What is a PPO?
What is a network?
What is a deductible?
What is co-insurance?
What is a co-pay?
What is an out-of-pocket maximum?
What is usual, customary and reasonable?
What is a pre-existing condition?
What is creditable coverage?
What do I do if I receive a bill for services covered by the plan?
What is a formulary?
What is coordination of benefits?
Why can't I enroll in or drop coverage at any time?
When can I add or delete a dependent?
Can I use my Flexible Spending Account to pay for anything relating to dependent care or medical services?
What is a Mail-Order Drug Program?
What Maternity Benefits Does Payless Offer?
What's covered by the plan for delivering mothers and newborns?
What are Pre-certification Requirements?
What is Predetermination?
How do I get coverage when I travel?
Why isn't a network plan offered in my area?
What is a Domestic Partner?
















Q. What is a PPO?

A. A PPO, Preferred Provider Organization, is a type of medical plan which offers a higher level of benefits when you use a network provider. That's because network providers discount their services - saving money for you and for Payless. Office visits to regular physicians and specialists are covered at 100% after a co-pay is met.

Q. What is a Network?

A. A network is a group of providers that have contracted with the carrier to provide their services at a discounted rate. Your zip code qualifies for a network plan if there are two network general physicians within 25 miles and one network hospital within 25 miles. If you are enrolled in a network plan that uses a network of physicians and hospitals, you receive a higher level of benefits if you use a network provider. In HMO plans you receive benefits only if you use a network provider.

Q. What is a Deductible?

A. A deductible is an amount of money that you pay before your medical plan starts contributing to the cost of your medical services. For example, if the plan's deductible for individual coverage is $500, the plan will start paying a percentage of your benefits after you have paid for $500 of covered expenses during a calendar year.

Q. What is Co-insurance?

A. Co-insurance is the fixed percentage of eligible expenses you pay, after you've paid the deductible. For example, if the plan pays 80% for a service after you've paid the deductible, you are responsible for paying the remaining 20%, which is your co-insurance (80% is the plan's co-insurance).

Q. What is a Co-pay?

A. A co-pay is a set dollar amount you pay for specified services covered by the plan. For example, if your co-pay for an office visit is $20, you will pay this amount at the time of service.

Q. What is an Out-of-Pocket Maximum?

A. An out-of-pocket maximum is the most you will pay in a calendar year toward your medical expenses. Throughout the calendar year, you will pay for portions of your medical expenses not covered by the medical plan. Co-pays, deductible and co-insurance are all out-of-pocket expenses. Once you reach the out-of-pocket maximum, all remaining expenses are covered at 100% by the medical plan. Keep in mind that some expenses (like mental health and substance abuse and prescription Co-pays) do not accumulate toward the annual out-of-pocket maximum.

Q. What is Usual, Customary and Reasonable (UCR)?

A. Usual, customary and reasonable (UCR) charges are based on what other health care providers in the area are charging for similar services. Most insurance companies will only reimburse you for up to what is considered reasonable and customary for that service in your area. Any amount over reasonable and customary (or UCR) would be your responsibility. In areas where network plans are available, as long as you use a network provider, the network provider discounts their fees. The discounted fees are generally below the amount considered usual, customary, and reasonable for that service. If you are in a plan where no network is available or you are in a network plan but choose not to use a network provider, you are responsible for any expenses that exceed the usual, customary and reasonable charges.
For instance -- if your non-network doctor charges $200 for a specific service and most other physicians in the area charge $180 for the same service, then -- you will pay an additional $20 (the difference in your doctor's charge and the usual, customary and reasonable charge) for that service.

Q. What is a Pre-existing Condition?

A. For medical coverage, a pre-existing condition is a condition for which medical treatment or medical expenses are incurred, a diagnosis is received or drugs or medicine were prescribed by a physician or licensed practitioner within a set period of time (as determined by each medical plan) prior to the earlier of the date a person begins an eligibility waiting period or becomes insured. Identified pre-existing conditions are excluded for a one-year period during which all waiting periods have been satisfied and/or a person has been insured for these benefits.

For the CIGNA Plan

.  If medical services as described above are received during the 90 days before the earlier of the date a person begins an eligibility waiting period or becomes insured, pre-existing conditions apply

For United 350, SafeNet and Select 350 Plans

.  If medical services as described above are received during the six (6) months before the earlier of the date a person begins an eligibility waiting period or becomes insured, pre-existing conditions apply

Q. What is Creditable Coverage?

A. If you or your dependents had prior health plan coverage (called "creditable coverage"), the pre-existing condition exclusion period will be reduced by the number of days you or your dependents were covered under such a prior health plan. Prior health plan coverage, or creditable coverage, includes coverage under another employer group health plan, Medicare, Medicaid, the Federal Employees Health Benefits Plan, military or veterans' health benefits, Indian Health Service or tribal organization programs, state high-risk pools, or an individual health insurance policy. In order to establish the amount of your previous creditable coverage, you must obtain a certificate of creditable coverage (or HIPAA certificate) from your prior health plan. Your prior health plan or insurer is required by law to provide you and your dependents with a certificate of creditable coverage document with the amount of creditable coverage you have accumulated. We will attempt to assist you in obtaining the certificate of creditable coverage in the event that you are unable to do so on your own. If you had a break in health plan coverage of 63 consecutive days or more, this plan will not count coverage prior to that break as creditable coverage for purposes of reducing the pre-existing condition exclusion period.

Q. What do I do if I receive a bill for services covered by the plan?

A. If you live in a network plan area, and use a network provider, your provider will bill the services directly to the medical plan. You are responsible only for your deductible, co-pay or co-insurance at the time of service. If you are in a plan where no network is available or you are in a network plan but choose not to use a network provider, you will be responsible for the full cost at the time of service. Then within six months of the date of service, you must submit a claim to your carrier for reimbursement. You can receive a claim form by calling the carrier's customer service center.

Q. What is a Formulary?

A. A formulary is a list of brand name drugs Medco (the Payless Pharmacy Benefit Manager) has determined to be effective and reasonably priced. You pay the least amount when you use a generic substitute. However, for some drugs, a generic substitute is not yet available in the market. When it's necessary to use a brand name drug, those on the formulary are provided at a lower price than brands not on the formulary.

Q. What is Coordination of Benefits?

A. When you and/or your family members are covered by more than one medical plan, the plans will coordinate payments. Generally, if you are covered by a plan at your employer, that plan is your primary plan - which means that it pays first for expenses. If you are covered by your spouses plan as well, that plan would be your secondary plan - which means that it would pay after your primary plan paid their portion. Your children's primary plan is determined by the birthday rule - which means that if the children are covered by both your and your spouse's plan, the spouse with the birthday that falls earlier in the year will be the primary plan. For example, if your birthday is in March and your spouse's birthday is in September, your plan would cover your children as their primary plan.

It is important to remember that the Payless plan, like most plans, as the secondary payer provides payment of medical benefits on a non-duplication basis. This means that when your Payless plan is the secondary payer, the Payless plan pays the difference, if any, between what the other plan paid and what your Payless plan would have paid if it were the only medical plan paying the claim.

You will be required, at the beginning of each calendar year, to verify whether you or your dependents also have coverage under another plan.

Q. Why can't I enroll in or drop coverage at any time?

A. Full-time Associates are able to pay for benefits on a pre-tax basis. In exchange for this benefit, the IRS places certain restrictions on when Associates can enroll in and drop coverage. You are able to change your benefit elections if you experience a "qualified change in status." Refer to What is a qualified status change? for more information.

Part-time Associates are able to drop coverage at any time since benefits are paid on an after-tax basis.

You are also allowed to change your benefit elections during the Company's Open Enrollment period or Annual Benefits Enrollment period.

Q. When can I add or delete a dependent?

A. Any change you wish to make to your benefit elections must be consistent with your change and affect eligibility for coverage. For example, if you have a baby, you may enroll your new baby in the plan and drop coverage for your spouse because you had a change to the number of dependents eligible. These changes include:

• A change in legal marital status, including marriage, death of a spouse, divorce, legal separation or annulment.
  
• A change in the number of dependents, including birth, adoption, placement for adoption or death
  
• A change in employment status, including termination or commencement of employment by the Associate, spouse or dependent
  
• A change in work schedule, including a reduction or increase in hours of employment by the Associate, spouse or dependent, including a change from Full-time to Part-time status or vice versa, a strike or lockout or commencement of return from an unpaid leave of absence
  
• A change that causes a dependent to satisfy or cease to satisfy the eligibility requirements for coverage under the Payless plan due to attainment of age, student status or other similar circumstances
  
• A change in the place of residence or work site of the Associate, spouse or dependent that results in a change in plan eligibility
  
• A court order that requires coverage of an eligible child
  
• Entitlement to Medicare or Medicaid
  
• A significant change in the cost or coverage of the Payless medical or dental plan, subject to certain limitations
  
• A significant change in the cost or coverage of a spouse's medical or dental plan, attributable to the spouse's employment if applicable, you may obtain a copy of your plan's procedure for determining the qualification of medical child support orders.

All election changes must be made through My Info within 30 days of the event (birth, marriage, etc.).

Q. Can I use my Flexible Spending Account to pay for anything relating to dependent care or medical services?

A. No. Only services allowed under IRS regulations will be paid through your Flexible Spending Account.

The IRS publishes a complete list of qualified expenses. It is available at www.irs.gov .

Q. What is a Mail-order Drug Program?

A. If you take a maintenance drug for an ongoing condition, you can use the Medco mail order program and order up to a 90-day supply for the same cost as a 60-day supply at retail. To start using the mail-order program, you may use the mail-order form or you may call Medco. You may also call Medco for a list of maintenance drugs included in the mail-order program.

Q. What Maternity Benefits Does Payless Offer?

A. Payless ShoeSource has arranged for telephonic access to registered nurses and educational materials for expectant mothers.

This service is available to participants in the Select 350, United 350, SafeNet or CIGNA 350 medical plans. Expectant mothers registering will complete a health survey administered by a registered nurse. The resources are for identifying health risks and providing prenatal education to expectant mothers. A woman may register for this service at any time during her pregnancy, although it is suggested that she do so as soon as the pregnancy is confirmed. An added incentive of a $100 award is available to expectant mothers who call during the first three months of pregnancy.

To register, call:

• 1-800-842-2094, if you are a participant in the United 350, Select 350, or SafeNet medical plans.
  
  
• 1-888-265-0047, if you are a participant in the CIGNA 350 medical plan.

You have 30 days from date of birth/adoption to add your newborn or adopted child to your medical and/or dependent life insurance plan.

In addition, Associates who are eligible and are enrolled in the Short-Term Disability program, may receive disability payments during their maternity absence.

Prior to your delivery date, ensure that the appropriate paperwork has been completed for your upcoming Leave of Absence. Contact the Leave of Absence Coordinator in the HR Benefits Department for more information.

Q. What's covered by the medical plans for delivering mothers and newborns?

A. The Company's medical plans allow mothers and newborns to stay in the hospital - and receive coverage for their stays - for at least 48 hours following a normal delivery, or at least 96 hours following a delivery by cesarean section. Of course, the decision about when to leave the hospital is up to the patient and her doctor, so stays may be shorter, but your health plan allows for coverage for stays up to those lengths.

Q. What are Pre-certification Requirements?

A. Some medical services need to be pre-certified (approved) before care is received. If you do not call for pre-certification before you receive care, the plan will not pay full benefits, and you may be responsible for paying the full cost. Hospital care: You must pre-certify all hospital admissions (or have your physician pre-certify for you). The only exception is for maternity stays. You do not need to pre-certify a maternity stay unless it is in excess of 48 hours following a normal delivery or 96 hours following a cesarean section, even if you use a non-network provider. In the case of an emergency admission, you, a family member, your physician or the hospital should call the number listed on your ID card within 48 hours (or the first business day thereafter) following admission. If you enter the hospital without pre-certification, $500 of your hospital charges will not be considered eligible for reimbursement and will not count toward your calendar-year deductible and out-of-pocket maximum. And, if a later review determines the services were not medically necessary, no reimbursement will be made. You will be responsible for the full cost. Treatment for mental illness/substance abuse must be pre-certified. If you do not call for pre-certification before treatment begins, your plan will not provide any benefits.

Q. What is predetermination?

A. Review by Care Coordination for any outpatient surgery or procedures, prior to the services being rendered, to determine if it is a covered procedure and identify any plan limitations.

• Review for medical necessity of a service or supply, prior to its rendering or delivery, to determine if it is covered and whether there are any plan limitations.
• Services that may fall under the 'not covered expenses' of the Summary Plan Description could be any not due to an accident, sickness or injury.
• Predetermination of planned services can save you on out of pocket costs, by being aware of limitations to your benefit coverage.

Q. How do I get coverage when I travel?

A. If you are enrolled in a network plan, there are typically network providers available throughout the United States. If you are temporarily outside your local network area and need non-emergency medical care, first contact a network physician or hospital. You may find out which providers and hospitals are in the network by contacting the phone number on your ID card. Any non-emergency care you receive from a non-network physician or hospital is covered at lower benefit levels. In a medical emergency, seek care immediately from the nearest provider and then contact your carrier within 48 hours (or the first business day thereafter) to arrange for follow-up care. If you do not contact your carrier, your claim will be paid at the out-of-network level.

Q. Why isn't a network plan offered in my area?

A. The network plan is offered where the carrier has a network of providers. When Payless contracts with the carrier for their services, certain access standards are set to determine whether you qualify for a network plan. We look at the doctors and hospitals to make sure that they are within a certain distance from your zip code. If you live in a zip code that has two network primary care physicians within 25 miles and one network hospital within 25 miles, then you are eligible for the network plan benefits.

Q. What is a Domestic Partner?

A. Payless has defined Domestic Partner as a same or opposite gender partner with whom the Associate resides and has a committed, long-term relationship of mutual support, and for whom the Associate has assumed long-term financial responsibility or has mutual financial responsibility. Please see the Declaration Statement of Domestic Partnership for details.

Associates may cover eligible Domestic Partners under most medical and dental plans offered by the Company. It is recommended that you seek legal advice from your attorney regarding possible legal and financial implications before you take the actions required to provide benefit coverage to a Domestic Partner.