SMALL GROUP HEALTH BENEFIT SOLUTIONS. ROANOKE 6701 Peters Creek Rd., Ste 101. CHARLOTTESVILLE 1000 Research Park Blvd., Ste 200

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1 SMALL GROUP HEALTH BENEFIT SOLUTIONS RICHMOND 9881 Mayland Dr. CHARLOTTESVILLE 1000 Research Park Blvd., Ste 200 ROANOKE 6701 Peters Creek Rd., Ste 101 Coventry Health Care is a registered trade name of Southern Health Services, Inc., a Virginia HMO. PPO products are underwritten by Coventry Health and Life Insurance Company and administered by Southern Health Services, Inc. in Virginia. For more information, visit us online at

2 About Coventry Health Care Coventry Health Care offers a full range of managed care products and services, including HMO, POS, PPO, individual, and Medicaid products. CoventryOne, health coverage offered to individuals and families, and our PPO product are underwritten by Coventry Health and Life Insurance Company and administered by Coventry Health Care. With over 130,000 members in Virginia 1, there are many good reasons to choose Coventry Health Care. Locally Focused Serving Virginia since 1985 Benefit plans specifically designed to meet the needs of Virginia employers Direct Access to participating specialists without a referral Offices in Charlottesville, Richmond, and Roanoke Account Management Provider Relations Medical Directors Health Services Strong Provider Network in Virginia 2 More than 15,000 providers 95 hospitals National pharmacy network National transplant network National Network for Out-of-Area Employees/Dependents 3 Over 600,000 providers 5,600 hospitals Financial Stability 4 Our parent company, Coventry Health Care, Inc., is a publicly traded company (NYSE: CVH). Coventry Health Care, Inc.: Over five million members nationwide Ranked on the Fortune 500 every year since revenues of $11.6 billion 2010 assets of $8.5 billion Coventry Health and Life Insurance Company has an A- rating from A.M. Best. 1 Coventry Health Care membership report February Coventry Health Care provider search results February Coventry Health Care, Inc. national network provider search results February Coventry Health Care, Inc Annual Report 2 Small Group Solutions

3 Committed to Unparalleled Service 94% of claims processed within 15 days 5 19 second average speed to answer customer calls 5 Ranked #1 in claims processing and payment by the American Medical Association 6 Broker Customer Service Unit Coventry Health Care has a dedicated customer service unit exclusively for our brokers and consultants. Agencies and brokers must have complete and current signed contracts with Coventry Health Care to have access to the broker customer service unit. This unit will be your resource for specific questions about claims, enrollment, ID cards, billing, pharmacy and other general customer service information. Call us toll-free at Monday through Friday, 8:30 a.m. 5:00 p.m. ET. Website Availability 24/7 Coventry Health Care offers a variety of online tools to brokers, clients, and members. Our dedicated NET Support Team is available Monday Friday, 8:30 a.m. to 5:30 p.m. ET to help with problems or questions about our website. Just call Broker Tool Kit Our Broker Tool Kit at has everything you need for quick and efficient service. Look to the Broker Tool Kit for: Small Group Quote Request Form Individual medical questionnaires (Statement of Health/Enrollment Form, VA Medical History Form) The BenefitExpress Product Portfolio Group Application and Group Agreement/Policy Schedules of Benefits and pharmacy Summaries of Benefits Online Account Management Brokers and clients can conduct a variety of business activities using Online Account Management. This online tool has great features such as dynamic billing adjustments, a consolidated view of invoices, and electronic payment options. Brokers can use a single login ID and password to access multiple Online Account Management accounts. Clients can access group health benefits information online 24 hours a day, seven days a week to: Add or terminate an employee Reconcile billing discrepancies Investigate eligibility inquiries Make a payment Print a member ID card Coventry Health Care Customer Service results 6 AMA 2010 National Health Insurer Report Card referencing Coventry Health Care, Inc. Small Group Solutions 3

4 My Online Services With My Online Services, members can manage their accounts when it is convenient. Among many other features, members can: View personal claims and authorizations Print a copy of the member ID card Access Medco pharmacy information Select and change primary care physicians Check the status of benefit accumulators Why Use BenefitExpress? BenefitExpress is Coventry Health Care s online quoting tool. BenefitExpress provides brokers with the ability to obtain a quote and generate a custom proposal. In addition, brokers are able to or fax a proposal directly from the BenefitExpress system to their clients. Underwriting Guidelines Group Evaluation Criteria Employer contribution Employee eligibility Health (for purposes of rating) Participation Group Demographics Nature of Business COBRA and State Continuation participants Time in business: groups in business for less than six months are not eligible for standard rates. If the group has undergone an acquisition and a new Tax ID has been issued, the group will be considered a new business. Small Group Eligibility Requirements (2-50 eligible employees) The employer group will be defined as small (2-50) or large (51+) based on eligible employees. Coventry Health Care must be the sole carrier offering group medical insurance benefits to the employer group. A minimum number of two full-time employees must enroll. An employer/employee relationship must exist. All full-time employees are considered eligible unless in a group-imposed waiting period. The employer must supply the most recent Virginia Quarterly Wage and Tax Report or Certified List of Employees. If submitting a Certified List of Employees, the employer must also submit a copy of the business license. Coventry Health Care does not cover employees who are routinely out of the country (combined 90 days per year or more). Coventry Health Care does not extend coverage to domestic partners (same or opposite sex) or to dependents of domestic partners. Groups with Virginia branch offices (Virginia employees/dependents of a subsidiary or branch office location of a 4 Small Group Solutions

5 company based outside of Virginia) will only be considered if: 1. They supply a Quarterly Wage and Tax Report filed in Virginia. 2. A Virginia employee has signature authority in Virginia. 3. Coventry Health Care is the sole carrier. Common Ownership/Common Control The owner must have 51% or greater ownership in all entities for the entities to purchase coverage jointly. Combined size of the group will determine if the group will be rated as small group or large group. Underwriting will have final approval of the SIC code factor to be applied. Ineligible Groups/Entities Groups with no bona fide employer/employee relationship or that cannot submit required documentation Private households Groups administered by Professional Employer Organizations (PEO) Out-of-state groups with Virginia branch offices, except as noted above Groups offering coverage to retirees Individuals who are on retainer (1099 contractors, attorneys, consultants, accountants) and persons who are members of boards of directors but not employees Groups that result from class-outs of larger entities unless approved by Underwriting Groups Ineligible for Standard Rates Groups terminated due to non-payment of premium within the last 24 months Groups currently in bankruptcy proceedings Groups under current ownership for less than 6 months, unless there has been no change in the Tax ID number Group Effective Dates The group s effective date will be the first of the month if all completed, signed and accurate enrollment materials are received by Coventry Health Care no later than the 5 th of that month. Otherwise, the group will be effective the 1 st of the following month. Current Carrier Invoice For groups with less than 15 enrolled employees, Coventry Health Care will provide credit toward any pre-existing condition exclusion for anyone listed on the current invoice. Employer Contribution Requirements The employer must contribute a minimum of 50% of the monthly health premium for the single (employee only) rate. Coventry Health Care reserves the right to confirm employer contributions at any time. Participation Requirements If the group is offered coverage from Southern Health Services, Inc. and Coventry Health and Life Insurance Company, the participation requirements apply in aggregate. Small Group Solutions 5

6 75% of all eligible employees, less valid waivers, must enroll. 50% of all eligible employees must enroll in the employer s group plan regardless of waivers. 100% of all eligible employees, less valid waivers, must enroll if the employer contribution is 100% of the employee-only rate. Employer groups that fail to meet the minimum participation requirements will be terminated. Participation is tracked by Coventry Health Care on a monthly basis. Valid Waivers Employees covered under one of the following plans/programs will be deemed to have a valid waiver: Another group health plan, if employees provide the name of the carrier that insures them TriCare (formerly CHAMPUS) Medicaid Indian Health Services Medicare Parts A and B COBRA and State Continuation Participation Audits Coventry Health Care may conduct periodic participation audits at any time to verify that participation requirements continue to be met. The audit will consist of: Submission of the most recent Quarterly Wage and Tax Report and/or a Sole Proprietor, Partner or Corporate Officer Statement Certified List of Employees Such other information as Coventry Health Care may require Failure to complete and return audit information within the time period requested may result in termination or nonrenewal of the group. Statement of Health Audits Coventry Health Care periodically audits Statements of Health and claims experience of new clients in an effort to confirm that members did not misrepresent or fail to disclose conditions. This process ensures that clients are rated appropriately and protects the community pool from adverse and unanticipated claims. If during the course of such an audit, there is reason to believe that a condition was misrepresented or not disclosed, Coventry will contact the client regarding means to remedy the situation. The remedy may include, but is not limited to adjusting the rates as appropriate back to the initial effective date. Rating Policy Final rates, effective date and compliance with underwriting guidelines will be determined by Coventry Health Care. For cases underwritten with Statements of Health, final rates will be based on actual enrollment received by Coventry Health Care. Statement of Health/Enrollment Form signature dates must be within 90 days of the effective date. After 90 days, Statement of Health/Enrollment Forms must be reviewed, updated and signed by all applicants and can be used for an additional 30 days. After 120 days combined, applicants must complete new Statement of Health/Enrollment Forms. Proposals, bids and quotes are subject to change as a result of any or all of the following: 6 Small Group Solutions

7 1. Effective date change 2. Change in census 3. Industry code (SIC) change 4. Benefit or plan change 5. Change in total number of employees enrolled vs. quoted 6. Any medical or health information and/or any change in medical or health history, including, but not limited to, information obtained from any Medical Questionnaire until an executed Group Application has been provided to Coventry Health Care 7. Change in the total number of employees Underwriting Requirements Statement of Health/Enrollment Forms For groups with 2-25 enrolled employees, each employee and COBRA or State Continuation participant enrolling with Coventry Health Care must complete a Statement of Health/Enrollment Form (or the VA Medical History Form) for himself/herself and any enrolling dependents or sign the waiver portion of the form. For groups with 26 or more enrolled employees, Coventry Health Care will accept either the Statement of Health/ Enrollment form (or the VA Medical History Form) or the Employer Risk Appraisal Questionnaire (ERAQ). If submitting the ERAQ, Coventry Health Care also requires the two most recent renewals, including any supplemental reporting. Please note that Coventry Health Care underwriting guidelines allow for the lowest rate when individual medical questionnaires are provided. Small Group Quote Request Checklist Illustrative Rates For illustrative rates, please provide a current census with the following: zip code, date of birth, gender, name, enrollment tier and number of children enrolled subscribers please load the census in BenefitExpress enrolled subscribers we will load the census in BenefitExpress for you. Please specify whether the illustrative rates should be based on individual medical forms or the submission of the ERAQ. Medically Underwritten Rates For medically underwritten rates, please provide the following: Completed Small Group Quote Request Form (if utilizing Statement of Health for underwriting) Completed Statement of Health/Enrollment Form (or VA Medical History Form) for each currently enrolled subscriber as well as any employees intending to enroll on the effective date Groups with 26 or more enrolled subscribers may submit the ERAQ and two prior year renewals in lieu of individual medical forms. Explanations for any yes answers on the Medical Questionnaire, including: 1. The question number 2. The employee or family member s name Small Group Solutions 7

8 3. The date(s) of service 4. The date(s) of diagnosis 5. Names of treating physicians 6. Names of specific conditions treated 7. Any tests, surgery and prescription medications currently or previously taken Coventry Health Care may request additional information. Failure to obtain or delay in getting additional information may result in delayed approval or withdrawal. Final Underwritten Rates For final underwritten rates, please provide the following: Most recent Virginia Quarterly Wage and Tax Report identifying the employee s status (part time, terminated, in waiting period, etc.) and adding any new employees. If submitting a Certified List of Employees, the employer must also submit a copy of the business license; Completed Group Application; Completed Enrollment Section B of the Statement of Health/Enrollment Form for each employee enrolling in the plan; Completed Waiver Section E of the Statement of Health/Enrollment Form for each employee waiving coverage; If the VA Medical History Form was used in the initial submission, Coventry Health Care will require complete Enrollment/Change Forms (either the enrollment section or the waiver section) for all eligible employees. Quoting Options for Small Groups Triple Option (2-50 Enrolled Employees) Choose up to three options from our available plans. We are required to offer at least one plan with an out-of-network option, so one of the plans must be either a POS or PPO option. Please note that if you choose a National PPO plan, it does count as one of your triple plan options. National PPO plans may be offered to all employees, even those in Virginia. There is no limitation on the number of employees that elect to enroll in the National PPO plan. Rates for the National PPO plan are not necessarily equivalent to rates for the local PPO plan. Multi-Option Adjustment Coventry Health Care does not use multi-option rate adjustments for dual or triple option small group plans. However, the selected benefits may not have more than a 50% difference in the rates between the highest option plan and the lowest option plan. The difference in rates is determined by dividing the most expensive plan by the least expensive plan, then subtract one. If a National PPO plan mirrors a local PPO plan, it may be excluded from the spread calculation. If the National PPO plan does not mirror the local PPO plan, it must be included. Pharmacy Multi-Option Flexibility Brokers can select two pharmacy riders per employer group in order to reduce the cost of a low-option medical plan by including a pharmacy rider with more member cost sharing. The following rules apply: The lowest cost pharmacy rider must be paired with the lowest cost medical plan. Groups cannot offer the same base medical plan with two different pharmacy riders. Pharmacy carve-outs are not permitted. VA.SGS.09-11