Attachment 6A - Outline of Coverage.pdf

THE FEDERAL LONG TERM CARE INSURANCE PROGRAM (FEDERAL PROGRAM)

100 Arboretum Drive, Suite 100

Portsmouth, New Hampshire 03801-7833

1-800-LTC-FEDS (1-800-582-3337)

TTY 1-800-843-3557

Group Policyholder: United States Office of Personnel Management (OPM) Insurer: John Hancock Life Insurance Company or Metropolitan Life Insurance Company

Federal Program Administrator: Long Term Care Partners, LLC

OUTLINE OF COVERAGE

Group Policy Numbers: 900-001

900-002

Benefit Booklet – FO/COMP

1. NOTICES

Important: We will make our decision whether to issue your insurance coverage based on your responses to the questions on your application. We will send you a copy of your application. We may deny benefits or rescind your insurance coverage if: your answers are incorrect or untrue for any reason or the answers changed between the date you completed your application and the date your coverage would become effective. The best time to clear up any questions is before a claim arises! If for any reason, any of your answers is or becomes incorrect before the date your coverage would become effective, please contact: Federal Long Term Care Insurance Program, 100 Arboretum Drive, Suite 100, Portsmouth, New Hampshire 03801-7833. You may also call

1-800-LTC-FEDS (1-800-582-3337) (TTY 1-800-843-3557).

The group policy, including the Benefit Booklet, is designed to be a qualified long term care insurance contract under Section 7702B(b) of the Internal Revenue Code of 1986, as amended. Subject to specified dollar limits that vary depending on your age, you may be able to include your premium in your itemized deductions on your Federal income tax return, if your total medical expenses, including the allowable portion of your premium, exceed 71/2% of adjusted gross income. The allowable dollar limits are reviewed each year by the U.S. Treasury and adjusted accordingly. We have designed the group policy so that benefits you receive under the Federal Program should be tax-free. Also, many states offer tax-incentives for residents who purchase long term care insurance. Please remember that tax laws can change. It is important to consult your tax advisor if you have any questions or need further details.

The Federal Program may not cover all of your long term care costs. Please review all coverage limitations and exclusions when you receive your Benefit Booklet, including the Schedule of Benefits.

YOUR COVERAGE IS GUARANTEED RENEWABLE. This means we will not cancel your coverage as long as you pay your premium on time. See the section titled When Your Premium May Change in this outline.

2. PURPOSE OF OUTLINE OF COVERAGE

This outline provides a brief description of the most important features of coverage available under the Federal Program. Since all long term care insurers are required to issue outlines of coverage, you should compare this outline to outlines of coverage for other policies available to you. This outline is not an insurance contract, but only a summary of coverage. The Benefit Booklet and the Schedule of Benefits contain the governing contractual provisions that relate specifically to YOU. Other rights are contained in the group policy that OPM has with us. OPM has reviewed and approved this outline to assure its accuracy. If you apply for the coverage offered under the Federal Program and your application is approved, you will automatically receive a copy of the Benefit Booklet. It is important that you READ YOUR BENEFIT BOOKLET

CAREFULLY!

Throughout this outline “we,” “us,” and “our” means the Insurer.

3. LONG TERM CARE COVERAGE

Long term care coverage is designed to cover services you need when you are unable to perform certain activities of daily living or need care due to a severe cognitive impairment. The long term care insurance provided under the Federal Program is designed to provide reimbursement for costs of necessary diagnostic, preventive, therapeutic, curative, rehabilitative, maintenance, or personal care services, provided in a setting such as an assisted living facility, a nursing home, an adult day care center, or your home, but not in an acute care unit of a hospital.

The Federal Program provides reimbursement, based on the daily benefit amount you select, for actual charges you incur for covered long term care expenses, subject to the limitations, exclusions, and waiting period described in this outline.

Medical insurance and Medicare are entirely different than long term care insurance. They are primarily designed to cover acute care, and not long term care services. If you are eligible for Medicare you need to know that the long term care coverage under the Federal Long Term Care Insurance Program is not Medicare Supplement Coverage. If you want to learn about Medicare Supplement Coverage, ask us for the Guide To Health Insurance For People With Medicare.

4. EFFECTIVE DATE OF COVERAGE AND ACTIVELY AT WORK REQUIREMENT

Coverage under the Federal Program becomes effective on the first day of the month after the month in which you are approved. For example, if you are approved for coverage on April 15, your coverage becomes effective May 1. However, employees and members of the uniformed services who apply using the abbreviated underwriting application must meet the actively at work requirement described below in order for their coverage to become effective.

If you are an employee or a member of the uniformed services for purposes of the Federal Program and you submit an abbreviated underwriting application which we approve for coverage, you must be actively at work on the original effective date shown on your Schedule of Benefits that we send you. If your original effective date falls on a weekend or holiday, you must be actively at work on the last work-day before your original effective date.

Actively at work means:

• for an Employee, that you meet all of the following conditions:

• you are reporting for work at your usual place of employment or other location to which government business requires you to travel; and

• you are able to perform all the usual and customary duties of your employment on your regular work-schedule; and

• you are not absent from work due to sickness, injury, annual leave, sick leave or any other leave (for employees working an alternative work schedule, an “AWS” day counts as a day you are Actively at Work).

• for a Member of the Uniformed Services, that you are on active duty and are physically able to perform the duties of your position.

You must notify us if you are not actively at work as stated above. In this case, your coverage will not go into effect until the first day of the month on or after the date you return to being actively at work. That date will then be your new original effective date provided that you are actively at work on that date. If your new original effective date falls on a weekend or holiday, you must be actively at work on the last work-day before your new original effective date. You must notify us of the date you return to active work and we will send you a new Schedule of Benefits. You must notify us if you are not actively at work on your new original effective date.

In this case, your coverage will not go into effect until you are actively at work as stated above.

Your original effective date will not change under this actively at work requirement if you were involuntarily separated from Federal civilian service (for reasons other than your misconduct) or from the uniformed services (except for a dishonorable discharge) after your application date but before your original effective date.

5. BENEFITS PROVIDED BY THE FEDERAL PROGRAM

Covered Services You may select one of two coverage options under the Federal Program – the Facilities-Only Option or the Comprehensive Option.

The Facilities-Only Option provides coverage for services you receive in a nursing home, assisted living facility, and hospice facility.

The Comprehensive Option provides coverage for all the services covered under the Facilities-Only Option plus services provided by a formal caregiver at home, services provided by an informal caregiver, hospice care at home, and services provided at an adult day care center.

Bed reservations, caregiver training and respite services are covered under both options. For the Facilities- Only option, we will only pay benefits for respite services provided in a nursing home, assisted living facility or hospice facility. For the Comprehensive Option, we will pay for respite services provided by a formal or informal caregiver at home or provided in a facility.

We will only pay benefits for covered services if:

• you are eligible for benefits and, where required, have satisfied the waiting period; and

• they are part of a written plan of care approved by us.

Benefit Amounts You may select a daily benefit amount from $50-$300 in $25 increments. Your daily benefit amount determines the most we will pay per day for covered services. It also determines your maximum lifetime benefit – see the Maximum Lifetime Benefit subsection for more information.

The Federal Program provides reimbursement for actual charges you incur for covered services up to the following percentages:

Covered Services Under

Both Options Daily Reimbursement Up To

Nursing home, assisted living facility or hospice facility 100% of your daily benefit amount

Bed reservations 100% of your daily benefit amount – benefits limited to 30 days per calendar year

Caregiver training 100% of your daily benefit amount – benefits limited to 7x your daily benefit amount in your lifetime

Respite services 100% of your daily benefit amount – benefits limited to 30x your daily benefit amount per calendar year

Additional Covered Services Under the Comprehensive Option Daily Reimbursement Up To

Formal caregiver services 75% of your daily benefit amount

Informal caregiver services 75% of your daily benefit amount – benefits for informal caregiver services are limited to those individuals who did not normally live in your home at the time you became eligible for benefits. In addition, benefits for care provided by family members are further limited to 365 days in your lifetime.

Hospice care at home 100% of your daily benefit amount

Adult day care center 75% of your daily benefit amount

If you select the Comprehensive Option, you may choose to have benefits for covered services calculated on a weekly basis. The weekly benefit amount is equal to seven times your daily benefit amount. If you choose the weekly benefit amount, the Federal Program provides reimbursement for actual charges you incur for covered services up to the following percentages:

Covered Services Under the Comprehensive Option (Weekly Benefit Amount) Weekly Reimbursement Up To

Nursing home, assisted living facility or hospice facility 100% of your weekly benefit amount

Formal caregiver services 75% of your weekly benefit amount

Informal caregiver services 75% of your weekly benefit amount – benefits for informal caregiver services are limited to those individuals who did not normally live in your home at the time you became eligible for benefits. In addition, benefits for care provided by family members are further limited to 365 days in your lifetime.

Hospice care at home 100% of your weekly benefit amount

Adult day care center 75% of your weekly benefit amount

Bed reservations 100% of your weekly benefit amount – benefits limited to 30 days per calendar year

Caregiver training 100% of your weekly benefit amount – benefits limited to 7x your daily benefit amount in your lifetime

Respite services 100% of your weekly benefit amount – benefits limited to 30x your daily benefit amount per calendar year

Maximum Lifetime Benefit The benefit period is the length of time your coverage will last if we pay your daily benefit amount each and every day. You may choose from a 3 year, 5 year or unlimited benefit period. If you have a 3 or 5 year benefit period, benefits will last longer than the benefit period if you do not receive covered services every day or if benefits paid for each day (or, if applicable, week) are less than your daily benefit amount (or, if applicable, weekly benefit amount).

Your maximum lifetime benefit is the total amount of money that we may pay for charges you incur for covered services. It is equal to your benefit period (in days) x your daily benefit amount. Your maximum lifetime benefit will be reduced by the amount of benefits that we pay. If you have an unlimited benefit period, your maximum lifetime benefit is also unlimited.

Schedule of Benefits

Your Schedule of Benefits that we will send you will show, among other things, the coverage option you select (Facilities-Only Option or Comprehensive Option), the covered services under that option, the maximum we will pay for those services per day (or, if applicable, per week), the benefit period, and your maximum lifetime benefit.

International Benefits The Federal Program provides benefits for covered services you receive outside the United States, its territories and possessions (collectively referred to as the “United States”). When you receive such services, we will pay benefits up to 80% of the amounts listed in the Benefit Amounts subsection.

If you have a 3 or 5 year benefit period, 80% of your maximum lifetime benefit can be used for covered services you receive outside the United States; the remaining 20% will be available for covered services you receive in the United States.

If you have an unlimited benefit period, your benefit period will be limited to 10 years for covered services you receive outside the United States. For such services, your maximum lifetime benefit will be equal to 3,650 days (10 years) x 80% of your daily benefit amount. Your maximum lifetime benefit for covered services you receive in the United States will remain unlimited.

The coordination of benefits provision described in the section titled Exclusions and Limitations (Coordination of Benefits subsection) in this outline does not apply to international benefits.

Example 1: Let’s assume that you select the Comprehensive Option with a daily benefit amount of $150 and you have a 5 year benefit period. For purposes of determining international benefits, your daily benefit amount is $120 ($150 x 80%) instead of $150. We would pay up to $120 per day for services provided to you in a nursing home. We would pay up to $90 ($120 x 75%) per day for services provided to you by a formal or informal caregiver at home. Out of your maximum lifetime benefit of $273,750, you could use up to 80% ($219,000) for all covered services you receive outside the United States. If you return to the United States and receive covered services, the remaining 20% ($54,750) of your maximum lifetime benefit will be available for those services.

Example 2: Let’s assume that you select the Comprehensive Option with a daily benefit amount of $150 and you have an unlimited benefit period. Let’s also assume that you chose to have that amount reimbursed as a weekly benefit amount equal to $1,050 ($150 x 7). For purposes of determining international benefits, your daily benefit amount is $120 ($150 x 80%) and your weekly benefit amount is $840 ($120 x 7). We would pay up to $840 per week for services provided to you in a nursing home. We would pay up to $630 per week ($840 x 75%) for services provided to you by a formal or informal caregiver at home. Your maximum lifetime benefit for covered services you receive outside the United States would be limited to $438,000 (3,650 x $120). If you return to the United States and receive covered services, your maximum lifetime benefit would remain unlimited for those services.

Alternate Plan of Care Under the circumstances described below, our care coordinator can authorize benefits for services for your care that are not specifically defined as covered services. For example, under an alternate plan of care, we will consider a facility that is not otherwise covered under the Federal Program (such as a residential care facility licensed in California). If you select the Comprehensive Option, our care coordinator can also authorize benefits for supplemental items that enable you to remain at home, such as modification to your home to make it wheelchair-accessible, durable medical equipment, and emergency response systems.

Services for your care and supplemental items for which benefits are authorized by us under this section are called an alternate plan of care and, as such, will be considered covered services. Benefits under an alternate plan of care will only be authorized if we determine, in our sole discretion, that the alternate plan of care meets the following criteria:

• it is part of your written plan of care approved by us; and

• it effectively meets your long term care service needs; and

• it does not include services provided by a person who normally lived in your home at the time you became eligible for benefits; and

• it is cost-effective for the Federal Program; and

• for the Facilities-Only Option, it does not include services that are provided outside a facility.

Your reimbursement for services for your care will be subject to the Waiting Period.

Supplemental items you pay for under an alternate plan of care will not count toward satisfying your waiting period. However, after you satisfy your waiting period and if you remain eligible for benefits, we will reimburse you retroactively for any expenses you incurred for approved supplemental items you received during your waiting period.

Payment of Benefits

We pay benefits using the “expense-incurred method.” This method reimburses you for actual charges you incur for covered services received up to a specific dollar amount. All benefits are paid in United States currency.

Eligibility for Benefits

You must be eligible for benefits and satisfy any required waiting period in order for benefits to be payable for covered services. You are eligible for benefits if you meet all of the following requirements after your coverage becomes effective:

• a licensed health care practitioner has certified within the last 12 months that:

• you are unable to perform, without Substantial Assistance from another person, at least 2 Activities of Daily Living for an expected period of at least 90 days due to a loss of functional capacity; or

• you need Substantial Supervision due to your Severe Cognitive Impairment;

• we agree with that certification; and

• we approve a written plan of care established for you by a licensed health care practitioner or our care coordinator.

Activities of Daily Living means:

• bathing:

• getting into a tub or shower; and

• getting out of a tub or shower; and

• washing your body in a tub, shower or by sponge bath; and

• washing your hair in a tub, shower or sink.

(If you need Substantial Assistance from another person to complete any one of these activities, you are dependent for bathing);

• dressing:

• putting on any necessary item of clothing (including undergarments) and any necessary braces, fasteners or artificial limbs; and

• taking off any necessary item of clothing (including undergarments) and any necessary braces, fasteners or artificial limbs.

(If you need Substantial Assistance from another person to complete any one of these activities, you are dependent for dressing);

• transferring:

• getting into a bed, chair or wheelchair; and

• getting out of a bed, chair or wheelchair.

(If you need Substantial Assistance from another person to complete any one of these activities, you are dependent for transferring);

• toileting:

• getting to and from the toilet; and

• getting on and off the toilet; and

• performing associated personal hygiene.

(If you need Substantial Assistance from another person to complete any one of these activities, you are dependent for toileting);

• continence:

• maintaining control of bowel and bladder function; or

• when unable to maintain control of bowel or bladder function, performing associated personal hygiene

(including caring for catheter or colostomy bag).

(If you cannot maintain control of bowel or bladder function and in addition you need Substantial Assistance from another person to perform the associated personal hygiene, you are dependent for continence);

• eating:

• feeding yourself by getting food into your mouth from a container (such as a plate or cup), including use of utensils when appropriate (such as a spoon or fork); or

• when unable to feed yourself from a container, feeding yourself by a feeding tube or intravenously.

(If you need Substantial Assistance from another person to complete any one of these activities, you are dependent for eating).

Severe Cognitive Impairment means a deterioration or loss in intellectual capacity (such as may occur with Alzheimer’s disease) that (a) places a person in jeopardy of harming him/herself or others and, therefore, the person requires Substantial Supervision by another person; and (b) is measured by clinical evidence and standardized tests which reliably measure impairment in: (1) short or long term memory; (2) orientation to people, places or time; and (3) deductive or abstract reasoning.

Substantial Assistance means Hands-On Assistance or Standby Assistance. Hands-On Assistance means physical help by another person without which you would not be able to perform the Activities of Daily Living. Standby Assistance means that you require the presence of another person within arm’s reach of you to prevent, by physical intervention or cueing, injury to you while you are performing the Activities of Daily Living.

Substantial Supervision means that you require continual monitoring by another person (which may include cueing by verbal prompting, gesture, or other demonstrations) to protect you from threats to your health and safety, for instance, while wandering.

Waiting Period

The waiting period is the number of days during which you must be eligible for benefits and receiving covered services before we will pay benefits. The waiting period applies to payment of benefits for all covered services unless otherwise stated. You only have to satisfy the waiting period once in your lifetime. Days applied toward satisfying the waiting period need not be consecutive, nor associated with the same episode of care. The days will be added together until the waiting period is satisfied. You have the choice of a 30-day or 90-day waiting period.

We do not pay benefits for services you receive during your waiting period, except as stated below.

The waiting period does not apply to hospice care, respite services and caregiver training. Because we do not apply the waiting period to hospice care, respite services and caregiver training, these covered services do not count toward meeting your waiting period.

Waiver of Premium

You will not have to pay your premium if you are eligible for benefits and have satisfied the waiting period.

We will also waive your premium if you are eligible for benefits and receiving hospice care. If you satisfy the requirements for waiver of premium on the first day of a month, the waiver will take effect on that date.

Otherwise, the waiver will take effect on the first day of the following month.

If, at a later date, you are no longer eligible for benefits (e.g., you recover) and wish to maintain your coverage, you will have to resume paying your premium on the first day of the month following the month in which you are no longer eligible for benefits.

Care Coordination Services

Our care coordinators are licensed health care practitioners who provide the following services at no additional charge to you:

1. provide general information about long term care services; and

2. assess and approve your need for long term care services; and

3. develop a plan for long term care services; and

4. monitor and reassess from time to time the long term care services that you receive; and

5. provide access to discounts for services, when available.

Our care coordinators will provide the services described above for your qualified relatives. These services will be provided regardless of whether your qualified relatives are enrolled in the Federal Program, as long as you are enrolled. The services listed under items 2, 3 and 4 will be available for your qualified relatives at an additional charge. For qualified relatives who are not enrolled in the Federal Program, we would only assess, not approve, their need for long term care services under item 2 above. Our care coordinators can provide you or your qualified relatives with information on the applicable charges for care coordination services for your qualified relatives.

You do not have to be eligible for benefits or satisfy the waiting period in order to receive care coordination services.

6. EXCLUSIONS AND LIMITATIONS

Exclusions The Federal Program does not pay benefits for any of the following:

• illness, treatment or medical condition arising out of:

• your participation in a felony, riot or insurrection;

• your attempted suicide, while sane or insane; or

• injuries you intentionally inflict on yourself;

• care or treatment for alcoholism or drug addiction;

• care or treatment provided in a government facility, including a Department of Defense or Department of Veterans Affairs facility, unless otherwise required by law;

• care you receive while in a hospital, except in a unit specifically designated as a nursing home or hospice facility;

• any service or supply to the extent the expense for it is reimbursable under Medicare, or would be so reimbursable except for the application of a deductible, coinsurance or copayment amount.

(This exclusion will not apply in those instances where Medicare is determined to be the secondary payor under applicable law);

• services or supplies for which you are not obligated to pay in the absence of insurance; or

• services provided by any person who normally lived in your home at the time you became eligible for benefits.

Limitations Benefits payable for covered services are subject to maximums and limitations. See the section titled Benefits Provided By The Federal Program (Benefit Amounts and Maximum Lifetime Benefit subsections).

Coordination of Benefits The Federal Program includes a Coordination of Benefits (COB) provision that follows the guidelines set by the National Association of Insurance Commissioners (NAIC). In determining the amount of benefits we will pay under the Federal Program, the COB provision allows us to look at other plans that might pay benefits for long term care services you receive. The other plans we look at include government programs (other than Medicaid), group medical benefits, and other employer-sponsored long term care insurance.

We do not look at Medicaid, individual insurance policies or association group insurance policies. The COB provision does not apply to international benefits.

If the Federal Program is primary (this means it pays first), we will pay benefits without coordinating with other plans. That means that we will pay benefits to the maximum extent permitted by your coverage.

If another plan or program is primary, then it will pay first. In that case, we will pay no more than the difference between the amount payable by your other coverage(s) and your actual expenses up to the Daily Benefit Amount or Weekly Benefit Amount you select.

Catastrophic Coverage Limitation (No War Exclusion) Unlike most long term care insurance policies available today, coverage under the Federal Program does not have a war exclusion. As a result, whether you are a civilian or member of the uniformed services, benefits may be payable under the Federal Program for conditions due to war or acts of war, declared or undeclared, or service in the armed forces or auxiliary units. Your coverage may be reduced, however, if a war (declared or undeclared), act of war, or act of terrorism is determined to be a Catastrophic Event as described below.

If there were a Catastrophic Event, the length of time during which you could receive benefits could be shortened. We will consult with OPM when determining if a Catastrophic Event has occurred. A Catastrophic Event is an event or series of events affecting such a significant number of enrollees that it threatens to undermine the financial stability of the Federal Program. This is less likely as Federal Program reserves grow.

7. RELATIONSHIP OF COST OF CARE AND BENEFITS

Because the costs of long term care services will likely increase over time, you should consider whether and how benefits under the Federal Program may be adjusted. You have the choice of receiving benefit increases under the automatic compound inflation option or the future purchase option.

Automatic Compound Inflation Option On each anniversary of your original effective date of coverage (or the date you switch to this option), your daily benefit amount and the remaining portion of your maximum lifetime benefit will automatically increase at a rate of 5% compounded annually. These increases are made even if you are eligible for benefits, without regard to your age, claim status, claim history or the length of time your coverage has been in effect, and will not cause your premium to increase.

Future Purchase Option Every two years we will increase your daily benefit amount and the remaining portion of your maximum lifetime benefit, except as described below. Increases will occur every two years on January 1st starting in 2004. Your coverage must be in effect for at least 12 months in order for you to receive your first increase under this provision. The increase will be a percentage based upon the change in the Department of Labor’s Consumer Price Index for Medical Care or another index mutually agreed upon by OPM and us.

If you do not want the increase, you must send us a written rejection before the date the increase will take effect. If you want the increase, you do not have to take any action other than paying the additional premium.

The increase will automatically take effect. Increases under this option will be made regardless of your age, but we will not increase your benefits under this option if you are eligible for benefits or if you declined a total of three prior increases.

Increases under this option do not require you to provide evidence of your good health, except as noted in the next paragraph. Each time we send you notice of an increase under this option, we will also offer you the opportunity to receive future benefit increases under the automatic compound inflation option instead of this option. If you elect to switch to the automatic compound inflation option, you will not receive the current increase under the future purchase option.

If you have declined a total of three increases under this option and you later wish to resume receiving increases, you must provide, at your expense, evidence of your good health that is satisfactory to us. See the section in this outline titled When Your Premium May Change.

Comparison of Automatic Compound Inflation Option and Future Purchase Option The sets of graphs that follow compare the automatic compound inflation option (ACIO) and the future purchase option (FPO). The FPO graphs reflect two scenarios: all FPO increases accepted and all FPO increases declined. There are comparisons for three issue ages: 45, 55 and 65. The graphs compare your monthly premium and your daily benefit amount over time. The length of time we have used for the issue age 45 graphs is 30 years; for the issue age 55 graphs is 25 years; and for issue age 65 graphs is 20 years. For the purposes of these graphs, we are assuming a 5% annual inflation increase for FPO (the same inflation rate that automatically applies to ACIO). The ACIO benefit automatically increases annually while the FPO benefit increases occur every two years. The lengths of time are illustrative only and do not imply that your coverage would end after the length of time shown.

Graphs for Comparing Inflation Options for ISSUE AGE 45 The two graphs on this page illustrate the monthly premium and the daily benefit amount over time under the automatic compound inflation option (ACIO) and the future purchase option (FPO). The graphs assume a Comprehensive Option, with an initial daily benefit amount of $150, a 90 day waiting period, and a 5-year benefit period. The graphs below only illustrate the first 30 years of premium and benefits.

As you can see from the first graph, your ACIO premium does not increase as the benefit increases. With FPO, your premium starts out lower than with ACIO. But, as your benefit increases, your FPO premium increases and eventually becomes greater than the ACIO premium. Since the FPO premium increases steeply during normal retirement ages, you should consider whether you will be able to afford the higher premium under the FPO. If you decline a FPO increase, your coverage doesn’t end, it just does not increase.

The second graph shows how your daily benefit amount increases over time under ACIO and how it increases under FPO if you do not decline the benefit increases and they take effect. However, if you decline the benefit increases, your FPO benefit will not increase and becomes substantially less than the ACIO benefit.

D ai ly B en ef it A m ou nt

Attained Age

45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75

FPO (all increases declined) FPO (all increases accepted)

ACIO

M on th ly

P re m iu m

Attained Age

45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75

FPO (all increases declined) FPO (all increases accepted)

ACIO

Graphs for Comparing Inflation Options for ISSUE AGE 55 The two graphs on this page illustrate the monthly premium and the daily benefit amount over time under the automatic compound inflation option (ACIO) and the future purchase option (FPO). The graphs assume a Comprehensive Option, with an initial daily benefit amount of $150, a 90 day waiting period, and a 5-year benefit period. The graphs below only illustrate the first 25 years of premium and benefits.

As you can see from the first graph, your ACIO premium does not increase as the benefit increases. With FPO, your premium starts out lower than with ACIO. But, as your benefit increases, your FPO premium increases and eventually becomes greater than the ACIO premium. Since the FPO premium increases steeply during normal retirement ages, you should consider whether you will be able to afford the higher premium under the FPO. If you decline a FPO increase, your coverage doesn’t end, it just does not increase.

The second graph shows how your daily benefit amount increases over time under ACIO and how it increases under FPO if you do not decline the benefit increases and they take effect. However, if you decline the benefit increases, your FPO benefit will not increase and becomes substantially less than the ACIO benefit.

M on th ly

P re m iu m

Attained Age

55 57 59 61 63 65 67 69 71 73 75 77 79

FPO (all increases declined) FPO (all increases accepted)

ACIO

D ai ly B en ef it A m ou nt

Attained Age

55 57 59 61 63 65 67 69 71 73 75 77 79

FPO (all increases declined)

Graphs for Comparing Inflation Options for ISSUE AGE 65 The two graphs on this page illustrate the monthly premium and the daily benefit amount over time under the automatic compound inflation option (ACIO) and the future purchase option (FPO). The graphs assume a Comprehensive Option, with an initial daily benefit amount of $150, a 90 day waiting period, and a 5-year benefit period. The graphs below only illustrate the first 20 years of premium and benefits.

As you can see from the first graph, your ACIO premium does not increase as the benefit increases. With FPO, your premium starts out lower than with ACIO. But, as your benefit increases, your FPO premium increases and eventually becomes greater than the ACIO premium. Since the FPO premium increases steeply during normal retirement ages, you should consider whether you will be able to afford the higher premium under the FPO. If you decline a FPO increase, your coverage doesn’t end, it just does not increase.

The second graph shows how your daily benefit amount increases over time under ACIO and how it increases under FPO if you do not decline the benefit increases and they take effect. However, if you decline the benefit increases, your FPO benefit will not increase and becomes substantially less than the ACIO benefit.

M on th ly

P re m iu m

Attained Age

65 67 69 71 73 75 77 79 81 83 85

FPO (all increases declined) FPO (all increases accepted)

ACIO

D ai ly B en ef it A m ou nt

Attained Age

65 67 69 71 73 75 77 79 81 83 85

FPO (all increases declined)

Other Benefit Changes (Upgrades and Downgrades) At any time, you may request an increase (upgrade) or decrease (downgrade) in your coverage. In order to receive approval of a request for an increase, you must provide, at your expense, evidence of your good health that is satisfactory to us. You do not have to provide evidence of your good health for a decrease. The amount of an increase or decrease is subject to Federal Program options available at the time of your request.

The premium for any increase that is approved by us will be based on your age and the rates when the increase takes effect. If you request a decrease in coverage consistent with available Federal Program options, your premium will decrease.

8. WHEN YOUR PREMIUM MAY CHANGE

If you select the automatic compound inflation option, your premium is designed to include all future inflation increases you will receive each year while you are insured. Your premium is designed not to increase due to inflation increases under this option.

If you select the future purchase option, your premium will increase for each inflation increase under this option. The additional premium for each increase will be based on your age and the premium rates in effect at the time the increase takes effect. If you accept an offer to switch from the future purchase option to the automatic compound inflation option, your premium will increase at the time that switch goes into effect.

This increase in premium pays for future increases under the automatic compound inflation option. Once you have switched, your premium is designed not to increase for any subsequent inflation increase.

If you request and we approve a daily benefit amount increase other than an inflation increase, your additional premium will also be based on your age and the premium rates in effect at the time the increase takes effect. Other coverage increases you request and we approve will cause your entire premium to be based on your age and the premium rates in effect at the time the increase takes effect. If you request a decrease in coverage consistent with available Federal Program options, your premium will decrease.

See the section titled Relationship of Cost of Care and Benefits for a summary of these benefit change provisions.

Your premium will not change because you get older or your health changes or for any other reason related solely to you. We may only increase your premium if you are among a group of enrollees whose premium is determined to be inadequate. While the Group Policy is in effect, OPM must approve the change.

9. WHEN YOU MAY RECEIVE A PREMIUM REFUND

30 Day Free Look/Cancellation of Coverage Within 30 days after you receive your Benefit Booklet, you may cancel your coverage if you are not satisfied with your coverage and receive a refund of your premium. If you wish to do this, you must notify us within 30 days of receiving the Benefit Booklet. Then we will refund all of your premium within 30 days. It will be as if the coverage was never issued.

You may cancel your coverage at any other time; however, we will only refund premiums that cover a period after the effective date of your cancellation.

Other Refunds of Premium We will refund any premium that you paid to cover any period after the date of your death or during which your premium is waived.

10. WHEN INSURANCE COVERAGE MAY BE CONTINUED OR ENDED

When Your Insurance Coverage Will End Your insurance coverage will end on the earliest of the following:

• the date you specify to us that you wish your coverage to end;

• the date of your death;

• the end of the period covered by your last premium payment if you do not pay the required premium when due;

• the date the group policy ends, subject to continuation of coverage as described below; or

• the date that you have exhausted your maximum lifetime benefit (in this event, care coordination services will continue).

Grace Period There is a 30-day grace period for payment of your premium. This means that we must receive your premium payment by the 30th day after the date it is due. If we do not receive your premium by the end of this grace period, we will send you written notice of termination of your coverage by first class United States mail. You will have 35 days from the date of the termination letter to pay your premium; otherwise your coverage will end.

Reinstatement of Coverage If your coverage ends because you did not pay your premium when due, your coverage will be reinstated as of the date it ended if, within six months of the date your coverage ended, you or your representative:

• submits evidence satisfactory to us that you suffered a cognitive impairment or loss of functional capacity before the expiration of the 30 day grace period for payment of your premium (the standard of proof we will require will be no more restrictive than the requirements to establish eligibility for benefits); and

• submits all past due premium to us.

If your coverage ends because you canceled it or did not pay your premium when due, your coverage will be reinstated as of the date it ended, if within 12 months of the date coverage ended, you:

• request reinstatement; and

• submit, at your expense, evidence of your good health that is satisfactory to us; and

• submit all past due premium to us.

If your coverage is reinstated, your premium will be based on your age as if your coverage had continued without interruption.

Portability Your long term care insurance coverage under the Federal Program is fully portable. This means that once you have coverage under the Federal Program and later are no longer a member of an eligible group, you can keep your coverage if you continue to pay the required premium and have not exhausted your maximum lifetime benefit. Your premium and coverage will not change solely because you left the group.

Continuation of Coverage If the group policy ends, OPM has stated that it intends to continue your insurance coverage by replacing the group policy with another that will:

• be effective on the day after the group policy ends; and

• provide coverage that is substantially the same as that provided by the group policy; and

• calculate your premium based on the same issue age(s) as under the group policy

In the unlikely event that the group policy ends and there is no replacement policy as described above, we will continue your coverage.

11. PREMIUM

The premium required for coverage under the Federal Program is shown in the enclosed materials.

12. APPLYING FOR COVERAGE UNDER THE FEDERAL PROGRAM

Anyone who wishes to apply for coverage under the Federal Program must complete the appropriate application.

We must approve your application in order for your coverage to become effective.