2014-2018 SPD COLB Prescription Drug Plan - HMO & PPO.pdf

CITY OF LONG BEACH

PRESCRIPTION DRUG PLAN

Originally Effective January 1, 2014 Amended and Restated as of January 1, 2018

TABLE OF CONTENTS

SECTION 1 – ESTABLISHMENT AND PURPOSE

SECTION 2 – ELIGIBILITY

SECTION 3 – BENEFITS

SECTION 4 – PLAN SPONSOR AND PLAN ADMINISTRATOR

SECTION 5 – AFFORDABLE CARE ACT

SECTION 6 – CLAIMS AND APPEAL PROCEDURES

SECTION 7 – THE USE AND DISCLOSURE OF PROTECTED HEALTH INFORMATION

SECTION 8 – GENERAL PROVISIONS

City of Long Beach Prescription Drug Plan

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SECTION 1 – ESTABLISHMENT AND PURPOSE

1.1 Establishment and Purpose

City of Long Beach (COLB) has established the City of Long Beach Prescription Drug Plan (Plan), a Component Health Plan of the City of Long Beach group health plan, for eligible employees and eligible retirees, and their dependents. It is the intention of COLB that this Plan qualify as an accident and health plan within the meaning of Section 105 of the Internal Revenue Code (Code) and, to the extent the benefits provided under the Plan are not discriminatory, that they be eligible for exclusion from gross income under the Code.

1.2 Exclusive Purpose

The exclusive purpose of this Plan is to provide prescription drug benefits described herein for the eligible employees and eligible early retirees of COLB and their eligible family members. No expenses payable under this Plan will be payable under any other benefit plan of COLB.

1.3 Original Effective Date

This Plan originally took effect on January 1, 2014.

1.4 Amendment and Restatement

This Restatement reflects all changes made to the Plan, including all changes required to achieve compliance with applicable federal regulations as of January 1, 2018.

1.5 Plan Year

January 1 through December 31 of the same calendar year.

1.6 Health Insurance Portability and Accountability Act

This Plan document contains a complete description of the Plan’s use and disclosure of Protected Health Information (PHI) as permitted by HIPAA with regard to health care treatment, payment for health care and health care operations. It also sets forth the agreement by COLB to use and disclose PHI only as permitted by

HIPAA.

1.7 Affordable Care Act

Component Health Plans also have become subject to certain provisions of the Affordable Care Act (ACA).

This Plan has been written to comply with the relevant provisions of ACA currently in effect.

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SECTION 2 – ELIGIBILITY

2.1 Eligibility

Employee Eligibility. The Plan is available to all individuals whose relationship with COLB is, under common law, that of an employee and who participates in the COLB Anthem Blue Cross HMO Plan or Anthem Blue Cross PPO Prudent Buyer Component Health Plan.

An employee who is reasonably expected to be a full-time employee as of his or her start date shall be offered coverage as of the Effective Date of Eligibility specified below:

§ Permanent Full-Time Employees. On the first day of the month following date of hire who is regularly scheduled to work eighty (80) hours or more per pay period.

§ Non-Permanent Full-Time Employees. On the first day of the month following date of hire who is regularly scheduled to work thirty (30) hours or more per week.

Retiree Eligibility. The Plan is also available to certain retirees of COLB who are retired from active full-time employment and who are eligible to receive health plan benefits as part of COLB’s pension plan and who were covered under the COLB group health plan on his or her date of termination of employment.

2.2 Participation

Each current employee who is eligible to participate in the Plan shall become a participant (Participant) on the Effective Date of the Plan. Each future Eligible Employee shall become a Participant upon meeting the eligibility requirements specified in this Section.

A former Participant whose participation in the Plan has ceased due to cessation of employment with COLB and who returns to employment must meet COLB’s then-current re-entry guidelines for participation in the Plan, so long as such Eligible Employee has applied to participate within his or her waiting period.

2.3 Eligible Dependents

For purposes of this Plan, eligible dependents shall include those dependents covered under the COLB Group Health Plan in which they participate.

An eligible dependent includes:

§ Legal Spouse. An employee’s legal spouse as recognized under state or federal law, including same sex spouses when legally married in a state that recognizes same sex marriages. An individual may be covered as both an employee and a spouse, if eligible as both. However, the total amount of benefits paid shall not exceed the maximum allowed amount.

§ Domestic Partner. An employee’s domestic partner under a legally registered and valid domestic partnership. An individual may be covered as both an employee and a domestic partner, if eligible as both.

However, the total amount of benefits paid shall not exceed the maximum allowed amount.

§ Dependent Child. An employee’s dependent child until the child reaches age 26. The term “child” includes:

ú A natural biological child;

ú A stepchild;

ú A legally adopted child or child legally placed for adoption as granted by action of a federal, state, or local governmental agency responsible for adoption administration of a court of law if the child has not attained age 26 as the date of such placement;

ú A child under the employee’s or employee’s spouse’s legal guardianship as ordered by a court;

P a g e • 3 ú A child who is considered an alternate recipient under a Qualified Medical Child Support Order

(QMCSO);

An eligible dependent child also includes an unmarried, totally disabled dependent child age 26 or over who chiefly depends on the employee for his or her support and maintenance and who is incapable of self-sustaining employment due to a physical or mental condition.

If both parents are covered under the Plan, their children may be covered as the dependents of both. However, the total amount of benefits paid shall not exceed the maximum allowed amount

2.4 Newly Acquired Dependents

In the event a Participant acquires new dependents while covered under this Plan, and the dependents meet the dependent eligibility requirements specified in the COLB Group Health Plan, these newly acquired dependents shall become eligible to participate in this Plan subject to the special enrollment provisions of this Plan.

2.5 Cessation of Participation

Participation under this Plan will cease upon the earliest of:

§ The date the Plan is terminated;

§ The date the Participant’s eligible class is eliminated;

§ The last day of the month the Participant cease to pay any required contributions under the Plan;

§ The last day of the month the Participant cease to be a member of an eligible class; or, § The last day of the month in which the Participant terminates employment or has a reduction of work hours which results in loss of eligibility.

§ Coverage for dependents will cease on the date a Participant ceases to be covered under the Plan.

§ In the event of fraud or misrepresentation related to any Participant or dependent’s participation, benefits or claims under the Plan, coverage under the Plan will terminate immediately for the Participant and his or her dependents.

If the Participant is granted an approved medical leave, his or her benefits will continue during such leave up to 6 months following his or her last day worked.

If the Participant is disabled due to a work injury, coverage will continue for the duration of the Participant’s disability, up to 6 months following his or her last day worked.

If the Participant ceases work because of a leave of absence, his or her coverage will end at the end of the month in which he or she last worked.

2.6 Reinstatement of Former Participant

A former Participant whose participation in the Plan has ceased due to cessation of employment with COLB, who then returns to employment, must meet COLB' then current re-entry guidelines for participation in the Plan.

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SECTION 3 – BENEFITS

Prescription drug benefits under the Anthem Blue Cross Component Health Plans are provided by CVS/Caremark. This Plan provides prescription drug benefits for drugs purchased during the Plan Year and not otherwise payable by another COLB Group Health Plan, workers compensation, or any other health plan including any state or federal program.

3.1 Participants

For purposes of this Plan, Participants shall include the eligible employee, and his/her eligible dependents.

Coverage under this Plan begins on the date the corresponding Anthem Blue Cross Component Health Plan coverage begins.

3.2 Prescription Drug Benefit Plan Copayments

The Participant pays a copayment to obtain drugs. Copayments are the portion of the cost that the Participant is required to pay per new or refill prescription. The rest of the cost is paid by COLB.

Short-term medications are generally taken for a limited amount of time and have a limited amount of refills.

Long-term medications are taken regularly for chronic conditions.

HMO Plans

Drug Type CVS/Caremark Retail

Pharmacy

Maintenance Choice Mail Service Pharmacy or

CVS/pharmacy

Short-Term Medications (Up to 30-day Supply)

Long-Term Medications (Up to 90-day Supply)

Generic Medications $10.00 $10.00

Preferred Brand-Name Medications

$25.00 $50.00

Non-preferred Brand-Name Medications

$40.00 $80.00

Refill Limit Retail Pharmacy Orders: One initial fill plus two refills for long-term medications. After the 3rd fill, you must use the CVS/Caremark Mail Service Pharmacy or a local CVS pharmacy. If you continue to fill your long-term prescription at a retail pharmacy, you will pay 2x the retail copayment and receive a 30-day supply. Please talk to your doctor about obtaining a 90-day prescription in these cases.

Annual Out-of-Pocket Limit (Combined with medical):

Individual: $1,000 per individual (Premier HMO) / $1,500 per individual (Classic HMO)

Family: $3,000 per family (Premier HMO) / $4,500 per family (Classic HMO)

Limitation: When a generic is available, but the pharmacy dispenses the brand-name medication for any reason, you will pay the difference between the brand-name medication and the generic plus the generic copayment.

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PPO Plan

Drug Type CVS/Caremark Retail

Pharmacy

Maintenance Choice Mail Service Pharmacy or

CVS/pharmacy

Short-Term Medications (Up to 30-day Supply)

Long-Term Medications (Up to 90-day Supply)

Generic Medications $10.00 $10.00

Preferred Brand-Name Medications

$25.00 $50.00

Non-preferred Brand-Name Medications

$40.00 $80.00

Refill Limit Retail Pharmacy Orders: One initial fill plus two refills for long-term medications. After the 3rd fill, you must use the CVS/Caremark Mail Service Pharmacy or a local CVS pharmacy. If you continue to fill your long-term prescription at a retail pharmacy, you will pay 2x the retail copayment and receive a 30-day supply. Please talk to your doctor about obtaining a 90-day prescription in these cases.

Annual Out-of-Pocket Limit:

Individual: $3,950 per individual (In-Network) / Unlimited (Out-of-Network)

Family: $7,900 per family (In-Network) / Unlimited (Out-of-Network)

Limitation: When a generic is available, but the pharmacy dispenses the brand-name medication for any reason, you will pay the difference between the brand-name medication and the generic plus the generic copayment.

3.3 General Limitations and Exclusions

§ Expenses incurred prior to a Participant's effective date of coverage or after termination of coverage.

§ Services for which the Participant is under no legal obligation to pay.

§ Services which are considered by the Internal Revenue Service to be cosmetic and, therefore, taxable to the Participant.

§ Services or supplies which are reimbursable under another Group Health Plan.

§ Certain drugs will be removed from the plan or formulary list as determined by CVS Caremark. Please refer to caremark.com or contact CVS Caremark at 855-559-7917 for more information.

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SECTION 4 – PLAN SPONSOR AND PLAN ADMINISTRATOR

4.1 Plan Sponsor and Plan Administrator

COLB is the Plan Sponsor and Plan Administrator.

COLB shall have the duty and authority to interpret and construe the Plan with regard to all questions of eligibility, the status and rights of any person under the Plan, and the manner, time, and amount of payment of any benefits under the Plan. Each Employee shall, from time to time, upon request of COLB, furnish to COLB such data and information as COLB shall require in the performance of its duties under the Plan.

COLB may adopt such rules and procedures, as it deems desirable for the administration of the Plan, provided that any such rules and procedures shall be consistent with provisions of the Plan.

COLB shall discharge its duties with respect to the Plan (i) solely in the interest of persons eligible to receive benefits under the Plan, (ii) for the exclusive purpose of providing benefits to persons eligible to receive benefits under the Plan and of defraying reasonable expenses of administering the Plan and (iii) with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character with like aims.

COLB may employ such counsel and agents and may arrange for such clerical and other services as it may require in carrying out the provisions of the Plan.

4.2 Named Fiduciary

COLB is a Named Fiduciary of the City of Long Beach Prescription Drug Plan.

COLB also hereby appoints each group insurance policy issuer (issuer) listed in Appendix A as a Named Fiduciary with such powers as may be necessary to determine the benefits payable under the insurance policies and resolve all questions pertaining to the applicability of the benefit provisions of the insurance policies.

COLB also hereby appoints the Contract Administrator as a Named Fiduciary of the self-insured (Component Health Plans) with such powers as may be necessary to determine the benefits payable with respect to said plans and to resolve all questions pertaining to the applicability of the benefit provisions of those plans.

4.3 Expenses

COLB shall pay all expenses authorized and incurred by the Plan Administrator in the administration of the Plan, unless by agreement or common practice the Plan Administrator absorbs such expenses.

4.4 Amendment and Termination

COLB intends to maintain the Plan indefinitely, but is under no obligation to continue the Plan and can terminate the Plan by providing written notice to the Plan participants. In amending or terminating the Plan, COLB cannot retroactively reduce the benefits to which a participant is entitled prior to the termination or amendment.

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SECTION 5 – AFFORDABLE CARE ACT

The following provisions apply to the COLB group health plan, and as applicable, to this Component Health Plan.

5.1 Coverage for Dependents Up to Age 26

Group health plans must make dependent coverage to adult children available until they turn age 26. The mandate applies to any adult child whether or not he or she is eligible to enroll in some other employer-sponsored group health plan. Adult children shall include those who are a child of the Plan participant, whether or not they live at home or are married or not married, a dependent on the employee’s tax return, or a student.

Adult children under age 26 must be offered coverage even if they do not live in a particular service area (but plans are not required to cover out-of-network services for these adult children).

5.2 90-Day Waiting Period Limit Group health plans may not apply a waiting period for coverage that exceeds 90 days. A waiting period is defined as the period that must pass before coverage for an eligible employee or his or her dependent becomes effective under the Plan. ACA regulations permit plans to condition health coverage eligibility on an employee’s completion of an employment-based orientation period of up to one month before application of the 90-day waiting period limits. A reasonable and bona fide employment based orientation period is permissible if it is not designed to avoid compliance with the 90-day waiting period limitation.

5.3 Essential Health Benefits

ACA generally defines Essential Health Benefits (EHBs) to include prescription drugs. ACA regulations further define Essential Health Benefits based on state-specific “benchmark” plans, or for self-insured plans, on the Federal Employees Health Benefit Program.

To the extent this Plan covers prescription drugs defined as EHBs, the ACA prohibits the Plan from imposing annual or lifetime dollar limits on items and services within that category.

5.4 Cost-Sharing Limitations

ACA requires non-grandfathered group health plans to apply a uniform maximum limit for out-of-pocket expenses (deductibles, co-insurance, co-pays, or similar charges) on all Essential Health Benefits of no greater than the maximum amounts set annually by the Internal Revenue Service (IRS) for HSA-eligible high-deductible health plans as adjusted for inflation using the “premiums adjustment percentage.”

§ The overall cost-sharing limit only applies to benefits provided in-network. A plan may include out-of-network expenses at its discretion.

§ Out-of-pocket expenditures on all Essential Health Benefits must accrue to one out-of-pocket maximum, without consideration for whether a plan uses more than one service provider to administer benefits.

§ Plans are not required to apply the annual limitation on out-of-pocket maximums to benefits that are not Essential Health Benefits. See above in this Section for a list of Essential Health Benefits.

§ Embedded Rule: For plan years beginning in 2016, the self-only cost-sharing limit must apply to each covered individual, whether the individual has self-only, family, or other coverage.

5.5 Preventive Care

Non-grandfathered group health plans subject to the preventive services coverage mandate must provide coverage for all of the following preventive services without imposing any co-payments, co-insurance, deductibles, or other cost-sharing requirements. If the attending provider determines that the service is

P a g e • 8 medically necessary, a plan must provide coverage regardless of sex assigned at birth, gender identity, or gender of the individual as recorded by the plan:

§ Evidence-based items or services with an A or B rating currently recommended by the United States Preventive Services Task Force (USPSTF);

§ Immunizations for routine use in children, adolescents, or adults currently recommended by the Advisory Committee on Immunization Practices (ACIP) of the Centers for Disease Control and Prevention;

§ For infants, children and adolescents: Evidence-informed preventive care and screenings provided in comprehensive guidelines supported by the Health Resources and Services Administration (HRSA); and, § For women: Evidence-informed preventive care and screening provided for in comprehensive guidelines supported by HRSA, to the extent not included in certain recommendations of the USPSTF.

ú HRSA guideline recommendation includes all FDA-approved contraceptive methods, sterilization procedures, and patient education and counseling for all women with reproductive capacity. Effective for plan years beginning on or after July 10, 2015, Plans must cover at least one form of contraception in each of the currently 18 distinct methods the FDA has identified in its Birth Control Guide.

ú USPSTF recommended genetic counseling and BRCA testing to determine a family history potentially associated with an increased risk for mutations in breast cancer susceptibility genes must be provided to women with positive screen results as well as women who previously have had breast cancer, ovarian cancer or other non-BRCA-related cancer who are currently asymptomatic and cancer-free.

5.6 Internal Claims, Appeals, and External Review Procedures

ACA includes enhanced internal claims and appeals requirements, along with external review procedures applicable to non-grandfathered group health plans and health insurers. Refer to the “Claims and Appeals Procedures” Section of this Employee Plan Summary for additional details.

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SECTION 6 – CLAIMS AND APPEAL PROCEDURES

Insofar as these procedures are consistent with the provisions of ACA, the procedures outlined below must be followed by Plan Participants (“claimants”) to obtain payment of benefits under this Plan.

6.1 Prescription Drug Claims

The procedures outlined below must be followed by claimants to obtain payment of benefits under this Plan.

For purposes of the Claims and Claims Appeal Procedure contained in this Plan, the term “Administrator” will mean either the issuer or the Plan Administrator depending upon the policy or plan under which the claim has been filed.

All claims and questions regarding prescription drug claims should be directed to the Administrator:

Attn: Prescription Drug Claims CVS/Caremark P.O. Box 52136 Phoenix, AZ 85072-2136 Phone: 855-559-7917

The Administrator shall have final authority for adjudicating all claims and a full review of the decision on such claims.

Each claimant claiming benefits under the Plan shall be responsible for supplying, at such times and in such manner as the Administrator in its sole discretion may require, written proof that the expenses were incurred or that the benefit is covered under the Plan. If the Administrator in its sole discretion shall determine that the claimant has not incurred a covered expense or that the benefit is not covered under the Plan, or if the claimant has failed to furnish such proof as is requested, no benefits shall be payable under the Plan.

6.2 When Claims Must Be Filed

Unless specifically provided for otherwise in a Component Plan’s claims provisions or pursuant to applicable law, a Claim for benefits must be filed within one year of the date charges for the services were incurred. Benefits are based upon the Plan's provisions at the time the charges were incurred. Charges are considered incurred when treatment or care is given or supplies are provided. Claims filed later than that date shall be denied, unless it is shown that it was not reasonably possible to file within this time frame.

The Plan, upon receipt of a written notice of a claim, will furnish to the participant a form for filing proof of loss. If such forms are not furnished within 15 days after notice is given, the participant will be considered to have complied with the requirement of the Plan with respect to proof of loss and written proof covering the occurrence, the character, and the extent of the loss for which the claim is made.

A Claim is considered to be filed when the following information is received by the Administrator:

§ The date of service;

§ The name, address, telephone number and tax identification number of the provider of the services or supplies;

§ The place where the services were rendered;

§ The diagnosis and procedure codes;

§ The amount of charges;

§ The name of the Plan;

§ The name of the participant; and, § The name of the patient.

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Upon receipt of this information, the claim will be deemed to be filed with the Plan. The Administrator will determine if enough information has been submitted to adjudicate the claim. If not, the Administrator may request more information. The Administrator must receive the additional information within 45 days from receipt by the claimant of the request for additional information. Failure to do so may result in claims being declined or benefits reduced.

6.3 Timing of Claim Decisions

The Administrator shall notify the claimant of a denial within the following time frames:

§ If the claimant has provided all of the information needed to process the claim, the Administrator will notify the claimant of its decision within a reasonable period of time, but not later than 30 days after receipt of the claim, unless an extension has been requested, then prior to the end of the 15-day extension period.

§ If the claimant has not provided all of the information needed to process the claim, and additional information is requested during the initial processing period, then the claimant will be notified of a determination of benefits prior to the end of the extension period, unless additional information is requested during the extension period, then the claimant will be notified of the determination by a date agreed to by the Administrator and the claimant.

6.4 Claims Appeal Procedure

Under ACA, non-grandfathered group health plans must implement an effective internal appeals process for appeals of coverage determinations and claims, under which the Plan or issuer shall, at a minimum:

§ Have in effect an internal claims appeal process;

§ Provide notice to enrollees, in a culturally and linguistically appropriate manner, of available internal and external appeals processes, and the availability of any applicable office of health insurance consumer assistance or ombudsman to assist such enrollees with the appeals processes;

§ Allow enrollees to review their files, to present evidence and testimony as part of the appeals process, and to receive continued coverage pending the outcome of the appeals process.

6.5 Nature of Denial

An adverse benefit determination eligible for internal claims and appeals processes includes a denial, reduction, or termination of, or failure to provide or make a payment for, a benefit (including a rescission of coverage), based on the following:

§ a determination of an individual's eligibility to participate in a plan or health insurance coverage;

§ a determination that a benefit is not a covered benefit;

§ the imposition of a preexisting condition exclusion, source-of-injury exclusion, network exclusion, or other limitation on otherwise covered benefits; or

§ a determination that a benefit is experimental, investigational, or not medically necessary or appropriate.

Notice of Denial. The notice of a denial of a claim shall be written in a manner calculated to be understood by the claimant and shall set forth:

§ The specific reason for the denial;

§ Specific references to the pertinent Plan provisions on which the denial is based including a copy of any internal guideline used in the benefit determination or notice of where and how to obtain a copy free of charge;

§ A description of any additional material or information necessary for the claimant to perfect the claim and an explanation as to why such information is necessary;

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§ An explanation of the Plan’s claims appeals procedures;

§ If the claim is denied based on medical necessity, experimental treatment, or similar exclusion or limitation, an explanation of the scientific or clinical judgment applied in the benefit determination, or notice of where and how to obtain a copy free of charge; and,

6.6 Timing of an Appeal

Within 180 days after the receipt of the above material, the claimant shall have a reasonable opportunity to appeal the claim denial to the Administrator for a full and fair review. The claimant or his duly authorized representative may:

§ Request a review by providing written notice to the Administrator;

§ Submit written comments, documents, records and other information relating to the claim; and, § Upon request, have reasonable access to and copies of all documents, records, and other information relevant to the claim.

6.7 Timing of Notification of Benefit Determination on Review The Administrator shall notify the claimant of the Plan’s benefit determination on review within a reasonable period of time, but not later than 60 days after receipt of the appeal.

The period of time within which the Plan's determination is required to be made shall begin at the time an appeal is filed in accordance with the procedures of this Plan, without regard to whether all information necessary to make the determination accompanies the filing.

6.8 Internal Review and Decision

Full and Fair Review. The Plan Administrator, as Plan Fiduciary, shall take into account all comments, documents, and other information submitted by the claimant without regard to whether the information was submitted with the original claim and without deference to the original determination. The decision shall be based in whole or in part on a medical judgment, with consultation with the appropriate independent health care professionals, if the claim involves investigational or experimental treatment, or issues of medical necessity, and shall identify such professionals.

A non-grandfathered plan also must provide the claimant, free of charge, with any new or additional evidence considered by the plan in connection with the claim. Such evidence must be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided to give the claimant a reasonable opportunity to respond. In addition, before the plan can issue an adverse benefit determination based on a new or additional rationale, the claimant must be provided, free of charge, with the rationale. The rationale also must be provided as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required.

Decision. The decision of the Plan Administrator shall be written and shall include specific reasons for the decision, with specific references and copies of the pertinent Plan provisions or internal guideline on which the decision is based. If the appeal is denied based on medical necessity, experimental treatment, or similar exclusion or limitation, the claimant will receive an explanation of the scientific or clinical judgment applied on the benefit determination, or notice of where and how to obtain a copy.

Second Appeal. Should the claimant receive an adverse determination of the appeal, the claimant shall have the right to file a second appeal. The second appeal must be filed no later than 30 days from the date indicated on the response letter to the first appeal. The timing of response to the second appeal shall be made in accordance with the same guidelines as those outlined for the first appeal.

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6.9 External Review

Non-grandfathered group health plans subject to ACA must also offer claimants the opportunity to pursue External Review. If a claimant’s internal appeal is denied, the claimant may have the right to have the claim reviewed by an independent reviewer (IRO), not employed by the health plan, through an External Review process. This applies to claims that involve 1) medical judgment as determined by the external reviewer; or 2) a rescission of coverage.

In general, most insurers of fully-insured group health plans must comply with the applicable state External Review process for such plans and issuers that, at a minimum, includes the consumer protections set forth in the Uniform External Review Model Act promulgated by the National Association of Insurance Commissioners. If no state External Review process applies, the plan must follow the federal External Review process or contract a with an accredited independent review organization to review external appeals on its behalf. Insurers of plans subject to the state External Review requirements must include a description of the External Review process in (or attached to) the policy, certificate, or other evidence of coverage it provides to participants, beneficiaries, or enrollees.

Self-insured plans must implement an effective External Review process that meets minimum standards established by the Department of Health and Human Services. However, a self-insured plan may voluntarily comply with an applicable state External Review process.

State and federal External Review procedures include the following minimum consumer protections (the IRO, at its discretion, may give the claimant more time to submit any additional information for purposes of the External Review):

§ Allow claimants at least four months to file a request for External Review after the receipt of the notice of adverse benefit determination or final internal adverse benefit determination.

§ Claimants must be notified and allowed to submit additional information in writing to the IRO, which the IRO must consider when conducting the External Review. The IRO must allow the claimant at least 5 business days to submit any additional information and any additional information submitted by the claimant must be forwarded to the issuer (or plan) within one business day of receipt by the IRO.

§ For a standard External Review, the IRO must provide written notice to the issuer (or plan) and the claimant of its decision to uphold or reverse the adverse benefit determination no later than 45 days after the receipt of the request for External Review. The IRO decision must be binding on the claimant, as well as the plan or issuer (except to the extent other remedies are available under state or federal law).

§ For an expedited External Review, the IRO must provide notice of the decision no later than 72 hours after receipt of the request for External Review (if notice of the IRO’s decision is not in writing, the IRO must provide written confirmation of its decision within 48 hours after the date of the notice of the decision).

A claimant may request an “expedited” External Review if the timeframe for completing an expedited internal appeal or standard External Review would seriously jeopardize the claimant's life or health or jeopardize the claimant's ability to regain maximum function, or, if a final internal benefits denial involves an admission, availability of care, continued stay, or health care item or service for which the claimant received emergency services, but has not been discharged from a facility.

§ If the IRO’s decision is to reverse the plan’s benefits denial, the plan must immediately provide coverage or payment for the claim (including immediate authorization or payment of benefits).

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SECTION 7 – THE USE AND DISCLOSURE OF PROTECTED

HEALTH INFORMATION

To the extent that a Component Health Plan uses or has access to PHI, the following provisions apply.

7.1 Health Plans

The prescription drug plans contained in this Plan will use protected health information (PHI) to the extent of and in accordance with the uses and disclosures permitted by the Health Insurance Portability and Accountability Act of 1996 (HIPAA). Specifically, the Plan will use and disclose PHI for purposes related to health care treatment, payment for health care and health care operations.

7.2 Health Plan Payments

Payment includes activities undertaken by the Plan to obtain premiums or determine or fulfill its responsibility for coverage and provision of Plan benefits that relate to an individual to whom health care is provided. These activities include, but are not limited to, the following:

§ determination of eligibility, coverage and cost sharing amounts (for example, cost of benefit, plan maximums and co-payments as determined for an individual’s claim);

§ adjudication of health benefit claims (including appeals and other payment disputes);

§ subrogation of health benefit claims;

§ establishing employee contributions;

§ risk adjusting amounts due based on enrollee health status and demographic characteristics;

§ billing, collection activities and related health care data processing;

§ claims management and related health care data processing, including auditing payments, investigating and resolving payment disputes and responding to participant inquiries about payments;

§ obtaining payment under a contract for reinsurance (including stop-loss and excess of loss insurance);

§ medical necessity reviews or reviews of appropriateness of care or justification of changes;

§ utilization review, including precertification, preauthorization, concurrent review and retrospect live review;

§ disclosure to consumer reporting agencies related to the collection of premiums or reimbursement (the following PHI may be disclosed for payment purposes: name and address, date of birth, Social Security number, payment history, account number and name and address of provider and/or health plan); and, § reimbursement to the Plan.

7.3 Health Care Operations

Health Care Operations include, but are not limited to, the following activities:

§ quality assessment

§ population-based activities relating to improving health or reducing health care costs, protocol development, case management and care coordination, disease management, contacting health care providers and patients with information about treatment alternatives and related functions;

§ rating provider and Plan performance, including accreditation, certification, licensing and credentialing activities;

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§ underwriting, premium rating, and other activities relating to the creation, renewal or replacement of a contract of health insurance or health benefits, and ceding, securing or placing a contract for reinsurance of risk relating to health care claims (including stop-loss insurance and excess of loss insurance);

§ conducting or arranging for medical review, legal services and auditing functions, including fraud and abuse detection and compliance programs;

§ business planning and development, such as conducting cost-management and planning-related analyses related to managing and operating the Plan, including formulary development and administration, development or improvement of payment method or coverage policies;

§ business management and general administrative activities of the Plan, including, but not limited to:

ú management activities relating to the implementation of and compliance with HIPAA’s administrative simplification requirements, or ú customer service, including the provision of data analyses for policyholders, Plan Sponsors or other customers.

§ resolution of internal grievances; and, § due diligence in connection with the sale or transfer of assets to a potential successor in interest, if the potential successor in interest is a “covered entity” under HIPAA or, following completion of the sale or transfer, will become a covered entity.

7.4 Business Associates

The Plan may disclose PHI to its Business Associates (as such term is defined under HIPAA) who have agreed in writing to comply with all applicable HIPAA regulations for purposes related to the administration of the Plan.

7.5 Third Parties with Authorization

With the exception of uses and disclosures of PHI for health care treatment, payment for health care and health care operations, the Plan will disclose PHI to third parties only upon authorization by the participant.