In an effort to improve the new sales process, effective immediately Coventry Health Care, Virginia, will no longer require binder checks at the time of sale. Instead, we will send new clients an off-cycle invoice for the first month's premium after the enrollment is complete. The invoice will reflect the actual enrollment as opposed to binder checks based on an estimated enrollment. Process change includes:

• The first invoice will be produced after the enrollment is processed.
• The invoice is due within 31 days from the date of issue and will not interfere with the regular process for producing monthly invoices.
• A signed Group Application will be sufficient to bind coverage.

Example: Coventry Health Care completes enrollment for a new client on March 18, for an April 1, 2011 effective date. We will generate an off-cycle invoice on March 24 that will be due 31 days from that date. On April 10, the standard invoice will compile for the May premium. This invoice is due before the first of the month as usual. 

Please note that this new process is not applicable for clients we have terminated for non-payment of premium. These clients must pay any outstanding balance from the previous coverage period and submit a binder check for the first month's premium.

When determining pricing for any plan design, underwriters evaluate specific features of the plan, including deductibles, and assign a utilization credit based on the assumed impact of the deductible on utilization patterns. In recent years, employers have had access to a variety of mechanisms by which they can take advantage of the premium savings inherent in a higher deductible while exposing employees to minimal levels of the additional cost-sharing. 

Please remember the following when considering a Coventry Consumer Choice product and HRA:

• Members must maintain a minimum responsibility of 50% of the deductible.
• Coventry Consumer Choice has modified product selection worksheets to eliminate any Health Reimbursement Arrangement (HRA) options that do not conform to this structure.
• If Coventry Consumer Choice will not be the administrator of your client's HRA, it is necessary that you alert us to the existence of an HRA and inform us about its design.

Aside from using an HRA or Health Savings Account to offset deductibles, some clients explore the use of "Gap" plans that reimburse employees for expenses subject to deductibles, coinsurance, and copayments under employees' comprehensive medical plan. Coventry Health Care Underwriting policy prohibits the pairing of any of our benefit plans with "Gap" policies. If you have questions about this policy, please contact Chris Fanning, Scot Chancy, or Freddie Oliver directly.

After Health Care Reform passed with an expanded definition of dependent eligibility, Coventry Health Care stopped terminating dependents on fully insured policies due to age. In the months prior to October 2010, many clients asked to extend dependent eligibility to age 26 while remaining subject to eligibility criteria in our plan documents related to marriage or full-time employment.

Since the Group Application supported this, we published a version that allowed dependents to remain on the group policy until age 26 unless they obtained full-time employment or got married. Beginning with clients effective October 1, 2010, we removed the restriction based on employment or marriage to comply with Health Care Reform and re-posted the Group Application to our website. Since that time, we have continued to receive applications that include the wrong definition of "eligibility." In order to comply with Health Care Reform, we cannot continue to accept Group Applications with incorrect dependent eligibility criteria.

We are attaching the correct version of this form to this newsletter. Please discard any previous versions of the form you may have. Beginning with clients effective April 1, 2011, we cannot accept Group Applications with a definition of dependent eligibility that does not comply with Health Care Reform.

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