INTRODUCTION

ABOUT YOUR EMPLOYEE HEALTH BENEFITS

For many years, Mason County Public Utility District 3 has provided health and related insurance coverage to eligible employees as a benefit of employment. Medical and dental coverage is provided to employees beginning on the day they become eligible.

This booklet provides important information about your medical and dental benefits, including descriptions of who is eligible to receive health benefits, how to enroll yourself and your dependents, what health plans are offered for the current plan year, what benefits are covered under each of the plans, and how to compare the health plans available to you.

CHOOSING A MEDICAL PLAN

Deciding which health care plan to join should be done carefully. It represents one of the biggest "fringe benefits" of your employment, and you will not be able to change plans until the next open enrollment period is declared. Open enrollment will take place during the month of November each year, to be effective on January 1. A few hints and tips that may help make your decision are:

What health care needs do you and your dependents have? In answering this question, consider not only the needs you may have now, but in the future as well. Do you or a covered dependent have a chronic health problem? Is it important to you to be able to see a certain doctor, dentist or other provider? Do you or a dependent have a future need for particular kinds of services (such as orthodontic treatment or therapy for specific conditions)? How far are you willing to travel to meet appointments, and what can you afford to pay?

What benefits are available through the available plans? Does the plan you are considering offer services that you or your dependents need now or are likely to need in the future? Do they have exclusions, limitations, or other restrictions that may apply?

What choice of providers will you have? Look at what types of providers are covered by the available plans, the list of providers you can choose from, and whether all of the providers in your area are actually accepting new patients. If you have a specific physician or hospital in mind, check to see whether the provider is available through the plan you want. The PUD Self-Insured Medical and Dental plans offer free choice of any approved provider; Group Health Cooperative requires you to seek your care at designated facilities and through designated providers. Also consider the plan's policy on access to specialist providers.

What are the costs to you in the plan you are considering? In comparing plans, take a few minutes to calculate how much you would have to pay out-of-pocket with each one. You should consider these possible expenses:

F Monthly premiums. For retirees or employees who are self-paying for coverage.

F Coinsurance rates. The percentage of the bill that you pay when you receive covered services. For example, your plan may pay 70% of allowed charges for hospital stays leaving you with a 30% (the coinsurance) to pay.

F Co-payment requirements. Fixed dollar charges that you must pay when receiving specific services, for example, for provider visits or prescriptions.

F Total out-of-pocket limit. The maximum amount that you or your family would have to pay in one year, except for co-payments, premiums and charges not covered by the plan.

F Excluded or limited items. Certain items and services are excluded or limited by the plans. If you normally use certain items or services, make sure they are covered by the plan you choose.

ELIGIBILITY

WHO CAN JOIN THE MEDICAL AND DENTAL PLANS

ELIGIBLE EMPLOYEES AND RETIREES

1. Regular Full-time Employees: These are defined as employees filling full-time positions authorized by the Board of Commissioners who are expected to be employed on a regular basis at 40 hours per week during more than six months of the calendar year. Regular full-time employees are eligible on their first day of employment.

2. Regular Part-time Employees: These are employees scheduled to work at least one full workday per month in positions which have been authorized by the Board of Commissioners and are also expected to be employed for more than six months. Regular part-time employees are eligible on their first day of employment.

3. Appointed and Elected Officials: Elected Commissioners are eligible on the date their term begins. Officials appointed by the elected commissioners are eligible on the date their appointment becomes effective.

4. Retirees: Retirees are defined as those who are vested in the Public Employees Retirement System (PERS I, II or III), have worked for the PUD for a minimum of ten (10) consecutive years at the time of retirement and who leave the employ of the PUD by (a) retiring and immediately receiving benefits under PERS; or (b) choosing not to receive benefits under PERS until such time as actuarial reductions to those benefits diminish. Said retirees are eligible for the same benefits under the self-insured medical, dental and vision plans as regular full-time employees. If a retired employee becomes employed and receives benefits from another group medical insurance plan, he/she may not continue participation in the PUD group insurance programs described above. Employees leaving employment or retiring from PUD 3 will be given a one-time option to stay with the PUD 3 group medical/dental insurance plans. All retirees will receive payment by the PUD toward medical insurance premiums at the rate of 3 percent for each year of employment with the Mason County PUD 3, up to the percentage being paid for active employees. All retired employees must pay their own medical and dental premiums directly to the PUD. Retirees over age 65 who are retired under the Public Employees Retirement System (PERS I, II or III) must be enrolled in Medicare Parts A & B. Medicare shall be primary to the PUD medical plan.

5. Employees Retiring Due to a Disability: Employees who leave the PUD due to a permanent disability will be allowed to remain a part of the group medical and dental plan but must self-pay their premiums directly to the PUD.

6. Employees on Long Term Disability: Employees who are unable to work as a result of a disability and are receiving benefits from the PUD's Long Term Disability Program, will be allowed to remain a part of the group medical and dental plans but must self-pay their premiums directly to the PUD.

ELIGIBLE DEPENDENTS

1. The eligible employee's lawful spouse.

2. The eligible employee's children through age 25 and is not eligible for employer-based health benefits other than through their parents. The term "children" includes your natural children, stepchildren, and legally adopted children. Dependents of dependents are not covered under this plan. Foster children approved by the utility are included.

A. Dependent children of any age are also eligible if they are incapable of self-support due to developmental disability or physical handicap, provided that their condition occurred prior to age 26 or during the time they were covered under the District plan. Proof of such a disability and dependency must be furnished prior to the dependent’s attainment of age 26, and as periodically requested thereafter.

SURVIVING DEPENDENTS

The surviving dependents of a retiree who were covered at the time of the retiree's death may continue their coverage. The retiree's spouse may continue coverage indefinitely; other dependents may continue until they lose eligibility under the above rules.

The surviving dependents of an eligible employee may also continue their coverage on a self-paid basis for up to 36 months under terms of the federal COBRA law.

Application for surviving dependent coverage must be made within 60 days from the death of the retiree or employee.

ENROLLMENT

HOW, WHEN AND WHERE TO SIGN UP FOR BENEFITS

You may enroll yourself and your eligible dependents in a PUD medical and dental plan on your first day of employment. Enrollment forms for this purpose are furnished by the Human Resources Department. A completed and approved enrollment form is necessary before processing of any claims can take place.

Employees and all eligible dependent family members must be covered under the same medical plan. If both you and your spouse are eligible employees or retirees of the District, you may enroll as subscribers in the same or different plans, and may each cover eligible dependent family members. Verification of dependency status of anyone enrolled under these plans may be requested at any time by the District or by Group Health Cooperative.

UPDATING YOUR RECORDS AND DEPENDENT ENROLLMENT

Employees and retirees who have a change of address or name should contact the Human Resources Department as soon as possible and complete an enrollment/change form.

When you acquire an eligible dependent (birth, marriage, adoption, etc.) the dependent must be enrolled within the enrollment eligibility periods specified below:

1. Newly acquired dependent: A newly acquired dependent (except a newborn child or a child placed for adoption) must be enrolled within 31 days of acquisition.

2. Newborn: A newborn child will be covered up to 31 days. To continue newborn coverage past the 31 days, you must enroll the child within 60 days of the date of birth.

3. Adopted child: A child placed for adoption may be covered from the date of placement provided the child is enrolled within sixty (60) days of the date of placement.

If a new dependent is not enrolled within the specified time periods, the dependent will not be eligible for coverage until the first of the month following enrollment.

If you acquire an eligible dependent when you are not in pay status or retired and you are continuing coverage on a self-pay basis, you must enroll the new dependent within the time frames specified above by submitting an enrollment form to the Human Resources office. If a new dependent is not enrolled within the specified time period when you are not in pay status or are retired, you must wait until the next open enrollment period.

If a new dependent becomes eligible prior to the 16th day of the month, the full month's premium is charged; otherwise, ½ of the premium is charged and the new full premium will begin with the next full calendar month.

Enrollment due to loss of other group coverage: If you or a dependent loses eligibility under another group plan due to either termination of employment or termination of the other group medical plan, those individuals losing coverage become eligible for coverage under this plan provided: (1) Enrollment for coverage is made within 31 days of termination of the other group coverage; (2) There is no lapse in coverage between the prior group plan and coverage under this plan; and (3) A letter from the employer sponsoring the coverage confirms that coverage was terminated under the prior program due to termination of employment or termination of the group plan. Proof of good health will not be required and no waiting period for coverage of pre-existing conditions will be required.

You may delete a dependent by submitting an enrollment/change form to the Human Resources office. Failure to delete a dependent in a timely manner may result in loss of COBRA continuation privileges for your dependent and retroactive denial of claims.

These enrollment changes should be made as soon as possible after you gain or lose a dependent through marriage, birth, adoption, divorce, death, or as otherwise described below. Employees and retirees should contact the Human Resources office for forms and information on how to update their records.

SWITCHING MEDICAL PLANS

You may change medical plans for yourself or your eligible dependents in the following situations:

1. During an open enrollment period announced by the PUD. Open enrollment will normally occur during the month of November, to be effective January 1 each year.

2. If a court order requires you to provide medical coverage for an eligible spouse or child, you may change medical plans and add the dependent immediately, with the change effective retroactive to the effective date of the court order or the employee's effective date of coverage, whichever is later.

3. If you retire for any reason, you may change plans at the time you apply for retiree coverage. The change will become effective on the first day of the month following your retirement date.

WHEN PLAN COVERAGE BEGINS

There are no preexisting condition restrictions or waiting periods on any PUD sponsored plan, except for retirees who defer or drop medical coverage (see reenrollment provision for the Self-Insured Medical Plan for retirees).

Coverage begins for the employee and his or her eligible dependents on the day the employee becomes eligible in accordance with the eligibility rules previously described.

For newly acquired dependents who are enrolled in accordance with provisions noted above, coverage begins on the date of acquisition, except that coverage for an adopted child begins on the date the child is physically placed with the employee for the purpose of adoption and the employee assumes financial responsibility for the child's medical expenses.

Coverage for other eligible dependents begins on the date the condition of dependency is established and approved by the PUD.

WHEN PLAN COVERAGE ENDS

Medical and dental coverage ends on the earliest of the following dates:

1. For any employee or dependent enrolled in the plan, coverage ends on the date the plan terminates, if that should occur.

2. For an employee who declines the opportunity or is ineligible to continue coverage on a self-pay basis, coverage ends: (a) at 12 o'clock midnight on the date of the employee's termination from employment, or (b) at the end of the last month for which the employer has paid the premium for reasons other than the employee's termination (such as leave without pay, reduction in force, retirement, or an employee's application for disability retirement).

3. For a dependent who declines the opportunity or is ineligible to continue coverage on a self-pay basis, coverage ends at the end of the month in which he or she ceases to qualify as a dependent (such as a dependent child reaching age 26, or a spouse when a final decree of divorce is entered).

4. For an enrollee who has chosen to continue coverage on a self-pay basis, such coverage ends: (a) on the date the enrollee is otherwise enrolled in an employer-funded plan; or (b) at the end of the last month in which the enrollee is eligible to continue coverage or for which the premium has been paid.

5. For a terminated employee who has chosen to continue coverage on a self-pay basis, the employer-paid premium will cover the enrollee through the end of the month in which the termination of employment occurs, and the self-pay premium will cover the employee beginning the first of the following month.

If you or an enrolled dependent are confined in a hospital or other medical facility when your coverage ends, contact the Human Resources Department to determine if you are eligible for an extended benefit. This should be done within 31 days after coverage would normally end. When coverage ends, you and your enrolled dependents may be eligible for continuation of coverage.

YOUR OPTIONS FOR CONTINUING BENEFITS

Employees covered by PUD-sponsored medical plans may continue coverage for themselves and their dependents during temporary or permanent loss of eligibility through the rules governing the federal COBRA law which confers the right to continue group coverage for a period of 18 to 36 months.

The dependents of employees and retirees also have similar options for continuing coverage for themselves following loss of eligibility for PUD-sponsored plans.

CONTINUATION OF COVERAGE (COBRA)

This provision provides continuation of coverage in compliance with the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) as currently amended. In general, COBRA requires that a “qualified beneficiary” covered under the Employer’s group health plan who experiences a “qualifying event” be allowed to elect to continue that health coverage for a period of time. Qualified beneficiaries are employees and dependents who are not covered by Medicare and who were covered by the Plan on the day before the qualifying event occurred. Coverage is elected on the election form provided by the Plan Administrator. Both you and your dependents should take the time to read the Continuation of Coverage provisions.

Covered employees have the right to elect Continuation of Coverage if they lose coverage under the Plan because of any one of the following qualifying events:

1. Termination (for reasons other than gross misconduct on the employee’s part) of the employee’s employment.

2. Reduction in the hours of the employee’s employment.

The spouse of an employee covered by the Plan has the right to elect continuation coverage if loss of coverage occurs under the Plan because of any of the following four (4) "qualifying events".

1. The death of the employee;

2. The termination of the employee’s employment (for reasons other than gross misconduct) or reduction in the employee’s hours of employment with the employer;

3. Divorce or legal separation from the employee; or

4. The employee becomes entitled to Medicare benefits.

In the case of a dependent child of an employee covered by the Plan, he/she has the right to elect continuation coverage if group health coverage under the Plan is lost because of any of the following five (4) "qualifying events:"

1. The death of the employee parent;

2. The termination of the employee parent's employment (for reasons other than gross misconduct) or reduction in the employee parent's hours of employment with the employer;

3. Parents' divorce or legal separation;

4. The dependent ceases to be an eligible "dependent child" under the Plan.

After COBRA coverage starts, covered qualified beneficiaries can add dependents who do not have Medicare and who meet the requirements from persons with other group coverage below in this section. Enrollment must be done in accordance with terms of the “Eligibility and Enrollment Provisions” section of this booklet. With one exception, however, these added dependents are not qualified beneficiaries. Their coverage is based on the coverage of the qualified beneficiary who enrolled them. The exception is that a child that is born to, or placed for adoption with, a former employee during a period of COBRA coverage is a qualified beneficiary.

NOTIFICATION REQUIREMENTS AND ELECTION PERIOD

Under the law, the employee or an eligible family member covered by the plan has the responsibility to notify the employer when the qualifying event is a divorce, legal separation, or a child losing dependent status or Medicare entitlement. If notice is not given to the employer within 60 days of the qualifying event or within 60 days of the date the qualified beneficiary would lose coverage due to the qualifying event, the qualified beneficiary will not be offered the option to elect continuation coverage.

When the employer is notified that one of these events has occurred, the appropriate individuals will be notified that they have the right to elect continuation coverage. In addition, appropriate individuals will be notified of their right to elect continuation coverage due to other “qualifying events” which result in loss of coverage, e.g., employee’s termination of employment (other than gross misconduct), reduction in hours, death, or an employee becoming entitled to Medicare.

Under the law, you must elect continuation coverage within 60 days of the date the Plan coverage would end or within 60 days of the date that the employer sends you notice of your right to elect continuation coverage, whichever is later. If the qualified beneficiary does not elect COBRA continuation coverage during this election period, they will not be eligible to enroll at a later date. However, a child that is born to or placed for adoption with a former employee during a period of COBRA coverage may become covered by COBRA as a qualified beneficiary provided that the enrollment guidelines to enroll the new dependent are followed.

A covered employee or the spouse of the covered employee may elect continuation coverage for all family members who meet the definition of a qualified beneficiary. The covered employee and his/her spouse and dependent child(ren) each have an independent right to elect continuation coverage. For example, a spouse and/or dependent child(ren) may elect continuation coverage even if the covered employee does not elect it.

PREMIUM PAYMENTS

If you elect continuation coverage, the employer must give you coverage that, as of the time coverage is provided, is identical to the coverage provided under the employer's plan to similarly situated employees or family members. This means that if the coverage for similarly situated employees or family members is modified, your coverage will be modified.

You must pay premium payments for your initial premium months by the 45th day after you elect continuation of coverage. Your initial premium months are the months that end on or before the 45th day after you elect continuation of coverage. All other premiums are due on the 1st of the month for which the premium is being paid, subject to a 30-day grace period.

MAXIMUM COVERAGE PERIODS

If a spouse or dependent child(ren) loses group health coverage because of the employee's death, divorce, legal separation or entitlement to Medicare, or because you lose your status as a dependent under the Plan, the maximum coverage period for the spouse and/or dependent (child)ren) is 36 months from the date of the qualifying event.

If the employee, spouse or dependent child(ren) lose group health coverage because of a termination or reduction in hours of the employee's employment, the maximum continuation coverage period (for the employee, spouse and/or dependent child(ren)) is 18 months from the date of termination or reduction in hours. There are two exceptions to this rule:

1. For a qualified beneficiary who is disabled on the date of termination or reduction of hours or any time within the first 60 days of COBRA continuation, the continuation coverage period is 29 months from the date of termination or reduction in hours. The disability that extends the 18-month coverage period must be determined under Title II (Old Age, Survivors, and Disability Insurance) or Title XVI (Supplemental Security Income) of the Social Security Act. For the 29-month continuation coverage period to apply, notice of the determination of disability under the Social Security Act must be provided by the disabled individual to the employer within the 18-month coverage period and within 60 days of the date of determination. The extension of coverage will be for all qualified beneficiaries in the disabled person’s family who lost plan coverage due to the termination or the reduction in hours, and who elect continuation of coverage. The premium rate to be paid during the 18 to 29 month extension may be 150 percent of the normal full premium rate for the coverage elected.

2. If a second qualifying event occurs (for example, the employee dies or becomes divorced) within the 18-month or 29-month coverage period, the maximum coverage period will be 36 months from the date of the termination or reduction in hours for the employee, spouse and/or child(ren).

Special rule involving employee's entitlements to Medicare benefits. This rule applies only if you are the employee's spouse or dependent child(ren) and you have continuation coverage because of a qualifying event that was either the termination or reduction in hours of the employment of the employee. If the qualifying event occurs within 18 months after the employee becomes entitled to Medicare, your maximum coverage period ends 36 months from the date the employee became entitled to Medicare.

TERMINATION BEFORE THE END OF THE MAXIMUM COVERAGE PERIOD

The continuation coverage for employee, spouse or dependent child(ren) automatically terminates (even before the end of the maximum coverage period) when any one of the following events occurs:

1. The employer no longer provides group health coverage to any of its employees;

2. The premium for your continuation coverage is not paid in a timely manner (within the 30-day grace period);

3. The employee, spouse or dependent child(ren) becomes covered under another group health plan (as an employee or dependent), which does not contain any exclusion or limitation with respect to any pre-existing condition of the covered individual. Effective July 1, 1997, an exclusion or limitation of the other plan might not apply at all to the qualified beneficiary, depending on whether the legal requirement to credit prior coverage is in effect for the new plan and on the length of creditable coverage under this Plan;

4. You become entitled to Medicare benefits after the date of your COBRA election;

5. You are entitled to a 29-month maximum coverage period, but then there is a final determination under Title II or XVI of the Social Security Act that the disabled qualified beneficiary is no longer disabled; however, continuation of coverage will not end until the month that begins more than 30 days after the determination and not before the end of the 18 month coverage period except as noted above.

6. For added dependents who are not qualified beneficiaries, coverage ends on the date that the coverage ends for the qualified beneficiary who enrolled them.

OTHER INFORMATION

If you have any questions about COBRA benefits, please contact the Human Resources Office.

If your marital status changes, or a dependent ceases to be a dependent eligible for coverage under the Plan terms, or you or your spouse's address changes, you must immediately notify the Human Resources office.

STATUS CHANGE

If an employee or dependent has a status change while covered under this Plan (i.e., employee to dependent, COBRA to active) and no interruption in coverage has occurred, the Plan will allow continuation of coverage with respect to out-of-pocket limitations.

RELEASE OF INFORMATION

You may be required to provide the plan or the PUD with information necessary to determine eligibility, administer benefits or process claims. This could include, but is not limited to, medical records. Coverage could be denied if you fail to provide such information when requested.

HIPAA Privacy Rules

Introduction

Individually identifiable health information (“Health Information”) regarding all Covered Employees and dependents participating in the Health Plan (“Plan Participants”) is currently and will continue to be provided by the Administrator for the Health Plan to the Plan Sponsor, and to specified employees or classes of employees in the Plan Sponsor’s workforce, to the minimum extent necessary for the Plan Sponsor to perform certain Plan Administrative Functions on behalf of the Health Plan. When Health Information is provided from the Plan, through the Administrator, to the Plan Sponsor, it is Health Information that is protected (“Protected Health Information” or “PHI”) by the privacy requirements contained in the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), and its implementing regulations contained in 45 CFR Part 160 and Part 164, Subparts A and E (the “Privacy Rules”).

HIPAA and the Privacy Rules restrict the Plan Sponsor’s ability to use and disclose PHI. The following HIPAA definition of PHI applies to this section:

Protected health information means information that is created or received by the Plan and relates to the past, present, or future physical or mental health or condition of a participant; the provision of health care to a participant; or the past, present, or future payment for the provision of health care to a participant; and that identifies the participant or for which there is a reasonable basis to believe the information can be used to identify the participant. Protected health information includes information of persons living or deceased.

The Plan Sponsor shall have access to, use and disclose PHI relating to the Health Plan (“Plan PHI”), received from and through the Administrator, only as permitted under this section, or as otherwise required or permitted by HIPAA.

II.

Provision of Protected Health Information to the Plan Sponsor

A. Permitted Disclosure of Enrollment/Disenrollment Information

The Health Plan, by and through the Administrator for the Plan, may disclose to the Plan Sponsor information relevant to whether an individual is participating in the Plan, or is enrolled in or has disenrolled from the Plan.

B. Permitted Uses and Disclosures of Summary Health Information

The Health Plan, by and through the Administrator for the Plan, may disclose Summary Health Information to the Plan Sponsor, provided the Plan Sponsor requests the Summary Health Information for the purpose of: (1) obtaining premium bids from health plans for providing health insurance coverage under the Plan; or (2) modifying, amending, or terminating the Plan.

“Summary Health Information” means: information that: (a) summarizes the claims history, claims expenses or type of claims experienced by individuals for whom a plan sponsor had provided health benefits under a Health Plan; and (b) from which the information described at 45 CFR § 164.514(b)(2)(i) has been deleted, except that the geographic information described in 45 CFR § 164.514(b)(2)(i)(B) need only be aggregated to the level of a five-digit zip code.

C. Permitted and Required Uses and Disclosure of Protected Health Information for Plan Administrative Purposes

Unless otherwise permitted by law, and subject to the conditions of disclosure described in paragraph D. and obtaining written certification pursuant to paragraph F., the Plan may disclose PHI to the Plan Sponsor, provided the Plan Sponsor uses or discloses such PHI only for Plan Administrative Functions (“Shared PHI”). “Plan Administrative Functions” means administration functions performed by the Plan Sponsor on behalf of the Plan, such as quality assurance, claims processing, auditing, and monitoring. Plan Administrative Functions do not include functions performed by the Plan Sponsor in connection with any other benefit or benefit plan of the Plan Sponsor, and they do not include any employment-related functions.

Notwithstanding the provisions of this section to the contrary, in no event shall the Plan Sponsor be permitted to use or disclose PHI in a manner that is inconsistent with 45 CFR § 164.504(f).

D. Conditions of Disclosure for Plan Administrative Purposes

Plan Sponsor agrees that with respect to any PHI (other than enrollment/disenrollment information and Summary Health Information, which are not subject to these restrictions) disclosed to the Sponsor by the Administrator on behalf of the Plan, Plan Sponsor shall:

1) Not use or further disclose the Shared PHI other than as permitted or required by the Coverage Booklet or as required by law.

2) Ensure that any agents, including any subcontractor to whom the Plan Sponsor provides the Shared PHI, agrees to the same restrictions and conditions that apply to the Plan Sponsor with respect to Shared PHI.

3) Not use or disclose the Shared PHI for employment-related actions or decisions or in connection with any other benefit or employee benefit plan of the Plan Sponsor.

4) Report to the Administrator, acting on behalf of the Health Plan, any use or disclosure of the Shared PHI that is inconsistent with the uses or disclosures provided for of which it becomes aware.

5) Make available Shared PHI to comply with the right of a Plan Participant to have access to his or her own PHI in the possession of the Plan Sponsor, in accordance with 45 CFR § 164.524.

6) Make available Shared PHI to comply with the right of a Plan Participant to request amendment of his or her PHI and to incorporate proper amendments agreed to by the Plan Sponsor, in accordance with 45 CFR § 164.526.

7) Make available the information required to comply with the right of a Plan Participant to receive an accounting of the uses and disclosures that have been made of the Shared PHI relating to the Participant, in accordance with 45 CFR § 164.528.

8) Make the Plan Sponsor’s internal practices, books, and records relating to the use and disclosure of Shared PHI available to the Secretary of Health and Human Services for purposes of determining compliance by the Plan Sponsor with the Privacy Rules.

9) If feasible, return or destroy all Shared PHI that the Plan Sponsor still maintains in any form and retain no copies of such PHI when no longer needed for the purpose for which disclosure was made, except that, if such return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible.

10) Ensure that the separation (i.e., the “firewall”) required by the Privacy Rules between the Health Plan (i.e., the “Authorized Employees” of the Plan Sponsor that handle PHI on behalf of the Plan) and the Plan Sponsor (i.e., the rest of the Plan Sponsor’s employees that have no access to the PHI) is consistently maintained.

E. Adequate Separation Between Health Plan and Plan Sponsor

The Plan Sponsor shall allow only those members of its workforce that are identified by name, title, class of employee or department in the Plan Sponsor’s Privacy Notice to have access to and use of the Shared PHI (“Authorized Employees”). No other persons shall have access to the Shared PHI. The Authorized Employees shall only have access to and use of the Shared PHI to the extent necessary to perform the Plan Administrative Functions that the Plan Sponsor performs for the Plan. In the event that any Authorized Employee does not comply with the provisions of this paragraph, that employee shall be subject to disciplinary action by the Plan Sponsor for non-compliance pursuant to the Plan Sponsor’s employee discipline and termination procedures.

F. Certification of Plan Sponsor

The Administrator shall disclose Shared PHI to the Plan Sponsor only upon the receipt by the Administrator, on behalf of the Health Plan, of a written certification by the Sponsor that the documents that govern the Plan (“Plan Documents”) have been amended to incorporate the provisions of 45 CFR § 164.504(f)(2)(ii), and that the Plan Sponsor agrees to the conditions of disclosure set for the in paragraph D. of this Plan Amendment.

COORDINATION OF BENEFITS PROVISIONS

PUD medical and dental plans provide for "coordination of benefits" (COB) to prevent duplication of benefits. COB provisions are included in most medical and dental plans so benefit costs can be fairly distributed when a person is covered by more than one plan. This typically occurs when employee and spouse are both covered by separate plans and/or Medicare, and the couple's dependents are covered under one or both plans. The plan will coordinate the benefits of this program with those of your other plans to make certain that, in each calendar year, the total payments from all plans are not more than the total allowable expenses. All of the benefits of this program are subject to coordination of benefits.

When more than one coverage exists, the plan which pays its benefits first is called "primary" and the one which pays its benefits second is called "secondary" and pays a reduced benefit. When COB occurs, the total benefit payable by all plans will not exceed 100% of “allowable expenses.” The primary plan always pays first, without regard to benefits provided by the other plan.

This Plan does not pay out any recoverable COB savings.

The term “allowable expense” shall mean the reasonable and commonly accepted expenses or the least amount allowed contractually between the two plans, incurred while covered under this plan, part or all of which would be covered under any of the other plans. In no event will more than 100% of total allowable expenses be paid between all plans, nor will total payment by this plan exceed the amount which this plan would have paid as primary plan.

Other plans include any plan, policy or coverage providing benefits or services. Such other plans include the following, even if they do not have their own coordination provisions:

1. Group, individual or blanket disability insurance or health care plans, whether on an insured or uninsured basis including, but not limited to hospital indemnity benefits and hospital reimbursement-type plans;

2. Hospital, medical service organization and other prepayment plans, whether individual or group;

3. Labor-management trusteed plans, labor organization plans, employer organization plans or employee benefit organization plans;

4. Any coverage under a government program and any coverage required or provided by any statute (except Workers’ compensation);

5. Group or individual student coverage, which is sponsored by a school or other educational institution;

6. Automobile insurance coverage.

To determine which of your plans is primary and which is secondary, follow the rules listed below if both plans coordinate benefits:

1. For a PUD Employee: The primary plan is the PUD plan and the secondary plan is the plan under which the PUD employee is covered that is sponsored by the spouse's employer or an individual policy provided by the spouse.

2. For the Spouse of a PUD Employee: The primary plan is the plan sponsored by the spouse's employer or individual policy provided by the spouse, and the secondary plan is the PUD plan.

3. For the Child of a PUD Employee: The primary plan is the plan of the parent whose month and day of birth occurs earlier in the year, and the secondary plan is the plan of the parent whose month and day of birth occurs later in the year. If the other plan does not contain this "birthday rule," resulting in conflicting order, the other plan's provisions will apply.

4. For the Child of Divorced Parents: The primary plan is determined by court decree. Otherwise, plan payment is determined in this order: (a) the plan of the natural or adoptive parent with custody, (b) the plan of the stepparent with custody, (c) the plan of the natural or adoptive parent without custody, (d) the plan of the stepparent without custody.

5. For persons covered both by a plan for active employees (and their dependents) and a plan for retirees or laid-off employees (and their dependents): The primary plan is the plan for active employees and the secondary plan is the plan for retirees or laid-off employees. If the other plan does not have a provision regarding laid-off or retired employees, which results in each plan determining benefits after the other, this plan's provisions for laid-off or retired employees will not apply.

6. For Retirees enrolled in parts A and B of Medicare: The primary plan is Medicare and the secondary plan is the retiree's PUD plan.

7. For persons eligible for Medicare either entirely or in part by reason other than age: The primary plan is determined as follows: (a) for those eligible for Medicare by reason of disability, Medicare will be primary and this Plan will be secondary; and (b) for those eligible for Medicare by reason of End Stage Renal Disease, benefits of this Plan shall be primary as they relate to the order of benefits determination during the initial 18 month period. After 18 months from the date the person first becomes eligible for Medicare due to End Stage Renal Disease, Medicare will be primary and this Plan will be secondary.

8. For persons who are eligible for Medicare by age alone, but still employed, the PUD Plan is primary.

9. For situations not described above: The primary plan is the plan which has covered the individual the longest, and secondary plan is the plan which has covered the individual for less time.

COORDINATION OF BENEFITS UNDER PUD SPONSORED PLANS

Payment provision of PUD-sponsored medical and dental plans are as follows:

The primary plan pays its benefits first, and then the secondary plan provides benefits so that total payments (or benefits) under your combined coverage will not exceed 100% of allowed charges. This Plan does not pay out any recoverable Coordination of Benefits savings.

For retirees who are enrolled in Medicare, the PUD-sponsored plans are always secondary to Medicare.

If you or your spouse have other group or individual coverage you may submit your prescription drug claims for reimbursement. To receive reimbursement attach both the prescription receipt (not the cash register receipt) and the Explanation of Benefits (EOB) from the primary carrier to a completed claim form. If your other coverage requires only a co-payment and there is no EOB, you must obtain verification from the pharmacy of the total cost of the prescription and attach it to a completed claim form. The PUD Plan will provide benefits so that total payments under your combined coverage will not exceed 100% of allowed charges.

Benefits under this plan shall not be reduced or otherwise limited because of the existence of another non-group contract which is issued as a hospital indemnity, surgical indemnity, specified disease or other plan of disability coverage.

A health maintenance organization is not required to pay claims or coordinate benefits for services which are not provided or authorized by the health maintenance organization and which are not benefits under the health maintenance contract.

MASON COUNTY PUBLIC UTILITY DISTRICT 3

SELF-INSURED GROUP MEDICAL PLAN

The PUD Self-Insured Group Medical Plan (the Plan) has been designed by the Employee Insurance Committee, approved by the employees of the District, the IBEW, Local 77 Bargaining Unit and the Board of Commissioners of Mason County PUD 3. Some plan functions are carried out by these contracting firms:

¨ Pacific Underwriters receives, processes and pays medical claims. The company verifies that patients are eligible for benefits, checks the accuracy of bills and determines whether billed services are allowable and medically necessary under plan provisions, calculates payment amounts, makes all payments to providers or subscribers for covered services, and maintains the customer service lines. The customer service representatives can often help you with questions about your claims and provide estimates of approximate levels of benefits that may be available for specific services.

¨ First Choice Health offers a network of health care providers (preferred providers) to the Self-Insured Plan subscribers. Using preferred providers for your health care will reduce your out-of-pocket expenses, while contributing to overall cost savings for the plan.

¨ Pacific Underwriters also conducts medical reviews prior to and during the delivery of health care services, including hospital admissions. The medical review program provides enrollees with information about treatment alternatives, ensures delivery of medically necessary services, and helps control health care costs under the Self-Insured Plan. Pacific Underwriter’s services are designed to ensure that you receive high quality care.

DEFINITIONS

Allowed Charge: The maximum amount the plan will pay for a specific service or supply.

Alternative Services: The alternative medicine benefit consists of services provided by homeopaths, naturopaths, acupuncturists, massage therapists and registered dietitians.

Approved Treatment Plan: A written outline of proposed treatment that is submitted by attending physician to the Plan Supervisor for review and approval.

Biofeedback: An electronic method which allows the patient to monitor the functioning of the body’s autonomic systems (e.g. body temperature, heart rate, etc.).

Calendar Year: A period of 12 months beginning each January 1.

Co-payment: A dollar amount you pay when receiving specific services (e.g., the first $10 for ordinary procedures and the first $50 in covered charges for hospital emergency room visits). Co-payments do not accumulate toward the out-of-pocket expense limit.

Custodial Care: Care that does not require the regular services of trained medical or allied health care professionals and that is designed primarily to assist the patient in activities of daily living. Custodial care includes, but is not limited to, help in walking, getting in and out of bed, bathing, dressing, feeding and preparation of special diets, and supervision of medications that are ordinarily self-administered.

Deductible: An annual amount of eligible medical expenses each calendar year that an employee or dependent must incur before any benefits are payable by the Plan. (See specific definition on page 24.)

Durable Medical Equipment: Equipment that can withstand repeated use, the only function of which is for treatment of the medical condition, and that is generally not useful to the patient in the absence of the condition (see Durable Medical Equipment, Supplies and Prostheses, Benefit 7).

Enrollee: The subscriber (employee or retiree) or a covered dependent.

Experimental and Investigative: Any treatment, procedure, facility, equipment, drug, drug usage, device or supply which, at the time rendered, does not meet the criteria listed below:

1. Approval has been granted by the Federal Food and Drug Administration, or by another United States Government agency for general public use for treatment of a condition; or

2. It has been scientifically demonstrated by the medical profession to have efficacy in terms of: (a) when the prognosis for the patient's condition is terminal, that the treatment substantially extends the probabilities of the person's survival; (b) when deterioration of a body system is progressive and reasonably certain to (or has) disabled or incapacitated the patient, that the treatment can be substantially expected to improve the probabilities of arresting the condition's progress for five or more years; or (c) when the body function has been lost by the patient, that the treatment has been shown to restore the body function to usefulness at least sixty percent of the time treatment has been utilized; and (d) and is ordered by an institution or provider with the United States that scientifically demonstrated proficiency in such treatment.

The Plan's Utilization Review Organization or other Medical Review Institution will determine whether a procedure is considered experimental or investigative. No benefits will be provided for procedures which are experimental or investigative.

Medical Emergency: The onset of a sudden illness or accidental injury that is severe enough to require immediate medical treatment necessary to safeguard the patient's life or prevent serious impairment of bodily function.

Medically Necessary: A service or supply required for diagnosis or treatment of illness or injury that meets all of the following criteria:

F It is consistent with the symptoms, diagnosis and treatment of the patient's condition.

F It is appropriate with regard to standards of good medical practice.

F It is not solely for the convenience of the patient or the provider.

F It is the least costly of the alternative levels of service or supplies that are adequate and available. When a patient is an inpatient, it further means that the services and supplies cannot be safely provided on an outpatient basis without adversely affecting the patient's condition or the quality of medical care rendered.

F It is generally performed or accepted by the medical or dental profession.

The fact that a physician or other provider prescribes, orders, recommends or approves a service or supply does not, in itself, make it medically necessary. The Plan reserves the right to determine whether or not, in its judgment, a service, supply or setting is medically necessary.

Out-of-Pocket Expense Limit: The maximum amount of coinsurance you are responsible to pay during the calendar year, plus any applicable deductibles or co-payments (see specific definition on page 24). After you reach the out-of-pocket expense limit, the Plan pays most benefits in full up to the usual, customary and reasonable charge for the remainder of the calendar year, unless otherwise specified.

Plan: Shall mean the Benefits described in this Plan Document.

Recipient: The recipient is the person who receives the organ for transplant from the organ donor. The recipient shall be a participant or dependent covered under the provisions of this Plan. Only those organ transplants not considered experimental in nature and specifically covered herein are eligible for coverage under this Plan

Relative: When used in this document shall mean husband, wife, son, daughter, mother, father, sister or brother of the participant or any covered dependent.

Spouse: The man or woman to whom the participant is legally married, not including a common-law marriage.

APPROVED PROVIDERS AND FACILITIES

Only services provided by the approved providers and facilities listed below are covered under the Self-Insured Plans provided by the PUD. "Provider" or "providers" refers to individual medical professionals who provide primary care, specialty care or ancillary services directly to enrollees. "Facility" or "facilities" refers to corporate entities such as hospitals, clinics, home health care agencies, and other organizations responsible for the delivery of medical or related services.

In order to directly bill the Plan and receive payment for services rendered in accordance with plan benefits, the provider or facility must be of a type appearing on this approved list, have a current license to deliver services in the geographic location where services are provided, provide only services that are within the provider's or facility's scope of practice defined by the licensing agency, and provide services within the benefit limits of the Plans.

List of Approved Providers and Facilities

F Acupuncturists who are licensed or certified by the state in which the services are rendered and are acting within the scope of such licenses or certification when services are being rendered.

F Licensed Audiologists

F Licensed Birthing Centers

F Licensed Chiropractors (Doctors of Chiropractic [DC])

F Christian Science Practitioners of the First Church of Christ Scientist, Boston Massachusetts

F Licensed Community Mental Health Agencies

F Licensed Dentists (Doctors of Dental Medicine [DMD] and Doctors of Dental Surgery or Dental Science [DDS])

F Medicare-approved Diabetic Education Programs

F Registered Dieticians who are licensed or certified by the state in which the services are rendered and are acting within the scope of such licenses or certification when services are being rendered.

F Home Health or Hospice Agencies licensed by the State of Washington; in other states, they must be Medicare-certified.

F Homeopaths who are licensed or certified by the state in which the services are rendered and are acting within the scope of such licenses or certification when services are being rendered.

F Licensed Hospitals

F Massage Therapists who are licensed or certified by the state in which the

services are rendered and are acting within the scope of such licenses or certification when services are being rendered.

F Licensed Masters of Arts (MA)

F Licensed Masters of Counseling (MC)

F Licensed Masters of Education (M.Ed.)

F Licensed Masters in Social Work (MSW)

F Licensed Occupational Therapists (OT)

F Licensed Optometrists (Doctors of Optometry)

F Licensed Practical Nurses (LPN) providing special nursing services only under Benefit 1, 21 22.

F Licensed Registered Nurses (RN), including Advanced Registered Nurse Practitioners (ARNP); Nurse Midwives; and Licensed Midwives

F Licensed Registered Physical Therapists (RPT)

F Licensed Pharmacists

F Licensed Podiatrists (Doctors of Podiatric Medicine [DPM])

F Licensed Psychologists

F Licensed Physicians (Doctors of Medicine [MD], Doctors of Osteopathy [DO]) or Doctors of Naturopathy (ND)

F Speech Therapists certified by the American Speech, Language and Hearing Association

F Licensed Surgical Centers

F Licensed Substance Abuse Treatment Facilities

F Licensed Marriage and Family Therapist (LMFT)

NOTE:. The services of respiratory therapists are covered by the plan only when they are employed by, and deliver services within, a hospital, skilled nursing facility, hospice, or home health program. The services of home health aides are covered only when they are employed by and deliver services within a hospice or home health care agency.

If you have questions about a specific provider's services being covered under the Plan, please call Pacific Underwriters, Inc., 1-800-562-5226 before beginning treatment. It is the patient's responsibility to establish that a provider is licensed. NOTE: First Choice contracts only with properly licensed providers.

USING PREFERRED PROVIDERS

The PUD's Self-Insured Medical Plan contracts with a preferred provider organization (PPO) to obtain professional services from doctors, hospitals and other providers at discounted rates. When you use a preferred provider, some of those savings are passed on to you.

Under the Plan, you may obtain covered services from any physician, hospital or other approved provider or facility for yourself and enrolled dependents. If you use a nonpreferred provider, you may need to complete and submit your own claim forms and be responsible for obtaining preauthorization for inpatient facility admissions and other services and supplies.

Eligible expenses incurred for services performed by a non-preferred provider will be reimbursed at the preferred benefit level if any of the following circumstances apply:

1. You live outside of the Preferred Provider Organization’s service area.

2. You are traveling outside of the Preferred Provider Organization’s service area.

3. You receive emergency services either inside or outside of the Preferred Provider Organization’s service area.

4. You receive services for Diagnostic Testing, MRI’s, X-rays, Labwork, or incur charges from an Anesthesiologist or Assistant Surgeon when the services are ordered as a result of a visit to a Preferred Physician or the services are received while you are in a Preferred Hospital.

If you choose preferred providers, generally your provider will submit claims for you and will save you money on your share of the bill, since the Plan will pay 90% of allowed charges for most services, instead of 70%, after the $10 co-payment is made. The exceptions to this policy are (a) services normally reimbursed at less than 70%, such as outpatient mental health care, which are paid in accordance with normal plan provisions, and (b) services normally reimbursed at 100%, such as approved inpatient rehabilitation. Ultimately, however, it is the enrollee's responsibility to make sure pre-authorization or pre-notification has been done.

You and each family member may choose different providers, and you can use preferred providers for all or only part of your medical care. Call the Human Resources office if you would like help in choosing a provider; need a current copy of the preferred provider directory; or have a question or complaint about a preferred provider, the service you received, or the availability of physicians in your area.

SERVICE AREA LIMITATIONS

Benefits covered under the District's Self-Insured Medical Plan are available worldwide from any approved provider or facility. All benefits for covered services will be provided to the Plan limits. Any charges not eligible under this Plan will be the responsibility of the employee.

In the event that travel is required outside the western Washington area in order that a covered employee or dependent receive medically necessary treatment which is not reasonably available within the area, the plan administrator reserves the right to pay for certain expenses associated with said travel. Travel expenses for a spouse or parent to accompany the individual receiving treatment may also be granted. The circumstances of each situation will be taken into consideration and determination will be made based on those facts.

MEDICAL NECESSITY

The Plan may require proof that services and supplies, including court-ordered care, for which you or your provider claim benefits under the Plan are medically necessary. No benefits will be provided under this plan if such proof is not provided or not acceptable to the Plan. For purposes of determining benefits, "medically necessary" means that a service or supply is required to diagnose or treat the patient's condition, is consistent with the symptoms or diagnosis and treatment of the condition, is the most appropriate level of service or type of supply needed for such diagnosis or treatment, is consistent with accepted medical practice, and is not administered primarily for the convenience of the patient or provider.

MEDICAL REVIEW REQUIREMENTS

The Plan reviews all non-emergency inpatient facility admissions, except normal child birth vaginal deliveries where the length of stay is 48 hours or less and cesarean section deliveries where the length of stay is 96 hours or less, and both inpatient and outpatient non-emergency surgeries (except when performed in the office of a physician). For notification of your inpatient facility admission or surgery, contact Pacific Underwriters, Inc. at 1-800-562-5226.

CASE MANAGEMENT

The plan provides an optional case management service at no cost for patients whose medical cases involve complex treatment and/or high expenses. Cases which may benefit from case management are identified by Pacific Underwriters during the preadmission review process. The program is designed to provide support when there is a serious chronic or catastrophic illness. Services are provided only with the patients knowledge and approval.

MEDICAL REVIEW DURING CLAIMS PROCESSING

When your claims are processed, the plan will verify that your treatment was medically necessary and that your provider's charges are within the plan's definition of allowed charges (see Definitions section).

DEDUCTIBLE

A deductible is a dollar amount that an enrollee must pay before the plan will begin to pay benefits. The Plan will not pay benefits until the calendar year deductible is met.

Medical: For each enrollee, the calendar year deductible is $100 (only when using non-preferred providers) and is calculated from January 1 to December 31. The maximum calendar year medical benefit deductible payable by all members of a family combined is $300 (for families of three or more covered persons). When a family’s total deductible payments equal this amount, no further calendar year deductible will be required for any family member during that calendar year.

Dental: For each enrollee, the calendar year dental deductible is $25.00 for Class II and Class III benefits. (The dental deductible does not apply to Class I covered benefits.) The deductibles are calculated from January 1 to December 31. There is no family deductible maximum for dental benefits.

DEDUCTIBLE CARRYOVER

Although a new medical deductible will apply each calendar year, expenses incurred during October, November and December which are applied against that year’s deductible will also be applied toward the deductible for the next year and thus reduce or elimate the next year’s deductible. Any amounts that satisfy an individual deductible will count toward satisfying the family deductible.

AMOUNTS NOT CREDITED TOWARD THE DEDUCTIBLE

The following expenses will not be considered in satisfying the deductible requirement:

· Expenses for services or supplies not covered by the Plan.

· Charges in excess of the allowed charges.

· Copays.

CO-PAYMENTS

Visits to approved providers or facilities are subject to a $10 co-payment per visit to a physician’s office. The $10 co-payment will apply to all types of medical services except those that are paid at flat rates or are otherwise described within the Plan document.

When the prescription drug card is used at an approved pharmacy, you must pay a $5 co-payment for each generic prescription or refill and a $15 co-payment for brand-name prescriptions or refills. Co-payments do not accumulate toward the annual out-of-pocket expense limit.

Services which are exempt from co-payments include: (a) routine vision care benefits; (b) emergency room visits which are subject to the $50 co-payment described below; (c) lab procedures, x-rays, mental health care, ambulance services and immunizations.

EMERGENCY ROOM CO-PAYMENT

You must pay a $50 co-payment each time you or a covered dependent are examined or treated in a hospital emergency room. This co-payment is not counted toward the calendar year deductible or the annual out-of-pocket expense limit. Exemptions from this co-payment are limited to the following:

F Immediate admission to the hospital.

F Life threatening situations which do not immediately lead to hospital admission.

F Direct referral to the emergency room by your family physician.

When seeking emergency services, physician charges will be paid at the preferred level, regardless of physician’s network status.

WHAT THE PLAN PAYS AND WHAT YOU PAY

COINSURANCE

Coinsurance refers to the percentage of the final bill for which you are responsible (for example, if the Plan's payment rate is 70% of allowed charges, you are responsible for the other 30%, plus any noncovered charges). When all deductibles and co-payments are satisfied, the plan makes its payment based on the following:

1. The Basic Plan Rate: 70% of Allowed Charges. Nonpreferred providers are normally paid at 70% of their billed charges or 70% of allowed, whichever is less. This means that the subscriber ordinarily is responsible for 30% of the allowed amount, plus any of the bill that exceeds allowed.

2. The "Preferred" Rate: 90% of the Allowed Charge. This is the amount paid by the plan when the patient has (a) used a preferred provider to receive covered services, or (b) received Medicare-covered services from a provider who accepts assignment from Medicare. This leaves the subscriber with only 10% of the allowed charge to pay. A preferred provider's allowed charge is determined by contract, and the provider cannot charge more than this for covered services provided to the Plan enrollees.

3. Special Reimbursement Rates for Specific Services. Some plan benefits are reimbursed at rates different than those listed above. For example, charges for outpatient mental health services are paid at 50% of allowed up to a maximum plan payment of 30 visits in a calendar year; plan-approved hospice care, inpatient rehabilitation services and second opinions required by the Plan are paid at 100% of allowed or allowed charges; and vision benefits are paid at specifically scheduled amounts.

OUT-OF-POCKET EXPENSE LIMIT

The individual annual out-of-pocket amount consists of the enrollee's $100 calendar year deductible if applicable and coinsurance payments on the first $4,000 of covered charges. If only preferred providers were used, the individual out-of-pocket limit will be $400. If only nonpreferred providers are used, total payments will be no more than $1,200 after the deductible is met for an individual. For a family of three or more persons, the out-of-pocket ceiling is $3,000 of total coinsurance payments during the year.

When an enrollee or family has reached the out-of-pocket limit during a single calendar year, the Plan will pay 100% of allowed charges for covered services received for the rest of the calendar year. The 100% payment rate will apply to covered services normally reimbursed at a rate of 70% or higher, unless otherwise indicated. It does not apply to co-payments, premiums, noncovered charges or provider charges in excess of what the Plan allows.

The following amounts are not included in the calculation of the calendar year out-of-pocket limit, either for an individual or for a family: (a) nonpreferred provider deductible; (b) any emergency room deductibles (co-payments); (c) co-payments for visits to approved providers or facilities; (d) co-payments for prescription drugs; (d) any reductions in benefits applied for failure to comply with medical review requirements; (f) any provider charges in excess of allowed, for which the enrollee remains responsible; (g) any noncovered charges; and (h) enrollee coinsurance payments for outpatient mental health care services.

MAXIMUM PLAN PAYMENT

The total amount paid out by the Plan on behalf of each covered individual for all benefits is limited to an annual maximum plan payment of $2,000,000. The total amount paid out by the Plan on behalf of each covered individual for all benefits in their lifetime is unlimited. Some services are also subject to specific calendar year or lifetime benefit limitations, as detailed in the Plan Benefits and Provision section.

FILING A CLAIM: WHAT TO DO AND WHAT TO EXPECT

When you need to file a claim for benefits, obtain a claim form from the Human Resources office. If you are a retiree, additional claim forms will be sent to you with your Explanation of Benefits when the claim is processed, or you may also contact the Human Resources office.

Here are the key steps in filing a claim for benefits:

1. ASSEMBLE NEEDED INFORMATION

Itemized bills from your providers: These should include the patient's name, a description of the illness or injury (usually a code number); date and type of service; and your provider's name, address, tax identification number, and fee. Your claim cannot be processed without this information. Cash register receipts, balance due statements, and payment receipts cannot be used to determine claim payments. Retirees for whom Medicare is the primary payer also need to submit itemized bills of the services they received which were covered by Medicare and send a copy of Medicare's Explanation of Medicare Benefits (EOMB) after Medicare has paid benefits on the claim.

Explanation of Benefits (EOB): When another group medical plan is the primary payer, you need to submit a claim to that plan first. When the other plan has processed your claim, you should receive an EOB explaining the benefit payment. Send a copy of that EOB, along with a copy of your itemized bills, to Pacific Underwriters, P. O. Box 66040, Seattle, WA 98166. Medicare-eligible retirees need to include the EOB with their claims as noted above; claims cannot be processed without the provider's full name and address and tax identification number.

2. FILE YOUR CLAIM

Submit a separate claim for each patient, although you may include multiple medical services for that one patient on a single claim form. Do not use nicknames or initials on claim forms or bills. Keep a copy of all documents for your records and send the claim to Pacific Underwriters, P.O. Box 66040, Seattle, WA 98166. File your claims within 12 months of the date of service (claims filed later than that will not be allowed).

Claims for Medical Services: These claims are filed on the PUD Self-Insured Plan Claim Form. The following tips will help you in filing medical claims:

F Preferred providers and hospitals will file claims for you.

F Submit all bills for a single illness at the same time whenever possible.

F Be sure to fill in the "other coverage" section on the claim form if you, your spouse, or a dependent child are covered under another plan. If there is no other coverage, mark "No" on the form.

3. WHAT HAPPENS AFTER YOU SUBMIT YOUR CLAIM

Benefits are calculated according to the plan benefit and payment provisions and you will receive and Explanation of Benefits (EOB) showing how your claim was processed. Keep your original copy of the EOB, since it is the only record you will receive of claim payment. You may need it for tax purposes or if there should be any questions about payment to your provider.

4. WHO GETS THE MONEY WHEN CLAIMS ARE PAID

If you used a preferred provider, the Plan will send payments directly to the provider when the claim has been processed. Accordingly, you should not make payments to a preferred provider until the Plan has paid its part of the bill.

If you use a nonpreferred provider (other than a hospital), payment may be sent to you or to your provider. Claim payments for hospitals are almost always sent directly to the hospital, regardless of its status as a preferred or nonpreferred provider.

When payment goes to the provider, both you and the provider will receive an EOB detailing what services were covered and how benefits were calculated. The EOB will have a check attached if payment is due to you.

WHAT HAPPENS WHEN THE PUD'S SELF-INSURED PLAN IS NOT THE PRIMARY PAYER?

The amount paid on your behalf may change when you or a family member have coverage through another source (or when both husband and wife are PUD 3 employees) because of coordination of benefits (COB) provisions. When the PUD Self-Insured Plan is secondary, it will coordinate benefits with other coverage so that total payments (or benefits) under the combined coverage will not exceed 100% of allowed charges (see Coordination of Benefits Provisions section).

ADDITIONAL INFORMATION ON PLAN ADMINISTRATION AND BENEFITS

THIRD PARTY LIABILITY (SUBROGATION/REIMBURSEMENT)

The Plan shall be subrogated, to the extent of any payments made under the plan to or for the benefit of any covered person, to all of the rights of recovery of or on behalf of the covered person arising out of any claim or cause of action which may accrue to such covered person, or such person’s successors in interest (including by way of illustration and not limitation, personal representative, executors, legal representatives, heirs and assigns) because of or arising as a result of any illness, injury, disease or other condition incurred or suffered by the covered person for which any party may be liable or legally responsible by reason or contract, tort or other legal cause.

In addition to the Plan’s subrogation rights, as a condition of participation under the Plan, each covered person shall agree to reimburse the Plan from any monies or other property recovered from any party by judgment, settlement or otherwise for any illness, injury, disease or other condition for which benefits were provided under the Plan, to the extent of such benefit payments.

The Plan administrator (or the Plan Supervisor, where appropriate) may in its sole and absolute discretion determine whether or not to pursue the Plan’s rights for subrogation and reimbursement. Any recovery from such other party as the result of a judgment, settlement or otherwise by or on behalf of such covered person shall be applied first in all events to reimburse the Plan for any and all payment made under the Plan with respect to such covered person, regardless of (a) the amount of damages claimed by the covered person shall recover against such other party, (b) any characterization of the payments by such other party as for the covered person damages (such as personal injuries or future education or training or pain and suffering) other than health care expenses, or (c) the covered person recovering the money or other property, being a minor.

Each covered person shall agree to promptly furnish the Plan administrator (or Plan Supervisor, if appropriate) such information concerning such person’s right of recovery from any other party, and to fully assist and cooperate with the Plan administrator (or Plan supervisor, if appropriate) in protecting and obtaining the Plan’s subrogation and reimbursement rights. The covered person shall further agree not to allow the Plan’s subrogation and reimbursement rights to be limited or harmed by any other acts or failures to act on the covered person’s part. In such event, the Plan administrator (or Plan supervisor, if appropriate) shall be authorized in its sole discretion to suspend or terminate the payment or provisions of any further benefits to or for the benefit of the covered person.

Notwithstanding the foregoing, any payments received by or with respect to a covered person from any insurance company pursuant to a policy under which the covered person is the owner (or dependent of the owner of such policy) and a named insured shall also be subject to this section.

The employer shall pay fees and costs associated with the enforcement of the Plan’s rights. No Plan benefits will be paid until liability has been established by the Plan administrator.

The covered person agrees to do whatever is necessary to enable the Plan’s right of subrogation to be exercised. The covered person shall hold in trust and reimburse the Plan for any payment it made for which the covered person recovers damages, regardless of the designation of such damages in any settlement document or court order.

A covered person must cooperate in every way including claims investigation, completing promptly and accurately the subrogation agreement, recovery of overpayments, furnishing information and assistance, executing and delivering necessary instruments as may be required and not to prejudge the rights of the Plan. Failure to cooperate or prejudicing a right of the Plan may result in a loss of benefits. Specifically, the Plan may require, as a condition to the payment of any benefits, that the Participant direct such Participant’s attorney in any legal action instituted by such Participant to represent both the interest of such Participant and the interest of the Plan. The Plan reserves the right to appoint an attorney in its own right as an alternative to its using such Participant’s attorney.

In the event that a settlement is made by another person or insurance company to the Participant or one of the covered dependents prior to the Plan’s rights being honored, the liability of the Plan shall be reduced by the amount of such settlement.

YOUR OBLIGATION TO NOTIFY THE PLAN

You must notify the Plan of any claim or lawsuit for a condition or injury for which the plan paid benefits. This includes promptly notifying the Plan in writing of all of the following matters:

F the facts of your condition or injury,

F any changes in your condition or injury,

F the name of any person responsible for your condition or injury and that person's insurance carrier, and

F advance notice of any settlement you intend to make of your action or claims.

RIGHT OF RECOVERY

Whenever payments have been made by the Plan Supervisor (or benefits have been quoted) in excess of the maximum amount of payment necessary at the time to satisfy the intent of this Plan, the Plan Supervisor shall have the right to recover such payment (or avoid making such payment), to the extent of such excess, from among one or more of the following as the Plan Supervisor shall determine: any persons to or for, or with respect to whom such payments were made, and/or any insurance companies and other organizations.

RIGHT TO RECEIVE AND RELEASE INFORMATION

You may be required to provide the Plan with information necessary to determine eligibility, administer benefits or process claims. This could include, but is not limited to, medical records. Coverage could be denied if you fail to provide such information when requested.

INADVERTENT ERROR

Inadvertent error by the Plan Administrator in the keeping of records or in the transmission of participant's applications shall not deprive any participant or dependent of benefits otherwise due, provided that such inadvertent error be corrected by the Plan Administrator within ninety (90) days after it was made.

FALSE CLAIMS OR STATEMENTS

No enrollee or provider or person acting on behalf of an enrollee or provider, shall submit a claim for which the care, services, or supplies claimed were not in fact provided or for which the enrollee is not expected to fully pay his or her obligation under the terms of the plan.

No enrollee or person acting on behalf of an enrollee shall make any false or incomplete statements on any application for enrollment under this plan.

APPEALING A CLAIM

If your claim is denied in whole or in part, you will receive written notification delivered in the same fashion as reimbursement for a claim. An Explanation of Benefits will be provided by the Plan Supervisor showing the calculation of the total amount payable, charges not payable, and the reason. If additional information is needed, you may be requested to provide the information prior to payment of your claim. You may request a review by filing a written application with the Plan Administrator through the Human Resources office. On receipt of a written request for review of a claim, the Plan Supervisor will review the claim and furnish copies of all documents and all reasons and facts relating to the decision. You or your authorized representative may examine pertinent documents (except as information may be contained therein which the "physician" does not wish made known to the claimant) which the Plan has and you may submit your opinion of the issues and your comments in writing.

Requests for review must be filed within 120 days after denial is received; however, we suggest it be filed promptly whenever possible. Decision by the Plan Supervisor will be made within 60 days unless special circumstances require extension. This decision will also be delivered to you in writing setting forth specific references to the pertinent Plan provisions upon which the decision is based.

If satisfaction is not received through the above process and you wish to have the continuing denial reconsidered, the following procedure may be pursued:

1. Contact the Human Resources office to discuss the specific situation. Provide the following information:

A. Copies of denied physician, hospital, laboratory or prescription drug bills and/or receipts.

B. Copies of all Explanations of Benefits (EOBs) involved in the denial by the Plan Supervisor (Pacific Underwriters).

C. Copies of any other communications with Pacific Underwriters relative to the denial of your claim.

2. After review and communication with Pacific Underwriters, if resolution is not reached, the Human Resources Manager will bring the denial before the Insurance Committee. The committee will only be given the facts of the situation and will not be given your name or the name of the patient (if the patient is a dependent). After consideration, if the committee feels that the plan should have covered the claim under the intent of its current provisions, Pacific Underwriters will be instructed to pay it.

3. If, after consideration, the committee determines that the plan does not provide for coverage of the claim in question, you will be informed of that decision within 60 days unless special circumstances require extension. Further consideration will be given for covering such services in the future through the amendment process (see Amendment of Plan Document below) or at the beginning of the next plan year.

CANCELLATION

An employee may cancel this coverage by giving written notice to the Plan Administrator through the Human Resources office who will notify the Plan Supervisor.

In the event of the cancellation of this Plan, all employee's and dependent's coverage shall cease automatically without notice. Employees and dependents shall not be entitled to further coverage or benefits whether or not any medical condition was covered by the Plan prior to termination or cancellation.

Upon termination of this Plan, all claims incurred prior to termination, but not submitted to the Plan Supervisor within 75 days of the effective date of termination of the Plan, will be excluded from any benefit consideration.

AMENDMENT OF PLAN DOCUMENT

The Plan Administrator may terminate, modify or amend the Plan in its sole discretion without prior notice. The employee Insurance Committee, duly authorized by the Board of Commissioners of the Plan Administrator, will be given the opportunity to be involved in decisions to terminate, modify or amend the Plan. Final authority, however, rests with the Board of Commissioners of the Plan Administrator.

Any such decision to terminate, amend or modify the Plan which affects covered employees, retirees and their dependents, will be communicated to the covered employees and retirees. The amended plan benefits shall be the basis for determining all Plan payments for all expenses incurred on or after the effective date of such amendment. Plan payments made under the Plan prior to amendment shall continue to be included as Plan payments in determining the total benefits remaining toward satisfaction of any benefit maximums calculated on either a Plan year, calendar year or lifetime basis.

PLAN IS NOT A CONTRACT OF EMPLOYMENT

The Plan shall not be deemed to constitute a contract of employment between Mason County PUD No. 3 (the PUD) and any employee or to be a consideration for, or an inducement to or condition of the employment of any employee. Nothing in the Plan shall be deemed to give any employee the right to be retained in the service of the PUD or to interfere with the right of the PUD to discharge any employee at any time; provided however, that the foregoing shall not be deemed to modify the provisions of any collective bargaining agreements which may be made by the PUD with the bargaining representative of the employees of the PUD.

FIDUCIARY OPERATION

Each fiduciary shall discharge his duties with respect to the Plan solely in the interest of the employees, retirees and beneficiaries of the PUD and (1) for the exclusive purposes of providing benefits to employees, retirees and their beneficiaries and defraying reasonable expenses of administering the Plan; (2) with care, skill, prudence and diligence under the circumstances then prevailing that a prudent man, acting in a like capacity and familiar with such matters, would use in the conduct of an enterprise of a like character and with like aims; and (3) in accordance with the documents and instruments governing the Plan to the extent that they are consistent with the provisions of RCW 46.62 and WAC Chapter 236-22.

MEDICARE

Medicare as used in this section shall mean Title XVII (Health Insurance for the Aged) of the United States Social Security Act, as added to by the Social Security Amendments of 1965, the Tax Equity and Fiscal Responsibility Act of 1982, or as later amended.

Person as used in this section means a person who is eligible for benefits as an employee in an eligible class of the Plan and who is or could be covered by Medicare Parts A and B, whether or not actually enrolled.

Eligible Expenses as used in this section with respect to services, supplies and treatment shall mean the same benefits, limits and exclusions as defined in this plan document. However, if the provider accepts Medicare assignment as payment in full, the eligible expenses shall mean the lesser of the total amount of the charges allowable by Medicare, whether enrolled or not, and the total eligible expenses allowable under the Plan exclusive of coinsurance and deductible.

Order of Benefits Determination as used in this section shall mean the order in which Medicare benefits are paid, in relation to the benefits of this Plan.

Total benefits of this Plan shall be determined as follows:

1. Active Employee age 65 or older

For active employees and/or non-working spouses of active employees age 65 or over, this Plan will be primary and Medicare will be secondary.

2. Disabled Employees with Medicare (except those with End-Stage Renal Disease)

For persons eligible for Medicare by reason of disability, the order of determination will be shown as follows:

If the company employs 100 or more employees: This Plan will be primary and Medicare will be secondary. The PUD will remain the primary payor of medical benefits until the earliest of the following events occurs: (1) the group coverage ends for all employees; or (2) the individual is no longer employed by PUD 3.

If the company employees less than 100 employees: This Plan will be secondary and Medicare will be primary.

3. Disabled Employees with End-Stage Renal Disease (ESRD)

This Plan shall be primary during the initial 18-month period which begins on the date of Medicare Entitlement. ESRD Medicare Entitlement begins on the fourth month of renal dialysis, but can start as early as the first month of dialysis for individuals who take a course in self-dialysis training during the three month waiting period.

4. Retirees with Medicare

For covered persons who are not active employees age 65 or over, and that are eligible for Medicare by reason of age alone, this Plan will be secondary and Medicare will be primary.

SCHEDULE OF BENEFITS

This Schedule of Benefits is a summary of the benefits provided under this Plan. Please read the entire booklet for details on specific benefit limitations and maximums, waiting periods and exclusions.

MEDICAL BENEFITS

Preferred Out of

Network Network

COPAY $ 10 $ 10

After copay and applicable deductible Plan will pay 90% 70%

INDIVIDUAL DEDUCTIBLE $000 $100

Per calendar year.

FAMILY DEDUCTIBLE $000 $300

Per calendar year.

INDIVIDUAL MAXIMUM OUT-OF-POCKET EXPENSE $400 $1,200

Per calendar year.

FAMILY MAXIMUM OUT-OF-POCKET EXPENSE $3,000

Per calendar year.

ALLERGY INJECTIONS 90% 70%

Copay waived when services of physician not required.

ALLERGY TESTING 90% 70%

ALTERNATIVE SERVICES 90% 70%

$1,000 combined maximum per calendar year.

Accupuncture, massage therapy and/or registered dietitian services

AMBULANCE (AIR AND GROUND) 90% 90%

*ANESTHESIOLOGIST 90% 70%

*ASSISTANT SURGEON 90% 70%

CHEMICAL DEPENDENCY TREATMENT 90% 70%

Maximum of $5,000 during 24 consecutive months.

Lifetime maximum of $10,000.

CHIROPRACTIC SERVICES NOT INCLUDING X-RAYS 90% 70%

Limited to $500 per calendar year.

*DIAGNOSTIC TESTING 90% 70%

DIETARY EDUCATION 90% 70%

Combined maximum – see Alternative Services

DURABLE MEDICAL EQUIPMENT 90% 90%

EMERGENCY ROOM SERVICES $50 Copay $50 Copay

Copay waived if admitted as a patient then 90% then 70%

and if emergency treatment is for

life threatening condition, if directly referred to

emergency room by family physician and if services

are obtained from hospital outpatient clinic.

HEARING BENEFIT 90% 70%

Maximum payment of $500 in any 36 consecutive months.

HOME HEALTH CARE 90% 70%

Limited to 130 visits per calendar year.

HOSPICE CARE 100% 100%

Lifetime maximum 10,000.

INFERTILITY TREATMENT 00% 00%

INFUSION THERAPY 90% 70%

*INPATIENT PHYSICIAN VISIT 90% 70%

MEDICAL FACILITY SERVICES 90% 70%

MENTAL TREATMENT

Inpatient 90% 70%

Limited to 10 days maximum per calendar year.

Outpatient 50% 50%

Limited to 30 visits per calendar year.

NEURODEVELOPMENTAL THERAPY 90% 70%

Limited to dependent children through age six.

OFFICE VISIT 90% 70%

PHYSICAL, OCCUPATIONAL & SPEECH THERAPY 90% 70%

PREVENTIVE CARE 90% 70%

Adult benefit limited to $500 per calendar year.

REHABILITATION SERVICES

Inpatient - limited to 60 days per calendar year. 90% 70%

Outpatient Services - As medically necessary 90% 70%

SECOND SURGICAL OPINION 90% 70%

SKILLED NURSING FACILITY 90% 70%

TOBACCO CESSATION 90% 90%

Lifetime maximum $300.

TEMPOROMANDIBULAR JOINT DISORDER 70% 70%

Lifetime maximum $500.

TRANSPLANTS 90% 0.00%

* If the surgeon and the facility are preferred providers, then the following will be covered at the preferred level and not subject to the deductible – anesthesiologist, assistant surgeon, inpatient physician visits and diagnostic testing.

PRESCRIPTION BENEFITS

NMHC Client Based Network pharmaceuticals

Generic Drugs $ 5 Copay

Brand name Drugs $15 Copay

Dispensing limit 34 days.

Maintenance Drugs – Neil’s Pharmacy/Mail order with Informed RX

Generic Drugs $ 5 Copay

Brand Name Drugs $15 Copay

Dispensing limit 100 days.

DENTAL BENEFITS

INDIVIDUAL DEDUCTIBLE $25 for Class II & III

Per calendar year.

Waived for preventive services.

MAXIMUM PAYABLE

During each 12 month period, Jan 1 – Dec. 31. $2,000 per person

_______________________________________

Class I benefits - Preventive 100%

Oral Exam, Cleaning, X-rays, Fluoride, Sealants.

Deductible waived.

Class II benefits – Basic and Restorative 80%

Fillings, Oral Surgery, Endodontic Treatment,

Periodontal Services.

Class III benefits – Major and Prosthetics 75%

Bridgework, Crowns, Dentures and their repairs.

ORTHODONTIA

Lifetime maximum $1500.

Deductible does not apply.

ORTHOGNATHIC SURGERY 70%

Lifetime maximum $5,000.

TEMPOROMANDIBULAR JOINT (TMJ) 70%

Lifetime maximum $500

VISION BENEFITS

EYE EXAM 100%

Limited to one exam per calendar year.

Lenses, Frames, Contact Lenses, and LASIK procedures $300

per calendar year.

MEDICAL PLAN BENEFITS AND PROVISIONS

Benefits described below are available to the PUD Self-Insured Medical Plan eligible enrollees beginning January 1, 2008. There are no preexisting condition restrictions or waiting periods under the Plan. All sections marked with ê indicate a change from the Plan which was in effect prior to January 1, 2008.

1. ALLERGY INJECTIONS/TESTING

After applicable co-payments are paid, the Plan will pay for eligible charges for the injections, testing, syringes and medication at 70% of allowed charges after the deductible is met when a non-preferred provider has delivered the services, or 90% of allowed charges if a preferred provider has delivered the services.

The co-payment is waived when services of a physician are not required.

2. ALTERNATIVE MEDICINE

Covered Benefits: Services provided and billed by a licensed Homeopath, Naturopath, Acupuncturist, Massage therapist, Registered Dietitian services and Certified Nutritionist.

Plan Payment Provisions: After applicable co-payments are paid, the Plan will pay 70% of allowed charges after the deductible is met when a non-preferred provider has delivered the services, or 90% of allowed charges if a preferred provider has delivered the services, up to the following annual maximums:

Acupuncture, massage therapy and/or registered dietitian services or office calls are limited to a combined annual maximum of $1,000 in paid claims.

Naturopaths and Homeopaths are not subject to an annual maximum.

All of these alternative medicine services may be self-referred.

3. AMBULANCE SERVICES

Covered Benefits: Services covered under this benefit include those provided by a licensed ambulance service in transporting the patient:

F from the site of the medical emergency to the nearest facility equipped to render treatment for a life-threatening illness or injury,

F from one medical facility to the nearest facility equipped to render further medically necessary treatment, or

F to the patient's home when deemed medically necessary and prior approval is received.

With approval through medical review, charges for air and rail transportation from the site of the medical emergency to the nearest facility equipped to provide medically necessary treatment are covered for the patient only.

Plan Payment Provisions: The Plan will pay 90% of allowed charges until the calendar year out-of-pocket limit is reached.

4. CHEMICAL DEPENDENCY SERVICES

Pre-authorization is recommended for inpatient services covered under this benefit. Please refer to the Medical Review Requirements section for details.

Covered Benefits: Chemical dependency is defined as repetitive use of alcohol or drugs to the extent that such use interferes with the user's social, psychological or physical well-being. Chemical dependency does not include dependence on tobacco, caffeine or food. Covered services include:

F Outpatient substance abuse diagnosis and treatment by an approved provider.

F Inpatient treatment according to a prescribed plan by an approved provider at an approved substance abuse treatment facility or hospital, subject to approval by the Plan's medical review program.

F Detoxification treatment at an approved substance abuse treatment facility or hospital, if followed by the patient's enrollment in a rehabilitation program within one week.

F Inpatient prescription drugs prescribed in connection with the treatment of chemical dependency. All other prescription drug charges are paid in accordance with the provisions of Benefit 19 (Prescription Drugs and Insulin).

Plan Payment Provisions: Charges for diagnosis and treatment of chemical dependency, whether in an inpatient or outpatient setting, are subject to the $10 co-payment and are paid at either 70% of allowed charges after the deductible is paid, or 90% of allowed charges if a preferred provider has delivered the services, until the Plan maximum limit for this benefit is reached.

The Plan will pay a maximum of $5,000 per enrollee during any period of 24 consecutive months, up to a lifetime maximum of $10,000.

The Plan reserves the right to take credit for chemical dependency benefits paid by any other group medical plan on behalf of an enrollee during the immediately preceding 24-month period.

Benefit Limitations: The Plan does not cover charges for care received in residential recovery houses which provide an alcohol or drug-free residential setting, for alcohol and drugs information and referral services, for enrollment in Alcoholics Anonymous or similar programs, for services provided by schools, for emergency service patrol, or for wilderness training programs.

4. CHIROPRACTIC CARE

Covered Benefits: Services provided and billed by a licensed Chiropractor.

Chiropractic services and/or office calls in which spinal adjustments are performed are limited to an annual maximum of $500 in paid claims (for x-rays refer to Diagnostic Testing)..

6. DIAGNOSTIC TESTING

Covered Benefits: Covered services include diagnostic laboratory tests, x-rays and other imaging studies, pathology examinations, electrocardiograms, electroencephalo-grams, and similar tests, studies and exams intended to establish a diagnosis or monitor the progress and outcome of therapy.

Plan Payment Provisions: The Plan will pay 70% of allowed charges after the deductible is paid, or 90% of allowed charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached. If the provider and the facility are preferred providers the benefit will be covered at the preferred level (90%) and not subject to the deductible.

Related Benefits or Services: Benefits are provided for Mammograms under Preventive Care in Benefit 19.

7. DURABLE MEDICAL EQUIPMENT, SUPPLIES AND PROSTHESES

Covered Benefits: Services and supplies provided under this benefit must be medically necessary and must be prescribed by an approved provider for the direct treatment of a covered condition, subject to the limitations listed. Covered services include, but not limited to:

F the rental or purchase (at the option of the Plan) of durable medical equipment, such as wheelchairs, hospital beds and respiratory equipment (combined rental fees shall not exceed full purchase price);

F casts, splints, crutches, trusses, or braces;

F oxygen and rental equipment for its administration;

F ostomy supplies;

F artificial limbs or eyes (including implant lenses prescribed by a physician and required as a result of cataract surgery or to replace a missing portion of the eye);

F the prosthesis and bra necessitated by surgery of the breast, and replacement of these items when necessitated by normal wear, a change in medical condition, or when additional surgery is performed that warrants a new prosthesis and/or bra;

F penile prosthesis when impotence is caused by a covered medical condition, is a complication which is a direct result of a covered surgery, or is a result of an injury to the genitalia or spinal cord and other accepted treatment has been unsuccessful; and

F a wig or hairpiece to replace hair lost due to radiation therapy or chemotherapy for a covered condition, up to a lifetime maximum plan payment of $100 per person.

Repair or replacement of eligible equipment shall be covered when necessary to meet the needs of the covered patient.

Plan Payment Provisions: The Plan will pay 90% of allowed charges (which includes state and local taxes), until the calendar year out-of-pocket limit is reached.

When a claim for expensive durable medical equipment is received, the physician will be asked to provide a letter of medical necessity, how long the patient will require the equipment, an appropriate diagnosis, the cost of rental and cost of purchase. The Plan will pay for the most cost effective method.

Benefit Limitations: This benefit does not cover charges for exercise equipment, air conditioners, corrective shoes, arch supports, sanitary supplies, special or extra-cost features or options which are convenience items. This benefit also does not cover charges for dehumidifiers, heating pads, enuresis training equipment, whirlpool baths, hot tubs or charges for equipment in excess of the charge for less costly equipment that serves the same medical purpose (such as motorized wheelchairs). Combined rental fees exceeding the full purchase price are not covered.

8. HEARING CARE

Covered Benefits: Services covered under this benefit include the following:

F hearing examinations and evaluations related to the purchase of a hearing aid and provided by an approved practitioner;

F purchase of a hearing aid (monaural or binaural) prescribed as a result of such exams, including ear mold(s), the hearing aid instrument, the initial battery, cords and other ancillary equipment, a warranty and follow-up consultation within 30 days following delivery of the hearing aid;

F repair of hearing aid equipment; and

F rental charges for a period not to exceed 30 days, if the enrollee returns the hearing aid before actual purchase.

To expedite payment of claims under this benefit, enrollees are encouraged to submit both the bill for the hearing examination and hearing aid purchase at the same time.

Plan Payment Provisions: After the $10 co-payment, the plan will pay 70% of allowed charges after the deductible is paid, or 90% of allowed charges if a preferred provider has delivered the services until the calendar year out-of-pocket limit is reached. The maximum plan payment for this benefit is $500 in any period of 36 consecutive months.

Benefit Limitations: Benefits will not be provided for:

F Replacement of a hearing aid more than once in any period of 36 consecutive months.

F Purchase of batteries or other ancillary equipment, except those covered under terms of the initial purchase of a hearing aid.

F Servicing or alteration of hearing aid equipment.

F Charges for a hearing aid which exceeds specifications, prescribed for correction of hearing loss.

F Charges incurred after plan coverage ends, unless the hearing aid was ordered prior to that date and is delivered within 45 days after the day plan coverage ends.

Related Plan Benefits: If a hearing examination is medically necessary because of illness or injury, charges for such services are covered under the terms of other plan benefits.

9. HOME HEALTH CARE

Covered Benefits: Services provided and billed by an approved home health care agency for medically necessary treatment of an illness or injury are covered under this benefit. Services must be part of a written treatment program prescribed by a physician (MD or DO), who must certify that the enrollee is homebound and that hospital or skilled nursing facility confinement would be required in the absence of home health care.

Covered services include visits for intermittent, part-time care by a registered nurse or licensed practical nurse; licensed physical therapist; certified respiratory therapist; certified occupational therapist; speech therapist certified by the American Speech, Language and Hearing Association; or home health aide acting under the direct supervision of one of the above therapists while performing services specifically ordered by a physician. Also covered are disposable medical supplies and drugs and medicines prescribed by a physician and provided by the agency.

Plan Payment Provisions: After applicable co-payments are paid, the Plan will pay 70% of allowed charges after the deductible is paid, or 90% of allowed charges if a preferred provider has delivered the services, up to an annual maximum of 130 visits. Home Health Care benefits are provided in lieu of and as an alternative to inpatient hospitalization. The written treatment plan should include an estimate of the cost of services and supplies to be rendered. If benefits under this section are exhausted, the subscriber may apply for a limited extension of benefits subject to the following:

F An updated written treatment plan approved by the Plan Supervisor;

F Skilled care is needed to prevent admission or readmission to an acute care facility;

F If rehabilitative, the treatment is demonstrated to be improving and restoring bodily functions lost due to illness or injury and is needed to return the patient to normal living;

F Inpatient benefits are only available when care cannot be safely provide on an outpatient basis; and

F The extension will be for a maximum of 30 days at a time.

Benefit Limitations: The Plan does not provide benefits for the following: maintenance or custodial care; 24-hour or full time care in the home, unless preauthorized; homemaker or housekeeping services; supportive environmental materials (handrails, ramps, etc.); services performed by family members or volunteer workers; social services; psychiatric care; separate charges for records, reports, transportation; dietary assistance; medically unnecessary services; and any services or supplies not included in the written treatment plan or not specifically mentioned in this section as covered, or supplies not included in the written treatment plan or not specifically mentioned in this section as covered.

10. HOSPICE CARE

Covered Benefits: Hospice care services are covered for up to six months as an alternative to hospitalization for the terminally ill (patients whose life expectancy is six months or less). Covered services must be rendered by an approved hospice program in conjunction with a written program of care approved and periodically reviewed by a physician (MD or DO). The written program should include an estimate of the cost of services and supplies to be rendered. Benefits are payable up to a maximum plan payment of $10,000 and only for the following:

F intermittent care delivered by any of the following providers; registered or licensed practical nurses; licensed physical therapists; certified respiratory therapists; speech therapists certified by the American Speech Language and Hearing Association; certified occupational therapists; social workers (MSWs); and home health aides working under the direct supervision of one of the previously mentioned professionals;

F inpatient services and supplies provided by the hospice (for a maximum of 10 days) when ordered by an attending physician, including such services and supplies as prescription drugs, insulin, medical supplies normally used for hospital inpatients, and rental of durable medical equipment;

F respite care for a homebound enrollee, limited to 120 hours in each three-month period of hospice care. The three-month period begins on the initial date of hospice care covered under this plan. Respite care is continuous care of more than four hours per day to afford temporary relief to family members from the duties of caring for a hospice patient.

Plan Payment Provisions: After applicable co-payments are paid, the Plan will pay 100% of allowed charges. Specific limitations on the plan's maximum payment for certain services also apply, as described in the benefits section above.

If the benefits of this section are exhausted, the subscriber may apply for a limited extension of benefits subject to the following:

F An updated written treatment plan approved by the Plan Supervisor;

F Skilled care is needed to prevent admission or readmission to an acute care facility;

F Inpatient benefits are only available when care cannot be safely provide on an outpatient basis; and

F The extension will be for a maximum of 30 days at a time.

Benefit Limitations: Benefits will not be available beyond six months from the initial date of hospice care covered under this Plan. However, the enrollee may apply to the plan for an extension at the end of the six-month period if hospice care benefits have not been exhausted. The Plan does not provide benefits for the following:

F services provided to other than the terminally ill enrollee, including bereavement counseling or pastoral and spiritual counseling;

F services performed by family members or volunteer workers;

F homemaker or housekeeping services (except as provided by home health aides as part of the hospice program);

F supportive environmental materials such as handrails and ramps;

F expenses for the normal necessities of living, such as food, clothing and household supplies, "Meals on Wheels," or similar food services.

F separate charges for reports, records or transportation;

F legal and financial counseling services;

F custodial care;

F services and supplies not included in the hospice program of care, not specifically set forth as covered service, or provided in excess of the specified plan limitations; and

F services provided during any period of time that the enrollee is receiving benefits under Home Health Care (Benefit 9).

11. HOSPITAL INPATIENT SERVICES

It is recommended that you request pre admission review whenever your physician recommends that you be admitted to the hospital on an elective (nonemergency) basis. The telephone number is 1-800-562-5226. In addition, you are asked to notify the Plan following any emergency hospital admission, even if you are discharged quickly. Please refer to the Medical Review Requirements section for details.

Covered Benefits: The plan covers medically necessary hospital accommodation and inpatient services, supplies, equipment and drugs prescribed by a physician for treatment of covered conditions (including general nursing care, surgery, prescription drugs, diagnostic tests and exams, radiation and x-ray therapy, blood and blood derivatives, bone and eye bank services, and take-home medications dispensed by the hospital at the time of discharge).

Plan Payment Provisions: The Plan covers medically necessary hospital accommodation at the following levels until the calendar year out-of-pocket limit is reached:

F 70% (after the deductible has been paid) of the facility's semiprivate room rate, if a nonpreferred facility is used, or

F 90% of the facility's allowed charge if a preferred facility is used.

Benefit Limitations: This benefit does not cover charges for the following:

F beds "reserved" while the patient is being treated in a special-care unit or is on leave from the hospital;

F custodial or convalescent care (care that does not require the continuing services of skilled medical or allied health professionals and that is intended primarily to assist the patient in activities of daily living);

F medically unnecessary inpatient admissions, including those for dental care;

F admissions solely for diagnostic purposes except with prior approval through the Medical Review procedures; and

Related Benefits or Services: Coverage of inpatient care for certain other specific plan benefits differs from that described for this benefit. Please refer to the following sections for details: Mental Health Care (Benefit 14), Chemical Dependency Services (Benefit 4), Surgical Services (Benefit 24), Organ Transplants (Benefit 17), Obstetric and Newborn Care (Benefit 15), Rehabilitation Services (Benefit 21), Skilled Nursing Facility (Benefit 22), and Hospice Care (Benefit 10).

12. HOSPITAL OUTPATIENT AND EMERGENCY ROOM SERVICES

Covered Benefits: Emergency room services covered under this benefit include charges by an approved provider or facility for the diagnosis and emergency treatment of a covered illness or injury.

Hospital outpatient services covered under this benefit include such services as facility charges for ambulatory surgery, preadmission or diagnostic tests and exams, and radiation therapy and chemotherapy.

Co-payment: Each emergency room visit by an enrollee is subject to a separate $50 co-payment, which is not subject to the out-of-pocket expense limit. The $50 emergency room co-payment will be waived if the patient is immediately admitted for further treatment on an inpatient basis, if the emergency treatment is for a life threatening condition, if the patient is directly referred to the emergency room by the family physician, and is not required when services are obtained from a hospital outpatient clinic.

The emergency room co-payment must be satisfied before the Plan will make a payment for emergency room services under this benefit.

Plan Payment Provisions: After satisfaction of the required co-payments, the Plan will pay 70% of allowed charges after the deductible is paid or 90% of allowed charges if a preferred provider has delivered the services, until the calendar year out-of-pocket expense limit is reached.

13. MAINTENANCE PRESCRIPTION DRUG PROGRAM

Covered Benefits: Prescription drugs (drugs that can be legally obtained only with a written prescription) may be dispensed in maintenance quantities (up to 100-day supply, four times annually) under the maintenance drug dispensing program. Drugs, which are available for this program, are contained in an official list, which is authorized and approved by NMHC (copies are available from the PUD Human Resources office).

Initially, a new prescription must be presented to Neil’s pharmacy for the employee or dependent. You can mail the co-payment and the original prescription(s) to: Neil's Pharmacy, Inc., Maintenance Order Prescription Program, P. O. Box 116, Shelton, WA 98584.

Plan Payment Provisions: A co-payment is payable for each prescription refill in the amount of $5.00 per prescription filled for generic drugs and $15.00 per prescription filled for name brand drugs. Following the co-payment the Plan pays 100% of the balance due directly to the pharmacy.

Benefit Limitations: The maintenance order prescription program is intended for maintenance drugs only. Drugs not listed on the officially authorized list will not be covered under this plan. If a drug prescribed in maintenance amounts is not listed, the physician must contact Neil's Pharmacy, Inc. to obtain consideration for dispensing in the larger quantities allowed under this program.

14. MENTAL HEALTH CARE

We encourage the use of the Employee Assistance Program (EAP) available through Reliant Behavioral Health when you or your family member needs counseling. An experienced counselor will meet with you to determine the nature and extent of your problem and assist you in determining the counseling or services that best meet your needs. Six EAP visits per issue are provided with no cost to you.

The EAP can provide you with a referral for further treatment or counseling if you determine that you need additional treatment.

Covered Benefits: Covered services under this benefit include outpatient hospital and physician charges for treatment of mental illness when medically necessary as follows: diagnostic evaluation, brief focal psychotherapy, intermittent care, emergent crisis services, consultation services and medication management.

Inpatient mental health and psychiatric/psychological care for acute mental illness are also covered

Plan Payment Provisions: For inpatient treatment, after the applicable deductible, the Plan will pay 70% of allowed charges or 90% of allowed charges if a preferred provider has delivered the services until the calendar year out-of-pocket limit is reached up to a maximum plan payment of 10 days per enrollee per calendar year. Outpatient mental health services are covered at 50% of allowed charges up to a maximum plan payment of 30 visits per enrollee per calendar year and are not counted toward accumulation of the out-of-pocket expense limit.

Benefit Limitations: Services must be provided by a licensed physician, licensed psychologist, licensed Masters in Social Work (MSW), licensed Masters of Arts (MA), licensed Masters of Counseling (MC), Masters of Education (M.Ed.), Advanced Registered Nurse Practitioner (ARNP) with training in psychology and counseling, licensed community mental health agency, (LMFT) Licensed Marriage and Family Therapist after Masters in Social Work (MSW) or state hospital.

This benefit does not provide for treatment of learning disabilities after diagnosis; for custodial care; for marital or sexual counseling or training services.

15. OBSTETRIC AND NEWBORN CARE

Medical review is necessary for services covered under this benefit. You are required to notify Pacific Underwriters of your pregnancy and expected date of delivery as early as possible to assist the medical review staff in identifying high-risk pregnancies. Please refer to the Medical Review Requirements section for details.

Covered Benefits: The Plan will at all times comply with the terms of the Newborns’ and Mothers’ Health Protection Act of 1996. The Plan will not restrict benefits for any hospital length of stay in connection with childbirth for the mother or newborn child to less than 48 hours following a normal vaginal delivery, or to less than 96 hours following a cesarean section, or require that a provider obtain authorization from the Plan for prescribing a length of stay for the mother or newborn child not in excess of the above periods.

A newborn child will be covered up to 31 days. To continue newborn coverage past the 31 days, you must enroll the child within 60 days of the date of birth. Obstetric services provided and billed by a licensed physician, nurse midwife, licensed midwife hospital, or birthing center are covered under this benefit for subscribers and dependents, provided plan coverage is in force at the time services are received. Nursery charges for the newborn infant or infants are also covered for the length of the mother's medically necessary childbirth-related hospital stay, provided the child is eligible and enrolled in accordance with Plan provisions. Circumcisions may be performed on an outpatient basis after release from hospital or birthing center if accomplished within initial 21 days of life. Charges for termination of pregnancy are covered for subscriber and dependents. Prenatal diagnostic screening for congenital disorders is covered.

Plan Payment Provisions: After payment of applicable co-payments, the Plan will pay 70% of allowed charges after the deductible is paid, or 90% of allowed charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached.

16. OFFICE, CLINIC AND HOSPITAL VISITS

Covered Benefits: All office, hospital, clinic, skilled nursing facility and home visits by approved providers for the diagnosis or treatment of eligible conditions are covered under this benefit, subject to any specific plan limitations on the services being provided.

Plan Payment Provisions: Office, hospital, clinic and skilled nursing facility (except for home visits) are provided after a $10 co-payment is made. (A co-payment for a hospital stay is not required). The Plan will then pay 70% of allowed charges after a $100 deductible is paid or will pay 90% of allowed charges if a preferred provider has delivered the services, until the calendar year out-of-pocket or benefit limit has been reached. The office visit co-payment for routine allergy treatment will be waived for allergy injections (immunotherapy), which do not require the services of the physician. Eligible charges for the syringe and medication only will be payable as above noted.

The Plan will pay 70% of the allowed charges after the deductible is paid for a second provider's opinion or 90% of allowed charges if the second opinion was performed by a preferred provider.

17. ORGAN TRANSPLANTS

Pre-authorization is recommended for services covered under this benefit. Please refer to the Medical Review Requirements section for details.

Covered Benefits: Services related to organ transplantation, including professional and facility fees for inpatient accommodation, diagnostic tests and exams, surgery, and follow up care, are covered.

Transplantation of human organs is covered when pre-authorized by the Plan, when performed in an approved medical facility and when not considered to be experimental or investigational. See other benefits of this plan for related services, such as prescription drugs and outpatient lab and x-ray. Transplantation performed in a non-approved facility is not covered.

ORGAN TRANSPLANT RECIPIENT

All services and supplies relating to organ transplant for the enrollee receiving the organ are covered in accordance with the provisions stated above, provided that the enrollee has complied with the Plan's medical review requirements. The enrollee must have been accepted into the treating facility's transplant program and must continue to follow that program's prescribed protocol.

ORGAN TRANSPLANT DONOR

The donor's initial medical expenses, as well as the costs of treating complications directly resulting from the surgery, will also be paid, provided the donor is not eligible for coverage under any other health care plan or government funding program and provided that the human organ or tissue transplant is not considered experimental or investigational. Plan payments for services provided to the donor are applied toward the $2,000,000 major medical lifetime maximum benefit of the enrollee receiving the organ.

Plan Payment Provisions: After applicable co-payments and deductibles have been paid, the Plan will pay 90% of allowed charges until the calendar year out-of-pocket limit is reached if the transplant was preauthorized and performed in an approved facility. All procedures are covered under the major medical lifetime maximum of $2,000,000.

Benefit Limitations: Transplantation that is not preauthorized or is not performed in an approved facility is not covered. No benefits are provided for charges related to locating a donor, such as tissue typing of family members.

18. PRESCRIPTION DRUGS AND INSULIN

“Legend Drugs” are those drugs, which cannot be purchased without a prescription written by a physician or dentist. Coverage for compounded drugs prescribed by a Naturopath is excluded on this plan.

Legend drugs and insulin are payable up to the wholesale price less 10% plus a professional dispensing fee as set by the Plan Administrator.

Over 400 commonly prescribed drug products are now available in a generic form at an average cost of 50% less than the brand name products. This plan requires the pharmacist to fill your prescription with a generic product whenever it is available unless your physician has specified “Dispense as Written.” If you request a brand name be used instead you will be charged the generic copay plus the difference between the cost of the generic and the brand name drug.

Coverage for compounded drugs prescribed by a Naturopath is excluded on this plan.

PAYMENT SCHEDULE

NMHC Client Based Network pharmaceutical card service will be used under this benefit. A nation-wide listing of participating pharmacies is available from the Human Resources Department.

Covered Benefits: Outpatient prescription drugs are reimbursable through your NMHC Plan. The following outpatient prescription drugs, if excluded from NMHC, will be eligible for reimbursement under the major medical plan when medically necessary for the treatment of an illness: Retin-A (for individual's over 26 years of age) and Dexedrine (not covered for weight loss conditions). Retrovir (Zidovine, AZT, Azidothymidine) or any other AIDS specific drugs are eligible under major medical when prescribed by a physician as part of an "approved treatment plan." See definitions of "approved treatment plan" in the definitions section. Maternity vitamins are covered when prescribed by a physician.

Contraceptive drugs and devices which have been prescribed by a physician, but are not covered under NMHC, will be payable under the Major Medical Plan.

Prescription drugs for treatment of dental conditions are reimbursable through your NMHC Plan. There is no prescription drug benefit under the Dental Plan.

Plan Payment Provisions: A co-payment is payable under the NMHC Plan for each prescription refill in the amount of $5.00 per prescription filled for generic drugs and $15.00 per prescription filled for name brand drugs. Following the co-payment, the Plan pays 100% of the balance due the NMHC Client Based Pharmacy direct to the pharmacy. If you fail to use a NMHC Client Based Network Pharmacy no benefits will be available for those prescriptions.

Benefit Limitations: This plan does not cover: non-legend drugs other than insulin; charges for the administration or injection of any drug other than contraceptives; therapeutic devices or appliances, including hypodermic needles, syringes, support garments and other non-medicinal substances, regardless of intended use; prescriptions which an eligible person is entitled to receive without charge from any Worker’s Compensation laws; drugs labeled “caution - limited by federal law to investigational use,” or experimental drugs, even though a charge is made to the covered individual; immunization agents, biological serum, blood or blood plasma; medication which is taken by or administered to an individual, in whole or in part, while he or she is a patient in a licensed hospital, rest home, sanitarium, extended care facility, convalescent hospital, nursing home or similar institution which operates on its premises, or allows to be operated on its premises, a facility for dispensing pharmaceuticals; any prescription refilled in excess of the number specified by the physician, or any refill dispensed after one year from the physician’s original order; Erectile Dysfunction oral drugs, limited to six (6) pills every 30 days; Infertility medications; growth hormones except when medically necessary; Minoxodil (Rogaine) for the treatment of alopecia (hair loss).

Benefits for Participants and Dependents Without a NMHC Prescription Card: At the option of the PUD, any participant may be required to surrender their NMHC prescription card. During their continuation of eligibility for coverage under this Plan, any covered participant or spouse who has not received a valid NMHC prescription card or who has had to surrender their NMHC prescription card will continue to have benefits under this section as if they had used a NMHC prescription card to obtain their covered prescriptions. To claim this benefit, a receipt for the paid prescription along with a NMHC claim form must be submitted to NMHC. NMHC will reimburse eligible claims as if the prescription card had been used. That is 100% reimbursement following the $5.00 or $15.00.

DISPENSING LIMITATIONS

Dispensing is limited to the amount normally prescribed by a physician, but not to exceed a 34 day supply if dispensed at the NMHC retail pharmacy.

COORDINATION OF BENEFITS

This Plan allows Coordination of Benefits with other health care coverage. The prescription copay can be submitted for reimbursement under the medical portion of the Mason County PUD No. 3 health Care Plan. The copay reimbursement is payable at 100%.

19. PREVENTIVE CARE

Covered Benefits: Services covered by the Plan under this benefit include well-baby care and routine physical examinations, including charges for routine laboratory and x-ray associated with such examinations. Preventive care includes outpatient services specifically provided to monitor and maintain the patient's health and/or to prevent illness. Routine vision care is covered under Benefit 26.

Well-Baby Care:

The Plan will cover routine well-baby care under the following guidelines of the United States Department of Health:

F Regular check-ups: 2 – 4 weeks 2, 4, 6, 9, 12, 15 & 18 months.

F Immunizations will be considered eligible expenses and 100% of cost will be paid by the Plan if approved and paid for by the State of Washington Health Vaccines Program.

When an immunization only is required, a co-payment will not be charged.

Routine/Preventive Physical Exams for Children and Teenagers:

F Regular check-ups: at age 2, 3, 4, 5, 6, 8, 10, 12, 14, 16 and 18 years.

F One routine physical examination is covered one time during each calendar year for the purpose of participation in sports activities.

Routine Physical Exams for Adults:

Mammograms are covered in accordance with the following schedule (unless medically necessary) and are excluded from the $500 routine care benefit maximum amount:

F one baseline mammogram for women age 35 through 39;

F one mammogram annually for women age 40 and over.

Colonoscopy procedures (colonoscopy, flexible sigmoidoscopy, virtual colonoscopy) are covered in accordance with the following schedule (unless medically necessary and/or requested by the physician):

F Beginning at age 50 and thereafter as requested and/or recommended by the physician;

F Prior to age 50 if there is a family history of colon polyps or colon cancer.

The Plan will cover routine physical examinations for adults (age 19 and over), including those for the purposes of insurance, licensing and other nonpreventive reasons as well as to monitor and maintain health and/or to prevent illness.

Immunizations will be covered under this benefit when deemed necessary to maintain health and/or prevent illness. When an immunization only is required, a co-payment will not be charged.

Benefits are limited to a maximum of $500 (excluding immunizations, mammograms and colonoscopy procedures) paid by the Plan each calendar year.

Plan Payment Provisions: Charges for preventive care services provided under the terms of this benefit are provided subject to the $10 co-payment. The Plan will pay 70% of allowed charges after the deductible if paid, or 90% of approved charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached.

20. RADIATION AND CHEMOTHERAPY SERVICES

Covered Benefits: Charges for therapeutic application of radiation and chemotherapy are covered under this benefit.

Plan Payment Provisions: After payment of the $10 co-payment, the Plan will pay 70% of allowed charges after the deductible is paid, or 90% of allowed charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached.

Benefit Limitations: High dosage chemotherapy with autologous bone marrow support for the treatment of solid mass tumors is not covered.

21. REHABILITATION SERVICES

Rehabilitative services required to improve or restore lost bodily function following injury or disease are covered under this benefit. Such treatment must be a part of a formal written treatment plan prescribed by a physician (MD or DO), or a Doctor of Chiropractic (DC) and rendered and billed by a plan-approved facility.

The Plan covers charges for inpatient or outpatient care. If the Plan determines that inpatient care is not medically necessary, or that care could be rendered in an outpatient setting with equal effectiveness, no benefits will be paid for inpatient rehabilitative care.

Services of licensed physical therapists, licensed occupational therapists, and certified speech therapists are covered under this benefit. Services provided must be medically necessary to improve or restore function lost because of illness, injury, or congenital anomaly such as cleft lip or palate, and must be prescribed by a physician (MD or DO) or Chiropractor (DC).

Inpatient: The Plan will pay 90% of allowed charges for approved services delivered in accordance with the terms of this benefit for up to 60 days per calendar year.

Outpatient: After payment of the $10 co-payment, the Plan will pay 70% of allowed charges after the deductible is paid, or 90% of allowed charges if a preferred provider has delivered the services.

Benefit Limitations: Under services provided for physical, occupational and speech therapy, maintenance therapy is not covered. Coverage is not provided under this benefit for therapy to assist in the initial development of a motor or sensory skill, such as speech therapy for developmental disorders or articulation, language therapy to correct developmental language delay, or treatment of learning disabilities after diagnosis.

Speech therapy is limited to treatment for an illness or injury that occurred while covered under a PUD sponsored plan.

Related Benefits or Services: See Benefit 12 for Outpatient Services, Benefit 27 for Neurodevelopmental Therapies.

22. SKILLED NURSING FACILITY

Covered Benefits: The Plan covers charges for accommodations and services and supplies for the treatment of an accidental injury, illness or other covered condition for which the patient requires 24-hour care and is under the continuous care of an attending physician. Services must be medically necessary, must be prescribed by the attending physician (MD or DO), and must be provided and billed by a state-licensed skilled nursing facility.

Benefit Limitations: This benefit does not cover charges for custodial care.

23. SPECIAL NURSING SERVICES

Covered Benefits: Acute skilled nursing services performed in the home or hospital by a registered nurse (RN) or licensed practical nurse (LPN), when not provided through a hospice or home health care agency, are covered under this benefit to a maximum plan payment of $5,000 per enrollee per calendar year. Services must be medically necessary and must be prescribed by a physician (MD or DO).

Plan Payment Provisions: After applicable co-payments are paid, (except for in home visits) the Plan will pay 70% of allowed charges after the deductible is paid, or 90% of allowed charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached.

24. SURGICAL SERVICES

Pre-authorization is recommended for elective services covered under this benefit which necessitate inpatient hospital admission surgery. Please refer to the Medical Review Requirements section for details.

Covered Benefits: Covered services under this benefit include those provided by the surgeon, assistant surgeon (when deemed medically necessary in the opinion of the Plan), and anesthesiologist in performing:

F medically necessary surgery for a covered condition;

F sterilization procedures;

F plastic and reconstructive surgery, including related services and supplies, if necessary to improve or restore bodily function lost due to a nonoccupational accident occurring while the enrollee is covered under the Plan, or a congenital anomaly (such as cleft palate or spina bifida) in a covered child;

F restorative surgery necessitated by previous surgery covered under this Plan;

F reconstruction of the involved breast following a mastectomy necessitated by disease, illness or injury, surgery and reconstruction of the other breast to produce a symmetrical appearance, prosthesis and treatment of physical complications of all stages of mastectomy, including lymphidemas. This coverage will be provided in consultation with the attending physician and the patient, and will be subject to the same annual deductibles and coinsurance provisions that apply for the mastectomy;

F penile prothesis when all other accepted treatment for impotence has been unsuccessful. Coverage is provided if impotence is caused by a covered medical condition, is a complication, which is a direct result of a covered surgery, or is a result of an injury to the genitalia or spinal cord.

Services of a dentist are covered only for:

F reduction of a fracture or dislocation of the jaw or facial bones;

F excision of tumors or cysts of the jaw, cheeks, lips, tongue, gums, roof and floor of the mouth, or restorative surgery necessitated by such excision;

F incision of salivary glands or ducts;

F surgical treatment for temporomandibular joint (TMJ) conditions; and

F treatment for an injury to natural teeth caused by an accident sustained while the enrollee was covered under the Plan, provided treatment begins within 12 months from the date of the accident and while the enrollee remains covered under this Plan.

Plan Payment Provisions: After payment of the applicable copay, the Plan will pay 70% of allowed charges, or 90% of allowed charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached.

Related Benefits or Services: Nonsurgical treatment of TMJ is not covered under the Plan, but may be covered under the PUD's Self-Insured Dental Plan.

Benefit Limitations: The lifetime maximum amount payable for surgical TMJ benefits rendered to an eligible person is $500.

25. TOBACCO CESSATION

Covered Benefits: The services of a provider, operating within the scope of their license, will be covered for a completed smoking cessation program. Medications to aid nicotine withdrawal including over-the-counter drugs will also be covered under this benefit. Benefits are payable to a maximum of $300 per lifetime.

Plan Payment Provisions: The Plan will pay 90% of UCR charges up to the $300 maximum limit. The deductible and co-payments do not apply.

Benefit Limitations: Eligible expenses under this Plan Benefit shall not include, acupuncture, vitamins and other food supplements, books or tapes.

Over the counter drugs are covered under this benefit only.

26. VISION CARE

Covered Benefits: Routine eye examinations and the purchase of lenses, frames and contact lenses are covered under this benefit, up to the maximum plan payments specified below.

Plan Payment Provisions: Charges for vision services provided under this benefit are exempt from the usual $10 co-payment provision. Maximum plan payments for specific services are as follows:

Routine Examination: One eye exam per calendar year, paid at 100%.

Lenses, Frames, Contact Lenses and LASIK procedures: A benefit of $300 per calendar year is allowed for the purchase of lenses, frames, contact lenses (including evaluation and fitting) and/or LASIK procedures.

Related Plan Benefits: Payment for implant lenses in connection with cataract surgery or surgery for a missing portion of the eye is described under Benefit 7 (Durable Medical Equipment Supplies and Prostheses).

Benefit Limitations: Benefits will not be provided for drugs or medications of any kind, or lenses or frames, which were furnished or ordered prior to the date of coverage under this Plan.

27. MISCELLANEOUS SERVICES

Covered Benefits: The Plan provides benefits for certain specialized medical services as listed below:

Biofeedback Therapy: Charges for biofeedback therapy are covered when the services are prescribed by a physician as part of an overall treatment plan and when they are medically necessary.

Blood and its Derivatives: Charges for medically necessary whole blood or blood derivatives, including charges for the infusion of these products, are covered.

Bone, Eye and Skin Bank Services: Charges for biologic materials supplied by human bone banks, eye banks, and skin banks are covered.

Diabetic Education: Medically necessary diabetic education when prescribed by a physician (MD or DO) and provided by a Medicare-approved program. This service shall be paid at 70% of allowed charges or 90% of allowed charges if a preferred provider has delivered the services to lifetime maximum of $300.

Eating Disorders (Bulimia, Anorexia Nervosa): Services for medically necessary diagnosis and treatment of these conditions are provided under terms of the Plan's benefits and payment provisions for Mental Health Care (see Benefit 14).

Elective Sterilization: The Plan pays for certain elective sterilization procedures such as tubal ligations and vasectomies. These procedures shall be paid at 70% of allowed or 90% of approved charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached. Eligible expenses under this Plan shall not include reversal or attempted reversal of these procedures.

Food Supplements: Phenylketonuria (PKU) supplements are covered when prescribed by a physician for the treatment of this disorder in newborn infants. Any other food supplements, including infant or adult dietary formulas or supplements, are not covered under the Plan.

Infusion Therapy: Inpatient and outpatient services and supplies for infusion therapy will be provided under the major medical benefits up to a maximum of $25,000 annually. The attending physician must submit and periodically review, a written treatment plan that specifically describes the infusion therapy services and supplies to be provided. The treatment plan must be approved in advance by the Plan Supervisor. Drugs and supplies used in conjunction with infusion therapy will be provided only under this benefit. Payment shall be at 70% allowed after applicable deductibles have been satisfied or 90% of approved charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached.

Neurodevelopmental Therapies: Neurodevelopmental therapies for children through age six are covered when prescribed by a physician (MD or DO) and provided by a licensed physical therapist, licensed occupational therapist or certified speech therapist. Coverage is provided for therapy to assist in the development of a motor or sensory skill, such as speech therapy for develop-mental disorders of articulation, language therapy to correct developmental language delay, or treatment of learning disabilities and diagnosis.

Plan Payment Provisions: After applicable co-payments are paid, the Plan will pay (except for treatment of eating disorders) 70 % of allowed charges, or 90% of allowed charges if a preferred provider has delivered the services, until the calendar year out-of-pocket limit is reached.

EXCLUSIONS AND LIMITATIONS

In addition to any exclusions and limitations included in the descriptions of individual plan benefits on the previous pages, the Plan does not cover any of the following, nor can such charges be applied to any required plan deductible of out-of-pocket expense limit:

1. any condition, illness or injury resulting from work-incurred illness or injuries;

2. custodial care;

3. rehabilitative care, except as provided in accordance with Benefit 27(Neurodevelopmental Therapies) and Benefit 21 (Rehabilitation Services);

4. services, facility charges and supplies not medically necessary, or for cosmetic purposes and complications thereof, except as provided in Benefit 19. (Preventive Care), Benefit 26 (Vision Care), and Benefit 24 (Surgical Services);

5. treatment of obesity, including weight-loss programs, surgery and the complications thereof;

6. routine physical exams, except as provided in Benefit 19 (Preventive Care);

7. special-purpose vision aids, treatment of dyslexia, vision therapy or training related to muscular imbalance of the eye and orthoptics, and vision services, except as specified in Benefit 26 (Vision Care);

8. surgical treatment to alter the refractive character of the cornea, such as radial keratotomy and the results thereof;

9. immunizations, except as provided in Benefit 19 (Preventive Care);

10. routine foot care procedures, corrective shoes, treatment of fallen arches or symptomatic complaints of the feet and routine hygienic care of the feet;

11. orthognathic surgery, nonsurgical treatment of temporomandibular joint (TMJ) and myofacial pain dysfunction (MPD) syndrome (see Dental Plan – pg. 64);

12. dental services or services of a dentist, except as provided in Benefit 24 (Surgical Services);

13. treatment of neuropsychiatric, mental or personality disorders, except as provided in Benefit 14 (Mental Health Care);

14. services or supplies for which no charge is made, or for which a charge would not have been made if this plan were not in effect, or for which the enrollee is not liable; services provided by a family member;

15. war-related illness or injury;

16. services or procedures which are not medically necessary or which are not generally performed or accepted by the medical or dental profession (the mere fact that a provider may recommend a service or supply does not in itself mean that it was medically necessary);

17. any treatment, procedure, facility, equipment, drug, drug usage, device or supply that is considered experimental or investigational at the time rendered;

18. services or supplies for the diagnosis or treatment of sex transformations, reproductive and sexual disorders (including sterility; impotency except as provided in Benefit 18 [Prescription Drugs and Insulin]; Benefit 24 [Surgical Services] and Benefit 7 [Durable Medical Equipment, Supplies and Prostheses]; infertility; and/or frigidity), reversal of surgical sterilization, artificial insemination and in-vitro fertilization;

19. services and supplies to the extent that benefits are payable under any automobile medical, automobile no-fault, automobile uninsured motorist and/or underinsured motorist, personal injury protection (PIP), commercial liability, commercial premises medical, homeowner's policy, or other similar type of insurance or contract, if the other insurance or contract covers medical treatment of injuries regardless of who caused the injury; however, plan payments will be advanced upon request if the enrollee agrees to apply for benefits under the terms of the other insurance and to reimburse this plan when settlement is received;

20. any charges in excess of usual, customer and reasonable (allowed) charges, as determined by the Plan;

21. services delivered by providers or facilities not listed as approved, or by providers or facilities delivering services of a type or in a manner not within the scope of their licenses;

22. charges for educational programs except as provided in Benefit 27 (Diabetic Education);

23. charges for the extraction of and/or storage of autologous blood and its derivatives;

24. court-ordered care, unless determined by the Plan to be medically necessary;

25. wilderness training programs for chemical dependency;

26. high-dosage chemotherapy with autologous bone marrow transplant for treatment of solid mass tumors; and

27. organ transplants and related services performed in non-approved facilities.

28. Compounded drugs prescribed by a naturopath.

MASON COUNTY PUBLIC UTILITY DISTRICT 3

SELF-INSURED GROUP DENTAL PLAN

The PUD Self-Insured Group Dental Plan (the Dental Plan) has been designed by the Employee Insurance Committee, approved by the employees of the PUD, the IBEW, Local 77 Bargaining Unit and the Board of Commissioners of Mason County PUD 3. Some plan functions are carried out by the following contracting firm:

· Pacific Underwriters receives, processes and pays dental claims. The company verifies that patients are eligible for benefits, checks the accuracy of bills and determines whether billed services are allowable and necessary under the plan provisions, calculates payment amounts, makes all payments to providers or subscribers for covered services, and maintains the customer service lines.

Every employee enrolled in the PUD Self-Insured Group Dental Plan will be issued a subscriber identification number that includes the employee's social security number. These subscriber identification numbers will be used solely to identify the subscriber and to coordinate benefits with third party payers. Inclusion of the identification numbers will be required on claims submitted to the Dental Plan. Disclosure of one's social security number for this purpose is voluntary. Any subscriber who objects to the use of his or her social security number in the Dental Plan's identification number may contact the Human Resources Office and a number unrelated to the social security number will be assigned.

HOW TO OBTAIN DENTAL SERVICES AND FILE A CLAIM

You may choose any licensed dentist. Tell your dentist you are covered by the Mason County PUD 3 Self-Insured Dental Plan, group number PURMS 11. If you have questions regarding your claim, contact: Pacific Underwriters, P. O. Box 66040, Seattle, WA 98166, 1-800-562-5226.

Pacific Underwriters will pay dental claims directly to any dentist office in the United States upon submission of a standard claim form. However, you may pay the dentist's bill, submit the claim to the Dental Plan and reimbursement will be made to you. The plan will pay the dentist's charge based on allowed for the area in which the services were obtained.

The Dental Plan will not pay for treatment if claim forms are submitted more than 12 months after completion of treatment.

ESTIMATE OF DENTAL BENEFITS

If your dental care will be extensive, you may wish to know in advance exactly what procedures are covered, the amount the Dental Plan will pay toward the treatment, and your financial responsibility. An estimate is recommended for major procedures such as crowns, inlays, onlays, prosthetics and periodontic services. To obtain an estimate, ask your dentist to complete and submit a standard Dental Plan claims form. An estimate is not a guarantee of benefits available. The actual benefits available are determined at the time of claims submission and are based on the specific service rendered and eligibility status at the time of service and subject to coordination of benefits.

Payment Levels of Covered Benefits:

F Class I benefits: 100%

F Class II benefits: 80% after deductible is met

F Class III benefits: 75% after deductible is met

F Orthodontic benefits: 50%

F Temporomandibular joint (TMJ) benefits 70%

F myofacial pain dysfunction (MPD) benefits 70%

F orthognathic benefits: 70%

Deductible

The Plan will pay 80% on Class II benefits and 75% on Class III benefits after a $25.00 annual dental deductible per enrollee has been met. Class I benefits are not subject to a deductible.

Program Maximums

The maximum amount payable for covered dental benefits (other than orthodontic, TMJ and orthognathic surgery) is as follows:

F $2,000 per person during each 12-month period, January 1 through December 31.

The lifetime maximum amounts payable per eligible person for covered dental benefits are as follows:

F Orthodontics: $1,500.

F Temporomandibular joint (TMJ), Myofascial Pain Dysfunction Syndrome (MPD) treatment: $500.

F Orthognathic surgery: $5,000.

Alternative Procedures

In cases where there are alternative procedures of treatment with different fees, the Dental Plan will usually pay the appropriate percentage of the lower fee. However, the Dental Plan will pay the appropriate percentage of the higher fee if satisfactory evidence is submitted to the Plan that the more expensive procedure is the only professionally adequate course of treatment.

COVERED DENTAL BENEFITS, LIMITATIONS AND EXCLUSION

The following Class I, Class II and Class III Covered Dental Benefits under this program are subject to the limitations and exclusions contained in this booklet. Such benefits are available only when rendered by a licensed dentist and when allowed as determined by the standards of generally accepted dental practice.

The amounts payable for Class I, Class II and Class III Covered Dental Benefits are as stated above.

CLASS I BENEFITS

1. DIAGNOSTIC SERVICES

Covered Dental Benefits: Routine examinations, x-rays, emergency examination and examination by a specialist in an American Dental Association recognized specialty.

Limitations: Two examinations are covered each year. Complete mouth or panorex x-rays are covered once every 36 consecutive months. Supplementary bitewing x-rays are covered two times per year regardless of age.

Exclusions: Consultations, study models, caries susceptibility tests, and charges for the review of a proposed treatment plan.

2. PREVENTIVE SERVICES

Covered Dental Benefits: Prophylaxis (ADA code 1110), fissure sealants and topical application of fluoride; space maintainers when used to maintain space for eruption of permanent teeth.

Limitations: Any type of prophylaxis (cleaning) is covered two times each year. Topical applications of fluoride are covered twice per year up to age 20, when performed in conjunction with a prophylaxis. Fissure sealant application is payable only for dependent children once every 36 months per applicable tooth, up to the patient's 14th birthday. Payment for sealants will be made only for permanent maxillary (upper) or mandibular (lower) molars with no caries (decay), no restorations, and with occlusal surface intact.

Exclusions: Plaque control program, oral hygiene instruction, dietary instruction and home fluoride kits, cleaning of a prosthetic appliance, and replacement of a space maintainer previously paid for the Dental Plan. Refer also to the General Exclusions Section.

CLASS II BENEFITS

1. RESTORATIVE SERVICES

Covered Dental Benefits: Stainless steel crowns, amalgam, synthetic, porcelain and plastic restorations (fillings) for treatment of carious lesions (visible destruction of hard tooth structure resulting from dental decay) and nightguards for bruxism.

Limitations. Refer to Class III Limitations if teeth are restored with crowns, inlays or onlays. Stainless steel crowns are covered every 24 months.

Exclusions: Restorations necessary to correct vertical dimension or to restore the occlusion; overhand removal, recontouring or polishing of restoration.

2. ORAL SURGERY

Covered Dental Benefits: Major and minor oral surgeries which include the following general categories: removal of teeth, preprosthetic surgery, treatment of pathological conditions, ridge extension of insertion of denture (vestibuloplasty), general anesthesia. (Covered only when administered by a dentist who meets the educational guidelines established by the Washington State Dental Disciplinary Board in conjunction with a covered oral surgery procedure.)

Exclusions: Extraoral grafts (grafting of tissues from outside the mouth or use of artificial materials), tooth transplants.

3. PERIODONTIC SERVICES

Covered Dental Benefits: Surgical and nonsurgical procedures for treatment of the tissues supporting the teeth, including root planing, subgingival curettage, gingivectomy and limited adjustments to occlusions (8 teeth or less) such as smoothing of teeth or reducing of cusps.

Limitations: Root planing or subgingival curettage (but not both) are covered once per calendar year. Limited occlusal adjustments are covered once per calendar year. Limited to four (4) periodontal cleanings per calendar year.

Exclusions: Nightguards and occlusal splints, periodontal splinting and/or crown and bridgework in conjunction with periodontal splinting, major (complete) occlusal adjustment, and periodontal appliances.

4. ENDODONTIC SERVICES

Covered Dental Benefits: Procedures for pulpal and root canal therapy, including pulp exposure treatment, pulpotomy and apicoectomy.

Limitations: Root canal treatment on the same tooth is covered only once every two years. Refer to Class III Limitations if the root canals are placed in conjunction with a prosthetic appliance.

Exclusions: Bleaching of teeth. Refer to General Exclusions.

CLASS III BENEFITS

1. RESTORATIVE SERVICES

Covered Dental Benefits: Crowns (except stainless steel), implants, inlays, onlays (gold, porcelain, plastic, gold substitute castings or combinations thereof) for treatment of carious lesions (visible destruction of hard tooth structure resulting from tooth decay). Attending dentist must verify that teeth cannot be restored with filling materials such as amalgam, silicate or plastic.

Limitations: Crowns (except stainless steel ), inlays or onlays on the same teeth are covered once every five years. If a tooth can be restored with a filling material such as amalgam, silicate or plastic, an allowance will be made for such a procedure toward the cost of any other type of restoration that may be provided.

Exclusions: A crown used as an abutment to a partial denture is not covered unless the tooth is decayed to the extent that a crown would be required to restore the tooth, whether or not a partial denture is required.

2. PROSTHODONTIC SERVICES

Covered Dental Benefits: Initial installation of partial or full removable dentures (including adjustments for the six month period following installation) to replace one or more natural teeth extracted while the individual is covered by this Plan. Repair of an existing prosthetic device is also covered.

Limitations: Replacement of an existing prosthetic device is covered only once every five years and only then if it is unserviceable and cannot be made serviceable.

F Full, immediate and overdentures. The Dental Plan will allow the appropriate amount for a full, immediate or overdenture toward the cost of any other procedure that may be provided, such as personalized restorations or specialized treatment. Root canal therapy performed in conjunction with overdentures is limited to two teeth per arch and is paid at the Class III payment level.

F Partial dentures. If a more elaborate or precision device is used to restore the case, the Dental Plan will allow the cost of a cast chrome and acrylic partial denture toward the cost of any other procedure that may be provided.

F Denture adjustments and relines. Denture adjustments and relines done more than six months after the initial placement are covered. Subsequent relines and jump rebases, but not both, will be covered once every 12 months.

F Implants. The Dental Plan will allow the appropriate amount for a full or partial denture toward the cost of appliances constructed on implants. Replacement of an existing full or partial denture is covered only once every five years and only if it is unserviceable and cannot be made serviceable.

Exclusions: Duplicate dentures, cleaning of prosthetic appliances, temporary dentures, crowns and copings in conjunction with overdentures. Any charges incurred for a partial or full removable denture or fixed bridgework during the first six months of employment with the PUD, if involving replacement of one or more natural teeth missing prior to becoming covered herein, unless the denture or fixed bridgework also includes replacement of a natural tooth which (1) is extracted while covered herein and (2) was not an abutment to a partial denture or fixed bridge installed within the immediately preceding five years. Refer also to General Exclusions.

ORTHODONTIC BENEFITS FOR ADULTS

AND ELIGIBLE DEPENDENT CHILDREN

All orthodontic treatment must be submitted to and authorized by the Dental Plan prior to commencement of treatment. Failure to have treatment preauthorized could result in a reduction or denial of benefits under the Dental Plan.

Orthodontic treatment is defined as the necessary procedures of treatment, performed by a licensed dentist, involving surgical or appliance therapy for movement of teeth and post-treatment retention.

The lifetime maximum amount payable for orthodontic benefits rendered to an eligible person is $1,500. Not more than one-half of the Dental Plan's total responsibility shall be payable for treatment during the initial banding phase. The Dental Plan will not pay for treatment if claim forms are submitted more than 12 months after banding date.

The amount payable for orthodontic treatment shall be 50% of the lesser of the allowed fees or the fees actually charged.

Covered Benefits: Treatment of malalignment of teeth and/or jaws that significantly interferes with the act of mastication (chewing). Orthodontic work that began prior to the eligible person's effective date but completed after the effective date will be considered for payment on a prorated basis.

In addition to the limitations and exclusions contained in this booklet, the following also apply to orthodontic treatment:

Limitations: Payment of monthly or other periodic charges is limited to:

F Completion, or through age 23 for eligible dependent children, if full-time students, whichever occurs first.

F Termination of the treatment plan prior to completion of the case.

F Termination of this plan. If coverage ends (because of age or termination of the plan) while treatment is still in progress, only services completed up to the date coverage ends will be covered.

Exclusions:

F Charges for replacement or repair of an appliance.

F No benefits will be provided for services considered inappropriate and unnecessary, as determined by the Dental Plan.

TEMPOROMANDIBULAR JOINT BENEFITS

(Myofascial Pain-Dysfunction Syndrome)

All temporomandibular joint benefits must be preauthorized by the Dental Plan prior to commencement of treatment. Benefits will be denied if treatment is not preauthorized.

Temporomandibular joint benefits are not available to retirees and their dependents.

Temporomandibular joint treatment is defined as nonsurgical intra-oral services provided by a licensed dentist or physician, when necessary and customary according to the standards of generally accepted dental practice, for the treatment of dental symptoms associated with the malfunction of the temporomandibular joint, including myofacial pain dysfunction. These procedures include:

F TMJ examination

F x-rays (TMJ film and arthrogram)

F temporary repositioning splint

F occlusal guard (nightguard)

F removable metal overlay stabilizing appliance

F stabilizing appliance

F full mouth occlusal equilibration

F arthrocentesis

F manipulation under local anesthesia

The amount payable for temporomandibular joint benefits shall be 70% of the lesser of allowed fees or the fees actually charged. The lifetime maximum amount payable for TMJ benefits rendered to an eligible person is $500.

To obtain authorization, dentists must submit documentation for necessity of treatment to the Dental Plan with a proposed treatment plan.

In addition to the limitations and exclusions set forth in this booklet, the following also apply to TMJ benefits:

F The Dental Plan shall not pay for the repair or replacement of any appliance furnished in whole or in part for temporomandibular joints.

F The Dental Plan shall not cover services which would normally be provided under medical care, including, but not limited to, psychotherapy, special joint exams and x-rays, joint surgery and medications.

F Fixed appliances and restorations are not covered.

F With the exception of TMJ examinations, TMJ film and arthrogram, diagnostic procedures not otherwise covered under the Dental Plan are not covered herein.

F Any procedures which are performed in conjunction with TMJ services, and are covered benefits under that portion of the dental plan, are not covered under this portion.

ORTHOGNATHIC SURGERY BENEFITS FOR ADULTS AND

ELIGIBLE DEPENDENT CHILDREN

All orthognathic treatment must be submitted to and authorized by the Dental Plan, prior to commencement of treatment. Benefits will be denied if treatment is not preauthorized.

Orthognathic surgery benefits are not available to retirees and their dependents.

Orthognathic treatment is defined as the necessary surgical procedures of treatment, performed by a licensed dentist or physician, to correct the malposition of the maxilla (upper jaw bone) and/or the mandible (lower jaw bone).

The amount payable for orthognathic treatment shall be 70% of the lesser of the allowed fees or the fees actually charged. The lifetime maximum amount payable for orthognathic benefits rendered to an eligible person is $5,000.

In addition to the limitations and exclusions set forth in this booklet, the following also apply to orthognathic treatment:

Limitations: Complications will be covered only if treatment is sought within 30 days from the original treatment.

Exclusions: The Dental Plan shall not cover:

F Services which would be provided under medical care, including, but not limited to: hospital and professional services.

F Diagnostic procedures not otherwise covered under this plan.

F Any procedures that are performed in conjunction with orthognathic surgery services, and are covered benefits under another portion of the Dental Plan.

GENERAL EXCLUSIONS

1. Work-related illness or injury.

2. Dentistry for cosmetic reasons, including, but not limited to, laminates or bleaching of teeth.

3. Restorations or appliances necessary to correct vertical dimension or to restore the occlusion, including restoration of tooth structure lost from attrition and restorations for malalignment of teeth.

4. Application of desensitizing medications.

5. Experimental services or supplies whose use is not generally recognized by the ADA as tested and accepted dental practice.

6. Analgesics (such as nitrous oxide or I.V. sedation) or other euphoric drugs, injections or prescription drugs.

7. Hospitalization charges and any additional fees charged by the dentist for hospital treatment, except when hospitalization is medically necessary and such charges are not covered under the enrollee's Medical Plan. If medically necessary, such hospital and related physician's services rendered during hospitalization, including outpatient charges, if the treatment or procedure performed is a covered dental benefit, will be covered and paid at the same percentage rate as if performed by a licensed dentist, up to the unused plan maximum.

8. Claims for hospitalization that are not accompanied by a physician's statement of medical necessity except as provided under Orthodontic Benefits.

9. Dental services started prior to the date the person became eligible for services under this program, except as provided under Orthodontic Benefits.

10. In the case of retirees and their dependents, charges for orthognathic surgery, temporomandibular joint dysfunction and myofacial pain dysfunction are not covered.

11. Dental care provided under any PUD-sponsored Medical Plan. If your medical plan covers diagnosis and treatment of accidental injuries to natural teeth, your Dental Plan will not pay for the same treatment already paid for by the medical plan (i.e., pay twice for the same treatment). However, if you are enrolled in a district-sponsored medical plan which does not provide coverage for diagnosis and treatment of accidental injuries to natural teeth sustained while covered by the Dental Plan, such charges will be covered at the same percentage rate as payable for the type of dental treatment performed, provided treatment begins within 12 months from the date of the accident.

12. Expenses incurred after termination of coverage, except expenses for:

(a) prosthetic devices fitted and ordered prior to termination and delivered within 30 days after termination;

(b) crowns, if the tooth is prepared for the crown prior to termination and installed within 30 days after termination;

(c) root canal treatment, if the tooth is opened prior to termination and treatment is completed within 30 days after termination.

13. Broken appointments.

14. Patient management problems.

15. Completion of insurance forms.

16. Laboratory examination of tissue specimen.

17. Habit-breaking appliances, except nightguards for bruxism.

18. Full-mount reconstruction.

19. Charges for dental services performed by anyone other than a licensed dentist or physician as specified herein.

20. All other services not specifically included as covered dental benefits.

21. Diagnostic casts.

22. Precision attachments for appliances.

CUSTOMER SERVICE DIRECTORY

Plan Supervisor:

Pacific Underwriters

Richard (Dick) Rodruck - 1.800.562.5226

Claims Consultant:

Diane Christensen - 1.800.562.5226

Bambi Harrison - 1.800.562.5226

Coverage Questions:

Diane Christensen - 1.800.562.5226

Bambi Harrison - 1.800.562.5226

Ryan VanAckeren - 1.800.562.5226

Eligibility:

Ryan VanAckeren - 1.800.562.5226

Bambi Harrison - 1.800.562.5226

Diane Christensen - 1.800.562.5226

Correspondence and Claim Filing Address:

Pacific Underwriters

P.O. Box 66040

Seattle, WA 98166

Telephone for all questions regarding coverage and claims:

1.800.562.5226

Plan Supervisor:

1/1/2011

Date

Signature