How the Medical
PPO Plan Works

You have the choice of enrolling in one of three plans: the City of Chicago's Medical Care Plan also known as the PPO plan, the POS plan or an HMO.

Before you read about specific expenses covered by the PPO plan, take a few minutes to learn about certain important features.

Participating Provider Option (PPO)

A special feature of the medical plan is the Participating Provider Option (PPO). If you choose doctors and hospitals that are part of the PPO network, the plan will pay a higher benefit than if you use the services of doctors and hospitals not belonging to the network. If you choose a PPO provider:

the plan will pay a higher percentage (90%) of many eligible doctor and hospital expenses; and

your calendar year out-of-pocket limit will be lower.

Refer to the directory of PPO network doctors and hospitals or contact Blue Cross Blue Shield of Illinois. The most current list of PPO providers is available on the internet. See the Important Numbers and Web Sites section of this handbook for more information.

Usual and Customary Charges

The plan pays benefits for usual hospital, surgical and other eligible medical expenses resulting from an illness or injury, for you and your covered dependents. Usual and customary charges are those that are the same as, or compare fairly with, charges made for similar services or supplies in the geographic area where expenses are incurred. For services subject to the PPO network, usual and customary charges are the PPO allowable charge.

The plan does not cover charges above the usual and customary limit as initially determined by the claims administrator, subject to the appeals procedure. The plan will not pay:

any amount incurred that exceeds what is usual and customary in the geographic location where the expenses are incurred; or

for a service or supply that is not generally accepted in medical practice or not considered medically necessary, or needed for the diagnosis or treatment of a condition.

If your expenses are more than the usual and customary amount, you will be responsible for the amount that is in excess. That amount cannot be applied toward your deductible (explained on page PPOM-3), it will not be covered by the plan once the deductible is satisfied and it will not be applied toward your out-of-pocket limit (see page PPOM-4).

Your Share of Expenses

The City of Chicago Medical Plan for Employees is self funded. The Plan has an Administrative Services Only ("ASO") agreement with its Claims Administrator meaning the Claims Administrator only processes claims. Through its contract with the Claims Administrator the City may receive discounts or other allowances from providers. These discounts or allowances are retained by the City to help offset the costs of the medical plans. Further, the calculation of the maximum amount of benefits payable by the Claims Administrator and the calculation of all required deductible and coinsurance amounts payable by you shall be based on the eligible billed charge for Covered Services rendered to you. This is irrespective of any separate financial arrangement between the City and the Claims Administrator.

Deductible

The deductible is the portion of your medical expenses that you pay each calendar year before the plan pays benefits.

The annual deductible is:

$150 for an individual, and

$250 for a family.

The expenses of all covered family members will be combined to meet the family deductible. However, at least one person in the family must meet the $150 individual deductible before expenses are combined to meet the family deductible.

Carryover Provision

If you do not meet your deductible before December 31st of any year, covered medical expenses that are incurred in October, November or December will be applied to the deductible for the following year if no benefits were paid by the plan during the year.

For example, if you incur $100 of eligible expenses between October and December, you'll need only $50 of eligible expenses to meet the individual deductible for the next year.

Out-of-network Deductible

There is an additional $300 deductible for each admission to a hospital outside the PPO network. The maximum inpatient deductible amount each calendar year is two for a family. This $300 deductible is applied to the out-of-network out-of-pocket limit.

Co-payment

After you've paid the calendar year deductible, the plan will pay a percentage of your eligible usual and customary expenses. You pay the remaining portion. This feature is called the co-payment. The amount of the co-payment

depends on the type of expense and whether you use the PPO network.

Out-of-pocket Limit

The plan places a limit on the amount of money you will have to pay for eligible medical expenses each calendar year. Once your share of expenses (deductible and co-payment) reaches the out-of-pocket limit, the plan will pay 100% of eligible medical expenses for the rest of the calendar year.

But, there is one exception. If you reach your out-of-pocket limit during your first inpatient hospital confinement for substance abuse treatment in a PPO facility, the balance of that hospital stay will be paid at 100%. Additional PPO expenses and all non-PPO expenses for substance abuse confinements will not count toward any out-of-pocket limit.

The out-of-pocket limit is based on whether you use in-network (PPO) or out-of-network (non-PPO) providers. And, it's possible that you can have separate out-of-pocket limits. For example, if you incur expenses for services both in and out of the PPO network, one out-of-pocket limit will apply to expenses incurred in the network and another out- of-pocket limit will apply to expenses incurred outside the network.

However, the following expenses will not count toward the out-of-pocket limit:

second and subsequent courses of in-network inpatient substance abuse treatment; and

all courses of out-of-network inpatient substance abuse treatment.

See the following section on Mental Health and Substance Abuse Treatment for more information.

Mental Health and Substance Abuse Treatment Maximums

The combined maximum benefits for inpatient and outpatient mental health and substance abuse treatment appear below.

These maximums count toward the overall plan maximum of $1.5 million. Keep in mind, co-payments for your first inpatient treatment for substance abuse received from an in-network hospital will count toward the PPO out-of-pocket limit.

The lifetime maximum for mental health and substance abuse treatment includes all expenses incurred from the date the plan was implemented for your bargaining unit or employee group.

Lifetime Maximum Benefit

Each covered person can receive $1.5 million in benefits during his or her lifetime while enrolled in the plan. Any expenses paid by previous City of Chicago plans will be included in your lifetime maximum.

November 2002

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