For Changes in benefits see page 24.

Authorized for distribution by

United States Office of Personnel Management

QualChoice Health Plan of North Carolina, Inc. 1999 A Health Maintenance Organization with a Point of Service Product

Serving: Northwestern North Carolina

Enrollment in this Plan is limited; see page 10 for requirements. Enrollment Code:

7Q1 Self only 7Q2 Self and family

Visit the OPM website at http:// www. opm. gov/ insure and this Plans website at http:// www. wfubmc. edu/ qualchoice

RI 73- 767

QualChoice of North Carolina, Inc.

2 QualChoice of North Carolina, Inc. located at 2000 West First Street, Suite 210, Winston- Salem, NC 27104, has entered into a contract

(CS 2822) with the Office of Personnel Management (OPM) as authorized by the Federal Employees Health Benefits (FEHB) law, to provide a comprehensive medical plan herein called QualChoice, or the Plan.

This brochure is the official statement of benefits on which you can rely. A person enrolled in the Plan is entitled to the benefit stated in this brochure. If enrolled for Self and Family, each eligible family member is also entitled to these benefits.

Premiums are negotiated with each plan annually. Benefit changes are effective January 1, 1999, and are shown on page 24 of this brochure.

Table of Contents

Page

Inspector General Advisory on Fraud............................................................................................................................ 3 General Information............................................................................................................................................... 3- 7

Confidentiality; If you are a new member; If you are hospitalized when you change plans; Your responsibility; Things to keep in mind; Coverage after enrollment ends (Former spouse coverage; Temporary continuation of coverage; Conversion to individual coverage; and Certificate of Creditable Coverage)

Facts about this Plan.................................................................................................................................................. 7- 10

Facts about Mental Condition/ Substance Abuse Benefits; Who provides care to Plan members? Information you have a right to know; Role of a primary care doctor; Choosing your doctor; Referrals for specialty care; For new members; Hospital care; Outof- pocket maximum; Deductible carryover; Submit claims promptly; Experimental/ investigational determinations; Other considerations; The Plans service area General Limitations.............................................................................................................................................. 11- 12

Important notice; Circumstances beyond Plan control; Arbitration of claims; Other sources of benefits

General Exclusions...................................................................................................................................................... 12 Benefits................................................................................................................................................................. 13- 18

Medical and Surgical Benefits; Hospital/ Extended Care Benefits; Emergency Benefits; Mental Conditions/ Substance Abuse Benefits; Prescription Drug Benefits

Other Benefits.......................................................................................................................................................... 19

Dental care

Point of Service Benefits........................................................................................................................................... 20 Non- FEHB Benefits.................................................................................................................................................. 21 How to Obtain Benefits........................................................................................................................................ 22- 23 How QualChoice Changes January 1999.......................................................................................................................... 24 Summary of Benefits.............................................................................................................................................. 25 Rate Information................................................................................................................................................................. 26

3

Inspector General Advisory: Stop Health Care Fraud!

Fraud increases the cost of health care for everyone. Anyone who intentionally makes a false statement or a false claim in order to obtain FEHB benefits or increase the amount of FEHB benefits is subject to prosecution for FRAUD. This could result in CRIMINAL PENALTIES. Please review all medical bills, medical records and claims statements carefully. If you find that a provider, such as a doctor, hospital or pharmacy, charged your plan for services you did not receive, billed for the same service twice, or misrepresented any other information, take the following actions:

$ Call the provider and ask for an explanation - sometimes the problem is a simple error.

$ If the provider does not resolve the matter, or if you remain concerned, call your plan at 336- 716- 0911 or 800- 816- 0911 and explain the situation.

$ If the matter is not resolved after speaking to your plan (and you still suspect fraud has been committed), call or write:

THE HEALTH CARE FRAUD HOTLINE 202- 418- 3300

The Office of Personnel Management Office of the Inspector General Fraud Hotline

1900 E Street, N. W., Room 6400 Washington, D. C., 20415

The inappropriate use of membership identification cards, e. g., to obtain services for a person who is not an eligible family member or after you are no longer enrolled in the Plan, is also subject to review by the Inspector General and may result in an adverse administrative action by your agency.

General Information Confidentiality Medical and other information provided to the Plan, including claim files, is kept confidential and will

be used only: 1) by the Plan and its subcontractors for internal administration of the Plan, coordination of benefit provisions with other plans, and subrogation of claims; 2) by law enforcement officials with authority to investigate and prosecute alleged civil or criminal actions; 3) by OPM to review a disputed claim or perform its contract administration functions; 4) by OPM and the General Accounting Office when conducting audits as required by the FEHB law; or 5) for bona fide medical research or education. Medical data that does not identify individual members may be disclosed as a result of the bona fide medical research or education.

If you are a new member

Use this brochure as a guide to coverage and obtaining benefits. There may be a delay before you receive your identification card and member information from the Plan. Until you receive your ID card, you may show your copy of the SF 2809 enrollment form or your annuitant confirmation letter from OPM to a provider or Plan facility as proof of enrollment in this Plan. If you do not receive your ID card within 60 days after the effective date of your enrollment, you should contact the Plan.

If you made your open season change by using Employee Express and have not received your new ID card by the effective date of your enrollment, call the Employee Express HELP number to request a confirmation letter. Use that letter to confirm your new coverage with Plan providers.

If you are a new member of this Plan, benefits and rates begin on the effective date of your enrollment, as set by your employing office or retirement system. As a member of this Plan, once your enrollment is effective, you will be covered only for services provided or arranged by a Plan doctor except in the case of emergency as described on page 16 or when you self- refer for point of service, or POS, benefits as described on page 20. If you are confined in a hospital on the effective date, you must notify the Plan so that it may arrange for the transfer of your care to Plan providers. See "If you are hospitalized" on page 4.

General Information continued 4

If you are a new member continued

FEHB plans may not refuse to provide benefits for any condition you or a covered family member may have solely on the basis that it was a condition that existed before you enrolled in a plan under the FEHB Program. If you are

hospitalized

If you change plans or options, benefits under your prior plan or option cease on the effective date of your enrollment in your new plan or option, unless you or a covered family member are confined in a hospital or other covered facility or are receiving medical care in an alternative care setting on the last day of your enrollment under the prior plan or option. In that case, the confined person will continue to receive benefits under the former plan or option until the earliest of (1) the day the person is discharged from the hospital or other covered facility (a move to an alternative care setting does not constitute a discharge under this provision), or (2) the day after the day all inpatient benefits have been exhausted under the prior plan or option, or (3) the 92nd day after the last day of coverage under the prior plan or option. However, benefits for other family members under the new plan will begin on the effective date. If your plan terminates participation in the FEHB Program in whole or in part, or if the Associate Director for Retirement and Insurance orders an enrollment change, this continuation of coverage provision does not apply; in such case, the hospitalized family members benefits under the new plan begin on the effective date of enrollment.

Your responsibility It is your responsibility to be informed about your health benefits. Your employing office or retirement systemcan provide information about: when you may change your enrollment; who family

members are; what happens when you transfer, go on leave without pay, enter military service, or retire; when your enrollment terminates; and the next open season for enrollment. Your employing office or retirement system will also make available to you an FEHB Guide, brochures and other materials you need to make an informed decision.

Things to keep in mind

The benefits in this brochure are effective on January 1 for those already enrolled in this Plan; if you changed plans or plan options, see "If you are a new member" above. In both cases, however, the Plan's new rates are effective the first day of the enrollee's first full pay period that begins on or after January 1 (January 1 for all annuitants).

Generally, you must be continuously enrolled in the FEHB Program for the last five years before you retire to continue your enrollment for you and any eligible family members after you retire.

The FEHB Program provides Self- Only coverage for the enrollee alone or Self and Family coverage for the enrollee, his or her spouse, and unmarried dependent children under age 22. Under certain circumstances, coverage will also be provided under a family enrollment for a disabled child 22 years of age or older who is incapable of self- support.

An enrollee with Self- Only coverage who is expecting a baby or the addition of a child may change to a Self and Family enrollment up to 60 days after the birth or addition. The effective date of the enrollment change is the first day of the pay period in which the child was born or became an eligible family member. The enrollee is responsible for his or her share of the Self and Family premiumfor that time period; both parent and child are covered only for care received from Plan providers, except for emergency or POS benefits.

You will not be informed by your employing office (or your retirement system) or your Plan when a family member loses eligibility.

You must direct questions about enrollment and eligibility, including whether a dependent age 22 or older is eligible for coverage, to your employing office or retirement system. The Plan does not determine eligibility and cannot change an enrollment status without the necessary information from the employing agency or retirement system.

General Information continued 5

Things to keep in mind continued

An employee, annuitant, or family member enrolled in one FEHB plan is not entitled to receive benefits under any other FEHB plan.

C Report additions and deletions, including divorces, of covered family members to the Plan promptly.

C If you are an annuitant or former spouse with FEHB coverage and you are also covered by Medicare Part B, you may drop your FEHB coverage and enroll in a Medicare prepaid plan when one is available in your area. If you later change your mind and want to re- enroll in FEHB, you may do so at the next open season, or whenever you involuntarily lose coverage in the Medicare prepaid plan or move out of the area it serves.

Most Federal annuitants have Medicare Part A. If you do not have Medicare Part A, you may enroll in a Medicare prepaid plan, but you will probably have to pay for hospital coverage in addition to the Part B premium. Before you join the plan, ask whether they will provide hospital benefits and, if so, what you will have to pay. You may also remain enrolled in this Plan when you join a Medicare prepaid plan.

Contact your local Social Security Administration (SSA) office for information on local Medicare prepaid plans (also known as Coordinated Care Plans or Medicare HMOs) or request it from SSA at 1- 800- 638- 6833. Contact your retirement systemfor information on droppingyour FEHB enrollment and changing to a Medicare prepaid plan. See page 21 for information on the Medicare prepaid plan offered by this Plan.

Federal annuitants are not required to enroll in Medicare Part B (or Part A) in order to be covered under the FEHB Program nor are their FEHB benefits reduced if they do not have Medicare Part B (or Part A).

Coverage after enrollment ends

When an employee's enrollment terminates because of separation from Federal service or when a family member is no longer eligible for coverage under an employee or annuitant enrollment, and the person is not otherwise eligible for FEHB coverage, he or she generally will be eligible for a free 31- day extension of coverage. The employee or family member may also be eligible for one of the following:

Former spouse coverage

When a Federal employee or annuitant divorces, the former spouse may be eligible to elect coverage under the spouse equity law. If you are recently divorced or anticipate divorcing, contact the employee's employing office (personnel office) or retiree's retirement system to get more facts about electing coverage.

Temporary continuation of coverage (TCC)

If you are an employee whose enrollment is terminated because you separate from service, you may be eligible to temporarilycontinue your health benefits coverage under the FEHB Programin anyplan for which you are eligible. Ask your employing office for RI 79- 27, which describes TCC, and for RI 70- 5, the FEHB Guide for individuals eligible for TCC. Unless you are separated for gross misconduct, TCC is available to you if you are not otherwise eligible for continued coverage under the Program. For example, you are eligible for TCC when you retire if you are unable to meet the five- year enrollment requirement for continuation of enrollment after retirement.

Your TCC begins after the initial free 31- day extension of coverage ends and continues for up to 18 months after your separation fromservice (that is, if you use TCC until it expires 18 months following separation, you will only pay for 17 months of coverage). Generally, you must pay the total premium (both the Government and employee shares) plus a 2 percent administrative charge. If you use your TCC until it expires, you are entitled to another free 31- day extension of coverage when you may

General Information continued 6

Temporary continuation of coverage (TCC) continued

convert to nongroup coverage. If you cancel your TCC or stop paying premiums, the free 31- day extension of coverage and conversion option are not available.

Children or former spouses who lose eligibility for coverage because they no longer qualify as family members (and who are not eligible for benefits under the FEHB Program as employees or under the spouse equity law) also may qualify for TCC. They also must pay the total premium plus the 2 percent administrative charge. TCC for former family members continues for up to 36 months after the qualifying event occurs, for example, the child reaches age 22 or the date of the divorce. This includes the free 31- day extension of coverage. When their TCC ends (except by cancellation or nonpayment of premium), they are entitled to another free 31- day extension of coverage when they may convert to nongroup coverage.

NOTE: If there is a delay in processing the TCC enrollment, the effective date of the enrollment is still the 32nd day after regular coverage ends. The TCC enrollee is responsible for premium payments retroactive to the effective date and coverage may not exceed the 18 or 36 month period noted above.

Notification and election requirements

C Separating employees Within 61 days after an employee's enrollment terminates because of separation from service, his or her employing office must notify the employee of the opportunity to elect TCC. The employee has 60 days after separation (or after receiving the notice from the employing office, if later) to elect TCC.

C Children You must notify your employing office or retirement system when a child becomes eligible for TCC within 60 days after the qualifying event occurs, for example, the child reaches age 22 or marries.

C Former spouses You or your former spouse must notify the employing office or retirement system of the former spouse's eligibility for TCC within 60 days after the termination of the marriage. A former spouse may also qualify for TCC if, during the 36- month period of TCC eligibility, he or she loses spouse equity eligibility because of remarriage before age 55 or loss of the qualifying court order. This applies even if he or she did not elect TCC while waiting for spouse equity coverage to begin. The former spouse must contact the employing office within 60 days of losing spouse equity eligibility to apply for the remaining months of TCC to which he or she is entitled.

The employing office or retirement system has 14 days after receiving notice from you or the former spouse to notify the child or the former spouse of his or her rights under TCC. If a child wants TCC, he or she must elect it within 60 days after the date of the qualifying event (or after receiving the notice, if later). If a former spouse wants TCC, he or she must elect it within 60 days after any of the following events: the date of the qualifying event or the date he or she receives the notice, whichever is later; or the date he or she loses coverage under the spouse equity law because of remarriage before age 55 or loss of the qualifying court order.

Important: The employing office or retirement system must be notified of a child's or former spouse's eligibility for TCC within the 60- day time limit. If the employing office or retirement system is not notified, the opportunity to elect TCC ends 60 days after the qualifying event in the case of a child and 60 days after the change in status in the case of a former spouse.

Conversion to individual coverage

When none of the above choices are available or chosen when coverage as an employee or family member ends, or when TCC coverage ends (except by cancellation or nonpayment of premium), you may be eligible to convert to an individual, nongroup contract. You will not be required to provide evidence of good health and the plan is not permitted to impose a waiting period

General Information continued 7

Conversion to individual coverage

continued or limit coverage for preexisting conditions. If you wish to convert to an individual contract, you

must apply in writing to the carrier of the plan in which you are enrolled within 31 days after receiving notice of the conversion right from your employing agency. A family member must apply to convert within the 31- day free extension of coverage that follows the event that terminates coverage, e. g., divorce or reaching age 22. Benefits and rates under the individual contract may differ from those under the FEHB Program.

Certificate of Creditable Coverage

Under Federal law, if you lose coverage under the FEHB Program, you should automatically receive a Certificate of Group Health Plan Coverage from the last FEHB Plan to cover you. This certificate, along with any certificates you receive from other FEHB plans you may have been enrolled in, may reduce or eliminate the length of time a preexisting condition clause can be applied to you by a new non- FEHB insurer. If you do not receive a certificate automatically, you must be given one on request.

Facts about this Plan

This Plan is a comprehensive medical plan, sometimes called a health maintenance organization (HMO) that offers a point of service, or POS, product. Whenever you need services, you may choose to obtain them from your personal doctor within the Plans provider network or go outside the network for treatment. Within the Plans network you are required to select a personal doctor who will provide or arrange for your care and you will pay minimal amounts for comprehensive benefits. There are no claim forms when Plan doctors are used. When you choose a non- Plan doctor or other non- Plan provider under the POS option, you will pay a substantial portion of the charges and the benefits available may be less comprehensive. See page 20 for more information.

Your decision to join an HMO should be based on your preference for the plans benefits and delivery system, not because a particular provider is in the plans network. You cannot change plans because a provider leaves the HMO.

Facts about Mental Condition/ Substance Abuse Benefits

A network of mental health and chemical dependency providers is available to you. This network includes psychiatrists, licensed clinical psychologists, certified social workers, and certified chemical dependencycounselors. For benefits you must call 1- 800- 475- 7900 for a referral based on your needs

and the networks availability and experience with your type of problem. Because the Plan provides or arranges your care and pays the cost, it seeks efficient and effective delivery of health services. By controlling unnecessary or inappropriate care, it can afford to offer a comprehensive range of benefits. In addition to providing comprehensive health services and benefits for accidents, illness and injury, the Plan emphasizes preventive benefits such as office visits, physicals, immunizations and well- baby care. You are encouraged to get medical attention at the first sign of illness.

Who provides care to Plan members?

You decide. The QualChoice network includes physicians on the facultyof Wake Forest University School of Medicine as well as community physicians and other health care providers. Network hospitals include Wake Forest University Baptist Medical Center and other area facilities. However, as a member of QualChoice, you are free to choose any doctor or hospital each time you need medical care under the POS benefits.

Information you have the right to know

All carriers in the FEHB Program must provide certain information to you. If you did not receive information about this Plan, you can obtain it by calling the Carrier at 1- 800- 816- 0911 or you may write the Carrier at PO Box 340, Winston- Salem, NC 27102- 0340. You may also contact the Carrier by faxat336- 716- 0920, at its website at http:/ www. wfubmc. edu/ qualchoice or by email at klyates. wfubmc. edu

Information that must be made available to you includes:

Disenrollment rates for 1997.

Facts about this Plan continued 8

Information you have the right to know continued

Compliance with State and Federal licensing or certification requirements and the dates met. If noncompliant, the reason for noncompliance. Accreditations by recognized accrediting agencies and the dates received. Carriers type of corporate form and years in existence. Whether the carrier meets State, Federal and accreditation requirements for fiscal

solvency, confidentiality and transfer of medical records. All initial decisions and reconsiderations are performed by the QualChoice Medical Director and/ or his physician designee. Plan preauthorization and utilization procedures for utilization management are available upon request regarding information pertinent to the patients clinical circumstances. Use of clinical protocols, practice guidelines and or utilization review standards are used in the QualChoice utilization management process. Upon written request to the Plan, the member may obtain a copy of such information as it pertains to the patients clinical circumstances. You can write to the Plan at PO Box 340, Winston- Salem, NC 27102- 0340. You may also contact the Plan by fax at 336- 716- 0920, or by email: klyates. wfubmc. edu

If a specific brand of covered drug is not available with our plan, you can have your physician write QualChoice a letter stating the medical necessity (for that brand) and requesting medical review. You should ask your physician to send the letter to the Plan at PO Box 340, WinstonSalem, NC 27102- 0340, or they can fax the letter to 336- 716- 0920, or send the letter by email: klyates. wfubmc. edu

QualChoice has disease management programs for persons identified with selected disease processes or disabilities.

Role of a primary care doctor

The first and most important decision each member must make is the selection of a primary care doctor. The decision is important since it is through this doctor that all other health services, particularly those of specialists, are obtained. It is the responsibility of your primary care doctor to obtain any necessary referrals from the Plan before referring you to a specialist or making arrangements for hospitalization. Services of other providers are covered only when you have been referred by your primary care doctor or when you use POS benefits, with the following exception: females age 13 years or older may see an obstetrics and gynecology PCP for obstetrical and gynecological care. Female enrollees must select an OB/ GYN physician. If your medical PCP does your OB/ GYN care, you may select that physician as your OB/ GYN PCP as well as your medical PCP.

Choosing your doctor

The Plans provider directory lists primary care doctors (family practitioners, pediatricians, OB/ GYNs and internists), with their locations and phone numbers, and notes whether or not the doctor is accepting new patients. Directories are updated monthly and are available at the time of enrollment or upon request by calling the Customer Service Department at 336- 716- 0911 or 1- 800- 816- 0911; you can also find out if your doctor participates with this Plan by calling this number. If you are interested in receiving care from a specific provider who is listed in the directory, call the provider to verify that he or she still participates with the Plan and is accepting new patients.

Important note: When you enroll in this Plan, services (except for emergency or POS benefits) are provided through the Plan's delivery system; the continued availability and/ or participation of any one doctor, hospital, or other provider cannot be guaranteed.

If you enroll, you will be asked to let the Plan know which primary care doctor( s) youve selected for you and each member of your family by sending a selection form to the Plan. If you need help choosing a doctor, call the Plan. Members may change their doctor selection by notifying the Plan 30 days in advance.

Facts about this Plan continued 9

Choosing your doctor continued

If you are receiving services from a doctor who leaves the Plan, the Plan will pay for covered services until the Plan can arrange for you to be seen by another participating doctor.

Referrals for specialty care

Except in a medical emergency, or when a primary care doctor has designated another doctor to see his or her patients, or when you choose to use the Plans POS benefits, you must receive a referral from your primary care doctor before seeing any other doctor or obtaining special services. Referral to a participating specialist is given at the primary care doctors discretion; if non- Plan specialists or consultants are required, the primary care doctor will arrange appropriate referrals.

When you receive a referral fromyour primary care doctor, you must return to the primary care doctor after the consultation unless your doctor authorizes additional visits. All follow- up care must be provided or authorized by the primary care doctor. Do not go to the specialist for a second visit unless your primary care doctor has arranged for, and the Plan has issued a referral letter in advance.

If you have a chronic, complex, or serious medical condition that causes you to see a Plan specialistfrequently,yourprimary caredoctorwilldevelop atreatmentplan with you and your health plan that allows an adequate number of direct access visits with that specialist. The treatment plan will permit you to visit your specialist without the need to obtain further referrals.

For new members If you are already under the care of a specialist who is a Plan participant, you must still obtain a referral from a Plan primary care doctor for the care to be covered by the Plan. If the doctor who

originally referred you to this specialist is now your Plan primary care doctor, you need only call to explain that you are now a Plan member and ask that you be referred for your next appointment.

If you are selecting a new primary care doctor and want to continue with this specialist, you must call so that the primary care doctor can decide whether to treat the condition directly or refer you back to the specialist.

Hospital care If you require hospitalization, your primary care doctor or authorized specialist will make the necessary arrangements and continue to supervise your care. This Plan uses hospitals and/ or

surgical centers for outpatient surgery. Out- of- pocket maximum

Your out- of- pocket expenses for benefits under this Plan are limited to the stated copayments required for a few benefits, except for the POS options, under which option 2 has a $800 individual, $2,000 family maximum; and option 3 has a $900 individual, $2,250 family maximum.

Deductible carryover

If you changed to this Plan during open season from a plan with a deductible and the effective date of the change was after January 1, any expenses that would have applied to that plans deductible will be covered by your old plan if they are for care you got in January before the effective date of your coverage in this Plan. If you have already met the deductible in full, your old plan will reimburse these covered expenses. If you have not met it in full, your old plan will first apply your covered expenses to satisfy the rest of the deductible and then reimburse you for any additional covered expenses. The old plan will pay these covered expenses according to this years benefits; benefit changes are effective January 1.

Submit claims promptly

When you are required to submit a claim to this Plan for covered expenses, submit your claim promptly. The Plan will not pay benefits for claims submitted later than December 31 of the calendar year following the year in which the expense was incurred unless timely filing was prevented by administrative operations of Government or legal incapacity, provided the claim was submitted as soon as reasonably possible.

Facts about this Plan continued 10

Experimental/ investigational determinations

The plan may cover experimental and investigational treatment if the Plan determines that the proposed treatment has demonstrated effectiveness in treating a particular condition through phase III clinical trials performed by a panel of medical and scientific experts. The plan may also use the findings and opinions of their medical quality improvement committee based on its review of publications, regulations, medical literature, accepted regional medical practices and reports by applicable federal agencies.

Other considerations

Plan providers will follow generally accepted medical practice in prescribing any course of treatment. Before you enroll in this Plan, you should determine whether you will be able to accept treatment or procedures that may be recommended by Plan providers.

The Plans service area

The service area for this Plan, where Plan providers and facilities are located, is described below. You must live or work in the service area to enroll in this Plan.

The service area for this Plan includes the following areas: Alamance, Alexander, Alleghany, Ashe, Burke, Caldwell, Catawba, Davidson, Davie, Forsyth, Guilford, Iredell, Randolph, Rockingham, Rowan, Stokes, Surry, Watauga , Wilkes and Yadkin Counties.

Benefits for care outside the service area are limited to emergency services, as described on page 16, and to services covered under Point of Service Benefits, as described on page 20.

If you or a covered family member move outside the service area, you may enroll in another approved plan. It is not necessary to wait until you move or for the open season to make such a change; contact your employing office or retirement system for information if you are anticipating a move.

11

General Limitations Important notice Although a specific service may be listed as a benefit, it will be covered for you only if, in the

judgment of your Plan doctor, it is medically necessary for the prevention, diagnosis, or treatment of your illness or condition. No oral statement of any person shall modify or otherwise affect the benefits, limitations and exclusions of this brochure, convey or void any coverage, increase or reduce any benefits under this Plan or be used in the prosecution or defense of a claim under this Plan. This brochure is the official statement on which you can rely.

Circumstances beyond Plan control

In the event of major disaster, epidemic, war, riot, civil insurrection, disability of a significant number of Plan providers, complete or partial destruction of facilities, or other circumstances beyond the Plans control, the Plan will make a good faith effort to provide or arrange for covered services. However, the Plan will not be responsible for any delay or failure in providing service due to lack of available facilities or personnel.

Arbitration of claims

Any claim for damages for personal injury, mental disturbance or wrongful death arising out of the rendition of or failure to render services under this contract must be submitted to binding arbitration.

Other sources of benefits

This section applies when you or your family members are entitled to benefits from a source other than this Plan. You must disclose information about other sources of benefits to the Plan and complete all necessary documents and authorizations requested by the Plan.

Medicare If you or a covered family member is enrolled in this Plan and Medicare Part A and/ or Part B, the Plan will coordinate benefits according to Medicares determination of which coverage is primary. However, this Plan will not cover services, except those for emergencies, unless you use Plan providers or the services are covered under this Plans POS benefits. You must tell your Plan that you or your family member are eligible for Medicare. Generally, that is all you will need to do, unless your Plan tells you that you need to file a Medicare claim.

Group health insurance and automobile insurance

This coordination of benefits (double coverage) provision applies when a person covered by this Plan also has, or is entitled to benefits from, any other group health coverage, or is entitled to the payment of medical and hospital costs under no- fault or other automobile insurance that pays benefits without regard to fault. Information about the other coverage must be disclosed to this Plan.

When there is double coverage for covered benefits, other than emergency services from non- Plan providers, this Plan will continue to provide its benefits in full, but is entitled to receive payment for the services and supplies provided, to the extent that they are covered by the other coverage, no- fault or other automobile insurance or any other primary plan. One plan normally pays its benefits in full as the primary payer, and the other plan pays a reduced

benefit as the secondary payer. When this Plan is the secondary payer, it will pay the lesser of (1) its benefits in full or (2) a reduced amount which, when added to the benefits payable by the other coverage, will not exceed reasonable charges. The determination of which health coverage is primary (pays its benefits first) is made according to guidelines provided by the National Association of Insurance Commissioners. When benefits are payable under automobile insurance, including no- fault, the automobile insurer is primary (pays its benefits first) if it is legally obligated to provide benefits for health care expenses without regard to other health benefits coverage the enrollee may have. This provision applies whether or not a claim is filed under the other coverage. When applicable, authorization must be given to this Plan to obtain information about benefits or services available from the other coverage, or to recover overpayments from other coverages.

General Limitations continued 12

CHAMPUS If you are covered by both this Plan and the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS), this Plan will pay benefits first. As a member of a prepaid plan, special

limitations on your CHAMPUS coverage apply; your primary care provider must authorize all care unless you use a non- Plan provider for POS benefits as described on page 20. See your CHAMPUS Health Benefits Advisor if you have questions about CHAMPUS coverage.

Medicaid If you are covered by both this Plan and Medicaid, this Plan will pay benefits first.

Workers compensation

The Plan will not pay for services required as the result of occupational disease or injury for which any medical benefits are determined by the Office of Workers Compensation Programs (OWCP) to be payable under workers compensation (under Section 8103 of Title 5, U. S. C.) or by a similar agency under another Federal or State law. This provision also applies when a third party injury settlement or other similar proceeding provides medical benefits in regard to a claim under workers compensation or similar laws. If medical benefits provided under such laws are exhausted, this Plan will be financially responsible for services or supplies that are otherwise covered by this Plan. The Plan is entitled to be reimbursed by OWCP (or the similar agency) for services it provided that were later found to be payable by OWCP (or the agency).

DVA facilities, DoD facilities, and Indian Health Service

Facilities of the Department of Veterans Affairs, the Department of Defense, and the Indian Health Service are entitled to seek reimbursement from the Plan for certain services and supplies provided to you or a family member to the extent that reimbursement is required under the Federal statutes governing such facilities.

Other Government agencies

The Plan will not provide benefits for services and supplies paid for directly or indirectly by any other local, State, or Federal Government agency.

Liability insurance and third party actions

If a covered person is sick or injured as a result of the act or omission of another person or party, the Plan requires that it be reimbursed for the benefits provided in an amount not to exceed the amount of the recovery, or that it be subrogated to the persons rights to the extent of the benefits received under this Plan, including the right to bring suit in the persons name. If you need more information about subrogation, the Plan will provide you with its subrogation procedures. General Exclusions All benefits are subject to the limitations and exclusions in this brochure. Although a specific service may be listed as a benefit, it will

not be covered for you unless your Plan doctor determines it is medically necessary to prevent, diagnose or treat your illness or condition. The following are excluded:

Care by non- Plan doctors or hospitals except for authorized referrals or emergencies (see Emergency Benefits) or eligible self- referred services obtained under Point of Service Benefits; Expenses incurred while not covered by this Plan; Services furnished or billed by a provider or facility barred from the FEHB Program; Services not required according to accepted standards of medical, dental, or psychiatric practice; Procedures, treatments, drugs or devices that are experimental or investigational; Procedures, services, drugs and supplies related to sex transformations; and Procedures, services, drugs and supplies related to abortions except when the life of the mother would be

endangered if the fetus were carried to term or when the pregnancy is the result of an act of rape or incest.

13

Medical and Surgical Benefits What is covered A comprehensive range of preventive, diagnostic and treatment services is provided by Plan doctors

and other Plan providers. This includes all necessary office visits; you pay a $10 office visit copay, but no additional copay for laboratory tests and X- rays. Within the service area, house calls will be provided if, in the judgment of the Plan doctor, such care is necessary and appropriate; you pay a $10 copay for a doctors house call and $10 for home visits by nurses and health aides.

The following services are included and are subject to the office visit copay unless stated otherwise:

Preventive care, including well- baby care and periodic check- ups (well- baby visits have no copay until age 2)

Mammograms will be given as routine screenings for any woman determined to be at risk for breast cancer. Mammograms are covered as follows: for women age 35 through 39, one mammogram during these five years; for women age 40 through 49, one mammogram every one or two years; and for women 50 years of age or older, one mammogram every year. In addition to routine screening, mammograms are covered when prescribed by the doctor as medically necessary to diagnose or treat illness.

Routine immunizations and boosters with no copay except for the office visit Consultations by specialists Diagnostic procedures, such as laboratory tests and X- rays with no copay Complete obstetrical (maternity) care for all covered females, including prenatal, delivery and

postnatal care by a Plan doctor. Copays are waived for maternity care. The mother, at her option, may remain in the hospital up to 48 hours after a regular delivery and 96 hours after a caesarean delivery. Inpatient stays will be extended if medically necessary. If enrollment in the Plan is terminated during pregnancy, benefits will not be provided after coverage under the Plan has ended. Ordinary nursery care of the newborn child during the covered portion of the mother's hospital confinement for maternity will be covered under either a Self Only or Self and Family enrollment; other care of an infant who requires definitive treatment will be covered only if the infant is covered under a Self and Family enrollment. Voluntary sterilization and family planning services Diagnosis and treatment of diseases of the eye Allergy testing and treatment, including testing and treatment materials (such as allergy serum) The insertion of internal prosthetic devices, such as pacemakers and artificial joints Cornea, heart, kidney and liver transplants; allogeneic (donor) bone marrow transplants;

autologous bone marrow transplants (autologous stem cell and peripheral stem cell support) for the following conditions: acute lymphocytic or non- lymphocytic leukemia, advanced Hodgkin's lymphoma, advanced non- Hodgkin's lymphoma, advanced neuroblastoma, breast cancer; multiple myeloma; epithelial ovarian cancer; and testicular, mediastinal, retroperitoneal and ovarian germ cell tumors. Transplants are covered when approved by the Medical Director. Related medical and hospital expenses of the donor are covered when the recipient is covered by this Plan.

Women who undergo mastectomies may, at their option, have this procedure performed on an inpatient basis and remain in the hospital up to 48 hours after the procedure.

Dialysis Chemotherapy, radiation therapy, and inhalation therapy Surgical treatment of morbid obesity Orthopedic devices, such as braces; foot orthotics - limited to 1 per year Prosthetic devices, such as artificial limbs and lenses following cataract removal Durable medical equipment, such as wheelchairs and hospital beds Chiropractic services - except spinal manipulation Home health services of nurses and health aides, including intravenous fluids and medications,

when prescribed by your Plan doctor, who will periodically review the program for continuing appropriateness and need.

Medical and Surgical Benefits continued 14

What is covered

continued

All necessary medical or surgical care in a hospital or extended care facility from Plan doctors and other Plan providers, at no additional cost to you.

Limited benefits Oral and maxillofacial surgery is provided for nondental surgical and hospitalization procedures for congenital defects, such as cleft lip and cleft palate, and for medical or surgical procedures

occurring within or adjacent to the oral cavity or sinuses including, but not limited to, treatment of fractures and excision of tumors and cysts. Diagnostic, therapeutic or surgical procedures involving bones and joints of the skeletal structure are covered if medically necessary to treat a condition which prevents normal functioning of the particular bone or joint involved. The coverage for procedures involving bones or joints of the jaw, face or head are subject to the same conditions and limitations as other bones and joints.

Reconstructive surgery will be provided to correct a condition resulting from a functional defect or from an injury or surgery that has produced a major effect on the member's appearance and if the condition can reasonably be expected to be corrected by such surgery.

Short- term rehabilitative therapy (physical, speech and occupational) is provided on an inpatient or outpatient basis for up to two months per condition if significant improvement can be expected within two months; you pay nothing per outpatient session. Speech therapy is limited to treatment of certain speech impairments of organic origin. Occupational therapy is limited to services that assist the member to achieve and maintain self- care and improved functioning in other activities of daily living.

Diagnosis and treatment of infertility is covered; you pay $10 per visit. The following types of artificial insemination are covered: intravaginal insemination (IVI); intracervical insemination (ICI) and intrauterine insemination (IUI); you pay nothing ; cost of donor sperm is not covered. Fertility drugs are not covered under the Prescription Drug Benefit. Other assisted reproductive technology (ART) procedures, such as in vitro fertilization and embryo transfer, are not covered.

Cardiac rehabilitation following a heart transplant, bypass surgery or a myocardial infarction is provided; you pay nothing.

What is not covered Physical examinations that are not necessary for medical reasons, such as those required for obtaining or continuing employment or insurance, attending school or camp, or travel

Reversal of voluntary, surgically- induced sterility Surgery primarily for cosmetic purposes Homemaker services Hearing aids Transplants not listed as covered Long- term rehabilitative therapy Spinal Manipulation Corrective eyeglasses, frames and contact lenses, including the fitting of contact lenses, except

as necessary for the first pair of corrective lenses following cataract surgery. Refractions, including lens prescriptions

15

Hospital/ Extended Care Benefits What is covered

Hospital care The Plan provides a comprehensive range of benefits with no dollar or day limit when you are hospitalized under the care of a Plan doctor. You pay nothing. All necessary services are covered, including:

Semiprivate room accommodations; when a Plan doctor determines it is medically necessary, the doctor may prescribe private accommodations or private duty nursing care Specialized care units, such as intensive care or cardiac care units

Extended care The Plan provides a comprehensive range of benefits with no dollar or day limit when full- time skilled nursing care is necessary and confinement in a skilled nursing facility is medically appropriate

as determined by a Plan doctor and approved by the Plan. You pay nothing. All necessary services are covered, including:

Bed, board and general nursing care Drugs, biologicals, supplies, and equipment ordinarily provided or arranged by the skilled

nursing facility when prescribed by a Plan doctor.

Hospice care Supportive and palliative care for a terminally ill member is covered in the home or a hospice facility. Services include inpatient and outpatient care, and family counseling; these services are provided

under the direction of a Plan doctor who certifies that the patient is in the terminal stages of illness, with a life expectancy of approximately six months or less.

Ambulance service

Benefits are provided for ambulance transportation ordered or authorized by a Plan doctor.

Limited benefits Acute inpatient detoxification

Hospitalization for medical treatment of substance abuse is limited to emergency care, diagnosis, treatment of medical conditions, and medical management of withdrawal symptoms (acute detoxification) if the Plan doctor determines that outpatient management is not medicallyappropriate. See page 17 for nonmedical substance abuse benefits.

What is not covered Personal comfort items, such as telephone and television Custodial care, rest cures, domiciliary or convalescent care

16

Emergency Benefits What is a medical emergency?

A medical emergency is the sudden and unexpected onset of a condition or an injury that you believe endangers your life or could resultin serious injury or disability, and requires immediate medical or surgical care. Some problems are emergencies because, if not treated promptly, they might become more serious; examples include deep cuts and broken bones. Others are emergencies because they are potentially life- threatening, such as heart attacks, strokes, poisonings, gunshot wounds, or sudden inability to breathe. There are many other acute conditions that the Plan may determine are medical emergencies what they all have in common is the need for quick action. If a member is confronted with a situation that a prudent layperson would reasonably consider to constitute a medical emergency, the visit will be covered by the Plan.

Emergencies within the service area If you are in an emergency situation, please call your primary care doctor. In extreme emergencies,

if you are unable to contact your doctor, contact the local emergency system (e. g., the 911 telephone system) or go to the nearest hospital emergency room. Be sure to tell the emergency room personnel that you are a Plan member so they can notify the Plan.

If you need to be hospitalized in a non- Plan facility, the Plan must be notified within 48 hours or on the first working day following your admission, unless it was not reasonably possible to notify the Plan within that time. If you are hospitalized in non- Plan facilities and a Plan doctor believes care can be better provided in a Plan hospital, you will be transferred when medically feasible with any ambulance charges covered in full.

Benefits are available for care from non- Plan providers in a medical emergency only if delay in reaching a Plan provider would result in death, disability or significant jeopardy to your condition. To be covered by this Plan, any follow- up care recommended by non- Plan providers must be approved by the Plan or provided by Plan providers except as covered under POS benefits.

Plan pays... Reasonable charges for emergency services to the extent the services would have been covered if received from Plan providers.

You pay... $50 per hospital emergency room visit or $50 per urgent care center visit for emergency services that are covered benefits of this Plan. If the emergency results in admission to a hospital, the copay is

waived.

Emergencies outside the service area

Benefits are available for any medically necessary health service that is immediately required because of injury or unforeseen illness.

If you need to be hospitalized, the Plan must be notified within 48 hours or on the first working day following your admission, unless it was not reasonably possible to notify the Plan within that time. If a Plan doctor believes care can be better provided in a Plan hospital, you will be transferred when medically feasible with any ambulance charges covered in full.

To be covered by this Plan, any follow- up care recommended by non- Plan providers must be approved by the Plan or provided by Plan providers except as covered under POS benefits.

Plan pays... Reasonable charges for emergency services to the extent the services would have been covered if received from Plan providers.

You pay... $50 per hospital emergency room visit or $50 per urgent care center visit for emergency services that are covered benefits of this Plan. If the emergency results in admission to a hospital, the copay is

waived.

What is covered Emergency care at a doctor's office or an urgent care center Emergency care as an outpatient or inpatient at a hospital, including doctors' services

Emergency Benefits continued 17

What is covered

continued

Ambulance service approved by the Plan

What is not covered Elective care or nonemergency care except as covered under POS Benefits Emergency care provided outside the service area if the need for care could have been foreseen

before leaving the service area except as covered under POS Benefits Medical and hospital costs resulting from a normal full- term delivery of a baby outside the

service area except as covered under POS Benefits

Filing claims for non- Plan providers

With your authorization, the Plan will pay benefits directly to the providers of your emergency care upon receipt of their claims. Physician claims should be submitted on the HCFA 1500 claim form. If you are required to pay for the services, submit itemized bills and your receipts to the Plan along with an explanation of the services and the identification information from your ID card. Payment will be sent to you (or the provider if you did not pay the bill), unless the claim is denied. If it is denied, you will receive notice of the decision, including the reasons for the denial and the provisions of the contract on which denial was based. If you disagree with the Plan's decision, you may request reconsideration in accordance with the disputed claims procedure described on page 22.

Mental Conditions/ Substance Abuse Benefits

To obtain care, you must call 1- 800- 475- 7900 for a referral.

Mental conditions What is covered To the extent shown below, the Plan provides the following services necessary for the diagnosis and

treatment of acute psychiatric conditions, including the treatment of mental illness or disorders: Diagnostic evaluation Psychological testing Psychiatric treatment (including individual and group therapy) Hospitalization (including inpatient professional services)

Outpatient care Up to 20 outpatient visits to Plan doctors or other psychiatric personnel each calendar year; you pay

a $20 copay for each covered visit -- all charges thereafter.

Inpatient care Up to 30 days of hospitalization each calendar year; you pay nothing for the first 30 days -- all charges thereafter.

What is not covered Care for psychiatric conditions that in the professional judgment of Plan doctors are not subject to significant improvement through relatively short- term treatment

Psychiatric evaluation or therapy on court order or as a condition of parole or probation, unless determined by a Plan doctor to be necessary and appropriate Psychological testing that is not medically necessary to determine the appropriate treatment of

a short- term psychiatric condition

Substance abuse What is covered This Plan provides medical and hospital services such as acute detoxification services for the medical,

non- psychiatric aspects of substance abuse, including alcoholism and drug addiction, the same as for any other illness or condition and, to the extent shown below, the services necessary for diagnosis and treatment.

Mental Conditions/ Substance Abuse Benefits continued 18

Outpatient care Up to 20 outpatient visits to Plan providers for treatment each calendar year; you pay a $20 copay for each covered visit - all charges thereafter.

Inpatient care Up to 30 days per calendar year in a substance abuse rehabilitation (intermediate care) program in an alcohol or drug rehabilitation center approved by the Plan; you pay nothing during the benefit period

all charges thereafter.

What is not covered Treatment that is not authorized by a Plan doctor

Prescription Drug Benefits What is covered Prescription drugs prescribed by a Plan or referral doctor and obtained at a Plan pharmacy will be

dispensed for up to a 34- day supply. You pay a $6 generic and $12 name brand copay per prescription unit or refill for up to a 34- day supply or 100- unit supply, whichever is less; 240 milliliters of liquid (8 oz.); 60 grams of ointment, creams or topical preparation; or one commercially prepared unit (i. e., one inhaler, one vial ophthalmic medication or insulin). Members can receive a 102- day supply by mail, if available. You pay $18 generic and $36 name brand.

Covered medications and accessories include: Drugs for which a prescription is required by Federal law Oral contraceptive drugs; contraceptive diaphragms Insulin; a copay charge applies to each vial Disposable needles and syringes needed to inject covered prescribed medication Smoking cessation drugs and medication, including nicotine patches Diabetic supplies, including insulin syringes, needles, glucose test tablets and test tape,

Benedict's solution or equivalent, glucose monitors and acetone test tablets

Drugs for sexual dysfunction are covered with 50% copay of the negotiated pharmacy rate

Intravenous fluids and medication for home use, implantable drugs, such as Norplant, and some injectable drugs, such as Depo Provera, are covered under Medical and Surgical Benefits.

What is not covered Drugs available without a prescription or for which there is a nonprescription equivalent available

Drugs obtained at a non- Plan pharmacy except for out- of- area emergencies Vitamins and nutritional substances that can be purchased without a prescription Medical supplies such as dressings and antiseptics Drugs for cosmetic purposes

Drugs to enhance athletic performance Fertility drugs

19

Other Benefits Dental

What is covered Accidental injury benefit Restorative services and supplies necessary to promptly repair (but not replace) sound natural teeth as part of the initial emergency treatment of an accident. The need for these services must result from an accidental injury. You pay nothing.

What is not covered Other dental services not shown as covered.

Vision No current benefit

20

Point of Service (POS) Benefits Facts about this Plans POS option

With the Plans Triple Option feature you decide, each and every time, how you want to obtain care.

Option 1: You see your Primary Care Physician (PCP), who treats you and/ or refers you to a specialist or other providers. You simply pay a copayment and there is no deductible or coinsurance in Option 1.

Option 2: You go directly to any QualChoice physician, without being referred by your PCP. You will pay a $25 copayment and you will pay 20% of your total bill for certain services. There is no deductible for Option 2.

Option 3: You go to any doctor or hospital outside the QualChoice network. Option 3 also requires you to obtain precertification for hospital admissions and certain outpatient services. You must satisfy an annual deductible and then pay 30% of your total medical bill.

At your option, you may choose to obtain benefits covered by this Plan from non- Plan doctors and hospitals whenever you need care, except for the benefits listed below under "What is not covered." Benefits not covered under Point of Service must either be received from or arranged by Plan doctors to be covered. When you obtain covered non- emergency medical treatment from a non- Plan doctor without a referral from a Plan doctor, you are subject to the deductibles, coinsurance and maximum benefit stated below.

What is covered The covered services are the same under the POS options, except that mental health and substance abuse are covered under Option 1 and Option 3 only.

Precertification Precertification is required.

Deductible There is no deductible for Option 1 or Option 2 of the plan. Option 3 has a $300 deductible per year for individuals and a $750 deductible per year for family.

Coinsurance Once the applicable deductible is paid, the plan will pay 80% of hospitalization charges under Option 2; and 70% of reasonable and customary charges under Option 3. The member may be billed by the

provider for the difference between the actual charges and reasonable and customary rates.

Maximum benefit When the accumulated paid coinsurance reaches the annual out- of- pocket maximum, the plan will pay 100% of all further covered reasonable and customary charges for the remainder of the calendar year.

You may be billed by the provider for the difference between the actual charges and reasonable and customary rates. The deductible paid and the copays are not included in the out- of- pocket maximum.

Hospital/ extended care

You go directly to a network specialist or hospital without a referral from your PCP; the plan will apply the appropriate coinsurance and pay under Option 2. You go directly to a non- network specialist or hospital without a referral from your PCP; the plan will apply the appropriate deductible and coinsurance and pay under Option 3.

Emergency benefits Emergency room visits are covered with a $50 copay, which is waived if you are admitted.

Other benefits Mental Health has no Option 2 benefits. Option 3 mental health inpatient and outpatient services are covered (30 days) at 80% after deductible or outpatient (20 visits) at 80% after deductible.

Chemical Dependency has no Option 2 benefits. Option 3 inpatient and outpatient chemical dependency services are covered at 80% after deductible with a maximum of $8000 per year and $16,000 lifetime.

How to obtain benefits

The three options are available to you at the point of service - you decide, each and every time, how you want to obtain care and how much you pay for services.

Benefits on this page are not part of the FEHB contract 21

Non- FEHB Benefits Available to Plan Members

The benefits described on this page are neither offered nor guaranteed under the contract with the FEHB Program, but are made available to all enrollees and family members of this Plan. The cost of the benefits described on this page is not included in the FEHB premium and any charges for these services do not count toward any FEHB deductibles, POS maximum benefits, or out- of- pocket maximums. These benefits are not subject to the FEHB disputed claims procedure.

Medicare prepaid plan enrollment

This Plan offers Medicare recipients the opportunity to enroll in the Plan through Medicare. As indicated on page 5, annuitants and former spouses with FEHB coverage and Medicare Part B may elect to drop their FEHB coverage and enroll in a Medicare prepaid plan when one is available in their area. They may then later re- enroll in the FEHB Program. Most Federal annuitants have Medicare Part A. Those without Medicare Part A may join this Medicare prepaid plan but will probably have to pay for hospital coverage in addition to the Part B premium. Before you join the plan, ask whether the plan covers hospital benefits and, if so, what you will have to pay. Contact your retirement system for information on dropping your FEHB enrollment and changing to a Medicare prepaid plan. Contact us at 336- 716- 0660 or 800- 273- 4115 for information on the Medicare prepaid plan and the cost of that enrollment. If you are Medicare eligible and are interested in enrolling in a Medicare HMO sponsored by this Plan without dropping your enrollment in this Plans FEHB plan, call 336- 716- 0660 or 800- 273- 4115 for information on the benefits available under the Medicare HMO.

The following services are available to Plan Members at no additional cost:

Wellness and Health Education Programs/ Literature

* Disease Management * Health Screenings (blood pressure, glucose, cholesterol ) * Smoking Cessation Program * Stress Management Program * Prenatal Care Program * Congestive Heart Failure and Coronary Vascular Disease Program * Diabetes Program

* Hypertension Program * Reduced Gym Memberships * Health Seminars * Wellness Newsletter

Dental Care Accident Injury Benefit

The plan will pay for any service or supply for an accidental injury to sound natural teeth if the service is performed or supplies provided as part of the initial emergency treatment for the accident and you are still covered under this Certificate.

Vision Care As a member of the QualChoice Health Plan, youll receive special prices and discounts on all eyewear at Visionworks, Eckerd Optical and other fine optical professionals. Youll also receive

special prices on eye exams, contact lens exams and contact lenses. Here are some examples of those discounts:

Optometric Benefits Member Pays

Regular Eye Exam $35 Contact Lens Exam, Fitting and Follow- up Regular Price Less 20% Daily Wear Contact Lenses $35/ Pair Disposable Contact Lenses $19/ Each Eyeglass Packages $29 to $59 Frames Over $95 Regular Price Less 30%

22

How to Obtain Benefits Questions If you have a question concerning Plan benefits or how to arrange for care, contact the Plans

Customer Service Office at 336- 716- 0911 or 800- 816- 0911 or you may write to the Plan at PO Box 340, Winston- Salem, NC 27102- 0340. You may also contact the Plan by fax at 336- 716- 0920, at its website at http:// www. wfubmc. edu/ qualchoice or by email: klyates. wfubmc. edu

Disputed claims review

Plan reconsideration If a claim for payment or services is denied by the Plan, you must ask the Plan, in writing and within

six months of the date of the denial, to reconsider its denial before you request a review by OPM. (This time limit may be extended if you show you were prevented by circumstances beyond your control from making your request within the time limit.) OPM will not review your request unless you demonstrate that you gave the Plan an opportunity to reconsider your claim. Your written request to the Plan must state why, based on specific benefit provisions in this brochure, you believe the denied claim for payment or service should have been paid or provided.

Within 30 days after receipt of your request for reconsideration, the Plan must affirm the denial in writing to you, pay the claim, provide the service, or request additional information reasonably necessary to make a determination. If the Plan asks a provider for information it will send you a copy of this request at the same time. The Plan has 30 days after receiving the information to give its decision. If this information is not supplied within 60 days, the Plan will base its decision on the information it has on hand.

OPM review If the Plan affirms its denial, you have the right to request a review by OPM to determine whether the Plans actions are in accordance with the terms of its contract. You must request the review within

90 days after the date of the Plans letter affirming its initial denial. You may also ask OPM for a review if the Plan fails to respond within 30 days of your written request for reconsideration or 30 days after you have supplied additional information to the Plan. In this case, OPM must receive a request for review within 120 days of your request to the Plan for reconsideration or of the date you were notified that the Plan needed additional information, either from you or from your doctor or hospital.

This right is available only to you or the executor of a deceased claimants estate. Providers, legal counsel, and other interested parties may act as your representative only with your specific written consent to pursue payment of the disputed claim. OPM must receive a copy of your written consent with their request for review.

Your written request for an OPM review must state why, based on specific benefit provisions in this brochure, you believe the denied claim for payment or service should have been paid or provided. If the Plan has reconsidered and denied more than one unrelated claim, clearly identify the documents for each claim.

Your request must include the following information or it will be returned by OPM:

A copy of your letter to the Plan requesting reconsideration; A copy of the Plan's reconsideration decision (if the Plan failed to respond, provide instead

(a) the date of your request to the Plan or (b) the dates the Plan requested and you provided additional information to the Plan);

How to Obtain Benefits continued 23

OPM review continued Copies of documents that support your claim, such as doctors' letters, operative reports, bills, medical records, and explanation of benefit (EOB) forms; and

Your daytime phone number. Medical documentation received from you or the Plan during the review process becomes a permanent part of the disputed claim file, subject to the provisions of the Freedom of Information Act and the Privacy Act.

Send your request for review to: Office of Personnel Management, Office of Insurance Programs, Contracts Division 3, P. O. Box 436, Washington, DC 20044.

You (or a person acting on your behalf) may not bring a lawsuit to recover benefits on a claim for treatment, services, supplies or drugs covered by this Plan until you have exhausted the OPM review procedure, established at Section 890.105, Title 5, Code of Federal Regulations (CFR). If OPM upholds the Plan's decision on your claim, and you decide to bring a lawsuit based on the denial, the lawsuit must be brought no later than December 31 of the third year after the year in which the services or supplies upon which the claim is predicated were provided. Pursuant to Section 890.107, Title 5, CFR, such a lawsuit must be brought against the Office of Personnel Management in Federal court.

Federal law exclusively governs all claims for relief in a lawsuit that relates to this Plan's benefits or coverage or payments with respect to those benefits. Judicial action on such claims is limited to the record that was before OPM when it rendered its decision affirming the Plan's denial of the benefit. The recovery in such a suit is limited to the amount of benefits in dispute.

Privacy Act statement If you ask OPM to review a denial of a claim for payment or service, OPM is authorized by Chapter 89 of Title 5, U. S. C., to use the information collected from you and the Plan to determine if the Plan has acted properly in denying you the payment or service, and the information so collected may be disclosed to you and/ or the Plan in support of OPM's decision on the disputed claim.

How QualChoice of North Carolina, Inc. Changes January 1999

24

Program- wide Changes

Several changes have been made to comply with the Presidents mandate to implement the recommendations of the Patient Bill of Rights. If you have a chronic, complex, or serious medical condition that causes you to

frequently see a Plan specialist, your primary care doctor will develop a treatment plan with you and your health plan that allows an adequate number of direct access visits with that specialist, without the need to obtain further referrals (See page 9). A medical emergency is defined as the sudden and unexpected onset of a condition or

an injury or disability, and requires immediate medical or surgical attention (See page 16). The medical management of mental condition will be covered under this Plans Medical

and Surgical Benefits provisions. Related drug costs will be covered under this Plans Prescription Drug Benefits, and any costs for psychological testing or psychotherapy will be covered under this Plans Mental Conditions Benefits. Office visits for the medical aspects of treatment do not count toward the 20 outpatient Mental Conditions visit limit.

Changes to this Plan

Members can receive a 102 day supply of prescription drugs by mail, if available (See page 18). Drugs for sexual dysfunction are covered with a 50% copay of the negotiated

pharmacy rate (See page 18).

Summary of Benefits for QualChoice - 1999 Do not rely on this chart alone. All benefits are provided in full unless otherwise indicated subject to the limitations and exclusions set forth in the brochure. This chart merely summarizes certain important expenses covered by the Plan. If you wish to enroll or change your enrollment in the Plan, be sure to indicate the correct enrollment code on your enrollment form (codes appear on the cover of this brochure). ALL SERVICES COVERED UNDER THIS PLAN, WITH THE EXCEPTION OF EMERGENCY CARE AND SERVICES AVAILABLE AS POS BENEFITS, ARE COVERED ONLY WHEN PROVIDED OR ARRANGED BY PLAN DOCTORS.

25

Benefits Plan pays/ provides Page Inpatient care Hospital Comprehensive range of medical and surgical services without dollar or day limit.

Includes in- hospital doctor care, room and board, general nursing care, private room and private nursing care if medically necessary, diagnostic tests, drugs and medical supplies, use of operating room, intensive care and complete maternity care. You pay nothing... 15

Extended care Allnecessaryservices,no dollarordaylimit. You pay nothing......................................... 15

Mental conditions Diagnosis and treatment of acute psychiatric conditions for up to 30 days of inpatient

care per year. You pay nothing........................................................................................... 17

Substance abuse Up to 30 days per year in a substance abuse treatment program. You pay

nothing................................................................................................................................. 18

Outpatient care Comprehensive range of services such as diagnosis and treatment of illness or injury,

including specialists care; preventive care, including well- baby care, periodic check- ups and routine immunizations; laboratory tests and X- rays; complete maternity care. You pay a $10 copay per office visit; copays are waived for maternity care and well- baby visits to age 2; $10 per house call bya doctor call................................................................ 13

Home health care All necessary visits by nurses and health aides. You pay $10 per

visit............................... 13

Mental conditions Up to 20 outpatient visits per year. You pay a $20 copay per visit..................................... 17

Substance abuse Up to 20 outpatient visits per year. You pay $20 copay per visit

........................................ 17

Emergency care Reasonable charges for services and supplies required because of a medical emergency.

You pay a $50 copay to the hospital for each emergency room visit and any charges for servicesthat are not covered bythis Plan............................................................................. 16

Prescription drugs Drugs prescribed by a Plan doctor and obtained at a Plan pharmacy. You pay a $6

generic or $12 name brand copayper prescription unit or refill......................................... 18

Dental care Accidentalinjurybenefit;you pay nothing. Preventive dental care- No current benefit..... 19, 21

Vision care No current benefit............................................................................................................ 19, 21

Point of Service Benefits

Services of non- Plan doctors and hospitals or plan doctors without a referral from your PCP. Not all benefits are covered. You pay deductibles and coinsurance and a maximumbenefit applies...................................................................................................... 20

Out- of- pocket maximum Your out- of- pocket expenses for benefits under this Plan are limited to the stated

copayments required for a few benefits except for the POS option under which option 2 has a $800 individual, $2, 000 family maximum; and option 3 has a $900 individual, $2,250family maximum....................................................................................................... 9

26

1999 Rate Information for QualChoice of North Carolina Non- Postal rates apply to most non- Postal enrollees. If you are in a special enrollment category, refer to the FEHB Guide for that category or contact the agency that maintains your health benefits enrollment.

Postal rates apply to most career U. S. Postal Service employees, but do not apply to non- career Postal employees, Postal retirees, certain special Postal employment categories or associate members of any Postal employee organization. If you are in a special Postal employment category, refer to the FEHB Guide for that category.

Non- Postal Premium Postal Premium Biweekly Monthly Biweekly Type of Enrollment Code

Govt Share

Your Share

Govt Share

Your Share

USPS Share

Your Share

Self Only 7Q1 $63.59 $21.19 $137.77 $45.92 $75.24 $9.54 Self and Family 7Q2 $154.79 $51.59 $335.37 $111.79 $183.16 $23.22