02 fts Medical FINAL 2010 - Hewitt · · 2011-02-25Sears Holdings Benefits Handbook 2010 2-i Medical Plan Full-time Salaried Medical Plan TABLE OF CONTENTS About the Medical Plan

Sears Holdings Benefits Handbook 2010 2-i Medical Plan Full-time Salaried

Medical Plan TABLE OF CONTENTS

About the Medical Plan Options................................................................................................................................................ 2-1 Women's Health and Cancer Rights Act of 1998 ............................................................................................................ 2-1 Inpatient Admissions in Connection with the Birth of a Child .......................................................................................... 2-1 Release of Information .................................................................................................................................................... 2-1 Contributions ................................................................................................................................................................... 2-1

How HMOs Work......................................................................................................................................................................... 2-1 How to Use an HMO ....................................................................................................................................................... 2-1

How the PPO Options Work....................................................................................................................................................... 2-2 PPO Options ................................................................................................................................................................... 2-2 Copayments .................................................................................................................................................................... 2-2 Coinsurance .................................................................................................................................................................... 2-2 Annual Deductible ........................................................................................................................................................... 2-2 Annual Out-of-Pocket Maximum ..................................................................................................................................... 2-2 Eligible Expenses............................................................................................................................................................ 2-3 Reasonable and Customary Charges (R&C) .................................................................................................................. 2-3 Identifying Network Providers ......................................................................................................................................... 2-3 Multiple Surgical Procedures .......................................................................................................................................... 2-3

Medical Management Provisions .............................................................................................................................................. 2-3 When You Must Call ....................................................................................................................................................... 2-4 Preauthorization Penalty ................................................................................................................................................. 2-4 What You Must Do .......................................................................................................................................................... 2-4 Case Management.......................................................................................................................................................... 2-4 Maternity Care Program.................................................................................................................................................. 2-4 Speech, Occupational and Physical Therapies............................................................................................................... 2-4 Early Risk Management Program ................................................................................................................................... 2-5 Informed Care Management Program ............................................................................................................................ 2-5 Denial of Preauthorization............................................................................................................................................... 2-5

Prescription Drug Coverage ...................................................................................................................................................... 2-5 Retail Pharmacy Program ............................................................................................................................................... 2-5 Retail Refill Allowance (RRA) Program........................................................................................................................... 2-5 Additional Services.......................................................................................................................................................... 2-5 How to Appeal a Denied Prescription Drug Claim .......................................................................................................... 2-6

Mental Health and Substance Abuse Program ........................................................................................................................ 2-6

Organ/Tissue Transplant Program............................................................................................................................................ 2-6 Donor Charges for Organ/Tissue Transplant .................................................................................................................. 2-7

Health Savings Account............................................................................................................................................................. 2-7 Eligibility .......................................................................................................................................................................... 2-7 Contributions ................................................................................................................................................................... 2-7 Using your HSA Contributions ........................................................................................................................................ 2-7 Rules about Flexible Spending Accounts........................................................................................................................ 2-7 Tax Savings .................................................................................................................................................................... 2-8 HSA Ownership............................................................................................................................................................... 2-8 Portability ........................................................................................................................................................................ 2-8 Setting Up Your HSA ...................................................................................................................................................... 2-8 Important Note ................................................................................................................................................................ 2-8

Plan Features – Select PPO ....................................................................................................................................................... 2-9

Plan Features – Basic PPO ........................................................................................................................................................ 2-9

Plan Features – High Deductible Health Plan .......................................................................................................................... 2-9

Schedule of Benefits — Select PPO, Basic PPO and High Deductible Health Plan........................................................... 2-10

General Exclusions .................................................................................................................................................................. 2-15

Sears Holdings Benefits Handbook 2010 2-ii Medical Plan Full-time Salaried

Claims Information ................................................................................................................................................................... 2-16 How to File a Claim Under the PPO options ................................................................................................................. 2-16 Filing Claims With an HMO ........................................................................................................................................... 2-16 How and When Claims Are Paid................................................................................................................................... 2-16 Qualified Medical Child Support Orders........................................................................................................................ 2-16 How to Appeal a Denied Claim ..................................................................................................................................... 2-17

Additional Information.............................................................................................................................................................. 2-17

Some Terms You Should Know............................................................................................................................................... 2-17

Important Note .......................................................................................................................................................................... 2-20

Sears Holdings Benefits Handbook 2010 2-1 Medical Plan Full-time Salaried

ABOUT THE MEDICAL PLAN OPTIONS Health care is important to all of us. That's why the Sears Holdings Medical Plan offers three group health plan options that are available to all eligible associates (except those in Hawaii, Puerto Rico and Guam) – the Select Preferred Provider Organization (PPO), the Basic PPO, and the High Deductible Health Plan (HDHP). This is a Preferred Provider Organization (PPO) plan for all Members except residents of Georgia; Members residing in GA are part of a Point of Service (POS) plan, and must use the appropriate POS Network Provider in their state to receive Network benefits. Additionally, Health Maintenance Organizations (HMOs) are available in some geographic areas. All of the group health plan options are comparable in that they cover routine and preventive care as well as catastrophic care. However, coverage and plan features of the HMOs vary. See How HMOs Work below. The group health plan options available to you depend on where you live. Eligibility is determined by your home zip code. Eligible zip code service areas are subject to change at any time. Throughout this section of the Handbook, several terms are capitalized. Those terms are defined at the back of this section, under Some Terms You Should Know.

WOMEN'S HEALTH AND CANCER RIGHTS ACT OF 1998 Under the Women’s Health and Cancer Rights Act of 1998 federal law, group health plans that provide medical and surgical benefits in connection with a mastectomy must cover the following medical and surgical procedures for breast reconstruction following a covered mastectomy: Reconstruction of the breast on which the mastectomy was

performed; Surgery and construction of the other breast to produce a

symmetrical appearance; and Prostheses and physical complications of all stages of the

mastectomy, including lymphedemas. This coverage is subject to the same Annual Deductible, Coinsurance levels and Preauthorization requirements that apply to other medical and surgical procedures.

INPATIENT ADMISSIONS IN CONNECTION WITH THE BIRTH OF A CHILD Under federal law, group health plans and health insurance issuers generally may not restrict benefits for any hospital length of stay in connection with childbirth for the mother or Newborn Child to less than 48 hours following a vaginal delivery, or less than 96 hours following a cesarean section. However, federal law generally does not prohibit the mother's or newborn's attending provider, after consulting with the mother, from discharging the mother or newborn earlier than 48 hours (or 96 hours, as applicable). In any case, plans and issuers may not, under federal law, require that a provider obtain authorization from the plan issuer for prescribing a length of stay not in excess of 48 hours (or 96 hours). Medical Management must be notified for inpatient care (for either the mother or the child) that continues beyond the 48 or 96 hour limits.

RELEASE OF INFORMATION Your election to participate in the Medical Plan constitutes your agreement to release medical information for the purposes of administering the plan for compliance with state or federal law.

CONTRIBUTIONS You are required to pay contributions for your medical coverage. The amount of your contributions will vary depending on the option you elect and the number of dependents you cover. Contribution rates are available online through www.88sears.com at the time you become eligible to enroll and during the Annual Enrollment period. Wellness credits are available in two forms: • Health Assessment Credit. You receive a wellness credit for

completing the confidential health assessment questionnaire. • Tobacco Free Credit. You receive a wellness credit on your

contributions if you and your covered dependents pledge to be tobacco-free or participate in a smoking cessation program during the coverage period.

Your contributions to your medical coverage are deducted from your paycheck on a pre-tax basis, under the premium conversion feature of the Sears Holdings Flexible Benefits Plan. See the section in the Handbook, Flexible Benefits, for details about that plan.

HOW HMOS WORK A Health Maintenance Organization (HMO) is an independent health care organization that offers medical services to its members for a set monthly fee. The Company may offer you the option to join an HMO; however the HMO, not Sears Holdings, is responsible for the actual coverage and the medical care it provides or arranges. Sears Holdings is not responsible for the quality of service provided or arranged by the HMO. The HMO controls: Processes for filing claims. Appeal of denied claims. Collection of benefit overpayments. Coordination of benefits between the HMO and any other

medical coverage you or a dependent may have. Coverage of dependents who do not live with you. Rights to reimbursement when payments are available from

other insurance sources or legal settlements. Other administrative processes.

HOW TO USE AN HMO In most cases, each member of your family chooses a primary

care physician to coordinate health care within the HMO. Coverage varies from one HMO to another. Services you receive outside the HMO are not covered, except

in emergencies. Your HMO can provide further details. You may have to pay a copayment to the HMO at the time

you are treated. The HMO is generally responsible for the remaining cost of eligible expenses.

You may call the Member Services department of the HMO if you have any questions. Member Services will give you information on providers within the HMO network.

If you are interested in an HMO, you should check with the HMO to see if Pre-existing Conditions limitations or other special provisions apply. This section of your Handbook does not describe the plan provisions applicable to you if you choose coverage under a Health Maintenance Organization (HMO). Your medical benefits are set forth in the certificate of coverage provided by the HMO in which you choose to participate. The certificates of coverage of the


following HMOs are hereby incorporated by reference: AmeriHealth-HMO; BlueCross BlueShield of Georgia HMO; Blue Advantage HMO, Blue Care Network of Southeast MI, BlueCross of California HMO, CDPHP HMO, Geisinger Health Plan, Health Alliance Plan –Detroit, Health Net – Arizona;, Health Net – Northern California, Health Net – Southern California, Health Plan of Hawaii HMO, Health Plan of Nevada, HIP of Greater New York HMO, HMSA- Preferred Provider, HP of Upper Ohio Valley, Humana HMO, Independent Health HMO. Kaiser Foundation Health Plan- Washington DC, Kaiser Foundation Health Plan- Georgia, Kaiser Foundation Health Plan- Northern California, Kaiser Foundation Health Plan-Southern California, Kaiser Health Plan of Hawaii, Kaiser Health Plan Ohio HMO, Kaiser Health Plan Colorado HMO, Keystone 1999 Plan HMO, Keystone Health Plan East HMO, Optima Health Plan HMO, PacifiCare Southern California, Pittsburgh Medical Center Health Plan HMO, Preferred Care, Scott & White Health Plan,Vista Health Plan-North, Vista Health Plan-South, Triple-S PPO (Puerto Rico). Please refer to your HMO plan materials for further details pertaining to your medical coverage under the HMO plan. You may obtain HMO plan materials directly from your HMO.

HOW THE PPO OPTIONS WORK The PPO options including the HDHP offered under the Medical Plan are administered by Empire BlueCross BlueShield, and use the BlueCross BlueShield network of providers. Unlike an HMO, you do not need to select an In-Network primary care physician. Instead, each time care is needed, you have the choice of obtaining medical services inside or outside the network. However, to receive the highest level of benefits from the Plan, an In-Network Provider should be used. In some cases the PPO options do not cover services when obtained outside the network. In addition, Network providers generally file claims on your behalf. Services provided by Out-of-Network providers are paid at Out-of-Network benefit levels even when In-network physicians refer participants to those providers. Please review the Schedule of Benefits and Plan Features sections for specific benefit levels. You can also contact the PPO for more information about the plan.

Member Services for the PPO Options 1-800-803-2432

www.empireblue.com

PPO OPTIONS You have three choices for PPO coverage. All feature the Blue Cross BlueShield network of providers. • The Select PPO provides a highest level of benefits of the

three PPOs and requires a higher premium. • The Basic PPO provides a lower level of benefits than the

Select PPO and has limits on the amount of benefits paid during the year. Premiums for the Basic PPO are lower than the Select PPO.

• The High Deductible Health Plan (HDHP) also provides a lower level of benefits (than the Select PPO) at a correspondingly lower premium. Those who enroll in the High Deductible Health Plan can contribute to a Health Savings Account (HSA). See page 7 of this section for more information.

COPAYMENTS Copayments are flat dollar amounts that you pay for specific services. Copayments, where applicable, are in addition to Deductibles and Coinsurance. Services for which a Copayment applies are listed in the Plan Features and Schedule of Benefits sections.

COINSURANCE Coinsurance is the percentage of Eligible Expenses paid by the plan and you after the Annual Deductible has been satisfied. Services for which Coinsurance applies are listed in the Schedule of Benefits sections. Specific coinsurance levels are listed in the Plan Features sections.

ANNUAL DEDUCTIBLE For some services you must satisfy an Annual Deductible before the plan will begin paying for covered services as outlined in the Plan Features and Schedule of Benefits sections. The annual Deductible is shown in the Plan Features sections. For the Select PPO and Basic PPO: The individual Annual Deductible applies separately to each

Covered Person each Plan Year, unless the family Annual Deductible is satisfied. Once a Covered Person has satisfied the individual Annual Deductible, the Plan will begin paying for covered services based on the Plan Features and Schedule of Benefits sections for that Covered Person.

The family Annual Deductible is the maximum Deductible that all Covered Persons in a family must satisfy, even if all Covered Persons have not satisfied their individual Annual Deductible. If the sum of all individual Annual Deductible amounts for a covered family equals the family Annual Deductible, no further Annual Deductible need be satisfied by any covered family member during the remainder of that Plan Year.

The Annual Deductible does not apply to the first three times for the Select PPO Plan and four times for the Basic PPO Plan each Covered Person sees a primary care network doctor for an office visit. The Annual Deductible does not apply to services covered at 100% (e.g. Preventive care benefits). The Annual Deductible does not apply to the retail and home delivery prescription drug benefit. Amounts you pay for these Expenses are not applied toward satisfaction of the Annual Deductible.

For the High Deductible Health Plan: The Annual Deductible applies collectively to all Covered

Persons. Once the Annual Deductible has been satisfied, all Covered Persons may begin receiving benefits.

The Annual Deductible applies to all benefits under the Plan, including prescription drug benefits.

ANNUAL OUT-OF-POCKET MAXIMUM An Out-of-Pocket Maximum is a cap on the total amount of Eligible Expenses you must pay (1) to satisfy the Annual Deductible and/or (2) as Coinsurance for Eligible Expenses each Plan Year. The annual Out-of-Pocket Maximum is shown in the Plan Features section. When a Covered Person has reached the individual annual Out-of-Pocket Maximum during a Plan Year, all future Eligible Expenses for that Covered Person, excluding Copayments (and excluding Expenses for prescription drugs in the Select PPO and Basic PPO) are paid by the plan at 100% for the remainder of the Plan Year. If


the sum of all individual annual Out-of-Pocket amounts for a covered family equals the family Out-of-Pocket Maximum, Eligible Expenses for the covered family, excluding Copayments (and excluding Expenses for prescription drugs in the Select PPO and Basic PPO) are paid by the plan at 100% for the remainder of the Plan Year. As noted above, in the Select PPO and Basic PPO, the amounts you pay for prescription drugs do not apply toward satisfaction of the Out-of-Pocket Maximum. The annual Out-of-Pocket Maximum does not include the amount you are required to pay because of failure to follow Medical Management provisions or any other Expenses excluded by the PPO options. Expenses in excess of Reasonable and Customary limits are not applied to the Out-of-Pocket Maximum as they are not Eligible Expenses under the Medical Plan.

ELIGIBLE EXPENSES Eligible Expenses means the Expenses incurred for direct treatment of an Injury or Sickness. To be an Eligible Expense an Expense must be for a service or supply that is performed or prescribed by a Physician and that is Medically Necessary. Eligible Expenses for covered services when you use a Network Provider is the contracted rate. If you use Out-of-Network Providers, any amount of Expense in excess of the Reasonable and Customary Charge is not an Eligible Expense and is, therefore, not reimbursable.

REASONABLE AND CUSTOMARY CHARGES (R&C) If you use Out-of-Network Providers, you are responsible for any charges determined to be in excess of the Reasonable and Customary Charge. Any amount of Expense in excess of the Reasonable and Customary Charge will not be applied toward satisfaction of any Deductible or Out-of-Pocket Maximum. You can request a pre-determination of Reasonable and Customary Charges by calling the PPO options.

IDENTIFYING NETWORK PROVIDERS You can ask your doctor if he or she participates in the BlueCross BlueShield network of providers. In California, network providers are identified as participants in BlueCross (not BlueCross BlueShield). You can also identify Network Providers in your area by contacting PPO Member Services. If you have access to the Internet, you can use the Provider Finder tool available online.

Member Services for the PPO Options 1-800-803-2432

www.empireblue.com

MULTIPLE SURGICAL PROCEDURES If you use Out-of-Network Providers, when two or more surgical procedures are performed during the same session through the same incision, natural body orifice or operative field, the amount eligible for consideration is: The Reasonable and Customary Charge for the largest amount

billed for one procedure; plus 50% of the Reasonable and Customary Charge for the next

largest amount billed for one procedure; and 25% of the Reasonable and Customary Charge for all other

procedures performed. You are responsible for the amounts in excess of greater than the amounts listed above.

If two or more surgical procedures are performed during the same session through different incisions, natural body orifices or operative fields, the amount eligible for consideration is the Reasonable and Customary Charge for each procedure performed. You are responsible for any amounts in excess of the Reasonable and Customary Charge.

MEDICAL MANAGEMENT PROVISIONS Described below are the Medical Management provisions that must be followed to qualify for maximum benefits under the PPO options. No benefits will be paid by the Medical Plan for any care under the PPO option or treatment that is not Medically Necessary. Medical Management Programs assist participants and their attending Physicians in determining the most appropriate care needed. In all instances, the final decision of what treatment to use rests with patients and their Physicians. Payment of benefits is made according to plan provisions.

Medical Management for the PPO Options 1-800-803-2432

When appropriate, Empire BlueCross BlueShield’s Medical Management staff members will discuss the planned level of care with the participant and the attending Physician and will advise within the following timeframes whether or not the care will be considered an Eligible Expense: Requests for preauthorization will be reviewed within 15

days. If Medical Management does not have enough information to make a decision within 15 days, participants will be notified in writing of the additional information needed and will have 45 days to respond. Medical Management will then make a decision within 15 days of receipt of the requested information, or if no response is received, within 15 days after the deadline for a response.

However, if the need for the service is urgent, a decision will be rendered as soon as possible, taking into account the medical circumstances, but in any event within 72 hours. If the request is urgent and further information is required to make a decision, participants will be notified within 24 hours and will have 48 hours to respond. Medical Management will make a decision within 48 hours of receipt of the requested information, or if no response is received, within 48 hours after the deadline for a response.

Requests for authorization of continued treatment (concurrent review) will be responded to within 24 hours of receipt of the request.

Medical Management will: Determine if an inpatient Hospital admission or mental

health/substance abuse course of treatment is Medically Necessary.

Preauthorize the initial number of days of Hospital confinement or the number of outpatient mental health/substance abuse visits that are Medically Necessary for the care and treatment of the Covered Person.

If necessary, periodically contact the attending Physician to certify additional days of Medically Necessary Hospital confinement if an extended Hospital stay is recommended by the attending Physician or additional outpatient mental health/substance abuse visits.


Suggest alternatives to Hospital confinement or surgery or an alternative level of treatment, if appropriate.

WHEN YOU MUST CALL You must call Medical Management for preauthorization of: Hospitalization Mental Health or Substance Abuse Treatment, both inpatient

and outpatient Private Duty Nursing/Visiting Nurse Services Home Health Care Skilled Nursing Facility admissions Hospice Care Organ/Tissue Transplants

In some cases a penalty will apply if you do not call for preauthorization. In other cases, no benefits will be payable. See below for a description of the preauthorization penalties that apply.

PREAUTHORIZATION PENALTY Failure to comply with the Preauthorization procedures under the PPO options will result in the following penalties: No coverage for the following treatments or services:

- Private Duty Nursing/Visiting Nurse Services - Home Health Care - Hospice Care

A $500 penalty per occurrence will be applied for non-authorized confinements (such as those listed below), provided the Expense is eligible and the stay is determined to be Medically Necessary: - Inpatient hospital - Inpatient hospital for childbirth only if the stay lasts

longer than 48 hours (96 hours for a Cesarean delivery) - Inpatient mental health/substance abuse - Inpatient rehabilitation - Organ/tissue transplants - Skilled nursing facility admissions

For mental health/substance abuse outpatient treatment, benefits under the PPO options will be paid at the Out-of-Network level, provided the Expense is eligible and the treatment is determined to be Medically Necessary.

The preauthorization penalty you pay will not be applied to your annual Deductible or the annual Out-of-Pocket Maximum.

WHAT YOU MUST DO Nonemergency Hospitalization. It is recommended that you

notify Medical Management two weeks prior to the admission so that Medical Management’s review will be complete by the scheduled admission date.

Hospitalization Due to Delivery of a Child. If the Hospital confinement is due to delivery of a child, the Hospital authorization should be done within the first trimester of the pregnancy.

Emergency Hospitalization. You must contact Medical Management within 48 hours of the admission, excluding Saturdays, Sundays and holidays. You must call Medical Management even if you are discharged within the 48-hour period.

Nonemergency Mental Health/Substance Abuse Admissions or Outpatient Treatment. You must call Empire BlueCross BlueShield Medical Management for preauthorization. Empire BlueCross BlueShield Medical Management can be reached at 1-800-803-2432.

Emergency Mental Health and Substance Abuse Treatment. You must call Empire BlueCross BlueShield Medical Management within 48 hours. You must obtain

authorization even if you are discharged within the 48-hour period.

Private Duty Nursing, Visiting Nurse Services, Home Health Care, Skilled Nursing Facility admissions, and Hospice Care. You must contact Medical Management prior to receiving services.

CASE MANAGEMENT Case Management is a program designed to help a participant whose medical condition is caused by a catastrophic Sickness or Injury. Health care professionals can provide information to assist the participant and attending Physician when evaluating options for appropriate alternative care to long-term hospitalization and, in appropriate cases, make benefits available for alternative treatment not normally covered by the plan. Alternative treatments that would generally be excluded will be covered under the PPO options only if they are recommended through the Case Management process and meet the criteria described below. Charges for these services and supplies will be payable if the services and supplies meet all the following criteria: They are approved by Medical Management. They are for medical treatment of the patient’s condition if it

is expected to be of an extended duration. They are in substitution for a greater expenditure that is an

Eligible Expense. They are not for Custodial Care or personal convenience.

MATERNITY CARE PROGRAM The Maternity Care Program is a comprehensive voluntary maternity program that promotes prenatal care and identifies members with high-risk pregnancies. Specially trained obstetrical nurses work in conjunction with the expectant mother and her Physician to provide appropriate prenatal care. The program consists of interviews that assist in the identification of high-risk pregnancies. Participants receive educational materials about pregnancy and related issues. Nurses can be reached by calling PPO Member Services.

SPEECH, OCCUPATIONAL AND PHYSICAL THERAPIES Covered children age 5 and under: Covered children will have up to a combined 200 visits per plan year (i.e. the calendar year) per child for physical, speech and occupational therapies. Coverage is available through the end of the calendar year in which the child reaches age 5. Covered members (excluding covered children mentioned immediately above): Covered members will have up to a combined 90 visits per calendar year for physical, speech and occupational therapy. This coverage also includes school age children after the calendar year in which they reach age 5. Note: The Plan will cover additional visits beyond the combined 90-visit limit for covered members, if medical necessity is established. Approved visits beyond the combined 90-visit limit will be capped at an aggregate maximum of 200 visits in a calendar year (inclusive of the first 90 visits). If therapy treatment for a medical condition is not deemed medically necessary, requests for coverage for additional physical, speech, and occupational therapy visits in the current or any future calendar year will be denied (including the annual 90-visit limit) unless it can be established that the treatment for such a condition is again medically necessary (e.g. evolving medical advancements through technology may change the treatment practice).


The therapies available through a school-age child’s educational school system will be coordinated with and supplemented by therapies covered by the Plan for school-age children.

EARLY RISK MANAGEMENT PROGRAM Empire BlueCross BlueShield, along with support from Active Health Management, uses a special computer program – called Systematic Analysis Review and Assistance, (SARA) – to analyze medical, lab, pharmacy and hospital claims data to identify patients at risk for potentially serious medical conditions. If SARA identifies a potential problem, Active Health Management Physicians and registered nurses review the information and discuss the issue with the patient’s treating Physician to offer suggestions about the best course of treatment. While treatment decisions remain the responsibility of the treating Physician and patient, this program gives participants access to an extra level of medical expertise.

INFORMED CARE MANAGEMENT PROGRAM The Informed Care Management Program, a voluntary program offered through Active Health Management, takes the SARA program a step further and engages both the Physician and patient in the care management process through customized care plans designed to improve a patient’s personal health status. The program is patient-centric, not disease-centric, and focuses on high-risk patients with impactable clinical issues in a broad range of areas. As always, the confidentiality of participants’ medical information is carefully protected at every step of the process for both the Early Risk Management Program and the Informed Care Management Program. Your use of the Plan constitutes your agreement to release medical information for purposes of the Early Risk Management Program and the Informed Care Management Program.

DENIAL OF PREAUTHORIZATION If you have received a denial for Preauthorization from Medical Management, that denial will be considered a denial of a claim for benefits and will be eligible for the appeals process described in the Other Information section.

PRESCRIPTION DRUG COVERAGE The Prescription Drug Program for the PPO options is administered by Medco Health. Prescriptions can be filled at a retail pharmacy that participates in the Medco Network pharmacy or through home delivery available through Kmart Pharmacy (90 day supply) or Medco Health Home Delivery Pharmacy ServiceTM. You will receive an identification card from Medco shortly after you enroll. The PPO options utilize three-tier Coinsurance for prescription drugs. Generic drugs are the least expensive drug category, while brand name drugs are divided into two separate categories—“Preferred” and “Non-Preferred”. These categories are described in the Some Terms You Should Know section. In addition to the Coinsurance shown in the Schedule of Benefits section, if you choose a brand name drug and there is a generic equivalent available for your prescription, you will also pay the difference in price between the brand name and the generic equivalent, even if your physician prescribes the brand name drug.

RETAIL PHARMACY PROGRAM To use the Prescription Drug Program for the PPO options, present your Medco identification card, your prescription and Coinsurance payment to any Medco Network pharmacy. The Medco Network includes Kmart Pharmacy as well as most grocery store pharmacy chains, regional drug stores, most hospital and clinic pharmacies and various independent pharmacies across the country. In total there are about 46,000 network pharmacies across the country. Pharmacies located in Wal-Mart, Target, Walgreen’s and CVS are excluded from the Medco Network. To locate a Network pharmacy in your area, contact Medco Health at 1-800-233-7865 or through their Web site at www.medco.com. If you use a pharmacy that is not in the Medco Network, you will need to pay for your prescription in full at the pharmacy and then submit a paper form to Medco. Forms are available by calling Medco Health at 1-800-233-7865 or through their Web site at www.medcohealth.com. You will be reimbursed based on the same coinsurance percentage and minimum/maximum coinsurance amounts as prescriptions filled at network pharmacies. However, the coinsurance percentage and minimum/maximums will be applied to the discounted prescription price that the drug would have cost if you had used a network pharmacy. You would be responsible for 100% of any amounts over the discounted prescription price. Through the retail pharmacy service, an equivalent generic drug will automatically be substituted for a brand name drug unless your physician specifies otherwise. No benefit will be paid for Expenses incurred for any portion of a prescription order that exceeds a 30-day supply. If you are enrolled in the High Deductible Health Plan, no benefit will be paid until the annual Deductible has been satisfied.

HOME DELIVERY RETAIL REFILL ALLOWANCE (RRA) PROGRAM Prescriptions for maintenance medications may be obtained through the Retail Refill Allowance (RRA) Program. The RRA Program was implemented on January 1, 2010. It is designed to encourage associates and their covered dependents to channel long-term maintenance medications through the most cost-effective process offered under the PPO medical plans. Maintenance medications are medications (excluding vitamins or food supplements) that are taken on a regular and continuing basis (generally 90 days or longer). Here is how the program works: After your initial prescription is filled, you can submit your next two refills through a participating retail pharmacy. After the second refill, the program will continue to provide coverage only if future refills are made through Kmart Pharmacy (90 day supply) or the Medco Pharmacy (Home Delivery). If you continue to have your long-term prescriptions refilled at a retail pharmacy (other than Kmart), you will be responsible for 100% of the cost. To use this benefit, submit your prescription to a local Kmart Pharmacy and request a 90 day supply or to the Medco Pharmacy (Home Delivery). Detailed information and forms may be obtained by calling Medco Health at 1-800-233-7865 or through their Web site at www.medco.com. The Retail Refill Allowance Program applies to medications taken on a long-term basis only (generally 90 days or longer), and it


excludes all controlled substances. You should continue to have your short-term prescriptions such as antibiotics, filled at a participating retail pharmacy. Through the home delivery pharmacy service, an equivalent generic drug will automatically be substituted for a brand name drug unless your physician specifies otherwise. No benefit will be paid for Expenses incurred for any portion of a prescription order that exceeds a 90-day supply. If you are enrolled in the HDHP, no benefit will be paid until the annual Deductible has been satisfied.

ADDITIONAL SERVICES With the approval of the Plan Administrator, Medco Health may provide additional services to assist you in managing prescription drugs, such as: Drug Utilization Review. This promotes the safe and

appropriate use of medications through review for drug interactions, appropriate dosage, timing of refills and others.

Health Management Programs. Medco Health works with you and your Physician to manage specific diseases. Please contact Medco Health for more information.

Preferred Brand Drugs. Commonly prescribed drugs that are selected based on clinical quality, effectiveness and value. You can ask your Physician if these drugs will work for you.

Preferred Drug Step Therapy. This is a cost savings program requiring a member to try a low cost generic or brand-name alternative drug before higher cost non-preferred drugs, unless certain circumstances exist.

Prior Authorization Requirements. Some medications are covered only if they are prescribed for certain uses. You can contact Medco Health to obtain information on the approval process and for a list of medications that require prior authorization.

Requests for prior authorization will be reviewed within 15 days. If there is not enough information to make a decision within 15 days, you will be notified in writing of the additional information needed and will have 45 days to respond. A decision will then be made within 15 days of receipt of the requested information, or if no response is received, within 15 days after the deadline for a response. In the case of a claim for coverage involving urgent care, you will be notified of the benefit determination within 72 hours of receipt of the claim. If the claim does not contain sufficient information to determine whether, or to what extent, benefits are covered, you will be notified within 24 hours after receipt of your claim, of the information necessary to complete the claim. You will then have 48 hours to provide the information and will be notified of the decision within 48 hours of receipt of the information.

HOW TO APPEAL A DENIED PRESCRIPTION DRUG CLAIM A denial of prescription drug benefits is considered a denial of a claim for benefits. You may appeal a denial by following the appeals process described in the Other Information section of this handbook.

MENTAL HEALTH AND SUBSTANCE ABUSE PROGRAM The Mental Health and Substance Abuse Program is administered by Empire BlueCross BlueShield. It is designed to provide confidential referrals and case management for mental health or substance abuse treatment.

If you need help or information, call Empire BlueCross BlueShield using the number for your PPO option. A customer service representative will gather information from you and help you find the right provider. In an emergency, a clinical case manager will provide immediate assistance and, if necessary, arrange for treatment at an appropriate facility. Professional Mental Health/Substance Abuse Providers include psychiatrists and psychologists, psychiatric nurses, certified social workers, and certified substance abuse and mental health providers. In order to get full benefits, you must comply with Preauthorization requirements for mental health and substance abuse treatment.

ORGAN/TISSUE TRANSPLANT PROGRAM Empire BlueCross BlueShield has a Centers of Excellence department for participants in need of an organ or tissue transplant. It includes access to the Blue Quality Centers for Transplant network, which is a network administered by the BlueCross BlueShield Association. The network includes nationally renowned transplant facilities throughout the United States that have demonstrated expertise in performing specific high-risk, high-cost transplants and transplant-related medical/surgical procedures. There are three options available if you need an organ transplant. The first option, for which you receive the highest level of benefits, must be at a Blue Quality Centers for Transplant facility and the transplant must be preauthorized through Empire BlueCross Blue Shield’s Centers of Excellence department. Also, if a Blue Quality Centers for Transplant facility is used, benefits for travel, hotel and meals are provided. You can contact the Centers of Excellence department with questions about the Blue Quality Centers for Transplant through the number provided on your medical ID card. Blue Quality Centers for Transplant facilities are available for the following types of transplants: Heart Lung Heart-Lung Liver Simultaneous kidney/pancreas Bone marrow and/or peripheral stem cell transplant

Secondly, you have the option to use a facility that is in the Empire Blue Cross BlueShield network, but is not a Blue Quality Centers for Transplant facility. The transplant must be preauthorized through Empire BlueCross BlueShield’s Centers of Excellence department. PPO plan participants will receive a lower level of benefits under this option. Also, no benefit for travel, hotel or meals is available if a Blue Quality Centers for Transplant facility is not used. The third option is to use a facility that is not a Blue Quality Centers for Transplant facility and is not in the BlueCross Blue Shield network. Under this option, services are not covered and any amount you pay toward the transplant will not be applied to your annual Deductible or Out-of-Pocket Maximum. Benefit levels for transplants are outlined in the Schedule of Benefits sections.


All transplants require Preauthorization through Empire BlueCross BlueShield Medical Management. Medical care and treatment for organ/tissue transplants includes the following: Pre-transplant or pre-medical/surgical evaluation and care

including diagnostic tests and x-rays. Organ procurement/tissue harvest and preparation subject to

the limitations described below. Surgery and recovery. Post-discharge follow-up, including services and supplies.

DONOR CHARGES FOR ORGAN/TISSUE TRANSPLANT In the case of an organ or tissue transplant, donor charges are considered Eligible Expenses (excluding donor search expenses) only if the recipient is a Covered Person under the plan and the donor fees are not covered under the donor’s insurance. If the donor’s insurance covers a portion of the fees, the plan will coordinate benefits with the donor’s plan. If the recipient is not a Covered Person, no benefits are payable for donor charges.

HEALTH SAVINGS ACCOUNT A Health Savings Account (HSA) is an account that you can contribute money into to save for medical expenses, but only you are covered under the High Deductible Health Plan (HDHP).

ELIGIBILITY To be eligible to contribute to an HSA, you must satisfy all of the following conditions, as required by federal law. You must not be eligible to be claimed as a dependent on

another person’s tax return. You must not be enrolled in Medicare. You must be enrolled in a qualified “high deductible health

plan” such as the HDHP. If you have additional health coverage under another plan,

either as an employee or a dependent, this other health coverage must also be a high deductible health plan or a plan providing specific, limited coverage (such as dental insurance, vision insurance, accident insurance, or long-term care coverage).

If your spouse is enrolled in a health care spending account through his or her employer, you cannot contribute to an HSA unless your spouse’s spending account excludes coverage for spouses and dependents who are covered by high deductible health plans.

You should consult with your tax advisor as to your eligibility to open an HSA.

CONTRIBUTIONS The maximum HSA contribution is based on the deductible for the coverage category you elect under the High Deductible Health Plan. For instance, if you cover yourself only, you can contribute up to the amount of the “associate only” deductible. Please review the Plan Features-High Deductible Health Plan section for the different contribution levels.

Exception: If you cover a non tax-qualified dependent under the HDHP, your contribution is limited to the next lower coverage category (e.g., if you cover yourself plus your same-sex domestic partner, you may only contribute up to the amount of the “associate only” deductible.)

If you are age 55 or older, you can make an additional “catch-up” contribution to your HSA, until you reach age 65. The catch-up contribution allowed by federal law is $900 for 2008 and $1,000 in

2009 and beyond unless the catch-up contribution limit is changed by the IRS. You cannot contribute to your HSA if you are receiving Medicare payments.

Important: You are responsible for ensuring that you are eligible to open and contribute to an HSA, and that you are not annually contributing more than permitted by law.

USING YOUR HSA CONTRIBUTIONS You can use the funds in your account to pay for qualified medical expenses as defined under Section 213(d) of the Internal Revenue Code, which are incurred by you, your spouse and dependents. Qualified medical expenses include deductibles and coinsurance under the HDHP as well as other expenses that the Plan does not cover, such as over-the-counter medication, dental expenses, and vision expenses. You can pay for medical expenses of your spouse and dependent children even if you do not cover them in the HDHP. You cannot pay for medical expenses of your domestic partner unless your partner qualifies as a dependent for tax purposes. Or, you can save the money in your account for future needs, such as retiree medical expenses. Once you reach age 65, your HSA can be used to pay insurance premiums like Medicare Part A and B. Money cannot be used to purchase a Medigap policy. You can also request a distribution of funds for other reasons; however, the amount distributed for other reasons will be subject to regular income taxes and, if you are not disabled or over age 65, a 10% penalty tax.

RULES ABOUT FLEXIBLE SPENDING ACCOUNTS While you are contributing to an HSA, there are restrictions on coverage that you can have under a health care spending account. If you enroll in both the Health Care Flexible Spending Account (FSA) under the Sears Holdings Flexible Benefits Plan and the HSA, you will only be able to submit certain expenses to the Health Care FSA: Expenses that are not covered by the HDHP, such as dental or

vision expenses and Expenses you have incurred after you have satisfied the

HDHP deductible. If you participate in the Health Care FSA, claims will only be paid if they meet one of the above conditions. If your spouse has a health care spending account through his or her employer, you cannot contribute to an HSA unless your spouse’s health care FSA excludes coverage for spouses and dependents who are covered by high deductible health plans. You cannot claim the same expense under both an HSA and a health care FSA. TAX SAVINGS

The potential tax savings associated with your HSA contributions include: 1. Tax deductions when you contribute to your account 2. Tax-free earnings through investment 3. Tax-free withdrawals for qualified medical expenses HSA OWNERSHIP Funds remain in the account from year-to-year. There are no “use it or lose it” rules for HSAs.


PORTABILITY HSAs are completely portable. You can keep your HSA even if you leave Sears Holdings or change your medical coverage. (However, you can only make contributions to your HSA while you are covered by a high deductible health plan.)

SETTING UP YOUR HSA The Medical Plan HSA is offered by Empire BlueCross BlueShield through Mellon Trust of New England, N.A. You may elect to establish your HSA at any time during the plan year, provided you are enrolled in the HDHP. Once you make an election to establish an HSA, you will receive a welcome kit from Empire with instructions on how to activate your account at Mellon and information on how to make the most of your HSA. You cannot use your HSA account until you activate your account at Mellon.

IMPORTANT NOTE The HSA feature is not intended to be an employer sponsored welfare benefit plan for purposes of the Employee Retirement Income Security Act of 1974 (ERISA), as amended.


PLAN FEATURES – SELECT PPO In-Network* Out-of-Network** Annual Deductible (does not apply to eligible preventive care services, prescription drugs or first three primary care Network doctors’ office visits) Individual

Family

$550 each plan year $1,600 each plan year

$1,350 each plan year $4,050 each plan year

Prescription Drug Deductible None None Annual Out-of-Pocket Maximum

Individual Family


$8,000 each plan year

$16,000 each plan year Primary Care Doctors’ Office Visits $25 copayment for each of the first

three times you see your in-network doctor for an office visit; thereafter 20%

40%

Coinsurance paid by you 20% 40% Hospital Copayment*** (applies toward Out-of-Pocket Maximum)

$250 per admission $500 per admission

Emergency Room Copayment*** (applies toward Out-of-Pocket Maximum)

$100 (waived if admitted) $100 (waived if admitted)

Maximum Annual Benefits No limit No limit Maximum Lifetime Benefits No limit No limit Preauthorization Failure to preauthorize results in reduced or no benefits (see next section)

PLAN FEATURES – BASIC PPO In-Network* Out-of-Network** Annual Deductible (does not apply to eligible preventive care services, prescription drugs or first four primary care Network doctors’ office visits)

Individual Family



Prescription Drug Deductible None None Annual Out-of-Pocket Maximum

Individual Family



$11,000 each plan year $22, 000 each plan year

Primary Care Doctors’ Office Visits $25 copayment for each of the first four times you see your in-network doctor

for an office visit; thereafter 20%

40%

Coinsurance paid by you 20% 40% Emergency Room Copayment*** (applies toward Out-of-Pocket Maximum)

$100 (waived if admitted) $100 (waived if admitted)

Maximum Annual Benefits $1,000,000 (combined in- and out-of-network) Maximum Lifetime Benefits No limit Preauthorization Failure to preauthorize results in reduced or no benefits (see next section)

PLAN FEATURES – HIGH DEDUCTIBLE HEALTH PLAN In-Network* Out-of-Network** Annual Deductible (does not apply to eligible preventive care services, but does apply to all other in-network and out-of network benefits combined, including prescription drugs)

$1,500 associate only $3,000 associate + spouse, associate + child(ren) or associate + family

Annual Out-of-Pocket Maximum (includes annual deductible and prescription drugs)

Individual Family


No limit

Coinsurance paid by you 20% 50% Preauthorization Failure to preauthorize results in reduced or no benefits (see next section) Maximum Annual Benefits No limit No limit Maximum Lifetime Benefits No limit No limit Maximum HSA Contribution

$3,050 associate only

$6,150 associate + spouse, associate + child(ren) or associate + family Catch-up Contribution limit $1,000 (applies to associates who will be age 55 by December 31, 2010) * In-Network charges have negotiated discounts applied. ** Out-of-Network benefits are subject to Reasonable and Customary (R&C) limitations. *** In addition to Coinsurance.


SCHEDULE OF BENEFITS — SELECT PPO, BASIC PPO AND HIGH DEDUCTIBLE HEALTH PLAN Benefits are payable, as described below, for Eligible Expenses incurred while covered because of Injury or Sickness. No benefits will be paid if services are not Medically Necessary.

Preventive Care Services Eligible Expenses In-Network Benefits Out-of-Network Benefits Routine Physicals 100% Coinsurance Including routine lab, immunizations, vision screen

Up to age 50: 1 every 2 years Age 50+: 1 per calendar year

Routine Mammogram 100% Coinsurance Ages 35 to 39: 1 within this timeframe

Age 40+: 1 per calendar year Routine Pap Smears 100% Coinsurance 1 per calendar year Well Baby/Well Child 100% Coinsurance Physical exam, medical history, developmental assessment, anticipatory guidance, lab tests performed in office or lab, and immunizations

Birth to 1 year: 6 visits 1 to 2 years: 3 visits 3 to 6 years: 4 visits

7 to 19 years: 6 visits Immunizations (per recommended guidelines, includes HPV)

100% Coinsurance

Sigmoidoscopy 100% Coinsurance Age 40+: 1 every 2 years Colonoscopy 100% Coinsurance Age 50+: 1 every 10 years Hypercholesterolemia Screening 100% Coinsurance 1 every 2 years Fecal Occult Blood Test Screening 100% Coinsurance Age 40+: 1 per calendar year Human Immunodeficiency Virus Screening 100% Coinsurance 1 per calendar year Prostate Cancer Screening 100% Coinsurance Annual diagnostic exam, prostatic specific antigen test (PSA) and lab tests

Digital rectal exam

Age 50+: 1 per calendar year

Bone Density 100% Coinsurance Based on age and diagnoses criteria. Contact Member Services for specific criteria.


SCHEDULE OF BENEFITS — SELECT PPO, BASIC PPO AND HIGH DEDUCTIBLE HEALTH PLAN

Medical Services Eligible Expenses In-Network Benefits Out-of-Network Benefits Physician Office Visit Emergency Room (for emergencies only) Surgical Center Ambulatory Care Center Urgent Care Center Physician Office Surgery

Coinsurance Coinsurance

Coinsurance Coinsurance Speech, Occupational or Physical Therapy (when required for rehabilitation following a Sickness or Injury or for children age 5 and under)

Subject to plan deductible and coinsurance. There is a combined limit of up to 90-visits per year per person for speech, occupational and for physical therapies. Medically necessary visits beyond 90 requires pre-certification. There is a combined limit for speech, occupational and physical therapies of up to 200 visits per year per child up to the end of the calendar year in which the child reaches age 5. Please see Speech, Occupational and Physical Therapies in this section for detailed information about this coverage.

Coinsurance Coinsurance Private Duty Nurse or Visiting Nurse Services—Must be either a R.N. or L.P.N. Covered in-home only

Maximum of $25,000 per Plan Year, combined In- and Out-of-Network. Preauthorization required.

No coverage if not preauthorized. Diagnostic testing, X-ray or lab services (excluding services performed as part of a routine physical)


Casts, splints, surgical dressings or other Medically Necessary supplies


Coinsurance Coinsurance Crutches, wheelchairs, hospital beds or Therapeutic Equipment Lesser of the purchase price or rental cost of such item. Prosthetic or Orthopedic Devices such as artificial limbs, eyes or braces including the replacement of these devices (when Medically Necessary)


Refer to the Plan Features section for coinsurance levels under the PPO Options.


SCHEDULE OF BENEFITS — SELECT PPO, BASIC PPO AND HIGH DEDUCTIBLE HEALTH PLAN Medical Services, continued

Eligible Expenses In-Network Benefits Out-of-Network Benefits Blood transfusions including the cost of whole blood or plasma not donated or replaced, and autologous blood donations


Non-routine eye exam by a Physician Coinsurance Coinsurance Coinsurance Coinsurance The first pair of glasses or contact lenses,

but not both, needed after cataract surgery, cornea transplantation or cornea grafting

Maximum benefit of $75 combined In- and Out-of-Network for a pair of glasses or contact lenses needed after each surgery.

Wig or toupee, due to hair loss resulting from chemotherapy or radiation treatments

Out-of-Network coinsurance level In- or Out-of-Network. Maximum lifetime benefit of $500.

Coinsurance Coinsurance Transgender reassignment hormonal therapy and/or surgical transformational measures for members who are at least 18 years old; and have met medical necessity criteria for the diagnosis of transsexualism.

Pre-certification is required. Call Customer Service for more information.

Coinsurance Coinsurance Chiropractic care for musculoskeletal condition only. (X-rays and physical therapy performed by a chiropractor are not covered.)

Maximum 26 visits per Plan Year, combined In- and Out-of-Network.

Anesthesia, oxygen, or other gases and the rental of equipment to administer them


Ground transportation by a licensed professional ambulance service to and from a local hospital


Air ambulance where Medically Necessary Coinsurance Coinsurance Transplants performed in Blue Quality Centers for Transplant

Medical expenses 100% (a $500 penalty will apply if not preauthorized)

Hotel accommodations for one companion who accompanies the patient (price range in area near the facility); up to a maximum of 21 days per plan Year

Lifetime maximum $10,000 combined with meals and travel

Meals and other necessary expenses for a companion (maximum $50 per day)

Lifetime maximum $10,000 combined with hotel and travel

Travel to and from the site of the transplant, procedure, surgery, or necessary follow-up for the patient and companion traveling on the same day(s) (limited to coach class)

Lifetime maximum $10,000 combined with hotel and meals

Not covered outside of Blue Distinction Centers for Transplants or the Blue Cross and Blue Shield network

Transplants performed in the Blue Cross and Blue Shield Network (outside of Blue Quality Centers for Transplant)

Medical expenses Coinsurance (a $500 penalty will apply if not preauthorized)

Not covered outside of Blue Quality Centers for Transplant or the Blue Cross BlueShield network

Meals, Hotel Accommodations and Travel Not covered Note: Kidney and cornea transplants are subject to the same provisions as other surgical procedures. Travel, hotel, and meal expenses in connection with a kidney or cornea transplant are not covered.

Inpatient Hospital Services Eligible Expenses In-Network Benefits Out-of-Network Benefits Charges made by a Hospital for: Coinsurance Coinsurance Room and Board—up to the Hospital semi-private room

rate Private room, if Medically Necessary A stay in an intensive care or isolation unit Miscellaneous Services, as defined Pre-Admission Tests, as defined Emergency Room, within 48 hours of onset and only if

Medically Necessary

You must preauthorize prior to entering a Hospital or within 48 hours of an emergency admission. A $500

penalty per occurrence will apply to Hospital confinements that have not been preauthorized.

Services of a Physician for inpatient surgery Coinsurance Coinsurance Services of a Physician for Hospital visits Coinsurance Coinsurance Gastric bypass $1,500 Copayment plus Coinsurance $1,500 Copayment plus Coinsurance



SCHEDULE OF BENEFITS — SELECT PPO, BASIC PPO AND HIGH DEDUCTIBLE HEALTH PLAN Outpatient Services

Eligible Expenses In-Network Benefits Out-of-Network Benefits X-ray, diagnostic testing or laboratory services Coinsurance Coinsurance

Out-of-Hospital Care Eligible Expenses In-Network Benefits Out-of-Network Benefits

Coinsurance Coinsurance Room and Board and Miscellaneous Services for an eligible stay in a Skilled Nursing Facility. A stay in a Skilled Nursing Facility is eligible only if: The stay is due to the same or related causes as

the Hospital stay; and A Hospital stay would otherwise be needed

Maximum of 120 days confinement per Plan Year, combined In- and Out-of-Network. No coverage if not preauthorized.

Eligibility qualifications must be met in each

Plan Year for benefits to be payable Coinsurance Coinsurance Charges for care by a Home Health Care Agency

Maximum of 100 visits per Plan Year, combined In- and Out-of-Network. Four hours equals one visit.

No coverage if not preauthorized. Coinsurance Coinsurance Charges for Hospice Care program

Room and Board and Miscellaneous Services for a stay in a Hospice. Skilled nursing care, home health aide care, and Miscellaneous Services when the Hospice Care program is provided in the patient’s or family’s home.

Counseling for the patient and/or the patient’s family, if recommended by a Physician. Family counseling will be a covered expense up to six months after the patient’s death (included in the $10,000 lifetime maximum)

All treatment and services must be rendered and billed by the Hospice Care program

Maximum $10,000 per lifetime (combined In- and Out-of-Network). No coverage if not preauthorized.

Maternity Benefits

Eligible Expenses In-Network Benefits Out-of-Network Benefits Prenatal maternity care Coinsurance Coinsurance Charges made by a Birthing Center or Hospital for medical care and treatment received in connection with a birth

Also included are the services of a Nurse-Midwife if: The Nurse-Midwife is acting under the direction of a

Physician; and The services are provided in a Birthing Center


Routine care or treatment of a Newborn Child while the child is necessarily confined in a Hospital




SCHEDULE OF BENEFITS — SELECT PPO, BASIC PPO AND HIGH DEDUCTIBLE HEALTH PLAN Prescription Drug Coverage

Eligible Expenses In-Network Benefits Out-of-Network Benefits Retail Pharmacy Program

Generic medication (up to a 30-day supply) 20% Coinsurance per prescription ($12 minimum, $50 maximum)

Preferred brand name medication (up to a 30-day supply)

20% Coinsurance per prescription ($30 minimum, $75 maximum), plus the difference between generic and brand name, at a network pharmacy

Non-preferred brand name medication (up to a 30-day supply)

40% Coinsurance per prescription ($50 minimum, $125 maximum), plus the difference between generic and brand name, at a network pharmacy

If you use a pharmacy that is not in the Medco Network, you will need to pay for your prescription in full at the pharmacy and then submit a paper form to Medco. Forms are available by calling Medco Health at 1-800-233-7865 or through their Web site at www.medco.com. You will be reimbursed based on the same coinsurance percentage and minimum/maximum coinsurance amounts as prescriptions filled at network pharmacies. However, the coinsurance percentage and minimum/maximums will be applied to the discounted prescription price that the drug would have cost if you had used a network pharmacy. You would be responsible for 100% of any amounts over the discounted prescription price.

If a network pharmacy fills your prescription, it will be covered even if the prescribing physician is not in the provider network.

Home Delivery Retail Refill Allowance (RRA) Program (90-day supply) Generic medication (up to a 90-day supply) 20% Coinsurance per prescription

($30 minimum, $125 maximum) No benefits if not obtained through Kmart Pharmacy or Medco Pharmacy (Home Delivery)

Preferred brand name medication (up to a 90-day supply)

20% Coinsurance per prescription (minimum $60, maximum $175), plus the difference between generic and brand name

No benefits if not obtained through Kmart Pharmacy or Medco Pharmacy (Home Delivery)

Non-preferred brand name medication (up to a 90-day supply)

40% Coinsurance per prescription (minimum $125, maximum $250), plus the difference between generic and brand name

No benefits if not obtained through Kmart Pharmacy or Medco Pharmacy (Home Delivery)

Important: If a drug’s actual cost is less than the applicable minimum amount, you’ll pay the actual cost of the drug rather than the Coinsurance.



GENERAL EXCLUSIONS No benefit will be paid under the PPO options for Expenses incurred for or in connection with: Charges in excess of the Reasonable and Customary charges

for services and supplies. Charges for care or treatment that is not Medically Necessary. Non-emergency or follow-up care rendered in an Emergency

Room on an outpatient basis. Acupuncture unless performed by a Physician. X-rays and physical therapy performed by a chiropractor. Chiropractic care for other than a Musculoskeletal condition. Charges for which no payment would be required if there were

no health coverage. Charges for which you or a dependent has no legal obligation

to pay. Services for medical care for which no charge is made. Drugs and treatments that are Experimental or Investigational.

Note: In cases of a life-threatening Sickness or Injury for which no other conventional treatment is available, the plans may consider certain Investigational treatments to be an Eligible Expense. You must call Medical Management before receiving such treatments or procedures.

The improvement of educational skills or correction of learning disturbances.

Modifications made to a home, property or automobile, such as ramps, elevators, spas, air conditioners or car hand controls.

The treatment of a work-related Sickness or Injury. Services or supplies furnished by or reimbursable through a

government plan or government-sponsored agency or program (except Medicare).

Care provided in any government Hospital or facility when the individual is eligible for government benefits.

Examinations to determine the need for, and fitting of, eyeglasses. (The first pair of either glasses or contact lenses needed after cataract surgery, cornea transplantation or cornea grafting is covered.)

Hearing aids or exams for their prescription or fitting. Custodial Care. Hospital confinement primarily for diagnostic testing. Treatment received before coverage under a PPO option began

or after it is terminated. Separate charges by interns, residents, house Physicians or

other health care professionals who are employed by the covered facility that makes their services available.

Routine foot care, unless to treat diabetes. Radial keratonomy or other surgical procedures to correct

refractions of the eye, including any confinement, treatment, services or supplies given in connection with or related to the surgery.

Genetic counseling and genetic testing performed by a genetic counselor.

Cosmetic surgery on any part of the body except reconstructive surgery following a mastectomy or when Medically Necessary to correct damage caused by an accident, an Injury, or to correct a congenital defect.

Dental Care or Treatment, unless the Expense is for: - Oral surgery to treat diseases or Injuries of the jaw, to

extract impacted teeth, or when related to an accident to sound natural teeth that occurred while covered, provided the repair or replacement is performed within one year of the Injury or damage; or

- Removal of tumors or cysts resulting from a medical condition.

Doctor’s services or x-ray examinations in conjunction with mouth conditions due to a periodontal or perspical disease, or

any condition (other than a malignant tumor) involving teeth, surrounding tissue or structure, the alveolar process or the gingival tissue, except for Dental Treatment described above.

Any loss caused or contributed to by an act of war, declared or undeclared, or by Sickness or Injury sustained while in the armed forces.

Programs or medications for weight reduction or obesity, except when Medically Necessary to treat morbid obesity.

Smoking cessation programs, services and supplies. Hypnosis. Recreational therapy. Private Duty Nursing services when the patient is confined in a

Hospital, Skilled Nursing Facility or other health care institution; or when the registered nurse or licensed practical nurse lives in the Covered Person’s home or is a member of the Covered Person’s family, or is not approved by Medical Management.

Services or care not recommended, approved and provided by a person who is licensed under a state medical practices act or similar state law or by a Nurse-Midwife who is licensed by a board of nursing as a Registered Graduate Nurse (RN) and has completed a program approved by the state for the preparation of Nurse-Midwives.

Charges for personal convenience items, including but not limited to telephone charges, television rental, guest meals, wheelchair/van lifts, exercise equipment, special toilet seats, grab bars or any other services or items determined by the plan to be for personal convenience.

Fees or charges made by an individual, agency or facility operating beyond the scope of its license.

Expenses incurred for services, supplies, medical care or treatment relating to, arising out of, or given in connection with procedures which facilitate a pregnancy but do not treat the cause of infertility such as in vitro fertilization, artificial insemination, embryo transfer, gamete intrafallopian transfer, zygote intrafallopian transfer and tubal ovum transfer.

Reversal of a previous surgery for sterilization. Completing claim forms, reports or medical records. Telephone consultations or giving information concerning a

claim. Failure to keep a scheduled office visit. Services or supplies provided by a member of your family or

household. Prescription drug coverage under the Prescription Drug

Program: - For non-Federal Legend Drugs. - When prescriptions exceed a 30-day supply at a retail

pharmacy. - When a 90-day supply of maintenance medication is not

filled in compliance with the Retail Refill Allowance (RRA) Program.

- For the difference in cost between a brand name drug and generic equivalent (in excess of the Coinsurance).

- When prescriptions are for over-the-counter medications or food supplements (excluding vitamins).

- When prescriptions are for drugs and supplies relating to, arising out of, or given in connection with procedures which facilitate a pregnancy, but do not treat the cause of infertility.

- When prescriptions are for drugs that are excluded from coverage by the Plan Administrator. (A list may be obtained from Medco Health.)

Note: All PPO option exclusions also apply to the Prescription Drug Program. Receipt of benefits under the Prescription Drug Program does not waive any of the exclusions that apply


to the PPO options and will not affect payment of other benefits under the PPO options.

Mental Health and Substance Abuse excluded services listed below: - Therapies that do not meet national standards for mental

health professional practice, including, but not limited to, Erhard/The Forum seminar training or similar motivational service, primal therapy, rolfing, sensitivity training, bioenergetic therapy, guided imagery or crystal healing therapy.

- The following types of therapies: aversion, bioenergetics, carbon dioxide, confrontation, expressive (art, poetry, movement and psychodrama) as separately billed services, hyperbaric or normobaric oxygen, marathon, megavitamin, sedative action electrostimulation, sexual (without a DSM IV diagnosis), and Z therapy, also known as “holding therapy.”

- Therapy for personal growth or professional training. - Treatment or consultations provided via telephone. - Treatment of congenital and/or organic disorders, except

for the associated treatable and acute behavioral manifestations.

- Experimental or Investigational therapies. - Marital counseling. - Treatment for caffeine or nicotine intoxication,

withdrawal or dependence. - Administrative psychiatric services when these are the

only services rendered (such as expert testimony, medical records review and maintenance, etc.).

- Chart review. - Consultation with a mental health professional for

adjudication of marital, child support and custody cases and adoptive home study or related services.

- Court ordered treatment, unless determined to be Medically Necessary.

- Cult deprogramming. - Custodial Care. - Discharge summaries. - Eating disorder and gambling programs based solely on

the 12-step model. - Educational evaluation, rehabilitation or treatment of

learning disabilities. - Environmental ecology treatments. - Halfway houses. - Hemodialysis for schizophrenia. - L-tryptophan and vitamins, except thiamine injections on

admission for alcoholism when there is a diagnosed nutritional deficiency.

- Non-abstinence based or nutritionally based treatment for Substance Abuse.

- Private Duty Nursing, except when preauthorized as Medically Necessary.

- Private rooms, except when required for infection control. - Services to treat conditions that are identified by the DSM

IV as not being attributable to a mental disorder (i.e., V-codes) or are not identified in the DSM IV (e.g., sexual addiction, codependency, etc.).

- Supervision of clinical treatment practitioners or team. - Training analysis (tuitional, orthodox). - Transcendental meditation. - Vocational assessment. - Wilderness programs or therapeutic camps.

CLAIMS INFORMATION

HOW TO FILE A CLAIM UNDER THE PPO OPTIONS Providers who participate in Blue Cross and Blue Shield networks have agreed to submit claims directly; so, if In-network Hospitals and Physicians are used, claims for their services generally will not have to be filed by the plan participant. In addition, many Out-of-Network Hospitals and Physicians will also file claims if the information on the Blue Cross and Blue Shield ID card is provided to them. If the provider requests a claim form to file a claim, a claim form can be obtained by calling Empire BlueCross BlueShield at 1-800-803-2432. When filing a claim, attach all itemized bills to the claim form. Make copies of all bills and claim forms. It is important to keep records for each covered family member. Mail the original claim form and itemized bills to:

Empire BlueCross BlueShield P.O. Box 5069 Middletown, NY 10940-9069

File claims as soon as possible. Only claims submitted within twelve (12) months following the date of service will be accepted. For pharmacy claims, mail the original claim form and itemized bills to:

Medco Health P.O. Box 2280 Lee’s Summit, MO 64063-2280

FILING CLAIMS WITH AN HMO Generally, you do not need to file claims for services provided under the terms of your HMO. However, the HMO controls the process for filing claims, appeal of denied claims and coordination of benefits between the HMO and any other medical coverage you have. If you need information about coverage or claims, call the HMO’s Member Services department.

HOW AND WHEN CLAIMS ARE PAID All benefits will be paid after the claims administrator receives complete claim information. Claims administrators are listed in the Other Information section of this handbook. If a PPO participant assigned benefits or received services from a Network Provider, the Medical Plan will make payment directly to that provider. Benefits will be paid directly to participants who obtain services from Out-of-Network Providers. If benefits are payable after your death, the benefits may be paid to your estate or to any of the following of your surviving relatives: spouse, children, parents, or brothers and sisters. Post-service claims will be reviewed and responded to within 30 days of receipt. If there is not enough information to make a decision within 30 days, participants will be notified in writing of the additional information needed, and will have 45 days to respond. Empire BlueCross BlueShield will make a decision within 15 days of receipt of the requested information, or if no response is received, within 15 days after the deadline for a response.

QUALIFIED MEDICAL CHILD SUPPORT ORDERS If a Qualified Medical Child Support Order (QMCSO) has been received by the Plan Administrator, benefits will be paid to an Alternate Recipient, or the Alternate Recipient’s custodial parent or legal guardian, or to the provider if so directed by the Alternate Recipient, custodial parent or legal guardian. A copy of the


QMCSO procedures for the PPO options can be obtained, without charge from the Health and Group Benefits Service Center.

HOW TO APPEAL A DENIED CLAIM If you feel your claim for benefits has been improperly denied, you have the right to appeal the decision. See the Other Information section of this handbook for more information.

ADDITIONAL INFORMATION The following details about your benefit coverage are provided in the Other Information section of this handbook: When you can make changes to your benefits. Coverage continuation for certain benefits. Contact information for benefit claims administrators and

insurance carriers.

SOME TERMS YOU SHOULD KNOW Ambulatory Care Center means a specialized facility that is established, equipped, operated and staffed primarily for the purpose of performing surgical procedures and that fully meets one of the following two tests: Is licensed as an Ambulatory Care Center by the regulatory

authority having responsibility for the licensing under the laws of the jurisdiction in which it is located; or

Where licensing is not required, it meets all of the following requirements: - Is operated under the supervision of a licensed Doctor of

Medicine (M.D.) or Doctor of Osteopathy (D.O.) who is devoted full time to supervision and who 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 remain 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 services of one or more Registered

Graduate Nurses (RNs) for patient care in the operating rooms and in the post-anesthesia recovery room; and

- Maintains an adequate medical record for each patient, the record to contain an admitting diagnosis including, for all patients except those undergoing a procedure under local anesthesia, a preoperative examination report, medical history and laboratory test and/or x-rays, an operative report and a discharge summary.

Birthing Center means a specialized facility that is primarily a place for delivery of children following a normal uncomplicated pregnancy and that fully meets one of the following two tests: Is licensed by the regulatory authority having responsibility for

the licensing under the laws of the jurisdiction in which it is located; or

Meets all of the following requirements:

- 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;

- Is available to handle foreseeable emergencies, with 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;

- Operates under the full-time supervision of a licensed Doctor of Medicine (M.D.) or Registered Graduate Nurse (RN);

- 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, the record to contain prenatal history, prenatal examination, any laboratory or diagnostic test and a postpartum summary.

Blue Quality Centers for Transplant means facilities designated by Empire BlueCross BlueShield to render Medically Necessary covered services and supplies for certain organ and tissue transplants under the PPO options.

Coinsurance is described in the How the PPO Options Work section.

Copayment is described in the How the PPO Options Work section.

Covered Person or participant means an eligible associate or dependent who is covered under a PPO option in accordance with the terms and conditions of the Medical Plan and applicable PPO option.

Custodial Care means care consisting of services and supplies that are furnished mainly to train or assist the individual in personal hygiene and other activities of daily living, that do not assist such person in recovering from an Injury or Sickness or can be provided by persons without the technical skills of a provider of health care covered by the PPO options. Such care is considered custodial regardless of where the care is provided or who recommends, directs or provides the care.

This is care that can be provided by a lay person who does not have professional qualifications, skills or training. Custodial Care includes: help in walking and getting into or out of bed; help in bathing, dressing and eating; help in other functions of daily living of a similar nature; administration of or help in using or applying medications, creams and ointment; routine administration of medical gas after a regimen of therapy has been set up; routine care of a patient, including functions such as changes of dressings, diapers and protective sheets and periodic turning and positioning in bed; routine care and maintenance in connection with casts, braces and other similar devices, or other equipment and supplies used in treatment of a patient, such as colostomy and ileostomy bags and in-dwelling catheters; routine tracheostomy care; and general supervision of exercise programs including carrying out of maintenance programs of repetitive exercises that do not need the skills of a therapist and are not skilled rehabilitation services.

Custodial Care also means services determined as primarily providing: A protected, monitored and controlled environment whether in

an institution or in the home; Assistance to support the essentials of daily living; and


Treatment that is unlikely to reduce the disability to the extent necessary to enable the patient to function outside the protected, monitored or controlled environment.

Annual Deductible is described in the How the PPO Options Work section.

Dental Care or Treatment means services or supplies for the teeth, natural or otherwise, and their supporting tissues and structures, including but not limited to orthodontic services.

Educational means that the primary purpose of a service or supply is to provide the Covered Person with training in the activities of daily living; instructions in scholastic skills such as reading or writing; treatment of learning disabilities; or preparation for an occupation; or that the service or supply is being provided to promote development beyond any level of function previously demonstrated.

Eligible Expense is described in the How the PPO Plans Work section.

Emergency (Medical) means the sudden onset of a medical condition manifesting itself by acute symptoms, including severe pain, which are severe enough that the lack of immediate medical attention could reasonably be expected to result in any of the following: The patient’s health would be placed in serious jeopardy; or Bodily functions would be seriously impaired; or There would be serious dysfunction of a bodily organ or part;

or Death.

Emergency (Psychiatric) means a sudden, serious condition for which the failure to receive immediate mental health or substance abuse care could result in an individual being a real and present danger to himself/herself or others. Some examples are attempted suicide and violent and aggressive behavior toward others.

Expense means a charge a person is legally obligated to pay. An Expense is deemed to be incurred on the date the service or supply is furnished and is applied in the order received.

Experimental or Investigational means the procedures, services or supplies (including drugs) that the claims administrator determines to be Experimental or Investigational using one or more of the following criteria: The medical or health care procedure or supply is under study

or in a clinical trial to evaluate its toxicity, safety or efficacy for a particular diagnosis or set of indications. Clinical trials include but are not limited to Phase I, II and III clinical trials.

The prevailing opinion within the appropriate specialty of the U.S. medical profession is that the medical or health care procedure or supply needs further evaluation for the particular diagnosis or set of indications before it is used outside clinical trials or other research settings. The claims administrator will determine if this item is true based on:

- Published reports in authoritative medical literature; and - Regulations, reports, publications and evaluations issued by

government agencies, such as the Agency for Health Care Policy and Research, the National Institutes of Health and the FDA.

A drug, medical supply or medical device that is subject to FDA approval may be determined Experimental or Investigational if: It does not have FDA approval; or It has FDA approval only under its Treatment of

Investigational New Drug regulation or a similar regulation; or It has FDA approval, but it is being used for an indication or at

a dosage that is not an accepted off-label use. The claims

administrator will determine if a use is an accepted off-label use based on published reports in authoritative medical literature and entries in the following drug compendia: The American Medical Association Drug Evaluations, The American Hospital Formulary Service Drug Information, and The U.S. Pharmacopoeia Dispensing Information.

The claims administrator has the discretionary authority to interpret and apply the definition of Experimental and Investigational in determining whether medical or dental services and supplies are Eligible Expenses.

Generic Drugs must pass the Food and Drug Administration’s (FDA) same strict standards for safety and produce the same clinical effect as brand name drugs. To gain FDA approval, generic drugs are required to meet certain criteria, such as having the same active ingredients and bioequivalency as brand name drugs. Generics are typically sold at substantial discounts from the branded price.

Health Care Provider means a licensed or certified provider whose services are given within the scope of that provider’s license or certification.

Home Health Care means the services and supplies shown below. The Home Health Care must replace a needed Hospital stay or a stay in a Skilled Nursing Facility. Also, it must be for the care or treatment of sick or injured persons and must be ordered in writing by the Covered Person’s Physician and provided in the home by a Home Health Care Agency team.

Home Health Care consists of these services and supplies: Part-time or intermittent home nursing care from, or

supervised by, a registered nurse; Part-time or intermittent home health aide services; Physical therapy, occupational therapy and speech therapy; Medical supplies, drugs and medications prescribed by a

Physician, and laboratory services, but only to the extent that they would have been covered in a Hospital or Skilled Nursing Facility.

Each visit from a Home Health Care Agency team of four hours or less is considered a single visit.

Home Health Care Agency means a public or private agency that specializes in giving nursing or therapeutic services in the home. It also must be licensed as a Home Health Care Agency and operate within the scope of its license.

Hospice means a facility, or a part of one, which is licensed as such and operates within the scope of its license. It also provides inpatient Hospice Care, maintains medical records on each patient and provides an ongoing quality assurance program, has full-time supervision by at least one Physician and provides 24-hour nursing service by registered nurses.

Hospice Care means a coordinated program of home or inpatient care for the special physical, psychological and social needs of terminally ill persons and their families. A terminally ill person is one who has been diagnosed by a Physician as having a life expectancy of six months or less. The program must be accredited by the National Hospice Organization.

Hospital means a licensed institution, other than a Skilled Nursing Facility, that provides inpatient medical care and treatment of sick and injured persons. Services provided by a Hospital also include: Diagnosis of Injury and Sickness; Full-time supervision by at least one Physician; 24-hour nursing service by registered nurses; Surgical facility or formal arrangements for available surgical

facilities; and


Therapeutic care of patients who are convalescing from Injury or Sickness.

The surgery requirement will be waived if treatment or services are provided for rehabilitation from a Sickness or Injury and the institution would otherwise qualify as a Hospital. Hospital also includes: Any hospital, psychiatric hospital, or tuberculosis hospital that

meets the Medicare definition, if the patient is eligible for Medicare;

Any institution accredited by the Joint Commission on Accreditation of HealthCare Organizations, licensed by the state and used primarily for the treatment of alcoholism, narcotism or mental illness; and

Any institution licensed by the state as a Residential Treatment Center for the sole treatment of Mental Health and Substance Abuse Disorders.

Injury means accidental bodily Injury.

In-Network means benefits provided under the PPO options if covered medical services are obtained from In-Network Providers.

In-network or Network Provider means a Hospital, Physician, Health Care Provider, or pharmacy that has contracted to participate in either the BlueCross BlueShield or Medco Health network.

Intensive Outpatient Program means a non-residential mental health/substance abuse treatment program in which attendance ranges from one to four hours per day, three to five days per week.

Medical Case Manager means an experienced professional (e.g., nurse, doctor or social worker) who works with patients and providers to coordinate certain services deemed necessary to provide the patient with a plan of Medically Necessary and appropriate health care.

Medical Management means the entity responsible for assessing the Medical Necessity of proposed care under the terms of the PPO options.

Medically Necessary or Medical Necessity means that a service or supply: Must be provided by a Physician, Hospital or other covered

provider under the PPO options; and Must be commonly and customarily recognized with respect to

the standards of good medical practice as appropriate and effective in the identification or treatment of a patient’s diagnosed Injury or Sickness; and

Must be consistent with the symptoms on which the diagnosis and treatment of the Sickness or Injury is based; and

Must be the appropriate supply or level of service that can safely be provided to a patient; and with regard to a person who is an inpatient, it must mean that the patient’s Sickness or Injury requires that the service or supply cannot be safely provided to that person on an outpatient basis; and

Must not be primarily for the convenience of the patient, Physician, Hospital or other covered provider under the PPO plans; and

Must not be scholastic, vocational training, Educational or developmental in nature, or Experimental or Investigational; and

Must not be provided primarily for the purpose of medical or other research.

The Plan Administrator has delegated the discretionary authority to determine Medical Necessity under the PPO options to the claims administrator. The fact that a patient’s Physician has ordered a

particular treatment or supply does not make it Medically Necessary under the PPO options.

Among the factors the claims administrator may consider in determining Medical Necessity are approval by the U.S. Food and Drug Administration, if applicable, or whether a service or supply is commonly and customarily recognized by Physicians in a particular medical specialty as appropriate for the diagnosis or treatment of the Sickness or Injury.

The presence of these or other factors will not automatically result in a determination of Medical Necessity if the claims administrator determines one or more of the seven requirements listed have not been met.

Mental Health Disorder means an illness, condition or disorder defined or described as a mental disorder in the Diagnostic and Statistical Manual of Mental Disorders (DSM IV-Fourth Edition), or its successor volume, published by the American Psychiatric Association, and includes, but is not limited to, psychosis, neurosis and personality disorders.

Mental Health/Substance Abuse Provider means a person who specializes in the treatment of Mental Health Disorders or Substance Abuse.

Miscellaneous Services means Medically Necessary services or supplies, other than Room and Board and professional services. These services or supplies must be provided by a Hospital, Hospice or Skilled Nursing Facility or other provider of service such as laboratories, pharmacies and rehabilitation centers.

Musculoskeletal condition means the delay or impedence of neural impulse to and/or from the brain.

Newborn Child means a child who has been confined in a Hospital since birth. As of discharge, the child is no longer considered a Newborn Child.

Non-Preferred Brand drugs are brand name drugs not on the preferred list.

Nurse-Midwife means a person who is licensed or certified to practice as a Nurse-Midwife. A Nurse-Midwife must also be licensed by the board of nursing as a Registered Graduate Nurse (RN) and have completed a program approved by the state for the preparation of Nurse-Midwives.

Orthopedic Device means a device that is Medically Necessary for the correction of locomotor disorders, particularly as it pertains to the skeleton, joints, muscles and fascia.

Out-of-Network means services furnished by Out-of-Network Providers, Out-of-Network hospitals and Out-of-Network pharmacies.

Out-of-Network Provider means a Hospital, Physician or Health Care Provider that has not contracted with Blue Cross and Blue Shield to participate in the PPO Network.

Out-of-Pocket Maximum is described in the How the PPO Options Work section.

Outpatient Treatment (Mental Health/Substance Abuse) means treatment for a Mental Health or Substance Abuse Disorder that generally occurs at the provider’s office.

Partial Hospitalization (Mental Health/Substance Abuse) means non-residential mental health or substance abuse treatment that provides the range of psychiatric services found in an inpatient setting.

Physician means a person who is licensed to practice medicine or surgery and acts within the scope of the license.


Physician also means a social worker who is licensed or certified by the state, working within the scope of the license or certification and who provides care or treatment of a Mental Health or Substance Abuse Disorder.

Plan Year means January 1 through December 31.

Pre-Admission Tests means those tests prescribed by a Physician that are to be performed on the Covered Person in a Hospital within seven days prior to scheduled confinement in the Hospital as an inpatient, provided that: Such tests are related to the performance of scheduled surgery;

and Such tests have been ordered by a duly qualified Physician

after a condition requiring such surgery has been diagnosed and Hospital admission for such surgery has been requested by the Physician and confirmed by the Hospital; and

The Covered Person is subsequently admitted to the Hospital, or the confinement is cancelled or postponed because a Hospital bed is unavailable or because a change sufficiently significant to preclude surgery has occurred in the Covered Person’s medical condition.

Preauthorization means PPO members must preauthorize care with Medical Management to receive coverage.

Preferred Brand Drugs are commonly prescribed brand name drugs that appear on the list of “preferred” medications. The drugs are selected based on their clinical quality, effectiveness and value and are approved by an independent committee made up of doctors and pharmacists. The “preferred” list encourages doctors to consider cost when prescribing medications by alerting them to lower cost drugs that are just as effective as higher cost drugs.

Private Duty Nursing or Visiting Nurse Services means the services of a registered nurse or licensed practical nurse if such care is furnished when: Intensive nursing care, requiring the skill level and training of

a registered nurse or licensed practical nurse, is needed in the treatment of a Sickness or Injury; and

The care could not be properly provided by an individual who does not have the professional qualifications of a registered nurse or licensed practical nurse.

Prosthetic Device means an item that replaces a permanently missing, functional part of the body.

Psychologist means a person who specializes in clinical psychology and is licensed or certified as a Psychologist or is a Member or Fellow of the American Psychological Association, if there is no government licensure or certification required.

Reasonable and Customary Charge means, as to charges for services rendered by or on behalf of an Out-of-Network Provider, the amount measured and determined by Empire BlueCross BlueShield by comparing the actual charge for the service or supply with the prevailing charges made for it. Empire BlueCross BlueShield determines the Reasonable and Customary Charge. It takes into account pertinent factors including the complexity of the service, the range of services provided and the prevailing charge level in the geographic area where the provider is located and other geographic areas having similar medical cost experience.

In no event will the Reasonable and Customary Charge exceed the provider’s actual charge for the service. If the provider’s charge is more than the Reasonable and Customary Charge, the Covered Person is responsible for payment of the difference.

Residential Treatment Center means a program providing active treatment and specialized programming for children and adolescents on a 24-hour residential basis.

Room and Board means the following charges to inpatients by a Hospital, Hospice or Skilled Nursing Facility: a bed, meals and the general services essential to daily medical care.

Sickness means these conditions: when the body’s organs do not function normally; when a temporary ailment reduces the body’s ability to function normally; or pregnancy.

Skilled Nursing Facility means a facility approved by Medicare as a Skilled Nursing Facility. If not approved by Medicare, it must meet all of the following tests: Is operated under the applicable licensing and other laws of the

jurisdiction in which it operates; Is under the supervision of a licensed Physician or Registered

Graduate Nurse (RN) who is devoted full time to supervision; Is regularly engaged in providing Room and Board and

continuously provides 24 hour-a-day skilled nursing care of sick and injured persons at the patient’s expense during the convalescent state of an Injury or Sickness;

Maintains a daily medical record of each patient who is under the care of a duly licensed Physician;

Is authorized to administer medication to patients on the order of a duly licensed Physician; and

Is not, 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 or drug addicts or the mentally ill.

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

Therapeutic Equipment means a device that: Is prescribed or recommended by a Physician; Is durable in nature and is not disposable; Is primarily used as a medical device and is not generally used

in the absence of a Sickness or Injury; Must be necessary for the treatment of Sickness or Injury; and Cannot be used by anyone other than the patient.

Treatment Center means a facility that meets all the following requirements: Is established and operated in accordance with any applicable

state law; Provides a program of treatment approved by a Physician and

Empire BlueCross BlueShield; Has or maintains a written, specific and detailed regimen

requiring full-time residence and full-time participation by the patient; and

Provides all of the following basic services: Room and Board, evaluation and diagnosis, counseling, referral and orientation to specialized community resources.

Urgent Care Center means a licensed medical center operating within the scope of its license to provide immediate medical care that is required because of the sudden and acute nature of an Injury or Sickness on an outpatient basis.

IMPORTANT NOTE The Medical Plan is a welfare benefit plan under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This section of the Handbook, together with the applicable provisions of the Introduction and Other Information sections are intended to constitute a summary plan description in accordance with ERISA.

Documents

02 fts Medical FINAL 2010 - Hewitt · · 2011-02-25Sears Holdings Benefits Handbook 2010 2-i Medical Plan Full-time Salaried Medical Plan TABLE OF CONTENTS About the Medical Plan