Attachment 6B - Alternative Insurance Plan Outline of Coverage.doc

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)

TDD 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 – Alternative Insurance Plan

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 incorrect, 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), TDD 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 7½% 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. Please remember that tax laws can change and 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.

2.

PURPOSE OF OUTLINE OF COVERAGE

This outline of coverage provides a brief description of the most important features of coverage available under the Federal Program’s Alternative Insurance Plan. Since all long term care insurers are required to issue outlines of coverage, you should compare this outline of coverage 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 coverage offered under the Federal Program’s Alternative Insurance Plan and your application is approved, you will automatically receive a Benefit Booklet. It is important that you READ YOUR BENEFIT BOOKLET CAREFULLY!

Throughout this outline of coverage “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 Federal Program’s Alternative Insurance Plan is designed to provide reimbursement for costs of necessary diagnostic, preventive, therapeutic, curative, rehabilitative, maintenance, or personal care services, provided in a nursing home.

The Federal Program’s Alternative Insurance Plan provides reimbursement, based on a weekly benefit amount, for actual charges you incur for covered long term care expenses, subject to the limitations, exclusions, and waiting period described below.

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. ACTIVELY AT WORK REQUIREMENT

If you are an employee or a member of the uniformed services for purposes of the Federal Program’s Alternative Insurance Plan and we approve your application for coverage, you must be actively at work on the original effective date shown on your Schedule of Benefits. 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 required 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 required above.

Your original effective date will not change under this actively at work requirement if you were involuntarily separated (for reasons other than your misconduct) after your application date but before your original effective date.

5.

BENEFITS PROVIDED BY THE Federal Program’s Alternative Insurance Plan

Covered Services

The Federal Program’s Alternative Insurance Plan provides coverage for services you receive in a nursing home, bed reservations, caregiver training and respite services in a nursing home.

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

Your initial weekly benefit amount is $200. If your coverage remains in effect for 24 months, and you do not become eligible for benefits during this period, your weekly benefit amount will increase to $300 on the first day of the next month. If your coverage remains in effect for 48 months, and you do not become eligible for benefits during this period, your weekly benefit amount will increase to $400 on the first day of the next of the month. If your coverage remains in effect for 72 months, and you do not become eligible for benefits during this period, your weekly benefit amount will increase to $500 on the first day of the next month. These increases will not cause your premium to increase.

The Federal Program’s Alternative Insurance Plan provides reimbursement for actual charges you incur for covered services up to the following percentages:

Covered Services

Weekly Reimbursement Up To

Nursing home

100% of your weekly benefit amount

Bed reservations in a nursing home 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 your weekly benefit amount in your lifetime

Respite services in a nursing home 100% of your weekly benefit amount - benefits limited to 4 x your weekly benefit amount per calendar year

Maximum Lifetime Benefit

The benefit period is the length of time your coverage will last if we pay your full weekly benefit amount every week. Your benefit period is 2 years (104 weeks). Benefits will last longer than the benefit period if benefits paid for each week that you receive covered services are less than the 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 weeks) x your weekly benefit amount. Your maximum lifetime benefit will be reduced by the amount of benefits that we pay.

Schedule of Benefits

Your Schedule of Benefits will show, among other things, covered services, the maximum we will pay for those services 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 the amounts listed in the Benefit Amounts subsection above.

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

Payment of Benefits

We will pay all benefits 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 (see definition below) 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 (see definition below);

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.

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. Your waiting period is 180 days. We do not pay benefits for services you receive during your waiting period, unless otherwise stated.

The waiting period does not apply to respite services and caregiver training. Because we do not apply the waiting period to 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. 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’s Alternative Insurance Plan 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 Veteran’s Affairs facility, unless otherwise required by law;

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

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

Limitations Benefits payable for covered services are subject to maximums and limitations. See the section titled Benefits Provided By The Federal Program’s Alternative Insurance Plan (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.

Catastrophic Coverage Limitation

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 or act of war (declared or undeclared) 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.

Future Purchase Option (For Inflation Protection)

If your weekly benefit amount increases to $500, we will further increase your weekly benefit amount and the remaining portion of your maximum lifetime benefit, as described below. We will send notice of the first increase in the fall of 2009 for the increase that will apply on January 1, 2010. Increases will occur every two years on January 1st thereafter. 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.

An increase under this provision will also increase the remaining portions of: (1) your lifetime maximum for caregiver training; and (2) your calendar year maximum for respite services, at the same rate as your weekly benefit amount.

If you do not want the increase, you must send us a written rejection notice 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.

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 health that is satisfactory to us.

See the section titled When Your Premium May Change.

Effect of Future Purchase Option (FPO) on Monthly Premium and Weekly Benefit Amount

The sets of graphs that follow 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 over time and your weekly 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 and 65 graphs, we have used 20 years. The lengths of time are illustrative only and do not imply that your coverage would end after either 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 weekly benefit amount over time under the weekly benefit amount increase and future purchase option (FPO) under the Federal Program’s Alternative Insurance Plan. You may be eligible for FPO increases when your weekly benefit amount increases to $500. For purposes of the graphs below, the FPO inflation index was assumed to increase at 5% per year. The graphs below only illustrate the first 30 years of premium and benefits. The second graph shows how your weekly benefit amount increases over time, if you do not decline the FPO increases so they take effect, compared to if you do decline the FPO increases, so that your weekly benefit amount does not increase.

Graphs for Comparing Inflation Options for ISSUE AGE 55

The two graphs on this page illustrate the monthly premium and the weekly benefit amount over time under the weekly benefit amount increase and future purchase option (FPO) under the Federal Program’s Alternative Insurance Plan. You may be eligible for FPO increases when your weekly benefit amount increases to $500. For purposes of the graphs below, the FPO inflation index was assumed to increase at 5% per year. The graphs below only illustrate the first 20 years of premium and benefits. The second graph shows how your weekly benefit amount increases over time if you do not decline the FPO increases so they take effect, compared to if you do decline the FPOincreases, so that your weekly benefit amount does not increase.

Graphs for Comparing Inflation Options for ISSUE AGE 65

The two graphs on this page illustrate the monthly premium and the weekly benefit amount over time under the weekly benefit amount increase and future purchase option (FPO) under the Federal Program’s Alternative Insurance Plan. You may be eligible for FPO increases when your weekly benefit amount increases to $500. For purposes of the graphs below, the FPO inflation index was assumed to increase at 5% per year. The graphs below only illustrate the first 20 years of premium and benefits. The second graph shows how your weekly benefit amount increases over time, if you do not decline theFPO increases so they take effect, compared to if you do decline the FPO increases, so that your weekly benefit amount does not increase.

8.

WHEN YOUR PREMIUM MAY CHANGE

Your premium will not increase due to automatic weekly benefit amount increases that may occur.

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.

Your premium will increase for each inflation increase under the future purchase 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.

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

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 it 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 premium that covers 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).

Portability

Your long term care insurance coverage under the Federal Program is 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.

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;

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.

PREMIUMS

The premiums required for coverage under the Federal Program’s Alternative Insurance Plan are shown in the enclosed materials.

12. APPLYING FOR COVERAGE UNDER THE FEDERAL PROGRAM’S ALTERNATIVE INSURANCE PLAN

Anyone who wishes to apply for coverage under the Federal Program’s Alternative Insurance Plan must complete the appropriate application. We must approve your application in order for your coverage to become effective.

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OOC –ALT PLAN PLAN

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Attained Age

Weekly Benefit Amount ($)

FPO (all increases accepted)

FPO (all increases declined)

Increases in Weekly Benefit Amount