HealthCare

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February 2006

Health Care
State Employees’ Comprehensive Major Medical Plan – State Health Plan
North Carolina Teachers’ and State Employees can enroll in the Comprehensive Major Medical Plan
(i.e. State Health Plan) which is administered by Blue Cross and Blue Shield. The State of North
Carolina provides health care benefits to teachers, employees, retirees, and their eligible dependents
according to the provisions and limitations of North Carolina General Statutes. Health Insurance is
offered to every permanent employee that is working at least (30) hours per week.

Employees have (30) days to enroll in health insurance coverage from the date of hire. If the employee
applies for health insurance after the (30) day period, there may be a 12-month waiting period for pre-
existing health conditions (see below).

NOTE: Even if you do NOT wish to enroll in the State Health Plan, you still must complete the
enrollment form and indicate that you are declining coverage.

Enrollment: Option to have health insurance premiums deducted Before or After taxes.
Health insurance premiums are deducted from your paycheck BEFORE taxes are withheld. As a result,
you lower your taxable income and lower your tax liability, thereby in effect, lowering the net cost of
your health plan coverage. Having your health insurance deducted before taxes is known as the “Flexible
Benefit Plan.” (This “Flexible Benefit Plan” merely reflects the option to have your monthly health
insurance deductions before taxes. It should not be confused with and is separate and distinct from
the NCFlex programs). If you want your health insurance premiums to be deducted before taxes, this
means that your health benefit coverage cannot be changed (dependents added or dropped) EXCEPT
during annual enrollment (usually August to be effective October 1st ) OR unless a “Qualifying Family
Status Change” event occurs.

The “Flexible Benefit Plan” option is automatic (i.e. your health insurance premiums will be deducted
BEFORE taxes) when you enroll in the State Health Plan UNLESS you complete the “Flexible Benefit
Plan Rejection Form” which indicates that you do NOT want your health insurance premiums to be
withheld from your earnings on a “before tax” basis. This means that by completing this form, your
health insurance premiums will be deducted AFTER taxes have been withheld.

Special Enrollment:
The Plan provides an enrollment period during which eligible individuals who initially declined coverage
because they had other coverage may enroll at a later date WITHOUT a waiting period for pre-existing
conditions. An employee, retiree, or eligible dependent is eligible to enroll in the Plan without a 12-
month waiting period for pre-existing conditions IF he or she:

1. Has a “Qualifying Family Status Event” occur; AND
2. Submits an Enrollment Application (form C9s) to their Health Benefits Representative within 30
days of losing coverage.

Similarly, eligible dependents may be enrolled later WITHOUT a 12-month waiting period for pre-
existing conditions based on a “Qualifying Family Status Event.” In such situations, the employee should
complete the State Health Plan Change Form.

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Dependents:
Eligible dependents include:

1. Spouse
2. A natural, legally adopted or foster child of the employee and/or spouse who is unmarried up to
the first of the month following his or her 19th birthday, whether or not the child is living with the
employee, as long as the employee is legally responsible for the child’s maintenance and support.
Foster child status requires legal documentation.

Dependent child coverage may be extended beyond the 19th birthday under the following conditions:

• The dependent is covered up to age 26 if unmarried and a full-time student at an accredited
school.
• The dependent is physically or mentally incapacitated to the extent that he or she is incapable
of earning a living and such handicap developed or began to develop before the dependent’s
19th birthday or 26th birthday if the dependent was covered by the Plan as a full-time student.

Please note that an individual cannot be enrolled as a dependent under the Plan if he or she is enrolled as
an employee. In addition, a dependent cannot be enrolled under two Plan contracts at the same time.

Choosing a Participating Provider: Find a Doctor
When choosing a physician, it is important to find and use a physician that is a Participating Provider.
Participating Providers agree to accept the State Plan’s usual, customary, and reasonable (UCR)
allowance for covered services. The Plan determines fair allowances for covered medical care provided
by doctors using “usual, customary, and reasonable (UCR)” allowances.

Usual – is based on a doctor’s average fee that he or she charges patients.
Customary – is based on the average fees that doctors with similar specialties and years of practice and
expertise charge a patient.

NOTE: The Plan takes the lower of usual and customary in determining the allowed amount.

Reasonable – is based on a review of medical records when there are extenuating circumstances or
when a covered medical procedure requires additional skill or experience.

Participating Providers agree to accept the Plan’s usual, customary, and reasonable (UCR) allowance,
agree to the following:

• File all claims for covered services;
• Limit out-of-pocket expenses to the $350 Plan year deductible, 20% coinsurance amount, $15
office visit copayment and charges for services not covered by the Plan; and
• Not bill the patient for charges that exceed the Plan’s UCR allowance.

All doctors will hold you responsible for the $350 year deductible, 20% coinsurance amount, $15 office
visit copayment and charges for services not covered by the Plan.

If you visit a non-participating provider, you will be responsible for paying any amount above the Plan’s
UCR allowance and you may have to file the claim yourself, even if this is the only provider for the type
of service rendered. If you do have to file the claim, claims must be filed within 18 months from the date
of service.

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For names of Participating Providers, you can contact Customer Service of the State Health Plan at 1-800-
422-4658. You can also access a list of Participating Providers on line at
www.statehealthplan.state.nc.us . Click on “Find a Doctor,” then select the category of provider
specialty (Internal Medicine, OBGYN, Physical Therapy, etc.) and identify the appropriate county and/or
zip code.

Key Points/Features of State Health Plan:
Plan Year July 1st through June 30th (fiscal year)

Maximum $5 Million lifetime (per employee and per each dependent)
Benefit
Contract Employee Only: Covers only the employee or retiree.
Options
Employee & Children: Covers the employee or retiree and all eligible dependent children.

Employee & Family: Covers the employee or retiree, legal spouse, and all eligible dependent
children.

Employee Employees do NOT have to pay a monthly contribution under this Plan. The State pays for the
Contributions employee’s health insurance premium. However, coverage for spouses and dependents is paid
(Monthly entirely by the employee. The additional coverage is payroll deducted each month at a pre-tax
Premiums) basis (unless you choose not to). See below:
Employee Only $0
Employee & Child(ren) $200.18
Employee & Family $480.14
(Spouse &/or children)

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Deductibles (Remember that the Plan Year is from 7/1 to 6/30):
Deductibles can include costs for doctor visits, but NOT copayments or costs for prescription drugs, etc.

Each member has a $350 deductible NOT to exceed $1050 per Employee/Child(ren) contract or
Employee/Family contract. Once the deductible has been met for the Plan Year, the State Health
Plan will pay 80% of covered health care expenses and the employee will pay 20% (the 20% that
the employee pays is known as “coinsurance.”)

Employee Only: Employee must meet a $350 deductible in the Plan Year before the Plan pays
benefits (i.e. before the Plan begins paying 80%) for covered health care.

Employee and Employee must meet $350 deductible on themselves in the Plan Year before the
One Child: Plan pays benefits (i.e. before the Plan begins paying 80%) for the employee’s
covered health care.

Employee must meet $350 deductible for their child in the Plan Year before the
Plan pays benefits (i.e. before the Plan begins paying 80%) for the employee’s child’s
covered health care.

($350 deductible for the employee and a $350 deductible for the child = $700).

Employee and A $1050 maximum deductible has been set for employees with 2 or more family
Two or More dependents (i.e. spouse and/or children).
Dependents
(children, Note for Employees w/ Two Dependents: Employee must meet $350 deductible
spouse): for themselves in the Plan Year before the Plan pays benefits (i.e. before the Plan
begins paying 80%) for the employee’s covered health care. Employee must meet
$350 deductible for first dependent in the Plan Year before the Plan pays benefits
(i.e. before the Plan begins paying 80%) for the employee’s dependent #1’s covered
health care. Employee must meet $350 deductible for second dependent for the
Plan Year before the Plan pays benefits (i.e. before the Plan begins paying 80%) for
the employee’s dependent #2’s covered health care ($350 x 3 = $1050).

Note for Employees w/ Three or More Dependents: Each member must meet
the $350 deductible, HOWEVER, the total family deductible is NOT to exceed
$1050. Therefore, the $1050 deductible can be shared among the employee and
their dependents (EXAMPLE: Employee $250, Spouse $300, Child One $300,
Child Two $200 = Total $1050. Since the maximum deductible of $1050 has
been met, any additional covered health care expenses for any and all of the
employee and family members for that Plan Year will be covered 80% by the Plan.)

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Coinsurance:
Once the Plan year deductible is met, the Plan pays 80% of allowable charges while the member pays
20%. The amount the member must share in contributing towards the cost of covered medical expenses
(i.e. the 20%), is referred to as “coinsurance.” Coinsurance does not include and/or is in addition to any
copayments, prescription drugs, deductibles, and services not covered by the Plan. Once the coinsurance
maximum is reached for the Plan Year, then the State Health Plan will cover 100% of covered medical
expenses. The maximum coinsurance amount per member per year is $2,000.

Each member has a maximum coinsurance amount of $2000, NOT to exceed $6000 per
Employee/Child(ren) contract or Employee/Family contract. Once the maximum coinsurance has
been met for the Plan Year, the State Health Plan will pay 100% of covered health care expenses.
Maximum Coinsurance Employee must meet the $2000 maximum coinsurance amount in the Plan Year before
Amount for Employee the Plan pays 100% for covered health care.
Only Coverage:
Therefore, the total coinsurance and deductible amount would be $2350 ($2000
coinsurance and $350 deductible) for the Plan Year.
Maximum Coinsurance Employee must meet the $2000 maximum coinsurance amount on themselves in the
Amount for Employee Plan Year before the Plan pays 100% for the employee’s covered health care.
and One Child:
Employee must meet the $2000 maximum coinsurance amount for their child in the Plan
Year before the Plan pays 100% of the employee’s child’s covered health care.

Therefore, the maximum coinsurance and deductible amount in a Plan Year for an
Employee and One Child would be $4700 ($4000 coinsurance and $700 deductible).
Maximum Coinsurance A $6000 maximum coinsurance amount per Plan Year has been set for employees with
Amount for Employee 2 or more dependents (i.e. spouse and/or children).
& Two or More
Dependents: Note for Employees w/ Two Dependents: Employee must meet $2000 maximum
coinsurance amount for themselves in the Plan Year before the Plan begins paying
100% of the employee’s covered health care. Employee must meet $2000 maximum
coinsurance amount for the employee’s first dependent in the Plan Year before the Plan
pays 100% of the employee’s dependent #1’s covered health care. Employee must
meet $2000 maximum coinsurance amount for the employee’s second dependent in the
Plan Year before the Plan pays 100% of the employee’s dependent #2’s covered health
care ($2000 x 3 = $6000).

The maximum coinsurance and deductible amount in a Plan Year for an Employee with
2 Dependents would be $7050 (max coinsurance is $6000 + max deductible is $1050 =
Total $7050).

Note for Employees w/ Three or More Dependents: Each member must meet the
$2000 coinsurance, HOWEVER, the total family coinsurance is NOT to exceed $6000.
Therefore, the $6000 can be shared among the employee and their dependents.
(EXAMPLE: Employee $2000 coinsurance, Spouse $2000 coinsurance, Child One
$1000, Child Two $1000 = Total $6000. Since the maximum coinsurance of $6000 has
been met, any additional covered health care expenses for any and all of the employee
and family members for that Plan year will be covered 100% by the Plan).

The maximum coinsurance and deductible amount in a Plan Year for an Employee with
3 or More Dependents would be $7050 (max coinsurance is $6000 + max deductible is
$1050 = Total $7050).

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Prescription Drugs:
Prescription Drug Copays Days Supply
0-34
Generic Drugs
$10
Preferred Brand Without Generic
Available $25
Preferred Brand With Generic
Available $40
Non-Preferred Brand (i.e. a new drug
considered experimental or a drug that has been $50
around for a while but is very, very expensive).
Prescription copayments are limited to $2,500 per person per Plan Year.
NOTE: If the cost of the prescription drug is lower than the copayment amount,
you will be charged the exact cost of the drug.

Prescription Drug The State Health Plan uses a Pharmacy Benefit Manager (PBM) to manage and
Cards & Contracting reduce costs of prescription drugs. The Pharmacy Benefit Manager, is currently
Pharmacies Medco.

The State Health Plan’s prescription drug card will be honored at most chain and
independent pharmacies. You may obtain information about which pharmacies
are contracting by:

• Searching on the Plan’s web site at www.statehealthplan.state.nc.us by
pharmacy name, county, city and/or zip code, OR
• Calling Medco at 1-800-336-5933

Preferred Drug List The Preferred Drug List is a list of prescription drugs selected by a committee of
North Carolina physicians and pharmacists organized by the Plan. When there
is more than one brand name drug available for your medical condition, it is
suggested that you ask your physician to prescribe a drug on the preferred list.
All generic drugs are preferred drugs. Ask your physician to authorize generic
substitution whenever a generic equivalent is available. The Preferred Drug list
can be obtained from the Plan’s web site (www.statehealthplan.state.nc.us) or
by calling the Pharmacy Benefits Manager (1-800-336-5933). From the website,
you can also select “Find a Drug.”

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When to Newly hired employees must enroll within 30 days from their hire date. If the employee
Enroll: applies for health insurance after the 30 day period, there may be a 12-month waiting period
for pre-existing health conditions.
Obtain enrollment form from the Benefits Representative at your work unit. Complete the
How to Enroll
enrollment form and submit to the Benefits Representative.

Effective Date “Employee Only” coverage for the State Health Plan ,is effective the first of the month
of Coverage following the date of employment.

State Health Plan with dependent/spouse coverage will not take effect until a deduction has
been made. Depending on when the Health Insurance Enrollment form is processed will
affect whether or not the employee’s health insurance coverage is effective the first of the
month following employment OR the first of the second month following employment.

IF YOU NEED YOUR HEALTH INSURANCE COVERAGE EFFECTIVE AS SOON AS
POSSIBLE, PLEASE SEE YOUR BENEFITS REPRESENTATIVE. IT IS POSSIBLE THAT
YOU CAN WRITE A CHECK (made out to your health insurance company) IN THE
AMOUNT OF YOUR MONTHLY DEDUCTION TO ENSURE YOUR HEALTH
INSURANCE COVERAGE IS EFFECTIVE THE FIRST OF THE MONTH FOLLOWING
YOUR DATE OF HIRE.

Where to Get Contact your Benefits Representative at your work unit and/or for detailed information,
Additional refer to the “Your Health Benefits: Comprehensive Major Medical Plan” booklet.
Information Or contact Blue Cross Blue Shield Customer Services by calling:
1-800-422-4658
8:00am to 5:00pm
Monday through Friday
Or visit the Plan’s web site at: www.statehealthplan.state.nc.us
You may also write to: Customer Services
P.O. Box 30111
Durham , NC 27702-3111