage within the 90 days prior to your enrollment date (either because you had no prior coverage or because there was more than a 90 day gap from the date your prior coverage terminated to your enrollment date), we will apply your plan's pre-existing conditions exclusion. In order to reduce or possibly eliminate your exclusion period based on your creditable coverage, you should provide us a copy of any certificates of creditable coverage you have.Please contact Aetna Member Services at 1-888-982-3862 if you need assistance in obtaining a certificate of creditable coverage from your prior carrier or if you have any questions on the information noted above. The pre-existing condition exclusion does not apply to pregnancy nor to a child who is enrolled in the plan within 31 days of birth, adoption, or placement for adoption. Note: For late enrollees, coverage will be delayed until the plan's next open enrollment, and the pre-existing condition exclusion will be applied from the individual's effective date of coverage. This plan does not cover all health care expenses and includes exclusions and limitations. Members should refer to their plan documents to determine which health care services are covered and to what extent. The following is a partial list of services and supplies ±hat are generally not covered. However, your plan documents may contain exceptions to this list based on state mandates or the plan design or rider(s) purchased by your employer. All medical or hospital services not specifically covered in, or which are limited or excluded in the plan documents; Charges related to any eye surgery mainly to correct refractive errors; Cosmetic surgery; including breast reduction; Custodial care, Dental care and X-rays; Donor egg retrieval, Experimental and investigational procedures; Hearing aids; Immunizations for travel or work; Infertility services, including, but not limited to, artificial insemination and advanced reproductive technologies such as IVF, ZIFT, GIFT, ICSI and other related services, unless specifically listed as covered in your plan documents; Nonmedically necessary services or supplies; Orthotics; Over-the-counter medications and supplies; Reversal of sterilization; Services for the treatment of sexual dysfunction or inadequacies, including therapy: supplies, or counseling; and special duty nursing. This material is for informational purposes only and is neither an offer of coverage nor medical advice. It contains only a partial, general description of plan benefits or programs and does not constitute a contract. Aetna does not provide health care services and, therefore, cannot guarantee results or outcomes. Consult the plan documents (i.e. Group Insurance Certificate and/or Group Policy) to determine governing contractual provisions, including procedures, exclusions and limitation relating to the plan. With the exception of Aetna Rx Home Delivery, all preferred providers and vendors are independent contractors in private practice and are neither employees nor agents of Aetna or its affiliates. Aetna Rx Home Delivery, LLC, is a subsidiary of Aetna Ina The availability of any particular provider cannot be guaranteed, and provider network composition is subject to change without notice. Some benefits are subject to limitations or visit maximums. Certain services require precertification, or prior approval of coverage. Failure to precertify for these services may lead to substantially reduced benefits or denial of coverage. Some of the benefits requiring precertification may include, but are not limited to, inpatient hospital, inpatient mental health, inpatient skilled nursing, outpatient surgery; substance abuse (detoxification, inpatient and outpatient rehabilitation). When the Member's preferred provider is coordinating care, the preferred provider will obtain the precertification. When the member utilizes anon-preferred provider, Member must obtain the precertification. Precertification requirements may vary. Depending on the plan selected, new prescription drugs not yet reviewed by our medication review committee are either available under plans with an open formulary or excluded from coverage unless a medical exception is obtained under plans that use a closed 12/19/2007 Page 4 .~ `+' State of Alaska Political Subdivisions ~'~-~~ ~'~~y Proposed Effective Date: 07-01-2006 Open Choice®(PPO) - ASC PLAN DESIGN AND BENEFITS PROVIDED BY AETNA LIFE INSURANCE COMPANY formulary. They may also be subject to precertification or step-therapy. Non-prescription drugs and drugs in the Limitations and Exclusions section of the plan documents (received after open enrollment) are not covered, and medical exceptions are not available for them. While this information is believed to be accurate as of the print date, it is subject to change. Plans are provided by Aetna Life Insurance Company. 12/19/2007 Page 5 Suggested by: Administration CITY OF KENAI RESOLUTION NO. 2007-XX A RESOLUTION OF THE COUNCIL OF THE CITY OF KENAI, ALASKA, AUTHORIZING PARTICIPATION IN THE STATE OF ALASKA GROUP HEALTH CARE AND LIFE INSURANCE BENEFITS PLAN. WHEREAS, the City of Kenai, herein called the "Employer" through its Council desires to make formal request to the Commissioner of Administration (herein called the "State Agency") for inclusion of its eligible employees in the State of Alaska Group Health Care and Life Insurance Benefits Pian (herein called the "Program") offered to employees of the State of Alaska, pursuant to Alaska Statutes 39.30.090 through 39.30.100; and, WHEREAS, the Employer is prepared to administer the Program as required and has applied to the State Agency for coverage under the Program for all of the Employer's eligible employees; and, WHEREAS, the Employer is prepared to pay the required premiums and submit same directly to the State's Group Health Care and Life Insurance Plan carriers NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that: Section 1: the Authorized Agent, as the representative of the Employer, is further authorized and directed to conduct all negotiations, conclude all arrangements and sign all agreements and instruments which may be necessary to carry out the letter and intent of the aforesaid request and to do so in conformity with all applicable Federal and State laws, rules and regulations, Section 2: the Employer is authorized to pay any and all premiums in accordance with the terms set up by the State Agency, Section 3: that the Employer agrees to give at least 90 days notice prior to terminating this agreement. PASSED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, this 19th day of December 2007. PAT PORTER, MAYOR ATTEST: Carol L. Freas, City Clerk Approved by Finance: G"ry^` PUBLIC NOTICE XENM.INGSIIfl U The Kenai City Council will meet in a work session on Wednesday, December 99, 2007 4o discuss the City of Kenai Health Insurance Plan Renewal. The work session will be held in the Kenai City Council Chambers located at 210 Fidalgo Avenue, Kenai and begin at 6:00 p.m. The work session is open to the public. Contact the Kenai City Clerk's office at 290 Fidalgo Avenue, Kenai, 283-7535, extension 231, with questions. Carol L. Freas, City Clerk D/211