Important news: Empire s Small Group health product withdrawals and rate increases for 2012

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1 Important news: Empire s Small Group health product withdrawals and rate increases for 2012 January 19, 2012 Dear Group Benefits Administrator: This letter pertains to important product discontinuances. If you have one of the plans listed directly below, it is being discontinued on your group s renewal date starting April We re withdrawing some products as part of an effort to reduce financial losses in our Small Group plans. We re also applying rate increases to some of the products that will remain available. Here is a summary of the important changes this letter covers: SMALL GROUP PRODUCT WITHDRAWALS Starting April 1, 2012, Empire will no longer offer these plans effective on a group s renewal date: o Empire Point of Service (POS) o Empire PPO Plus o Empire Prism EPO o Empire EPO Essential Options 1-9 o Empire EPO Stepped o Value EPO o Empire Total Blue PPO with Health Savings Account (HSA) Options 2, 5, 6 As a reminder, Empire stopped offering Empire Total Blue PPO Options 7 and 8 with HSA, starting 10/1/11 upon renewal. SMALL GROUP PRODUCTS REMAINING We will still offer these Small Group products: o Direct HMO Option 12 o HMO Option 12 (Gatekeeper) o Empire PPO Option 1 o Empire PPO Option 2 o Empire EPO Essential Option 10 o Empire Total Blue (CDHP) Option RATE INCREASES Premium rates for the remaining Small Group products will increase beginning April 1, an association of independent Blue Cross and Blue Shield plans. GRP_BCBS 12/11

2 Read below for more information on these changes: *Product withdrawals: The following Small Group plans will be withdrawn on the dates below: Product withdrawal Withdrawal date Empire Point of Service (POS) Upon the group s next renewal date starting on or after 4/1/12 Empire PPO Plus Upon the group s next renewal date starting on or after 4/1/12 Empire Prism EPO Upon the group s next renewal date starting on or after 4/1/12 Empire EPO Essential Options 1-9 Upon the group s next renewal date starting on or after 4/1/12 Empire EPO Stepped Upon the group s next renewal date starting on or after 4/1/12 Value EPO Upon the group s next renewal date starting on or after 4/1/12 Empire Total Blue PPO with Health Savings Account (HSA) (excludes Option 3) Upon the group s next renewal date starting on or after 4/1/12 The above products will be closed to new sales starting April 1, Small Group health plans Empire will continue to offer: If your plan is being withdrawn and you want to continue with Empire Small Group coverage, you must select one of the following plans: Direct HMO Option 12 HMO Option 12 (Gatekeeper) Empire PPO Option 1 Empire PPO Option 2 Empire EPO Essential Option 10 Empire Total Blue (CDHP) Option 3 Empire will also continue to offer Healthy New York to eligible Small Groups. Starting January 1, 2012, the state has advised that only the high-deductible Healthy New York plan is available for new sales. Groups that already have the Healthy New York standard plan may keep it. Here are a few details about the plans Empire will continue to offer: Product In-network deductible In-network coinsurance In-network out of pocket max PCP office visit cost share Specialist office visit cost share Inpatient cost share Direct HMO $0 $0 $0 $30 $50 $1,000 Option 12 HMO Opt. 12 $0 $0 $0 $30 $50 $1,000 (Gatekeeper) PPO Option 1 $1,000 10% $3,000 $45 $60 Ded/Coinsurance PPO Option 2 $1,500 20% $4,500 $45 $60 Ded/Coinsurance EPO Essential $4,000 20% $10,000 $30 $50 Ded/Coinsurance Option 10 Total Blue HSA Option 3 $2,000 20% $5,000 Ded/Coinsurance Ded/Coinsurance Ded/Coinsurance You may purchase any of these products with or without prescription drug coverage. Empire will also continue to offer the Healthy New York product.

3 Next steps & what you need to do: To move your coverage to another Empire plan, please contact us. Remember, if your plan is being withdrawn and you do not choose a new plan, your coverage will automatically end at 12:01 a.m. on your renewal date. o The planned withdrawals start April 1, 2012 upon a group s renewal date. So, for example, if your group s renewal date is June 1, your plan will be withdrawn effective June 1, Your coverage could end sooner if you stop your Empire policy or payment before then. When you enroll in a new Small Group plan with Empire, your group must meet our Small Group eligibility guidelines. Effective April 1, 2012 for new sales and upon renewal for existing, groups may select only one Empire plan for their group s membership. We encourage you to review our new eligibility guidelines to determine if your group is eligible for Empire Small Group coverage. Please visit the employer portal for current guidelines. We ll need the required paperwork from you to enroll in a new plan. If you choose a new Empire health plan, your employees will get a new ID card as well as information about the new plan. Need more information before you decide? We know you may have questions. To find benefit summaries for the remaining Small Group product options, go to empireblue.com. Click on the Employers button on the left side of the page. Then click the orange Enter button. At the top of the Employer Home page, click on the Answers@Empire button on the navigation bar and choose Benefit Summaries. You may also want to talk with your Empire representative or broker. Or you can call our GBA Contact Center at If your plan is being withdrawn, we enclose copies of the notice we re providing to your impacted members. They describe rights available under the NYS law known as Ian s Law and under Labor Law, 217, Insurance Law 4235 and 55.2 of the NYS Insurance Regulations, Title Rate increases: Premium rate increases will go into effect on April 1, 2012 for some of the Small Group products remaining in the market. You may contact your broker or Empire by calling the GBA Contact Center at , or via at PremiumRateChange@empireblue.com for further information about this rate change. An explanation of this filing and notices for the approved rate increases can be found at empireblue.com/priorapproval. If you have a plan that is subject to a rate increase, we have included a copy of the notice for you to provide to your employees enrolled in that plan. We also recommend that you provide any additional information your members may need to understand their coverage costs, with the notice, such as any changes in employee contribution levels. Thank you. Sincerely, Mark L. Wagar President and CEO

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5 Additional Rights Available Under New York State Law The following notice will be provided to covered members to advise them of rights available to them under NY Chapter 393 of the Laws of 2010, better known as Ian s Law Certain rights are available to you if: All references to you or You mean you or a covered family member 1. You have a serious medical condition. 2. You used a benefit under your Empire policy in the last 12 months related to that condition. 3. The benefit you used is not covered by the replacement coverage available to your employer from Empire. If you fit into this category, your employer has the right to: Choose any benefit plan offered by Empire that provides access to the same or substantially similar benefit to the one you are losing as a result of the withdrawal. If you think you are eligible under this right, even if you are not sure, you or your employer may contact the Superintendent of Financial Services within 45 days of the date of this notice. Contact the Superintendent: By at classdiscontinuance@dfs.ny.gov By mail at the following address: New York Department of Financial Services Health Bureau-Class Discontinuance One Commerce Plaza Albany, NY The Superintendent will determine if you are entitled to this right and let you know. If you are eligible, Empire will offer your employer replacement coverage that includes the benefit you need. Or, if Empire does not offer replacement coverage with the benefit you need, Empire will allow your employer to continue with your current policy to ensure you have access to the benefit you need. If in the future, Empire introduces an alternative product that includes the benefit you need and you remain eligible, your group may be required to switch to that product. If the Superintendent determines that we have not followed these requirements, we may be prohibited from discontinuing your coverage. If the Superintendent determines that we wrongfully discontinued your class of coverage, we may be required, depending on the circumstances, to offer your employer the right to reinstate your discontinued coverage or to offer you replacement coverage that provides you access to the benefit you need.

6 Notice As required by Labor Law, Section 217, Insurance Law, Section 4235 and Codes, Rules and Regulations of the State Of New York, Title 11, Insurance, Section 55.2, Empire BlueCross BlueShield hereby advises you of certain rights and obligations set forth in these Sections. A. All covered members, subscribers and certificate holders and their covered dependents shall be afforded the following rights under the termination policy: 1. Any claims incurred during the effective dates of the group contract will be processed and adjudicated in accordance with the terms, conditions and provisions of said group contact. 2. Additional benefits beyond the termination date of the contract may be available under the terminating contract for conditions which result in a total disability, pursuant to the terms, conditions and provisions of the terminating group contract. 3. Rights to convert to a direct pay contract between Empire BlueCross BlueShield and the covered member, subscriber or certificate holder, providing for coverage which is currently being offered on a direct pay basis, may be available provided the group does not obtain replacement coverage. B. Further, as required by the provisions cited above, you, as the policyholder, may be required to meet the following obligations: 1. The policyholder must give written notice of the intended termination to each certificate holder resident New York State insured under this group policy by hand-delivering or mailing to the certificate holder a copy of the notice of termination and a covering letter advising the certificate holders of the intended termination. 2. The policyholder s notice to the certificate holder shall be either: a. hand-delivered by the policyholder to the certificate holder at the certificate holder s place of employment (e.g. by including the notice in the certificate holder s pay envelope) at least nine days prior to the intended date of termination; or b. mailed by the policyholder to each certificate holder at the certificate holder s last known residential address at least nine days prior to the intended date of termination. 3. The policyholder must also post a copy of this notice of intent to terminate and the required covering letter in conspicuous locations chosen as most likely to give notice to the certificate holders. The notice shall be posted at least nine days prior to the intended date of termination. 4. In accordance with the provisions of Labor Law, Section 212(4), the provisions of the Codes, Rules and Regulations of the State Of New York, Title 11, Insurance Section 55.2 and Labor Law, Section 212(3) shall not be deemed to apply if, at least 10 days prior to the date of the intended termination, as specified in the notice of intent to terminate, the policyholder has: a. taken necessary steps whereby the intended termination is rendered null and void; or b. contracted with another insurer to replace the existing insurer for the providing of similar coverage for the same certificate holders, and filed an affidavit with the Commissioner of Labor and Superintendent of Financial Services to that effect.

7 Notice i. Affidavits filed with the Commissioner of Labor shall refer to Labor Law, Section 212, and be addressed to : Director of Labor Standards Department of Labor Agency Building 12 State Office Building Campus Albany, New York ii. Affidavits filed with the Superintendent of Financial Services shall refer to Labor Law, section 217 of the Codes, Rules and Regulations of the State of New York, Title 11, Insurance Section 55.2 Part, and shall be addressed to: Chief, Health Bureau NYS Department of Financial Services One Commerce Plaza Albany, NY 12257