More About Your Health Care Benefits

The following information generally applies to all of the health care plans offered through FlexSolutions (unless otherwise noted). Please review this section as it...

• Defines key terms that affect how benefits are paid under certain plans

• Provides information on when coverage ends

• Outlines continuing coverage that may be available after you leave A&B

• Explains how your benefits under these plans may be affected by other coverage you (or your dependents) may have; and,

• Provides other information pertaining to these benefits.

The following definitions may be helpful when reviewing the HMSA and CIGNA Medical Plans, the HDS and MetLife Dental Plans, and the Vision Service Plan (VSP). While every effort has been made to ensure these definitions reflect how the Plans are administered, each Plan will rely on the definitions provided in their respective plan documents when administering these benefits.

Note that these definitions are not intended to apply to the Kaiser HMO, which provides benefits based on the provisions outlined in its plan booklet.

Ambulatory Surgical Center (or Free-Standing Surgical Center)

A specialized facility established, equipped, operated, and staffed primarily for the purpose of performing surgical procedures and that fully meets one of the following two tests...

• It is licensed as an ambulatory surgical center by the regulatory authority having responsibility for the licensing under the laws of the jurisdiction in which it is located.

• Where licensing is not required, it:

  • is operated under the supervision of a licensed doctor of medicine (M.D.) or doctor of osteopathy (D.O.) who is devoted to full-time supervision and permits a surgical procedure to be performed only by a duly qualified physician who, at the time the procedure is performed, is privileged to perform the procedure in at least one hospital in the area;

  • requires in all cases, except those requiring only local infiltration anesthetics, that a licensed anesthesiologist administer the anesthetic, or supervise an anesthetist who is administering the anesthetic, and that the anesthesiologist or anesthetist remains present throughout the surgical procedure;

  • provides at least one operating room and at least one post-anesthesia recovery room;

  • is equipped to perform diagnostic X-ray and laboratory examinations, or has an arrangement to obtain these services;

  • has trained personnel and necessary equipment to handle emergency situations;

  • has immediate access to a blood bank or blood supplies;

  • provides the full-time service of one or more registered graduate nurses (RN) for patient care in the operating rooms and in the post-anesthesia recovery room; and

  • maintains an adequate medical record for each patient, containing an admitting diagnosis including (for all patients except those undergoing a procedure under local anesthesia) a preoperative examination report, medical history, lab tests and/or X-rays, an operative report, and a discharge summary.

An ambulatory surgical center that is part of a hospital will be considered an ambulatory surgical center for the purposes of this Plan as long as it meets this definition.

Birth Center

A specialized facility that is primarily a place for the delivery of children following a normal uncomplicated pregnancy and that fully meets one of the following two tests...

• It is licensed by the regulatory authority having responsibility for the licensing under the laws of the jurisdiction in which it is located.

• It:

  • is operated and equipped in accordance with any applicable state law;

  • is equipped to perform routine diagnostic and laboratory examinations such as hematocrit and urinalysis for glucose, protein, bacteria, and specific gravity;

  • has available to handle foreseeable emergencies, trained personnel and necessary equipment, including but not limited to oxygen, positive pressure mask, suction, intravenous equipment, equipment for maintaining infant temperature and ventilation, and blood expanders;

  • is operated under the full-time supervision of a licensed doctor of medicine (M.D.), doctor of osteopathy (D.O.) or registered graduate nurse (R.N.);

  • maintains a written agreement with at least one hospital in the area for immediate acceptance of patients who develop complications; and

  • maintains an adequate medical record for each patient, which includes prenatal history, prenatal examination, any lab or diagnostic tests, and a postpartum summary.

A birth center that is part of a hospital will be considered a birth center for the purposes of this Plan as long as it meets this definition.

Brand Name Drug

A brand name drug is a prescription drug that is a single source drug marketed under its distinctive trade name and which is, or was at one time, under patent protection. It must comply with the Food and Drug Administration's standards and be an innovator drug.

Calendar Year

A period beginning January 1 and ending December 31. This period is also known as the "Plan Year" for the purposes of all FlexSolutions health care plans. Note: When you enroll as a new hire, coverage in your initial year generally begins on your effective date of your coverage (as explained under When Coverage Begins), not the previous January 1.

Chemical Dependency

See substance abuse.

Claims Administrator

The entity responsible for administering claims. For the purposes of these health care plans, the claims administrators are HMSA, CIGNA, HDS, MetLife, and Vision Service Plan. Note: The Claims Administrator does not necessarily insure the benefits described in this Handbook.

Copayment

A copayment is the amount you must pay to a network provider at the time you receive certain services. The Plan then pays a certain percentage of the eligible expense (usually 100%). Any copayment amounts you pay generally do not count toward your deductible (if applicable).* For additional details, refer to the applicable health care plan descriptions provided elsewhere in this Handbook.

Covered Expense

Under the CIGNA Medical Plans, expenses incurred by or on behalf of a covered individual for charges listed under What The CIGNA Plans Cover. Expenses incurred for such charges are considered covered expenses to the extent that the services or supplies provided are recommended by a physician and are essential for the necessary care and treatment of an injury or a sickness.

Covered Family Members

(Also referred to as "covered dependents.") Any eligible dependents that are covered under this Plan, as defined under Who Is Eligible.

Deductible

The deductible is the amount you must pay before the Plan begins paying benefits. After you meet the deductible, the Plan pays a certain percentage of eligible expenses. For additional details, refer to the applicable health care plan descriptions provided elsewhere in this Handbook.

Eligible Charge

Under the HMSA Plans, the eligible charge is the amount upon which your copayment is based. The eligible charge is the lesser of either the...

• Provider's actual charge, or

• Amount HMSA establishes as the maximum allowable fee.

  Note that the eligible charge does not include excise tax or any other tax.

HMSA Participating Providers agree to accept the eligible charge for covered services, while non-participating providers generally do not. Therefore, if you receive services from a non-participating provider you are responsible for your regular copayment plus any difference between the actual charge and the eligible charge.

The following exceptions to eligible charges do apply...

• Discounted Arrangements—As a normal business practice (and as a means to keep your health plans affordable), HMSA may obtain discounts, rebates and other reductions in the cost of medical services and supplies from health care providers and suppliers. Any discounts or rebates received from these entities will not reduce the charge upon which your payments are based; however, such discounts or rebates will be used to reduce the subsequent rates of HMSA's plans.

• Prescription Drug Eligible Charges—The discounted arrangements described above may also apply to prescription drug charges. As such, any discounts or rebates HMSA receives from drug manufacturers or suppliers will not reduce the charges upon which your payments for prescription drugs are based; however, such discounts or rebates will be used to reduce the rates for all of HMSA's prescription drug plans.

  In determining the eligible charge for prescription drugs, HMSA will consider the eligible charge as the lesser of the actual charge or HMSA's allowable charge.*

  * The allowable charge is the cost of the drug to the provider (the Adjusted Average Wholesale Price) plus an allowance established by the Association for dispensing the drug (the dispensing fee).

• Claims for Services Provided by Out-of-State Providers— Benefit payments for covered services received outside Hawaii are based on whether the services are received from Blue Cross and/or Blue Shield Providers or other providers. Benefits received from:

  • Blue Cross and/or Blue Shield Providers are based on the contract negotiated between the out-of-area Blue Cross and/or Blue Shield plans and their participating providers. Such contracts have copayments based on negotiated discounted charges or the provider's actual charges. The amount you pay for covered services will be lower when the contracted amount is based on discounted charges rather than the provider's actual charges.

  • Other Providers (providers who are not Blue Cross and/or Blue Shield participating providers) are based on the eligible charges for the same or comparable services received from non-participating providers in Hawaii.

Eligible Employee

An employee eligible for benefits under this Plan as defined under Who Is Eligible.

Emergency Services

The medical, psychiatric, surgical, hospital and related health care services, including testing and ambulance service, provided after the sudden onset of a medical condition that results in acute symptoms, (including severe pain), severe enough that the lack of immediate medical attention could reasonably be expected to...

• Place the individual's health in serious jeopardy,

• Seriously impair bodily function, or

• Result in serious or permanent dysfunction of a bodily organ or part.

Under the CIGNA Plans, this includes any immediate treatment for alcoholism, drug abuse, or any mental or nervous disorders in which the lack of treatment could reasonably be expected to result in self injury or injury to other individuals.

Experimental or Investigational Services

Under the HMSA Medical Plans: A medical treatment, procedure, drug, device, or care is experimental or investigative if:

• The drug or device cannot be lawfully marketed without approval of the U.S. Food and Drug Administration and approval for marketing has not been given at the time the drug or device is furnished.

• The drug, device, medical treatment, or procedure, or the patient informed consent document utilized with the drug, device, treatment, or procedure was reviewed and approved by the treating facility's Institutional Review Board or other body serving a similar function, or if federal law requires such review and approval.

• Reliable evidence shows that the drug, device, medical treatment, or procedure is the subject of ongoing Phase I or Phase II clinical trials; is for the research, experimental study, or investigational arm of ongoing Phase III clinical trials; or is otherwise under study to determine its maximum tolerated dose, its toxicity, its safety, its efficacy or its efficacy compared with a standard means of treatment or diagnosis.

• Reliable evidence shows that the prevailing opinion among experts regarding the drug, device, medical treatment, or procedure is that further studies or clinical trials are necessary to determine its maximum tolerated dose, toxicity, safety, efficacy, or its efficacy compared with a standard means of treatment or diagnosis.

For the purposes of this provision, "Reliable Evidence" shall mean only:

• Published reports and articles in authoritative medical and scientific literature.

• The written protocol or protocols used by the treating facility or the protocol(s) of another facility studying substantially the same drug, device, medical treatment or procedure.

• The written informed consent used by the treating facility or by another facility studying substantially the same drug, device, medical treatment, or procedure.

Generic Drug

A prescription drug that is available from multiple sources and is no longer under patent protection. It must comply with the Food and Drug Administration's standards. In addition, under the HMSA Plans a drug that is prescribed or dispensed under its commonly used generic (chemical) name and that is no longer protected under patent law or as determined by HMSA to be a generic drug.

Health Care Provider

A licensed or certified provider other than a physician whose services might be considered eligible under this Plan. Usually such services are eligible due to a state law requiring payment of services provided within the scope of that provider's license or certification.

Home Health Care Agency

Under the HMSA Medical Plans: An agency or organization that provides a program of home health care and meets one of the following three tests: It...

• Is approved by Medicare,

• Is established and operated in accordance with the applicable licensing and other laws, and

• Meets all of the following requirements:

  • has the primary purpose of providing home health care,

  • has a delivery system for bringing supportive services to the home,

  • has a full-time administrator,

  • maintains written records of services provided to the patient,

  • its staff includes at least one registered graduate nurse (R.N.), or it has nursing care by a registered graduate nurse (R.N.) available,

  • its employees are bonded, and

  • it maintains malpractice insurance.

Under the CIGNA Medical Plans: A hospital or a non-profit or public agency that...

• Primarily provides skilled nursing services and other therapeutic services under the supervision of a physician or nurse,

• Is operated according to rules established by a group of professional persons,

• Maintains clinical records on all patients, and

• Does not primarily provide custodial care or care and treatment of the mentally ill.

Hospice Care Program

Under the CIGNA Medical Plans: A hospice care program means...

• A coordinated, interdisciplinary program to meet the physical, psychological, spiritual, and social needs of a terminally ill person and his or her family.

• A program that provides palliative and supportive medical, nursing, and other health services through home or inpatient care during the illness.

A terminally ill person is someone who is expected to live less than six months.

Hospice Facility

Under the HMSA Medical Plans: An agency that provides counseling and incidental medical services to a terminally ill individual. Such services may include room and board. To be eligible, the agency must...

• Be approved by Medicare as a hospice (and, under the HMSA Plans, be under contract with HMSA as a hospice facility),

• Be licensed in accordance with any applicable state laws, and

• Meet the following requirements:

  • provide services 24 hours a day, seven days a week,

  • be under the direct supervision of a duly qualified physician,

  • have a nurse coordinator who is a registered graduated nurse with four years of full-time clinical experience (including two years involving the care for terminally ill patients),

  • have as its main purpose the providing of hospice services,

  • have a full-time administrator,

  • maintain written records of services given to the patient, and

  • maintain malpractice insurance coverage.

A hospice that is part of a hospital will be considered a hospice for the purposes of this Plan as long as it meets this definition.

Under the CIGNA Medical Plans: An institution or part of an institution which...

• Primarily provides care for terminally ill patients,

• Is accredited by the National Hospice Organization,

• Meets the standards established by CIGNA, and

• Fulfills any licensing requirements of the state of locality in which it operates.

Hospital

An acute care institution that is engaged primarily in providing facilities for surgery, diagnosis, and treatment of ill and injured persons on an inpatient basis at the patient's expense. Under the...

• HMSA Plans, the hospital must be...

  • licensed as a hospital by the proper government authority, and

  • approved by Medicare as a hospital.

• CIGNA Plans, the hospital must be...

  • accredited as a hospital by the Joint Commission on Accreditation of Healthcare Organizations, and

  • certified as a hospital by the proper government authority.

In addition, under all of the Plans, the hospital must...

• Maintain on the premises, diagnostic and therapeutic facilities for the surgical and medical diagnosis and treatment of sick and injured individuals by or under the supervision of a staff of duly qualified physicians,

• Continuously provide on the premises 24-hour-a-day nursing service by or under the supervision of registered nurses, and

• Operate continuously with organized facilities for operative surgery on the premises.

Illness

See Sickness.

Mail Order Pharmacy

A pharmacy that has agreed to participate in the HMSA or CIGNA mail order program.

Medicare

The Health Insurance For The Aged and Disabled program under Title XVIII of the Social Security Act of 1965. (See Effect Of Medicare for details on how this Plan coordinates with Medicare.)

Medicare-Eligible Individual

Any individual eligible to enroll in, and be covered by, the voluntary portion of Medicare.

Mental (or Nervous)/Substance Abuse Disorder Treatment

Includes treatment for any sickness...

• Identified in the current edition of the Diagnostic and Statistical Manual of Mental Disorders (DSM) of the American Psychiatric Association, including a psychological and/or physiological dependence or addiction to alcohol or psychoactive drugs or medications, regardless of any underlying physical or organic cause.

• Where the treatment is primarily the use of psychotherapy or other psychotherapeutic methods.

• For which treatment is provided by a psychiatrist or psychologist only.

• Under the HMSA Plans only, by a clinical social worker or advanced practice registered nurse.

All inpatient services (including room and board,) provided for an illness identified in the DSM and provided by a mental health facility or area of a hospital providing mental health or substance abuse treatment are considered mental disorder treatment, except in the case of multiple diagnoses. (If there are multiple diagnoses, only the treatment for the illness identified in the DSM is considered mental disorder treatment.)

Detoxification services given before, and independent of, a course of psychotherapy or substance abuse treatment is not considered mental disorder treatment.

Prescription drugs are not considered part of mental disorder treatment; however, they may be covered under the prescription drug program.

Network Provider (or Participating Provider)

A hospital, pharmacy, physician, dentist, or other health care provider that participates in the various FlexSolutions health care plan networks (i.e., the HMSA PPO and Health Plan Hawaii Plus networks; the CIGNA PPO and HMO networks; the HDS and MetLife Dental Plan networks; and the Vision Service Plan network). This may include a hospital, physician, dentist, or registered and licensed pharmacies, including mail order pharmacies, as defined in this section. Network providers agree to accept not more than a specified amount as determined by the Claims Administrator in accordance with the applicable fee schedule.

Note that under the HMSA Plans, network providers are a subset of HMSA's participating provider group.

No-Fault Automobile Insurance Law

A law providing for payments without determining fault in connection with automobile accidents.

Non-Network Provider (Non-Participating Provider)

A hospital, pharmacy, physician, dentist, or other health care provider that does not participate in any of the networks referenced under the definition of Network Provider above. Note that the various health care plan Claims Administrators have no contract with such providers to guarantee you that the provider's charges will not exceed reasonable charges; any amount charged by a non-network provider is owed by you, regardless of the amount of reimbursement you receive from the Plan.

Non-Participating Provider

Under the HMSA Medical Plans: A health care provider that does not participate in the HMSA provider system. Note that HMSA has no contract with such providers to guarantee you that the provider's charges will not exceed eligible charges. Any amount charged by a non-participating provider in excess of the total charge is owed by you, regardless of the amount of reimbursement you receive from HMSA.

Nurse

A registered graduate nurse, a licensed practical nurse or a licensed vocational nurse who has the right to use the abbreviation "R.N.," "L.P.N.," or "L.V.N."

Nurse-Midwife

An individual who is licensed or certified to practice as a nurse-midwife and fulfills these requirements...

• Is licensed by a board of nursing as a registered nurse

• Has completed a program approved by the state for the preparation of nurse-midwives

• Is certified by the American College of Nurse-Midwives

• Is formally associated with a physician for the purposes of supervision and consultation.

Nurse-Practitioner

An individual who is licensed or certified to practice as a nurse-practitioner and fulfills both of these requirements...

• Is licensed by a board of nursing as a registered nurse, and

• Has completed a program approved by the state for the preparation of nurse-practitioners.

Optometrist

An individual licensed to practice optometry.

Other Services and Supplies

Services and supplies furnished to the individual and required for treatment, other than the professional services of any physician and any private duty or special nursing services (including intensive nursing care, regardless of its name).

Payment Determination Criteria

Under the HMSA Plans: To be considered eligible for coverage, the services and supplies provided must be...

• Appropriate and necessary for the symptoms, diagnosis and direct care of the individual's illness or injury; for the purposes of this provision, an illness or injury is any bodily disorder, bodily injury, disease, or condition, including pregnancy and complications of pregnancy;

• Consistent with professionally recognized standards of health care in the United States, and given at the right time and in the right setting;

• Not primarily for the individual's convenience, or the convenience of the individual's provider; and

• The most appropriate supply or level of service that can safely be provided.

The Plan will not cover any service or supply (or portion of any service or supply) that does not meet these payment determination criteria. The fact that a physician or other provider may prescribe, order, recommend, or approve a service or supply does not in itself mean that the service or supply is a covered service. More than one procedure, service or supply may be appropriate for the diagnosis and treatment of the individual's condition, in which case the Plan reserves the right to approve only the least costly treatment, service or supply.

Physician

For most of the health care plans, a physician is a legally qualified Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.), Doctor of Podiatry (D.P.M.), Doctor of Chiropody (D.P.M.; D.S.C.), Doctor of Chiropractic (D.C.),* Doctor of Dental Surgery (D.D.S.), or Doctor of Medical Dentistry (D.M.D.).

Under the CIGNA Plans, a physician is a licensed medical practitioner who is practicing within the scope of his license and is licensed to prescribe and administer drugs or to perform surgery.

Physician Standby Services

Services performed by a physician in attendance for a treatment or procedure where the physician does not provide direct care to the patient.

Plan Year

January 1 through December 31. See also the definition of "Calendar Year."

Precertification

Under the HMSA Medical Plans: A process of review and approval that must be completed before certain medical services are eligible for benefits. (See Precertification for details.)

Prescription Drugs

The following items are considered prescription drugs for the purposes of the prescription drug benefits provided under the FlexSolutions Medical Plans...

• Federal Legend Drugs (excluding vitamins)—this is any medicinal substance that the FDA requires to be labeled "Caution— Federal law prohibits dispensing without prescription"

• Drugs that require a prescription under state law but not under federal law

• Compound drugs—a drug with more than one ingredient, at least one of which must be a Federal Legend Drug or a drug that requires prescription under state law

• Injectable insulin and certain diabetic supplies (i.e. lancets and diabetic test strips)

• Oral contraceptives

• Chem and glucose sticks

• Needles and syringes

Note that a prescription drug refers to medication that by federal law can only be dispensed upon a physician's prescription.

Primary Care Physician (PCP)

A physician in general practice or one who specializes in pediatrics, family practice or internal medicine, or any licensed physician who has agreed with the Claims Administrator to coordinate a covered individual's care. The PCP is not an agent or employee of the Claims Administrator. Individuals enrolled in the HMSA Health Plan Hawaii Plus Plan or the CIGNA Network HMO Plan, must designate a PCP.

Provider

A health care practitioner who...

• Qualifies as such under the requirements of the Federal Medicare Program

• Is certified or licensed by the proper government authority, and

• Renders services within the lawful scope of his or her respective license.

Psychiatric/Chemical Dependency Disorder, Treatment of

See Mental (or Nervous)/Substance Abuse Disorder Treatment

Reasonable and Customary (MetLife Dental Plan)

For the purposes of the MetLife-administered Dental Plan, the "reasonable and customary" (R&C) charge is defined as the lowest of the:

• Usual charge made by the dentist or other provider of the services or supplies for the same or similar services or supplies,

• Usual charge of most other Dentists or other providers in the same geographic area for the same or similar services or supplies, or

• Actual charge for the services or supplies.

Reasonable and Customary Charge (CIGNA Medical Plans)

Under the CIGNA Medical Plans, a charge will be considered "reasonable and customary" if:

• It is the normal charge made by the provider for a similar service or supply, and

• It does not exceed the normal charge made by most providers of such service or supply in the geographic area where the service was received.

To determine if a charge is reasonable and customary, the nature and severity of the injury or sickness being treated will be considered.

Rehabilitation Facility

A facility accredited as a rehabilitation facility by the Commission on Accreditation of Rehabilitation Facilities. Includes skilled nursing facilities, rehabilitation hospitals, and sub-acute facilities.

Room and Board

Room, board, general duty nursing, intensive nursing care (regardless of name), and any other services regularly furnished by the hospital as a condition of occupancy for the class of accommodations occupied. This does not include professional services of physicians nor special nursing services rendered outside an intensive care unit (regardless of name).

Sickness

Any physical or mental illness, including pregnancy. Also, in connection with newborn children, congenital birth defects and birth abnormalities (including premature births).

Skilled Nursing Facility

Under the HMSA Medical Plans: A facility to which an individual is admitted (by a physician) for skilled nursing services (but not custodial care) provided under the care of an attending physician. To be eligible for benefits, the facility must meet Medicare standards, or it must...

• Operate under the applicable licensing and other laws;

• Be under the supervision of a licensed physician or registered nurse (R.N.) devoted to full-time supervision;

• Regularly engage in providing room and board, continuously providing, 24 hours a day, skilled nursing care of sick and injured individuals at the patient's expense during the convalescent stage of an injury or illness; and

• Be authorized to administer medication to patients on the order of a duly licensed physician.

The facility must also maintain a daily medical record of each patient who is under the care of a duly licensed physician and not be (other than incidentally) a home for the aged; the blind or the deaf; a hotel; a domiciliary care home; a maternity home; or a home for alcoholics, drug addicts or the mentally ill.

A skilled nursing facility that is part of a hospital will be considered a skilled nursing facility for the purposes of this Plan as long as it meets this definition.

Under the HMSA Plans, the facility must be approved by HMSA

Under the CIGNA Medical Plans: A licensed institution (other than a hospital) that specializes in physical rehabilitation, skilled nursing and/or medical care, but only if the institution:

• Maintains all facilities necessary for medical treatment on the premises,

• Provides treatment on an inpatient basis at the patient's expense under the supervision of physicians, and

• Provides nursing services.

Social Worker

A person who specializes in clinical social work and is licensed or certified as a social worker by the appropriate authority.

Substance Abuse

A condition of psychological and/or physiological dependence or addiction to alcohol or psychoactive drugs or medications that results in functional (physical, cognitive, mental, affective, social, or behavioral) impairment.

Total Disability (as it applies to health coverage)

In the case of a covered employee, the inability to perform all of the substantial and material duties of the individual's regular employment or occupation. In the case of a covered dependent, the inability to perform the normal activities of an individual of like age and gender. Note that this definition applies to health care coverage; the definition of total disability as it pertains to A&B's Long-Term Disability (LTD) Plan may differ.

Treatment Center

A facility that provides a program of effective medical and therapeutic treatment for mental/nervous and substance abuse disorders. The center must...

• Be established and operated in accordance with any applicable state law;

• Provide a program of treatment approved by the physician and the Plan;

• Have or maintain a written, specific and detailed regimen requiring full-time residence and full-time participation by the patient; and

• Provide at least the following basic services:

  • room and board (if the Plan provides inpatient benefits at a treatment center),

  • evaluation and diagnosis,

  • counseling, and

  • referral and orientation to specialized community resources.

Treatment centers that qualify as a hospital (as defined by this Plan) are covered as a hospital and not as a treatment center.

Urgent Care

Under the CIGNA Medical Plans: Medical, surgical, hospital or related health care services and testing which are not emergency services, but which are (as determined by CIGNA in accordance with generally accepted medical standards) necessary to treat a condition requiring prompt medical attention.

Usual, Customary and Reasonable (HDS Dental Plan)

For the purposes of the HDS-administered Dental Plans, UCR is defined as follows:

• Usual—a fee regularly charged and received by an individual dentist for a given service; i.e., his or her own usual fee. If more than one fee is charged for a given service, the fee determined to be usual shall not exceed the lowest fee regularly charged or offered to patients.

• Customary—a fee within the range of usual fees charged and received by dentists of similar training for the same service within a given geographic area.

• Reasonable—a fee that is "usual and customary" or above "usual and customary" but considered justifiable because of special circumstances or extraordinary difficulties.

For You

Your coverage under the A&B FlexSolutions health care program for active employees (medical, dental and vision coverage) will end on the earliest of the...

• Last day of the month in which your active employment with A&B ends;

• Last day of the month in which you fail to make any required contribution;

• Last day of the month in which you no longer meet the eligibility requirements as defined under Who Is Eligible or

• Date the program (or a particular coverage within the program) is discontinued.

For the purposes of this provision, your active employment will be considered to have ended when you are no longer actively working, though the following exceptions to this provision will apply: If you are not at work due to...

• An illness or injury, your employment may be continued until stopped by the Company, based on the terms of A&B's Long-Term Disability (LTD) Plan;

• A leave of absence granted by the Company under the terms of the Federal Family and Medical Leave Act (FMLA), your employment may be continued under the terms of the Act; or

• A temporary layoff or leave of absence, your employment may continue until stopped by the Company, but not beyond the end of the calendar month after the calendar month in which the absence started. However, this limit may not apply to any coverage continued by the Company during an approved leave of absence to comply with state or federal law.

Other exceptions to these provisions are explained under COBRA Continuation Coverage and Conversion to Individual Coverage, respectively. Note: Information regarding when participation in the Health Care Reimbursement Account ends be found under When Your (Reimbursement Account) Participation Ends in Reimbursement Accounts.

For Your Dependents

Your covered dependents' coverage under the A&B FlexSolutions health care program (medical, dental and vision coverage) will end on the earliest of the...

• Date your coverage ends,

• Last day of the month in which you fail to make any required contribution,

• Date your dependent becomes eligible through another employer,

• Last day of the month in which your dependent no longer meets the eligibility requirements as defined under Who Is Eligible or

• Date the program (or a particular coverage within the program) is discontinued.

However, if your dependent is a mentally or physically disabled child as defined by the applicable plan, his or her coverage will not end due to age, as long as the disability existed before the date his or her coverage would otherwise end. A disabled child's coverage will continue as long as the child remains...

• Disabled,

• Unmarried, and

• Incapable of self-support, depending mainly on you for support.

To maintain your child's coverage, you may be required to periodically provide the Plan with proof of his or her continuing disability. (For this purpose, an exam will not be required more often than once each year after two years from the date your child reached the maximum age.)

Other exceptions to these provisions are explained under COBRA Continuation Coverage and Conversion to Individual Coverage, respectively.

Notification Of Coverage

If you leave A&B and had been covered under a FlexSolutions medical plan, you and your covered dependents will receive a certificate of prior coverage indicating the period of coverage under the plan. Additionally, if a covered dependent loses coverage under FlexSolutions, he or she will receive a certificate of prior coverage.

You can present this certificate to your new employer to offset any pre-existing condition limitation that may apply under your new plan; you may also use this certificate when obtaining an individual health insurance policy to offset any similar limitations.

You may request a certificate of prior coverage at any time within 24 months of losing coverage under the plan.

COBRA (the Consolidated Omnibus Budget Reconciliation Act) is a federal law that requires many employers to allow employees and their dependents ("qualified beneficiaries") to continue group health coverage at their own expense for a period of time after employer-provided coverage ends. A&B administers COBRA coverage for all of the health care plans (including the Health Care Reimbursement Account) offered through FlexSolutions.

The coverage provided under COBRA is the same as that offered to active employees. If the coverages provided to active employees change while you (or your dependents) are receiving coverage through COBRA, your (or your dependents') coverage will change accordingly.

Who Is Eligible

You may continue your medical, dental and/or vision coverages (and the Health Care Reimbursement Account on an after-tax basis) through COBRA if your coverage ends due to one of the following qualifying events...

• Your employment with the Company ends (except as a result of gross misconduct), or

• You lose eligibility because the number of hours you work is reduced.

Your covered dependent may continue his or her medical, dental and/or vision coverages through COBRA if dependent status is lost due to one of the following qualifying events...

• You die

• You divorce or legally separate from your spouse

• You become entitled to Medicare benefits

• The dependent child loses coverage under the terms of the FlexSolutions program

• Your employment with A&B ends (except as a result of gross misconduct)

• You lose eligibility because the number of hours you work is reduced

Your Coverage Options

At the time your coverage ends, you may...

• Only elect COBRA coverage under those Plans in which you are already enrolled, and

• Not add previously eligible but currently uncovered dependents through COBRA.

However once you elect COBRA coverage, you are entitled to participate in the Plans' Open Enrollment (as long as you are still eligible for and participating in COBRA coverage at that time). During Open Enrollment you may...

• Add previously uncovered (but eligible) dependents to your coverage,

• Change your plan election(s) - for example, you may switch from the HMSA PPO to the Health Plan Hawaii Plus Plan, and

• Drop any coverages you no longer want.

Keep in mind that if you declined a particular coverage (either for yourself or your dependents) at the time you became eligible for COBRA coverage or you drop a particular coverage during Open Enrollment, you (or your dependents) may never reenroll in that coverage for the remainder of your COBRA coverage period.

Notification Requirements

Making A COBRA Election

Any individual who is eligible for, and wants to obtain, COBRA continuation coverage must make his or her election by notifying A&B within 60 days after...

• Coverage ends as a result of a qualifying event (as outlined under How Long COBRA Coverage Lasts), or

• The date A&B sends a notice of your right to continue coverage

... whichever occurs last.

While notification to a spouse also applies for all other covered dependents residing with the spouse, each dependent has an independent right to elect continued coverage. No "evidence of insurability" (proof of good health) is required to continue coverage under COBRA.

You and your dependents ("qualified beneficiaries") have the right to elect COBRA even if you have other coverage before you elect coverage (for example, if you have coverage under your spouse's plan at the time your coverage under your FlexSolutions plans end). However, if you obtain other coverage after electing COBRA, your COBRA coverage will end, as specified under How Long COBRA Coverage Lasts.

Each qualified beneficiary has an independent right to elect continuation coverage. For example, both the employee and the employee's spouse may elect continuation coverage, or only one of them. Parents may elect to continue coverage on behalf of their dependent children. A qualified beneficiary may change a prior rejection of continuation coverage any time until 60-day notification date.

If you or your dependents do not elect COBRA continuation coverage, coverage will end on the date explained under When Coverage Ends.

However, if your employment ends due to international trade, such as increased imports or a shift in production to another country, you may become eligible for federal trade adjustment assistance (TAA). Part of this assistance is a 65% tax credit toward the purchase of COBRA coverage if loss of health coverage is trade-related. If you become eligible for TAA after a termination of employment or reduction of hours and did not elect COBRA coverage during your initial 60-day election period, you will be eligible for a second COBRA election period. This second election period begins on the first day of the month in which you are determined to be a TAA-eligible individual provided this second election is made within six months after the date health coverage was originally lost. If you elect COBRA coverage during this second election period, it is effective on the first day of the second election period and not on the date coverage originally was lost. However, the maximum COBRA coverage period is still measured from the date coverage originally was lost.

How Long COBRA Coverage Lasts

An individual's coverage under COBRA ends as explained below.

Cost Of COBRA Coverage

You (or your covered dependents) must pay a premium for COBRA continuation coverage. This premium is actuarially determined and may include...

• The amount you paid toward the cost of this coverage while you were covered as an active employee, plus

• Any portion of the premium formerly paid by A&B, plus

• A 2% administration fee.

The premium will not exceed 102% of the rate that would apply for an active plan member with similar coverage on the date this premium was due. However, the amount charged to disabled individuals, individuals on "Cal-COBRA" coverage, or individuals over age 60 after the initial 18-month period may be increased as follows...

• Disabled individuals on extended COBRA continuation coverage may be charged up to 150%,

• Individuals on "Cal-COBRA" coverage for months 19 through 36 may be charged up to 110%, and

• Individuals over age 60 on extended COBRA continuation coverage, may be charged up to 213%

... of the current active rate.

The premium rate will be determined at the beginning of the Plan Year and will apply to anyone who elects to continue coverage during that period. The premium rate will not change during the Plan Year, unless A&B revises the group health care program for all members, or continuing dependent coverage is terminated because there are no longer any eligible dependents under COBRA coverage.

Payment Of Benefits

If any individual on COBRA continuation coverage files a claim for benefits, the benefits will be paid according to Plan provisions.

Address Changes

You should keep A&B informed of any change of address for you or your family members. You should also keep a copy of any notices you send to A&B.

For More Information

Further information about COBRA coverage will be provided to you and/or your dependents when you or your dependents become eligible as explained previously.

If you have questions about your COBRA continuation coverage, you should contact A&B or you may contact the nearest Regional or District Office of the U.S. Department of Labor's Employee Benefits Security Administration (EBSA). Addresses and phone numbers of Regional and District EBSA Offices are available through EBSA's website at www.dol.gov/ebsa.

If A&B, in accordance with the Federal Family and Medical Leave Act of 1993 (FMLA), grants you an approved family or medical leave of absence (approved FMLA leave), you may, during the continuance of such approved FMLA leave, continue your health care coverage for you and your eligible dependents.*

At the time you request the leave, you must agree to make any contributions required by the Company to continue coverage. Note that the amount you must pay toward this coverage will not exceed the amount an active employee pays for coverage under the same plan.

If you are granted continued coverage while on an approved FMLA leave, your coverage will end on the earliest of the following: The date...

• You are required to make any contribution and you fail to do so;

• A&B determines your approved FMLA leave is terminated; or

• The program (or a particular coverage within the program) is discontinued; however, coverage for health expenses may be available to you under another plan sponsored by A&B.

If your health coverage ends because your approved FMLA leave is deemed terminated by A&B, you may, on the date of such termination, be eligible for COBRA coverage on the same terms as though your employment terminated, other than for gross misconduct, on such date. If this Plan provides any other continuation of coverage (for example, upon termination of employment, death, divorce, or ceasing to be a defined dependent), you (or your eligible dependents) may be eligible for such continuation on the date A&B determines your approved FMLA leave is terminated or the date of the event for which the continuation is available.

If you acquire a new dependent while your coverage is continued during an approved FMLA leave, the dependent will be eligible for the continued coverage on the same terms as would be applicable if you were actively at work (and not on an approved FMLA leave). Note that coverage for a dependent will not be continued under the terms of this provision beyond the date it would otherwise end.

If you return to work for A&B following the date A&B determines the approved FMLA leave is terminated, your coverage under this Plan will be in force as though you had continued in active employment rather than going on an approved FMLA leave, provided you make request for such coverage within 31 days of the date A&B determines the approved FMLA leave to be terminated. If you do not make such a request within 31 days, coverage will again be effective under this Plan only if and when this Plan gives its written consent.

If any coverage being continued terminates because A&B determines the approved FMLA leave is terminated, any Conversion Privilege will be available on the same terms as though your employment had terminated on the date A&B determines the approved FMLA leave is terminated.

You should know that under the Company's actual leave programs, your health care coverage may continue beyond 12 weeks. For information regarding the affect on your health care coverage when you take a leave of absence, see Leaves of Absence or contact your local Human Resources representative.

If you are on a military leave, your coverage may also continue; however, it may be coordinated with any military coverage you are eligible to receive.

If you or your dependents are covered under a FlexSolutions Medical Plan and your group or COBRA coverage ends, you or your dependents may be eligible to convert this medical coverage into an individual plan of some type, as explained in the sections below. You may not "convert" the benefits provided through the Dental or Vision Plans.

For HMSA Participants

You or your dependents may transfer to another HMSA plan for which you are eligible when coverage under your FlexSolutions HMSA Medical Plan ends due to your termination (or any other separation from A&B) or cancellation for non-payment of premium.

This transfer must occur within 30 days after you have received a notice that your coverage has ended. You and each of your dependents requesting transfer must meet the requirements of the other HMSA plan in which you are enrolling.

If your dependents are seeking transfer coverage due to your death, and they are unable to qualify for any group coverage, your spouse/domestic partner may become a new member under an individual HMSA plan and your dependent children may be enrolled as though they were dependents of your spouse/domestic partner.

Note: When you or your dependents transfer from this Plan to another HMSA plan, the benefit maximum carryover rules of that new plan will apply.

For CIGNA Participants

If you or your dependents are covered under the CIGNA Low Option PPO, the CIGNA PPO, or the CIGNA Network HMO Medical Plans offered through FlexSolutions, and your group or COBRA coverage ends, you or your dependents may be eligible to convert the coverage into an individual plan of some type, as long as the plan remains in force for active employees and a conversion option is available.

To convert your medical coverage, you will not need to provide "evidence of insurability" unless the benefits provided through the conversion coverage are greater than those provided under this Plan. In this instance, you will be asked to provide evidence of insurability for the increased coverage only.

Depending on where you live, you will either be issued an individual health insurance policy, or your conversion coverage will be provided through a conversion trust. In the case of the trust, you will receive a certificate of insurance instead of an individual policy.

Specifically, you may convert your group medical coverage to individual coverage (for you and any covered dependents) if...

• Your employment ends,

• Your COBRA coverage ends, or

• You are no longer an eligible employee.

However, if your group coverage ends because this Plan ends, you will not have the right to any conversion coverage.

Your dependents may convert their group medical coverage to individual coverage if...

• You die, in which case your surviving spouse/domestic partner may obtain conversion coverage for all covered dependents;

• You divorce or end your domestic partnership, in which case your former spouse/domestic partner and eligible dependent children may obtain conversion coverage when:

  • the marriage or domestic partnership is dissolved, or

  • at the end of any period of continuation of coverage, but only if this Plan is in force on that date; or

• The dependent:

  • ceases to be eligible, or

  • is at least age 19 when you obtain your conversion coverage (only dependents under age 19 may be covered under any conversion family coverage).

For Kaiser Participants

You or your dependents may transfer to another Kaiser HMO Plan for which you are eligible when coverage under your FlexSolutions Kaiser HMO ends due to your termination (or any other separation from A&B) or cancellation for non-payment of premium.

This transfer must occur within 30 days after your coverage has ended. You and each of your dependents requesting transfer coverage become members under individual Kaiser plans. (As such, the benefits for which you will be eligible may change.)

If your dependents are seeking transfer coverage due to your death, and they are unable to qualify for any group coverage, one dependent may become a new member under an individual Kaiser plan and your other dependents may be enrolled as though they were dependents of that new member.

Other Plans Not Including Medicare

Some individuals have health coverage in addition to coverage under this Plan. When this is the case, the benefits from "other plans" will be taken into account. This may mean a reduction in benefits under your FlexSolutions Plan(s) so that the combined benefits paid by...

• Your FlexSolutions Medical or Dental Plan, and

• All other applicable plans through which you may be covered

... is not more than the total amount of the eligible expenses (as defined by the A&B plans) incurred.

The coordination of benefits provision as it applies to the CIGNA Medical and MetLife-administered Dental Plans appears below. HMSA follows its own Coordination Of Benefits rules. Though HDS follows similar rules when applying this provision, for details you should refer to the applicable plan booklet, available from the plan or your local Human Resources representative. Note that these provisions typically do not apply to health maintenance organizations (HMOs).

Effect Of Medicare

When an individual covered under a FlexSolutions Medical Plan becomes eligible for Medicare, the FlexSolutions Plan ("this Plan") will pay benefits in accordance with the Medicare Secondary Payer requirements of federal law. Note that while federal law governs Medicare and its coordination with other medical plans, provisions may still vary. Therefore, in addition to reviewing the information presented here, you should also refer to your particular medical plan's booklet, or contact your plan directly, for more information.

In general, this Plan is the primary plan for Medicare-eligible individuals if eligibility for Medicare is due to the covered individual...

• Being age 65 and the employee has "current employment status" with A&B as defined by federal law and determined by the provisions of the A&B benefits program;

• Being disabled and the employee has "current employment status" with A&B as defined by federal law and determined by the provisions of the A&B benefits program; or

• Having end stage renal disease (ESRD) under the conditions and for the time periods specified by federal law.

Medicare will be the primary plan for Medicare-eligible individuals if...

• The employee is retired

• Eligibility for Medicare is due to disability, and the employee does not have "current employment status" with A&B as defined by federal law and determined by the provisions of the A&B benefits program, or

• Eligibility for Medicare is due to end stage renal disease (ESRD), but only after the conditions and/or time periods specified in federal law cause Medicare to become primary.

Facility Of Payment

A payment made under another plan may include an amount that should have been paid under this Plan. If it does, the Claims Administrator may pay that amount to the organization that made the payment. That amount will then be treated as a benefit payable under this Plan, and the Claims Administrator will not have to pay that amount again. "Payment made" includes providing benefits in the form of services, in which case "payment made" means the reasonable cash value of the benefits provided in the form of services.

This provision only applies under the CIGNA Medical and MetLife-administered Dental Plans.

Right Of Reimbursement

This provision applies when you or your covered dependents receive or may receive reimbursement from a third party as the result of an injury or illness. The purpose of this provision is to ensure no benefit payments are duplicated under the FlexSolutions health care plans.

As used here, third party reimbursement means any direct or indirect payments you may receive (as a result of an injury or illness) from any source by way of settlement, judgment or any other manner, including but not limited to, reimbursement from uninsured or underinsured motorist and no-fault insurance coverage.

If third party reimbursement is or may be due to you or your covered dependents, but is not yet paid, the Claims Administrator may advance benefit payments to you or your dependents, whoever is the covered individual. The covered individual (or his or her legal guardian in the event the covered individual is a minor or is not legally competent) agrees to...

• Promptly notify the Claims Administrator of any recovery received from the third party, and

• Reimburse the Claims Administrator the benefits advanced under the FlexSolutions Plan, up to the amount of any reimbursement received from the third party.

Any benefit paid will be subject to all provisions that apply under the FlexSolutions Plan.

The covered individual must complete and return to the Claims Administrator any forms required by the Claims Administrator.

This provision will apply whether or not liability for payment is admitted by the third party. If a covered person refuses to reimburse the Claims Administrator in accordance with the terms of this provision, the Claims Administrator has the right to deduct the amount of benefits paid from any future benefits payable to the covered person or to any other covered family member. The Claims Administrator has the right to bring legal action against the covered person to recover any balance owed under the terms of this provision.

Right Of Recovery

Whenever payments have been made exceeding the amount necessary to satisfy the provisions of this Plan, the Plan has the right to recover these expenses from any individual (including yourself, or an Insurance Company or other organization receiving the excess payments). The Plan may also withhold payment, if necessary, on future benefits until the overpayment is recovered.

Further, whenever payments have been made based on fraudulent information provided by you, the Plan will exercise the right to withhold payment on future benefits until the overpayment is recovered.