Group Administration Manual For groups with two to 50 eligible employees

Transcription

1 Group Administration Manual For groups with two to 50 eligible employees

2 Horizon Blue Cross Blue Shield of New Jersey Three Penn Plaza East Newark, New Jersey July 2008 Dear Group Administrator: Thank you for choosing Horizon Blue Cross Blue Shield of New Jersey as your health insurer. This Group Administration Manual will help you administer your group s health benefits plan(s). As your group s administrator, you are the liaison between Horizon BCBSNJ and your group. What s more, you are responsible for the initial enrollment, changes (including deletions) and payment of premiums. Federal regulations, underwriting rules and state regulations govern your enrollment responsibilities and the Group Administration Manual explains them in detail to ensure accurate enrollment of your employees and their dependents. Please call us if you have a special situation that needs further explanation. The Group Administration Manual does not discuss the benefits purchased for your employees. Those benefits are explained in detail in the employees Benefit Booklets or their Member Handbooks. We send these booklets and/or handbooks to newly enrolled employees along with their ID cards. This educational publication presents information as an aid to independent research. It does not provide legal opinion or advice for any individual case. Consult the appropriate professional for any such services or advice. Again, thank you for choosing Horizon Blue Cross Blue Shield of New Jersey. An independent licensee of the Blue Cross and Blue Shield Association.

3 TABLE OF CONTENTS ELIGIBILITY - EMPLOYEES Who is eligible ELIGIBILITY - DEPENDENTS Who is an eligible dependent Reasons for which coverage cannot be denied Noneligible dependents PROOF OF CHILD DEPENDENT ELIGIBILITY Legal adoption Court appointed guardianship Full-time student status Disabled dependent status UNITS OF COVERAGE Types of coverage When carve-out units of coverage apply PRE-EXISTING CONDITION LIMITATION WAITING PERIOD Waiting period election Changing the waiting period EFFECTIVE DATE OF ENROLLMENT EMPLOYEES Eligibility date Timely enrollment Late enrollment OPEN ENROLLMENT EFFECTIVE DATE OF ENROLLMENT DEPENDENTS Effective date of enrollment Eligibility date for spouse/civil union partner/domestic partner Adding a spouse/civil union partner/domestic partner timely enrollment Adding a spouse/civil union partner/domestic partner late enrollment Adding a newborn Selecting a PCP for a newborn Adding a child other than a newborn timely enrollment Adding a child other than a newborn late enrollment Eligibility date GROUP S ELIGIBILITY EXCEPTIONS TO THE LATE ENROLLEE RULES Enrolling under an exception to the late enrollee rules Loss of Coverage Special Enrollment Period Dependent Special Enrollment Period Dependent Special Enrollment Period employee is not currently enrolled Dependent Special Enrollment Period employee is currently enrolled Enrolling a dependent due to a court order PRE-EXISTING CONDITION LIMITATION What is a pre-existing condition What is the enrollment date When does the pre-existing condition limitation apply When the pre-existing condition limitation does not apply Length of pre-existing limitation and when it starts being counted Impact of waiting period on pre-existing condition limitation

4 TABLE OF CONTENTS Crediting previous creditable coverage What is creditable coverage Certificates of creditable coverage WHEN EMPLOYEES MAY CHANGE BETWEEN THE SMALL EMPLOYER S PLANS Annual open enrollment Employer opens a new plan offering HIPAA special enrollment period Employee is changing from Horizon HMO coverage CONTINUATION RIGHTS ANNUAL VERIFICATION OF EXISTING GROUP S ELIGIBILITY When to certify group qualification TERMINATION OF ENROLLMENT EMPLOYEE Mandatory termination Voluntary termination Coverage options for terminated employees TERMINATION OF ENROLLMENT DEPENDENT Dependent coverage termination Reasons a child is no longer eligible Coverage options for ineligible dependents TERMINATION OF ENROLLMENT SPOUSE/CIVIL UNION PARTNER/ DOMESTIC PARTNER Divorced spouse termination Coverage options for a divorced spouse or former civil union partner/ domestic partner TERMINATION OF ENROLLMENT DECEASED DEPENDENT Deceased spouse termination TERMINATION OF A DEPENDENT FOR CAUSE (APPLIES TO HORIZON HMO) Effective date of termination CONTINUATION RIGHTS Coordinating continuation rights CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT (COBRA) Employers who must comply with COBRA Employers who are exempt from COBRA Who is a qualified beneficiary Who is a covered employee Qualifying events and maximum coverage periods Medicare entitlement Qualifying events Election period Coverage under another group health plan Amount of premium employers may charge When premium payments are due Terminating qualified beneficiaries

5 TABLE OF CONTENTS OTHER CONTINUATION RIGHTS New Jersey Group Continuation (NJGC) New Jersey Total Disability Surviving Dependent Continuation New Jersey Continuation Rights for Over-Age Dependents (NJCROD) S A Uniformed Services Employment and Reemployment Rights Act (USERRA) MEDICARE ENTITLEMENT DUE TO AGE TEFRA/DEFRA TEFRA/DEFRA APPLIES If TEFRA/DEFRA applies (groups with at least 20 employees) Group coverage as primary How to select group coverage as primary Medicare coverage as primary When an employee retires TEFRA/DEFRA DOES NOT APPLY Groups with less than 20 employees How to select Medicare as primary Coordination of Benefits MEDICARE ENTITLEMENT DUE TO DISABILITY Medicare-eligible due to disability (other than ESRD) Medicare-eligible due to ESRD Determining the primary payer Coordination period DUAL MEDICARE ENTITLEMENT Dual Medicare eligibility Dual entitlement chart BILLING Statement and summary of account Detail bill Timely paperwork USEFUL TERMINOLOGY MANAGED CARE HORIZON HMO HORIZON HMO COINSURANCE OPTIONS HORIZON POS HORIZON DIRECT ACCESS HORIZON PPO BLUECARD PPO PROGRAM

6 TABLE OF CONTENTS BLUECARD WORLDWIDE INDEMNITY PLANS Horizon Basic Health Plan A Horizon Comprehensive Health Plans B, C, D and E UTILIZATION REVIEW Pre-facility review Emergency admission notification Medical appropriateness review Procedures requiring preapproval CLAIM FILING Guidelines Horizon POS claims Horizon Direct Access and BlueCard PPO claims Horizon PPO claims Explanation of Benefits (EOB) HEALTH CLAIM FORMS AND MAILING ADDRESSES Horizon HMO Horizon POS Horizon Direct Access Horizon PPO Horizon Basic Health Plan A and Horizon Comprehensive B, C, D and E COORDINATION OF BENEFITS Which insurance pays first How to file a COB claim PRESCRIPTION DRUG PROGRAMS Deductible and copayment options How to use the Prescription Card Program Using nonparticipating pharmacies MAGELLAN BEHAVIORAL HEALTH T Benefits of managed mental health care Utilization Management Pre-Admission Review Program HORIZON BCBSNJ DENTAL PROGRAMS USEFUL FORMS HORIZON BCBSNJ DENTAL PROGRAMS HIPAA NOTICES GENERAL NOTICES OF SPECIAL ENROLLMENT RIGHTS GENERAL NOTICES OF PRE-EXISTING CONDITIONS EXCLUSIONS CONTACT US BY TELEPHONE CONTACT US ON THE WEB

7 Eligibility Employees Employees When an employee joins your organization, it is important to follow proper enrollment procedures to ensure that the employee s enrollment is accurate and takes effect on the correct day. After an employee s coverage is in effect, he/she becomes a subscriber of Horizon Blue Cross Blue Shield of New Jersey. Who is eligible? To be eligible for small employer group coverage as an employee, a person must be: In an eligible class of employees (e.g., salaried, hourly) to whom a small employer is offering coverage; and Actively at work on the effective date of his/her coverage. If the employee is not actively at work due to a health status-related factor, the actively at work requirement does not apply. A person must also be one of the following: A bonafide full-time employee who works a normal work week of 25 hours or more for you or any of your affiliated companies. An employee who works on a temporary or substitute basis is not eligible for coverage. A proprietor or partner if he/she is a full-time employee as specified above. An independent contractor who meets these requirements: Performs a service for the employer pursuant to a written contract; Works exclusively for the employer; Works 25 or more hours per week for the employer; Works on other than a temporary or substitute basis; and The relationship is established to serve a substantial business need of the employer, not intended primarily to obtain insurance coverage. If the employer does not offer coverage to independent contractors, independent contractors do not count toward group size and are not used when calculating participation. For Horizon HMO, an eligible employee must also reside in the Horizon HMO service area. 1

8 Other eligible subscribers Persons who do not qualify as eligible employees as defined on page 1 may also be eligible as follows: A small employer who is replacing his/her health benefits plan may choose to offer coverage to permanent part-timers (work less than 25 hours per week, but at least 20 hours per week) and/or pensioners who were already enrolled on the prior Small Group Non-Reform or Small Group Non-Standard group health benefits plan at the time the small employer s coverage is converted to a Reform health benefits plan. Future permanent, part-time employees and/or pensioners would also be eligible. Former employees may have the right to continue group coverage in certain situations (e.g., total disability, COBRA and New Jersey Group Continuation). Eligibility Dependents Who is an eligible dependent? To be eligible for coverage, a dependent must be the employee s spouse, civil union partner or domestic partner (if the employer extends coverage to domestic partners) or child as defined in this section. Spouse A spouse is an individual legally married to the employee. For Horizon HMO, an eligible spouse must reside in the Horizon HMO service area. If the spouse s last name is different than the employee s last name, we must receive a copy of the marriage certificate. Civil Union Partner A civil union partner is an individual who is the same sex as the employee and has legally entered into a civil union with the employee. It requires both individuals to: Not be a party in another civil union, domestic partnership or marriage; Be of the same-sex; Be at least 18 years of age (parental consent required for minors); and Obtain a civil union license/certificate from their local or state registrar. For Horizon HMO, the civil union partner must reside in the Horizon HMO service area. Note: If the civil union partner s last name is different than the employee s last name, the employee must submit a copy of his/her civil union license/certificate. 2

9 Domestic partner (if the employer extends coverage to domestic partners) A domestic partner must meet the following requirements: Is in a same-sex relationship with the employee where both the employee and domestic partner are at least 18 years of age. Has established a domestic partnership with the employee by jointly filing an Affidavit of Domestic Partnership and obtaining a New Jersey Certificate of Domestic Partnership from their local registrar. For Horizon HMO, the domestic partner must reside in the Horizon HMO service area. Note: If the domestic partner s last name is different than the employee s last name, the employee must submit a copy of his/her Certificate of Domestic Partnership. Child A child is an individual who meets all the requirements listed below. He/she is the: Employee s own child; Employee s stepchild, if he/she depends on the employee for most of his/her support and maintenance; Employee s legally adopted child (proof is required); Child for whom the employee has court-appointed guardianship (proof is required); Child of the employee s civil union partner if he/she depends on the employee for most of his/her support and maintenance; or Child of the employee s domestic partner if he/she depends on the employee for most of his/her support and maintenance (if the employer extends coverage to children of domestic partners); He/she is unmarried; and He/she is under age 19, unless he/she: Is enrolled as a full-time student at an accredited school and is under age 23 (proof is required); or Has a mental or physical incapacity or developmental disability (proof is required) and he/she: Remains unmarried and is incapable of earning a living; Depends on the employee for most of his/her support and maintenance; Had the condition before age 19 or while covered as a full-time student; and 3

10 Initially enrolled under the employee s policy or any other policy before reaching the age limit and stayed continuously covered after reaching the age limit. We may request proof of dependent eligibility at our discretion. Reasons for which coverage cannot be be denied An employee s child cannot be denied coverage on the grounds that the child: Was born out of wedlock. However, proof of parentage, such as a birth certificate, may be required. Is not claimed as a dependent on the employee s federal tax return. Does not reside with the employee or reside in our service area (any applicable physician, health care professional and hospital use restrictions must be adhered to). Noneligible dependents A noneligible dependent is: An employee s dependent who is on active duty in any armed forces of any country. An employee s dependent, if he/she is eligible for coverage under the small employer s health plan as an employee, is offered a health benefits plan and has chosen to enroll under a separate contract. A foster child or grandchild of either the employee or his/her spouse unless the child meets the requirements specified for an eligible dependent child. An employee s opposite-sex domestic partner. An employee s same-sex domestic partner unless the employer offers coverage to same-sex domestic partners. Proof of Child Dependent Eligibility Overview This section details what is considered satisfactory proof of: Legal adoption; Court-appointed guardianship; Full-time student status; and Disabled dependent status. 4

11 Legal adoption Satisfactory proof of adoption consists of one of the following: A copy of the adopted child s birth certificate in the name of the adopting parents together with a certificate by the parents of the date of adoption; A notarized statement by an adoption agency (which is approved and accredited by the appropriate State authority) stating that adoption proceedings have been initiated in a court of competent jurisdiction and that the named child has been formally placed for adoption with the prospective parents (who are also named on the statement); or A notarized legal document from the attorney representing the employee, which clearly defines the parties involved and the terms of the custody appointment. The document should include a statement indicating that the employee is responsible for the medical care of the child. A child is considered legally adopted from the time he/she is placed for the purpose of adoption, whether a final adoption order is ever issued. Court appointed guardianship Satisfactory proof of court-appointed guardianship consists of: A document issued by a court of competent jurisdiction naming the employee or spouse/civil union partner/domestic partner as the legal guardian; and A statement by the employee certifying that the child is principally dependent upon the employee or spouse/civil union partner/ domestic partner for support and maintenance. Full-time student status Annually each fall, Horizon BCBSNJ partners with various vendors to validate full-time student status. Children who cannot be verified through these vendors will receive a Student Verification Questionnaire. If the child meets the definition of a full-time student, the employee must complete and return the questionnaire and provide acceptable documentation of full-time student status in order to enroll his/her child. Full-time is 12 or more credit hours, or as defined by the accredited school. The documentation must contain: The child s name; The name of the school the child is attending; Whether or not the child is a full-time student; and The academic period for which the child is enrolled. 5

12 We will only accept the following documents as proof of full-time student status: A signed letter from the school s Registrar on the school s letterhead; A signed letter from the employee with a stamp or signature from the school; A current course schedule; A current paid tuition receipt; or Documentation from the National Student Clearinghouse. Disabled dependent status The employee must provide written proof that the child is incapacitated and depends on the employee for most of his/her support and maintenance. Horizon BCBSNJ must receive the notification within 31 days from the date the child reaches the policy age limit. Please use the Request for Continuance of Enrollment for a Disabled Dependent form (#2407) to supply the required information. We may request periodic proof that the child s condition continues. Units of Coverage Types of coverage The units of coverage are: Single Covers the employee only. Two Adults Covers the employee and eligible spouse/civil union partner/domestic partner. Parent and child(ren) Covers the employee and eligible child(ren). Family Covers the employee, eligible spouse/civil union partner/domestic partner and eligible child(ren). When carve-out units of coverage apply An employee may be enrolled in a carve-out unit of coverage for his/her health benefits plan when the employee and/or his/her eligible dependent is eligible for Medicare for any reason and Medicare is the primary plan and the group health plan is the secondary plan. Carve-out units of coverage do not apply to freestanding prescription drug riders or to dental coverage. Refer to pages for information on when Medicare is the primary plan. 6

13 Waiting Period Waiting period election You may elect to have your employees become eligible for coverage on the date of employment or at the completion of a specified waiting period. The length of the waiting period, measured in monthly increments, can range from zero to six months. You may vary the waiting period among classes of employees. Example ABC Company has a Horizon HMO plan for all its eligible employees. The waiting period chosen by ABC Company varies between classes of employees: The salaried employees have a one-month waiting period. The hourly employees have a three-month waiting period. Changing the waiting period You may change the length of the waiting period for a class of employees effective upon the group s next anniversary date. The change only applies to employees who are hired on or after the effective date of the new waiting period. Effective Date of Enrollment Employees Eligibility date An employee s eligibility date for medical coverage is the later of two dates: The date of employment; or The day after any applicable waiting period ends. Note: Freestanding dental programs have different effective dates and waiting period requirements. Please refer to the Dental Group Administration Manual for information on freestanding dental program effective dates and waiting periods. 7

14 Required form The Enrollment/Change Request form is required for enrollment. This form must be completed and signed by the employee and the employer. The employees ID card and certificate are sent to the group. You must submit this form to Horizon BCBSNJ. Keep a copy of the form for your files. Timely enrollment For coverage to start on the employee s eligibility date, Horizon BCBSNJ must receive the completed enrollment form within 30 days of the employee s eligibility date. To determine whether the pre-existing condition limitation applies, please refer to the Pre-existing Condition Limitation section on page 16. The effective date of an employee s coverage will not be postponed if an employee is not actively at work due to his/her own health status-related factor. Examples The group does not have a waiting period. Reed begins working on timely enrollment February 7, Horizon BCBSNJ receives the enrollment form on February 11, Reed s coverage is effective February 7, 2008, the date of employment. The group s waiting period is two months. Anthony s start date is January 12, 2008 and Horizon BCBSNJ receives the enrollment form on January 21, Anthony s coverage is effective on March 12, 2008, the day after the waiting period ends. Late enrollment If Horizon BCBSNJ receives the completed enrollment form more than 30 days after an employee s eligibility date, the employee is considered a late enrollee. Coverage for late enrollees becomes effective no earlier than the date Horizon BCBSNJ receives the completed application. Late enrollees are subject to the pre-existing condition limitation, which may be reduced by prior creditable coverage. Examples Craig begins active full-time work on March 7, There is no late enrollment waiting period. The enrollment form is received on April 15, The effective date of coverage is April 15, 2008, since the enrollment form was received more than 30 days after his eligibility date. Craig is a late enrollee and is subject to the pre-existing condition limitation. 8

15 The group imposes a two-month waiting period. Laura s date of hire is September 1, On December 15, 2008 we receive her enrollment form. Since we received her enrollment form more than 30 days after her November 1 eligibility date, she is a late enrollee and is subject to the pre-existing condition limitation. Effective Date of Enrollment Dependents Effective date of enrollment An employee must be enrolled for his/her eligible dependent(s) to be added. If coverage is made available to dependents, your employee may elect to enroll his/her eligible dependents when his/her own coverage becomes effective. An employee may also add eligible dependents at any time after the employee s effective date of coverage. Any eligible dependent who is confined to a hospital or other health care facility or is confined at home on the date his/her coverage is to start is still eligible for coverage on that date. Required form The Enrollment/Change Request form is required for any change in enrollment. This form must be completed and signed by the employee and the employer. You must submit this form to Horizon BCBSNJ. Keep a copy of the form for your files. Eligibility date for spouse/civil union partner/domestic partner The eligibility date is as follows: For a spouse, the date of marriage; For a civil union partner, the date of the civil union; and For a domestic partner, the date the Certificate of Domestic Partnership was issued. Adding a spouse/civil union partner/domestic partner timely enrollment If Horizon BCBSNJ receives the completed enrollment form to add an eligible spouse/civil union partner/domestic partner within 30 days of eligibility, his/her coverage becomes effective on the date of eligibility. To determine whether the pre-existing condition limitation applies, please refer to the Pre-existing Condition Limitation section on page 16. 9

16 Examples Stephanie is an enrolled employee in a group of six or more timely enrollment eligible employees. She marries on May 21, 2008, and the enrollment form to add her spouse arrives at Horizon BCBSNJ on May 27, Since the required paperwork was received within 30 days of the marriage, the effective date of the spouse s coverage is May 21, The spouse is not subject to a pre-existing condition limitation since the group has six or more eligible employees. As of the last anniversary date, the group has four eligible employees. Ashley marries on June 4, 2008, and the enrollment form to add her spouse arrives at Horizon BCBSNJ on June 10, The effective date of the spouse s coverage is June 4, The spouse is subject to a pre-existing condition limitation since there are two to five eligible employees in the group. Adding a spouse/ civil union partner/ domestic partner late enrollment If we receive the completed enrollment form to add an eligible spouse/civil union partner/domestic partner more than 30 days after eligibility, he/she is a late enrollee and is subject to the pre-existing condition limitation. Coverage becomes effective no earlier than the date Horizon BCBSNJ receives the completed enrollment form. Example Bill marries on January 8, 2008, and the required paperwork to late enrollment add his spouse arrives at Horizon BCBSNJ on July 14, Bill s spouse is a late enrollee, so her coverage is effective July 14, The spouse is subject to a pre-existing condition limitation. Adding a newborn An employee s newborn child is automatically covered for 31 days from the date of birth, subject to the terms of his/her health benefits plan. When the employee is enrolled in a Single or a Two Adults unit of coverage and we receive the application for Parent and Child(ren) or Family coverage: Within 31 days of the newborn s birth, the newborn will be covered from the moment of birth and is considered to have enrolled timely. More than 31 days after the newborn s birth, the newborn is automatically covered for the first 31 days from the date of birth. However, coverage will be interrupted after the first 31 days. Coverage will become effective again no earlier than the date we receive the completed enrollment form. To determine whether the pre-existing condition limitation applies, please refer to the Pre-existing Condition Limitation section on page

17 An employee who already has Parent and Child(ren) or Family coverage must also submit an enrollment form to continue coverage for the newborn. Regardless of when we receive the enrollment form, there is no lapse in coverage for the newborn. Coverage for the newborn will be provided from the date of birth. Note: If the employer does not offer coverage to dependents, the newborn child is not covered after the initial birthing confinement (the joint eligible hospital stay with the newborn s mother). Selecting a PCP for a newborn If required by plan design, a Horizon HMO member must select a Primary Care Physician (PCP) for his/her dependent newborn so that rendered services and supplies are covered. If a PCP is not selected, all services for the newborn are not covered. A Horizon POS member must select a PCP for his/her dependent newborn so that incurred services and supplies are covered at the highest level of benefits. If the member does not select a PCP, all services for the newborn are paid at a lower level of benefits, except for medical emergencies. Example The employee is enrolled in a Two Adults unit of coverage. The timely enrollment newborn s date of birth is August 18, We receive the enrollment form to convert from Two Adults to Family on August 26, The effective date of change to Family coverage is the newborn s date of birth since the enrollment form was received within 31 days of the date of birth. The newborn has continuous coverage from the date of birth and is not subject to the pre-existing condition limitation. Example The employee is enrolled in a Single unit of coverage. The late enrollment newborn s date of birth is March 1, We receive the enrollment form to convert from a Single to a Parent and Child(ren) unit of coverage on April 15, The newborn is covered for the first 31 days from the date of birth (from March 1 through March 31, 2008) and then has a lapse in coverage. The newborn s coverage becomes effective again on his/her enrollment date, which is April 15, Although the application was received more than 31 days after the newborn s date of birth, whether the pre-existing condition limitation applies depends on whether the break in coverage is more than 90 days. For details, please refer to the Pre-existing Condition Limitation section on page

18 Adding a child other than a newborn timely enrollment The child s coverage becomes effective on his/her eligibility date, if we receive the completed enrollment form to enroll the child within 30 days of the child s eligibility date. To determine whether the pre-existing condition limitation applies, please refer to the Pre-existing Condition Limitation section on page 16. Adding a child other than a newborn late enrollment If the completed enrollment form is received more than 30 days after the child s eligibility date, the child is a late enrollee and coverage becomes effective no earlier than the date we receive the enrollment form. The child is subject to the pre-existing condition limitation. Eligibility date For adopted children, the eligibility date is the date of adoption or the date the child is placed in the home for adoption. Proof of adoption is required. If your employee becomes a legal guardian, the eligibility date is the date your employee assumes the legal guardianship of the child. Proof of court-appointed guardianship is required. Exceptions to the Late Enrollee Rules Enrolling under an exception to the late enrollee rules When a person enrolls during one of the time frames described below, he/she is not considered a late enrollee because he/she is enrolling under an exception to the late enrollee rules: HIPAA Special Enrollment Period. Loss of Coverage Special Enrollment Period. Dependent Special Enrollment Period. Enrolling a dependent due to a Court Order. Loss of Coverage Special Enrollment Period An eligible employee or eligible dependent is not considered a Late Coverage Special Enrollee if he/she was covered under any group health plan or health insurance coverage when coverage was previously offered and lost coverage is due to one of the following qualifying reasons: Loss of eligibility which includes but is not limited to: Termination of employment or eligibility; Reduction in the number of hours of employment; Divorce, legal separation, dissolution of civil union, civil union separation, termination of domestic partnership; or Death of an employee. 12

19 Exhaustion of COBRA continuation coverage, which occurs when an individual s COBRA coverage ends for any reason other than failure of the employee or dependent to pay premium timely or termination of coverage for cause. Termination of the employer s contribution toward coverage, which occurs when the employer stops contributing toward the employee s or the dependent s coverage so long as it is not COBRA continuation coverage. For this to apply, we must receive the completed enrollment form within 90 days after the event and documentation that states the reason and the date the previous coverage ended. Coverage begins when the other coverage ends and the person is not a late enrollee. Examples Maria becomes an active full-time employee in a group with six or more eligible employees on January 10, She initially waives coverage since she s covered under her spouse s group coverage, and she states this reason on the Waiver form. Coverage with her spouse s health benefits plan terminates on May 27, 2008 due to divorce. Horizon BCBSNJ receives Maria s application on July 15, The effective date of coverage is May 28, 2008, since the enrollment form was received within 90 days after the previous group health benefits plan ended. Maria is enrolling under an exception to the late enrollee rules and is not subject to the pre-existing condition limitation, since she is enrolled in a group of six or more eligible employees. Erica becomes an active full-time employee in a group with six or more eligible employees on January 10, She initially waives coverage since she s covered under her spouse s group coverage and states this reason on the Waiver form. Coverage with her spouse s health benefits plan terminates on May 27, 2008 due to divorce. Horizon BCBSNJ receives Erica s enrollment form on September 20, The effective date of coverage is September 20, 2008, since we did not receive the enrollment form within 90 days after the previous group health benefits plan ended. Erica is a late enrollee and is subject to the pre-existing condition limitation. Jim marries on June 14, His new spouse initially waives coverage in a group of six or more eligible employees since she s covered under her own employer s group health benefits plan and states this reason on the Waiver form. Her coverage ends on June 30, 2008, due to termination of employment, and the enrollment form to enroll her as Jim s dependent arrives on July 15, The effective date of her group coverage is July 1, 2008, since the required enrollment form was received within 90 days of the date of termination of the other employer s health benefits plan. She is enrolling under an exception to the late enrollee rules and is not subject to the pre-existing condition limitation since she is enrolled in a group of six or more eligible employees. 13

20 Dependent Special Enrollment Period The Dependent Special Enrollment Period allows an eligible employee to enroll new dependents he/she obtains through marriage/civil union/domestic partnership, birth or adoption. This applies whether the employee is currently enrolled or not. Dependent Special Enrollment Period employee is not currently enrolled If an eligible employee is not currently enrolled and an individual becomes the employee s dependent through: Marriage/civil union/domestic partnership, the employee may enroll the following persons without being considered late enrollees if we receive the enrollment form within 30 days of marriage/civil union/ domestic partnership: Himself/herself; His/her new spouse/civil union partner/domestic partner; and/or New child dependents he/she obtains as a result of the marriage/civil union/domestic partnership. Birth, adoption or placement for adoption, the employee may enroll the following persons without being considered a late enrollee if we receive the enrollment form within 31 days of birth, adoption or placement for adoption: Himself/herself; The newborn or newly adopted child; and/or His/her spouse/civil union partner/domestic partner (if not already enrolled). Coverage becomes effective on the date of marriage/civil union/ domestic partnership, birth, adoption or placement for adoption. Dependent Special Enrollment Period employee is currently enrolled If an eligible employee is currently enrolled and an individual becomes the employee s dependent through: Marriage/civil union/domestic partnership, the employee may enroll the following persons without being considered late enrollees if we receive the enrollment form within 30 days of marriage/civil union/ domestic partnership: His/her new spouse/civil union partner/domestic partner; and/or New child dependents he/she obtains as a result of the marriage/ civil union/domestic partnership. Birth, adoption or placement for adoption, the employee may enroll the following persons without being considered a late enrollee if we receive the enrollment form within 31 days of birth, adoption or placement for adoption: 14

21 The newborn or newly adopted child; and/or His/her spouse/civil union partner/domestic partner (if not already enrolled). Coverage becomes effective on the date of marriage/civil union/ domestic partnership, birth, adoption or placement for adoption. Note: If the employee is adding his/her dependent during a Dependent Special Enrollment Period, the employee may change to another offering of the employer without having to wait until the group s next open enrollment period. Example Lee previously waived coverage when she was first eligible. She marries on November 20, We receive her enrollment form on November 30, 2008, enrolling herself and her new spouse in a Two Adults contract. The effective date is November 20, Due to this special dependent enrollment period, they are enrolling under an exception to the late enrollee rules and are not subject to a pre-existing condition limitation since they are enrolled in a group of six or more eligible employees. Had the group size been between two and five eligible employees, the pre-existing condition limitation would apply. Enrolling a dependent due to a court order When an employee is under legal obligation to provide health coverage for his/her eligible dependent due to a court or administrative order, the dependent is not considered a late enrollee if we receive: The completed enrollment form within 30 days of the issuance of the order; and A copy of the order. Coverage becomes effective as of the date required pursuant to the order. 15

22 Pre-existing Condition Limitation What is a pre-existing condition? A pre-existing condition is an illness or injury, whether physical or mental, which manifests itself in the six months before a covered person s enrollment date and for which medical advice, diagnosis, care or treatment was recommended or received from a practitioner in the six months before his/her enrollment date. Taking a prescribed drug is considered medical care or treatment. Genetic information cannot be treated as a pre-existing condition in the absence of a diagnosis. A pre-existing condition limitation can never apply to pregnancy. What is the enrollment date? For persons who enroll timely, the enrollment date is the earlier of: The effective date of the person s coverage; or If there is a waiting period, the first day of the waiting period, which is typically the first day of full-time employment. For late enrollees and for persons who enroll under an exception to the late enrollee rules, the enrollment date is the effective date of the person s coverage. When does the pre-existing condition limitation apply? For groups of two to five eligible employees, the pre-existing condition limitation applies to: Persons who enroll timely; Late enrollees; and Persons who enroll under an exception to the late enrollee rules. For groups of six or more eligible employees, the pre-existing condition limitation only applies to late enrollees. In addition, late enrollees get credit for coverage within the past 90 days. The determination of a group s size and whether the pre-existing condition limitation applies to your health benefits plan is made on the initial effective date of the small employer s coverage and each subsequent policy anniversary date. If a change is made as to whether the pre-existing condition limitation applies to your group, it will not affect employees and dependents already enrolled in your health benefits plan. 16

23 When the The pre-existing condition limitation does not apply in the following pre-existing condition situations regardless of group size: limitation does not apply A newborn child: When the employee is enrolled in a Single or Two Adults unit of coverage and we receive the enrollment form: Within 30 days of the newborn s birth; or More than 31 days from birth but the newborn was covered under any creditable coverage within 30 days of birth and there is not a significant break in coverage of more than 90 consecutive days prior to the newborn s enrollment date. When the employee is enrolled in a Parent and Child(ren) or Family unit of coverage and we receive the enrollment form at any time. An adopted child or a child placed for adoption, if we receive the enrollment form: Within 31 days of the date of adoption or placement for adoption; or More than 31 days from the date of adoption or placement of adoption and the child was covered under any creditable coverage within 30 days of adoption or placement for adoption and there is not a significant break in coverage of more than 90 consecutive days prior to the child s enrollment date. To late enrollees, unless 10 or more late enrollees request enrollment during any 30-day enrollment period. Example Newborn The employee is enrolled in a Single unit of coverage. The and no break in newborn s date of birth is March 1, We receive the coverage of more enrollment form to convert to a Parent & Child(ren) unit of than 90 days coverage on April 15, The newborn is covered for the first 31 days from the date of birth (from March 1 through March 31, 2008) and then has a lapse in coverage. The newborn s coverage becomes effective again on his/her enrollment date, which is April 15, Since the newborn was covered under creditable coverage within 30 days of birth and did not have a significant break in coverage of more than 90 consecutive days prior to his/her April 15th enrollment date, the newborn is not subject to the pre-existing condition limitation. 17

24 Example Newborn and break in coverage of more than 90 days The employee is enrolled in a Single unit of coverage. The newborn s date of birth is March 1, We receive the enrollment form to convert to a Parent & Child(ren) unit of coverage on July 15, The newborn is covered for the first 31 days from the date of birth (from March 1 through March 31, 2008). The newborn s coverage becomes effective again on his/her enrollment date, which is July 15, Although the newborn was covered under creditable coverage within 30 days of birth, he/she had a significant break in coverage of more than 90 consecutive days prior to his/her July 15th enrollment date. Therefore, the newborn is subject to the pre-existing condition limitation from his/her July 15, 2008 enrollment date. Length of pre-existing limitation and when it starts being counted If the pre-existing condition limitation applies, we do not cover services or pay benefits for charges for pre-existing conditions for a look-forward period of 180 days starting on the person s enrollment date. Impact of waiting period on pre-existing condition limitation When a person enrolls timely in a group of five or fewer eligible employees and the group imposes a waiting period, the waiting period and pre-existing condition limitation periods are counted concurrently. Examples ABC Company has seven eligible employees on the last anniversary date. The pre-existing condition limitation does not apply except for late enrollees. On the group s next anniversary date, it has five eligible employees, and the pre-existing condition limitation applies to anyone who subsequently enrolls. It will not impact employees and dependents who were enrolled prior to the anniversary date. Norma is hired June 7, 2008, into a group of two to five eligible employees and has a three-month waiting period. Horizon BCBSNJ receives her enrollment form within 30 days of her eligibility date. Her enrollment date is June 7, 2008 (the first day of her waiting period); the effective date of coverage is September 7, Norma has a look-forward period that starts on June 7, 2008, and continues for 180 days through December 4, As of December 5, 2008, the pre-existing condition limitation no longer applies. Karen is hired March 1, 2008, in a group of six or more eligible employees and has a one-month waiting period. Horizon BCBSNJ receives her enrollment form on June 21, 2008, which is more than 30 days after her eligibility date. Karen is a late enrollee and her enrollment date is June 21, 2008 (her effective date of coverage). Her look-forward period starts June 21, 2008, and continues for 180 days through December 18, As of December 19, 2008, the pre-existing condition limitation no longer applies. 18

25 Crediting previous creditable coverage A person s pre-existing condition limitation will be reduced by the number of days of creditable coverage that he/she has prior to his/her enrollment date under the Small Employer group plan, except for days that occur before a significant break in coverage of more than 90 consecutive days. A waiting period is not counted as a break in coverage. What is creditable coverage? The following is a list of creditable coverage: Group health plans (including self-funded plans). Individual health benefits plan. Medicare (Parts A or B). Medicaid. State Children s Health Insurance Program (SCHIP). TRICARE (formerly CHAMPUS). Medical care program of the Indian Health Service or of a tribal organization. A health plan offered under Chapter 89 of Title 5, United States Code (Federal Employee Health Benefits Program). A public health plan, which includes any plan that provides health coverage which is established or maintained by a state, the U.S. government, foreign country or by any political subdivision of a state, the U.S. government or foreign country. This includes socialized medicine (government-sponsored health program). A health benefits plan under section 5(e) of the Peace Corps Act. A state health benefits risk pool. Coverage under any other type of plan as set forth by the Commissioner of Banking and Insurance. Note: Coverage continued under a continuation right such as COBRA or New Jersey Group Continuation is considered creditable coverage if it falls under one of the above categories. Coverage does not have to be issued in the United States to be creditable. We require proof of such coverage. 19

26 Certificates of creditable coverage An individual who was previously covered under creditable coverage is entitled to receive a Certificate of Creditable Coverage (COCC) when one of the following triggering events occurs: Automatically when an individual s coverage under the plan terminates; Automatically when an individual s COBRA terminates; or Upon request by an individual at any time while covered and for up to 24 months after termination of coverage, whether or not a COCC was already received. The COCC must be provided at a time consistent with notices required under applicable COBRA or state continuation provision. The COCC may be used to reduce or eliminate any pre-existing condition limitation that may be included under any subsequent individual or group health insurance coverage the individual may obtain. If an employee had creditable coverage prior to the Horizon BCBSNJ coverage, be sure to forward the COCC to Horizon BCBSNJ immediately upon receipt. Example does not Joan s date of full-time hire in a group of two to five eligible receive credit toward employees is January 1, The group does not impose a limitation waiting period. We receive her enrollment form within 30 days of her eligibility date. Her coverage becomes effective on January 1, 2008, which is her eligibility date. Her COCC indicates that she had 90 days of prior creditable coverage which terminated on September 1, Since the break between her prior creditable coverage ending (September 1, 2007) and her enrollment date (January 1, 2008) is more than 90 days, she does not receive credit for her prior creditable coverage. Therefore, she is subject to a 180-day, pre-existing condition limitation which starts being counted on her enrollment date (January 1, 2008). Example receives Mary s date of full-time hire in a group of two to five eligible credit to reduce employees is January 1, The group does not impose a limitation waiting period. We receive her enrollment form within 30 days of her eligibility date. Her coverage becomes effective on January 1, 2008, which is her eligibility date. Her COCC indicates that she had 90 days of prior creditable coverage which terminated on December 15, Since the break between her prior creditable coverage ending (December 15, 2007) and her enrollment date (January 1, 2008) is not more than 90 days, she receives credit for her prior 90 days of creditable coverage. Therefore, she is subject to a 90 day pre-existing condition limitation from January 1, 2008 through March 31, Effective April 1, 2008, the pre-existing condition limitation no longer applies. 20

27 Example receives Joe s date of full-time hire in a group of two to five eligible credit to eliminate employees is January 1, The group imposes a three-month limitation waiting period. We receive his enrollment form within 30 days of his eligibility date. His coverage becomes effective on April 1, 2007, which is his eligibility date. His COCC indicates that he had 24 months of prior creditable coverage which terminated on December 15, His waiting period (from January 1 through March 31, 2007) is not counted as a break in coverage. Since the break between his prior creditable coverage ending (December 15, 2006) and his enrollment date (January 1, 2007) is not more than 90 days, he receives credit to eliminate his 180 day pre-existing condition limitation. When Employees May Change Between the Small Employer s Plans Overview As described below, an employee may change between the small employer s health benefits plans: During the group s annual open enrollment period; When the employer opens a new plan offering; During a HIPAA Special Enrollment Period in certain situations; or When he/she loses Horizon HMO coverage because the Horizon HMO ends its operations or he/she moves outside the Horizon HMO service area. Annual Open Enrollment Purpose of open enrollment period Small employers have an annual open enrollment period during which enrolled employees may change between any of the health benefits plans offered by the small employer. Length of open enrollment period The open enrollment period is the one-month period beginning immediately before the group s anniversary date. Open enrollment effective date When an employee requests to change plans during the open enrollment period, coverage becomes effective on the open enrollment effective date, which is the group s next anniversary date. 21

28 Example The group s anniversary date is July 1. The group s open enrollment period is from June 1, 2008 through June 30, During the open enrollment period, we receive an enrollment form to transfer an employee from Horizon PPO to Horizon POS. The employee s Horizon POS coverage becomes effective on July 1, 2008, which is the open enrollment effective date (the group s next anniversary date). Transfers during the open enrollment period Persons who make a transfer between the small employer s health benefits plans during an open enrollment period will not be subject to the following provisions on the transfer date: An actively at-work requirement; A waiting period, to the extent that it has already been satisfied; and A pre-existing condition limitation, to the extent that it has already been satisfied. Employer Opens a New Plan Offering When an employee may change to new plan offering When an employer opens a new plan offering, an employee may change to the new plan offering. The effective date depends on when we receive the enrollment form. If we receive the enrollment form on or before the effective date of the new plan, the employee s coverage under the new plan offering becomes effective on the effective date of the new plan. If we receive the enrollment form after the effective date of the new plan, the employee must wait until the group s next open enrollment period to change to the new plan offering. HIPAA Special Enrollment Period When an employee may change plans An employee may change between the small employer s health benefits plans during a HIPAA Special Enrollment Period in the following situations: When a dependent loses coverage due to a qualifying reason and the employee is adding his/her dependent during a Loss of Coverage Special Enrollment Period. When an employee is adding his/her dependent(s) during a Dependent Special Enrollment Period. 22

29 Employee is Changing from Horizon HMO Coverage The following table details how to assign the effective date when an employee is changing from Horizon HMO for certain reasons. If an employee is changing from Horizon HMO coverage because... And we receive the completed enrollment form... Then the effective date of the new coverage is... Horizon HMO ends its operations; or The employee moves outside the Horizon HMO service area. On or before his/her Horizon HMO membership ends. After his/her Horizon HMO membership ends. The date his/her Horizon HMO membership ends. The date the enrollment form is received. Note: If the enrollment form is received more than 31 days after his/her Horizon HMO membership ends, the employee and his/her dependents are Late Enrollees. Horizon HMO becomes insolvent. Within 31 days after his/her Horizon HMO membership ends. More than 31 days after his/her Horizon HMO membership ends. The date the enrollment form is received. The date the enrollment form is received. The employee and his/her dependents are Late Enrollees. 23

30 Annual Verification of Existing Group s Eligibility Certification of group eligibility Each year, small employer groups must complete a New Jersey Small Employer Certification form so we can verify that the group still qualifies as a small employer. Completion of this form is mandatory and is in accordance with the laws of the state of New Jersey. Required forms You must submit the following forms to Horizon BCBSNJ so we can verify that your group still qualifies as a small employer: The New Jersey Small Employer Certification form (#2466); and Small Employer Health Benefits Waiver of Coverage form(s) (#2465), one for each eligible employee who has waived your Horizon BCBSNJ group coverage. When to certify group qualification The certification form is sent to you no earlier than 150 days prior to the anniversary date of your group s health benefits plan. You must return the completed form within 10 days of when we request it, as well as updated Waiver forms for all eligible employees who have waived your Horizon BCBSNJ group coverage. If you also sponsor another group health plan through a different insurance carrier, we need a copy of their most recent bill, listing the names of all covered employees. After Horizon BCBSNJ receives the completed certification form, if we determine that your group no longer qualifies as a small employer, your group s health benefits plan may not be renewed on your anniversary date. Consequence Failure to remit the completed Small Employer Certification form and related documents may result in the termination of your group s health benefits plan on your group s anniversary date. 24

31 Termination of Enrollment Employee Mandatory termination An employee s coverage ends on the first of the following dates: The date an employee ceases to be an actively at-work, full-time employee for any reason, including death, retirement, layoff, leave of absence and the end of employment. The date an employee stops being an eligible employee. The last day for which premiums have been paid for the employee. The date your health benefit plan ends or is discontinued for the class of employees to which that employee belongs. For Horizon HMO: The date the employee moves his/her permanent residence outside the Horizon HMO service area. Voluntary termination An employee may elect to drop his/her coverage. The employee may re-enroll as a late enrollee and may be subject to the pre-existing condition limitation. Required form Horizon BCBSNJ must receive written notification to remove an ineligible employee. We must receive the paperwork within two months from when the employee ceases to be eligible to receive a full premium refund. Please use the Enrollment/Change Request form to notify us of a termination. Select Employee Withdrawal/Termination and indicate the effective date of termination. Crossing off the employee s name from your bill does not provide adequate notification. Effective date of termination The effective date of termination is usually the day after the employee s last day at work. 25

32 Premium refunds Horizon BCBSNJ refunds the amount of the premium charges for the employees that were included in the premiums paid for up to two months immediately before the date we receive written notification. However, if claims were incurred and paid after coverage should have ended, the amount of premium refund is calculated from the day after the most recent incurred date of any paid claim. Premium refunds will not be made beyond two months from the date written notification is received. Examples January 15, 2008 is Michele s last day of work. Horizon BCBSNJ receives the Enrollment/Change Request form on February 4, She had no paid claims incurred after her last day of work. January 16, 2008 is Michele s effective date of termination and the date from which your refund, if any, is counted. January 28, 2008 is Harold s last day of work. Horizon BCBSNJ receives the Enrollment/Change Request form on May 2, Since we received the Enrollment/Change Request form more than two months after Harold s last day and since there were no paid claims incurred after coverage should have ended, the effective date of termination and the date from which the refund is counted is March 2, 2008 (two months prior to receiving the Enrollment/ Change Request form). January 28, 2008 is Susan s last day of work. The last paid claim for a service rendered was March 15, Horizon BCBSNJ receives the Enrollment/Change Request form on May 2, Since we receive the Enrollment/Change Request form more than two months after Susan s last day and since there was a paid claim incurred after coverage should have ended, the effective date of termination and the date from which the refund is counted is March 16, 2008 (the day after the last paid claim). Coverage options for terminated employees The terminated employee and his/her eligible dependents who wish to enroll in Individual coverage may apply to any insurance carrier that offers Individual coverage. If he/she is interested in obtaining direct payment Horizon BCBSNJ coverage, he/she should call Consumer and Senior Markets at to obtain an enrollment package and product information. The terminated employee and his/her eligible dependents may be eligible for COBRA or other continuation rights. 26

33 Termination of Enrollment Dependent Dependent coverage termination Coverage for an employee s enrolled dependent ends on the first of the following dates: The date the dependent stops being an eligible dependent; The date the employee s coverage ends; The date the group s health benefits plan ends; The date dependent coverage is terminated for all employees or for a class of employees; The date an employee fails to pay any required part of the cost of dependent coverage. Coverage ends on the last day of the period for which the employee made the required payments, unless coverage ends earlier for other reasons; or For Horizon HMO: The date a spouse/civil unior partner/domestic partner moves his or her permanent residence outside the Horizon HMO service area. Reasons a child is Reasons that a child stops being an eligible dependent include but are no longer eligible not limited to: the date a child marries, the date a child turns age 19 unless he/she is continuing coverage as a full-time student or the date a child who is covered as a full-time student no longer meets the definition including, but not limited to, graduating or dropping to part-time status. If a child graduates and continues his/her education, he/she may be covered as a full-time student provided he/she meets the definition and we receive proof of full-time student status. Required form Horizon BCBSNJ must receive written notification to remove an ineligible dependent. When the last dependent child is no longer eligible for coverage, submit an Enrollment/Change Request form to change the type of contract, e.g., Family to Two Adults or Parent and Child(ren) to Single. Select the Remove Dependent Child box and indicate the effective date of termination. Premium refunds We must receive the paperwork within two months from when the dependent ceases to be eligible. Horizon BCBSNJ refunds the amount of the premium charges for the dependent that was included in the premiums paid for up to two months immediately before the date written notification is received. However, if a claim check reveals that claims were incurred and paid after coverage should have ended, the amount of premium refund is calculated from the day after the most recent date of any paid claim. 27

34 Coverage options for ineligible dependents The former dependent who wishes to enroll in Individual coverage may apply to any insurance carrier that offers Individual coverage. If he/she is interested in obtaining direct payment Horizon BCBSNJ coverage, he/she should call Horizon BCBSNJ s Consumer and Senior Markets at to obtain an enrollment package and product information. The dependent may be eligible for COBRA or other continuation rights. Termination of Enrollment Spouse/Civil Union Partner/Domestic Partner Divorced spouse termination When an employee divorces, he/she must remove the spouse from group coverage. Eligible children may continue under the employee s contract. Separated spouse termination When there is a marital separation, the employee may, but is not required to, remove his/her spouse from coverage. Dissolution of civil union When there is a dissolution of civil union, the employee must remove his/her civil union partner from coverage. Eligible children may continue under the employee s contract. Termination of domestic partnership When there is a termination of domestic partnership, the employee must remove his/her domestic partner and the domestic partner s child(ren) from coverage. Required form Horizon BCBSNJ must receive written notification to remove an ineligible dependent. Please submit an Enrollment/Change Request form changing the employee s contract to either a Single or a Parent and Child(ren) contract. 28

35 Effective date of termination If we receive the paperwork within two months of the date of divorce or termination of domestic partnership, the effective date of termination is the date of the divorce or termination of domestic partnership. Coverage will never be terminated beyond two months from the date we receive written notification. If a claims check reveals that claims were incurred and paid after coverage should have ended, coverage will be terminated the day after the most recent incurred date of any paid claims. Coverage options for The divorced spouse or former civil unior partner/domestic partner a divorced spouse/ who wishes to enroll in Individual coverage may apply to any former civil union partner/ insurance carrier that offers Individual coverage. former domestic partner If he/she is interested in obtaining direct payment Horizon BCBSNJ coverage, he/she should contact Horizon BCBSNJ s Consumer and Senior Markets at to obtain an enrollment package and product information. The former spouse/civil union partner/domestic partner may be eligible for COBRA or other continuation rights. Termination of Enrollment Deceased Dependent Deceased spouse termination When a covered dependent dies and the contract type is greater than what is needed, a change in coverage to a Single or Parent and Child(ren) unit of coverage must be made. Required form Horizon BCBSNJ must receive written notification to remove a deceased dependent. Please submit an Enrollment/Change Request form to remove the dependent and indicate the appropriate change of contract type. Effective date of termination The effective date of change is the day following the death. If the death occurred more than six months prior to the notification, a copy of the death certificate must be submitted along with the form. Premium refunds will not be made beyond a one-year period or the date the last incurred claim was paid, whichever is more recent. 29

36 Termination of a Dependent for Cause (Applies to Horizon HMO) Termination of a dependent for cause If any of the following conditions exist, we may give written notice to the dependent that he/she is no longer covered under the small employer health benefits plan: Misuse of ID card; Misconduct. The dependent abuses the system, including but not limited to: theft, damage to a network physician s property, forgery of drug prescriptions and consistent failure to keep scheduled appointments; We and/or network physicians are unable to establish and maintain a satisfactory relationship with the dependent, the dependent fails to abide by our rules and regulations or the dependent acts in a manner that is verbally or physically abusive; Furnishing incorrect or incomplete information in an enrollment application or related form (limited to the first two years of coverage unless the statements were fraudulent); The dependent fails to pay any copayment or coinsurance or to make any reimbursement to us required under the contract; or The dependent fails to assist us in coordinating benefits. Effective date of termination If we provide written notice, the dependent ceases to be covered as follows: Effective immediately if the termination is due to misuse of ID card or misconduct; and Effective 31 days after we provide written notice for all other reasons. No benefits are provided to the dependent under the coverage after that date. 30

37 Continuation Rights Coordinating continuation rights If a person is eligible for continuation rights under Consolidated Omnibus Budget Reconciliation Act (COBRA) and New Jersey Group Continuation (NJGC) he/she may elect to continue under COBRA only. If a person is eligible for continuation rights under COBRA/NJGC and New Jersey Continuation Rights for Over-Age Dependents (NJCROD), he/she may only elect one of the continuations. Using multiple continuation provisions If a person has continuation rights under COBRA and any other continuation provision, and elects to continue under both, the continuations: Start at the same time; Run concurrently; and End independently on their own terms. Using one continuation provision If a person is covered under more than one continuation provision, he/she: Will not be entitled to duplicate benefits; and Will not be subject to the premium requirements of more than one provision at the same time. The employer s responsibility This educational publication presents information as an aid to independent research. It does not provide legal opinion or advice for any individual case. It is the employer s responsibility to notify Horizon BCBSNJ, in writing, of any changes to their continuation rights status. Continuation rights status changes when the group size: Falls to less than 20 employees (NJGC); or Grows to 20 or more employees (COBRA). Letters advising of continuation rights status changes may be mailed to: Horizon Blue Cross Blue Shield of New Jersey Dept. A PO Box 607 Newark, NJ

38 Consolidated Omnibus Budget Reconciliation Act (COBRA) Employers who must comply with COBRA Employers who maintain group health plans and employ 20 or more employees on 50 percent of typical business days during the preceding calendar year must comply with COBRA. This means that they must offer certain former employees and their dependents (called qualified beneficiaries) the option to continue identical group health coverage, which otherwise would end due to a specific qualifying event. If an employer is subject to COBRA and its work force drops below 20 employees during the calendar year, it cannot terminate existing COBRA coverage just because its workforce has dropped below 20 employees. The employer continues to be responsible for qualifying events that occur for the remainder of that calendar year. Employers who are exempt from COBRA The following employers are exempt from COBRA: Employers which employed fewer than 20 employees on at least 50 percent of typical business days during the preceding calendar year; Church plans as defined by Internal Revenue Code section 414(e); and Governmental plans as defined by statute. If an employer was exempt from COBRA due to the number of employees it employed in the preceding calendar year and its work force grows to 20 or more employees in the current calendar year, the employer must comply with COBRA on January 1 of the following year. Employees do not have to re-satisfy a waiting period if continuation was selected during a leave of absence. Determining the employee count The employee count includes full-time and part-time common law employees, regardless of whether they are enrolled in the group health plan. A part-time employee is counted as a fraction of a full-time employee. For example, if a part-time employee works 20 hours a week and the employer considers 40 hours as full-time, the part-time employee would count as one-half of an employee for COBRA purposes. Self-employed individuals, independent contractors (and their employees and agents), nonemployee directors (in the case of a corporation) and leased employees (who are not common law employees of the employer) are not included in this count, even if they are enrolled in the group health plan. 32

39 Definition of common law employee A common law employee is an employed individual for whom income and employment taxes are withheld by the employer for whom the services are directly performed. Generally, the employer/employee relationship exists where the employer has the right to control and direct the individual who performs the services as to the result to be accomplished and as to the details and means by which that result is to be accomplished. Who is a qualified beneficiary COBRA continuation must be extended to qualified beneficiaries who are covered under their employer s group health plan on the day before a qualifying event. A qualified beneficiary may be a: Covered employee; Covered spouse of a covered employee; Covered domestic partner of a covered employee; Covered dependent child of a covered employee; Covered dependent child of a covered employee s domestic partner; or Child who is born to or placed for adoption with the covered employee during the employee s period of COBRA continuation. Note: An employee s civil union partner and children of his/her civil union partner are not qualified beneficiaries. Who is a covered employee A covered employee is any individual who is (or was) covered under a group health plan by virtue of the performance of services by the individual for one or more persons maintaining the plan. A covered employee is one of the following individuals if they are covered under a group health plan: Former employees and retired employees; Self-employed individuals; Independent contractors; Agents; and Corporate directors. 33

40 Qualifying events and maximum coverage periods The following are the maximum periods of COBRA coverage and the corresponding qualifying events. When a loss of coverage is experienced due to one of the following qualifying events: The following qualified beneficiaries: May elect COBRA continuation Voluntary or involuntary termination of employment of a covered employee (except for gross misconduct); or Reduction in employment hours so the covered employee no longer meets the group s eligibility requirements; The death of the covered employee; Divorce or legal separation of a covered employee and his/her spouse; Termination of domestic partnership of the covered employee and his/her domestic partner; The covered employee s becoming entitled to Medicare Parts A and/or B ( Entitled means the person is covered); or Employee, spouse/domestic partner and/or covered dependent child (except for a child of an employee s civil union partner) Spouse/domestic partner and/or covered dependent child (except for a child of an employee s civil union partner) For up to a maximum of 18 months. Note: This timeframe may be extended to 29 months if certain conditions are satisfied. For up to a maximum of 36 months. Loss of dependent child status under the terms of the employer health plan (e.g., marriage, attaining age 19 or age 23 if a full-time student). Note: This does not include a child who loses coverage under New Jersey Continuation Rights for Over-Age Dependents. Dependent child (except for a child of the employee s civil union partner) For up to a maximum of 36 months. The employer s filing of bankruptcy proceeding. Spouses and dependent children of retirees Until the retiree dies. After the retiree dies, they may continue coverage for 36 months from the date of the retiree s death. 34

41 Coordination with disability extension The maximum coverage period may be extended from 18 to 29 months for qualified beneficiaries who the Social Security Administration (SSA) determines were disabled at the time of employment termination or reduction in employment hours or during the first 60 days of COBRA continuation coverage. The disability extension also applies if the individual was determined to be disabled long before the qualifying event as long as the person is still disabled as of the qualifying event date. Persons who are determined to be disabled under the SSA must provide notice to the employer or COBRA plan administrator of the disability determination before the end of the original 18-month COBRA period and within 60 days of the date of the SSA s determination. The 11-month extension also applies to family members who are not disabled and are entitled to COBRA continuation coverage. Medicare entitlement before termination of employment If a covered employee becomes entitled to Medicare and then loses coverage due to termination of employment or a reduction in hours within 18 months of his/her entitlement to Medicare, any qualified beneficiary other than the former employee is eligible for COBRA continuation coverage for up to the longer of either: 18 months from the termination of employment or reduction in employment hours (or 29 months if disabled); or 36 months from the date the former employee became entitled to Medicare. Note: The covered employee is still a qualified beneficiary entitled to COBRA due to termination of employment or reduction in hours because he/she was entitled to Medicare before the qualifying event. Medicare entitlement, death or divorce after termination of employment If a covered employee loses coverage due to termination of employment or reduction in hours and then subsequently becomes entitled to Medicare, dies or divorces during the 18-month COBRA coverage period, the spouse and dependent children can extend COBRA coverage for 36 months from the termination of employment or reduction in hours. Note: The employee s entitlement to Medicare is only considered a qualifying event if it would have resulted in a loss of coverage in the absence of the termination of employment or reduction in hours. 35

42 COBRA notification By federal law, employers are responsible for notifying employees and their dependents in writing of their right to elect COBRA continuation. An Initial Notification must be sent to all employees and their eligible dependents upon either the group becoming COBRA-eligible or upon initial eligibility. The notification should include the employee s responsibility to notify the plan administrator when there is a divorce, legal separation or a child dependent who ceases to be eligible. The Qualifying Event Notification must be sent with proper language via first class mail (Certificate of Mailing, post office form #3817 recommended) to the attention of all qualified beneficiaries within 14 days of the qualifying event. If the employer modifies the benefit program provided to employees, this modification also applies to those individuals who have elected COBRA continuation coverage. Qualifying events that require notification from employer When coverage is lost due to one of the following qualifying events, the employer must notify the plan administrator of the qualifying event within 30 days after the qualifying event or 30 days after the date coverage is lost, depending on when the maximum coverage period is measured from: Voluntary or involuntary termination of employment of a covered employee; Reduction in employment hours so the covered employee no longer meets the group s eligibility requirements; Death of the covered employee; The covered employee becomes entitled to (covered by) Medicare Parts A and/or B, if known; or The employer s filing of a bankruptcy proceeding. The plan administrator must then notify all qualified beneficiaries of their COBRA rights within 14 days of the day they learn of the event. Note: If the employer is the plan administrator, the employer still has 30 days to notify the plan administrator of the qualifying event. Qualifying events that require notification from covered employee or qualified beneficiary When coverage is lost due to one of the following qualifying events, the covered employee or other qualified beneficiary must notify the plan administrator of the qualifying event within the later of 60 days after the date of the event or 60 days after the date coverage is lost: Divorce or legal separation of a covered employee and his/her spouse; Termination of domestic partnership of the covered employee and his/her domestic partner; 36

43 Loss of dependent child status under the terms of the employer health plan; or The covered employee s becoming entitled to (covered by) Medicare Parts A and/or B. The plan administrator must then notify all qualified beneficiaries of their COBRA rights within 14 days of the date they learn of the event. Election period Continued coverage does not occur automatically. The qualified beneficiary must give written notice that he/she elects to continue coverage. The election period must be at least 60 calendar days in length and ends on the later of: 60 days from the date coverage is lost due to the qualifying event; or 60 days from the date the plan administrator sends a notice of COBRA rights to the qualified beneficiary. A special election period, as described below, may apply. Special election period The federal Trade Act of 2002 added a special election period for individuals that are deemed eligible for trade adjustment assistance (TAA) benefits by the U.S. Department of Labor or state labor agencies if they lost their job due to trade-related reasons. If an individual did not previously elect coverage during the election period described earlier, he/she may elect coverage during a 60-day special election period if he/she is eligible for TAA benefits. The special election period begins on the first day of the month in which the individual becomes TAA-eligible. The election must be made no later than six months after the date of the TAA-related loss of group health coverage. If coverage is elected during the special election period, it begins on the first day of the special election period. The maximum periods of COBRA are still 18, 29 or 36 months, depending on the qualifying event. Also, the period between the initial loss of group health coverage and the beginning of the special election period will not constitute a break in coverage under HIPAA s 63-day break in coverage rule. Independent election rights Each qualified beneficiary has independent election rights. This means that each qualified beneficiary may decide separately whether he/she wants to elect COBRA continuation. 37

44 Covered under another group health plan or is entitled to Medicare An employer must allow an election of COBRA coverage under its health plan even if the qualified beneficiary is: Covered under another group health plan; or Entitled to (covered by) Medicare on or before the date of the COBRA election. Coverage that must be made available to qualified beneficiaries Qualified beneficiaries must be offered the same coverage they were receiving immediately before the qualifying event. If coverage under the plan is changed or eliminated, qualified beneficiaries must be permitted to elect coverage under any remaining plan available to similarly situated active employees. Required form To elect COBRA continuation coverage, submit an Enrollment/Change Request form. Indicate the date of the loss of coverage, the qualifying event and select the appropriate length of continuation (18, 29 or 36 months). Amount of premium employers may charge The qualified beneficiary pays 100 percent of the premium (total of both the employee and employer contribution for coverage). In addition, the employer may impose a surcharge of up to 2 percent to cover administrative expenses. If a COBRA continuee s coverage is being extended beyond 18 months due to disability, an employer can increase the disabled qualified beneficiary s required payment from 102 percent to 150 percent of the applicable premium from the 19th to the 29th month. 38

45 When premium payments are due The qualified beneficiary has 45 days from the date of electing the continuation coverage to pay all premiums owed for any time prior to the date of COBRA election. A group cannot require the qualified beneficiary to pay for any period of continuation coverage after the date of COBRA election until 45 days after the initial election to continue coverage. The qualified beneficiary has a 30-day grace period for subsequent premium payments. Premium short by insignificant amount If a premium payment is short by an insignificant amount, the employer or plan administrator must choose between one of the following options: Treat the payment as satisfying their payment requirement as payment in full; or Before canceling the qualified beneficiary s coverage, they must send a notice to the qualified beneficiary and provide at least a 30-day grace period from the date of notice to pay the balance of the premium. The premium is short by an insignificant amount if the shortfall is not greater than the lesser of: $50; or 10 percent of the amount to be paid. Adding dependents Qualified beneficiaries have the same rights as similarly situated active employees to add or eliminate coverage for family members. Determining whether COBRA is primary or secondary Generally, the following table details the coordination between Medicare and COBRA. If a person is entitled to Medicare due to... And elects COBRA... Age or disability Medicare is the primary payer; and COBRA is the secondary payer. End Stage Renal Disease (ESRD) COBRA is the primary payer and Medicare is the secondary payer during the 30-month coordination period. Once the 30-month coordination period expires, Medicare is the primary payer and COBRA is the secondary payer. 39

46 Terminating qualified beneficiaries COBRA continuation coverage normally terminates at the end of the maximum coverage period, which is 18, 29 or 36 months, depending on the qualifying event. However, you may terminate a qualified beneficiary s coverage before the maximum coverage period if any of the following occur: The date your employer s group health plan ends for all employees and the employer fails to maintain any group health plan for all employees. The date on which the qualified beneficiary first becomes entitled to Medicare Part A and/or B after the date of COBRA election. Note: Qualified beneficiaries other than the former employee may continue COBRA coverage for a total of 36 months from the initial qualifying event if they are still eligible for coverage (e.g., they are not entitled to Medicare). For qualified beneficiaries who are receiving 29 months of COBRA coverage due to their own or a covered family member s disability, the month that begins more than 30 days after the Social Security Administration s final determination that the disabled qualified beneficiary is no longer disabled. Coverage cannot be terminated before the end of the maximum coverage period that would apply without regard to the disability extension. The first day in which timely payment is not made. The date a qualified beneficiary becomes covered by another employer s plan that: Does not contain any limitation or exclusion for a qualified beneficiary s pre-existing condition; or Contains a pre-existing condition limitation or exclusion, that is eliminated through the qualified beneficiary s total period of creditable coverage. The date a qualified beneficiary voluntarily terminates coverage. The date a qualified beneficiary is terminated for cause. Note: The employer may terminate for cause on the same basis that is used for an active employee. 40

47 When coverage ends before maximum coverage period When a qualified beneficiary s COBRA continuation ends before the maximum coverage period of 18, 29 or 36 months, submit an Enrollment/Change Request form. Indicate the effective date of the termination and the reason for termination. Inform the qualified beneficiary of his/her effective date of termination. Other coverage options for qualified beneficiaries The qualified beneficiary may apply to any insurance carrier that offers Individual coverage in New Jersey. If the qualified beneficiary is interested in obtaining direct payment Horizon BCBSNJ coverage, he/she should call Horizon BCBSNJ s Individual and Senior Market Sales at to obtain an enrollment package and product information. Other Continuation Rights Other continuation rights There are five other types of continuation coverage that may apply to your organization/employees: New Jersey Group Continuation (NJGC); New Jersey Total Disability; Surviving Dependent Continuation; New Jersey Continuation Rights for Over-Age Dependents (NJCROD); or Uniformed Services Employment and Reemployment Rights Act (USERRA). New Jersey Group Continuation (NJGC) Which employers must offer NJGC The following small employers must offer New Jersey Group Continuation (NJGC) to qualified beneficiaries when they lose coverage under the group s health plan due to a qualifying event. Employers that are not subject to COBRA (generally, employers with fewer than 20 employees); and Employers that are subject to COBRA but only in situtaions when a civil union partner and/or his/her child loses coverage due to a qualifying event. 41

48 Who is a qualified beneficiary NJGC must be extended to qualified beneficiaries who are covered as either an employee or dependent under the employer s group health plan on the day before a qualifying event. A qualified beneficiary may be: An employee. A spouse/civil union partner/domestic partner of an employee. A dependent child of an employee. Employers that are subject to COBRA The following table details the qualifying events and qualified beneficiaries for employers that are subject to COBRA (generally, employers with 20 or more employees). If coverage is lost due to one of the following qualifying events... The following qualified beneficiaries... May elect NJGC... Termination of employment of a covered employee, for a reason other than cause; or Reduction in a covered employee s work hours to less than 25 hours per week; Civil union partner Covered dependent child(ren) of the employee s civil union partner For up to a maximum of 18 months. The death of the covered employee; Divorce or legal separation of a covered employee and his/her spouse; Dissolution of civil union, or civil union separation of a covered employee and his/her civil union partner; Termination of domestic partnership of a covered employee and his/her domestic; or Spouse/civil union partner/domestic partner Covered dependent child(ren) For up to a maximum of 36 months. Dependent child(ren) ceases to be an eligible dependent. Covered dependent child(ren) For up to a maximum of 36 months. 42

49 Coordination with disability extension 29 months) The maximum coverage period may be extended from 18 to 29 months if: The qualified beneficiary was determined by the Social Security Administration (SSA) to have been disabled at the time of employment termination or during the first 60 days of NJGC; and The qualified beneficiary provides notification of the SSA s determination to us within 60 days of the date of the determination and before the end of the original 18-month period. The 29-month continuation coverage also applies to the non-disabled family members who are entitled to NJGC. Notice of NJGC election rights Small employers must provide written notice to employees of their right to elect NJGC at the time of the qualifying event, the monthly premium the employee must pay to continue coverage and the times and manners in which such monthly payments must be made. Election period Qualified beneficiaries must make a written election within 30 days of a qualifying event. Qualified beneficiaries who fail to give the employer notice that they elect to continue, or fail to make any premium payment in a timely manner, waive their continuation rights. Impact of Medicare on NJGC An employer must allow an election of coverage under its health plan even if the qualified beneficiary is eligible for Medicare or covered under Medicare on or before the date NJGC is elected. If a qualified beneficiary has elected NJGC and later becomes entitled to benefits under Medicare, his/her NJGC will be terminated. Units of coverage In situations where children are enrolling without their parents, a Parent & Child(ren) unit of coverage is used where the oldest child is enrolled as if he/she is the parent. Dental coverage If an employer chooses to extend NJGC to dental coverage, a qualified beneficiary may elect dental coverage if he/she was covered under the group s dental plan on the day before the qualifying event. 43

50 Required form To continue health coverage (and dental coverage, if applicable), submit an Enrollment/Change Request form. Indicate the length of the continuation (18, 29 or 36 months), the date of the loss of coverage and the date of the qualifying event. Adding dependents If an employee elects NJGC, he/she may enroll his/her newly acquired dependent where birth/adoption or marriage/civil union/domestic partnership occurs after the qualifying event. He/she may not enroll any existing dependents who were not enrolled at the time of the qualifying event. If a dependent elects NJGC, he/she cannot enroll new dependents or existing dependents. Paying premiums Employees must pay the first month s premium to the employer within 30 days of the date they elect continuation. Subsequent premium payments must be paid to the employer by the due date. All premium payments, except the first, will be considered timely if they are made within 31 days of the specified due date. Amount of premium The monthly premium is the total rate that would have been charged for the small employer benefits had the employee stayed insured under the policy as an employee. It includes any amount the employer would have paid. An additional charge of two percent of the total premium may be charged by the employer for the continuation coverage. When the maximum coverage period is 29 months due to disability extension, an additional 50 percent of the total premium rate may be required from the 19th through the 29th month. When continuation ends A covered person s continued health coverage will terminate before the maximum coverage period (which is 18, 29 or 36 months depending on the qualifying event) on the first of the following: The date the qualified beneficiary first becomes covered under Medicare after the date NJGC was elected. Note: NJGC will not be terminated if a qualified beneficiary becomes eligible for Medicare (but is not covered under Medicare) after the date NJGC was elected. The date on which coverage ends for failure to make timely premium payment. The date a covered person first becomes covered under another health benefits plan (as an employee or otherwise), which contains 44

51 no limitation or exclusion with respect to any pre-existing condition of the covered person, or if a pre-existing condition limitation or exclusion is applicable, the date such limitation ends. For qualified beneficiaries who are receiving 29 months of coverage due to their own, or a family member s, disability the later of: 18 months; or The month that begins more than 31 days after the date of the SSA s final determination that the qualified beneficiary is no longer disabled. The date the employer no longer provides any health benefits plan to any employee or other qualified beneficiary. New Jersey Total Disability Employers must offer New Jersey Total Disability All small employers must offer employees who become totally disabled and cannot continue working the opportunity to continue group coverage for themselves and for their dependents. Which employees are eligible? Any employee, whose group coverage would normally end because his/her active employment ends due to disability and is no longer on the payroll, can elect to continue coverage with your group. Coverage for the disabled employee s covered dependents is available, at his/her option. Definition of totally disabled To be considered totally disabled due to illness or injury, the employee must not be able to perform any duty of his/her regular occupation or any occupation for which he/she is or may be suited, by education, training or experience, and must not be employed elsewhere for wage or profit. Requirements The requirements to qualify for New Jersey Total Disability are: Employee was enrolled continuously under his/her small employer group coverage with us for at least three months immediately before his/her group health and/or dental benefits ended. Employee notifies the group administrator in writing that he/she wants to continue coverage on a group basis and makes the first payment of premium within 31 days of the date coverage would normally end. The employee s required payment of any premiums to continue coverage cannot be greater than the group rate. The employer is not obligated to pay any part of the premium. The employee must submit proof of total disability from his/her attending physician. 45

52 Required form To continue coverage, submit an Enrollment/Change Request form. Under the length of continuation, check off Total Disability. Also, indicate the date of the loss of coverage and the date of the qualifying event. Proof of total disability is required. When does coverage end? Coverage under the group ends if: The former employee fails to make timely premium payment. The covered person becomes employed and eligible for benefits under another employer s group health and/or dental plan (insured or uninsured). The small employer s health and/or dental benefits plan ends or is amended to end for the class of employees to which the employee belongs. The dependent is no longer considered an eligible dependent. Surviving Dependent Continuation Employers must offer Surviving Dependent Continuation All small employers must offer continuation coverage to the deceased employee s covered dependent(s). Paying premiums You have the right to ask the surviving dependent(s) to pay up to 100 percent of the premiums. Required form When your employee is deceased, submit an Enrollment/ Change Request form. The effective date of the deceased employee s termination is the day following the death. If the dependent(s) wants the coverage, submit an Enrollment/ Change Request form within 31 days of the employee s death. Indicate that the length of the continuation is 180 days, the date of the loss of coverage and the date of the qualifying event. Other coverage options for surviving dependent(s) In lieu of Surviving Dependent Continuation, a surviving: Spouse and his/her children may elect COBRA or NJGC (depending on group size) for up to a maximum of 36 months; Civil union partner and children of the employee s civil union partner may elect NJGC for up to a maximum of 36 months; and 46

53 Domestic partner and children of the employee s domestic partner may elect a COBRA-like continuation right which mirrors COBRA or NJGC (dependening on group size) for up to a maximum of 36 months. When does coverage end? Subject to the payment of the required premium, coverage may be continued until the earlier of: 180 days following the date of the employee s death; or The date the dependent is no longer an eligible dependent. New Jersey Continuation Rights for Over-Age Dependents (NJCROD) Employers must offer NJCROD Effective May 12, 2006, all small employers who offer dependent coverage must offer New Jersey Continuation Rights for Over-Age Dependents (NJCROD) to certain children of covered employees who lose coverage due to reaching the limiting age specified in the group health plan. NJCROD is sometimes referred to as Chapter 375 continuation coverage. Definition of an Over-Age Dependent An Over-Age Dependent meets all of the following requirements: Is the child of a subscriber and who is younger than age 30; Is not married and is not in a civil union; Has no dependents of his/her own; Is either a resident of New Jersey or enrolled as a full-time student at an accredited public or private school; Is not covered under any other group or individual health benefits plan and is not covered under Medicare; Must have previously aged-out of a parent s group health plan, which is a fully insured plan issued in New Jersey; The child, previously aged-out of the employee s fully insured group health plan issued in New Jersey, could have aged-out of his/her parent s group health plan with a different employer. The parent of the child is covered as an employee under a fully insured group health plan issued in New Jersey and is enrolled in a unit of coverage that covers dependents (unless all children have already aged-out). 47

54 Employer responsibilities Small employers must provide notice to their employees of the opportunity for their dependents to elect NJCROD: On or before the date a dependent would otherwise age-out of his/her parent s plan; On or before the date a dependent continuing under the law loses dependency status (unless due to reaching age 30 or having a dependent of their own); and Before the 30-day period in each year following the year coverage terminated due to the child reaching the limiting age under the group s plan. Small employers must maintain proof of an Over-Age Dependent s eligibility in their files. In addition, they must notify Horizon BCBSNJ immediately when they discover that a child no longer meets the definition of an Over-Age Dependent. Election periods Over-Age Dependents who wish to enroll must elect coverage in writing by completing the Enrollment/Change Request form during one of the following time frames: Dependents who age-out on or after May 12, 2006 may enroll: Within 30 days before or after reaching the limiting age. During a 30-day period beginning on each anniversary of the date the dependent s coverage terminated due to aging-out, if the child meets the definition of an Over-Age Dependent during that period. Dependents covered under NJCROD who lose eligibility on or after May 12, 2006 for reasons other than reaching age 30 may enroll within 30 days after again meeting the dependent definition under the law. (For example, nonstudents who move out of, but return to, New Jersey.) Required form After validating eligibility, you must submit an Enrollment/Change Request form to the address that appears in the upper right hand corner of the form to ensure that we bill the appropriate premium and set up the dependent s enrollment. Coverage type An Over-Age Dependent will always be enrolled in a Single unit of coverage. If an employee has more than one child who elects NJCROD, each Over-Age Dependent will be enrolled separately under a Single unit of coverage. The Over-Age Dependent s continued coverage (health and prescription drug coverage) will be identical to the coverage provided 48

55 to the parent who is covered as an employee. If the parent s plan changes because the small employer changes plans or because the parent changes plans during an open enrollment period, the Over-Age Dependent must also change to the same plan as his/her parent. NJCROD is not available for dental coverage. Amount of premium The premium rate, which includes a 2 percent administrative fee, is determined by applying a specific factor to the non carve-out Single rate of the plan in which the parent is enrolled. The specific factor must be approved by the Department of Banking and Insurance and approval is subject to change. For the current factor, please call your broker, your Horizon BCBSNJ Account Consultant or our customer service number, Billing Horizon BCBSNJ will bill Over-Age Dependents directly and they are required to remit the premium directly to us. Dependents are required to enter an address on the enrollment form even when it is the same as their parent s address. Cost-sharing All cost-sharing requirements and limitations will apply to the Over-Age Dependent separately and will not be combined with the parent s policy. Consequently, covered expenses incurred by the Over-Age Dependent will not contribute to family deductibles and maximum out-of-pocket (MOOP) expenses, nor will family incurred expenses contribute to the Over-Age Dependent s deductibles or MOOPs. Coverage termination An Over-Age Dependent s coverage will end at the earliest date the Over-age Dependent either: Attains age 30; Marries or enters a civil union; Acquires a child; Either: Relocates outside New Jersey and does not enroll as a full-time student at an accredited school; or If not a New Jersey resident, is no longer enrolled as a full-time student at an accredited school; Becomes covered under any other group or individual health benefits plan; or Becomes covered under Medicare. 49

56 The date the Over-Age Dependent s parent: Is no longer covered under the fully insured group health benefits plan as a covered employee or under COBRA; or Discontinues dependent coverage when one or more children have not already aged-out. The date on which the small employer discontinues dependent coverage or discontinues group coverage and does not replace it with another fully insured group health benefits plan issued in New Jersey; or At the end of the 30-day grace period for failure to pay premium by the end of the grace period. Uniformed Services Employment and Re-employment Rights Act (USERRA) USERRA continuation The Uniformed Services Employment and Re-employment Rights Act (USERRA) requires all employers, both public and private, to offer continuation rights to Reservists called to active duty, as well as those who volunteer for it. USERRA protects employees from discrimination or reprisal for military service. It prohibits discrimination in any aspect of employment, re-employment or any benefits of employment on the basis of an individual s participation in the uniformed services. Protected employees Length of USERRA continuation USERRA provides protection to employees who are members of the United States armed forces (Army, Navy, Air Force, Marines and Coast Guard), including the Reserves, the Army and Air National Guards, the commissioned corps of the Public Health Service and any other persons designated by the President in time of war or national emergency. The law covers all forms of active duty, plus inactive training duty and full-time National Guard training duty. It does not matter whether the duty is voluntary or involuntary, how long the person has been an employee, or how long the duty is for. Employees away from their jobs because of military duty may elect to continue employer-sponsored health care for themselves and their dependents for a period ending on the earlier of: 24 months; or The day after the employee fails to return to employment (as described under re-employment rights on page 51). 50

57 Amount of premium The amount of premium charged depends on the length of military duty. If military duty is for: 30 days or less, the employee cannot be charged more than the regular employee contribution (if any). 31 days or longer, the employee can be charged up to 102 percent of the plan cost. COBRA continuation When an employee begins a military leave of absence, a qualifying event based on reduction of hours occurs and the appropriate COBRA notices and election rights must be provided. If the employer is subject to COBRA, the employer must offer health care continuation coverage under both COBRA and USERRA. If employees choose USERRA coverage, they are not entitled to a COBRA election when the USERRA coverage ends. If employees choose COBRA, they do not receive USERRA coverage when COBRA ends. Coordination of benefits For employees on active duty, TRICARE is the individual s primary coverage. However, if the individual seeks care not covered by the military health plan, the coverage under an employer-funded plan would be primary. For the spouse and dependents, military health service coverage is secondary to any other health coverage. Thus, USERRA or COBRA coverage (or regular employer-provided coverage) would be primary. Re-employment rights To be eligible for re-employment rights, an eligible employee must either report back for work or submit an application for re-employment, depending on the length of military service. If the length of military service was: Fewer than 31 days, he/she must report back for work on the first full day after release from service. 31 days or more, he/she must submit an application for re-employment within 14 days after discharge if the length of service was 31 through 180 days or no later than 90 days after discharge if the length of service was more than 180 days. Health benefits upon reinstatement A re-employed individual returning from military service is entitled to have his/her health coverage through their employer reinstated. No new waiting periods or pre-existing conditions limitations may apply. Coverage for service-related medical conditions may be excluded. 51

58 If the employer changed coverage while the employee was absent for military service, at reinstatement, the returning employee is eligible for the coverage he or she would have received had he or she not left employment to enter military service. Notification requirement Employers are required to provide affected individuals with a notice explaining USERRA s employment rights, benefits and obligations. Medicare Entitlement Due to Age Medicare entitlement due to age An employee who is age 65 may be eligible for Medicare, a federal program that provides health insurance. There are two parts to Medicare: Part A (hospital insurance) and a voluntary Part B (medical insurance). Enrollment in both Part A and Part B is automatic for those age 65 and older receiving Social Security or Railroad Retirement benefits. However, those who have not filed for Social Security benefits (for example, those persons age 65 who are still working) must file an application for Medicare benefits. This can be done during the initial enrollment period, which begins on the first day of the third month before the month in which the person turns age 65 and ends seven months later. If the person does not apply three months before turning age 65, Part B coverage will be delayed. There is a premium for Part B coverage, and while a person may decline, there may be consequences. Late enrollment Late enrollments are accepted; however, after the initial enrollment period at age 65, annual enrollments last from January through March, and coverage does not begin until July 1. Persons who enroll late (generally after age 65) in Medicare Part B normally are subject to a late penalty. The monthly Part B premium is increased by 10 percent for each full 12 months that an individual delays enrollment in the program from the initial enrollment period. The individual will have to pay this extra amount as long as they have Part B. TEFRA/DEFRA If a group has at least 20 employees, the group must comply with the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and the Deficit Reduction Act of 1984 (DEFRA), which are sometimes referred to as the Working Aged Provision. 52

59 TEFRA applies when employees who are age 65 or older have group coverage as a result of their own current employment status. DEFRA applies when spouses who are age 65 or older have group coverage as a result of the employee s current employment status. Note: A spouse does not include the employee s civil union partner/domestic partner. Questions to ask to determine the primary payer Determination of whether Medicare or the group health plan is the primary payer for persons eligible for Medicare due to age depends on the answers to the following two questions: 1. Is the group subject to TEFRA/DEFRA? An employer who has at least 20 employees (full-time and/or part-time) for each working day in each of 20 or more calendar weeks in the current or preceding year must comply with TEFRA/DEFRA, even if fewer than 20 employees participate in the employer s health plan. If the employer does not have 20 or more employees in the preceding year, the employer is required to comply with TEFRA/DEFRA beginning with the point in time in which the employer has 20 or more employees on each working day of 20 calendar weeks of the current year, regardless of how many employees are participating in the employer s health plan. 2. Does the Medicare-eligible person have group coverage as a result of his or her own or the spouse s current enrollment status? The individual is considered to have current employment status, if the individual: Is working for the employer as an employee; Is the employer (including a self-employed person); or Is associated with the employer in a business relationship. 53

60 TEFRA/DEFRA Applies If TEFRA/DEFRA applies If TEFRA/DEFRA applies and: (groups with at least 20 employees) Persons have group coverage as a result of their own or their spouse s current employment status, employees and spouses age 65 and older must be given the opportunity to select either of the following as the primary payer: The group health plan; or Medicare. If Medicare is chosen as the primary payer, the individual s enrollment in the group health plan must end except for freestanding dental coverage. Persons do not have group coverage as a result of their own or their spouse s current employment status, Medicare is the primary payer. Note: A spouse does not include the employee s civil union partner/domestic partner. Group coverage as primary When group coverage is selected as the primary payer, it is known as a TEFRA/DEFRA conversion. Selecting the group s regular health plan as primary coverage means that actively working employees and their spouses have the same health care coverage as non-medicare eligible under 65-year-old employees/spouses. While the 65-year-old employee/spouse may have Medicare Part A, enrollment in Part B (medical insurance) is not required. Notification Ninety days before the employee s 65 th birthday, Horizon BCBSNJ sends a conversion letter to the group. Please note the employee s decision TEFRA or Medicare on the bottom half of the letter and return it to us for processing. If the letter is not returned to us, we will send a second conversion letter 30 days before the employee s 65 th birthday. If you do not receive either conversion letter, you must submit the paperwork on the employee/spouse when each becomes age 65. How to select group coverage as primary When an active employee who is age 65 selects group coverage as primary: You must submit an Enrollment/Change Request form. Select the Other box and indicate the date the employee became Medicare eligible and indicate TEFRA under the reason. When an active employee s spouse who is age 65 selects group coverage as primary: 54

61 You must submit an Enrollment/Change Request form. Select the Other box and indicate the date the dependent became Medicare eligible and indicate DEFRA under the reason. You must always notify us of a spouse s decision. You can add the spouse s decision DEFRA or Medicare on the bottom half of the employee s conversion letter. Coverage is automatically changed to TEFRA/DEFRA if no notice is received. If you do not receive the conversion letter, you must submit the paperwork on the spouse when he/she becomes age 65. Note: Horizon HMO and TEFRA/DEFRA reminders: The employee/spouse has the same Horizon HMO requirements and must continue to follow them. Employee/spouse pays the copayment. Medicare coverage as primary For employees/spouses who choose Medicare as the primary payer, TEFRA/DEFRA prohibits you from offering them a group health plan that adds to the benefits provided by Medicare. Employees/spouses may retain freestanding dental coverage. How to select Medicare as primary When an employee who is age 65 or older selects Medicare as the primary payer: The employee s present health care coverage must be discontinued. However, any freestanding dental coverage may be retained. Submit an Enrollment/Change Request form. Select the Employee Withdraw Termination box and indicate the effective date and reason for the termination. The employee may enroll in supplementary coverage Horizon BCBSNJ provides on a direct payment basis through our Horizon BCBSNJ Consumer and Senior Markets by obtaining a Horizon Medigap or a Horizon Medicare Advantage policy by calling COBRA provides the covered dependents a 36-month continuation when an employee becomes entitled to Medicare. If the dependents elect COBRA coverage, submit an Enrollment/Change Request form. Indicate that the dependent(s) is electing COBRA by indicating the length of continuation, the date of the loss of coverage and the date of the qualifying event. If your active employee s spouse becomes 65 and selects Medicare as primary: Submit an Enrollment/Change Request form to change the contract for the employee to Single or Parent and Child(ren). Select the Remove Spouse/Domestic Partner box and indicate the effective date and reason for the termination. The spouse may enroll in supplementary coverage Horizon BCBSNJ provides on a 55

62 direct-payment basis through our Horizon BCBSNJ Consumer and Senior Markets by obtaining a Horizon Medigap or a Horizon Medicare Advantage policy by calling When an employee retires When an employee who is age 65 or older retires, Medicare becomes the primary coverage. He/she cannot have the group health plan as primary. If the employee is not already enrolled in Medicare Part B, he/she can purchase Part B (medical insurance) during the special enrollment period and will not have to pay a late penalty on the Part B premium. The special enrollment period is: Anytime the person is still covered by the group through his/her current or active employment; or During the eight months following the month the employee s employment ends or the group coverage ends (whichever occurs first). If a person is eligible for but not enrolled in Part B, the group plan s payments for Part B services will be reduced by the amount that Medicare Part B would have covered. Therefore, it is important that the person enroll in Medicare Part B. TEFRA/DEFRA Does Not Apply Groups with fewer than Since TEFRA/DEFRA does not apply to groups with fewer than 20 employees 20 employees, Medicare is the primary payer for the employee/spouse who is eligible for Medicare due to age. How to select Medicare as primary for an employee Ninety days before the employee s 65 th birthday, Horizon BCBSNJ sends a conversion letter to the group indicating an employee is turning 65. If the information is incorrect, please make the necessary corrections on the letter and return it to us. If you do not receive the letter or an employee is omitted, please send us an Enrollment/Change Request form indicating that Medicare will become primary for this employee. How to select Medicare Unlike the employee who becomes age 65, we do not notify the group as primary for an when the spouse becomes age 65. employee s spouse When the employee s spouse becomes age 65, you must submit an Enrollment/Change Request form indicating that Medicare is the primary payer. 56

63 Effective date The effective date of change is the first of the month in which the employee/spouse becomes age 65. If the birthday is on the first of any month, the effective date is the first of the previous month. Ineligible employee/ spouse A 65-year-old employee/spouse who is not eligible for Medicare s Part A (hospital insurance), e.g., nonresident alien, may remain on your group with full benefits until eligible for Medicare benefits. To enable the employee/spouse to remain on group coverage, you must send us a copy of the statement from the Social Security Administration (SSA) or a letter from the SSA that explains the lack of eligibility. Coordination of Benefits The group health plan coordinates with Medicare on the following: What Medicare paid when the person is enrolled in both Medicare Part A and Part B; or What Medicare would have paid when the person is eligible for Medicare Part B, but is not enrolled in Medicare Part B. When an employee/spouse is Medicare-eligible and is not enrolled in Medicare Part B, he/she is responsible for the portion of claims that Medicare would have paid had the person been enrolled in Medicare Part B. Example A Medicare-eligible person has group coverage and is not enrolled in Medicare Part A or Part B: For Medicare Part A services, Horizon BCBSNJ is the primary payer; and For Medicare Part B services, Horizon BCBSNJ will pay the lesser of: The amount we would normally pay; and The balance due (Medicare s allowance minus the amount Medicare would have paid) as if the person had Medicare Part B. 57

64 Medicare Entitlement Due to Disability Medicare-eligible due to disability (other than ESRD) An individual under age 65 who is disabled for reasons other than End Stage Renal Disease (ESRD) is eligible for Medicare after he/she has been receiving Social Security payments or Railroad Retirement benefits for at least 24 months on the basis of disability. Determining the primary payer Medicare is the primary payer when: The employer employs fewer than 100 employees; or The employer employs at least 100 employees and the Medicare-eligible person is not enrolled as a result of his/her own or a family member s current employment status. Notes: When determining employer size, make sure that you count all employees, including union employees. A family member is the employee s spouse or child. A family member does not include the employee s civil union partner/domestic partner or the child of the employee s civil union partner/domestic partner. Medicare-eligible due to ESRD Individuals under age 65 who have ESRD are eligible for Medicare when they have permanent kidney failure that is treated with renal dialysis or a kidney transplant. Determining the primary payer Employer group health plans of all sizes must be the primary payer for a covered person (employee, spouse, civil union partner, domestic partner or child) who becomes eligible for or entitled to Medicare because of ESRD for a specified time, referred to as the coordination period. Coordination period The coordination period (during which Medicare is not the primary payer) applicable to employer health plans for the ESRD population is permanently extended to 30 months for any individual whose coordination period began on or after March 1, ESRD Medicare entitlement ESRD Medicare entitlement usually begins with the fourth month of renal dialysis (after an individual has served the three-month waiting period). 58

65 Dual Medicare Entitlement Dual Medicare eligibility When persons who: Are eligible for Medicare due to either age or disability (other than ESRD) and Have their group health plan as the primary payer become eligible for Medicare based on ESRD, The group health plan continues to be the primary payer for the first 30 months of dual entitlement. After the 30-month period, Medicare becomes the primary payer (as long as Medicare s dual entitlement still exists). When persons who: Are eligible for Medicare due to either age or disability (other than ESRD) and Have their group health plan as the secondary payer become eligible for Medicare based on ESRD, The Group health plan becomes the secondary payer (as long as Medicare dual entitlement still exists). When persons are eligible for Medicare due to ESRD, the group health plan is the primary payer for 30 months after the date of Medicare eligibility, even if the person becomes eligible for Medicare due to age or disability during this time. Dual entitlement chart Please use this chart to determine dual Medicare entitlement: Reason for Primary payer before Primary payer after Medicare eligibility dual entitlement dual entitlement First age or disability Group Group for 30 months Second ESRD First age or disability Medicare Medicare Second ESRD First ESRD Group for 30 months Group continues to Second age be primary for the or disability remainder of the 30 months; then, Medicare becomes primary 59

66 Billing Billing The bill for Horizon BCBSNJ coverage is computer-generated and consists of two main sections: The Statement and Summary of Account page; and The Detail Bill. Statement and Summary of Account The top half of the statement includes the following information: Statement Date, Account Number, Invoice Number, Past Due Amount, Current Monthly Charges, Pay This Amount, Due Date, Amount Enclosed and Address Block. Changes are reflected on your current bill as long as we receive and process them before the Statement Date noted in the upper right-hand corner of the statement. For your records, retain the bottom portion that includes: Previous Balance amount you owed or overpaid as of your last statement. Payments you made since your last statement. Current Billings for this period. Net Adjustments other amounts that may be added to or subtracted from the bill, such as adding a new employee or terminating an employee s coverage. Pay This Amount what you owe as of the Statement Date. A Summary of Account shows all previous balances, payments and miscellaneous noncash debits or credits. Detail bill The Detail Bill provides enrollment and premium information. The top of each Detail Bill page includes the following information: Date Prepared, Group Number, Rating Year, Billing Period Covered, Group Name and Address and Account Number. The column headings on a Detail Bill are: Social Security Number, Employee Number, Identification Number, Employee Name, Gender, Rate, Age, Contract Type, Products with Premium and Total of Premiums. The Detail Bill is sorted and sub-totaled, based upon the following employee types: COBRA and New Jersey Group Continuation, TEFRA, and regular subscribers under and over age 65 with Horizon BCBSNJ as primary. Once all subscribers are printed, the Detail Bill is totaled. A Summary of Contract Counts follows, based upon contract type and subscriber type. 60

67 Adjustments Adjustments are printed and totaled before the current enrollment details. All credits have the letters CR following the number. Adjustments on individual subscribers are listed. Be sure to check the effective dates. Call us immediately at BLUE (2583) if you think that an effective date is incorrect. Billing address Detach the top of the statement and mail it with your check, made out to Horizon Blue Cross Blue Shield of New Jersey. Include your account number and group number on your check and on the envelope. Use the envelope provided and mail to: Horizon Blue Cross Blue Shield of New Jersey PO Box 1738 Newark, NJ Payments All payments are due on or before the Due Date of the Statement. Use the Total Amount Due figure on the Statement for payment. This amount covers all credit and debit adjustments and current premium charges. When making a payment, credits should not be taken nor debits added until they appear on your Statement. The only deduction from the Total Amount Due on the Statement should be for payment in transit that is not yet reflected. Do not record additions or deletions for your group on the bill copy. Horizon BCBSNJ has an automated check deposit system that speeds up the crediting of your check to your account. Copies of your invoices do not reach us until some time after your check has cleared; therefore, any terminations and/or changes in types of contracts you make directly on the bill cannot be processed timely. We cannot respond quickly to your correspondence if you include it with your premium payment. If there is a problem concerning a balance, remit payment before resolving the problem so that you do not jeopardize your account s status. Timely paperwork ensures correct billing Follow the sequence below to help ensure correct billing: Submit the Enrollment/Change Request form for an employee who is no longer eligible for coverage during the month in which the termination takes place. We credit the amount of the premium charges for the employee that were included in the premiums paid for up to two months immediately before the date written notification is received. However, if a claims check reveals that claims were incurred and paid after coverage should have ended, the amount of premium credit is calculated from the day after the most recent incurred date of any paid claims. Premium credits are not issued beyond two months from the date written notification is received. 61

68 Review the adjustments on your Statement, which reflect employee additions, deletions and changes that occur during a billing cycle since the bill is also an enrollment record for your group. Payments and payment transfers are also noted. Check the effective dates given. Call us at if you believe that an effective date is incorrect or if there is a discrepancy. Check that your Detail Bill lists all employees with the correct gender and coverage type and bills the proper amount and that a terminated employee no longer appears. Pay as billed. The only deduction should be for a payment in transit, not yet reflected on the Statement. Do not take a credit on the newly terminated employee. If you take this credit in advance of the processing of the required paperwork, you could jeopardize your account s status, leading to suspension and/or termination. Exception Retroactive dependent deletions (due to death) may be made. Reminder All payments are due on or before the Due Date of the Statement. 62

69 Useful Terminology Useful terms The following explanations may help to better define some of the terminology used in this manual. Copayment A copayment, or copay, is a type of cost sharing whereby insured or covered persons pay specified dollar amount per visit, per day, per unit of service (e.g., $10 per visit, $100 per inpatient hospital day) and the insurer pays the rest of the cost. The copayment is incurred at the time of service. The amount paid does not vary with the cost of the service. Deductible A deductible is the specified dollar amount the insured person must pay before payments for covered services begin. For example, a Horizon BCBSNJ plan might require the insured to pay the first $250 of covered expenses during a calendar year before Horizon BCBSNJ will begin payment. Coinsurance An arrangement under which the insured person pays a fixed percentage of the allowance for the medical care after the deductible has been met. Specific ratios vary depending on the plan. For example, in an 80/20 plan, Horizon BCBSNJ pays 80 percent of the allowable charge, and the insured individual is responsible for 20 percent. Understanding copayments and coinsurance With Horizon HMO 100/80 and Horizon HMO 100/50, members are responsible for either a copayment when receiving certain services in a physician s office or a coinsurance payment when receiving certain out-of-office services. That means the payment required depends on whether services are rendered in the physician s office or an outside facility. Maximum Out of Pocket (MOOP) To limit the amount of money a member has to pay out of their pocket for medical care, a maximum dollar amount was established. This maximum is referred to as Maximum Out of Pocket. Once the Maximum Out of Pocket is met in a calendar year, no additional coinsurance is required in that calendar year. Copayments do not apply toward out-of-pocket maximums. 63

70 Managed Care Managed care Horizon BCBSNJ offers several managed care products from which to choose: Horizon HMO; Horizon POS; and Horizon Direct Access. What is hassle free? Hassle free eases the managed care process for improved customer satisfaction and access. Removing steps from our processes has allowed Horizon BCBSNJ and our physicians and hospitals to make caring for our members easier. Horizon BCBSNJ s hassle-free initiatives include: Direct access to Ob/Gyns for routine gynecological care; Revision of the referral process and the referral form; Revision of the list of services that require authorization; An expanded physician network; and A Web site, with online physician information and an extensive selection of Member Online Services. Direct access to Ob/Gyn care Direct access to an Ob/Gyn allows a female managed care member to visit her participating Ob/Gyn for any related gynecological illness/ condition/preventive care and annual exam without obtaining a referral from her Primary Care Physician (PCP). Visits for nongynecological conditions, such as cold or flu, must still be directed to her PCP. Certain services still require certification: infertility services, inpatient admissions and in-office surgical procedures. Referrals We have eased the referral process to allow referrals to be valid for up to 180 days. The maximum number of visits allowed on the expanded referral is 12 visits. The PCP still needs to issue the referral before the date the first service was rendered. The referral is valid only for the number of visits and types of services specified by the PCP on the referral form. In addition, an extended referral allows a specialist to treat members for certain conditions without needing additional referrals from the members PCP. This benefit applies to certain chronic conditions, and the PCP must get approval from an Horizon BCBSNJ case manager before issuing an extended referral. 64

71 Removal of precertification requirements Precertification is no longer required for same-day surgeries (except for plastic/cosmetic procedures, in-office Ob/Gyn surgical procedures and infertility services). Your plan may use CareCore National, LLC as the network manager for nonemergency outpatient radiology/diagnostic imaging services, including determining whether a service is medically necessary. Questions about whether a service needs prior authorization should be directed to the Horizon BCBSNJ Member Services area. Removal of mandatory second opinion requirements The Mandatory Second Surgical Opinion requirement has been replaced with a discretionary second opinion or a voluntary elective second opinion. Horizon BCBSNJ has the right to require the member to obtain a second opinion before certifying a surgery/procedure that is called a discretionary second opinion. If necessary, a tie breaker opinion may be rendered. If the member does not receive a discretionary second opinion when requested, the claim pays at the non-network level of benefits. The claim is subject to any penalties because of its noncompliance with the contract. A voluntary, elective second opinion occurs when the member requests a second opinion any time a surgery or admission is recommended. The member s PCP must issue a referral to a participating physician at the member s request. For Horizon POS, if a member self-refers to a nonparticipating physician, the service is reimbursed at the non-network level of benefits. For confirmation or questions on which type of second opinion is needed, the member or physician should call the telephone number listed on the member s ID card. Horizon HMO Horizon HMO Horizon HMO (health maintenance organization) is a managed care plan that gives members the security of low out-of-pocket expenses, comprehensive coverage and virtually no claim forms to fill out. To access benefits, Horizon HMO members choose a Primary Care Physician (PCP) from our vast Horizon Managed Care Network of participating physicians. Horizon HMO Access and Horizon HMO Access Plus Horizon HMO Access and Horizon HMO Access Plus provide direct access to network specialists without a referral. Employees select a (PCP) from our Horizon Managed Care Network and enjoy the freedom to coordinate their needs without a referral. Members are not required to select a PCP. However, a lower copayment is only available for a pre-selected PCP. 65

72 Selecting a PCP PCPs are family practitioners, pediatricians, internists or general practitioners. While the PCP provides most care, he/she refers members to participating specialists and hospitals when they need more specialized care. Referrals The PCP gives referrals when specialty care is needed. Referrals are valid for 180 days and the PCP can refer as many as 12 visits on a single referral. An extended referral may be given for certain conditions. Female members may visit a participating Ob/Gyn without a referral from their PCP for services within the scope of obstetrics and gynecology. Prior authorization is required for infertility treatment and in-office surgeries. Horizon HMO Coinsurance Options Horizon HMO coinsurance options In addition to the traditional Horizon HMO product, Horizon BCBSNJ also offers HMO coinsurance options: Horizon HMO 100/80; and Horizon HMO 100/50. These are the first HMOs of their kind in New Jersey; unlike most HMOs, members in these plans pay either a copayment when receiving services rendered in their physician s office or a deductible and coinsurance payment when receiving certain out-of-office services. Selecting a PCP To access benefits, Horizon HMO members choose a Primary Care Physician (PCP) from our vast Horizon Managed Care Network of participating physicians. PCPs are family practitioners, pediatricians, internists or general practitioners. While the PCP provides most care, he/she refers members to participating specialists and hospitals when they need more specialized care. Referrals The PCP gives referrals when specialty care is needed. Referrals are valid for 180 days and the PCP can refer as many as 12 visits on a single referral. An extended referral may be given for certain conditions. Female members may visit a participating Ob/Gyn without a referral from their PCP for services within the scope of obstetrics and gynecology. Prior authorization is required for infertility treatment and in-office surgeries. 66

73 Horizon POS Horizon POS Horizon POS (Point of Service) gives members the freedom of using our network of physicians and hospitals or going outside the network to physicians or hospitals if members choose. Selecting a PCP To access benefits, Horizon POS members choose a Primary Care Physician (PCP) from our vast managed care network of participating physicians. PCPs are family practitioners, pediatricians, internists or general practitioners. While the PCP provides most care, he/she refers members to participating specialists and hospitals when they need more specialized care. Network benefits Like Horizon HMO, the chosen PCP coordinates network care and the member receives the highest level of coverage available under their benefits contract. Members who receive PCP-referred care within the Horizon Managed Care Network have less paperwork and less cost sharing. Staying in network also means the member s PCP obtains the necessary certifications and approvals. Referrals The PCP gives referrals when specialty care is needed. Referrals are valid for 180 days and the PCP can refer as many as 12 visits on a single referral. An extended referral may be given for certain conditions. Female members may visit a participating Ob/Gyn without a referral from their PCP for services within the scope of obstetrics and gynecology. Prior authorization is required for infertility treatment and in-office surgeries. Non-network benefits Non-network benefits are services that members decide to receive from any physician without a referral from their PCP. This includes care from a participating physician without prior authorization and services at a nonparticipating lab or other facility. Members who go out of network have more paperwork and more cost sharing, such as deductibles and coinsurance. Members who go out of network are also responsible for obtaining the required pre-admission review before going into the hospital and utilization review for specified procedures and other services or supplies, such as infusion therapy. 67

74 Horizon Direct Access Horizon Direct Access Horizon Direct Access is a managed care plan that combines network benefits with the freedom to seek services out of network, too. Horizon Direct Access is very similar to the Horizon POS product. Services that require prior authorization under Horizon POS also require prior authorization under Horizon Direct Access. The differences are that the members do not have to select a Primary Care Physician (PCP) for network benefits and do not need a referral for specialty care from a physician within the network provided for Horizon Direct Access members. Selecting a PCP Horizon Direct Access members do not have to select a PCP to access network benefits; however, we strongly encourage them to do so. Network benefits Horizon Direct Access allows members to seek care from the physicians in the Horizon Managed Care Network without obtaining a referral from a PCP. Non-network benefits With Horizon Direct Access, members can also receive care out of network. Non-network benefits are services rendered in New Jersey by a physician who does not participate with the Horizon Managed Care Network. Horizon MyWay HSA and Horizon HSA Compatible Horizon MyWay HSA pairs a high-deductible health plan with a Health Savings Account (HSA) to cover eligible medical expenses. Horizon HSA-compatible plans only contain the high-deductible health plan. Under either option, once the deductible is met, members health care expenses are paid according to the terms of your health plan. Unused HSA funds roll over from year to year and are portable. That means members can access your HSA funds regardless of employer, age, marital status changes, future medical coverage, or state of residence. What s more, HSA funds are held in a money market fund and accrue tax-free interest. Horizon PPO Horizon PPO Horizon PPO is a Preferred Provider Organization of more than 48,000 physicians throughout New Jersey. 68

75 Network benefits Subscribers who use a Horizon PPO physician receive the highest level of benefits from their health care plan and have automatic claims filing through these physicians. Any Horizon PPO physician can admit patients to a hospital in our Horizon Hospital Network for additional savings. Using acute care facilities in our Horizon Hospital Network guarantees the highest level of benefits. Non-network benefits Horizon PPO also offers subscribers a non-network option with the same reliable care as in-network coverage. Patients may select any physician or hospital, but they pay higher out-of-pocket expenses, submit their own claims and wait for reimbursement. Out-of-state benefits When a subscriber needs to access care while out of state, the subscriber should choose a physician who participates in that state s PPO network. The participating physician accepts the local Plan s allowance as payment in full for all eligible services and cannot balance bill above the deductible and coinsurance, except for ineligible services. An out-of-state hospital that participates with the local Plan s PPO is considered in network with the BlueCard PPO program. Subscribers should be sure to provide the alpha-prefix indicated on their ID card to the out-of-state physician or hospital. Horizon High Deductible PPO Plan D Horizon High Deductible PPO Plan D is a PPO plan with high-deductible options: $1,500 Single policy/$3,000 Family Unit policy; or $2,250 Single policy/$4,500 Family Unit policy. Horizon MSA Companion Plan Horizon MSA Companion Plan is a high-deductible PPO plan with inflation-adjusted deductible options. Persons enrolled in a medical savings account (MSA) who wish to maintain their tax-favored status must have a high-deductible plan with an inflation-adjusted deductible. Because the deductible amounts are inflation-adjusted, they have the potential to change each year. After December 31, 2007, employers cannot establish an MSA; however, existing account holders can continue to make contributions. The money deposited in an MSA account is considered pre-tax dollars and is not subject to taxation. The money in an MSA can be used to pay for eligible expenses without having to pay tax on the withdrawn amount. Money withdrawn for other reasons is subject to taxation and a penalty. 69

76 Horizon MyWay HSA and Horizon HSA Compatible Horizon MyWay HSA pairs a high-deductible health plan with a Health Savings Account (HSA) to cover eligible medical expenses. Horizon HSA-compatible plans only contain the high-deductible health plan. Under either option, once the deductible is met, your health care expenses are paid according to the terms of your health plan. Unused HSA funds roll over from year to year and are portable. That means members can access your HSA funds regardless of employer, age, marital status changes, future medical coverage, or state of residence. HSA funds are held in a money market fund and accrue tax-free interest. BlueCard PPO Program What is BlueCard PPO? The BlueCard PPO program processes claims for Horizon BCBSNJ subscribers and their dependents who receive health services out of their plan s service area (out of state). It uses physician and plan arrangements that capture local discounts from the participating physicians and hospitals in the area where employees receive services. It also delivers consistent benefits and excellent services to employees. How does BlueCard PPO work? All subscribers receive consistent benefit administration due to the Home Plan (the Blue Cross and/or Blue Shield Plan in which the employee is enrolled), processing all claims for themselves and eligible dependents. Physicians and hospitals receive consistent reimbursement due from the Host Plan (the local Blue Cross and/or Blue Shield Plan with whom they contract) according to their established payment methodologies. Here is how the BlueCard PPO program works: Member travels/lives out of state. Member becomes ill or requires medical services. Member receives services from a PPO physician and/or hospital (nonparticipating physicians and hospitals are eligible but we do not receive discounts), whether inpatient, outpatient or professional. Member presents ID card to physician and/or hospital. Physician and/or hospital files claim with local (Host) Plan. Local Plan prices claim as if it were one of their members. Horizon BCBSNJ processes claim according to member s benefits and liabilities and approves amount for payment. Local Plan pays physician and/or hospital. Horizon BCBSNJ transfers money to local Plan and releases the Explanation of Benefits to the member. 70

77 Keeping costs down The BlueCard PPO program can keep costs down when your employees need health care away from home. When they obtain health care services outside our service area through the BlueCard PPO program, the amount of claim they pay for covered services is, in most instances, calculated on either: The amount the physician or hospital charges for covered services; or The negotiated price that the local Blue Cross and/or Blue Shield Plan passes on to Horizon BCBSNJ, whichever is lower. Exceptions A few Blue Cross and/or Blue Shield Plans are governed by state laws that do not allow subscriber liability calculations based on the lesser of price or billed charge. When subscribers receive covered health care services in these states, subscriber liability for covered services is calculated using their statutory methods. Negotiated prices In many cases, the local Blue Cross and/or Blue Shield Plan obtains a discount from the physician s billed charges that is passed on to us. Many plans can determine only an estimated price at the time a claim is paid. In addition, some Plans physician contracts do not give a comparable discount for all claims. These Plans elect to smooth out the effect of their contracts by applying an average discount to BlueCard PPO program claims. Plans using these methods may prospectively adjust their estimated or average prices to correct for over or underestimation of past prices. Example A subscriber receives medical services for an illness he/she has while vacationing in another state. Assume the agreement with us requires the subscriber to pay 20 percent of the physician s allowable charge. This physician has negotiated a price of $80 with the local Blue Cross and/or Blue Shield Plan, although the standard charge for this service is $100. The physician bills the local Plan its standard charge of $100. The local Plan passes that bill back to us and indicates we should pay the negotiated price of $80. We then base the amount of the claim the subscriber pays for this covered service (20 percent in this example) on that $80 negotiated price, not the standard $100 charge. The subscriber pays $16 (20 percent of $80), not $20 (20 percent of $100). BlueCard Worldwide What is BlueCard Worldwide? The BlueCard Worldwide program consists of the physician and hospital networks of the international licensees of the Blue Cross and Blue Shield Association (BCBSA) and a supplemental hospital network 71

78 operated by the BCBSA to fill in the gaps in places where there are not licensees. The BlueCard Worldwide program offers accounts and subscribers the following services: Cashless physician and hospital care in countries outside the United States. Members are responsible for out-of-pocket expenses (noncovered services, copayments, deductible and coinsurance). Automated system for processing international claims. Ability to obtain discounts from certain hospitals. Who can use BlueCard Worldwide? BlueCard Worldwide is available to all members whose claims are eligible for processing through the BlueCard program. If your contract requires pre-admission review, members should call Horizon BCBSNJ at BLUE (2583). Care and services available The BlueCard Worldwide program gives members access to inpatient, outpatient and professional services; medical assessments by medical professionals; translators; and arrangement for hospitalization stays and appointments. How extensive is BlueCard Worldwide? Today, the program includes physician and hospital networks in more than 200 countries worldwide. For a list of participating physicians, hospitals and other health care professionals, members can call the BlueCard Access line at BLUE (2583), 24 hours a day, seven days a week. There is also a current list of participating hospitals posted on the Blue Cross and Blue Shield Association s Web site located at < How are locations chosen? Hospital locations are selected based upon examinations of American travel patterns and international claims processed for Blue Cross and/or Blue Shield members and interviews with Blue Cross and/or Blue Shield Plans. Using a physician not in the BlueCard Worldwide program Out-of-country claims for physicians, outpatient services and hospitals not in our worldwide network require members to pay the bills up front and submit the claims to Horizon BCBSNJ for reimbursement. 72

79 Indemnity Plans Indemnity plans Horizon BCBSNJ offers five indemnity plans: Horizon Basic Health Plan A; Horizon Comprehensive Health Plan B; Horizon Comprehensive Health Plan C; Horizon Comprehensive Health Plan D; and Horizon Comprehensive Health Plan E. Payments in our indemnity plans are made according to Horizon BCBSNJ allowance. Deductibles and coinsurance amounts vary with each plan and subscribers are responsible for these deductible and coinsurance amounts. Horizon Basic Health Plan A Horizon Basic Health Plan A provides limited coverage for physician visits and hospital stays (30 hospital days), but at a lower cost than most plans. When subscribers use participating physicians and other health care professionals and network hospitals, they have lower out-of-pocket costs. The plan covers preventive care benefits and limited services. Emergency room care is not covered unless the subscriber is admitted as an inpatient. The lifetime maximum is $1,000,000 per person. Mental or nervous conditions and substance-abuse care and the prescription card program are not available. Horizon Comprehensive Health Plans B, C, D and E Horizon Comprehensive Health Plans B, C, D and E give subscribers maximum comprehensive coverage that includes hospital, medical-surgical and major medical benefits. When subscribers use participating physicians and other health care professionals and network hospitals, they have lower out-of-pocket costs. The plans cover preventive care benefits. Horizon Comprehensive Health Plan B has an unlimited maximum. Horizon Comprehensive Health Plans C, D and E have unlimited lifetime maximums. 73

80 Utilization Review What is utilization review? Our utilization review program has several components: Pre-facility review; Emergency admission notification; Continued stay review; Medical appropriateness review; and Individual case management program. Pre-facility review Horizon BCBSNJ must review all nonemergency facility admissions before they occur. The covered person and/or his/her physician must notify Horizon BCBSNJ and request a pre-facility review by telephone or facsimile. When Horizon BCBSNJ receives the notice and request, we evaluate the: Medical necessity and appropriateness of the facility admission; Anticipated length of stay; and Appropriateness of health care alternatives, like home health care or other outpatient care. If Horizon BCBSNJ authorizes a facility admission, the authorization is valid for the: Specified facility; Named attending physician; Specified admission date; Authorized length of stay; and Diagnosis and treatment plan. Horizon BCBSNJ notifies the covered person and his/her physician or facility of the outcome of our review by phone, which is confirmed in writing. Penalty Horizon BCBSNJ reduces what it pays for covered charges in a non-network facility by 50 percent if: A covered person does not request a pre-facility review; or The covered person does not request a pre-facility review five business days or as soon as reasonably possible before the facility admission is scheduled to occur; or Horizon BCBSNJ authorization becomes invalid and the covered person does not obtain a new one. 74

81 If the facility is not in our network and the covered person did not contact us for a pre-admission review, Horizon BCBSNJ denies the claim and does a retrospective review of readmission for medical necessity. Horizon BCBSNJ applies a 50 percent penalty for noncompliance. If Horizon BCBSNJ determines an admission or portion of an admission is not medically necessary and appropriate, it is a noncovered charge. There are no benefits for noncovered charges. Emergency admission notification Horizon BCBSNJ must be notified of all emergency admissions by telephone. The covered person or the physician must notify us within 48 hours of the admission or as soon as reasonably possible. The call must be placed at the point of admission for mental or nervous conditions and substance and alcohol abuse care. Continued stay review Horizon BCBSNJ has the right to initiate a continued stay review of any facility admission and may contact the covered person s physician or facility. The covered person or his/her physician and facility must initiate a continued stay review whenever it is medically necessary and appropriate to change the authorized length of a facility stay. This must be done before the end of the previously authorized length of stay. Penalty As a penalty for noncompliance, Horizon BCBSNJ reduces what it pays for covered facility charges by 50 percent if: Horizon BCBSNJ is not notified of the admission at the time and in the manner described above; The covered person and his/her physician or facility does not request a continued stay review when necessary; or The covered person does not receive authorization for such continued stay. Medical appropriateness review Horizon BCBSNJ requires a covered person to get preapproval for the specified procedures and other services or supplies listed below. Horizon BCBSNJ must receive the request at least five business days before the procedure or other service or supply is scheduled or as soon as reasonably possible. When Horizon BCBSNJ receives the request, we evaluate the medical necessity and appropriateness of the procedure or other service or supply, and we either: Approve the proposed procedure or other service or supply; or Require a second opinion regarding the need for the procedure or other service or supply. 75

82 Horizon BCBSNJ notifies the covered person and his/her physician or admitting facility by telephone of the outcome of the review and confirms the outcome in writing. If any procedure, service and/or supply is not considered medically necessary and appropriate, the procedure is considered a noncovered charge. There are no benefits for noncovered charges. Procedures requiring preapproval Procedures requiring preapproval are, but not limited to: Transplants;* Human Organ/Bone Marrow Transplants;* Any surgeries or procedures deemed cosmetic or reconstructive in nature except to the extent reconstructive surgery covered under this policy must be covered by law; and Cardiac, pulmonary and vestibular rehabilitation. * All candidates for transplants should contact Horizon BCBSNJ at the time they become candidates or as soon as reasonably possible thereafter. Services or supplies requiring preapproval Services or supplies requiring preapproval are, but not limited to: Home health care; Hospice care not provided as part of a facility admission; Infusion therapy; Durable medical equipment (over $500); Nutritional counseling; Fertility services; Private duty nursing; and Prosthetic devices. Penalties As a penalty for noncompliance, Horizon BCBSNJ reduces what it pays for covered professional charges for these procedures by 50 percent if: The covered person does not request preapproval for a specified procedure; Horizon BCBSNJ is not given at least 24 hours to review and evaluate the proposed procedure; or Horizon BCBSNJ requires additional opinions and the covered person does not get these opinions before the procedure is done. 76

83 As a penalty for noncompliance, Horizon BCBSNJ applies a 100 percent noncompliance penalty for these services and supplies if no authorization is obtained. Horizon BCBSNJ pays no benefits for these services and supplies if: The covered person does not request an authorization before receiving the service or supply; Horizon BCBSNJ is not given at least 24 hours to review and evaluate the proposed service or supply; Horizon BCBSNJ requires an additional opinion and the covered person does not get the additional opinion before obtaining the service or supply. Individual case management Another feature of your policy is an individual Case Management program for long-term or severely ill patients. Under the individual Case Management program, coordinators consult with the patient and the physician to select ways of providing care while maximizing benefits. Participation is voluntary, and the patient, physician and Horizon BCBSNJ must all agree to the alternative treatment plan. Claim Filing Claim filing By using participating physicians and other health care professionals, employees/dependents do not need to file claims. Participating physicians and other health care professionals should submit claims on their behalf. Guidelines Whenever employees/dependents are required to file a claim for eligible services, please have them follow the guidelines below. Missing or incomplete information delays processing. Complete all required information including the address, telephone number and the ID number with the alpha-prefix and the group number, located on the employee s ID card. Include date, type and place of service, date of injury or accident if applicable, diagnosis, treatment and itemized charges. Identify the patient s name and birth date. Please use the full legal name and be sure to sign the claim form. Attach original bills to the claim form. Make copies of the claim form and all attachments for the employee s personal files at home. Submit claim forms immediately or within one year of the date of service. 77

84 Durable medical equipment (not eligible under Horizon Basic Health Plan A) requires claim filing and is subject to an employee s deductible and coinsurance. Dependent coverage through a noncustodial parent If a child has coverage through a noncustodial parent, the health insurer or carrier must: Provide information to the custodial parent as may be necessary for the child to obtain benefits/health care services through the child s noncustodial parent s coverage. Provide the custodial parent or the health care professional with the authorization of the custodial parent to submit claims for covered services without the approval of the noncustodial parent. Make payments on claims submitted directly to the custodial parent, the health care professional or the Division of Medical Assistance Health Services in the Department of Human Services, which administers the state Medicaid program, as appropriate. Reminder For the convenience of your employees, please maintain a supply of the Annual Family Profile and Claim Notice form. This form is required whenever an employee submits his/her first claim of the calendar year. A completed Annual Family Profile and Claim Notice form helps us update our enrollment records with the latest information on coordination of benefits and a list of dependents. Horizon POS claims Non-network benefits allow employees/dependents to self-refer for care. They are required to meet a deductible and pay a certain amount of coinsurance as well as any ineligible charges. If employees/dependents self-refer to participating physicians within the Horizon PPO Network, they submit the claims to us and wait for the summary before billing employees/dependents. We send the participating physicians and our payment along with a summary detailing employees /dependents responsibilities (deductible and coinsurance). Copayments do not apply in the non-network setting. Since participating physicians accept our allowance as payment in full for all eligible services, they cannot balance bill above the deductible and coinsurance, except for ineligible services. Authorization for certain procedures is still required. 78

85 Horizon Direct Access and BlueCard PPO claims If the chosen physician or health care professional is participating in the state s Preferred Provider Organization (PPO) network, he/she accepts the local Plan s allowance as payment in full for all eligible services and cannot balance bill above the deductible and coinsurance, except for ineligible services. An out-of-state hospital that participates with the local Plan s PPO is now considered in network with BlueCard PPO. Horizon PPO claims When employees see physicians or other health care professionals who are part of our Horizon PPO Network, they are no longer required to pay for medical expenses at the time they receive medical attention. Employees/dependents no longer have to pay their bills at the time of their visits nor do they have to submit any claim forms. Physicians submit paperwork directly to Horizon BCBSNJ, and we reimburse them according to our applicable allowance. Then, we send a statement to the employees and physicians detailing which services were paid. The physician bills the employee or dependent for any amounts for which they are responsible later. Nonparticipating physician claims Generally, employees/dependents are expected to pay nonparticipating physicians and other health care professionals when services are rendered. Whenever possible, charges and method of payment should be discussed in advance with those physicians. Physicians should complete their section of the claim form or employees/dependents can attach itemized bills from physicians. Hospitals Ordinarily, hospitals submit claims to Horizon BCBSNJ and we pay them directly. If the hospital does not submit the claim, the employee/ dependent must do so. Employees/dependents can obtain a UB92 or UB04 itemized bill from the hospital and include it with the claim form. For Horizon HMO, Horizon POS (in network), Horizon Direct Access (in network, where applicable) and Horizon PPO (in network), employees/dependents pay their copayments at the time of service. Explanation of Benefits (EOB) We send a summary of benefits to the employees an Explanation of Benefits (EOB) explaining the disposition of the claim. If employees are due payment, a check is included with the EOB. If employees have not satisfied the contract s deductible provisions to the date of the current claims, no payments are due, and we send the EOB without checks. Employees should keep all EOB summary sheets for income tax purposes. 79

86 Health Claim Forms and Mailing Addresses Horizon HMO Please use the Supplemental Benefits Claim form (#1895). Mail completed claim forms to: Horizon Blue Cross Blue Shield of New Jersey PO Box 820 Newark, NJ Horizon POS Please use the Horizon POS Health Insurance Claim form (#0834). Mail completed claim forms to: Horizon Blue Cross Blue Shield of New Jersey PO Box 820 Newark, NJ Horizon Direct Access Please use the Health Insurance Claim form (#7190). Mail completed claim forms to: Horizon Blue Cross Blue Shield of New Jersey PO Box 1609 Newark, NJ Horizon PPO Please use the Health Insurance Claim form (#7190). Mail completed claim forms to: Horizon Blue Cross Blue Shield of New Jersey PO Box 1609 Newark, NJ Horizon Basic Health Please use the Health Insurance Claim form (#7190). Plan A and Horizon Mail completed claim forms to: Comprehensive Health Plans B, C, D and E Horizon Blue Cross Blue Shield of New Jersey PO Box 1609 Newark, NJ

87 Coordination of Benefits What is coordination of benefits? Coordination of Benefits (COB) prevents overpayment of a claim when a person has coverage under two or more health benefit plans. This program does not deprive an employee of any benefits to which he/she is entitled and potentially allows for 100 percent reimbursement of allowable charges. It also ensures an eligible person does not collect more in benefits than he/she incurs in charges. Horizon BCBSNJ as the primary carrier When there is a covered medical expense, COB governs the determination of which insurance program pays first known as the primary carrier. When Horizon BCBSNJ is the primary carrier, we provide benefits up to the limits of your contract s provision. Horizon BCBSNJ as the secondary carrier When we are the secondary carrier, we pay an amount which, when added to the benefits paid under the other carrier s plan, is not more than the total allowable expenses. The amount paid by us as a secondary carrier does not exceed what would have been paid if we had been the primary carrier during that year. Which insurance pays first? Almost all group insurance policies provide for coordination of benefits. A policy without a COB provision is automatically the primary policy. When we and at least one other plan have coordination provisions, the following rules determine which plan is the primary contract: When a person is covered under both plans as an employee, the plan that covers the person as an active employee pays first and the plan that covers the person as a laid off or retired employee pays second. When a person is covered under both plans as a dependent, the plan that covers the person as a dependent of an active employee pays first and the plan that covers the person as a dependent of the laid off or retired employee pays second. Except for a dependent child of legally separated or divorced parents, the Birthday Rule applies.* Under the Birthday Rule, the plan that covers a dependent of an employee whose birthday falls earlier in the calendar year is primary. Only the month and day of the parent s birthday are used to determine primacy not the year. * Horizon BCBSNJ follows the Birthday Rule. 81

88 Example The father s birthday is July 16, 1968 and the mother s birthday is May 17, If the children are covered under both parents policies, the mother s plan is primary since the mother s birthday falls earlier in the year. If the mother and father s birthdays are on the same day, the plan covering the parent for the longer period of time is primary. Dependent child(ren) of legally separated or divorced parents For a dependent child of legally separated or divorced parents, the following governs which plan is primary for dependent children: When a court order makes one parent financially responsible for the health care expenses of the dependent child, then that parent s plan is primary. If there is no such court order, the plan of the: Natural parent with custody pays first. Stepparent with custody pays next. Natural parent without custody pays last. If none of the above rules apply, the plan that has covered the person for the longer period is the primary plan. How to file a COB claim When employees follow the proper COB claim filing sequence, it can help ensure faster payments. Employees should always inform hospitals and physicians of all coverage and include this COB information on all claim forms. Your employees should file a claim first with the primary carrier. After they receive an Explanation of Benefits from the primary carrier, they should send that statement along with the secondary carrier s claim form and a copy of the itemized bill to the secondary carrier. If two different Horizon BCBSNJ contracts are involved, one claim form is sufficient, as long as both ID numbers are reflected on it. Copies should be made for personal record-keeping. 82

89 Prescription Drug Programs Prescription drug programs The Horizon BCBSNJ ID card combines both prescription and health benefits. Subscribers use the ID card at any of the 50,000 pharmacies that participate nationwide. These pharmacies have agreed to provide prescription drugs at a discounted price to Horizon BCBSNJ subscribers. Horizon BCBSNJ offers the following prescription drug options to small employers: Copayment options; Deductible and copayment options; or A prescription drug card program. Copayment options Some prescription drug options only require the member to pay a copayment for a covered prescription. The prescription drug copayment is separate from the health coverage copayment. Employees present their prescription ID cards at participating pharmacies. Pharmacists then fill the prescription(s) and electronically submit claim(s) for automatic pricing and processing. Employees are responsible for paying the appropriate copayment(s) at the time of service. Deductible and copayment options Some prescription options have a prescription deductible along with a prescription drug copayment. The prescription drug deductible and prescription drug copayment are separate from the health coverage deductible and copayment. The prescription drug deductible applies per covered person per calendar year. The prescription drug deductible is applied toward the first prescription purchased each year regardless of whether the purchase is through a participating pharmacy or through mail service. Once the prescription drug deductible is satisfied, subscribers pay a prescription drug copayment for the remainder of the year. Example The prescription drug deductible for John s plan is $50 and the prescription drug copayment is $15. John s first prescription filled costs $40. John pays the pharmacist $40 (applied to his $50 prescription drug deductible). John s second prescription costs $37. John pays the pharmacist a total of $25 ($10 for his prescription drug deductible which has now been satisfied and $15 for his prescription drug copayment). John s third prescription costs $70. John pays the pharmacist only $15, his prescription drug copayment. 83

90 Prescription card option Groups that do not have copayment option prescription plans have a prescription drug card program. This program provides discounted prices for subscribers prescription drugs.* * The discount prescription drug program is not available to groups enrolled in Horizon HMO or in Horizon Basic Health Plan A. How to use the Prescription Drug Card Program Subscribers access the discount prescription drug program in the following manner: Subscribers present their prescription card to a participating pharmacist. The pharmacist electronically submits the claim data and the claim is automatically processed and priced. Subscribers pay the full discounted amount to the pharmacist at the point of sale. Horizon BCBSNJ processes the claim, produces the Explanation of Benefits (EOB), and/or issues a check for the discounted amount subject to your contract s provisions health coverage deductible and coinsurance. Using participating pharmacies When subscribers use their prescription drug card at a participating pharmacy, they do not need to file a prescription drug claim form. Claim forms are needed only if they purchase medication at a nonparticipating pharmacy or if they have not used their card. The prescription receipt(s) must be attached to the claim form. If receipts are not attached, the claim will be returned to the subscriber. Claims are processed within 10 to 14 days from the day claims are received. Subscribers may submit a claim form up to the end of the following calendar year after the service date of their prescription. Using nonparticipating pharmacies If subscribers go to a nonparticipating pharmacy or they do not present their card to the pharmacist, they must pay the full retail price of the prescription to the pharmacist. Subscribers must then submit a paper claim for reimbursement of the retail amount, subject to their health coverage deductible and coinsurance. The prescription receipt(s) must be attached to the claim form. If receipts are not attached, the claim will be returned to the subscriber. Claims are processed within 10 to 14 days from the day claims are received. Subscribers may submit a claim form up to the end of the following calendar year after the service date of their prescription. Reimbursement is based on the discounted charge. If subscribers go to a pharmacy that does not participate in the network, their out-of-pocket expense is usually higher. 84

91 Magellan Behavioral Health TM Who is Magellan Behavioral Health? Having recognized that the treatment of mental health and substance abuse is a highly specialized field requiring very specific training and credentials, Horizon BCBSNJ has joined forces with Magellan Behavioral Health to provide mental health and substance abuse care management services for our customers. Benefits of managed mental health care One out of every five Americans will experience mental health problems this year, ranging from depression and anxiety to substance abuse. According to the National Institute of Mental Health, 4 million Americans receive some form of mental health or substance abuse treatment annually. What does this mean for employers? First, it means reduced productivity and increased absences. It is a fact that employees experiencing mental health problems without proper treatment have greater difficulties with everyday functions. Second, indirect costs for employers will increase. These costs are the result of employee utilization of other health services and increased disability and workers compensation claims. Third, direct costs for mental health treatment are rising. One reason for rising costs is the widespread use of expensive, more restrictive inpatient services rather than less costly, less restrictive outpatient treatments. Between 65 and 80 percent of the cost of mental health and substance abuse care stems from inpatient services alone despite repeated studies that advise against relying primarily on their use. Still other reasons are increasing awareness of the serious effects of chronic alcoholism, both on an individual, his or her family and employer, as well as the fact that we live in a society with increasing levels of stress and violence. Limiting benefits and restricting access are shortsighted solutions for cutting costs. Programs that focus on care denial result in lower quality care for patients and much higher costs for employers. It is also a fact that sick people denied treatment get sicker. As treatment becomes more difficult, options lessen and the prognosis for recovery dims. Ultimately, employer costs escalate. Used appropriately, managed mental health care provides a far more effective solution to serving the mental health needs of employees. It offers patients mental health and substance abuse care services in the least restrictive and most cost-effective settings. It provides employers with the resources to break the cost spiral. It enables employers to spend their mental health care dollars effectively and, at the same time, offer care for their employees. 85

92 Magellan Behavioral Health Magellan Behavioral Health managed mental health program: Originates from and maintains constant focus on individual patient needs, rather than physician needs. Moves patients from restrictive, expensive inpatient programs to more flexible, less-intrusive and less-costly outpatient ones. Is structured to facilitate access to appropriate care and to treat patients early in the course of their illness, thereby holding greater promise for recovery. Manages care based on individual treatment plans that ensure prompt, aggressive and appropriate treatment. By focusing on highly specific goals, these plans are designed to return the patient quickly to a higher level of functioning. The result is accessible high-quality, solution-oriented mental health care for employees, accompanied by reduced benefit expenditures for employers. Utilization management Magellan Behavioral Health offers an enriched utilization management program, consisting of: Pre-Admission Review; Concurrent Review; Retrospective Review; Catastrophic Case Management; and Approval and coordination of the exchange of inpatient days for outpatient visits under the mental health benefit change. The member must first call Horizon BCBSNJ at BLUE (2583) for the procedures to follow. Pre-Admission Review Program (PAR) Inpatient Pre-Admission Review (PAR) is a process of reviewing medical necessity and appropriateness of treatment. Performed by trained mental health professionals who have the proper credentials, all inpatient admissions and denials are also reviewed by a physician advisor. As an integral part of the PAR program, the review of requests for your employees and their dependents related to inpatient mental health substance abuse confinements are provided on a pre-admission, concurrent and retrospective review basis. This pre-admission review is provided at the request of a patient, physician or facility and must be requested before an admission, including emergency admissions. If prior authorization for an admission is not obtained, the admission is reviewed retrospectively for medical necessity and subject to a penalty. 86

93 If the treatment is determined to be not medically necessary at the inpatient level of care, the facility, health care professional and patient may be responsible for the entire cost of the admission. It is strongly recommended that Magellan Behavioral Health is notified before any inpatient treatment is provided for mental health and substance abuse care conditions. To facilitate this process, an extensive communications campaign was and continues to be conducted with the clinical and administrative staffs of the acute care and private psychiatric hospitals and all residential alcohol treatment facilities in the state of New Jersey. This campaign includes the detailed review of our inpatient admissions criteria and the policies and procedures used to conduct utilization management services. By working closely with these facilities, we have been successful in decreasing the number of inpatient confinements for patients who would benefit from treatment in a less restrictive environment. Through physician and member education and the development of a strong alliance, we expect that, over time, only the most effective and efficient treatment will be rendered, resulting in a bottom line advantage to you, the employer. Concurrent Review Concurrent Review examines the continued medical necessity and appropriateness of treatment. Retrospective Review Retrospective Review is an auditing function. Catastrophic Case Management Catastrophic Case Management is a process of identifying and case managing potentially long-term illnesses that are more expensive. By substituting equally high-quality treatment alternatives in the community for long-term inpatient care, considerable savings can often be realized. Contacting Magellan Behavioral Health Magellan Behavioral Health can be reached through its toll-free help line, at , 24 hours a day, seven days a week. 87

94 Horizon BCBSNJ Dental Programs Horizon BCBSNJ dental programs Horizon BCBSNJ offers a variety of dental programs. Coverage includes a sophisticated dental claims system, dedicated customer service area and a team of dental benefits specialists dedicated to your dental benefits. Horizon BCBSNJ offers the following dental plans to groups of two to 50 eligible employees: Horizon Dental Option Plan; Horizon Dental PPO Plan; Horizon Dental Choice (HDC), for groups with 10 or more employees; Horizon Dental Companion Plan and Horizon Basic Dental Companion Plan, for groups with a Horizon BCBSNJ medical program. For more information on any of these dental plans, please call DENTAL ( ). 88

95 Useful Forms List of group administration forms The chart below details some of the forms you need to administer your organization s group coverage. Form Completed by Purpose Time requirement Enrollment/Change Employee (and To enroll a new or Within 30 days of Request form signed by officer, rehired employee or a employee s or #6803 partner or dependent. dependent s eligibility company owner). date (31 days for a newborn). To delete an employee or dependent. Within 60 days of the date the employee is no longer eligible. To enroll an employee or dependent under continuation. Depends on the continuation right that is elected. For the employee to change products during the open enrollment period. During the open enrollment period, which is the one-month period beginning immediately before the group s anniversary date. Small Employer Officer, partner Group adds a new Prior to the effective date Reform Product or company product. of the new plan. Conversion owner. Application #8149 or Conversion Request form #3108 Group product conversion. Prior to the effective date of product conversion. Group changes products for a subset of employees. Prior to the effective date of change in products. To change (increase or decrease) the length of the waiting period for a class of employees. Prior to the group s anniversary date. 89

96 Form Completed by Purpose Time requirement Annual Family Employee Update COB family status. Within 30 days of receipt. Profile and Claim Notice #2469 Small Employer Employee Indicates reason for waiving. With application. Waiver of Coverage #2465 Request for Employee and Continue coverage for covered Within 31 days from the Continuance of physician dependent with mental or date child reaches the Enrollment for a child incapacity or physical policy s age limit. Disabled developmental disability. Dependent #2407 Supplemental Employee Used to submit Within one year of the Benefits Claim Horizon HMO claims. date of service. form #1895 Horizon POS Employee Used to submit Within one year of the Health Insurance Horizon POS claims. date of service. Claim form #0834 Health Insurance Employee Used to submit claims for Within one year of the Claim form #7190 the following plans: date of service. Horizon Direct Access; Horizon PPO; Horizon Basic Health Plan A and Horizon Comprehensive Health Plans B, C, D and E. 90

97 HIPAA Notices Notices The Final Regulations for Health Coverage Portability for Group Health Plans and Group Health Insurance Issuers Under HIPAA Titles I & IV, published by the Departments of the Treasury, Labor and Health and Human Services and effective February 28, 2005, include special notification requirements that apply to group health plans. Specifically, these federal rules provide that, at or before the time an employee is initially offered the opportunity to enroll, the plan must furnish the employee with a notice that explains the special enrollment rights required pursuant to the regulations. In addition, the rules provide that if the plan imposes a pre-existing condition exclusion, it must provide a written general notice explaining that exclusion and cannot apply that exclusion to an employee or dependent until the notice is provided. The notice must be included as part of any written application materials distributed by the plan for enrollment. If the plan doesn t distribute such materials, the notice must be provided by the earliest date after a request for enrollment that the plan, acting in a reasonable and prompt fashion, can provide the notice. Following are the Notices that appear on the Enrollment/Change Request form. They are based on samples provided in the Federal regulations and reflect both the Federal rules and New Jersey s rules with respect to plans issued to small employers. General Notice of If you are declining enrollment under your group health plan for Special Enrollment Rights yourself and/or your dependents (if your plan includes coverage for dependents) because of other health insurance or other group health plan coverage, you may be able to enroll yourself and those dependents in this group health plan if you or the dependents lose eligibility for that other coverage (or if the other employer stops contributing toward your or your dependents other coverage). However, if the other coverage was continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), you must request enrollment within 30 days after the COBRA coverage ends. If the other coverage was not COBRA continuation coverage, you must request enrollment within 90 days after your or your dependents other coverage ends (or after the other employer stops contributing toward the other coverage). In addition, if this plan includes coverage for dependents and you acquire a new dependent as a result of marriage, birth, adoption or placement for adoption, you may be able to enroll yourself and your dependents under this plan after declining its coverage. However, you must request enrollment within 31 days after the child s birth or within 30 days after the marriage, adoption or placement for adoption. 91

98 If you decline group health coverage under this plan, you will be asked to state in writing whether the declination was due to the existence of other health coverage. If you don t provide this statement, the above special enrollment rights may not be available to you if you need them. To request special enrollment or obtain more information about it, contact your benefits manager, if available, or your employer. General Notice of Pre-existing Conditions Exclusions Note: Your plan imposes a pre-existing conditions exclusion. As described below, the details of the exclusion that your plan has differ depending on the number of eligible employees in your group. Contact your benefits manager, if available, or employer for this information. Small Employers with five or fewer employees A pre-existing conditions exclusion means that if you or a covered dependent (if your plan includes coverage for dependents) has a medical condition before coming to our plan, you might have to wait a certain period of time before the plan will provide coverage for the condition. This limitation only applies to a condition which manifests itself during the six-month period immediately preceding your or your dependent s enrollment date and for which medical advice, diagnosis, care or treatment was recommended or received during the six-month period immediately preceding that date. The enrollment date means, with respect to an employee or dependent, the earlier of the effective date of his/her coverage under the group health plan, or the first day of the waiting period, if any, for such enrollment. Small Employers with more than five eligible employees In this case, your plan only imposes a pre-existing conditions exclusion on employees and dependents (if the plan includes coverage for dependents) who are late enrollees. A late enrollee is: An employee or dependent (other than a newborn or an adopted child) who enrolls or is enrolled more than 30 days after first becoming eligible; or A newborn or adopted child whom you enroll more than 31 days after the child s birth, adoption or placement for adoption. This means that if you or your dependent is a late enrollee and has a medical condition before coming to our plan, you will have to wait a certain period of time before the plan will provide coverage for that condition. 92

99 This limitation only applies to a condition which manifests itself during the six-month period immediately preceding your or your dependent s enrollment date and for which medical advice, diagnosis, care or treatment was recommended or received during the six-month period immediately preceding that date. The enrollment date is the effective date of your or your dependent s coverage under the group health plan. All Small Employers A pre-existing conditions exclusion does not apply to pregnancy. In addition, it does not apply to: A child who is covered under any creditable coverage within 31 days of birth adoption or placement of adoption as long as there is not a significant break in coverage of more than 90 consecutive days prior to the child s enrollment date; or Birth defects in a covered dependent child. This plan will not provide benefits for pre-existing conditions for 180 days, measured from the person s enrollment date. However, the length of this period can be reduced by the number of days of your or your dependent s prior creditable coverage. Most prior health coverage is creditable coverage and can be used to reduce the length of this exclusion, provided that you or your dependent has not experienced a break in coverage of 90 days or more. To reduce the length of this exclusion by creditable coverage, you must provide the plan with a copy of any certificates of creditable coverage that you have. There are also other ways that you can prove prior creditable coverage. If you have questions about the pre-existing conditions exclusion, or if you need help demonstrating creditable coverage, contact your benefits manager, if available, or your employer. 93

100 Contact Us By Telephone Customer service hours Call BLUE (2583), Monday, Tuesday, Wednesday and Friday, from 8 a.m. to 6 p.m., Eastern Time (ET), and on Thursday, from 9 a.m. to 6 p.m., ET. Members health Members who have a health benefits question should call BLUE (2583). They will be asked to enter the ID number on their Horizon BCBSNJ ID card. They are immediately routed to their dedicated team of client service consultants. For pre-admission review, Horizon PPO, Horizon Basic Health Plan A and Horizon Comprehensive Health Plan B, C, D and E members should call BLUE (2583). To locate a participating BlueCard PPO physician, Horizon PPO members should call BLUE (2583). Members prescription Members who have a prescription drug benefits question should drug benefits call Members mental health/substance abuse Members who have a mental health/substance abuse benefit question should call Magellan Behavioral Health. Help Line: Pre-admission review: BLUE (2583). Dental Group administrators, brokers and members with dental benefit questions should call DENTAL ( ). Group administrators If you have benefit and claim inquiries, please call and brokers If you have enrollment and premium billing inquiries, please call Member Maintenance Group administrators should call to request Member Maintenance access, which will allow you to: 94

101 Change addresses. Make premium payments online. Print/download premium bill invoices. Process a termination or a downward conversion as long as it is not more than seven days retroactive from the current date. Request an ID card. Review premium billing information. Submit PCP changes. View employee enrollment. Investigations/Fraud Consumer and Senior Markets Sales To contact our Investigations/Fraud department, please call Employees and their dependents who no longer qualify for small employer group coverage may call our Consumer and Senior Market sales team at Contact Us On the Web Visit us online at < Visitors to Horizon Blue Cross Blue Shield of New Jersey s Web site will find the following: Participating physicians; Maps and door-to-door directions to physicians offices; Special announcements from Horizon BCBSNJ; Downloadable forms; Answers to frequently asked questions about managed care; State-wide special events sponsored by Horizon BCBSNJ; and Hyperlinks to important health and wellness information. You are encouraged to visit our Web site from time to time. We are always expanding it to include even more useful information and services. 95

102 Services and products provided by Horizon Blue Cross Blue Shield of New Jersey or Horizon Healthcare of New Jersey, Inc., each of which is an independent licensee of the Blue Cross and Blue Shield Association. Horizon Healthcare of New Jersey, Inc. is a subsidiary of Horizon Blue Cross Blue Shield of New Jersey. Registered marks of the Blue Cross and Blue Shield Association. and SM Registered and service marks of Horizon Blue Cross Blue Shield of New Jersey. Magellan Behavioral HealthTM is a registered trademark of Magellan Health Services, Inc Horizon Blue Cross Blue Shield of New Jersey Three Penn Plaza East, Newark, New Jersey (W0708)