New Group Application East Region New business effective Jan. 1, 2011

New Group Application East Region New business effective Jan. 1, 2011 2-50 Eligible employees PriorityHMO SM PriorityPOS SM PriorityPPO SM Revised 10/10

Life just got a little easier. This comprehensive health care plan is available to small businesses. Key advantages include: No pre-existing condition limitations - Employees are covered even if they currently have health concerns or conditions. Packaged plan designs Variety of plan packages designed to meet the needs of you and your employees Access to Priority Health s large network of qualified providers - Employees can access primary and specialty care providers near home or work. Quality health care plan - PriorityHMO has received full accreditation from the National Committee for Quality Assurance (NCQA). Valuable online resources - Employees and their dependents can access claims data and healthy living resources. In addition, employers can access billing and enrollment tools. New Group Checklist - Use this checklist to expedite the processing of your submission. New Group Application 2-50 Return all pages Check for first month s premium. MESC 1017 (Quarterly Wage Detail Report) required of all groups regardless of size. For groups with 2 eligible employees please submit additional required business proofs as outlined on page 3 of the New Group Application. Enrollment Form for all enrolling employees ensure that dates of hire, employer and employee signature, and PCP selection (if an HMO or POS) are listed on each form. The COBRA Continuation portion of the Enrollment Form is also required for any COBRA participant. Employee Waiver Form (page 8) if applicable. Copy of Final Proposal and Census from Rate Generator (verify that: census and enrollment forms match, riders for contraceptive medication or domestic partner are correctly listed, and the correct effective date is listed). HRA CFS and Schedule of Reimbursement, if applicable. If Priority Health is not administering the HRA please indicate plan administrator on page 5. New Group Exception Letter if application is not complete or is submitted after the 10 th of the month preceding the requested effective date. New groups received but not completed, or received after the 20 th of the month will have an effective date of the first of the following month. Mail all materials to Priority Health in accordance with required 30-day processing lead time: PO Box: Priority Health MS1380 PO Box 269 Grand Rapids, MI 49501-0269 OR Physical address: Priority Health MS1380 1231 East Beltline NE Grand Rapids, MI 49525 Priority Health will send an acceptance letter to the group and agent upon approval. Final rates will be based on final enrollment. In general, Mental Health Parity does not apply to small business. The rates produced on Rate Generator are not valid when a group is required to comply with Mental Health Parity. If you have questions or need additional information, please call your independent insurance agent or the Priority Health Small Business department at 616 942-1820 or 800 471-2504. East region 1

Small group minimum participation rules Priority Health and Priority Health Insurance Company (collectively, Priority Health ) Effective January 1, 2011 Overall participation requirement for groups of the following sizes 2 10 eligible employees*: 100% of eligible employees seeking coverage must participate. 11 25 eligible employees*: 75% of eligible employees seeking coverage must participate. 26-50 eligible employees*: 50% of eligible employees seeking coverage must participate. Participation requirements for multiple Priority Health plan offerings Groups with 2-25 eligible employees* seeking coverage may offer 1 plan design Groups with 26-50 eligible employees* seeking coverage may offer 2 plan designs. - When multiple plans are offered, the overall participation requirements apply to each plan. Priority Health may elect to waive this rule for groups of 26-50 eligible employees if the two Priority Health plans together enroll 100% of employees seeking coverage (e.g. 40% enroll in Plan A and 60% enroll in Plan B). - A minimum of five (5) enrolled contracts in each plan. - HealthbyChoice Achievements SM may only be paired with another HealthbyChoice Achievements plan. Participation of employees outside the Service Area/Michigan HMO 100% of enrolled employees must work or live in the service area. POS 90% of enrolled employees must live and work in the service area. PPO 70% enrolled employees must live in Michigan. Participation rules applied to segments If Priority Health is offered to a segment of employees (such as those who live in the service area or management or administrative employees), participation rules for the segment covered by the Priority Health plan will apply as if the segment offered by Priority Health is the entire group (e.g. in a group of 45 employees, 30 of whom live outside the service area and are not covered by Priority Health, the participation rules for a group of 15 employees will apply). Additional paperwork may be required. If the entire group is comprised of more than 50 eligible employees*, the group will be considered a large group and, therefore, not subject to these small group participation rules. * Eligible employees includes all employees who work on a full-time basis for 30 or more hours a week as well as employees who work 17.5 to 30 hours a week if elected by the group in the Group Agreement. East region 2

Business proof requirements Required - all groups Most recently filed quarterly wage detail report (MESC 1017) Employee waiver forms where applicable Certification of owner required if owner is to be covered and is not listed on MESC1017 Additional requirements - groups with only 2 eligible employees Sole proprietor Partnership Corporation Farmer 1. Copy of Schedule C and 2. Copy of Federal Tax I.D. and the IRS Verification Form or Certification, e.g. Doing Business As (DBA) Certificate with County Clerk stamp 1. Copy of Schedule 1065 including Schedule K1 and 2. Copy of Federal Tax I.D. and the IRS Verification Form, or partnership papers 1. Copy of Schedule 1120 (Sub S - Schedule 1120s) including Schedule K1 and 2. Copy of any federal document with Federal I.D. number, or Articles of Incorporation Copy of Schedule F Limited liability company Non-profit corporation 1. Copy of Schedule 1065 including Schedule K1 and 2. Copy of Articles of Organization 1. If Sole Proprietor - Schedule C and state license or certification and 2. Non Sole Proprietor - Copy of Federal Tax I.D. including the IRS Verification Form and state license or certification and copy of applicable tax filing for entity Additional requirements 1. Group must be of a permanent nature and financially stable. 2. Group must have been formed for a purpose other than to secure group insurance. 3. Group must meet the definition of small employer and eligible employee as defined in Chapter 37 of the Michigan Insurance Code (see page 11). 4. Seasonal employees (those working less than 36 weeks per year), temporary employees, substitute employees and 1099 contractors are not eligible. 5. Directors, corporate officers, trustees, corporate lawyers, elected officials, and owners or partners are not eligible unless they are full time employees. 6. Group must carry Worker s Compensation coverage unless not required by law. 7. Priority Health will not co-exist with an employer sponsored individual plan if it causes Group to not meet the Participation Rules outlined on page 2. 8. Members who are eligible for Medicare (or any governmental benefits), will be treated as if they are enrolled in Medicare parts A & B when Priority Health benefits are applied whether or not they are actually enrolled. 9. Group must meet Employer Contribution Level as outlined on page 4 for all actively enrolled employees. East region 3

Application New business effective date: Required employer information Employer (legal name): Physical address: Mailing address: Billing address: Phone: Email (required): Administrative contact/title: Billing contact/title: (please print) Chief Executive Officer or decision maker: Renewal date (if different than new business): Business information Priority Health reserves the right to request additional information or verification from the group regarding business activities and proper SIC code placement. Final SIC code determinations will be made by Priority Health. Priority Health reserves the right to re-rate at any time if discrepancies are found. SIC Code: Specific nature of business: Is this a PEO/leasing company? Social Security numbers won t be printed on premium invoice unless you select here: Print SSNs Fax: Insurance information Has your business ever had coverage with Priority Health? Yes If yes, date of coverage and group number: No Name of most recent carrier: Type of most recent health care coverage? (OFIR required information) Non profit health care corporation Uninsured Check PPO Self-insured one: Traditional insurance Workers compensation carrier: Policy number: Employer contribution levels (percentage or dollar amount) Federal Tax ID number: The employer must contribute at least 75% of the single rate or no less than 50% of the single, double, and family rate. Single Double Family Employer pays: Employee pays: East region 4

Choose your benefit design Standard plans HMO plans POS plans PPO plans HMO 100-1 HMO 100-2 HMO 100-3 POS 100-1 POS 100-2 POS 100-3 PPO 100-1 PPO 100-2 PPO 100-3 PPO 100-4 Contraceptives Yes No HealthbyChoice Achievements HMO 80-1 HMO 80-2 HMO 80-3 HMO 80-4 POS 80-1 POS 80-2 POS 80-3 POS 80-4 PPO 80-1 PPO 80-2 PPO 80-3 PPO 80-4 PPO 80-5 HMO 70-1 HMO 70-2 HMO 70-3 POS 70-1 POS 70-2 POS 70-3 PPO 70-1 PPO 70-2 PPO 70-3 PPO 70-4 HMO plans HMO 90-1 HMO 80-1 HMO 80-2 POS plans POS 90-1 POS 80-1 POS 80-2 PPO plans PPO 90-1 PPO 80-1 PPO 80-2 Contraceptives Yes No PriorityHSA HMO plans POS plans PPO plans HMO 100-1 HMO 100-2 POS 100-1 POS 100-2 PPO 100-1 PPO 100-2 Contraceptives Yes No Do you currently offer an HSA to your employees? HMO 80-1 HMO 80-2 HMO 80-3 POS 80-1 POS 80-2 POS 80-3 PPO 80-1 PPO 80-2 PPO 80-3 Yes No If yes, what is your deductible period? All services, including prescription drugs, are subject to the HSA deductible (except preventive care as outlined in our preventive health care guidelines). PriorityHRA HMO plans HMO 80-1 HMO 80-2 HMO 80-3 POS plans POS 80-1 POS 80-2 POS 80-3 PPO plans PPO 80-1 PPO 80-2 PPO 80-3 Contraceptives Yes No If Priority Health is administering HRA, the employer group MUST complete an HRA application in addition to the new group application. Name of HRA administrator: East region 5

No wrap certification Is an employer-sponsored supplemental plan available to employees (either employee-paid or employer-paid)? Yes No If yes, what type of coverage is offered? Accident or disability only Specific illness only Hospital confinement only Other (include a copy of the benefit summary to determine if the plan is wrapping) I understand that wrapping is only allowed if my group purchases a PriorityHRA plan. Wrapping is defined as reimbursing coinsurance, copayment or deductible amounts with employer dollars directly, through an HRA, FSA or any other employer-funded medical reimbursement arrangement. This includes arrangements administered by Priority Health, a Third Party Administrator or internally by the employer group. Wrapping may also include an employer-sponsored supplemental plan that is offered with the intention of reimbursing deductibles, coinsurance and copayments. PriorityHSA cannot be paired with a traditional health FSA whether employee or employer-funded. We have discussed this with our agent and understand that misrepresentation is a breach of our contract with Priority Health and, as such, cause for termination. Group Representative Signature East region 6 Date Employee eligibility information How many hours must employees work to be considered eligible for health benefits? 30 hours per week Other: hours (cannot be less than 17.5) All employers who had 20 or more employees on 50% of its typical business days during the preceding calendar year must comply with COBRA. Qualified beneficiaries, as defined by COBRA, are eligible for coverage unless in an excluded class, i.e. retiree, part-time and temporary employees. Is your company eligible for COBRA? Yes No Would you like an Infinisource 1 packet? Yes No Newly hired employee waiting period Terminated employee policy Date of hire 30 days 60 days 90 days First of the month following: days Other: days Date of termination End of month in which employment terminates Extension of coverage after layoff policy 2 Last day of employment End of month 30 days 60 days 90 days 6 months Disabled employee policy 2 Last day of employment End of month 30 days 60 days 90 days 6 months Domestic partner Yes No If yes, same gender only? Yes No 1 COBRA administration through Infinisource is a free, value-added service to Priority Health employers. 2 Group s extension of coverage policy for lay-off or disability may not exceed 6 months. If a group has no written policy for laid-off employees, the group s standard termination rule applies. If a group has no written policy for employees on disability leave, the term of coverage shall not exceed 6 months from the date of disability

Group roster List all employees on payroll regardless of status (for group size 26+, please attach additional roster). Groups may provide this information in a spreadsheet format if all fields are completed and the employer s signature is included. Employee name Average hours worked/week Eligible for health benefits? Waiving all employersponsored coverage? Enrolling with Priority Health? Enrolling with another carrier? 1. Yes No Yes No Yes No Yes No 2. Yes No Yes No Yes No Yes No 3. Yes No Yes No Yes No Yes No 4. Yes No Yes No Yes No Yes No 5. Yes No Yes No Yes No Yes No 6. Yes No Yes No Yes No Yes No 7. Yes No Yes No Yes No Yes No 8. Yes No Yes No Yes No Yes No 9. Yes No Yes No Yes No Yes No 10. Yes No Yes No Yes No Yes No 11. Yes No Yes No Yes No Yes No 12. Yes No Yes No Yes No Yes No 13. Yes No Yes No Yes No Yes No 14. Yes No Yes No Yes No Yes No 15. Yes No Yes No Yes No Yes No 16. Yes No Yes No Yes No Yes No 17. Yes No Yes No Yes No Yes No 18. Yes No Yes No Yes No Yes No 19. Yes No Yes No Yes No Yes No 20. Yes No Yes No Yes No Yes No 21. Yes No Yes No Yes No Yes No 22. Yes No Yes No Yes No Yes No 23. Yes No Yes No Yes No Yes No 24. Yes No Yes No Yes No Yes No 25. Yes No Yes No Yes No Yes No 1. Total number: Employees: Eligible employees: Eligible employees enrolling: 2. Eligible employees outside Priority Health s service area: 3. Is Priority Health the sole carrier? If no, name of other carrier. 4. Eligible employees enrolling with other carrier: 5. Eligible employees waiving all employer offered coverage (please attach waiver forms): 6. Based on today s date, did you have 20 or more employees for 20 or more calendar weeks (this includes fulltime, part-time, intermittent, leased and/or seasonal employees excluding self-employed individuals) during the previous or current calendar year? Yes No If yes and you met this threshold during the previous year or current calendar year, please provide the date that this threshold was reached / / (If no, please enter today s date) 7. Did you have 100 or more employees during 50 percent of your business days (full-time, part-time, intermittent, leased and/or seasonal employees excluding self-employed individuals) during the previous calendar year? Yes (1/1/2011) No East region 7

Employee waiver form Reform groups (2-50 eligible employees) This form is required for all eligible employees who are not enrolling with Priority Health at the time of initial enrollment and/or the group s open enrollment period. I understand that I am eligible for Priority Health coverage through my employer and that my employer is required to contribute at least 75% of the single rate or no less than 50% of the single, double, and family rate. I waive the right to enroll with Priority Health as offered to me by my employer for the following reason (please check one): I have other coverage offered by my employer. I have other coverage through my spouse or other family member. I have other coverage through Medicare or as a retiree from another employer. I have individual coverage through another source that is not employer-sponsored or employerpaid. I have no other coverage but choose not to enroll in my employer s plan. I understand that I will not be eligible for coverage through Priority Health until my employer s next open enrollment period unless I qualify for coverage due to a HIPAA qualifying event (such as marriage, birth of a child, adoption, or loss or other coverage). Employee name printed Employee signature Date Employer signature Date Group name Priority Health group number East region 8

Agent information Agent name: Contact name: Agency name: Mailing address: Phone: Federal Tax I.D. number: Fax: Email: Group certification I hereby certify that all information completed on this Small Group Application and Agreement is true and complete to the best of my knowledge and that Priority Health will rely on these statements and this information as a basis for approving this application and administering benefits according to the Certificate of Coverage or Policy. I understand my Independent Agent has no right to bind coverage, alter terms of the contracts or application in any manner, or to adjust any claim for benefits under the contracts. I understand that mid-year benefit changes are not permitted. I agree that I will not cancel our current health coverage until Priority Health has advised that coverage applied for has been approved. I understand that final rates will be based on final enrollment and subject to underwriting by Priority Health. I agree to be bound by all terms and conditions of the documents I submit in connection herewith, as well as the agreement between Priority Health and any Sponsor Organization. I understand that Priority Health reserves the right to change SIC code designations for my account. Any changes in SIC code designation (after the effective date of coverage) that result in premium adjustments will be initiated within 30 days notice to the group. No retroactive changes will be issued as either positive or negative rate credits. I understand that Group may terminate this Agreement, without cause, at the end of any month by giving Health Plan 30 days advance written notice of termination. Signature of company officer Title Date Signature of agent Title Date Priority Health representative Title Date East region 9

Automatic bill payment plan Priority Health has developed an electronic fund transfer process for collecting monthly health insurance premiums. On the first business day of the month, the checking or savings account that you have designated on the first page of this form will be automatically debited for the amount on your billing statement. You will receive your premium billing statement each month approximately ten (10) days prior to the deduction occurring from your account. Priority Health must be notified of any changes to your designated account at least 5 business days prior to the last day of the month. Please fill out all information appropriately and return it with your application for coverage or it can be mailed directly to: Attn: Group Services MS 2270 Priority Health 1231 East Beltline NE Grand Rapids MI 49525 You will receive a letter in the mail confirming your request for automatic monthly deductions from the account specified. This letter will also notify you in advance of the first date that your premium payment deduction will occur. If you have any additional questions on the automatic bill payment plan, please call Group Services at 800 942-0954. Enrollment form I authorize Priority Health to deduct the premium payment from the checking or savings account listed below. I understand the deduction will occur on the first business day of every month and if at any time I decide to discontinue this payment service, I will notify Priority Health in writing 30 days before discontinuing. Company name: Billing address: City/State/ZIP: Mailing address (if different): Phone #: Contact person: I understand I must be authorized by the company to sign this form on its behalf. Authorized signature: Date: Print name: To ensure the correct account number is used for this electronic payment and to obtain the ABA/Routing number, please contact your financial institution. Name of financial institution: ABA/routing number (9 digits on bottom of check): - - Checking (or savings) account no.: There will be a $50 charge for any transfers returned for insufficient funds. IMPORTANT: Please include either a voided check, copy of a voided check, copy of a statement or a bank letter with this application. East region 10

Reference From Chapter 37 of the Michigan Insurance Code: Small Employer means any person, firm, corporation, partnership, limited liability company, or association actively engaged in business who, on at least 50% of its working days during the preceding and current calendar years, employed at least two but not more than 50 eligible employees. In determining the number of eligible employees, companies that are affiliated companies or that are eligible to file a combined tax return for state taxation purposes shall be considered one employer. Eligible employee means an employee who works on a full-time basis with a normal work week of 30 or more hours. Eligible employee includes an employee who works on a full-time basis with a normal work week of 17.5 to 30 hours, if an employer so chooses and if this eligibility criterion is applied uniformly among all of the employer s employees and without regard to health status-related factors. For Internal Use Only Jackson Group name: Effective date: Renewal date: Group number: Subgroup number: Binder check: Detroit Main class Hourly class COBRA class Salary class PPO: network = (required information) Domestic partner New group waiving new hire waiting period Group services: Billing: Finance: Industry class Commission arrangement I.D.: Finance: Date Date Date East region 11