COORDINATION OF BENEFITS

Coordination of Benefits (COB) is the method of dividing responsibility for payment among the health plans that cover an individual so that the total of all reasonable expenses for covered services will be paid. The Health Plan coordinates benefits with all other group and private health plans. It also coordinates benefits for married couples who are both eligible participants in the Plan and for dependent children of two eligible married participants. If a parent and a child are both participants, the Plan will coordinate with respect to the child’s coverage. However, since under the Plan rules the parent cannot be a qualified dependent of the child, the parent will only be treated as a participant with one coverage.

Determination of Primary Plan
The primary plan is the plan that pays first on the claim. If a balance is still due after the primary plan’s payment, the claim should be sent to the secondary plan for consideration.

General Rules
In determining which of the plans is primary or secondary, this Health Plan will apply the rules outlined below. The first rule that applies to the situation will be used.

1. The plan without a coordination of benefits provision is always primary.
2. The plan covering the person as a participant is primary to the plan covering the person as a dependent.
3. he plan covering the person with Earned Eligibility is primary to the plan covering the person with Senior Performers (retiree) Eligibility or Self-Pay coverage.
4. The plan covering the person for the longest continuous period is primary to the plan covering the person for a shorter period if the person has the same type of eligibility (for example, Earned Eligibility) in both plans. If you have the same coverage effective date under more than one plan, please contact the Plan Office for your coordination of benefits rules.

Determination of Dependent Child’s Primary Plan
In the case of a dependent child where the parents are not divorced, this Plan uses the“birthday rule”. This means the plan of the parent whose birthday occurs earlier in the calendar year is primary. If both parents have the same birthday, the plan that has covered the child for the longer period is primary.

In the case of a dependent child where the parents are divorced, the rules are:

• If the parent with custody has not remarried, the plan of the custodial parent is primary to the plan of the non-custodial parent.
• If the parent with custody has remarried, the plan of the custodial parent is primary, the plan of the custodial stepparent is secondary and the plan of the non-custodial parent is third.
• If a court order provides a different order of benefit determination, the court order will be followed. A copy of the court order will be required.

Coordination of Benefits with Other Entertainment Industry Health Plans
If you are entitled to primary coverage with another entertainment industry plan, but fail to pay the premium in that plan, the SAG Producers Plan will maintain its secondary position. This rule serves to maintain the correct primary/secondary positions of the health plans based on your longest continuous coverage. The other entertainment industry plans include the AFTRA Health Plan, the Directors Guild of America-Producer Health Plan, the Equity-League Health Plan, the Motion Picture Industry Health Plan and the Writers’ Guild-Industry Health Plan. These rules apply to participants and dependents in both Plan I and Plan II, regardless of whether your eligibility is Earned or Senior Performers.

For hospital and major medical benefits, the Plan will pay up to 20% of the Allowed Amount for your claims, subject to the deductibles. For prescription drug benefits, you will not receive a Medco ID card. You must pay for your prescriptions at the pharmacy and submit a claim to the Plan Office for reimbursement of up to 20% of the Allowed Amount, subject to the deductible. For mental health and chemical dependency benefits, you are still required to pre-authorize all services with ValueOptions. ValueOptions will reimburse 20% of the contract amount and you will be responsible for the remaining 80%. Dental and vision benefits will continue to be administered through Delta Dental and Vision Service Plan as if the SAG-Producers Plan is primary.

Exceptions:
Primary Plan is Individual Only – If your other primary plan provides only individual coverage (excludes coverage for your dependents), the SAG-Producers Plan will continue to pay primary for your dependents. For example, the Individual Plan at AFTRA provides no dependent coverage, so dependents of participants in that plan would continue to be covered as primary in the SAG-Producers Plan, regardless of whether you continued your AFTRA coverage. However, the AFTRA Family Plan does provide for dependent coverage by paying a premium. Accordingly, you will be required to keep your AFTRA Family Plan dependent coverage in force to avoid a reduction in coverage with the SAG-Producers Plan.

Effective July 1, 2007, AFTRA’s Individual Plan will become the Core Plan and cover only participants with a very high deductible. If you become eligible for coverage under the Core Plan, the SAG-Producers Plan will not reduce benefits because of your failure to pay the AFTRA premium.

SAG-Producers Plan Original Position is Third or Lower – If the SAG-Producers Plan’s original position is third or lower the reduction does not apply. So, if you have DGA as primary, AFTRA as secondary and SAG as third, but you fail to pay your AFTRA premium, SAG will pay as if it were in second position. Your benefits will not be reduced because of your failure to pay the AFTRA premium.

If Medicare is your primary plan, however, this exception changes so that the reduction does not apply if the SAG-Producers Plan’s original position is fourth or lower. For example, suppose Medicare is primary, AFTRAis second and SAG is third. If you fail to pay the AFTRA premium, SAG will only pay what it would have paid in the third position.

Married Participants Both Eligible for SAG Producers Coverage – A special rule applies to married participants who are both eligible for the SAG-Producers Plan and who also have coverage in another entertainment industry plan. If the SAG-Producers Plan is primary for one or both of the participants, the SAG Plan will not penalize the family for failure to pay all three premiums. You can choose to pay for only one SAG coverage, in which you and your family will receive primary coverage. If you pay the premiums for both SAG coverages, you and your family will receive full coverage (100%), subject to the Plan’s Allowances.

Coordination of Benefits with HMOs
If you or your dependent have primary coverage with an HMO, including a Medicare HMO, you must use your HMO provider network. When you do, the SAG-Producers Health Plan will pay secondary for any copayments or deductibles you may incur. If you do not use the HMO network providers, the Health Plan will reduce benefits by 80%. In other words, the maximum the Plan will pay is 20% of the Allowed Amount on the claim.

This rule applies to HMO coverage you or your dependents may have through Medicare, another employer or privately. It is extremely important that you use your HMO when it is your primary plan. If you do not, your benefits under this Health Plan are reduced and you will have much larger out-of-pocket expenses.

In cases where your HMO excludes specific services for which this Plan has a benefit, such as chiropractic care, regular Health Plan benefits will be paid.

Coordination of Benefits with Medicare
A description of how the Health Plan coordinates benefits with Medicare may be found on pages 72 and 73.

How Benefits are Computed
Once a determination has been made about which plan is primary, the benefits are processed as follows:

When This Health Plan is Primary
If this Health Plan is primary, the bills should be submitted to the Plan Office first. This Plan will pay benefits based on its rules as if there were no other coverage.

When This Health Plan is Secondary
If this Plan is secondary, copies of the original bills and a copy of the other plan’s Explanation Of Benefits (EOB) should be submitted to the Plan Office. This Plan will determine how much it would have paid had there been no other coverage. It will then subtract what was paid by the primary plan from the total Allowed Amount.

The Allowed Amount is based on whether or not the provider is a network provider:

The difference between the Allowed Amount and the primary plan’s payment will be paid by this Health Plan, provided it does not exceed the amount this Plan would have paid as primary. When a Blue Cross Prudent Buyer or PHCS network provider is involved, if the primary plan has already reimbursed more than the network contracted rate, this Plan will not make any payment and the remaining charges become a network write-off. The participant is not responsible for the balance.

Here are examples. Both examples assume that the participant is in Plan I, and that the deductibles have been met.