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Network Agreements The Network has entered into payment agreements with participating hospitals to provide services to Plan participants. Under these payment agreements, the Plan does not always pay an amount to the hospital which corresponds to the amount indicated on the Explanation of Benefits.

The Pharmacy Benefit Manager has developed a Clinical Drug Formulary (Formulary) and list of preferred drugs. The list of preferred drugs is a subset to the Formulary, which serves as a guideline for the most commonly prescribed medications. The use of the Formulary may generate savings from drug manufacturers. These savings are generated from prescription drug claims. Any savings as a result of the Formulary are utilized in the financing of the Plan.

Terms The terms “pay”, “paid”, “payment”, and “payable”, as well as similar terms, are found throughout this Plan Document. When the aforementioned terms are used with respect to the provision of benefits, the terms are referencing the benefits provided under the Plan, rather than the actual amount paid by the Plan.

Disclosure The State and School Employees’ Health Insurance Plan may disclose summary health information to the Plan Sponsor for the administrative functions of the Plan to include payment, treatment, and operations as defined by the Health Insurance Portability and Accountability Act of 1996 (45 C.F.R. Parts 160-64).

Privacy of Protected Health Information The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) gives participants certain rights and imposes certain obligations on the Plan with respect to health information. The following sections describe protections afforded a participant’s health information as it relates to coverage under the Plan. This information is referred to as “protected health information.”

The State and School Employees Health Insurance Management Board is the Plan Sponsor. The Plan will disclose protected health information to the Plan Sponsor only upon receipt of certification by the Plan Sponsor that the Plan Document has been amended to incorporate the following provisions. The Plan Sponsor agrees to abide by the following requirements:

  • (a)

    The Plan Sponsor will use or disclose protected health information only to carry out Plan administration functions for the Plan not inconsistent with the requirements of the Health Insurance Portability and Accountability Act of 1996 (45 C.F.R. Parts 160-64), as permitted or required by the Plan Document or as required by law.

  • (b)

    The Plan Sponsor will ensure that any agent, including any subcontractor, to whom it provides protected health information agrees to the same restrictions and conditions included in the Plan Document with respect to protected health information.


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