Administration Guide for Employers with Self-Funded Health Plan Designs and Stop-Loss Insurance

Transcription

1 Administration Guide for Employers with Self-Funded Health Plan Designs and Stop-Loss Insurance PERSONAL. Flexible. Trusted.

2 Welcome to Starmark This administration guide will provide you with a better understanding of your administrative responsibilities for your self-funded health plan and stop-loss insurance coverage. For your convenience, you can download any of the forms referenced in this guide from the Starmark website at You may also obtain any of the forms by contacting your agent or a Starmark customer service representative at While this guide should provide answers to most of your questions, please contact a customer service representative if you have a question not addressed in this guide. Be sure to have your group number and/or the employee s identification number available at the time of the call. We look forward to providing you with the exceptional customer service that you and your employees deserve. If there is any discrepancy between the stop-loss insurance contract or Administrative Services Agreement/ Agreement for Plan Supervisor and this administration guide, the stop-loss contract and Administrative Services Agreement will prevail. Self-funded plans are administered by Starmark, and stop-loss insurance is provided by Trustmark Life Insurance Company. Plan design availability and/or stop-loss coverage may vary by state.

3 TABLE OF CONTENTS Page Monthly Billing Billing Adjustments/Rate Changes... 3 Monthly Reporting... 4 New Contract Year Provisions Adding A Subsidiary Changing Ownership... 5 Changing Address... 5 Changing Your Plan Design Enrollment... 5 Who Is Eligible?... 5 When Is Someone Eligible?... 6 How to Enroll Employees and Dependents... 6 When Is Self-funded Coverage Effective?... 7 Misstatement on the Employee Eligibility Statement Medicare Waiving Coverage Under Your Self-Funded Benefit Plan Termination of Coverage Under Your Self-Funded Benefit Plan Employee Termination Employer Termination Terminations Mid-Contract Year Runout Period Certificates of Creditable Coverage Continuation of Coverage Miscellaneous Administration Participation Requirements Using Your Self-Funded Benefit Plan Claim Filing Instructions Precertification Procedures Prescription Drug Benefit Coordination of Benefits Glossary

4 Monthly Billing 1. Statements are prepared and mailed to employers on or about three weeks prior to the date payment is due. Employers using electronic funds transfer (EFT) will have bills prepared and mailed approximately 10 days prior to the due date. Bills will list the cost for each covered employee and dependent, if any. 2. The tear-off section of the statement and a check made payable to Starmark should be remitted by the due date every month. All payments should be paid in advance, payable by you or any person designated to act on your behalf. Each payment shall be equal to the sum of the amounts payable for each person covered, plus or minus any adjustments indicated on the bill. Use the envelope provided with your statement; it is specifically for payments. Retain the remaining portion of the statement for your records. 3. If you require your employees to contribute to their self-funded benefit plan, payment should be deducted monthly. The first deduction for a new employee should be made as mutually agreed upon between you and that employee. If you change your contribution, you must notify Starmark. 4. All checks are automatically deposited and cashed by our bank, regardless of the status of your plan. Cashing of a monthly check on a lapsed stop-loss insurance contract does not guarantee continued coverage. In the event that a check is returned due to insufficient funds, an additional service fee will be added to your payment amount. Multiple checks returned for insufficient funds may result in the termination of your plan. 5. If there are any mitigating circumstances regarding any lapse or termination situation, you should discuss these with a customer service representative. Reinstatement options, along with a reinstatement fee, may apply. 6. Timely payment is critical to ensure that administration of your selffunded benefit plan continues without interruption. If the current amount due is not paid by the end of the grace period, the stop-loss insurance contract and Administrative Services Agreement will automatically terminate on the last day of the period for which your last payment was made. A letter confirming the date of termination will be sent after the end of the grace period. It is your responsibility to advise your employees if your self-funded benefit plan is also terminated. 1

5 7. The grace period starts on the due date and runs for 31 days from the due date. Payment must be made before the end of the grace period. Claim payments will be held while the account is in the grace period, until all monthly payments due are received. 8. An alternative way to make your payment is to choose electronic funds transfer (EFT). This method of payment is available only through financial institutions that are Automated Clearing House (ACH) members. To add or make changes to your method of payment, please allow at least 14 days to process the request. For more information, contact a Starmark customer service representative at , option If you wish to terminate your stop-loss insurance coverage and the Administrative Services Agreement, you must notify us in writing prior to the proposed date of termination. We will not retroactively make terminations. See Termination of Coverage Under Your Self-Funded Benefit Plan section. Send payment to the following address: Monthly payment: Starmark Administration 75 Remittance Drive, Suite 3087 Chicago, IL Overnight payment: Starmark Administration, Suite 3087 c/o The Northern Trust Bank 350 North Orleans Street Receipt & Dispatch, 8th Floor Chicago, IL All other correspondence: Starmark 400 Field Drive Lake Forest, IL

6 Billing Adjustments/Rate Changes 1. Adjustments on your statement may occur if any of the following changes are made to your self-funded benefit plan: a. A new employee is added to the plan. b. An employee is terminated. c. An employee makes a change in the type of coverage selected (i.e., family coverage to single coverage). d. Changes are made to the plan s benefits. If an employee terminates employment, their coverage under your self-funded benefit plan will terminate on the last day of the month in which the employee worked. You are responsible for that employee s billing amount for the entire month. If claims are paid after the requested termination date, you are responsible for an additional month s payment. To avoid additional charges, notify us by the end of the month in which the termination occurs by completing the Termination/Waiver Section located on the back of the billing statement. In an effort to limit billing adjustments, we recommend you make the monthly payment as billed. If you add an employee, dependent or spouse, do not adjust your payment until the change appears on your bill. You will be back-billed and/or you will receive credit for changes on the next statement generated after the changes are processed. 2. We may change the stop-loss insurance contract premium rate on any of the following: a. the date when the terms of the stop-loss insurance contract are changed; b. the date that you add or delete a subsidiary or affiliated company or division; c. the date of any revision to your self-funded benefit plan; d. the date your location or the nature of business in which you are engaged changes; or e. The date there is a change in enrollment exceeding 10% of the first month s enrollment of the current contract period or the 9th month of the prior contract period. 3

7 Monthly Reporting Every month, you will receive an Aggregate Claim Liability Summary report that compares your actual claim activity to the aggregate liability. The aggregate liability represents the amount of claims for which you are responsible. A portion of your monthly payment is deposited into a designated bank account to cover this liability. The report allows you to track your claims. New Contract Year Provisions 1. You will receive written notice at least 30 days prior to the effective date of any rate change for a new stop-loss insurance contract year. 2. Prior to the end of the contract year, you may be required to submit a State Quarterly Wage and Tax Statement and a completed State Employer Certification Form to verify the number of eligible employees and the number of employees participating in your self-funded benefit plan. 3. You will be required to meet participation requirements for the new contract period or the stop-loss insurance contract will not be issued. 4. A new contract period does not constitute a renewal, rather issuance of a new stop-loss insurance contract and other agreements. The new offer will be subject to new rates, which will reflect the new benefit period and the new contract terms. New agreements must be signed and returned prior to the effective date of the new contract period. Adding a Subsidiary If you request to add a location (i.e., subsidiary or affiliate), a newly purchased company, a new class of employees to your stop-loss insurance contract, or if group composition changes by 10% or more, the stop-loss insurance contract for your entire group must be re-underwritten. The monthly billing amount will be changed to reflect your company s new composition and other risk factors as a result of the additional employees. To make any of these changes, you must submit all of the following: 1. Newly completed Application for Stop-loss Insurance Coverage. 2. Newly completed Employee Eligibility Statements for all employees being added to the plan. 3. Most recent State Quarterly Wage and Tax Statement. 4

8 Changing Ownership If your business undergoes a change in ownership, complete a new Application for Stop-loss Insurance Coverage and return to us. New Plan Documents may be required. Changing Address 1. You must notify us of any change in address. If your business moves within the original state of issue or to another state in which Starmark self-funded benefit plan designs and stop-loss insurance coverage are available, your monthly billing amount will be adjusted to reflect the new address at the next contract year. 2. If your business moves to a state where Starmark self-funded benefit plan designs and stop-loss insurance coverage are not available, your stoploss insurance contract and Administrative Services Agreement will be terminated as of the new plan year. Changing Your Plan Design You may be able to make changes to your self-funded benefit plan design. Submit all requested changes in writing. All changes are subject to approval. If you change the percent or amount you contribute to the cost of your selffunded benefit plan, then you must notify us in writing within 30 days of the change. Some changes in contribution levels may affect your plan design. 1. Who Is Eligible? Enrollment Self-funded coverage must be offered to all eligible employees and their dependents. a. To be considered an eligible employee, a formal employer-employee relationship must exist that can be confirmed by demonstrating the employer pays FICA wages and reports them on a Federal W-2. Any employee, including a proprietor or partner, who works for the employer at least 25 hours per week on a regular basis is eligible for coverage. An employee must reside in the U.S. and be: i. A U.S. citizen and possess a Social Security number; or ii. A legal alien, possess a work visa or green card, and have been issued a Social Security number or other governmentissued identification number. 5

9 b. An eligible dependent is an eligible employee s legally married spouse or child under the age of 26. A child who is the subject of a court-issued, qualified medical support order or a child placed for adoption (including the time before the adoption is final) may also be considered an eligible dependent. c. Independent contractors, commissioned or 1099 employees may be considered on groups of five or more eligible employees if they work for only one employer and comprise no more than 50 percent of the total employees enrolling in the benefit plan. A copy of the 1099 form for each employee will be required. Part-time, temporary, seasonal, retired or leased employees are not eligible for coverage. Boards of Directors, shareholders and/or silent partners are not considered eligible for coverage unless they can show a full-time employment status. 2. When Is Someone Eligible? An employee and/or dependent is eligible for coverage under your selffunded benefit plan on the following dates: a. For an employee: i. Completion of the waiting period, if any, selected by you; or ii. The date of a qualifying event for special enrollment. b. For a dependent: i. The date the employee is eligible for coverage; or ii. The date of a qualifying event for special enrollment. 3. How To Enroll Employees and Dependents Each employee must fully complete, sign and date the Employee Eligibility Statement for himself and/or his dependents. The completed Employee Eligibility Statement must be received by us within 60 days of the date the form is signed. If you enroll an employee and/or dependent and he terminates employment before the effective date, notify us in writing and self-funded coverage will not become effective for that employee and/or his dependents. An employee and/or dependent is also eligible for self-funded coverage if he previously waived coverage and the employee and/or dependent has a special enrollment event. The employee can enroll by either 6

10 completing a paper Eligibility Statement or going online at See the Special Enrollee section for more information. It is important to send the completed Employee Eligibility Statement to us when the enrollee becomes eligible to avoid several months of potential retroactive payment charges. Self-funded coverage cannot become effective before the date the employee signs the Employee Eligibility Statement. 4. When Is Self-Funded Coverage Effective? Timely Enrollees A timely enrollee is an eligible employee who completes and signs the Employee Eligibility Statement on behalf of himself and/or his dependents. The effective date for timely enrollees is as follows: - Plans with a waiting period If the Employee Eligibility Statement is signed during the waiting period, the effective date is the first of the month following the waiting period. If the Employee Eligibility Statement is signed during the initial enrollment period, which is the 31 days after the 1st of the month following the waiting period, the effective date will be the first of the month following the signature date. - Plans with immediate coverage If the Employee Eligibility Statement is signed on or before the date of hire, the effective date will be the date of hire. If the Employee Eligibility Statement is signed after the date of hire, but within 31 days from the date of hire, the effective date will be the date the Employee Eligibility Statement is signed. Enrollment requirements are determined at the time the Employer Application is completed and signed. Timely Enrollees age 19 or older may be subject to a 12-month preexisting condition limitation period. This period will be reduced by any prior creditable coverage the person had immediately preceding the hire date with a break in coverage of no more than 63 days. If a timely Employee Eligibility Statement is missing information, the employee will be contacted to supply the missing information. The information must be received in order for the employee s coverage under your self-funded benefit plan to become effective. The employee may still 7

11 receive coverage on the date he became eligible based on the date of the original Employee Eligibility Statement. Appropriate payment, which may include charges back to the effective date, will appear on the billing statement once coverage under your self-funded benefit plan is in effect. If the signature on the eligibility statement is more than 60 days old, the employee will be contacted to verify that the information on the statement is correct and for the employee to re-sign the form with a current date. The updated form must be returned to us in order for the employee s coverage under your self-funded benefit plan to become effective. The effective date of the employee s coverage will be the first of the month following the date the original Employee Eligibility Statement was received by us. Appropriate payment, which may include charges back to the effective date, will appear on the billing statement once the employee s coverage under your self-funded benefit plan is in effect. IMPORTANT NOTICE: Incomplete or outdated eligibility statements may cause the enrollee to be considered a late enrollee. Late Enrollees Late Enrollees are separated into two categories: a. Eligible employees or dependents who waived coverage under your selffunded benefit plan at the plan s original effective date. These late enrollees must submit an eligibility statement to us at the time coverage is desired. If the eligibility statement is received by us prior to the end of the first contract year, coverage will be effective at the beginning of the second contract year. If the eligibility statement is received by us after the self-funded benefit plan has been in force for 12 months, coverage will start on the first day of the month following the date the eligibility statement is signed. If the signature on the Employee Eligibility Statement is more than 60 days old, the employee will be contacted to make sure all the information on the eligibility statement is correct and for the employee to re-sign the form with a current date. The updated Employee Eligibility Statement must be returned to us for coverage under your self-funded benefit plan to become effective. The effective date of the employee s coverage will be the benefit plan s first anniversary date or the first of the month following the date the original eligibility statement was received by us, whichever is later. b. Eligible employees who are hired after the original effective date of your self-funded benefit plan who request enrollment for themselves and/or their eligible dependents following the initial enrollment period. 8

12 Coverage under your self-funded benefit plan will start on the first day of the month following the date the eligibility statement is signed. If the signature on the Employee Eligibility Statement is more than 60 days old, the employee will be contacted to make sure all the information on the eligibility statement is correct and for the employee to re-sign the form with a current date. The updated Employee Eligibility Statement must be returned to us for coverage to become effective. The effective date of the employee s coverage under your self-funded benefit plan will be the first of the month following the date the original eligibility statement was received by us. Late enrollees age 19 or older may be subject to an 18-month preexisting condition limitation period for medical coverage under your self-funded benefit plan. This 18-month pre-existing condition limitation period will be reduced by any prior creditable coverage the person had immediately preceding the effective date with a break in coverage of no more than 63 days preceding the effective date. Important Notice: A person shall be considered a late enrollee if he/ she enters the United States on a visa and enrolls for coverage under your self-funded benefit plan more than 31 days after his/her visa is stamped upon arrival. Special Enrollees A special enrollee is an employee and/or dependent who previously waived coverage under your self-funded benefit plan, but may now be eligible because an approved qualifying event occurred. The enrollment period for a special enrollee is the 31 days following the qualifying event (60 days for special enrollees who have lost their Medicaid or State Children s Health Insurance Program coverage). An Employee Eligibility Statement and a Special Enrollee Form (AD41) must be submitted, along with documentation to support the qualifying event, if the employee or dependent qualifies as a special enrollee. If an applicant qualifies as a special enrollee, coverage under your selffunded benefit plan will become effective on the date of the qualifying event. Failure to submit the request and supporting documentation within the enrollment period could result in an extended pre-existing condition limitation period or a delay in coverage under your self-funded benefit plan. If you are unable to obtain the supporting documentation within the enrollment period, do not delay your enrollment request. 9

13 Dependent Child Enrollment A dependent child acquired by the member while coverage under your selffunded benefit plan is in force, will be covered as follows: Newborn child - a child born to a member while the member s coverage is in force is automatically covered from the moment of birth if no additional contribution is required to cover such child. When additional contribution is required to cover the child, the member must submit an Employee Eligibility Statement with the newborn s information within 31 days after the date of birth. Adopted child an adopted child is covered from the initial placement. The member must submit an Employee Eligibility Statement, Special Enrollment Form (AD41) and supporting adoption documentation within 31 days after the initial placement. Stepchild a stepchild is covered on the date of the marriage of his parent and stepparent. The member must submit an Employee Eligibility Statement Special Enrollment Form (AD41) and supporting documentation within 31 days after the event. Failure to enroll the new dependent within the first 31 days will result in coverage being delayed until the first of the month following the signature date on the submitted Employee Eligibility Statement. The approved qualifying events are as follows: Loss of Coverage a. Job termination b. No longer eligible company policy (i.e., dependent coverage is no longer offered, etc.) c. COBRA benefits have expired. Benefit/Coverage Change a. Contribution (increase/decrease in employer contribution level) b. Benefit (increase/decrease in deductible, coinsurance, etc.) c. Payment Amount (increase in payment amount) 10

14 Life-Changing Events a. Adoption of a child b. Divorce c. Marriage d. Birth of a child Misstatement on the Employee Eligibility Statement The Employee Eligibility Statement or other similar form, which captures information regarding medical conditions and treatment of eligible persons, is made part of the application for insurance and shall be relied upon in determining rates and eligibility for coverage. Trustmark has the right to revise the rates (retroactively or prospectively) for the stop-loss insurance contract, or terminate the stop-loss insurance contract if a person completes the Employee Eligibility Statement or other similar form with false, incomplete or misleading information that results in a material misrepresentation affecting the assessment of the risk or the terms or conditions for coverage. Trustmark has the right to make any adjustment or denial of benefits due to the material misrepresentation. Medicare Medicare benefits for employees or spouses who are age 65 and over will be paid secondary to Medicare when an employer has fewer than 20 employees. Covered charges will be reduced by any benefits payable by Medicare. When an employer has 20 or more employees and is subject to the Social Security Act (Section 1862(b)), medical benefits will be paid primary to Medicare. This may result in an increase in the payment amount. An employee may choose to voluntarily waive coverage under your selffunded benefit plan and elect Medicare as sole payer. To determine employer size, Medicare will look at whether the employer had at least 20 employees (full- and part-time) in at least 20 weeks of the preceding or current calendar year. You must notify us of any changes in group size relevant to administering benefits under Medicare or federal law. Waiving Coverage Under Your Self-Funded Benefit Plan If an employee declines coverage under your self-funded benefit plan and/or dependent coverage when eligible, he must complete and sign the Waiver of Coverage section on the Employee Eligibility Statement. Coverage should be waived within the initial enrollment period whenever possible. 11

15 If the employee waives the coverage under your self-funded benefit plan offered by you for the employee or his dependents, including spouse coverage, the employee or his dependents may be considered late enrollees if they apply for coverage at a later date. If the employee or his dependents are considered late enrollees, coverage may be delayed. See the section How to Enroll Employees and Dependents and the notice regarding Special Enrollment Rights attached to the Employee Eligibility Statement for additional information. Termination of Coverage Under Your Self-Funded Benefit Plan 1. Employee Termination When an employee terminates employment, complete and submit the Termination/Waiver section on the back of the monthly billing statement to notify us of the change. Coverage under your self-funded benefit plan will terminate on the last day of the month in which the employee worked. If coverage terminated on or after the first day of the month, coverage will continue and payment will be requested for the full month. Notification to terminate employee coverage should be sent to us as quickly as possible. We will not retroactively credit your billing amount. See the Plan Document for more details on termination. 2. Employer Termination If you are terminating your company s self-funded benefit plan and stoploss insurance coverage, submit a written notice prior to your next due date indicating that coverage is to be terminated. Stop-loss coverage will be terminated at the end of the billing period in which the request is received by us and payment has been made. Reminder: If payment has been received for the current billing period, we will not retroactively terminate your coverage or credit any payment. Trustmark Life Insurance Company can terminate your stop-loss insurance contract for the following reasons: a. If we do not receive your monthly payment within 31 days of the due date, your stop-loss insurance coverage terminates as of the due date. b. If the group fails to meet participation requirements, the stop-loss insurance contract and Administrative Services Agreement may be terminated on any due date with 31 days advance notice. c. The group submits a voluntary written request for termination. d. The business moves to a state where we do not write business. 12

16 e. The business is no longer engaged in the same business that it was on the date the stop-loss insurance contract was effective. f. There is evidence of fraud or misrepresentation. g. There is noncompliance with plan provisions. 3. Terminations Mid-Contract Year If your stop-loss insurance contract terminates before the end of the contract period, the annual aggregate attachment point will be deemed not satisfied. Therefore, we will process claims, with dates of service during the time the contract was in force, to the earliest of: the end of the runout period or when the balance of the aggregate claim liability account is depleted. Any claims over this amount will be your responsibility. If a claim is made during this time against the Specific Attachment Point, you are responsible for funding the Specific Deductible. 4. Runout Period The Runout Period is the period after the end of the contract year, during which claims incurred during the contract year will continue to be paid. After the contract year has ended, you will receive a letter that provides an accounting of the balance in your aggregate claim liability account as well as information regarding the handling of claims during the runout period. Claims incurred during the contract year and paid in the runout period are either paid from funds remaining in your aggregate claim liability account or under the provisions of the stop-loss insurance contract, if applicable. During the runout period, you will continue to receive the monthly Aggregate Claim Liability Report until final accounting is complete. After the run-out period has ended, claims incurred during the contract period will not be processed by Starmark and will be returned to the provider of the service. Certificates of Creditable Coverage When a member s coverage under your self-funded benefit plan terminates, a Certificate of Creditable Coverage will be generated for the terminated employee. We will send the Certificate of Creditable Coverage to the former employee if the employee s address is on file. If we do not have the former employee s current address, we will send the Certificate of Creditable Coverage to you for delivery to the terminated employee. The employee may be eligible to continue coverage under your self-funded benefit plan after termination of employment. See the Continuation of Coverage section for more information. 13

17 When your self-funded benefit plan terminates, we will send you a Certificate of Creditable Coverage listing all persons covered and how long each person had coverage. Individual Certificates of Creditable Coverage for specific employees will be furnished upon request. Continuation of Coverage Continuation of coverage applies only after an employee or dependent has been continuously covered under your self-funded benefit plan, and any similar group coverage provided by you, the employer, which it replaces, for three months. When you employ less than 20 employees, your self-funded benefit plan allows qualified terminated employees, and divorced or surviving dependents of qualified employees, to continue their benefits at their own expense. Please refer to the Plan Document for details. Written notice of continuation rights must be given to employees and dependents eligible for continuation. We have Continuation Election forms available for your use. These forms can be ordered from us or downloaded from the Starmark website. When you employ 20 or more full- and part-time employees for more than 50% of the working days in the previous calendar year, your employees qualify for continuation under the federal law, COBRA. COBRA compliance is your responsibility. Any COBRA notices must be on your letterhead or other form provided by you. Please contact your legal counsel for further information. Miscellaneous Administration 1. Clerical errors by us shall not invalidate a member s coverage under your self-funded benefit plan. This includes errors in enrolling, recording or reporting for coverage purposes. 2. We give you a Plan Document for each employee. The document describes benefits for covered employees and any dependents. 3. Visit the Starmark website at to download forms. 4. You must provide us with information to administer your self-funded benefit plan. Information is required when an eligible employee becomes covered, when changes in amounts of coverage occur, and when a member s coverage terminates. 5. Upon request, we will provide each employer with any information we have available to prepare Schedule A 5500 Forms. 14

18 Participation Requirements 1. A minimum of 75% participation of eligible employees for medical coverage under your self-funded benefit plan is required after valid waivers for each eligible group. Eligible employees and dependents may, upon request, be excluded from medical coverage if they have other employer-based group medical coverage through a spouse. If eligible employees have valid waivers, a minimum of 75% participation will be required. 2. Prior to each new contract year, each employer may be required to submit an Employer Certification form to verify the number of employees participating in the self-funded benefit plan. 3. We may terminate an employer s stop-loss insurance coverage for lack of participation on any payment due date with 31 days advance notice. Using Your Self-Funded Benefit Plan 1. Claim Filing Instructions Your employees or their providers (doctors and hospitals) should file their claim as specified on the medical ID card. An explanation of benefits (EOB) will be sent to the employee at his home address to show how payment has been distributed. 2. Precertification Procedures To initiate the precertification process, the employee must call the precertification network at the phone number provided on his medical ID card prior to any of the following requested medical procedures: 1. Inpatient hospital stays, including maternity 2. Organ and bone marrow transplants 3. Home healthcare 4. Physical, occupational or speech therapy 5. Home infusion therapy, including chemotherapy 6. Hospice care 7. Acute inpatient rehabilitation stays 8. Long-term acute rehabilitation 9. Subacute inpatient medical and rehabilitation 10. Skilled nursing stays 15

19 11. Inpatient mental illness, nervous disorders, alcohol abuse and chemical abuse 12. Diagnostic imaging tests, including new technology, but not limited to, Magnetic Resonance Imaging (MRI), Position Emission Tomography (PET), Computerized Tomography (CAT) Scans, and Single Proton Emission. Precertification is not required for outpatient surgeries. In the case of an emergency admission, precertification must be completed by calling the precertification network within 48 hours after care begins, or by the next regular working day. If precertification procedures are not followed, your self-funded benefit design provides for a penalty. 3. Prescription Drug Benefit, if selected The prescription drug benefit information is included on the ID card. Here s how to use the prescription drug card: a. Go to any member pharmacy. b. Present your ID card along with your prescription for new or refill prescriptions. c. The pharmacist will ask you to sign a form verifying that you received the prescription. d. The prescription drug benefit manager s system will immediately show the pharmacist the amount you are required to pay. If the ID card has not yet been received, the member pharmacy will be able to access the prescription drug benefit manager s system and the employee should be able to purchase prescription drugs as if he showed the ID card. Otherwise, prescriptions should be purchased by the employee and a prescription drug claim form should be completed and sent directly to the prescription drug benefit manager. The prescription drug benefit manager will then reimburse the employee the amount eligible, less any deductible, or copayment or coinsurance percent, if applicable. Additional prescription drug claim forms can be accessed online through the Starmark website or obtained by contacting Starmark customer service. The prescription drug claim form can also be used when prescription drugs are purchased at a nonparticipating pharmacy or when traveling out of town without the ID card. 16

20 Mail Service Prescriptions The prescription drug benefit also includes a mail service drug benefit for maintenance drugs. With the mail service drug benefit, an employee, or his dependent, can order prescription drugs through the mail and may pay less than at the retail pharmacy for a longer supply of maintenance drugs. Non-Covered Prescription Drugs Prescription drugs not covered under the prescription drug card may be covered under your self-funded benefit plan subject to the deductible, coinsurance and other benefit plan provisions. These bills should be submitted to the address on the ID card. See the Plan Document for additional details. If you have any questions regarding the prescription drug benefit, call the prescription drug benefit manager s customer service number shown on the ID card. Coordination of Benefits Coordination of benefits will apply when benefits that would be paid under all of the member s plans exceed the allowable expense. When coordination of benefits applies, benefits payable under your self-funded benefit plan may be reduced. They will be reduced so that the sum of the benefits paid under your self-funded benefit plan, plus benefits payable under all other plans, do not exceed the total allowable expense. Benefits payable under other plans include benefits that would be paid if you made claim. The rules for the order of benefit payment are summarized below. When your self-funded benefit plan must pay first, coordination will not apply. 1. Nondependent/Dependent. A plan which covers a person other than as a dependent will pay before a plan which covers that person as a dependent. If, however, the person is also a Medicare beneficiary, Medicare is: a. Secondary to the plan covering the person as a dependent; and b. Primary to the plan covering the person as other than a dependent. 2. Dependent Child/Parents not Separated or Divorced. A plan that covers a child as a dependent of a parent whose month of birth occurs earlier in a calendar year will pay before a plan that covers the same child as a dependent of a parent whose month of birth occurs later in a calendar year. If both parents have the same birthday, the plan that has covered a parent for the longer period will pay first. 17

21 3. Dependent Child/Separated or Divorced Parents. If two or more plans cover a person as a dependent of separated or divorced parents, benefits for the child are determined in the following order: a. The plan that covers the child as a dependent of the parent with custody of the child; b. The plan that covers the child as a dependent of the spouse of the parent with custody; and c. The plan that covers the child as a dependent of the parent without custody of the child. However, if the specific terms of a court decree state that one of the parents is responsible for the child s healthcare expenses, the benefits of that plan are determined first. 4. Continuation. A plan covering a person as an employee or dependent shall be primary to a plan covering that person under state or federal continuation. This subsection shall not apply if the other plan does not contain an order of benefits determination and the plans do not agree on the order. When these rules do not establish an order of payment, the plan that has covered the person for the longer period of time will pay first. Two plans shall be treated as one if the claimant was eligible under the second plan within 24 hours after the first plan ended. For further details, refer to the Plan Document. Glossary Certificate of Creditable Coverage: A written document specifying the period of an employee s or dependent s creditable coverage. An individual should be given credit toward the pre-existing condition limitation for creditable coverage that ended less than 63 days prior to the effective date. Time covered by previous health coverage may be credited when moving from one benefit plan to another, from a benefit plan to an individual policy, or from an individual policy to a benefit plan. See the Plan Document for more details. Claim: A request for payment of benefits covered under the Plan Document. A bill from the provider is needed to pay medical claims. COBRA: A federal law that requires an employer to offer an employee or his dependents an extension of benefits if the employer employs 20 or more employees (full- or part-time). The duration of the extension will depend upon the qualifying event. See the Plan Document for more details. 18

22 Coinsurance: The percentage of covered charges payable by the member. For example: If the benefit plan pays 80% of covered charges, the coinsurance for the member would be 20% of covered charges. Continuation: An extension of benefits an employer offers to employees and/or their dependents. The maximum duration of the extension will be nine months for employees. See the Plan Document for more details. Contract Year: The 12-month period during which the stop-loss insurance contract or your self-funded benefit plan, if applicable, is in effect. Coordination of Benefits: Taking other plans into account when paying benefits. Copayment: The amount of the office visit charge that a member must pay when services are rendered by a preferred provider. This amount does not apply toward satisfaction of any deductible or the out-of-pocket limit. Deductible: The amount of covered charges a member must pay before any benefits are payable. Due Date: The date your payment is due to us. The due date is noted on the Billing Statement. Dependent: A person who resides in the United States and who is the eligible employee s: 1. Legally married spouse, or domestic partner. 2. Natural child(ren), legally adopted child(ren) or step-child(ren) who are under the age of Child who has coverage in force, who has reached the limiting age, is incapable of self-sustaining employment and is dependent upon the employee or dependent on other care provider(s) for lifetime care and supervision. The employee must give us proof of the child s incapacity and dependency within 31 days after the date the limiting age is reached in order to continue coverage under your self-funded benefit plan. The employee may also be required, from time to time, to give proof of his continuing incapacity and dependency. If proof is not given within 60 days of a request, his coverage will end 60 days after the request is made. 4. Natural child(ren), legally adopted child(ren) or stepchild(ren) who are under the age of

23 Notwithstanding the above, the following are not considered to be dependents: a. A person who is eligible for coverage as an employee. b. A child who is a foster child. c. A child who is eligible for any other employer-based medical plan as an employee. d. A child who is covered as a dependent of another employee. Eligible Employee: A person who is working for employer for at least 25 hours per week, has satisfied the waiting period, if any, required by the employer, and is a member of a class eligible for coverage. A person may be considered an eligible employee if they are not actively at work due to hospital confinement or disability. Explanation of Benefits (EOB): A statement that explains how benefits are payable and how they are distributed. Initial Enrollment Period: The 31 days immediately following the waiting period established by the employer. Lapse: Termination of the stop-loss insurance contract due to nonpayment after the grace period has ended. Late Enrollee: An eligible employee or dependent who waives coverage at the original effective date of your self-funded benefit plan, or one who requests enrollment following the initial enrollment period. A person shall be considered a late enrollee if he/she enters the United States on a visa and enrolls for coverage under the Plan more than 31 days after his/her visa is stamped upon arrival. See also How to Enroll Employees and Dependents or the Plan Document for details. Member: An eligible employee or dependent whose coverage under your self-funded benefit plan has become effective. Misstatement: Any information that is not correctly written on the Employee Eligibility Statement. Monthly Billing Amount: The amount of money the employer pays each month for the employee s benefit plan. 20

24 Our: Starmark or Trustmark. Participation: The number of eligible employees that must be enrolled in your self-funded benefit plan for you to be eligible for coverage under the stop-loss insurance contract. At least 75% of eligible employees must be enrolled. Pre-existing Condition: A sickness or injury for which a person has, during the six months prior to his enrollment date, received medical care, advice or treatment; had drugs or medicines prescribed, whether taken or not; or had diagnostic tests ordered whether performed or not. A condition is deemed pre-existing whether or not a final diagnosis has been made. Pregnancy is not a pre-existing condition, nor is genetic information in the absence of a diagnosis of the condition related to such information. Pre-existing Condition Limitation: No benefits will be paid for expenses that result from care or treatment of any pre-existing condition until the end of a 12-month period, or 18 months in the case of a late enrollee. The period a person had creditable coverage will be credited against the limitation if such creditable coverage was continuous and there was no break in coverage of more than 63 days before the effective date of coverage under your self-funded benefit plan, exclusive of any applicable waiting period. Prior Creditable Coverage: Any health coverage under another group health plan, an individual health insurance policy, COBRA, Medicaid, Medicare or a public health plan that an employee may have had within the 63 days immediately prior to enrollment in your self-funded benefit plan. Prior coverage may be used as accumulated creditable coverage to offset part or all of any pre-existing condition limitation period required under your new self-funded benefit plan Provider: A physician or hospital that provides medical services. Reinstatement: Making your coverage under your stop-loss insurance contract effective again after a termination and all overdue payments are made. Runout Period: The period after the end of the contract year, during which claims incurred during the contract year will continue to be paid. Special Enrollee: An employee or dependent who previously waived coverage under your self-funded benefit plan, but may now be eligible because he has involuntarily lost his other coverage, had a benefit/coverage change, or a life-changing event. 21

25 State Quarterly Wage and Tax Statement: A form each employer must file with the state on a quarterly basis. It lists all employees working for the employer and their salaries. Timely Enrollee: An eligible employee who completes and signs the Employee Eligibility Statement on behalf of himself and/or his dependents during the waiting period and prior to the end of the initial enrollment period. Us: Starmark or Trustmark. Waiting Period: The amount of time the employee must be employed before he is eligible for coverage under your self-funded benefit plan. Waiver of Coverage: A request from an employee to not be included under your self-funded benefit plan provided by You. We: Starmark or Trustmark. You/Your: Employer 22

26 Trustmark, an employee benefits company for nearly 100 years, is dedicated to providing financial security, improving health and well-being, and helping people navigate the healthcare system. Serving more than 2 million covered lives or plan participants, Trustmark is rated A- (Excellent) by A.M. Best. Starmark is a distinguished leader in group healthcare benefits offering self-funded and fully insured plan designs. With paperless employee enrollment, health and wellness programs, nationwide network access and seamless HRA administration, Starmark is the choice in employer healthcare benefits. Plan design availability and/or stop-loss coverage may vary by state. Self-funded plans are administered by Starmark, and stop-loss insurance is provided by Trustmark Life Insurance Company. PERSONAL. Flexible. Trusted Star Marketing and Administration, Inc. AD44 SF (10-11)