2018 SPD City of Long Beach Prescription Drug Plan - HMO & PPO.pdf

CITY OF LONG BEACH

PRESCRIPTION DRUG PLAN

Employee Plan Summary

January 1, 2018

TABLE OF CONTENTS

PLAN INFORMATION

ELIGIBILITY

Eligibility Participation Eligible Dependents Newly Acquired Dependents Cessation of Participation Reinstatement or Former Participant

PRESCRIPTION DRUG BENEFITS PROVIDED

Participants Prescription Drug Benefit Plan Copayments Customer Care General Limitations and Exclusions

PLAN ADMINISTRATION

In General Amendment and Termination

AFFORDABLE CARE ACT

Coverage for Dependents Up to Age 26 90-Day Waiting Period Limit Essential Health Benefits Cost-Sharing Limitations Preventive Care Internal Claims, Appeals, and External Review Procedures

ADDITIONAL HEALTH PLAN PROVISIONS

Special Open Enrollment Rights for Certain Individuals under HIPAA Genetic Information Nondiscrimination Act Family and Medical Leave Act of 1993 USERRA: Employees on Military Leave

CLAIMS AND APPEAL PROCEDURES

Prescription Drug Claims When Claims Must Be Filed Timing of Claim Decisions Claims Appeal Procedure Nature of Denial Timing of an Appeal Timing of Notification of Benefit Determination on Review Internal Review and Decision External Review

NOTICE OF CONTINUATION COVERAGE RIGHTS UNDER COBRA

Introduction What is COBRA Continuation Coverage?

When is COBRA Continuation Coverage Available?

You Must Give Notice of Some Qualifying Events How is COBRA Continuation Coverage Provided?

Disability Extension of 18-Month Period of Continuation Coverage Second Qualifying Event Extension of 18-Month Period of Continuation Coverage Are There Other Coverage Options Besides COBRA Continuation Coverage?

If You Have Questions Keep Your Plan Informed of Address Changes Plan Contact Information

OTHER IMPORTANT INFORMATION

Privacy of Information Right of Subrogation Controlling Documents

City of Long Beach Prescription Drug Plan

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PLAN INFORMATION

The City of Long Beach (COLB) maintains the City of Long Beach Prescription Drug Plan (Plan) which is a Component Health Plan of the City of Long Beach group health plan, for the exclusive benefit of, and to provide welfare benefits to, its eligible employees and eligible early retirees, their spouses and eligible dependents.

Plan Name: City of Long Beach Prescription Drug Plan

Type of Plan: Welfare Benefit Plan

Plan Year: January 1 through December 31 of the same calendar year

Effective Date of this Employee Plan Summary:

January 1, 2018

Original Effective Date of Plan:

January 1, 2014

Funding Method: Funded through self-insured arrangements

Source of Contributions: From COLB’s general assets and Employee contributions, when required

Plan Sponsor and Plan Administrator:

City of Long Beach 333 W. Ocean Boulevard, 13th Floor Long Beach, CA 90802 562-570-6060

Plan Sponsor’s Employer Identification Number:

95-6000733

Agent for Service of Legal Process:

City of Long Beach 333 W. Ocean Boulevard, 13th Floor Long Beach, CA 90802 562-570-6060

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ELIGIBILITY

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.

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.

Eligible Dependents For purposes of this Plan, your eligible dependents shall include those dependents covered under the COLB Anthem Blue Cross Component Health Plan in which they participate.

An eligible dependent includes:

§ Legal Spouse. Your 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. Your 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. Your 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 your or your spouse’s or domestic partner’s legal guardianship as ordered by a court;

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 you for his or her support and maintenance and who is incapable of self-sustaining employment due to a physical or mental condition. Certification and proof of

P a g e • 3 continuing disability must be provided as determined by COLB in its sole discretion. Please contact COLB for more information.

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.

Newly Acquired Dependents In the event you acquire 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.

Cessation of Participation Your participation under this Plan will cease upon the earliest of:

§ The date the Plan is terminated;

§ The date your eligible class is eliminated;

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

§ Coverage for dependents will cease on the date you cease to be covered under the Plan.

§ In the event of fraud or misrepresentation related to participation, benefits or claims under the Plan, your coverage (and your dependents’ coverage) under the Plan will terminate immediately.

If you are granted an approved medical leave, your benefits will continue during such leave up to 6 months following your last day worked.

If you are disabled due to a work injury, coverage will continue for the duration of your disability, up to 6 months following your last day worked.

If you cease work because of a leave of absence, your coverage will end at the end of the month in which you last worked.

Reinstatement or Former Participant If your participation in the Plan ceases due to cessation of employment with COLB and you return to employment, you must meet COLB's then current re-entry guidelines for participation in the Plan.

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PRESCRIPTION DRUG BENEFITS PROVIDED

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 City of Long Beach Group Health Plan, workers compensation, or any other health plan including any state or federal program.

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.

Prescription Drug Benefit Plan Copayments You pay a copayment to obtain drugs. Copayments are the portion of the cost that you are required to pay per new or refill prescription. The rest of the cost is paid by the City of Long Beach.

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. If you take a drug on a long-term basis, you may be able to purchase a 90-day supply of that drug if it is on the maintenance list.

Under this Plan, you can choose to enroll in one of two prescription drug benefit plans. The copayments you pay will depend on the plan you enrolled in.

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.

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.

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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.

Customer Care If you have questions about your prescriptions or benefits, you can contact CVS/Caremark Customer Care by either calling 1-855-559-7917 or emailing customerservice@caremark.com.

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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PLAN ADMINISTRATION

In General COLB is the Plan Administrator of the Plan and a Named Fiduciary. COLB is the Plan's agent for service of legal process.

COLB has the duty and authority to interpret and construe the Plan in regard to all questions of eligibility, the status and rights of any Plan participant 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 designate any individual, partnership or corporation as the Administrator to carry out its duties and responsibilities with respect to the administration of the Plan. Such designation shall be in writing and such writing shall be kept with the records of 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 will 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 like character and with like aims.

Amendment and Termination COLB intends to maintain the Plan indefinitely, but is under no obligation to continue the Plan and can amend or 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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AFFORDABLE CARE ACT

The following provisions apply to the City of Long Beach group health plan, and as applicable, to this Component Health Plan.

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).

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.

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

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

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.

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 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

P a g e • 8

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.

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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ADDITIONAL HEALTH PLAN PROVISIONS

Special Open Enrollment Rights for Certain Individuals under HIPAA

If you are declining enrollment for yourself or your dependents (including your spouse) because of other health insurance coverage, you may in the future be able to enroll yourself and your dependents in one of the health care options offered by the Plan Sponsor, provided that you request enrollment within 31 days after your other coverage ends or any company contributions for such coverage have terminated.

In addition, if you have a new dependent as a result of marriage, birth, adoption, or placement for adoption, you may be able to enroll yourself and your dependents, provided that you request enrollment within 31 days after the marriage, birth, adoption, or placement for adoption. If you otherwise decline to enroll, you may be required to wait until the group’s next open enrollment to do so. You also may be subject to additional limitations on the coverage available at that time. Coverage will generally begin on the first day of the calendar month following the timely enrollment request. However, if the special enrollment event is birth or adoption or placement for adoption, if timely enrolled, coverage for such newborn or adopted children will begin as of the date of birth, adoption or placement for adoption.

Any requests for special enrollment or to obtain more information should be directed to:

City of Long Beach Attn: HR Officer - Employee Benefits 333 W. Ocean Boulevard, 13th Floor

Long Beach, CA 90802 562-570-6060

Genetic Information Nondiscrimination Act The Genetic Information Nondiscrimination Act of 2008 (GINA) prohibits employers and other entities covered by GINA Title II from requesting or requiring genetic information of an individual or family member of the individual, except as specifically allowed by GINA. In general, GINA:

§ Prohibits this Plan from adjusting premiums or contribution amounts for a group on the basis of genetic information;

§ Prohibits this Plan from requesting or mandating that an individual or family member of an individual undergo a genetic test, providing that such prohibition does not limit the authority of a health care professional to request an individual to undergo a genetic test, or preclude a group health plan from obtaining or using the results of a genetic test in making a determination regarding payment;

§ Allows this Plan to request, but not mandate, that a participant or beneficiary undergo a genetic test for research purposes if the Plan does not use the information for underwriting purposes and meets certain disclosure requirements; and, § Prohibits this Plan from requesting, requiring, or purchasing genetic information for underwriting purposes, or with respect to any individual in advance of or in connection with such individual’s enrollment.

To comply with this law, COLB asks that you not provide genetic information when responding to any request for medical information. ‘Genetic information' as defined by GINA includes an individual's family medical history, the results of an individual's or family member's genetic tests, the fact that an individual or an individual's family member sought or received genetic services, and genetic information of a fetus carried by an individual or an individual's family member or an embryo lawfully held by an individual or family member receiving assisted reproductive services.

Family and Medical Leave Act of 1993 Notwithstanding the above rule regarding termination of participation or any other provision to the contrary in this Plan, if you go on a qualifying leave under the Family and Medical Leave Act of 1993 (FMLA), the following rules will apply.

§ Only to the extent required by FMLA (among other things, this means only for the duration of a qualifying leave), COLB will continue to maintain your health benefits on the same terms and

P a g e • 10 conditions as though you were still an active employee.

§ Except as otherwise provided by FMLA, your Plan participation will cease when the Plan Administrator learns that you do not intend to return to work after your leave. If earlier, your Plan participation will immediately cease upon expiration of your FMLA leave, if you fail to return to work at such time.

§ Except as otherwise provided in FMLA, if you fail to return to work after the FMLA leave, you will be required to reimburse COLB for the cost of the coverage COLB provided you while you were on FMLA leave (the cost equals the COBRA premium, without a 2% add-on).

Eligible employees may take up to 12 weeks’ leave during a 12-month period for the birth or adoption of the employee’s child; the serious illness of the employee’s spouse, child, or parent; the employee’s own disabling serious illness; and the employee’s spouse, son, daughter, or parent is on active duty in the military or is called up for active duty (qualifying exigency leave).

§ Eligible employees who are family members of active duty military personnel injured or ill in the line of military duty, and perhaps medically unfit to perform the duties of the member’s office, grade, rank, or rating may take up to 26 work weeks of job-and-benefits-protected leave during a 12-month period to care for the servicemember. The same provisions apply to a relative of a veteran who was previously a member of the Armed Forces during the five years preceding the date of treatment, recuperation, or therapy.

§ Eligible employees may take up to 15 calendar days of qualifying exigency leave to spend time with a servicemember who is on ordered short-term temporary, rest and recuperation leave during deployment.

USERRA: Employees on Military Leave Employees going into or returning from military service will have Plan rights mandated by the Uniformed Services Employment and Reemployment Rights Act of 1994. These rights include up to 24 months of extended health care coverage upon payment of the entire cost of coverage plus a reasonable administration fee and immediate coverage with no preexisting conditions exclusions applied in the Plan upon return from service (and will run concurrently with any COBRA continuation coverage, to the extent allowed by law). These rights apply only to Employees and their Dependents covered under the Plan before leaving for military service.

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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.

Prescription Drug Claims For purposes of the Prescription Drug Claims and Claims Appeal Procedure contained in this Employee Plan Summary, 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.

You must follow the procedures outlined below to obtain payment of prescription drug benefits under this Plan.

You should direct all claims and questions regarding Claims 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.

As an individual claiming benefits under the Plan, you 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 you have not incurred a covered expense or that the benefit is not covered under the Plan, or if you have failed to furnish such proof as is requested, no benefits shall be payable to you under the Plan.

When Claims Must Be Filed Unless specifically provided otherwise in a Component Plan 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 you a form for filing proof of loss. If such forms are not furnished within 15 days after notice is given, you 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.

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 your receipt of the request for additional information. Failure to do so may result in claims being declined or benefits reduced.

Timing of Claim Decisions The Administrator shall notify you of a denial within the following time frames:

§ If you have provided all of the information needed to process the claim, the Administrator will notify you 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.

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§ If you have not provided all the information needed to process the claim, and additional information is requested during the initial processing period, then you 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 you will be notified of the determination by a date agreed to by you and the Administrator.

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.

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 or 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 you can obtain a copy free of charge;

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

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

§ If your 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 you can obtain a copy free of charge; and, Timing of an Appeal Within 180 days after the receipt of the above material, you shall have a reasonable opportunity to appeal the claim denial to the Administrator for a full and fair review. You or your 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.

Timing of Notification of Benefit Determination on Review

The Administrator shall notify you 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

P a g e • 13 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.

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 you 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 your appeal is denied based on medical necessity, experimental treatment, or similar exclusion or limitation, you will receive an explanation of the scientific or clinical judgment applied on the benefit determination, or notice of where and how you can obtain a copy.

Second Appeal Should you receive an adverse determination of the appeal, you 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.

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, P a g e • 14 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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NOTICE OF CONTINUATION COVERAGE RIGHTS UNDER COBRA

Introduction You are receiving this notice because you have recently become covered under a group health plan (the Plan).

This notice contains important information about your right to COBRA continuation coverage, which is a temporary extension of coverage under the Plan. This notice generally explains COBRA continuation coverage, when it may become available to you and your family, and what you need to do to protect the right to receive it. When you become eligible for COBRA, you may also become eligible for other coverage options that may cost less than COBRA continuation coverage.

The right to COBRA continuation coverage was created by a federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA continuation coverage can become available to you and to other members of your family who are covered under the Plan when you would otherwise lose your group health coverage. It can also become available to other members of your family who are covered under the Plan when they would otherwise lose their group health coverage. For additional information about your rights and obligations under the Plan and under federal law, you should review the Plan’s Employee Plan Summary or contact the Plan Administrator.

You may have other options available to you when you lose group health coverage. For example, you may be eligible to buy an individual plan through the Health Insurance Marketplace (such as Covered California).

By enrolling in coverage through the Marketplace, you may qualify for lower costs on your monthly premiums and lower out-of-pocket costs. Additionally, you may qualify for a 30-day special enrollment period for another group health plan for which you are eligible (such as a spouse’s plan), even if that plan generally doesn’t accept late enrollees.

What is COBRA Continuation Coverage?

COBRA continuation coverage is a continuation of health Plan coverage when coverage would otherwise end because of a life event known as a “qualifying event.” Specific qualifying events are listed later in this notice. After a qualifying event, COBRA continuation coverage must be offered to each person who is a

“qualified beneficiary.” You, your spouse and your dependent children could become qualified beneficiaries if coverage under the Plan is lost because of the qualifying event. Under the Plan, qualified beneficiaries who elect COBRA continuation coverage must pay for COBRA continuation coverage.

If you are an employee, you will become a qualified beneficiary if you lose your coverage under the Plan because either one of the following qualifying events happens:

§ Your hours of employment are reduced, or

§ Your employment ends for any reason other than your gross misconduct.

If you are the spouse of an employee, you will become a qualified beneficiary if you lose your coverage under the Plan because any of the following qualifying events happens:

§ Your spouse dies;

§ Your spouse’s hours of employment are reduced;

§ Your spouse’s employment ends for any reason other than his or her gross misconduct;

§ Your spouse becomes entitled to Medicare benefits (under Part A, Part B, or both); or

§ You become divorced or legally separated from your spouse.

Your dependent children will become qualified beneficiaries if they lose coverage under the Plan because any of the following qualifying events happens:

§ The parent-employee dies;

§ The parent-employee’s hours of employment are reduced;

§ The parent-employee’s employment ends for any reason other than his or her gross misconduct;

§ The parent-employee becomes entitled to Medicare benefits (under Part A, Part B, or both);

§ The parents become divorced or legally separated;

or

§ The child stops being eligible for coverage under the Plan as a “dependent child.”

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When is COBRA Continuation Coverage Available?

The Plan will offer COBRA continuation coverage to qualified beneficiaries only after the Plan Administrator has been notified that a qualifying event has occurred. When the qualifying event is the end of employment or reduction of hours of employment, death of the employee, or the employee’s becoming entitled to Medicare benefits (under Part A or Part B, or both), the employer must notify the Plan Administrator of the qualifying event.

You Must Give Notice of Some Qualifying Events

For the other qualifying events (divorce or legal separation of the employee and spouse or a dependent child’s losing eligibility for coverage as a dependent child), you must notify the Plan Administrator within 60 days after the qualifying event occurs. Your notice must provide the type of qualifying event, the date of the qualifying event, and the name and address of the employee, spouse or dependent who underwent the qualifying event.

You must provide this notice to:

City of Long Beach Attn: HR Officer - Employee Benefits 333 W. Ocean Boulevard, 13th Floor

Long Beach, CA 90802 562-570-6060

How is COBRA Continuation Coverage Provided?

Once the Plan Administrator receives notice that a qualifying event has occurred, COBRA continuation coverage will be offered to each of the qualified beneficiaries. Each qualified beneficiary will have an independent right to elect COBRA continuation coverage. Covered employees may elect COBRA continuation coverage on behalf of their spouses, and parents may elect COBRA continuation coverage on behalf of their children.

COBRA continuation coverage is a temporary continuation of coverage. When the qualifying event is the death of the employee, the employee’s becoming entitled to Medicare benefits (under Part A, Part B, or both), your divorce or legal separation, or a dependent child losing eligibility as a dependent child, COBRA continuation coverage lasts for up to 36 months. When the qualifying event is the end of employment or reduction of the employee’s hours of employment, and the employee became entitled to Medicare benefits less than 18 months before the qualifying event, COBRA continuation coverage for qualified beneficiaries other than the employees lasts until 36 months after the date of Medicare entitlement. For example, if a covered employee becomes entitled to Medicare 8 months before the date on which his employment terminates, COBRA continuation coverage for his spouse and children can last up to 36 months after the date of Medicare entitlement, which is equal to 28 months after the date of the qualifying event (36 months minus 8 months). Otherwise, when the qualifying event is the end of employment or reduction of the employee’s hours of employment, COBRA continuation coverage generally lasts for only up to a total of 18 months.

There are two ways in which this 18-month period of COBRA continuation coverage can be extended.

Disability Extension of 18-Month Period of Continuation Coverage

If you or anyone in your family covered under the Plan is determined by the Social Security Administration to be disabled and you notify the Plan Administrator in a timely fashion, you and your entire family may be entitled to receive up to an additional 11 months of COBRA continuation coverage, for a total maximum of 29 months. The disability would have to have started at some time before the 60th day of COBRA continuation coverage and must last at least until the end of the 18-month period for COBRA continuation coverage. You must provide notice to us of receipt of a determination by the Social Security Administration of total disability within 60 days of the date of the notice, the name of the qualified beneficiary who has become disabled, a copy of the determination letter, and the original date of disability.

You must provide this notice to:

City of Long Beach Attn: HR Officer - Employee Benefits 333 W. Ocean Boulevard, 13th Floor

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Second Qualifying Event Extension of 18- Month Period of Continuation Coverage

If your family experiences another qualifying event while receiving 18 months of COBRA continuation coverage, the spouse and dependent children in your family can get up to 18 additional months of COBRA continuation coverage, for a maximum of 36 months, if notice of the second qualifying event is properly given to the Plan. This extension may be available to the spouse and dependent children receiving continuation coverage if the employee or former employee dies, becomes entitled to Medicare (under Part A, Part B, or both), or gets divorced or legally separated, or if the dependent child stops being eligible under the Plan as a dependent child but only if the event would have caused the spouse or dependent child to lose coverage under the Plan had the first qualifying event not occurred.

Are There Other Coverage Options Besides COBRA Continuation Coverage?

Yes. Instead of enrolling in COBRA continuation coverage, there may be other coverage options for you and your family through the Health Insurance Marketplace, Medicaid, or other group health plan coverage options (such as a spouse’s plan) through what is called a “special enrollment period.” Some of these options may cost less than COBRA continuation coverage. You can learn more about many of these options at www.healthcare.gov.

If You Have Questions Questions concerning your Plan or your COBRA continuation coverage rights should be addressed to the contact or contacts identified below. For more information about the Marketplace, visit www.healthcare.gov.

Keep Your Plan Informed of Address Changes

In order to protect your family’s rights, you should keep the Plan Administrator informed of any changes in the addresses of family members. You should also keep a copy, for your records, of any notices you send to the Plan Administrator.

Plan Contact Information City of Long Beach Prescription Drug Plan

City of Long Beach 333 W. Ocean Boulevard, 13th Floor

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OTHER IMPORTANT INFORMATION

Privacy of Information In the administration of this Plan, COLB or one of its Business Associates may be required to use or disclose protected information for purposes of paying or causing to be paid benefits under this Plan.