Administrative Handbook

Transcription

1 Administrative Handbook Small Business Employers California For groups with 2 50 eligible employees CA (5/07)

2 Table of Contents Welcome 3 Contact Information 4 Glossary 5 Enrolling in Your New Health Benefits Plan 6 7 How Can the Aetna Small Group Service Center Help You? 6 Aetna Website 6 Employer Information 7 11 Benefit Waiting Period 7 Pick-A-Plan Portfolio 7 Participation Requirements 8 Contribution Requirements 8 Anniversary Dates 8 Annual Renewal 8 Non-Renewal of Coverage 8 Cancelling Group Coverage 8 Member Notification Due to Non-Payment of Premium 9 Changing Your Broker 9 Changes in Ownership 9 Benefit Modifications 10 Pharmacy 11 How to Enroll in Life and Dental Insurance 11 Address Changes 11 Group Maintenance Accuracy of Information 12 ID Cards, Certificates 12 Other ID Card Information 12 Replacement ID Cards 12 Sample ID Cards 13 Employee Information Employee Eligibility 14 Eligible Employees: Full-time vs. Part-time, Sole Proprietors 14 Ineligible Employees 14 Employees Residing Outside of California 14 Leave of Absence 15 Adding Employees to the Plan Enrolling New Employees 16 Open Enrollment 16 Late Applicants 17 Pre-existing Conditions 17 Credit for Prior Coverage and Pre-existing Conditions Exclusions 17 Where to Submit Proof of Prior Coverage 18 Deductible Credit 18 Employee Application Tips 18 Enrollment Forms Guide 18 Sample Enrollment Form 19 Selecting a PCP for HMO 19 Converting Part-time Employees to Full-time Employees (and vice versa) 19 New Hires 20 Coverage Effective Dates Enrolling Rehired Employees 20 Dependent Changes to the Plan 20 Eligible Dependents 20 Enrolling Eligible Dependents Qualifying Event 21 Live and Work Requirements 21 Address Changes 21

3 Employees Choosing Not to Enroll in the Plan 22 Declinations 22 Removing Employees from the Plan 23 Terminating or Cancelling an Employee 23 Removing Employees Who Remain Eligible but Discontinue Coverage 23 Removing COBRA Members 23 Continuation of Coverage COBRA 24 CAL-COBRA 24 COBRA Eligible Dependents 24 Effective Date 24 HIPAA 25 Conversion 25 Extension of Benefits 25 Employees Who Turn Age Over Age Dependents 25 Divorce 25 Medicare 26 Medicare Coverage 26 Medicare Rates 26 Billing Premium Rates 27 Premium Payments Plan Key 29 Invoice Summary and Payment Stub 29 Retroactivity/Other Adjustments 30 Current Inforce Charges 31 Benefit Snapshot 32 Dental 33 Enrolling New Employees 33 Changes in Coverage 33 Ending Coverage 33 Late Applicants 33 Waiting Periods 33 Voluntary Dental Options 33 Employer Contribution 33 Participation 34 Open Enrollment 34 Life Insurance Premiums 35 Enrolling New Employees 35 Late Applicants 35 Employer Contribution 35 Participation 35 Changing Coverage 35 Ending Coverage 35 Job Classification (Position) Schedules 36 Beneficiary Designations 36 New Hire Checklist & Employee Termination Checklist 37 1

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5 Welcome to Aetna. We are excited you have chosen Aetna and look forward to providing you with a level of service that demonstrates our commitment to providing a quality health plan for you and your employees. This handbook provides a summary of the administrative information you need to help you administer your Aetna plan(s). It is important for the successful administration of your plan(s) that you read and understand this information, particularly the necessity of timely and accurate submission of data and other information as described in the handbook. As you read through this handbook, please note that you may encounter specific terms or references that do not apply to the plan or benefits you have selected. The actual terms of your group plan will be set forth in the plan documents (Schedule of Benefits, Certificate of Coverage, Evidence of Coverage, Group Agreement, Group Insurance Certificate, Booklet, Bookletcertificate, Group Policy) issued to you by Aetna. As such, the information contained in this handbook is in no way part of, nor a waiver to, the actual terms of your group plan or any other agreement you may have with Aetna. Thank you for choosing Aetna. Sincerely, Aetna Small Group 3

6 Contact Information PLAN SPONSOR SERVICES phone fax Choose the following numbers, when prompted, to access the information you need: 1 Renewals 2 Claims 3 Billing & Enrollment Billing For Lockbox information, see customer bill or please contact the Plan Sponsor Services toll-free number for more information. Enrollment Aetna P.O. Box Fresno, CA MEMBER SERVICES Phone Fax For benefit questions or claims inquiries for Aetna HMO Plan (prompt 1) Phone Fax For benefit questions or claims inquiries for Aetna EPO Plan, Aetna PPO Plan, Aetna Choice Plan (MC), Aetna Indemnity Plan. Claims Addresses For Aetna HMO Plan Aetna Life Insurance Company P.O. Box El Paso, TX For Aetna EPO Plan, Aetna PPO Plan, Aetna Choice Plan (MC), Aetna Indemnity Plan Aetna Life Insurance Company P.O. Box El Paso, TX DENTAL prompt 1 (Dental Plan Member) prompt 2 (Dental Care Provider) Claims Address Aetna P.O. Box Lexington, KY LIFE Claims Address Aetna Life Insurance P.O. Box Lexington, KY DISABILITY Claims Address Aetna Life Insurance P.O. Box Lexington, KY PHARMACY AETNA RX or prompt 2 (Member or calling on behalf of a member) Claims Address Aetna Pharmacy Management Attn: Claims Processing P.O. Box Lexington, KY Mail Order Drug Ordering Address Aetna Rx Home Delivery P.O. Box Kansas City, MO OTHER PROGRAMS Vision One Discount Program Call for closest eye care provider, or you may use DocFind. Informed Health Line Hour Nurse Help Line Aetna Behavioral Health Find information on Behavioral Health Services, Alternative Health Care Programs, Fitness Program, DocFind and Aetna Navigator on our website, 4

7 Glossary Here are some terms you will encounter as you review this handbook: Benefit Waiting Period The probationary period or the amount of time a new hire must wait to become eligible for coverage with Aetna. Determined by the plan sponsor at the time benefits are elected and set up. HMO Health Maintenance Organization IPA Independent Physician Association Indemnity Traditional plans for areas within a state that do not have HMO or PPO Providers. MOD Mail-order drug PCP A term for primary care provider. A primary care provider (PCP) must be designated to ensure benefits are paid. PCPs are family practitioners, general practitioners, internists and pediatricians. Preferred Provider A PPO term for physician. To receive maximum benefits, an employee should visit physicians who are preferred or in the network. PPO Preferred Provider Organization Provider The physician chosen to provide care Traditional products PPO and indemnity medical, dental, life and disability plans n MC Managed Choice n EPO Elect Provider Organization n HDHP High Deductible Health Plan n HRA Health Reimbursement Arrangement HMO Products n HRA Health Reimbursement Arrangement n AVN Aetna Value Network 5

8 Enrolling in Your New Aetna Health Benefits Plan How Can the Aetna Small Group Service Center Help You? As the benefits administrator, you may contact the Aetna Small Group Service Center, a group of individuals trained to address your unique concerns. This group of individuals will be able to answer your questions regarding enrollment, billing and group setup. In addition, you may order replacement membership cards for employees or additional enrollment supplies. Call the Aetna Small Group Service Center at during the hours of 8:00 a.m. to 5:00 p.m. PST, Monday through Friday. Member questions should be directed to our Member Services department. We suggest that your employees speak with a Member Services representative by calling the toll-free telephone number listed on their identification (ID) cards. The Member Services department is open Monday through Friday, 8:00 a.m. to 5:00 p.m. PST. See page 4 for a detailed contact list. If a situation requires your involvement, call the Aetna Small Group Service Center for prompt resolution. Your employees should consult their member handbooks and/or their applicable plan documents for clarification of how the plan works; for covered services, limitations and exclusions; and for a description of the Aetna grievance and appeals process. Aetna has a process that gives members the added option of requesting an objective and timely external review of certain coverage denials for members covered under our insured products. Your employees may call Member Services for more information. Aetna Website Our website, provides a variety of group and member education tools that allow you and your employees to support and enhance their group health benefits. Employer Visit the site to download your renewal booklet and forms for employee changes. You may also update your contact information so that we have up-to-date information in order to contact you. You may also use the contact us feature if you should have questions regarding your plan. Employees Aetna provides multiple links that allow employees to have access to their private information for claims and benefits by using our Aetna Navigator website. Within this site members are able to locate providers using our DocFind online directory, review claims paid, deductible or coinsurance amounts, prescription drug plan, download claims history, print temporary ID cards and more. DocFind Employees may access this feature via their secure member website on Aetna Navigator, which will do the work of pre-filling the plan name and other information to generate a listing of doctors, dentists, pharmacies, hospitals, facilities and other health care professionals. For new employees who have not been enrolled, they may access the public version of DocFind where they may search for doctors, dentists, pharmacies, hospitals, facilities and other health care professionals before they make their final plan selection. 6

9 Employer Information Health & Wellness Here you ll find a vast library of information about health, wellness, health benefits and financial planning. Learning Resources Look up diseases and conditions, tests, procedures, treatments and much more. Find information from experts at Harvard Medical School, Columbia University College of Dental Medicine and other reliable sources. Now available: Aetna InteliHealth, Aetna Behavioral Health, Dental Health, and Patient Safety Tips. Living Well No matter who you are or what stage of life you re in, taking care of yourself should be a priority. Find a rich selection of resources to help you achieve optimal health: includes women s health, men s health, healthy aging, herbs and natural remedies, weight management, and coping with depression. Decision Support Tools Our online tools can help you find a doctor, make health benefit choices, select life and long-term care insurance and more. Get answers to your health and financial planning questions, based on your personal input. Benefit Waiting Period The benefit waiting period is the probationary period or the amount of time a new hire must wait to become eligible for coverage with Aetna. This waiting period can be changed upon the plan administrator s request. The benefit waiting period can only be changed once in a rolling 12-month period and this does include the annual renewal. All benefit waiting period changes are subject to approval by Aetna. If you selected a probationary period, depending on the group s effective date, the eligibility date will be the 1st or the 15th day of the month following satisfaction of the probationary period. If there is no probationary period, depending on the group s effective date, the eligibility date will be the 1st or the 15th day of the month following their hire date. In order to be eligible for coverage, the employee must sign and return the enrollment form within 31 days of the employee s eligibility date. If medical coverage is waived by the employee and/or dependents, it is recommended the employer obtain a signed waiver and submit to Aetna (see enrollment/change form) and keep on file. Otherwise, the employee will be treated as a late enrollee and will be subject to the requirements outlined in the Late Applicant section. All new employees are required to meet their benefit waiting period. Waiving the benefit waiting period is not permitted. If an employee is rehired within 12 months of terminating coverage under your plan with Aetna, the employee does not need to meet the benefit waiting period again. Aetna Offers Its Pick-A-Plan Portfolio Option to All California Small Businesses (2 50 eligible employees) Pick-A-Plan is Aetna Small Group s suite of plans designed specifically with the small employer in mind. These plans provide choice, flexibility and simplicity. What is the Pick-A-Plan option? Pick-A-Plan allows employers with 2 or more eligible employees to select as many medical plans as they wish, and build a customized portfolio by selecting from any of Aetna s available products. By offering Pick-A-Plan at enrollment, current employees can switch to any plan at the plan sponsor s anniversary, without medical underwriting. If employers do not have the suite of Pick-A-Plan products in place, employees may have to go through medical review to determine if they qualify for the new plan. If Pick-A-Plan is in place, all new hires will be able to select any plan at the time of enrollment. 7

10 Employer Information (continued) Participation Requirements Employees of 3 or less: Enrollment in an Aetna plan must be equal to 100% of total eligible employees excluding valid waivers, such as coverage through a spouse. Waiver forms are required. Employees of 4 50: Enrollment in an Aetna plan must be equal to or at least 75% of eligible employees excluding valid waivers, such as coverage through a spouse. Waiver forms are required. Contribution Requirements Medical For Single Option Plans, the employer must contribute at least 50% of the employee rate. For Pick-A-Plan Options, an employer has two choices, a Single Contribution or a Defined Contribution. Single Contribution The employer must contribute at least 50% of the employee rate. Defined Contribution The employer may choose to offer a Defined Contribution of at least $80 or the actual cost of the plans picked, whichever is less. Dental The employer must contribute at least 50% of the employee only cost or 25% of the total cost of the plan. Life Groups with less than 10 eligible employees, the employer must contribute 100% of the cost of the plan. Groups with eligible employees, the employer must contribute at least 50% of the cost of the plan (excluding the Optional Dependent Life). Anniversary Dates Your anniversary date will be 12 months after your original effective date. It is on this date that you will receive your annual renewal from Aetna. Annual Renewal The Annual Renewal period is the time of year when you and your employees can reevaluate your health care benefits needs, select the plan(s) that best meets those needs and make contract changes. The timing of the Annual Renewal greatly affects the service your members receive. Aetna will provide the renewal materials 30 days in advance of the renewal date. Plan changes must be submitted to Aetna within the specified time frame on your renewal letter. Plan changes will not be accepted after the date noted on the renewal letter. Change to your plans can be made at New Business or at Renewal. Please refer to the Benefit Modifications table on page 10 for details. Non-Renewal of Coverage Aetna reserves the right to terminate the group health benefits plan for reasons including, but not limited to the following: n Material misrepresentation n Non-payment of premium n Failure to meet the minimum contribution and/or participation requirements n Failure of the group to provide accurate eligibility information or other breach of contract Cancelling Group Coverage Renewal policy cancellations require written notification of intent to cancel within 30 days of the renewal. Cancellations other than at renewal require 60 days advance notice. If advance notice is not provided, we will cancel the account with the next billing cycle, and you will be liable for all premiums billed through that date. 8

11 Member Notification Due to Non-Payment of Premium Title 28, s of the California Code of Regulations, requires the employer to demonstrate a notice of cancellation was mailed to each employee enrolled in a medical HMO or dental HMO at the employee s current address. The most common reason Aetna terminates coverage is due to non-payment of premium. In many instances, this is the way we are notified if a group has secured coverage through another carrier. However, because we did not receive notification from the employer that other coverage is in place, the employees must be notified. In order to comply with the California Department of Managed Health Care, Aetna is taking on the responsibility of notifying employees when HMO coverage is terminated. If Aetna does not receive premium for HMO coverage at the end of the grace period, a letter will be mailed to the employee s home address. In order to prevent a letter being mailed to the employee, we need to be notified if other coverage is replacing the existing HMO coverage. If we are notified prior to the end of the grace period, we will not send a letter to the employee. Termination notices should be faxed to the Aetna Small Group Service Center at Changing Your Broker If you d like to change your broker, please fax your request on company letterhead to Aetna at The letter should include the following: n List all account numbers for all of your products (Medical, Out of State Medical, Dental and Life) n Name of the new broker or agency n Effective date of the new broker or agency Changes in Ownership When an inforce group has been sold, the case should normally be terminated. However, there are a few instances when the new owner may want to continue to offer benefits to the employees. The case may remain in force as long as it is the same business, at the same location with the same employees. The new owner must provide the following: n Buyers agreement showing new owner, name change, and date of purchase. n List of employees currently working for the company and number of hours worked. This can be sent over with the new owner s signature and does not have to be from an attorney or CPA. However, if the tax ID number of the existing group changes, we reserve the right to medically underwrite. 9

12 Benefit Modifications Benefit Changes When eligible Request must be received Required documentation Upgrade Medical Benefits (To include adding Medical Plans to existing medical plans) Downgrade Medical Benefits Add Dental to Existing Medical Plans (refer to Dental Guidelines) Add Life to Existing Medical Plans (refer to Life Underwriting Guidelines) Add Part-Time Coverage New Business During the initial plan year a group may only change plans 6 months post sale/ 6 months prior to the renewal date.** Example: A group with a 12-1 effective date can only can only upgrade benefits through 6-1. Existing Business Upgrades are allowed once*** in a 12-month rolling period, limited to the 6-month period following the renewal date. Example: A 1-1 renewal may request a plan change through 6-1. New Business During the initial plan year a group may only change plans 6 months post sale/ 6-months prior to the renewal date.** Example: A group with a 12-1 effective date can only can only upgrade benefits through 6-1. Existing Business Downgrades are allowed twice*** in a 12-month rolling period, limited to the 6 month period following the renewal date. Example: A 1-1 renewal may request a plan change through 6-1. Anytime Anytime Renewal date only On Renewal Request must be submitted on or prior to the effective date of the renewal. Off Renewal Request must be submitted 30 days prior to the requested effective date. On Renewal Request must be submitted on or prior to the effective date of the renewal. Off Renewal Request must be submitted 30 days prior to the requested effective date. On Renewal Request must be submitted on or prior to the effective date of the renewal. Off Renewal Request must be submitted 2 weeks prior to the requested effective date. On Renewal Request must be submitted on or prior to the effective date of the renewal. Off Renewal Request must be submitted 2 weeks prior to the requested effective date. Request must be submitted on or prior to the effective date of the renewal. 1. A new employer application (complete pages 1 and 4 and indicate the requested effective date) or a letter from the group requesting the change. 2. An employee change of coverage form needs to be completed for employees requesting to change to the new plan. 3. A copy of the most recent filed DE A Joinder agreement where applicable. 1. A Plan Sponsor Signature Page or a new employer application (complete pages 1 and 4 and indicate the requested effective date or a letter from the group requesting the change) or a letter from the group requesting the change. 2. An employee change of coverage form needs to be completed for employees requesting to change to the new plan. 3. A Joinder agreement where applicable. 1. A new employer application (complete pages 1-4) is required for all dental adds. Plan Sponsor Signature Page or a letter from the group requesting the change may be submitted in addition to the ER application. 2. New employee enrollment forms are required for all employees enrolling or declining dental benefits (please provide a copy of the ID cards for those employees waiving coverage). 1. A new employer application (complete page 1, 2 and 4) is required for all life adds. Plan Sponsor Signature Page or a letter from the group requesting the change may be submitted in addition to the ER application. 2. New employee enrollment forms are required for all employees enrolling or declining life benefits (if the group is electing 100% contrib., 100% participation is required). 1. A letter from the group requesting the change or a new employer application. 2. New employee enrollment forms for all eligible parttime employees who are enrolling or declining the coverage (please provide a copy of the ID cards for those employees waiving coverage). 3. A copy of the most recent filed DE-6. Name Change Anytime Anytime 1. A letter from the group requesting the change. 2. A completed name change form. 3. A copy of the most recent filed DE-6. BWP Change Benefit-waiting periods must be consistently applied for all employees, including newly hired key employees. No retroactive benefit waiting period changes allowed. NO EXCEPTIONS Enrollment Form Requirements May be requested 6 months AFTER the original effective date. Only one benefit waiting period change in a 12-month period or on the group s anniversary date. Downgrades Anytime a change in coverage is across platforms, an enrollment form is required (pages 1 and 4). Upgrades & New Hires to existing business must submit an enrollment form (pages 1 thru 4). Request must be submitted prior to the requested effective date. If a group makes a plan change within the same platform where more than 1 plan is involved, the Employee Plan Change Template or a letter may be submitted by the Employer on company letterhead. The letter must list each individual employee, and what plan they are going to be enrolled in (regardless if the employee is moving plans). Buy ups are subject to medical underwriting and may be declined for groups that are not offering pick a plan. Dental and life adds: Require all employees to complete an enrollment or waiver form (if applicable). Upgrades: Require all employees moving to the upgraded plan to complete pages 1-4 of the employee application. CHANGES TO THE RENEWAL DATE ARE NOT ALLOWED. **California law requires six-month rate guarantee. ***Renewal plan changes are counted towards the maximum number of allowable changes. 1. A letter from the group requesting the change or a new employer application. If a group makes a plan change within the same platform where more than 1 plan is involved and more than 1 platform is involved, the Employee Plan Change Template or a letter must be submitted by the Employer on company letterhead. This letter must list each individual employee, and what plan they are going to be enrolled in (regardless if the employee is moving plans). In addition, any employee moving platforms must complete an enrollment form (pages 1 and 4).

13 Employer Information (continued) Pharmacy Members with prescription drug coverage must present their ID cards to the pharmacy when obtaining prescriptions. In the event that a member does not present an ID card, the participating pharmacist may call our provider hotline at AETNARX ( ), 24 hours a day, 7 days a week, to verify the necessary information. Until members receive their Aetna ID cards, they should have their prescriptions filled at participating pharmacies and pay for the prescriptions. Once members receive their ID cards, they should submit for reimbursement a copy of the receipt with their ID number or Social Security number clearly marked on the Prescription Drug Claim Form. Submit the claim form to: Pharmacy Management P.O. Box Minneapolis, MN How to Enroll in Life and Dental Insurance We have a variety of Dental and Life products to meet your Small Group needs. Please contact your broker, or Aetna at , to get an Aetna quote for our Dental and Life Products. Address Changes Group address changes Needs to be submitted in writing to either the address or fax number provided below. Employee address changes Please submit an employee change form to either the address or fax number below. Aetna Attn: Billing & Enrollment P.O. Box Fresno, CA Or they may be faxed to Address changes are also accepted over the phone. See the contact list on page 4 for more information. Please be advised that a move to a new rating area may affect the billing and premiums for the employee and/ or dependents. 11

14 Group Maintenance Accuracy of Information In order for Aetna to provide you with accurate billing statements and to effectively administer the benefits under your health benefit plan, you must submit timely and accurate information on any eligibility changes that may occur. These include but are not limited to the following: n Employees and/or dependents being added to the plan n Employees and/or dependents being deleted from the plan n Group address change n Employee address change n Change in plans n Change in Medicare eligibility n Change in COBRA or Cal-COBRA status for employees n Employees turning age 65 n Change in ownership of the group n Employee changes within the group in the event of an acquisition n Change in the number of employees within the group that would affect the groups eligibility for COBRA, Cal- COBRA, or Medicare payor status n Change in dependent student status 12 All changes must be received by Aetna within 30 days of the event. Aetna Attn: Billing & Enrollment P.O. Box Fresno, CA Or they may be faxed to ID Cards, Certificates An ID (identification) card lists pertinent information about the plan under which the employee/dependent is enrolled. A member must present the ID card to access care from a medical, dental or pharmacy provider. Timely submission of completed enrollment forms will expedite ID card processing. After the Employee Enrollment Form is signed by the employee, give a copy to the employee, keep a copy for your records and mail or fax the original to Aetna. The ID cards are usually mailed within 10 days of our receipt of the enrollment form. A subscriber who has a covered spouse or partner will automatically receive two copies of their family ID card; medical and dental cards will be separate, so a family with both coverages will receive both medical and dental family cards. The ID card will hold up to five names. Larger families will receive a second card or a set of cards. Families that wish to obtain additional cards (i.e. for a college student) or make changes may request them through Aetna Navigator or by calling Member Services at the number listed on the member ID card. Other ID Card Information Through the year, enrollment changes are submitted to Aetna. Certain changes will cause an ID card to generate. They include: n Addition of new employee n Provider change n Addition of new dependent(s) n Effective date change n Name change n ID card request Replacement ID Cards ID cards are not automatically generated upon renewal, unless a change in benefit plan occurs.

15 Sample ID Cards Note: There are no Member ID cards for the Aetna Indemnity plan. HMO MC [NAP] [Rent al logo] [Customer logo] Plan Name 1 Plan Name 2 GRP#: VALID: 01/01/2006 RX [Customer Name 1] [Customer Name 2] [REFERRALS REQUIRED] ID# MEMBER NAME BBCCDDEA SAMPLE MEMBER DR BBCCDDEB SAMPLE MEMBER DR BBCCDDEC SAMPLE MEMBER DR BBCCDDED SAMPLE MEMBER DR BBCCDDEE SAMPLE MEMBER DR DR 1 0 MEMBER SERVICES SP 20 ID W GRP: BIN# [RX] 01 JOHN MEMBER PCP: DA VID SMITH 02 JANE MEMBER PCP: D AVID SMITH 03 JACK MEMBER PCP: SUSAN MILLER 04 JILL MEMBER PCP: SUSAN MILLER 05 JOHN MEMBER PCP: SUSAN MILLER MEMBER SERVICES O/V $ PROVIDER S CALL SPC $ PAYOR NUMBER Medical: Aetna HMO Medical: Aetna MC DMO Dental PPO [Customer Name 1] [Customer Name 2] ID W GRP: SAMPLE MEMBER PCD JOHN SMITH 02 SAMPLE MEMBER PCD JOHN SMITH 03 SAMPLE MEMBER PCD SUSAN MILLE R 04 SAMPLE MEMBER PCD SUSAN MILLE R 05 SAMPLE MEMBER PCD JOHN SMITH MEMBER SERVICES O/V $ 5.00 [Customer Name 1] [Customer Name 2] ID W GRP: SAMPLE MEMBER 02 SAMPLE MEMBER 03 SAMPLE MEMBER 04 SAMPLE MEMBER 05 SAMPLE MEMBER MEMBER SERVICES PAYOR NUMBER PAYOR NUMBER Dental: DMO (Dental Maintenance Organization) Dental: PPO (Preferred Provider Organization) 13

16 Employee Information Employee Eligibility When your company enrolled with Aetna, you selected eligibility rules to reflect your company s policy. You may confirm these rules or any other eligibility concerns with the Aetna Small Group Service Center by calling anytime between 8:00 a.m. and 5:00 p.m. PST, Monday through Friday. The toll-free number is Eligible Employees n Full-time A permanent employee who is actively engaged on a fulltime basis in the conduct of the small employer with a normal work week of at least 30 hours per week. n Part-time A permanent employee who works at least 20 hours but no more than 29 hours per week. In order for part-time employees to be eligible for coverage there are four categories that must be met by the employer. 14 > The employee otherwise meets the definition of an eligible employee except for number of hours worked. > The employer offers the employee health coverage under a health benefits plan. > All similarly situated individuals are offered coverage under the health benefit plan. > The employee must have worked at least 20 hours per normal work week for at least 50% of the weeks in the previous calendar quarter. The insurer may request any necessary information to document the hours and time period in question, including, but not limited to, payroll records and employee wage and tax filings. n Sole Proprietors/Partners/Corporate Officers Sole Proprietors, Partners, and Corporate Officers must be actively engaged in the conduct of the business on a fulltime, permanent basis working no less than the minimum number of hours required by the applicable state laws. Ineligible Employees Temporary, leased, contract, substitute, seasonal (defined as employees who have a planned termination date in the future), or employees compensated on an IRS 1099 form are not eligible for Aetna s benefits plan. Employees Residing Outside of California For Out-of-State Employees Aetna will offer the in-state portfolio and rating structure to employees that live in an out-of-state network area. Out-of-state employees that do not live in an out-of-state network area will be eligible for the in-state indemnity plans. HMO and EPO are not available products for employees who live outside of California. To be eligible for the in-state portfolio, a small group must have 51% of its employees living within California. The Outof-State PPO plans are available to those groups that do not qualify for the in-state portfolio solution. When applying the live/work rule and the employee works in the service area, the business zip code should be used. This is normally a distance of 30 miles.

17 Leave of Absence Temporary or Long Term Layoff or Leave of Absence: If an insured employee stops working due to temporary lay-off or leave of absence, coverage can be continued at the discretion of the plan sponsor (as long as premium payments are made to Aetna) until the earliest of: 1. The end of the calendar month following the month in which the lay-off/leave of absence started. For example, the employee will take a short-term leave of absence on 9/10/2006 but will return no later than 10/31/2006. Coverage can be continued until 10/31/ Policy discontinuance. For example, the employee will take a temporary leave of absence effective 9/10/2006 but the group will cancel coverage effective 9/30/2006. Coverage can be continued until 9/30/2006. It is the employer s responsibility to notify Aetna of both the start and end dates for any leave of absence. 15

18 Adding Employees to the Plan Enrolling New Employees All employees need to complete an Aetna employee application in its entirety. The health questionnaire does not need to be completed by new employees joining an existing plan. The new hire eligibility policy, which includes your benefit waiting period, will determine when a new hire can become effective with Aetna. All new hire applications must be received by Aetna within 31 days of the requested effective date. If the application is not received within 31 days, the new hire application must be resubmitted during your annual renewal. The enrollment change form is used to enroll new subscribers and to process changes in family status, such as the birth of a child or a marriage, change plan coverage or termination. You (the employer) should review all completed enrollment change forms for proper processing and timely issuing of ID cards and submit to Aetna 31 days prior to the requested effective date. This includes any application for an employee who decides to waive coverage which is in accordance with California State Law AB The following items should be completed on the application before it is submitted to Aetna for processing: n Group/Control Number n Employer s Full Name n Plan Option (if applicable) n Effective Date n Employee and Dependent(s) Names n Employee Address n Employee/Dependent(s) Date(s) of Birth n Applicable Dependent Relationship Information n Social Security Numbers n Explanation (if applicable) for dependents having a different last name n Provider Selections (if applicable) n Employee Hire Date n Employee Signature n Prior Health Coverage Information (if applicable) n Full-time Student Information (if applicable) Enrollment change forms should be submitted to: Aetna Attn: Billing & Enrollment P.O. Box Fresno, CA Or they may be faxed to Ensure that each employee retains a copy of the enrollment form. This copy can be used for 31 days from the effective date for primary care physician (PCP) office visits only. Turn to page 19 for a sample enrollment form. Open Enrollment A period of time when: n Insured employees and dependents may transfer medical coverage from HMO to Traditional products and visa versa, if applicable. n Uninsured employees and their dependents may enroll for medical benefits. For those customers with an open enrollment period in their plans, the open enrollment date is the date on which benefits selected during the open enrollment period become effective. 16

19 All enrollment applications must be: n Signed no later than 31 days after the renewal or open enrollment date, and n Received by Aetna no later than 2 months after the renewal or open enrollment date. Please note: Open enrollment for life insurance is different than open enrollment for medical benefits in that it does not allow late applicants who have no existing life coverage to elect any type of coverage. Evidence of Insurability is required to be enrolled. Late Applicants Enrollment applications should be dated, signed and returned by the employee to the employer within 31 days of the eligibility date. The eligibility date is determined by applying the probationary period to the hire date. Example: Employee is hired 02/15/06. The probationary period is the first of the month following 90 days. 02/15/ = 05/16/06, first of the following month makes the effective date 06/01/06. The eligibility period is 06/01/06 through 06/30/06. If the enrollment application is received: n 90 or more days after the eligibility date, or n More than 31 days after the eligibility date and is not dated and signed by the employee within 31 days of the eligibility date. The employee may be considered a late applicant and will be enrolled with an effective date upon which the application was received. Life and Disability applicants are subject to medical underwriting. Dental applicants can be enrolled at any time, but are limited to preventive and diagnostic services for the first 12 months (24 months for orthodontics). Pre-existing Conditions Pre-existing conditions are defined as an illness, physical condition or disease for which an employee and/or dependent would have received medical advice, care, or treatment, including the use of prescription drugs from a licensed health care provider within 180 days immediately preceding the effective date of the new policy or the benefit waiting period. Employees who select HMO products are not subject to pre-existing conditions; however, they do apply to those employees who have selected any of the Traditional products. Employees who do not submit prior coverage information with the enrollment change form may be subject to pre-existing condition rules. Failure to provide proof of prior coverage may subject an employee and their dependents to the full pre-existing conditions limitation with no credit for prior coverage. Credit for Prior Coverage and Pre-existing Conditions Exclusions Acceptable forms of proof are: n Certificate of Creditable Coverage from prior carrier, or n Copy of ID card from prior carrier, or n Copy of recent payroll stub showing medical coverage deduction; or n Copy of most recent medical premium bill from prior carrier. Proof of prior coverage must show creditable coverage within 180 days immediately prior to the employee s effective date of coverage. 17

20 Adding Employees to the Plan (continued) Where to Submit Proof of Prior Coverage Proof of prior coverage should accompany an enrollment/change form and should be submitted to: Aetna Attn: Billing & Enrollment P.O. Box Fresno, CA Fax Deductible Credit Deductible Credit does apply to Small Group new business. In certain limited situations, it allows for deductible amounts accrued with a previous insurance carrier to be credited to the current year deductible with Aetna. If both the prior carrier plan and the Aetna plan run on a calendar year (January 1 December 31) the following scenarios will apply: a) If the effective date with Aetna is January 1, deductible credit does not apply because there is not an overlapping benefit period. b) If the effective date is other than January 1, Aetna will give credit for prior carrier deductible accumulations incurred in the current calendar year. For all products, new hires to an existing group are not eligible for deductible credit. Only employees covered by the prior carrier at the time of takeover are eligible for deductible credit. Proof of deductible credit, such as Explanation of Benefits from the prior carrier, should be faxed to the Claims Department at Employee Application Tips n Use black or blue ink and print clearly. n Include the group and/or control number at the top of the application. This allows for ease in enrollment. n Make sure that all required sections of the application are completed in their entirety. n If the employee selects an HMO product, please ensure that a primary care physician (PCP) is noted. n If the employee has dependents, they must either be enrolled or the declination section will need to be completed. n Prior coverage section is extremely important to ensure pre-existing conditions are waived. n If the employee and/or dependent are age 65 or older, please submit a copy of the Medicare ID card. The last page of the application must be signed and dated by the employee. Enrollment Forms Guide You may view a presentation on or print the PDF file that provides a form that highlights the items needed to complete the Employee Application. You may access this at 18

21 Sample Enrollment Form Selecting a PCP for HMO Under your Aetna benefits plan, your primary care provider (PCP) plays an important role in your care. This physician is not only responsible for managing your health care needs, but for providing referrals to other qualified specialists and providers. Each member who has Aetna HMO coverage should select a PCP. In California, for HMO plans only, if a member does not select a PCP, a provider will be assigned for them. The selection is a random process based on the PCP s proximity to the member s residence, allowing the member to access the full range of covered benefits under the plan. Members are free to change this selection at any time by calling Member Services at the toll-free number on their ID cards. However, you should encourage your employees to select PCPs for themselves and any eligible dependents at the time of enrollment. Contact your broker or the Aetna Small Group Service Center if you have questions about this policy. Converting Part-time Employees to Full-time Employees (and vice versa) Part-time to Full-time If the employer allows the time accumulated while working part-time to be counted towards the Benefit Wait Period, so will Aetna. However, the employer must do this consistently with all of their employees. Full-time to Part-time If the employer allows part-time employees they are eligible to remain on the group health plan. If the employer does not allow part-time employees, the employee will need to be terminated from the plan and provided with their Cal-COBRA or COBRA notifications. 19

22 Adding Employees to the Plan (continued) New Hires Enrollment applications should be dated, signed and returned by the employee to the employer within 31 days of the eligibility date. The eligibility date is determined by applying the probationary period to the hire date. Example: Employee is hired 02/15/06. The probationary period is the first of the month following 90 days. 02/15/ = 05/16/06, first of the following month makes the effective date 06/01/06. Eligibility period is 06/01/06 through 06/30/06. If the enrollment application is received: n 90 or more days after the eligibility date, or n More than 31 days after the eligibility date and is not dated and signed by the employee within 31 days of the eligibility date. The employee may be considered a late applicant and will be enrolled with an effective date upon which the application was received. Life and Disability applicants are subject to medical underwriting. Dental applicants can be enrolled at any time, but are limited to Preventive and Diagnostic services for the first 12 months (24 months for Orthodontics). Coverage Effective Dates Enrolling Rehired Employees For HMO and Traditional Products If an employee is rehired within one year of the termination from the same group, it is not required that s/he re-serve the Benefit Waiting Period unless specifically requested. If rehired after one year from the termination date, the benefit waiting period must be met. An employee is considered a rehire only if s/he has been previously on the Aetna health plan with the same employer prior to termination. Dependent Changes to the Plan It is important to notify Aetna when an employee wishes to add or delete dependents due to a change in family status. These changes can be made on the appropriate enrollment/change form with the proper box checked off. Eligible Dependents Dependent coverage is not automatically included with Aetna coverage unless offered by the employer. If you offer coverage for dependents, you must also extend this coverage to all eligible or enrolled employees who may have dependents. The following persons are considered eligible dependents: n Lawful spouse or domestic partners n Unmarried children (definition is any biological, stepchild, or legally adopted child) up to the limiting age of the plan. The limiting age for medical and dental is to age 19 standard, to age 24 for fulltime students. For Life, eligible dependents are covered from live birth to age 21 as standard, to age 23 for full-time students. If both husband and wife work for the same company, they may be enrolled separately; however, the children may only be enrolled under one parent, not both. Enrolling Eligible Dependents n New Spouse Aetna allows 31 days from the date of marriage to add a new spouse. > Traditional New spouse will be added on the date of marriage or the first of the following month to be determined by the plan sponsor. > HMO First day of the month (FOM) following the event. 20

23 n Children Unmarried child(ren) from birth up to age 19 (includes natural, stepchildren, foster, legally adopted children, proposed adoptive children, and a child under court order). Unmarried child(ren) from birth up to limiting age of 24 if they are attending school on a regular basis and depend solely on the employee for support (includes stepchildren and legally adopted children). Fulltime student information should be faxed to the Claims Department at n Newborns Ideally, when a baby is born, the plan sponsor will advise Aetna to add the newborn with appropriate information, such as name, date of birth, etc., prior to receipt of a claim for the newborn. A Social Security number is not required to enroll the newborn. However, in most instances, the claim for the newborn is received by Aetna prior to the newborn being added to the policy. A newborn child is automatically covered for 31 days from the date of birth. In order to continue coverage beyond this initial period, an application adding the dependent child must be received within the initial 31 day period. The addition of the newborn for 31 days may result in a premium increase for the employee. Aetna will routinely bill and collect any additional premium charges resulting from the newborn addition. n Adoptions Aetna does not require legal documentation. The adopted child would be handled the same as a biological newborn. The effective date of the adopted child should be the date of the adoption or the date the child is placed with the adoptive parents with the intent to adopt. Applications that are missing information are considered to be incomplete and can be mailed back to the employer for completion. This may cause a delay in the enrollment for the employee and/or the dependents. Qualifying Event In accordance with HIPAA in the event that an employee who has previously waived or declined coverage due to a spousal waiver, s/he may come onto the health benefits plan when the subscriber s spouse loses coverage due to layoff or employment termination. Traditional The effective date can be the date of the event or first day of the month following the qualifying event. HMO - The effective date is the first of the month following qualifying event. To enroll, the subscriber must submit within 31 days of the date of loss of coverage, verification of a spouse s previous insurance coverage, proof of layoff or employment termination and a new enrollment form. Live and Work Requirements For HMO products Employees who live or work within an eligible HMO area are eligible for coverage as indicated in our administrative guidelines. For Traditional products Employees who live or work in a Traditional product area are eligible for coverage as indicated in our administrative guidelines. For Indemnity products Employees who live or work in an area that does not have either an HMO or PPO contracted physician will be issued an indemnity policy. This will be for employees who live or work within the rural areas of the state. For Out-of-State Employees Aetna will offer the in-state portfolio and rating structure to employees that live in an out-of-state network area. Out-of-state employees that do not live in an out-of-state network area will be eligible for the instate indemnity plans. HMO and EPO are not available products for employees who live outside of California. To be eligible for the instate portfolio, a small group must have 51% of its employees living within California. The out-of-state PPO plans are available to those groups that do not qualify for the in-state portfolio solution. When applying the live/work rule and the employee works in the service area, the business zip code should be used. This is normally a distance of 30 miles. Address Changes Group address changes Please submit in writing to either the address or fax number provided below. Employee address changes Please submit on an employee change form to either the address or fax number below. Aetna Attn: Billing & Enrollment P.O. Box Fresno, CA Or they may be faxed to Address changes are also accepted over the phone. See the contact list on page 4 for more information. Please be advised that a move to a new rating area may affect the billing and premiums for the employee and/or dependents. 21

24 Employees Choosing not to Enroll in the Plan Declinations Under California State Law AB1672, any member (employee and/or dependent(s)) who declines coverage for any reason when first offered coverage must state the reason for waiving coverage in writing. An enrollment application should be completed and submitted to Aetna for those employees and eligible dependents who wish to decline coverage. 22

25 Removing Employees from the Plan Terminating or Cancelling an Employee Employee and dependent coverage under our plans terminate for circumstances that include the following: n The employee leaves his/her place of employment. n Your company or group covers the employee under an alternative health benefits plan offered. n The member misrepresents himself/ herself in enrollment or fraudulently uses his/her Aetna ID card. The employee must be cancelled from the plan when the following events occur (if applicable): n Employee is terminated either voluntarily or by the employer willfully. n An eligible full-time employee who moves from full-time to part-time and the group s health benefit plan does not offer coverage to part-time employees. n An eligible part-time employee whose hours are reduced to less than the number of hours in which a parttime employee is eligible for coverage, below 20 hours per week. n An employee is on a leave of absence and the period in which the employer covers employees on leave has expired. n An employee moves to one of the following ineligible statuses: temporary, contract, leased, seasonal, substitute, or when compensation is reported on an IRS 1099 form. n Employee wishes to no longer continue coverage under federal COBRA coverage. n Employee becomes ineligible for any other reason to participate in the health benefits plan. The termination effective date and reason for termination should be indicated by the employer on the enrollment/change form and mailed to the following address: Aetna Attn: Billing & Enrollment P.O. Box Fresno, CA Or they may be faxed to HIPAA certificates will be automatically generated and sent to members at their home address upon member termination. Removing Employees Who Remain Eligible but Discontinue Coverage An employee may request to terminate his/her participation in the health benefits plan because s/he chooses to enroll with a spouse. However, s/he remains as an eligible employee. In this case, s/he should use an enrollment change form and complete Sections B and G. This form will then be used at a later time, if needed, to determine if a qualifying event has occurred in the likelihood the employee determines at a later date to return to his/her employer s health plan. Removing COBRA Members Use an enrollment change form to notify Aetna that the member s period of continuation has ended. Failure to submit this form to Aetna on a timely basis will not modify the date coverage is scheduled to terminate as prescribed by law and/or contract for the particular qualifying event, i.e., 18, 29 or 36 months. Any terminations will be retroactive to the termination date not exceeding more than 105 days. 23

26 Continuation of Coverage COBRA Participation in the employee s benefit plan, as well as coverage under whatever medical programs are provided by the employer to employees and their dependents, may be continued under the federal legislation known as COBRA. COBRA applies to groups that employ 20 or more employees for 50 percent of the previous calendar year. The employer is responsible for administration (within the guidelines established by the federal government for compliance). It is recommended that the employer seek legal counsel for further instruction on the requirements to be compliant with this legislation. In the event an employee becomes eligible for federal COBRA, an enrollment change form that includes the date of COBRA eligibility should be completed and submitted to Aetna. Those employees that would be eligible for Cobra coverage are: n Employees voluntarily or involuntarily terminated from their employment (other than for gross misconduct). n A reduction in hours of employment from full-time to part-time status unless the employer chooses to provide part-time coverage. It is the employer s responsibility to notify Aetna when a change has occurred in their COBRA and Medicare status, as this does affect rates. 24 Cal-COBRA California Health & Safety Code & et seq. became effective January 1, 1998, which applies to groups of 2 19 eligible employees. n Aetna administers Cal-COBRA for employers not subject to COBRA. Every California employer who provides group health coverage and who employed 2 19 employees on at least 50 percent of its working days during the preceding calendar year or, if the eligible employer was not in business during any part of the proceeding calendar year, employed 2 19 eligible employees on at least 50 percent of its working days during the preceding calendar quarter, is subject to Cal-COBRA. n For these employer groups, Aetna will administer Cal-COBRA. Under Cal-COBRA, employers are required to notify Aetna within 31 days when an employee terminates employment or is no longer eligible due to a reduction of work hours. Employees that are terminated for gross misconduct are not eligible for Cal-COBRA. To notify Aetna, the employer needs to complete the Cal-COBRA Notification form. After receipt of the notification, Aetna will forward information regarding benefits, rates and a Cal-COBRA notification to the employee at his/her last known address. COBRA Eligible Dependents In the event a dependent becomes eligible for federal COBRA, an enrollment change form that includes the date of COBRA eligibility should be completed and submitted to Aetna. Those dependents that would be eligible for COBRA coverage are: n Children who meet their limiting age of 19 and are not full-time students n Children who meet the limiting age of 24 n Divorce n Death of the employee n Employee becomes eligible for Medicare It is the employer s responsibility to notify Aetna when a change has occurred in their COBRA and Medicare status, as this does affect rates. Effective Date Continuation of group coverage commences on the date of the qualifying event if the plan so provides. The maximum period of COBRA continuation of group coverage varies from months based on the type of qualifying event and the participant. Note: When a qualifying event occurs and an employee or dependent loses coverage, you must

27 notify Aetna to terminate benefits for the employee and/or dependent(s). Aetna reserves the right to limit credit for terminations not reported in a timely manner. HIPAA Terminated employees and/or their dependents who have exhausted or are not eligible for COBRA or Cal-COBRA coverage, may be able to continue coverage through the Health Insurance Portability and Accountability Act (HIPAA) or the Aetna conversion plan. When advising an employee or dependent of his/her rights to continue coverage under COBRA or Cal-COBRA, the employer must be sure that the employee or dependent understands that if s/he does not elect COBRA or Cal-COBRA continuation, s/he will NOT be entitled to the HIPAA guaranteed option. Conversion HMOs and Traditional policies shall provide that an employee or member whose coverage under the group policy has been terminated by the employer shall be entitled to convert to nongroup membership. (Conversion policies for group carriers must be the same as the health benefits contract offered to federally eligible individuals. Group coverage shall not be deemed terminated until expiration of any continuation of the group coverage.) Employees and/or dependents who have exhausted their COBRA or Cal- COBRA rights should contact Member Services themselves to elect coverage. Extension of Benefits If an insured member is totally disabled when his/her medical coverage ceases and after any continuation period ends, s/he may be eligible to continue medical benefits specifically related to the disabling condition at no premium charge for a limited period of time after termination from the group plan. Determination of total disability will be made by the claim office. Employees Who Turn Age 65 Medicare is the primary payor for employer groups that have 20 or less employees regardless if they are or are not eligible for the health benefits plan (based upon 50 percent of the working days in the prior calendar year). Aetna group health plans are not supplements to Medicare for those employees who are turning age 65. Members who are turning age 65 should consult the Certificate of Coverage or Member Services prior to their 65th birthday. Please have the employee provide Aetna with a copy of the Medicare ID card once received. It is also recommended for all employees regardless of group size to contact the Social Security Administration prior to their 65th birthday. Premium rates are affected when members turn age 65. Over Age Dependents Over age dependents are defined as those reaching the limiting age of the group plan, regardless of fulltime student status. All over age dependents should be reported to Aetna as soon as the dependent reaches the limiting age of the group s contract. Failure to remove the dependent may result in unpaid claims and overpayment of premium. In California, under COBRA/Cal- COBRA continuation, over age dependents are eligible for a maximum of 36 months of coverage at the time the age limit is attained. Aetna reserves the right to limit credit for terminations not reported in a timely manner. Divorce In California, under COBRA/ Cal-COBRA continuation, divorced spouses may elect to continue their coverage for a maximum of 36 months. Some divorcing spouses may not legally remove their spouse until approved by the court. This is the responsibility of the employee and employer to confirm and not Aetna. 25

28 Medicare Medicare Coverage Medicare is a federal health insurance program primarily established for people age 65 and over and qualified disabled individuals who meet certain eligibility requirements. When an employee or dependent spouse approaches age 65, the Age Discrimination and Employment Act (ADEA) requires that an employer counsel these individuals regarding Medicare benefits. Employers should ensure individuals meeting this criteria are informed of eligibility requirements, how to apply for Medicare, and how Medicare coverage operates in relation to your group health plan. Please consult with your legal counsel regarding your Medicare responsibilities. Aetna considers a person eligible for Medicare if s/he is covered or is not covered because of having refused, dropped or failed to make a proper request for coverage. Please refer to your plan documents for the specific terms that apply to your group plan. The following guidelines will assist you in determining when an individual is eligible for Medicare primary health coverage. These are general guidelines and are not intended as a substitute for the group plan documents or for the law itself, or for legal or other professional advice. 26 Aetna Primary or Medicare Primary refers to which entity pays claims first, Aetna or Medicare. If your group plan is subject to the Tax Equity and Fiscal Responsibility Act (TEFRA), Aetna is primary for the employee and dependent if the employee is active. (See Disability* and End-Stage Renal Disease** remarks.) If your group plan is not subject to TEFRA, Aetna is secondary for employees and dependents under 65 years of age. TEFRA is the law that established the Working Aged Rules that apply to employers who employ 20 or more fullor part-time employees for 20 or more weeks in the current or previous year. Working Aged Rules require group heath plans to be primary for active employees age 65 and over and for their spouses age 65 and older. Medicare will pay the claim first. Aetna considers any individual who is entitled to Medicare benefits to have Medicare, even if the individual has elected not to enroll in Medicare Part B coverage. Medicare is primary for employees and dependents 65 years of age or older. (See Disability* and End-Stage Renal Disease** remarks.) Retirees: Retiree coverage is not available. Note: Plan Sponsor Services and Member Services will provide assistance based on the current information available to them in our systems. You are required to provide Aetna on an annual basis verification that this information is correct. Please be sure to provide all requested information for Employer Verification and Medicare Secondary Payor to Aetna in a timely manner to maintain the accuracy of your plan information. Please contact your broker or the Small Group Service Center if you have questions. Medicare Rates Medicare rates are based on the employee s information only and are subject to final review. Dependent Medicare status may cause rates to change at final enrollment (e.g., a Medicare Primary group with an employee who is over age 65 with a spouse that is under age 65). * Disability: If the member is entitled to Medicare due to disability, there are various factors that are considered in determining who the primary payor is. These include, but are not limited to, the type of disability, age and retirement status. There are circumstances that would require Aetna to be primary to Medicare, if the person is on Medicare due to disability. Please contact Member Services for assistance using the toll-free number on your ID card. ** End-Stage Renal Disease: Different laws govern determination of primary payor if the member has End-Stage Renal Disease. Please contact Member Services for assistance using the tollfree number on your ID card.

29 Billing Premium Rates As a carrier we are required to abide by the provisions within the state law that determine both the frequency of any rate increase in the base rates and the risk adjustment factor. Changes in the Standard Employee Risk Rate are based upon rising health care costs and economic conditions within geographic areas. These costs cannot be predicted as to when or if they may change. If your group is in your guarantee period, your rates cannot change until your next renewal period. Rates may be affected at the group level in which all employees are impacted based upon products selected and the Risk Adjustment Factor issued to the group. Rates may also be affected at the employee level due to changes in age (tier changes), adding or deleting dependents, or when eligible to change benefits. n Standard Employee Risk Rate (SERR) This is the base premium rate which Aetna has filed with the State of California for specific products and rating areas. You will be notified within 30 days of any changes to your SERR. n Risk Adjustment Factor The Risk Adjustment Factor (RAF) is based upon the medical and prescription information submitted at new business and will be calculated based upon claims information at each renewal. This factor cannot be more than 10% above or below the SERR. In the evaluation of your annual renewal we will determine the RAF that should be assigned to your group but will not change more than once in a 12-month period. You will be notified within 30 days of any change to your RAF. Premium Payments Billing Cycle Monthly invoices are produced and mailed approximately two weeks before the premium due date. Example: Cycle 1 Invoice for June 1, 2006 premium due date is produced May 15, Cycle 2 Invoice for June 15, 2006 premium due date is produced June 1, The total premium is due on the first day of the monthly coverage period. If not received by the end of the grace period, the contract may be terminated. You will be liable for the premium for all periods of coverage (including the grace period) unless you provide at least a 30-day advance written notice of your intent to terminate. In the event that your premium does become delinquent, your next billing statement will reflect any past due amounts to bring your account current. A billing statement consists of the following sections. A more detailed description of each section and an example of a statement are shown on the following pages. n Invoice Summary and Payment Stub n Current Inforce Charges n Retroactivity/Other Adjustments n Benefit Snapshot PSUID# is the Plan Sponsor Unique Identifier this number combines all Aetna group and control numbers into one and may be seen on premium statements and renewal packages. Adjustments to Your Bill Please pay the billed amount as it is the group s responsibility to verify and check each monthly statement for accuracy. Please do not provide any premium for employees who may be new but do not appear on your current billing statement. Please do not submit Enrollment Forms with your bill, as the premiums are mailed to the lockbox of the bank and they cannot be processed. This may also cause a delay in processing your payment. 27

30 Billing (continued) Questions on Your Bill If you find discrepancies on the bill, you should call the Aetna Small Group Service Center at promptly so they can be resolved in a timely manner. Aetna s billing and coverage is based on the member information provided to us by you. Therefore, you are responsible for notifying us in a timely manner of any changes in coverage and/or member status. Employers are responsible for payments for the coverage provided by Aetna when member terminations are not reported in a timely manner. Where to Mail Your Payment Payments should be mailed by using the window envelope provided with your statement. Enclose your check and payment stub to ensure prompt and accurate posting to the correct account. Enrollment transactions should be sent to the Aetna Small Group Service Center directly, attention Enrollment Department. This is a lockbox arrangement, which means that your premiums are being delivered to the bank for automatic deposit. Deposit of your premium check does not necessarily mean acceptance of the payment or a guarantee of coverage. Medicare Rates Medicare rates are based on employee s information only and are subject to final review. Dependant Medicare status may cause rates to change at final enrollment (e.g., a Medicare Primary group with an employee who is over age 65 with a spouse that is under age 65). Late Payment Notice Reminder calls are made on or around the 21st of each month if premium payment has not been received. If your account remains unpaid, the group contract could be terminated and outstanding balances referred to our collections department. Collections After all efforts have been made to collect premium due on a terminated group, Aetna will report all terminated small employer groups with past due or outstanding balances to Dun & Bradstreet Credit Services. Dun & Bradstreet (D&B) maintains the world s largest business database containing information about 64 million businesses worldwide, including 13 million in the United States. D&B is the leading provider of business information for credit, marketing and purchasing decisions worldwide. For questions regarding collections, please contact our collections department at What to Include Write your group number on the face of the check When to Include it Always Send your remittance Always slip with your check Write the amount you are remitting on the slip When payment is different than the billed amount 28

31 Plan Key The Plan Key page lists the products and plans where your membership is enrolled, along with the transaction type codes and their descriptions. Invoice Summary and Payment Stub 1. Invoice Information Prepared Date Date consolidated bill generated. Invoice Number Unique bill identifier. Triad Number Service center identification. Account Number Plan sponsor unique identification. Bill Package Account number assigned at plan setup. Coverage Period The period we are billing for coverage. 2. Customer Address The address designated by the plan sponsor. Some plans in this sample are not available to all groups in all markets. Bills shown are for sample purposes only and do not reflect actual billing details or amounts. 3. Summary of Account Opening Balance Prior period balance. Current Inforce Charges Current charges based on active membership as of prepared date. Retroactivity/Other Adjustments Charges for activity not previously billed or adjustments to previously billed amounts. Net Charges Total of Current Inforce Charges plus Retroactivity/ Other Adjustments. Paid Date The deposit date. The number of entries displayed in this section is based on the number of payments received since the last bill. Payment ID The identifier associated to the payment received. Usually a check or wire number. Total Payments Received Since Last Invoice Total of payments received since last invoice. Amount Due Amount to be remitted. 4. Messages Important information regarding payment terms and agreement. Remittance Stub To be returned with payment. Billing Questions Aetna service center and phone number. 5. Remittance Address Address where payments should be mailed. Please Pay By Payment due date. Amount Due Amount to be remitted. 29

32 Billing (continued) Retroactivity/Other Adjustments 1. Trans Transaction type. 2. Eff Date Effective date of transaction. 3. Mths Imp The number of months impacted. 4. Product Type and Premium Product and total premium charged per subscriber. 5. Total Retroactivity Total of all subscriber retroactive charges. 6. Other Adjustments List of adjustments. Debit and credit adjustments displayed separately by date. 7. Total Other Adjustments Net adjustments. Some plans in this sample are not available to all groups in all markets. Bills shown are for sample purposes only and do not reflect actual billing details or amounts. 30

33 Current Inforce Charges 1. Product Type and Premium Product and total premium charged per subscriber. 2. Total Sub Total amount of premium per subscriber for all products. 3. Total Current Charges Total amount by product and total current charges. Some plans in this sample are not available to all groups in all markets. Bills shown are for sample purposes only and do not reflect actual billing details or amounts. 31

34 Billing (continued) Benefit Snapshot 1. Product Displays only products with active enrollment. 2. Plan Type Plan types with membership enrolled. (See Plan Key for reference.) 3. Singles (Subscriber Only) Subs Number of Single Subscribers enrolled in the plan. Premium Total amount of premium for Single Subscribers enrolled in the plan. 4. Couples (Subscriber + Spouse) Subs Number of Couples enrolled in the plan. Premium Total amount of premium for Couples enrolled in the plan. 5. Parent/Child(ren) (Subscriber + 1 or More Children) Subs Number of Parent/Child(ren) enrolled in the plan. Premium Total amount of premium for Parent/Child(ren) enrolled in the plan. 6. Families (Subscriber + Spouse + 1 or More Children) Subs Number of Families enrolled in the plan. Some plans in this sample are not available to all groups in all markets. Bills shown are for sample purposes only and do not reflect actual billing details or amounts. Premium Total amount of premium for Families enrolled in the plan. 32

35 Dental Enrolling New Employees Employees should complete the enrollment/change form selecting the dental plan desired. Employees should also list all dependents that are to be enrolled as well. Changes in Coverage Employees should complete the enrollment/change form identifying what change in coverage is to occur. This can be either the addition of a child under the age of 5 (for their first visit) or adding or declining dependents. Ending Coverage Employee and dependent coverage under our plans terminate for circumstances that include the following: n The subscriber leaves his/her place of employment or loses group membership. n Your company or group covers the subscriber under an alternative health benefits plan offered. n The member fails to make any required copayments (if applicable). n The member misrepresents himself/ herself in enrollment or fraudulently uses his/her Aetna ID card. The termination effective date and reason for termination should be indicated by the employer on the enrollment change form and mailed to the following address: Aetna Attn: Billing & Enrollment P.O. Box Fresno, CA Or they may be faxed to Late Applicants An employee or dependent may enroll at any time. Waiting Periods Effective April 1, 2007, we have eliminated waiting periods for nonvoluntary dental plans for groups with employees that have credible coverage prior to joining Aetna. Waiting periods will be administered at the plan sponsor level based on the type of prior coverage. These two examples illustrate both prior coverage situations: n lives: The prior carrier covered major but excluded orthodontia: the waiting period will not apply to covered major services but will apply to orthodontia (if the new Aetna plan covers orthodontia) for existing members and new hires. n lives: The prior carrier covered major and orthodontia: the waiting periods will not apply to covered major or orthodontic services for existing members and new hires. Voluntary Dental Options The Voluntary Dental options provide a solution to meet the individual needs of members in the face of rising health care costs. Administration is easy and members benefit from low group rates and the convenience of payroll deductions. Employers choose how the plan is funded. It can be entirely member paid or employers can contribute up to 50 percent. Please contact your broker if you would like to add one of our Voluntary Dental plans. Employer Contribution The employer must contribute at least 50 percent of the employee-only cost or 25 percent of the total cost of the plan. 33

36 Dental (continued) Participation Groups with 2 3 eligible 100 percent participation is required, excluding those with other qualifying existing dental coverage. Groups with 4 50 eligible 75 percent participation is required, excluding those with other qualifying existing dental coverage. A minimum of 50 percent of total eligible employees must enroll in the dental plan. 100 percent participation is required in plans that are non-contributory (employer paid 100 percent). All employees, excluding those with other qualifying coverage dental coverage, must enroll. Employees may select coverage for eligible dependents under the dental plan, even if they selected single coverage on the medical plan or vice versa. Open Enrollment Open enrollment is prohibited for dental insurance. 34

37 Life Insurance Premiums Premiums for life insurance are age banded and are guaranteed for a 2-year period. Enrolling New Employees For new hires enrolling into the Guarantee Issue amount of life insurance, an enrollment change form is needed in which beneficiary information should be included. For new hires enrolling into an amount higher then the Guarantee Issue amount, the employee needs to complete the enrollment change form to include the medical information. At the time of submission the employee is subject to Evidence of Insurability (EOI). Late Applicants Late applicants without a qualifying event (i.e. marriage, divorce, newborn child, adoption, loss of spousal coverage, etc.) are not allowed and must wait for the group s next renewal date to enroll. Late applicants are subject to Evidence of Insurability regardless if the group has only elected the Guarantee Issue amount. Employees that are late entrants must qualify for the life insurance at any amount. Employer Contribution Groups with less than 10 eligible lives, the employer must contribute 100 percent of the cost of the plan. Groups with eligible lives: The employer must contribute at least 50 percent of the cost of the plan (excluding Optional Dependent Life). Participation Groups with less than 10 eligible lives: 100 percent participation is required. Groups with eligible lives: 75% participation is required if the plans are at least partially contributory. If the plans are non-contributory 100 percent participation is required. Changing Coverage If the employer chooses to increase coverage at the anniversary/renewal period, or if this amount is above the Guarantee Issue amount, then all employees are subject to EOI. Employees need to complete the enrollment/change form to include all sections (medical is required). Ending Coverage Employee and dependent coverage under our plans terminate for circumstances that include the following: n The subscriber leaves his/her place of employment or loses group membership. n Your company or group covers the subscriber under an alternative health benefits plan offered. n The member misrepresents himself/herself in enrollment. The termination effective date and reason for termination should be indicated by the employer on the enrollment change form and mailed to the following address: Aetna Attn: Billing & Enrollment P.O. Box Fresno, CA Or they may be faxed to

38 Life Insurance (continued) Job Classification (Position) Schedules Varying levels of coverage based on Job Classifications are available for groups with 10 or more lives. Up to three separate classes are allowed (with a minimum requirement of 3 employees in each class). Items such as probationary periods must be applied consistently within a class of employees. The benefit for the class with the richest benefit must not be greater than 5 times the benefit of the class with the lowest benefit. Example: Position/Job Class/Basic Term Life Amount/Packaged Life/Disability Executives $50,000 High Option Managers, Supervisors $20,000 Medium Option All Other Employees $10,000 Low Option Beneficiary Designations Life Insurance beneficiaries are not required; however, if not listed on the employee enrollment change form, this will cause a delay in payment. 36