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Home My WebLink About02-5957DOUGLAS, DOUGLAS & DOUGLAS 27 W. HIGH ST. POB 2~1 CARLISLE PA 17013 TELEPHONE 71%24.3-1790 WILLIAM P. DOUGLAS, ESQ. Supreme Court I.D.# 37926 Cumberland County Pennsylvania Plaintiff VS Ceres Group, Inc. t / a / d / b / a Central Reserve Life Insurance Company o2- ggg7 Civil Term Civil Action Law Jury Trial Demanded Defendant NOTICE YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION WITHIN TWENTY DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED, BY ENTERING A WRITTEN APPEARANCE PERSONALLY OR BY ATTORNEY AND FILING IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. YOU ARE WARNED THAT IF YOU FAIL TO DO SO, THE CASE MAY PROCEED WITHOUT YOU AND A JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT FURTHER NOTICE FOR ANY MONEY CLAIMED IN THE COMPLAINT OR FOR ANY OTHER CLAIM OR RELIEF REQUESTED BY THE PLAINTIFF. YOU MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 2 Liberty Square Carlisle PA 17013 717-249-3166 DATE: December 16, 2002 Complaint The plaintiff, Deanna Salisbury, is an adult individuals residing at 4029 Carlisle Road, Gardners, Cumberland County, Pennsylvania. The Defendant, Ceres Group, Inc. acting through their alter ego and subsidiary Central Reserve Life Insurance Company, is a corporation transacting business in the Commonwealth of Pennsylvania, with offices located 17800 Royalton Road, Cleveland, Ohio. On November 3, 2000, the defendant issued a policy of insurance to the plaintiffs. There policy of insurance in effect at all times relevant hereto, with Central Reserve Life Insurance Company bearing policy number AS - 000253958 - 0001. The contract provided for payment of medical expenses incurred by the insured. During the calendar year 2001 the plaintiff, Deanna Salisbury was required to receive medically necessary treatment. The defendant wrongfully refused to pay for medical services which were provided to Deanna Salisbury by her health care providers in accordance with the terms of the policy. The defendant did fraudulently, knowingly and intentionally misrepresent and deceive Deanna Salisbury and her medical providers with respect to the availability of medical benefit coverage under her policy of insurance. The defendant has frivolously and with no proper foundation for their actions refused to pay proceeds under their policy of insurance and provide medical benefits in accordance with the terms of the policy. The bad faith conduct of the defendant gives rise to a cause of action pursuant to 42 Pa. C.S.A. §8371. 10. The defendant failed to promptly and completely investigate all claims arising under the aforementioned contract of insurance. 11. The defendant did not act in good faith to effectuate prompt, fair and equitable resolution of claims, knowing that liability to pay medical bills is .dear and coverage applies, and as a result, the plaintiff has been forced to ~ncur expense to protect her interests. 12. The defendant failed to promptly provide a factually sound explanation for the basis of denial in the insurance policy in relation to the facts or applicable law for denial of the claim. 13. The defendant has willfully, maliciously and/or recklessly withheld benefits from the plaintiff, due to its failure to investigate the claim thoroughly which constitutes a breach of an implied covenant. 14. The defendant, in bad faith, has denied payment on behalf of its insured without a sound legal basis for its denial and in not fully inquiring into the possible basis which might support the insured's claim of coverage. 15. The defendants deliberately acted in conscious disregard and with indifference to the rights of their insured. 16. The defendant impliedly and/or expressly warranted that it would, in good faith, provide insurance coverage to Deanna Salisbury in accordance with the contract and abide by the terms of said contract. 17. As a result of the aforesaid, the defendant breached its contract and/or warranty, which breach resulted in loss to the plaintiff, as well as aggravation, inconvenience and emotional distress. 18. The plaintiff hereby requests all remedial relief as provided in 42 Pa. C.S.A. §8371 and payment in full of all past reasonable and necessary medical expenses. Wherefore it is prayed that judgment be entered in favor of the plaintiff and against the defendant in an amount in excess of that requiring compulsory referral to arbitration. A jury trial is hereby demanded. Respectfully submitted, William P. Douglas, ]~q. Attorney for PlainEiff December 9, 2002 AFFIDAVIT I HEREBY SWEAR OR AFFIRM THAT THE FOREGOING IS TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND/OR INFORMATION AND BELIEF. THIS IS MADE SUBJECT TO THE PENALTIES OF 18 PA.C.S.§ 4904 RELATING TO UNSWORN FALSIFICATION TO AUTHORITIES. Date: December 9, 2002 I Dean~al~sbury ~ PRAECIPE FOR LISTING CASE FOR ARGUMENT (Must be tTpemitten and submitted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please ] i_~t the within matter for the next Ar~3~m~mt Court. CAPTION OF CASE (entire caption must be stated in D,]] )' DEANNA SALISBUR¥~=, (Plaintiff) CERES GROUP, INC., t/d/b/a CENTRAL RESERVE LIFE INSURANCE COMPANY, ( Defe_-~ant ) No. 02-5957 Civil 19 State matter to be argued (i e , plaintiff's motion f~r new d~marr~r to cc~nplmint, etc.): Defendant's Preliminary Objections to Plaintiff's Complaint. 2. Identify counsel m%o ~ 1 1 argue case: (a) for p~a~ntiff: address: (b) for defendant: William P.Doutlas, Esquire DOUGLAS, DOUGLAS & DOUGLAS 27 West High Street Carlisle, PA 17013 Anthony T. Lucido, Esquire MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 I will notify mil parties in writingwithin t~odays that this casehas been l~ted for arc3t~ment. 4. Argt~mt Court Date: February 12, 2003 AttorneyS for Defendant CERTIFICATE OF SERVICE I, Ami J. Thumma, an authorized agent for Martson iDeardorff Williams & Otto, hereby certify that a copy of the foregoing Praecipe was served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: William P. Douglas, Esquire DOUGLAS, DOUGLAS & DOUGLAS 27 West High Street P.O. Box 261 Carlisle, PA 17013 MARTSON DEARDORFF WILLIAMS & OTTO Ami J. Thumlr~ Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: January 8, 2003 F:~FILES\DATAFILE\Gendoc.cur\10793-1.PO1/~t Created: 12/23/98 03:33:55 PM Revised: 01/09/03 09:14:30AM 107931 DEANNA SALISBURY, Plaintiff Vo CERES GROUP, INC., t/d/b/a CENTRAL RESERVE LIFE INSURANCE COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 02-5957 JURY TRIAL DEMANDED TO: DEANNA SALISBURY and her attorney, WILLIAM P. DOUGLAS, ESQUIRE YOU ARE HEREBY NOTIFIED TO PLEAD TO THE WRITTEN PRELIMINARY OBJECTIONS WITHIN TWENTY (20) DAYS FROM SERVICE HEREOF, OR A JUDGMENT MAY BE ENTERED AGAINST YOU. PRELIMINARY OBJECTIONS AND NOW, comes Defendant Ceres Group, Inc., t/d/b/a Central Reserve Life Insurance Company, by and through it attorneys, MARTSON DEARDORFF WILLIAMS & OTTO, and files the following Preliminary Objections to Plaintiff's Complaint. 1. On December 19, 2002, Plaintiff Deanna Salisbury (hereinafter Plaintiff) served Defendant Central Reserve Life Insurance Company t/d/b/a Ceres Group, Inc., (hereinafter Defendant) with a Complaint. 2. Plaintiff was insured as a dependant spouse under a health insurance policy issued by Defendant and covering her husband, James Salisbury. A copy of the insurance policy is attached as Exhibit "A." 3. The Complaint alleges, inter alia, that the Defendant breached its policy of insurance with the Plaintiff by refusing to pay for certain medical services rendered to Plaintiff by various health care providers. 4. In addition, the Complaint alleges that the Defendant acted in bad faith by denying Plaintiff's claims under the policy. OBJECTION I FAII,URE TO ATTACH AGREEMENT UNDER Pa. R.C.P. 10190) 5. The Pennsylvania Rules of Civil Procedure require a pleader to attach a copy oft he agreement between the parties when the claim asserted is based upon a written agreement. 6. In the present case, the Plaintiff's Complaint alleges that the Defendant breached its ligations under the insurance policy by denying her claims. 7. Plaintiff has failed to attach a copy of the insurance policy to her Complaint. WHEREFORE, Defendant requests the court to sustain its Preliminary Objections and to dismiss Plaintiff's Complaint, with prejudice. OBJECTION II LACK OF JURISDICTION UNDER Pa. R.C.P. 1028 (1) 8. The insurance policy at issue contains an express provision requiring that "any dispute arising out of a related to the Policy... shall be settled by arbitration in accordance with applicable federal or state laws . . . and administered by the American Arbitration Association." See Exhibit "A," pg. 37. 9. Pennsylvania law put Plaintiff on notice of the terms of the insurance policy and Plaintiff is bound by those terms, including the arbitration clause. 10. Plaintiff has not exhausted her administrative remedies under the policy, in that she has failed to arbitrate her claims against Defendant. 11. Pursuant to the express and unambiguous language of the policy's arbitration clause, this court lacks jurisdiction to resolve the controversy between the parties. WHEREFORE, Defendant requests the court to sustain its Preliminary Objections and to dismiss Plaintiff' s Complaint, with prejudice. MARTSON DEARDORFF WILLIAMS & OTTO Anthony T. Lucido, Esquire I. D. Number 76583 Ten East High Street Carlisle, PA 17013 (717) 243-3341. Date: January 9, 2003 Attorneys for Defendant If an Insured Person obtains services from a Plan Provider that are not Covered Charges under CRL's plan, the provider will determine his or her own fees for these services, which may or may not be discounted. This Certificate Booklet explains, in general, the terms of your coverage. However, when reading this Booklet, remember that decisions regarding your medical care are between you and your Doctor. This plan is not being sold as an employment benefit plan and the Member's Employer is not responsible, either directly or indirectly, for paying the premium or benefits. This Certificate Booklet describes, in general terms, the principal features of the insurance. Nothing in this Certificate Booklet will waive or alter any of the terms or conditions of the Policy, and if any discrepancies, misprint of certificates, or change in benefits occurs, the Policy will govern. No statement made by any representatives of CRL if in conflict with this Certificate Booklet or the provisions of the Group Policy shall be binding on CRL. CERTIFICATE OF COVERAGE CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) Cleveland, Ohio Certifies that JAMES A SALISBURY is insured effective 11/03/2000, subject to the terms and conditions of Group Insurance Policy A-1003 issued to: Eagle Consumer Association (Policyholder). ACCOUNT NO: AS-000253958 CERT: STATE: Pennsylvania DEDUCTIBLE -- IN NETWORK: $500 OUT OF NETWORK: $1,000 0001 DEPENDENT: DEDUCTIBLE: EFFECTIVE DATE: ALANNA $500 11/03/2000 A LEA SHA $500 11/03/2000 DEANNA $500 11/03/2000 This Certificate Booklet replaces any and all certificates or booklets describing this insurance which may have been issued previously. Steven H. Puck President TABLE OF CONTENTS I1. III. IV. V. VI. SCHEDULE OF BENEFITS A. Life Insurance Benefit ............................................................................................................................................... 1 B. Dependent Life Insurance Benefit ............................................................................................................................ 1 C. Progressive Dental Benefit -- Schedule A ............................................................................................................... 1 D. Preventive Medical Benefit ....................................................................................................................................... 1 E. Accident Expense Benefit ......................................................................................................................................... 1 F. Prescription Drug Benefit ......... : ............................................................................................................................... 1 G. Covered Office Visits ................................................................................................................................................ 1 H. Comprehensive Maior Medical Benefit ..................................................................................................................... 2 BENEFIT PROVISIONS A. Life lnsurance Benefit ............................................................................................................................................... 4 B. Accidental Death and Dismemberment Benefit ...................................................................................................... 5 C. Common Carrier Benefit ........................................................................................................................................... 6 D. Orphan's Benefit ........................................................................................................................................................ 6 E. Dependent Life Insurance Benefit ............................................................................................................................ 6 F. Progressive Dental Benefit-- Schedule A ............................................................................................................... 7 G. Preventive Medical Benefit ....................................................................................................................................... 9 H. Child Immunization Benefit ...................................................................................................................................... 9 I. Accident Expense Benefit ......................................................................................................................................... 9 J. Prescription Drug Benefit ......................................................................................................................................... 9 K. Major Medical Expense Benefit 1. Covered Charges ................................................................................................................................................ 12 2. Extended Care Facility Benefit ............................................................................................................................ 13 3. Lifetime Maximum ............................................................................................................................................... 14 4. Alcohol and Drug Abuse and Dependency Benefit .............................................................................................. 14 5. 24-Hour Coverage ............................................................................................................................................... 15 L. Centers of Excellence Program ................................................................................................................................. 15 COVERED CHARGES SUBJECT TO LIMITATIONS .................................................................................... 17 GENERAL EXCLUSIONS ............................................................................................................................... 19 DEFINITIONS .................................................................................................................................................. 21 POLICY PROVISIONS A. Eligibility ..................................................................................................................................................................... 27 B. Dual Coverage ........................................................................................................................................................... 27 C. Effective Date of Insurance ....................................................................................................................................... 27 D. Adding Dependent Coverage ................................................................................................................................... 27 E. Payment of Premium ................................................................................................................................................. 28 F. Grace Period .............................................................................................................................................................. 28 G. Legal Rights Due to Fraud ........................................................................................................................................ 28 H. Policy/Premium Changes ......................................................................................................................................... 28 I. Renewal of Insured Person's Insurance .................................................................................................................. 28 J. Modifications or Discontinuance of Coverage ........................................................................................................ 29 K. Issuance of Certifications of Creditable Coverage ................................................................................................. 29 L. Misstatement of Age .................................................................................................................................................. 30 M. Beneficiary ................................................................................................................................................................. 30 VII. CLAIM PROVISIONS A. Notice of Loss/Claim ................................................................................................................................................. 31 B. Proof of Loss ............................................................................................................................................................. 31 C. Examination ............................................................................................................................................................... 31 D. Payment of Claim ...................................................................................................................................................... 31 E. Workers' Compensation ........................................................................................................................................... 32 F. Time Limits ................................................................................................................................................................. 32 G. Subrogation ............................................................................................................................................................... 32 VIII. H. Coordination of Benefits ........................................................................................................................................... 33 I. Precertification Requirement .................................................................................................................................... 35 J. What to Do About Your Claim .................................................................................................................................. 35 K. Selected Individual Case Management .................................................................................................................... 36 L. Cost Containment ...................................................................................................................................................... 36 M. Administrative Remedies .......................................................................................................................................... 36 CONTINUATION AND CONVERSION ............. 38 A. Continuation of Coverage ............................................................................................................................ B. Life Insurance Conversion ........................................................................................................................................ 38 C. Medical Insurance Conversion ................................................................................................................................. 39 SCHEDULE OF BENEFITS Life Insurance Benefit Member Amount ..$5O,OOO Life Insurance ..................................................................................................................................... Accidental Death & Dismemberment .................................................................................................... $15,000 Accidental Death on common Carrier .................................................................................................. $50,000 Orphan's Benefit ................................................................................................................................... $10,000 Group Life Insurance, .Accidental Death & Dismemberment, Common Carrier and Orphan's Benefit terminate at age sixty-five (65). B. Dependent Life Insurance Benefit $2,OO0 Spouse .................................................................................................................................................... Children six (6) months of age and over ................................................................................................. $1,000 Children less than six (6) months of age ................................................................................................... $ 500 The spouse's Life Insurance terminates at age sixty-five (65). C. Progressive Dental Benefit -- Schedule A ......................................................................................... $3,000 D. Preventive Medical Benefit ............................................................................................................... Included E. Accident Expense Benefit ...................................................................................................................... $500 Prescription Drug Benefit Generic Prescription Drugs ....................................................... 100% of Covered Charges in excess of a $15 Copayment for each prescription drug Brand Name Formulary Prescription Drugs ............................... 80% of Covered Charges in excess of a $25 Copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs ..................................................................... 70% of Covered Charges in excess of a $35 Copayment for each prescription drug Managed Mail Prescription Program -- Maintenance medications, after one (1) thirty (30) day refill, may be ordered through CRL's Managed Mail Prescription Program. Generic Prescription Drugs ....................................................... 100% of Covered Charges in excess of a $30 Copayment for each prescription drug Brand Name Formulary Prescription Drugs ................................ 80% of Covered Charges in excess of a $50 Copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs ..................................................................... 70% of Covered Charges in excess of a $70 Copayment for each prescription drug Covered Office Visits (Copays not available in plans with Deductibles higher than $1,000) Covered Doctor's office visitsI to an In-network Plan Provider ........................................................................................ 100% of Covered Charges in excess of $20 per visit 2 Covered injections~ provided by an In-network Plan Provider in the Doctor's office as part of the office visit ................................................................................................ 100% of Covered Charges in excess of $5 per visit 2 Covered x-ray services~ provided by an In-network Plan Provider in the Doctor's office as part of the office visit ...................................................................................... 100% of Covered Charges in excess of $10 per visit 2 Covered laboratory testing or diagnostic services~ provided by an In-network Plan Provider in the Doctor's office as part of the office visit ......................................... 100% of Covered Charges in excess of $5 per visit 2 Comprehensive Major Medical Benefit Member and Del~endents Maximum Payments Major Medical Expense Benefit: Any portion of the out-of-network Deductible and Coinsurance satisfied by an Insured Person applies toward the in-network Deductible and Coinsurance. However, amounts satisfied toward the in-network Deductible and Coinsurance do not apply toward the out-of-network Deductible and Coinsurance. In-network Individual Calendar Year Deductible: ................. $500 Aggregate Family Deductible .................................................... Three (3) times the In-network individual Deductible Out-of-network Individual Calendar Year Deductible: ............................................................................... $1,000 Aggregate Family Deductible .................................................... Three (3) times the Out-of-network individual Deductible An additional $75 deductible will be applied to all Covered Charges for each emergency room visit due to a Sickness, if the Insured Person is not immediately admitted as an Inpatient. Any amounts paid by the Insured Person as a deductible for each emergency room visit will not be applied toward the Maximum Out-of-Pocket Amount. Covered Charges for Inpatient Hospitalizations, Outpatient procedures and all other Covered Charges4 when using an In-network Plan Provider ................... 100% of In-network Covered Charges after the In-network Deductible to end of calendar year Covered Charges for Pre-certified Inpatient Hospitalizations,3 Outpatient procedures and all other Covered Charges4 when using an Out-of-network Non-plan Provider ............................................. 80% of the first $10,000 of Out-of-network Covered Charges after the Out-of- network Deductible; 100% of remainder to end of calendar year Extended Care Facility Benefit ..................................................Maximum sixty (60) days Lifetime Maximum, for all benefits (Per Person) ......................... $5,000,000 Charges in excess of a specific dollar limit stated in the Covered Charges Subject to Limitations and General Exclusions sections cannot be used to satisfy any Coinsurance requirement or to meet the family's Maximum Out-of-Pocket limit. ~ This benefit does not apply to Covered Charges under any other benefit provision or limitation such as spinal manipulation; occupational, speech or physical therapy; and mental nervous conditions. 2 The office visit Co-pay applies only to the actual office visit. The Co-pay for injections, x-rays, laboratory services or diagnostic testing is in addition to the office visit Co-pay. 2 Any other services, such as office Surgeries, processing or reading charges, are subject to the Deductible and Coinsurance. 3 For Treatment determined to be medically Necessary and appropriate, CRL will apply a penalty equivalent to the greater of $500 or 20% of Covered Charges, up to $1,000, for each Treatment where precertification is required but not obtained. The precertification penalty will be applied before the Deductible and Coinsurance and will not be credited toward the Insured Person's maximum out-of-pocket limit. Please refer to the provision entitled "Precertification Requirement." 4 Covered Charges for annual gynecological examination and routine pap smears will be paid according to the Insured Percentages as stated above, but will not be subject to the Deductible. NOTICE 1: In the following situations, this Policy will pay for all services so that the Insured Person is not liable for a greater Out-of-Pocket amount than if the Insured Person were attended to by a Plan Provider: a. the Insured Person is referred by a Plan Provider to a Non-plan Provider; b. a Plan Provider is not available; or c. the Insured Person requires emergency health care services and cannot reasonably be attended to by a Plan Provider. NOTICE 2: The Insured Person should verify, in advance, whether a provider of health care services is a Plan Provider. To ensure the greatest savings are achieved under this health care plan which you have selected, you should make every effort to use In-network Plan providers, whenever possible. II, BENEFIT PROVISIONS A. Life Insurance Benefit Amount The Amount of Life Insurance will be paid upon the death of the Insured Member. The Amount of Life Insurance is shown on the Schedule of Benefits. Payment Payment of Life Insurance Benefits will normally be made in one (1) lump sum. However, the Insured Member may choose to have the insurance benefits paid in any other way subject to approval by CRL. If the Insured Member elected a lump sum payment, the Beneficiary may elect to have the benefits paid in any other way subject to approval by CRL. Exclusion No benefits will be paid for a loss resulting from intentionally self-inflicted Injury or suicide, while sane or insane, occurring within the first twenty-four (24) months of the Insured Member's coverage under this Policy. Waiver of Premium a. Life Insurance Benefits will be extended without premium payment during the continuation of Total Disability from the date the Insured Member's insurance terminates due to Total Disability, for the lesser of: twelve (12) months or the number of months insured under this Policy, if prior to age sixty (60), the Insured Member: (1) becomes totally and permanently disabled while insured; and (2) has proof of the disability satisfactory to CRL submitted to CRL no later than twelve (12) months after the termination of insurance. b. All insurance under the Waiver of Premium Benefit will terminate on the earliest of: (1) the date the Insured Member is no longer Totally Disabled; (2) the date this Policy is terminated or cancelled; or (3) the end of the lesser of: (a) a twelve (12) month period; or (b) the number of months insured under this Policy, following the date the Insured Member's insurance terminated. c. The Amount of Life Insurance is subject to the termination of benefits as stated in the Schedule of Benefits. d. The Insured Member may convert such insurance to an individual policy of Life Insurance. See Life Insurance Conversion section. e. CRL, at its own expense, reserves the right to have an Insured Member examined by a CRL selected Doctor, as often as it may require. Reduction Due to Conversion An Insured Member who has converted any part of the Life Insurance Benefits under this Policy because the insurance has terminated for any reason and who again becomes an Insured Member at a later date will have the Amount of Insurance reduced by the amount of the converted benefit in force unless Evidence of Insurability is submitted to CRL. Assignability An absolute assignment by the Insured Member of all the incidents of ownership of Life Insurance will be permitted, but only if CRL is given actual written notice of such assignment. Such assignment will be effective only after written notice has been received by CRL's Home Office and CRL has acknowledged, in writing, receipt of the notice. Collateral assignments, by whatever name called, will not be permitted. 4 Limit of Amount of Life Insurance The total amount of Life Insurance Benefits will never exceed the Amount of Insurance shown on the Schedule of Benefits. In no event will payment be made under more than one (1) of the following: a. Life Insurance Benefits; b. Waiver of Premium Benefit; or c. any benefits resulting from the Conversion Section of this Policy. B. Accidental Death and Dismemberment Benefit Benefits a. Benefits will be paid if the Insured Member incurs any of the losses listed in the Table of Losses, and if the loss: (1) results from a bodily Injury due to an accident while the Member was insured; and (2) was independent of all other causes. b. For dismemberment or loss of eyesight, loss must occur within ninety (90) days of accidental bodily Injury in order for benefits to be payable. Exclusions No benefits will be paid for any loss which is a result of: a. bodily or mental infirmity or disease of any kind, whether or not the proximate or precipitating cause of death is accidental bodily Injury; b. war, declared or undeclared, or an act of war, whether or not serving in the military forces or any civilian noncombatant unit serving with the fomes: c. committing an assault or felony, whether sane or insane; d. participation in a riot or insurrection; e. a fight in which the Insured Person is a voluntary participant; f. suicide or attempted suicide, or intentionally self-inflicted Injury, whether sane or insane; g. engaging in an illegal occupation; h. travel or flight in an aircraft or spacecraft, or descent from such a craft while in flight, or subsequent drowning, if the Insured Person is a pilot, officer or crew member of the craft; is giving or receiving aviation training or instruction; has duties on or relating to the craft; or is being flown for the purpose of descent from the craft while in flight; i. voluntary taking or injection of drugs, whether legal or illegal, unless prescribed or administered by a licensed Doctor; j. the voluntary taking of any drugs, whether legal or illegal, prescribed for the Insured Person by a licensed Doctor and intentionally not raked as prescribed; k. sensitivity to drugs, whether legal or illegal, voluntarily taken unless prescribed by a Doctor; I. drug addiction, unless the addiction results from the voluntary taking of drugs, whether legal or illegal, prescribed or administered by a licensed Doctor or from the involuntary taking of drugs, whether legal or illegal; m. voluntary taking of any poison except in the case of food poisoning; n. voluntary inhaling of any kind of gas, except during the course of employment; o. chronic alcoholism; p. directly or indirectly from the voluntary taking of alcohol alone or in combination with a drug, medication or sedative when this action results in legal intoxication as defined by Pennsylvania law; or q. medical or surgical Treatment. Table of Losses In the Event of Loss of: The Amount Payable will be: Life ...................................................................................................................... Full Amount of Insurance Both Hands or Both Feet ................................................................................... Full Amount of Insurance Sight of Both Eyes ............................................................................................. Full Amount of Insurance One Hand and One Foot ................................................................................... Full Amount of Insurance One Foot and Sight of One Eye ........................................................................ Full Amount of Insurance 5 One Hand and Sight of One Eye ...................................................................... Full Amount of Insurance One Hand ...................................................................................... One-Half the Full Amount of Insurance ...One-Half the Full Amount of Insurance One Foot .................................................................................... Sight of One Eye ........................................................................... One-Half the Full Amount of Insurance With respect to hands or feet, "loss" means permanent severance at or above the wrist or ankle joint. With respect to eyesight, "loss" means the entire and permanent loss of sight. NOTE: In any event, the Full Amount of Insurance will be paid only once for any one (1) accident, no matter how many of the above-listed losses occur as the result of that accident. The Full Amount of Insurance is shown on the Schedule of Benefits. Common Carrier Benefit 1. CRL will pay the Common Carrier Benefit only if the Accidental Death and Dismemberment Benefit is paid. The Benefit is payable for loss of life due to an injury sustained while the Insured Member is a fare-paying passenger on a public conveyance that: a. is run by a common carrier regulated by the government; b. transports passengers for hire; and c. is not a chartered or other privately arranged conveyance. 2. The Common Carrier Benefit will terminate on the same date as the Group Life Insurance and Accidental Death and Dismemberment Benefit. Orphan's Benefit 1. The Orphan's Benefit will be paid to the Insured Member's estate provided that: a. the amount of Accidental Death and Dismemberment insurance is paid; b. the legal spouse of the Insured Member dies, independent of all other causes, due to accidental bodily Injury arising from the same accident which results in the death of the Insured Member; c. the death of the spouse occurs within forty-eight (48) hours of the death of the Insured Member; d, one (1) or more children survive the Insured Member; and e. the child or children are natural or legally adopted children of the insured Member and are less than twenty-one (21) years of age on the date of the insured Member's death. 2. This death benefit is in addition to any other benefits payable under this Policy. Dependent Life Insurance Benefit 1. The Amount of Insurance will be paid to the Insured Member upon the death of the Insured Dependent. The benefits will be paid in a lump sum. 2. Each Dependent will be eligible on the later of: a. the date the Insured Member becomes eligible; or b. the date the person becomes a Dependent. 3. No Dependent will be eligible unless insured as a Dependent under the CRL group health policy. No Dependent will be eligible as a Dependent of more than one (1) Member or as both a Member and a Dependent. 4. No Dependent insurance will become effective for a Dependent before the Member's insurance is effective, insurance for a Dependent confined in a Hospital will not become effective until the day after the final discharge from the Hospital. This provision will not apply to a newborn Hospital-confined on his or her effective date. 5. A Dependent's insurance will terminate on the earliest of'. a. the date the Policy terminates; b. the last date to which premium has been paid; c. the last day of the month during which the person ceases to be eligible; or d. the date the Insured Member's insurance terminates. If a Dependent is the spouse of an Insured Member and the group term life insurance terminates for reasons other than the termination of the Policy, the Dependent-spouse may convert such insurance to an individual policy of life insurance. Evidence of Insurability will not be required. The form of the life policy may be any then offered by CRL, except term insurance, at the spouse's then attained age and for the amount applied. The amount payable under such policy will be the same amount of group term life insurance payable under this Policy. The premium for such policy will be at CRL's rate then in effect for the: a. form and amount of the Policy; b. class of risk to which the spouse then belongs; and c. spouse's age on the effective date of the Policy. The individual policy of life insurance will only be issued if application is made and the first premium is received by CRL's Home Office within thirty-one (31) days after the date on which the spouse's group term life insurance under this Policy terminates. The individual policy will become effective at the end of this thirty-one (31) day application period. If the spouse dies during the thirty-one (31) day application period, CRL will pay the maximum amount of insurance which the spouse might have converted. The death claim will be paid under the group policy and not the individual policy. Any premiums paid for the individual policy will be refunded. The total amount of Dependent Life Insurance Benefits paid will never exceed the Amount of Insurance shown on the Schedule of Benefits. In no event will payment be made under more than one (1) of the following: a. Dependent Life Insurance Benefits; or b. any benefits resulting from the Conversion Section of this Policy. Progressive Dental Benefit -- Schedule A 1. The Plan provides a Progressive Dental Benefit for the Insured Person. The total amount paid for each Insured Person for services performed in any one (1) Benefit Year will not be more than the Maximum Payment as shown below. A percentage of the benefit contained in the Schedule of Dental Procedures will be paid, based upon the number of Benefit Years in which the Insured Person has been insured by CRL. 2. A Benefit Year is a period of twelve (12) consecutive months beginning with the insured Person's effective date of insurance under the Policy. Maximum Payment 1st Benefit Year ............................................................................................... 20% of Scheduled Amount 2nd Benefit Year ............................................................................................. 40% of Scheduled Amount 3rd Benefit Year .............................................................................................. 60% of Scheduled Amount 4th Benefit Year .............................................................................................. 80% of Scheduled Amount 5th Benefit Year ............................................................................................ 100% of Scheduled Amount 3. The charges are incurred on the date the service is performed. ,, Exclusions In addition to the General Exclusions and Covered Charges Subject to Limitations, no Dental Benefits will be paid for: a. any dental procedure not begun and completed while insured for Dental Benefits. However, CRL will allow an extension of sixty (60) days following the date of termination for completion of a particular Dental Procedure, as outlined in the Schedule of Dental Procedures, which was begun while the Insured Person is insured for Dental Benefits; b. replacement of any lost or stolen dental appliance; c. dental appointments which are not kept; d. charges for fixed bridgework, dentures and crowns, except that 50% of the scheduled amount will be paid beginning with the Insured Person's fifth (5th) consecutive Benefit Year for: (1) replacement of fixed bridgework, dentures or crowns after at least five (5) years of its last placement. (2) fixed bridgework or dentures replacing a tooth removed while the Insured Person is insured for Dental Benefits, but not replacing a support tooth for a fixed bridgework or denture installed within the last five (5) years.* e. any prosthesis until insured under this plan for five (5) consecutive Benefit Years;* f. Orthodontia Treatment; g. any appliance to be used as a spare; h. implants; i. periodontal scaling or any type of prophylaxis procedure in excess of two (2) such Treatments during any Benefit Year; j. adjustment of appliances within six (6) months of placement; k. examination of the oral cavity in excess of two (2) exams during any Benefit Year; I. complete series of x-rays in excess of one (1) complete series during any two (2) year period; m. bitewing x-rays in excess of four (4) such x-rays during any Benefit Year; n. charges covered under any other benefit of the Policy; o. any type of periodontic procedure which is not specifically included in the schedule; p. any charges for Hospital, Hospital Facility, or Outpatient Facility; or q. any procedure not listed in the Schedule of Dental Procedures. $3,000 Schedule of Dental Procedures (Partial listing only) Clinical Oral Examinations 00110 Initial oral examination ................................................................................................................ $21.00 00120 Periodic oral examination ............................................................................................................ $21.00 00130 Emergency oral examination ....................................................................................................... $21.00 Radiographs 00210 Complete series .......................................................................................................................... $54.00 00220 Periapical (first film) ....................................................................................................................... $9.00 00272 Bitewings (two films) ................................................................................................................... $16.00 00330 Panoramic film ............................................................................................................................. $24.00 Preventative 01110 Adults - prophylaxis ...................................................................................................................... $27.00 01120 Children - prophylaxis ................................................................................................................. $27.00 Periodontics 04110 Periodontic examination ..................................................................................................... Not Payable 04340 Periodontal scaling (entire mouth) ........................................................................... Pay as prophylaxis Extractions (including local anesthesia and routine post- operative care) 07110 Single tooth .................................................................................................................................. $36.00 *This exclusion does not apply when an Insured Person loses a tooth due to a Sickness which occurs while the coverage is in force. The entire Schedule of Dental Procedures is contained in the Policy. The above is only a partial listing of the procedures contained in the Schedule of Dental Procedures and is included here for purposes of example. The Insured Member may call the Customer Service Representative for additional information. Preventive Medical Benefit 1. The plan provides a Preventive Medical Benefit for medical services that are not for the care, Treatment or diagnosis of an Illness. The total amount paid for each Insured Person for services received in any one (1) Benefit Year will not be more t'han the lesser of the Maximum Payment or the actual fee charged. 2. A Benefit Year is a period of twelve (12) consecutive months beginning with the Insured Person's effective date of insurance under the Policy. Covered Procedure Scheduled Benefits Physical Exam and Associated Tests ......................................................................................... $100' Routine Physical Exams Pediatric Exams *includes the total of any and all services in this category. 4.. Exclusions In addition to the General Exclusions and Covered Charges Subject to Limitations, no benefits will be paid for: a. any procedure not listed in the Covered Procedures section; b. vitamin injections; or c. routine eye exams. Child Immunization Benefit Coverage will be provided for those child immunizations, including the immunizing agents, which, as determined by the Department of Health, conform with the standards of the (Advisory Committee on Immunization Practices of the Center for Disease Control) U.S. Department of Health and Human Services. Benefits will be exempt from deductibles or dollar limits. Accident Expense Benefit 1. Benefits will be paid for Covered Charges as a result of an accidental bodily Injury which occurs while the person is insured under this Policy. 2. This benefit will cover the following: a. Doctor; b. Hospital; c. diagnostic x-ray or lab tests; and d. Registered Nurse (R.N.) or Licensed Practical Nurse (L.P.N.). 3. Charges must be incurred within ninety (90) days of the date of the Injury. The total amount of benefits paid will be the amount charged, but not more than the Maximum Payment shown on the Schedule of Benefits. 4. Exclusions See General Exclusions and Covered Charges Subject to Limitations. NOTE: Dental Expenses are not covered under this Benefit. Prescription Drug Benefit After CRL's approval of the insurance coverage, a prescription drug card/s will be issued, along with information about formulary prescriptions and participating pharmacies. This benefit works as follows: 9 When using a participating pharmacy: a. The Insured Person will pay the applicable Copayment and/or percentage shown on the Schedule of Benefits. The amount of the Copayment and/or percentage may vary by the type of prescription being dispensed: Generic Prescription Drug Brand Name Formulary Prescription Drug Brand Name Non-Formulary Prescription Drug b. Insured Persons may call CRL or the prescription drug vendor to determine if a particular drug is included in CRL's formulary (list of preferred prescription drugs). c. If the drug charge is less than the Copayment and/or percentage shown, the Insured Person will be responsible for the full cost of the medication. d. The pharmacy will fill the prescription for up to a thirty (30) day supply. If the Insured Person's Doctor prescribes the medication for a period longer than thirty (30) days, it is considered a maintenance medication. Maintenance medications, after one (1) thirty (30) day refill, must be ordered through CRL's Managed Mail Prescription Program described later in this section. 2. If the Insured Person forgets the prescription drug card, the Insured Person will pay the full cost of the medication at the pharmacy. In order to receive reimbursement, the Insured Person must send a claim form (available from CRL) to the prescription vendor, which will reimburse the Insured Person according to the terms of their program. 3. If the Insured Person visits a non-participating pharmacy, the Insured Person will pay the full cost of the medication to the pharmacy. The Insured Person may then send the receipt for the prescription charges along with a prescription drug claim form to the prescription drug vendor. Non-participating pharmacy prescription charges are reimbursed on the same basis as participating pharmacies. 4. The prescription drug card must be returned to CRL when the coverage terminates for any reason. If the card is used after its termination date, the Insured Person will be billed directly by CRL for any benefits paid after the termination date. Covered Charges: a. Legend drugs. Children's prescription vitamins, to one (1) year of age and prenatal prescription vitamins for eligible maternity patients. b. The following non-legend items on prescription only: Insulin, insulin needles and syringes, sugar test tablets and tape, including Chemstrips, Acetone tablets and Benedict's Solution or equivalent. c. Compounded medication of which at least one (1) ingredient is a prescription legend drug. d. Any other drug, which, under the applicable state law, may only be dispensed under the written prescription of a Doctor or other lawful prescriber. Managed Mail Prescription Program: a. Insured Persons who take maintenance medications may use the Managed Mail Prescription Program. Maintenance medications are those which must be taken for an extended period of time in order to treat certain conditions. The Managed Mail Prescription Program consists of the following steps: (1) An Insured Person's Doctor writes a prescription for up to a sixty (60) day supply, with up to three (3) refills of a maintenance medication. If the medication is needed immediately, the Doctor should issue two (2) prescriptions, one for an immediate supply to be obtained at a local pharmacy, and a second for an extended supply to be mailed to the Managed Mail Prescription Vendor. (2) The Insured Person must include the Copayment and/or percentage amount through a check made payable to the Managed Mail Prescription Vendor or by furnishing their credit card number and expiration date. Insured Persons may call a toll-free number to determine the availability of generic alternatives or ask other questions. (3) The Insured Person completes the patient profile section for the first mail service order only and sends the profile along with the Managed Mail Prescription Order Form. (4) The original prescription(s) should be submitted with the Managed Mail Prescription Order Form to the Vendor. 10 K= (5) Prescriptions will be delivered either by U.S. Postal Service or UPS. Allow 10-14 days for delivery from the date the order form is mailed. (6) Refills may be ordered by calling a toll-free number. Have your prescription number and credit card available. b. The Copayment and/or percentage amount is based upon the type of drug being dispensed and is shown on the Schedule of Benefits. The Insured Person is responsible for this amount before benefits are payable under this plan. c. A Generic Prescription Drug will be dispensed unless a Brand Name Prescription Drug is requested by the Insured Person's Doctor or if a Generic Prescription Drug is not available. Prescriptions for Mental Illness: Prescriptions related to a diagnosed Mental Illness, including conditions caused by or related in any manner to such Mental Illness, are payable at 50%, up to a maximum of $550 per calendar year. Exclusions: In addition to the Covered Charges Subject to Limitations and the General Exclusions, this Benefit will not pay for the following: a. contraceptives, oral or other, whether medication or device, unless prescribed to treat a medical condition; b. any drug for the Treatment of sexual dysfunction; c. charges for the administration or injection of any drug; d. non-legend drugs except those listed above; e. therapeutic devices or appliances, including support garments and other nonmedical substances, regardless of intended use, except those listed above; f. prescriptions which an eligible person is entitled to receive without charge from any Workers' Compensation Laws; g. drugs labeled "Caution-Limited by federal law to Investigational use," or Experimental drugs, even though a charge is made to the individual; h. immunization agents, biological sera, blood or blood plasma; i. medication which is to be taken by or administered to an individual, in whole or in part, while he or she is a patient in a licensed Hospital, rest home, sanitarium, extended care facility, convalescent Hospital, nursing home or similar institution which operates on its premises, or allows to be operated on its premises, a facility for dispensing pharmaceuticals; j. any prescription refilled in excess of the number specified by the Doctor, or any refill dispensed after one (1) year from the Doctor's original order; and k. charges for more than a 34-day supply of any medication, or more than 100-unit doses, whichever is greater, unless coverage is being provided under the Managed Mail Prescription Program Definitions: Generic Prescription Drug -- a prescription drug that is produced by more than one (1) manufacturer. It is chemically the same as and usually costs less than the Brand Name Prescription Drug for which it is being substituted. Brand Name Prescription Drug -- a prescription drug that has been patented with the brand name and is produced by the original manufacturer under that brand name. Formulary -- CRL's list of preferred prescription drugs. Brand Name Formulary Prescription Drug -- a Brand Name Prescription Drug that is included in CRL's list of preferred prescription drugs. Non-Formulary Prescription Drug -- a Prescription Drug that is not included in CRL's list of preferred prescription drugs. Major Medical Expense Benefit 1. Benefits will be paid if an Insured Person has Covered Charges during the calendar year which exceed the Deductible amount shown on the Certificate of Coverage. 11 2. Determination of Benefits Benefits will be determined by multiplying the Insured Percentage times the amount of Covered Charges which exceed: a. the Deductible; and b. any amount payable under any other benefit provision of Policy. 3. Calendar Year Deductible The Insured Person's calendar year Deductible(s) are shown on the Certificate of Coverage. 4. Aggregate Family Deductible There will be a maximum amount that the Insured Member with Insured Dependents must pay for Covered Charges incurred in the same calendar year and applied to individual Deductibles. The excess over the aggregate amount, as shown in the Schedule of Benefits, will be subject to the Insured Percentage. 5. Maximum Out-of-Pocket Limit The maximum amount that the Insured Member with Insured Dependents will pay for covered medical expenses incurred in a calendar year is the total of three (3) individual Deductible amounts and three (3) individual Coinsurance amounts. Common Accident If two (2) or more Insured Persons insured under the same certificate incur Covered Charges due to Injuries in the same accident, then only one (1) Deductible will be applied to all eligible charges incurred as a result of such accident during the calendar year the accident occurred and the next following calendar year. Emergency Room Deductible Each time the Insured Person visits an emergency room of a Hospital, a Hospital affiliated emergency room or a free-standing facility for Treatment of a Sickness, an emergency room deductible of $75 will be applied. This Deductible will be waived if the Insured Person is admitted directly from the emergency room into a Hospital as an Inpatient. This Deductible is in addition to the Calendar Year Deductible and will not be applied to the Maximum Out-of-Pocket Amount. KI. Covered Charges 1. Room and Board for confinement in a Hospital, including intensive care. (Private room only covered up to average semi-private Room and Board rate.) 2. Medical services and supplies furnished by a Hospital. 3. Medical services and supplies furnished by an Outpatient department of a Hospital, a free-standing surgical facility or an Urgent Care facility. 4. Anesthetics and their administration. 5. Medical services given by a Doctor. 6. Services of a Registered Nurse (R.N.) or Licensed Practical Nurse (L.P.N.) for private duty nursing services or Certified Registered Nurse Anesthetists. 7. X-ray exams, lab tests and other diagnostic services. 8. X-ray and radiation therapy, cobalt and chemotherapy Treatment. 9. Local transportation to or from a Hospital by a professional ground or air ambulance service. However, air ambulance is only covered if due to a life-threatening Illness. 10. Services of a Physiotherapist under the direct supervision of a Doctor. 12 11. All costs associated with a mammogram every year for women forty (40) years of age or older and with any mammogram based on a Doctor's recommendation for women under forty (40) years of age. 12. Subject to all the terms and conditions of Policy, benefits will be paid for Covered Charges for the Insured Person relating to human tissue/organ transplants that are not Experimental/Investigational provided that prior, written authorization from CRL's Case Management has been obtained before the pre-testing, evaluation and donor search. If such prior, written authorization has not been obtained, no benefits will be paid for any expenses relating to a human tissue/organ transplant(s). Subject to all the terms and conditions of Policy, medical expenses of a live donor will be considered Covered Charges of the Insured Person provided benefits remain and are available under Policy after the Insured Person's Covered Charges have been paid. If the live donor's expenses would be covered by: a. a group or individual insurance policy; b. any non-insurance arrangement, such as a charitable foundation, whether private or public; or c. any arrangement or coverage for individuals or individuals in a group (whether on an insured or uninsured basis), including, but not limited to, any prepayment coverage, per capita, or HMO; then benefits under Policy for Covered Charges of the live donor will be limited to the Covered Charges not covered by such other coverage. All live donor expenses must receive prior, written authorization by CRL's Case Management in order to be considered eligible for payment under Policy as Covered Charges. 13. Breast reconstruction as follows: Any covered person who is receiving benefits through CRL in connection with a mastectomy, performed on a person who has been diagnosed with breast cancer and who elects breast reconstruction, will have coverage provided in a manner determined in consultation with the attending physician and the patient, for: a. Reconstruction of the breast on which the mastectomy has been performed; b. Surgery and reconstruction of the other breast to produce a symmetrical appearance; c. Prostheses and Treatment of physical complications at all stages of mastectomy, including lymphedemas. Coverage will be subject to the Calendar Year Deductible, Coinsurance and any copayments applicable. 14. Medical supplies as follows: a. blood, plasma and derivatives; b. initial replacement of natural limbs and eyes when loss occurs while insured under the Policy; c. initial permanent lens immediately following cataract Surgery, except that replacements will not be covered; d. casts, splints, trusses, braces and crutches; e. purchase or rental of Hospital-type equipment for kidney dialysis (the total purchase price to be eligible will be on a monthly pro-rata basis during the first twenty-four (24) months of ownership; no benefits are paid for an Insured Person on or after the day such person is entitled to benefits under Medicare); f. purchase or rental (whichever costs less, as determined by CRL) of durable medical equipment for temporary use, not to exceed a six-month period; and g. oxygen. NOTE: See General Exclusions and Covered Charges Subject to Limitations. K2. Extended Care Facility Benefit Benefits will be paid when the Insured Person incurs Room and Board and Miscellaneous Charges in an Extended Care Facility following a Hospital confinement. Benefits will not be paid for more than the semi-private room and board rate up to sixty (60) days during any one (1) disability period. 13 Covered Charges are those which are Necessary, Reasonable and Customary and which meet all of the following requirements: a. the preceding Hospital confinement lasled continuously for at least three (3) days; b. the Extended Care Facility admission begins within fourteen (14) days after discharge from the Hospital; c. the confinement, certified by the attending Doctor, is medically Necessary for the care of an Insured Person who is Totally Disabled and who otherwise would have been confined as a bed patient in a Hospital; and d. the Insured Person is under the direct care of a Doctor. Exclusions In addition to the General Exclusions and Covered Charges Subject to Limitations, no Extended Care Facility benefit will be paid for: a. the excess for Room and Board Charges above the Hospital semi-private rate which would have been paid in lieu of the Extended Care Facility; or b. service for Custodial Care. K3. Lifetime Maximum 1. Payments for all medical expense benefits under the Policy will never be more than the Lifetime Maximum Benefit, as stated in the Schedule of Benefits, for all of an Insured Person's Illnesses. Regardless of the number of times that an individual may be covered under any of CRL's plans, there is only one Lifetime Maximum Benefit. 2. No benefits will be paid for charges incurred after the insurance terminates, except as may be provided under an Extended Benefits provision, if included in the plan. K4. Alcohol and Drug Abuse and Dependency Benefit 1. Benefits will be paid for the following types of Treatment for Alcohol and Drug Abuse and dependency: a. Inpatient Detoxification; b. Non-Hospital residential care; and c. Outpatient Care. The first course of Treatment during an Insured Person's lifetime, will be paid on the same basis as for any other Illness. The second and all subsequent courses of Treatment during the Insured Person's lifetime will be subject to the Deductible and will be paid at 50%. A course of Treatment is considered to be the full range of Detoxification, Treatment and supportive services carried out specifically to alleviate the dysfunction of the Insured Person. 2. Benefits will be payable as follows for each type of Treatment: a. Inpatient Detoxification (1) Benefits are payable for the following services: (a) Lodging and dietary services; (b) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff; (c) Diagnostic X-ray; (d) Psychiatric, psychological and medical laboratory testing; and (e) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities; (a) Hospital; (b) Psychiatric Hospital; (c) Freestanding Treatment facility; and (d) Health care facility. (3) Benefits are subject to a lifetime limit of four (4) admissions for each covered person. Each admission is limited to seven (7) days. b. Non-Hospital Residential Care (1) Benefits are payable for the following services: 14 (a) Lodging and dietary services; (b) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff; (c) Rehabilitative therapy and counseling; (d) Family counseling and intervention; (e) Psychiatric, psychological and medical laboratory testing; and (f) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities: (a) Freestanding Treatment facility; and (b) Health care facility. (3) To qualify to have benefits paid, a Doctor or psychologist must certify the Insured Person as a person suffering from Alcohol or other Drug Abuse or dependency and must have referred the Insured Person for the appropriate Treatment. (4) Benefits may be limited to a minimum of thirty (30) days per year, subject to a lifetime limit of ninety (90) days. These Non-Hospital Residential Care days may not be exchanged for Outpatient Care days. c. Outpatient Care (1) Benefits are payable for the following services: (a) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff; (b) Rehabilitative therapy and counseling; (c) Family counseling and intervention; (d) Psychiatric, psychological and medical laboratory testing; and (e) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities: (a) Freestanding Treatment facility; (b) Psychiatric Hospital; and (c) Health care facility. (3) To qualify to have benefits paid, a Doctor or psychologist must certify the Insured Person as a person suffering from Alcohol or other Drug Abuse or dependency and must have referred the Insured Person for the appropriate Treatment. (4) Benefits may be limited to a minimum of thirty (30) Outpatient, full-session visits, or the equivalent of partial visits, per year subject to a lifetime limit of 120 full-session visits or the equivalent of partial visits. These Outpatient Care days may not be exchanged for Non-Hospital Residential Care days. In addition to the above benefits for Inpatient Detoxification, Non-Hospital Residential Care and Outpatient Care, benefits will be available for a minimum of thirty (30) separate sessions of Outpatient or Partial Hospitalization Services which may be exchanged on a two-to-one basis for fifteen (15) additional days of Non-Hospital Residential Care. No benefits are payable for charges for Treatment of alcoholism, including conditions caused by or resulting from alcoholism and drug abuse and dependency, except as described in this Benefit. K5. 24-Hour Coverage Benefits will be paid for Covered Charges incurred by an ~nsured Person due to an Illness arising out of, or in the course of, the Insured Person's self-employment for wage or profit, but only if the Insured Person is otherwise exempt from coverage under the state workers' compensation statute or other similar laws. Centers of Excellence Program 1. An Insured Person requiring an organ/tissue transplant that is a Covered Charge under the Policy, may elect to request participation in Central Reserve Life Insurance Company's (CRL's) Centers of Excellence Program (COE). As a condition of being considered for COE, an Insured Person must agree, in writing, to use COE Providers for all Covered Charges related to an organ/tissue transplant. A COE Provider is a health care professional or facility that has or is governed by an agreement with a provider network selected by CRL to provide certain health care services to Insured Persons. 15 2o If an Insured Person elects to participate in COE, and is approved by the COE Coordinator for entry into COE, allowable charges are subject to the in-network Deductible and Coinsurance. The lifetime maximum benefit payable under COE is $5,000,000 (COE Lifetime Maximum Benefit), which amount is included in the $5,000,000 Lifetime Maximum Benefit available under the Policy. Any Covered Charges paid for organ/tissue transplant-related expenses shall be cumulative for purposes of determining any maximum benefits under the Policy. TRAVEL AND LIVING EXPENSES: Any benefits payable under this travel and living expense provision shall be subiect to CRL's approval prior to reimbursement. a. Up to $10,000 is included as Covered Charges within the COE Maximum Lifetime Benefit, which will be available to pay the reasonable travel and living expenses incurred by: (1) a live donor, if applicable; and (2) the Insured Person and one companion, or, if the Insured Person is a Dependent child, two parents. b. Round-trip transportation to the COE Provider, including round-trip coach airfare, train, or other commercial carrier. Reimbursement for travel by private auto shall be based on the IRS allowance per mile for medical travel. c. The cost of meals and hotel accommodations for the Insured Person and donor if Treatment in an Outpatient setting is required. d. The cost of meals and hotel accommodations for one companion or two parents while accompanying the Insured Person during Hospitalization and Outpatient care. PREAUTHORIZATION AND ENROLLMENT: In order to be considered by CRL as a possible candidate for acceptance into COE, as soon as any organ/tissue transplant services are indicated, the Insured Person or his/her Doctor, shall contact CRL's COE Coordinator at 1-800-321-3997, extension 6255, to request preauthorization and enrollment in COE. The decision whether an Insured Person shall be allowed to enroll in COE shall be made in the discretion of the COE Coordinator. If an Insured Person is denied a transplant procedure by the COE Provider, the Insured Person shall be offered the opportunity to utilize a second COE Provider for an evaluation. If the second COE Provider, for any reason, determines that the Insured Person is not an acceptable candidate for the proposed organ/tissue transplant procedure, no further coverage under COE shall be provided for services and supplies that are related in any manner to the proposed organ/tissue transplant procedure. 16 Ill. COVERED CHARGES SUBJECT TO LIMITATIONS Subject to the General Exclusions and all other Policy provisions, the following medical expense benefits are payable subject to the stated limitations: 1. Treatment of a diagnosed Mental Illness including conditions caused by, or related in any manner to, such Mental Illness for: a. inpatient Hospital charges. b. Doctor charges for psychiatric services up to $20 per visit. c. Drugs or medicines. Allowable expenses are subject to the Deductible but are not included in the calculation of the Maximum Out-of-Pocket Limit. Benefits are paid at 50% to a maximum per calendar year of $2,000 for Inpatient expenses and $550 for Outpatient expenses. 2. Spinal manipulation, including, but not limited to, manipulation for spinal subluxation and any associated Treatment or services, up to a maximum Covered Charge of $15 per day of Treatment, subject to the following maximum benefits payable: a. $300 per calendar year for all Treatment or services. The maximum benefit payable for the Insured Member and Insured Dependents combined is $600 per calendar year. b. $75 per calendar year for all x-rays. The maximum benefit payable for the Insured Member and Insured Dependents combined is $150 per calendar year. 3. Sterilization up to a lifetime maximum benefit of $350. 4. Allergy testing and allergy injections, including, but not limited to, iniectable antigens, and extracts, up to a maximum of $500 per calendar year. The maximum benefit payable for the Insured Member and Dependents combined is $1000 per calendar year. 5. Surgery of the foot as provided in the Foot Surgery Schedule. Foot Surgery Schedule (Partial Listing Only) Incision 28010 Tenotomy, Subcutaneous, Toe Single ...................................................................................... $250.00 $400.00 28011 Multiple ...................................................................................................................................... Excision 28110 Ostectomy, Partial Excision, Fifth Metatarsal Head (Bunionette) ............................................ $700.00 Tenotomy, Open, Extensor, Foot or Toe 28285 Hammertoe Operation, One Toe .............................................................................................. $595.00 28290 Correction of Hallux Valgus (Bunion) ....................................................................................... $900.00 28292 Keller Bunionectomy .............................................................................................................. $1,210.00 When multiple procedures are performed, CRL allows 100% of the schedule benefit for the principle, or first procedure, and progressively less for the other multiple procedures. The entire Foot Surgery Schedule is contained in the Policy. The above is only a partial listing of the procedures contained in the Foot Surgery Schedule and is included here for purposes of example. The Insured Member may call the Customer Service Representative for additional information. No benefits are payable for foot care due to: a. Treatment of weak, strained or flat foot or instability or imbalance of the foot. b. Treatment of corns, calluses or the free edge of toenails, except when necessitated for peripheral vascular disease or other Illnesses of similar medical seriousness. c. Charges in excess of the amounts provided in the Foot Surgery Schedule. 17 6. Hospice care and services, whether on an Inpatient or Outpatient basis, that are provided by a Hospice Care Program, or other Hospice care provider approved by CRL. Care and services must be provided within six (6) months from the date the Insured Person entered or re-entered (after a period of remission) the Hospice Care Program or CRL approved Hospice care provider (Hospice Benefit). The Hospice Benefit is subiect to the following requirements and limitations: a. The attending Doctor must certify that the Insured Person has a terminal Illness and a life expectancy of six (6) months or less. b. CRL will determine the eligibility for, and will administer the Hospice Benefit. c. All Covered Charges for the Hospice Benefit must be billed by the Hospice Care Program, or the approved Hospice care provider, and will be subject to all of the terms of the Policy, including any applicable Deductibles and Coinsurance. In addition to Covered Charges otherwise payable under other provisions of the Policy, the Hospice Benefit will be paid up to the following limitations: (1) $100 per day for Outpatient Hospice care up to a lifetime maximum of $3500. (2) $200 per day for room and board and care while an Inpatient in a Hospice up to a lifetime maximum of $10,000. 7. Occupational, speech and physical therapy and related diagnostic testing, up to a maximum Covered Charge of $50 per visit with a maximum of 25 visits per calendar year for each type of therapy, provided the occupational and speech therapy is ordered by a Doctor as Necessary and the therapy is directly related to and begins within six (6) months following Surgery or Illness. The above services must be performed by a licensed occupational, speech or physical therapist and be under the supervision of a Doctor. Covered Charges do not include Treatment of a learning disability, speech impediment, or developmental delay even though therapy is recommended due to organic dysfunction, including, but not limited to, congenital deformity or birth trauma. (See General Exclusions.) 8. Cosmetic Surgery/Treatment, but only if required to restore a part of the body which has been altered as a result of the following events or conditions that occurred while the Insured Person was insured by the Policy and for which benefits were eligible for payment in accordance with the terms of the Policy: a. Medically diagnosed congenital defects and birth abnormalities; b. Accidental bodily Injury; c. Surgery; or d. Disease that was first diagnosed while the Insured Person was insured by the Policy. 9. For repair of Injury to sound natural teeth, (including their replacement) as a result of an accidental bodily Injury which occurs while the person is insured. Treatment must be given within ninety (90) days of the date of the accident. 18 IV. GENERAL EXCLUSIONS No benefits will be paid for charges: 1. For transportation, except local transportation to or from a Hospital by a professional ground or air ambulance service. However, air ambulance is only covered if due to a life-threatening Illness. 2. For fertility or infertility studies, diagnostic testing, advice, consultation, examination, medication, or for any Treatment related to or connected in any way with the restoration or enhancement of fertility or the inability to conceive or conception by artificial means, including, but not limited to, in-vitro fertilization or embryo transfer. However, when the infertility was caused by a covered Sickness or Injury, the Treatment for that Sickness or Injury will be covered. 3. For donation of any body organ by an Insured Person. 4. For services performed by a person who ordinarily resides in the Insured Person's home or is a Close Relative of the Insured Person. 5. For any Cosmetic Surgery/Treatment, unless required to restore a part of the body which has been altered as a result of the following events or conditions that occurred while the Insured Person was insured by the Policy and for which benefits were eligible for payment in accordance with the terms of the Policy: a. Medically diagnosed congenital defects and birth abnormalities; b. Accidental bodily Injury; c. Surgery; or d. Disease that was first diagnosed while the Insured Person was insured by the Policy. 6. For any Illness that is subject to and paid or payable under any state or federal workers' compensation law or other similar statute or occupational disease law. If the insured Person is denied benefits under any such law but an award is made at a later date, CRL shall have the right to recover the cost of any claims paid. However, coverage is provided to the Insured Person for Covered Charges incurred by the Insured Person due to an illness arising out of or in the course of employment for wage or profit if the Insured Person is: a. Self-employed; and b. exempt from under any state or federal workers' compensation statutes or other similar laws. 7. For Treatment or services Experimental or Investigational in nature. 8. For eye refractions, eye glasses, or contact lens, including fittings and examinations, or eye Surgery, when the primary purpose is to correct myopia (nearsightedness), hyperopia (farsightedness) or astigmatism (blurring), including, but not limited to radial keratotomy. 9. For Treatment, services or supplies furnished by a department or agency of the United States Government. This exclusion will not apply to a non-service connected illness of a veteran of the United States armed forces who does not have a service connected Illness. This exclusion will not apply to emergency Treatment provided in the case of a life-threatening medical condition. 10. For services and supplies eligible for payment by a governmental or charitable program, except as required by law. 11. For hearing aids, including fittings and examinations. 12. For which the Insured Person is not legally obliged to pay. 13. For Treatment or services which are not generally accepted medical practices in the United States for a given Illness. 19 14. For Treatment of obesity, morbid obesity or for weight reduction purposes, unless the Sickness or Injury is life-threatening. 15. For illness that results from participation in a felony or to which a contributory cause was the Insured Person's being engaged in an illegal occupation. 16. For routine physical or premarital examination except as may be covered under the Preventive Medical Benefit. 17. Due to a Preexisting Illness. Benefits will be paid for charges incurred after the end of a period of twelve (12) consecutive months while insured under the plan. 18. For sex changes. 19. For Treatment of controlled (as defined by the Federal Food and Drug Administration) or prohibited substance abuse, except as provided for in the Alcohol and Drug Abuse and Dependency Benefit. 20. Resulting from any suicide, attempted suicide or intentionally self-inflicted Injury or Sickness while sane or insane. 21. For examination, Treatment or Surgery of the teeth, gums or direct supporting structure except: a. As may be provided under a Progressive Dental Benefit; or b. For repair of Injury to sound natural teeth, (including their replacement) as a result of an accidental bodily Injury which occurs while the person is insured. Treatment must begin within ninety (90) days of the date of the accident. 22. For an Illness caused by any act of war, whether or not declared. 23. For Surrogate Pregnancy. 24. Services and supplies that are covered under an extension of group health benefits provision by a previous employer-related health plan, health insurance plan or other coverage arrangement. Such services and supplies will not be covered by this Policy until the extension of benefits under the prior plan ends. 25. For Illness that results either directly or indirectly from the Insured Person's participation in a hazardous activity, which shall be defined as skydiving, hang-gliding, parachuting, piloting experimental or ultra-light aircraft or riding in a hot-air balloon. 26. For Illness resulting either directly or indirectly from the Insured Person's Intoxication or being under the influence of alcohol, drugs, controlled substances, or any other substance capable of mental or physical impairment, unless it has been administered or prescribed on the advice of a Doctor. Intoxication means a concentration of 0.15% or more by weight of alcohol in the blood or urine. This exclusion shall apply even if no traffic or criminal charges are filed or pursued. 27. For Illness that results either directly or indirectly from the Insured Person's committing or attempting to commit or participation in a felony. 28. For pregnancy, except Covered Complications of Pregnancy. 29. For Outpatient prescription drugs, unless the optional prescription drug benefit has been elected. Refer to Schedule of Benefits. 20 ~/. DEFINITIONS The following are defined terms and are capitalized whenever they appear in the Certificate Booklet or Policy. 1. BENEFICIARY: The person(s) designated by the Insured Person and to whom Life Insurance Benefits will be paid. 2. CERTIFICATION OF CREDITABLE COVERAGE: A written certification of: a. the period of Creditable Coverage of the individual under a health insurance plan and the coverage (if any) under a COBRA continuation provision; and b. the waiting period (if any) (and affiliation period, if applicable) imposed with respect to the individual for any coverage under such plan. 3. CLOSE RELATIVE: The Insured Person, the Insured Person's spouse, a child, brother, sister or parent of the Insured Person or of the Insured Person's spouse. 4. COINSURANCE: The percentage of the Covered Charges the Insured Person must pay which is the difference between 100% and the insured Percentage stated in the Schedule of Benefits. 5. COPAYMENT/CO-PAY: If required by the terms of the group health plan, copayment or co-pay refers to the payment that an Insured Person must make to the health care provider each time a particular Treatment or service is provided. 6. COSMETIC SURGERY/TREATMENT: Any Treatment, opera- tive, or non-operative procedure or any portion of an operative procedure performed primarily to improve physical appearance and/or to treat a mental condition through change in bodily form. 7. COVERED CHARGES: The Reasonable and Customary charges for expenses which are Necessary to the Care and Treatment of and Illness and which are eligible for payment under the Policy. An expense is incurred at the time the service or supply is actually provided. However, the professional fee for a vaginal delivery or a Caesarean section delivery, including prenatal and postnatal care, will be deemed to have been incurred at the time of delivery. Covered Charges do not include: charges applied to a Deductible or Coinsurance amount under any benefit of the Policy; or charges for expenses incurred after the insurance terminates, except as may be provided under an extended benefits provision. 8. COVERED COMPLICATIONS OF PREGNANCY: a. Conditions requiring medical Treatment prior or subsequent to the termination of pregnancy whose diagnoses are distinct from pregnancy but which are adversely affected by pregnancy or caused by pregnancy, such as acute nephritis, nephrosis, cardiac decompensation, missed abortion, disease of the vascular, hemopoieatic, nervous, or endocrine systems, and similar medical and surgical conditions of comparable severity; but will not include false labor, occasional spotting, Doctor prescribed rest during the period of pregnancy, morning sickness and similar conditions associated with the management of a difficult pregnancy not constituting a classifiably distinct complication of pregnancy; and b. Involuntary Caesarean section, miscarriage, hyperemesis gravidarum and pre-eclampsia requiring Hospital confinement, ectopic pregnancy which is terminated, and spontaneous termination of pregnancy which occurs during a period of gestation in which a viable birth is not possible. c. Conditions requiring medical Treatment after the termination of pregnancy whose diagnoses are distinct from pregnancy but which are adversely affected by pregnancy or caused by pregnancy. 9. CREDITABLE COVERAGE: Coverage under any of the following, provided there was not a sixty-three (63) day break in coverage during which time period the individual was covered: (A waiting period shall not be treated as a break in coverage.) a. A Group Health Plan; b. Health insurance coverage; c. Part A or Part B of Title XVIII of the Social Security Act (Medicare); 21 d. Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under Section 1928 (the program for distribution of pediatric vaccines); e. Chapter 55, Title 10, United States Code (CHAMPUS); f. A medical care program of the Indian Health Service or of a tribal organization; g. A State health benefits risk pool; h. A health plan offered under Chapter 89 of title 5, United States Code (the Federal Employees Health Benefits Program); i. A public health plan; or j. A health benefit plan under Section 5(e) of the Peace Corps Act [22 U.S.C. Section 2504(e)]. (Not all insurance will be Creditable Coverage. It depends on state and/or federal law. For example, coverage for a specified disease or illness, such as cancer, is not considered Creditable Coverage.) 10. CUSTODIAL CARE: Services and supplies, regardless of who recommends them or where they are provided, that an Insured Person receives mainly to assist in daily living activities. 11. DEDUCTIBLE: The amount of Covered Charges that the Insured Person must pay each calendar year before the Policy pays major medical benefits. 12. DEPENDENT: a. A Member's spouse under the age of sixty-five (65) (if not legally separated from the Member). b. Any person desginated to be a Dependent by a court order as per Act 114 of 1992 (providing for Medical Support of Children). c. A Member's unmarried child (including a stepchild, legally adopted child or a child Placed for Adoption) until the date the child attains age nineteen (19). The term Dependent will also include a Member's unmarried child age nineteen (19) or over, who is: (1) Incapable of earning a living due to mental retardation or physical handicap. CRL must be furnished proof of incapacity within thirty-one (31) days of the date insurance would have terminated due to age. CRL may require proof of continued incapacity each year after the first two-year period that insurance has been extended; (2) Chiefly dependent on the Member for financial support; and (3) Insured on the date immediately preceding the day the insurance would have terminated due to age. d. An eligible Member's unmarried child nineteen (19) but under twenty-three (23) years of age enrolled as a full-time student in an accredited school and supported by the Member. 13. DOCTOR: Any provider of medical care and Treatment when such care or Treatment is within the scope of the provider's licensed authority and is provided pursuant to applicable laws. This term includes medical doctors, osteopaths, chiropractors, podiatrists, dentists, psychologists, optometrists, physical therapists, nurse practitioners and nurse midwives. 14. EVIDENCE OF INSURABILITY:, Satisfactory proof, as determined by CRL, that a person is acceptable for insurance. 15. EXPERIMENTAL/INVESTIGATIONAL: A Treatment is Experimental or Investigational if CRL determines that: a. the Treatment is a drug or device that cannot be lawfully marketed without approval of the FDA and that approval for marketing has not been given at the time the drug or device is furnished. (Any other approval granted by the FDA as an interim step, e.g. an Investigational Device Exemption, is not sufficient); or b. the Treatment or the patient informed consent document utilized with the Treatment was reviewed and approved by the treating facility's Institutional Review Board or other body serving a similar function, or if federal law requires such review and approval; or c. Reliable Evidence shows that the Treatment is the subject of any on-going Phase I or Phase II Clinical Trial; is the research, experimental, study or investigational arm of any on-going Phase III Clinical Trial; or is otherwise under study to determine its maximum tolerated dose, its toxicity, its safety, its efficacy or its efficacy as compared with a standard means of treatment or diagnosis or with no therapy; or 22 d. the relative effectiveness of the Treatment compared to standard therapy or to no therapy has not been proven to be as good as, or better, by completed randomized Phase III Clinical Trials; or e. Reliable Evidence shows that the prevailing opinion among experts regarding the Treatment is that further studies or clinical trials are necessary to determine its maximum tolerated dose, toxicity, safety, efficacy or its efficacy as compared with a standard means of treatment or diagnosis or with no therapy. Phase I Clinical Trial shall mean a study to determine the relationship between toxicity and dose-schedule of treatment. Phase II Clinical Trial shall mean a study to determine whether the procedure produces a biological response, and, if so, the frequency, degree and duration of the response. Phase III Clinical Trial shall mean a study to determine the relative effectiveness of the treatment compared to standard therapy or to no therapy. Reliable Evidence shall mean only published reports and articles in accepted medical and scientific literature; the written protocol(s) used by the treating facility or another facility studying substantially the same Treatment; or the written informed consent used by the treating facility or by another facility studying substantially the same Treatment. 16. EXTENDED CARE FACILITY: A facility, operating under the laws of the state where it is located, that has as its primary purpose the provision of lodging and skilled nursing care, twenty-four (24) hours a day, for persons recovering from an Illness. The facility must also: a. Be supervised on a full-time basis by a Doctor or Registered Nurse (R.N.); b. Keep clinical records on all patients; c. Have the services of a Doctor available at all times under an established agrement; and d. Except incidentally, not be a place for rest, the aged, drug addicts, alcoholics, or the mentally ill. 17. GROUP HEALTH PLAN: An employee welfare benefit plan as defined under ERISA and as further defined under the Health Insurance Portability and Accountability Act of 1996 (an employer-sponsored health insurance plan). 18. HOME OFFICE: Central Reserve Life Insurance Company, 17800 Royalton Road, Cleveland, Ohio 44136-5197. 19. HOSPICE: Care of the terminally ill. The goals of Hospice are to reduce or abate the mental and physical distress of the terminally ill and to meet the special stresses of terminal illness, dying and bereavement. 20. HOSPICE CARE PROGRAM: A formal program directed by a Doctor to help care for a terminally ill person. The services may be provided through a centrally-administered, medically- directed and nurse-coordinated program. The program will provide primarily home care services twenty-four (24) hours a day, seven (7) days a week. Hospice may also be provided through confinement in a Hospice Facility that operates as part of the program for short periods of stay in a home-like setting for direct care or respite. The program team must include a Doctor and a Registered Nurse (R.N.) and may also include a home health aid, licensed social worker, clinical psychologist, or a physical therapist. 21. HOSPICE FACILITY: A facility that: a. Provides primarily Inpatient care to terminally ill patients; b. Is operated under the laws of the jurisdiction where it is located; c. Is supervised by a Doctor with at least one Doctor on call twenty-four (24) hours a day; d. Provides twenty-four (24) hour a day nursing services under the direction of a Registered Nurse (R.N.) and has a full-time administrator; and e. Provides an ongoing quality assurance program. 22. HOSPITAL: A facility that: a. Is operated as a Hospital under the laws of the state where it is located; b. Is open at all times; c. Is operated mainly to diagnose and treat Illnesses on an inpatient basis; d. Is any birthing facility used by a licensed certified midwife; 23 e. Has twenty-four (24) hour nursing services by or under the supervision of an R.N.; f. Is not mainly a skilled nursing facility, clinic, nursing home, rest home, convalescence home or like place; and g. Is accredited as a Hospital under the Hospital Accreditation Program of the Joint Commission on Accreditation of Healthcare Organizations. 23. HOSPITAL MISCELLANEOUS EXPENSE: Charges made by a Hospital for other than Room and Board, except professional, surgical, medical, dental or special nursing fees. 24. ILLNESS: Sickness or Injury. 25. INJURY: An accidental bodily Injury sustained by the Insured Person which is the direct and independent cause of the loss and which occurs while the insurance is in force. Subject to all other terms of the Policy, Injury does not include Injuries for which benefits are payable under any workers' compensation, employer's liability or similar law. 26. INPATIENT: A person who is admitted, lodged, fed and receives services and Treatment in a Hospital, Extended Care Facility or Hospice Facility on an Inpatient basis as opposed to services and Treatment provided on an Outpatient basis. 27. INSURED DEPENDENT: A Dependent of a Member who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. 28. INSURED MEMBER: A Member who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. 29. INSURED PERSON: A Member or Dependent, who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. 30. INTOXICATED: The condition of an Insured Person being legally intoxicated as defined by Pennsylvania law. 31. MEDICARE: Benefits provided by Title XVIII of the Federal Social Security Act, as amended. 32. MEMBER: A person while a dues-paying Member in good standing with the Policyholder who is at least sixteen (16) years of age. 33. MENTAL ILLNESS: a. A neurosis, psychoneurosis, psychopathy or psychosis and includes all mental, nervous or emotional disorders without demonstrable organic origin. b. Any other Illness whose diagnosis is classified in the Mental Disorders section of the most recent edition of the International Classification of Diseases. 34. NECESSARY TO THE CARE OR TREATMENT OF ILLNESS (NECESSARY): Services or supplies provided by a Doctor, Hospital, Extended Care Facility, Hospice or other health care provider which CRL determines are: a. Appropriate to diagnose or treat the Insured Person's condition, Illness or Injury; b. Consistent with standards of good medical practice in the United States; c. Medically Necessary and not primarily for the personal comfort, social well-being or convenience of the Insured Person, the family or the provider; d. Not a part of or associated with the scholastic education or vocational training of the Insured Person; e. Not Experimental or Investigational in nature; or f. In the case of Inpatient care, services or supplies that cannot be provided safely on an Outpatient basis. The fact that a health care provider has prescribed, recommended, or approved a service or supply does not, in and of itself, make it medically Necessary. A Plan Provider shall not assert any claim against CRL or the Insured Persons for covered services denied by the Preferred Provider Network due to lack of medical Necessity. 24 35. NON-PLAN PROVIDER: Any Doctor, Hospital or other health care provider not contracting with a preferred provider network with which CRL has contracted. 36. OUTPATIENT: Refers to certain services and Treatment provided to a person on an Outpatient basis by a Hospital, Extended Care Facility, Hospice or other Outpatient Facility, as opposed to services and Treatment provided to a person who is an Inpatient. 37. OUTPATIENT FACILITY: An Outpatient department of a Hospital, an ambulatory surgical facility or an Urgent Care Center that is operated in accordance with the laws of the state where it is located and it must: a. Be operated mainly to diagnose and treat Illnesses on an Outpatient basis and have organized facilities for Surgery; b. Have a staff of one (1) or more Doctors on the premises at all times during the facility's regularly scheduled hours of service; c. Have nursing services by or under the supervision of a Registered Nurse (R.N.) or Licensed Practical Nurse (L.P.N.); and d. Not be primarily a skilled nursing facility, clinic, doctor's office, nursing home, rest home, convalescence home or other similar place. 38. PERIOD OF CONFINEMENT: A continuous period of time when a person is an Inpatient in a Hospital. 39. PHYSICIAN: See Doctor. 40. PLACED FOR ADOPTION: The term "placement", or being "placed" for adoption, in connection with any placement for adoption of a child with any person, means the assumption and retention by such person of a legal obligation for total or partial support of such child in anticipation of adoption of such child. The child's placement with such person terminates upon the termination of such legal obligation. 41. PLAN PROVIDER: Any Doctor, Hospital or other health care provider contracting with a preferred provider network with which CRL has contracted. 42. PREEXISTING ILLNESS: A disease or physical condition caused by Illness or Iniury for which medical advice or Treatment has been received within ninety (90) days immediately prior to becoming covered under the Policy. Such Illness shall be covered after the Insured Person has been covered for more than twelve (12) months under the Policy. 43. PREFERRED PROVIDER ORGANIZATION (PPO): An organization that has contracted with Doctors, Hospitals, or other health care providers who have agreed to provide health care services at negotiated rates. CRL contracts with the PPO to create a network plan. 44. REASONABLE AND CUSTOMARY CHARGES: Unless otherwise indicated, the Policy pays benefits for Covered Charges that CRL determines are Reasonable and Customary. The Reasonable and Customary Charge for any Treatment, service or supply is the usual charge made by the provider in the absence of insurance. The usual charge may not be more than the general level of charges for an Illness or Injury of comparable severity and nature made by other providers within the geographic area in which the service or supply is provided. When multiple procedures are performed, CRL allows 100% of Reasonable and Customary for the principal procedure and progressively less for the other procedures. 45. ROOM AND BOARD CHARGES: Charges made by a Hospital or Extended Care Facility for the room, meals, and routine nursing services for those persons confined as Inpatients. 46. SICKNESS: Sickness or disease of an Insured Person which is diagnosed or treated after the effective date of insurance and while insurance is in force. Subject to all other terms of the Policy, Sickness does not include Sickness or disease for which benefits are provided under any workers' compensation, occupational disease, employer's liability or similar law. 47. SURGERY: a. Incision, excision, cryotherapy, electrocautery, lithotripsy, or laser Treatment, of a body organ or part; 25 b. Reduction of a fracture or dislocation by manipulation; c. Suturing of a wound, but not the removal of sutures; or d. Removal of a stone or foreign object by endoscopy. 48. SURROGATE PREGNANCY: The pregnancy of a woman who is bearing a child for another individual that resulted from conception by natural or artificial means, including, but not limited to, conception by in-vitro fertilization or embryo transfer. 49. TOTAL DISABILITY, OR TOTALLY DISABLED: If the terms of coverage require that total disability be defined, the following will apply: An Insured Person will be deemed to have a Total Disability when, as a direct result of an Illness or Injury, the Insured Person is unable to perform the essential activities of a person of like age and sex who is in good health. 50. TREATMENT: Any and all forms of care, including, but not limited to, medical care or surgical care; advice; consultation; equipment; devices; diagnosis; cure, mitigation or prevention of disease; drugs (prescribed or non-prescribed); examination; observation; services; supplies; or testing. The following definitions will apply with respect to the Alcohol and Drug Abuse and Dependency Benefit: 1. ALCOHOL OR DRUG ABUSE: Any use of alcohol or other drugs which produces a pattern of pathological use causing impairment in social or occupational functioning or which produces physiological dependency evidenced by physical tolerance or withdrawal. For the purposes of this act, drugs shall be defined as addictive drugs and drugs of abuse listed as scheduled drugs in the act of April 14, 1972 (P.L. 233, No. 64), known as The Controlled Substance, Drug, Device and Cosmetic Act. 2. DETOXIFICATION: The process whereby an alcohol- intoxicated or drug-intoxicated or alcohol-dependent or drug-dependent person is assisted, in a facility licensed by the Department of Health, through the period of time necessary to eliminate, by metabolic or other means, the intoxicating alcohol or other drugs, alcohol and other drug dependency factors or alcohol in combination with drugs as determined by a licensed Doctor, while keeping the physiological risk to the patient at a minimum. 3. HOSPITAL: A facility licensed as a Hospital by the Department of Health, the Department of Public Welfare, or operated by the Commonwealth and conducting an alcoholism or drug addiction Treatment program licensed by the Department of Health. 4. INPATIENT CARE: The provision of medical, nursing, counseling or therapeutic services twenty-four (24) hours a day in a Hospital or Non-Hospital Facility, according to individualized Treatment plans. 5. NON-HOSPITAL FACILITY: A facility, licensed by the Department of Health, for the care or Treatment of alcohol-dependent or other drug-dependent persons, except for transitional living facilities. 6. NON-HOSPITAL RESIDENTIAL CARE: The provisions of medical, nursing, counseling or therapeutic services to patients suffering from alcohol or other drug abuse or dependency in a residential environment, according to individualized Treatment plans. 7. OUTPATIENT CARE: The provision of medical, nursing, counseling or therapeutic services in a Hospital or Non- Hospital Facility on a regular and predetermined schedule, according to individualized Treatment plans. 8. PARTIAL HOSPITALIZATION: The provision of medical, nursing, counseling or therapeutic services on a planned and regularly scheduled basis in a Hospital or Non-Hospital Facility licensed as an alcoholism Treatment program by the Department of Health, designed for a patient or client who would benefit from more intensive services than are offered in Outpatient Treatment but who does not require Inpatient care. 26 VI. POLICY PROVISIONS Ao Eligibility 1. Active, dues paying Members in good standing of the Policyholder, between the ages of sixteen (16) and sixty-four and a half (64-1/2), are eligible to apply for coverage. However, any Member who is eligible for coverage under a similar, non-contributory, employer-sponsored maior medical plan, is not eligible for coverage under the Policy. 2. No individual will be eligible as a Dependent of more than one (1) Member or be eligible as both a Member and Dependent. Any Dependent who is eligible for coverage under a similar, non-contributory, employer-sponsored major medical plan is not eligible for coverage under the Policy. 3. Foster children may be eligible for coverage under this plan, but only if the Insured Person is legally responsible for paying for the medical expenses of such foster child. If the foster child is eligible for coverage under this plan, then the rules for "Adding Dependent Coverage", as stated below, will apply to that foster child. Dual Coverage No person may be insured at the same time as a Member under more than one (1) certificate under the Policy. Co Effective Date of Insurance A Member who has been approved in writing by the Home Office and is Totally Disabled on the date the Member's coverage would otherwise take effect, will not become effective until the second consecutive day the Member is not Totally Disabled. Adding Dependent Coverage 1. The effective date of coverage for each eligible Dependent will be determined as follows: a. Newborns and adopted children will be covered for Injury or Sickness, including the Necessary Care and Treatment of medically diagnosed congenital defects, birth abnormalities, prematurity and routine nursery care from the moment of birth or date of placement in the adoptive home. Notice of the birth of a newborn child or adoption of a child must be furnished to CRL within thirty-one (31) days after the date of birth or the date of placement in the adoptive home in order to have coverage continue beyond such thirty-one (31) day period. The additional premium charge, including a pro rata charge for the initial thirty-one (31) day period, for the newborn or adopted child, if any, will be added to the Member's next premium statement and must be paid with that premium when due. If a written request is not received within thirty-one (31) days after the newborn's date of birth or the date of placement of an adopted child, the Member must complete an application and, if approved by CRL, CRL will determine the effective date of the newborn or adopted child's coverage. Newborn coverage will apply to a newborn child of an Insured Dependent. b. other Dependents-- (1) Automatically covered if the Group Insurance Change Request is received by the Home Office prior to the eligibility date (date of marriage or adoption). The effective date will be the eligibility date. (2) Coverage will be effective the first day of the month following receipt of the completed form if the Group Insurance Change Request is received within: (a) thirty-one (31) days after the eligibility date; or (b) sixty (60) days after the the eligibility date for Dependents insured pursuant to Act 114 of 1992 (providing for Medical Support of Children). (3) The Member must complete an application if CRL is not notified within: (a) thirty-one (31) days after the eligibility date; or 27 (b) sixty (60) days after the eligibility date for Dependents insured pursuant to Act 114 of 1992 (providing for Medical Support of Children). Each Dependent will be considered independently and, if approved by CRL, CRL will determine the effective date of coverage. No Dependent coverage will become effective for a Dependent before the Member's coverage is effective. Payment of Premium All required premiums due are to be paid on or before the due date. Each premium payment must be received at the Home Office to be considered paid. F. Grace Period A Grace Period of thirty-one (31) days will be provided for the payment of each premium falling due after the first premium. If the premium due has been paid prior to the expiration of the Grace Period, the coverage will be deemed to have continued in force during the Grace Period. If any premium due, after payment of the first premium, is not paid before the end of Grace Period, the insurance coverage will automatically terminate at the end of the Grace Pedod. No notice of termination is required. G. Legal Rights Due to Fraud or Misrepresentation 1. In addition to any other legal rights that CRL may have, CRL reserves the right to cancel the coverage of an Insured Person under the Policy in the event of fraud or material misrepresentation by the Insured Person, or his or her representative. 2. In the absence of fraud, all statements made by the Insured Person will be deemed representations and not warranties. No such statement will be used to deny a claim or reduce benefits unless it is stated in the written Application. Policy/Premium Changes 1. The Policyholder may request in writing a change in the Policy at any time without the consent of the Insured Person or beneficiaries or any other interested party. Any such change is subiect to CRL's approval and requires the signature of the Policyholder and an officer of CRL in order to be effective. Any such change and the notice required will be provided in accordance with the Policy provisions. 2. CRL may increase or otherwise adjust the premium rates of the Policy by class in accordance with its experience on any premium due date after the Policy has been in effect for twelve (12) months with thirty (30) days advance written notice to the Member. 3. If a Preferred Provider Organization is used in conjunction with the Policy, the list of Plan Providers is subject to change (modifications, deletions or additions) without advance notice to the Insured Person. If the agreement between CRL and the Preferred Provider Organization is terminated for any reason, CRL will offer the Member a substitute plan of its choice. Renewal of Insured Person's Insurance CRL will renew or continue in force coverage at the option of the Member, except as follows: 1. Nonpayment of premiums. The Member has failed to pay premiums in accordance with the terms of the Policy, or CRL has not received timely premium payments. 2. Fraud. The Insured Person has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the Policy. 3. Loss of eligibility. 28 o a. The Member has failed to maintain his/her membership in the association. Upon termination of the association membership, the former Member may continue this insurance by notifying CRL and applying for the continuation of coverage. b. The Dependent ceases to meet the definition of a Dependent. c. The Member has moved to a state in which CRL does not hold a Certificate of Authority to issue insurance or does not actively market health insurance because CRL has discontinued all types of plans within that state. Termination of Coverage. CRL is ceasing to offer coverage in accordance with the Policy Provision entitled "Modifications or Discontinuance of Coverage" or the Policy terminates in its entirety. Movement outside of service area. If the Member has elected a network plan (e.g., preferred provider organization - PPO), and no longer lives, resides or works in the service area, but only if such coverage is terminated uniformly without regard to any health status-related factor of covered individuals. The Member may elect not to renew coverage by providing written notice to CRL. The earliest date that the coverage will be terminated is on the last day of the month during which CRL's Home Office receives written notice. Modifications or Discontinuance of Coverage 1. Uniform Modification of Coverage. At the time of coverage renewal, CRL may modify the health insurance coverage for a product offered to an individual in the individual market, provided such modification is consistent with state law and effective on a uniform basis among all individuals with that product. Discontinuance of Coverage. a. Discontinuance of a Particular Type of Coverage. If CRL decides to discontinue offering a particular type of health insurance coverage offered in the individual market, all coverage of this type will be discontinued uniformly by CRL by providing: (1) notice to each Insured Person at least ninety (90) days prior to the date of the discontinuation of this type of coverage; and (2) an offer to each Member of the option to purchase any other individual health insurance coverage currently being offered by CRL for individuals in such market. b. Discontinuance of All Coverage. (1) If CRL elects to discontinue offering all health insurance coverage in the individual market in a state, health insurance coverage may be discontinued by CRL if: (a) CRL provides notice to the applicable state authority and to each Insured Person covered under such coverage at least one-hundred eighty (180) days prior to the date of the discontinuation of such coverage; and (b) such coverage is not renewed. (2) If CRL discontinues all coverage in the individual market, CRL may not issue any health insurance coverage in the individual market and state involved during the five (5) year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed. Issuance of Certifications of Creditable Coverage 1. Each Insured Person, at the time of termination of Creditable Coverage, is entitled to receive information which provides the period of Creditable Coverage under the plan. Within twenty-four (24) months of termination, if the Insured Person requires a copy of this Certification, the carrier should be contacted. 2. CRL will provide Certification of Creditable Coverage only for the period of time during which the Insured Person was covered by CRL. 29 CRL will cooperate with the Member, Dependent, another carrier, or any other individual or organization who performs services in connection with the insurance relationship, if requested. CRL will accept and/or provide information regarding Creditable Coverage to another carrier through means other than a written certification (e.g., by telephone). Misstatement of Age If the age of any Insured Person has been misstated, the premiums may be adiusted. If the amount of insurance would be affected by such misstatement, it will be changed to the amount the Insured Person would have had at the correct age, and the premium will be based on the corrected age and amount. Beneficiary 1. An Insured Member may name anyone as a Beneficiary except the Member. More than one (1) Beneficiary may be named. Benefits will be paid to the living Beneficiaries. If two (2) or more Beneficiaries are named and one (1) dies before the Insured Member dies, the benefit will be paid to the living Beneficiary or Beneficiaries. 2. If there is no Beneficiary named, benefits will be paid to the estate. If the named Beneficiaries are deceased at the time the Insured Member dies, the benefit will be paid to the Insured Member's spouse, if living. If the spouse is deceased, the benefit will be paid to the Insured Member's parents equally or to the survivor. If neither survive, the benefit will be paid to the insured Member's estate. 3. An Insured Member may change the Beneficiary. Any change requires satisfactory written notice to CRL. After CRt. records the change, it is effective from the date the Insured Member signed the notice. The Insured Member must be living at the time CRL records the change in order for it to be effective. CRL will not be responsible for any payment made or other action taken before the change is recorded. 4. If the Beneficiary is a minor or someone otherwise legally incapable of receiving and handling the payment, CRL may make payment to the person who appears to CRL to be caring for or supporting the Beneficiary unless a claim has been made by a legally appointed guardian prior to CRL's payment. 3O ¥11. CLAIM PROVISIONS Notice of Loss/Claim 1. Written notice of Loss or claim must be given to CRL within twenty (20) days after the date of any covered Loss. If notice is not given within twenty (20) days, a claim will not be denied or reduced if notice was given as soon as was reasonably possible. 2. After CRL receives notice of claim, the forms for filing proof of claim will be furnished to the Insured Person within fifteen (15) days. If CRL fails to provide the necessary forms within the stated time, the Insured Person will be deemed to have met the proof of Loss requirements if written proof of Loss is submitted within the time requirements as stated in the Proof of Loss section below. Proof of Loss 1. Written proof of loss must be given to CRL no later than ninety (90) days after the date of the loss. All proofs of loss must be received by CRL at its Home Office. 2. If written proof of loss is not given within ninety (90) days, the claim will not be denied or reduced if that proof was given as soon as reasonably possible. In no event, except in the case of documented legal incapacity, will proof of loss be accepted beyond one (1) year from the end of the written notice period. 3. Proof as required in this section and the foregoing section means evidence of loss satisfactory to CRL. The receipt, acknowledgement or investigation of a claim will not waive CRL's rights to defend against any claim. Examination CRL, at its own expense, will have the right to require an Insured Person be examined by a Doctor of CRL's choice, as often as it may reasonably require. In the event of death of the Insured Person, CRL will have the right to require an autopsy, unless otherwise prohibited by law. Payment of Claim 1. Indemnities payable under this Policy for any loss, other than loss for which this Policy provides any periodic payment, will be paid immediately upon receipt of due written proof of such loss. 2. When the Insured Person uses the services of a Plan Provider who is a member of the Preferred Provider Network, all benefits will be paid to the Plan Provider. When the Insured Person uses the services of providers who are not members of the Preferred Provider Network, all benefits will be paid to the insured Member, unless medical benefits have been assigned to the provider of serivce. CRL is not responsible for the validity of any assignment. 3. A Plan Provider shall not assert any claim against CRL or the Insured Persons for covered services denied by the Preferred Provider Network due to the lack of medical Necessity. 4. If CRL determines that the Insured Member is not legally able to receive such payment, CRL may, at its option, pay the benefits to the health care providers or the Insured Member's estate or to the closest living relative, as known to CRL. 5. If benefits are payable to the Insured Member's estate or a beneficiary who cannot execute a valid release, CRL may pay benefits up to $1,000 to someone related to the Insured Member or the beneficiary by blood or marriage whom CRL considers to be entitled to the benefits. CRL will be discharged from any liability to the extent of any such payment made in good faith. 31 6o CRL reserves the right to allocate any Deductible amount to any Covered Charges and to apportion the benefits to the Insured Person and to any assignees. Such actions will be binding on the Insured Person and assignees. CRL will make reasonably diligent efforts to recover benefit payments made erroneously but in good faith and may apply subsequent benefits otherwise payable to offset any overpayment. CRL also reserves the right to recover any overpayment by, but not limited to, any of the following methods: a. adjustment to Coinsurance and Deductible; or b. demand of immediate return of the overpayment from the Insured Person or responsible party. Workers' Compensation The Policy is not a workers' compensation policy, The Policy does not satisfy any governmental requirements for coverage by worker's compensation insurance. Time Limits No action at law or equity shall be brought to recover on the Policy prior to the expiration of sixty (60) days after proof of loss has been furnished in accordance with the requirements of the Policy and full compliance with the Policy's appeals procedure. No action at law or equity shall be brought unless brought within three (3) years from the expiration of the time within which proof of loss is required by the terms of the Policy. Subrogation Any Treatment that would otherwise be Covered Charges under the terms of this plan that give rise to a claim by an Insured Person against a third party or against any person or entity as the result of the actions of a third party are excluded from coverage under this plan. This plan also does not provide benefits to the extent that there is other coverage under non-group medical payments including auto or medical expense type coverage to the extent of that coverage. However, this plan will provide benefits, otherwise payable under this plan, to or on behalf of the Insured Person only on the following terms and conditions: 1. In the event that benefits are provided under this plan, CRL shall be subrogated to all of the Insured Person's rights of recovery for medical expense benefits against any person or organization to the extent of the benefits provided. The Insured Person shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The Insured Person shall do nothing after loss to prejudice such rights. The Insured Person hereby agrees to cooperate with CRL and/or any representatives of CRL in completing such forms and in giving such information surrounding any accident or event as CRt_ or its representatives deem necessary to fully investigate the matter. 2. CRL is also granted a right of reimbursement from the proceeds of any recovery for medical expense benefit whether by settlement, judgment or otherwise. This right of reimbursement is cumulative with and not exclusive of the subrogation right granted above, but only to the extent of the benefits provided by the terms of this plan. 3. CRL, by payment of any benefits under the terms of this plan, is hereby granted a lien on the proceeds of any settlement, judgment or other payment received by the Insured Person. The Insured Person hereby consents to this lien and agrees to take whatever steps are necessary to assist CRL to secure the lien. 4. CRL, by payment of any benefits under the terms of this plan, is hereby granted an assignment of the proceeds of any settlement, iudgment or other payment received by the Insured Person to the extent of the benefits paid. By accepting benefits under the terms of this plan, the Insured Person hereby consents to this assignment and authorizes and directs his or her attorney, personal representative or any insurance company to directly reimburse CRL or its designee to the extent of the benefits paid. This assignment becomes effective and is binding upon the insured Person's attorney, personal representative or any insurance company upon service of a copy of this provision to them by CRL or its designee. 32 5. The subrogation and reimbursements rights, assignments and liens apply to any recoveries made by or on behalf of the Insured Person as a result of the Illness sustained, including, but not limited to, the following: a. Payments made directly by the third party or any insurance company on behalf of the third party or any other payments on behalf of the third party. b. Any payments, settlements, judgment or arbitration awards paid by any insurance company under an uninsured or underinsured motorist coverage, whether on behalf of the Insured Person or other person. c. Any other payments from any source designed or intended to compensate the Insured Person for any Illness sustained as the result of negligence or alleged negligence of a third party. d. Any workers' compensation award or settlement. 6. CRL's right to recover (whether by subrogation or reimbursement) shall apply to decedents', minors' and incompetent or disabled persons' settlements or recoveries. 7. No Insured Person shall make any settlement which specifically reduces or excludes, or attempts to reduce or exclude the benefits provided by CRL. 8. CRL's right of recovery shall be a prior lien against any proceeds recovered by the Insured Person, which right shall not be defeated nor reduced by the application of any so-called Made-Whole Doctrine, or any other such doctrine purporting to defeat CRL's recovery rights by allocating the proceeds exclusively to non-medical expense damages. 9. No Insured Person shall incur any expenses on behalf of CRL in pursuit of CRL's rights. Specifically, no court costs nor attorneys' fees may be deducted from CRL's recovery without the prior expressed written consent of CRL. This right shall not be defeated by any so-called Fund Doctrine or Common Fund Doctrine or Attorney's Fund Doctrine. 10. CRL shall recover the full amount of benefits provided hereunder without regard to any claim of fault on the part of any Insured Person, whether under comparative negligence or otherwise. 11. The benefits under this plan are secondary to any coverage under no-fault or similar insurance. 12. In the event that the Insured Person shall fail or refuse to comply with the terms of this provision, the Insured Person shall reimburse CRL for any and all costs and expenses including attorneys' fees, incurred by CRL. 13. The right of subrogation is not enforceable if prohibited by statute or regulation. In addition, CRL does not have the right to recover benefits paid from awards made under Medical Malpractice Insurance and the Motor Vehicle Financial Responsibility Law. Coordination of Benefits 1. Coordination of Benefits (COB) may limit benefits when an Insured Person is insured under more than one (1) plan. The benefits payable under the Policy may be reduced, under the rules below, so that from all plans, an Insured Person will not receive more than 100% of Covered Charges. 2. The following is a list of plans with which the Policy coordinates benefits: a. Group insurance, except group or group-type Hospital indemnity benefits of $100 per day or less; b. Other arrangements, whether insured or uninsured, covering individuals in a group; c. Blue Cross and Blue Shield plans on a group basis; d. Plans of Hospital or medical service organizations on a group basis; e. Group practice plans; f. Group pre-payment plans; g. Federal government plans or programs except Medicaid; h. Medicare Parts A and B; i. Coverage required or provided by law; j. Student insurance, except that COB will not apply to accident-only coverage for grammar or high school students; and k. Individual no-fault auto insurance, by whatever name called. 33 3. Benefits payable under this Policy are in excess and not in duplication of any first-party benefits due and collectible pursuant to the Pennsylvania Motor Vehicle Financial Responsibility Law. 4. CRL will pay the regular benefits as primary plan. If it is determined to be the secondary plan, CRL will pay the excess of allowable expenses after the primary plan pays its regular benefits. In any event, CRL will not pay more than the regular benefits of its plan. 5. These rules determine which plan is primary and the order in which the other plans follow: a. Any plan which does not have the COB provision will be the primary plan and pay first. b. For a plan having a COB provision, these rules apply: (1) The plan which covers the Insured Person as a Dependent will be considered the secondary plan and pay after any other plan; (2) For Dependent children: (a) The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year. (b) If both parents have the same birthday, the benefits of the plan which covered the parent longer are determined before those of the plan which covered the other parent for a shorter period of time. (c) The word "birthday" refers only to month and day in a calendar year, not the year in which the person was born. (d) If the other plan does not have the birthday rule described above, but instead has a rule based upon the gender of the parent; and if, as a result, the plans do not agree on the order of benefits, the rule based upon the gender of the parent will determine the order of benefits. c. If the natural parents of a Dependent child are divorced or otherwise separated: (1) If the parent with custody of the child has not remarried, the plan which covers the child as a Dependent of that parent will be considered before the plan which covers the child as the Dependent of the parent without custody. (2) If the parent with custody of the child has remarried, the plan which covers the child as a Dependent of that parent will be considered before the plan which covers the child as a Dependent of the step-parent. The plan which covers the child as a Dependent of the parent without custody will be considered last. (3) If there is a court decree which establishes financial responsibility for the medical, dental or other health care expenses with respect to the child, (1) and (2) above will not apply. The plan which covers the child as a Dependent of the parent with such financial responsibility will be considered before any other plan which covers the child as a Dependent. d. When the rules above do not apply, the plan that has insured the person the longest will be primary, except those plans insuring the individual as a retired or laid-off employee will pay as a secondary plan. 6. An allowable expense is a Necessary, Reasonable and Customary expense covered, at least in part, by one (1) of the plans. Such a plan may provide services, rather than cash payments. In this case, the fair value of each service given will be deemed all allowable expense paid by that plan. 7. Benefits will be coordinated on a calendar year basis or any portion of a calendar year in which the person was insured by CRL. 8. For the purposes of this COB section, any or all of the following may apply: a. The Member is required to furnish CRL complete information concerning all plans and benefits paid or payable from those plans. b. As permitted by law, CRL may, without the Insured Person's consent: (1) obtain information from all plans involved; (2) reimburse such other plans, if CRL determines that benefits have been paid by another plan which should have been paid by CRL. Such reimbursement will be a valid payment under this plan; or (3) release to other plans any information necessary for COB. c. CRL may obtain reimbursement from any other plan, and/or from the Insured Person, if CRL has paid benefits which should have been paid by any other plan. Such reimbursement is a valid payment under the other plan. d. CRL may obtain a refund of any amount which exceeded 100% of allowable expenses as a result of CRL's payment as a secondary plan. Precertification Requirement CRL requires that Insured Persons notify its medical review board at the telephone number shown on the identification card to determine if medical services, admissions or supplies are medically Necessary and appropriate. However, OBTAINING PRECERTIFICATION DOES NOT NECESSARILY GUARANTEE PAYMENT OF BENEFITS, since all claims are subject to the terms of the Policy. 1. Hospital Preadmission Certification Insured Persons must contact the medical review board to precertify all non-emergency hospital confinements in a non-participating facility, including confinements for maternity, at least seventy-two (72) hours prior to the scheduled admission. If the Policy includes maternity benefits, precertification should be obtained as soon as the Insured Person learns of the pregnancy. Emergency hospital admissions must be reported to the medical review board within forty-eight (48) hours following the admission or as soon as reasonably possible. 2. Precertification Penalty If the Insured Person fails to obtain the required precertification, CRL reserves the right to determine, upon receipt of the claim, if the medical service, admission or supplies are medically Necessary and appropriate. No benefits will be paid for Treatment determined to be not medically Necessary or appropriate. For Treatment determined to be medically Necessary and appropriate, CRL will apply a penalty equivalent to the greater of $500 or 20% of Covered Charges, up to $1,000, for each Treatment where precertification is required but not obtained. The precertification penalty will be applied before the Deductible and Coinsurance and will not be credited toward the insured Person's maximum out-of-pocket limit. 3. Obtaining precertification does not assure that benefits will be paid for the procedure. CRL will make the final determination whether benefits are payable based on the terms of the Policy, following submission of the claim. What to Do About Your Claim 1. Group life insurance, waiver of premium benefit, and accidental death and dismemberment claims Upon notification, CRL will furnish the necessary forms together with instructions on the procedures to be followed in presenting a claim. 2. Medical claims Medical claims should be submitted to your PPO Network directly -- see your I.D. card. Hospital bills Show your CRL I.D. card to the Hospital so that the bill will be sent directly to the PPO Network. It is not necessary for the Hospital to complete our form. Medical bills Your doctor will generally indicate charges on his/her own claim form or on an itemized bill. For all other medical charges you must submit THE ACTUAL BILLS. It is important to remember: a. Bills must be itemized to show: (1) Name of Insured Member (2) Name of Doctor (3) Name of Person or entity providing the service (4) Name of Patient (5) Diagnosis 35 (6) Dates of Treatment (7) Policy Number (8) Services rendered and amount of charge b. Don't send cancelled checks, cash register receipts or photocopies of bills. These cannot be accepted. c. Don't submit a list of expenses prepared by yourself. The original bills are needed. d. Don't submit bills which include several members of your family. Separate bills are required for each patient. e. Don't accumulate your bills for submission at the end of the year. Submit your bills periodically if your medical Treatment covers a long period of time. Remember Please be certain to show your account number on all bills that you submit. This number can be found on your CRL ID card or in your certificate booklet. Selected Individual Case Management The medical expense benefits provided by the Policy will include benefits for approved charges for alternate methods of medical care or Treatment not otherwise listed as Covered Charges. Approved charges are charges for services, Treatment and supplies approved in advance by CRL and established in writing in a selected individual case management treatment plan. Cost Containment CRL reserves the right to initiate, conduct and maintain, or to contract for, various programs and procedures directed at cost containment. Such programs and procedures include, but are not limited to, underwriting, precertification, concurrent review, utilization review, selected individual case management, auditing of charges, and preferred provider organization programs. Administrative Remedies Any controversy arising out of or relating to the Policy, such as disputes about the denial of a claim, are subject to certain administrative procedures that must be exhausted by the Insured Person ("Insured") prior to the Insured pursuing any other remedy that may be available. These required administrative remedies are (1) Appeal of Decision; and (2) Arbitration. Appeal of Decision Appeal--Technical Manager (TM): a. If CRL makes a decision which the Insured wishes to appeal, a written request must be sent within sixty (60) days of the date of CRL's written notice to the Insured to: Appeal-Technical Manager Central Reserve Life Insurance Company 17800 Royalton Road Cleveland, Ohio 44136-5197 b. The Insured's written request must provide: (1) a written statement of the reasons for the appeal and the facts of the matter; and (2) copies of any evidence or documentation. c. Within forty-five (45) days after the date of receipt of a timely-filed request for reconsideration, the TM must provide written notice to the Insured that: (1) the initial decision has been reversed or changed; (2) the initial decision has been reaffirmed; or (3) more information is being requested from the Insured. (This includes any information from the health care provider[s].) Within thirty (30) days after the information is received, the TM must notify the Insured as provided in (1) or (2) herein. d. If the Insured does not provide the information requested within sixty (60) days of the requested date, the TM will reconsider the decision based on the information in the file. Written notice of the decision will be sent to the insured. 36 Appeal Review: e. If the TM affirms or changes the decision, or fails to respond as provided in c., above, and if the Insured wants to continue the appeal, the Insured must request review by Appeal Review within sixty (60) days of the date the TM was required to respond: Appeal Review Central Reserve Life Insurance Company 17800 Royalton Road Cleveland, Ohio 44136-5197 f. In reviewing a decision by the TM, Appeal Review may: (1) ask the Insured to submit more information; (2) obtain an advisory opinion from an independent Doctor(s); (3) obtain any other information or advisory opinions as may, in its judgment, be required to make a decision; or (4) make its decision based solely on the information provided by the TM and the Insured. g. Within thirty (30) days after receipt of the Insured's request for review or, if additional information or advisory opinions were requested, within thirty (30) days of the receipt of the necessary information and/or advisory opinions, Appeal Review will send written notice of its decision to the Insured. h. If for any reason Appeal Review does not respond, the Insured must advise CRL's Legal Department of the failure to respond, by calling 1-800-321-3997. Arbitration After exhaustion of the Appeal of Decision procedures, any dispute arising out of or related to the Policy that remains shall be settled by arbitration in accordance with applicable federal or state laws and the Insurance Dispute Resolution Procedures, as amended, and administered by the American Arbitration Association. 37 VIII. CONTINUATION AND CONVERSION Continuation of Coverage 1. Member's Right to Continue Coverage a. This notice is intended to inform Members, in a summary fashion, of their rights and obligations under the continuation of coverage provisions. (All Members should take the time to read this notice carefully.) b. An Insured Member, with his or her covered Dependents, whose coverage under the Policy terminates because of the termination of membership in the association shall have the option to continue this insurance provided that the group association Policy is still in rome. c. Upon deciding to terminate his or her membership in the association, the Member shall notify CRt, in writing, of the decision to terminate membership in the association and to request that the coverage be continued under the continuation Policy. In order to have the continuation coverage be effective the first day of the month following receipt of the written notice by CRL, such notice must be received in CRL's Home Office no later than the fifteenth day of the preceding month. Any written requests received after the fifteenth day of the month shall be effective on the first day of the month following the month in which notice was received. 2. Dependent's Right to Continue Coverage as a Member a. Under certain circumstances, a Dependent may be eligible to have coverage issued in his or her own right upon the occurrence of the following events: (1) the Member's death; (2) divorce or legal separation; (3) the Dependent child no longer meets the definition of Dependent due to age. b. If any one or more of the above reasons occurs, the Dependent must complete an application and it must be received in CRL's Home Office within thirty-one (31) days of the first day of the month following the qualifying event (e.g., the Dependent turns age 24, the member's death, or the date of the divorce or legal separation). c. If insurance for a Dependent who is under age sixteen (16) terminates because of the Member's death, and there is no insured spouse, the insured Dependent child may not continue coverage; however, he or she can convert his or her insurance in accordance with the Medical Conversion section of the Policy. Life Insurance Conversion 1. If the Insured Member's group term life insurance terminates due to the termination of membership in the eligible classes, the insurance may be converted to an individual policy of life insurance. Evidence of Insurability will not be required. 2. The form of the life insurance policy may be any then offered by CRL, except term insurance, at the Member's attained age and for the amount applied. At the Member's option, the amount of such policy will be equal to or less than the amount of group term life insurance under this Policy, but not less than $2,000.00. 3. The premium for such policy will be at CRL's rate then in effect for: a. the form and amount of the Policy; b. the class of risk to which the Member then belongs; and c. the Member's attained age on the effective date of the Policy. 4. If an Insured Member's group term life insurance terminates because this Policy terminates or is amended to terminate Life Insurance Benefits, the Member may convert such insurance to an individual policy of life insurance provided the Member has been insured under this group Policy for at least five (5) years. The form and prer~ium will be as in 2. and 3. above, but the amount of insurance may not exceed the lesser of: 38 a. the amount of the group term life insurance the Member had under this Policy less the amount of life insurance for which the Member is or becomes eligible for under any group policy which replaces, within thirty-one (31) days, the insurance that iust terminated under this Policy; or b. $2,000.00. 5. The individual policy of life insurance will: a. be issued only if application is made and the first premium is received by CRL within thirty-one (31) days after the date on which the Member's group term life insurance under this Policy terminates; b. take effect at the end of this thirty-one (31) day application period; and c. be issued without disability or other added benefits. 6. If benefits are paid under the Waiver of Premium Benefit of this Policy, any policy issued under this Section will be void. The individual policy must be returned to CRL for a refund of premium, and no claims under it will be paid. 7. If the Insured Member dies during the thirty-one (31) day application period, CRL will pay the maximum amount of insurance which the Member might have converted. The death claim will be paid under the group policy and not the individual policy. Any premiums paid for the individual policy will be refunded. 8. A person who is a resident of a state in which CRL does not hold a Certificate of Authority to issue insurance will not be entitled to convert. Medical Insurance Conversion The Member may be eligible to convert to an individual policy in the event that the Member s insurance terminates for any reason, including discontinuance of the group Policy in its entirety or with respect to an insured class, provided the Member has been insured under the Policy for at least three (3) consecutive months prior to the qualifying event date. Other than this notice, CRL is not under any obligation to provide additional notice to a potentially eligible Member of the terms of this section or the requirements for conversion. The Member must notify CRL of termination of insurance so that CRL can furnish the Member with complete details of the benefits available. In addition to the terms as stated above, a Member's eligibility to convert to an individual policy is subject to all of the following: 1. A person who is, or is eligible to be, covered for benefits under any other group policy or Medicare, will not be entitled to convert. 2. A person who is a resident of a state in which CRL does not hold a Certificate of Authority to issue insurance will not be entitled to convert. 3. In addition to the above, conversion under this section is also subject to all of the following: a. The provisions of the individual policy may not be the same as the provisions of the Policy and the individual policy may not provide the same level of benefits as the Policy. Upon request, CRL will furnish complete details of the benefits available. b. The individual policy may insure the following persons if they were insured under the Policy on the date their insurance terminates: (1) the Member and Dependents; (2) the spouse of a deceased Member and that spouse's Dependents; (3) Dependents of a deceased Member if the Member is not survived by a spouse; (4) a Dependent child whose insurance terminates because of age or marriage; and (5) the former spouse of a Member, upon divorce or legal separation when the ending of the marriage terminates the spouse's insurance under the Policy. Also, Dependents of such former spouse, if their insurance terminates solely because of the end of the marriage. c. A written application and the first premium must be received at the Home Office within thirty-one (31) days after the termination of insurance under the Policy, otherwise the Member will lose the rights to a conversion policy. d. The individual policy will take effect on the day after the person's group insurance terminates. e. The premium for the individual policy will be CRL's scheduled premium based on the age and sex of the applicant. 39 f. This section does not extend a person's medical insurance under the Policy beyond the date such insurance would otherwise terminate. 40 CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER I~IOTICE: The following rider amends the coverage described in your certificate booklet. The provisions being added or changed by this rider are subject to all the terms and conditions of the Policy, including, but not limited to, the General Exclusions, and Covered Charges Subject to Limitations. Please refer to your certificate booklet for more information regarding your coverage. Please attach this rider to your certificate booklet. -I'he following provision is effective June 20, 1997: Coverage will be provided for the cost of nutritional supplements (formulas) that are equivalent to a prescription drug as medically necessary for the therapeutic treatment of phenylketonuria, branched-chain ketonuria, galactosemia and homocystinuria as administered under the direction of a Doctor. Benefits will be subject to any Copayment and Coinsurance provisions of the policy but will not be subject to the Deductible. CENTRAL RESERVE LIFE INSURANCE COMPANY RIE)-0279 I (Rev. 06/02/00) CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER NOTICE: The following rider amends the coverage described in your certificate bOoklet. It applies only to Employer Units and Members located in Pennsylvania. The provisions being added or changed by this rider are subiect to all the terms and conditions of the Policy, including, but not limited to, the General Exclusions and Covered Charges Subject to Limitations. Please refer toyour certificate booklet for more information regarding your coverage. Please attach this rider to your certificate booklet. For Employer Units/Members effective on or after January 1, 1998, these changes take effect on the Employer Unit's/ Member's effective date of insurance with CRL. For Employer Units/Members effective prior to January 1,1998, these changes take effect on the Employer Unit's/Member's first renewal date, with CRL, following January 1,1998. For subsequently hired Employees and new Dependents, these changes take effect on the later of the Employer Unit's/ Member's first renewal date, with CRL, following January 1,1998, or the Insured Person's effective date of insurance with CRL. Coverage shall be provided for Inpatient care following a mastectomy for the length of stay that the Doctor determines is necessary to meet generally accepted criteria for safe discharge. Coverage shall also be provided for a home health care visit that the Doctor determines is necessary within forty-eight (48) hours after discharge, when the discharge occurs within forty-eight (48) hours following admission for mastectomy. When coverage is provided for mastectomy Surgery, coverage shall also be provided for prosthetic devices and reconstructive Surgery incident to any mastectomy. Coverage for prosthetic devices inserted during reconstructive Surgery and reconstruc- tive Surgery will be limited to such surgical procedures performed within six (6) years of the date of the mastectomy. Benefits payable are subject to any Copayment, Coinsurance or Deductible amounts in the Policy. The term "mastectomy" means the removal of all or part of the breast for Medically Necessary reasons, as determined by a licensed Doctor. The term "prosthetic devices" means the use of initial and subsequent artificial devices to replace the removed breast or portions thereof as order by a Doctor. The term "reconstructive Surgery" means a surgical procedure performed on one breast or both breasts following a mastectomy, as determined by a Doctor, to reestablish symmetry between the two breasts or alleviate functional impairment caused by the mastectomy. The term "reconstructive Surgery" sh all include, but is not limited to, augmentation mammoplasty, reduction mammoplasty and mastopexy. The term "symmetry between breasts" means approximate equality in size and shape of the nondiseased breast with the diseased breast after definitive reconstructive Surgery on the diseased or nondiseased breast has been performed. CENTRAL RESERVE LIFE INSURANCE COMPANY ~l~r~ iYo rE ~cneL¢ ~ekisr;- d e n t RID-0328 I (Rev. 06/02/00) A Subsidiary of Ceres Group, Inc. CENTRAL RESERVE LIFE INSURANCE COMPANY 17800 Royalto~ Road · Cleveland, OH 44136-5197 · 440-572-2400 www.centralreserve.com · www.ceresgroupinc.com ADMINISTRATION INSTRUCTIONS PREMIUM BILLING INSTRUCTIONS A billing will be sent to you every month before the premium due date. An administrative fee for this service is added to each billing statement and must be included in the amount submitted when paying your monthly premium. CORRECTIONS PRINT any necessary corrections on the billing statements. DELETION OF DEPENDENT COVERAGE Put a line through the dependent coverage premium and, if the date is to be other than the first day of the month for which premium is due, write the effective date of termination on the billing statement. Remit premium for single coverage. PAYMENT OF PREMIUM About two weeks before the due date (which is the first day of each calendar month) a group premium billing statement will be mailed to the Member. CRL strongly recommends that all premium payments be remitted upon receipt and before the due date. If CRL has not received the payment within two (2) weeks of the due date, a "Late Notice" will be mailed to the Member as a reminder that payment has not been received. If at the time the next premium statement is generated, premium has still not been received, a reminder message will appear on the billing statement. If payment is not received by the end of the grace period (which is thirty-one [31] days from the due date), coverage will automatically terminate as of the last date for which premium was paid. In the event coverage terminates for late payment or non-payment of premium, a courtesy letter will be sent to the Member on or about the seventh (7th) day of the month. The letter will advise the Member that coverage terminated as of the last date for which premium had been paid. The letter also will contain information about applying for possible reinstatement of coverage through the submission of medical and other information. (See "Reinstatement" Section.) ASSOCIATION DUES AND ADMINISTRATIVE CHARGES In order to be eligible to apply for coverage for the health insurance plan, you must be a member of the Association. CRL's health insurance plan is only one of the benefits available to members of the Association. Those Association members who have coverage under the health insurance plan pay their association dues on a monthly basis. This amount is added to, and appears at the bottom of, your health insurance premium billing statement. CRL forwards the membership dues to the Association each month. The administrative charge, which also appears at the bottom of your premium billing statement, is a charge required by CRL for individuals who have coverage under the Association-sponsored health insurance plan. The administrative charge helps cover the cost of administering the plan for Association health insurance, such as preparation of billing statements, rating and actuarial studies, underwriting, claims processing, and computer services. CHANGES Changes may be submitted using the Employee/Member Group Insurance Change Request, AEF-GRP15, or by indicating the change in writing. All requests must include the Member's signature and date. Please keep a copy of the request for your records. 1. Insured's name change 2. Change in Dependent status 3. Adding a dependent(s) - See Certificate Booklet. An application may be required. 4. Beneficiary change WHEN YOU NEED SERVICE Our Express Network phone system gives you a direct line to your personal Customer Service Representative. When you need service or simply want a question answered, call toll-free: Claims- 1-800-966-6023 Administrative - 1-800-253-7709 Your personal Customer Service Representative is ready to help you, backed by a team of personnel specializing in the needs of your specific region. AEF-1527 I (Rev, 06105100) WHEN YOU NEED SERVICE Our Express Network phone system gives you a direct line to your personal Customer Service Representative. When you need service or simply want a question answered, follow these two easy steps. 1. Call CRL toll free at 1-800-321-3997. 2. Listen for the message from the automatic answering device that will help direct your call to the appropriate person. It's as simple as that. Your personal Customer Service Representative is ready to help you, backed by a team of personnel specializing in the needs of your specific region. Call CRL: 1-800-321-3997 Toll Free RID-1476 Brand Name Formulary Prescription Drugs .......... Brand Name Non-Formulary Prescription Drugs .............................................. 80°,/0 of Covered Charges in excess of a $25 copayment for each prescription drug 70% of Covered Charges in excess of a $35 copayment for each prescription drug Managed Mail Prescription Program- Maintenance medications, after one (1) thirty (30) day refill, may be ordered through CRL's Managed Mail Prescription Program. Generic Prescription Drugs ................................ 100% of Covered Charges in excess of a $30 copayment for each prescription drug Brand Name Formulary Prescription Drugs .............................................. 80% of Covered Charges in excess of a $50 copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs .............................................. 70% of Covered Charges in excess of a $70 copayment for each prescription drug Maximum Benefit per Calendar Year ........................ $1,500 2. The Prescription Drug Benefit shown under the Benefit Provisions section of the certificate booklet is deleted and is replaced with the following Prescription Drug Benefit. Prescription Drug Benefit After CRL's approval of the insurance coverage, a prescription drug card/s will be issued, along with information about formulary prescriptions and participating pharmacies. This benefit works as follows: The benefit is subject to the calendar year Deductible and calendar year maximum benefit shown on the Schedule of Benefits. The maximum Deductible amount that a Member with Insured Dependents must pay for Covered Charges incurred in the same calendar year is three (3) times the Member's Deductible. a. When using a participating pharmacy: (1) The Insured Person will pay the applicable copayment and/or percentage shown on the Schedule of Benefits. The amount of the copayment and/or percentage may vary by the type of prescription being dispensed: (a) Generic Prescription Drug (b) Brand Name Formulary Prescription Drug (c) Brand Name Non-Formulary Prescription Drug (2) Insured Persons may call CRL or the prescription drug vendor to determine if a particular drug is included in CRL's formulary (list of preferred prescription drugs). (3) If the drug charge is less than the copayment and/or percentage shown, the ~nsured Person will be responsible for the full cost of the medication. I (08/24/01) CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER - ASSOCIATION (Prescription Drug) NOTICE: The following rider amends the coverage described in your certificate booklet. The provisions being added or changed by this rider are subject to all the terms and conditions of the Policy, including, but not limited to, the General Exclusions and Covered Charges Subject to Limitations-Pleaserefertoyourcertificatebookletformoreinformationregarding your coverage. Please attach this rider to your certificate booklet. These changes take effect on the Member's first renewal date with CRL on or after October 1,2001. 1. The Prescription Drug Benefit as shown on the Schedule of Benefits is deleted and is replaced with the following: Prescription Drug Benefit Calendar Year Deductible ......................................... $100 Aggregate Family Deductible .................................... Three (3) times the Individual Deductible Generic Prescription Drugs ................................ 100% of Covered Charges in excess of a $15 copayment for each prescription drug (4) The pharmacy will fill the prescription for up to a thirty (30) day supply. If the Insured Person's Doctor prescribes the medication for a period longer than thirty (30) days, it is considered a maintenance medication. Maintenance medications, after one (1) thirty (30) day refill, may be ordered through CRL's Managed Mail Prescription Program described later in this section. b. If the Insured Person forgets the prescription drug card, the Insured Person will pay the full cost of the medication at the pharmacy. In order to receive reimbursement, the Insured Person must send a claim form (available from CRL) to the prescription vendor, which will reimburse the Insured Person according to the terms of their program. c. If the Insured Person visits a non-participating pharmacy, the Insured Person will pay the full cost of the medication to the pharmacy. The Insured Person may then send the receipt for the prescription charges along with a prescription drug claim form to the prescription drug vendor. Non-participating pharmacy prescription charges are reimbursed on the same basis as participating pharmacies. d. The prescription drug card must be returned to CRL when the coverage terminates for any reason. If the card is used after its termination date, the Insured Person will be billed directly by CRL for any benefits paid after the termination date. e. Covered Charges: (1) Legend drugs. Children's prescription vitamins, to one (1) year of age and prenatal prescription vitamins for eligible maternity patients. (2) The following non-legend items on prescription only: Insulin, insulin needles and syringes, sugar test tablets and tape, including Chemstrips, Acetone tablets and Benedict's Solution or equivalent. ~3) Compounded medication of which at least one (1) ingredient is a prescription legend drug. (4) Any other drug, which, under the applicable state law, may only be dispensed under the written prescription of a Doctor or other lawful prescriber. f. Managed Mail Prescription Program: (1) Insured Pe;' '~ns who take maintenance medications may use the Managed Mail Prescription Program. Maintenance medications are those which must be taken for an extended period of time in order to treat certain cepd~t o.~s. The Managed Mail Prescription Program consists of the following steps: (a) An Insured Person's Doctor writes a prescription for up to a sixty (60) day initial supply of a maintenance medication. If the medication is needed immediately, the Doctor should issue two (2) prescriptions, one for an immediate supply to be obtained at a local pharmacy, and a second for an extended supply to be mailed to the Managed Mail Prescription Vendor. (b) The Insured Person must include the copayment and/or percentage amount through a check made payable to the Managed Mail Prescription Vendor or by furnishing their credit card number and expiration date. Insured Persons may call a toll-free number to determine the availability of generic alternatives or ask other questions. (c) The Insured Person completes the patient profile section for the first mail service order only and sends the profile along with the Managed Mail Prescription Order Form. The patient profile is a section of the Managed Mail Prescription Order Form. This form is included with the Prescription Drug Benefit participant materials which are sent to you along with your Prescription Drug Card. (d) The original prescription(s) should be submitted with the Managed Mail Prescription Order Form to the Vendor. (e) Prescriptions will be delivered either by U.S. Postal Service or UPS. Allow 10-14 days for delivery from the date the order form is mailed. (f) Refills may be ordered by calling a toll-free number. Have your prescription number and credit card available. (2) The copayment and/or percentage amount is based upon the type of drug being dispensed and is shown on the Schedule of Benefits. The Insured Person is responsible for this amount before benefits are payable under this plan. (3) A Generic Prescription Drug will be dispensed unless a Brand Name Prescription Drug is requested by the Insured Person's Doctor or if a Generic Prescription Drug is not available. g. Prescriptions for IVlental Illness: Prescriptions related to a diagnosed Mental Illness, including conditions caused by or related in any manner to, such Mental Illness are payable at 50% up to a maximum of $550 per calendar year. h. Exclusions: In addition to the Covered Charges Subject to Limitations and the General Exclusions, this Benefit will not pay for the following: (1) contraceptives, oral or other, whether medication or device, unless prescribed to treat a medical condition; (2) any drug for the Treatment of sexual dysfunction; (3) charges for the administration or injection of any drug; (4) non-legend drugs except those listed above; (5) therapeutic devices or appliances, including support garments and other nonmedical substances, regardless of intended use, except those listed above; (6) prescriptions which an eligible person is entitled to receive without charge from any Workers' Compensation Laws; (7) drugs labeled "Caution-Limited by federal law to Investigational use," or Experimental drugs, even though a charge is made to the individual; (8) immunization agents, biological sera, blood or blood plasma; (9) medication which is to be taken by or administered to an individual, in whole or in part, while he or she is a patient in a licensed Hospital, rest home, sanitarium, extended care facility, convalescent Hospital, nursing home or similar institution which operates on its premises, or allows to be operated on its premises, a facility for dispensing pharmaceuticals; (10) any prescription refilled in excess of the number specified by the Doctor, or any refill dispensed after one (1) year from the Doctor's original order; and (11) charges for more than a 34-day supply of any medication, or more than 100-unit doses, whichever is greater, unless coverage is being provided under the Managed Mail Prescription Program. i. Definitions: Generic Prescription Drug - a prescription drug that is produced by more than one (1) manufacturer. It is chemically the same as and usually costs less than the Brand Name Prescription Drug for which it is being substituted. Brand Name Prescription Drug - a prescription drug that has been patented with the brand name and is produced by the original manufacturer under that brand name. Formulary - CRL's list of preferred prescription drugs. Brand Name Formulary Prescription Drug - a Brand Name Prescription Drug that is included in CRL's list of preferred prescription drugs. Non-Formulary Prescription Drug - a Prescription Drug that is not included in CRL's list of preferred prescription drugs. 3. The following is added to the list of General Exclusions: No benefits will be paid for charges for Outpatient prescription drugs, unless the optional Prescription Drug Benefit has been elected. Refer to the Certificate of Coverage or Schedule of Benefits to determine whether or not the Prescription Drug Benefit has been elected. CENTRAL RESERVE LIFE INSURANCE COMPANY VERIFICATION Anthony T. Lucido, Esquire, of the firm of MARTSON DEARDORFF WILLIAMS & OTTO, attorneys for Ceres Group, Inc., t/d/b/a Central Reserve Life Insurance Company, in the within action, certifies that the statements made in the foregoing Preliminary Objections are true and correct to the best of his knowledge, information and belief. He understands that false statements herein are made subject to the penalties of 18 Pa. C.S. Section 4904 relating to unsworn falsification to authorities. Anthony J. Lucido CERTIFICATE OF SERVICE I, Ami J. Thumma, an authorized agent for Martson Deardorff Williams & Otto, hereby certify that a copy of the foregoing Preliminary Objections were served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: William P. Douglas, Esquire DOUGLAS, DOUGLAS & DOUGLAS 27 West High Street P.O. Box 261 Carlisle, PA 17013 MARTSON DEARDORFF WILLIAMS & OTTO By Ii, i~j. T~hu~a~ Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: January 9, 2003 DOUGLAS, DOUGLAS & DOUGLAS 27 W. HIGH ST. POB 261 CARLISLE PA 17013 TELEI~HONE 717-243-1790 WILLIAM P. DOUGLAS, ESQ. Supreme Court I.D.# 37926 Deanna Salisbury Cumberland County Pennsylvania Plaintiff vs Ceres Group, Inc. t/a/d/b/a Central iReserve Life Insurance Company No. 02- 5957 Civil Term Civil Action Law i Jury Trial Demanded Defendant! .......................................................................................... Amended Complaint NOTICE YOU HAVE BEEN SUED IN COURT. IF YOU WISH TO DEFEND AGAINST THE CLAIMS SET FORTH IN THE FOLLOWING PAGES, YOU MUST TAKE ACTION WITHIN TWENTY DAYS AFTER THIS COMPLAINT AND NOTICE ARE SERVED, BY ENTERING A WRITTEN APPEARANCE PERSONALLY OR BY ATI'ORNEY AND FILING IN WRITING WITH THE COURT YOUR DEFENSES OR OBJECTIONS TO THE CLAIMS SET FORTH AGAINST YOU. YOU ARE WARNED THAT IF YOU FAIL TO DO SO, THE CASE MAY PROCEED WITHOUT YOU AND A JUDGMENT MAY BE ENTERED AGAINST YOU BY THE COURT WITHOUT FURTHER NOTICE FOR ANY MONEY CLAIMED IN THE COMPLAINT OR FOR ANY OTHER CLAIM OR RELIEF REQUESTED BY THE pLAINTIFF. YOU MAY LOSE MONEY OR PROPERTY OR OTHER RIGHTS IMPORTANT TO YOU. YOU SHOULD TAKE THIS PAPER TO YOUR LAWYER AT ONCE. IF YOU DO NOT HAVE A LAWYER OR CANNOT AFFORD ONE, GO TO OR TELEPHONE THE OFFICE SET FORTH BELOW TO FIND OUT WHERE YOU CAN GET LEGAL HELP. Cumberland County Bar Association 2 Liberty Square Carlisle PA 17013 71%249-3166 DATE: January 15, 2003 o o o o o o Amended Complaint The plaintiff, Deanna Salisbury, is an adult individuals residing at 4029 Carlisle Road, Gardners, Cumberland County, Pennsylvania. The Defendant, Ceres Group, Inc. acting through their alter ego and subsidiary Central Reserve Life Insurance Company, is a corporation transacting business in the Commonwealth of Pennsylvania, with offices located 17800 Royalton Road, Cleveland, Ohio. On November 3, 2000, the defendant issued a policy of insurance to the plaintiffs. There policy of insurance in effect at all times relevant hereto, with Central Reserve Life Insurance Company bearing policy number AS - 000253958 - 0001. The contract provided for payment of medical expenses incurred by the insured. During the calendar year 2001 the plaintiff, Deanna Salisbury was required to receive medically necessary treatment. The defendant wrongfully refused to pay for medical services which were provided to Deanna Salisbury by her health care providers in accordance with the terms of the policy. The defendant did fraudulently, knowingly and intentionally misrepresent and deceive Deanna Salisbury and her medical providers with respect to the availability of medical benefit coverage under her policy of insurance. The defendant has frivolously and with no proper foundation for their actions refused to pay proceeds under their policy of insurance and provide medical benefits in accordance with the terms of the policy. The bad faith conduct of the defendant gives rise to a cause of action pursuant to 42 Pa. C.S.A. §8371. 10. The defendant failed to promptly and completely investigate all claims arising under the aforementioned contract of insurance. 11. The defendant did not act in good faith to effectuate prompt, fair and equitable resolution of claims, knowing that liability to pay medical bills is clear and coverage applies, and as a result, the plaintiff has been forced to incur expense to protect her interests. 12. The defendant failed to promptly provide a factually sound explanation for the basis of denial in the insurance policy in relation to the facts or applicable law for denial of the claim. 13. The defendant has willfully, maliciously and/or recklessly withheld benefits from the plaintiff, due to its failure to investigate the claim thoroughly which constitutes a breach of an implied covenant. 14. The defendant, in bad faith, has denied payment on behalf of its insured without a sound legal basis for its denial and in not fully inquiring into the possible basis which might support the insured's claim of coverage. 15. The defendants deliberately acted in conscious disregard and with indifference to the rights of their insured. 16. The defendant impliedly and/or expressly warranted that it would, in good faith, provide insurance coverage to Deanna Salisbury in accordance with the contract and abide by the terms of said contract. 17. As a result of the aforesaid, the defendant breached its contract and/or warranty, which breach resulted in loss to the plaintiff, as well as aggravation, inconvenience and emotional distress. 18. The plaintiff hereby requests all remedial relief as provided in 42 Pa. C.S.A. §8371 and payment in full of all past reasonable and necessary medical expenses. Wherefore it is prayed that judgment be entered in favor of the plaintiff and against the defendant in an amount in excess of that requiring compulsory referral to arbitration. A jury trial is hereby demanded. Respectfully ~mitt~d, William P. Douglas, E~q. Attorney for Plaintiff January 15, 2003 AFFIDAVIT I HEREBY SWEAR OR AFFIRM THAT THE FOREGOING IS TRUE AND CORRECT TO THE BEST OF MY KNOWLEDGE AND/OR INFORMATION AND BELIEF. THIS IS MADE SUBJECT TO THE PENALTIES OF 18 PA.C.S.§ 4904 RELATING TO UNSWORN FALSIFICATION TO AUTHORITIES. Date: January 15, 2003 William P. Douglas'fEsq. Attorney for Plaintiff Eagle PPO Plan For P~nnsylvania Member: JAMES A SALISBURY Account No: AS-000253958 Cert: 0001 If the coverage described in this Certificate Booklet has been amended, a rider(s) explaining the changes has been placed in the back of this booklet. Please read the rider(s) carefully. PPO66-PA (11/03/2000) ~X~ISI~ If an Insured Person obtains services from a Plan Provider that are not Covered Charges under CRL's plan, the provider will determine his or her own fees for these services, which may or may not be discounted. This Certificate Booklet explains, in general, the terms of your coverage. However, when reading this Booklet, remember that decisions regarding your medical care are between you and your Doctor. This plan is not being sold as an employment benefit plan and the Member's Employer is not responsible, either directly or indirectly, for paying the premium or benefits. This Certificate Booklet describes, in general terms, the principal features of the insurance. Nothing in this Certificate Booklet will waive or alter any of the terms or conditions of the Policy, and if any discrepancies, misprint of certificates, or change in benefits occurs, the Policy will govern. No statement made by any representatives of CRL if in conflict with this Certificate Booklet or the provisions of the Group Policy shall be binding on CRL CERTIFICATE OF COVERAGE CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) Cleveland, Ohio Certifies that JAMES A SALISBURY is insured effective 11/03/2000, subject to the terms and conditions of Group Insurance Policy A-1003 issued to: Eagle Consumer Association (Policyholder). ACCOUNT NO: AS-000253958 CERT: STATE: Pennsylvania DEDUCTIBLE - IN NETWORK: $500 OUT OF NETWORK: $1,000 OO01 DEPENDENT: DEDUCTIBLE: EFFECTIVE DATE: ALANNA $500 11/03/2000 AL EA SHA $500 11/03/2000 DEANNA $500 11/03/2000 This Certificate Booklet replaces any and all certificates or booklets describing this insurance which may have been issued previously. Steven H. Puck President VIII. H. Coordination of Benefits ........................................................................................................................................... 33 I. Precertification Requirement ............................................................................................................................... ,....35 J. What to Do About Your Claim .................................................................................................................................. 35 K. Selected Individual Case Management .................................................................................................................... 36 L. Cost Containment ...................................................................................................................................................... 36 M. Administrative Remedies .......................................................................................................................................... 36 CONTINUATION AND CONVERSION A. Continuation of Coverage ............. ; ........................................................................................................................... 38 B. Life Insurance Conversion ........................................................................................................................................ 38 C. Medical Insurance Conversion ................................................................................................................................. 39 SCHEDULE OF BENEFITS A. Life Insurance Benefit Member Amount Life Insurance ....................................................................................................................................... $50,000 Accidental Death & Dismemberment .................................................................................................... $15,000 Accidental Death on Common Carrier .................................................................................................. $50,000 Orphan's Benefit ................................................................................................................................... $10,000 Group Life Insurance, Accidental Death & Dismemberment, Common Carrier and Orphan's Benefit terminate at age sixty-five (65). B. Dependent Life Insurance Benefit Spouse .................................................................................................................................................... $2,000 Children six (6) months of age and over ................................................................................................. $1,000 Children less than six (6) months of age ................................................................................................... $ 500 The spouse's Life Insurance terminates at age sixty-five (65). C. Progressive Dental Benefit - Schedule A ......................................................................................... $3,000 D. Preventive Medical Benefit ............................................................................................................... Included E. Accident Expense Benefit ...................................................................................................................... $500 F. Prescription Drug Benefit Genedc Prescription Drugs .............................. : ........................ 100% of Covered Charges in excess of a $15 Copayment for each prescription drug Brand Name Formulary Prescription Drugs ............................... 80% of Covered Charges in excess of a $25 Copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs ..................................................................... 70% of Covered Charges in excess of a $35 Copayment for each prescription drug Managed Mail Prescription Program -- Maintenance medications, after one (1) thirty (30) day refill, may be ordered through CRL's Managed Mail Prescription Program. Generic Prescription Drugs .......................................................100% of Covered Charges in excess of a $30 Copayment for each prescription drug Brand Name Formulary Prescription Drugs ............................... 80% of Covered Charges in excess of a $50 Copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs ..................................................................... 70% of Covered Charges in excess of a $70 Copayment for each prescription drug G. Covered Offic~ Visits (Copays not available in plans with Deductibles higher than $1,000) Covered Doctor's office visits~ to an In-network Plan Provider ........................................................................................ 100% of Covered Charges in excess of $20 per visit 2 Covered injections~ provided by an In-network Plan Provider in the Doctor's office as part of the office visit ................................................................................................ 100% of Covered Charges in excess of $5 per visit 2 Covered x-ray services~ provided by an In-network Plan Provider in the Doctor's office as part of the office visit ...................................................................................... 100% of Covered Charges in excess of $10 per visit 2 Covered laboratory testing or diagnostic services~ provided by an In-network Plan Provider in the Doctor's office as part of the office visit ......................................... 100% of Covered Charges in excess of $5 per visit 2 Comprehensive Major Medical Benefit Member and Dependents Maximum Payments Major Medical Expense Benefit: Any portion of the out-of-network Deductible and Coinsurance satisfied by an Insured Person applies toward the in-network Deductible and Coinsurance. However, amounts satisfied toward the in-network Deductible and Coinsurance do not apply toward the out-of-network Deductible and Coinsurance. In-network Individual Calendar Year Deductible: ................. $500 Aggregate Family Deductible .................................................... Three (3) times the In-network individual Deductible Out-of-network Individual Calendar Year Deductible: ............................................................................... $i ,000 Aggregate Family Deductible .................................................... Three (3) times the Out-of-network individual Deductible An additional $75 deductible will be applied to all Covered Charges for each emergency room visit due to a Sickness, if the Insured Person is not immediately admitted as an Inpatient. Any amounts paid by the Insured Person as a deductible for each emergency room visit will not be applied toward the Maximum Out-of-Pocket Amount. Covered Charges for Inpatient Hospitalizations, Outpatient procedures and all other Covered Charges4 when using an In-network Plan Provider ................... 100% of In-network Covered Charges after the In-network Deductible to end of calendar year Covered Charges for Pre-certified Inpatient Hospitalizations,'~ Outpatient procedures and all other Covered Charges4 when using an Out-of-network Non-plan Provider ............................................. 80% of the first $10,000 of Out-of-network Covered Charges after the Out-of- network Deductible; 100% of remainder to end of calendar year Extended Care Facility Benefit ..................................................Maximum sixty (60) days Lifetime Maximum, for all benefits (Per Person) ......................... $5,000,000 Charges in excess of a specific dollar limit stated in the Covered Charges Subject to Limitations and General Exclusions sections cannot be used to satisfy any Coinsurance requirement or to meet the family's Maximum Out-of-Pocket limit. This benefit does not apply to Covered Charges under any other benefit provision or limitation such as spinal manipulation; occupational, speech or physical therapy; and mental nervous conditions. The office visit Co-pay applies only to the actual office visit. The Co-pay for injections, x-rays, laboratory services or diagnostic testing is in addition to the office visit Co-pay. Any other services, such as office Surgeries, processing or reading charges, are subject to the Deductible and Coinsurance. For Treatment determined to be medically Necessary and appropriate, CRL will apply a penalty equivalent to the greater of $500 or 20% of Covered Charges, up to $1,000, for each Treatment where precertiflcation is required but not obtained. The precertification penalty will be applied before the Deductible and Coinsurance and will not be credited toward the Insured Person's maximum out-of-pocket limit. Please refer to the provision entitled "Precertification Requirement." Covered Charges for annual gynecological examination and routine pap smears will be paid according to the Insured Percentages as stated above, but will not be subject to the Deductible. NOTICE 1: In the following situations, this Policy will pay for all services so that the Insured Person is not liable for a greater Out-of-Pocket amount than if the Insured Person were attended to by a Plan Provider: a. the Insured Person is referred by a Plan Provider to a Non-plan Provider; b. a Plan Provider is not available; or c. the Insured Person requires emergency health care services and cannot reasonably be attended to by a Plan Provider. NOTICE 2: The Insured Person should verify, in advance, whether a provider of health care services is a Plan Provider. To ensure the greatest savings are achieved under this health care plan which you have selected, you ~ should make every effort to use In-netwOrk Plan providers, whenever possible, I II. BENEFIT PROVISIONS A. Life Insurance Benefit Amount The Amount of Life Insurance will be paid upon the death of the Insured Member. The Amount of Life Insurance is shown on the Schedule of Benefits. 2. Payment Payment of Life Insurance Benefits will normally be made in one (1) lump sum, However, the Insured Member may choose to have the insurance benefits paid in any other way subject to approval by CRL. If the Insured Member elected a lump sum payment, the Beneficiary may elect to have the benefits paid in any other way subject to approval by CRL. 3. Exclusion No benefits will be paid for a loss resulting from intentionally self-inflicted Injury or suicide, while sane or insane, occurring within the first twenty-four (24) months of the Insured Member's coverage under this Policy. 4. Waiver of Premium a. Life Insurance Benefits will be extended without premium payment during the continuation of Total Disability from the date the Insured Member's insurance terminates due to Total Disability, for the lesser of: twelve (12) months or the number of months insured under this Policy, if prior to age sixty (60), the Insured Member: (1) becomes totally and permanently disabled while insured; and (2) has proof of the disability satisfactory to CRL submitted to CRL no later than twelve (12) months after the termination of insurance. b. All insurance under the Waiver of Premium Benefit will terminate on the earliest of: (1) the date the Insured Member is no longer Totally Disabled; (2) the date this Policy is terminated or cancelled; or (3) the end of the lesser of: (a) a twelve (12) month period; or (b) the number of months insured under this Policy, following the date the Insured Member's insurance terminated. c. The Amount of Life Insurance is subject to the termination of benefits as stated in the Schedule of Benefits. d. The Insured Member may convert such insurance to an individual policy of Life Insurance. See Life Insurance Conversion section. e. CRL, at its own expense, reserves the right to have an Insured Member examined by a CRL selected Doctor, as often as it may require. 5. Reduction Due to Conversion An Insured Member who has converted any part of the Life Insurance Benefits under this Policy because the insurance has terminated for any reason and who again becomes an Insured Member at a later date will have the Amount of Insurance reduced by the amount of the converted benefit in fome unless Evi(~ence of Insurability is submitted to CRL. Assignability An absolu[e assignment by the Insured Member of all the incidents of ownership of Life Insurance will be permitted, but only if CRL is given actual written notice of such assignment. Such assignment will be effective only' after written notice has been received by CRL's Home Office and CRL has acknowledged, in writing, receipt of the notice. Collateral assignments, by whatever name called, will not be permitted. 4 7. Limit of Amount of Life Insurance The total amount of Life Insurance Benefits will never exceed the Amount of Insurance shown on the Schedule of Benefits. In no event will payment be made under more than one (1) of the following: a. Life Insurance Benefits; b. Waiver of Premium Benefit; or c. any benefits resulting from the Conversion Section of this Policy. B. Accidental Death and Dismemberment Benefit Benefits a. Benefits will be paid if the Insured Member incurs any of the losses listed in the Table of Losses, and if the loss: (1) results from a bodily Injury due to an accident while the Member was insured; and (2) was independent of all other causes. b. For dismemberment or loss of eyesight, loss must occur within ninety (90) days of accidental bodily Injury in order for benefits to be payable. Exclusions No benefits will be paid for any loss which is a result of: a. bodily or mental infirmity or disease of any kind, whether or not the proximate or precipitating cause of death is accidental bodily Injury; b. war, declared or undeclared, or an act of war, whether or not serving in the military forces or any civilian noncombatant unit serving with the forces: c. committing an assault or felony, whether sane or insane; d. participation in a riot or insurrection; e. a fight in which the Insured Person is a voluntary participant; f. suicide or attempted suicide, or intentionally self-inflicted Injury, whether sane or insane; g. engaging in an illegal occupation; h. travel or flight in an aircraft or spacecraft, or descent from such a craft while in flight, or subsequent drowning, if the Insured Person is a pilot, officer or crew member of the craft; is giving or receiving aviation training or instruction; has duties on or relating to the craft; or is being flown for the purpose of descent from the craft while in flight; i. voluntary taking or injection of drugs, whether legal or illegal, unless prescribed or administered by a licensed Doctor;, j. the voluntary taking of any drugs, whether legal or illegal, prescribed for the Insured Person by a licensed Doctor and intentionally not taked as prescribed; k. sensitivity to drugs, whether legal or illegal, voluntarily taken unless prescribed by a Doctor; I. drug addiction, unless the addiction results from the voluntary taking of drugs, whether legal or illegal, prescribed or administered by a licensed Doctor or from the involuntary taking of drugs, whether legal or illegal; m. voluntary taking of any poison except in the case of food poisoning; n. voluntary inhaling of any kind of gas, except during the course of employment; o. chronic alcoholism; p. directly or indirectly from the voluntary taking of alcohol alone or in combination with a drug, medication or sedative when this action results in legal intoxication as defined by Pennsylvania law; or q. medical or surgical Treatment. Table of Losses In the Event of Loss of: The Amount Payable will be: Life .......... :: .......................................................................................................... Full Amount of Insurance Both Hands or Both Feet ................................................................................... Full Amount of Insurance Sight of Both Eyes ............................................................................................. Full Amount of Insurance One Hand and One Foot ................................................................................... Full Amount of Insurance One Foot and Sight of One Eye ........................................................................ Full Amount of Insurance One Hand and Sight of One Eye ...................................................................... Full Amount of Insurance One Hand ...................................................................................... One-Half the Full Amount of Insurance One Foot .............................................................. : ........................ One-Half the Full Amount of Insurance Sight of One Eye ........................................................................... One-Half the Full Amount of Insurance With respect to hands or feet, "loss" means permanent severance at or above the wrist or ankle joint. With respect to eyesight, "loss" means the entire and permanent loss of sight. NOTE: In any event, the Full Amount of Insurance will be paid only once for any one (1).accident, no matter how many of the above-listed losses occur as the result of that accident. The Full Amount of Insurance is shown on the Schedule of Benefits. C. Common Carrier Benefit CRL will pay the Common Carrier Benefit only if the Accidental Death and Dismemberment Benefit is paid. The Benefit is payable for loss of life due to an Injury sustained while the Insured Member is a fare-paying passenger on a public conveyance that: a. is run by a common carrier regulated by the government; b. transports passengers for hire; and c. is not a chartered or other privately arranged conveyance. The Common Carrier Benefit will terminate on the same date as the Group Life Insurance and Accidental Death and Dismemberment Benefit. D. Orphan's Benefit The Orphan's Benefit will be paid to the Insured Member's estate provided that: a. the amount of Accidental Death and Dismemberment insurance is paid; b. the legal spouse of the Insured Member dies, independent of all other causes, due to accidental bodily Injury arising from the same accident which results in the death of the Insured Member; c. the death of the spouse occurs within forty-eight (48) hours of the death of the Insured Member; d. one (1) or more children survive the Insured Member; and e. the child or children are natural or legally adopted children of the Insured Member and are less than twenty-one (21) years of age on the date of the Insured Member's death. 2. This death benefit is in addition to any other benefits payable under this Policy. E. Dependent Life Insurance Benefit The Amount of Insurance will be paid to the Insured Member upon the death of the Insured Dependent. The benefits will be paid in a lump sum. Each Dependent will be eligible on the later of: a. the date the Insured Member becomes eligible; or b. the date the person becomes a Dependent. No Dependent will be eligible unless insured as a Dependent under the CRL group health policy. No Dependent will be eligible as a Dependent of more than one (1) Member or as both a Member and a Dependent. No Dependent insurance will become effective for a Dependent before the Member's insurance is effective. Insurance for a Dependent confined in a Hospital will not become effective until the day after the-final discharge from the Hospital. This provision will not apply to a newborn Hospital-confined on his or her effective date. o A Dependent's insurance will terminate on the earliest of: a. the date the Policy terminates; b. the last date to which premium has been paid; c. the last day of the month during which the person ceases to be eligible; or d. the date the Insured Member's insurance terminates. If a Dependent is the spouse of an Insured Member and the group term life insurance terminates for reasons other than the termination of the Policy, the Dependent-spouse may convert such insurance to an individual policy of life insurance. Evidence of Insurability will not be required. The form of the life policy may be any then offered by CRL, except term insurance, at the spouse's then attained age and for the amount applied. The amount payable under such policy will be the same amount of group term life insurance payable under this Policy. The premium for such policy will be at CRL's rate then in effect for the.' a. form and amount of the Policy; b. class of risk to which the spouse then belongs; and c. spouse's age on the effective date of the Policy. The individual policy of life insurance will only be isSued if application is made and the first premium is received by CRL's Home Office within thirty-one (31) days after the date on which the spouse's group term life insurance under this Policy terminates. The individual policy will become effective at the end of this thirty-one (31) day application period. If the spouse dies during the thirty-one (31) day application period, CRL will pay the maximum amount of insurance which the spouse might have converted. The death claim will be paid under the group policy and not the individual policy. Any premiums paid for the individual policy will be refunded. The total amount of Dependent Life Insurance Benefits paid will never exceed the Amount of Insurance shown on the Schedule of Benefits. In no event will payment be made under more than one (1) of the following: a. Dependent Life Insurance Benefits; or b. any benefits resulting from the Conversion Section of this Policy. Progressive Dental Benefit - Schedule A 1. The Plan provides a Progressive Dental Benefit for the Insured Person. The total amount paid for each Insured Person for services performed in any one (1) Benefit Year will not be more than the Maximum Payment as shown below. A percentage of the benefit contained in the Schedule of Dental Procedures will be paid, based upon the number of Benefit Years in which the Insured Person has been insured by CRL. 2. A Benefit Year is a period of twelve (12) consecutive months beginning with the Insured Person's effective date of insurance under the Policy. Maximum Payment 1st Benefit Year ............................................................................................... 20% of Scheduled Amount 2nd Benefit Year ............................................................................................. 40% of Scheduled Amount 3rd Benefit Year .............................................................................................. 60% of Scheduled Amount 4th Benefit Year .............................................................................................. 80% of Scheduled Amount 5th Benefit Year ............................................................................................ 100% of Scheduled Amount 3. The charges are incurred on the date the service is performed. 4. Exclusions In addition to the General Exclusions and Covered Charges Subject to Limitations, no Dental Benefits will be paid for: a. any dental procedure not begun and completed while insured for Dental Benefits. However, CRL will allow an extension of sixty (60) days following the date of termination for completion of a particular Dental Procedure, as outlined in the Schedule of Dental Procedures, which was begun while the Insured Person is insured for Dental Benefits; b. replacement of any lost or stolen dental appliance; c. dental appointments which are not kept; d. charges for fixed bridgework, dentures and crowns, except that 50% of the scheduled amount will be paid beginning with the Insured Person's fifth (5th) consecutive Benefit Year for: (1) replacement of fixed bridgework, dentures or crowns after at least five (5) years of its last placement. (2) fixed bridgework or dentures replacing a tooth removed while the Insured Person is insured for Dental Benefits, but not replacing a support tooth for a fixed bridgework or denture installed within the last five (5) years.* e. any prosthesis until insured under this plan for five (5) consecutive Benefit Years;* f. Orthodontia Treatment; g. any appliance to be used as a spare; h. implants; i. periodontal scaling or any type of prophylaxis procedure in excess of two (2) such Treatments during any Benefit Year;, j. adjustment of appliances within six (6) months of placement; k. examination of the oral cavity in excess of two (2) exams during any Benefit Year; I. complete series of x-rays in excess of one (1) complete series during any two (2) year period; m. bitewing x-rays in excess of four (4) such x-rays during any Benefit Year; n. charges covered under any other benefit of the Policy; o. any type of periodontic procedure which is not specifically included in the schedule; p. any charges for Hospital, Hospital Facility, or Outpatient Facility; or q. any procedure not listed in the Schedule of Dental Procedures. $3,000 Schedule of Dental Procedures (Partial listing only) Clinical Oral Examinations 00110 Initial .oral examination ........................................................................... : .................................... $21.00 00120 Periodic oral examination ............................................................................................................ $21.00 00130 Emergency oral examination ....................................................................................................... $21.00 Radiographs 00210 Complete series .................................................................................... . ...................................... $54.00 00220 Periapical (first film) ....................................................................................................................... $9.00 00272 Bitewings (two films) ................................................................................................................... $16,00 00330 Panoramic film .......................................................................... : .................................................. $24.00 Preventative 01110 Adults - prophylaxis ..................................................................................................................... $27.00 01120 Children - prophylaxis ................................................................................................................. $27.00 PeHodontics 04110 Periodontic examination .................... i ................................................................................ Not Payable 04340 Periodontal scaling (entire mouth) ........................................................................... Pay as prophylaxis Extractions (including local anesthesia and routine post- operative care) 07110 Single tooth ................................................................................................................................. $36;00 *This exclusion does not apply when an InsUred Person loses a tooth due to a Sickness which occurs while the coverage is in force. The entire Schedule of Dental Procedures is contained in the Policy. The above is only a partial listing of the procedures contained in the Schedule of Dental Procedures and is included here fOr purposes of example. The Insured Member may call the Customer Service Representative for additional information. G. Preventive Medical Benefit The plan provides a Preventive Medical Benefit for medical services that are not for the care, Treatment or diagnosis of an Illness. The total amount paid for each Insured Person for services received in any one (1) Benefit Year will not be more than the lesser of the Maximum Payment or the actual fee charged. 2. A Benefit Year is a period of twelve (12) consecutive months beginning with the Insured Person's effective date of insurance under the Policy. 3. Covered Procedure Scheduled Benefits Physical Exam and Associated Tests ......................................................................................... $100~ Routine Physical Exams Pediatric Exams *Includes the total of any and all services in this category. 4. Exclusions In addition to the General Exclusions and Covered Charges Subject to Limitations, no benefits will be paid for.' a. any procedure not listed in the Covered ProcedUres section; b. vitamin injections; or c. routine eye exams. H. Child Immunization Benefit Coverage will be provided for those child immunizations, including the immunizing agents, which, as determined by the Department of Health, conform with the standards of the (Advisory Committee on Immunization Practices of the Center for Disease Control) U.S. Department of Health and Human Services. Benefits will be exempt from deductibles or dollar limits. I. Accident Expense Benefit 1. Benefits will be paid for Covered Charges as a result of an accidental bodily Injury which occurs while the person is insured under this Policy. 2. This benefit will cover the following: a. Doctor; b. Hospital; c. diagnostic x-ray or lab tests; and d. Registered Nurse (R.N.) or Licensed Practical Nurse (LP.N.). 3. Charges must be incurred within ninety (90) days of the date of the Injury. The total amount of benefits paid will be the amount charged, but not more than the Maximum Payment shown on the Schedule of Benefits. 4. Exclusions See General Exclusions and Covered Charges Subject to Limitations. NOTE: Denta~'Expenses are not covered under this Benefit. Prescription Drug Benefit After CRL's approval of the insurance coverage, a prescription drug card/s will be issued, along with information about formulary prescriptions and participating pharmacies. This benefit works as follows: 1. When using a participating pharmacy: a. The Insured Person will pay the applicable CoPayment and/or percentage shown on the Schedule of Benefits. The amount of the Copayment and/or percentage may vary by the type of prescription being dispensed: Generic Prescription Drug Brand Name Formulary Prescription Drug Brand Name Non-Formulary Prescription Drug b. Insured Persons may call CRL or the prescription drug vendor to determine if a particular drug is included in CRL's formulary (list of preferred prescription drugs). c. If the drug charge is less than the Copayment and/or pementage shown, the Insured Person will be responsible for the full cost of the medication. d. The pharmacy will fill the prescription for up to a thirty (30) day supply. If the Insured Person's Doctor prescribes the medication for a period longer than thirty (30) days, it is considered a maintenance medication. Maintenance medications, after one (1) thirty (30) day refill, must be ordered through CRL's Managed Mail Prescription Program described later in this section. 2. If the Insured Person forgets the prescription drug card, the Insured Person will pay the full cost of the medication at the pharmacy. In order to receive reimbursement, the Insured Person must send a claim form (available from CRL) to the prescription vendor, which will reimburse the Insured Person according to the terms of their program. 3. If the Insured Person visits a non-participating pharmacy, the Insured Person will pay the full cost of the medication to the pharmacy. The Insured Person may then send the receipt for the prescription charges along with a prescription drug claim form to the prescription drug vendor. Non-participating pharmacy prescription charges are reimbursed on the same basis as participating pharmacies. 4. The prescription drug card must be returned to CRL when the coverage terminates for any reason. If the card is used after its termination date, the Insured Person will be billed directly by CRL for any benefits paid after the termination date. 5. Covered Charges: a. Legend drugs. Children's prescription vitamins, to one (1) year of age and prenatal prescription vitamins for eligible maternity patients. b. The following non-legend items on prescription only: Insulin, insulin needles and syringes, sugar test tablets and tape, including Chemstrips, Acetone tablets and Benedict's Solution or equivalent. c. Compounded medication of which at least one (1) ingredient is a prescription legend drug. d. Any other drug, which, under the applicable state law, may only be dispensed under the wdtten prescription of a Doctor or other lawful prescriber. 6. Managed Mail Prescription Program: a. Insured Persons who take maintenance medications may use the Managed Mail Prescription Program. Maintenance medications are those which must be taken for an extended pedod of time in order to treat certain conditions. The Managed Mail Prescription Program consists of the following steps: (1) An Insured Person's Doctor writes a prescription for up to a sixty (60) day supply, with up to three (3) refills of a maintenance medication. If the medication is needed immediately, the Doctor should issue two (2) prescriptions, one for an immediate supply to be obtained at a local pharmacy, and a second for an extended supply to be mailed to the Managed Mail Prescription Vendor. (2) The Insured Person must include the Copayment and/or percentage amount through a check made payable to the Managed Mail Prescription Vendor or by fumishing their credit card number and expiration date. Insured Persons may call a toll-free number to determine the availability of genedc alternatives or ask other questions. (3) The Insured Person completes the patient profile section for the first mail service order only and sends the profile along with the Managed Mail Prescription Order Form. (4) The original prescription(s) should be submitted with the Managed Mail Prescription Order Form to the Vendor. 10 (5) Prescriptions will be delivered either by U.S. Postal Service or UPS. Allow 10-14 days for delivery from the date the order form is mailed. (6) Refills may be ordered by calling a toll-free number. Have your prescription number and credit card available. b. The Copayment and/or pementage amount is based upon the type of drug being dispensed and is shown on the Schedule of Benefits. The Insured Person is responsible for this amount before benefits are payable under this plan. c. A Genedc Prescription Drug will be dispensed unless a Brand Name Prescription. Drug is requested by the Insured Person's Doctor or if a Generic Prescription Drug is not available. Prescriptions for Mental Illness: Prescriptions related to a diagnosed Mental Illness, including conditions caused by or related in any manner to such Mental Illness, are payable at 50%, up to a maximum of $550 per calendar year. Exclusions: In addition to the Covered Charges Subject to Limitations and the General Exclusions, this Benefit will not pay for the following: a. contraceptives, oral or other, whether medication or device, unless prescribed to treat a medical condition; b. any drug for the Treatment of sexual dysfunction; c. charges for the administration or injection of any drug; d. non-legend drugs except those listed above; e. therapeutic devices or appliances, including support garments and other nonmedical substances, regardless of intended use, except those listed above; f. prescriptions which an eligible person is entitled to receive without charge from any Workers' Compensation Laws; g. drugs labeled "Caution-Limited by federal law to Investigational use," or Experimental drugs, even though a charge is made to the individual; h. immunization agents, biological sera, blood or blood plasma; i. medication which is to be taken by or administered to an individual, in whole or in part, while he or she is a patient in a licensed Hospital, rest home, sanitarium, extended care facility, convalescent Hospital, nursing home or similar institution which operates on its premises, or allows to be operated on its premises, a facility for dispensing pharmaceuticals; j. any prescription refilled in excess of the number specified by the Doctor, or any refill dispensed after one (1) year from the Doctor's original order; and k. charges for more than a 34-day supply of any medication, or more than 100-unit doses, whichever is greater, unless coverage is being provided under the Managed Mail Prescription Program o Definitions: Generic Prescription Drug -- a prescription drug that is produced by more than one (1) manufacturer. It is chemically the same as and usually costs less than the Brand Name Prescription Drug for which it is being substituted. Brand Name Prescription Drug -- a prescription drug that has been patented with the brand name and is produced by the original manufacturer under that brand name. Formulary -- CRL's list of preferred prescription drugs. Brand Name Formulary Prescription Drug -- a Brand Name Prescription Drug that is included in CRL's list of preferred prescription drugs. Non-Formulary Prescription Drug -- a Prescription Drug that is not included in CRL's list of preferred I;zrescription drugs. K. Major Medical Expense Benefit 1. Benefits will be paid if an Insured Person has Covered Charges during the calendar year which exceed the Deductible amount shown on the Certificate of Coverage. 11 2. Determination of Benefits Benefits will be determined by multiplying the Insured Pementage times the amount of Covered Charges which exceed: a. the Deductible; and b. any amount payable under any other benefit provision of Policy. 3. Calendar Year Deductible The Insured Person's calendar year Deductible(s) are shown on the Certificate of Coverage. 4. Aggregate Family Deductible There will be a maximum amount that the Insured Member with Insured Dependents must pay for Covered Charges incurred in the same calendar year and applied to individual Deductibles. The excess over the aggregate amount, as shown in the Schedule of Benefits, will be subject to the Insured Percentage. 5. Maximum Out-of-Pocket Limit The maximum amount that the Insured Member with Insured Dependents will pay for covered medical expenses incurred in a calendar year is the total of three (3) individual Deductible amounts and three (3) individual Coinsurance amounts. 6. Common Accident If two (2) or more Insured Persons insured under the same certificate incur Covered Charges due to Injuries in the same accident, then only one (1) Deductible will be applied to all eligible charges incurred as a result of such accident during the calendar year the accident occurred and the next following calendar year. Emergency Room Deductible Each time the Insured Person visits an emergency room of a Hospital, a Hospital affiliated emergency room or a free-standing facility for Treatment of a Sickness, an emergency room deductible of $75 will be applied. This Deductible will be waived if the Insured Person is admitted directly from the emergency room into a Hospital as an Inpatient. This Deductible is in addition to the Calendar Year Deductible and will not be applied to the Maximum Out-of-Pocket Amount. K1. Covered Charges 1. Room and Board for confinement in a Hospital, including intensive care. (Private room only covered up to average semi-private Room and Board rate.) 2. Medical services and supplies furnished by a Hospital. 3. Medical services and supplies furnished by an Outpatient department of a Hospital, a free-standing surgical facility or an Urgent Care facility. 4. Anesthetics and their administration. 5. Medical services given by a Doctor. 6. Services of a Registered Nurse (R.N.) or Licensed Practical Nurse (LP.N.) for private duty nursing services or Certified Registered Nurse Anesthetists. 7. X-ray exams, lab tests and other diagnostic services. 8. X-ray and radiation therapy, cobalt and chemotherapy Treatment. 9. Local transportation to or from a Hospital by a professional ground or air ambulance service. However, air ambulance is only covered if due to a life-threatening Illness. 10. Services of a Physiotherapist under the direct supervision of a Doctor. 12 11. All costs associated with a mammogram every year for women forty (40) years of age or older and with any mammogram based on a Doctor's recommendation for women under forty (40) years of age. 12. Subject to all the terms and conditions of Policy, benefits will be paid for Covered Charges for the Insured Person relating to human tissue/organ transplants that are not Experimental/Investigational provided that pdor, written authorization from CRL's Case Management has been obtained before the pre-testing, evaluation and donor seamh. If such pdor, wdtten authorization has not been obtained, no benefits will be paid for any expenses relating to a human tissue/organ transplant(s). Subject to all the terms and conditions of Policy, medical expenses of a live donor will be considered Covered Charges of the Insured Person provided benefits remain and are available under Policy after the Insured Person's Covered Charges have been paid. If the live donor's expenses would be covered by: a. a group or individual insurance policy; b. any non-insurance arrangement, such as a charitable foundation, whether pdvate or public; or c. any arrangement or coverage for individuals or individuals in a group (whether on an insured or uninsured basis), including, but not limited to, any prepayment coverage, per capita, or HMO; then benefits under Policy for Covered Charges of the live donor will be limited to the Covered Charges not covered by such other coverage. All live donor expenses must receive pdor, written authorization by CRL's Case Management in order to be considered eligible for payment under Policy as Covered Charges. 13. Breast reconstruction as follows: Any covered person who is receiving benefits through CRL in connection with a mastectomy, performed on a person who has been diagnosed with breast cancer and who elects breast reconstruction, will have coverage provided in a manner determined in consultation with the attending physician and the patient, for: a. Reconstruction of the breast on which the mastectomy has been performed; b. Surgery and reconstruction of the other breast to produce a symmetrical appearance; c. Prostheses and Treatment of physical complications at all stages of mastectomy, including lymphedemas. Coverage will be subject to the Calendar Year Deductible, Coinsurance and any copayments applicable. 14. Medical supplies as follows: a. blood, plasma and derivatives; b. initial replacement of natural limbs and eyes when loss occurs while insured under the Policy; c. initial permanent lens immediately following cataract Surgery, except that replacements will not be covered; d. casts, splints, trusses, braces and crutches; e. purchase or rental of Hospital-type equipment for kidney dialysis (the total purchase pdce to be eligible will be on a monthly pre-rata basis during the first twenty-four (24) months of ownership; no benefits are paid for an Insured Person on or after the day such person is entitled to benefits under Medicare); f. purchase or rental (whichever costs less, as determined by CRL) of durable medical equipment for temporary use, not to exceed a six-month period; and g. oxygen. NOTE: See General Exclusions and Covered Charges Subject to Limitations. K2. Extended Care Facility Benefit 1. Benefits will be paid when the Insured Person incurs Room and Board and Miscellaneous Charges in an Extended Care Facility following a Hospital confinement. Benefits will not be paid for more than 'the semi-private room and board rate up to sixty (60) days during any one (1) disability period. 13 Covered Charges are those which are Necessary, Reasonable and Customary and which meet all of the following requirements: a. the preceding Hospital confinement lasted continuously for at least three (3) days; b. the Extended Care Facility admission begins within fourteen (14) days after discharge from the Hospital; c. the confinement, certified by the attending Doctor, is medically Necessary for the care of an Insured Person who is Totally Disabled and who otherwise would have been confined as a bed patient in a Hospital; and d. the Insured Person is under the direct care of a Doctor. Exclusions In addition to the General Exclusions and Covered Charges Subject to Umitations, no Extended Care Facility benefit will be paid for: a. the excess for Room and Board Charges above the Hospital semi-private rate which would have been paid in lieu of the Extended Care Facility; or b. service for Custodial Care. K3. Lifetime Maximum Payments for all medical expense benefits under the Policy will never be more than the Lifetime Maximum Benefit, as stated in the Schedule of Benefits, for all of an Insured Person's Illnesses; Regardless of the number of times that an individual may be covered under any of CRL's plans, there is only one Lifetime Maximum Benefit. 2. No benefits will be paid for charges incurred after the insurance terminates, except as may be provided under an Extended Benefits provision, if included in the plan. K4. Alcohol and Drug_ Abuse and Dependency Benefit 1. Benefits will be paid for the following types of Treatment for Alcohol and Drug Abuse and dependency: a. Inpatient Detoxification; b. Non-Hospital residential care; and c. Outpatient Care. The first course of Treatment during an Insured Person's lifetime, will be paid on the same basis as for any other Illness. The second and all subsequent courses of Treatment during the Insured Person's lifetime will be subject to the Deductible and will be paid at 50%. A course of Treatment is considered to be the full range of Detoxification, Treatment and supportive services carried out specifically to alleviate the dysfunction of the Insured Person. 2. Benefits will be payable as follows for each type of Treatment: a. Inpatient Detoxification (1) Benefits are payable for the following services: (a) Lodging and dietary services; (b) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff; (c) Diagnostic X-ray; (d) Psychiatric, psychological and medical laboratory testing; and (e) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities; (a) Hospital; (b) Psychiatric Hospital; (c) Freestanding Treatment facility; and (d) Health care facility. (3) Benefits are subject to a lifetime limit of four (4) admissions for each covered person. Each admission is limited to seven (7) days. b. Non-Hospital Residential Care (1) Benefits are payable for the following services: 14 .. (a) Lodging and dietary services; (b) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff; (c) Rehabilitative therapy and counseling; (d) Family counseling and intervention; (e) Psychiatric, psychological and medical laboratory testing; and (f) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities: (a) Freestanding Treatment facility; and (b) Health care facility. (3) To qualify to have benefits paid, a Doctor or psychologist must certify the Insured Person as a person suffedng from Alcohol or other Drug Abuse or dependency and must have referred the Insured Person for the appropriate Treatment. (4) Benefits may be limited to a minimum of thirty (30) days per year, subject to a lifetime limit of ninety (90) days. These Non-Hospital Residential Care days may not be exchanged for Outpatient Care days. Outpatient Care (1) Benefits are payable for the following services: (a) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff; (b) Rehabilitative therapy and counseling; (c) Family counseling and intervention; (d) Psychiatric, psychological and medical laboratory testing; and (e) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities: (a) Freestanding Treatment facility; (b) Psychiatric Hospital; and (c) Health care facility. (3) To qualify to have benefits paid, a Doctor or psychologist must certify the Insured Person as a person suffering from Alcohol or other Drug Abuse or dependency and must have referred the Insured Person for the appropriate Treatment. (4) Benefits may be limited to a minimum of thirty (30) Outpatient, full-session visits, or the equivalent of partial visits, per year subject to a lifetime limit of 120 full-session visits or the equivalent of partial visits. These Outpatient Care days may not be exchanged for Non-Hospital Residential Care days. In addition to the above benefits for Inpatient Detoxification, Non-Hospital Residential Care and Outpatient Care, benefits will be available for a minimum of thirty (30) separate sessions of Outpatient or Partial Hospitalization Services which may be exchanged on a two-to-one basis for fifteen (15) additional days of Non-Hospital Residential Care. No benefits are payable for charges for Treatment of alcoholism, including conditions caused by or resulting from alcoholism and drug abuse and dependency, except as described in this Benefit. K5. 24-Hour Coverage Benefits will be paid for Covered Charges incurred by an Insured Person due to an Illness arising out of, or in the course of, the Insured Person's self-employment for wage or profit, but only if the Insured Person is otherwise exempt from coverage under the state workers' compensation statute or other similar laws. L. Centers of Excellence Program An Insured Person requiring an organ/tissue transplant that is a Covered Charge under the Policy, may elect to request participation in Central Reserve Life Insurance Company's (CRL's) Centers of Excellenc~ Program (COE). As a condition of being considered for COE, an Insured Person must agree, in writing, to use COE Providers for all Covered Charges related to an organ/tissue transplant. A COE Provider is a health care professional or facility that has or is governed by an agreement with a provider network selected by CRL to provide certain health care services to Insured Persons. 15 If an Insured Person elects to participate in COE, and is approved by the COE Coordinator for entry into COE, allowable charges are subject to the in-network Deductible and Coinsurance. The lifetime maximum benefit payable under COE is $5,000,000 (COE Lifetime Maximum Benefit), which amount is included in the $5,000,000 Lifetime Maximum Benefit available under the Policy. Any Covered Charges paid for organ/tissue transplant-related expenses shall be cumulative for purposes of determining any maximum benefits under the Policy. TRAVEL AND LIVING EXPENSES: Any benefits payable under this travel and living expense provision shall be subject to CRL's approval prior to reimbursement. a. Up to $10,000 is included as Covered Charges within the COE Maximum Lifetime Benefit, which will be available to pay the reasonable travel and living expenses incurred by: (1) a live donor, if applicable; and (2) the Insured Person and one companion, or, if the Insured Person is a Dependent child, two parents. b. Round-trip transportation to the COE Provider, including round-trip coach airfare, train, or other commercial carder. Reimbursement for travel by private auto shall be based on the IRS allowance per mile for medical travel. c. The cost of meals and hotel accommodations for the Insured Person and donor if Treatment in an Outpatient setting is required. d. The cost of meals and hotel accommodations for one companion or two parents while accompanying the Insured Person dudng Hospitalization and Outpatient care. PREAUTHORIZATION AND ENROLLMENT: In order to be considered by CRL as a possible candidate for acceptance into COE, as soon as any organ/tissue transplant services are indicated, the Insured Person or his/her Doctor, shall contact CRL's COE Coordinator at 1-800-321-3997, extension 6255, to request preauthodzation and enrollment in COE. The decision whether an Insured Person shall be allowed to enroll in COE shall be made in the discretion of the COE Coordinator. If an Insured Person is denied a transplant procedure by the COE Provider, the Insured Person shall be offered the opportunity to utilize a second COE Provider for an evaluation. If the second COE Provider, for any reason, determines that the Insured Person is not an acceptable candidate for the proposed organ/tissue transplant procedure, no further coverage under COE shall be provided for services and supplies that are related in any manner to the proposed organ/tissue transplant procedure. 16 II1. COVERED CHARGES SUBJECT TO LIMITATIONS Subject to the General Exclusions and all other Policy provisions, the following medical expense benefits are payable subject to the stated limitations: Treatment of a diagnosed Mental Illness including conditions caused by, or related in any manner to, such Mental Illness for: a. Inpatient Hospital charges. b. Doctor charges for psychiatric services up to $20 per visit. c. Drugs or medicines. Allowable expenses are subject to the Deductible but are not included in the calculation of the Maximum Out-of-Pocket Limit. Benefits are paid at 50% to a maximum per calendar year of $2,000 for Inpatient expenses and $550 for Outpatient expenses. Spinal manipulation, including, but not limited to, manipulation for spinal subluxation and any associated Treatment or services, up to a maximum Covered Charge of $15 per day of Treatment, subject to the following maximum benefits payable: a. $300 per calendar year for all Treatment or services. The maximum benefit payable for the Insured Member and Insured Dependents combined is $600 per calendar year. b. $75 per calendar year for all x-rays. The maximum benefit payable for the Insured Member and Insured Dependents combined is $150 per calendar year. 3. Sterilization up to a lifetime maximum benefit of $350. 4. Allergy testing and allergy injections, including, but not limited to, injectable antigens, and extracts, up to a maximum of $500 per calendar year. The maximum benefit payable for the Insured Member and Dependents combined is $1000 per calendar year. 5. Surgery of the foot as provided in the Foot Surgery Schedule. Foot Surgery Schedule (Partial Listing Only) Incision 28010 Tenotomy, Subcutaneous, Toe Single ...................................................................................... $250.00 28011 Multiple ...................................................................................................................................... $400.00 Excision 28110 Ostectomy, Partial Excision, Fifth Metatarsal Head (Bunionette) ............................................ $700.00 Tenotomy, Open, Extensor, Foot or Toe 28285 Hammertoe Operation, One Toe .............................................................................................. $595.00 28290 Correction of Hallux Valgus (Bunion) ....................................................................................... $900.00 28292 Keller Bunionectomy .............................................................................................................. $1,210.00 When multiple procedures are performed, CRL allows 100% of the schedule benefit for the principle, or first procedure, and progressively less for the other multiple procedures. The entire Foot Surgery Schedule is contained in the Policy. The above is only a partial listing of the procedures contained in the Foot Surgery Schedule and is included here for purposes of example. The Insured Member may call the Customer Service Representative for additional information. No benefits are payable for foot care due to: a. Treatment of weak, strained or flat foot or' instability or imbalance of the foot. b. Treatment of corns, calluses or the free edge of toenails, except when necessitated for peripheral vascular disease or other Illnesses of similar medical seriousness. c. Charges in excess of the amounts provided in the Foot Surgery Schedule. 17 Hospice care and services, whether on an Inpatient or Outpatient basis, that are provided by a Hospice Care Program, or other Hospice care provider approved by CRL Care and services must be provided within six (6) months from the date the Insured Person entered or re-entered (after a period of remission) the Hospice Care Program or CRt_ approved Hospice care provider (Hospice Benefit). The Hospice Benefit is subject to the following requirements and limitations: a. The attending Doctor must certify that the Insured Person has a terminal Illness and a life expectancy of six (6) months or less. b. CRL will determine the eligibility for, and will administer the Hospice Benefit. c. All Covered Charges for the Hospice Benefit must be billed by the Hospice Care Program, or the approved Hospice care provider, and will be subject to all of the terms of the Policy, including any applicable Deductibles and Coinsurance. In addition to Covered Charges otherwise payable under other provisions of the Policy, the Hospice Benefit will be paid up to the following limitations: (1) $100 per day for Outpatient Hospice care up to a lifetime maximum of $3500. (2) $200 per day for room and board and care while an Inpatient in a Hospice up to a lifetime maximum of $10,000. 7. Occupational, speech and physical therapy and related diagnostic testing, up to a maximum Covered Charge of $50 per visit with a maximum of 25 visits per calendar year for each type of therapy, provided the occupational and speech therapy is ordered by a Doctor as Necessary and the therapy is directly related to and begins within six (6) months following Surgery or Illness. The above services must be performed by a licensed occupational, speech or physical therapist and be under the supervision of a Doctor. Covered Charges do not include Treatment of a learning disability, speech impediment, or developmental delay even though therapy is recommended due to organic dysfunction, including, but not limited to, congenital deformity or birth trauma. (See General Exclusions.) 8. Cosmetic Surgery/Treatment, but only if required to restore a part of the body which has been altered as a result of the following events or conditions that occurred while the Insured Person was insured by the Policy and for which benefits were eligible for payment in accordance with the terms of the Policy: a. Medically diagnosed congenital defects and birth abnormalities; b. Accidental bodily Injury; c. Surgery; or d. Disease that was first diagnosed while the Insured Person was insured by the Policy. 9. For repair of Injury to sound natural teeth, (including their replacement) as a result of an accidental bodily Injury which occurs while the person is insured. Treatment must be given within ninety (90) days of the date of the accident. -18 IV. GENERAL EXCLUSIONS No benefits will be paid for charges: For transportation, except local transportation to or from a Hospital by a professional ground or air ambulance service. However, air ambulance is only covered if due to a life-threatening Illness. For fertility or infertility studies, diagnostic testing, advice, consultation, examination, medication, or for any Treatment related to or connected in any way with the restoration or enhancement of fertility or the inability to conceive or conception by artificial means, including, but not limited to, in-vitro fertilization or embryo transfer. However, when the infertility was caused by a covered Sickness or Injury, the Treatment for that Sickness or Injury will be covered. 3. For donation of any body organ by an Insured Person. 4. For services performed by a person who ordinarily resides in the Insured Person's home or is a Close Relative of the Insured Person. 5. For any Cosmetic Surgery/Treatment, unless required to restore a part of the body which has been altered as a result of the following events or conditions that occurred while the Insured Person was insured by the Policy and for which benefits were eligible for payment in accordance with the terms of the Policy: a. Medically diagnosed congenital defects and birth abnormalities; b. Accidental bodily Injury; c. Surgery; or d. Disease that was first diagnosed while the Insured Person was insured by the Policy. 6. For any Illness that is subject to and paid or payable under any state or federal workers' compensation law or other similar statute or occupational disease law. If the Insured Person is denied benefits under any such law but an award is made at a later date, CRL shall have the right to recover the cost of any claims paid. However, coverage is provided to the Insured Person for Covered Charges incurred by the Insured Person due to an Illness arising out of or in the course of employment for wage or profit if the Insured Person is: a. Self-employed; and b. exempt from under any state or federal workers' compensation statutes or other similar laws. 7. For Treatment or services Experimental or Investigational in nature. o 10. For eye refractions, eye glasses, or contact lens, including fittings and examinations, or eye Surgery, when the primary purpose is to correct myopia (nearsightedness), hyperopia (farsightedness) or astigmatism (blurring), including, but not limited to radial keratotomy. For Treatment, services or supplies furnished by a department or agency of the United States Government. This exclusion will not apply to a non-service connected Illness of a veteran of the United States armed fomes who does not have a service connected Illness. This exclusion will not apply to emergency Treatment provided in the case of a life-threatening medical condition. For services and supplies eligible for payment by a governmental or charitable program, except as required by law. 11. For hearing aids, including fittings and examinations. 12. For which the 'Insured Person is not legally obliged to pay. 13. For Treatment or services which are not generally accepted medical practices in the United States for a given Illness. 19 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. For Treatment of obesity, morbid obesity or for weight reduction purposes, unless the Sickness or Injury is life-threatening. For illness that results from participation in a felony or to which a contributory cause was the Insured' Person's being engaged in an illegal occupation. For routine physical or premarital examination except as may be covered under the Preventive Medical Benefit. Due to a Preexisting Illness. Benefits will be paid for charges incurred after the end of a period of twelve (12) consecutive months while insured under the plan. For sex changes. For Treatment of controlled (as defined by the Federal Food and Drug Administration)or prohibited substance abuse, except as provided for in the Alcohol and Drug Abuse and Dependency Benefit. Resulting from any suicide, attempted suicide or intentionally self-inflicted Injury or Sickness while sane or insane. For examination, Treatment or Surgery of the teeth, gums or direct supporting structure except: a. As may be provided under a Progressive Dental Benefit; or b. For repair of Injury to sound natural teeth, (including their replacement) as a result of an accidental bodily Injury which occurs while the person is insured. Treatment must begin within ninety (90) days of the date of the accident. For an Illness caused by any act of war, whether or not declared. For Surrogate Pregnancy. Services and supplies that are covered under an extension of group health benefits provision by a previous employer-related health plan, health insurance plan or other coverage arrangement. Such services and supplies will not be covered by this Policy until the extension of benefits under the prior plan ends. For Illness that results either directly or indirectly from the InsUred Person's participation in a hazardous activity, which shall be defined as skydiving, hang-gliding, parachuting, piloting experimental or ultra-light aircraft or riding in a hot-air balloon. For Illness resulting either directly or indirectly from the Insured Person's Intoxication or being under the influence of alcohol, drUgs, controlled substances, or any other substance capable of mental or physical impairment, unless it has been administered or prescribed on the advice of a Doctor. Intoxication means a concentration of 0.15% or more by weight of alcohol in the blood or urine. This exclusion shall apply even if no traffic or criminal charges are filed or pursued. For Illness that results either directly or indirectly from the Insured Person's committing or attempting to commit or participation in a felony. For pregnancy, except Covered Complications of Pregnancy. For Outpatient prescription drugs, unless the optional prescription drug benefit has been elected. Refer to Schedule of Benefits. 2O ¥. DEFINITIONS The following are defined terms and are capitalized whenever they appear in the Certificate Booklet or Policy. 1. BENEFICIARY: The person(s) designated by the Insured Person and to whom Life Insurance Benefits will be paid. 2. CERTIFICATION OF CREDITABLE COVERAGE: A written certification of: a. the period of Creditable Coverage of the individual under a health insurance plan and the coverage (if any) under a COBRA continuation provision; and b. the waiting pedod (if any) (and affiliation period, if applicable) imposed with respect to the individual for any coverage under such plan. 3. CLOSE RELATIVE: The Insured Person, the Insured Person's spouse, a child, brother, sister or parent of the Insured Person or of the Insured Person's spouse. 4. COINSURANCE: The percentage of the Covered Charges the Insured Person must pay which is the difference between 100% and the Insured Percentage stated in the Schedule of Benefits. COPAYMENT/CO-PAY: If required by the terms of the group health plan, copayment or co-pay refers to the payment that an Insured Person must make to the health care provider each time a particular Treatment or service is provided. COSMETIC SURGERY/TREATMENT: Any Treatment, opera- tive, or non-operative procedure or any portion of an operative procedure performed primarily to improve physical appearance and/or to treat a mental condition through change in bodily form. 7. COVERED CHARGES: The Reasonable and Customary charges for expenses which are Necessary to the Care and Treatment of and Illness and which are eligible for payment under the Policy. An expense is incurred at the time the service or supply, is actually provided. However, the professional fee for a vaginal delivery or a Caesarean section delivery, including prenatal and postnatal care, will be deemed to have been incurred at the time of delivery. Covered Charges do not include: charges applied to a Deductible or Coinsurance amount under any benefit of the Policy; or charges for expenses incurred after the insurance terminates, except as may be provided under an extended benefits provision. 8. COVERED COMPLICATIONS OF PREGNANCY: a. Conditions requiring medical Treatment prior or subsequent to the termination of pregnancy whose diagnoses are distinct from pregnancy but which are adversely affected by pregnancy or caused by pregnancy, such as acute nephritis, nephrosis, cardiac decompensation, missed abortion, disease of the vascular, hemopoieatic, nervous, or endocrine systems, and similar medical and surgical conditions of comparable severity; but will not include false labor, occasional spotting, Doctor prescribed rest during the period of pregnancy, morning sickness and similar conditions associated with the management of a difficult pregnancy not constituting a classifiably distinct complication of pregnancy; and b. Involuntary Caesarean section, miscarriage, hyperemesis gravidarum and pre-eclampsia requiring Hospital confinement, ectopic pregnancy which is terminated, and spontaneous termination of pregnancy which occurs during a period of gestation in which a viable birth is not possible. c. Conditions requiring medical Treatment after the termination of pregnancy whose diagnoses are distinct from pregnancy but which are adversely affected by pregnancy or caused by pregnancy. 9. CREDITABLE COVERAGE: Coverage under, any of the following, provided there was not a sixty-three (63) day break-in coverage during which time period the individual was covered: (A waiting period shall not be treated as a break in coverage.) a. A Group Health Plan; b. Health insurance coverage; c. Part A or Part B of Title XVIII of the Social Security Act (Medicare); 21 d. Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under Section 1928 (the program for distribution of pediatric vaccines); e. Chapter 55, Title 10, United States Code (CHAMPUS); f. A medical care program of the Indian Health Service or of a tribal organization; g. A State health benefits risk pool; h. A health plan offered under Chapter 89 of title 5, United States Code (the Federal Employees Health Benefits Program); i. A public health plan; or j. A health benefit plan under Section 5(e) of the Peace Corps Act [22 U.S.C. Section 2504(e)]. (Not all insurance will be Creditable Coverage. It depends on state and/or federal law. For example, coverage for a specified disease or illness, such as cancer, is not considered Creditable Coverage.) 10. CUSTODIAL CARE: Services and supplies, regardless of who recommends them or where they are provided, that an Insured Person receives mainly to assist in daily living activities. 11. DEDUCTIBLE: The amount of Covered Charges that the Insured Person must pay each calendar year before the Policy pays major medical benefits. 12. DEPENDENT: a. A Member's spouse under the age of sixty-five (65) (if not legally separated from the Member). b. Any person desginated to be a Dependent by a court order as per Act 114 of 1992 (providing for Medical Support of Children). c. A Member's unmarried child (including a stepchild, legally adopted child or a child Placed for Adoption) until the date the child attains age nineteen (19). The term Dependent will also include a Member's unmarried child age nineteen (19) or over, who is: (1) Incapable of earning a living due to mental retardation or physical handicap. CRL must be furnished proof of incapacity within thirty-one (31) days of the date insurance would have terminated due to age. CRL may require proof of continued incapacity each year after the first two-year pedod that insurance has been extended; (2) Chiefly dependent on the Member for financial support; and (3) Insured on the date immediately preceding the day the insurance would have terminated due to age. d. An eligible Member's unmarried child nineteen (19) but under twenty-three (23) years of age enrolled as a full-time student in an accredited school and supported by the Member. 13. DOCTOR: Any provider of medical care and Treatment when such care or Treatment is within the scope of the provider's licensed authority and is provided pursuant to applicable laws. This term includes medical doctors, osteopaths, chiropractors, podiatrists, dentists, psychologists, optometrists, physical therapists, nurse practitioners and nurse midwives. 14. EVIDENCE OF INSURABILITY:, Satisfactory proof, as determined by CRL, that a person is acceptable for insurance. 15. EXPERIMENTAL/INVESTIGATIONAL: A Treatment is Experimental or Investigational if CRL determines that: a. the Treatment is a drug or device that cannot be lawfully marketed without approval of the FDA and that approval for marketing has not been given at the time the drug or device is furnished. (Any other approval granted by the FDA as an interim step, e.g. an Investigational Device Exemption, is not sufficient); or b. the Treatment or the patient informed consent document utilized with the Treatment was reviewed and approved by the treating facility's Institutional Review Board or other body serving a similar function, or if federal law requires such review and approval; or c. Reliable Ev~ence shows that the Treatment is the subject of any on-going Phase I or Phase II Clinical Trial; is the research, experimental, study or investigational arm of any on-going Phase III Clinical Trial; or is otherwise under study to determine its maximum tolerated dose, its toxicity, its safety, its efficacy or its efficacy as compared with a standard means of treatment or diagnosis or with no therapy; or 22 d. the relative effectiveness of the Treatment compared to standard therapy or to no therapy has not been proven to be as good as, or better, by completed randomized Phase III Clinical Tdals; or e. Reliable Evidence shows that the prevailing opinion among experts regarding the Treatment is that further studies or clinical trials are necessary to determine its maximum tolerated dose, toxicity, safety, efficacy or its efficacy as compared with a standard means of treatment or diagnosis or with no therapy. Phase I Clinical Trial shall mean a study to determine the relationship between toxicity and dose-schedule of treatment. Phase II Clinical Trial shall mean a study to determine whether the procedure produces a biological response, and, if so, the frequency, degree and duration of the response. Phase III Clinical Trial shall mean a study to determine the relative effectiveness of the treatment compared to standard therapy or to no therapy. Reliable Evidence shall mean only published reports and articles in accepted medical and scientific literature; the written protocol(s) used by the treating facility or another facility studying substantially the same Treatment; or the wdtten informed consent used by the treating facility or by another facility studying substantially the same Treatment. 16. EXTENDED CARE FACILITY: A facility, operating under the laws of the state where it is located, that has as its primary purpose the provision of lodging and skilled nursing care, twenty-four (24) hours a day, for persons recovering from an Illness. The facility must also: a. Be supervised on a full-time basis by a Doctor or Registered Nurse (R.N.); b. Keep clinical records on all patients; c. Have the services of a Doctor available at all times under an established agrement; and d. Except incidentally, not be a place for rest, the aged, drug addicts, alcoholics, or the mentally ill. 17. GROUP HEALTH PLAN: An employee welfare benefit plan as defined under ERISA and as further defined under the Health Insurance Portability and Accountability Act of 1996 (an employer-sponsored health insurance plan). 18. HOME OFFICE: Central Reserve Life Insurance Company, 17800 Royalton Road, Cleveland, Ohio 44136-5197. 19. HOSPICE: Care of the terminally ill. The goals of Hospice are to reduce or abate the mental and physical distress of the terminally ill and to meet the special stresses of terminal illness, dying and bereavement. 20. HOSPICE CARE PROGRAM: A formal program directed by a Doctor to help care for a terminally ill person. The services may be provided through a centrally-administered, medically- directed and nurse-coordinated program. The program will provide pfimadly home care services twenty-four (24) hours a day, seven (7) days a week. Hospice may also be provided through confinement in a Hospice Facility that operates as part of the program for short periods of stay in a home-like setting for direct care or respite. The program team must include a Doctor and a Registered Nurse (R.N.) and may also include a home health aid, licensed social worker, clinical psychologist, or a physical therapist. 21. HOSPICE FACILITY: A facility that: a. Provides primarily Inpatient care to terminally ill patients; b. Is operated under the laws of the jurisdiction where it is located; c. Is supervised by a Doctor with at least one Doctor on call twenty-four (24) hours a day; d. Provides twenty-four (24) hour a day nursing services under the direction of a Registered Nurse (R.N.) and has a full-time administrator; and e. Provides an ongoing quality assurance program. 22. HOSPITAL: A facility that: a. Is operated as a Hospital under the laws of the state where it is located; b. Is open at all times; c. Is operated mainly to diagnose and treat Illnesses on an Inpatient basis; d. Is any birthing facility used by a licensed certified midwife; 23 23. 24. 25. 26. 27. 28. 29. 30. e. Has twenty-four (24) hour nursing services by or under the supervision of an R.N.; f. Is not mainly a skilled nursing facility, clinic, nursing home, rest home, convalescence home or like place; and g. Is accredited as a Hospital under the Hospital Accreditation Program of the Joint Commission on Accreditation of Healthcare Organizations. HOSPITAL MISCELLANEOUS EXPENSE: Charges made by a Hospital for other than Room and Board, except professional, surgical, medical, dental or special nursing fees. ILLNESS: Sickness or Injury. INJURY: An accidental bodily Injury sustained by the Insured Person which is the direct and independent cause of the loss and which occurs while the insurance is in force. Subject to all other terms of the Policy, Injury does not include Injuries for which benefits are payable under any workers' compensation, employer's liability or similar law. INPATIENT: A person who is admitted, lodged, fed and receives services and Treatment in a Hospital, Extended Care Facility or Hospice Facility on an Inpatient basis as opposed to services and Treatment provided on an Outpatient basis. INSURED DEPENDENT: A Dependent of a Member who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. INSURED MEMBER: A Member who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. INSURED PERSON: A Member or Dependent, who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. INTOXICATED: The condition of an Insured Person being legally intoxicated as defined by Pennsylvania law. 31. MEDICARE: Benefits provided by Title XVIII of the Federal Social Security Act, as amended. 32. MEMBER: A person while a dues-paying Member in good standing with the Policyholder who is at least sixteen (16) years of age. 33. MENTAL ILLNESS: a. A neurosis, psychoneurosis, psychopathy or psychosis and includes all mental, nervous or emotional disorders without demonstrable organic origin. b. Any other Illness whose diagnosis is classified in the Mental DisOrders section of the most recent edition of the International Classification of Diseases. 34. NECESSARY TO THE CARE OR TREATMENT OF ILLNESS (NECESSARY): Services or supplies provided by a Doctor, Hospital, Extended Care Facility, Hospice or other health care provider which CRL determines are: a. Appropriate to diagnose or treat the Insured Person's condition, Illness or Injury; b. Consistent with standards of good medical practice in the United States; c. Medically Necessary and not primarily for the personal comfort, social well-being or convenience of the Insured Person, the family or the provider; d. Not a part of or associated with the scholastic education or vocational training of the Insured Person; e. Not Experimental or Investigational in nature; or f. In the case of Inpatient care, services or supplies that cannot be provided safely on an Outpatient basis. The fact that a health care provider has prescribed, recommended, or approved a service or supply does not, in and of itself, make it medically Necessary. A Plan Provider shall not assert any claim against CRL or the Insured Persons for covered services denied by the Preferred Provider Network due to lack of medical Necessity. 24 35. NON-PLAN PROVIDER: Any Doctor, Hospital or other health care provider not contracting with a preferred provider network with which CRL has contracted. 36. OUTPATIENT: Refers to certain services and Treatment provided to a person on an Outpatient basis by a Hospital, Extended Care Facility, Hospice or other Outpatient Facility, as opposed to services and Treatment provided to a person who is an Inpatient. 37. OUTPATIENT FACILITY: An Outpatient department of a Hospital, an ambulatory surgical facility or an Urgent Care Center that is operated in accordance with the laws of the state where it is located and it must: a. Be operated mainly to diagnose and treat Illnesses on an Outpatient basis and have organized facilities for Surgery; b. Have a staff of one (1) or more Doctors on the premises at all times during the facility's regularly scheduled hours of service; c. Have nursing services by or under the supervision of a Registered Nurse (R.N.) or Licensed Practical Nurse (L.P.N.); and d. Not be primarily a skilled nursing facility, clinic, doctor's office, nursing home, rest home, convalescence home or other similar place. 38. PERIOD OF CONFINEMENT: A continuous period of time when a person is an Inpatient in a Hospital. 39. PHYSICIAN: See Doctor. 40. PLACED FOR ADOPTION: The term "placement', or being 'placed' for adoption, in connection With any placement for adoption of a child with any person, means the assumption and retention by such person of a legal obligation for total or partial support of such child in anticipation of adoption of such child. The child's placement with such person terminates upon the termination of such legal obligation. 41. PLAN PROVIDER: Any Doctor, Hospital or other health care provider contracting with a preferred provider network with which CRL has contracted. 42. PREEXISTING ILLNESS: ^ disease or physical condition caused by Illness or Injury for which medical advice or Treatment has been received within ninety (90) days immediately prior to becoming covered under the Policy. Such Illness shall be covered after the Insured Person has been covered for more than twelve (12) months under the Policy. 43. PREFERRED PROVIDER ORGANIZATION (PPO): An organization that has contracted with Doctors, Hospitals, or other health care providers who have agreed to provide health care services at negotiated rates. CRL contracts with the PPO to create a network plan. 44. REASONABLE AND CUSTOMARY CHARGES: Unless otherwise indicated, the Policy pays benefits for Covered Charges that CRL determines are Reasonable and Customary. The Reasonable and Customary Charge for any Treatment, service or supply is the usual charge made by the provider in the absence of insurance. The usual charge may not be more than the general level of charges for an Illness or Injury of comparable sevedty and nature made by other providers within the geographic area in which the service or supply is provided. When multiple procedures are performed, CRL allows 100% of Reasonable and Customary for the principal procedure and progressively less for the other procedures. 45. ROOM AND BOARD CHARGES: Charges made by a Hospital or Extended Care Facility for the room, meals, and routine nursing services for those persons confined as Inpatients. 46. SICKNESS: Sickness or disease of an Insured Person which is diagnosed or treated after the effective date of insurarzce and while insurance is in force. Subject to all other terms of the Policy, Sickness does not include Sickness or disease for which benefits are provided under any workers' compensation, occupational disease, employer's liability or similar law. 47, SURGERY: a. Incision, excision, cryotherapy, electrocautery, lithotripsy, or laser Treatment, of a body organ or part; 25 48. 49. 50. b. Reduction of a fracture or dislocation by manipulation; c. Sutudng of a wound, but not the removal of sutures; or d. Removal of a stone or foreign object by endoscopy. SURROGATE PREGNANCY: The pregnancy of a woman who is bearing a child for another individual that resulted from conception by natural or artificial means, including, but not limited to, conception by in-vitro fertilization or embryo transfer. TOTAL DISABILITY, OR TOTALLY DISABLED: If the terms of coverage require that total disability be defined, the following will apply: An Insured Person will be deemed to have a Total Disability when, as a direct result of an Illness or Injury, the Insured Person is unable to perform the essential activities of a person of like age and sex who is in good health. TREATMENT: Any and all forms of care, including, but not limited to, medical care or surgical care; advice; consultation; equipment; devices; diagnosis; cure, mitigation or prevention of disease; drugs (prescribed or non-prescribed); examination; observation; services; supplies; or testing. The following definitions will apply with respect to the Alcohol and Drug Abuse and Dependency Benefit: 5o o 7° ALCOHOL OR DRUG ABUSE: Any use of alcohol or other drags which produces a pattern of pathological use causing impairment in social or occupational functioning or which produces physiological dependency evidenced by physical tolerance or withdrawal. For the purposes of this act, drugs shall be defined as addictive drugs and drugs of abuse listed as scheduled drugs in the act of April 14, 1972 (P.L. 233, No. 64), known as The Controlled Substance, Drug, Device and Cosmetic Act. DETOXIFICATION: The process whereby an alcohol- intoxicated or drug-intoxicated or alcohol-dependent or drug-dependent person is assisted, in a facility licensed by the Department of Health, through the period of time necessary to eliminate, by metabolic or other means, the intoxicating alcohol or other drugs, alcohol and other drug dependency factors or alcohol in combination with drugs as determined by a licensed Doctor, while keeping the physiological risk to the patient at a minimum. HOSPITAL: A facility licensed as a Hospital by the Department of Health, the Department of Public Welfare, or operated by the Commonwealth and conducting an alcoholism or drug addiction Treatment program licensed by the Department of Health. INPATIENT CARE: The provision of medical, nursing, counseling or therapeutic services twenty-foUr (24) hours a day in a Hospital or Non-Hospital Facility, according to individualized Treatment plans. NON-HOSPITAL FACILITY: A facility, licensed by the Department of Health, for the care or Treatment of alcohol-dependent or other drug-dependent persons, except for transitional living facilities. NON-HOSPITAL RESIDENTIAL CARE: The provisions of medical, nursing, counseling or therapeutic services to patients suffering from alcohol or other drug abuse or dependency in a residential environment, according to individualized Treatment plans. OUTPATIENT CARE: The provision of medical, nursing, counseling or therapeutic services in a Hospital or Non- Hospital Facility on a regular and predetermined schedule, according to individualized Treatment plans. PARTIAL HOSPITALIZATION: The provision of medical, nursing, counseling or therapeutic services on a planned and regularly scheduled basis in a Hospital or Non-Hospital Facility licensed as an alcoholism Treatment program by the Department of Health, designed for a patient or client who would benefit from more intensive-services than are offered in Outpatient Treatment but who does not require Inpatient care. 26 ¥1. POLICY PROVISIONS A. Eligibility Active, dues paying Members in good standing of the Policyholder, between the ages of sixteen (16) and sixty-four and a half (64-1/2), are eligible to apply for coverage. However, any Member who is eligible for coverage under a similar, non-contributory, employer-sponsored major medical plan, is not eligible for coverage under the Policy. No individual will be eligible as a Dependent of more than one (1) Member or be eligible as both a Member and Dependent. Any Dependent who is eligible for coverage under a similar, non-contribUtory, employer-sponsored major medical plan is not eligible for coverage under the Policy. Foster children may be eligible for coverage under this plan, but only if the Insured Person is legally responsible for paying for the medical expenses of such foster child. If the foster child is eligible for coverage under this plan, then the rules for "Adding Dependent Coverage", as stated below, will apply to that foster child. Dual Coverage No person may be insured at the same time as a Member under more than one (1) certificate under the Policy. C. Effective Date of Insurance A Member who has been approved in writing by the Home Office and is Totally Disabled on the date the Member's coverage would otherwise take effect, will not become effective until the second consecutive day the Member is not Totally Disabled. D. Adding Dependent Coverage 1. The effective date of coverage for each eligible Dependent will be determined as follows: a. Newborns and adopted children will be covered for Injury or Sickness, including the Necessary Care and Treatment of medically diagnosed congenital defects, birth abnormalities, pmmaturity and routine nursery care from the moment of birth or date of placement in the adoptive home. Notice of the birth of a newborn child or adoption of a child must be furnished to CRL within thirty-one (31) days after the date of birth or the date of placement in the adoptive home in order to have coverage continue beyond such thirty-one (31) day period. The additional premium charge, including a pm rata charge for the initial thirty-one (31) day period, for the newbem or adopted child, if any, will be added to the Member's next premium statement and must be paid with that premium when due. If a written request is not received within thirty-one (31) days after the newbom's date of birth or the date of placement of an adopted child, the Member must complete an application and, if approved by CRL, CRL will determine the effective date of the newborn or adopted child's coverage. Newborn coverage will apply to a newborn child of an Insured Dependent. b. other Dependents-- (1) Automatically covered if the Group Insurance Change Request is received by the Home Office prior to the eligibility date (date of marriage or adoption). The effective date will be the eligibility date. (2) Coverage will be effective the first day of the month following receipt of the completed form if the Group Insurance Change Request is received within: (a) thirty-one (31) days after the eligibility date; or (b) sixty (60) days after the the eligibility date for Dependents insured pursuant to Act 114 of 1992 (providing for Medical Support of Children). (3) The Member must complete an application if CRL is not notified within: (a) thirty-one (31) days after the eligibility date; or 27 Eo (b) sixty (60) days after the eligibility date for Dependents insured pursuant to Act 114 of 1992 (providing for Medical Support of Children). Each Dependent will be considered independently and, if approved by CRL, CRL will determine the effective date of coverage. 2. No Dependent coverage will become effective for a Dependent before the Member's coverage is effective. Payment of Premium All required premiums due are to be paid on or before the due date. Each premium payment must be received at the Home Office to be considered paid. F. Grace Period A Grace Period of thirty-one (31) days will be provided for the payment of each premium falling due after the flint premium. If the premium due has been paid pdor to the expiration of the Grace Pedod, the coverage will be deemed to have continued in fome during the Grace Period. If any premium due, after payment of the first premium, is not paid before the end of Grace Period, the insurance coverage will automatically terminate at the end of the Grace Pedod. No notice of termination is required. G. Legal Rights Due to Fraud or Misrepresentation In addition to any other legal rights that CRL may have, CRL reserves the right to cancel the coverage of an Insured Person under the Policy in the event of fraud or matedal misrepresentation by the Insured Person, or his or her representative. In the absence of fraud, all statements made by the Insured Person will be deemed representations and not warranties. No such statement will be used to deny a claim or reduce benefits unless it is stated in the written Application. H. Policy/Premium Changes The Policyholder may request in writing a change in the Policy at any time without the consent of the Insured Person or beneficiaries or any other interested party. Any such change is subject to CRL's approval and requires the signature of the Policyholder and an officer of CRL in order to be effective. Any such change and the notice required will be provided in accordance with the Policy provisions. CRL may increase or otherwise adjust the premium rates of the Policy by class in accordance with its experience on any premium due date after the Policy has been in effect for twelve (12) mOnths with thirty (30) days advance written notice to the Member. If a Preferred Provider Organization is used in conjunction with the Policy, the list of Plan Providers is subject to change (modifications, deletions or additions) without advance notice to the Insured Person. If the agreement between CRL and the Preferred Provider Organization is terminated for any reason, CRL will offer the Member a substitute plan of its choice. Renewal of Insured Person's Insurance CRL will renew or continue in force coverage at the option of the Member, except as follows: 1. Nonpayment of premiums. The Member has failed to pay premiums in accordance with the terms of the Policy, or CRL has not received timely premium payments. 2. Fraud. Th~ Insured Person has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the Policy. 3. Loss of eligibility. 28 a. The Member has failed to maintain his/her membership in the association. Upon termination of the association membership, the former Member may continue this insurance by notifying CRL and applying for the continuation of coverage. b. The Dependent ceases to meet the definition of a Dependent. c. The Member has moved to a state in which CRL does not hold a Certificate of Authority to issue insurance or does not actively market health insurance because CRL has discontinued all types of plans within that state. 4. Termination of Coverage. CRL is ceasing to offer coverage in accordance with the Policy Provision entitled "Modifications or Discontinuance of Coverage" or the Policy terminates in its entirety. Movement outside of service area. If the Member has elected a network plan (e.g., preferred provider organization - PPO), and no longer lives, resides or works in the service area, but only if such coverage is terminated uniformly without regard to any health status-related factor of covered individuals. o The Member may elect not to renew coverage by providing wdtten notice to CRL. The earliest date that the coverage will be terminated is on the last day of the month during which CRL's Home Office receives written notice. J. Modifications or Discontinuance of Coverage Uniform Modification of Coverage. At the time of coverage renewal, CRL may modify the health insurance coverage for a product offered to an individual in the individual market, provided such modification is consistent with state law and effective on a uniform basis among all individuals with that product. Discontinuance of Coverage. a. Discontinuance of a Particular Type of Coverage. If CRI_ decides to discontinue offering a particular type of health insurance coverage offered in the individual market, all coverage of this type will be discontinued uniformly by CRL by providing: (1) notice to each Insured Person at least ninety (90) days prior to the date of the discontinuation of this type of coverage; and (2) an offer to each Member of the option to purchase any other individual health insurance coverage currently being offered by CRL for individuals in such market. b. Discontinuance of All Coverage. (1) If CRL elects to discontinue offering all health insurance coverage in the individual market in a state, health insurance coverage may be discontinued by CRL if: (a) CRL provides notice to the applicable state authority and to each Insured Person covered under such coverage at least one-hundred eighty (180) days prior to the date of the discontinuation of such coverage; and (b) such coverage is not renewed. (2) If CRL discontinues all coverage in the individual market, CRL may not issue any health insurance coverage in the individual market and state involved during the five (5) year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed. K. Issuance of Certifications of Creditable Coverage Each Insured Person, at the time of termination of Creditable Coverage, is entitled to receive information which provides the period of Creditable Coverage under the plan. Within twenty-four (24) months of termination, if the Insured Person requires a copy of this Certification, the carrier should be contact, ed. 2. CRL will provide Certification of Creditable Coverage only for the period of time during which the Insured Person was covered by CRL. 29 Lo CRL will cooperate with the Member, Dependent, another carrier, or any other individual or organization who performs services in connection with the insurance relationship, if requested. CRL will accept and/or provide information regarding Creditable Coverage to another carder through means other than a written certification (e.g., by telephone). Misstatement of Age If the age of any Insured Person has been misstated, the premiums may be adjusted. If the amount of insurance would be affected by such misstatement, it will be changed to the amount the Insured Person would have had at the correct age, and the premium will be based on the corrected age and amount. Beneficiary An Insured Member may name anyone as a Beneficiary exCept the Member. More than one (1) Beneficiary may be named. Benefits will be paid to the living Beneficiaries. If two (2) or more Beneficiaries are named and one (1) dies before the Insured Member dies, the benefit will be paid to the living Beneficiary or Beneficiaries. If there is no Beneficiary named, benefits will be paid to the estate. If the named Beneficiaries are deceased at the time the Insured Member dies, the benefit will be paid to the Insured Member's spouse, if living. If the spouse is deceased, the benefit will be paid to the Insured Member's parents equally or to the survivor. If neither survive, the benefit will be paid to the Insured Member's estate. An Insured Member may'change the Beneficiary. Any change requires satisfactory written notice to CRL. After CRL records the change, it is effective from the date the Insured Member signed the notice. The Insured Member must be living at the time CRL records the change in order for it to be effective. CRL will not be responsible for any payment made or other action taken before the change is recorded. 4-, If the Beneficiary is a minor or someone otherwise legally incapable of receiving and handling the payment, CRL may make payment to the person who appears to CRL to be caring for or supporting the Beneficiary unless a claim has been made by a legally appointed guardian prior to CRL's payment. 30 ~/11. CLAIM PROVISIONS A. Notice of Loss/Claim o Written notice of Loss or claim must be given to CRL within twenty (20) days after the date of any covered Loss. If notice is not given within twenty (20) days, a claim will not be denied or reduced if notice was given as soon as was reasonably possible. After CRL receives notice of claim, the forms for filing proof of claim will be furnished to the Insured Person within fifteen (15) days. If CRL fails to provide the necessary forms within the stated time, the Insured Person will be deemed to have met the proof of Loss requirements if written proof of Loss is submitted within the time requirements as stated in the Proof of Loss section below. B. Proof of Loss Written proof of loss must be given to CRL no later than ninety (90) days after the date of the loss. All proofs of loss must be received by CRL at its Home Office. If written proof of loss is not given within ninety (90) days, the claim will not be denied or reduced if that proof was given as soon as reasonably possible. In no event, except in the case of documented legal incapacity, Will proof of loss be accepted beyond one (1) year from the end of the written notice period. Proof as required in this section and the foregoing section means evidence of loss satisfactory to CRL. The receipt, acknowledgement or investigation of a claim will not waive CRL's rights to defend against any claim. Co Examination CRL, at its own expense, will have the right to require an Insured Person be examined by a Doctor of CRL's choice, as often as it may reasonably require. In the event of death of the Insured Person, CRL will have the right to require an autopsy, unless otherwise prohibited by law. D. Payment of Claim 1. Indemnities payable under this Policy for any loss, other than loss for which this Policy provides any periodic payment, will be paid immediately upon receipt of due written proof of such loss. When the Insured Person uses the services of a Plan Provider who is a member of the Preferred Provider Network, all benefits will be paid to the Plan Provider. When the Insured Person uses the services of providers who are not members of the Preferred Provider Network, all benefits will be paid to the Insured Member, unless medical benefits have been assigned to the provider of serivce. CRL is not responsible for the validity of any assignment. 3. A Plan Provider shall not assert any claim against CRL or the Insured Persons for covered services denied by the Preferred Provider Network due to the lack of medical Necessity. If CRL determines that the Insured Member is not legally able to receive such payment, CRL may, at its option, pay the benefits to the health care providers or the Insured Member's estate or to the closest living relative, as known to CRL. If benefits are payable to the Insured Member's estate or a beneficiary who cannot execute a valid release, {~RL may pay benefits up to $1,000 to someone related to the Insured Member or the beneficiary by blood or marriage whom CRL considers to be entitled to the benefits. CRL will be .discharged from any liability to the extent of any such payment made in good faith. 31 CRL reserves the right to allocate any Deductible amount to any Covered Charges and to apportion the benefits to the Insured Person and to any assignees. Such actions will be binding on the Insured Person and assignees. CRL will make reasonably diligent effods to recover benefit payments made erroneously but in good faith and may apply subsequent benefits otherwise payable to offset any overpayment. CRL also reserves the dght to recover any overpayment by, but not limited to, any of the following methods: a. adjustment to Coinsurance and Deductible; or b. demand of immediate return of the overpayment from the Insured Person or responsible party. Workers' Compensation The Policy is not a workers' compensation policy. The Policy does not satisfy any governmental requirements for coverage by worker's compensation insurance. F. Time Limits No action at law or equity shall be brought to recover on the Policy prior to the expiration of sixty (60) days after proof of loss has been fumished in accordance with the requirements of the Policy and full compliance with the Policy's appeals procedure. No action at law or equity shall be brought unless brought within three (3) years from the expiration of the time within which proof of loss is requited by the terms of the Policy. G. SubrogatiOn Any Treatment that would otherwise be Covered Charges under the terms of this plan that give dse to a claim by an Insured Person against a third party or against any person or entity as the result of the actions of a third party are excluded from coverage under this plan. This plan also does not provide benefits to the extent that there is other coverage under non-group medical payments including auto or medical expense type coverage to the extent of that coverage. However, this plan will provide benefits, otherwise payable under this plan, to or on behalf of the Insured Person only on the following terms and conditions: In the event that benefits are provided under this plan, CRL shall be subrogated to all of the Insured Person's rights of recovery for medical expense benefits against any person or organization to the extent of the benefits provided. The Insured Person shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The Insured Person shall do nothing after loss to prejudice such rights. The Insured Person hereby agrees to cooperate with CRL and/or any representatives of CRL in completing such forms and in giving such information surrounding any accident or event as CRL or its representatives deem necessary to fully investigate the matter. CRL is also granted a right of reimbursement from the proceeds of any recovery for medical expense benefit whether by settlement, judgment or otherwise. This dght of reimbursement is cumulative with and not exclusive of the subrogation right granted above, but only to the extent of the benefits provided by the terms of this plan. CRL, by payment of any benefits under the terms of this plan, is hereby granted a lien on the proceeds of any settlement, judgment or other payment received by the Insured Person. The Insured Person hereby consents to this lien and agrees to take whatever steps are necessary to assist CRL to secUre the lien. CRL, by payment of any benefits under the terms of this plan, is hereby granted an assignment of the proceeds of any settlement, judgment or other payment received by the Insured Person to the extent of tl~e benefits paid. By accepting benefits under the terms of this plan, the Insured Person hereby consents to this assignment and authorizes and directs his or her attomey, personal representative or any insurance company to directly reimburse CRL or its designee to the extent of the benefits paid. This assignment becomes effective and is binding upon the Insured Person's attorney, personal representative or any insurance company upon service of a copy of this provision to them by CRL or its designee. 5. The subrogation and reimbursements rights, assignments and liens apply to any recoveries made by or on behalf of the Insured Person as a result of the Illness sustained, including, but not limited to, the following: a. Payments made directly by the third party or any insurance company on behalf of the third party or any other payments on behalf of the third party. b. Any payments, settlements, judgment or arbitration awards paid by any insurance company under an uninsured or undednsured motorist coverage, whether on behalf of the Insured Person or other person. c. Any other payments from any source designed or intended to compensate the Insured Person for any Illness sustained as the result of negligence or alleged negligence of a third party. d. Any workers' compensation award or settlement. 6. CRL's right to recover (whether by subrogation or reimbursement) shall apply to decedents', minors' and incompetent or disabled persons' settlements or recoveries. 7. No Insured Person shall make any settlement which specifically reduces or excludes, or attempts to reduce or exclude the benefits provided by CRL. 10. 11. 12. 13. CRL's right of recovery shall be a prior lien against any proceeds recovered by the Insured Person, which right shall not be defeated nor reduced by the application of any so-called Made-Whole Doctrine, or any other such doctrine purporting to defeat CRL's recovery dghts by allocating the proceeds exclusively to non-medical expense damages. No Insured Person shall incur any expenses on behalf of CRL in pursuit of CRL's rights. Specifically, no court costs nor attorneys' fees may be deducted from CRL's recovery without the pdor expressed wdtten consent of CRL. This right shall not be defeated by any so-called Fund Doctdne or Common Fund Doctrine or Attorney's Fund Doctrine. CRL shall recover the full amount of benefits provided hereunder without regard to any claim of fault on the part of any Insured Person, whether under comparative negligence or otherwise. The benefits under this plan are secondary to any coverage under no-fault or similar insurance. In the event that the Insured Person shall fail or refuse to comply with the terms of this provision, the Insured Person shall reimburse CRL for any and all costs and expenses including attomeys' fees, incurred by CRL. The right of subrogation is not enforceable if prohibited by statute or regulation. In addition, CRL does not have the right to recover benefits paid from awards made under Medical Malpractice Insurance and the Motor Vehicle Financial Responsibility Law. H. Coordination of Benefits Coordination of Benefits (COB) may limit benefits when an Insured Person is insured under more than one (1) plan. The benefits payable under the Policy may be reduced, under the roles below, so that from all plans, an Insured Person will not receive more than 100% of Covered Charges. The following is a list of plans with which the Policy coordinates benefits: a. Group insurance, except group or group-type Hospital indemnity benefits of $100 per day or less; b. Other arrangements, whether insured or uninsured, covering individuals in a group; c. Blue Cross and Blue Shield plans on a group basis; d. Plans of Hospital or medical service organizations on a group basis; e. Group practice plans; f. Group pre-payment plans; g. Federal government plans or programs except Medicaid; h. Medicare Parts A and B; i. Coverage required or provided by law; i. Student insurance, except that COB ~vill not apply to accident-only coverage for grammar or high school students; and k. Individual no-fault auto insurance, by whatever name called. Benefits payable under this Policy are in excess and not in duplication of any first-party benefits due and collectible pursuant to the Pennsylvania Motor Vehicle Financial Responsibility Law. CRL will pay the regular benefits as primary plan. If it is determined to be the secondary plan, CRL will pay 'the excess of allowable expenses after the primary plan pays its regular benefits. In any event, CRL will not pay more than the regular benefits of its plan. These rules determine which plan is primary and the order in which the other plans follow: a. Any plan which does not have the COB provision will be the primary plan and pay first. b. For a plan having a COB provision, these rules apply: (1) The plan which covers the Insured Person as a Dependent will be considered the secondary plan and pay after any other plan; (2) For Dependent children: (a) The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year. (b) If both parents have the same birthday, the benefits of the plan which covered the parent longer are determined before those of the plan which coveted the other parent for a shorter period of time. (c) The word "birthday" refers only to month and day in a calendar year, not the year in which the person was born. (d) If the other plan does not have the birthday rule described above, but instead has a rule based upon the gender of the parent; and if, as a result, the plans do not agree on the order of benefits, the rule based upon the gender of the parent will determine the order of benefits. c. If the natural parents of a Dependent child are divorced or otherwise separated: (1) If the parent with custody of the child has not remarried, the plan which covers the child as a Dependent of that parent will be considered before the plan which covers the child as the Dependent of the parent without custody. (2) If the parent with custody of the child has remarried, the plan which covers the child as a Dependent of that parent will be considered before the plan which covers the child as a Dependent of the step-parent. The plan which covers the child as a Dependent of the parent without custody will be considered last. (3) If there is a court decree which establishes financial responsibility' for the medical, dental or other health care expenses with respect to the child, (1) and (2) above will not apply. The plan which covers the child as a Dependent of the parent with such financial responsibility will be considered before any other plan which covers the child as a Dependent. d. When the rules above de not apply, the plan that has insured the person the longest will be pdmary, except those plans insuring the individual as a retired or laid-off employee will pay as a secondary plan. An allowable expense is a Necessary, Reasonable and Customary expense covered, at least in part, by one (1) of the plans. Such a plan may provide services, rather than cash payments. In this case, the fair value of each service given will be deemed an allowable expense paid by that plan. Benefits will be coordinated on a calendar year basis or any portion of a calendar year in which the person was insured by CRL. For the purposes of this COB section, any or all of the following may apply: a. The Member is required to furnish CRL complete information concerning all plans and benefits paid or payable from those plans. b. As permitted by law, CRL may, without the Insured Person's consent: (1) obtain information from all plans involved; (2) reimburse such other plans, if CRL determines that benefits have been paid by another plan which should have been paid by CRL. Such reimbursement will be a valid payment under this plan; or (3) release to other plans any information necessary for COB. c. CRL may obtain reimbursement from any other plan, and/or from the Insured Person, if CRL has paid benefits which should have been paid by any ether plan. Such reimbursement is a valid payment under the other plan. 34 d. CRL may obtain a refund of any amount which exceeded 100% of allowable expenses as a result of CRL's payment as a secondary plan. Precertification Requirement CRL requires that Insured Persons notify its medical review board at the telephone number shown on the identification card to determine if medical services, admissions or supplies are medically Necessary and appropriate. However, OBTAINING PRECERTIFICATION DOES NOT NECESSARILY GUARANTEE PAYMENT OF BENEFITS, since all claims are subject to the terms of the Policy. Hospital Preadmission Certification Insured Persons must contact the medical review board to precertify all non-emergency hospital confinements in a non-participating facility, including confinements for maternity, at least seventy-two (72) hours pdor to the scheduled admission. If the Policy includes matemity benefits, precertification should be obtained as soon as the Insured Person learns of the pregnancy. Emergency hospital admissions must be reported to the medical review board within forty-eight (48) hours following the admission or as soon as reasonably possible. 2. Precertification Penalty If the Insured Person fails to obtain the required precertification, CRL reserves the right to determine, upon receipt of the claim, if the medical service, admission or supplies are medically Necessary and appropriate. No benefits will be paid for Treatment determined to be not medically Necessary or appropriate. For Treatment determined to be medically Necessary and appropriate, CRL will apply a penalty equivalent to the greater of $500 or 20% of Covered Charges, up to $1,000, for each Treatment where precertification is required but not obtained. The precertification penalty will be applied before the Deductible and Coinsurance and will not be credited toward the Insured Person's maximum out-of-pocket limit. 3. Obtaining precertification does not assure that benefits will be paid for the procedure. CRL will make the final determination whether benefits are payable based on the terms of the Policy, following submission of the claim. J. What to Do About Your Claim Group life insurance, waiver of premium benefit, and accidental death and dismemberment claims Upon notification, CRL will furnish the necessary forms together with instructions on the procedures to be followed in presenting a claim. 2. Medical claims Medical claims should be submitted to your PPO Network directly -- see your I.D. card. Hospital bills ShOw your CRL I.D. card to the Hospital so that the bill will be sent directly to the PPO Network. It is not necessary for the Hospital to complete our form. Medical bills Your doctor will generally indicate charges on his/her own claim form or on an itemized bill. For all other medical charges you must submit THE ACTUAL BILLS. It is important to remember: a. Bills rn~st be itemized to show: (1) Name of Insured Member (2) Name of Doctor (3) Name of Person or entity providing the service (4) Name of Patient (5) Diagnosis 35 (6) Dates of Treatment (7) Policy Number (8) Services rendered and amount of charge b. Don't send cancelled checks, cash register receipts or photocopies of bills. These cannot be accepted. c. Don't submit a list of expenses prepared by yourself. The original bills are needed. d. Don't submit bills which include several members of your family. Separate bills are required for each patient. e. Don't accumulate your bills for submission at the end of the year. Submit your bills periodically if your medical Treatment covers a long period of time. Remember Please be certain to show your account number on all bills that you submit. This number can be found on your CRL ID card or in your certificate booklet. Selected Individual Case Management The medical expense benefits provided by the Policy will include benefits for approved charges for alternate methods of medical care or Treatment not otherwise listed as Covered Charges. Approved charges are charges for-services, Treatment and supplies approved in advance by CRL and established in writing in a selected individual case management treatment plan. L. Cost Containment CRL reserves the right to initiate, conduct and maintain, or to contract for, vadous programs and procedures directed at cost containment. Such programs and procedures include, but are not limited to, underwriting, precertification, concurrent review, utilization review, selected individual case management, auditing of charges, and preferred provider organization programs. M. Administrative Remedies Any controversy arising out of or relating to the Policy, such as disputes about the denial of a claim, are subject to certain administrative procedures that must be exhausted by the Insured Person ("Insured') prior to the Insured pursuing any other remedy that may be available. These required administrative remedies are (1) Appeal of Decision; and (2) Arbitration. Appeal of Decision Appeal-Technical Manager (TM): a. If CRL makes a decision which the Insured wishes to appeal, a written request must be sent within sixty (60) days of the date of CRL's written notice to the Insured to: Appeal-Technical Manager Central Reserve Life Insurance Company 17800 Royalton Road Cleveland, Ohio 44136-5197 b. The Insured's written request must provide: (1) a written statement of the reasons for the appeal and the facts of the matter; and (2) copies of any evidence or documentation. c. Within forty-five (45) days after the date of receipt of a timely-filed request for reconsideration, the TM must provide written notice to the Insured that: (1) the initial decision has been reversed or changed; (2) the initial decision has been reaffirmed; or (3) more information is being requested from the Insured. (This includes any information from the_health care provider[s].) Within thirty (30) days after the information is received, the TM must notify the Insured as provided in (1) or (2) herein. d. If the Insured does not provide the information requested within sixty (60) days of the requested date, the TM will reconsider the decision based on the information in the file. Written notice of the decision will be sent to the Insured. 36 Appeal Review: e. If the TM affirms or changes the decision, or fails to respond as provided in c., above, and if the Insured wants to continue the appeal, the Insured must request review by Appeal Review within sixty (60) days of the date the TM was required to respond: Appeal Review Central Reserve Life Insurance Company 17800 Royalton Road Cleveland, Ohio 44136,5197 f. In reviewing a decision by the TM, Appeal Review may: (1) ask the Insured to submit more information; (2) obtain an advisory opinion from an independent Doctor(s); (3) obtain any other information or advisory opinions as may, in its judgment, be required to make a decision; or (4) make its decision based solely on the information provided by the TM and the Insured. g. Within thirty (30) days after receipt of the Insured's request for review or, if additional information or advisory opinions were requested, within thirty (30) days of the receipt of the necessary information and/or advisory opinions, Appeal Review will send wr'~en notice of its decision to the Insured. h. If for any reason Appeal Review does not respond, the Insured must advise CRL's Legal Department of the failure to respond, by calling 1-800-321-3997. Arbitration After exhaustiOn of the Appeal of Decision procedures, any dispute adsing out of or related to the Policy that remains shall be settled by arbitration in accordance with applicable federal or state laws and the Insurance Dispute Resolution Procedures, as amended, and administered by the American Arbitration Association. 37 VIII. CONTINUATION AND CONVERSION A. Continuation of Coverage 1. Member's Right to Continue Coverage a. This notice is intended to inform Members, in a summary fashion, of their rights and obligations under the continuation of coverage provisions. (All Members should take the time to read this notice carefully.) b. An Insured Member, with his or her covered Dependents, whose coverage under the Policy terminates because of the termination of membership in the association shall have the option to continue this insurance provided that the group association Policy is still in force. c. Upon deciding to terminate his or her membership in the association, the Member shall notify CRL, in wdfing, of the decision to terminate membership in the association and to request that the coverage be continued under the continuation Policy. In order to have the continuation coverage be effective the first day of the month following receipt of the written notice by CRL, such notice must be received in CRL's Home Office no later than the fifteenth day of the preceding month. Any written requests received after the fifteenth day of the month shall be effective on the first day of the month following the month in which notice was received. 2. Dependent's Right to Continue Coverage as a Member a. Under certain circumstances, a Dependent may be eligible to have coverage issued in his or her own right upon the occurrence of the following events: (1) the Member's death; (2) divorce or legal separation; (3) the Dependent child no longer meets the definition of Dependent due to age. b. If any one or more of the above reasons occurs, the Dependent must complete an application and it must be received in CRL's Home Office within thirty-one (31) days of the first day of the month following the qualifying event (e.g., the Dependent turns age 24, the member's death, or the date of the divome or legal separation). c. If insurance for a Dependent who is under age sixteen (16) terminates because of the Member's death, and there is no insured spouse, the insured Dependent child may not continue coverage; however, he or she can convert his or her insurance in accordance with the Medical Conversion section of the Policy. B. Life Insurance Conversion If the Insured Member's group term life insurance terminates due to the termination of membership in the eligible classes, the insurance may be converted to an individual policy of life insurance. Evidence of Insurability will not be required. The form of the life insurance policy may be any then offered by CRL, except term insurance, at the Member's attained age and for the amount applied. At the Member's option, the amount of such policy will be equal to or less than the amount of group term life insurance under this Policy, but not less than $2,000.00. The premium for such policy will be at CRL's rate then in effect for: a. the form and amount of the Policy; b. the class of risk to which the Member then belongs; and c. the Member's attained age on the effective date of the Policy. .. If an Insured Member's group term life insurance terminates because this Policy terminates or is amended to terminate Life Insurance Benefits, the Member may convert such insurance to an individual policy of life insurance provided the Member has been insured under this group Policy for · at least five (5) years. The form and premium will be as in 2. and 3. above, but the amount of insurance may not exceed the lesser of: 38 Co a. the amount of the group term life insurance the Member had under this Policy less the amount of life insurance for which the Member is or becomes eligible for under any group policy which replaces, within thirty-one (31) days, the insurance that just terminated under this Policy; or b. $2,000.00. The individual policy of life insurance will: a. be issued only if application is made and the first premium is received by CRL within thirty-one (31) days after the date on which the Member's group term life insurance under this Policy terminates; b. take effect at the end of this thirty-one (31) day application pedod; and c. be issued without disability or other added benefits. If benefits are paid under the Waiver of Premium Benefit of this Policy, any policy issued under this Section will be void. The individual policy must be returned to CRL for a refund of premium, and no claims under it will be paid. If the Insured Member dies *during the thirty-one (31) day application pedod, CRL will pay the maximum amount of insurance which the Member might have converted. The death claim will be paid under the group policy and not the individual policy. Any premiums paid for the individual policy will be refunded. A person who is a resident of a state in which CRL does not hold a Certificate of Authority to issue insurance will not be entitled to convert. Medical Insurance Conversion The Member may be eligible to convert to an individual policy in the event that the Member s insurance terminates for any reason, including discontinuance of the group Policy in its entirety or with respect to an insured class, provided the Member has been insured under the Policy for at least three (3) consecutive months pdor to the qualifying event date. Other than this notice, CRL is not under any obligation to provide additional notice to a potentially eligible Member of the terms of this section or the requirements for conversion. The Member must notify CRL of termination of insurance so that CRL can fumish the Member with complete details of the benefits available. In addition to the terms as stated above, a Member's eligibility to convert to an individual policy is subject to all of the following: 1. A person who is, or is eligible to be, covered for benefits under any other group policy or Medicare, will not be entitled to convert. 2. A person who is a resident of a state in which CRL does not hold a Certificate of Authority to issue insurance will not be entitled to convert. 3. In a. addition to the above, conversion under this section is also subject to all of the following: The provisions of the individual policy may not be the same as the provisions of the Policy and the individual policy may not provide the same level of benefits as the Policy. Upon request, CRL will furnish complete details of the benefits available. The individual policy may insure the following persons if they were insured under the Policy on the date their insurance terminates: (1) the Member and Dependents; (2) the spouse of a deceased Member and that spouse's Dependents; (3) Dependents of a deceased Member if the Member is not survived by a spouse; (4) a Dependent child whose insurance terminates because of age or marriage; and (5) the former spouse of a Member, upon divorce or legal separation when the ending of the marriage terminates the spouse's insurance under the Policy. Also, Dependents of such former spouse, if their insurance terminates solely because of the end of the marriage. c. A written application and the first premium must be received at the Home Office within thirty-one (31) days after the termination of insurance under the Policy, otherwise the Member will lose the rights to a conversion policy. d. The individual policy will take effect on the day after the person's group insurance terminates. e. The premium for the individual policy ~Nill be CRL's scheduled premium based on the age and sex of the applicant. ¸39 f. This section does not extend a person's medical insurance under the Policy beyond the date such insurance would otherwise terminate. ,40 CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER I~IOTICE: The following rider amends the coverage described in your certificate booklet. The provisions being added or changed by this rider are subject to all the terms and conditions of the Policy, including, but not limited to, the General Exclusions, and Covered Charges Subject to Limitations. Please refer to your certificate booklet for more information regarding your coverage, please attach this rider to your certificate booklet. 'The following provision is effective June 20, 1997: Coverage will be provided for the cost of nutritional supplements (formulas) that are equivalent to a prescription drug as medically necessary for the therapeutic treatment of phenylketonuria, branched-chain ketonuria, galactosemia and homocystinuria as administered under the direction of a Doctor.. Benefits will be subject to any Copayment and Coinsurance provisions of the policy but will not be subject to the Deductible. CENTRAL RESERVE LIFE INSURANCE COMPANY RID-0279 I {'Rev. 06/02/OO) CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER NOTICE: The following rider amends the coverage described in your certificate booklet. It applies only to Employer Units and Members located in Pennsylvania. The provisions being added or changed by this dder are subiect to all the terms and conditions of the Policy, including, but not limited to, the General Exclusions and Covered Charges Subject to Limitations. Please refer to your certificate booklet for more information regarding your coverage. Please attach this rider to your certificate booklet. For Employer Units/Members effective on or after January 1, 1998, these changes take effect on the Employer Unit's/ Member's effective date of insurance with CRL. For Employer Units/Members effective prior to January 1,1998, these changes take effect on the Employer Unit's/Member's first renewal date, with CRL, following January 1, 1998. For subsequently hired Employees and new Dependents, these changes take effect on the later of the Employer Unit's/ Member's first renewal date, with CRL, following January 1,1998, or the Insured Person's effective date of insurance with CRL. Coverage shall be provided for Inpatient care following a mastectomy for the length of stay that the Doctor determines is necessary to meet generally accepted cdteria for safe discharge. Coverage shall also be provided for a home health care visit that the Doctor determines is necessary within forty-eight (48) hours after discharge, when the discharge occurs within forty-eight (48) hours following admission for mastectomy. When cove rage is provided for mastectomy Surgery, coverage sh all also be provided for prosthetic devices and reconstructive Surgery incident to any mastectomy. Coverage for prosthetic devices inserted during reconstructive Surgery and reconstruc- tive Surgery will be limited to such surgical procedures performed within six (6) years of the date of the mastectomy. Benefits payable are subject to any Copayment, Coinsurance or Deductible amounts in the Policy. The term ~mastectomy" means the removal of all or part of the breast for Medically Necessary reasons, as determined by a licensed Doctor. The term ~prosthetic devices" means the use of initial and subsequent artificial devices to replace the removed breast or portions thereof as order by a Doctor, The term "reconstructive Surgery" means a surgical procedure performed on one breast or both breasts following a mastectomy, as determined by a Doctor, to reestablish symmetry between the two breasts or alleviate functional impairment caused by the mastectomy. The term "reconstructive Surgery" shall include, but is not limited to, augmentation mammoplasty, reduction mammoplasty and mastopexy. The term "symmetry between breasts" means approximate equality in size and shape of the nondiseased breast with the diseased breast after definitive reconstructive Surgery on the diseased or nondiseased breast has been performed. CENTRAL RESERVE LIFE INSURANCE COMPANY RID-0328 I (Rev. 06/02/00) C~ F~S A Subsidiary of .~ .~ Ceres Group, Inc. CENTRAL RESERVE LIFE INSURANCE COMPANY 17800 Royalton Road · Cleveland, OH 44136-5197 · 440-572-2400 www.centralrese~ve.com · www.ceresgroupinc.com ADMINISTRATION INSTRUCTIONS PREMIUM BILLING INSTRUCTIONS A billing will be sent to you every month before the premium due date. An administrative fee for this service is added to each billing statement and must be included in the amount submitted when paying your monthly premium. CORRECTIONS PRINT any necessary corrections on the billing statements. DELETION OF DEPENDENT COVERAGE Put a line through the dependent coverage premium and, if the date is to be other than the first day of the month for which premium is due, write the effective date of termination on the billing statement. Remit premium for single coverage. PAYMENT OF PREMIUM About two weeks before the due date (which is the first day of each calendar month) a group premium billing statement will be mailed to the Member. CRL strongly recommends that all premium payments be remitted upon receipt and before the due date. If CRL has not received the payment within two (2) weeks of the due date, a "Late Notice" will be mailed to the Member as a reminder that payment has not been received. If at the time the next premium statement is generated, premium has still not been received, a reminder message will appear on the billing statement. If payment is not received by the end of the grace period (which is thirty-one [31] days from the due date), coverage will automatically terminate as of the last date for which premium was paid. In the event coverage terminates for late payment or non-payment of premium, a courtesy letter will be sent to the Member on or about the seventh (7th) day of the month. The letter will advise the Member that coverage terminated as of the last date for which premium had been paid. The letter also will contain information about applying for possible reinstatement of coverage through the submission of medical and other information. (See "Reinstatement" Section.) ASSOCIATION DUES AND ADMINISTRATIVE CHARGES In order to be eligible to apply for coverage for the health insurance plan, you must be a member of the Association. CRL's health insurance plan is only one of the benefits available to members of the Association. Those Association members who have coverage under the health insurance plan pay their association dues on a monthly basis. This amount is added to, and appears at the bottom of, your health insurance premium billing statement. CRL forwards the membership dues to the Association each month. The administrative charge, which also appears at the bottom of your premium billing statement, is a charge required by CRL for individuals who have coverage under the Association-sponsored health insurance plan. The administrative charge helps cover the cost of administering the plan for Association health insurance, such as preparation of billing statements, rating and actuarial studies, underwriting, claims processing, and computer services. CHANGES Changes may be submitted using the Employee/Member Group Insurance Change Request, AEF-GRP15, or by indicating the change in writing. All requests must include the Member's signature and date. Please keep a copy of the request for your records. 1. Insured's namechange 2. Change in Dependent status 3. Adding a dependent(s) - See Certificate Booklet. An application may be required. 4. Beneficiary change WHEN YOU NEED SERVICE Our Express Network phone .~ystem gives you a direct line to you r personal Customer Service Representative. When you need service or simply want a question answered, call toll-free: Claims - 1-800-966-6023 Administrative - 1'800-253-7709 Your personal Customer Service Representative is ready to help you, backed by a team of personnel specializing in the needs of your specific region. AEF-1527 I (Rev. 06i05/00) WHEN YOU NEED SERVICE Our Express Network phone system gives you a direct line to your personal Customer Service Representative. When you need service or simply want a question answered, follow these two easy steps. 1. Call (~RL toll free at 1-800-321-3997. 2. Listen for the message from the automatic answering device that will help direct your call to the appropriate person. It's as simple as that. Your personal Customer Service Representative is ready to help you, backed by a team of personnel specializing in the needs of your specific region. Call CRL: 1-800-321-3997 Toll Free CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER - ASSOCIATION (Prescription Drug) NOTICE: The following rider amends the coverage described in your certificate booklet. The provisions being added or changed by this rider are subject to all the terms and conditions of the Policy, including, but not limited to, the General Exclusions and Covered Charges Subject to Limitations. Please refer to your certificate booklet for more information regarding your coverage. Please attach this rider to your certificate booklet. These changes take effect on the Member's first renewal date with CRL on or after October 1, 2001. 1. The Prescription Drug Benefit as shown on the Schedule of Benefits is deleted and is replaced with the following: Prescription Drug Benefit Calendar Year Deductible ......................................... $100 Aggregate Family Deductible .................................... Three (3) times the Individual Deductible Generic Prescription Drugs ................................ 100% of Covered Charges in excess of a $15 copayment for each prescription drug Brand Name Formulary Prescription Drugs .......... 80% of Covered Charges in excess of a $25 copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs .............................................. 70% of Covered Charges in excess of a $35 copayment for each prescription drug Managed Mail Prescription Program- Maintenance medications, after one (1) thirty (30) day refill, may be ordered through CRL's Managed Mail Prescription Program. Generic Prescription Drugs ................................ 100% of Covered Charges in excess of a $30 copayment for each prescription drug Brand Name Formulary Prescription Drugs .............................................. 80% of Covered Charges in excess of a $50 copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs .............................................. 70% of Covered Charges in excess of a $70 copayment for each prescription drug Maximum Benefit per Calendar Year ........................ $1,500 2. The Prescription Drug Benefit shown under the Benefit Provisions section of the certificate booklet is deleted and is replaced with the following Prescription Drug Benefit. Prescription Drug Benefit After CRL's approval of the insurance coverage, a prescription drug card/s will be issued, along with information about formulary prescriptions and participating pharmacies. This benefit works as follows: The benefit is subject to the calendar year Deductible and calendar year maximum benefit shown on the Schedule of Benefits. The maximum Deductible amount that a Member with Insured Dependents must pay for Covered Charges incurred in the same calendar year is three (3) times the Member's Deductible. a. When using a participating pharmacy: (1) The Insured Person will pay the applicable copayment and/or percentage shown on the SchedUle of Benefits. The amount of the_copayment and/or percentage may vary by the type of prescription being dispensed: (a) Generic Prescription Drug (b) Brand Name Formulary Prescription Drug (c) Brand Name Non-Formulary Prescription Drug (2) Insured Persons may call CRL or the prescription drug vendor to determine if a particular drug is included in CRL's formulary (list of preferred prescription drugs). (3) If the drug charge is less than the copayment and/or percentage shown, the Insured Person will be responsible for the full cost of the medication. RID-1476 (4) The pharmacy will fill the prescription ior up to a thirty (30) day supply. If the Insured Person's Doctor prescribes the medication for a period longer than thirty (30) days, it is considered a maintenance medication. Maintenance medications, after one (1) thirty (30) day refill, may be ordered through CRL's Managed Mail Prescription Program described later in this section. b. If the insured Person forgets the prescription drug card, the Insured Person will pay the full cost of the medication at the pharmacy. In order to receive reimbursement, the insured Person must send a claim form (available from CRL) to the prescription vendor, which will reimburse the Insured Person according to the terms of their program. c. If the Insured PersOn visits a non-participating pharmacy, the Insured Person will pay the full cost of the medication to the pharmacy. The Insured Person may then send the receipt for the prescription charges along with a prescription drug claim form to the prescription drug vendor. Non-participating pharmacy prescription charges are reimbursed on the same basis as participating pharmacies. d. The prescriptiOn drug card must be returned to CRL when the coverage terminates for any reason. If the card is used after its termination date, the Insured Person will be billed directly by CRL for any benefits paid after the termination date. e. Covered Charges: (1) Legend drugs. Children's prescription vitamins, to one (1) year of age and prenatal prescription vitamins for eligible matemity patients. (2) The following non-legend items on prescription only: Insulin, insulin needles and syringes, sugar test tablets and tape, including Chemstrips, Acetone tablets and Benedict's Solution or equivalent. ;3) Compounded medication of which at least one (1) ingredient is a prescription legend drag. (4) Any other drug, which, under the applicable state law, may only be dispensed under the written prescription of a Doctor or other lawful prescriber. f. Managed Mail Prescription Program: (1) Insured Per 3ns who take maintenance medications may use the Managed Mail Prescription Program. Maintenance medications are those which must be taken for an extended period of time in order to treat certain conditions. The Managed Mail Prescription Program consists of the following steps: (a) An Insured Person's Doctor wdtes a prescription for up to a sixty (60) day initial supply of a maintenance medication. If the medication is needed immediately, the Doctor should issue two (2) prescriptions, one for an immediate supply to be obtained at a local pharmacy, and a second for an extended supply to be mailed to the Managed Mail Prescription Vendor. (b) The Insured Person must include the copayment and/or percentage amount through a check made payable to the Managed Mail Prescription Vendor or by furnishing their credit card number and expiration date. Insured Persons may call a toll-free number to determine the availability of generic alternatives or ask other questions. (c) The Insured Person completes the patient profile section for the first mail service order only and sends the profile along with the Managed Mail Prescription Order Form. The patient profile is a section of the Managed Mail Prescription Order Form. This form is included with the Prescription Drug Benefit participant materials which are sent to ~/ou along with your prescription Drug Card. (d) The original prescription(s) should be submitted with the Managed Mail Prescription Order Form to the Vendor. (e) Prescriptions will be delivered either by U.S. Postal Service or UPS. Allow 10-14 days for delivery from the date the order form is mailed. (f) Refills may be-ordered by calling atoll-free number. Haveyour prescription number and credit card available. (2) The copayment and/or percentage amount is based upon the type of drug being dispensed and is shown on the Schedule of Benefits. The Insured Person is responsible for this amount before benefits are payable under this plan. (3) A Generic Prescription Drug will be dispensed unless a Brand Name Prescription Drug is requested by the Insured Person's Doctor or if a Generic Prescription Drug is not available. DEANNA SALISBURY, Plaintiff CERES GROUP, 1NC., t/d/b/a CENTRAL RESERVE LIFE INSURANCE COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 02-5957 JURY TRIAL DEMANDED TO: DEANNA SALISBURY and her attorney, WILLIAM P. DOUGLAS, ESQUIRE YOU ARE HEREBY NOTIFIED TO PLEAD TO THE WRITTEN PRELIMiNARY OBJECTIONS WITHiN TWENTY (20) DAYS FROM SERVICE HEREOF, OR A JUDGMENT MAY BE ENTERED AGAINST YOU. DEFENDANT'S PRELIMINARY OBJECTIONS TO PLAINTIFF'S AMENDED COMPLAINT AND NOW, comes Defendant Ceres Group, Inc., t/d/b/a Central Reserve Life Insurance Company, by and through it attorneys, MARTSON DEARDORFF WILLIAMS & OTTO, and files the following Preliminary Objections to Plaintiff's Complaint. 1. On December 19, 2002, Plaintiff Deanna Salisbury (hereinafter Plaintiff) served Defendant Central Reserve Life Insurance Company t/d/b/a Ceres Group, Inc., (hereinafter Defendant) with a Complaint. 2. Plaintiff was insured as a dependant spouse under a health insurance policy issued by Defendant and covering her husband, James Salisbury. A copy of the insurance policy is attached as Exhibit "A." 3. The Complaint alleges, inter alia, that the Defendant breached its policy of insurance with the Plaintiff by refusing to pay for certain medical services rendered to Plaintiff by various health care providers. 4. In addition, the Complaint alleges that the Defendant acted in bad faith by denying Plaintiff's claims under the policy. OBJECTION I LACK OF JURISDICTION UNDER Pa. R.C.P. 1028 (1) 5. The insurance policy at issue contains an express provision requiring that "any dispute arising out of or related to the Policy... shall be settled by arbitration in accordance with applicable federal or state laws . . . and administered by the American Arbitration Association." See Exhibit "A," pg. 37. 5. Pennsylvania law puts Plaintiff on notice of the terms of the insurance policy and Plaintiff is bound by those terms, including the arbitration clause. 6. Plaintiffhas not exhausted her administrative remedies under the policy, in that she has failed to arbitrate her claims against Defendant. 7. Pursuant to the express and unambiguous language of the policy's arbitration clause, this court lacks jurisdiction to resolve the controversy between the parties. WHEREFORE, Defendant requests the court to sustain its Preliminary Objections and to dismiss Plaintiff's Complaint, with prejudice. MARTSON DEARDORFF WILLIAMS & OTTO Anthony T. Lucido, Esquire I. D. Number 76583 Ten East High Street Carlisle, PA 17013 (717) 243-3341 Date: January 22, 2003 Attorneys for Defendant Central Reserve Life Insurance Co: Ce'rt~£icate Booklet Eagle PPO Plan For Pennsylvania Member: JAMES A SALISBURy Account No: AS-000253958 Cert: 0001 If the coverage described in this Certificate Booklet has been amended, a rider(s) explaining the changes has been placed in the back of this booklet. Please read the rider(s) carefully. PPO66-PA (11/03/2000) EXHIBIT "A" If an Insured Person obtains services from a Plan Provider that are not Covered Charges under CRL's plan, the provider will determine his or her own fees for these services, which may or may not be discounted. This Certificate Booklet explains, in general, the terms of your coverage. However, when reading this Booklet, remember that decisions regarding your medical care are between you and your Doctor. This plan is not being sold as an employment benefit plan and the Member's Employer is not responsible, either directly or indirectly, for paying the premium or benefits. This Certificate Booklet describes, in general terms, the principal features of the insurance. Nothing in this Certificate Booklet will waive or alter any of the terms or conditions of the Policy, and if any discrepancies, misprint of certificates, or change in benefits occurs, the Policy will govern. No statement made by any representatives of CRL if in conflict with this Certificate Booklet or the provisions of the Group Policy shall be binding on CRL. CER'rlFICATE OF COVERAGE CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) Cleveland, Ohio Certifies that JAMES A SALISBURY is insured effective 11/03/2000, subject to the terms and conditions of Group Insurance Policy A-1003 issued to: Eagle Consumer Association (Policyholder). ACCOUNT NO: AS-000253958 CERT: 0001 STATE: Pennsylvania DEDUCTIBLE -- IN NETWORK: $500 OUT OF NETWORK: $1,000 DEPENDENT: DEDUCTIBLE: EFFECTIVE DATE: ALANNA $500 11/03/2000 ALEASHA $500 11/03/2000 DEANNA $500 11/03/2000 ]-his Certificate Booklet replaces any and all certificates or booklets describing this insurance which may have been issued previously. Steven H. Puck President TABLE OF CONTENTS II. III, IV. V. vi, VII. SCHEDULE OF BENEFITS A. Life Insurance Benefit ............................................................................................................................................... 1 B. Dependent Life Insurance Benefit ....................................................................................................................... 1 C. Progressive Dental Benefit-- Schedule A ..........................................................................................................1 D. Preventive Medical Benefit .................................................................................................................................... 1 E. Accident Expense Benefit ................................................................................................................................ 1 F. Prescription Drug Benefit ......................................................................................................................................... 1 G. Covered Office Visits ................ ~ .......................................................................................................................... 1 H. Comprehensive Major Medical Benefit ............................................................................. ...2 BENEFIT PROVISIONS A. Life Insurance Benefit ....................................................................................................................................... 4 B. Accidental Death and Dismemberment Benefit ................................................................................................. 5 C. Common Carrier Benefit ........................................................................................................................................... 6 D. Orphan's Benefit ........................................................................................................................................................ 6 E. Dependent Life Insurance Benefit .................................................................................................................6 F. Progressive Dental Benefit -- Schedule A .........................................................................................................7 G. Preventive Medical Benefit ............................................................................................................................. 9 H. Child Immunization Benefit ................................................................................................................................. 9 I. Accident Expense Benefit ................................................................................................................................... 9 J. Prescription Drug Benefit ..................................................................................................................................... 9 K. Major Medical Expense Benefit 1. Covered Charges .......................................................................................................................................... 12 2. Extended Care Facility Benefit ....................................................................................... -13 3. Lifetime Maximum ........................................................................................................... 14 4. Alcohol and Drug Abuse and Dependency E~enefit .................................................... ' ............................. 14 5. 24-Hour Coverage ......................................................................................................................................... 15 L. Centers of Excellence Program ............................................................................................................................. 15 COVERED CHARGES SUBJECT TO LIMITATIONS ................................................. 17 GENERAL EXCLUSIONS ............................................................................................................................... 19 DEFINITIONS .................................................................................................................................................. 21 POLICY PROVISIONS A. Eligibility ....................................................................................................................................................... 27 B. Dual Coverage ....................................................................................................................................................... 27 C. Effective Date of Insurance ................................................................................................ 27 D. Adding Dependent Coverage ................................................................................................. i"'.,' ........................... 27 E, Payment of Premium .................................................................................................. 28 F. Grace Period ..................................................................................................................................................... 28 G. Legal Rights Due to Fraud ...................................................................................................................... i ........ 28 H, Policy/Premium Changes ................................................................................................ I. Renewal of Insured Person's Insurance ..................................... ' .................................. ~ J. Modifications or Discontinuance of Coverage ................................................................................................. 29 K. Issuance of Certifications of Creditable Coverage ............................................................................ 29 L. Misstatement of Age .............................................................................................................. · ..........30 M. Beneficiary ................................................................................................................................................................. 30 CLAIM PROVISIONS A. Notice of Loss/Claim ................................................................................................................................................. 31 B. Proof of Loss ..................................................................................................................................................... 31 C. Examination ................................................................................................................... 31 D, Payment of Claim ............................................................................... E. Workers' Compensation ........ ' ............................................................ 31 ...................................................................................... 32 F. Time Limits .............................................................................................................................................................. 32 G. Subrogat on ............................................................................................................................................................... 32 I'l. Coordination of E~erlefits ................................................................................................................. I. Precertification Flequirement ................................................................. · ....................... J, What to Do About Your Claim ....................................... ' ................................................ K. Selected Individual Case Management .................. ' ............................................................................ L. Cost Containment ................ ' .............................................................................. 36 M. Administrative Remedies .......... ' ............................................................................ 36 VIII. CONTINUATION AND CONVERSION A. Continuation of Coverage ..................................................................................... 38 B. Life Insurance Conversion ............................................................ . ........ · ............ C. Medicallnsurance Conversion ......................................................................... :::....:i:::::::::: .................... :,~ SCHEDULE OF BENEFITS ko B° Life Insurance Benefit Member Amount Life Insurance ....................................................................................................................................... $50,00-~ Accidental Death & Dismemberment .................................................................................................... $15,000 Accidental Death on Common Carrier .................................................................................................. $50,000 Orphan's Benefit ................................................................................................................................ $10 000 Group Life Insurance, Accidental Death & Dismemberment, Common Carrier and Orphan's Benefit terminate at age sixty-five (65). Dependent Life Insurance Benefit Spouse .................................................................................................................................................... $2,000 Children six (6) months of age and over .................. $1 ................................................. ,000 Children less than six (6) months of age ................................................................................................... $ 500 The spouse's Life Insurance terminates at age sixty-five (65). C. Progressive Dental Benefit -- Schedule A ......................................................................................... $3,000 D, Preventive Medical Benefit ............................................................................................................... Included E, Accident Expense Benefit ...................................................................................................................... $500 F. Prescription Drug Benefit Generic Prescription Drugs ....................................................... 100% of Covered Charges in excess of a $15 Copayment for each prescription drug Brand Name Formulary Prescription Drugs ............................... 80% of Covered Charges in excess of a $25 Copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs ..................................................................... 70% of Covered Charges in excess of a $35 Copayment for each prescription drug Managed Mail Prescription Program -- Maintenance medications, after one (1) thirty (30) day refill, may be ordered through CRL's Managed Mail Prescription Program. Generic Prescription Drugs ....................................................... 100% of Covered Charges in excess of a $30 Copayment for each prescription drug Brand Name Formulary Prescription Drugs ............................... 80% of Covered Charges in excess of a $50 Copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs ..................................................................... 70% of Covered Charges in excess of a $70 Copayment for each prescription drug G. Covered Office Visits (Copays not available in plans with Deductibles higher than $1,000) Covered Doctor's office visits1 to an In-network Plan Provider ........................................................................................ 100% of Covered Charges in excess of $20 per visit 2 Covered injections~ provided by an In-network Plan Provider in the Doctor's office as part of the office visit ................................................................................................ 100% of Covered Charges in excess of $5 per visit 2 Covered x-ray services~ provided by an tn-network Plan Provider in the Doctor's office as part of the office visit ...................................................................................... 100% of Covered Charges in excess of $10 per visit 2 Covered laboratory testing or diagnostic services~ provided by an In-network Plan Provider in the D · octor s off ce as part of the office visit ......................................... 100% of Covered Charges in excess of $5 per visit 2 H. Comprehensive Major Medical Benefit Member and Dependent~ Max~ments Major Medical Expense Benefit: Any portion of the out-of-network Deductible and Coinsurance satisfied by an Insured Person applies toward the in-network Deductible and Coinsurance. However, amounts satisfied toward the in-network Deductible and Coinsurance do not apply toward the out-ofmetwork Deductible and Coinsurance. In-network Individual Calendar Year Deductible: ................. $500 Aggregate Family Deductible ....................................................Three (3) times the In-network individual Deductible Out-of-network Individual Calendar Year Deductible: ............................................................................... $1,000 Aggregate Family Deductible ....................................................Three (3) times the Out-of-network individual Deductible An additional $75 deductible will be applied to all Covered Charges for each emergency room visit due to a Sickness, if the Insured Person is not immediately admitted as an Inpatient. Any amounts paid by the Insured Person as a deductible for each emergency room visit will not be applied toward the Maximum Out-of-Pocket Amount. Covered Charges for Inpatient Hospitalizations, Outpatient procedures and alt other Covered Charges4 when using an In-network P an Prov der ......... 100% of In-network Covered Charges after the In-network Deductible to end of calendar year Covered Charges for Pre-certified Inpatient Hospitalizations,~ Outpatient procedures and all other Covered Charges4 when using an Out-of-network Non-plan Provider ............................................. 80% of the first $10,000 of Out-of-network Covered Charges after the Out-of- network Deductible; 100% of remainder to end of calendar year Extended Care Facility Benefit .................................... Maximum sixty (60) days Lifetime Maximum, for all benefits (Per Persor~) ......................... $5,000,000 Charges in excess of a specific dollar limit stated in the Covered Charges Subject to Limitations and General Exclusions sections cannot be used to satisfy any Coinsurance requirement or to meet the family's Maximum Out-of-Pocket limit. ~ This benefit does not apply to Covered Charges under any other benefit provision or limitation such as spinal manipulation; occupational, speech or physical therapy; and mental nervous conditions. 2 The office visit Co-pay applies only to the actual office visit. The Co-pay for injections, x-rays, laboratory services or diagnostic testing is in addition to the office visit Co-pay. Any other services, such as office Surgeries, processing or reading charges, are subject to the Deductible and Coinsurance. For Treatment determined to be medically Necessary and appropriate, CRL will apply a penalty equivalent to the greater of $500 or 20% of Covered Charges, up to $1,000, for each Treatment where precertification is required but not obtained. The precertification penalty will be applied before the Deductible and Coinsurance and will not be credited toward the Insured Person's maximum out-of-pocket limit. Please refer to the provision entitled "Precertification Requirement." Covered Charges for annual gynecological examination and routine pap smears will be paid according to the Insured Percentages as stated above, but will not be subject to the Deductible. NOTICE 1: In the following situations, this Policy will pay for all services so that the Insured Person is not liable for a greater Out-of-Pocket amount than if the Insured Person were attended to by a Plan Provider: a. the Insured Person is referred by a Plan Provider to a Non-plan Provider; b. a Plan Provider is not available; or c. the Insured Person requires emergency health care services and cannot reasonably be attended to by a Plan Provider. NOTICE 2: The Insured Person should verify, in advance, whether a provider of health care services is a Plan Provider. To ensure the greatest savings are achieved under this health care plan which you have selected, you I should make every effort to use In-network Plan providers, whenever possible. II. BENEFIT PROVISIONS A. Life Insurance Benefit 1. Amount The Amount of Life Insurance will be paid upon the death of the Insured Member. The Amount of Life Insurance is shown on the Schedule of Benefits. 2. Payment Payment of Life Insurance Benefits will normally be made in one (1) lump sum. However, the Insured Member may choose to have the insurance benefits paid in any other way subject to approval by CRL. If the Insured Member elected a lump sum payment, the Beneficiary may elect to have the benefits paid in any other way subject to approval by CRL. 3. Exclusion No benefits will be paid for a loss resulting from intentionally self-inflicted Injury or suicide, while sane or insane, occurring within the first twenty-four (24) months of the Insured Member's coverage under this Policy. Waiver of Premium a. Life Insurance Benefits will be extended without premium payment during the continuation of Total Disability from the date the Insured Member's insurance terminates due to Total Disability, for the lesser of: twelve (12) months or the number of months insured under this Policy, if prior to age sixty (60), the Insured Member: (1) becomes totally and permanently disabled while insured; and (2) has proof of the disability satisfactoW to CRL submitted to CRL no later than twelve (12) months after the termination of insurance. b. All insurance under the Waiver of Premium Benefit will terminate on the earliest of: (1) the date the Insured Member is no longer Totally Disabled; (2) the date this Policy is terminated or cancelled; or (3) the end of the lesser of: la) a twelve (12) month period; or lb) the number of months insured under this Policy, following the date the Insured Member's insurance terminated. c. The Amount of Life Insurance is subject to the termination of benefits as stated in the Schedule of Benefits. d. The Insured Member may convert such insurance to an individual policy of Life Insurance. See Life Insurance Conversion section. e. CRL, at its own expense, reserves the right to have an Insured Member examined by a CRL selected Doctor, as often as it may require. Reduction Due to Conversion An Insured Member who has converted any part of the Life Insurance Benefits under this Policy because the insurance has terminated for any reason and who again becomes an Insured Member at a later date will have the Amount of Insurance reduced by the amount of the converted benefit in force unless Evidence of Insurability is submitted to CRL. Assignability An absolute assignment by the Insured Member of all the incidents of ownership of Life Insurance will be permitted, but only if CRL is given actual written notice of such assignment. Such assignment will be effective only after written notice has been received by CRL's Home Office and CRL has acknowledged, in writing, receipt of the notice. Collateral assignments, by whatever name called, will not be permitted. Limit of Amount of Life Insurance The total amount of Life Insurance Benefits will never exceed the Amount of Insurance shown on the Schedule of Benefits. In no event will payment be made under more than one (1) of the following: a. Life Insurance Benefits; b. Waiver of Premium Benefit; or c. any benefits resulting from the Conversion Section of this Policy. B. Accidental Death and Dismemberment Benefit Benefits a. Benefits will be paid if the Insured Member incurs any of the losses listed in the Table of Losses, and if the loss: (1) results from a bodily Injury due to an accident while the Member was insured; and (2) was independent of all other causes. b. For dismemberment er loss of eyesight, loss must occur within ninety (90) days of accidental bodily Injury in order for benefits to be payable. Exclusions No benefits will be paid for any loss which is a result of: a. bodily or mental infirmity or disease of any kind, whether or not the proximate or precipitating cause of death is accidental bodily Injury; b. war, declared or undeclared, or an act of war, whether or not serving in the military forces or any civilian noncombatant unit serving with the forces: c. committing an assault or felony, whether sane or insane; d. participation in a riot or insurrection; e. a fight in which the Insured Person is a voluntary participant; f. suicide or attempted suicide, or intentionally self-inflicted Injury, whether sane or insane; g. engaging in an illegal occupation; h. travel or flight in an aircraft or spacecraft, or descent from such a craft while in flight, or subsequent drowning, if the Insured Person is a pilot, officer or crew member of the craft; is giving or receiving aviation training or instruction; has duties on or relating to the craft; or is being flown for the purpose of descent from the craft while in flight; voluntary taking or injection of drugs, whether legal or illegal, unless prescribed or administered by a licensed Doctor; the voluntary taking of any drugs, whether legal or illegal, prescribed for the Insured Person by a licensed Doctor and intentionally not taked as prescribed; sensitivity to drugs, whether legal or illegal, voluntarily taken unless prescribed by a Doctor; drug addiction, unless the addiction results from the voluntary taking of drugs, whether legal or illegal, prescribed or administered by a licensed Doctor or from the involuntary taking of drugs, whether legal or illegal; voluntary taking of any poison except in the case of food poisoning; voluntary inhaling of any kind of gas, except during the course of employment; chronic alcoholism; directly or indirectly from the voluntary taking of alcohol alone or in combination with a drug, medication or sedative when this action results in legal intoxication as defined by Pennsylvania law; or medical or surgical Treatment. mo Table of Losses In the Event of Loss of: The Amount Payable will be: Life ...................................................................................................................... Full Amount of Insurance Both Hands or Both Feet ................................................................................... Full Amount of Insurance Sight of Both Eyes ............................................................................................. Full Amount of Insurance One Hand and One Foot ................................................................................... Full Amount of Insurance One Foot and Sight of One Eye ........................................................................ Full Amount of Insurance One bland and Sight of Oue Eye ...................................................................... Full Amount of Insurance One Hand ...................................................................................... One-Half the Full Amount of Insurance One Foot ....................................................................................... One-Half the Full Amount of Insurance Sight of One Eye ........................................................................... One-Half the Full Amount of Insurance With respect to hands or feet, "loss" means permanent severance at or above the wrist or ankle joint. With respect to eyesight, "loss" means the entire and permanent loss of sight. NOTE: In any event, the Full Amount of Insurance will be paid only once for any one (1) accident, no matter how many of the above-listed losses occur as the result of that accident. The Full Amount of Insurance is shown on the Schedule of Benefits. C. Common Carrier Benefit 1. CRL will pay the Common Carrier Benefit only if the Accidental Death and Dismemberment Benefit is paid. The Benefit is payable for loss of life due to an Injury sustained while the Insured Member is a fare-paying passenger on a public conveyance that: a. is run by a common carrier regulated by the government; b. transports passengers for hire; and c. is not a chartered or other privately arranged conveyance. 2. The Common Carrier Benefit will terminate on the same date as the Group Life Insurance and Accidental Death and Dismemberment Benefit. D. Orphan's Benefit 1. The Orphan's Benefit will be paid to the Insured Member's estate provided that: a. the amount of Accidental Death and Dismemberment insurance is paid; b. the legal spouse of the Insured Member dies, independent of all other causes, due to accidental bodily Injury arising from the same accident which results in the death of the Insured Member; c. the death of the spouse occurs within forty-eight (48) hours of the death of the Insured Member; d. one (1) or more children survive the Insured Member; and e. the child or children are natural or legally adopted children of the Insured Member and are less than twenty-one (21) years of age on the date of the Insured Member's death. 2. This death benefit is in addition to any other benefits payable under this Policy. Dependent Life Insurance Benefit 1. The Amount of Insurance will be paid to the Insured Member upon the death of the Insured Dependent. The benefits will be paid in a lump sum, 2. Each Dependent will be eligible on the later of: a. the date the Insured Member becomes eligible; or b. the date the person becomes a Dependent. No Dependent will be eligible unless insured as a Dependent under the CRL group health policy. No Dependent will be eligible as a Dependent of more than one (1) Member or as both a Member and a Dependent. No Dependent insurance will become effective for a Dependent before the Member's insurance is effective. Insurance for a Dependent confined in a Hospital will not become effective until the day after the final discharge from the Hospital. This provision will not apply to a newborn Hospital-confined on his or her effective date. A Dependent's insurance will terminate on the earliest of: a. the date the Policy terminates; b. the last date to which premium has been paid; c. the last day of the month during which the person ceases to be elig ble' or d. the date the Insured Member's insurance terminates. 6. If a Dependent is the spouse of an Insured Member and the group term life insurance terminates for reasons other than the termination of the Policy, the Dependent-spouse may convert such insurance to an individual policy of life insurance. Evidence of Insurability will not be required. The form of the life policy may be any then offered by CRL, except term insurance, at the spouse's then attained age and for the amount applied. The amount payable under such policy will be the same amount of group term life insurance payable under this Policy. The premium for such policy will be at CRL's rate then in effect for the: a. form and amount of the Policy; b. class of risk to which the spouse then belongs; and c. spouse's age on the effective date of the Policy. 7. The individual policy of life insurance will only be issued if application is made and the first premium is received by CRL's Home Office within thirty-one (31) days after the date on which the spouse's group term life insurance under this Policy terminates. The individual policy will become effective at the end of this thirty-one (31) day application period. 8. If the spouse dies during the thirty-one (31) day application period, CRL will pay the maximum amount of insurance which the spouse might have converted. The death claim will be paid under the group policy and not the individual policy. Any premiums paid for the individual policy wilt be refunded. The total amount of Dependent Life Insurance Benefits paid will never exceed the Amount of Insurance shown on the Schedule of Benefits. In no event will payment be made under more than one (1) of the following: a. Dependent Life Insurance Benefits; or b. any benefits resulting from the Conversion Section of this Policy. F. Progressive Dental Benefit -- Schedule A The Plan provides a Progressive Dental Benefit for the Insured Person. The total amount paid for each Insured Person for services performed in any one (1) Benefit Year will not be more than the Maximum Payment as shown below. A percentage of the benefit contained in the Schedule of Dental Procedures will be paid, based upon the number of Benefit Years in which the Insured Person has been insured by CRL. 2. A Benefit Year is a period of twelve (12) consecutive months beginning with the Insured Person's effective date of insurance under the Policy. Maximu~ment 1st Benefit Year ................................................................................... 20% of Scheduled Amount 2nd Benefit Year ............................................................................................. 40% of Scheduled Amount 3rd Benefit Year ................................................................ 60% of Scheduled Amount 4th Benefit Year .............................................................................................. 80% of Scheduled Amount 5th Benefit Year ................................. 100% of Scheduled Amount The charges are incurred on the date the service is performed. Exclusions In addition to the General Exclusions and Covered Charges Subject to Limitations, no Dental Benefits will be paid for: a. any dental procedure not begun and completed while insured for Dental Benefits. However, CRL will allow an extension of sixty (60) days following the date of termination for completion of a particular Dental Procedure, as outlined in the Schedule of Dental Procedures, which was begun while the Insured Person is insured for Dental Benefits; b. replacement of any lost or stolen dental appliance; c. dental appointments which are not kept; d. charges for fixed bridgework, dentures and crowns, except that 50% of the scheduled amount will be paid beginning with the Insured Person's fifth (5th) consecutive Benefit Year for: (1) replacement of fixed bridgework, dentures or crowns after at least five (5) years of its last placement. (2) fixed bridgework or dentures replacing a tooth removed while the Insured Person is insured for Dental Benefits, but not replacing a support tooth for a fixed bridgework or denture installed within the last five (5) years.* e. any prosthesis until insured under this plan for five (5) consecutive Benefit Years;* f. Orthodontia Treatment; g. any appliance to be used as a spare; h. implants; i. periodontal scaling or any type of prophylaxis procedure in excess of two (2) such Treatments during any Benefit Year; j. adjustment of appliances within six (6) months of placement; k. examination of the oral cavity in excess of two (2) exams during any Benefit Year; I. complete series of x-rays in excess of one (1) complete series during any two (2) year period; m. bitewing x-rays in excess of four (4) such x-rays during any Benefit Year; n. charges covered under any other benefit of the Policy; o. any type of periodontic procedure which is not specifically included in the schedule; p. any charges for Hospital, Hospital Facility, or Outpatient Facility; or q. any procedure not listed in the Schedule of Dental Procedures. $3,000 Schedule of Dental Procedures (Partial listing only) Clinical Oral Examinations 00110 Initial oral examination .............. .................................................................................................. $21.00 00120 Periodic oral examination ............................................................................... . ...... $21,00 00130 Emergency oral examination ............................................................... . ..... $21.00 Radiographs 00210 Complete series .......................................................................................................................... $54.00 00220 Periapical (first film) ....................................................................................................................... $9.00 00272 Bitewings (two films) ................................................................................................................... $16.00 00330 Panoramic film ............................................................................................................................. $24.00 Preventative 01110 Adults - prophylaxis ................................................... $27 00 01120 Children - prophylaxis ................................................................................................................. $27.00 Periodontics 04110 Periodontic examination ......................... Not ....................................... Payable 04340 Periodontal scaling (entire mouth) ........................................................................... Pay as prophylaxis Extractions (including local anesthesia and routine post- operative care) 07110 Single tooth ................................................................ $36 00 *This exclusion does not apply when an Insured Person loses a tooth due to a Sickness which occurs while the coverage is in force. the entire Schedule of Dental Procedures is contained in the Policy. The above is only a partial listing of tile procedures contained in the Schedule of Dental Procedures and is included here for purposes of example. The Insured Member may call the Customer Service Representative for additional information. G. Preventive Medical Benefit Ho The plan provides a Preventive Medical Benefit for medical services that are not for the care, Treatment or diagnosis of an Illness. The total amount paid for each Insured Person for services received in any one (1) Benefit Year will not be more than the lesser of the Maximum Payment or the actual fee charged. A Benefit Year is a period of twelve (12) consecutive months beginning with the Insured Person's effective date of insurance under the Policy. 3. Covered Procedure Scheduled Benefit~ Physical Exam and Associated Tests ......................................................................................... $100' Routine Physical Exams Pediatric Exams *Includes the total of any and all services in this category. 4. Exclusions In addition to the General Exclusions and Covered Charges Subject to Limitations, no benefits will be paid for: a. any procedure not listed in the Covered Procedures section; b. vitamin injections; or c. routine eye exams. Child Immunization Benefit Coverage will be provided for those child immunizations, including the immunizing agents, which, as determined by the Department of Health, conform with the standards of the (Advisory Committee on Immunization Practices of the Center for Disease Control) U.S. Department of Health and Human Services. Benefits will be exempt from deductibles or dollar limits. I. Accident Expense Benefit 1. Benefits will be paid for Covered Charges as a result of an accidental bodily Injury which occurs while the person is insured under this Policy. 2. This benefit will cover the following: a. Doctor; b. Hospital; c. diagnostic x-ray or lab tests; and d. Registered Nurse (R.N.) or Licensed Practical Nurse (L.P.N.). 3. Charges must be incurred within ninety (90) days of the date of the Injury. The total amount of benefits paid will be the amount charged, but not more than the Maximum Payment shown on the Schedule of Benefits. 4. Exclusions See General Exclusions and Covered Charges Subject to Limitations. NOTE: Dental Expenses are not covered under this Benefit. Prescription Drug Benefit After CRL's approval of the insurance coverage, a prescription drug card/s will be issued, along with information about formulary prescriptions and participating pharmacies. This benefit works as follows: 1. When using a participating pharmacy: a. The Insured Person will pay the applicable Copayment and/or percentage shown on the Schedule of Benefits. The amount of the Copayment and/or percentage may vary by the type of prescription being dispensed: Generic Prescription Drug Brand Name Formulary Prescription Drug Brand Name Non-Formulary Prescription Drug b. Insured Persons may call CRL or the prescription drug vendor to determine if a particular drug is included in CRL's formulary (list of preferred prescription drugs). c. If the drug charge is less than the Copayment and/or percentage shown, the Insured Person will be responsible for the full cost of the medication. d. The pharmacy will fill the prescription for up to a thirty (30) day supply. If the Insured Person's Doctor prescribes the medication for a period longer than thirty (30) days, it is considered a maintenance medication. Maintenance medications, after one (1) thirty (30) day refill, must be ordered through CRL's Managed Mail Prescription Program described later in this section. If the Insured Person forgets the prescription drug card, the Insured Person will pay the full cost of the medication at the pharmacy. In order to receive reimbursement, the Insured Person must send a claim form (available from CRL) to the prescription vendor, which will reimburse the Insured Person according to the terms of their program. If the Insured Person visits a non-participating pharmacy, the Insured Person will pay the full cost of the medication to the pharmacy. The Insured Person may then send the receipt for the prescription charges along with a prescription drug claim form to the prescription drug vendor. Non-participating pharmacy prescription charges are reimbursed on the same basis as participating pharmacies. The prescription drug card must be returned to CRL when the coverage terminates for any reason. If the card is used after its termination date, the Insured Person will be billed directly by CRL for any benefits paid after the termination date. Covered Charges: a. Legend drugs. Children's prescription vitamins, to one (1) year of age and prenatal prescription vitamins for eligible maternity patients. b. The following non-legend items on prescription only: Insulin, insulin needles and syringes, sugar test tablets and tape, including Chemstrips, Acetone tablets and Benedict's Solution or equivalent. c. Compounded medication of which at least one (1) ingredient is a prescription legend drug. d. Any other drug, which, under the applicable state law, may only be dispensed under the written prescription of a Doctor or other lawful prescriber. Managed Mail Prescription Program: a. Insured Persons who take maintenance medications may use the Managed Mail Prescription Program. Maintenance medications are those which must be taken for an extended period of time in order to treat certain conditions. The Managed Mail Prescription Program consists of the following steps: (1) An Insured Person's Doctor writes a prescription for up to a sixty (60) day supply, with up to three (3) refills of a maintenance medication. If the medication is needed immediately, the Doctor should issue two (2) prescriptions, one for an immediate supply to be obtained at a local pharmacy, and a second for an extended supply to be mailed to the Managed Mail Prescription Vendor. (2) The Insured Person must include the Copayment and/or percentage amount through a check made payable to the Managed Mail Prescription Vendor or by furnishing their credit card number and expiration date. Insured Persons may call a toll-free number to determine the availability of generic alternatives or ask other questions. (3) The Insured Person completes the patient profile section for the first mail service order only and sends the profile along with the Managed Mail Prescription Order Form. (4) The original prescription(s) should be submitted with the Managed Mail Prescription Order Form to the Vendor. 10 (5) Prescriptions will be delivered either by U.S. Postal Service or UPS. Allow 10-14 days for delivery from the date the order form is mailed. (6) Refills may be ordered by calling a toll-free number. Have your prescription number and credit card available. b. The Copayment and/or percentage amount is based upon the type of drug being dispensed and is shown on the Schedule of Benefits. The Insured Person is responsible for this amount before benefits are payable under this plan. c. A Generic Prescription Drug will be dispensed unless a Brand Name Prescription Drug is requested by the Insured Person's Doctor or if a Generic Prescription Drug is not available. Prescriptions for Mental Illness: Prescriptions related to a diagnosed Mental Illness, including conditions caused by or related in any manner to such Mental Illness, are payable at 50%, up to a maximum of $550 per calendar year. Exclusions: In addition to the Covered Charges Subject to Limitations and the General Exclusions, this Benefit will not pay for the following: a. contraceptives, oral or other, whether medication or device, unless prescribed to treat a medical condition; b. any drug for the Treatment of sexual dysfunction; c. charges for the administration or injection of any drug; d. non-legend drugs except those listed above; e. therapeutic devices or appliances, including support garments and other nonmedical substances, regardless of intended use, except those listed above; f. prescriptions which an eligible person is entitled to receive without charge from any Workers' Compensation Laws; g. drugs labeled "Caution-Limited by federal law to Investigational use," or Experimental drugs, even though a charge is made to the individual; h. immunization agents, biological sera, blood or blood plasma; i. medication which is to be taken by or administered to an individual, in whole or in part, while he or she is a patient in a licensed Hospital, rest home, sanitarium, extended care facility, convalescent Hospital, nursing home or similar institution which operates on its premises, or allows to be operated on its premises, a facility for dispensing pharmaceuticals; j. any prescription refilled in excess of the number specified by the Doctor, or any refill dispensed after one (1) year from the Doctor's original order; and k. charges for more than a 34-day supply of any medication, or more than 100-unit doses, whichever is greater, unless coverage is being provided under the Managed Mail Prescription Program Definitions: Generic Prescription Drug -- a prescription drug that is produced by more than one (1) manufacturer. It is chemically the same as and usually costs less than the Brand Name Prescription Drug for which it is being substituted. Brand Name Prescription Drug -- a prescription drug that has been patented with the brand name and is produced by the original manufacturer under that brand name. Formulary -- CRL's list of preferred prescription drugs. Brand Name Formulary Prescription Drug -- a Brand Name Prescription Drug that is included in CRL's list of preferred prescription drugs. Non-Formulary Prescription Drug -- a Prescription Drug that is not included in CRL's list of preferred prescription drugs. K. Major Medical Expense Benefit 1. Benefits will be paid if an Insured Person has Covered Charges during the calendar year which exceed the Deductible amount shown on the Certificate of Coverage. 2. Determinatio{i of Benefits Benefits will be determined by multiplying the insured Percentage times the amount of Covered Charges which exceed: a. the Deductible; and b. any amount payable under any other benefit provision of Policy. 3. Calendar Year Deductible The Insured Person's calendar year Deductible(s) are shown on the Certificate of Coverage. 4. Aggregate Family Deductible There will be a maximum amount that the Insured Member with Insured Dependents must pay for Covered Charges incurred in the same calendar year and applied to individual Deductibles. The excess over the aggregate amount, as shown in the Schedule of Benefits, will be subject to the Insured Percentage. 5. Maximum Out-of-Pocket Limit The maximum amount that the Insured Member with Insured Dependents will pay for covered medical expenses incurred in a calendar year is the total of three (3) individual Deductible amounts and three (3) individual Coinsurance amounts. 6. Common Accident If two (2) or more Insured Persons insured under the same certificate incur Covered Charges due to Injuries in the same accident, then only one (1) Deductible will be applied to all eligible charges incurred as a result of such accident during the calendar year the accident occurred and the next following calendar year. 7. Emergency Room Deductible Each time the Insured Person visits an emergency room of a Hospital, a Hospital affiliated emergency room or a free-standing facility for Treatment of a Sickness, an emergency room deductible of $75 will be applied. This Deductible will be waived if the Insured Person is admitted directly from the emergency room into a Hospital as an Inpatient. This Deductible is in addition to the Calendar Year Deductible and will not be applied to the Maximum Out-of-Pocket Amount. K1. Covered Charges 1. Room and Board for confinement in a Hospital. including intensive care. (Private room only covered up to average semi-private Room and Board rate.) 2. Medical services and supplies furnished by a Hospital. 3. Medical services and supplies furnished by an Outpatient department of a Hospital, a free-standing surgical facility or an Urgent Care facility,. 4. Anesthetics and their administration. 5. Medical services given by a Doctor. 6. Services of a Registered Nurse (R.N.) or Licensed Practical Nurse (L.P.N,) for private duty nursing services or Certified Registered Nurse Anesthetists. 7, X-ray exams, lab tests and other diagnostic services, 8. X-ray and radiation therapy, cobalt and chemotherapy Treatment. 9. Local transportation to or from a Hospital by a professional ground or air ambulance service. However, air ambulance is only covered if due to a life-threatening Illness. 10. Services of a Physiotherapist under the direct supervision of a Doctor. II. All costs associated with a mammogram every year for women forty (40) years of age or older and with any mammogram based on a Doctor's recommendation for women under forty (40) years of age. 12. Subject to all the terms and conditions of Policy, benefits will be paid for Covered Charges for the Insured Person relating to human tissue/organ transplants that are not Experimental/ Investigational provided that prior, written authorization from CRL's Case Management has been obtained before the pre-testing, evaluation and donor search. If such prior, written authorization has not been obtained, no benefits will be paid for any expenses relating to a human tissue/organ transplant(s). Subject to all the terms and conditions of Policy, medical expenses of a live donor will be considered Covered Charges of the Insured Person provided benefits remain and are available under Policy after the Insured Person's Covered Charges have been paid. If the live donor's expenses would be covered by: a. a group or individual insurance policy; b. any non-insurance arrangement, such as a charitable foundation, whether private or public; or c. any arrangement or coverage for individuals or individuals in a group (whether on an insured or uninsured basis), including, but not limited to, any prepayment coverage, per capita, or HMO; then benefits under Policy for Covered Charges of the live donor will be limited to the Covered Charges not covered by such other coverage. All live donor expenses must receive prior, written authorization by CRL's Case Management in order to be considered eligible for payment under Policy as Covered Charges. 13. Breast reconstruction as follows: Any covered person who is receiving benefits through CRL in connection with a mastectomy, performed on a person who has been diagnosed with breast cancer and who elects breast reconstruction, will have coverage provided in a manner determined in consultation with the attending physician and the patient, for: a. Reconstruction of the breast on which the mastectomy has been performed; b. Surgery and reconstruction of the other breast to produce a symmetrical appearance; c. Prostheses and Treatment of physical complications at all stages of mastectomy including lymphedemas. ' Coverage will be subject to the Calendar Year Deductible, Coinsurance and any copayments applicable. 14. Medical supplies as follows: a. blood, plasma and derivatives; b. initial replacement of natural limbs and eyes when loss occurs while insured under the Policy; c. initial permanent lens immediately following cataract Surgew, except that replacements will not be covered; d. casts, splints, trusses, braces and crutches; e. purchase or rental of Hospital-type equipment for kidney dialysis (the total purchase price to be eligible will be on a monthly pro-rata basis during the first twenty-four (24) months of ownership; no benefits are paid for an Insured Person on or after the day such person is entitled to benefits under Medicare); f. purchase or rental (whichever costs less, as determined by CRL) of durable medical equipment for temporary use, not to exceed a six-month period; and g. oxygen. NOTE: See General Exclusions and Covered Charges Subject to Limitations. K2. Extended Care Facility Benefit Benefits will be paid when the insured Person incurs Room and Board and Misceltaneous Charges in an Extended Care Facility following a Hospital confinement. Benefits will not be paid for more than the semi-private room and board rate up to sixty (60) days during any one (1) disability period. ¸13 2. Covered Charges are those which are Necessary, Reasonable and Customary and which meet all of the following requirements: a. the preceding Hospital confinement lasted continuously for at least three (3) days; b. the Extended Care Facility admission begins within fourteen (14) days after discharge from the Hospital; c. the confinement, certified by the attending Doctor, is medically Necessary for the care of an Insured Person who is Totally Disabled and who otherwise would have been confined as a bed patient in a Hospital; and d. the Insured Person is under the direct care of a Doctor. 3. Exclusions In addition to the General Exclusions and Covered Charges Subject to Limitations, no Extended Care Facility benefit will be paid for: a. the excess for Room and Board Charges above the Hospital semi-private rate which would have been paid in lieu of the Extended Care Facility; or b. service for Custodial Care. K3. Lifetime Maximum Payments for all medical expense benefits under the Policy will never be more than the Lifetime Maximum Benefit, as stated in the Schedule of Benefits, for all of an Insured Person's Illnesses. Regardless of the number of times that an individual may be covered under any of CRL's plans, there is only one Lifetime Maximum Benefit. No benefits will be paid for charges incurred after the insurance terminates, except as may be provided under an Extended Benefits provision, if included in the plan. K4. Alcohol and Drug Abuse and Dependency Benefit 1. Benefits will be paid for the following types dependency: a. Inpatient Detoxification; b. Non-Hospital residential care; and c. Outpatient Care. of Treatment for Alcohol and Drug Abuse and The first course of Treatment during an Insured Person's lifetime, will be paid on the same basis as for any other Illness. The second and all subsequent courses of Treatment during the Insured Person's lifetime will be subject to the Deductible and will be paid at 50%. A course of Treatment is considered to be the full range of Detoxification, Treatment and supportive services carried out specifically to alleviate the dysfunction of the Insured Person. Benefits will be payable as follows for each type of Treatment: a. Inpatient Detoxification (1) Benefits are payable for the following services: (a) Lodging and dietary services; (b) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff; (c) Diagnostic X-ray; (d) Psychiatric, psychological and medical laboratory testing; and (e) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities; (a) Hospital; (b) Psychiatric Hospital; (c) Freestanding Treatment facility; and (d) Health care facility. (3) Benefits are subject to a lifetime limit of four (4) admissions for each covered person. Each admission is limited to seven (7) days. b. Non-Hospital Residential Care (1) Benefits are payable for the following services: t 4 (a) Lodging and dietary services; (b) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff. (c) Rehabilitative therapy and counseling; ' (d) Family counseling and intervention; (e) Psychiatric, psychological and medical laboratory testing; and (f) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities: (a) Freestanding Treatment facility; and (b) Health care facility. (3) To qualify to have benefits paid, a Doctor or psychologist must certify the Insured Person as a person suffering from Alcohol or other Drug Abuse or dependency and must have referred the Insured Person for the appropriate Treatment. (4) Benefits may be limited to a minimum of thirty (30) days per year, subject to a lifetime limit of ninety (90) days. These Non-Hospital Residential Care days may not be exchanged for Outpatient Care days. c. Outpatient Care (1) Benefits are payable for the following services: (a) Services of a Doctor, psychologist, nurse, certified addictions counselor and trained staff; (b) Rehabilitative therapy and counseling; (c) Family counseling and intervention; (d) Psychiatric, psychological and medical laboratory testing; and (e) Drugs, medicines, equipment use and supplies. (2) Benefits are payable for services provided in the following licensed facilities: (a) Freestanding Treatment facility; (b) Psychiatric Hospital; and (c) Health care facility. (3) To qualify to have benefits paid, a Doctor or ps~/chologist must certify the Insured Person as a person suffering from Alcohol or other Drug Abuse or dependency and must have referred the Insured Person for the appropriate Treatment. (4) Benefits may be limited to a minimum of thirty (30) Outpatient, full-session visits, or the equivalent of partial visits, per year subject to a lifetime Iimit of 120 full-session visits or the equivalent of partial visits. These Outpatient Care days may not be exchanged for Non-Hospital Residential Care days. 3. In addition to the above benefits for Inpatient Detoxification, Non-Hospital Residential Care and Outpatient Care, benefits will be available for a minimum of thirty (30) separate sessions of Outpatient or Partial Hospitalization Services which may be exchanged on a two-to-one basis for fifteen (15) additional days of Non-Hospital Residential Care. 4. No benefits are payable for charges for Treatment of alcoholism, including conditions caused by or resulting from alcoholism and drug abuse and dependency, except as described in this Benefit. K5. 24-Hour Coverage Benefits will be paid for Covered Charges incurred by an Insured Person due to an Illness arising out of, or in the course of, the insured Person's self-employment for wage or profit, but only if the Insured Person is otherwise exempt from coverage under the state workers' compensation statute or other similar laws. L. Centers of Excellence Program An Insured Person requiring an organ/tissue transplant that is a Covered Charge under the Policy, may elect to request participation in Central Reserve Life Insurance Company's (CRL's) Centers of Excellence Program (COE). As a condition of being considered for COE, an Insured Person must agree, in writing, to use COE Providers for all Covered Charges related to an organ/tissue transplant. A COE Provider is a health care professional or facility that has or is governed by an agreement with a provider network selected by CRL to provide certain health care services to Insured Persons. 15 If an Insured Person elects to participate in COE, and is approved by the COE Coordinator for entry into COE, allowable charges are subject to the in-network Deductible and Coinsurance. The lifetime maximum benefit payable under COE is $5,000,000 (COE Lifetime Maximum Benefit), which amount is included in the $5,000,000 Lifetime Maximum Benefit available under the Policy. Any Covered Charges paid for organ/tissue transplant-related expenses shall be cumulative for purposes of determining any maximum benefits under the Policy. TRAVEL AND LIVING EXPENSES: Any benefits payable under this travel and living expense provision shall be subject to CRL's approval prior to reimbursement. a. Up to $10,000 is included as Covered Charges within the COE Maximum Lifetime Benefit, which will be available to pay the reasonable travel and living expenses incurred by: (1) a live donor, if applicable; and (2) the Insured Person and one companion, or, if the Insured Person is a Dependent child, two parents. b. Round-trip transportation to the COE Provider, including round-trip coach airfare, train, or other commercial carrier. Reimbursement for travel by private auto shall be based on the IRS allowance per mile for medical travel. c. The cost of meals and hotel accommodations for the Insured Person and donor if Treatment in an Outpatient setting is required. d. The cost of meals and hotel accommodations for one companion or two parents while accompanying the Insured Person during Hospitalization and Outpatient care. PREAUTHORIZATION AND ENROLLMENT: In order to be considered by CRL as a possible candidate for acceptance into COE, as soon as any organ/tissue transplant services are indicated, the Insured Person or his/her Doctor, shall contact CRL's COE Coordinator at 1-800-321-3997, extension 6255, to request preauthorization and enrollment in COE. The decision whether an Insured Person shall be allowed to enroll in COE shall be made in the discretion of the COE Coordinator. If an Insured Person is denied a transplant procedure by the COE Provider, the Insured Person shall be offered the opportunity to utilize a second COE Provider for an evaluation. If the second COE Provider, for any reason, determines that the Insured Person is not an acceptable candidate for the proposed organ/tissue transplant procedure, no further coverage under COE shall be provided for services and supplies that are related in any manner to the proposed organ/tissue transplant procedure. 16 IlL COVERED CHARGES SUBJECT TO LIMITATIONS Subject to the General Exclusions and all other Policy provisions, the following medical expense benefits are payable subject to the stated limitations: Treatment of a diagnosed Mental Illness including conditions caused by, or related in any manner to, such Mental Illness for: a. Inpatient Hospital charges. b. Doctor charges for psychiatric services up to $20 per visit. c. Drugs or medicines. Allowable expenses are subject to the Deductible but are not included in the calculation of the Maximum Out-of-Pocket Limit. Benefits are paid at 50% to a maximum per calendar year of $2,000 for Inpatient expenses and $550 for Outpatient expenses. 2. Spinal manipulation, including, but not limited to, manipulation for spinal subluxation and any associated Treatment or services, up to a maximum Covered Charge of $15 per day of Treatment, subiect to the following maximum benefits payable: a. $300 per calendar year for all Treatment or services. The maximum benefit payable for the Insured Member and Insured Dependents combined is $600 per calendar year. b. $75 per calendar year for all x-rays. The maximum benefit payable for the Insured Member and Insured Dependents combined is $150 per calendar year. 3. Sterilization up to a lifetime maximum benefit of $350. 4. Allergy testing and allergy injections, including, but not limited to, injectable antigens, and extracts, up to a maximum of $500 per calendar year. The maximum benefit payable for the Insured Member and Dependents combined is $1000 per calendar year. 5. Surgery of the foot as provided in the Foot Surgery Schedule. Foot Surgery Schedule (Partial Listing Only) Incision 28010 Tenotomy, Subcutaneous, Toe Single ...................................................................................... $250.00 28011 Multiple ...................................................................................................................................... $400.00 Excision 28110 Ostectomy, Partial Excision, Fifth Metatarsal Head (Bunionette) ............................................ $700.00 Tenotomy, Open, Extensor, Foot or Toe 28285 Hammertoe Operation, One Toe .............................................................................................. $595.00 28290 Correction of Hallux Valgus (Bunion) ....................................................................................... $900.00 28292 Keller Bunionectomy .................................................. $1 210 00 When multiple procedures are pedormed, CRL allows 100% of the schedule benefit for the principle, or first procedure, and progressively less for the other multiple procedures. The entire Foot Surgery Schedule is contained in the Policy. The above is only a partial listing of the procedures contained in the Foot SurgeW Schedule and is included here for purposes of example. The Insured Member may call the Customer Service Representative for additional information. No benefits are payable for foot care due to: a. Treatment of weak, strained or flat foot or instability or imbalance of the foot. b. Treatment of corns, calluses or the free edge of toenails, except when necessitated for peripheral vascular disease or other Illnesses of similar medical seriousness. c. Charges in excess of the amounts provided in the Foot Surgery Schedule. 6. Hospice care and services, whether on an Inpatient or Oulpatient basis, that are provided by a Hospice Care Program, or other Hospice care provider approved by CRL. Care and services must be provided within six (6) months from the date the Insured Person entered or re-entered (after a period of remission) the Hospice Care Program or CRL approved Hospice care provider (Hospice Benefit). The Hospice Benefit is subject to the following requirements and limitations: a. The attending Doctor must certify that the Insured Person has a terminal Illness and a life expectancy of six (6) months or less. b. CRL will determine the eligibility for, and will administer the Hospice Benefit. c. All Covered Charges for the Hospice Benefit must be billed by the Hospice Care Program, or the approved Hospice care provider, and will be subject to all of the terms of the Policy, including any applicable Deductibles and Coinsurance. In addition to Covered Charges otherwise payable under other provisions of the Policy, the Hospice Benefit will be paid up to the following limitations: (1) $100 per day for Outpatient Hospice care up to a lifetime maximum of $3500. (2) $200 per day for room and board and care while an Inpatient in a Hospice up to a lifetime maximum of $10,000. 7. Occupational, speech and physical therapy and related diagnostic testing, up to a maximum Covered Charge of $50 per visit with a maximum of 25 visits per calendar year for each type of therapy, provided the occupational and speech therapy is ordered by a Doctor as Necessary and the therapy is directly related to and begins within six (6) months following Surgery or Illness. The above services must be performed by a licensed occupational, speech or physical therapist and be under the supervision of a Doctor. Covered Charges do not include Treatment of a learning disability, speech impediment, or developmental delay] even though therapy is recommended due to organic dysfunction, including, but not limited to, congenital deformity or birth trauma. (See General Exclusions.) 8. Cosmetic Surgery/Treatment, but only if required to restore a part of the body which has been altered as a result of the following events or conditions that occurred while the Insured Person was insured by the Policy and for which benefits were eligible for payment in accordance with the terms of the Policy: a. Medically diagnosed congenital defects and birth abnormalities; b. Accidental bodily Injury; c. Surgery; or d. Disease that was first diagnosed while the Insured Person was insured by the Policy. 9. For repair of Injury to sound natural teeth, (including their replacement) as a result of an accidental bodily Injury which occurs while the person is insured. Treatment must be given within ninety (90) days of the date of the accident. 18 GENERAL EXCLUSIONS No benefits will be paid for charges: For transpodation, except local transportation to or from a Hospital by a professional ground or air ambulance service. However, air ambulance is only covered if due to a life-threatening Illness. For fertility or infertility studies, diagnostic testing, advice, consultation, examination, medication, or for any Treatment related to or connected in any way with the restoration or enhancement of fertility or the inability to conceive or conception by artificial means, including, but not limited to, in-vitro fertilization or embryo transfer. However, when the infertility was caused by a covered Sickness or Injury, the Treatment for that Sickness or Injury will be covered. 3. For donation of any body organ by an Insured Person. 4. For services performed by a person who ordinarily resides in the Insured Person's home or is a Close Relative of the Insured Person. 5. For any Cosmetic Surgery/Treatment, unless required to restore a part of the body which has been altered as a result of the following events or conditions that occurred while the Insured Person was insured by the Policy and for which benefits were eligible for payment in accordance with the terms of the Policy: a. Medically diagnosed congenital defects and birth abnormalities; b. Accidental bodily Injury; c. Surgery; or d. Disease that was first diagnosed while the Insured Person was insured by the Policy. 6. For any Illness that is subject to and paid or payable under any state or federal workers' compensation law or other similar statute or occupational disease law. If the Insured Person is denied benefits under any such law but an award is made at a later date, CRL shall have the right to recover the cost of any claims paid. However, coverage is provided to the Insured Person for Covered Charges incurred by the Insured Person due to an Illness arising out of or in the course of employment for wage or profit if the Insured Person is: a. Self-employed; and b. exempt from under any state or federal workers' compensation statutes or other similar laws. 7. For Treatment or services Experimental or Investigational in nature. 8. For eye refractions, eye glasses, or contact lens, including fittings and examinations, or eye Surgery, when the primary purpose is to correct myopia (nearsightedness), hyperopia (farsightedness) or astigmatism (blurring), including, but not limited to radial keratotomy. 9. For Treatment, services or supplies furnished by a department or agency of the United States Government. This exclusion will not apply to a non-service connected Illness of a veteran of the United States armed forces who does not have a service connected Illness. This exclusion will not apply to emergency Treatment provided in the case of a life-threatening medical condition. 10. For services and supplies eligible for payment by a governmental or charitable program, except as required by law. 1 1. For hearing aids, including fittings and examinations. 12. For which the Insured Person is not legally obliged to pay. 13. For Treatment or services which are not generally accepted medical practices in the United States for a given Illness. 1 9 I,b For i-leatment of obesity, melbid obesity or for weight reduction purposes, unless the Sickness or Injury is life-threatening. 15. For illness that results from participation in a felony or to which a contributory cause was the Insured p , erson s being engaged in an illegal occupation. 16. For routine physical or premarital examination except as may be covered under the Preventive Medical Benefit. 17. Due to a Preexisting Illness. Benefits wilt be paid for charges incurred after the end of a period of twelve (12) consecutive months while insured under the plan. 18. For sex changes. 19. For Treatment of controlled (as defined by the Federal Food and Drug Administration) or prohibited substance abuse, except as provided for in the Alcohol and Drug Abuse and Dependency Benefit. 20. Resulting from any suicide, attempted suicide or intentionally self-inflicted Injury or Sickness while sane or insane. 21. For examination, Treatment or Surgery of the teeth, gums or direct supporting structure except: a. As may be provided under a Progressive Dental Benefit; or b. For repair of Injury to sound natural teeth, (including their replacement) as a result of an accidental bodily Injury which occurs while the person is insured. Treatment must begin within ninety (90) days of the date of the accident. 22. For an Illness caused by any act of war, whether or not declared. 23. For Surrogate Pregnancy. 24. ,Services and supplies that are covered under an extension of group health benefits provision by a previous employer-related health plan, health insurance plan or other coverage arrangement. Such services and supplies will not be covered by this Policy until the extension of benefits under the prior plan ends. 25. For Illness that results either directly or indirectly from the Insured Person's participation in a hazardous activity, which shall be defined as skydiving, hang-gliding, parachuting, piloting experimental or ultra-light aircraft or riding in a hot-air balloon. 26. For Illness resulting either directly or indirectly from the insured Person's Intoxication or being under the influence of alcohol, drugs, controlled substances, or any other substance capable of mental or physical impairment, unless it has been administered or prescribed on the advice of a Doctor. Intoxication means a concentration of 0.15% or more by weight of alcohol in the blood or urine. This exclusion shall apply even if no traffic or criminal charges are filed or pursued. 27. For Illness that results either directly or indirectly from the Insured Person's committing or attempting to commit or participation in a felony. 28. For pregnancy, except Covered Complications of Pregnancy. 29. For Outpatient prescription drugs, unless the optional prescription drug benefit has been elected. Refer to Schedule of Benefits. ~0 DEFINITIONS The following are defined terms and are capitalized whenever they appear in the Certificate Booklet or Policy. 1. BENEFICIARY: The person(s) designated by the Insured Person and to whom Life Insurance Benefits will be paid. CERTIFICATION OF CREDITABLE COVERAGE: A written cedification of: a. the period of Creditable Coverage of the individual under a health insurance plan and the coverage (if any) under a COBRA continuation provision; and b. the waiting period (if any) (and affiliation period, if applicable) imposed with respect to the individual for any coverage under such plan. CLOSE RELATIVE: The Insured Person, the Insured Person's spouse, a child, brother, sister or parent of the Insured Person or of the Insured Person's spouse. COINSURANCE: The percentage of the Covered Charges the Insured Person must pay which is the difference between 100% and the Insured Percentage stated in the Schedule of Benefits. COPAYMENT/CO-PAY: If required by the terms of the group health plan, copayment or co-pay refers to the payment that an Insured Person must make to the health care provider each time a particular Treatment or service is provided. COSMETIC SURGERY/TREATMENT: Any Treatment, opera- tive, or non-operative procedure or any portion of an operative procedure performed primarily to improve physical appearance and/or to treat a mental condition through change in bodily form. 7. COVERED CHARGES: The Reasonable and Customary charges for expenses which are Necessary to the Care and Treatment of and illness and which are eligible for payment under the Policy. An expense is incurred at the time the service or supply' is actually provided. However, the professional fee for a vaginal delivery or a Caesarean section delivery, including prenatal and postnatal care, will be deemed to have been incurred at the time of delivery. Covered Charges do not include: charges applied to a Deductible or Coinsurance amount under any benefit of the Policy; or charges for expenses incurred after the insurance terminates, except as may be provided under an extended benefits provision. 8. COVERED COMPLICATIONS OF PREGNANCY: a. Conditions requiring medical Treatment prior or subsequent to the termination of pregnancy whose diagnoses are distinct from pregnancy but which are adversely affected by pregnancy or caused by pregnancy, such as acute nephritis, nephrosis, cardiac decompensation, missed abortion, disease of the vascular, hemopoieatic, nervous, or endocrine systems, and similar medical and surgical conditions of comparable severity; but will not include false labor, occasional spotting, Doctor prescribed rest during the period of pregnancy, morning sickness and similar conditions associated with the management of a difficult pregnancy not constituting a classifiably distinct complication of pregnancy; and b. Involuntary Caesarean section, miscarriage, hyperemesis gravidarum and pre-eclampsia requiring Hospital confinement, ectopic pregnancy which is terminated, and spontaneous termination of pregnancy which occurs during a period of gestation in which a viable birth is not possible. c. Conditions requiring medical Treatment after the termination of pregnancy whose diagnoses are distinct from pregnancy but which are adversely affected by pregnancy or caused by pregnancy. 9. CREDITABLE COVERAGE: Coverage under any of the following, provided there was not a sixty-three (63) day break in coverage during which time period the individual was covered: (A waiting period shall not be treated as a break in coverage.) a. A Group Health Plan; b. Health insurance coverage; c. Part A or Part B of Titte XVIII of the Social Security Act (Medicare); 21 d. Title XIX of the Social Security Act (Medicaid), other than coverage consisting solely of benefits under Section t 928 (the program for distribution of pediatric vaccines); e. Chapter 55, Title 10, United States Code (CHAMPUS); f. A medical care program of the Indian Health Service or of a tribal organization; g. A State health benefits risk pool; h. A health plan offered under Chapter 89 of title 5, United States Code (the Federal Employees Health Benefits Program); i. A public health plan; or j. A health benefit plan under Section 5(e) of the Peace Corps Act [22 U.S.C. Section 2504(e)]. (Not all insurance will be Creditable Coverage. It depends on state and/or federal law. For example, coverage for a specified disease or illness, such as cancer, is not considered Creditable Coverage.) 10. CUSTODIAL CARE: Services and supplies, regardless of who recommends them or where they are provided, that an Insured Person receives mainly to assist in daily living activities. 1 1. DEDUCTIBLE: The amount of Covered Charges that the Insured Person must pay each calendar year before the Policy pays major medical benefits. 12. DEPENDENT: a. A Member's spouse under the age of sixty-five (65) (if not legally separated from the Member). b. Any person desginated to be a Dependent by a court order as per Act 114 of 1992 (providing for Medical Support of Children). c. A Member's unmarried child (including a stepchild, legally adopted child or a child Placed for Adoption) until the date the child attains age nineteen {19). The term Dependent will also include a Member's unmarried child age nineteen (19) or over, who is: (1) Incapable of earning a living due to mental retardation or physical handicap. CRL must be furnished proof of incapacity within thirty-one (31) days of the date insurance would have terminated due to age. CRL may require proof of continued incapacity each year after the first two-year period that insurance has been extended; (2) Chiefly dependent on the Member for financial support; and (3) Insured on the date immediately preceding the day the insurance would have terminated due to age. d. An eligible Member's unmarried child nineteen (19) but under twenty-three (23) years of age enrolled as a full-time student in an accredited school and supported by the Member. 13. DOCTOR: Any provider of medical care and Treatment when such care or Treatment is within the scope of the provider's licensed authority and is provided pursuant to applicable laws. This term includes medical doctors, osteopaths, chiropractors, podiatrists, dentists, psychologists, optometrists, physical therapists, nurse practitioners and nurse midwives. 14. EVIDENCE OF INSURABILITY:Satisfactory, proof, as determined by CRL, that a person is acceptable for insurance. 15. EXPERIMENTAL/INVESTIGATIONAL: A Treatment is Experimental or Investigational if CRL determines that: a. the Treatment is a drug or device that cannot be lawfully marketed without approval of the FDA and that approval for marketing has not been given at the time the drug or device is furnished. (Any other approval granted by the FDA as an interim step, e.g. an Investigational Device Exemption, is not sufficient); or b. the Treatment or the patient informed consent document utilized with the Treatment was reviewed and approved by the treating facility's Institutional Review Board or other body serving a similar function, or if federal law requires such review and approval; or c. Reliable Evidence shows that the Treatment is the subject of any on-going Phase I or Phase II Clinical Trial; is the research, experimer~tal, study or investigational arm of any on-going Phase III Clinical Trial; or is otherwise under study to determine its maximum tolerated dose, its toxicity, its safety, its efficacy or its efficacy as compared with a standard means of treatment or diagnosis or with no therapy; or 22 d. the relative effectiveness of the Treatment compared to standard therapy or to no therapy has not been proven to be as good as, or better, by completed randomized Phase III Clinical Trials; or e. Reliable Evidence shows that the prevailing opinion among experts regarding the Treatment is that further studies or clinical trials are necessary to determine its maximum tolerated dose, toxicity, safety, efficacy or its efficacy as compared with a standard means of treatment or diagnosis or with no therapy. Phase I Clinical Trial shall mean a study to determine the relationship between toxicity and dose-schedule of treatment. Phase II Clinical Trial shall mean a study to determine whether the procedure produces a biological response, and, if so, the frequency, degree and duration of the response. Phase III Clinical Trial shall mean a study to determine the relative effectiveness of the treatment compared to standard therapy or to no therapy. Reliable Evidence shall mean only published reports and articles in accepted medical and scientific literature; the written protocol(s) used by the treating facility or another facility studying substantially the same Treatment; or the written informed consent used by the treating facility or by another facility studying substantially the same Treatment. 1 6. EXTENDED CARE FACILITY: A facility, operating under the laws of the state where it is located, that has as its primary purpose the provision of lodging and skilled nursing care, twenty-four (24) hours a day, for persons recovering from an Illness. The facility must also: a. Be supervised on a full-time basis by a Doctor or Registered Nurse (R.N.); b. Keep clinical records on all patients; c. Have the services of a Doctor available at all times under an established agrement; and d. Except incidentally, not be a place for rest, the aged, drug addicts, alcoholics, or the mentally ill. 17. GROUP HEALTH PLAN: An employee welfare benefit plan as defined under ERISA and as further defined under the Health Insurance Portability and Accountability Act of 1996 (an employer-sponsored health insurance plan). 18. HOME OFFICE: Central Reserve Life Insurance Company, 17800 Royalton Road, Cleveland, Ohio 44136-5197. 19. HOSPICE: Care of the terminally ill. The goals of Hospice are to reduce or abate the mental and physical distress of the terminally ill and to meet the special stresses of terminal illness, dying and bereavement. 20. HOSPICE CARE PROGRAM: A formal program directed by a Doctor to help care for a terminally ill person. The services may be provided through a centrally-administered, medically- directed and nurse-coordinated program. The program will provide primarily home care services twenty-four (24) hours a day, seven (7) days a week. Hospice may, also be provided through confinement in a Hospice Facility that operates as part of the program for short periods of stay in a home-like setting for direct care or respite. The program team must include a Doctor and a Registered Nurse (R.N.) and may also include a home health aid, licensed social worker, clinical psychologist, or a physical therapist. 21. HOSPICE FACILITY: A facility that: a. Provides primarily Inpatient care to terminally ill patients; b. Is operated under the laws of the jurisdiction where it is located; c. Is supervised by a Doctor with at least one Doctor on call twenty-four (24) hours a day; d. Provides twenty-four (24) hour a day nursing services under the direction of a Registered Nurse (R.N.) and has a full-time administrator; and e. Provides an ongoing quality assurance program. 22. HOSPITAL: A facility that: a. Is operated as a Hospital under the laws of the state where it is located; b. Is open at all times; c. Is operated mainly to diagnose and treat Illnesses on an Inpatient basis; d. Is any birthing facility used by a licensed certified midwife; 23 e. Has twenty-four (24) hour nursing services by or under the supervision of an R.N.; f. Is not mainly a skilled nursing facility, clinic, nursing home rest home, convalescence home or like place; and ' g. ts accredited as a Hospital under the Hospital Accreditation Program of the Joint Commission on Accreditation of Healthcare Organizations. 23. HOSPITAL MISCELLANEOUS EXPENSE: Charges made by a Hospital for other than Room and Board, except professional, surgical, medical, dental or special nursing fees. 24. ILLNESS: Sickness or Injury. 25. INJURY: An accidental bodily Injury sustained by the Insured Person which is the direct and independent cause of the loss and which occurs while the insurance is in force. Subject to all other terms of the Policy, Injury does not include Injuries for which benefits are payable under any workers' compensation, employer's liability or similar law. 26. INPATIENT: A person who is admitted, lodged, fed and receives services and Treatment in a Hospital, Extended Care Facility or Hospice Facility on an Inpatient basis as opposed to services and Treatment provided on an Outpatient basis. 27. INSURED DEPENDENT: A Dependent of a Member who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. 28. INSURED MEMBER: A Member who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. 29. INSURED PERSON: A Member or Dependent, who has been approved by CRL for coverage under the terms of the Policy and for whom premiums are paid. 30. INTOXICATED: The condition of an Insured Person being legally intoxicated as defined by Pennsylvania law. 31. MEDICARE: Benefits provided by Title XVIII of the Federal Social Security Act, as amended. 32. MEMBER: A person while a dues-paying Member in good standing with the Policyholder who is at least sixteen (16) years of age. 33. MENTAL ILLNESS: a. A neurosis, psychoneurosis, psychopathy or psychosis and includes all mental, nervous or emotional disorders without demonstrable organic origin. b. Any other Illness whose diagnosis is classified in the Mental Disorders section of the most recent edition of the International Classification of Diseases. 34. NECESSARY TO THE CARE OR TREATMENT OF ILLNESS (NECESSARY): Services or supplies provided by a Doctor, Hospital, Extended Care Facility, Hospice or other health care provider which CRL determines are: a. Appropriate to diagnose or treat the Insured Person's condition, illness or Injury; b. Consistent with standards of good medical practice in the United States; c. Medically Necessary and not primarily for the personal comfort, social well-being or convenience of the Insured Person, the family or the provider; d. Not a part of or associated with the scholastic education or vocational training of the Insured Person; e. Not Experimental or Investigational in nature; or f. In the case of Inpatient care, services or supplies that cannot be provided safely on an Outpatient basis. The fact that a health care provider has prescribed, recommended, or approved a service or supply does not, in and of itself, make it medically Necessary. A Plan Provider shall not assert any claim against CRL or the Insured Persons for covered services denied by the Preferred Provider Network due to lack of medical Necessity. $5. NON-PLAN PI-]OVIDER: Any Doctor, Hospital or other health care provider not corltractin9 with a preferred provider network with which CRL has contracted. 36. OUTPATIENT: Refers to certain services and Treatment provided to a person on an Outpatient basis by a Hospital, Extended Care Facility, Hospice or other Outpatient Facility, as opposed to services and Treatment provided to a person who is an Inpatient. 37. OUTPATIENT FACILITY: An Outpatient department of a Hospital, an ambulatory surgical facility or an Urgent Care Center that is operated in accordance with the laws of the state where it is located and it must: a. Be operated mainly to diagnose and treat Illnesses on an Outpatient basis and have organized facilities for Surgery; b. Have a staff of one (1) or more Doctors on the premises at all times during the facility's regularly scheduled hours of service; c. Have nursing services by or under the supervision of a Registered Nurse (R.N.) or Licensed Practical Nurse (L.P.N.); and d. Not be primarily a skilled nursing facility, clinic, doctor's office, nursing home, rest home, convalescence home or other similar place. 38. PERIOD OF CONFINEMENT: A continuous period of time when a person is an Inpatient in a Hospital. 39. PHYSICIAN: See Doctor. 40. PLACED FOR ADOPTION: The term "placement", or being "placed" for adoption, in connection with any placement for adoption of a child with any person, means the assumption and retention by such person of a legal obligation for total or partial support of such child in anticipation of adoption of such child. The child's placement with such person terminates upon the termination of such legal obligation. 41. PLAN PROVIDER: Any Doctor, Hospital or other health care provider contracting with a preferred provider network with which CRL has contracted. 42. PREEXISTING ILLNESS: A disease or physical condition caused by Illness or Injury for which medical advice or Treatment has been received within ninety (90) days immediately prior to becoming covered under the Policy. Such Illness shall be covered after the Insured Person has been covered for more than twelve (12) months under the Policy. 43. PREFERRED PROVIDER ORGANIZATION (PPO): An organization that has contracted with Doctors, Hospitals, or other health care providers who have agreed to provide health care services at negotiated rates. CRL contracts with the PPO to create a network plan. 44. REASONABLE AND CUSTOMARY CHARGES: Unless otherwise indicated, the Policy pays benefits for Covered Charges that CRL determines are Reasonable and Customary. The Reasonable and Customary Charge for any Treatment, service or supply is the usual charge made by the provider in the absence of insurance. The usual charge may not be more than the general level of charges for an Illness or Injury of comparable severity and nature made by other providers within the geographic area in which the service or supply is provided. When multiple procedures are performed, CRL allows 100% of Reasonable and Customary for the principal procedure and progressively less for the other procedures. 45. ROOM AND BOARD CHARGES: Charges made by a Hospital or Extended Care Facility for the room, meals, and routine nursing services for those persons confined as Inpatients. 46. SICKNESS: Sickness or disease of an Insured Person which is diagnosed or treated after the effective date of insurance and while insurance is in force. Subject to all other terms of the Policy, Sickness does not include Sickness or disease for which benefits are provided under any workers' compensation, occupational disease, employer's liability or similar law. 47. SURGERY: a. Incision, excision, cryotherapy, electrocautery, I thotripsy or laser Treatment, of a body organ or pad; 2,5 b. Reduction of a fracture or dislocation by manipulation; c. Suturing of a wound, but not the removal of sutures; or d. Removal of a stone or foreign object by endoscopy. 48. SURROGATE PREGNANCY: The pregnancy of a woman who is bearing a child for another individual that resulted from conception by natural or artificial means, including, but not limited to, conception by in-vitro fertilization or embryo transfer. 49. TOTAL DISABILITY, OR TOTALLY DISABLED: If the terms of coverage require that total disability be defined, the following will apply: An Insured Person will be deemed to have a Total Disability when, as a direct result of an Illness or Injury, the Insured Person is unable to perform the essential activities of a person of like age and sex who is in good health. 50. TREATMENT: Any and all forms of care, including, but not limited to, medical care or surgical care; advice; consultation; equipment; devices; diagnosis; cure, mitigation or prevention of disease; drugs (prescribed or non-prescribed); examination; observation; services; supplies; or testing. The following definitions will apply with respect to the Alcohol and Drug Abuse and Dependency Benefit: 1. ALCOHOL OR DRUG ABUSE: Any use of alcohol or other drugs which produces a pattern of pathological use causing impairment in social or occupational functioning or which produces physiological dependency evidenced by physical tolerance or withdrawal. For the purposes of this act, drugs shall be defined as addictive drugs and drugs of abuse listed as scheduled drugs in the act of April 14, 1972 (P.L. 233, No. 64), known as The Controlled Substance, Drug, Device and Cosmetic Act. 2. DETOXIFICATION: The process whereby an alcohol- intoxicated or drug-intoxicated or alcohol-dependent or drug-dependent person is assisted, in a facility licensed by the Department of Health, through the period of time necessary to eliminate, by metabolic or other means, the intoxicating alcohol or other drugs, alcohol and other drug dependency factors or alcohol in combination with drugs as determined by a licensed Doctor, while keeping the physiological risk to the patient at a minimum. 3. HOSPITAL: A facility licensed as a Hospital by the Department of Health, the Department of Public Welfare, or operated by the Commonwealth and conducting an alcoholism or drug addiction Treatment program licensed by the Department of Health. 4. INPATIENT CARE: The provision of medical, nursing, counseling or therapeutic services twenty-four (24) hours a day in a Hospital or Non-Hospital Facility, according to individualized Treatment plans. 5. NON-HOSPITAL FACILITY: A facility, licensed by the Department of Health, for the care or Treatment of alcohol-dependent or other drug-dependent persons, except for transitional living facilities. 6. NON-HOSPITAL RESIDENTIAL CARE: The provisions of medical, nursing, counseling or therapeutic services to patients suffering from alcohol or other drug abuse or dependency in a residential environment, according to individualized Treatment plans. 7. OUTPATIENT CARE: The provision of medical, nursing, counseling or therapeutic services in a Hospital or Non- Hospital Facility on a regular and predetermined schedule, according to individualized Treatment plans. 8. PARTIAL HOSPITALIZATION: The provision of medical, nursing, counseling or therapeutic services on a planned and regularly scheduled basis in a Hospital or Non-Hospital Facility licensed as an alcoholism Treatment program by the Department of Health, designed for a patient or client who would benefit from more intensive services than are offered in Outpatient Treatment but who does not require Inpatient care. 26 VI. POLICY PROVISIONS A. Eligibility Active, dues paying Members in good standing of the Policyholder, between the ages of sixteen (16) and sixty-four and a half (64-1/2), are eligible to apply for coverage. However, any Member who is eligible for coverage under a similar, non-contributory, employer-sponsored major medical plan, is not eligible for coverage under the Policy. No individual will be eligible as a Dependent of more than one (1) Member or be eligible as both a Member and Dependent. Any Dependent who is eligible for coverage under a similar, non-contributory, employer-sponsored major medical plan is not eligible for coverage under the Policy. Foster children may be eligible for coverage under this plan, but only if the Insured Person is legally responsible for paying for the medical expenses of such foster child. If the foster child is eligible for coverage under this plan, then the rules for "Adding Dependent Coverage", as stated below, will apply to that foster child. Dual Coverage No person may be insured at the same time as a Member under more than one (1) certificate under the Policy. Effective Date of Insurance A Member who has been approved in writing by the Home Office and is Totally Disabled on the date the Member's coverage would otherwise take effect, will not become effective until the second consecutive day the Member is not Totally Disabled. D. Adding Dependent Coverage The effective date of coverage for each eligible Dependent will be determined as follows: a. Newborns and adopted children will be covered for Injury or Sickness, including the Necessary Care and Treatment of medically diagnosed congenital defects, birth abnormalities, prematurity and routine nursery care from the moment of birth or date of placement in the adoptive home. Notice of the birth of a newborn child or adoption of a child must be furnished to CRL within thirty-one (31) days after the date of birth or the date of placement in the adoptive home in order to have coverage continue beyond such thirty-one (31) day period. The additional premium charge, including a pro rata charge for the initial thirty-one (31) day period, for the newborn or adopted child, if any, will be added to the Member's next premium statement and must be paid with that premium when due. If a written request is not received within thirty-one (3t) days after the newborn's date of birth or the date of placement of an adopted child, the Member must complete an application and, if approved by CRL, CRL will determine the effective date of the newborn or adopted child's coverage. Newborn coverage will apply to a newborn child of an Insured Dependent. b. other Dependents-- (1) Automatically covered if the Group Insurance Change Request is received by the Home Office prior to the eligibility date (date of marriage or adoption). The effective date will be the eligibility date. (2) Coverage will be effective the first day of the month following receipt of the completed form if the Group Insurance Change Request is received within: (a) thirty-one (31) days after the eligibility date; or (b) sixty (60) days after the the eligibility date for Dependents insured pursuant to Act 114 of 1992 (providing for Medical Support of Children). (3) The Member must complete an application if CRL is not notified within: (a) thirty-one (31) days after the eligibility date; or 27' (b) sixty (60) days after the eligibility date for Dependents insured purs~ant to Act ~14 of 1992 (providing for Medical Support of Children). Each Dependent will be considered independently and, if approved by CRL, CRL will determine the effective date of coverage. No Dependent coverage will become effective for a Dependent before the Member's coverage is effective. Payment of Premium All required premiums due are to be paid on or before the due date. Each premium payment must be received at the Home Office to be considered paid. F. Grace Period A Grace Period of thirty-one (31) days will be provided for the payment of each premium falling due after the first premium. If the premium due has been paid prior to the expiration of the Grace Period, the coverage will be deemed to have continued in force during the Grace Period. If any premium due, after payment of the first premium, is not paid before the end of Grace Period, the insurance coverage will automatically terminate at the end of the Grace Period. No notice of termination is required. G. Legal Rights Due to Fraud or Misrepresentation In addition to any other legal rights that CRL may have, CRL reserves the right to cancel the coverage of an Insured Person under the Policy in the event of fraud or material misrepresentation by the Insured Person, or his or her representative. In the absence of fraud, all statements made by the Insured Person will be deemed representations and not warranties. No such statement will be used to deny a claim or reduce benefits unless it is stated in the written Application. H. Policy/Premium Changes The Policyholder may request in writing a change in the Policy at any time without the consent of the Insured Person or beneficiaries or any other interested party. Any such change is subject to CRL's approval and requires the signature of the Policyholder and an officer of CRL in order to be effective. Any such change and the notice required will be provided in accordance with the Policy provisions. CRL may increase or otherwise adjust the premium rates of the Policy by class in accordance with its experience on any premium due date after the Policy has been in effect for twelve (12) months with thirty (30) days advance written notice to the Member. If a Preferred Provider Organization is used in conjunction with the Policy, the list of Plan Providers is subject to change (modifications, deletions or additions) without advance notice to the Insured Person. If the agreement between CRL and the Preferred Provider Organization is terminated for any reason, CRL wilt offer the Member a substitute plan of its choice. Renewal of Insured Person's Insurance CRL will renew or continue in force coverage at the option of the Member, except as follows: 1. Nonpayment of premiums. The Member has failed to pay premiums in accordance with the terms of the Policy, or CRL has not received timely premium payments. 2. Fraud. The Insured Person has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the Policy. 3. Loss of eligibility. 2~ a. The Member has failed to maintain his/her membership in the association. Upon termination of the association membership, the former Member may continue this insurance by notifying CRL and applying for the continuation of coverage. b. The Dependent ceases to meet the definition of a Dependent. c. The Member has moved to a state in which CRL does not hold a Certificate of Authority to issue insurance or does not actively market health insurance because CRL has discontinued all types of plans within that state. 4. Termination of Coverage. CRL is ceasing to offer coverage in accordance with the Policy Provision entitled "Modifications or Discontinuance of Coverage" or the Policy terminates in its entirety. 5. Movement outside of service area. If the Member has elected a network plan (e.g., preferred provider organization - PPO), and no longer lives, resides or works in the service area, but only if such coverage is terminated uniformly without regard to any health status-related factor of covered individuals. The Member may elect not to renew coverage by providing written notice to CRL. The earliest date that the coverage will be terminated is on the last day of the month during which CRL's Home Office receives written notice. Modifications or Discontinuance of Coverage 1. Uniform Modification of Coverage. At the time of coverage renewal, CRL may modify the health insurance coverage for a product offered to an individual in the individual market, provided such modification is consistent with state law and effective on a uniform basis among all individuals with that product. Discontinuance of Coverage. a. Discontinuance of a Particular Type of Coverage. If CRL decides to discontinue offering a particular type of health insurance coverage offered in the individual market, all coverage of this type will be discontinued uniformly by CRL by providing: (1) notice to each Insured Person at least ninety (90) days prior to the date of the discontinuation of this type of coverage; and (2) an offer to each Member of the option to purchase any other individual health insurance coverage currently being offered by CRL for individuals in such market. b. Discontinuance of All Coverage. (1) If CRL elects to discontinue offering all health insurance coverage in the individual market in a state, health insurance coverage may be discontinued by CRL if: (a) CRL provides notice to the applicable state authority and to each Insured Person covered under such coverage at least one-hundred eighty (180) days prior to the date of the discontinuation of such coverage; and (b) such coverage is not renewed. (2) If CRL discontinues all coverage in the individual market, CRL may not issue any health insurance coverage in the individual market and state involved during the five (5) year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed. Issuance of 1. Certifications of Creditable Coverage Each Insured Person, at the time of termination of Creditable Coverage, is entitled to receive information which provides the period of Creditable Coverage under the plan. Within twenty-four (24) months of termination, if the Insured Person requires a copy of this Certification, the carrier should be contacted. CRL will provide Certification of Creditable Coverage only for the period of time during which the Insured Person was covered by CRL. 29 CRL will cooperate with the Member, Dependent, another carrier, or any other individual or organization who performs services in connection with the insurance re ationship, if requested. CRL will accept and/or provide information regarding Creditable Coverage to another carrier through means other than a written certification (e.g., by telephone). Misstatement of Age If the age of any Insured Person has been misstated, the premiums may be adjusted. If the amount of insurance would be affected by such misstatement, it will be changed to the amount the Insured Person would have had at the correct age, and the premium will be based on the corrected age and amount. M. Beneficiary An Insured Member may name anyone as a Beneficiary except the Member. More than one (1) Beneficiary may be named. Benefits will be paid to the living Beneficiaries. If two (2) or more Beneficiaries are named and one (1) dies before the Insured Member dies, the benefit will be paid to the living Beneficiary or Beneficiaries. If there is no Beneficiary named, benefits will be paid to the estate. If the named Beneficiaries are deceased at the time the Insured Member dies, the benefit will be paid to the Insured Member's spouse, if living. If the spouse is deceased, the benefit will be paid to the Insured Member's parents equally or to the survivor. If neither survive, the benefit will be paid to the Insured Member's estate. An Insured Member may change the Beneficiary. Any change requires satisfactory written notice to CRL After CRL records the change, it is effective from the date the Insured Member signed the notice. The Insured Member must be living at the time CRL records the change in order for it to be effective. CRL will not be responsible for any payment made or other action taken before the change is recorded. If the Beneficiary is a minor or someone otherwise legally incapable of receiving and handling the payment, CRL may make payment to the person who appears to CRL to be caring for or supporting the Beneficiary unless a claim has been made by a legally appointed guardian prior to CRL's payment. 3O ~/11. CLAIM PROVISIONS A. Notice of Loss/Claim Written notice of Loss or claim must be given to CRL within twenty (20) days after the date of any covered Loss. If notice is not given within twenty (20) days, a claim will not be denied or reduced if notice was given as soon as was reasonably possible. After CRL receives notice of claim, the forms for filing proof of claim will be furnished to the Insured Person within fifteen (15) days. If CRL fails to provide the necessary forms within the stated time, the Insured Person will be deemed to have met the proof of Loss requirements if written proof of Loss is submitted within the time requirements as stated in the Proof of Loss section below. B. Proof of Loss 1. Written proof of loss must be given to CRL no later than ninety (90) days after the date of the loss. All proofs of foss must be received by CRL at its Home Office. If written proof of loss is not given within ninety (90) days, the claim will not be denied or reduced if that proof was given as soon as reasonably possible. In no event, except in the case of documented legal incapacity, will proof of loss be accepted beyond one (1) year from the end of the written notice period. Proof as required in this section and the foregoing section means evidence of loss satisfactory to CRL. The receipt, acknowledgement or investigation of a claim will not waive CRL's rights to defend against any claim. Co Examination CRL, at its own expense, will have the right to require an Insured Person be examined by a Doctor of CRL's choice, as often as it may reasonably require. In the event of death of the Insured Person, CRL will have the right to require an autopsy, unless otherwise prohibited by law. D. Payment of Claim 1. Indemnities payable under this Policy for any loss, other than loss for which this Policy provides any periodic payment, will be paid immediately upon receipt of due written proof of such loss. 2. When the Insured Person uses the services of a Plan Provider who is a member of the Preferred Provider Network, all benefits will be paid to the Plan Provider. When the Insured Person uses the services of providers who are not members of the Preferred Provider Network, all benefits will be paid to the Insured Member, unless medical benefits have been assigned to the provider of serivce. CRL is not responsible for the validity of any assignment. 3. A Plan Provider shall not assert any claim against CRL or the Insured Persons for covered services denied by the Preferred Provider Network due to the lack of medical Necessity. 4. If CRL determines that the Insured Member is not legally able to receive such payment, CRL may, at its option, pay the benefits to the health care providers or the Insured Member's estate or to the closest living relative, as known to CRL. If benefits are payable to the Insured Member's estate or a beneficiary who cannot execute a valid release, CRL may pay benefits up to $1,000 to someone related to the Insured Member or the beneficiary by blood or marriage whom CRL considers to be entitled to the benefits. CRL will be discharged from any liability to the extent of any such payment made in good faith. CRL reserves the right to allocate any Deductible amount to any Covered Charges and to apportion the benefits to the Insured Person and to any assignees. Such actions will be binding on the Insured Person and assignees. 7. CRL will make reasonably diligent efforts to recover benefit payments made erroneously but in good faith and may apply subsequent benefits otherwise payable to offset any overpayment. CRL also reserves the right to recover any overpayment by, but not limited to, any of the following methods: a. adjustment to Coinsurance and Deductible; or b. demand of immediate return of the overpayment from the Insured Person or responsible party. Workers' Compensation The Policy is not a workers' compensation policy. The Policy does not satisfy any governmental requirements for coverage by worker's compensation insurance. F. Time Limits No action at law or equity shall be brought to recover on the Policy prior to the expiration of sixty (60) days after proof of loss has been furnished in accordance with the requirements of the Policy and full compliance with the Policy's appeals procedure. No action at law or equity shall be brought unless brought within three (3) years from the expiration of the time within which proof of loss is required by the terms of the Policy. G. Subrogation Any Treatment that would otherwise be Covered Charges under the terms of this plan that give rise to a claim by an Insured Person against a third party or against any person or entity as the result of the actions of a third party are excluded from coverage under this plan. This plan also does not provide benefits to the extent that there is other coverage under non-group medical payments including auto or medical expense type coverage to the extent of that coverage. However, this plan will provide benefits, otherwise payable under this plan, to or on behalf of the Insured Person only on the following terms and conditions: In the event that benefits are provided under this plan, CRL shall be subrogated to all of the Insured Person's rights of recovery for medical expense benefits against any person or organization to the extent of the benefits provided. The Insured Person shall execute and deliver instruments and papers and do whatever else is necessary to secure such rights. The Insured Person shall do nothing after loss to prejudice such rights. The Insured Person hereby agrees to cooperate with CRL and/or any representatives of CRL in completing such forms and in giving such information surrounding any accident or event as CRL or its representatives deem necessary to fully investigate the matter. CRL is also granted a right of reimbursement from the proceeds of any recovery for medical expense benefit whether by settlement, judgment or otherwise. This right of reimbursement is cumulative with and not exclusive of the subrogation right granted above, but only to the extent of the benefits provided by the terms of this plan. CRL, by payment of any benefits under the terms of this plan, is hereby granted a lien on the proceeds of any settlement, judgment or other payment received by the Insured Person. The Insured Person hereby consents to this lien and agrees to take whatever steps are necessary to assist CRL to secure the lien. CRL, by payment of any benefits under the terms of this plan, is hereby granted an assignment of the proceeds of any settlement, judgment or other payment received by the Insured Person to the extent of the benefits paid. By accepting benefits under the terms of this plan, the Insured Person hereby consents to this assignment and authorizes and directs his or her attorney, personal representative or any insurance company to directly reimburse CRL or its designee to the extent of the benefits paid. This assignment becomes effective and is binding upon the Insured Person's attorney, personal representative or any insurance company upon service of a copy of this provision to them by CRL or its designee. 32 The subrogation and reimbursements rights, assignments and liens apply to any recoveries made by or on behalf of the Insured Person as a result of the Illness sustained, including, but not limited to, the following: a. Payments made directly by the third party or any insurance company on behalf of the third party or any other payments on behalf of the third party. b. Any payments, settlements, judgment or arbitration awards paid by any insurance company under an uninsured or underinsured motorist coverage, whether on behalf of the Insured Person or other person. Any other payments from any source designed or intended to compensate the Insured Person for any Illness sustained as the result of negligence or alleged negligence of a third party. Any workers' compensation award or settlement. 6. CRL's right to recover (whether by subrogation or reimbursement) shall apply to decedents', minors' and incompetent or disabled persons' settlements or recoveries. 7. No Insured Person shall make any settlement which specifically reduces or excludes, or attempts to reduce or exclude the benefits provided by CRL. CRL's right of recovery shall be a prior lien against any proceeds recovered by the Insured Person, which right shall not be defeated nor reduced by the application of any so-called Made-Whole Doctrine, or any other such doctrine purporting to defeat CRL's recovery rights by allocating the proceeds exclusively to non-medical expense damages. No Insured Person shall incur any expenses on behalf of CRL in pursuit of CRL's rights. Specifically, no court costs nor attorneys' fees may be deducted from CRL's recovery without the prior expressed written consent of CRL. This right shall not be defeated by any so-called Fund Doctrine or Common Fund Doctrine or Attorney's Fund Doctrine. 10. CRL shall recover the full amount of benefits provided hereunder without regard to any claim of fault on the part of any Insured Person, whether under comparative negligence or otherwise. 11. The benefits under this plan are secondaw to any coverage under no-fault or similar insurance. 12. In the event that the Insured Person shall fail or refuse to comply with the terms of this provision, the Insured Person shall reimburse CRL for any and all costs and expenses including attorneys' fees, incurred by CRL. 13. The right of subrogation is not enforceable if prohibited by statute or regulation. In addition, CRL does not have the right to recover benefits paid from awards made under Medical Malpractice Insurance and the Motor Vehicle Financial Responsibility Law. H. Coordination of Benefits 1. Coordination of Benefits (COB) may limit benefits when an Insured Person is insured under more than one (1) plan. The benefits payable under the Policy may be reduced, under the rules below, so that from all plans, an Insured Person will not receive more than 100% of Covered Charges. 2. The following is a list of plans with which the Policy coordinates benefits: a. Group insurance, except group or group-type Hospital indemnity benefits of $100 per day or less; b. Other arrangements, whether insured or uninsured, covering individuals in a group; c. Blue Cross and Blue Shield plans on a group basis; d. Plans of Hospital or medical service organizations on a group basis; e. Group practice plans; f. Group pre-payment plans; g. Federal government plans or programs except Medicaid; h. Medicare Pads A and B; i. Coverage required or provided by law; j. Student insurance, except that COB will not apply to accident-only coverage for grammar or high school students; and k. Individual no-fault auto insurance, by whatever name called. u3 3. Benefits payable under this Policy are in excess and not in duplication of any first-party benefits due and collectible pursuant to the Pennsylvania Motor Vehicle Financial Responsibility Law. 4. CRL will pay the regular benefits as primary plan. If it is determined to be the secondary plan, CRL will pay the excess of allowable expenses after the primary plan pays its regular benefits. In any event, CRL will not pay more than the regular benefits of its plan. 5. These rules determine which plan is primary and the order in which the other plans follow: a. Any plan which does not have the COB provision will be the primary plan and pay first. b. For a plan having a COB provision, these rules apply: (1) The plan which covers the Insured Person as a Dependent will be considered the secondary plan and pay after any other plan; (2) For Dependent children: (a) The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year. (b) If both parents have the same birthday, the benefits of the plan which covered the parent longer are determined before those of the plan which covered the other parent for a shorter period of time. (c) The word "birthday" refers only to month and day in a calendar year, not the year in which the person was born. (d) If the other plan does not have the birthday rule described above, but instead has a rule based upon the gender of the parent; and if, as a result, the plans do not agree on the order of benefits, the rule based upon the gender of the parent will determine the order of benefits. c. If the natural parents of a Dependent child are divorced or otherwise separated: (1) If the parent with custody of the child has not remarried, the plan which covers the child as a Dependent of that parent will be considered before the plan which covers the child as the Dependent of the parent without custody. (2) If the parent with custody of the child has remarried, the plan which covers the child as a Dependent of that parent will be oonsidered before the plan which covers the child as a Dependent of the step-parent. The plan which covers the child as a Dependent of the parent without custody will be considered last. (3) If there is a court decree which establishes financial responsibility for the medical, dental or other health care expenses with respect to the child, (1) and (2) above will not apply. The plan which covers the child as a Dependent of the parent with such financial responsibility will be considered before any other plan which covers the child as a Dependent. d. When the rules above do not apply, the plan that has insured the person the longest will be primary, except those plans insuring the individual as a retired or laid-off employee will pay as a secondary plan. 6. An allowable expense is a Necessary, Reasonable and Customary expense covered, at least in part, by one (1) of the plans. Such a plan may provide services, rather than cash payments. In this case, the fair value of each service given will be deemed an allowable expense paid by that plan. 7. Benefits will be coordinated on a calendar year basis or any portion of a calendar year in which the person was insured by CRL. 8. For the purposes of this COB section, any or all of the following may apply: a. The Member is required to furnish CRL complete information concerning all plans and benefits paid or payable from those plans. b. As permitted by law, CRL may, without the Insured Person's consent: (1) obtain information from all plans involved; (2) reimburse such other plans, if CRL determines that benefits have been paid by another plan which should have been paid by CRL Such reimbursement will be a valid payment under this plan; or (3) release to other plans any information necessary for COB. c. CRL may obtain reimbursement from any other plan, and/or from the Insured Person, if CRL has paid benefits which should have been paid by any other plan. Such reimbursement is a valid payment under the other plan. 34- d. CRL may obtain a refund of any amount which exceeded 100% of allowable expenses as a result of CRL's payment as a secondary plan. Precertification Requirement CRL requires that Insured Persons notify its medical review board at the telephone number shown on the identification card to determine if medical services, admissions or supplies are medically Necessary and appropriate. However, OBTAiNiNG PRECERTIFICATION DOES NOT NECESSARILY GUARANTEE PAYMENT OF BENEFITS, since all claims are subject to the terms of the Policy. 1. Hospital Preadmission Certification Insured Persons must contact the medical review board to precertify all non-emergency hospital confinements in a non-participating facility, including confinements for maternity, at least seventy-two (72) hours prior to the scheduled admission. If the Policy includes maternity benefits, precertification should be obtained as soon as the Insured Person learns of the pregnancy. Emergency hospital admissions must be reported to the medical review board within forty-eight (48) hours following the admission or as soon as reasonably possible. Precertification Penalty If the Insured Person fails to obtain the required precertification, CRL reserves the right to determine, upon receipt of the claim, if the medical service, admission or supplies are medically Necessary and appropriate. No benefits will be paid for Treatment determined to be not medically Necessary or appropriate. For Treatment determined to be medically Necessary and appropriate, CRL will apply a penalty equivalent to the greater of $500 or 20% of Covered Charges, up to $1,000, for each Treatment where precertification is required but not obtained. The precertification penalty will be applied before the Deductible and Coinsurance and will not be credited toward the Insured Person's maximum out-of-pocket limit. Obtaining precertification does not assure that benefits will be paid for the procedure. CRL will make the final determination whether benefits are payable based on the terms of the Policy, following submission of the claim. J. What to Do About Your Claim Group life insurance, waiver of premium benefit, and accidental death and dismemberment claims Upon notification, CRL will furnish the necessary forms together with instructions on the procedures to be followed in presenting a claim. 2. Medical claims Medical claims should be submitted to your PPO Network directly -- see your I.D. card. 3. Hospital bills Show your CRL I.D. card to the Hospital so that the bill will be sent directly to the PPO Network. it is not necessary for the Hospital to complete our form. Medical bills Your doctor will generally indicate charges on his/her own claim form or on an itemized bill. For all other medical charges you must submit THE ACTUAL BILLS. It is important to remember: a. Bills must be itemized to show: (1) Name of Insured Member (2) Name of Doctor (3) Name of Person or entity providing the service (4) Name of Patient (5) Diagnosis 35 Lo Mo (6) Dates of Treatment (7) Policy Number (8) Services rendered and amount of charge b. Don't send cancelled checks, cash register receipts or photocopies of bills. These cannot be accepted. c. Don't submit a list of expenses prepared by yourself. The original bills are needed. d. Don't submit bills which include several members of your family. Separate bills are required for each patient. e. Don't accumulate your bills for submission at the end of the year. Submit your bills periodically if your medical Treatment covers a long period of time. 6. Remember Please be certain to show your account number on all bills that you submit. This number can be found on your CRL ID card or in your certificate booklet. Selected Individual Case Management The medical expense benefits provided by the Policy will include benefits for approved charges for alternate methods of medical care or Treatment not otherwise listed as Covered Charges. Approved charges are charges for services, Treatment and supplies approved in advance by CRL and established in writing in a selected individual case management treatment plan. Cost Containment CRL reserves the right to initiate, conduct and maintain, or to contract for, various programs and procedures directed at cost containment. Such programs and procedures include, but are not limited to, underwriting, precertification, concurrent review, utilization review, selected individual case management, auditing of charges, and preferred provider organization programs. Administrative Remedies Any controversy arising out of or relating to the Policy, such as disputes about the denial of a claim, are subject to certain administrative procedures that must be exhausted by the Insured Person ("Insured") prior to the Insured pursuing any other remedy that may be available. These required administrative remedies are (1) Appeal of Decision; and (2) Arbitration. 1. Appeal of Decision Appeal--Technical Manager (TM): a. If CRL makes a decision which the Insured wishes to appeal, a written request must be sent within sixty (60) days of the date of CRL's written notice to the Insured to: Appeal-Technical Manager Central Reserve Life Insurance Company 17800 Royalton Road Cleveland, Ohio 44136-5197 b. The Insured's written request must provide: (1) a written statement of the reasons for the appeal and the facts of the matter; and (2) copies of any evidence or documentation. c. Within forty-five (45) days after the date of receipt of a timely-filed request for reconsideration, the TM must provide written notice to the Insured that: (1) the initial decision has been reversed or changed; (2) the initial decision has been reaffirmed; or (3) more information is being requested from the Insured. (This includes any information from the health care provider[s].) Within thirty (30) days after the information is received, the TM must notify the Insured as provided in (1) or (2) herein. d. If the Insured does not provide the information requested within sixty (60) days of the requested date, the TM will reconsider the decision based on the information in the file. Written notice of the decision will be sent to the Insured. 36 Appeal Review: e. If the TM affirms or changes the decision, or fails to respond as provided in c., above, and if the Insured wants to continue the appeal, the Insured m~Jst request review by Appeal Review within sixty (60) days of the date the TM was required to respond: Appeal Review Central Reserve Life Insurance Company 17800 Royalton Road Cleveland, Ohio 44136-5197 f. In reviewing a decision by the TM, Appeal Review may: (1) ask the Insured to submit more information; (2) obtain an advisory opinion from an independent Doctor(s); (3) obtain any other information or advisory opinions as may, in its judgment, be required to make a decision; or (4) make its decision based solely on the information provided by the TM and the Insured. g. Within thirty (30) days after receipt of the Insured's request for review or, if additional information or advisory opinions were requested, within thirty (30) days of the receipt of the necessary information and/or advisory opinions, Appeal Review will send written notice of its decision to the Insured. h. If for any reason Appeal Review does not respond, the Insured must advise CRL's Legal Department of the failure to respond, by calling 1-800-321-3997. Arbitration After exhaustion of the Appeal of Decision procedures, any dispute arising out of or related to the Policy that remains shall be settled by arbitration in accordance with applicable federal or state laws and the Insurance Dispute Resolution Procedures, as amended, and administered by the American Arbitration Association. 37 VIII. CONTINUATION AND CONVERSION A. Continuation of Coverage 1. Member's Right to Continue Coverage a. This notice is intended to inform Members, in a summary fashion, of their rights and obligations under the continuation of coverage provisions. (All Members should take the time to read this notice carefully.) b. An Insured Member, with his or her covered Dependents, whose coverage under the Policy terminates because of the termination of membership in the association shall have the option to continue this insurance provided that the group association Policy is still in force. c. Upon deciding to terminate his or her membership in the association, the Member shall notify CRL, in writing, of the decision to terminate membership in the association and to request that the coverage be continued under the continuation Policy. In order to have the continuation coverage be effective the first day of the month following receipt of the written notice by CRL, such notice must be received in CRL's Home Office no later than the fifteenth day of the preceding month. Any written requests received after the fifteenth day of the month shall be effective on the first day of the month following the month in which notice was received. 2. Dependent's Right to Continue Coverage as a Member a. Under certain circumstances, a Dependent may be eligible to have coverage issued in his or her own right upon the occurrence of the following events: (1) the Member's death; (2) divorce or legal separation; (3) the Dependent child no longer meets the definition of Dependent due to age. b. If any one or more of the above reasons occurs, the Dependent must complete an application and it must be received in CRL's Home Office within thirty-one (31) days of the first day of the month following the qualifying event (e.g., the Dependent turns age 24, the member's death, or the date of the divorce or legal separation). c. If insurance for a Dependent who is under age sixteen (16) terminates because of the Member's death, and there is no insured spouse, the insured Dependent child may not continue coverage; however, he or she can convert his or her insurance in accordance with the Medical Conversion section of the Policy. B. Life Insurance Conversion 1. If the Insured Member's group term life insurance terminates due to the termination of membership in the eligible classes, the insurance may be converted to an individual policy of life insurance. Evidence of Insurability will not be required. 2. The form of the life insurance policy may be any then offered by CRL, except term insurance, at the Member's attained age and for the amount applied. At the Member's option, the amount of such policy will be equal to or less than the amount of group term life insurance under this Policy, but not less than $2,000.00. 3. The premium for such policy will be at CRL's rate then in effect for: a. the form and amount of the Policy; b. the class of risk to which the Member then belongs; and c. the Member's attained age on the effective date of the Policy. 4. If an Insured Member's group term life insurance terminates because this Policy terminates or is amended to terminate Life Insurance Benefits, the Member may convert such insurance to an individual policy of life insurance provided the Member has been insured under this group Policy for at least five (5) years. The form and prer~ium will be as in 2. and 3. above, but the amount of insurance may not exceed the lesser of: a. the amount of the group term life insurance the Member had under this Policy less the amount of life insurance for which the Member is or becomes eligible for under any group policy which replaces, within thirty-one (31) days, the insurance that just terminated under this Policy; or b. $2,000.00. The individual policy of life insurance will: a. be issued only if application is made and the first premium is received by CRL within thirty-one (31) days after the date on which the Member's group term life insurance under this Policy terminates; b. take effect at the end of this thidy-one (31) day application period; and c. be issued without disability or other added benefits. If benefits are paid under the Waiver of Premium Benefit of this Policy, any policy issued under this Section will be void. The individual policy must be returned to CRL for a refund of premium, and no claims under it will be paid. If the Insured Member dies during the thirty-one (31) day application period, CRL will pay the maximum amount of insurance which the Member might have converted. The death claim will be paid under the group policy and not the individual policy. Any premiums paid for the individual policy will be refunded. 8. A person who is a resident of a state in which CRL does not hold a Certificate of Authority to issue insurance will not be entitled to convert. Medical Insurance Conversion The Member may be eligible to convert to an individual policy in the event that the Member s insurance terminates for any reason, including discontinuance of the group Policy in its entirety or with respect to an insured class, provided the Member has been insured under the Policy for at least three (3) consecutive months prior to the qualifying event date. Other than this notice, CRL is not under any obligation to provide additional notice to a potentially eligible Member of the terms of this section or the requirements for conversion. The Member must notify CRL of termination of insurance so that CRL can furnish the Member with complete details of the benefits available. In addition to the terms as stated above, a Member's eligibility to convert to an individual policy is subject to all of the following: 1. A person who is, or is eligible to be, covered for benefits under any other group policy or Medicare, will not be entitled to convert. 2. A person who is a resident of a state in which CRL does not hold a Certificate of Authority to issue insurance will not be entitled to convert. In addition to the above, conversion under this section is also subject to all of the following: a. The provisions of the individual policy may not be the same as the provisions of the Policy and the individual policy may not provide the same level of benefits as the Policy. Upon request, CRL will furnish oomplete details of the benefits available. b. The individual policy may insure the following persons if they were insured under the Policy on the date their insurance terminates: (1) the Member and Dependents; (2) the spouse of a deceased Member and that spouse's Dependents; (3) Dependents of a deceased Member if the Member is not survived by a spouse; (4) a Dependent child whose insurance terminates because of age or marriage; and (5) the former spouse of a Member, upon divorce or legal separation when the ending of the marriage terminates the spouse's insurance under the Policy. Also, Dependents of such former spouse, if their insurance terminates solely because of the end of the marriage. c. A written application and the first premium must be received at the Home Office within thirty-one (31) days after the termination of insurance under the Policy, otherwise the Member will lose the rights to a conversion policy. d. The individual policy will take effect on the day after the person's group insurance terminates. e. The premium for the individual policy will be CRL's scheduled premium based on the age and sex of the applicant. 39 f. 'l-his section does not extend a person's medical insurance under the Policy beyond the date such insurance would otherwise terminate. 4O CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER i~IOTICE: The following rider amends the coverage described in your certificate booklet. The provisions being added or changed by this rider are subject to ail the terms and conditions of the Policy, including, but not limited to, the General Exclusions, and Covered Charges Subject to Limitations. Please refer to your certificate booklet for more information regarding your coverage. Please attach this rider to your certificate booklet. -fhe following provision is effective June 20, 1997: Coverage will be provided for the cost of nutritional supplements (formulas) that are equivalent to a prescription drug as r~edically necessary for the therapeutic treatment of phenylketonuria, branched-chain ketonuria, galactosemia and h0mocystinuria as administered under the direction of a Doctor. Benefits will be subject to any Copayment and Coinsurance provisions of the policy but will not be subject to the Deductible. CENTRAL RESERVE LIFE INSURANCE COMPANY RID 0279 I (Rev 0~/o2/00) CENTRAL RESERVE LIFE INSURANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER HOTICE: The following rider amends the coverage described in your certificate booklet. It applies only to Employer Units and Members located in Pennsylvania. The provisions being added or changed by this rider are subject to all the terms and conditions of the Policy, including, but not limited to, the General Exclusions and Covered Charges Subject to Limitations. Please refer to you r certificate booklet for more information regarding your coverage. Please attach this rider to your certificate booklet. For Employer Units/Members effective on or after January 1, 1998, these changes take effect on the Employer Unit's/ Member's effective date of insurance with CRL. For Employer Units/Members effective prior to January 1, 1998, these changes take effect on the Employer Unit's/Member's first renewal date, with CRL, following January 1, 1998. For subsequently hired Employees and new Dependents, these changes take effect on the later of the Employer Unit's/ Member's first renewal date, with CRL, following January 1,1998, or the Insured Person's effective date of insurance with CRL. Coverage shall be provided for inpatient care following a mastectomy for the length of stay that the Doctor determines is necessary to meet generally accepted criteria for safe discharge. Coverage shall also be provided for a home health care visit that the Doctor determines is necessary within forty-eight (48) hours after discharge, when the discharge occurs within forty-eight (48) hours following admission for mastectomy. When cove rage is provided for mastectomy Surgery, coverage shall also be provided for prosthetic devices and reconstructive Surgery incident to any mastectomy. Coverage for prosthetic devices inserted during reconstructive Surgery and reconstruc- tive Surgery will be limited to such surgical procedures performed within six (6) years of the date of the mastectomy. Benefits payable are subject to any Copayment, Coinsurance or Deductible amounts in the Policy. The term 'mastectomy" means the removal of a or part of the breast for Medically Necessary reasons, as determined by a licensed Doctor. The term "prosthetic devices" means the use of initial and subsequent artificial devices to replace the removed breast or portions thereof as order by a Doctor. The term "reconstructive Surgery" means a surgical procedure performed on one breast or both breasts following a mastectomy, as determined by a Doctor, to reestablish symmetry between the two breasts or alleviate functional impairment caused by the mastectomy. The term "reconstructive Surgery" shall include, but is not limited to, augmentation mammoplasty, reduction mammoplasty and mastopexy. The term "symmetry between breasts" means approximate equality in size and shape of the nondiseased breast with the diseased breast after definitive reconstructive Surgery on the diseased or nondiseased breast has been performed. CENTRAL RESERVE LIFE INSURANCE COMPANY Mary Ellen Larkin Senior Vice President RID 0~28 I (Re,; 06/02/00) A Subsidiary of Ceres Group, Inc. CENTRAL RESERVE LIFE INSURANCE COMPANY 17800 Royalton Road · Cleveland, OH 44136-5197 o 440-572-2400 www.centralreserve.corn · www.ceresgroupinc.com ADMINISTRATION INSTRUCTIONS PREMIUM BILLING INSTRUCTIONS A billing will be sent to you every month before the premium due date. An administrative fee for this service is added to each billing statement and must be included in the amount submitted when paying your monthly premium. CORRECTIONS PRINT any necessary corrections on the billing statements. DELETION OF DEPENDENT COVERAGE Put a line through the dependent coverage premium and, if the date is to be other than the first day of the month for which premium is due, write the effective date of termination on the billing statement. Remit premium for single coverage. PAYMENT OF PREMIUM About two weeks before the due date (which is the first day of each calendar month) a group premium billing statement will be mailed to the Member. CRL strongly recommends that all premium payments be remitted upon receipt and before the due date. If CRL has not received the payment within two (2) weeks of the due date, a "Late Notice" will be mailed to the Member as a reminder that payment has not been received. If at the time the next premium statement is generated, premium has still not been received, a reminder message will appear on the billing statement, if payment is not received by the end of the grace period (which is thirty-one [31] days from the due date), coverage will automatically terminate as of the last date for which premium was paid. In the event coverage terminates for late payment or non-payment of premium, a courtesy letter will be sent to the Member on or about the seventh (7th) day of the month. The letter will advise the Member that coverage terminated as of the last date for which premium had been paid. The letter also will contain information about applying for possible reinstatement of coverage through the submission of medical and other information. (See "Reinstatement" Section.) ASSOCIATION DUES AND ADMINISTRATIVE CHARGES In order to be eligible to apply for coverage for the health insurance plan, you must be a member of the Association. CRL's health insurance plan is only one of the benefits available to members of the Association. Those Association members who have coverage under the health insurance plan pay their association dues on a monthly basis. This amount is added to, and appears at the bottom of, your health insurance premium billing statement. CRL forwards the membership dues to the Association each month. The administrative charge, which also appears at the bottom of your premium billing statement, is a charge required by CRL for individuals who have coverage under the Association-sponsored health insurance plan. The administrative charge helps cover the cost of administering the plan for Association health insurance, such as preparation of billing statements rating and actuarial studies, underwriting, claims processing, and computer services. ' CHANGES Changes may be submitted using the Employee/Member Group Insurance Change Request, AEF-GRP15, or by indicating the change in writing. All requests must include the Member's signature and date. Please keep a copy of the request for your records. 1. Insured's name change 2. Change in Dependent status 3. Adding a dependent(s) - See Certificate Booklet. An application may be required. 4. Beneficiary change WHEN YOU NEED SERVICE Our Express Network phone system gives you a direct line to you r personal Customer Service Representative. When you need service or simply want a question answered, call toll-free: Claims - 1-800-966-6023 Administrative - 1-800-253-7709 Your personal Customer Se rvice Representative is ready to help you, backed by a team of person nel specializing in the needs of your specific region. AEF-1527 I (Rev 06~05/00) WHEN YOU NEED SERVICE Our Express Network phone system gives you a direct line to your personal Customer Service Representative. When you need service or simply want a question answered, follow these two easy steps. 1. Call CRL toll free at 1-800-321-3997. 2, Listen for the message from the automatic answering device that will help direct your call to the appropriate person. It's as simple as that. Your personal Customer Service Representative is ready to help you, backed by a team of personnel specializing in the needs of your specific region. Call CRL: 1-800-321-3997 Tolt Free CENTRAL RESERVE LIFE Ir'ISIJRANCE COMPANY (CRL) PENNSYLVANIA COVERAGE RIDER - ASSOCIATION (Prescription Drug) NOTICE: The following rider amends the coverage described in your certificate booklet. The provisions being added or changed by this rider are subject to all the terms and conditions of the Policy, including, but not limited to, the General Exclusions and Covered Charges Subject to Limitations. Please refer to your certificate booklet for more information regarding your coverage. Please attach this rider to your certificate booklet. These changes take effect on the Member's first renewal date with CRL on or after October 1,2001. 1. The Prescription Drug Benefit as shown on the Schedule of Benefits is deleted and is replaced with the following: Prescription Drug Benefit Calendar Year Deductible ......................................... $100 Aggregate Family Deductible .................................... Three (3) times the Individual Deductible Generic Prescription Drugs ................................ 100% of Covered Charges in excess of a $15 copayment for each prescription drug Brand Name Formulary Prescription Drugs .......... 80% of Covered Charges in excess of a $25 copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs .............................................. 70% of Covered Charges in excess of a $35 copayment for each prescription drug Managed Mail Prescription Program- Maintenance medications, after one (1) thirty (30) day refill, may be ordered through CRL's Managed Mail Prescription Program. Generic Prescription Drugs ................................ 100% of Covered Charges in excess of a $30 copayment for each prescriDtion drug Brand Name Formulary Prescription Drugs .............................................. 80?/° of Covered Charges in excess of a $50 copayment for each prescription drug Brand Name Non-Formulary Prescription Drugs .............................................. 70% of Covered Charges in excess of a $70 copayment for each prescription drug Maximum Benefit per Calendar Year ........................ $1,500 2. The Prescription Drug Benefit shown under the Benefit Provisions section of the certificate booklet is deleted and is replaced with the following Prescription Drug Benefit. Prescription Drug Benefit After CRL's approval of the insurance coverage, a prescription drug card/s will be issued, along with information about formulary prescriptions and participating pharmacies. This benefit works as follows: The benefit is subject to the calendar year Deductible and calendar year maximum benefit shown on the Schedule of Benefits. The maximum Deductible amount that a Member with Insured Dependents must pay for Covered Charges incurred in the same calendar year is three (3) times the Member's Deductible. a. When using a participating pharmacy: (1) The Insured Person will pay the applicable copayment and/or percentage shown on the Schedule of Benefits. The amount of the copayment and/or percentage may vary by the type of prescription being dispensed: (a) Generic Prescription Drug (b) Brand Name Formulary Prescription Drug (c) Brand Name Non-Formulary Prescription Drug (2) Insured Persons may call CRL or the prescription drug vendor to determine if a particutardrug is included in CRL's formulan/(list of preferred prescription drugs). (3) If the drug charge is !ess than the copayment an ::t/or percentage shown, the Insured P~.,rsonwil[be respor~sible for ~he full cost of the medication. RID-1476 1 ,!(~a,'24/01 ) (-t) l-hepharrnacywillfilllhe prescrtption forup to athirly (30) day supply. If the Insured Person's Doctor prescribes the medication for a period longer than thirty (30) days, it is considered a maintenance medication. Maintenance rnedications, after one (1) thirty (30) day relill, may be ordered through CRL's Managed Mail Prescription Program described later in this section. b. If the Insured Person forgets the prescription drug card, the Insured Person will pay the full cost of the medication at the pharmacy. In order to receive reimbursement, the Insured Person must send a claim form (available from CRL) to the prescription vendor, which will reimburse the Insured Person according to the terms of their program. c. If the Insured Person visits a non-participating pharmacy, the Insured Person will pay the full cost of the medication to the pharmacy. The Insured Person may then send the receipt for the prescription charges along with a prescription drug claim form to the prescription drug vendor. Non-participating pharmacy prescription charges are reimbursed on the same basis as participating pharmacies. d. The prescription drug card must be returned to CRL when the coverage terminates for any reason. If the card is used after its termination date, the Insured Person will be billed directly by CRL for any benefits paid after the termination date. e. Covered Charges: (1) Legend drugs. Children's prescription vitamins, to one (1) year of age and prenatal prescription vitamins for eligible maternity patients. (2) The following non-legend items on prescription only: Insulin, insulin needles and syringes, sugar test tablets and tape, including Chemstrips, Acetone tablets and Benedict's Solution or equivalent. ,.3) Compounded medication of which at least one (1) ingredient is a prescription legend drug. (4) Any other drug, which, under the applicable state law, may only be dispensed under the written prescription of a Doctor or other lawful prescriber. f. Managed Mail Prescription Program: (1) Insured Pe~' '~ns who take maintenance medications may use the Managed Mail Prescription Program. Maintenance medications are those which must be taken for an extended period of time in order to treat certain cond!tions. The Managed Mail Prescription Program consists of the following steps: (a) An Insured Person's Doctor writes a prescription for up to a sixty (60) day initial supply of a maintenance medication. If the medication is needed immediately, the Doctor should issue two (2) prescriptions, one for an immediate supply to be obtained at a local pharmacy, and a second for an extended supply to be mailed to the Managed Mail Prescription Vendor. (b) The Insured Person must include the copayment and/or percentage amount through a check made payable to the Managed Mail Prescription Vencior or by furnishing their credit card number and expiration date. Insured Persons may call a toll-free number to determine the availability of generic alternatives or ask other questions. (c) The Insured Person completes the patient profile section for the first mail service order only and sends the profile along with the Managed Mail Prescription Order Form. The patient profile is a section of the Managed Mail Prescription Order Form. This form is included with the Prescription Drug Benefit participant materials which are sent to you along with your Prescription Drug Card. (d) The original prescription(s) should be submitted with the Managed Mail Prescription Order Form to the Vendor. (e) Prescriptions will be delivered either by U.S. Postal Service or U PS. Allow 10-14 days for delivery from the date the order form is mailed. (f) Refills may be ordered by calling a toll-free number. Have your prescription number and credit card available. (2) The copayment and/or percentage amount is based upon the type of drug being dispensed and is shown on the Schedule of Benefits. The Insured Person is responsible for this amount before benefits are payable under this plan. (3) A Generic Prescription Drug will be dispensed unless a Brand Name Prescription Drug is requested by the Insured Person's Doctor or if a Generic Prescription Drug is not available. g. F'rersc~iptior]s ior Merq~d Illness: Prescriptions related to a diagnosed lVlental Illness, including conditions caused by or related in any manner to, SLIch Mental Illness are payable at 50% up to a maximum of $550 per calendar year. h. Exclusions: In addition to the Covered Charges Subject to Limitations and the General Exclusions, this Benefit will not Pay for the following: (1) contraceptives, oral or other, whether medication or device, unless prescribed to treat a medical condition; (2) any drug for the Treatment of sexual dysfunction; (3) charges for the administration or injection of any drug; (4) non-legend drugs except those listed above; (5) !herapeuticdevicesorappliances, inc uding supp°rtgarmentsandother nonmedicalsubstances, regardless of ~ntended use, except those listed above; (6) prescriptions which an eligible person is entitled to receive without charge from any Workers' Compensation Laws; (7) drugs labeled "Caution-Limited by federal law to Investigational use," or Experimental drugs, even though a charge is made to the individual; (8) immunization agents, biological sera, blood or blood plasma; (9) medication which is to be taken by or administered to an individual, in whole or in part, while he or she is a patient in a licensed Hospital, rest home, sanitarium, extended care facilib/, convalescent Hospital, nursing home or similar institution which operates on its premises, or allows to be operated on its premises, a facility for dispensing pharmaceuticals; (10) any prescription refilled in excess of the number specified by the Doctor, or any refill dispensed after one (1) year from the Doctor's original order; and (11 ) charges for more than a 34-day supply of any medication, or more than 100-unit doses, whichever is greater, unless coverage is being provide(~ under the Managed Mail Prescriphon Program. i. Definitions: Generic Prescription Drug - a prescription drug that is produced by more than one (1) manufacturer. It is chemically the same as and usually costs less than the Brand Name Prescription Drug for which it is being substituted. Brand Name Prescription Drug - a prescription drug that has been patented with the brand name and is produced by the original manufacturer under that brand name. Formulary - CRL's list of preferred prescription drugs. Brand Name Formulary Prescription Drug - a Brand Name Prescription Drug that is included in CRL's list of preferred prescription drugs. Non-Formulary Prescription Drug - a Prescription Drug that is not included in CRL s I st of preferred prescription drugs. ' 3. The following is added to the list of General Exclusions: No benefits will be paid for charges for Outpatient prescription drugs, unless the optional Prescription Drug Benefit has been elected. Refer to the Certificate of Coverage or Schedule of Benefits to determine whether or not the Prescription Drug Benefit has been elected. CENTRAL RESERVE LIFE INSURANCE COMPANY Mary Ellen Larkin Senior Vice President CERTIFICATE OF SERVICE I, Ami J. Thumma, an authorized agent for Martson Deardorff Williams & Otto, hereby certify that a copy of the foregoing Preliminary Objections ~vere served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: William P. Douglas, Esquire DOUGLAS, DOUGLAS & DOUGLAS 27 West High Street P.O. Box 261 Carlisle, PA 17013 MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: January 22, 2003 PRAECIPE FOR 5ISTING CASE FOR ARGUMENT (M~st be tTpewritten a~l sul~it'ted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Plp~se ] i.~t the within matter for the next Ar~3tm~t Court. CAPTION OF CASE (entire caption must be stated in D,] ] )' DEANNA SALISBURY, ( PI ~intiff) CERES GROUP, INC., t/d/b/a CENTRAL RESERVE LIFE INSURANCE COMPANY, (Defer~ant) NO. 02-5957 Ci%~il 19 State rotter to be argued (i.e., plaintiff's mot!~ for new trial, defer~nt's d~m~ L~_r to cu,~laint, etc. ): Defendant's Preliminary Objections to Plaintiff's Amended Complaint 2. Identify counsel who ~ 1 1 argue case: (a) for pi mintiff: ~ess: (b) for defer~lant: William P.Doutlas, Esquire DOUGLAS, DOUGLAS & DOUGLAS 27 West High Street Carlisle, PA 17013 Anthony T. Lucido, Esquire MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 17013 I w~ll notify a]l pa~Lie~ in writing within t~ days that t_him case has ~n 1 i-~ted for ~t. 4. ~t Court Date: March 26, 2003 Attorneys for Defendant CERTIFICATE OF SERVICE I, Ami J. Thumma, an authorized agent for Martson Deardorff Williams & Otto, hereby certify that a copy of the foregoing Praecipe were served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: William P. Douglas, Esquire DOUGLAS, DOUGLAS & DOUGLAS 27 West High Street P.O. Box 261 Carlisle, PA 17013 MARTSON DEARDORFF WILLIAMS & OTTO Ami J. Th{j~ma Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: January 23, 2003 DEANNA SALISBURY, Plaintiff CERES GROUP, INC., t/d/b/a CENTRAL RESERVE LWE INSURANCE COMPANY, Defendant IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CIVIL ACTION - LAW NO. 02-5957 : JURY TRIAL DEMANDED PRAECIPE TO WITHDRAW PRELIMINARY OBJECTIONS FROM ARGUMENT LIST TO THE PROTHONOTARY: Please withdraw Defendant Ceres Group, Inc., t/d/b/a Central Reserve Life Insurance Company's Preliminary Objections to Plaintiff's Complaint from the February 12, 2003, Argument Court List. Thank you for your assistance in this matter. MARTSON DEARDORFF WILLIAMS & OTTO Anthony T. Lucido, Esquire I. D. Number 76583 Ten East High Street Carlisle, PA 17013 (717) 243-3341 Date: January 23, 2003 Attorneys for Defendant CERTIFICATE OF SERVICE I, Ami J. Thumma, an authorized agent for Martson Deardorff Williams & Otto, hereby certify that a copy of the foregoing Praecipe were served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: William P. Douglas, Esquire DOUGLAS, DOUGLAS & DOUGLAS 27 West High Street P.O. Box 261 Carlisle, PA 17013 MARTSON DEARDORFF WILLIAMS & OTTO Ami J. ThuflDtna Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: January 23, 2003 PRAECIPE FOR LISTING CASE FOR ARGL~MENT (M~st be ~tten ~ sumit'ted in duplicate) TO THE PROTHONOTARY OF CUMBERLAND COUNTY: Please ] i~t the within matter for the next A~u~nent Couzt. CAPTION OF CASE (entire caption must be stated in ~,] ] )' DEANNA SALISBURy, (Plaintiff) CERES GROUP, INC., t/d/b/a CENTRAL RESERVE LIFE INSURANCE COMPANY, ( Defer~t ) No. 02-5957 Civil 19 State rotter to be argued (i.e., plaintiff's mtio~ for new tria~, d~fe~nt's demmarr~r to cc~laint, etc.): Defendant's Preliminary Objections to Plaintiff's Amended Complaint 2. Identify cc~msel who w~ ] ] argue case: (a) for p] ~intiff: ~ss: (b) for defendant: William P.Doutlas,. Esquire DOUGLAS, DOUGLAS ~, DOUGLAS 27 West High Street Carlisle, PA 17013 Anthony T. Lucido:. Esquire MARTSON DEARDORFF WILLIAMS & OTTO Ten East High Street Carlisle, PA 170~.3 I w~l 1 notJ~ al 1 parties in writing within tw~ days that this case has been l i rated for arc~t. 4. Argument Cotuct Date: March 26, 2003 Attorneys for Defendant CERTIFICATE OF SERVICE I, Ami J. Thumma, an authorized agent for Martson Deardorff Williams & Otto, hereby certify that a copy of the foregoing Praecipe were served this date by depositing same in the Post Office at Carlisle, PA, first class mail, postage prepaid, addressed as follows: William P. Douglas, Esquire: DOUGLAS, DOUGLAS & DOUGLAS 27 West High Street P.O. Box 261 Carlisle, PA 17013 MARTSON DEARDORFF WILLIAMS & OTTO Ami J. Thumr~t ' Ten East High Street Carlisle, PA 17013 (717) 243-3341 Dated: ,.J~ ! 3, c~ 6'03 DOUGLAS, DOUGLAS & DOUGLAS 27 W. HIGH ST. POB 261 CARLISLE PA 17013 TELEPHONE 71%243-1790 WILLIAM P. DOUGLAS, ESQ. Supreme Court I.D.//37926 Cumberland County Pennsylvania Plaintiff vs No. 02- 5957 Civil Term Ceres Group, Inc. t/a/d/b/a Central i Reserve Life Insurance Company Civil Action Law Jury Trial Demanded Defendant Plaintiff's Answer to Defendant's Preliminary Objections AND NOW, comes the Plaintiff by and through her attorneys Douglas, Douglas & Douglas, and respectfully presents: 1. Admitted. 2. Admitted. 3. Admitted. 4. Admitted. Denied. The allegation is denied as a legal conclusion to which no response is necessary. o Denied. The bills in question were submitted to the carrier for payment and the carrier refused to pay them in accordance with Pennsylvania law and the terms of the c. ontract despite repeated requests. In addition the claim for bad faith is extra-contractual in nature and controlled by Pennsylvania statute not policy language. Denied. The Court has jurisdiction with respect to any and all claims for bad faith. Brief of Plaintiff in Opposition to Preliminary Objections The defendant in this matter is an insurance company selling insurance in the Commonwealth of Pennsylvania. The Courts of Pennsylvania do have general jurisdiction over the defendant, in this matter pursuant to 42 Pa. C.S.A.§5301 which states: Sec. 5301. Persons (a) General rule.--The existence of any of the following relationships between a person and this Commonwealth shall constitute a sufficient basis of jurisdiction to enable the tribunals of this Commonwealth to exercise general personal jurisdiction over such person, or his personal representative in the case of an individual, and to enable such tribunals to render personal orders against such person or representative: (2) Corporations.-- (i) Incorporation under or qualification as a foreign corporation under the laws of this Commonwealth. (ii) Consent, to the extent authorized by the consent. (iii) The carrying on of a continuous and systematic part of its general business within this Commonwealth... The corporation consented jurisdiction of the Commonwealth of Pennsylvania because they carried on a continuous and systematic part of its general business in the Commonwealth. Jurisdiction over nonresident defendant may be based upon either specific acts of defendant which give rise to cause of action, or upon defendant's general activity within forum state; in order for a Pennsylvania court to assert specific jurisdiction, the cause of action must arise out of defendant's activities within Commonwealth, while general jurisdiction exists regardless of whether the cause of action is related to defendant's activities in Commonwealth as long as defendant's activities are "continuous and substantial." Derman v. Wilair Services, Inc., .590 A.2d 317, 404 Pa. Super. 136, Super. 1991, appeal denied 600 A.2d 537, 529 Pa. 621. ... It is dear that this Court has jurisdiction over the defendant due to their selling of health insurance in the Commonwealth of Pennsylwmia. As for the claim of lack of jurisdiction pursuant to the arbitration clause in the agreement, the policy in question contains no language 'with respect to 42 Pa. C.S.A. §8371 therefore, any claims arising pursuant to the aforesaid statute are subject to the jurisdiction of this Court. Hazelton Area School District v Bozak, 671 A2d 277 (Pa. Cmwlth. Ct. 1996). Wherefore, it is respectfully prayed that the preliminary objections of the defendant be dismissed. March 25, 2003 Respectfully s,~_ubmitte, d, William P. Douglas, L~q. ~' Attorney for the plaint~f-f PART VII. CIVIL ACTIONS AND PROCEEDINGS CHAPTER 83. PARTICULAR RIGHTS AND IMMUNITIES SUBCHAPTER G. SPECIAL DAMAGES 42 Pa. C.S.A. § 8371 Actions on insurance policies In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions: (1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%. (2) Award punitive damages against the insurer. (3) Assess court costs and attorney fees against the insurer. DEANNA SALISBURY, PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA CERES GROUP, INC., t/a/d/b/a CENTRAL RESERVE LIFE INSURANCE COMPANY, DEFENDANT IN RE: 02-5957 CIVIL. TERM PRELIMINARY OBJECTIONS OF DEFENDANT TO PLAINTIFF'S AMENDED COMPLAINT BEFORE BAYLEY, J. AND GUIDO, J. ORDER OF COURT '~~ day of April, 2003, IT IS ORDERED: AND NOW, this (1) The preliminary objection of defendant as to jurisdiction on the cause of action in plaintiff's amended complaint alleging breach of contract, IS GRANTED. The contract claim, which is subject to mandatory arbitration under the provisions of the insurance policy, IS DISMISSED. (2) The preliminary objection of defendant to plaintiff's bad faith claim brought under 42 Pa.C.S. Section 8371, IS DENIED. Edgar B. Bayle~J.~ 02-5957 CIVIL TERM William P. Douglas, Esquire For Plaintiff Anthony T. Lucido, Esquire For Defendant :sal DEANNA SALISBURY, PLAINTIFF IN THE COURT OF COMMON PLEAS OF CUMBERLAND COUNTY, PENNSYLVANIA Vo CERES GROUP, INC., t/a/dlb/a CENTRAL RESERVE LIFE INSURANCE COMPANY, DEFENDANT IN RE: 02-5957 CIVIL TERM PRELIMINARY OBJECTIONS OF DEFENDANT TO PLAINTIFF'S AMENDED COMPLAINT BEFORE BAYLEY, J. AND GUIDO, J. OPINION AND ORDER OF COURT Bayley, J., April 2, 2003:-- On January 15, 2003, plaintiff, Deanna Salisbury, filed an amended complaint against defendant, Ceres Group, Inc., t/a/d/b/a Central Reserve Life Insurance Company. Plaintiff avers that defendant issued her an insurance policy on November 3, 2000. The policy provided for payment of her medical expenses. Plaintiff incurred medical expenses in 2001, for which defendant has wrongfully denied coverage. In addition to that claim for damages for breach of contract, plaintiff has pleaded a cause of action for bad faith under the Judicial Code at 42 Pa.C.S. § 8371. Pursuant to Pa. Rule of Civil Procedure 1028(a)(1), defendant filed a preliminary objection to the amended complaint claiming lack of jurisdiction because the insurance policy contains a provision that "any dispute arising out of or related to the Policy... shall be settled 02-5957 CIVIL TERM by arbitration in accordance with applicable federal or state laws.., and administered by the American Arbitration Association." The objection was briefed and argued on March 26, 2003. The threShold question of whether a party has agreed to arbitrate a dispute presents a jurisdictional issue. Patton v. Hanover Insurance Co., 417 Pa. Super. 351 (1992). Plaintiff acknowledges that her contract claim is subject to arbitration.~ However, she maintains that this court has jurisdiction over her bad faith claim under 42 Pa.C.S. Section 8371, that provides: In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions: (1) Award interest on the amount of the claim from the date the claim was made by the insured in an amount equal to the prime rate of interest plus 3%. (2) Award punitive damages against the insurer. (3) Assess court costs and attorney fees against the insurer. (Emphasis added.) In Nealy v. State Farm Mutual Automobile Insurance Company, 695 A.2d 790 (Pa. Super. 1997), the Superior Court of Pennsylvania addressed the question of whether a bad faith claim under 42 Pa.C.S. Section 8371 must be litigated in a court and not at arbitration. An insurance company refused to pay benefits under its uninsured/underinsured motorist coverage following a death in a motor vehicle accident. The policy had an arbitration provision. Notwithstanding that the claim under the insurance policy was properly referred to arbitration, the Superior Court concluded: See Ambridge Borough Water Authority v. Columbia, 458 Pa. 546 (1974). -2- 02-5957 CIVIL TERM Arbitration panels are designed to ease the burden on our courts by deciding issues of damages and liability as they pertain to the factual dispute that gave rise to the contractual insurance claim. A § 8371 bad faith claim, however, is initiated based upon behavior of the insurance company occurring subsequent to the negligent or intentional behavior of a third party that spawned the contractual suit. Thus, because the behavior complained of is temporally and factually distinct from any behavior that would impact upon the outcorne of the damages and liability disposition of the contract claim, we see no reason to expand upon the panels' jurisdiction. We therefore hold that the trial court in the instant matter properly concluded that the arbitration panel did not have jurisdiction to decide the § 8371 bad faith claim and that the arbiters' gratuitous comments to the effect that State Farm did not act in bad faith were merely dicta. Just as appellants were contractually required to initially litigate their insurance claims at the arbitration level, they were statutorily required to commence their bad faith claim against their insurer in the court of common pleas.4 4 Because of the caselaw [sic] previously detailed which holds that arbitration claims are separate and distinct from § 8371 claims, appellants' bad faith claim could have been brought contemporaneously with or subsequent to their contractual insurance claims. Defendant maintains that plaintiff's contract claim and bad faith claim are inextricably linked; therefore, under Shadduck v. Christopher J. Kaclik, Inc., 713 A.2d 635 (Pa. Super. 1998), both causes of action must be submitted to arbitration. In Shadduck, a homeowner brought an action against a builder for (1) breach of a construction contract, (2) fraudulent misrepresentation, and (3) violation of the Unfair Trade Practices and Consumer Protection Law. The builder filed a preliminary objection to the complaint averring that the construction · contract required that all of the claims be submitted to arbitration. The trial court refused to compel arbitration. On appeal the Superior Court reversed. The arbitration clause in the parties' contract contained a provision that "All claims or disputes between the Contractor and -3- 02-5957 CIVIL TERM the Owner arising out of, or relating to, this contract or the breach thereof shall be decided by arbitration .... "The Superior Court was satisfied that the clause was indicative of the parties' intent to submit all of their grievances to arbitration, regardless of whether the claims sounded in tort or contract. The homeowner.argued that the causes of action for fraudulent · misrepresentation, violation of the Unfair Trade Practices, and Consumer Protection Laws were temporally and factually distinct from their breach of contract claim. The Court disagreed, concluding: It is, therefore, plain that the same factual averments underlie both Owners' tort and breach of contract claims. Additionally, the claimed misrepresentations and unfair trade practices allegedly occurred before, during and after Builder's construction. Again, this is the same time period at issue in Owners' parallel breach of contract arbitration action. In short, there is no credible support for Owners' averment that their tort claims are "temporally and factually distinct" from their breach of contract claims. We, therefore, hold that Owners' interpretation of our holding in Nealy is overly expansive and does not compel the same result. In sum, we hold that the parties' agreement mandates that all disputes arising out of the contract or the breach thereof be submitted to compulsory arbitration, without regard to whether the claims sound in tort or contract. Further, we find that the underlying tort claims at issue arise out of the building contract or the alleged breach thereof. We, therefore, reverse the trial court's order denying Builder's preliminary objection in the nature of a motion to compel arbitration? The Court distinguished the facts in Nealy v. State Farm Mutual Automobile Insurance Company, supra, stating: Upon review, this Court held that, due to the unique nature of section 8371 bad faith claims, original jurisdiction thereover lies solely in our courts of common pleas. In explaining our rationale, we noted that, 2 This decision is in conflict with an opinion of the Commonwealth Court in Hazelton Area School District v. Bosak, 671 A.2d 277 (Pa. Commw. 1996). 02-5957 CIVIL TERM because the behavior giving rise to such causes of action occur after the behavior originally complained of, bad faith claims "are distinct from the underlyir~g contractual insurance claims fro,m which the dispute arose." In the case sub judice, the issue is whether a bad faith claim brought under 42 Pa.C.S. Section 8371 is subject to arbitration when the underlying dispute as to coverage under an insurance policy is subject to arbitration.3 As the Shadduck court recognized, the decision in Nealy was that "due to the unique nature of section 8371 bad faith claims, original jurisdiction thereover lies solely in our courts of common pleas." The holding of Nealy comports with the Judicial Code that specifically provides: In an action arising under an insurance policy, if the court finds that the insurer has acted in bad faith toward the insured, the court may take all of the following actions .... (Emphasis added.) Because plaintiff's Section 8371 bad faith claim arises under an insurance policy, jurisdiction is in the court. Nealy cannot be distinguished from the case at bar and is precedent by which we are bound. Accordingly, the following order is entered. ORDER OF COURT AND NOW, this ~_. day of April, 2003, IT IS ORDERED: (1) The preliminary objection of defendant as to jurisdiction on the cause of action in plaintiff's amended complaint alleging breach of contract, IS GRANTED. The contract claim, 3 Shadduck is distinguishable in that it was not an action arising under an insurance policy but rather involved an issue whether tort claims were temporally and factually · distinct from a breach of contract claim. See also Moses Taylor Hospital v. GSGSB, 46 D. & C.4th 176 (Lackawanna Co. 2000), where a breach of contract claim was temporally and factually linked with tort claims of negligence, breach of professional responsibility and breach of warranty. -5- 02-5957 CIVIL TERM which is subject to mandatory arbitration under the provisions of the insurance policy, IS DISMISSED. (2) The preliminary objection of defendant to plaintiff's bad faith claim brought under 42 Pa.C.S. Section 8371, IS DENIED. William P. Douglas, Esquire For Plaintiff Anthony T. Lucido, Esquire For Defendant :sal By the C0u~~ Edgar"]~.'Bay ey, J. _~ -6- PRAECIPE FOR LISTING CASE FOR TRIAL (Must be typewritten and sukmitted in duplicate) TO THE PROTHONOTARY OF CUMBERLABD COUNTY Please list the followinG case: ( Check one ) CAPTION OF CASE (entire caption rm~st be stated in full) ( X ) for JURY trial at the next term of civil court. ( ) for trial without a jury. ( clheck one ) DEANNA SALISBURY (X) Civil Action - Law ( ) Appeal from Arbitration ( ) (other) (Plaintiff) vs. CERES GROUP, INC., t/d/b/a CENTRAL RESERVE LIFE INSURANCE COMPANY (Defendant) vs. The trial list will be called on and April 6, 2004 Trials commence on May~ 3, 209/: Pretrials will be held on (Briefs are due 5 days bef~4 (The party lis.ting this case for trial shal provide forthwith a copy of the praecipe to all counsel, pursuant to local Rule 214.1. ) No. 02-5957 Civil 19 Indicate the attorney who will try case for the tk3rty who files this praecipe: William P. Douglas Indicate trial counsel for other parties if known: Anthony T. Lucido, Esquire, Ten E. High St., Carlisle, PA 17013 Date: This case is ready for trial. March 12, 2004 Print N~ne: William P. Do'las Attorney for: Plaintiff DEANNA SALISBURY, PLAINTIFF : IN THE COURT OF COMMON PLEAS OF : CUMBERLAND COUNTY, PENNSYLVANIA CERES GROUP, INC., t/d/b/a CENTRAL RESERVE LIFE INSURANCE COMPANY, DEFENDANT : 02-5957 CIVIL TERM ORDER OF COURT AND NOW, this 13th day of April, 2004, a civil non-jury trial is scheduled for Thursday, May 13, 2004, at 1:30 p.m., in Courtroom Number 2, Cumberland County Courthouse, Carlisle, Pennsylvania. By t he~,~,~, EdgarB. Bayley, J. William P. Douglas, Esquire For Plaintiff Anthony T. Lucido, Esquire For Defendant Court Administrator :sal DOUGLAS LAW OFFICE 27 W. HIGH ST. I~OB 261 CARLISLE PA 17013 TELEPHONE 717-243-1790 William P. Douglas, Esq. Supreme Ct. ID # 37926 [ Lumverianct Lounty ~t~ennsyivama Plaintiff] No. 02,- 5957 Civil Term VS Ceres Group, Inc. t/a/d/b/a Central Reserve Life Insurance Company Defendant Civil Action Law Jury 'trial Demanded Praecipe Withdraw Complaint Dear Mr. Long, Please withdraw the plaintiff's complaint and mark this matter discontinued with prejudice. William P. Douglgs, Esq. Attorney for'~Elaintiff May 20, 2004