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Health & Welfare: Group Medical Preferred Provider Organization (PPO)

General Information

Choosing the right health care plan is essential to meeting your needs and the needs of your family. Blue Cross Blue Shield of Illinois is the claim administrator for the State Farm Group Medical Preferred Provider Organization (PPO) Plan. The Plan provides comprehensive medical coverage for accidents and illnesses, and offers freedom of choice. You may choose your own medical providers and hospitals without having to obtain a referral from a primary care physician. You also have the freedom to seek treatment anywhere in the nation.

If you decide that the PPO Plan is the right choice for you, State Farm provides two unique options to choose from. While each option offers the same basic benefits, your deductible, out-of-pocket expense limits and monthly contribution amounts differ depending on your selection. State Farm provides you with the ability to decide which option is best for you and your family.

The deductible represents the amount you pay before any benefits are paid from the Plan. After your deductible is met, eligible medical charges are shared by you and the Plan. This sharing, or coinsurance, depends on whether or not you choose a provider who is in the PPO network or a provider outside of the PPO network. Coinsurance continues to apply to eligible medical charges until you reach your out-of-pocket expense limit. The out-of-pocket expense limit is the amount of eligible charges you pay before the Plan covers 100 percent of eligible charges not subject to any Plan restrictions or limitations. Out-of-pocket expense limits include deductibles and coinsurance amounts.

New Hire Automatic Enrollment

Employees hired or rehired on or after January 1, 2012, who do not make an enrollment election during their initial enrollment period will be automatically enrolled in the lowest cost benefit option (currently the HRA Option — Option 3E). The automatic enrollment will only cover the employee. Employees wanting to waive coverage or make changes must make those changes through the My State Farm Benefits Resource website within 31 days of hire.

PPO Plan Options

Annual Deductibles

Individual Family
Annual Deductible Option 2E $1,000 $2,000
Option 3E $2,500* $5,000*

Out-of-Pocket Expense Limit (Medical and Prescription Drug)

Includes calendar year deductible and coinsurance.

PPO Providers Non PPO Providers
Individual Family Individual Family
Medical and Prescription Drug Out-of-Pocket Expense Limit (Includes calendar year deductible and coinsurance.) Option 2E $3,000 (Medical)
$3,600 (Rx)
$6,000 (Medical)
$7,200 (Rx)
$5,000 $10,000
Option 3E $5,000* (Medical)
$1,600 (Rx)
$10,000* (Medical)
$3,200 (Rx)
$7,500* $15,000*

You can lower your monthly contributions if you are willing to accept potential responsibility for larger out-of-pocket expense limits.


PPO Providers Non-PPO Providers
Coinsurance Percentages
(after satisfaction of the annual deductible)
All services:
Associate pays 10% Plan pays 90%
All services, except those noted below:
Associate pays 40% Plan pays 60%
Emergency services and services performed outside the United States: Associate pays 10% Plan pays 90%
Other Miscellaneous Services performed by Non-Solicited Providers: Associates pays 10% Plan pays 90%
Usual & Customary charges apply.
Coinsurance Percentages
(after satisfaction of the annual deductible) For Ancillary Providers Used in Conjunction with a PPO: Hospitalization, Outpatient Surgery, or Physician Office Visit
All services:
Associate pays 10%
Play pays 90%
Radiology, Pathology, and Anesthesiology: Associate pays 10%
Plan pays 90%
Usual & Customary charges apply.
Preventive Care Associate pays 0%
Plan pays 100%
Associate pays 40%Play pays 60%
40% Coinsurance not applied to Out-of-Pocket Expense Limits
Usual & Customary charges apply.
Well-Child Care Coverage provided for regularly scheduled checkups (including initial inpatient newborn checkup), immunizations, laboratory tests, and other associated screening or diagnostic services through age 17.

Sports or school physicals are ineligible.
Associate pays 0%Plan pays 100% Associate pays 40%Plan pays 60%

40% Coinsurance not applied to Out-of-Pocket Expense Limits

Usual & Customary charges apply.

*Note: It is important to note that Option 3E works a little differently than the other option. Option 3E features a Company-funded Health Reimbursement Arrangement (HRA). State Farm puts money in an account for you that will be applied automatically to covered expenses, such as deductibles and coinsurance. Employee contributions are not used to fund the HRA.

If you enroll in the Group Medical PPO Plan Option 3E, State Farm will contribute to your HRA up to a maximum of $1,000 for employee-only (single) coverage, depending on your hire date, and will contribute $1,000 annually thereafter if you continue to choose this plan option. If you have employee plus dependent coverage, State Farm will contribute up to a maximum of $2,000 to your HRA, depending on your hire date, and $2,000 annually thereafter, as long as you continue to be enrolled in this plan option.

The HRA automatically reimburses covered expenses as they are incurred. An added benefit to choosing this option each year is that the balances in your HRA will roll over from year to year to a maximum of $10,000 for employee-only coverage, and a maximum of $20,000 for employee plus dependent coverage. Expenses incurred in prior years can only be paid from HRA funds that were available in the year the services were incurred.

Expenses covered from the HRA are paid automatically through the Blue Cross Blue Shield claim payment system. There is no need to submit claims to Blue Cross Blue Shield for HRA reimbursement. As long as there is a balance remaining in the account, members do not need to pay for service applied to the deductible out of their own pocket.

Please note – when an employee changes from the HRA Option 3E to an HMO, Option 2E or waives coverage – any remaining HRA balance is forfeited.

Encouraging Healthy Living

The Group Medical PPO Plan also offers members access to tools and resources that promote healthy living. Live Well, Be Well is a State Farm program designed for State Farm employees to help guide individuals to live healthier lifestyles. Members and their dependents have access to a variety of online Healthy Living programs and tools such as health calculators (like calories, Body Mass Index (BMI), heart rate), grocery shopping lists, meal and fitness planners, health quizzes, and much more.

Prescription Drug Coverage

The prescription drug benefit is automatically provided when you enroll in the Group Medical PPO Plan for employees and is administered by CVS Caremark. You will receive a separate ID card for your prescription drug benefits. You may obtain prescriptions through several different delivery methods as referenced below:

  • Any retail network pharmacy for short-term medicines, up to a 30-day supply, or
  • CVS Caremark Mail Order Service Pharmacy or any retail CVS/pharmacy for long-term maintenance medications up to a 90-day supply.

Reimbursement levels vary depending on whether you choose generic, preferred brand name, or non-preferred brand name prescription drugs, and whether you buy them in a participating local retail pharmacy or through mail order.

Tier Description Retail (30-Day Supply) Mail Order or retail CVS/pharmacy (90-Day Supply)
1st Generic - least expensive. Be sure to check out the Value Generic Program for best savings. 20% coinsurance
$10 minimum
$25 maximum
20% coinsurance
$20 minimum
$50 maximum
2nd Preferred Brand Names - When a generic is not available, choosing a Preferred Brand can save you money. View www.caremark.com/statefarm . 30% coinsurance
$10 minimum
$75 maximum
30% coinsurance
$20 minimum
$150 maximum
3rd Non-Preferred Brand Names - Most expensive Brand drugs due to availability of alternate lower cost Preferred Brand drugs and/or generics. 50% coinsurance
$10 minimum
$100 maximum
50% coinsurance
$20 minimum
$200 maximum

The minimums and maximums apply to the coinsurance amounts. For example,

  • If a generic medication costs $8.00 for a 30-day supply, you pay only $8.00 since the total cost of the medication is less than $10.00.
  • If a preferred brand costs $70, you will pay $21 which is equal to 30% of $70.

Tips to save money with your prescription drug benefits:

  • Use your CVS Caremark Prescription Drug Card to maximize savings.
  • Ask for generics – they are FDA approved and contain the same active ingredients and dosage requirements as the brand name drug.
  • Value Generic Program offers 90-day supply for $9.99
  • If a generic is not available, share the CVS/Caremark Preferred Drug List with your doctor to see if a less-expensive brand-name drug will work for you.
  • Use CVS/Caremark's Mail Order Service or a retail CVS/pharmacy for maintenance medications (up to a 90-day supply).

Prescription Benefits Utilization Management Programs:

Prescription Benefits have Utilization Management programs in place to ensure the right drug is provided to the right patient at the right time. If you do need prescription medications, it is encouraged to be familiar with these programs to understand their requirements and benefits to you. The Pre-Authorizations, Restrictions and Limitations include but are not limited to:

  • Maintenance Choice Program – Obtain a 90 day supply for a maintenance drug (ongoing health conditions such as high blood pressure, high cholesterol) at any retail CVS/pharmacy for the same out-of-pocket as a 90 day Mail Order supply.
  • Maintenance Medications at Retail – A maintenance drug can be filled at a retail pharmacy three times during the calendar year (maximum 30-day supply each), however, with the fourth and subsequent refills, your 30 day supply will increase o the mail order coinsurance of a 90 day supply.
  • Pre Authorization of Select Brand Name Drugs* – Select high cost Brand Name Drugs require pre authorization before benefits will be allowed. If pre authorization is not obtained, full cost of the drug will be your responsibility unless a lower cost option is selected.
  • Pre Authorization and/or Quantity Limits for Controlled Substances* – Specific drugs regulated under Schedule II (CII) of the Controlled Substances Act are subject to certain limitations.
  • Lifestyle Quantity Limitations* – Drugs prescribed for the treatment of erectile dysfunction will be limited to 8 pills per 30-day supply, and 24 pills per 90-day supply.
  • Specialty Drug Guideline Management* – Specialty Drugs (high cost drugs used to treat complex medical conditions) are reviewed for eligibility to ensure safety and efficacy while preventing off-label utilization.
  • Generics First* – Select drug therapies will require the use of up to two Generic drugs before a Non-Preferred Drug will be considered eligible.
  • Specialty Preferred Drug Step Therapy* – Select drug therapies will require the use of a Preferred Specialty Drug before a Non-Preferred Specialty drug will be considered eligible.
  • Specialty Drugs Generics First Program* – Select Non-Preferred Specialty Brand drug therapies will now require the use of a Generic alternative before a Non-Preferred Specialty Brand drug will be considered eligible. (New for January 1, 2016)
  • Compound medications and Topical Pain Patches – High cost compound bulk powders, compound chemicals and topical pain patches are excluded. All otherwise eligible compounds and/or pain patches exceeding $300 will require Pre Authorization. (New for January 1, 2016)

Note for * – you can review these drug listings at www.caremark.com/statefarm.

It's important you understand that if you decide to waive or cancel medical coverage, you must wait until the next Annual Enrollment Period to enroll. Your coverage will be effective the following January 1. If you have a qualified Health Insurance Portability and Accountability Act (HIPAA) special enrollment event (e.g., loss of coverage, obtaining a new dependent due to marriage, a birth, an adoption, or placement for adoption), you may be eligible to enroll in medical coverage mid-year. You must notify the State Farm Benefits Center within 31 days of an event in order to be eligible for coverage.

State Farm encourages you to review your benefit options carefully and make informed decisions.


This brief overview of the State Farm Group Medical Preferred Provider Organization Plan is not intended to be a complete explanation of plan features. For more detailed information and state exceptions, please refer to the online Human Resources Policy Manual for U.S. employees.