To our policyholders: v ■

To our policyholders: v ■

\ . ■ \ v Trigon Blue Cross Blue Shield (formerly Blue Cross and Blue Shield of Virginia) has been proud to serve the citizens of Virginia for 60 years by providing cost-effective health insurance products and services.

In that spirit, we have entered into an agreement with the Virginia Commissioner of Insurance and have received approval from the State Corporation Commission to offer the coinsurance refund program described below.

Under the terms of this program, you may be eligible to receive a refund if you were a Trigon policyholder or a member of one of its HMO affiliates (Physicians Health Plan, Inc., HMO Virginia, Inc., HealthKeepers, Inc., and Peninsula Health Care, Inc.) who paid coinsurance on behalf of yourself or an eligible dependent for covered facility services during the period 1984 through 1993. The term policyholder means the named insured, subscriber, employee or member under a Trigon contract. For purposes of this program, the term covered facility means hospitals, skilled nursing facilities, home health agencies, psychiatric/substance or alcohol abuse centers and ambulatory surgery facilities, or other facilities that have been designated by Trigon as a participant in one or more of its provider networks.

If you have any questions as to whether a particular facility is covered, you may telephone us at 1-800-422-4662.

For a number of years we have been negotiating discounts with covered facilities for their services. Trigon earns these discounts based on the substantial patient volumes and financial and administrative advantages that a relationship with Trigon brings to the covered facilities.

The savings from these discounts have helped us to hold down premium increases, and in many cases, to lower them. This has been a significant benefit for all of our policyholders.

Until 1994, Trigon calculated coinsurance based on the amount of undiscounted covered facility charges. “Coinsurance” is that percentage of the covered facility bill for which you are responsible, minus any amounts paid toward your deductible or non-covered services. It applies to those inpatient and outpatient covered facility services covered by your policy. As you know, it usually is a small amount compared to the total bill, and the amount you pay normally does not go above a set limit.

The Virginia State Corporation Commission Bureau of Insurance has expressed concern that some of our marketing and informational materials were misleading and deceptive and that our policyholders may have misunderstood how their coinsurance payments were calculated.