Questions and Answers About the New Policy on Leave Usage on November 29th and December 31st, 2002

• To the policy statement

Q. Does this new policy apply to any other scheduled effective dates, besides December 1, 2002, and January 1, 2003?

A. No, it does not.

Q. Can you give me any examples of how this new policy works?

A. Sure. For example:

• An employee approved for coverage with a scheduled effective date of December 1, 2002, will still have his/her coverage effective on December 1, even if he/she is on leave November 29th, as long as he/she returns to being actively at work sometime in December 2002.
• An employee approved for coverage with a scheduled effective date of January 1, 2003, will still have his/her coverage effective on January 1, even if he/she is on leave December 31, as long as he/she returns to being actively at work sometime in January 2003.

Q. Does it apply to sick leave too?

A. Yes. It applies to any approved leave, including annual leave, sick leave, leave without pay and administrative leave.

Q. Does this new policy affect spouses of employees?

A. No. Spouses of employees do not have an actively at work requirement.

Q. I'll be on leave from November 25th through December 27th. I was approved for coverage effective December 1. Will my coverage still be effective on December 1?

A. Yes, because you are returning to actively at work status in December. Please remember, however, that you would still have to let Long Term Care Partners know if your health changes during that time in a way that would affect the answer(s) on your application. You must also pay your premium on time.

Q. Does this new policy affect annuitants?

A. No. Annuitants use the full underwriting application. This change only affects employees (not spouses) using the abbreviated underwriting application.

Q. I have lots of use or lose leave. If I'm off for two full weeks, December 23 - January 3, can my coverage still be effective January 1?

A. Yes, as long as you're back to being actively at work sometime in January.

Q. I liked your old policy. My coverage is scheduled to be effective on January 1, but I don't want it to be effective until February 1. I was going to take leave December 31 just to delay the effective date and avoid the premium payment for January. Can I still do that?

A. You can still take leave December 31, but that won't delay the effective date of your coverage. Your coverage will still be effective January 1, as long as you're actively at work sometime in January.

Q. I applied during Open Season and chose payroll deduction of premiums. When will the deduction start being taken out of my pay?

A.Your first deduction will be taken from the paycheck that covers the first full pay period that begins on or after your effective date of coverage. For many employees, this means that you may not actually see the premiums deducted from your pay until several weeks or so after your coverage has gone into effect. For example, an October 1 effective date may be in the middle of a pay period. Premium deduction will begin during the next full pay period and show up in your check following that pay period.

Q. I applied during Open Season and chose annuity deduction of premiums. When will the deductions start being taken from my annuity?

A. Your first deduction will be taken from the annuity check that pays you for the month in which your coverage begins. Since your annuity is paid in arrears, your premiums won't be deducted until the month after your effective date of coverage. For example, if you have a November 1 effective date, your first deduction will be taken from the check you receive in December, since that check covers your November payment. Your coverage will still be effective on November 1.

Q. But I had a deduction taken from my October 1 annuity check when I had an October 1 effective date. Is this correct?

A.Unfortunately, some civilian annuitants had annuity deductions taken one month too early. This only affected enrolled annuitants who chose annuity deduction and who had an October 1, 2002, effective date. Your deductions were supposed to start being taken with your November 1, 2002, check. You will receive a refund of the premium taken from the October 1, 2002, payment along with a letter of explanation from LTC Partners. Even though this amount is being refunded, it does not affect your effective date of coverage. Your coverage still goes into effect as scheduled on October 1, 2002, and you will have premium deducted from your November 1 annuity check.

Q. I applied during the Early Enrollment and then changed to payroll/annuity deduction. When will the change be effective?

A. You should expect to see your first payroll deduction taken from the check that covers the first full pay period in October, or the check that covers the first full pay period that follows the date your billing change form is processed, whichever is later.

Q. When is open season?

A. July 1 to December 31, 2002.

Q. After 2002, when is the next open season?

A. We will not have annual open seasons. But we do not know at this point how frequently we will have them and when the next one will be. We have to evaluate this open season first. So you really can't count on a future open season at any time soon. AND — there is no guarantee that any future open season will offer the abbreviated underwriting that we're offering during this open season for Federal/Postal employees, members of the uniformed services, and their spouses.

Q. How will employees and members of the uniformed services be notified about open season?

A. Employees will receive an announcement of open season that will encourage them to call LTC Partners, visit the LTC Partners web site, or possibly to return a postage-paid card to request an open season information kit and application (open season kit). The response method will depend on the form the announcement takes, discussed below.

The announcement may take the form of a printed brochure, an email message, a paystub message, etc., depending upon the communication vehicles used within a particular agency/department/ uniformed service.

LTC Partners will bulk ship open season announcement brochures to agencies/departments/branches of the uniformed services that wish to use this type of communication. LTC Partners will provide an email announcement for forwarding to employees to those agencies/departments/branches of the uniformed services that wish to use email communication for open season information. And, LTC Partners will provide messages for paystubs and other communications vehicles depending on each implementation coordinator's request.

LTC Partners is also using many other methods of communications, which may include cable tv spots, the website, newspaper and magazine ads, billboards, radio and tv spots, press releases, etc.

Q. How will annuitants and retired members of the uniformed services be notified about open season?

A. They will receive a printed brochure at their correspondence address that contains a postage-paid card to request an open season information kit and application. However, if they are also subscribers to the Get Smart About Your Future bulletin series, they will NOT receive a separate printed brochure announcing open season. Their announcement will be contained in bulletins #4 and #5.

LTC Partners is also using many other methods of communications, which may include cable tv spots, the website, newspaper and magazine ads, billboards, radio and tv spots, press releases, etc.

Q. Will all employees, members of the uniformed services, annuitants and retired members of the uniformed services receive these notices about open season at the same time?

A. No. LTC Partners will be staggering the delivery of open season announcements. They've developed a schedule to spread the deliveries across agencies/departments/uniformed services/annuitants and geographic areas to help control the volume of requests for the open season kit.

Q. Does the open season announcement have a deadline?

A. The open season announcement asks interested recipients to request an open season kit within 10 days of receiving the announcement, by:

• returning a postage-paid card (applicable to the brochure form of the announcement only), or
• calling the toll-free number (1-800-LTC-FEDS) (1-800-582-3337)) (TDD for the hearing impaired: 1-800-843-3557), or
• visiting the website (www.ltcfeds.com)

The open season kits, in turn, request that the individual return a completed application within 60 days of receiving the kit. These dates are designed to help LTC Partners balance the tremendous workload that will result from this new Program. While it is true that eligible individuals can submit applications anytime during open season, we strongly encourage people to apply during their designated 60-day window.

Q. What if I don't get or see one of these announcements?

A. That's not a problem. ALL the announcements are doing is alerting people that open season is here and encouraging them to request an open season information kit with application (or view the information on the web). So all you have to do is request a kit by calling 1-800-LTC-FEDS (1-800-582-3337) (TTD for the hearing impaired 1-800-843-3557) or go to www.ltcfeds.com and view the information.

Q. Will anyone receive an open season kit with application automatically, without requesting one?

A. No. No one will receive a kit automatically - anyone who wishes to have a Kit must request one. By only sending the kit to persons who are truly interested, we can help keep Program administrative costs and premiums down. And, personal requests allow the Kits to contain personalized rate quotes based on the requestor's age.

Q. If I already have coverage from Early Enrollment, can I change benefits during open season?

A. Yes, you can apply to change benefits during open season. You will have to complete a new application and will have to pass the applicable underwriting again. If your new application is approved, you will be able to have the new benefits. If it is not approved, you will keep what you had from early enrollment.

Q. What are the underwriting requirements for open season (meaning questions about health status)?

A. Employees and members of the uniformed services and their spouses will be subject to abbreviated underwriting. All other eligible groups will be subject to full (long form) underwriting. Anyone eligible to use the abbreviated underwriting application will have to answer additional questions if they want to apply for the unlimited benefit period during open season. The abbreviated underwriting questions plus the additional questions for unlimited are still fewer questions than full underwriting, but of course more than the abbreviated underwriting questions for the 3 year or 5 year benefit period.

Q. Are all of the benefits under the Program available during open season?

A. Yes, all of the benefits available in the Federal Long Term Care Insurance Program are available during open season. In addition to the benefits that were available during early enrollment, there are also weekly benefits, an unlimited benefit period, a facilities-only option, alternative insurance and a service package./p>

Q. What choices do I have for paying my premiums?

A. You can choose from payroll/annuity deduction, automatic debit from your checking or savings account or direct billing from LTC Partners.

Q. If I enrolled during the early enrollment, can I change to payroll deduction during the open season?

A. Yes. You must complete a billing change form which you can download at www.ltcfeds.com.

Q. At what age will my premiums be calculated?

A. Your "billing" age will be your age on July 1, 2002, no matter when during open season you apply.

Q. If I enrolled during early enrollment and apply to change benefits during open season, can I preserve my "billing" age from the early enrollment?

A. Yes.

Q. If I apply during the open season and my application is approved, when will my coverage be effective?

A. It will be effective on the later of October 1, 2002, or the 1st of the month after your application is approved, AND for Federal and Postal employees and members of the uniformed services, you must be actively at work on that effective date for at least half of your regularly scheduled work hours on that date for coverage to take effect (or on the last workday before that date, if it falls on a weekend or holiday). If you work other than a full-time schedule, and the original effective date falls on a date that you are not scheduled to be at work, then you must meet the actively at work requirement on your closest workday before that original effective date.

Applicants are solely responsible for letting LTC Partners know if they do not meet the actively at work definition on the original effective date. Applicants are also solely responsible for letting LTC Partners know if their health changes from the time they completed their application until the effective date of their coverage. If it does, and if that change in health is such that they would now answer one or more questions differently on the application, they have a duty to inform LTC Partners. LTC Partners will then determine if they are still approved for coverage. If they do not inform LTC Partners of this change in health, then LTC Partners may have the right to deny a claim for benefits or rescind coverage.

Q. This sounds complex. Will I find out about these effective date rules in an official capacity?

A. Yes. The rules on coverage effective dates are explained in the Benefit Booklet that LTC Partners sends to everyone who is approved for coverage.

Q. What does it mean to be "actively at work"?

A. For Federal and Postal employees, it means:

• You are reporting for work at your usual place of employment or other location to which government business requires you to travel; and
• You are able to perform all the usual and customary duties of your employment on your regular work-schedule; and
• You are not absent from work due to sickness, injury, annual leave, sick leave or any other leave (for employees working an alternative work schedule, an "AWS" day off counts as a day you are Actively at Work).

Q. I'm an employee. WHY do I have to be actively at work for my coverage to be effective? It affects my vacation plans.

A. We negotiated premiums with Long Term Care Partners with the understanding that employees and members of the uniformed services would be subject to abbreviated underwriting IF there would also be an actively at work requirement. An actively at work requirement is standard industry practice for employer-sponsored group long term care insurance. The reasoning is that being actively at work absolutely speaks volumes about someone's health. You can look at it as a proxy for asking additional questions about health. Being on sick or annual leave means you're not actively at work. Chances are that the reason you're not at work is not related to a reason that would make you uninsurable, but it could be. And people take annual leave if they're sick and vice-versa. There's no policing of that. So both are excluded from being actively at work.

It is important to realize that without this requirement, employees would have been subject to FULL underwriting during Open Season. Having only abbreviated underwriting during this Open Season is a huge advantage and allows many more employees to qualify for the insurance. Having to be actively at work (or else postponing the effective date) is a small price to pay for this advantage. And, keep in mind that the actively at work requirement is only for ½ of your regularly scheduled tour of duty for that day.

Q. I'm an employee. If I apply AFTER Open Season using the full underwriting application, do I still have to be actively at work in order for my coverage to become effective?

A. No. The actively at work requirement applies ONLY with the abbreviated underwriting application.

Q. I'm the spouse of an employee. Does the employee I'm related to have to be actively at work in order for my coverage to become effective?

A. No. The actively at work requirement applies only to employees and members of the uniformed services who are applying for coverage.

Q. I work a flexible work schedule (one type of alternate work schedule) and earn "credit hours". I earn credit hours when I work more than my basic work requirement for that day. I elect to work longer on some days than others, and then I carry forward those "credit" hours to use later. When I'm using my earned credit hours, am I considered to be actively at work for purposes of my effective date of coverage, the same as if I take an AWS day (which is considered an actively at work day)?

A. Yes. An employee using credit hours earned as part of an alternate/flexible work schedule is considered to be actively at work during those hours.

Q. I'm a Federal employee (or U.S. Postal Service employee) in the Reserves. I'm going to be activated very soon. My coverage is scheduled to go into effect on the first of the month. Your other FAQs say that if I'm in a leave status, I'm not actively at work. But what if I'm on leave without pay from my Federal job and instead on active duty in the uniformed services on that date -- will my coverage still become effective on my scheduled effective date?

A. YES, it will, assuming your health hasn't changed in such a way to change the answers to any questions on your application.

Q. What happens if I apply while I am in an eligible group, but then I leave the eligible group before my insurance is effective? Will my insurance still become effective?

A. It depends. You must be in the same eligible group on the date you apply for the insurance and on the date the insurance is supposed to become effective. Generally, if you leave the eligible group during this time period, your insurance will not become effective. But there are some exceptions.

• If you retire from active service after you apply but before the coverage effective date, you must reapply using the long form application, as a retiree.
• If you apply as an employee and are involuntarily separated from your Federal job (other than for misconduct) after you apply but before your coverage effective date, your coverage will still become effective.
• If you apply as a qualified relative and the eligible person that you are related to either dies or is involuntarily separated from Federal service after you apply but before your coverage effective date, your coverage will still become effective.

  Q. How do I get an open season application?

  A. You can ask for an Open Season Information Kit with application by calling 1-800-LTC-FEDS (1-800-582-3337) or TTY 1-800-843-3557, or you can go to www.ltcfeds.com.

  Q. I am currently outside of the U.S. and am having difficulty dialing the 800 number. What should I do?

  A. A: The 800 number, 1-800-LTC-FEDS (1-800-582-3337) or TTY 1-800-843-3557 can be reached from approximately 175 countries outside of the United States, by using AT&T Direct Access. Information on this feature, including a list of countries can be found at http://www.att.com/business_traveler/guides_and_access/international_dialing .html. A downloadable wallet card of access codes can be found at http://www.att.com/business_traveler/guides_and_access/wallet_card.html under the section Wallet Guides for Travelers Based Outside the U.S., For use with AT&T Corporate Calling Card.

  Q. I still have an open season application. Can I submit it in January?

  A. Yes you can. It is too late to request or download an open season application, because Open Season ended on December 31. However, if you already have an open season application, you can submit it in January to the address listed on your application. Or call 1-800-582-3337 to ask for an address to use for overnight mail. As long as Long Term Care Partners receives it by January 31, they will process it using open season rules (e.g., the July 1 "age freeze"). You do NOT have to have your application approved or your billing options completed by any particular date in order to take advantage of the open season rules. The key is the date that Long Term Care Partners receives your application, not the date it is approved.

  Q. What if my open season application is postmarked by January 31? Is that ok?

  A. No. The January 31 date is a "received by" date. It is not a "postmarked by" date. Long Term Care Partners will process any open season applications it receives by January 31, using open season rules.

  Q. Does my open season application have to be approved by January 31?

  A. No. You do NOT have to have your open season application approved or your billing options completed by any particular date in order to take advantage of the open season rules. The key is the date that Long Term Care Partners receives your application, not the date it is approved. As long as Long Term Care Partners receives it by January 31, they will process it using open season rules (e.g., the July 1 "age freeze").

  Q. I still have an open season application. Can I submit it in January?

  A. Yes you can. It is too late to request or download an open season application, because Open Season ended on December 31. However, if you already have an open season application, you can submit it in January to the address listed on your application. Or call 1-800-582-3337 to ask for an address to use for overnight mail. As long as Long Term Care Partners receives it by January 31, they will process it using open season rules (e.g., the July 1 "age freeze"). You do NOT have to have your application approved or your billing options completed by any particular date in order to take advantage of the open season rules. The key is the date that Long Term Care Partners receives your application, not the date it is approved.

  Q. What if my open season application is postmarked by January 31? Is that ok?

  A. No. The January 31 date is a "received by" date. It is not a "postmarked by" date. Long Term Care Partners will process any open season applications it receives by January 31, using open season rules.

  Q. Does my open season application have to be approved by January 31?

  A. No. You do NOT have to have your open season application approved or your billing options completed by any particular date in order to take advantage of the open season rules. The key is the date that Long Term Care Partners receives your application, not the date it is approved. As long as Long Term Care Partners receives it by January 31, they will process it using open season rules (e.g., the July 1 "age freeze").