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1 Document title: AUTHORIZED COPY Progress Energy Health Benefit Plans Document number: HRI-SUBS Applies to: Keywords: Eligible non-bargaining unit employees of Progress Energy, Inc., Progress Energy Carolinas, Inc.; Progress Energy Florida, Inc.; Progress Energy Service Company, LLC human resources information; benefits booklets Summary Plan Description Progress Energy, Inc. Employer Identification No Plan No. 526 Effective January 1, 2012 (unless otherwise noted) This document is a Summary Plan Description (SPD) for the Progress Energy health benefit plans, component plans under the Progress Energy, Inc. Welfare Benefit Plan (the Plan ), sponsored by Progress Energy, Inc. (Progress Energy or the company). The plans are composed of the: Progress Energy (the medical plan ) Progress Energy Employee Assistance and Mental Health & Substance Abuse Services Plan (the EAP and MHSA Services Plan ) (each a plan and together the plans ) Progress Energy Dental Plan (the dental plan ) Progress Energy Vision Plan (the vision plan ) An SPD is a summary of the official plan documents that govern the terms, conditions and administrative operations of a benefit plan that is subject to the Employee Retirement Income Security Act of 1974 (ERISA). It does not describe every plan provision in full detail, and it does not alter any plan or any legal instrument related to the plans creation, operations, funding or benefit payment obligations. Every effort has been made to ensure that this document reflects relevant plan provisions in effect as of January 1, However, if there are any inconsistencies between this document and the official plan documents (including any insurance contracts), the terms and conditions of the applicable official plan documents (including any insurance contracts) will govern. In no case does this document imply or guarantee any right of future employment. Non-bargaining regular, full-time employees, long-term disability (LTD) recipients and retired employees and their eligible dependents of Progress Energy as well as Progress Energy Carolinas, Inc., Progress Energy Florida, Inc., and Progress Energy Service Company, LLC (participating subsidiaries of Progress Energy) are eligible to participate in: The Progress Energy (enrollment in the medical plan also provides access to coverage for prescription drugs, as well as mental health & substance abuse services under the EAP and MHSA Services Plan) The Progress Energy Employee Assistance and Mental Health & Substance Abuse Services Plan The Progress Energy Dental Plan* (see note below) The Progress Energy Vision Plan* (see note below) *Note: Former Florida Power Corporation (non-bargaining employees), Progress Fuels Corporation (corporate employees) and Progress Telecom Corporation employees who were eligible for benefits under the FlexPower program and who retired on or before January 1, 2002 and their surviving dependents are not eligible for the Progress Energy Dental Plan or the Progress Energy Vision Plan. HRI-SUBS Rev. 23 Page 1 of 205
2 Non-bargaining part-time and temporary employees and their eligible dependents of Progress Energy participating subsidiaries of Progress Energy are eligible to participate in: The employee assistance program (EAP) portion of the EAP and MHSA Services Plan Progress Energy reserves the right to amend or terminate the plans or any plans benefits at any time based on the cost of the benefits or other considerations without prior approval of or notification to any party. Links to Reference Documents and Forms FRM-SUBS-00011, Choice Benefits Change Form FRM-SUBS-01117, Catalyst Rx Reimbursement Form FRM-SUBS-20112, Walgreens Mail Service Registration and Prescription Order Form HRI-SUBS-30003, Your Guide to the HDHP and HSA Option HRI-SUBS-30004, Guide to Benefits for Domestic Partners FRM-SUBS-01062, UHC Health Claim Transmittal Form FRM-SUBS-00877, Group Dental Claim Form FRM-SUBS-00091, VSP (Vision Service Plan) Information FRM-SUBS-01112, ValueOptions Claim Form FRM-SUBS-00879, BCBSNC Member Claim Form HRI-SUBS Rev. 23 Page 2 of 205
3 Eligibility Pgs 4-11 Newly Eligible Employees 4 Dependents 4 QMCSO 5 Employment of Both You & Your Dependent by 6 Progress Energy Leaves of Absence 6 Former Employees 6 Retired Employees 6 Age and Service Requirements for Retirees 7 Retiree Medical Caps 10 Enrollment and Changes Pgs Enrollment for Newly Eligible Employees 12 Levels of Coverage 12 Enrolling Dependents 13 Enrollment for Newly Eligible Retirees 13 Changing Your Elections 13 Annual/Biennial Benefits Enrollment 14 Qualifying Events 14 Pgs Section Contents 16 Important Information 17 BCBSNC HDHP 22 BCBSNC Standard and Choice Plans 45 BCBSF Standard and Choice Plans 71 UHC Standard and Choice Plus Plans 94 AvMed and BlueCare HMO Plans 117 AUTHORIZED COPY Table of Contents When Coverage Ends Pgs When Eligibility Ends 186 When Eligibility Ends for Dependents 186 When Coverage Ends 186 HIPAA Certificates of Coverage 187 COBRA Coverage Pgs Eligibility for COBRA 188 Plans Covered Under COBRA 188 Responsibility of Employer to Provide Notice 189 Your Responsibility to Notify Your Employer 189 Cost of COBRA Coverage 189 Maximum Period of Coverage 190 Termination of COBRA Coverage 190 Other COBRA Information 191 Other Important Information Pgs Section Contents 193 Plan Information 194 Plan Administration 196 Your Rights Under ERISA 200 Contact Information Pgs Employee Service Center 202 Benefits Administrators 202 EAP & MHSA Services Plan Pgs Section Contents 124 EAP-ValueOptions 125 MHSA Services ValueOptions 128 MHSA Services BCBSNC/Magellan 136 Dental Plan Pgs Section Contents 141 Important Dental Plan Information 142 Dental Premium Plan 144 Vision Plan Pgs Section Contents 151 Vision Service Plan 152 Claims and Appeals Pgs Section Contents 155 HRI-SUBS Rev. 23 Page 3 of 205
4 Eligibility AUTHORIZED COPY Eligibility The plans cover employees and their dependents who meet the eligibility requirements specified herein and who are employed by a participating subsidiary. The plans provide benefits to eligible retirees and LTD recipients and their dependents as described herein. A subsidiary is a participating subsidiary if it is within Progress Energy's controlled group and if it, with the approval of Progress Energy, has elected by action of its Board of Directors to participate in these plans. The term "controlled group" means the group of companies as defined in Section 1563(a) of the Internal Revenue Code (the "Code"). A participating subsidiary may only participate in the plans for so long as it is a member of Progress Energy's controlled group. A participating subsidiary may elect to withdraw from participation in the plans at any time. Leased employees as defined in Section 414(n) of the Code and independent contractors are not eligible to participate in the plans. Newly Eligible Employees Choice Benefits is the benefits program Progress Energy offers to certain non-bargaining employees to provide them with the flexibility to choose from a variety of benefit options and coverage levels. Medical, Dental and Vision Non-bargaining regular, full-time employees are eligible to enroll in one of the Progress Energy-sponsored medical plan options (includes prescription drug coverage, as well as mental health and substance abuse coverage under the EAP and MHSA Services Plan), dental and vision plans on the first day of employment or reclassification with a participating subsidiary. You and your employer share the cost of medical, dental and optional vision coverage. If you choose basic vision coverage, your employer pays the full cost for that option. Payroll deductions are taken on a before-tax basis. For newly eligible employees, payroll deductions begin with the paycheck following processing of your enrollment. Mental Health and Substance Abuse (MHSA) Non-bargaining regular, full-time employees who are enrolled in one of the Progress Energy-sponsored medical plan options are eligible for mental health and substance abuse services on the first day of employment or reclassification with a participating subsidiary. Employee Assistance Program (EAP) Non-bargaining full-time, part-time, and temporary employees and all members of their household are eligible to receive EAP services on the first day of employment or reclassification with a participating subsidiary. Progress Energy pays the full cost of coverage for EAP services. Dependents If you are eligible for and you elect medical, dental or vision coverage for yourself, you may also elect to cover your eligible dependents. Dependent eligibility for prescription drug coverage and mental health and substance abuse services requires participant and dependent enrollment in one of the Progress Energy-sponsored medical plan options. Each eligible dependent must be listed by name, Social Security number, relationship and date of birth in order to be covered. HRI-SUBS Rev. 23 Page 4 of 205
5 Eligibility Eligible dependents under the medical plan (includes prescription drug coverage, as well as mental health and substance abuse coverage under the EAP and MHSA Services Plan), dental and vision plans are: Your spouse or domestic partner 1 Children under age 26 who: Are your biological children; or Have been placed with you for legal adoption, whether or not the adoption has become final; or Are your stepchildren or domestic partner s children; or Are your foster children; or Are your ward under a legal guardianship appointment or for whom you have legal custody under a valid court decree. Your unmarried children age 26 or older 2 : Who are incapable of self-support because of mental or physical disability, provided they became disabled before age 26, and Who either live with you or live in a long-term care facility and are mainly dependent upon you or your spouse or domestic partner for support and care 3, and For whom you can provide proof of their incapacity, residency, and dependency continuously since age Your domestic partner is eligible only if you both satisfy the criteria described in the Declaration of Domestic Partner Relationship and have submitted a Declaration of Domestic Partner Relationship form to the Employee Service Center. The Guide to Benefits for Domestic Partners (HRI-SUBS-30004) and forms are available through ProgressNet or from the Employee Service Center at or Such documents are hereby incorporated by reference and made a part of this SPD. Your former spouse (by divorce, legal separation or annulment) and former stepchildren may not be covered under these plans unless the two of you remarry; likewise, your former domestic partner and domestic partner s children may not be covered unless you and your former domestic partner re-establish a domestic partner relationship or marry. 2 For children who are disabled, you must notify the Employee Service Center within 30 days of the child reaching age 26 and provide the necessary documentation. 3 To determine if you provide more than half of a child s support, you must first determine the total support provided for that child. Total support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation and similar necessities. Note: Employees who cover or attempt to enroll ineligible dependents are in violation of the company s Code of Ethics and may be subject to disciplinary action up to and including termination of employment. They may also be required to pay damages and costs to the company, including reimbursement of any benefit payments made with respect to an ineligible dependent. Qualified Medical Child Support Order A qualified medical child support order (QMCSO) is an order issued by a court or through a state administrative process established under state law. In addition, national medical support notices must be treated as QMCSOs. A QMCSO directs the Plan Administrator to cover a child for benefits under the health care plan. Upon receipt of the order, the Plan Administrator will review the order to determine whether or not it is a QMCSO. During this review period, the Plan Administrator will instruct the applicable Benefits Administrator to hold all claims that may be payable for the children named in the order. The Plan Administrator will notify in writing all persons named in the order of the determination. If the Plan Administrator determines the order is a QMCSO, its terms must be followed to the extent required by law. If you are subject to a QMCSO, you must pay the appropriate cost of coverage as for any dependent coverage. If the Plan Administrator determines the order is not a QMCSO, a revised order may be prepared for submission and review. The Plan Administrator will instruct the applicable Benefits Administrator to discontinue holding claims at the time an order is determined not to be a QMCSO. If a revised order is submitted and determined to be a QMCSO, the Benefits Administrator will pay any claims on behalf of the child to the extent required by the revised order. HRI-SUBS Rev. 23 Page 5 of 205
6 Eligibility Employment of Both You and Your Dependent by Progress Energy If both you and your dependent are employed by a participating subsidiary of Progress Energy, each of you may elect to be covered under different Progress Energy-sponsored medical and dental plans. Or, one of you may elect the No Coverage option and be covered as a dependent by the other. You may not be covered both as an employee and as a dependent under the Progress Energy-sponsored medical and dental plans. Also, only one of you may cover your children, stepchildren or domestic partner children. These same restrictions apply if your dependent is a bargaining unit employee of Progress Energy Florida, Inc. The above restrictions don t apply for vision coverage. If both you and your dependent are employed by a participating subsidiary of Progress Energy, you may be covered both as an employee and as a dependent under your dependent s vision coverage. Also, if you and your spouse or domestic partner are employed by a participating subsidiary of Progress Energy, both of you may cover your children, stepchildren or domestic partner children. Leaves of Absence If you make the required contributions, you and your eligible dependents may continue medical (includes prescription drug coverage, as well as mental health and substance abuse coverage under the EAP and MHSA Plan), EAP, dental and vision coverage for yourself and your eligible dependents while you are on a leave of absence as permitted in the Employee Handbook for: Newborn care Adoption/foster care Military service Long-Term Disability (see note below regarding dental and vision eligibility*) Any other absence that qualifies under the Family and Medical Leave Act *If you were an employee of the former Florida Power Corporation (non-bargaining employees), Progress Fuels Corporation (corporate employees), or Progress Telecom Corporation and were eligible for benefits under the FlexPower program, and you became disabled and were reclassified to disabled retiree status under the LTD Plan of Progress Energy Florida, Inc., prior to January 1, 2002, then you and your dependents are not eligible for Progress Energy-sponsored dental and vision coverage. Former Employees Terminated employees of a Progress Energy participating subsidiary who have entered into a binding written agreement that grants the terminated employee and any of his or her otherwise eligible dependents the right to continued participation in medical (includes prescription drug coverage, as well as mental health and substance abuse coverage under the EAP and MHSA Services Plan), EAP, dental and vision coverage may continue coverage according to the terms of the agreement. Retired Employees Employees must meet specific eligibility requirements to continue Progress Energy-sponsored health benefits coverage after retirement. The age and service requirements differ depending upon the employer and the effective date of the employee's retirement. See below for more detailed information about the age and service requirements that apply to you and your employer group. Employees who terminated between June 1, 2005 and December 1, 2005 pursuant to the terms of the Voluntary Enhanced Retirement Program may continue to be eligible to be covered under the Plans, subject to the terms of that Program. HRI-SUBS Rev. 23 Page 6 of 205
7 Eligibility Age and Service Requirements for Retirees The table below describes how the age and service requirements relate to continuation and cost of medical (includes prescription drug coverage, as well as mental health and substance abuse coverage under the EAP and MHSA Services Plan), dental, vision and EAP coverage upon retirement. Note that full-cost retirees are not eligible for EAP only coverage. The Retirement Age and Service Requirements reflect the minimum requirements for retirement. The Welfare Benefits Age and Service Access Requirements reflect the minimum requirements for access to unsubsidized (full cost) retiree health benefits. The Welfare Benefits Age and Service Subsidy Requirements reflect the minimum requirements for qualifying for subsidized retiree health benefits. To qualify for subsidized retiree health benefits, you must meet the Welfare Benefits Age and Service Subsidy Requirements, shown in the following table. If you do not meet the Welfare Benefits Age and Service Subsidy Requirements, you may be eligible for access to Progress Energy-sponsored health benefits coverage based on the Welfare Benefits Age and Service Access Requirements. In the event that you meet neither the Welfare Benefits Age and Service Access nor Subsidy Requirements upon retirement, you may still be eligible to retire under the Progress Energy Pension Plan according to that plan s benefit and vesting service requirements, but you will not be eligible to elect health benefits at retirement or in the future. In determining whether the specified Retirement Age and Service Requirements and the Welfare Benefits Age and Service Requirements have been met, "service" includes years of employment as an eligible employee (as previously defined in this SPD) with a Progress Energy participating subsidiary. Service as a temporary or part-time employee does not count towards satisfaction of Welfare Benefits Age and Service Requirements. Once you have met the minimum required age and years of service as described under the Welfare Benefits Age and Service Access and/or Subsidy Requirements, you will remain eligible for retiree health benefits (access only or subsidized) upon retirement, even if you are reclassified to temporary or part-time employment prior to retirement. Employees of a participating subsidiary may receive credit for prior service with a non-participating subsidiary only if that service was incurred during the time the non-participating subsidiary was within the controlled group of Progress Energy. (Note: Service with SRS will be included only during the time said employer was within the controlled group of Progress Energy. Service with Progress Telecom, LLC will be included only through December 31, 2004.) A non-participating subsidiary is an employer that is within Progress Energy s controlled group of companies (as defined in Internal Revenue Code Section 1563) but that does not offer a particular benefit to its employees. HRI-SUBS Rev. 23 Page 7 of 205
8 H I R E D A T E & C O M P A N Y A G E & S E R V I C E R E Q U I R E M E N T S Age and Service Requirements for Retirees - Must be attained by your retirement date New employees hired or rehired on or after 1/1/2002 Eligible employees 1 of Progress Energy Carolinas, Inc., Progress Energy Service Company, and Progress Energy Ventures, Inc. (regardless of hire date) Eligible employees hired by or transferred to NCNG on or after 1/1/ Eligible employees hired by or transferred 3 to Progress Energy Florida, Inc. (non-bargaining employees), Progress Fuels (corporate employees), and Progress Telecom Corporation (or Progress Telecom, LLC) on or after 1/1/2002 See additional Employer Group information on the following page. AUTHORIZED COPY Eligibility Employer Group Group 1 Group 2 Group 3 Eligible employees hired by NCNG on or before 12/31/1999 Retirement Age and Service Requirements Age 65 or older with at least 5 years of service; or Age 55 or older with at least 15 years of service; or 35 years of service regardless of age. The years of service, above, must be in a nonbargaining employment classification. Temporary and part-time service must comply with the benefit service definition as defined in the Progress Energy Pension Plan document in order to meet these requirements. Welfare Benefits Age and Service Access Requirements Age 65 or older with at least 5 years of service; or Age 55 or older with at least 15 years of service; or 35 years of service regardless of age. The total years of service worked must include regular, full-time service for the minimum required years of service shown above. Welfare Benefits Age and Service Subsidy Requirements (must meet the first and second bullets and either bullet three or four) Hired or rehired on or before 12/31/2001; and Attained age 40 or completed 5 years of eligible service on or before 12/31/2001; and Completion of 15 years of service after reaching age 40; or Completion of 35 or more years of service. The total years of service worked must include regular, full-time service for the minimum required years of service shown above. Note: Employees hired by NCNG on or before 12/31/1999 must meet the age and service requirements defined below to qualify for Progress Energy-sponsored retiree medical (includes prescription drug and MHSA coverage), EAP, dental and vision coverage. Employees hired on or after 1/1/2000 must meet the age and service requirements defined in Group 1. Retirement Age and Service Requirements Age 65 or older with at least 5 years of service; or Age 55 or older with at least 20 years of service. Welfare Benefits Age and Service Access Requirements Age 65 or older with at least 5 years of service; or Age 55 or older with at least 20 years of service. The total years of service worked must include regular, full-time service for the minimum required years of service shown above. Welfare Benefits Age and Service Subsidy Requirements Hired or rehired on or before 12/31/2001; and Attained age 40 or completed 5 years of eligible service on or before 12/31/2001; and Completion of 15 years of service after reaching age 40. The total years of service worked must include regular, full-time service for the minimum required years of service shown above. Eligible employees of Progress Energy Florida, Inc. (non-bargaining employees), Progress Fuels (corporate employees), and Progress Telecom Corporation (or Progress Telecom, LLC) hired on or before 12/31/2001 Note: Employees hired on or before 12/31/2001, who were receiving benefits under the FlexPower program prior to 1/1/2002, must meet the age and service requirements defined below to qualify for Progress Energysponsored retiree health benefits coverage. Employees hired on or after 1/1/2002, must meet the age and service requirements defined in Group 1. See additional Employer Group information on the following page. Retirement Age and Service Requirements Age 65 or older with at least 5 years of service; or Age 55 or older with at least 15 years of service. Welfare Benefits Age and Service Access Requirements Age 65 or older with at least 5 years of service; or Age 55 or older with at least 15 years of service. The total years of service worked must include regular, full-time service for the minimum required years of service shown above; exception: regular, parttime service on or before 12/31/2001 counts towards the Welfare Benefits Age and Service Requirements. Welfare Benefits Age and Service Subsidy Requirements Hired or rehired on or before 12/31/2001; and Attained age 40 or completed 5 years of eligible service on or before 12/31/2001; and Completion of 15 years of service after reaching age 40. The total years of service worked must include regular, full-time service for the minimum required years of service shown above; exception: regular, parttime service on or before 12/31/2001 counts towards the Welfare Benefits Age and Service Requirements. HRI-SUBS Rev. 23 Page 8 of 205
9 The notes below apply to the table on the previous page: AUTHORIZED COPY Eligibility 1 Applies to employees of Progress Energy Carolinas, Inc., Progress Energy Service Company, LLC and Progress Energy Ventures, Inc. (participating subsidiaries of Progress Energy) who were eligible for benefits under the Progress Energy-sponsored Choice Benefits program prior to 1/1/2002. Does not include any employees transferred or relocated to these subsidiaries who were eligible for benefits under the FlexPower program prior to the merger of the Choice Benefits and FlexPower benefit programs effective 1/1/2002, or employees who were hired by or transferred to NCNG prior to 1/1/ Applies to employees of NCNG who were eligible for benefits under the Progress Energy-sponsored Choice Benefits program prior to 1/1/ Applies to former employees of Progress Energy Carolinas, Inc., Progress Energy Service Company, LLC, and Progress Energy Ventures, Inc. (participating subsidiaries of Progress Energy) who were eligible for benefits under the Progress Energysponsored Choice Benefits program prior to 1/1/2002. Does not include any employees transferred or relocated to these subsidiaries who were eligible for benefits under the FlexPower program prior to the merger of the Choice Benefits and FlexPower benefit programs effective 1/1/2002, or employees who were hired by or transferred to NCNG prior to 1/1/2000 Additional Employer Group information regarding the table on the previous page: Group 1 former CP&L employees: For retirement from the former CP&L after 1/1/1993 (last day of active employment was on or after 1/1/1993) but on or before 1/1/2002 (last day of active employment was on or before 12/31/2001) retirees who met both the Retirement Age and Service Requirements AND the Welfare Benefits Age and Service Subsidy Requirements are eligible to continue Progress Energy-sponsored retiree medical, EAP, dental and vision coverage at company-subsidized retiree rates. Retirees who met the Retirement Age and Service Requirements AND the Welfare Benefits Age and Service Access Requirements are eligible to continue retiree medical, dental and vision coverage at full cost rates. For retirement from the former CP&L on or before 1/1/1993 (last day of active employment was on or before 12/31/1992) employees who met the Retirement Age and Service Requirements at the time they terminated employment with CP&L are eligible to continue Progress Energy-sponsored retiree medical, EAP, dental and vision coverage for themselves and their eligible dependents at company-subsidized retiree rates. Group 3 former Florida Progress employees: For employees hired on or before 12/31/2001 Retirement effective after 1/1/2002 (last day of active employment is on or after 1/1/2002) retirees who meet the Retirement Age and Service Requirements AND the Welfare Benefits Age and Service Access Requirements defined in Group 3 on the previous page are eligible for Progress Energy-sponsored retiree medical, dental and vision coverage for themselves and their eligible dependents at full cost rates. To qualify for medical, EAP, dental and vision coverage for themselves and their eligible dependents at company-subsidized retiree rates (reduced from full-cost rates), both the Retirement Age and Service Requirements AND the Welfare Benefits Age and Service Subsidy Requirements defined in Group 3 on the previous page must be met. For retirement effective on or before 1/1/2002 (last day of active employment was on or before 12/31/2001) - non-bargaining employees who retired from the former Florida Power Corporation, Florida Progress Corporation, or any participating subsidiary of the Progress Energy Florida, Inc.-sponsored FlexPower program on or before 1/1/2002, are eligible for Progress Energy-sponsored retiree medical and EAP coverage for themselves and their eligible dependents but are not eligible for Progress Energy-sponsored dental and vision coverage for themselves and their eligible dependents. The retiree and spouse contribution is based on the age/service matrix percentage at retirement if retirement is on or after 1/1/1993. Retirements prior to 1/1/1993 require no retiree or spouse contribution. Dependent child coverage is paid 100% by the retiree. HRI-SUBS Rev. 23 Page 9 of 205
10 Eligibility Retiree Medical Caps Effective January 1, 2002, Progress Energy implemented retiree medical funding caps that will affect the cost of medical benefits for some retired employees who have company-subsidized medical coverage. Medical caps are limits on the annual dollar amount of future company contributions to retiree medical benefits and are based on the average cost per participant and the expected rate of medical inflation. When the applicable limits are reached, company contributions will be "capped" and future premium increases will be paid by plan participants. However, the retiree medical caps will not affect the availability or cost of any other retiree benefits. How the retiree medical caps will apply to you depends on your age, service and employer group. See Age and Service Requirements for Retirees on the previous pages for more detailed information. How the caps will work: There are separate pre-65 and post-65 caps, with the post-65 cap taking effect when the covered retiree reaches age 65. The annual total cost caps are: Pre-65 $7,000 Post-65 1 $4,000 1 Retirees and dependents that are Medicare-eligible due to disability prior to age 65 are subject to the post-65 cap. The premiums (and funding cap) for post-65 retiree medical coverage are lower than the pre-65 premiums (and funding cap) because Medicare becomes the primary coverage (and the Progress Energy plan provides secondary coverage) when an individual reaches age 65 or becomes Medicare eligible due to disability. Retirees and their covered dependents are required to move from pre-65 coverage to post-65 coverage in the year when either they or their covered dependents reach age 65 or become Medicare eligible due to disability. This is necessary because Medicare will become primary to (or pay benefits before) the retiree medical coverage for either the retiree or his or her covered dependents. However, the determination of whether the total cost for a retiree and his or her covered dependents counts toward the pre- or post-65 cap calculation is based on the retiree s age. For example, the total cost for a retiree age 65 or older whose spouse or domestic partner is not yet age 65 will count toward the post-65 cap calculation. Likewise, the total cost for a retiree under age 65 whose spouse or domestic partner is age 65 or older will count toward the pre-65 cap calculation. Calculating the caps To determine when each cap is reached, the total cost of pre- and post-65 retiree coverage (claims plus administrative costs) is divided by the total number of participants (both retirees and dependents) in each group. This calculation produces an average cost per participant for each group that will be monitored annually until the caps are met. When the caps are met, the employer-provided subsidy for affected retirees will be capped and continue at that level for the foreseeable future. Pre- and post-65 plan costs are combined for all retirees from participating subsidiaries so costs can be accurately monitored for comparison with the caps. Caps will affect premiums only The caps will not affect the benefits payable under the medical plan; they apply only to the funding of future premiums. For example, a post-65 retiree will not be limited to $4,000 of benefits. Likewise, a pre-65 retiree will not be limited to $7,000 of benefits. The caps will only impact the monthly premiums. It is possible that a pre-65 retiree will experience the impact of the pre-65 cap on his or her premiums and then transition to post-65 premiums that are not yet impacted by the post-65 cap. How the medical caps will be applied Retiree medical funding caps affect the cost of medical benefits for some retired employees who have subsidized medical coverage. See the following page for a detailed explanation of how retiree medical caps work. Refer to the table on page 8 for detailed information related to the Welfare Benefits Age and Service Subsidy Requirements that must be met to qualify for company-subsidized retiree medical rates. HRI-SUBS Rev. 23 Page 10 of 205
11 Eligibility Note: Medical caps do not apply to eligible employees who meet only the Welfare Benefits Age and Service Access Requirements. These individuals must pay the full cost of retiree medical coverage as explained below. Employees who are subject to the age and service requirements in Groups 1 & 2 on page 8 Active employees who were both under age 40 and had less than five years of service as of December 31, 2001, and all employees hired or rehired on or after January 1, 2002, are required to pay the full cost of retiree medical coverage and are not subject to the retiree medical funding caps. They will continue to remain eligible for retiree medical coverage when they meet the applicable age and service requirements. These individuals will have access to coverage at that time, but there will be no employer-provided subsidy of coverage. They will be required to pay the applicable premium rates that are subject to change each year. Active employees who were either age 40 or older or had five or more years of service as of December 31, 2001, who later qualify for company-subsidized retiree medical coverage, and who retire on or after January 1, 2002, are subject to the retiree medical funding caps. These individuals will continue to remain eligible for retiree medical coverage and will be required to pay the applicable premium rates that are subject to change each year. However, beginning in the year in which the applicable cap is met, the employer-provided subsidy for these retirees will be capped, and all future cost increases will be passed on to the affected retirees through increased premium rates. Active employees who were either age 40 or older or had five or more years of service as of December 31, 2001, who retire prior to qualifying for company-subsidized retiree medical coverage on or after January 1, 2002, and who meet the Welfare Benefits Age & Service Access Requirements are required to pay the full cost of retiree medical coverage and are not subject to the retiree medical funding caps. These individuals will continue to remain eligible for retiree medical coverage, but there will be no employer-provided subsidy of coverage. They will be required to pay the applicable premium rates that are subject to change each year. Active employees who were eligible for companysubsidized retiree medical coverage as of December 31, 2001 (regardless of their retirement date) are not subject to the retiree medical funding caps. These individuals will continue to remain eligible for retiree medical coverage and will be required to pay the applicable retiree premium rates that are subject to change each year. Retirees who retired prior to January 1, 2002 are not subject to the retiree medical caps. They will be required to pay the applicable premium rates that are subject to change each year. Employees who are subject to the age and service requirements in Group 3 on page 8 Active employees who were both under age 40 and had less than five years of service as of December 31, 2001, and all employees hired or rehired on or after January 1, 2002, are required to pay the full cost of retiree medical coverage and are not subject to the retiree medical funding caps. They will continue to remain eligible for retiree medical coverage when they meet the applicable age and service requirements. These individuals will have access to coverage at that time, but there will be no employer-provided subsidy of coverage. They will be required to pay the applicable premium rates that are subject to change each year. Active employees who were either age 40 or older or had five or more years of service as of December 31, 2001, who later qualify for company-subsidized retiree medical coverage, and who retire on or after January 1, 2002, are subject to the retiree medical funding caps. These individuals will continue to remain eligible for retiree medical coverage and will be required to pay the applicable premium rates that are subject to change each year. However, beginning in the year in which the applicable cap is met, the employer-provided subsidy for these retirees will be capped, and all future cost increases will be passed on to the affected retirees through increased premium rates. Active employees who were either age 40 or older or had five or more years of service as of December 31, 2001, who retire prior to qualifying for company-subsidized retiree medical coverage on or after January 1, 2002, and who meet the Welfare Benefits Age & Service Access Requirements are required to pay the full cost of retiree medical coverage and are not subject to the retiree medical funding caps. These individuals will continue to remain eligible for retiree medical coverage, but there will be no employer-provided subsidy of coverage. They will be required to pay the applicable premium rates that are subject to change each year. Retirees who retired on or after January 1, 1998 and on or before January 1, 2002 (those who were subject to the retiree medical funding caps of the former Florida Power) are subject to the Progress Energy retiree medical funding caps. These retirees will continue to be subject to the Florida retiree medical rate matrix and if applicable will be required to pay the retiree premiums that are subject to change each year. Retirees who retired prior to January 1, 1998 (those who were not subject to the retiree medical funding caps of the former Florida Power) are not subject to the Progress Energy medical caps. Individuals in this group who retired on or after January 1, 1993, will continue to be subject to the Florida retiree medical rate matrix and if applicable will be required to pay the retiree premiums that are subject to change each year. HRI-SUBS Rev. 23 Page 11 of 205
12 Enrollment and Changes Enrollment and Changes Enrollment for Newly Eligible Employees As a non-bargaining regular, full-time employee, you must enroll yourself and your eligible dependents in the medical, dental and vision plans within 30 days of your employment date or reclassification date. Also, you must enroll through Employee Self Service to elect the appropriate coverage and list each dependent by name, Social Security number, relationship and date of birth before any benefits may be paid. Coverage will be effective on your date of hire or reclassification if your elections are made within 30 days of such date. There are no pre-existing condition exclusions for you or your dependents for the medical plan (including EAP & mental health and substance abuse) or the vision plan. There are pre-existing condition exclusions under the dental plan. (See Expenses Not Covered in the Dental Plan section.) Levels of Coverage If you enroll in the medical, dental or vision plan, there are three levels of coverage available: Self (employee only) Self + 1 (employee plus one eligible dependent) Family (employee plus two or more eligible dependents) If you do not enroll within 30 days of your employment date or reclassification date, your benefits will default as described below: Plan Medical - includes mental health & substance abuse (MHSA) and prescription drug coverage Dental Vision Default Coverage Standard, self only (BCBSNC or BCBSF, depending on location) No Coverage Basic plan, self only Medical If you do not enroll in the medical plan option within 30 days of becoming eligible, you will be automatically enrolled with self only coverage under the BCBSNC or BCBSF Standard Plan. Your dependents will not be covered. The effective date of coverage will be your date of hire or reclassification. Note: You may elect the No Coverage option only if you are covered by another medical plan. If you elect the No Coverage option, you must provide evidence of other coverage within 30 days of your election. If you provide evidence of other coverage within 30 days, coverage will be waived retroactive to the date you requested No Coverage. If you present evidence after 30 days, the change will be effective the date the evidence is provided. MHSA and prescription drugs Your enrollment and the enrollment of your eligible dependents in one of the Progress Energy-sponsored medical plan options automatically enrolls you in the MHSA benefit under the EAP and MHSA Plan and gives you access to prescription drug coverage. An additional election is not required. Dental If you do not enroll in the dental plan within 30 days of becoming eligible, your dental election will automatically default to the No Coverage option. HRI-SUBS Rev. 23 Page 12 of 205
13 Enrollment and Changes Vision If you do not enroll in a vision plan option within 30 days of becoming eligible, you will be automatically enrolled with self only coverage under the Basic Plan at no cost to you. Your dependents will not be covered. The effective date of coverage will be your date of hire or reclassification. You may elect to cover your eligible dependents under the Basic Plan or you may elect coverage under the Optional Plan for yourself and your eligible dependents, the cost of which you and your employer will share. There is not a No Coverage option under the vision plan. Enrolling Dependents You must cover yourself under a plan option in order to enroll your eligible dependents. Each dependent must meet the eligible dependent definition (see Dependents in the Eligibility section). Also you must elect the plans, the appropriate level of coverage (self, self plus one or family) and list each dependent by name, Social Security number*, relationship and date of birth through Employee Self Service or on the enrollment form before benefits can be paid. Enrollment through Employee Self Service applies to new employees, reclassifications to regular, full-time status and annual/biennial benefits enrollment. Enrollment on the employer-provided enrollment form applies to all other qualifying events. Coverage will be effective on your date of hire or reclassification if you enroll within 30 days of such date. Please see the Guide to Benefits for Domestic Partners (HRI-SUBS-30004) for an explanation of the tax impact of paying premiums for your domestic partner on a before-tax basis. *Note: The Mandatory Insurer Reporting Law (Section 111 of Public Law ) requires group health plan insurers, third party administrators, and plan administrators of self-insured group health plans to report Social Security numbers for certain covered members. To comply with this legislation, Progress Energy needs Social Security numbers for dependents covered under any company-sponsored medical plan. If you do not have the dependent's Social Security number, you should complete the rest of the information and submit your enrollment. You must call the Employee Service Center and add the dependent's Social Security number as soon as you receive it. Note: Employees who cover ineligible dependents are in violation of the company s Code of Ethics and may be subject to disciplinary action up to and including termination of employment. They may also be required to pay damages and costs to the company, including any benefit payments made with respect to an ineligible dependent. Enrollment for Newly Eligible Retirees As a newly eligible retiree medical, dental and vision coverage will automatically continue. If you wish to waive some or all of the coverage, you must complete a retiree enrollment form within 30 days of your retirement date. Coverage will be effective on your retirement date. Deductions will begin with your second pension check. If there is not a monthly pension check, you will receive a bill for your benefits on a monthly basis. If you choose to waive coverage, you will not be able to enroll in benefits until the next annual/biennial enrollment period unless you have a qualifying event. Changing Your Elections After the 30-day newly eligible enrollment period has expired, you may not change your elections until the next annual enrollment period for medical coverage or biennial enrollment period for dental and vision coverage unless you experience a qualifying event. HRI-SUBS Rev. 23 Page 13 of 205
14 Enrollment and Changes Annual/Biennial Benefits Enrollment You may change your medical election each year during annual benefits enrollment. Elections made during annual benefits enrollment are effective January 1 through December 31 of the upcoming year (or through some earlier date if coverage ends as described under When Coverage Ends or if you make an election change upon a qualifying event). There are no pre-existing condition exclusions for you or your dependents under the medical plan. The dental and vision plans have biennial (every two years) enrollment periods, and changes to your dental and vision elections may only be made at those times unless you have a qualifying event that will allow you to make a change. Elections made during dental and vision enrollment periods are effective for two years beginning January 1 of the upcoming year unless coverage ends as described under When Coverage Ends or if you experience a qualifying event. Qualifying Events The Internal Revenue Service rules do not permit you to change your Choice Benefits elections during the plan year unless you experience a qualifying event. If you experience a qualifying event, a completed employer-provided Choice Benefits Change Form (FRM-SUBS-00011) must be received by the Employee Service Center within 30 days of the event to modify your coverage (or 60 days for certain events as noted below). Changes due to birth, adoption or placement for adoption (a subset of HIPAA special enrollment right events) may be effective retroactively back to the date of the birth, adoption or placement for adoption, as long as such date is no more than 30 days prior to the date of notification, subject to the provisions of the underlying group health plan. All other changes may only be effective on a prospective basis and no earlier than the first day of the pay period after the Choice Benefits Change Form is received by the Employee Service Center. Otherwise, you will have to wait until the next annual or biennial enrollment period to change your elections. All election changes must be consistent with the qualifying event and the following participant group guidelines. Regular, full-time non-bargaining employees and employees on a leave of absence may not make changes to their medical, dental or vision election until the next benefits enrollment period unless they experience a qualifying event. Enrollment occurs annually for medical and biennially for dental and vision. Retired employees, including full-cost retirees, may make changes to their coverage within 30 days of a qualifying event (or 60 days for certain events as noted below), consistent with the qualifying event. However, they may elect to drop coverage or dependents without a qualifying event at any time during the year. They may also make changes during annual benefits enrollment for medical or biennial benefits enrollment for dental and vision. LTD recipients and COBRA participants may not add dependents to their medical, dental or vision coverage until the next annual enrollment period for medical or the next biennial enrollment period for dental and vision unless they experience a qualifying event. However, they may elect to drop coverage or dependents without a qualifying event at any time during the year. Changes made as a result of a qualifying event must be requested within 30 days (or 60 days for certain events as noted below) of, and be consistent with, the qualifying event. Qualifying events do not allow you to change from one medical plan option to another unless you relocate and the new location is outside of the option s service area or unless you are making a change pursuant to a HIPAA special enrollment right event (i.e., adding a new dependent via marriage, birth, adoption or placement for adoption; losing other coverage; or the Medicaid/CHIP events listed in the last two bullets below). Also note that a physician/hospital leaving the network does not constitute a qualifying event. Qualifying events include: Your marriage or fulfillment of all Progress Energy domestic partner relationship requirements. Legal separation, annulment, divorce or termination of domestic partner relationship. Birth, adoption or placement for adoption, or change in custody of your child. HRI-SUBS Rev. 23 Page 14 of 205
15 Enrollment and Changes Death of your spouse, domestic partner or child. Loss of dependent status (e.g., child reaching age 26). You, your spouse, domestic partner or child takes or returns from an unpaid leave of absence. Your spouse s, domestic partner s, child s or your health care coverage changes significantly (attributable to your spouse s, domestic partner s or child s employment or change in student status or to a significant cost change or coverage curtailment). Your spouse s, domestic partner s or child s employer conducts an annual enrollment and your spouse, domestic partner or child changes his or her benefit elections. You, your spouse, domestic partner or child changes from part-time to full-time or from full-time to part-time employment and that change impacts eligibility for coverage. Your spouse, domestic partner or child becomes employed or unemployed. You, your spouse, domestic partner or child changes place of work or permanent residence (and the new location is outside of the option s service area) (only applicable for medical). You, your spouse, domestic partner or child loses eligibility for Medicaid or Children s Health Insurance Program (CHIP) coverage 1 (only applicable for medical). You, your spouse, domestic partner or child becomes eligible to participate in a premium assistance program under Medicaid or CHIP. 1 1 Employee must notify the Employee Service Center within 60 days of loss of Medicaid/CHIP eligibility or of the premium assistance eligibility determination. All other qualifying events must be communicated to the Employee Service Center within 30 days of the event. In order to cover a new dependent due to a qualifying event, you must complete an employer-provided Choice Benefits Change Form (FRM-SUBS-00011) or a retiree change form even if you already have family coverage. The new dependent's name, Social Security number*, relationship and date of birth must be listed on the form. If the Employee Service Center does not receive the form within 30 days of the event (or 60 days for certain events as noted above), the dependent may not be added to your coverage until the next enrollment period. The dental and vision options have biennial enrollment periods. *Note: The Mandatory Insurer Reporting Law (Section 111 of Public Law ) requires group health plan insurers, third party administrators, and plan administrators of self-insured group health plans to report Social Security numbers for certain covered members. To comply with this legislation, Progress Energy needs Social Security numbers for dependents covered under any company-sponsored medical plan. If you do not have the dependent's Social Security number, you should complete the rest of the information and submit the form. You must call the Employee Service Center and add the dependent's Social Security number as soon as you receive it. When a dependent is no longer eligible for coverage, you must complete an employer-provided Choice Benefits Change Form (FRM-SUBS-00011) or a retiree change form within 30 days of the qualifying event to remove the dependent from coverage and reduce your premiums if applicable. Termination of coverage will be effective on the date your dependent ceases to be eligible for coverage. Premiums will not be refunded retroactively. If you do not remove the dependent from coverage, you will be covering an ineligible dependent. Note: Employees who cover ineligible dependents are in violation of the company s Code of Ethics and may be subject to disciplinary action up to and including termination of employment. They may also be required to pay damages and costs to the company, including any benefit payments made with respect to an ineligible dependent. HRI-SUBS Rev. 23 Page 15 of 205
16 Important Information Pgs Coverage Options 17 Primary and Secondary Coverage 18 Medicare Part D 19 Maintenance of Benefits 20 BCBSNC High Deductible Health Plan Pgs Enrollment Eligibility 22 Medical and Prescription Drug ID Card 22 BCBSNC HDHP Summary Chart 23 How the HDHP Works 25 Utilization Management (UM) Program 27 Care Management 30 Condition Management Program 30 Covered Expenses 31 Expenses Not Covered 40 AUTHORIZED COPY Section Contents UHC Choice Plus Plan Summary Chart 98 How the UHC Standard and Choice Plus 100 Plans Work Utilization Review Program 102 Case Management 104 Condition Management Program 104 Covered Expenses 105 Expenses Not Covered 113 HMO Plans Pgs Enrollment Eligibility 117 Medical and Prescription Drug ID Card 117 AvMed HMO Plan Summary Chart 118 BlueCare HMO Plan Summary Chart 120 How the HMO Plans Work 122 BCBSNC Standard and Choice Plans Pgs Enrollment Eligibility 45 Medical and Prescription Drug ID Cards 45 BCBSNC Standard Plan Summary Chart 46 BCBSNC Choice Plan Summary Chart 48 How the BCBSNC Standard and Choice 50 Plans Work Utilization Management (UM) Program 53 Care Management 55 Condition Management Program 55 Covered Expenses 56 Expenses Not Covered 66 BCBSF Standard and Choice Plans Pgs Enrollment Eligibility 71 Medical and Prescription Drug ID Cards 71 BCBSF Standard Plan Summary Chart 72 BCBSF Choice Plan Summary Chart 74 How the BCBSF Standard and Choice Plans 76 Work Utilization Review (UR) Program 78 Case Management 80 Condition Management Program 80 Covered Expenses 81 Expenses Not Covered 90 UHC Standard and Choice Plus Plans Pgs Enrollment Eligibility 94 Medical and Prescription Drug ID Cards 95 UHC Standard Plan Summary Chart 96 HRI-SUBS Rev. 23 Page 16 of 205
17 Important Information AUTHORIZED COPY Important Information Your eligibility and enrollment in one of the Progress Energy-sponsored medical plan options gives you access to coverage for prescription drugs, as well as mental health and substance abuse services under the EAP and MHSA Plan. Coverage Options Active employees and non-medicare eligible participants The medical plan coverage options listed below are available if you meet the Progress Energy-sponsored medical plan eligibility criteria (see the Eligibility section), and if you are either (1) an active regular, full-time employee including eligible dependent (regardless of Medicare status); (2) a non-medicare eligible retiree including non-medicare eligible dependent of a retiree; or (3) a non-medicare eligible surviving dependent: High Deductible Health Plan (administered by BCBSNC) Standard Plan (administered by BCBSNC, BCBSF and UnitedHealthcare) Choice Plan (administered by BCBSNC and BCBSF) Choice Plus Plan (administered by UnitedHealthcare) AvMed HMO (administered by AvMed) BlueCare HMO (administered by BCBSF) No Coverage* *Note: If you are a regular, full-time employee, you may elect the No Coverage option only if you are covered by another medical plan. If you elect the No Coverage option, you must provide evidence of other coverage within 30 days of your election. If you provide evidence of other coverage within 30 days, coverage will be waived retroactive to the date you requested No Coverage. If you present evidence after 30 days, the change will be effective the date the evidence is provided. Medicare-eligible retirees and surviving dependents The medical plan coverage options listed below are available if you meet the Progress Energy-sponsored medical plan eligibility criteria (see the Eligibility section), and if you are either (1) a retiree and you (or your covered dependents) are eligible for Medicare or (2) a surviving dependent and you (or your covered dependents) are eligible for Medicare: Standard Plan (administered by BCBSNC, BCBSF and UnitedHealthcare) Choice Plan (administered by BCBSNC and BCBSF) No Coverage You should apply for and purchase Medicare Part B when you or your dependent first become eligible for Medicare, and you should use providers who accept Medicare. The Benefits Administrator will assume you have purchased Medicare Part B and use providers who accept Medicare, and will coordinate benefits accordingly, whether or not you are actually covered under Part B or actually use providers who accept Medicare. This means that if you do not enroll in Medicare Part B when you become eligible or if you use providers who do not accept Medicare and then incur expenses that would be covered by Medicare Part B, you will be responsible for paying the full cost of those expenses. They will not be covered or paid by the Progress Energy plan. Long-term disability recipients If you are an LTD recipient and eligible for Progress Energy-sponsored medical coverage (see the Eligibility section), you and your eligible dependents may choose one of the following options 1 : HRI-SUBS Rev. 23 Page 17 of 205
18 Standard Plan (administered by BCBSNC, BCBSF and UnitedHealthcare) Choice Plan (administered by BCBSNC and BCBSF) Choice Plus Plan (administered by UnitedHealthcare) AvMed HMO until Medicare-eligible (administered by AvMed) BlueCare HMO until Medicare-eligible (administered by BCBSF) Primary and Secondary Coverage AUTHORIZED COPY Important Information 1 LTD recipients and their eligible dependents can continue enrollment in an HMO until they become eligible for Medicare, at which time they must change plans (or they can change plans effective January 1 prior to becoming Medicare-eligible if they do not want to change plans mid-year). Progress Energy and another employer-sponsored plan If you and your eligible dependents are covered under a Progress Energy-sponsored plan and another employersponsored plan, one plan is considered the primary plan and the other is the secondary plan. The primary plan pays claims first and the secondary plan pays claims after the primary plan has paid. Primary and secondary responsibility for a claim under these plans is usually determined as follows: The plan without a claims coordination provision will be primary and the plan with a claims coordination provision will be secondary. When both plans have coordination provisions, the plan covering the patient as an active employee will be primary. A plan that covers an active employee or a dependent of an active employee will be primary to a plan that covers the patient as an inactive (retired or terminated) employee or as a dependent of an inactive employee. If a determination of responsibility cannot be made using the above guidelines, the plan that has covered the patient the longest will be the primary plan. Dependent children If a dependent child is covered by two or more employer-sponsored plans, the "birthday rule" will apply unless there has been a divorce. Under the birthday rule, the plan of the parent whose birthday occurs first in the year is primary regardless of the year of birth. For example, the plan of the parent with a February birthday is primary to the parent with a May birthday. The father s plan will be primary if a plan does not contain the birthday rule. If there has been a divorce and the courts have assigned financial responsibility for a child s health care to one parent, that parent s plan is primary. Otherwise, in the case of divorce: The plan of the parent with custody pays first, and the plan of the stepparent pays second. The plan of the parent without custody pays third (second if there is no stepparent or the stepparent does not participate in an employer-sponsored plan). Medicare eligible participants Active employees If you are actively employed, the Progress Energy-sponsored medical plan will be primary and Medicare will be secondary in accordance with the following principles: For you, if you are covered by both the Progress Energy-sponsored medical plan and Medicare. For your dependent, if you have a Medicare-eligible dependent covered under a Progress Energy-sponsored medical plan. For you or your dependent, during the first 30-months of eligibility or entitlement to Medicare based solely on end stage renal disease (ESRD). After 30 months, Medicare will be primary. HRI-SUBS Rev. 23 Page 18 of 205
19 Important Information Retirees, surviving dependents or long-term disability recipients If you are a retiree, surviving dependent or LTD recipient, Medicare will be primary and the Progress Energysponsored medical plan will be secondary in accordance with the following principles*: For you, if you are retired or a surviving dependent and are age 65 or over. For you, if you are disabled when you retire or are a surviving dependent and are eligible for Medicare (regardless of your age). For you, if you are eligible for LTD benefits and have received Social Security benefits for 24 months (regardless of your age). For your dependent, if you have a Medicare-eligible dependent covered under a Progress Energy-sponsored plan and you are retired or eligible for LTD benefits (regardless of your age) or a surviving dependent. Pre age 65 - For you or your dependent, after the first 30 months of eligibility or entitlement to Medicare based solely on end stage renal disease (ESRD). Post age 65 - Medicare will remain primary for you or your dependent even if you become eligible for Medicare based on end stage renal disease (ESRD). *You should send the Employee Service Center a copy of the Medicare card within 30 days of becoming eligible for Medicare so your coverage and premium may be changed appropriately. You should apply for and purchase Medicare Part B when you or your dependent first become eligible for Medicare, and you should use providers who accept Medicare. The Progress Energy-sponsored plan will assume you have purchased Medicare Part B and use providers who accept Medicare, and will coordinate benefits accordingly, regardless of whether or not you are actually covered under Part B or actually use providers who accept Medicare. This means that if you do not enroll in Medicare Part B when you become eligible or if you use providers who do not accept Medicare and then incur expenses that would be covered by Medicare Part B, you will be responsible for paying the full cost of those expenses. They will not be covered or paid by the Progress Energy plan. If you are a retiree or a surviving dependent when you or a dependent becomes eligible for Medicare, your participation in the HDHP, Choice Plus Plan, AvMed HMO Plan or BlueCare HMO Plan will end and you will need to elect coverage under the Standard or Choice Plans by the month in which Medicare becomes effective. If you are an LTD recipient when you or a dependent becomes eligible for Medicare, your participation in the AvMed HMO Plan or BlueCare HMO Plan will end and you will need to elect coverage under the Standard, Choice or Choice Plus Plans by the month in which Medicare becomes effective. Note: If you notify the Employee Service Center that you or your spouse became Medicare-eligible and are covered under the UHC Choice Plus Plan, you will become covered under the UHC Standard Plan (except LTD recipients) unless you elect to be covered under the BCBS Choice or Standard Plan. If your spouse or domestic partner is not Medicare-eligible at that time and becomes covered under the UHC Standard Plan, copays will no longer apply. Additionally, if you notify the Employee Service Center when you or your spouse becomes Medicare-eligible and you are covered under AvMed HMO or BlueCare HMO, you will become covered under the BCBS Choice Plan unless you elect to be covered under the BCBS or UHC Standard Plans (or UHC Choice Plus Plan if you are an LTD recipient). Medicare Part D If you participate in a Progress Energy medical plan option, you may continue receiving your prescription drugs through the Progress Energy medical plan and not elect a separate Medicare Part D plan. The company will provide a certificate of creditable coverage you can use to avoid any Medicare Part D plan premium increase that would otherwise be required if you choose to enroll in a Medicare Part D plan at a later date. HRI-SUBS Rev. 23 Page 19 of 205
20 Maintenance of Benefits AUTHORIZED COPY Important Information When you or a dependent is covered under the Progress Energy-sponsored medical plan and another employersponsored medical plan (or Medicare) and the Progress Energy-sponsored plan is secondary, benefits are coordinated through maintenance of benefits. Under maintenance of benefits, the Progress Energy-sponsored plan provides benefits only to make up the difference (if any) between what the other primary plan paid and what the Progress Energy-sponsored medical plan would have paid if it had been primary, using the lesser of the primary or secondary plan s allowed amount, subject to provider contract agreements. This means that 100% coverage between the two plans is not provided. You are responsible for any charges not paid by either plan, including any amounts in excess of the allowed (usual and customary) amount. Maintenance of benefits does not apply to the HMOs. See the HMO s Certificate of Coverage for coordination of benefit rules. Examples: The following examples show how a claim would be paid under maintenance of benefits. The assumptions in these examples are: (i) the primary plan paid the claim at 80% and 70%, respectively, after a $300 deductible; (ii) the Progress Energy BCBS or UHC Standard Plan was secondary; and (iii) the claim was for authorized outpatient services. Note: Deductible is the amount you pay in a calendar year for covered expenses before benefits are provided under the Progress Energy-sponsored medical plan on covered services that require you to pay a percentage of the charge (coinsurance). Maintenance of benefits when Medicare is primary Total bill $ 2,000 Allowed amount $ 1,500 Primary plan (Medicare) Assume deductible has been met - $1,500 x 80% $ 1,200 Participant liability $ 300 Secondary plan (Progress Energy BCBS or UHC Standard Plan) Assume deductible has been met - $1,500 x 80% $ 1,200 Participant liability $ 300 Since the secondary plan s (Progress Energy) maximum liability is $1,200 (the same as Medicare, the primary plan), the Progress Energy plan will pay $0, leaving a balance of $300 to be paid by the participant. In general, Medicare participants would reach the out-of-pocket limit and have 100% coverage between the primary and secondary plans for covered expenses when their total medical expenses (not including prescription drugs, charges over the allowed amount, services not precertified and non-covered services) exceed the following: Choice Plan $12,000 ($3,000 out of pocket consisting of Progress Energy plan deductible and coinsurance) Standard Plan $14,000 ($4,000 out of pocket consisting of Progress Energy plan deductible and coinsurance) Prior to reaching the out-of-pocket limit the Progress Energy plan would pay $0, except for wellness exams, prescription drugs and expenses covered under the Progress Energy plan that are not covered by Medicare. Note: The Progress Energy 150-day skilled nursing benefit includes 100 days that are allowed by Medicare. If Medicare pays for 100 days of skilled nursing care, the Progress Energy benefit is 50 days ( ). HRI-SUBS Rev. 23 Page 20 of 205