Attachment 6C - Early Enrollment Outline of Coverage.doc

FEDERAL LONG TERM CARE INSURANCE PROGRAM (PROGRAM)

P.O. Box 9170

Boston, Massachusetts 02117-9170

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

Program Administrator: Long Term Care Partners, LLC

OUTLINE OF COVERAGE

Group Policy Numbers: 900-001; 900-002

Early Enrollment Benefit Booklet (Benefit Booklet)

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 are incorrect, please contact: Federal Long Term Care Insurance Program, P.O. Box 9170, Boston, Massachusetts 02117-9170. You may also call 1-800-LTC-FEDS (1-800-582-3337).

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 policy so that benefits you receive under the Program should be tax-free. Please consult your tax advisor if you have any questions or need further details.

The 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 Program. 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 purchase the coverage offered under the Program, you will automatically receive a copy of the 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 long term care insurance provided under the 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 Program provides reimbursement, based on the daily benefit amount you select, 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 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.

BENEFITS PROVIDED BY THE PROGRAM

Covered Services

When you apply for coverage, you can select one of the following options or you may request other choices for your daily benefit amounts. The choices range from $50 - $300 per day, in $25 increments.

Comprehensive Plan

Maximum Lifetime Benefit*

$100 daily benefit amount for a 3-year benefit period

$109,500

$150 daily benefit amount for a 3-year benefit period

$164,250

$150 daily benefit amount for a 5-year benefit period

$273,750

* We determine your maximum lifetime benefit by multiplying your daily benefit amount times 365 (the number of days in a year) times 3 (if you select the 3-year benefit period) or times 5 (if you select the 5-year benefit period).

Your daily benefit amount is the most we will pay on any day for reimbursement of covered services, subject to the chart below. Only the amount of benefits we pay will reduce your maximum lifetime benefit. For any day that you receive more than one covered service listed below, the total benefits payable for that day will not exceed the daily benefit amount for the covered service with the highest maximum.

The Program provides reimbursement for the following covered services, as long as they are part of a written plan of care approved by us, up to the percentage of your daily benefit amount listed next to the covered service:

Covered Services

Reimbursement Up To

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

Hospice care at home

Home care provided by a formal caregiver

75% of your daily benefit amount

Informal caregiver services**

Adult day care center

Respite services**

Caregiver training**

Bed reservations**

**See the Benefit Maximums section that follows.

International Benefits

The Program provides benefits for covered services you receive outside the United States, its territories and possessions. When you receive covered services internationally, we will pay benefits for such services up to 80% of the amounts listed above. Only 80% of your maximum lifetime benefit can be used for covered services you receive internationally; the other 20% would be available only for covered services you receive in the United States, its territories and possessions.

For example: Let’s assume that you select the plan above that provides a $150 daily benefit amount for a 5-year benefit period. Your daily benefit amount for covered services you receive internationally would be $120 ($150 x 80%) instead of $150. Out of your maximum lifetime benefit of $273,750, you could use up to 80% ($219,000) for all covered services you receive internationally. The other 20% ($54,750) of your maximum lifetime benefit would be available for covered services you receive in the United States, its territories and possessions.

Alternate Plan Of Care

The Program provides a benefit for an alternate plan of care. Under certain circumstances, the long term care coordinator assigned to you can authorize benefits for services that are not specifically defined as covered services under the Program (for example, making your home wheelchair accessible).

Payment Of Benefits

We will pay all benefits in United States currency.

Benefit Maximums

Your schedule of benefits will show your daily benefit amount and maximum lifetime benefit. It will also show the benefit amounts for each covered service. In addition, specific lifetime or calendar year limitations apply to certain benefits as follows:

informal caregiver services provided by family members: benefits limited to 365 days in your lifetime. (Note: Family members may not live in your home at the time you become eligible for benefits.)

caregiver training: benefits limited to 7 days x your daily benefit amount in your lifetime.

respite services: benefits limited to 30 days x your daily benefit amount per calendar year.

· bed reservations: benefits limited to 30 days per calendar year.

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 certifies that:

you are unable to perform without substantial assistance at least 2 Activities of Daily Living (see definition below) for an expected period of at least 90 days; or you need substantial supervision due to your Severe Cognitive Impairment (see definition below);

we agree with that certification; and a written plan of care has been established for you by a licensed health care practitioner and approved by us.

Activities of Daily Living are the following:

bathing: washing your hair, washing yourself by sponge bath, or in either a tub or shower, including the task of getting into or out of the tub or shower;

dressing: putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs;

transferring: moving into or out of a bed, chair or wheelchair;

toileting: getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene;

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); and/or eating: feeding yourself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously.

Severe Cognitive Impairment is a deterioration or loss in intellectual capacity, such as may occur with Alzheimer’s disease, that places you in jeopardy of harming yourself or others.

Waiting Period

The waiting period is the number of days during which you must be eligible for benefits and receiving covered services before your benefits start. 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. When you apply for coverage, you select the length of your waiting period --- the standard is 90 days, but you may choose 30 days instead.

We do not pay benefits during your waiting period. However, 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 the 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, even though no waiting period applies to hospice care. 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.

Care Coordination Services

Our care coordinators are available under the Program to provide general information about long term care services, assess and approve your need for long term care services and develop a plan for your receipt of long term care services, and then monitor and reassess those services. Our care coordinators can tell you about any providers in your area who offer discounts for the services you need and provide other assistance. Our care coordinators are licensed health care practitioners. Care coordination services are also available to your qualified relatives who are eligible to apply for coverage under the Program, regardless of whether they are covered, as long as you are covered under the Program. (Certain services for qualified relatives may be provided at an additional charge.)

5.

EXCLUSIONS AND LIMITATIONS

Exclusions

The 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 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 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 lives in your home at the time you become eligible for benefits.

Limitations Benefits payable for covered services are subject to maximums and limitations. See the section titled Benefits Provided By The Program (Benefit Maximums subsection).

Coordination of Benefits

The 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 Program, the COB provision allows us to look at other plans that might pay benefits for long term care services you receive. Under the COB provision, total benefits from all plans that pay a long term care benefit to you cannot exceed the actual costs you incur. The other plans we can look at include government programs, group medical benefits, and other employer-sponsored long term care insurance plans. We do not look at Medicaid or individual long term care insurance policies you may have. The COB provision does not apply to international benefits.

Catastrophic Coverage Limitation

If there were a Catastrophic Event, the length of time during which you could receive benefits could be shortened, in consultation with OPM. 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 Program.

6.

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 Program may be adjusted. You have the choice of receiving benefit increases under the Automatic Compound Inflation Option or the Future Purchase Option. Only the Automatic Compound Inflation Option guarantees that your benefits will increase over time, and will not cause your premium to increase.

Automatic Compound Inflation Option

On each anniversary of your original effective date of coverage, 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 send you an offer to increase your daily benefit amount and the remaining portion of your maximum lifetime benefit. The first offer will be made in the fall of 2003 for the increase that will apply on January 1, 2004. Increases will occur every other January 1st thereafter. The increase will be a percentage based upon the change in the 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 send you an offer if you are eligible for benefits or if you have declined a total of three offers.

Offers under this option do not require you to provide proof of your good health, except as noted below. Each time we send you an offer 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 increase offered under the Future Purchase Option.

If you have declined a total of three offers under this option and you later wish to resume receiving offers, you must provide, at your expense, evidence satisfactory to us of your good health.

See the section 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 (ACI) and the Future Purchase Option (FPO) under 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 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 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 daily benefit amount over time under the Automatic Compound Inflation Option (ACI) and the Future Purchase Option (FPO). The graphs assume an initial daily benefit amount of $150, a 90-day waiting period, and a 5-year benefit period. While the ACI benefit will automatically increase at 5% per year, the FPO benefit increases are based on an inflation index that is designed to reflect actual costs. When projecting the FPO increases for the graphs below, this inflation index was assumed to increase at 5% per year. The graphs below only illustrate the first 30 years of premium and benefits.

As you can see from the first graph, your ACI premium does not increase as the benefit increases. With FPO, your premium starts out lower than with ACI. But, as your benefit increases, your FPO premium increases and eventually becomes greater than the ACI 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.

The second graph shows how your daily benefit amount increases over time under ACI 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 ACI benefit.

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 (ACI) and the Future Purchase Option (FPO). The graphs assume an initial daily benefit amount of $150, a 90-day waiting period, and a 5-year benefit period. While the ACI benefit will automatically increase at 5% per year, the FPO benefit increases are based on an inflation index that is designed to reflect actual costs. When projecting the FPO increases for the graphs below, this inflation index was assumed to increase at 5% per year. The graphs below only illustrate the first 20 years of premium and benefits.

As you can see from the first graph, your ACI premium does not increase as the benefit increases. With FPO, your premium starts out lower than with ACI. But, as your benefit increases, your FPO premium increases and eventually becomes greater than the ACI 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.

The second graph shows how your daily benefit amount increases over time under ACI 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 ACI benefit.

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 (ACI) and the Future Purchase Option (FPO). The graphs assume an initial daily benefit amount of $150, a 90-day waiting period, and a 5-year benefit period. While the ACI benefit will automatically increase at 5% per year, the FPO benefit increases are based on an inflation index that is designed to reflect actual costs. When projecting the FPO increases for the graphs below, this inflation index was assumed to increase at 5% per year. The graphs below only illustrate the first 20 years of premium and benefits.

As you can see from the first graph, your ACI premium does not increase as the benefit increases. With FPO, your premium starts out lower than with ACI. But, as your benefit increases, your FPO premium increases and eventually becomes greater than the ACI 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.

The second graph shows how your daily benefit amount increases over time under ACI 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 ACI benefit.

Other Benefit Changes

You may, at any time, request an increase or decrease in your daily benefit amount. In order to receive approval of a request for an increase, you must provide, at your expense, evidence satisfactory to us of your good health. The amount of an increase or decrease is subject to limits available at the time of your request. Any increase that is approved by us will be based on your age and the premium rates when the increase takes effect. See the section titled When Your Premium May Change.

7.

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 will not increase due to an inflation increase 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. However, once you have switched, your premium will not increase for any subsequent inflation increase.

If you request, and we approve, a benefit increase unrelated to 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. If you request a decrease in benefits consistent with available Program options, your premium will decrease.

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

Your premium will not change because you get older or your health changes. However, we may change your premium, if OPM approves the change. Such a change can only be made for a group of enrollees and not on an individual enrollee basis.

8.

WHEN YOU MAY RECEIVE A PREMIUM REFUND

30 Day Free Look

Within 30 days after you receive your Benefit Booklet, you may cancel your coverage if you are not satisfied with it. If you wish to cancel your coverage, you must notify us within 30 days of receiving the Benefit Booklet. Then we will refund your premium within 30 days. It will be as if the coverage was never issued.

If You Later Cancel Or On Your Death

We will refund any premium that you paid to cover any period after the date of your death or after the effective date of your cancellation.

9.

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, provided you paid premium through that date;

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 Program is portable. This means that once you have coverage under the 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 as described in the subsection above titled Portability.

10.

PREMIUMS

The premiums required for coverage under the Program are shown in the enclosed materials.

11.

UNDERWRITING

Anyone who wishes to apply for coverage under the Program must complete the appropriate application. We must approve your application in order for your coverage to become effective.

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