Medicare Supplement Plan. Medicare Supplement Plan of Marathon Oil Company

Transcription

1 Medicare Supplement Plan of Marathon Oil Company January 1, 2015

2 Table of Contents I. Purpose... 1 II. Definitions... 1 III. Health Plan Participation... 2 IV. Cost of Coverage... 5 V. Enrolling in the Plan... 7 VI. Waiver of Coverage VII. Special Provisions for Under-Age-65 Disabled/ESRD Individuals VIII. Overview of How the Plan Works IX. Managed Prescription Drug Program X. Coordination of Benefits XI. Claim Submission Procedures XII. If a Claim is Denied (Claim Appeal Procedures)...20 XIII. Miscellaneous Situations Affecting Plan Benefits...26 XIV. Legal Right to Continue Coverage Under COBRA...28 XV. Administrative Information...33 XVI. Special Provisions Relating to Medicaid...35 XVII. Participation by Associated Companies or Organizations...35 XVIII. Modification and Discontinuance of Plan...36 XIX. Further Information...37 Appendix A Member Contributions...38 Appendix B Additional Information on Participant Contributions Appendix C Eligibility Grid...44 Appendix D The Medicare Supplement Plan of Marathon Oil Company...48

3 I. Purpose Medical expenses can place sizeable financial burdens on retirees, and their survivors, especially in cases of long-term or other catastrophic illnesses. The Medicare Supplement Plan is designed to provide the post age 65 retiree and his or her post age 65 spouse, disabled individuals under age 65 whose primary group health plan coverage is Medicare, with coverage to help pay for expenses not covered under Federal Medicare. The Plan provides the retiree and their spouse with coverage to help pay for expenses covered under Part A and Part B of Medicare, plus coverage for prescription drugs under the Managed Prescription Drug Program of the Medicare Supplement Plan. II. Definitions When used in this Medicare Supplement Plan, the following terms shall have the meanings ascribed to them below: Allowed amount The maximum amount on which payment is based for covered health care services. Copayments A fixed dollar amount a Participant pays for covered health care, usually when the Participant receives the service. Coinsurance The percentage of covered costs the Plan or the Participant pays after any required deductibles are met. Deductible The amount each Participant pays toward most covered charges in a Plan Year before the Plan begins paying benefits. For purposes of determining whether a Participant has satisfied the deductible, any amount accumulated from January 1 March 31 will reset effective April 1. ERISA The Employee Retirement Income Security Act of 1974, as amended. Formulary A list of preferred drugs. Express Scripts maintains the formulary list using an independent committee that meets regularly to review the drugs on the formulary based on safety, efficacy, and cost, and to decide whether any new drug should be added. Hospital A legally constituted and operated institution which has on-the-premises organized facilities (such as for diagnosis and major surgery) to care for and treat sick and injured persons. There must be a staff of doctors and a Registered Nurse on duty at all times. This term does not include an institution, or part of one, used mainly for rest or nursing care, convalescent care, care of the aged, care of the chronically ill, custodial care, or educational care. Marathon Oil Company In this document, this can be referred to as the Company. It means Marathon Oil Company, and, as appropriate, includes members of the Marathon Oil Company controlled group that are participating employers in this Plan. Medically Necessary Services or supplies that are provided for the diagnosis or treatment of a medical or mental health and chemical dependency condition; are appropriate for the medical or mental health and chemical dependency condition; are done within the proper setting or manner required for the medical or mental health and chemical dependency condition; and meet generally accepted health care practices. 1

4 Network The facilities, providers and suppliers the Plan has contracted with to provide health care services. Out-of-Pocket Maximum The most each Participant would pay including deductible and coinsurance in a Plan Year. Once a program s out-of-pocket maximum has been met, the Plan pays 100% for covered health care services and supplies under that program for the remainder of the Plan Year. However, for purposes of determining whether a Participant has satisfied the out-ofpocket maximum, any amount accumulated from January 1 March 31 will reset effective April 1. Participant An individual who meets eligibility requirements and participates in the Plan. Plan This Medicare Supplement Plan of Marathon Oil Company. Plan Year The Plan Year is the calendar year. The following do not count toward satisfying out-of-pocket maximum limits: Charges above Reasonable and Customary and Negotiated Fee Schedules; Non-covered charges, including charges incurred after Out-of-Pocket Maximums have been reached; and For purposes of the Medical/Surgical Program s out-of-pocket maximum, all deductibles and coinsurances paid under the Managed Prescription Drug Program. For purposes of the Mail-Order component out-of-pocket maximum of the Managed Prescription Drug Program, and all deductibles and coinsurances paid under the Medical/Surgical Program. Provider A licensed physician, a hospital, or other health care professional recognized by the Plan. Reasonable and Customary The usual charge for a medical service or mental health and chemical dependency service or treatment in a geographic area. Unusual circumstances and complications are taken into consideration. The Medical/Surgical Program uses the 90th reasonable and customary percentile. Spouse The man or woman to whom a Participant is legally married under the laws of a domestic or foreign jurisdiction with the legal authority to sanction marriages. Urgent Care Urgent care is treatment for a sudden illness or injury that demands immediate medical attention but is not life threatening. Examples or urgent situations include: sprains/strains, high fever, minor burns, vomiting, ear infections and urinary tract infections. III. Health Plan Participation A. Participant Eligibility You are eligible to participate in the Plan as a Participant as follows: 1. Retiree Participant Over-Age 65 or LTD Retiree Participant Retired employees are eligible to participate in this Plan as a Retiree Participant or an LTD Retiree Participant if: 2

5 They are over-age 65; as of their date of retirement were eligible for coverage under either the Health Plan of Marathon Oil Company or the International Medical Plan; and have at least ten years of actual service under the Employee Service Plan. Note: Those who were hired on or after January 1, 2008 are limited to 10 years of total combined post-employment coverage in this Plan or the Health Plan of Marathon Oil Company. Coverage begins on the first day of retirement. Former Retiree Participants who are rehired will be able to return to their prior Retiree Participant status and subsidy level (no credit will be given for additional service for subsidy purposes). For purposes of determining eligibility for Retiree Participant coverage, past service which has been granted to an otherwise eligible employee under the Employee Service Plan as a result of an acquisition, merger or other corporate transaction supported by a signed definitive agreement signed on or after March 1, 2004, will count towards eligibility to be a Retiree Participant provided the signed definitive agreement governing the merger, acquisition or other corporate transaction specifically provides for the recognition of service under the Employee Service Plan for the purpose of determining eligibility for retiree medical benefits. 2. LTD Terminated Participant A former employee whose primary group health plan coverage is through Medicare and whose employment was terminated upon reaching the maximum 24 months of Sick Leave allowed under the Marathon Oil Company Sick Leave Plan, but who continues after the termination to remain eligible for disability benefits under the Marathon Oil Company Long Term Disability (LTD) Plan is eligible to participate as an LTD Terminated Participant. Coverage as an LTD Terminated Participant begins on the first day following such a termination. 3. Surviving Spouse Participant Over-Age 65 The over-age 65 surviving Spouse of an active employee of the Company, LTD Terminated Participant or Retiree Participant (including an LTD Retiree Participant) on the date of the death shall be eligible to participate as a Surviving Spouse Participant,if the deceased employee or retiree was eligible for coverage in the Health Plan of Marathon Oil Company, the Retiree Health Plan of Marathon Oil Company, or the International Medical Plan on the day of their death. An over-age 65 surviving Spouse who is covered under the Health Plan of Marathon Oil Company or the Retiree Health Plan of Marathon Oil Company as a dependent spouse of an employee or retiree on the date of death of the employee or retiree will automatically have their coverage under this Plan begin as a Surviving Spouse Participant on the day following the death of the employee or retiree. 3

6 An over-age 65 surviving Spouse who is not covered under the Health Plan of Marathon Oil Company or the Retiree Health Plan of Marathon Oil Company as a dependent spouse of an employee or retiree on the date of death of the employee or retiree must complete, sign and submit the proper enrollment form to Marathon Oil Company within 31 days after the date of death for coverage under this Plan to begin as a Surviving Spouse Participant. Provided that the surviving Spouse properly enrolls, coverage under this Plan will be effective on the day following the death of the employee or retiree. 4. Spouse Participant Over-Age 65 The over-age 65 Spouse of an under-age 65 active employee or under-age 65 retiree (including an employee whose employment terminates as a result of disability) shall be eligible to participate in this Plan if the employee or retiree participates in the Health Plan of Marathon Oil Company. 5. ESRD Participant or LTD Participant Under-Age 65 An employee or retiree of the Company or the Spouse or other dependent of such an employee or retiree who is under age 65 and whose primary group health plan coverage is through Medicare due to disability or ESRD is eligible to elect coverage under this Plan. ESRD Participants who are not over age 65 will cease to be eligible for participation in this Plan on March 31, Such participants will be eligible to elect coverage under the Health Plan of Marathon Oil Company effective April 1, B. Dependent Eligibility Your eligible dependents may be covered under the Plan; provided, however that no individual may be covered as both a dependent and another type of Participant. Eligible dependents include: 1. Spouse The over-age 65 Spouse of a Participant is an eligible dependent under the Plan. 2. Domestic Partner The over-age 65 qualified domestic partner of an active employee or retiree of the Company is an eligible dependent under the Plan. Domestic partners must meet the requirements established in the Marathon Oil Company Affidavit of Domestic Partner Relationship form prior to benefit enrollment. C. Who Is Not Eligible An individual is not eligible for coverage under this Plan if such individual is: 1. a dependent child; 2. eligible for medical coverage under another group health plan maintained in the United States, toward which Marathon Oil Company or a member of its controlled group contributes, unless the individual s spouse is in a group health plan to which Marathon Oil Company or another member of its controlled group contributes that requires such individual to be covered (i.e., coverage cannot be waived); or 4

7 3. eligible for medical coverage under another group health plan sponsored by a nonparticipating member of the controlled group which includes Marathon Oil Company. D. When Coverage Ends or May Be Continued The following are instances of when coverage under the Plan is terminated or may be continued. In most instances, if coverage may be continued, contributions are required to be paid. 1. The Participant fails to pay the required Participant contributions on a timely basis; Coverage terminates on the last date for which contributions were paid. 2. The retirement eligible ESRD Participant on a Sick Leave is terminated under the neutral discharge practice rules after the first day of the month and has elected to retire the first day of the following month; Coverage may be continued provided the required monthly contributions are paid. 3. If a retiree waives coverage under this Plan in order to participate in an appropriate alternative plan, such as the Veteran s health care plan, a Medicare Advantage Plan (Part C of Medicare) or TRICARE, coverage under this Plan for the eligible dependents may be continued. See Appendix C. 4. If a Retiree Participant and Spouse die simultaneously coverage terminates as of death; If a Participant becomes divorced; Coverage for the Spouse terminates at the effective date of the divorce and may be continued provided the required monthly contributions are paid. 5. If a Surviving Spouse Participant remarries; Coverage for the Surviving Spouse Participant and eligible dependents terminates at the end of the month in which the marriage occurs. 6. If a dependent becomes an employee of the Company; Coverage terminates when the dependent becomes eligible for medical coverage under another group health plan maintained in the United States, toward which Marathon Oil Company or a member of its controlled group contributes. However, if the dependent is a Spouse, coverage as an employee or as a dependent is optional. 7. The participant was hired after January 1, 2008 and has reached ten years of combined participation in the Pre-65 and/or the Medicare Supplement Plan. Coverage terminates the last day of the month prior to your tenth year of retirement. IV. Cost of Coverage The Plan is funded by the contributions of plan Participants and the general assets of Marathon Oil Company. The Plan is designed so that the Company would pay approximately 80% of the cost of the Plan and Participants would pay approximately pay 20% of the Plan cost through contributions if all Participants were entitled to receive the full Company subsidy of their contribution amounts, but in certain circumstances, Participants may pay a higher percentage, and in certain circumstances the Company may pay a higher percentage. The total cost of the Plan is ultimately determined by claims experience and administrative costs. 5

8 Participants will be advised of changes in monthly contributions prior to the start of each calendar year. Participants pay for coverage through payroll deductions, or, if not receiving pay, by monthly payments in advance. A. Participant Contributions The total cost for the Plan is determined annually based on past claims experience for Participants. The Company subsidy for the group is then calculated such that the Company would be paying approximately 80% of the cost if all Participants were eligible for the full Company subsidy. Thus the Participant cost for those individuals who are eligible for 100% of the Company subsidy is approximately 20% of the total cost of the Plan. However, the amount of Company subsidy for a Participant may be less than 100%, and is currently determined using the 4% accrual method. Under the 4% accrual method, an employee age 30 or older earns 1% of the eventual Company subsidy for each calendar quarter in which they are either actively employed or on one of the approved leave statuses on the last day of the quarter. Generally this means that an employee earns 4% of the eventual Company subsidy per year. If an employee works continuously from age 30, they will be entitled to 100% of the eventual Company subsidy by age 55. The amount of subsidy earned for each individual is frozen at their retirement, and will then be used to determine all future Plan Participant contributions for the Retiree Participant and any covered dependent. See Appendix A for actual rates based on the possible accrued percentage of Company subsidy. Participant contributions for Spouse Participants and Surviving Spouse Participants of retirees are determined using the percent of Company subsidy earned by their respective Retiree Participant and frozen at the time of the Retiree Participant s retirement. Participant contributions for Surviving Spouse Participants of Employees who died while actively employed with the Company (prior to retirement) are determined using 100% of the Company subsidy. Retiree Participants other than LTD Retiree Participants or LTD Terminated Participants who worked more than 50% of their total service as regular part-time employees will receive 50% of the Company subsidy that the Retiree Participants would otherwise have been entitled to. However, a Participant who moved from service as a regular full-time employee to service as a regular part-time employee after becoming eligible to retire shall receive the full Company subsidy and shall continue to accrue additional Company subsidy as if such Participant remained employed as a regular full-time employee. Rehired regular employees receive credit for any previously earned Company subsidy percentage. Regular employees who were rehired prior to January 1, 2008 also accrue additional Company subsidy percentages for their period of subsequent employment. Regular employees who were rehired on or after January 1, 2008 do not accrue any additional Company subsidy percentages under this Plan. 6

9 Important Note: Prior to January 2, 2004 a different method, the Age and Service Point System, was used to determine the amount of Company subsidy for retirees who participate in the Health Plan of Marathon Oil Company. Those individuals who were employed at the time the Age and Service Point System was in effect earned the percent of subsidy using this method. Appendix B explains how this method worked, and also certain grandfather provisions that are used when an individual has earned percentages under both methods. V. Enrolling in the Plan A. Benefits Open Enrollment There is a Benefits Open Enrollment each year during the fall. During Benefits Open Enrollment, eligible individuals may enroll in the Plan. No evidence of good health is required. Plan coverage elected during Benefits Open Enrollment will be effective the following January 1. In connection with the change in this Plan to provide a defined contribution benefit beginning in April 2015, eligible individuals (as described above) will have an additional Benefits Open Enrollment opportunity to elect coverage under the Plan effective April 1, 2015 under the new defined contribution option. B. Participant Enrollment Eligible individuals may elect coverage under the Plan at the times indicated below. Individuals who waive coverage may not cover their Spouse or dependents under this Plan, although coverage for an under-age 65 Spouse may be available under another plan in accordance with the terms of such plan. 1. Enrollment When First Eligible for Coverage a. Retiree Participant Coverage i. Prospective Retiree Participants, LTD Retiree Participants, and LTD Terminated Participants who are enrolled in the Health Plan of Marathon Oil Company on the day immediately prior to their first date of eligibility under this Plan as a Retiree Participant, LTD Retiree Participant, or LTD Terminated Participant will be automatically enrolled in this Plan. They are not required to complete an enrollment form in order to be enrolled in this Plan. ii. Prospective Retiree Participants, LTD Retiree Participants, and LTD Terminated Participants who are not enrolled in the Health Plan of Marathon Oil Company on the day immediately prior to their first date of eligibility under this Plan as a Retiree Participant, LTD Retiree Participant, or LTD Terminated Participant must complete, sign, and submit the proper enrollment form in order to be covered as Participants under this Plan. If the enrollment form is received by the Company on or before the first date of eligibility or within 31 days after the first date of eligibility, participation is effective on the eligibility date. 7

10 iii. An election to be covered under this Plan by an eligible individual with ESRD or an under-age 65 LTD Participant previously covered under the Health Plan of Marathon Oil Company shall be effective on the first date of coverage by Medicare, where Medicare is the primary payer of benefits, provided that such election is received by the Company within 31 days after the first date of coverage by Medicare where Medicare is the primary payer of benefits. b. Spouse Participants, Surviving Spouse Participants, and Domestic Partners i. Prospective Spouse Participants, Surviving Spouse Participants, and Domestic Partners who are enrolled in the Health Plan of Marathon Oil Company as a dependent of a Participant on the day immediately prior to their first date of eligibility under this Plan as a Participant will be automatically enrolled in this Plan as a dependent. Such Participants will not be required to complete, sign and submit an enrollment form to the Company in order to be enrolled in this Plan. ii. Prospective Spouse Participants, Surviving Spouse Participants, and Domestic Partners who are not enrolled in the Health Plan of Marathon Oil Company as a covered dependent of a Participant on the day prior to their first date of eligibility under this Plan must complete, sign, and submit the proper enrollment form to the Company in order to be covered as Participants under this Plan. If the enrollment form is received by the Company on or before the first date of eligibility or within 31 days after the first date of eligibility, participation is effective on the eligibility date. If the enrollment form is not received within 31 days after the date of any qualified life event, participants may be enrolled during the Benefits Open Enrollment Period. 2. Late Enrollment An eligible individual may late enroll in the Plan due to any of the following six events: a. marriage or divorce; b. death of a Spouse; c. acquiring an eligible dependent due to birth, adoption, or placement for adoption; d. an eligible dependent s loss of eligibility for coverage under another group health benefit plan or other health insurance coverage obtained either through another employer or through self-employment; e. the exhaustion of COBRA continuation of coverage by either an eligible retiree or eligible dependent, under another employer plan; or f. moving back to and establishing a permanent residence in the United States or Puerto Rico from a foreign country. If the enrollment form is received on or before the date of any of the above events or within 31 days following the event, participation is effective on the date of the event. 8

11 For purposes of this section, the phrase loss of eligibility for coverage includes any loss of health coverage which results from a legal separation, divorce, death, termination of employment, reduction in the number of hours of employment, and the termination of employer contributions towards that coverage. Loss of eligibility for coverage does not include a loss of coverage due to any individual s failure to make timely premium payments (or other required contributions) for any reason or due to termination of coverage for cause. In addition, under the Children s Health Insurance Program (CHIP) Reauthorization Act of 2009, effective April 1, 2009, an eligible individual may enroll in the Plan within 60 days of either (1) termination of Medicaid or CHIP coverage due to loss of eligibility or (2) becoming eligible for a state premium assistance program under Medicaid or CHIP coverage. C. Dependent Enrollment Except as provided in Article III or Article V, an eligible dependent may only be enrolled in the Plan if the Participant to which the dependent is related is also enrolled in the Plan. 1. If the enrollment form for an eligible dependent or dependents is received by the Company before or within 31 days of the date of an event described below, participation is effective on the date of the event: a. the first date of eligibility of the Participant; b. the first date of eligibility of the dependent; c. the loss of eligibility for coverage by an eligible dependent of a Participant under another group health benefit plan or other health insurance coverage obtained either through another employer or through self-employment; or d. exhaustion of COBRA continuation of coverage under another employer s group health benefit plan by a prospective member and/or by an eligible dependent of either a prospective member or a Participant; provided, however that dependents of Spouse Participants, or Surviving Spouse Participants are not eligible to be enrolled due to this event (d). If the enrollment form is not received within 31 days after the date of any of the above events, eligible dependents may be enrolled during the Benefits Open Enrollment Period. For purposes of this section, the phrase loss of eligibility for coverage does not include a loss of coverage due to any individual s failure to make timely premium payments (or other required contributions) for any reason or due to termination of coverage for cause. Under the Children s Health Insurance Program (CHIP) Reauthorization Act of 2009, effective April 1, 2009, dependents may be enrolled in the Plan within 60 days of either (1) termination of Medicaid or CHIP coverage due to loss of eligibility or (2) becoming eligible for a state premium assistance program under Medicaid or CHIP coverage. 9

12 VI. Waiver of Coverage Except as otherwise provided in this Article VI, a Participant may waive coverage under this Plan for the Participant and/or dependents in conjunction with a Qualified Life Event or Benefits Open Enrollment. The waiver is effective the day the proper form is received by the Company. Subject only to the exception described in Section (B) below, if Participant coverage is waived, all dependent coverage must also be waived. A prospective Participant and dependents who have previously waived coverage may rejoin the Plan as provided in Article V. A. If a Participant is making contributions to the Plan through a cafeteria plan, coverage may not be waived except: 1. when the waiver is due to a change in family or employment status and the applicable cafeteria plan would permit the Participant to change the contribution amount; or 2. during Benefits Open Enrollment. B. In certain instances, a Retiree Participant, LTD Retiree Participant, or LTD Terminated Participant may waive coverage under the Medicare Supplement Plan for themselves and cover their eligible dependents. An example is: 1. Participant elects to enroll in an approved alternative plan such as the Veteran s health care plan, a Medicare Advantage Plan (Part C of Medicare) or TRICARE. The chart attached as Appendix C illustrates what options are available. VII. Special Provisions for Under-Age-65 Disabled/ESRD Individuals If an eligible individual or Spouse are under age 65, covered by Medicare due to disability or ESRD and have Medicare as the primary payer of benefits, they may choose to change their coverage from the Health Plan of Marathon Oil Company to this Plan; provided, however, that this option shall no longer apply after March 31, Such Participants who elect coverage under this Plan may continue to cover their eligible under-age-65 dependents under the Health Plan of Marathon Oil Company or the Retiree Health Plan of Marathon Oil Company. A. Offset Provision This offset provision applies to Participants who are disabled or have ESRD and eligible for Medicare Benefits and have (or would have if Medicare were elected) Medicare as the primary payer of benefits (with this Plan as the secondary payer of benefits). Under the offset provision, benefits under this Plan will be reduced (offset) by the benefits payable under Medicare Parts A and B (or that would have been payable had Medicare been elected). Eligible for Medicare Benefits means the individual is or could be covered under Medicare Part A, or Part A and B, because of 1) the entitlement to Social Security benefits for themselves or for one of their parents (in the case of a child) or 2) ESRD. 10

13 VIII. Overview of How the Plan Works A. Expenses Not Covered Items not covered by Medicare, such as custodial care, are not covered by this Plan. Participants are not eligible for preventative services. Expenses must be reasonable and necessary for treatment of an illness or injury. In addition, this Plan will not pay benefits that would have been payable from Medicare Parts A and B. This Plan requires that you enroll in Medicare Parts A and B, and the Plan will offset any payments that would have been payable from Medicare even if you fail to enroll in Medicare Parts A and B. B. Benefit Coverage Under the Plan 1. General Types of Programs Benefits under the Plan are provided by the following two programs: a. Medical/Surgical Program Covers services and supplies relating to a medical diagnosis. Benefits are provided under the Medical/Surgical Program of the Plan, which supplements Parts A and B of Medicare. i. Medical/Surgical Program The Medical/Surgical Program of the Plan provides benefits for services and supplies covered under Part A and Part B of Medicare. Services and supplies not covered by Part A and B of Medicare are not covered by the Medical/Surgical Program of the Plan. The Plan does not provide benefits for services and supplies covered under a Medicare Advantage Plan (Part C) of Medicare or under a Medicare Prescription Drug Plan (Part D) of Medicare. The Medical/Surgical Program is a Medicare carve out plan. As such, before final payment is made under the Plan, the amount paid by Medicare for the claim is carved out or subtracted from the Plan benefit amount. The Plan will pay the remaining amount, if any. All benefits under the Medical/Surgical Program of the Plan are reimbursed from charges approved by Medicare as reasonable and necessary covered services and charges incurred in connection with an illness or injury. Medicare does not cover care that is custodial. The Medical/Surgical Program pays for only those expenses incurred for services, supplies or treatment which are reasonable and customary (as determined by Medicare) in connection with an illness or injury and which are included for coverage. b. Managed Prescription Drug Program the Managed Prescription Drug Program covers prescription drugs as described in Article IX. 11

14 2. Medical/Surgical Program Coverage a. Coinsurance Defined Under the Plan, coinsurance is the portion of the covered cost that the Participant pays. The Plan calculates 80% of the approved cost, then pays the difference, if any, between the calculated amount and the payment Medicare has already made. The Participant is responsible for any of the approved cost not covered after both Medicare and the Plan have made payment. b. Medical/Surgical Out-of-Pocket maximum The Medical/Surgical out-of-pocket maximum applies to all covered charges under the Medical/Surgical Program. Once the Participant has incurred the individual Medical/ Surgical out-of-pocket maximum in the form of coinsurance, the remainder of the covered expenses under the Medical/Surgical portion of the Plan will be paid at 100% for the rest of that calendar year for that individual only. The Medical/Surgical out-of-pocket maximum is adjusted annually based on the medical cost trend factor experienced by the Plan. Individuals who were previously covered under Health Plan of Marathon Oil Company and who subsequently enroll in this Plan in the same calendar year will have their Medical/Surgical amounts that were applied to their out-of-pocket maximum under the Health Plan of Marathon Oil Company recognized for purposes of calculating the Medical/Surgical out-of-pocket maximum of this Plan for the calendar year in which they enrolled in this Plan. Individuals who were covered under the Health Plan of Marathon Oil Company will only have their in-network Medical/Surgical out-of-pocket amount applied toward the Medical/Surgical out-of-pocket maximum for this Plan. The following charges do not count towards satisfying the Medical/Surgical out-of-pocket maximum limits: Charges above reasonable and customary amounts, and All coinsurances paid by the Participant under the Prescription Program. IX. Managed Prescription Drug Program The Managed Prescription Drug Program is a Medicare approved Part D program administered by Express Scripts Medicare. The Part D prescription drug coverage provided under the Managed Prescription Drug Program is in addition to coverage under Medicare Part A and/or Medicare Part B and is Creditable Coverage, which means it is at least as good as the standard Medicare prescription drug coverage. This coverage applies to all Participants covered under the Plan. The Managed Prescription Drug Program has a Retail Pharmacy component and a Mail-Order component. All coverage under the Managed Prescription Drug Program is subject to the determination that the drugs must be Medically Necessary and other limitations, as set forth in this Article IX. 12

15 Participants are required to inform Express Scripts Medicare of any other prescription drug coverage that they are currently enrolled in. A Participant can be in only one Medicare prescription drug plan at a time. A Participant s enrollment in this Plan may end any enrollment in another Medicare prescription drug plan, a Medicare Advantage Plan with prescription drug coverage, or an individual Medicare Advantage Plan. By joining this Medicare prescription drug plan, each Participant agrees that Express Scripts Medicare can release information to Medicare and other plans as is necessary for treatment, payment, and health care operations. Each Participant also agrees that Express Scripts Medicare can release their information, including prescription drug event data, to Medicare, who may release it for research and other purposes in accordance with applicable Federal statutes and regulations. A. Coverage Express Scripts Medicare has different stages of coverage as described below, which determine the amount a Participant pays for a drug: Initial Coverage Stage When a Participant meets the yearly retail-only deductible of $100, the Participant must pay the cost-sharing amounts described in Article IX, Section B until total yearly drug costs for the individual Participant reach $2,970. For purposes of determining whether a Participant has satisfied the deductible, any amount accumulated from January 1 March 31 will reset effective April 1. Coverage Gap Stage After yearly drug costs for an individual Participant reach $2,970, the Participant will generally pay the same amount as in the Initial Coverage Stage until the Participant s yearly out-of-pocket drug costs reach $4,750. Catastrophic Coverage Stage After an individual Participant s yearly out-of-pocket drug costs reach $4,750, the Participant enters the Catastrophic Coverage Stage and will generally pay the cost-sharing amounts described in Article IX, Section D. 1. To Receive Coverage To receive coverage under the Plan, outpatient prescription drugs (as defined in Section 2.a. below) must be purchased through the Retail Pharmacy Component (through a participating Express Scripts retail pharmacy) or through the Mail-Order Component (from the Express Scripts s mail-order pharmacy) of the Managed Prescription Drug Program. Network pharmacies (including both retail and mail-order network pharmacies) offer discounted drug prices, drug utilization review to protect individuals from potentially dangerous drug interactions, and no claim forms to submit. Except for certain exception situations explained in Article XI, Section 2, there is no coverage for outpatient prescription drugs that are not purchased through a retail or mail-order network pharmacy. 2. Outpatient Prescription Drugs a. Outpatient prescription drugs are prescription drugs which are: i. Prescribed to be administered when the Participant is not confined to a hospital as an inpatient (includes certain specialty medications injectable medications administered either by the Participant or a health care professional); and 13

16 ii. Not billed by a home health agency, hospice agency, or sub-acute care facility (extended care facility); and iii. Federal legend drugs (prescription drugs), state restricted drugs, compounded medications, and oral contraceptives; or iv. Insulin with a prescription only and covered diabetic supply items with a prescription only. Covered diabetic supply items are syringes (including needles), test strips, lancets, and glucometers. (An insulin pump, as well as tubing and needles for the pump, are covered under the durable medical equipment provisions of the Medical/ Surgical Program and are not covered as a diabetic supply item under the Managed Prescription Drug Program.) b. Not covered under the Managed Prescription Drug Program but subject to the provisions of the Medical/Surgical Program are: i. Supply items (other than diabetic supply items), therapeutic devices, and durable medical equipment; and ii. Prescription drugs and covered diabetic supplies billed by a home health agency, hospice agency, or sub-acute care facility (extended care facility). B. Prescription Drug Benefit Levels Initial Coverage Stage 1. When a Participant uses the Retail Pharmacy Component, the Participant will first pay the Retail Deductible Amount found in Appendix D. There is no deductible under the Mail-Order Component. For purposes of determining whether a Participant has satisfied the deductible, any amount accumulated from January 1 March 31 will reset effective April 1. Subject to Section B.2. below, when using the Retail Pharmacy Component the amount the Participant pays after satisfying the Retail Deductible Amount will be the higher of the minimum co-payment or the coinsurance percentage as follows (but never more than the total cost of the drug): Retail (31 Day Supply) Participant Pays the Greater of Type of Medication Minimum Co-Payment or Participant Percentage Generics $5 20% Brand Name Drugs on the Formulary Brand Name Drugs Not on the Formulary Retail (90 Day Supply) $25 20% $35 50% Participant Pays the Greater of Type of Medication Minimum Co-Payment or Participant Percentage Generics $15 20% Brand Name Drugs on the Formulary Brand Name Drugs Not on the Formulary $75 20% $105 50% 14

17 When using the Mail Order Component the amount the Participant pays will be the higher of the minimum co-payment or the coinsurance percentage as follows (but never more than the total cost of the drug): Mail Order (90 Day Supply) Participant Pays the Greater of Type of Medication Minimum Co-Payment or Participant Percentage Generics $10 20% Brand Name Drugs on the Formulary Brand Name Drugs Not on the Formulary $50 20% $100 50% In addition, any generic or brand name drug on the formulary that is ordered through the Mail Order Component is subject to a $200 maximum per prescription. Participants can call Express Scripts Customer Service at to see if a drug is on the formulary or to request a copy of the formulary. Information about the formulary is also available online at Express Scripts Medicare may periodically add or remove drugs from the formulary, make changes to coverage limitations on certain drugs, or change how much Participants must pay for a drug. If any formulary change limits a Participant s ability to fill a prescription, the Participant will generally be notified before the change is made. If a Participant requests an exception for a drug that is not covered under the Managed Prescription Drug Program and Express Scripts Medicare approves the exception, the Participant will pay the cost-share for Brand Name Drugs not on the formulary. Express Scripts Medicare may require prior authorization for certain drugs or may require a Participant to first try one drug to treat a condition before the Plan will cover another drug for that condition. C. Prescription Drug Benefit Levels Coverage Gap Stage After an individual Participant s yearly drug costs reach $2,970, the Participant will generally pay the same cost-sharing amount as in the Initial Coverage stage until the individual Participant s yearly out-of-pocket drug costs reach $4,750. If an individual Participant meets the mail order out-of-pocket maximum as described in Section G below, the Participant will pay $0 for covered prescription drugs from the Mail Order Component for the remainder of the Plan Year. D. Prescription Drug Benefit Levels Catastrophic Coverage Stage After an individual Participant s out-of-pocket drug costs reach $4,750, the Participant will pay the greater of 5% coinsurance or: a $2.65 copayment for covered generic drugs (including brand name drugs treated as generics) with a maximum at mail not to exceed $200; or 15

18 a $6.60 copayment for all other covered drugs with a maximum at mail not to exceed $200 except for brand name drugs not on the formulary. If an individual Participant has not yet met the mail order out-of-pocket maximum as described in Section G below, but the Participant s yearly out-of-pocket drug costs-including manufacturer discounts-exceed $4,750, the Participant will pay the same cost-sharing amounts as listed above in this Section D. E. Prescription Drug Benefit Levels Long-Term Care Pharmacy Residents of a long-term care facility using an in-network Long Term Care pharmacy will pay the cost-sharing amount for a one-month supply at retail for the Initial, Coverage Gap, and Catastrophic Coverage Stages. F. Using the Retail Pharmacy Component The names of participating pharmacies in the Retail Pharmacy Component are available by calling Express Scripts Customer Service at , or online at G. Mail Order Out-of-Pocket Maximum To protect Participants who have illnesses requiring significant prescription drugs, the Plan has an individual mail order out-of-pocket maximum of $3,500. When the coinsurance an individual Participant has paid using the Mail Order Component total $3,500 in a calendar year, covered charges for that individual Participant under the Mail Order Component are paid at 100% for the rest of the calendar year. There is no out-of-pocket maximum for the Retail Pharmacy Component. H. Clinical Programs Administered by Express Scripts The Plan has authorized Express Scripts to implement a number of clinical programs that assure that the drugs are clinically appropriate and consistent with the Plan s intent. These programs are subject to change as Express Scripts continues to develop and enhance existing programs. As the pharmaceutical industry changes rapidly, the Plan will actively pursue administrative opportunities to assure patient safety and optimize health plan effectiveness for Plan Participants. At any time a current list of clinical programs administered by Express Scripts can be requested and will be provided to the Participant on a timely basis. The major clinical program areas are as follows: Drug Utilization Review Concurrent and retrospective drug utilization review to assure safety and appropriate use. Specialty Pharmacy To provide enhanced pharmacy services for some conditions such as anemia, hepatitis C, multiple sclerosis, asthma, growth hormone deficiency, and rheumatoid arthritis that are treated with specialty medications. The Plan requires certain specialty drugs to be dispensed only through the Specialty Pharmacy. 16

19 Coverage Management Programs These programs help ensure the appropriateness of coverage for specific drugs and specific amounts of drugs. The following programs are included under Coverage Management Traditional Prior Authorization, SMART Prior Authorization, Dose Duration, Quantity Duration, Dispensing Quantity, and Dose Optimization. These clinical programs will work with the prescribing physician, dispensing pharmacist and Participant to assure that any conflicts that may arise are resolved in a prompt and safe manner. I. Special Preventative Coverage A physician may prescribe a preventative vaccine that is available in oral form. A physician may also write a prescription for a Participant to purchase an injectable vaccine at the pharmacy, prior to administration in the physician s office. In such cases, the Managed Prescription Drug Program will cover the vaccine at 100% not subject to a deductible if purchased using the Retail Pharmacy Component or the Mail-Order Component. Services to administer the vaccine would still be covered by the Medical/Surgical Program. J. Premiums for Prescription Drug Coverage The premium paid for the Plan includes coverage for the Managed Prescription Drug Program. A Participant may be charged a late enrollment penalty if they did not enroll in a Medicare prescription drug plan when first eligible for Medicare Part A and/or Part B, and they did not have other prescription drug coverage that met Medicare s minimum standards, or if they had a break in coverage of at least 63 days. If a Participant owes a late enrollment penalty, the Participant will be notified by Express Scripts Medicare. K. Service Area The service area for the Managed Prescription Drug Program is all 50 states, the District of Columbia, and Puerto Rico. A Participant must live in one of these areas to participate in the Managed Prescription Drug Program. X. Coordination of Benefits A. Coordination With Other Group Health Plans To the extent applicable, this Plan coordinates benefits with other health plans under which Participants are covered (such as a Spouse covered under their employer s plan). In these instances, the plans work together through what is called coordination of benefits or non-duplication of benefits provisions. With the exception of benefits under the Managed Prescription Drug Program, when the Plan is secondary to another group plan, benefits paid are determined using the Benefits Less Benefit method of coordination of benefits. This method calculates the amount payable under standard Plan provisions, and then reduces that amount by the amount of payment due for the same charges from any other group plan that is primary to the Plan. 17

20 The Plan follows standard rules accepted by the insurance industry to determine which plan is primary when an individual is covered by more than one group plan. Some but not all of the rules are as follows: The plan that covers a Participant as active is primary to a plan that covers the Participant as inactive (for example, retired). The plan that covers an individual as a Participant pays primary to a plan that covers the same individual as a dependent of a Participant. The plan that has covered an individual the longest pays primary if the individual is covered in the same category by two plans (for example, an individual is actively employed by two different companies). If a child is covered as a dependent under two different group plans, coverage is primary under the plan of the parent whose birthday (month and day) occurs earlier in the calendar year. For example, if the father was born on August 16 and the mother on June 11, the mother s plan is primary and would pay benefits first. In the case of divorce or separation, the plan of the parent with custody of the dependent child usually pays benefits for the child first. If the person with custody remarries, the stepparent s plan pays second, and the plan of the parent without custody pays third. However, if a court decree places financial responsibility for the dependent child s medical care on one parent, that parent s plan always pays benefits first. B. Coordination With Other Plans To the extent applicable, coordination with Medicare and other government-sponsored plans follows regulations as issued by the appropriate government agencies. The following types of plans normally coordinate with the Plan: Governmental benefit programs provided or required by law, other than Medicare and Medicaid. No-fault automobile insurance plans. Plans provided by an employer, union, trust, or other similar provider. Other group health care plans by which Participants or dependents are covered, including student coverage provided through a school above the high school level. XI. Claim Submission Procedures All claims under the Plan must be submitted in accordance with the procedures described below. There is no time limit for filing a claim under the Medical/Surgical Program. A claim for benefits under the Managed Prescription Drug Program must be submitted within six months after the end of the calendar year in which the claim was incurred. 18

21 A. Medical/Surgical Program Health Design Plus is the claim payer under the Medical/Surgical Program and offers Medicare Crossover claims processing, which means that transfer of information will occur automatically from Medicare. There is generally no need for you or your provider to file a claim with Health Design Plus. However, if for some reason a claim needs to be filed manually, the address is: Health Design Plus, P.O. Box 2580, Hudson, OH B. Managed Prescription Drug Program Express Scripts Medicare is the claim payer under the Managed Prescription Drug Program. Claims are adjudicated at the time a prescription is purchased and filled under either the Retail Pharmacy Component or the Mail Order Component of the Managed Prescription Drug Program. There is no coverage for outpatient prescription drugs not purchased at a participating retail pharmacy or through the Express Scripts Mail-Order Pharmacy. In certain situations, there are exceptions to these provisions as described below. Each of the following situations require the submission of a claim form when outpatient prescription drugs (including covered diabetic supplies) are purchased as indicated. The four exception situations are as follows: 1. Outpatient prescription drugs purchased outside the United States by Participants who reside in the United States, but who are temporarily out of the country due to business or leisure and where a medical need arises. 2. If a Participant purchases outpatient prescription drugs at a participating retail pharmacy but the claim is not filed electronically by the pharmacist for reasons listed below, coverage will be as described in Article IX. Some examples of instances where this may happen include: a. For a new Participant (within the first 30 days of coverage) not included in the Express Scripts system; and b. If a Participant did not have their Express Scripts ID card, or for any other reason the claim was not filed electronically. 3. If a Participant resides in the United States and does not have access to (beyond ten miles) a participating retail pharmacy, coverage will be as indicated in Article IX. Claim forms for use with the above situations, and mail-order forms can be obtained by calling Express Scripts Customer Service at or online at Submit claim forms to: Express Scripts P.O. Box Lexington, KY