Enrollment booklet 2005 State of Georgia Flexible Benefits Program

AUG 1 2005

TERMS & CONDITIONS

The Flex ible Benefits Program is offered by the Employee Benefit Plan Council , the Board of Community Health and parti cipatin g departments and authorities. The Flex ible Benefits Program is gove rned by the Internal Revenue Code, section 125, and rul es issued by the Employee Benefit Plan Council and the Board of Community Health. The Flex ible Benefits Program prov ides you with a method to have your employer purchase benefits with money that would have been pa id to you. You do not receive the premium amounts and contributions fo r the pre-tax options you select as taxable income (and therefore do not pay taxes on that amount); yo u do receive the bene fits as an employer paid benefit. The Option Statement is a bindin g salary agreement. Failure to compl y with all contractual and administrati ve requirements will result in any excess salary reductions being retai ned by the Plan. The fo llowing statements apply to the bene fit options listed on the Option Statement and on the Open Enro llment we b site.
I) Your participation in the Flexible Benefits Progra m is voluntary. You are not required to choose any of the options. If yo u do not wish to parti c ipate in these bene fits, mark 'no coverage' in each benefit category, sign and date the Option Statement, and return it to yo ur personnel or payro ll offi ce. If you choose yo ur bene fits th rough web enrollment, click 'no coverage' in each benefit category and complete the confirmation proce ss.
2) The coverage levels available to you and the premium amount fo r each coverage level may be calculated using yo ur retirement salary, yo ur age, your e ligibility fo r disability retirement bene fits, and FICA status. Any errors in yo ur age, salary, eligibility fo r disability retirement bene fits or FICA status should be reported to your personnel or payroll offi ce immedi ately.
3) The calculation of tax savings does not take into consideration any other income reduction program such as Deferred Compensation or Tax Sheltered Annuities, or any changes you may make in coverages fo r the upcoming yea r.
4) By selecting coverages and indicating contributions to Spendin g Acco unts, you are agreeing that your age ncy may reduce your taxa ble income by the amount necessary to purchase those coverages and make those contributions. Except in certa in circumstances, the amount of income reduction may not be changed unt il the next enrollment peri od.
5) After this enro llment period you may become a parti cipant or make changes in some coverages onl y under limited conditions in accordance with the rules o f the IRS code, the Employee Bene fit Plan Council, and the Board o f Communi ty Health. The Employee Benefit Plan Counc il and the Board o f Community Hea lth have the responsibility to interpret these rul es and make the final decision as to whether you may enroll or change any coverage outside o f the enro llment peri od. Your request for enro llment or a change outside o f the enrollment peri od will on ly be considered if you submit the proper documentation within the time frame allotted. To submit a request fo r enrollment or change to coverage under the State Health Bene fit Plan, you must complete and submit a Membershi p or Discontinuation Form to your employer's Bene fits Coordinator within 31 days to enroll or increase coverage and 90 days to cease or decrease coverage. Your request fo r enro ll me nt or a change in any other coverage un de r the Flex ible Benefits Program must be submitted in writing to your employer's Benefi ts Coordin ator within 31 days to enro ll or increase coverage and 90 days to cease or decrease coverage. Submission of a request fo r enrollment or a change, or the occurrence of one of the fo llowing events, does not guara ntee that you will be able to enroll or change coverage outside the enrollment peri od. Please see yo ur Benefits Coordinator if you have questions about when you may enroll or make changes o utside the enrollment period. A list of events th at might permit you to enroll or change one or more coverages under the Flex ible Bene fits Program: a) You gain or lose a spouse; or b) You gain (no time limit if due to judgment, decree or order) or lose an eligible dependent; or c) Your spouse or de pendent becomes eligible fo r or loses coverage under another employer's plan, COBRA or a gove rnm enta l plan; or d) An event causes your dependent to gain or lose eligibility fo r coverage under your employer's plan; or e) Your change of residence causes you or your spouse or dependents to gain or lose eligibility for coverage under your plan or another employer's plan; or f) The cost of yo ur dependent care increases or decreases signifi cantl y and your dependent provider is not re lated to you, yo ur spouse, or your dependent; or g) Your spouse's employer increases, dec reases or ceases coverage, or conducts open enrollment; or h) You, yo ur spouse or your dependent gain or lose eligibili ty for Medicare or Medi caid .
6) This salary agree ment will be terminated if yo u change the agreement during the nex t enro llment period. If you do not change the agreement, your bene fit choices will rollover in the next Plan year or defa ult to a specified coverage.
7) If yo u are eligible to parti cipate in the Plan, you terminate and are rehi red during the same Plan Year, you must maintain the same o pti ons.
8) O ptions and coverage levels under the State Health Benefit Plan are set forth in the State Health Bene fit Plan Document. Options and coverage under the Flex ible Spendin g Accounts are set fo rth in the Flex ible Bene fit Plan Document. For a ll other benefits under the Flex ible Bene fits Program, the options and coverage levels offered conform to policies provided by the insura nce company making the offer. By selecting an option and coverage level yo u agree to ab ide by the terms and conditions o f that poli cy.

9) Contributions to Spending Accounts are voluntary. You should not parti c ipate in Spending Acco unts until yo u thoroughl y read the sections o f the Enro llment Booklet re lated to Spending Accounts. By choosing to contribute money to one or more Spending Accounts you are agreeing to abide by the Rules o f the Employee Benefit Plan Council related to Spending Accounts. In particul ar, you are agreeing to the fo llowing provisions: a) Money contributed fo r one type of Spending Account cannot be used to pay clai ms paya ble from another type of Spendin g Account. b) In genera l, the amount contributed for a Dependent Care Acco unt cannot be greater th an th e earned sa lary of you or your spouse, whichever is less. c) If you are married filin g separately, the amount contributed fo r a Depende nt Care Account cannot be greater than $2,500. d) The validity of a claim against a Spending Account is determined in accordance w ith the Plan, Intern al Revenue Code, and IRS regul ations as interpreted by the Admi nistrator subject to the appeal prov isions o f the Plan. e) Any money not reimbursable to you will be fo rfeited to the Flexible Bene fits Program. Forfeited money will not be returned or paid to the employee but will be used to reduce the costs associated with prov iding this bene fit. f) For the Spending Acco unts, eligible ex penses will be re imbursed in acco rdance with the Rules of the Employee Benefit Plan Counc il and the IRS code. g) For the Dependent Care Spending Account, you will not be reimbursed fo r more than the Plan has received from your department on your behalf. h) If you decide to acti vate and use the Spending Account debit card, you agree to abide by a ll requirements as indicated in the cardholder agreement received with the ca rd .
10) By se lecting the Specified Illness Benefit, you are agreeing to the following: a) I am assertin g that to the best o f my knowledge and belie f, the answers to the questions on this application are true and complete. They are offered to American Ge nera l Assurance Company as the bas is fo r any insurance issued. It is understood and agreed that coverage will not become effecti ve unless I am acti ve ly at work on the da te o f enrollment and the effecti ve date of coverage. b) I unde rstand and agree that no benefits are payable for loss starting or occurrin g within 12 months of the effecti ve date of coverage which is caused by, contri buted to by, due to or resulting from a Pre-ex isting condition, unless I have go ne 12 months without med ical care, treatment or supplies fo r the Pre-existin g condition. c) I realize that any fa lse statement or misrepresentation may res ult in loss o f coverage under the certificate. I understand that no insurance will be in effect until approved by Ameri can General Assura nce Company and the necessary premium is paid . Any person who, with intent to defraud or kn owing that he is faci litating fra ud against an insurer, submits an application or fil es a claim conta ining a fa lse or dece ptive statement may be guilty of insurance fraud . d) I authorize my employer to deduct ap propriate amount from my earnings and to deduct and pay Ameri can General Assurance Company the premium required therea fter each month for my insurance.
11 ) Other terms and conditions: a) If you choose not to parti cipate or choose not to continue coverages, your ab ili ty to enro ll at a later da te will be subj ect to contractua l provisions, which may include medi cal proo f of insurability or limited coverages. b) If yo u fa iled to enroll in options requiring medi cal underwriting when first eligible and you choose new or increased levels of coverage, you must complete the medical underwritin g process and be approved. c) If you choose coverage under the Life Insurance options and the Accidental Death and Dismemberm ent options, the same Bene fi ciary Election Form will be used. If a bene fi ciary is not named, yo ur Estate wiII be the bene fici ary. d) If yo u select more than $50,000 under the Li fe Insurance option, yo u may choose to pay the premium with after-tax dollars to avo id imputed income; this will eliminate any tax savings on the life insurance premium .
12) If yo u do not use the web site to complete your Health Bene fit se lection, you may be req uired to complete additiona l fo rms to finalize your Health Bene fit se lection. You shoul d contac t your Personnel Office to obtain the necessary fo rms. Failure to complete the required fo rms may jeopardi ze yo ur selected coverage or your opportuni ty to enro ll or change coverage until the next enro llment period.
13) In the event of an administrati ve error with res pect to the Flexible Bene fits Program, decisions will be made in accordance with the Internal Revenue Code, the Rules o f the State Health Benefit Plan, and the Rules of the Employee Bene fit Plan Counci l for the Flex ible Bene fit s Program.
Please choose your Plan coverage carefully. Only eligible dependents, as defined by the Plan Administrator and in Program communications, can participate in the Flexible Benefits Program : Any attempt to file claims for a dependent who is not eligible for coverage 1s fraud . The Plan Administrator will require repayment of any ineligible claims . If the employee purchased family coverage but is only eligible for single coverage , the d_1fference in the premiums paid into the Plan will not be refunded . Also, the difference between single coverage and family coverage premiums will be included as income on a W-2 and/or amended W-2 for inclusion on the employee's tax return . Additionally, the inclusion of ineligible dependents for coverage under the Flexible Benefits Program may result m termination from the Program and/or prosecution for fraud .

TABLE OF CONTENTS

Tenns and Conditi ons ..... .. ................ ..... ... .................. .Inside Front Cover
UNIT 1
State Health Benefit Plan ............... ............................ ... ... ........... ..... ...... ... 1 Who's Eligible To Participate ... .... ........... ................................................ .2 Pre-Tax Premiums Help You Stretch Your Dollars .... ... ... ... ... ............ .....2 Points To Consider .. ... .... ...... ............... ..... .. .... .. ... .. .... ... ... ..... ..................2-4 Flexible Benefits Program Calendar .... ..... ... .. ..... ..... ... ..... .. ... .. ... .. ....... ..... 5
UNIT2
Forms To Complete ... ........ ... ... .............. ..... ..... ... ...... ...... ..... .... ... .. ..... ........ 7 After You Enro ll For Coverage .... .... .... ..... ..... .... ... .............. ...... ............. 10 When Coverage Begins ... .. .......... .... ... ... .. .... ..... ... .. ..... .. ... ... ..... .. ... .......... 10 Confirming Your Choices ...... .. ... .. ... .. ... .. .... .. .... .... ... ..... ..... .. ... ... ... .. ... .... .10 Change Your Decisions At Annual Open Enrollment .... .. ... .................. 10 Change Your Decisions Outside Open Enro llment ........ .... ..... ..... ......... 10 What Happens If You Leave The State ......................... ..... ......... ......... ..11 Taking Coverage With You When You Leave ....... .. ... ... ... .. .... .. ... ..... ..... 12
UNIT 3
Dental Insurance .......... .............. .. ....... .... ... ........... .... ........... ... ................. 14 Regular Dental Option ....... .......... ..... ...... ...... ..... ............... ..... .......... .... ... 14 Preferred Provider Option (PPO) ........ ...... .... ...... ............... .... .. ..... .. ....... 14 Prepaid Option .. ..... .... .... .... .. ... .... .. ... ...... ..... .. ... .. .... .. .... ... .. ... ... .. ............... 14 Late Entrant Provisions ..... .... .... .. ... .. ... .. .... ..... .. .... .. ... .... ..... ...... ... .... .. ..... . 15 Some Important Infonnation About
The Prepaid Option .: 15 Some Important lnfonnat ion About
The Regular And PPO Options .... ..... .. ... .. .... ..... .... ..... ... ... ... .......... .17 Pre-Detennination Of Benefits ...... .... .... .. ... ... .. ... .. ..... .. ... .. ... .. ... .............. 17 Exclusions List .... ...... ... .... .................. ... .... ..... ....... ..... .... ...... ....... .. ... .... .. .17 Example Of Regular And PPO Benefit Payments ................. ..... ..... ..... 17 In Network and Non Network Example ..................... .. ... .. ... .... .... ..... .. .. 17
UNIT 4
Vision Coverage ... .. .. ...... .. .... ............ ... ......... ..... ...... ...... ........ ... .. ... ... ... .. .. 19 Medica lly Necessary .. .......... .... ........ ........ ..... ... ... ........ ..... ..... ......... ..... .. .. 19 Exclusions ... .. ......... .... .... .. .. ..... ..... .... .. ....... .................................. ..... .. .... .. 19 Vision Coverage Chart ...... .... ......... ..... ...... ..... .... ........ ..... ........................20

UNIT 7
Disability Insurance.......... .. ....................................... .... ... .... .... ... ... .... .. .. .33 Short-Tenn Disability Protection ... ....... ........... ................ .. ....... .. ... ... .. ....33 How STD Works ... .. ... .......... ................ .......................................... .... ... ..33 What ls A Late Enro ll ment Penalty For Late Entrants ............ .. ............33 Long-Term Disability Protection ...... ............... .... ... ........... ........ ..... ........34 Eligibility For An Early Disabili ty Retirement ........... ................. ........ ..34
UNIT 8
Long-Tem1 Care Insurance ....... ............................... .. ..... ..... .......... ... ... .. .36 Your Long-Term Care Options .... .......... ... ..... ..... ....................................36 When Benefits Are Paid ... ................................... ... .. .............................. .36 About Your Premiums And Enro lling ..... ... .. ... .... ..... .. ... .. ... .. ... .. ... ..... .... .37
UNIT 9
Specified Illness .... .. .. ...... ..... .. .......... ......................... ......................... .....39 Plan Provisions ........................ ......................... .... ... .... ... .. .... .... .......... .. .. .39 First Occurrence Benefit .... .. .... .. ....... ..... ..... .................... .... ...... ..... ........ .40 Additional Occurrence Benefit ..... .... .. ... ............... .................... ............. .40 Health Screening Benefits ..... .. .... .... .. ... .. ... ... .. .. .. ........ .... ..... .. ... .... ......... .40
UNIT 10
Legal Insurance ... ... ..... ..... .... .. .. .... ... .. ... .. ... .. .. ... ... ... .. .... ..... .. ... ..... ..... .... .. .42 Telephone Legal Services .. ... .. ... ... .... .. .... ... ..... ... .. ... ... ... .. ... .. .. .... ..... .... ... .42 In-Office Legal Services ............ .. .. ...... ... .. ... .. .......... ..... .. ... .. ..... ....... .. ... ..42 Online Legal Services ............... .. ... .. ... ............... ..... .. ... ..... ..... ..... ........... .43 Reduced Fee Legal Service ....... ..... ..... ..... ..... ............... .... .. ................... .43
UNIT 11
"Peach State Reserves" The Georgia Retirement Investment Plan........... ..... ..... .. .... ..... ............... .. ... .. .... ...... .... ..... ... ...44
Eligibility .... ................ ....... ..... .... .... .... .... .. ... ... .... ... .. ..... ... .... ....... ........ .. ...45 What Is Peach State Reserves? .... .... ..................... ......... ........................ .45 Emergency Withdrawals ...... .... ... ........... ..... ..... ..... ................................. .46 Enrolling In Peach State Reserves ....... ...... ... ......... .... ... ........ .. ... ..... .. .. .. ..46 Plan Comparisons Chart .... ..... ...... .......... .... ..... ..... ..... ..... ... ..... ..... ....... ... .47 Investing Your Money For Retirement ....... .............. .. ... ..... ..... .. ..... ..... ..47 Managing Your PSRA Account ................ .. .... ... .. ... .... .... .. .... ... .. .... .... .... .48

UNIT 5
Spending Accounts ... ..... .... ....... .. ...... ................... .. ...................... .. ... .. ... ..22 Health Care Spending Account (HCSA) .... .. ... ...................... ...... .. ...22-23 Dependent (Ch ild) Care Spending Account (DCSA) .. ...... ..............24-25 Im portant Information About HCSA and DCSA ........ .... ...... .. .......... ....26 A Word About Forfeitures.. ..... ....... ....... ...... .... ............ ......... ... ... .. .. .. .. ... ..26 If You Leave Or Retire ...... ......... ..... .. ..... ..... ... ........... .. .................. ....... ...26
UNIT6
Employee, Spouse, and Child Life Insurance ........... .. ..... ..... ... ..... .........29 How Employee Life Insurance Works .... ..... .... .. .. .... .... .... ... ..... ..............29 Spouse Life lnsurance ... .. .... .......... ..... ..... ......... ........... ......... ... .. .. .. .. .... ....29 Child Life Insurance ... ......... .. ... ................ ...... .... .. ...................... ..... ..29-30 Accidental Death And Dismembennent Insurance ................... ...... ......3 I

UNIT 12
Electronic Open Enrollment ............... ....... ... .. .. .... ..... ...... .... .. ....... .... .49-5 I
UNIT 13
Benefit Phone Directory ........... .... ....... ..... ....... .. ... ... ... ... .. ... .. ... .. .. ..... ......52 Employee Check List ...... ........... ..... .... .. .... .. .... .. ... .. ... .. .... .. ...... ...... .. .... ....53
Hf PAA Privacy Notice ... .... ...... .. ............ ....... ............... Inside Back Cover

Welcome to the State of Georgia Flexible Benefits Program
Are you planning or expecting the birth or adoption of a child? Getting married soon? Are you caring for an aging parent? Is it time to start thinking about supplementing your retirement? These are just some of life 's changes that could affect the health care and financial needs of you and your family.
This 2005 Enrollment Booklet gives you an opportunity to review and understand your benefits package. It summarizes benefits available to State employees and their eligible dependents, along with certain procedures to be followed to obtain these benefits.
There are important changes for the 2005 Plan Year, so review all information carefully. It is up to you to understand all the options available and make the choices that best suit your needs. Making the right decisions about your options can make a real difference toward building a rewarding future for you and your family.

STATE HEALTH BENEFIT PLAN

The Health Plan Decision Guide provides important information about enrollment deadlines and the benefits offered by each option of the State Health Benefit Plan. There are a number of significant changes to the Plan effective July 1, 2005 and it is essential that you carefully read the Decision Guide prior to making your election for coverage. Failure to do so could have a financial impact on your premium.
Plan changes are summarized below.
Tobacco and Spousal Surcharges are being implemented effective July 1, 2005. Surcharge questions will be asked regarding your and/or your covered dependents' use of tobacco products. Surcharge questions will also be asked regarding your spouse's eligibility for other group health insurance coverage through his/her employment. You must truthfully answer these questions. Failure to answer these questions will result in an automatic default to the $40 per month tobacco surcharge and $30 per month spousal surcharge.
PPO/PPO Consumer Choice (CCO) and Indemnity Members - The Indemnity Premier, PPO Premier and PPO Choice Premier options will no longer be offered. The names for the Indemnity Basic, PPO Basic and PPO Choice Basic will change to the Indemnity, PPO and PPO CCO and will no longer offer a maximum out-of-pocket limit for pharmacy benefits. There will be an increase in the deductibles and out-ofpocket maximums, and the co-payments for

Preferred Brand and Non-Preferred Brand drugs will increase. Also, the reduction in the Emergency Room co-payment when referred by NurseCall will be discontinued.
HMO Changes - Members will need to meet a deductible and pay a co-insurance amount with an out-of-pocket maximum for certain services (i.e. inpatient and outpatient hospital facility, inpatient professional charges, etc.) The deductible and co-insurance amounts are included as part of your annual out-of-pocket maximum. Services requiring a co-payment will not be applied toward the out-of-pocket maximum. Once your out-of-pocket maximum has been met, covered services are payable at I00% (excluding co-payments). Kaiser Permanente will implement a maximum lifetime benefit of $2 million.
TRICARE Supplement for Eligible Military Members - Supplemental insurance will be available to employees and dependents that are eligible for TRICARE. In order to enroll in the TRICARE Supplement, the subscriber and each dependent must be eligible for TRICARE, and provide a Defense Enrollment Eligibility Reporting System (DEERS) number. According to federal regulations governing this type of coverage, the following may be eligible: Active Military, Retired Military, some Reserve, some Natiorial Guard and Qualified spouses and exspouses.
REFER TO THE HEALTH PLAN DECISION GUIDE FOR SPECIFIC DETAILS

Unit One / 1

Who 's Eligible To Participate In general, you are eligible to participate in the Flexible Benefits Program if: You are a full-time regular employee who works at
least 30 hours a week and are expected to work for at least nine months. Employees who work in a sheltered workshop or work transition program, contingent employees, temporary employees, and student employees are not eligible. You are a public schoolteacher, working at least 18 hours, and employed in a professionally-certified capacity, working half-time or more and not considered a "temporary" or "emergency" employee. You are an employee of a local school system holding a non-certificated position. You must be eligible to participate in the Teacher's Retirement System (TRS) or its local equivalent, and you must work a minimum of 20 hours a week (or 60% of the time necessary to carry out the duties of the position, if that's more than 20 hours). You are an employee of a local school system working at least 15 hours (or 60% of the time necessary to carry out the duties of your position, if that's more than 15 hours) and you are eligible to participate in the Public School Employees' Retirement System (PSERS), as defined by Paragraph 20 of Section 47-4-2 of the Georgia Code. You are an employee of a county or regional library and work at least 18 hours per week.
If you aren't sure whether you're eligible, contact your personnel/payroll office.
Pre-Tax Premiums Help You Stretch Your Dollars The Flexible Benefits Program allows you to save on taxes while you pay for your benefits. Pre-tax premiums reduce your taxable pay ... and your taxes. That's because premiums for most of your insurance options, health benefit options, and spending account contributions are taken out of your paycheck before federal and state income taxes and Social Security (FICA) taxes are withheld.
This means your taxable pay is lower. .. and so are your taxes. It also means you have more in your paycheck - or more to spend on benefits than you would if you paid the same premiums with after-tax dollars .
2 / Unit One

The example on the next page shows the impact of the pre-tax advantage for an employee earning $25,000 a year with annual pre-tax premiums of $1,800.
Your Benefit Salary - which includes your base salary and salary supplements that are regular, nontemporary, and not more than the amount on which retirement contributions are calculated - is reflected on your Option Statement and remains constant for the entire Plan year. Benefit Salary is the pay used to calculate your pay-based coverage - employee life, AD&D, and disability.
A Few Words About Pre-Tax Premiums Using pre-tax premiums will not affect other employee benefits that are based on pay, such as any State of Georgia retirement system, life insurance, disability, and pension benefits. Those benefits will be based on your full pay before pre-tax premiums are taken out. It is worth noting that: except for any Peach State Reserves contributions,
you won't pay Social Security taxes (FICA) on your pre-tax premiums...potentially reducing your future Social Security benefits, although any reduction will be minimal in comparison with your total Social Security benefits; pre-tax premiums are not available for short-term disability, spouse life and child life, legal, longterm care insurance or specified illness.
Points To Consider Whether you're single with no children, single with children, married with no children, or married with children, consider these points if. ..
Your Spouse Has Benefit Coverage
Spending Accounts If your spouse's plan offers spending accounts, you can each have a Health Care Spending Account at the maximum allowed. For Dependent (Child) Care Spending Accounts, however, IRS laws restrict your total family contributions to $5,000 per year. For the 2005 Plan Year (July - December 31) contributions will be limited to $2,496.
Legal Since few employers offer legal insurance, this coverage may be worth considering if your family has legal needs.

Annual pay Annual pre-tax premiums Taxable pay Income and FICA taxes Annual after-tax premiums Take-home pay

$25,000 0
$25,000 - 3,513 - 1,800 $19,687

$25,000 1,800
$23,200 .
- 2,997 -0
$20,203

With pre-tax premiums, this employee saves $5 16 in taxes, and has $5 16 more to spend on other benefits... or to take home.
Pre-tax premiums are available only for the state-wide benefits offered through t he Flexible Benefits Program; they are not available for other agencysponsored benefits. This example is based on a married employee filing a joint return and claiming four exemptions.

in these options up to the maximum monthly amount allowed for each account.
Once you enroll, you may submit claims for services incurred on or after the first of the month after you have completed one full calendar month of employment. If, for example, you are hired July 8 and sign up for a spending account, reductions will start on August 15. You can begin submitting claims for services that you incur on or after September 1.
Long -Term Care You have a one-time opportunity to sign up for longterm care insurance without providing medical underwriting.

25

2.6%

35 45 55

j

2.3% 1.7% 0.8%

Based on pay of$25,000 and $2,500 in pre-tax premiums until age 65.

Employee Life, Spouse Life and Child Life You have a one-time opportunity to choose some employee, spouse and child life insurance coverage without providing medical underwriting. The chart on page 8 lists medical underwriting requirements.

Long-term Care This coverage is available to all eligible employees and some family members. Like legal insurance, few employers offer long-term care insurance.
Peach State Reserves (Deferred Compensation) Your spouse may save the maximum allowed in his or her company's savings plan and you may save the maximum allowed in the Peach State Reserves' Deferred Compensation Plans if you are eligible to participate. See page 45 for information on eligibility.
You Are A New Employee
Dental There is a much shorter waiting period in the Regular and PPO options if you sign up immediately. Late enrollment penalties will apply to the Regular and PPO options if you do not enroll now, but elect to do so in the future. The Prepaid Option does not have waiting periods or late enrollment penalties.

Specified Illness You have a one time opportunity to sign up for Specified Illness guaranteed issuance without providing medical underwriting.
Disability You have a one-time opportunity to sign up for
long-term disability coverage without providing medical underwriting. You have a one-time opportunity to sign up for short-term disability without being subject to a late entrant waiting period.
Other Coverage Thereare no medical underwriting requirements at any time for legal, AD&D, spending accounts, or vision .
You can sign up for the Peach State Reserves anytime if you are eligible to participate. See page 45 for information on eligibility.

Spending Accounts If you are hired by the State after July 1, your paycheck reductions for the spending accounts will start the 15th of your first full calendar month of employment. Your total contributions to each account are prorated by the number of months you participate

Be sure to consider your options carefit!ly when you
first enroll. ifyou decline or drop some ofyour State
coverages and want to pick them up again another year, you may have to prove insurability through
medical underwriting to be covered again, or have longer waiting periods to receive full benefits.
Unit One/ 3

When Your Spouse Works For The State
Dental Each of you may take single coverage and enroll in different options if you choose, but your children will not be covered. As an alternative, one of you may take family coverage and cover your spouse and children. If you both take family coverage, the most the plan wi II pay is 100% of the allowable expenses.
Spending Accounts Each of you may have a Health Care Spending Account for the maximum allowed. For the Dependent (Child) Care Spending Account, however, you cannot exceed the $4,992 family maximum. For the Plan Year (July l - December 31) contribution will be limited to $2,496.
Long-Term Care Each of you may enroll for the coverage you need.
Legal Each of you may take single coverage; in this case, your children will not be covered. Or, one of you may take family coverage and cover your spouse and children.
Employee Life and AD&D Each of you may enroll for the coverage you need.

Spouse Life Each of you may provide Spouse Life insurance for each other. Or, if you wish, one spouse may take coverage and the other spouse could choose "no coverage."
Specified Illness Each of you may enroll for the coverage you need.
Child Life Each of you may provide Child Life insurance for your eligible children. Or, if you wish, one spouse may take coverage and the other spouse could choose "no coverage."
Disability Each of you may enroll for the coverage you need.
Peach State Reserves for Eligible Employees Each of you may contribute up to the maximum for your plans. If both spouses have accounts, you could have a substantial nest egg at retirement. See page 45 for information on eligibility.
Ifyou are married to a State employee covered by the
Flexible Benefits Program, make sure you understand how your coverage works together. You may have some advantages.

4 / Unit One

Flexible Benefits Program Calendar
All pay-related benefits (employee li fe insurance, AD&D, and disability) are based on your Benefit Salary and/or Benefit Age on this date.
Open Enrollment period. Mandatory e lectroni c open enrollment.A ll necessary forms and instructions wi ll be availab le to you on the Open Enrollment web site. Confirmation statements prepared, completed, and distributed showing the amount that will be taken from your paycheck beginning in June. Check your Statement carefu ll y to be sure your choices have been recorded correctly. Contact your personnel/payroll office immed iate ly if you discover an error. Your deadline for completing web enrollment and all required forms (including medical underwriting forms) . Your first payroll reductions of the new plan year for your health benefit plan premiums and one-half of your monthly spending account contributions. (Note: This date may be different for ed ucational enti ties.) Your first payroll reductions of the new plan year for premiums for all other Flexible Benefit options and the remaining one-half of your monthly spending account contributions. (Note: This date may be different for educational entities.) Coverage effective date for FLEX .. . provided you are not absent from work on the first scheduled work day in July due to illness or disability; for Health benefits. .. provided you are at work or on a paid leave of absence on the first scheduled workday in July. Notify your personnel/payroll office if you have not received your SHBP ID card or Notice of HMO Membership Action form by this date. Last salary reductions fo r Flexible Benefit premiums for 2005. Last day of coverage for the 2005 plan year, and the last day to incur eligible expenses for reimbursement from the spendi ng accounts fo r the plan year. Deadline for filing Spending Account cla ims for expenses incurred during the 2005 Plan Year - July I, 2005December 31, 2005. C laims must be postmarked by this date.
Unit One / 5

ocun
'L..
c..
6 / Unit Two

Forms to Complete Depending on the benefit choices made, you may be required to complete forms in addition to your . Option Statement, such as : Minnesota Life Evidence oflnsurability Form for
approval of employee life, spouse life, and child life. If you make any of these benefit selections on the web, you must complete the medical underwriting form on the web. AIG American General Evidence of Jnsurability Form to be approved for specified illness. lf you select specified illness on the web, you must complete the medical underwriting form on the web. Unum Group Long-Term Care Insurance Application Evidence ofJnsurability Form to be approved for long-term care coverage. This medical underwriting form is not available on the web. When you have completed the form , return it to your personnel office. The Standard Evidence ofInsurability Form to be approved for long-term disability. If you select long term disability on the web, you must complete the medical underwriting form on the web. Enrollment forms for health coverage, and the Prepaid Dental option.
For Dental Insurance If you enroll in the Prepaid Dental Option, you must complete a dentist Selection Form to pre-select a participating dentist prior to being able to use your dental insurance. Call CIGNA's Dental Member Services at l-800-642-5810 or go online at www.cigna.com to obtain the Dental Selection Form.
Be sure to include dependent information on this form.
Note: Health insurance forms are not applicable to the dental benefit.
For Employee, Spouse, and Child Life Insurance In addition to your Option Statement or web enrollment, you may be required to complete the life medical underwriting process. If you are a current employee or new employee, the charts on the following page will assist you in determining medical underwriting requirements.

Minnesota Life Evidence of lnsurability Form If you or your dependents are required to undergo the employee life, spouse life and child life medical underwriting process, you must complete the underwriting process on the web during open enrollment, or if you are hired after May 2, 2005, you must obtain the paper Minnesota Life Evidence oflnsurability Form from your personnel/payroll office and submit timely. Based on the information you provide on the form , the insurance company may require additional medical information for clarification.
Amplified Blood Test ln addition to the Minnesota Life Evidence of Jnsurability Form, your employee and/or spouse life insurance selection may require the completion of an amplified blood test. After Minnesota Life receives your Evidence of lnsurability Form, the paramedic company responsible for collecting a blood sample will contact you. The amplified blood test includes measurement of blood pressure, pulse, height, and weight. You will not be charged for this test. The amplified blood test is never required for child life insurance selections. If you have any questions about the amplified blood test process, please call Minnesota Life toll free at 1-800-660-2519.
When you request new or additional coverage, and your medical history warrants, the insurance company may ask for additional information, including an amplified blood test, even if your new coverage is for less than $150,000. You must complete by the deadline or coverage may be denied.
Flexible Benefits Beneficiary Election Form The first time you enroll in employee life insurance coverage, AD & D or Specified Illness, remember to complete the appropriate Flexible Benefits Beneficiary Election Form to name your beneficiaries. If your address changes or you desire a beneficiary change, update your beneficiary information by completing another Flexible Benefits Beneficiary Election Form. Be sure to return the completed form to your Personnel Office. You are always the beneficiary of your spouse life and/or child life insurance option.
Note: There are two beneficiary election forms - one for Life and AD & A and one for Specified Illness.
Unit Two/ 7

Current Employees
Enrolling for the first time, re-enrolling or increasing coverage

Enro lling for the first time in any level. Discontinued coverage and re-enrolling.
Currently Enro lled in Employee Life and increasing coverage.

Ev idence of lnsurability form required. Amplified Blood Test required fo r coverage over $ 150,000.
Evidence of lnsurability fo rm required. Amplified Blood Test req uired fo r coverage over $ I50,000.

Enro lling for the fi rst time in any level.

Evidence of lnsurability fo rm required. Amplified Blood Test

Discontinued coverage and re-enrolling

req uired fo r coverage over $ 150,000.

~~~~~~\1t~;1t:1:1k~~~-~-~--~.,.~~1,"i~-1~i

Enrolling fo r the fi rst time in any level of coverage

I Evidence of Insurability fom1 required.

Discontinued coverage and re-enrolling

I
New Employees
Enrolling for the first time

Enrolling in One times pay (capped at $250,000) Enro lling in Two, Three, Four or Five time pay

NON E
Coverage over $ I00,000 Evidence of lnsurability form required. Amp Ii fi ed Blood Test required for coverage over $ 150,000

Enrolling in coverage up to and including $30,000 Enro lling in coverage over $30,000

NONE
Evidence of lnsurability form required. Amplified Blood Test required fo r coverage over $ I50,000

Enro lling for the first time in any level

NONE

For Specified Illness Insurance In addition to your Option Statement or web enrollment, you may be required to complete the medical underwriting process. If you are a current employee or new employee, the chart below will assist you in determining medical underwriting require ment s.

Specified Illness Medical Underwriting

For Current and New Employees

Enro lling in Level I ($5,000 coverage)

No ne

Enro lling in Level 2* ,3,4,S, or 6

Medica l Underwriting required by the carrier

Level 2 wil l not requ ire Med ica l Underwri ting, if I0% or greater participation.

8 / Unit Two

AIG American General Evidence of lnsurability Form If you are required to undergo the specified illness medical underwriting process, you must complete the underwriting process on the web during Open Enrollment or if you are hired after May 2, 2005, you must obtain the paper AIG American General Evidence of Insurability Form from your personnel/payroll office and submit timely.
For Long-Term Care Insurance If you are a current employee choosing long-term care for the first time or have discontinued coverage and are re-enrolling or are currently in the plan and wish to increase your benefit level or add options, you must complete the Long-Term Care Application.

Call Unum at 1-888-SOG-FLEX (1-888-764-3539) or contact your local personnel/payroll office for an application. The long-term care medical underwriting process cannot be completed on the web.

If you are a new employee and select this coverage, you do not have to complete this form. Simply, select this coverage on your Option Statement.

For AD&D Insurance If you have enrolled in life insurance coverage, the beneficiary you name for your life insurance benefits is also the beneficiary for your AD&D benefits. If you did not take life insurance coverage, you should comp lete a Flexible Benefits Program Beneficiary Election Form for your AD&D coverage. You can change beneficiaries any time by filing a new form with your department.
For Long-Term Disability Insurance If you are a current employee choosing coverage for the first time, or discontinued coverage and/are reenrolling, you must complete the disability medical underwriting process on the web during Open Enrollment or if you are hired after May 2, 2005, you must obtain the paper form from your personnel/ payroll office and submit timely.
The Standard Evidence of lnsurability Form The medical underwriting process includes the comp letion of the Evidence of lnsurability Form. The form must be completed by the designated deadline. Based on the information you have provided, the insurance company may require additional medical infonnation for clarification. If you are a new emp loyee and se lect the long-term disability option, you do not have to comp lete the medical underwriting process.
Ai er you 've decided which benefits are best.for you, it's time to sign up for them. Re.fer to the employee checklist on page 53 to assure you are covering all bases.
Additional Required Information Additional information you may be required to furnish, may include medical history questions, medical records from your physician, an amplified blood test, and/or a paramedical examination. There

is no additional expense to you for the blood test or for medical records. To speed up the medical underwriting process, you may be contacted by telephone for additional information by The Standard or one of The Standard's representing companies. Jf you have any questions, please contact The Standard's Medical Underwriting staff toll-free at 1-888-641-7 186.
For Peach State Reserves (Deferred Compensation) You can enroll in Peach State Reserves anytime. There is no specific Enrollment Period. To enroll in either the 401 (k) or 457 Deferred Compensation Plan , you are required to complete one or more of the following forms for each Plan . Each Plan has forms specific to that Plan . Make sure you get the correct forms.
Deferred Compensation Plan New Enrollment Participation Agreement Request this form from your personnel/payroll office to enro ll in the chosen Deferred Compensation Plan for the first time.
Deferred Compensation Plan Beneficiary Election Form Request this form from your personnel/payroll office when you enrol l in the selected Plan for the first time or when you want to update beneficiary information or change your beneficiary.
Unit Two/ 9

Deferred Compensation Spousal Waiver Form (401 (k) only) Request this form from your personnel/payroll office when you enroll in the 401 (k) plan if you are married and are electing anything other than I00% spousal beneficiary.
After You Enroll For Coverage
When Coverage Begins Coverage for new options selected during the 2005 Open Enrollment will begin on July 1, 2005 as long as you have met all contractual and administrative requirements.

To Change Your Decisions at Annual Open Enrollment Every Open Enrollment you can change your benefit decisions, based on which benefits are available and right for you. Remember, this is an annual agreement to allow the State to purchase some benefits for you through pre-tax premiums. You will not be able to change these benefit decisions until the next Open Enrollment unless you have a qualifying change in status as described in the Terms and Conditions. The Open Enrollment restrictions do not apply to Peach State Reserves. If eligible, you may enroll, change deferral amounts or discontinue deferrals at any time during the year.

If you are a new employee, complete your personalized paper Option Statement and other needed forms by your department's deadline, but no later than 31 days after your hire date. Your coverage will begin on the first day of the month after you have completed a full calendar month of employment.
Confirming Your Choices You will receive a Confirmation Statement. Check it to be sure your choices were correctly entered. The Confirmation Statement does not guarantee your coverage in some benefit coverages that require additional information. If you have not completed and submitted the additional forms/information required by your selected plan and have not been approved by the respective insurance companies, the choices shown on your Confirmation Statement for employee life, spouse life, child life insurance, and long-term disability insurance, specified illness, longterm care, and State Health Benefit Plan PPO, Indemnity and HMO Options may not be valid.
Your new premiums for your health benefit plan and spending account reductions begin June 15; other premiums begin June 30. See specific plan descriptions for information about when your coverage begins.
Compare your paycheck statements with your Confirmation Statement. It is your responsibility to notify your personnel/payroll office if there is an error.
10 / Unit Two

To Change Your Decisions Outside Annual Open Enrollment
Qualifying Change in Status Event In general, the Internal Revenue Service prohibits you from changing any coverage elections, or enrolling in or canceling any coverage under the Flexible Benefits Program outside of Open Enrollment. However, the rules of the Internal Revenue Service, the Board of Community Health and the Employee Benefit Plan Council do permit you to change coverage or enroll or cancel coverage in certain limited circumstances, if the change corresponds to a qualifying change in status event.
The Employee Benefit Plan Council and the Board of Community Health have the responsibility to interpret these rules and make the final decision as to whether you may enroll or change any coverage outside of the Open Enrollment period. Your request for enrollment or a change outside of the enrollment period will only be considered if you submit the proper documentation within the time frame allotted. To submit a request for enrollment or changes to coverage under the State Health Benefit Plan, you must submit a completed Membership or Discontinuation Form to your employer's Benefits Coordinator within 31 days of a qualifying event (unless another time period is specified). Your request for enrollment or a change in any other coverage under the Flexible Benefits Program must be submitted on the Change in Status Event Form and given to your employer's Benefits Coordinator within 31 days of a qualifying event (unless another time period is specified).

Submission of a request for enrollment or a change, or the occurrence of a qualifying event, does not guarantee that you will be able to enroll or change coverage outside the enrollment period. Please see your Benefits Coordinator if you have questions about when you may enroll or make changes outside the enrollment period. For a list of possible change in status events that might permit you to enroll or change one or more coverages under the Flexible Benefits Program, please refer to the Terms and Conditions in the front of this booklet.
Any changes will go into effect the first of the month following the date when the payroll deduction is changed to reflect your new choice. However, when you change coverage based on the acquisition of dependents, the coverage effective date for the new coverage may be retroactive to the date of the acquisition of the dependent in some circumstances, or may be the first of the month following the request to change coverage.
If you have questions regarding a change in any of your coverages, first call your employer's Benefits Coordinator. If you need further information about eligibility for health coverage, call the State Health Benefit Plan at 404-656-6322 or 1-800-610-1863. For questions regarding other coverages, call the Flexible Benefits Program at 404-656-2730 or 1-888968-0490.

What Happens If You Leave State Employment If you leave State employment, you can continue some of your Flexible Benefits Program choices: You may be eligible to continue your medical ,
dental , vision coverage and/or Health Care Spending Account for you and eligible family members after your last day of employment. A conversion or portability feature may apply to your employee life, spouse life, and child life insurance, specified illness, long-term disability and/or AD&D coverage. You can be billed directly for legal coverage for the rest of the plan year and then convert coverage to an individual policy. You can continue long-term care. Unum will bill you directly. You can convert your Prepaid Dental option coverage to an individual policy and be billed directly by CIGNA Dental.
If you leave active State employment and then return during the same plan year, your previous choices will remain in effect unless you report a qualifying change in status event.
When you go on leave without pay, contact your personnel/payroll office, the State Health Benefit Plan, and the Flexible Benefits Program. If you do not continue paying premiums for coverage, your benefits will be cancelled. Be sure to review each Plan Description for each option and see your personnel/payroll office for more information.

Unit Two/ 11

-
State Health Benefit Plan

Coverage Can Be D irect

Retiree Coverage Available

Billed By Carrier, ported

Through Retirement Plan Coverage Can Be Continued or Converted To An

Benefit Deductions

Through COBRA

~

- .-

Individual Policy

Yes

Yes

Yes

You Must Decide And Complete Forms Within
60 days

Dental Coverage

Regular & PPO

Yes

Yes

No

COBRA - 60 days

Prepaid Option

Yes

Yes

Yes

Convert 31 Days -

Prepaid Option

-

;;

Vision Coverage

No

Yes

No

60 days

Health Care

No

Spending Account

Dependent (Child)

No

Care Spending

Account

I

Employee/Spouse/

No

Child Life Insurance

I AD&D Insurance

No

I Specified Illness

No

J

Disability Coverage

Short-Term,

No

Long-Term

No

Legal Insurance

1:

No

I

Long-Term Care

No

Insurance

Yes

No

60 days

No

No

-

:

No

Yes

3 1 days

No

Yes

31 days

No

Yes

31 days

No

No

-

No

Yes

31 days

I

No

Yes

3 1 days

I

No

Yes

31 days

-

-

12 / Unit Two

::J
V)
C

Unit Three/ 13

Under any of the dental options, single or family coverage is offered. Your cost depends on the option you choose and whether you select single or family coverage. You may have a choice of up to three dental options depending on where you live or work: Regular - For all employees. Preferred Provider Option - For employees who
live or work in the metropolitan Atlanta, Augusta, Columbus, Macon, and Savannah areas. Prepaid - For employees who live or work in the metropolitan Atlanta area.
If a PPO dentist or a Prepaid dentist is available in the area where you live or work, you may choose the applicable option. Under the PPO, you have the freedom to go to any dentist, but, there are benefits of using a PPO participating dentist. However, if your dentist leaves the Prepaid plan during the plan year, you must select another participating dentist. It is important that you consider your particular needs and be aware of the potential lack of convenience by choosing a dental option that does not have a dental provider in close proximity to where you live. In this case, you will not be able to change or drop your option.
Contact your personnel/payroll representative if you need assistance in choosing the PPO or Prepaid option.
Consider the following: If you select the Dental PPO and choose to use a
non-PPO dentist, you should expect to pay more out of pocket. If you select the Dental Prepaid option you must visit a dentist within the CIGNA Dental Care network to receive benefits. You will not receive benefits if you visit a dentist outside the network.
Your Plan Choices
Regular Dental Option Benefits are determined using the 90th percentile
rates for procedures. You may use any dentist you choose. You may choose a dentist in the available PPO
network with benefits based on the maximum allowable charge (MAC). This may result in lower
14 / Unit Three

out of pocket costs. A non-network dentist is entitled to collect from
you the difference between the amount of benefits payable by United Concordia and the dentist charge for that service.
Preferred Provider Option (PPO) Benefits are based on the MAC determined by
United Concordia and accepted by the PPO dentist. Enrollment in the PPO is with the PPO Program,
not with a particular dentist. PPO dentists can discontinue their arrangement with the Program at any time. If you require the services of a specialist, ask your dentist to refer you to a PPO specialist. If you use the services of a non-PPO dentist: The dentist is entitled to charge you the difference between the amount of benefits payable by United Concordia and the dentist's charge. This means you could pay more out-of-pocket expense for using a non-PPO dentist, because the payment will reflect the lower PPO scheduled fee .
Prepaid Option The Prepaid option through CIGNA Dental Care is
an easy to use plan offering choice, quality, and savings with a focus on preventive care. Choose a general dentist from the CIGNA Dental network. Covered family members can each choose their own dentists, near home, work, or school. You will receive a Patient Charge Schedule listing all covered services and the corresponding patient charge for each service. For many services, there is no charge at all. Other plan features include: No deductibles to meet. No annual dollar maximums. No claim forms to file and no waiting periods for coverage. If you choose this option, you must select and use a CIGNA Dental Care Participating General Dentist to receive the benefits the option offers. Each family member you enroll may select a personal Participating General Dentist. If your dentist recommends specialty treatment, he/she will refer you to a participating CIGNA Dental Care Specialist. Whether seeing a general dentist or specialist, you will still only be responsible for the fees listed on your Patient Charge Schedule. To find a participating CIGNA Dental Care network dentist call 1-800-642-5810 or log onto www.c1gna.com .

If a procedure is not listed on your Patient Charge Schedule, it is not covered. A full explanation of plan exclusions and limitations is included in your Patient Charge Schedule.
Did You Know ... Your dental benefits are not taxed, and most dental expenses that are not paid by dental coverage - such as deductibles and co-payments - can be submitted to your health care spending account, providing a tax savings of26% - 45% on these expenses.
Late Entrant Provisions for Regular and PPO Late Entrant Limitations result in delayed benefits. This means you won't receive some benefits until you have participated in the dental plan for a specified period of time.
Late Entrant Limitations will apply to: current employees who are enrolling in either the
Regular or PPO Options for the first time; or employees who fail to pay premiums when they
are on an unpaid leave. current employees who choose not to continue
coverage and re-enroll at a later date.
Late Entrant Limitations will not apply: if you enroll in the Prepaid Option as a new or
current employee when you transfer between the dental options (if
not currently under Late Entrant); if you enroll in the PPO or Regular Option plan
when you are first eligible as a new employee; or to employees who fail to pay premiums when they
are on unpaid Family Medical Leave or Military Leave (if not currently under Late Entrant)
New employees are not subject to the Late Entrant Limitations - as long as they enroll when first eligible. If you are a new employee and are interested in the Regular or PPO Options, sign up now to avoid these limitations in the future. Under the Regular and PPO Options, new employees have a six-month waiting period for Major and Orthodontic (dependents under age 19) services.

Certain Restrictions, along with age andfrequency limitations, apply to all dental options. For more information on the Regular and PPO Options, call United Concordia tollfree at 1-866-215-2356. For more information on the Prepaid option, call CIGNA at 1-800-642-5810.
Some Important Information About the Prepaid Option
Once enrolled, you will receive a complete Patient Charge Schedule listing all covered services and associated fees along with your CIGNA Dental Care ID Card. Procedures not listed on the Patient Charge Schedule are not covered.
You do not need your ID card to receive care. CIGNA Dental will send each dentist a monthly listing of all members who have enrolled with their office. You may request a Patient Charge Schedule by calling CIGNA Dental Member Services at 1-800-642-5810 or online at www.cigna.com, then go to mycigna.com. This Patient Charge Schedule will provide a complete list of covered benefits and co-payments.
If you choose the Prepaid Option, you must select and use a CIGNA Dental Care Participating Dentist. Otherwise, you will not be eligible for benefits.
Each enrolled family member may select a different Participating General Dentist.
To select a CIGNA Dental Care dentist for the first time, fill out and send in the Dentist Selection Form included in your enrollment materials. If you enroll in the CIGNA Dental Care plan but do not choose a dentist, one will be chosen for you based on your zip code. You have the option to change network dentists as often as you like by calling 1-800-642-5810, or by logging onto www.cigna.com. Your change will be effective the first day of the following month.
Under the Prepaid Option, only amalgam (silver) fillings are covered.

Unit Three / 15

Some Important Features Of The Regular and PPO Dental Options There are some features to keep in mind when you use the dental options, Regular or PPO. The options of the State Health Benefit Plan (PPO,
Indemnity, and HMO) provide limited, if any, coverage for dental treatment. See your SPD, UPDATERs and Health Plan Decision Guide for more information. For more detailed HMO information, contact the HMO directly. The PPO dentists have agreed to provide quality services at reduced rates. This means you save money if you use a PPO dentist. If you enroll in the dental PPO, receiving dental care from a nonPPO dentist can result in an increased out-ofpocket expense for you, as shown in the example on the following page. United Concordia uses the American Dental Association (ADA) procedure codes in effect at the time a claim is handled to determine benefits.
Pre-Determination of Benefits Under the Regular and PPO Dental Options, for any service of more than $300, it is recommended it be reviewed by Un ited Concordia before receiving treatment. This is called a "pre-determination of benefits." If treatment occurs without a predetermination of benefits and the service is denied, you may experience unexpected out-ofpocket costs.

Some Exclusions For Regular and PPO Dental Options Items and services that are not covered by the Reg ular and PPO Options are set forth in the Summary Plan Description for those options. Some examples include: charges for oral hygiene, plaque control programs,
and dietary instruction; the initial placement of full or partial dentures or
bridges, if the prosthesis includes teeth that were missing before you were covered by the dental option.
Example of Regular and PPO Benefit Payments The chart on the next page shows the differences in benefits paid by the Regular and PPO Options for the same expense. In addition, it illustrates the advantages of using PPO dentists, if you choose the PPO option. For the same $500 charge, this employee would pay: $ 100 if covered under the Regular Option ; 35 if covered under the PPO Option and using a
PPO dentist; $185 if covered under the PPO Option but using a
non-PPO dentist.

In Network and Non Network Example

Does Not Appl y
$500 X 80% $400 $5 00
$ 100

$350
$350 x90% $315 $350
$35

Does Not Apply
$350 X 90% $315 $500
$ 185
Unit Three/ 17

Dental Options Comparison Chart

80% of th e 90th percentile***

90% MAC**

50% of the 90th percenti le***

50% MAC**

50% of the 90th percenti le*** fo r dependents under 19

50% MAC** for dependents under 19

$50 per person;$ I50 for fa mil y (applies to Type II and Type Ill Major services only) each plan year
$ 1,000 per person each plan yea r; $ 1,500 lifetime benefit for Orthodontia
New employees or newly enro lled dependents - after six months of continuous coverage fo r Type Ill Major services and Orthodontia
Current employees enrolling for coverage for the first time after 12 months continuous coverage for Type II Basic services; after 24 months continuous coverage for Type 111 Major services and Orthodontia
Your share of the cost for these services will actually be a flat dollar co-payment . See Schedule of Benefits for details.

charges for all covered services. See your patient Charge Schedule for Speci fie Charges
I00% Reduced, fixed, preset charges for all covered services. See your patient Charge Schedule for Specific Charges (amalgam (si lver) fillings only)
60%* Reduced, fixed, preset charges for all covered services. See your patient Charge Schedule for Specific Charges
50% for employee (and eligible dependents*) Reduced, fixed, preset charges for all covered services. See your patient Charge Schedule for Speci fie Charges
NONE
OMAX IM UM
NO WAITING PERIOD
0 LIMITATIO

Oral exa ms Prophylaxis Space mai ntainers for
dependents under 14 X-rays

Fillings Root canals Extractions Sca ling and root planing Repairs to dentures,
bridges, and crowns Sealants, children
under 16

Crowns Dentures Bridgework Surgica l periodontal

Cephalometric x-rays Treatment study Bands, appliances

"United Concordia reimburses all fee-for-service and PPO dentists a=rding to the maximum allowable charge (MAC) schedules. The MAC is determined using charge data submitted to United Concordia from more than 100,000 participating providers . United Concordia policies & procedures and exclusions limitations apply. This chart is a representative listing of services covered under the program. '''You may use a PPO provider even if you enrolled in the Regular Dental Option. This may result in lower out-of-pocket costs .
16 / Unit Three

The Vision Plan, provided through Spectera, features : covered exams and materials; statewide access to a network of panel
providers; no claims to file for "in-network" benefits; and benefits for "out-of-network" providers.
Spectera's participating provider network includes private practice optometrists, ophthalmologists and retail chains (currently most of the Wal-Mart stores in Georgia). When you make an appointment with a network provider, ensure that they still are participating in Spectera's network. Then identify yourself as eligible through the State of Georgia Flexible Benefits Program Spectera Vision Plan and provide your (employee's) social security number along with the patient's date of birth.
If you receive covered services from a network eye care provider, you will receive the benefits shown in the chart on page 20. You will not be required to file a claim, but will be responsible at the time of service for any co-payments and the cost of any non-covered service or equipment.
If you receive care from an out-of-network provider, you pay the cost at the time of service and submit a receipt to Spectera to be reimbursed for covered outof-network benefits. Receipts must be submitted together for services and materials purchased on different dates to receive reimbursement. Mail your itemized receipts, with your Social Security number and patient's date of birth to:
Spectera Attention: Claims 2811 Lord Baltimore Drive Baltimore, MD 21244-2644
Ifyou have any questions about your vision care
plan option, please contact Spectera's customer service at 1-800-638-3120.
Important to Remember Certain standard contact lenses, including daily wear, and up to 4 boxes of standard single vision disposable contacts are covered in full for your co-payments. If you purchase contacts that are not among Spectera's "covered in full" selection, you will receive an annual

$100 allowance toward the purchase of contact lenses, and professional fees (i .e. , fit and follow-up). Please note: To receive the full $ 100 allowance, you must receive your exam, fitting and evaluation at a single visit to the same network provider (at Wal-Mart, $65 of the $ I00 allowance is allocated to materials and $35 to professional fees). The allowance will only apply to one purchase per plan year. You must submit all receipts at the same time. Any balance remaining and not used during the plan year when the purchase occurred will be forfeited.
Spectera covers standard single vision and standard lined multi focal lenses for glasses. Cosmetic lens options such as scratch coating, UV coating, progressive lenses, etc. , are not covered, but are provided to Spectera's members at a savings below normal retail charges.
Always verify coverage by identifying yourself as a Spectera member under the State of Georgia plan when making your appointment. Give the provider the employee's social security number and the patient's date of birth. In- or out-of-network benefits are available every 12 or 24 months (depending on the benefit) measured from the last date of service.
Medically Necessary A member qualifies for medically necessary contact lenses if Spectera establishes that an eligible member has any of the following: Keratoconus or irregular astigmatism; Anisometropia of 3.50 diopters or more; Post cataract surgery without intraocular lens; or Visual acuity in the better eye of less than 20/70
with spectacles, but better than 20/70 with contacts.
Exclusions The Vision Plan does not cover: replacement of lost lenses or frames medical or surgical treatment of eye conditions amounts above the schedule of benefits or
allowances services or materials not included as eligible
expenses by the Vision Plan cosmetic extras such as no line multifocal lenses,
tints, UV coatings etc.
Unit Four / 19

Vision Coverage Chart

Routine Eye Exam Every 12 months

Covered after $ 10 co-pay

~f'\~_,:.\..--: ;:~i-~:'.:i~?r . ,.:,:; -~-,~,,~
il:llf~f~~t':lif,~"~,..-"i!;;-
Reimburses up to $40

Lenses Standard Every 12 month s, if prescribed

Covered after $20 materials co-pay

Single vision, or

Reimburses up to $30

Lined Bi foca l, or

Reimburses up to $45

Lined Tri foca l, or

Reimburses up to $60

Lenticul ar

Reimburses up to $80

Frames Every 24 months after a $20 materials co-pay*

Retail locations (Wal-M art) Up to $ 130 retail allowance toward any
fra me package Frames below $ 130 prov ided at
no additional cost Private Doctors Office $50 wholesa le allowance towards any
fra me. You pay the di ffe rence. Group of se lect frames at
no additional cost

Reimburses up to $45 of retail

Contact Lenses Every 12 months in place of eyeg lasses

Medicall y Necessary**

Covered after $20 materials co-pay

Reimburses up to $200

Not Medicall y Necessary

Covered after $20 material co-pay fo r covered lenses selected from Spectera list. Up to four boxes of covered di sposabl e contact lenses are included when using a network prov ider. All other contacts available th ro ugh a$ I05 allowance that includes fittin g, foll ow-up and materials. Please note to receive the full $ I05 credit, you must receive your exam, fitting evaluation and all contact materials at the same prov ider at the same time. (A t Wal-Mart $70 of the $ 105 allowance is allocated to materials and $3 5 to professional fees).

Up to $ I05 max that includes fit, fo llow-up

Refracti ve Eye Surgery Spectera participants receive access to discounted refracti ve eye surgery from numerous provider locations throughout the United States.

Di scount only : The in-network benefit is a di scount off the full retail price. To find a participating laser eye surgeon in your area, visit our website at www.spectera.com

No benefits

Remember: If you use in-network providers, you are responsible only for your ponion of cost. If you decide to use a non-network provider, you pay eve,ything and seek the 0U1-of-ne1work benefits paymems schedule.
Only a one time $20 material co-pay applies per benefit period. **As defined herein (on page 19)

20 I Unit Fou r

V)
I I
C ::J
u u 0
<:(

on
,-..C,.c...

C
(lJ
Cl.
V>

Unit Five / 21

SAVE! SAVE! SAVE! with SPENDING ACCOUNTS
NEW!
Health Care Spending Account Debit Card Effective July 1, 2005 , when you enroll in the Health Care Flexible Spending Account (FSA) program, you'll receive a VISA Spending Account Card for purchases of eligible health care expenses such as prescriptions, medical, dental, or vision deductibles and co-payments. Not only will the new Spending Account Card relieve you from the burden of paying for expenses from your personal bank account, it will also reduce the number of claims you need to file for reimbursement of healthcare expenses. Please remember that you must still keep your receipts since some transactions may require validation.
You will automatically receive the Spending Account Card, along with information about the card and how it can be used, when you enroll in a Health Care FSA through the State of Georgia Flexible Spending Account program. If you decide to utilize your card, upon activation, a one-time fee of $5 . 10 will be deducted from your account for Plan Year 2005 (July I - December 31 ). The fee wi II be $10.20 for Plan Year beginning January 1, 2006 (January 1 December 31 ). You may request one additional card with your spouse or dependent's name on it, for a fee of $5 .00. If your card is lost or stolen, you may request another card for a fee of$15.00. Since these fees are deducted from your account, they are also pre-tax.
Contributions Limits: Plan year 2005 (July I - December 31 , 2005)
- Health Care - $2,520 maximum - Dependent Care - $2,496 maximum Plan year beginning January I, 2006 (January - December, 2006) - Health Care - $5,040 maximum - Dependent Care - $4,992 maximum
Monthly maximums remain the same.
Spending accounts are like getting a tax rebate every time you pay for health care and child or other dependent care expenses, since your pay goes into
22 I Unit Five

Go on-line with MySHPS at www.shps.net to print claim forms, direct deposit forms, and check your account status. By providing your email address, you may also receive routine correspondence via e-mail from SHPS about your account, confirmation of your faxed claim, and notification once your claim is processed. The claim fax number is 1-866-643-2219.
Call SHPS AccountLink toll-free at l-800893-0763. Use this automated phone system to find out your current account balance(s) and the status of your last claim. You may talk with a SHPS customer service counselor by staying on the line or pressing the (*) key.
AccountLink is available 8 a.m. - 2 a.m. Eastern time, Monday - Saturday. Benefit Counselors are available 8 a.m. - 8 p.m. Eastern time, Monday - Friday.
the accounts before taxes are withheld. This can mean savings of approximately 26%-45%, depending on your tax situation! You can determine your potential annual tax savings at http:www.myshps.net/fsa_calculator.asp.
Health Care Spending Account
The Health Care Spending Account helps you save tax dollars on the health-related treatment you and your family receive.
The IRS rules and the rules of the Employee Benefit Plan Council designate eligible expenses for the Health Care Spending Account. The Employee Benefit Plan Council has the responsibility to interpret these rules and make all decisions as to an expense's eligibility. Some of these eligible expenses include: Deductibles and co-payments not paid by any
health or dental insurance in which you or your family members participate; Costs for procedures not covered or not covered fully by a health, dental or vision plan; Specialized equipment for disabled persons; Preventative care screenings; Contact lens and glasses; Laser eye surgery; Prescription and over-the-counter medicine;

Mental health services; Physical therapy; and Certain other IRS approved expenses.
Exclusions List
These are a few examples of health care expenses that are not e ligible for reimbursement under the Health Care Spending Account: Cosmetic procedures/drugs Electrolysis Hair transplants Herbal supplements Insurance premiums Nicotine patches and gum Nutritional supp lements Postage/handling fees Teeth whitening/bonding Vitamins

For further information on potentially elig ible expenses, see IRS Publication 502, available at your personnel/payroll office, your local public library or IRS office, or online at www. irs.gox/prodlforms_yubs/pubs/pubs. html. Most, but not all, of these expenses are reimbursable under the Health Care Spending Account.
THE HEALTH CARE SPENDING ACCOUNT WORKS VERY MUCH LIKE INSURANCE. Your "elected coverage" is your monthly contribution times the number ofmonths you are expected to contribute. You can submit claims and receive reimbursement from your account up to the total amount ofyour "elected coverage" for the plan year.

Health Care Spending Account Worksheet for Plan Year 2005
Yo u can use thi s worksheet or the one on line at www.shps.net for help in determining how much pre-tax sa lary to depos it into a Hea lth Care Spending Account. After using thi s worksheet and detennining how much lo deposit, complete your 2005 Opt ion Statement (or web enrollment) indicating your decision.

medical plan deductible: average out-of-pocket medical expenses (co insurance or co- payments): dental plan deductibl e: average out-of-pocket dental ex penses (co insurance or co-payments): expenses for ro utine med ica l, dental* or vision exams not covered by the plans: out-of-pocket expenses for eyeglasses and contact lenses not covered by insurance: orthodontia ex penses: other eli gible expenses: ADD th e amounts from the lines above and enter the total; if the total amo unt is greater than the max imum, enter the maxi1mun : DIVIDE by six month s: This is the amount you should have depos ited each month into your Health Care Spending Account.
*Coverage for specific Periodontal Disease Osseous surgeries are no longer CO\ered h~ the State Health Benefit Plan. If ~ou are considering periodontal sur,:e~ during the 2005 plan )Car, he sure to speak \\ith ~our health and dental re1>resentathes before deciding on the amount )OU set aside in ~our Health Care Spending Account.
Unit Five / 23

Dependent (Child) Care Spending Account
The Dependent (Chi ld) Care Spending Acco unt provides you with the opportunity to use tax-free dollars to pay for the care of your children under age 13 or other IR S/eli gib le dependents wh il e you and your spouse work or go to schoo l full time. The IRS rul es and rules of the Employee Benefit Pl an Coun c il designate e li gibl e expenses for the Dependent Care Spending Account. The Employee Benefit Pl an Coun c il has the responsibility to interpret these rules and make all decisions as to an expense's elig ibility.
Childcare services may include yo ur cost to send a child to preschool , after schoo l, or nursery school. Also, expenses for dependents of any age who are un ab le to care for themselves because of a physical or mental handicap are eligib le. A person qualifying for this type of care must spend at least eight hours a day in your home. Elderly dependent care may include you r cost to send a dependent parent to an elderl y daycare faci li ty or to have someone to care fo r them in your home.
If yo u are married , both you and yo ur spouse must be

working or a full -time student during the time the care is received. Your income tax return (long and short forms) will require yo u to include your dependent care provi der's name and tax number or Social Security number.
Exclusions List These are a few examples of dependent care ex penses that are not eli gi bl e for reimbursement: Activity and book fees Child support payments C leaning and cooki ng serv ices not provided by the
care provider Custodial nursing care Field trips Food, clothing, and entertainment Late payment fees Kindergarten Long Term Care premiums Overnight camps Placement fees for finding a dependent care
provider Sports lessons Transportation to and from the child care provider Tuition to pri vate school

How It Works
How the Dependent (Ch ild) Care Spending Accou nt works.

NOTE: The Economic Growth and Tax Relief Reconciliation Act (EGTRRA) of 200 I increased the amount of the employment-related expenses that may be taken into account for a taxable year to $3 ,000 for one qualifying individual and $6,000 for two or more qualifying individuals. This increase app li es to the Dependent Care Tax Credit on ly and not the Dependent (Child) Care Spending Account.

:.i11:aill'l!1wovidar sign a claim form or get a clam form or m:eipt, be
lle'ii~W.1'-iWilne ud complae address.
y your cuaent bank account
your current are added to
You ma y fa x your claims to 1-866-643-2219 or e- mail your scanned claim and doc umentation to fcedback@shps.net. 24 / Unit Five

An employee who is a single parent filin g as head of household with one child and $3,000 of dependent care ex penses may have better tax sav ings using the dependent care tax credit in stead of participatin g in the Dependent Care Spending Account.
The sing le parent above w ith one chi ld and more than $3,000 of dependent care expenses may have better tax savi ngs w ith the Dependent Care Spending Account since the limit is $4992 rather than the $3,000 for the tax credit.
If there are two or more children with $6,000 in dependent care expenses, the employee could utilize both the dependent care tax credit and

Dependent (Child) Care Spending Account Worksheet - Plan Year 2005
You can use this worksheet or the one on line at www.shps.net for help in detem1ining how much pre-tax sa lary to deposit into a Dependent (Child) Care Account. After using thi s worksheet and determining how much to deposit, compl ete your 2005 Option Statement (or web enrollment) indicating your decision.

WRITE in your:
amount of day care expenses you normally pay each week: other weekly eligible expenses you normall y incur: ADD the amounts from the lines above and enter the total:
MULTIPLY the number of weeks you will incur expenses for the 2005 plan year. If the tota l amount is greater than the $2,496 maximum, enter $2,496 here:
DIVIDE by six months:
This is the amount you should have deposited each month into your Dependent (Child) Care Spending Account.

spending account by electing $4,992 through the spending account and claiming $ 1,008 through the tax credit. However, the rules for coordinating the dependent care tax credit and spending account do not permit the reverse.
Assume an employee is a single parent and has $5,000 in dependent care expenses. The employee could not use the $3,000 dependent care tax credit and put $2,000 in the spending account. This would cause the spending account benefit to reduce the expenses eligible for the dependent care tax credit from $3,000 to $1,000 because taking the exclusion under the spending account phases out the dependent care tax credit. You should carefully review your option ofusing the dependent care tax credit or using the Dependent Care Spending Account.
Everyones situation is unique - it is very important that you consult a qualified tax advisor for assistance in determining if the dependent care tax credit, spending account, or a combination ofthe two is best for your situation.

Dependent (Child) Care Spending Account Limits for Plan Year 2005
You may not be able to deposit the full maximum if any of the following situations apply to you. If your spouse works for the State or another
employer who offers a similar plan, the total of your family's contributions to a dependent (child) care spending account cannot exceed $2,496. If either you or your spouse earns less than $2,500 for Plan Year 2005, you can deposit as much as the smaller of your two incomes up to $2,496. If your spouse is either a full-time student or incapable of self-care, you may deposit up to $1 ,500 for one dependent, or $2,496 for two or more dependents. If you are married but file a separate federal income tax return, you may deposit a maximum of $ 1,250 to your dependent (child) care spending account. If you are hired after July I or have a qualified change in status during the plan year (see Terms and Conditions in front of this booklet), you may contribute up to $416 per month for the remainder of the plan year.

Unit Five / 25

Important Information About Health Care and Dependent (Child) Care Spending Accounts
There are some important things to keep in mind when deciding how much money to put into your spending accounts. For Plan Year 2005 , Spending Account
reductions from your paycheck begin June 15 for coverage effective July I. If you are hired mid-year or have a qualified change of status during the year (see Terms and Conditions in front of the enrollment booklet), you may not contribute the maximum allowed under each account for the remainder of the plan year. You may only contribute the maximum per month allowed to each account. Reductions for spending accounts are made every pay period. But remember to enter the monthly amount you want to contribute on your web Option Statement. Your spending account enrollment is binding for the plan year. You may be able to make limited changes if you have a quaIified status change. You cannot carry over expenses that you have incurred in one plan year into the next plan year for reimbursement. Claims should only be submitted after medical services or dependent care services have been provided. You may submit claims at any time for any amount, but payment will not be made until your claims total $25 or more. Reimbursement may be by check or by direct deposit to your bank account. You receive a quarterly statement showing how much you have in each account. You cannot transfer money from one account to another. SHPS routinely issues reimbursements on a daily basis from their Kentucky locations. Spending account claims for the 2005 Plan Year (July I - December 31 , 2005) must be faxed or mailed with correct documentation and postmarked on or before March 31 , 2006. Claims postmarked after March 31st will not be paid. Spending account claims for the 2006 Plan Year (January 1 - December 31 , 2006) must be faxed or mailed with correct documentation and postmarked by March 31 , 2007.

Under IRS rules, any money left in your accounts on December 31 , 2005 at the end of the plan year and not claimed for the previous plan year's expenses by the claim filing deadline is forfeited. It is retained by the plan and used for administrative expenses.
A Word About Forfeitures
By putting money into your spending accounts, you can save approximately 26%-45% in taxes for eligible expenses. Many employees say they don't use the spending accounts because they are afraid of forfeiting money, although few employees actually do. In 2003-2004, only 23% of those participating forfeited money in the spending accounts. Although there is a possibility of forfeiting money, consider your tax savings. For example, an employee with an annual salary of $22,000 and spending account contributions of $2,000 could potentially save $580. If this same employee forfeits $55, he still saved $525.
If You Leave or Retire
If you terminate or retire from State employment during the plan year, your Health Care Spending Account coverage stops with the end of the month following the last full month of employment or contribution. For example, if you terminate employment on August 31, your last contribution to your Health Care Spending Account would be taken from your August 31 paycheck. Your coverage would end September 30, because contributions deducted from your paycheck in one month provide coverage for the following month. If you submit a claim for expenses incurred on or after October I, your claim would not be paid.
If you have contributed more to the Health Care Spending Account than you have been reimbursed for on the date you leave or retire, your coverage may be extended temporarily under COBRA. Call the Flexible Benefits Program at 404-656-2730 or 1-888-968-0490 for more information.
If you have contributed more to the Dependent Care Spending Account than you have been reimbursed for on the date you leave or retire, your coverage may continue if you have eligible expenses. You will not

26 / Unit Five

be able to continue contributing. Call the Flexible Benefits Program at 404-656-2730 or 1-888-968-0490 for more information.
Go on-line with MySHPS at www.shps.net to print claim forms, direct deposit forms, and check your account status. By providing your e-mail address, you may also receive routine correspondence via e-mail from SHPS about your account, confirmation of your faxed claim, and notification once your claim is processed.

Call SHPS AccountLink toll-free at 1-800-893-0763. Use the automated phone system to find out your current account balance(s) and the status of your last claim. You may talk with a SHPS customer service counselor by staying on the line or pressing the (*) key.
AccountLink is available 8:00 a.m. - 2:00 a.m. Eastern time, Monday - Friday. Benefit Counselors are available 8:00 a.m. - 8:00 p.m. Eastern time, Monday - Friday.

The claim mailing address is: The claim fax number is

SHPS, Inc.

l-866 -643-2219

FSA Processing Center

P.O. Box 14646

Lexington, KY 40512

Unit Five / 27

Vl~cCcs
28 / Unit Six

If you want life insurance protection or you want to supplement the protection you already have, you may choose group term life coverage under the Flexible Benefits Program.

You may choose coverage equal to:

one times your pay (maximum coverage is

$250,000)

two times your pay

three times your pay four times your pay five times your pay

The coverage maximum is $500,000.

six times your pay

seven times your pay

The life insurance amount you choose will be based on your Benefit Salary as of April 1, 2005, or your date of hire, whichever is later. This amount is rounded up to the next higher $1,000, after you multiply your coverage and the premium has been adjusted for your April 1, 2005 pay and age. If you are age 65 or older, the value of your life coverage is reduced.

The premium cost for life insurance is based on your age, salary, and on the amount of coverage you choose. You may pay your premiums with pre-tax or after-tax dollars if you choose coverage over $50,000. If you have over $50,000 of life insurance coverage, it's worth knowing that: the extra "value" of your coverage will be shown as
"imputed income" on your W2 statement, and you will also pay FICA taxes as well on "imputed income." the extra taxes you may owe will be minimal ... and the tax savings using pre-tax premiums will be greater than any "imputed income" tax withheld, unless you earn over $100,000 and are over age 65. In any case, if you elect over $50,000 of coverage you have the option to pay for life insurance with after-tax premiums and avoid imputed income. If you wish to elect after-tax premiums, indicate your choice on your Option Statement.

How Employee Life Insurance Works The life insurance amount you choose is paid to your beneficiaries if you die while this coverage is in effect. Your beneficiaries are the persons you name to receive your life insurance benefits.

If you are choosing life insurance for the first time, name your beneficiaries by completing the Flexible Benefits Program Beneficiary Election Form, and file it with your personnel office. You can change your beneficiaries anytime by completing a new form .
Whenever you enroll or change your life insurance coverage, be sure to check the Life Medical Underwriting process so you wi ll know what will be expected. These processes are described on page 8.
Spouse Life Insurance If you choose employee life insurance for yourself, you may also choose spouse life insurance coverage for your spouse. Your spouse is eligible for coverage if you are not legally separated or divorced. Spouse life insurance premiums are based on the coverage level and employee age. These premiums for spouse coverage are after-tax. You may choose $6,000, $12,000, $30,000, $60,000, $100,000, $150,000, $200,000 or $250,000 spouse coverage levels. However, if you are age 65 or older, the value of your spouse life coverage is reduced.
Spouse Life coverage cannot exceed I00% of your amount of Employee Life coverage.
You are the beneficiary of Spouse Life insurance coverage and will receive the insurance benefit in the event of your spouse's death.
Child Life Insurance If you choose life insurance for yourself, you may also choose child life insurance coverage for your child(ren). Child life insurance premiums are aftertax.
Your children are eligible for coverage if they are: Unmarried, dependent on you for support and under
age 19. Unmarried and a full-time student under age 26. For the $3,000, $6,000, $10,000, $15,000 or
$20,000 child coverage levels, the child coverage can begin at live birth. Coverage from live birth to 6 months is the lesser of the elected amount or $6,000.
Child Life coverage cannot exceed I00% of your amount of Employee Life coverage.

Unit Six/ 29

Physically and/or mentally handicapped children covered under Child Life may continue to be covered beyond the age of 19.
You are the beneficiary of child life insurance coverage and will receive the insurance benefit in the event of the child's death.

Enrolling For Coverage If your coverage selection requires medical underwriting, you will need to complete the Minnesota Life Evidence of Insurability Form along with any other required information. An approval by Minnesota Life, the insurance carrier, must be made before coverage can be in effect.

Available Coverage Amounts Spouse Life - $ 6,000 - $ 12,000
- $ 60,000 - $100,000 - $200,000 - $250,000

- $ 30,000 - $150,000

Child Life - $ 3,000 - $ 6,000 - $ I0,000 - $ 15 ,000 - $ 20,000

If you are a newly eligible employee, you may elect $30,000 or less of spouse life coverage and/or any coverage of child life without completing the medical underwriting process.
If you have any questions, call the Flexible Benefits Program at 404-656-2730 or toll free at 1-888-9680490.

For information regarding conversion and portability of your Employee Life, Spouse Life, and Child Life insurance, contact Minnesota Life Insurance toll-free at 1-800-660-2519.

30 I Unit Six

Accidental Death and Dismemberment

Insurance

The Flexible Benefits Prog ram lets you decide if you

~ant accidental death and dismemberment (AD&D)

insurance.

You may choose coverage equal to :

one times your pay

two times your pay

three times your pay

four times your pay five times your pay six times your pay

The coverage maximum is $500,000.

seven times your pay

Jn general for the AD&D insurance to be paid to you or your beneficiary, your death or injury must be the result of a covered accident. Tn case of permanent
and total disability, you are eligible for AD&D
benefits if your injury prevents you from working at any job for which you are qualified by education, training, or experience.

Enrolling For Coverage Your cost depends on how much AD&D insurance you choose. As with life insurance, your coverage will be based on your Benefit Salary as of April 1, 2005 or your date of hire, whichever is later. This amount is rounded to the next higher $1,000, after you multiply your pay by you election. If you are age 75 or older, the value of your coverage is reduced.
The beneficiaries you name for life insurance are also your beneficiaries for AD&D insurance. If you are not enrolled in life insurance, be sure that you complete the Flexible Benefits Beneficiary Election Form to name your beneficiari es. You can change your beneficiaries anytime by completing a new form. Be sure to return the completed form to your personnel office.

An Example

:

. .

,J;. ~ - - - '

Di e

I00% of your coverage

Become perma nently and totall y di sabled

I00% of your coverage

Lose two or more limbst

I00% of your coverage

Lose your hearing and speech

I00% of your coverage

Lose one limbt, hea ring, or speech 50% of your coverage

Lose thumb and index fin ger from the same hand

25% of your coverage

*Paid in monthly insta llments over the period of your di sabi lity.
tA " limb" is a hand, foot, or sight in one eye.

Unit Six / 31

(lJ
u
C
'L..
::J
V,
C
~
.,I I
..-c
'V,
-
32 / Unit Seven

To help provide income protection against the unexpected, the Flexible Benefits Program allows you to choose: short-term disability insurance and/or long-term disability insurance.
Short-Term Disability Protection
If you choose short-term disability (STD) coverage,
this plan will work with other income benefits to replace 60% of your Benefit Salary (in effect during the Plan Year the disability began) up to $800 per week. Other benefits include Social Security, workers' compensation, any other governmental disability programs, any other group disability plans including the State retirement systems, or special injury benefits you are eli gible to receive. If these other benefits total more than 60% of your Benefit Salary, the short-term disability plan w ill not pay for this disability.
How STD Works
In general : If your claim is approved by the insurance
company, you are eligible to receive short-term disability benefits after you have been disabled for 30 continuous calendar days or 7 continuous calendar days depending on the coverage level you have chosen. A late enrollment penalty may apply for late entrants to the STD plan. You may choose whether to use sick leave or receive these benefits. You cannot receive these benefits and sick leave at the same time. You may, however, decide to receive these benefits and save your sick leave for future use. Your short-term disability benefits are calculated on the Benefit Salary that is in effect during the Plan Year your disability began, less other income benefits. For example, if your first day of disability is June 3, 2005 , your disability benefit will be calculated on the Benefit Salary reflected on your 2004-2005 Option Statement, not your 2005 Benefit Salary. Your short-term disability benefits can continue until you recover, return to work, or receive benefits for a maximum of 150 calendar days or a maximum of 173 calendar days, depending on the coverage level you have chosen. The calendar-day maximums are reduced by any days of paid sick

leave, donated leave or Special Injury Leave that you use which exceeds the applicable wait period. When changing from the 30-day Benefit Waiting Period to the 7-day Benefit Waiting Period, a PreExisting clause is applicable. If you have a condition for which you should have sought medical care or which originated prior to the 7-day Benefit Waiting Period effective date, you will be subject to the rules of the 30-day Benefit Waiting Period.
What Is A Late Enrollment Penalty For Late Entrants?
A current employee choosing coverage for the first time or re-enrolling after discontinuing coverage is considered a late entrant. If your STD Disability is caused by an accidental injury, benefits will begin after you have been disabled for 30 continuous calendar days or 7 continuous calendar days depending on the coverage level you have chosen after the benefit waiting period is satisfied for STD. However, for STD late entrants, who become disabled due to Physical Disease, Pregnancy, or Mental Disorder, during the 12-month period after the date your STD insurance becomes effective, benefits will not begin until after you have been disabled for 60 days. For STD late entrants whose disabilities begin after this 12 month period, benefits will start after the benefit waiting period (7 or 30 continuous calendar days) is satisfied for STD.
Ifyou have any questions about eligibility or how the
short-term and long-term disability insurance plans work, call 1-888-641 -7186.
Enrolling For Short-Term Disability Coverage... Your premiums will be based on your coverage level and Benefit Salary. You pay for this coverage with after-tax premiums. You won 't pay taxes on the benefits you receive.
Unit Seven / 33

Long-Term Disability Protection The Flexible Benefits Program's long-term disability (LTD) coverage works with other benefits you are eligible to receive, including Social Security, workers' compensation, other governmental disability programs, any other group disability plans including the State retirement systems, or any special injury benefits you are eligible to receive. The plan assures that your combined disability benefits from all these sources will equal 60% of your pay as shown on your Option Statement, up to $4,000 a month. The plan will pay at least $100 a month, even if your disability benefits from all other sources total more than 60% of your Benefit Salary, up to $4,000 a month, unless you are in an overpayment situation.
How Long LTD Benefits May Be Payable These benefits will begin after you have been disabled for 180 calendar days and are reduced by any sick leave you use. Long-term disability benefits end when you are no longer disabled or reach age 65 , except benefits for disabilities caused by mental disorders, or other limited conditions (excluding schizophrenia, bi-polar or organic brain disease), which are limited to two years. If you become disabled after reaching age 60, however, your benefits could continue for a limited period after age 65. For the first two years of your disability, you are disabled if you cannot perform your occupation, and earn less than 80% of your monthly Benefit Salary from your employer. After that, you are disabled if you are unable to perform, with reasonable continuity, the material duties of any occupation and cannot earn more than 60% of your monthly Benefit Salary from any employer.

If you become disabled and receive long-term disability benefits, you will be responsible for paying ta xes on your benefits from this plan. However, since your income from disability benefits would be lower than your salary, you would owe less in taxes.
If you are selecting LTD insurance for the first time, see page 9 for the medical underwriting process.
Eligibility For An Early Disability Retirement
At total and permanent disability, some employees are eligible for early retirement through a State retirement system , as long as the disability is considered permanent. For the Employees' Retirement System, you may call 404-350-6300 for more information. For the Teachers' Retirement System, you may call 404-352-6500 or toll free at 1-800-352-0650.

Enrolling For Long-Term Disability Coverage
Your cost for long-term disability coverage is based on your age, your FICA Status, Benefit Salary, and whether or not you are eligible for disability coverage through any State of Georgia retirement plan, and/or through Social Security. Long-term disability premiums are paid with pre-
tax dollars. The Internal Revenue Service (IRS) considers these benefits to be taxable income.

34 I Unit Seven

uccs

Unit Eight / 35

I

I

Long-term care refers to a wide range of personal

Your Long-Term Care Options

care, health and social services for people of all ages You can choose from one of three daily benefit leve ls

who suffer a chronic disease or long-lasting di sa-

and the corresponding monthly premium that is right

bility. These services can be provided in a nursing

for your needs and budget. The amount of the benefit

facility, an adult day care center or at home, and can depends on two facto rs: where the long-term care is

involve some nursing care. The cost for this kind of provided - either in a nursing facility, or home/day/

care is very high. Home care can be as much as

assisted li ving faci lity - and the daily dollar level of

$20,000 per year, and nursing home care can range in the coverage you have selected. With any of these

cost from $20,000 to $60,000 annually. Generally,

dail y benefit options, benefits are paid on a monthly

you pay these expenses out of your own pocket,

basis. As the chart shows, the monthly benefit is

because medical insurance and Medicare do not

equal to I00% of your elected dai ly benefit amount

cover long-term care. Typically, Medicaid is only

for care provided in a state- licensed nursing home

available to members after they have significantly

facility, and 60% of your elected daily benefit

depleted their assets and income. Long-term care

amount for care provided in an assisted li vi ng fac ility

insurance is desi gned to protect you financially by

or at home. If you wish, you can add on a reduced

paying benefits if you need long-term care. It also

paid-up option and/or an infl ation protection option .

helps you maintain greater independence and a

higher quality of life.

Who Can Be Covered

This plan is offered to you , your spouse, your parents

Daily Benefit Option

or your parents-in-law. "Parents" are biological (natural ), adoptive, or step-parents of eli gibl e

employees or spouses. Your spouse, parents and

parents-in-law wi ll have to complete a medical

underwriting process and be approved to be accepted

$ 125/day $ 100/day $75/day

$ 125 $100 $75

$75

$228, 125

for long-term care coverage. Your fa mil y members'

60

$ 182,500

premiums wi ll be billed directly by the insurance

45

$ 136,875

company. Your payroll deduction wi ll be for your

indi vidual coverage only.

DID YOU KNOW... Nearly half of all Americans over age 65 require
long-term care for some period of time? Med ical insurance and Med icare genera lly do not
cover long-term care? Medicaid covers some types of long-term care, but
restricts your choices of where th is care can be provi ded? Many Americans wi ll spend their life savings on less than one year of care?

When Benefits Are Paid Benefits begin after a 90-day waiting period in which yo u or a covered family member has an elig ibl e physical or cognitive disability. You qualify for benefits if the di sab ility creates a need for yo u to receive continual help from another person to carry out any three of the fo llowing six activ iti es of daily living: eati ng dress ing bathing using the toilet transferring from a bed to a chair continence
Benefits from long-term care insurance are not taxed when yo u rece ive them.

36 / Unit Eight

About Your Premiums and Enrolling You pay for your long-term care coverage through the convenience of payroll deduction with after-tax dollars. Premium costs are based on your age as of the Benefit Calculation Date or date of hire, whichever is later. Your family members' premiums are based on their age as of the date they apply for coverage. Their premiums will be sent directly to Unum, not deducted from payroll. If you are a current employee and selecting long-term care insurance for the first time, or are currently enrolled and want to increase your benefit level or add options, or are re-enrolling after discontinuing coverage, check pages 8 and 9 for medical underwriting requirements. For more information about long-term care coverage, call Unum at 1-888SOG-FLEX (1-888-764-3539).

The long-term care plan can play an important part in your future. Coverage will stay in effect for as long as you continue to pay the monthly premium, even if you should leave the State's employment. You could then apply for coverage continuation and be billed by Unum directly at your home.

Unit Eight / 37

, ,
V> 38 / Unit Nine

SPECIFIED ILLNESS PLAN - New for 2005!
The Flexible Benefits Program and the Employee Benefit Plan Council are offering a new option, Specified Illness, with AIG American General.
The good news is that many people with a specified illness survive these life threatening battles. Unfortunately, as the recovery process begins, people become aware of the medical bills that have piled up.

Covered Critical Illnesses*

Illnesses Covered Under Plan

Percentage of Face Amount

Heart Attack Stroke Major Organ Transplant Renal Fai lure (End Stage) Internal Cancer Carcinoma in situ**

100% 100% 100% 100% 100% 25 %

Coronary Artery Bypass Surgery**

25 %

Your recovery doesn't have to be spoi led by medical bills.
With the group specifi ed illness plan, our goal is to help you and your family cope with and recover from the financial stress of surviving a critical illness or condition.
According to medical statistics: Over l .3 million new cancer cases were expected to
be diagnosed in 2004. 1 The National Institutes of Health estimated the
overall costs for cancer in the year 2003 at $189.5 billion: $64.2 billion for direct medical costs and $125.3 billion for indirect costs. 1 An estimated 700,000 Americans were to have a new coronary attack in 2004. About 500,000 were to have a recurrent attack.2 ln 2004 the estimated direct and indirect cost of cardiovascular disease was $368.4 billion.2

following the diagnosis of each covered specified illness after you are hospital confined for the specified illness and charged for room and board. (See the chart above for information on covered specified illnesses.)
Rates cannot be individually increased due to change in age, health or individual claim.
Simplified underwriting-answer only a few health questions.
The plan is portable* - take your coverage with you if you leave your job.
Available to employees age 18-69. Benefits for participants reduced 50% at age 70.

Plan Provisions
The following are coverage levels: $5 ,000 - for Plan Year 2005 , no Medical
Underwriting required $10,000 - Medical Underwriting required, unless
I0% participation rate is met in the Specified Illness Plan. Employees should complete Medical Underwriting questions, in case 10% participation is not met. If $5,000 level is se lected and I0% participation is met, employees will not be allowed to change election to the $ I0,000 level , even though it wou ld be guaranteed issue. $20,000 - Medical Underwriting required $30,000 - Medical Underwriting required $40,000 - Medical Underwriting required $50,000 - Medical Underwriting required Lump-sum benefits paid directly to the insured

*Certain stipu lations apply to portability.
** A partial benefit (25%) is payable for carcinoma in s itu and coronary
artery bypass surgery. Payment of the partial benefit for carcinoma in situ wi ll reduce the benefit for internal cancer. Payment of the partial benefit for coronary artery bypass surgery will reduce the benefit for a heart attack.
I. 2004 Ca ncer Facts & Figures, America n Cancer Society 2. 2004 Hea rt and Stroke Stati sti ca l Update, American Hea rt
Association

Unit Nine / 39

First Occurrence Benefit The insured may receive up to I00% of the benefit selected upon the first diagnosis of each covered critical illness.
Additional Occurrence Benefit If an insured collects full benefits for a Critical Illness under the plan and later has one of the remaining covered illnesses, then we will pay the full benefit amount for any additional illness. Occurrences must be separated by at least 6 months.
Re-Occurrence Benefit If an insured receives full benefit for a covered condition and is later diagnosed with the same condition, we will pay the full benefit again. The two dates of diagnosis must be separated by at least 12 months or 12 months treatment free for Internal Cancer.

Health Screening Benefits An insured may receive a maximum of $50 for any one covered screening test per calendar year. We will pay this benefit regardless of the results of the test. Payment of this benefit will not reduce the amount payable for the diagnosis of a critical illness. There is no limit to the number of years the insured can receive the health screening benefit; it will be paid as long as the policy remains in force. This benefit is payable for the covered employee. The covered health screening tests include: Stress test on a bicycle or treadmill Fasting blood glucose test, blood test for
triglycerides or serum cholesterol test to determine level of HDL and LDL Bone marrow testing Breast ultrasound CA 15-3 (blood test for breast cancer) CA 125 (blood test for ovarian cancer) CEA (blood test for colon cancer) Chest x-ray Colonoscopy Flexible sigrnoidoscopy Hemocult stool analysis Mammography Pap smear PSA (blood test for prostate cancer) Serum protein electrophoresis (blood test for myeloma) Thermography

40 I Unit Nine

Unit Ten / 41

Everyday occurrences often require legal assistance whether it's selling a home, establishing a will, obtaining credit, or addressing a variety of other legal matters. Legal services simply cannot be avoided. Attorney fees can be costly, ranging from hundreds to thousands of dollars.
Seven out ofeight people deal with a legal event each year.*
The State of Georgia Flexible Benefits Program has offered the benefits of group legal insurance for over 15 years. During that time, thousands of employees from the State of Georgia have taken advantage of this valuable resource and have been able to avoid the high cost of accessing legal advice (qualified attorneys charge an average of $220 per hour) .
Joining LegalCare can help put your mind at ease
Hopefully you will only need a lawyer for a positive occasion, but should the need arise you can enjoy the comfort of having these resources ready and accessible. More importantly, practically every personal legal service is included in your membership - from writing a simple Will, reviewing contracts, and answering legal questions quickly over the phone, to actually representing you in court.

LegalCare Offices in 47 other states (excluding Alaska and Hawaii) if needed.
In-Office Legal Services The Signature LegalCare Plan makes in-office attorney visits easy! The Network Attorney will provide you with advice on most covered legal matters with attorney fees paid-in-full. If there isn't a Network Attorney in your area, Signature LegalCare will cover the services of a non-network attorney on the same basis for services provided by a participating network attorney.
Some of the matters covered under the plan include:
Family Law Dissolution of Marriage (Uncontested, Contested) Child Custody/Child Support Court Adoption Proceedings (Uncontested,
Contested) Guardianship/Conservatorship
Real Estate Matters Sale Only Purchase Only Sale and Purchase Refinancing

The Signature LegalCare Plan TM Benefits
Personal Telephone Legal Services: You will have unlimited, toll-free access to Telephone Network Attorneys (Preventive LegalCare Offices) licensed to practice law in Georgia who average 20 years of experience and can quickly help you identify your legal needs and determine alternatives. Telephone Attorneys can provide you with:
Unlimited, toll-free advice about personal legal matters
Follow-up calls and correspondence to third parties Document review
Additionally, you will have access to Preventive
42 / Unit Ten

Wills and Trusts Simple Will Reciprocal Simple Wills Reciprocal Wills with Trust Provision Living Will
Consumer Protection Covered Person as Plaintiff for the enforcement of
guarantees, warranties, leases and other contracts
Debt Collection Defense Defense against contract, foreclosure and debt
claims Personal Bankruptcy Identity Theft
And Many Others Document Review and Preparation Estate Administration and Estate Closing Eviction Defense Immigration/Naturalization

IRS Audit Juvenile Court Proceedings Name Change Tenant Negotiations Traffic Charges (not involving DUI) Noncovered Services (Attorney Office Work
8 Hours) Reduced Fee Benefit Personal Injury
You can also choose to see a non-Network Attorney. When covered services have been completed, file a claim form , including your attorney's billing statement, with Signature LegalCare. You'll receive direct reimbursement for the visit, up to the maximum allowed by the plan.
NOTE: You will still have eight hours available to you to use to wards legal advice annually for noncovered services (except those legal matters which are specifi,cally excluded or otherwise covered). Wh en using a Network Attorney, each hour
is paid in full; ifyou use a Non-Network Attorney,
you will be reimbursed up to $70 per hou,~
Additional Valuable Services:
Additional Valuable Services Included
Online Legal Services Signature LegalCare offers Online Legal Services. These services give you access to The Personal Law Center. Signature LegalCare provides the opportunity for a member to research, educate themselves and even take action on their everyday legal issues. Provided through our partnership with NOLO Solutions, the nation's leader in self-help legal content, this service will be accessible through the Signature LegalCare website and provides the member with unlimited online access to plainEnglish and easy-to-use legal information, explanations, interactive documents and tools on a variety of everyday legal issues such as:

Caring for Family Members Taxes & Audits Personal Injury Cars & Tickets And Many, Many More!!
Reduced Fee Legal Services Reduced Fee Benefit 25% Discount off Attorney's UCR - when "Attorney Office Work" (8 hours for noncovered services) is exhausted or if the matter is not Paid in Full and has exceeded the Signature LegalCare Maximum fee. Must use a Network Attorney for this benefit.
Personal Injury Services Personal Injury coverage for a covered member. Covered members are responsible for payment of attorney fees and should be responsible for all litigation expenses associated with representation. Plan exclusions apply.
a. 25% for services before or after trial b. 30% for services after an appeal
During Open Enrollment you may call Signature LegalCare at 1-800-848-2012 if you have questions concerning how the legal insurance plan works, or visit their web site at www.signaturelegalcare.com. Scroll down to State of Georgia and enter your 5 digit password (43215).
This document is intended to provide an overview of plan coverage. Please remember that only the insurance policy can give actual terms, coverage, amounts, conditions and exclusions.
Underwritten by Heritage Casualty Insurance Company
* Http://www. benejitnews.com: Employee Benefit News, November, 2000 "l egal Problems Impair Employee Effectiveness. "

Wills & Estate Planning Divorce & Child Custody Real Estate: Purchase, Sale Refinance & Rental Consumer Protection

Unit Ten/ 43

iP

te

fThe

Eligibility Peach State Reserves is available to most employees, except library employees (state law does not currently permit libraries to participate in Peach State Reserves). However, employees of educational entities are only eligible to contribute if their local school system has chosen to participate. Currently, Fayette County Board of Education is the only school system participating in Peach State Reserves.
The following section describes Peach State Reserves - The Georgia Retirement Investment Plan. Peach State Reserves is separate from the Flexible Benefits Program, and we want to take this opportunity to remind eligible employees that this Program is available to help build their financial security.

The High Cost of Delay If you wait just 30 days to begin or to increase your contributions by $100 at 8 percent over 30 years, you will fail to realize $1 ,006. If delaying 30 days is costly, what happens if you wait to begin or add to your contributions for ten year?

The Difference a Decade Makes*

Jamie has $40,236 at age 60 Jamie, age 25, saved $30 per month for 10 years (earning 8%) and stopped savi ng at age 35. Jami e's total in vestment = $3,600

Terry has $28,75 1 at age 60. Terry, age 35, saved $30 per month for 25 years (earning 8%). Terry 's total investment = $9,000

Jami e invested $5,400 less but has $ 11 ,485 more than Terry at age 60 because Jamie started saving IOyears sooner.

The examples given are hypothetical illustrations only. There is no guara111ee you will earn the same amount. You could earn less: you could earn more.

What Is Peach State Reserves? Interested in an easy way to save for your retirement? Peach State Reserves - The Georgia Retirement Investment Plan (PSR) - is for employees of the state of Georgia. With PSR, you can use payroll deduction to accumulate tax-deferred savings in a 401(k) or 457 Plan (or both!). This means you can hold off paying income taxes today and invest your savings and earnings until you need retirement income later.

Why Do I Need To Save For Retirement? If you remain a state employee for 30 years, your State Employees ' pension may cover slightly more than half of what you will need in retirement. If you do not remain a state employee over the course of your working years, you will have even less - or perhaps nothing - from the state pension program. Americans are living longer and the prospect of longer lives means more years in retirement and a greater need for retirement savings. Inflation also reduces your purchasing power, so you ' 11 need more money to maintain your standard of living.

The Effect of Inflation (4%)
What you will need to replace today's dollars
--- - ~-- - - - - - - ---------
Your$ Today 10 yrs. from now 20 yrs. from now 30 yrs. from now

$25 .00

$37.00

$45,000

$5 4,8 00

$30.00

$44,400

$54,000

$65 ,700

$50.00

$74,00

$90,000

$ 109,600

Even if you didn ' t start early, don ' t let that deter you . It's better to have some savings, than none at all , and contributing more can greatly increase your savings.

How Does Peach State Reserves Beat Conventional Savings?
First, you receive a significant tax break. In conventional savings, you pay taxes on income before you can set some aside for investing. PSR allows you to invest the full amount, as the following chart illustrates. So, you ' ll probably be able to save more than you thought you could.

Before Tax Savings (PSR)

After Tax Savings (Credit Union , Broker, etc.)

$ 1,000
-$50 PSR deduction
$950 Taxable Income -$266 Federal Taxes
-$57 State Taxes $627

$ 1,000
-$280 federal Taxes
-$60 State Taxes $660 -$50 Taxable Savings Deducti on $6 10

$17 more takHIOllle pay wbeil you save before taxes! And lowertaxea piid!'

Second, your earnings benefit from the tax deferral. The pre-tax dollars that you invest also compound on a tax-deferred basis. Since you do not pay taxes on the earnings each year, in most cases the earnings will accumulate more quickly than earnings in aftertax accounts for which you have to pay taxes each year. And the advantage grows the longer you can invest in the plan and the more you contribute, as the following chart illustrates.

Unit Eleven / 45

Contributing $25 More Semi-Monthly Greatly Increases Savings By Age 60

eligible for withdrawal in cases of financial need, except under extremely limited circumstances (and in the case of 40 l(k), with additional tax penalty). All employees should be setting aside savings on an after-tax basis that they can access without restriction or penalty. Only after such an emergency fund is established should someone consider enrolling in PSR.

35

40

45

50

55

60

Age

$50 Semi-month ly

$75 Semi-monthly

Who Should Participate? Everyone eligible to participate in PSR should consider enrolling. This is particularly relevant if any of the following are true: You do not plan on working for the State of
Georgia your entire career You are currently saving without the benefit of tax-
deferral You plan to take early retirement You pay significant federal and state

Who Should NOT Participate? You should not participate if: You do not have the money to save for long-term
needs You do not have funds for immediate emergencies

Emergency Withdrawals The Section 457 and 40l(k) Plans were designed by the Internal Revenue Service as a mechanism for saving towards retirement on a pre-tax basis. The Plans are NOT designed for emergency expenses or financial hardship. Therefore, withdrawals are very difficult to qualify for prior to separation from state service. While many private sector 40 I(k) Plans offer loans, through which participants may access funds to make a down payment on a house, or to supplement educational expenses, the state of Georgia 401(k) and 457 Plans do not have loan provisions, and the money you contribute to the Plan(s) is NOT
46 I Unit Eleven

Enrolling In Peach State Reserves The first step in making any decision should be to determine where you are now and where you need to be by retirement age. The web site www.gms.state.ga.us/employee/psr.asp offers information to help you estimate how much you will need to save for retirement in the "Informational Resources" section (use the "Ballpark Estimate" on the American Savings Education Council site link from the PSR website - it's quick and easy). The PSR Brochure available from your personnel office also has a worksheet to help you get started. Even if you're not sure how much to save, the most important thing is to start! You can figure the rest out later but if you don't start, we've shown you the impact of delaying.
The charts on the following pages is an overview comparison of both Plans. For complete and detailed information, visit our web site at www.gms.state.ga.us/employee/psr.asp., pick up a PSR brochure from your local personnel/benefit/ payroll representatives, or call Great-West (PSR's customer service administrator) toll-free at 1-800701-8255. You can enroll in PSR at any time (Remember, PSR is not a part of the Flexible Benefits Program, so enrollment and changes are allowed year-round) . You may stop making contributions at any time by completing a Change Participation Agreement Form and submitting it to your personnel/payroll office.
To enroll, you must: read the prospectus for each fund choice fill out and sign the New Enrollment Participation
Agreement fill out and sign the Beneficiary Form complete the Spousal Waiver Form for the 40l(k)
only, if applicable. The forms should be available

A 457 and 401 (k) Plan Comparison

For 401(k) - Employees in pennanent, full-time positions and part-time or temporary employees working 1,000 hours or more per year.
Initial enrollment for eligible employees is available any time.
Upon hire, employees may transfer assets into PSR from their previous employer's 40l(k), 403(b) or 457 Plan, or in some cases, from IRAs, with some restrictions. Upon tennination of employment, participants may transfer assets to their new employer's 40 I(k), plan or into IRAs.

Tax Year 2005 2006

Deferral Limit $14,000 $15,000

Special 457 Plan Catch- Up Double the nonnal contribution limit for the 3 years prior to the projected retirement date.

None in the 40 I(k) plan.

Age 50 and over Additional Contributions

Employees who are age 50 or older (or who will reach age 50 in the applicable tax year), may make "additional

contributions." These are additional amounts beyond the nonnal contribution limit, as indicated below:

Tax Year

Additional Amount

2005

$4,000

2006

$5,000

You cannot contribute to the Special 457 Catch-Up and Age 50 457 Additional Contributions during the same tax year.

from your local personnel/payroll office. Your contributions can begin the calendar month after your forms are approved and processed.
Investing Your Money For Retirement There are different ways to invest your money. For people who don't want to invest in the stock market, the Plan offers a stable value option that provides a guaranteed rate of return (updated quarterly) and does not invest in the stock market. For those who do wish to invest in the stock and bond markets, there are several mutual funds that provide a broad range of investment styles (also called "asset classes"), including growth and value stocks; small, medium and large company stocks; combinations of stocks and bonds; and popular "Index" funds . These "core" investment options are all no-load with no trading fees, and many are available at lower cost through PSR than you would be ab le to obtain for the same

funds if investing in them through a private broker (not to mention the tax advantage you get through PSR!). In addition, a Self-Directed Brokerage Option with thousands of mutual funds and individual stocks and bonds is available for investment for those participants with an account balance of at least $10,000.
Model portfolios a simplified approach to investing For people who don't want to select which funds to invest in, Peach State Reserves has three preallocated portfolios. You just pick the portfolio that has the level of market risk/investment growth potential you are most comfortable with. The Plan has Conservative, Moderate and Aggressive portfolios already set up. Each portfolio allocates your contributions into the specific funds within the portfolio, providing automatic diversification across
Unit Eleven/ 47

Contributions can be started or stopped and amounts changed any time. Changes become effective the following calendar month.

None in the 457 plan.

None in the 40 I(k), except for participating Community Service Boards.

Upon separation from state service, funds may be rolled into another 401(k), 457, 403(b) or IRA in order to maintain the tax-deferred status of the assets. 457 assets that are rolled into anything other than another 457 Plan will be assessed the 10% early withdrawal penalty if a distribution is later taken prior to age 59 1/2.

Generally, payouts are not allowed until separation from state service, except in the case of 401(k), in which payouts can be made on or after age 59 l/2, even if sti II working. Payouts from both Plans are required to begin at age 70 1/2, ifno longer working. For 40l(k) Plans, if payout is taken prior to age 59 1/2, in most cases, a penalty is assessed in addition to taxes. This penalty does not apply to the 457 Plan, unless 457 assets are rolled into a 401(k) Plan, 403(b) Plan or IRA and payout is then taken prior to age 59 1/2.

For 457 - Married participants don't have to specify their spouse as beneficiary.

For 401(k) - Spouse must be named as beneficiary for entire account balance unless spouse submits a waiver.

Must meet strict IRS requirements. Extremely difficult to qualify.

asset classes. Furthermore, the portfolios are rebalanced quarterly to maintain their asset class allocation targets. Diversification and rebalancing are strongly recommended by most financial advisors to help achieve long-term investment goals, and by choosing one of the pre-allocated portfolios, all of that is taken care of for you. For more detailed information regarding the individual funds in each portfolio, visit our website at www.gms.state.ga.us/employee/psr.asp.
Managing .Your PSR Account
Once you've enrolled, you manage your investments by accessing your account on the internet (or calling Great-West) - there's never any paperwork to complete (unless you want to change your payroll deduction amount or your beneficiary, in which case you'll need to get the appropriate form from your personnel or payroll office). It's all at your fingertips and you can make investment changes 24 hours a day.* You can even have your quarterly statements stored electronically on your account website, so you can eliminate paper!

*Changes made before 4 p.m. Eastern time will be processed the following day at the previous day's closing market prices.
Help yourself to a secure financial future with a Peach State Reserves investment account. Even if you leave state government, you can take the money with you by rolling it over into your new employer's plan, or you can leave it in Peach State Reserves and continue to manage your account. We look forward to helping you with your continued progress toward your retirement savings goals.

48 / Unit Eleven

Electronic Open
Enrollment
For Plan Year 2005 (July 1 - December 31 , 2005), Electronic Open Enrollment (EOE) is mandatory for all eligible employees (including those hired between February 1 through May 2, 2005) who participate in the State of Georgia Flexible Benefits Program. Emp loyees who have access to the Internet at work, home or other location can select their benefits e lectronically by accessing the Flexible Benefits Program's web site at www.gabenefits.org
The menu design enables you to click on the option , review your available benefit choices and submit your selections on-line. The Summary of Your Selections 2005 page provides a summary of your Open Enrollment selections; the Summary of Your Selections 2004-2005 page lists the options in which you are currently enrolled.
Before making your selections, carefully review your 2005 Enrollment booklet, including "Terms and Conditions" of your enrollment and the "What's New for P lan Year 2005" brochure. Entry of your selected options indicates that you agree to the Terms and Conditions and understand that this is a binding salary agreement for the duration of the 2005 Plan Year.
NOTE: Please remember the 2005 Plan Year coverage period is July l - December 31 , 2005 (only 6 months). Please consider your personal situation when making your selections, especially regarding the Health Care and Dependent Care Spending Account options. Please review your 2005 Enrollment Booklet for additional information.
Going On-Line
Go on-line using your regular internet browser (recommended Internet Explorer 5.0 or higher).
Type the web site address: www.gabenefits.org
Initial Sign-On
Please read the Welcome page as it provides valuable information about the selection process.

Electronic Open Enrollment Web On-Line Instructions
Open Enrollment 2005 Friday, April 22 - Friday, May 20, 2005
7:00 a.m. - midnight
Electronic Open Enrollment Web Navigation Help Desk 404-656-3000 / 1-800-264-3941
7:00 a.m. - 5:00 p.m. (excluding Saturday, Sunday & State holidays)
Click the READY button to proceed.
Enter the following information : - User ID (your social security number without the dashes). Click the SUBMIT USER ID button. - Your birthdate (mm-dd-yyyy). - Password (the length of the password you create
can be from 6- 10 characters).
- Re-enter password. - Select a security question. Click the drop-down
arrow to see the choice of questions. - Answer the question (this wi ll allow you to reset
your password at a later date should you forget it) .
Click the SUBMIT FIRST TIME DATA button.
Employee Base Information Page
Some premiums are calculated based on your personal data (i.e. age, benefit salary, etc.).
If the annual salary, date of birth, age, county of residence, FICA status, and/or disability retirement status is incorrect, please click the I disagree button and contact your personnel/payroll office immediately to correct this information.
If the annua l salary, date of birth, age, county of residence, FICA status, and/or disability retirement status is correct, please click the I agree button to continue with your benefit selections.
You are now ready to review and submit your choices on-line.
Need access to a computer? A list of sites to access Open Enrollment is located at www.gms.state.ga.us. Click the "Smart Choices" button , Open Enrollment site locater.
Unit Twelve / 49

Selecting Your Options
Before making your selections, carefully review the Terms and Conditions of your enrollment located in your Enrollment booklet. Select options in any order you wish. However, it
is necessary to have the Employee Life option before you can select the Spouse Life and/or Child Life options. If you do not wish to change an option, you do not have to click on that option to complete the final confirm process, except: - It is necessary to select a coverage level (5 ,000 -
10,000 - 20,000 - 30,000 - 40,000 or 50,000) or no coverage for the Specified Illness option. - You must answer the tobacco products and spousal surcharge questions for the health insurance options. Failure to answer surcharge questions and make the right choices during this Open Enrollment could have a financial impact on your health insurance premiums.
To select an option: - Click the option in the menu selection on the left side of the page or in the Flexible Benefit Option column in the Summary of Your Selections 2005 box. - Click the radio button next to the coverage choice except for the Spending Account options. - Enter MONTHLY amount or 00 for the Health Care and Dependent Care Spending Account options. - Click the SUBMIT YOUR SELECTION button each time you make a benefit selection. - Each time you click the SUBMIT YOUR SELECTION you will be taken back to the Summary of Your Selections 2005 page, except: When selecting Employee Life, Spouse Life, Child Life, Long-Term Disability, Long Term Care and/or Specified Illness that requires medical underwriting, and When selecting family coverage for the Health option.

Confirming Your Selections
Your selections are not final until you complete the confirmation process.
Click the Confirmation button on the Summary of Your Selections 2005 page.
Check the box acknowledging you have read and abide by the Terms and Conditions of enrollment.
If you are not ready to confirm your benefit selections, click the Cancel (I will confirm later) button.
If you are ready to confirm your benefit selections, click the Please Confirm My Benefit Choices.
You will be taken back to the Summary of Your Choices 2005 page. A unique confirmation number, date and time will be displayed. Print the confirmation page or write down the confirmation number, date and time for your records.
NEW! If you want to change your selection after confirming on the web site, you may return to the web site as often as you like during the Open Enrollment period to make changes. Each time you complete the final confirm process a new unique confirmation number will be created. The benefits selected as of midnight May 20, 2005 will be your final selections.
Log Off
Click Log Off when you have completed your visit to the web site. You may sign on again throughout the Ope!'] Enrollment period - April 22 through May 20, 2005.
Subsequent Sign-On
Enter your User ID (SSN without dashes). Click the Submit User ID button. Enter your password. Click the Submit Password button.
Forgot your password?
Click I forgot my password. Answer the security question. Enter a new password. Re-enter the new password. Click the Here button.

(*) See the Special Instructions section for additiona l entry instructions .
50 / Unit Twelve

Special Instructions
Medical Underwriting - If you select Employee Life, Spouse Life, Child Life, Long-Term Disability and/or Specified lllness requiring medical underwriting, you will automatically be taken to a page to complete the form on-line. See instructions on the web site to complete the medical underwriting form(s) online. - If you select Long Term Care requiring medical underwriting, you will automatically be taken to a page to inform you that it is your responsibility to contact your personnel/payroll office to obtain the paper medical underwriting form . - You must complete the medical underwriting process for Employee Life, Spouse Life, Child Life, Long-Term Disability and/or Specified Illness on-line in order to complete the final confirmation process. You may click the "Finish Later" button to save your entry and return to the web application to finish no later than the last day of Open Enrollment. - If you do not wish to complete the medical underwriting form on-line, you will need to change your selection to one that does not require medical underwriting.
Health Benefits - Due to the number of Health Benefit changes this Open Enrollment, please carefully review your Health Plan Decision Guide before making your benefit selection. - You must answer the tobacco products and spousal surcharge questions to proceed to the

Health Benefit selection page. See instructions on the web site. - If you are eligible to select the TRICARE Supplement option, you must enter the 9 digit DEERS number. - If you select family Health coverage, you will automatically be taken to a page to update/add dependents. Updating/adding dependents to your SHBP coverage: 1. Enter the total number of dependents if the
number given is not accurate. 2. Click the Continue button. 3. Fill in all the boxes for each dependent when
adding new dependents. 4. Dependents may be removed by clicking N in
the YES/NO drop down arrow. 5. Click the Update button if you have
completed the form, or click the FINISH LATER button if you wish to complete the form later.
Other
Employee Life After-Tax - If you select over $50,000 of Employee Life coverage, you may choose to pay with after tax dollars by clicking the box in the after tax section on the Employee Life page.
You may not select a coverage level in either the Spouse Life and/ or Child Life options that exceeds your amount of Employee Life coverage.

Unit Twelve/ 51

BENEFIT PHONE DIRECTORY

State Health Benefit Plans

Call if you have a question about bow the plan works

PPO, PPO Choice Indemnity Option Atlanta metropolitan area
PPO Provider Information Prescription Drug Information
Medical Certification Program (MCP) Atlanta metropolitan area Outside metro area
Behavioral Health Services (BHS) Atlanta metropolitan area Outside metro area
NurseCall 24
BlueChoice Healthcare Plan CIGNA Healthcare of Georgia Kaiser Permanente United Healthcare of Georgia Association and Society Insurance Corporation (ASI) - TriCare Supplement

Contact your personnel/payroll Outside metro area representative. If representative is not available, call claim numbers at right. 1-800-483-6983 1-877-650-9342
770-438-9770 1-800-762-4535
1-800-631-9943 1-800-631-9943
1-800-524-7130
1-800-464-1367 1-800-564-7642 1-800-611-181 1 1-866-527-9599
1-800-638-2610 ext. 255

Flexible Benefits Program

Employee, Spouse, Child Life Insurance and Accidental Death and Dismemberment

Life conversion and

404-656-2730

portability information

or 1-888-968-0490

Dental Insurance CIGNA - www.cigna.com United Concordia-Regular & PPO www.ucci.com/tuctcc/clients.jsp?id= 18

1-800-642-5810 1-866-215-2356

Vision Coverage www.spectera.com
Disability Insurance
Long-Term Care Insurance
Legal Insurance Hearing Impaired www.signaturelegalcare.com
Spending Accounts Hearing Impaired www.shps.net
Specified Illness Insurance Portability Information www.gms _ specifiedillness.com

1-800-638-3120
1-888-641-7186 1-888-SOG-FLEX or 1-888-764-3539 1-800-848-2012 1-800-535-2348
1-800-893-0763 1-800-952-0450
1-866-849-2958 1-866-849-2958

Peach State Reserves
Peach State Reserves Office
Great-West "Key Talk" '

404-651-6088 or 1-800-331-7180 1-800-701-8255

52 I Unit Twelve

Call if you have a question about a claim that has been submitted
404-233-4479 l-800-483-6983
Not applicable 1-877-650-9342
404-233-4479 1-800-483-6983
404-233-4479 1-800-483-6983 Not applicable l-800-464-1367 1-800-244-6224 404-261-2825 l-866-527-9599 l-800-638-2610 ext. 255
l-800-660-2519 or l-800-660-2519
1-800-642-5810 1-866-215-2356
1-800-638-3120
1-888-641-7186 or l-888-764-3539
1-800-848-2012 1-800-535-2348
l -800-893-0763 1-800-952-0450
1-866-849-2958 l-866-849-2958
Not applicable

EMPLOYEE CHECKLIST
0 Check with personnel/payroll office for
deadlines.
0 Review the enrollment booklet, providing you
with valuable information for each option descriptions of required supplemental forms medical underwriting requirements (pages
7 - 9), and Terms & Conditions (inside front cover).
0 During the 2005 Open Enrollment, make
your benefit selections on the web site (www.gabenefits.org) from April 22 - May 20, 2005.
0 Check Option Statement and enrollment booklet
to confirm if forms are required, such as Medical Underwriting forms.
0 Review your Confirmation Statement thoroughly
and immediately report discrepancies to personnel/payroll office. Follow-up to assure corrections were made.
0 Compare your June pay stub(s) against options
selected. Contact your personnel/payroll office with discrepancies.
0 Report any incorrect information to your
personnel/payroll office.
Check the following forms that you need to complete and either download from GMS web site or contact personnel/payroll office for forms:
0 "Flexible Benefits Program Beneficiary Election
Forms" (Life and Specified Illness) if selecting coverage level above the guaranteed issue.
0 Minnesota Life "Evidence of Insurability
Form" For Employee Life For Spouse Life For Child Life

0 AIG "Evidence of Insurability Form"
For Specified Illness
0 The Standard "Evidence of Insurability Form"
For Long-Term Disability
0 Unum Long-Term Care Application (must be
obtained from personnel/payroll)
0 Prepaid Dental Option "Dental Selection Form"
(call CIGNA at l-800-642-5810).
Each member must be enrolled with a provider. Remember to enter dependents.
Note: Health forms are not applicable to dental.
For questions about claims or benefits for the State Health Benefit Plan, see page 52 for phone numbers.
For general questions about the Flexible Benefits Program, call 404-656-2730 if it's a local Atlanta call, or toll-free at 1-888-968-0490 outside the local area.
If changes in the Program are necessary to comply with the law or IRS regulations, you will be notified.
This booklet summarizes the benefits you can choose through the State of Georgia Flexible Benefits Program. A more detailed explanation of benefit provisions is provided in each benefit plan description. Every attempt has been made to ensure that the information in this booklet is accurate.
The State of Georgia Flexible Benefits Program is governed by legal documentation and insurance contracts. However, in the event there are any conflicts between this booklet and the official plan descriptions and contracts, the terms of the official plan descriptions and contracts will prevail.
The Flexible Benefits Program is governed by the current tax law and is subject to and operated in accordance with the regulations of the Internal Revenue Service (IRS).

Unit Twelve / 53

54 / Unit

PRIVACY AND SECURITY NOTICE The Health Insurance Portability and Accountability Act of 1996 '(HI PAA) requires that covered entities, including state agencies that deal with Protected Health Information (PHI), provide you with this notice. This notice pertains to those programs specifically administered by the Georgia Merit System (GMS) in which GMS may maintain various types of PHI about you . GMS understands that information about you and your family is very personal. As such, GMS is committed to protecting and securing your information.
This notice tells you how GMS uses and discloses information about you and discusses your rights in keeping this information private and secure. Please review this notice carefully.
Overview What is HIPAA? HIPAA, the Health Insurance Portability and Accountability Act of 1996, is a federal law regarding the confidentiality and security of Protected Health Information (PHI). It imposes restrictions on how your health information can be used and shared and confirms rights for individuals concerning their own health information.
What is PHI? PHI, Protected Health Information, is individually identifiable health information that is maintained or transmitted by a covered entity. It is information related to a person's health, provision of care, or payment. Examples of items containing PHI include: a bill for health services, an explanation of benefits statement, receipts for reimbursement from a health flexible spending account or any list showing the amount of benefits paid with a breakdown by social security number. This also includes your employer (state agency, school system, authority, etc.) transmitting information about you to GMS. This information may include your name, address, birth date, social security number, employee identification number and certain health information
How GMS Uses and Discloses Protected Health Information When services are contracted, GMS may disclose some or all of your information to the company to perform the job GMS has contracted with them to do. GMS requires the company to safeguard your information in accordance with federal and state law.
Privacy and Security Law Requirements GMS is required by law to:
Maintain the privacy of your information. Protect electronic PHI by implementing reasonable and appropriate physical administrative and technical safeguards. Provide this notice of GM S's legal duties and privacy and security practices regarding the information that GMS has about you. Abide by the terms of this notice. Refrain from using or disclosing any information about you without your written permission, except for the reasons given in this notice. You may revoke your permission at any time, in writing. That revocation will not apply to information that GMS disclosed prior to receiving your written request. If you are unable to give your permission due to an emergency, GMS may release information, if it is in your best interest. GMS must notify you as soon as possible after releasing the information.

Your Health Information Rights You have the following rights regarding the health information maintained by GMS about you: You have the right to see and obtain a copy of your health
information. This right would not extend to information needed for a legal action relating to GMS. You have the right to ask GMS to change health information that is incorrect or incomplete. GMS may deny your request under certain circumstances or request additional documentation. You have the right to request a list of the disclosures that GMS has made of your health information beginning in April 2003. You have the right to request a restriction on certain uses or disclosures of your health information. GMS is not required to agree with your request. You have the right to request that GMS communicate with you about your health in a way or at a location that will help you keep your information confidential. You may request another copy of this notice from GMS, or you may obtain a copy from the GMS web site, www.GMS.state.ga.us (under "Privacy").
For More Information and To Report a Problem If you have questions and would like additional information about Protected Health Information (PHI) you may contact the GMS Privacy Officer at 404-656-2730 (Atlanta calling area) or 1-888968-0490 (outside of Atlanta calling area). You may also visit GMS's web site, www.gms.state.ga.us.
GMS does not discriminate on the basis of disability in the admission or access to, or treatment of employment in its programs or activities. If you have a disability and need additional accommodations to participate in any Merit System programs, please contact the GMS Customer Service Division. For TDD relay service only: 1-800-255-0056 (text-telephone) or 1-800-255-0135 (voice) .
If you believe your privacy or security rights have been violated: You may file a complaint by calling the GMS Privacy Unit at
404-656-2730 (Atlanta calling area) or 1-888-968-0490 (outside of Atlanta calling area), or by writing to:
Georgia Merit System Attn: Privacy Officer 2 MLK Jr. Drive, SE Suite 502, West Tower Atlanta, GA 30334 You can file a complaint with the Secretary of Health and Human Services by writing to: Secretary of Health and Human Services, 200 Independence Ave. SW, Washington, DC 20201. For additional information, call 1-877-696-6775. You may file a grievance with the United States Office for Civil Rights by calling 1-866-OCR-PRIV (1-866-627-7748) or 1-886788-4989 TTY.
There will be no retaliation for filing a complaint or grievance.
If GMS changes its privacy or security practices significantly, GMS will post the new notice on its Web site at www.gms.state.ga.us (Under "Privacy"). This notice, effective April 14, 2003, was amended April 20, 2005.

s
2 Martin Luther King , Jr. Drive, S.E. Suite 504 West Tower Atlanta , Georgia 30334-5100 404.656.2705 404.656 .5959 Fax www.gms.state.ga.us