GROUP LONG-TERM CARE CERTIFICATE of COVERAGE. Premera Blue Cross has issued a Group Contract to XXXX

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1 Premera Blue Cross th St. S.W. Mountlake Terrace, WA GROUP LONG-TERM CARE CERTIFICATE of COVERAGE Premera Blue Cross has issued a Group Contract to (called the Group Contractholder in this Certificate) XXXX The Group Contract is intended to be a Qualified Long-Term Care Contract under 7702B(b) of the Internal Revenue Code of 1986, as amended. If the U.S. Department of Treasury determines that this coverage is not a qualified Long-Term Care Contract, you will be offered an amendment designed to restore the preferential tax qualification status of this Contract. For additional information concerning the tax status of Subscription charges paid and benefits received under this Certificate, you should consult your personal tax advisor. Consideration: The Group Contract is a contract between the Group Contractholder and Premera Blue Cross. They are the only parties to the contract. The contract alone is the agreement by which payments are made. To inspect the Group Contract, contact the Plan Sponsor. The contract may be changed only by one of these parties. This Certificate and any riders attached to it contain the main provisions of the Group Contract which affect the persons covered under the Group Contract. If the Group Contract is changed in a way that will affect your coverage, a rider or a new Certificate will be issued to you to describe the change. In this Certificate," you, your, yours" refer to you as the Covered Person named in the Schedule of Benefits. "The Company, we, our, us" refer to Premera Blue Cross. Renewability: You have the right, subject to the terms of your Certificate, to continue the Certificate as long as you pay your Subscription Charge on time. The Company cannot change any of the terms of your Certificate on its own except that, in the future, it may increase the Subscription Charge you pay. To renew, you must pay the Subscription Charge on the date that it is due as shown in the Certificate Schedule of Benefits or within the Grace Period. This requirement may be waived for you; please refer to the Waiver of Subscription Charges provision. The Group Contract is not a Medicare Supplement Contract. If you are eligible for Medicare, you should review the Guide to Health Insurance for People with Medicare available from The Company. Right to Examine This Certificate: If, for any reason, you decide not to keep this Certificate, return it to The Company or to the Group Contractholder within 30 days after you receive it. We will treat the Certificate as though it had never been issued. We will refund any Subscription Charges you paid. If the subscription charge is not refunded within the 30 days after we receive your returned Certificate, we will pay you an additional amount equal to 10 percent of your Subscription Charge refund. Caution: The issuance of this Long-Term Care Certificate is based upon your responses to the questions on your Enrollment Form or Application. A copy of that form is attached. If your answers are incorrect or untrue, The Company may have the right to deny benefits or rescind your Certificate. The best time to clear up any questions is now, before a claim arises! If, for any reason, any of your answers are incorrect, contact The Company at the address listed above. Notice to Buyer: This Certificate may not cover all of the costs associated with Long-Term Care incurred by the buyer during the period of coverage. You are advised to review carefully all of the Certificate limitations. H. R. Brereton Barlow President and Chief Executive Officer G ( ) An Independent Licensee of the BlueCross BlueShield Association 1

2 GROUP COVERAGE CERTIFICATE TABLE OF CONTENTS FACE PAGE Consideration Renewability The Group Contract is not a Medicare Supplement Contract Right to Examine This Certificate Caution Notice to Buyer TABLE OF CONTENTS SCHEDULE OF BENEFITS (Schedule) SECTION 1 BECOMING A COVERED PERSON Who Can Be A Covered Person When Your Coverage Begins Your Certificate Effective Date Late Enrollment The Actively At Work Requirement Continuity of Coverage SECTION 2 BENEFIT INFORMATION Eligibility for the Payment of Benefits Limitations or Conditions on Eligibility for Benefits Amount of Benefit Payments Care Coordination Nursing Facility Care Benefit Assisted Living Facility Care Benefit Inpatient Hospice Care Benefit Bed Reservation Benefit World Wide Coverage SECTION 3 COORDINATION WITH OTHER BENEFITS COB Definitions Order of Benefit Determination rules Effects on the Benefits of this Plan Right to Receive and Release Needed Information Facility of Payment Right of Recovery SECTION 4 EXCLUSIONS SECTION 5 CLAIMS PROVISIONS Notice of Claim Claim Forms Written Proof of Loss Time of Payment of Claims Adjustment of Claims Assignment of Benefit Payments Physical Examinations G ( ) 2

3 Legal Actions Appeal Procedure SECTION 6 Subscription Charges Subscription Charge Changes Waiver of Subscription Charges Reduction in Coverage SECTION 7 TERMINATION PROVISIONS Termination of Benefit Payments Termination of Coverage Notice of Termination Extension of Benefits Continuation of Coverage SECTION 8 GENERAL PROVISIONS This Certificate is not a Policy Changes in Coverage Entire Contract Conformity with State Laws Grace Period Misstatement of Age Incontestability Pro-Rata Subscription Charge Refund at Death Reinstatement of Certificate Reinstatement Due to Unintentional Lapse Unpaid Subscription Charges GLOSSARY: Defines the terms shown with Initial Capital Letter in the document. G ( ) 3

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5 SCHEDULE of BENEFITS Covered Person Information Group Contract Number: 4321 Group Contract Effective Date: August 1, 2001 Certificate Number: L Certificate Effective Date: XX/XX/XX Name of Covered Person: Date of Birth: XX/XX/XX JOHN DOE Issue Age: XX 123 WHATEVER WAY ANYWHERE, USA Required Period of Employment : 90 Change Effective Date: XX/XX/XXXX days/months days Maximum Benefit XXXX Elimination Period X 0 days per duration of coverage X 20 days per duration of coverage X 60 days per duration of coverage X 90 days per duration of coverage X 100 days per duration of coverage X 180 days per duration of coverage Basic Benefits Nursing Facility Care Assisted Living Facility Care Inpatient Hospice Care Bed Reservation Benefit Limit World Wide Coverage Benefit Limits* $XXXX Maximum Daily Benefit $XXXX Maximum Daily Benefit $XXXX Maximum Daily Benefit 21 days per calendar year 365 days per duration of coverage Maximum Daily Benefits Applicable Annual Subscription Charges for Basic Benefits $XXXX Riders Selected Benefit Limits* Home and Community Based Services Rider** $XXXX Home Care and Home Health Care $XXXX Maximum Daily Benefit Adult Day Health Care $XXXX Maximum Daily Benefit Outpatient Hospice Care $XXXX Maximum Daily Benefit Respite Care $XXXX Maximum Daily Benefit 21 days per calendar year Emergency Response System $50 per month Installation Limit $ Caregiver Training $500 per duration of coverage **Benefits in this Rider subject to a Maximum Daily Benefit can be accrued on a per-week basis. The benefits payable per Week will not exceed the Maximum Daily Benefit multiplied by seven. Refer to your Rider. Inflation Protection $XXXX X 5% Simple Inflation Protection Option Rider. X 5% Compound Inflation Protection Option Rider Nonforfeiture at Lapse Benefit Option Rider: $XXXX Total Annual Subscription Charge $XXXX Subscription Charge Due Date: XX/XX/XX and each Annual thereafter You have selected to be billed: Annual; your subscription charge is $XXXX Annual Other Subscription Charge Modes: Semi-annual $XXXX; Quarterly $XXXX; Monthly (ACH only) $XXXX Applicable Discounts have been applied to your Total Annual Subscription Charge: Spousal 10%/20% Group 22%/19% *The Benefits that will be payable will not exceed the actual charges. G ( ) 4

6 Who Can Be A Covered Person SECTION 1 BECOMING A COVERED PERSON All persons who are in the Eligible Group can become Covered Persons. You are in the Eligible Group if you are: an employee of the Group Contractholder and you: are Actively at Work on your Certificate Effective Date; and have completed the Required Period of Employment with the Group Contractholder; a spouse of an employee of the Group Contractholder; a parent or parent-in-law of an employee of the Group Contractholder; a retiree of the Group Contractholder; or a spouse of a retiree of the Group Contractholder; or a child of an employee or spouse of an employee of the Group Contractholder, who is 18 years of age or older; or a child or child s spouse of a retiree or spouse of a retiree of the Group Contractholder, who is 18 years of age or older; or a sibling or sibling s spouse of an employee, retiree, spouse of an employee, or spouse of a retiree of the Group Contractholder. You may not become a Covered Person under this Group Contract if you are less than 18 years of age or are receiving Medicaid benefits. When Your Coverage Begins Your coverage will begin at 12:01 a.m. based on the time zone in the place where you reside. Your Certificate Effective Date Your Certificate Effective Date is shown in the Schedule. "Certificate Effective Date" means the day your coverage under the Group Contract begins. Your Certificate Effective Date will be the first day of the month that is the same as or next follows the date we receive your Enrollment Form if: (a) you are a full-time employee who is Actively at Work; and (b) you enroll during the open enrollment period. An "Actively at Work" employee is an employee who meets the requirements described in the section headed "The Actively At Work Requirement." Your Certificate Effective Date will be delayed if: you are in the Eligible Group as a full-time employee of the Group Contractholder; and you are not Actively at Work on your Certificate Effective Date. If you are a full-time employee who is not Actively at Work, your Certificate Effective Date will be the first day of the month following the date you are Actively at Work. For all other persons in the Eligible Group, your Certificate Effective Date will be the first day of the month that is the same as or next follows the date we approve your Application and you pay the required Subscription Charges. Your Certificate Effective Date will be delayed if you are: (a) confined in a Hospital or a Nursing Facility; or (b) receiving Home Care or Home Health Care. Your Certificate Effective Date will be delayed to the first day of the month following the date: (a) you are discharged from the Hospital or Nursing Facility; or (b) your Home Care or Home Health Care services have ended. We, The Company, shall pay the benefits provided in your Certificate for losses described herein which begin while this Certificate is in force. All benefits are subject to all the terms and conditions stated in the Group Contract, including any amendment, attachment, endorsement or rider, which may be attached to and made a part of the Group Contract. Late Enrollment You should enroll as soon as you are in the Eligible Group. If you do not enroll within 31 days of the date you are first eligible (or if The Company did not approve your prior request for coverage under the Group Contract), you must provide evidence at your own expense that you are insurable. The evidence may include a doctors exam. Coverage can then begin if, and when, The Company approves your application. G ( ) 5

7 The Actively at Work Requirement The Actively at Work Requirement applies only to full-time employees of the Group Contractholder. "Full-time" employees are those persons working 17.5 hours per week or more who have met the required period of employment. If you are in the Eligible Group as a full-time employee of the Group Contractholder, you must be Actively at Work for your coverage to begin. To be Actively at Work, you must: be able to do the normal tasks of your job on a full-time basis for a full work day on the day your coverage is to begin; be able to do such tasks at one of your employer s normal places of business or at a location to which you must travel to do your job; and not be absent from work because of leave of absence or temporary lay off. Continuity of Coverage If you were covered by the Group Contractholder s group Long-Term Care plan (called the prior plan in this section) on the day before the Group Contract Effective Date, you may be covered by the Group Contract subject to the following: 1. The benefits payable under the Group Contract may be limited if your Certificate Effective Date is delayed because you: did not meet the Actively At work Requirement; or you were confined in a Hospital or Nursing Facility, or were receiving Home Care or Home Health Care services. We will pay benefits that are equal to: the amount of benefits which would have been paid by the prior plan had coverage remained in force; minus any benefits for which the prior plan is liable. Such benefits will be payable for a Period of Care that begins after the date of transfer but prior to your Certificate Effective Date. Benefits will continue to the earlier of: your Certificate Effective Date; the date your coverage under the Group Contract would normally end as described in the Section "Termination Provisions"; or if you are covered under the prior plan s Extension of Benefits provision, when the prior plan is no longer required to cover you under the Extension of Benefits provision. 2. The Maximum Benefit shown in your Schedule of Benefits for this Certificate will be reduced by the amount of benefits paid by us for the prior plan. Eligibility for Payment of Benefits SECTION 2 BENEFIT INFORMATION In order to be a Qualified Long-Term Care Contract, the Group Contract will pay benefits for Qualified Long-Term Care Services only. Benefits will only be payable if you are a Chronically Ill Individual, as certified by the Care Coordinator or another Licensed Health Care Practitioner. If you are not a Chronically Ill Individual as defined in this Certificate, you will not be eligible for benefits. While you are a Covered Person under the Group Contract, you will be eligible to receive benefits for Qualified Long- Term Care Services if: an assessment by the Care Coordinator or another Licensed Health Care Practitioner shows that you are a Chronically Ill Individual; the Qualified Long-Term Care Services you receive are included in your approved Plan of Care; and the Qualified Long-Term Care Services are provided on or after your Certificate Effective Date. You must satisfy the Elimination Period before benefits become payable. See "Limitations or Conditions Upon Eligibility for Benefits" below. G ( ) 6

8 To be considered a Chronically Ill Individual, either the Care Coordinator or another Licensed Health Care Practitioner must certify that: 1. you are expected to be unable to perform at least two Activities of Daily Living ("ADLs") for at least 90 days due to a loss of functional capacity, without Substantial Assistance from another individual; 2. you have a level of disability similar (as determined under regulations prescribed by the Secretary of the Treasury in consultation with the Secretary of Health and Human Services) to the level of disability described in clause 1; or 3. you require Substantial Supervision to protect yourself from threats to health and safety due to Severe Cognitive Impairment. A person will be considered a Chronically Ill Individual if a Licensed Health Care Practitioner has certified within the preceding 12 months that the individual meets this requirement. If you choose, The Company will provide a Licensed Health Care Practitioner, called the Care Coordinator, to perform the required certification and prepare your Plan of Care. See the section headed "Care Coordination." You may choose to use any other Licensed Health Care Practitioner to certify you are a Chronically Ill Individual and prepare your Plan of Care. If you choose to use any other Licensed Health Care Practitioner, you must submit to us the following items prepared for you by the Licensed Health Care Practitioner you selected: the results of the assessment of: a) your ability to perform Activities of Daily Living; or b) your Cognitive Impairment; a certification signed by the Licensed Health Care Practitioner that you are a Chronically Ill Individual; and the Plan of Care. Limitations or Conditions on Eligibility for Benefits You must receive covered Qualified Long-Term Care Services for the number of days defined as the Elimination Period before benefits are payable. Once you have satisfied the Elimination Period, benefits will become payable for the remainder of that Period of Care. The Elimination period is cumulative; that is, you will not have to satisfy the Elimination Period more than once while you are covered under this Certificate. The Elimination Period begins with the first day during a Period of Care that you receive covered Qualified Long- Term Care Services that are included in your Plan Of Care. The Elimination Period can be satisfied by any combination of Qualified Long-Term Care Services. The Elimination Period does not apply to the Inpatient Hospice Care Benefit. Days for which benefits are paid for Inpatient Hospice Care will not be applied to satisfy the Elimination Period. If you leave the Hospice Care Program and you did not satisfy the Elimination Period before receiving Hospice Care, the Elimination Period will apply to services received after you leave the Hospice Care Program. The Elimination Period is shown in the Schedule. Please refer to the section headed EXCLUSIONS for information about services that are not covered at all. Amount of Benefit Payments The amount of your benefit payments will be based on the benefit limits shown in your Schedule and the type of Qualified Long-Term Care Services you receive. Only one Maximum Daily Benefit will be paid for all Qualified Long- Term Care Services you receive on any given day. The Maximum Daily Benefit for each type of service covered under this Certificate is shown in the Schedule. The amount of your daily benefit payment will be the lesser of: the Maximum Daily Benefit amount shown in the Schedule for the type of service received; and the actual daily charge. The Company will send you a payment each month for the days you were eligible to receive benefit payments during the prior month. Benefit payments will be paid for no more than the Maximum Benefit shown in the Schedule. When the Maximum Benefit is exhausted, your coverage will end. However, your coverage may end sooner for reasons in Section 7, Termination Provisions. G ( ) 7

9 Care Coordination This feature of the Group Contract provides you with the knowledge, training and experience of a Care Coordinator to provide the assessment necessary for certification as a Chronically Ill Individual and to develop your Plan of Care. The cost of Care Coordination is paid for by The Company and will not reduce your Maximum Benefit. The steps in the Care Coordination program are described below. Step 1: Contact the Care Coordinator. To start the development of your Plan of Care, you or your family members must contact a Care Coordinator. The Care Coordinator should be contacted as soon as it becomes necessary for you to receive Qualified Long-Term Care Services due to your: (a) inability to perform Activities of Daily Living; or (b) Severe Cognitive Impairment. Contact the Care Coordinator through: MedAmerica Insurance Company 165 Court Street Rochester, NY Telephone: Step 2: Assessment and Certification. The Care Coordinator will prepare a comprehensive assessment of your functional abilities to determine if you are a Chronically Ill Individual. The Care Coordinator will base this assessment on: your ability to perform ADLs; and whether you have a Severe Cognitive Impairment. If the assessment shows that you are a Chronically Ill Individual, the Care Coordinator will prepare a Plan of Care for you. Step 3: Preparation of the Plan of Care. Working with your doctor, the Care Coordinator will identify in your Plan of Care the type and frequency of services you will require. The Plan of Care will also indicate the length of time you are expected to need the Qualified Long-Term Care Services. Your Plan of Care may include any combination of the levels of care and services described in your Certificate. Your Plan of Care may also include services that are not covered by your Certificate. You or your designated representative, your physician and The Company must agree that the Plan of Care is appropriate to meet your needs. Step 4: Coordinating services. The care coordinator reviews your needs and resources and provides information on appropriate services. You will select the provider to perform the services you need. Step 5: Monitoring the Plan of Care. After your Qualified Long-Term Care Services have begun, the Care Coordinator will continue to assist you by periodically assessing the care you are receiving and your functional capacity and cognitive ability. The Care Coordinator will: determine whether your Plan of Care continues to be appropriate; recommend necessary changes; and provide the required annual certification that you continue to be a Chronically Ill Individual. The Care Coordinator will reassess your needs and monitor your Plan of Care for as long as you receive benefits under the Group Contract. Your Plan of Care will be updated to reflect changes in: your functional capacity; your cognitive abilities, your behavioral abilities; and the availability of social support. Monitoring your Plan of Care ensures that if your needs for Qualified Long-Term Care Services change, your Plan of Care will be changed to meet those needs. G ( ) 8

10 Step 6: Obtaining a new Plan of Care after one Plan of Care has ended. In the event your Plan of Care has ended, a new plan can be established if: you again require Qualified Long-Term Care Services; you have not exhausted the Maximum Benefit; and this Certificate is still in force. You or your representative should contact the Care Coordinator as described in Step 1. Facility Based Services The Maximum Daily Benefit payable for expenses incurred for confinement in a facility will equal the lesser of: the Maximum Daily Benefit for the type of facility care received; and the actual daily charge. All benefit maximum amounts and other benefit limits are shown in the Schedule. Nursing Facility Care Benefit We will pay benefits for each day you are confined in a Nursing Facility if: you are receiving Skilled Nursing Care, Intermediate Care, or Custodial Care while confined in a Nursing Facility; the care you are receiving is the most appropriate level of care to meet your needs; and you have satisfied the other requirements described in the "Eligibility for the Payment of Benefits" section of this Certificate. Assisted Living Facility Care Benefit We will pay benefits for each day you are confined in an Assisted Living Facility if: you are receiving Assisted Living Facility Care; the care you are receiving is the most appropriate level of care to meet your needs; and you have satisfied the requirements described in the "Eligibility for the Payment of Benefits" section of this Certificate. Inpatient Hospice Care Benefit We will pay benefits for each day you are confined in a Hospice and if: your physician certifies that you are terminally ill and you are not expected to live longer than six months; you are receiving Hospice Care provided by a Hospice under a Hospice Care Program; and you have met the requirements described under Eligibility for Payment of Benefits section of this Certificate, except for satisfying the Elimination Period. In no event will the Inpatient Hospice Care benefit be paid for any expenses incurred for Hospice Care services after the date of your death. Bed Reservation Benefit We will pay a Bed Reservation Benefit if: you are charged for your room in a Nursing Facility or an Assisted Living Facility; you are temporarily absent from that facility for any reason during a Period of Care; and you have satisfied the Elimination Period. The maximum number of days for which benefits will be paid in any Calendar Year is equal to the Bed Reservation Benefit Limit. This limit is shown in the Schedule. Each day for which a Bed Reservation Benefit is paid will count toward the Maximum Benefit. Benefits will not be payable if you have not satisfied the Elimination Period; however, the number of days a room charge is made by the Nursing Facility or Assisted Living Facility will count toward meeting the Elimination Period. G ( ) 9

11 Additional Benefit World Wide Coverage We will pay benefits for up to 365 days for services equivalent to those covered by the Group Contract when you receive such services outside the United States, its possessions or territories, or Canada. Your maximum daily benefits will apply as shown in the Schedule. You will be responsible for providing sufficient documentation to allow us to verify that you have received equivalent services and have satisfied the requirements described under the Eligibility for the Payment of Benefits section of this Certificate. All benefit payments will be paid in U.S. dollars. SECTION 3 COORDINATION WITH OTHER BENEFITS Long-Term Care Coverage helps you pay for the cost of any Long Term Care. It is not meant for you to receive benefits that are more than the cost of such care. Coordination with other benefits is used to keep the cost of your coverage reasonable. At the same time, it allows you to get as much in benefits as the full cost of services if you are covered under more than one plan. The "Coordination With Other Benefits" provision ("COB") applies to this plan when you have coverage under more than one plan. If this provision applies, you should review the section headed "Order of Benefit Determination Rules." These rules determine whether the benefits of this plan are determined before or after those of another plan. If you are covered by this plan and one or more other plans as defined below, the benefits which will be paid by this plan for Qualified Long-Term Care Services will be either: the regular benefits payable under this plan; or reduced benefits which, when added to the benefits of the other plans, will equal 100% of the "Allowable Expense." "COB" DEFINITIONS You will need to know what is meant by certain terms used in this section. They are defined below. "Plan" means a plan under which medical benefits or Long-Term Care services are provided by: group or blanket insurance coverage or any other arrangement to cover people in a group (other than through the issuance of individual policies), whether on an insured or uninsured basis; a hospital service plan or a medical service plan, a group practice plan or other prepayment plan; labor-management trusteed plans, union welfare plans, employer plans or employee benefit plans; or government programs or plans provided or required by law. The term "plan" does not include an individual insurance policy, franchise policy, school accident-type plan, a hospital indemnity policy paying $100 per day or less, or an individual subscription to a Blue Cross or Blue Shield plan or other service or prepayment plan for which you make subscription charge payments directly to the organization which provides the coverage. "Allowable Expense" means a necessary, reasonable and customary expense for a service covered by this plan that is: (a) incurred while you are eligible for benefits under this plan; and (b) covered in part or in full by one of the plans coordinated with this plan. When a plan provides benefits in the form of service, the reasonable cash value of each service will be considered as both an Allowable Expense and as a benefit paid. When benefits are reduced under a primary plan because you did not comply with the plan provisions, the amount of such reduction will not be considered an Allowable Expense. "Claim" means a request that benefits of a plan be provided or paid. The benefits claimed may be in the form of: (a) services (including supplies); (b) payment for all or a portion of the expenses incurred; or (c) an indemnification. "Claim Determination Period" means a calendar year. However, it does not include any part of a year during which you had no coverage under this plan. "Primary Plan/Secondary Plan" To coordinate benefits, one of the two or more plans involved is the primary plan. The other plans are secondary plans. The primary plan pays first without regard to the other plans. The secondary plans coordinate their payments so that the total paid by all the plans will not be more than the Allowable Expense. No plan will pay more than it would have paid with no coordination. G ( ) 10

12 A plan that does not coordinate benefits is always the primary plan. Order of Benefit Determination Rules General - When there is a basis for a claim under this plan and another plan, this plan is a secondary plan unless: the other plan has rules coordinating its benefits with those of this plan; and both those rules and this plan s rules, in Subsection 2 below, require that this plans benefits be determined before those of the other plan. Rules - This plan determines its order of benefits using the first of the following rules which applies. Non-Dependent/Dependent - The benefits of the plan which cover you as an employee, enrollee or subscriber (that is, other than as a dependent) are determined before those of the plan which cover you as a dependent. Active/Inactive Employee - The benefits of a plan which cover you as an employee who is neither laid off nor retired (or as that employee s dependent) are determined before those of a plan which cover you as a laid off or retired employee (or as that employee s dependent). If the other plan does not have this rule, and if, as a result, the plans do not agree on the order of benefits, this Rule is ignored. Longer/Shorter Length of Coverage - If none of the above rules determine the order of benefits, the benefits of the plan which covered you as an employee, enrollee or subscriber longer are determined before those of the plan which covered you for the shorter term. Effects on the Benefits of this Plan When it has been determined from the "Order of Benefit Determination Rules" that this plan is the secondary plan, the benefits payable under this plan will be reduced. No benefit payment will be made under this plan until an explanation of benefits (EOB) from the primary plan is provided to The Company. The benefits of this plan will be reduced when the sum of: the benefits that would be payable under this plan in the absence of this COB provision; and the benefits that would be payable under the other plans, exceeds the Allowable Expenses in a Claim Determination Period. The benefits of this plan will be reduced so that they and the benefits payable under the other plans do not total more than those Allowable Expenses. Right to Receive and Release Needed Information Certain facts are needed to apply the coordination of benefit rules. The Company has the right to decide which facts it needs. We have the right to release to, or obtain from, an organization or person the information we need to apply this section. We may obtain such facts without the consent or notification of any person to do this. You must give The Company the facts we need to coordinate benefits. Facility of Payment A payment made under another plan may include an amount which should have been paid under this plan. If it does, The Company may pay that amount to the organization which made that payment. That amount will then be treated as though it were a benefit paid under this plan. The Company will not have to pay that amount again. The term "payment made" includes providing benefits in the form of services. Right of Recovery If the amount of the payments made by The Company is more than it should have paid under this COB provision, The Company may recover the excess from one or more of the following: the person to or for whom such payments were made; an insurance company; or another organization. The "amount of the payments made" includes the reasonable cash value of any benefits provided in the form of services. G ( ) 11

13 SECTION 4 EXCLUSIONS We will not pay benefits for expenses incurred for any of the following: a loss caused by or resulting from alcoholism or drug addiction; a loss caused by or resulting from illness, treatment, or medical condition arising out of any of the following: war or an act of war, whether declared or undeclared; your participation in a felony, riot, or insurrection; service in the armed forces or auxiliary units of the armed forces; or suicide or attempted suicide (while sane or insane), or intentionally self-inflicted injury. confinement or services provided in a government facility, unless a charge is made that you are obligated to pay (except otherwise required by law); confinement in a Hospital, except a Nursing Facility or Hospice that is a distinct part of the Hospital; services for which benefit payments are reimbursable under Medicare or would be so reimbursable but for the application of a deductible or coinsurance requirement; or other governmental program (except Medicaid, or a medical plan established by a government for its own employees), any state or federal Workers Compensation, employer s liability or occupational disease law, or the basic reparations of a no-fault motor vehicle insurance plan; services not included in your Plan of Care; services provided by a member of your Immediate Family; or services for which no charge is normally made in the absence of coverage. SECTION 5 CLAIMS PROVISIONS Notice of Claim - Written notice of claim must be sent to us at our Home Office or to our agent within thirty (30) days after a loss begins. Such notice must include your name, Group Contract number and Certificate number. If notice cannot reasonably be given within that time, you must send the notice as soon as reasonably possible. Claim Forms - After we receive notice of claim, we will send claim forms to you within fifteen (15) days. If we do not send the forms within fifteen (15) days, you can send us written proof describing the event for which claim is made. You must send such proof within the time limit stated in the section headed Written Proof of Loss. Written Proof of Loss - Written proof of loss must be sent to us within ninety (90) days after: your loss begins; or the termination of the period for any continuing loss for which the Group Contract provides periodic payment. If it is not reasonably possible to give such proof in the time required, your claim will not be affected if proof is sent as soon as reasonably possible. Unless you are legally incapacitated, proof must be sent no later than one year after the time specified. Time of Payment of Claims - Benefits will be paid immediately upon our receipt of written proof of loss. Benefits will be paid to you, if you are living; otherwise, payment will be made to your estate. In the event of a Period of Care with periodic payments, payment will be made on a monthly basis. Adjustment of Claims We have the right to adjust any overpayment or underpayment made because of an error in the processing of a claim. Any overpayment, if not reimbursed at the time another benefit is payable, will reduce the benefit amount then due. Any underpayment will be paid immediately upon notification that an error has been made. Assignment of Benefit Payments You may instruct us to pay any benefit due under this Certificate directly to a person or organization that provided your care. Any direct payment we make in good faith will discharge our liability under the Group Contract for the payment of that benefit. However, no assignment of any kind will bind us without our written consent. Physical Examinations We have the right to have a Licensed Health Care Practitioner examine you as often as reasonably necessary while you are in claims status. Any such examinations will be made at our expense. Legal Actions - No legal action can be brought to recover on this contract until sixty (60) days after the date written proof of loss was given. No action can be brought after three (3) years from the date written proof of loss is due. G ( ) 12

14 Appeal Procedure - If we deny a claim for benefit payments in whole or in part and you disagree with our determination, you or your designated representative has the right to appeal the determination, including: the denial of your claim; and the Care Coordinator s assessment, which is the basis of certification that you are a Chronically Ill Individual. You or your authorized representative must request a formal review in writing within sixty (60) days of receipt of the Explanation of Benefits (EOB) form or other notification from us. This written request must be received by us within the sixty (60) day period and contain the following information: your name; your Group Contract and Certificate number; other identifying information found on the face of the EOB form or other notification form from us; the reason(s) why you disagree with our denial of your claim; and any information, document(s) or comments that you want to have considered. We will notify you of our determination within sixty (60) days following our receipt of the appeal request. If special circumstances require an extension of time, you will be notified of the reasons for the delay. The delay will be no more than an additional (60)days. However, our final decision will not prevent you from taking further legal action. SECTION 6 SUBSCRIPTION CHARGES The Subscription Charges due must be paid on each Subscription Charge due date shown on the Schedule. Subscription Charge Changes Rates for Subscription Charges will not change because of your age or your use of benefits under this Certificate. Any Subscription Charge rate change will be made only on a Rating Class basis. The Subscription Charges for this Certificate are guaranteed not to change for the first year this Certificate is in force unless the terms of this Certificate are changed. Rate changes will be effective on the next date the Subscription Charges are due after a 31-day advance written notice. Subscription Charge rates will not be changed more frequently than once in any 12-month period. Additional, increased, decreased, or terminated coverage may cause a pro-rata adjustment of the Subscription Charges. Waiver of Subscription Charges Once the Elimination Period has been satisfied, we will waive the required Subscription Charge payment for any Subscription Charge amount which subsequently becomes due during a Period of Care. If you purchased the Home and Community Based Services Rider, Waiver of Subscription Charges does not apply if you are receiving Respite Care benefits only, Caregiver Training benefits only, or benefits for both of these services only. Waiver of Subscription Charges will apply if you are receiving any other Home and Community- Based Services. You must resume payment of Subscription Charges when you are no longer receiving benefits. Once you have satisfied the Elimination Period, all Subscription Charges will be waived whenever you are receiving Qualified Long-Term Care Services through an approved Plan of Care. Reduction in Coverage You have the right to reduce your coverage without providing evidence of insurability. Benefits must be reduced according to the plans that are available to you, meaning you may terminate optional riders or you may select a plan with a lower maximum benefit, a longer elimination period, or a lower maximum daily benefit if one is offered by the Group Contractholder. SECTION 7 TERMINATION PROVISIONS The Extension of Benefits provision may apply when your coverage would otherwise terminate in accordance with the terms of this section. Your coverage will not be canceled, non-renewed, or otherwise terminated by us on the grounds of age, deterioration of mental or physical health or for any other reason, except as provided in this Section. TERMINATION OF BENEFIT PAYMENTS Benefit payments will end at 12:01 a.m. based on the time zone in the place where you reside on the earliest of the following dates: the date your certification as a Chronically Ill Individual ends; the date your Plan of Care ends; the date the Maximum Benefit is exhausted; or G ( ) 13

15 the date the Group Contract terminates. TERMINATION OF COVERAGE Your coverage under the Group Contract will end at 12:01 a.m. based on the time zone in the place where you reside on the earliest of the following dates: the date the Group Contract ends; the date that your Maximum Benefit is exhausted; the date of your death; the date we receive written notice of termination from you, or such future date that you may request for termination. Any Unearned Subscription Charge paid by you will be returned by us to you, upon receipt of such notice; the day before the Subscription Charge Due Date which next follows the date you are no longer in the Eligible Group; or the date the Grace Period expires, if you fail to make the required Subscription Charge payment. Notice of Termination: Before your coverage under the Group Contract terminates for failure to make the required Subscription Charge payment when due, we will notify you, and any person designated by you, of our intent to terminate coverage. The notice will be given by first class United States mail 30 days after the required Subscription Charges are due and unpaid. For the purposes of this provision, a notice will be deemed to have been received five days after the date of mailing. If the Subscription Charge payment is not received after 30 days from the date the notice is deemed received, your coverage under the Group Contract will terminate. EXTENSION OF BENEFITS If coverage is terminated we will extend benefits for confinement in a Nursing Facility, Assisted Living Facility, or Hospice, if: the Period of Care for which benefits are payable began while your coverage was in force and continues without interruption after termination of coverage; and you have not exhausted your Maximum Benefit. When benefit payments are extended, they will be paid as if your coverage under the Group Contract had not ended. Benefit payments will not be payable for expenses incurred for services that are received after the date confinement ends or after you have exhausted the Maximum Benefit. Payment of benefits will be subject to the Maximum Benefit and all of the other stated terms and conditions of the Group Contract. Continuation of Coverage If your coverage ends because you are no longer in the Eligible Group, you may elect to have your coverage continued. You must notify us that you wish to continue your coverage and pay the required Subscription Charge within 31 days of the date the coverage ends. Coverage will be continued as long as: 1. you continue to make the required Subscription Charge payment; and 2. the Maximum Benefit has not been exhausted. You may not elect to continue coverage under the Group Contract if your coverage ends because you failed to pay the Subscription Charges for it. SECTION 8 GENERAL PROVISIONS This Certificate is not a Policy - This Certificate is not an insurance policy nor a contract. The Group Contract is identified in this Certificate. The coverage provided by the Group Contract is described in this Certificate. It is subject to all the terms, exclusions and conditions of the Group Contract. It is not subject to any requirement, term or condition of any other contract or document. Changes in Coverage You can request to change your coverage at any time. A new application for Long-Term Care coverage may be required. Changes in coverage will take effect at 12:01 a.m., based on the time zone in the place where you reside, on the date we approve your request. You must make additional required Subscription Charge payments for the cost of increased coverage. G ( ) 14

16 Entire Contract - The Group Contract is a legal contract between the Group Contractholder and The Company. The Entire Contract consists of: the Application of the Group Contractholder, the Master Contract, the Enrollment Form or Application(s) for the Certificate(s) for each Covered Person, the Certificate, and any attached Riders and Endorsements. No change in the Contract will be valid unless the change is approved in writing by an Executive Officer of The Company, and such officer s approval is shown on the Group Contract. Conformity with State Laws If any provision of this Certificate which on its Certificate Effective Date is in conflict with the statutes of the state in which the Certificate is delivered, it is therefore amended to conform to the minimum requirements of such law or regulation. Grace Period - The Group Contract provides a Grace Period of 65 days following the due date of Subscription Charge payment. This Certificate will continue in force during the Grace Period. Misstatement of Age - If your age has been misstated, any benefits payable under the Group Contract will be those the Subscription Charges would have purchased at the correct age. If no coverage would have been available to you, you will have no coverage and we will refund any Subscription Charge that you paid. Incontestability - We will not contest whether or not the Group Contract is valid after it has been in force for two years from the Group Contract Effective Date. In the absence of fraud, all statements will be deemed representations and not warranties (absolute guarantees). We may rescind a Certificate or deny an otherwise valid claim if, during the first six months the Certificate is in force, we find a misstatement in the Enrollment Form or Application that is material to acceptance for coverage. After the Certificate has been in force for six months but less than two years, we will rescind a Certificate or deny benefits for an otherwise valid claim upon a showing of misrepresentation that is both: material to the acceptance for coverage; and pertains to the condition for which benefits are sought. After a Certificate is in force for two years, it will only be contested upon a showing that you knowingly and intentionally misrepresented relevant facts relating to your health. No statement made by you will void the coverage or be used in a contest unless it is made in writing. A copy of the statement will be furnished to you or to your authorized representative. No claim for loss incurred shall be reduced or denied on the grounds that the cause was a preexisting condition. This does not preclude us from taking action for misrepresentation or fraud. Pro-Rata Subscription Charge Refund at Death - When we receive proof of your death, we will refund any Subscription Charges you have paid for coverage extending beyond the date of your death. The refund will cover the period from the date of your death to the next renewal date to which the Subscription Charges have been paid. We will make this payment to your lawful spouse, if any, otherwise to your estate. If the Group Contractholder paid any portion of the Subscription Charges, a pro-rata share of the refunded Subscription Charges will be returned to the Group Contractholder. Reinstatement of Certificate If this Certificate terminates because the Subscription Charge was not paid during the 30 day period, you may request that we reinstate your coverage. You will be required to submit a Reinstatement Application which includes Evidence of Insurability for our review, at your own expense. If we approve your Reinstatement Application, the reinstated Certificate Effective Date will be determined by us, but no later than the 45th day following approval. If we issue a conditional receipt for Subscription Charge payment and do not approve or disapprove the request for reinstatement within 45 days from the date of the conditional receipt we will reinstate your coverage on that 45th day. This Certificate may also be reinstated if we, or an Agent duly authorized by us, accept the Subscription Charge without requiring a Reinstatement Application. If application is not required, reinstatement will be effective no later than the 45th day after acceptance of the Subscription Charges. The reinstated Certificate will cover a Period of Care only if it begins more than 10 days after the date of reinstatement. All other rights of us and you under the Group Contract will be the same as they were before this Certificate terminated; however, these rights are subject to any endorsement which relates to the reinstatement. Reinstatement Due to Unintentional Lapse If this Certificate terminates for failure to make the required Subscription Charge payments when due and you or your designated representative provide adequate proof to us that the lapse is because you were a Chronically Ill Individual at the time of termination, coverage may be reinstated. G ( ) 15

17 A request to reinstate coverage must be made within five months of the date coverage ceased and any past due Subscription Charges must be paid us. If we approve reinstated coverage we will treat this Certificate as if there had been no lapse in coverage. Unpaid Subscription Charges If we pay a claim under this Certificate, any required renewal Subscription Charges due and unpaid may be deducted from the amount of the claim payment. GLOSSARY You will need to know what is meant by certain terms used to describe your benefits. They are defined below. These defined terms will be printed with Initial Capital Letters whenever they appear in the rest of the document. Activities of Daily Living refers to certain basic daily tasks necessary to maintain a person s health and safety. In this Certificate, "Activities of Daily Living" refers to the activities described below: Bathing means the ability to wash oneself completely in a tub, a shower or by sponge bath with or without the aid of equipment, including the task of getting into or out of the tub or shower. Continence means the ability to maintain control of bowel and bladder function; or, when unable to maintain control of bowel or bladder function, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag). Dressing means putting on and taking off all items of clothing and any necessary braces, fasteners or artificial limbs. Eating means feeding oneself by getting food into the body from a receptacle (such as a plate, cup or table) or by a feeding tube or intravenously. Toileting means the ability to do all of the following, with or without the aid of equipment: (a) get to and from the toilet; (b) get on and off the toilet; and (c) maintain a reasonable level of personal hygiene for the body. Transferring means the ability to move into or out of a bed, chair or wheelchair or to move from place to place, either via walking, a wheelchair, cane, crutches, walker or other equipment. Assisted Living Facility means a facility that is engaged primarily in providing ongoing care and related services to residents in one location, and: is licensed or certified, if required, by the jurisdiction in which it is operating to provide such care; provides 24-hour-a-day care and services sufficient to support needs resulting from a Severe Cognitive Impairment or from an inability to perform ADLs; has trained and ready to respond employees on duty at all times to provide that care; provides three meals a day and accommodates special dietary needs; has formal arrangements for the services of a Licensed Health Care Practitioner to furnish emergency medical care; has appropriate methods and procedures for handling and administering drugs and biologicals; is not, other than incidentally, a home for the mentally retarded, the mentally ill, the blind or the deaf, a hotel or boarding home; and is not a Nursing Facility, Hospital, clinic, or a place which operates primarily for the treatment of alcoholism or drug addiction. These requirements are typically met by Assisted Living Facilities that are either free-standing facilities or part of a life-care community. They may also be met by adult family homes, some personal care and adult congregate care facilities. They are generally NOT met by individual homes or independent living units. Assisted Living Facility Care means care received in an Assisted Living Facility. Calendar Year means a period of twelve (12) months that begins on January 1 and ends on December 31. Care Coordinator means a Licensed Health Care Practitioner provided for you by The Company to: assess your need for Qualified Long-Term Care Services; provide the initial written certification to The Company and thereafter, re-certification every twelve months, that you are a Chronically Ill Individual; develop a Plan Of Care for you; and coordinate and monitor the actual delivery of services. G ( ) 16

18 Certificate Effective Date means the day upon which your coverage under the Group Contract starts. It is shown in the Schedule. Chronically Ill Individual means a Licensed Health Care Practitioner has certified you as: 1. expected to be unable to perform, without Substantial Assistance from another person, at least two ADLs for a period of at least 90 days due to a loss of functional capacity; 2. having a level of disability similar (as determined under regulations prescribed by the Secretary of the Treasury in consultation with the Secretary of Health and Human Services) to the level of disability described in clause 1;or 3. requiring Substantial Supervision by another person to protect such individual from threats to health and safety because of your Severe Cognitive Impairment. "Chronically Ill Individual" shall not include any person otherwise meeting the requirements of this definition unless, within the preceding 12 month period, a Licensed Health Care Practitioner has certified, in writing, that such person meets these requirements. Custodial Care means that level of care which is mainly for the purpose of performing the ADLs. It may be provided by persons without professional skills or training. Such care is intended to: maintain and support your existing level of health; and preserve your health from further decline. Custodial Care is not primarily for your own or your family s convenience. Elimination Period means the number of days you must receive Qualified Long-Term Care Services covered by the Group Contract before benefits will be paid. Evidence of Insurability means a statement of proof of an applicants medical history and lifestyle evaluation. It will be the basis upon which The Company will be determine acceptance for coverage. Grace Period means the 65 days following the date the Subscription Charge payment is due. This Certificate will continue in force during the Grace Period. Hands-On Assistance means physical assistance of another person without which you would be unable to perform the ADL. Hospice means a facility or agency that: is licensed or certified to provide a Hospice Care Program; and is primarily devoted to the care of terminally ill patients and their families. Hospice Care means any services that a licensed Hospital, Home Care Agency, Home Health Care Agency, Nursing Facility, or Hospice provides under a Hospice Care Program. Hospice Care Program means a coordinated program primarily concerned with pain and symptom control of people who are terminally ill. It provides palliative and supportive medical, nursing and other health services through home or inpatient care to: individuals who have no reasonable prospect of a cure and have a life expectancy of less than six months, as estimated by a physician; and the families of those individuals. Hospital means an institution which: is duly licensed as a Hospital by the jurisdiction in which it is located; is operating within the scope of its license when rendering services for care and treatment for which a charge is made; and provides: for the care and treatment of injured or sick persons on a resident or inpatient basis; for diagnosis and surgery under the supervision of a staff of one or more physicians; and 24-hour nursing services by Registered Nurses on duty or call. Such institution must be accredited as a Hospital by either the Joint Commission on Accreditation of Hospitals or the Bureau of Hospitals of the American Osteopathic Association. G ( ) 17

19 Hospital does not mean a place or any part of a place, even if it is called a Hospital, that is operated mainly for rest, convalescence, nursing; extended care, care of the aged; the care or treatment of drug addicts; or the care or treatment of alcoholics. A Hospital operated mainly for the treatment of mental disorders, but lacking surgical facilities, will qualify if it meets all the other requirements of this definition. Immediate Family means persons related to you by blood or law (including in-laws) in the following degrees; spouse, child, parent or sibling. Intermediate Care means a degree of nursing care and evaluation that is less than that provided for Skilled Nursing Care but greater than that provided for Custodial Care. This level of care provides a planned, continuous program of nursing care that is preventive or rehabilitative in nature. Licensed Health Care Practitioner means any physician, other than a member of your Immediate Family, as defined in 1861(r)(1) of the Social Security Act which provides that a physician is a doctor of medicine or osteopathy legally authorized to practice medicine and surgery by the state in which he or she performs such function or action; and any registered professional Nurse, Licensed Social Worker, or other individual who meets such requirements as may be prescribed by the Secretary of the Treasury. "Nurse" means a legally qualified person, other than a member of your Immediate Family, who is licensed by the state as either: (a) a Registered Nurse; (b) a Licensed Practical Nurse; (c) a Licensed Vocational Nurse; or (d) a Licensed Public Health Nurse. "Licensed Social Worker" includes any social worker, other than a member of your Immediate Family, who has been issued a license, certificate, or similar authorization to act as a social worker by a state or a body authorized by a state to issue such authorization. Maintenance or Personal Care Services means any care, the primary purpose of which is the provision of needed assistance with any of the disabilities as a result of which the individual is a Chronically Ill Individual. This includes protecting the person from threats to health and safety related to Severe Cognitive Impairment. These services may include meal preparation, household cleaning, and other similar services which the Chronically Ill Individual is unable to perform. Maximum Benefit means the maximum amount of benefits that will be paid for all Qualified Long-Term Care Services that are: included in your Plan of Care; and covered by the Group Contract. This benefit limit applies to all benefits paid under the Group Contract, except the cost of the Care Coordinator, during the entire time you are covered under this Certificate. It applies to all Periods of Care which occur while you are covered under the Group Contract. Your Maximum Benefit is shown in the Schedule. Maximum Daily Benefit means the maximum benefit allowed per day as shown in the Schedule. The Maximum Daily Benefit will not exceed the daily rate actually charged for the care received. Medicare means all parts of the Health Coverage for the Aged Act under Title XVIII of the Federal Social Security Act. Nurse: see definition of Licensed Health Care Practitioner above. Nursing Facility means a facility or distinct part of a facility that is licensed or certified, if required, in the jurisdiction in which it is operating to provide Skilled Nursing Care, Intermediate Care or Custodial Care. Nursing Facility does not mean a Hospital or an institution that is operated mainly for the treatment and care of: Alcoholism; or Drug addiction; or Training, schooling or occupational therapy. Nursing Facility Care means care or treatment received in a Nursing Facility. It includes Skilled Nursing Care, Intermediate Care and Custodial Care. Period of Care means a period of time during which you are receiving Qualified Long-Term Care Services because you are a Chronically Ill Individual. G ( ) 18

20 A Period of Care begins on the first day you receive a Qualified Long-Term Care Service through your Plan of Care. A Period of Care will end when: you are no longer receiving covered Qualified Long-Term Care Services, or your Plan of Care ends. A Period of Care includes each day for which you are an inpatient in a Nursing Facility, Assisted Living Facility or Hospice and a charge for room and board is made. If you purchased the Home and Community Based Services Rider, the Period of Care will also include each day you receive a service for which a charge is made for services covered by the Rider. Plan of Care means a written description of the type, frequency and duration Qualified Long-Term Care Services appropriate to your needs. The Plan of Care will identify any benefits you will receive under the Group Contract for the services rendered. The Plan of Care is developed by the Care Coordinator or another Licensed Health Care Practitioner, approved by us and signed by you or your designated representative. Qualified Long-Term Care Services means necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, and rehabilitative services, and Maintenance or Personal Care Services which are: required by a Chronically Ill Individual; and provided pursuant to a Plan of Care prescribed by a Licensed Health Care Practitioner. Rating Class means a population segment classified by actuaries as having similar underwriting risks, including the following factors: age, sex; marital status; benefit options; and underwriting year. Severe Cognitive Impairment means a deterioration or loss in intellectual capacity that is measured by clinical evidence and standardized tests which reliably measure impairment in short-term or long-term memory, orientation to people, places, or time; and deductive or abstract reasoning. Such deterioration or loss must place you in jeopardy of harming yourself, therefore requiring Substantial Supervision by another person. Skilled Nursing Care means that level of care which: requires the training and skills of a Registered Nurse or Licensed Practical Nurse; and is prescribed by a doctor for the medical care of the patient; and may not be provided by less skilled or less intensive care such as Custodial Care or Intermediate Care. Stand-by Assistance means the presence of another person within your arm s reach, available to prevent injury to you through their physical intervention, while you perform an ADL (such as being ready to catch you if you fall while getting into or out of the bathtub or shower as part of bathing, or being ready to remove food from your throat if you choke while eating). Substantial Assistance means hands-on assistance or Stand-by Assistance. For the purposes of this Certificate, Stand-by Assistance will be used to determine that you require Substantial Assistance by another person to perform the ADL. Substantial Supervision means continual supervision (which may include cueing by verbal prompting, gestures, or other demonstrations) by another person that is necessary to protect the severely cognitively impaired individual from threats to his or her health or safety (such as may result from wandering). Unearned Subscription Charges means an amount paid by you for coverage that extends over a period of time during which your coverage is no longer in force. G ( ) 19