HomeMy WebLinkAboutResolution - 4998 - Contracts-First Health_Alta Rx, WNLI Company, Et Al-Managed Health Benefits Prgm - 10_19_1995Resolution No. 4998
October 19, 1995
Item #15
RESOLUTION
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK:
THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to
execute for and on behalf of the City of Lubbock the Contracts and all related documents by and
between the City of Lubbock and First Health/Alta Rx, Washington National Life Insurance
Company, Advance ParadigM Mail Service, Inc., St. Mary of the Plains Hospital and University
Medical Center, Canada Life Assurance Company, Protective Life Insurance Company, and
UNUM Life Insurance Company of America to implement a managed health benefits program
for the City of Lubbock, which contracts are attached hereto, which shall be spread upon the
minutes of the Council and as spread upon the minutes of this Council shall constitute and be a
part of this Resolution as if fully copiyAt—ere-1n-i-n-Z1qail.
Passed by the City Council this _
ATTEST:
Betty M. Johnson, City Secretary
APPROVED AS TO CONTENT:
Mary An4yews, Managing Director
of Human Resources
APPROVED AS TO FORM:
DWald G. Vandiver, First
Assistant City Attorney
:dp\ccdocs\bette&t.res
October 10, 1995
10 CANADA LIFE
Now
OUR STRENGTH SECURES YOUR Furum
City of Lubbock, Texas (Legal name of policy holder) requests that
The Canada Life Assurance Company issue a plan of group insurance benefits specified as follows:
Group Insurance benefits(s) being requested and percentage of premium the employer pays:
d Basic Term Life % a AD&D 90
❑ Optional Term Life % ❑ Weekly Indemnity
a Spousal Optional Term Life % a Long Term Disability 100 %
❑ Dependent Term Life % ❑ Dental
The insurance will become effective on the Effective Date shown in this Request for Insurour
subject to the following:
1) Approval of the Request for Insurance in writing by Head Office of The Canada Life Assurance Co.
2) Adequate enrollment.
3) Payment in full of the first month's premium.
��� /
Effective Date -1201 a.m. local time on 19 95 .
Renewal Date -1201 a.m. local time on _ 19 97
1,011unx1- 31j-'�
A payment of $ has been made on account of the premium for the new policy.
It is agreed t when xact premi ermined the balance, if any, will be paid by us or any
overpayment will be�djt by da as the gse-rm ► be
- 7
•/:!wlO/��lrr MaYor
,.. •r•• Lam•Title: City SecretarV
Ira
Dated at Lubbock, Texas _ this 19th day of October 19-9_rl__
L'SAMM
APPROVED AS TO CONTENT: Mary Andrews, Managing Director
THE CANADA L[FE ASSliRA:' iPAVY _ - "-of'Resources
/�.
APPROVED AS TO FORM: �`�,_ 1d G. Vandiver, Assistant
TYPE OF ADMINISTRATION:
[ ] Canada Life
44 Self Administered
BILLING OPTIONS:
ADMINISTRATIVE DETAILS
Payment of Premiums will be:
[ ] monthly in advance
[ ] other
NN - regular billing not produced, renewal bill not produced.
ND -A - regular .billing not produced, detailed renewal bill in alpha order.
ND-N - regular billing not produced, detailed renewal bill in numeric order.
NL-A - regular billing not produced, list renewal bill in alpha order.
NL-N - regular billing not produced, list renewal bill in numeric order.
NS-A - regular billing not produced, summary renewal bill in alpha order.
NS-N - regular billing not produced, summary renewal bill in numeric order.
DD-A - detailed regular billing, detailed renewal bill in alpha order.
DD-N - detailed regular billing, detailed renewal bill in numeric order.
LD-A - list regular billing, detailed renewal bill in alpha order.
LD-N - list regular billing, detailed renewal bill in numeric order.
LL-A - list regular billing, list renewal bill in alpha order.
LL-N - list regular billing, list renewal bill in numeric order.
SD -A - summary regular billing, detailed renewal bill in alpha order.
SD-N - summary regular billing, detailed renewal bill in numeric order.
SL-A - summary regular billing, list renewal bill in alpha order.
SL-N - summary regular billing, list renewal bill in numeric order.
SS -A - summary regular billing, summary renewal bill in alpha order.
SS-N - summary regular billing, summary renewal bill in numeric order.
Is the Policyholder:
[ ] Corporation
[X] Municipality
[ ] Other: (Describe)
Nature of business:
Are any employees covered by this policy subject to a Collective Bargaining Agreement? [ ] Yes M No
The Canada Life Assurance Co. Page No. 2
ADNUMSTRATTVE DETAILS (Continued)
Participation and Contnbution Information:
Number Number
eligible Participating
Basic Life
Optional Life
Spousal Opt. Life
Dependent Life
AD&D
wi
LTD
Dental
Employee Contributions
If Yes, Indicate amount or %
[ ] No
[ ] Yes %
[ ] No
[ J Yes %
[ l No
[ J Yes %
[jNo
[jYes %
No
[]Yes %
[ ] No
[ ] Yes %
[ ] No
[ ] Yes %
Employee [ ] No [ ] Yes %
Dependent [ ] No [ ] Yes %
Policyholder Address: City of Lubbock
1625 13th St.
Lubbock, TX 79401
Contact person: Lou Lyn Moore Title: BENEFITS COORDINATOR
Phone Number. 806-767-2317 Your Employer Identification Number: 75-6000590
Fax Number. 806-763-1461 Your ERLSA plan number. . Plan Year.
Name, Address and Phone number of the Plan Administrator. MARY ANDREWS
P.O. BOX 2000
LUBBOCK, TX 79457 (806) 767-2315
Agent of service of Legal Process for the Policyholder.
The Canada Life Assurance Co. Page No. 3
ADNUN STRATIVE DETAILS (Continued)
Prior Coverage:
a) Is the insurance coverage applied for to replace any similar form of coverage now or previously in force with
another Insurer?
[ ] Yes if No
b) Is it intended that the insurance coverage applied for be in addition to or supplemented by or supplemental to any
other coverage now in force or to be in force with this or any other Insurer?
[ ] Yes 11 No
If yes, please provide details:
Affiliated Associated or Subsidiary Companies:
Are there any Affiliated or Subsidiary Companies being covered under this policy?
[ ] Yes ki No
If Yes, please list the Affiliated or Subsidiary companies names:
Reinstatement (All benefits except LTD):
Employees whose insurance is canceled due to termination of employment may become insured if they are
reemployed.
[ l within six months (I Other:
The Canada Life Assurance Co. Page No. 4
ADMINISTRATIVE DETAILS (Continued)
Issue Mailing Instructions:
Group Office Client (CC i3roker
Initial billing: X
Policy: X
Booklet Certificates: X
Plan Outline: X
Administrative Mailing Instructions:
Same A� ddress al
Claims:
Billing: 7—
Correspondence: —�
Special
Duplicate Statements produced: [ J Yes jj No
2 sets at renewal only: [ J Yes No
Extra copies sent to:
Register cards to employer: [ J one [ J two JA None
Name of the Initial Underwriter:
Group Representatives Signature: Dated
V �Z�
The Canada Life Assurance Co. Page No. 5
LONG TERM DISABILITY SALES SPECIFICATIONS
Eligible Employees:
)M All frill time employees working: XX 30 hours [ j hours/week.
[ ] other:
Waiting Period:
Employees employed on the effective date:
[ ] No waiting period
[ ] Same as for those employed after the effective date
Employees employed after the effective date:
[ ] Completion of days/ months of continuous employment
[ ] First of the month following days/months of continuous employment.
(] other:
Changes in Amount of Insurance:
A change in class or rate of earnings shall take place:
[ ] on the date of change
[ ] Ist of the policy month following date of change
[ ] other: Annual Reconciliation
Termination of Insurance:
Termination of insurance will take effect on P(] date of termination or [ ] at the end of the policy month.
Salary Related Benefits - Definition of earnings:
[ ] Gross excluding bonus, commissions, overtime, Dividends and profit sharing.
If an Income is based on commissions:
V] (i) If employed two calendar years or more, the average gross annual earnings during the preceding
calendar years as set out on his W2 Taxation form.
If employed less than two calendar years, the amount estimated by us based on reasonable
expectation of earned income.
or
[ 1 (ii) If employed two calendar years or more, the average gross annual earnings during the preceding
three calendar years as set out on his W2 Taxation form.
[) (iii) Other:
The Canada Life Assurance Co. Page No. 15
LONG TERM DISABILITY (Continued)
The amount of monthly benefit for each employee shall be 60 % of each employee's monthly rate of earnings
to a maximum of $5 , 010 per month rounded to the next higher $1.00.
Elimination Period:
[] 90 days jj 180 days [ ] other days
Maximum Benefit Period:
41 Age Graded ADEA i.e. (Standard)
Age at Date
Disability Commences
Under 60
60
61
62
63
64
65
66
67
68
69 or over
[ 1 ADEA 5 year extension (6515/70 Benefit Duration):
Age at Date
Disability Commences
Less than 60
60 - 64
65-69
70 and older
[] To age 70:
Employee Buy -Down to 90 days Elimination
Period
Maximum Benefit Period
to age 65 (a minimum
of 60 monthly benefit
payments will be made).
60 benefit payments
48 benefit payments
42 benefit payments
36 benefit payments
30 benefit payments
24 benefit payments
21 benefit payments
18 benefit payments
15 benefit payments
12 benefit payments
Maximum Benefit Period
To age 65, but not less than 5 years
5 years
To age 70, but not less than 1 year
I year
This option provides a benefit to age 70 regardless of age at disability; if disabled at age 70 or greater, the claimant
will be entitled to a benefit duration of up to 12 months.
[ 15 year:
This option provides that benefits will be paid for 5 years or to age 70, which ever comes first. If disability occurs
at age 69 or older, benefits will be payable for up to 12 months.
[ ] Other
The Canada Life Assurance Co. Page No. 16
LONG TERM DISABILITY (Continued)
Survivor Benefit:
3 months (standard)
[ ] other: months
Offsets:
[ ] Standard - Direct offset with [ ] Primary or *1 Full Family
[ ] Back door -. Direct on primary and 70 % on other benefits
[ ] All sources - 70% on all benefits
FICA TAXES:
Are employees subject to FICA tax? [ ] Yes [ ] No If No, explain:
Own Occ:
] 24 months [ ] Partial [ Residual
[ ] 36 months [ ] Partial [ ] Residual
[ ] Own Occ to 65 [ ] Partial [ ] Residual
[ ] other:
Minimum Benefit:
[ ] $50 (standard) [ ] $100
[ ] $50 or 10% [ ] $100 or 10%
[ ] other
Indexing of Pre -Disability Earnings:
[ ] lesser of 3 % or CPI (Standard)
)M Option 3_% (Tied to CPI)
Increases to take effect on [ ] January 1st [ ] Anniversary date
Mental & Nervous Limitation: Drug & Alcohol Limitation:
�( 24 month limitation (standard)
[ ] As any other illness
Cola Type:
[ ] Not applicable
[ ] Indexing after 5 years %
[ l Indexing after 1 year %
[ ] Indexing for 5 years %
Increases to take effect on [ ] January 1st [ ] Anniversary date
[ ] 24 month limitation (standard)
)W As any other illness
Prc e s Condition Exclusion: -
IX 3/12 (standard)
[ ] 5/30
[ ] 6/12/24
[ ] waived
[ ] 5 day actively at work
The Canada Life Assurance Co. Page No. 17
LONG TERM DISABILITY (Continued)
Options:
N/A [ ] Rehire Provision: [ ] 6 months [ ] 12 months
[ ] Retirement Contribution N/A % Maximum
[ ] Medical Premium Supplement Coverage option S N/A
The Canada Life Assurance Co. Page No. 18
CITY OF LUBBOCK
Check No. - 51132
Check Date - 10/30/95
Stub 1 of 1
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For: 27.15
10 27
BINDER LONG TERM DISABILITY
A LIFE
10,000.00
10,000.00
CITY OF LUBBOCK
LUBBOCK, TX 79401
AMMzana STM BM,
LMMOac, TEMS 79409 0051132
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P717
27416 1 10 30 95 $****10,000.00
TEN THOUSAND AND 00/100
TO 'M
ORMEa of CANADA LIFE
13355 NOEL RD, STE 645
ONE GALLERIA TOWER/LB 70
DALLAS, TX 75240 SS
11200511320 1:1 113 2 2 58 31:008 7 79 3n•
INSURANCE PAKTNERS SOMWEST. INC.
SAW
SASS
Mr,C ADAMS
August 17, 1995
Ms. Lou Moore
City of Lubbock
P.O. Box 2000
Lubbock, TX 79457
RE: Canada Life Long Term Disability Policy
Dear Lou:
Enclosed is a draft copy of the contract which shows City of Lubbock. This contract is the
same as the first contract I sent to you, but will allow you to integrate your language on a
personalized copy. Secondly, we have enclosed a sample communication piece that can be
transferred to City letterhead to discuss implementation of the long term disability contract and
the opportunity to buy -down the elimination period from 180 days to 90 days. Lastly,
enclosed is an application to be signed where indicated. Please remit a bi &r check in the
amount of $10,000 and make it payablcm �2fta-n binder check om be issued on or
about the c t of thecoverage. Wp 'cations as soon as possible.
lotle, f 1>5 ro►-4:ae4-
Lou, I appreciate your reviewing this material. Should you have any questiens or need
assistance on any of the above, please call me. I look forward to visiting wirh you soon.
Sincerely,
Randall R. Martell, iEA
Vice President of Corporate
Benefits and Consulting
kaLeav)y V - 715240
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No. H. DRAFT
We, The Canada Life Assurance Company, agree to pay the benefits that become payable under this policy
to the person or persons entitled.
This agreement is subject to the provisions on the attached pages which, together with this page, make up
the policy.
This policy will take effect on August 1st, 1995.
Policy Holder - CITY OF LUBBOCK
Issued at our Head Office at Atlanta, Georgia, as of August 1st, 1995.
NOT VALID - DRAFT ONLY
Assistant Registrar
GROUP LONG TERM DISABILITY INCOME POLICY
Not eligible for dividends
WARNING
This is a legal contract betwedn the Policy Holder
and The Canada Life Assurance Company
READ YOUR POLICY CAREFULLY
THE CANADA LIFE ASSURANCE COMPANY
U.S. HEAD OFFICE: 6201 POWERS FERRY RD., NW, ATLANTA, GA 30339
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The Canada Life Assurance Company Page 1 Dated August 1st, 1995
TABLE OF CONTENTS
Name of Provision
Page Number
IMPORTANT NOTICE .............................................. 4
AVISOIMPORTANTE.............................................. 4
DEFINITIONS................................................... 5
WHO MAY BECOME INSURED ....................................... 10
HOW AND WHEN INSURANCE TAKES EFFECT ............................ 11
AMOUNT OF INSURANCE ........................................... 12
DISABILITY INCOME BENEFIT ....................................... 14
WHEN DISABILITY INCOME BENEFITS CEASE ............................ 15
WAIVER OF PREMIUM ............................................. 16
RETURN TO WORK ............................................... 17
SURVIVOR BENEFIT .............................................. 18
REDUCTIONS ................................................... 19
FREEZE ON REDUCTIONS .......................................... 21
RIGHT OF RECOVERY ............................................. 22
LIMITATIONS................................................... 23
LIIVIITATION ON BENEFITS FOR MENTAL DISORDER ....................... 24
LIMITATION ON BENEFITS FOR ALCOHOLISM AND/OR DRUG ADDICTION ....... 25
EXCLUSIONS .................................................... 26
PRE-EXISTING CONDITION EXCLUSION ................................ 27
CONTINUITY OF COVERAGE UPON CHANGE OF INSURERS .................. 28
WHEN A PERSON'S INSURANCE TERMINATES ............................ 30
PREMIUMS..................................................... 31
The Canada Life Assurance Company Page 2 Dated August 1st, 1995.
TABLE OF CONTENTS
Name of Provision Page Number
PERIOD OF GRACE ............................................... 33
CURRENCY..................................................... 33
PLACE OF PAYMENT .............................................. 33
NOT ELIGIBLE FOR DIVIDENDS ...................................... 33
WORKERS' COMPENSATION NOT AFFECTED ............................. 33
CLERICAL ERROR ................................................ 33
BOOKLET -CERTIFICATE ............................................ 34
STANDARD PROVISIONS ......................................... 35
AMENDMENTS TO THE POLICY ...................................... 37
TERMINATION OF POLICY .......................................... 38
SELF -ADMINISTRATION ............................................ 39
GD600-201
The Canada Ufe Assurance Company Page 3 Dated August 1st, 1995.
IMPORTANT NOTICE
To obtain information or make a complaint:
1. You may call The Canada Life
Assurance Company's toll -free telephone
number for information or to make a
complaint at
1-800-554-4026
2. You may contact the Texas Department
of Insurance to obtain information on
companies, coverages, rights or
complaints at:
1-800-252-3439
3. You may write the Texas Department of
Insurance
P.O. Box 149104
Austin, TX 78714-9104
FAX # (512) 475-1771
4. PREMIUM OR CLAIM DISPUTES:
Should you have a dispute concerning
your premium or about a claim you
should contact the company The Canada
Life Assurance Company first. If the
dispute is not resolved, you may contact
the Texas Department of Insurance.
5. ATTACH THIS NOTICE TO YOUR
AVISO IMPORTANTE
Para obtener informacion o para someter una
queja:
1. Usted puede llamar al numero de
telefono gratis de Canada Life
Assurance Company's para information
o para someter una queja al
1-800-554-4026
2. Puede comunicarse con el Departamento
de Seguros de Texas para obtener
informacion acerca de companies,
coberturas, derechos o quejas al
1-800-252-3439
3. Puede escribir al Departamento de
Seguros de Texas
P.O. Box 149104
Austin, TX 78714-9104
FAX # (512) 475-1771
4. DISPUTAS SOBRE PRIMAS O
RECLAMOS: Si tiene una disputa
concerniente a su prima o a un
reclamo, debe comunicarse con la
compania. The Canada Life Assurance
Company primero. Si no se resuelve la
disputa puede entonces comunicarse con
el departamento (TDI).
POLICY: 5. UNA ESTE AVISO A SU POLIZA:
This notice is for information only and Este aviso es solo para proposito de
does not become a part or condition of informacion y no se convierte en parte o
the attached document. condicion del documento adjunto.
The Canada I.1fe Assurance Company Page 4 Dated August 1st, 1995;
DEFINITIONS
All male terms will include the female term, unless stated otherwise.
"You" and "your" mean the Policy Holder.
"We", "our" and "us" mean The Canada Life Assurance Company.
"Person" means an employee.
"Actively at work" means that a person is either:
1. actually performing his normal duties, if it is a scheduled work day; or
2. capable of performing his normal duties, if he is not at work due to a non-scheduled
work day, holiday or vacation day;
at his normal place of employment or at some other location where your business requires him to be.
"Effective Date" means August 1st, 1995.
"Policy month" means a period of one month commencing on the Effective Date or on the first day of
each month thereafter.
"Policy year" means a period of one year commencing on the Effective Date or on any anniversary
thereof.
"Employee" means anyone who is employed by you.
GD600-203
"Elimination period" is the period that the person must have actually been disabled during a
continuous period of disability before he may receive payments under this policy. It will not include any
period that is described in the Limitations provision. The elimination period under this policy is 180
days.
The Canada Life Assurance Company Page 5 Dated August 1st, 1995.
"Continuous period of disability" includes all periods of disability that meet all of the following
conditions.
1. They commence while the person is insured under this policy.
2. They are due to the same cause or causes.
3. The elimination period must be satisfied during a period of 198 consecutive days.
4. After the elimination period has been satisfied, they are separated by a period of six
consecutive months or less during which the person was not disabled.
However, if we cease to make payments to a person because he is no longer disabled and he becomes
disabled again due to the same cause or causes within six months and after this, policy has terminated,
such disability will be considered by us to be part of the same continuous period of disability and we will
pay benefits to him unless both of the following have occurred:
1. Replacement coverage has been obtained with another insurer.
2. There is legislation or regulation which stipulates that the new insurer should assume
liability for such disability.
"Retirement program" means a program which provides retirement benefits to employees and
which is not funded wholly by employee contributions. The term will not include a profit-sharing plan,
a thrift plan, an individual retirement account (IRA), a tax sheltered annuity (TSA), a stock ownership
plan or a non -qualified plan of deferred compensation.
GD600-204
"Mental disorder" means any psychiatric or emotional illness or disease. It includes each of the
following.
1. Neurotic disorders such as but not limited to anxiety, dissociative disorders, phobias,
depressions and obsessive compulsive disorders.
2. Psychotic disorders such as but not limited to schizophrenia, paranoid psychosis and
affective disorders.
3. Personality disorders such as but not limited to sociopathic personality.
"Pregnancy" includes childbirth or miscarriage and any disease or infirmity resulting from or
aggravated by the pregnancy. It also includes therapeutic abortions or complications arising from any
abortion.
?he Canada Life Assurance Company Page 6 Dated August 1st, 1995.
"Physician" means an individual who is operating within the scope of his license and is either:
1. licensed to practice medicine and prescribe and administer drugs or to perform surgery;
or
2. legally qualified as a medical practitioner and required to be recognized, under this policy
for insurance purposes, according to the insurance statutes or the insurance regulations
of the governing jurisdiction.
It will not include an employee or his spouse, daughter, son, father, mother, sister or brother.
"Hospital" or "medical facility" means a facility licensed to provide full-time medical care and
treatment under the direction of a full-time staff of licensed physicians.
GD600-205
"Annual earnings" as used to determine the benefits of a person under this policy will be
calculated as his annual gross base earnings as an employee. They exclude any income he receives such
as but not limited to commissions, bonuses, dividends, overtime and profit sharing.
UD8-2
"Monthly earnings" will be the annual earnings of the person divided by 12.
UD8-3
"Indexed pre -disability monthly earnings" means the person's monthly earnings immediately prior
to the date he became disabled, increased by a cost of living adjustment. The adjustment will be made
starting on the 13th benefit payment and on each anniversary of that date. The amount of each
adjustment will be the lesser of 3 % or the percentage increase in the Consumer Price Index.
UDX-2
The Canada Life Assurance Company Page 7 Dated August 1st, 1995.
Standard Definition of Disability - excluding aircraft crew
"Disabled" and "disability" mean that, due to injury, disease, illness, pregnancy or mental
disorder, the person is either totally disabled or partially disabled. The loss of a professional or
occupational license does not, in itself, constitute disability.
"Totally disabled" means that the person is unable to work and fulfills either of the two conditions
below:
Condition 1 - During the elimination period and for the next 24 months after the elimination
period in a continuous period of disability, the person is unable to perform the substantial and
material duties of his own occupation, or
Condition 2 - After the elimination period plus the next 24 months in a continuous period of
disability, the person is unable to perform the substantial and material duties of any occupation
for which he is qualified in view of his age, education, experience, and physical and mental
capacity.
"Partially disabled" means that the person fulfills all of the three conditions below:
Condition 1 - The person was totally disabled for the entire elimination period, and
Condition 2 - The person is unable to perform with reasonable continuity the substantial and
material duties of.
a. his own occupation, for the first 24 months after the elimination period in a continuous
period of disability, or
b. any occupation for which he is qualified in view of his age, education, experience, and
physical and mental capacity, after the elimination period plus the next 24 months in a
continuous period disability, and
Condition 3 - The person becomes employed and is unable to earn more than 80% of his indexed
pre -disability monthly earnings.
UD9-5
The Canada Life Assurance Company Page 8 Dated August 1st, 1995.
Definition of Disability - aircraft crew only
For any person employed as a pilot, co-pilot or crew member of any aircraft, the following
definitions of disabled, disability, totally disabled, and partially disabled apply:
"Disabled" and "disability" mean that, due to injury, disease, illness, pregnancy or mental
disorder, the person is either totally disabled or partially disabled. The loss of a pilot's license or any
other professional or occupational license does not, in itself, constitute disability.
"Totally disabled" means that the person is unable to work and is unable to perform the
substantial and material duties of any occupation for which he is qualified in view of his age, education,
experience, and physical and mental capacity.
"Partially disabled" means that the person fulfills all of the three conditions below:
Condition 1 - The person was totally disabled for the entire elimination period, and
Condition 2 - The person is unable to perform with reasonable continuity the substantial and
material duties of any occupation for which he is qualified in view of his age, education,
experience, and mental and physical capacity, and
Condition 3 - The person becomes employed and is unable to earn more than 80% of his indexed
pre -disability monthly earnings.
UD9-10
The Canada Life Assurance Company Page 9 Dated August 1st, 1995.
WHO MAY BECOME INSURED
The class or classes of persons who may be insured under this policy are all of the full-time
employees who work at least XX hours per week on a regular basis as employees provided they are legal
residents of the U.S. or Canada.
Each person who is a member of such a class on the Effective Date or who becomes a member
of such a class after the Effective Date may become insured on the earliest date on which he is a member
of such a class.
GD600-207
the Canada life Assurance Company Page 10 Dated August 1st, 1995.
HOW AND WHEN INSURANCE TAKES EFFECT
A person will automatically become insured under this policy on the earliest date on which he
may become insured provided that he is then actively at work. If he is not actively at work on the date
on which he would otherwise become insured he will become insured only when he is again actively at
work.
An application to become insured must be completed on a form approved for that purpose by us.
It must be promptly deposited with us at our Head Office.
The Canada Life Assurance Company Page 11 Dated August 1st, 1995.
AMOUNT OF INSURANCE
The amount of insurance with respect to each person who is insured will be based on the Schedule
shown below.
You must deposit written notice with us at our Head Office of any change in the class or earnings
of a person which would affect the amount of his insurance.
A decrease in the amount of his insurance will take effect on the date stated in the notice.
An increase in the amount of his insurance will take effect on the date stated in the notice
provided that he is then actively at work. If he is not actively at work on the date on which the amount
of his insurance would otherwise increase, the increase will take effect only when he is again actively at
work.
When we are calculating the amount of a benefit based on earnings that has become payable with
respect to a person under this policy, we will use whichever of the following amounts was the smallest
at the time the continuous period of disability began.
1. The person's actual earnings as defined in the Definitions provision.
2. The level of earnings on which the premium for the person's benefit was being paid.
No change will be made in the amount of insurance of a person during any one continuous period
of disability.
The amount of insurance shown in this provision will be subject to reductions as outlined in the
Reductions provision.
GD600-210
Me Canada Life Assurance Company Page 12 Dated August 1st, 1995.
SCHEDULE
CLASS MONTHLY BENEFIT
1. All eligible employees XX% of monthly earnings (rounded to
the next higher $1.00 of benefit) to a
maximum benefit of $X,XXX.
GD600-211
The Canada Life Assurance Company Page 13 Dated August 1st, 1995.
DISABELITY INCOME BENEFIT
We will pay to a person who begins a continuous period of disability, the amount of insurance
which applies to him under this policy at the date the period began. Our payment will be subject to all
of the following conditions.
1. He is insured under this policy when the continuous period of disability begins.
2. Payments will be made for that part of a continuous period of disability that commences
on the later of the following dates.
a. The date on which he has completed the elimination period..
b. The date on which initial proof that the person is disabled is given to us at our
Head Office. The proof must be given to us within 90 days after he has
completed the elimination period. The proof must be satisfactory to us.
3. The payments will be made to him at the end of each month.
4. The amount of insurance which applies to him under this policy will be subject to
reductions. These are outlined in the Reductions provision.
5. If the period during which a person is entitled to receive benefits under this policy is not
a complete number of months, we will make a partial payment for that period that is not
a complete month. The partial payment will be calculated as one -thirtieth of his monthly
benefit for each day of the period that is not a complete month.
The monthly payment with respect to a person under this policy will not be less than $0, except
as described in the Return to Work provision.
UB27-1
GD600-333
The Canada Life Assurance Company Page 14 Dated August 1st, 1995.
WREN DISABILITY INCOME BENEFITS CEASE
The payments to a person will continue during the continuous period of disability until the earliest
time shown below.
1. The date on which he ceases to be disabled as defined in this policy. The person will
cease to be insured under this policy at that time if he does not then return to active work
for you.
2. The date of his death.
3. The end of the maximum benefit payment period that is shown in the following Table.
TABLE
Age at Date
isabilitv Commences Maximum Benefit Period
Under 60
to age 65 (a minimum
of 60 monthly benefit
payments will be made).
60
60 benefit payments
61
48 benefit payments
62
42 benefit payments
63
36 benefit payments
64
30 benefit payments
65
24 benefit payments
66
21 benefit payments
67
18 benefit payments
68
15 benefit payments
69 or over
12 benefit payments
GD600-213
The Canada Life Assurance Company Page 15 Dated August 1st, 1995.
WAIVER OF PREMIUM
We will waive the payment of each premium falling due under this policy with respect to a person
while he is actually disabled during a continuous period of disability, subject to both of the following
conditions:
1. He has completed the elimination period.
2. His claim has been admitted by us.
GD600-216
The Camada Life Assurance Company Page 16 Dated August 1st, 1995.
RETURN TO WORK
If a disabled person returns to work, we will pay benefits under this policy provided he remains
disabled under the terms of this policy and has satisfied the elimination period.
The amount of the benefit otherwise payable under this policy will be reduced as described in the
Reductions provision of this policy. Income from employment will be treated as follows for the purposes
of the Reductions provision:
1. During the first 12 months of a return to work, income he is receiving from any
employment will not be included as a source of income under the Reductions provision.
2. During the next 12 months, 25 % of the gross monthly income he is receiving from any
employment will be included as a source of income under the Reductions provision.
3. For any additional period, 50% of the gross monthly income he is receiving from any
employment will be included as a source of income under the Reductions provision.
However, if at any time, the total of:
1. the monthly benefit he is receiving from this policy,
2. the sources described in the Reductions provision of this policy, other than income from
employment, and
3. any earnings from employment,
exceeds 100% of his indexed pre -disability monthly earnings, then the benefit under this policy will be
further reduced. We will reduce his monthly benefit so that his total monthly income from all such
sources does not exceed 100% of his indexed pre -disability monthly earnings.
We will stop making benefit payments to him on the earlier of the following dates:
The date on which he would otherwise cease to be disabled as defined in this policy.
2. The date on which he would otherwise cease to receive benefits under this policy.
GD600-329
Me Canada Life Assurance Company Page 17 Dated August 1st, 1995.
SURVIVOR BENEFIT
Definition
As used in this provision:
"eligible survivor" means:
The spouse of a person, if living at the date of his death.
2. If the spouse has died prior to the date of death of the person, the children of the person
provided they are under age 25.
Benefit
If a person who is disabled in accordance with the terms of this policy dies, we will make one
lump sum payment to his eligible survivor. The payment will be made provided that both of the
following conditions have been met:
1. The person had completed a continuous period of disability of 180 days or the elimination
period, whichever is greater.
2. The person had been receiving or was entitled to receive payments under this policy
immediately prior to his death.
The payment to be made to the eligible survivor will be 3 times the full monthly benefit the
person received prior to his death or would have been entitled to receive if his death had not occurred.
This will not include any reduction made to the monthly benefit in accordance with the other terms of
policy.
If the payment becomes due to the children of a person, we will make the payment to the children
or to an individual legally entitled to receive payment on behalf of the children.
;�1�:�ac3di7
Tire Canada Life Assurance Company Page 18 Dated August 1st, 1995.
REDUCTIONS
Benefits Due to Disability From Other Sources
If a person is entitled to receive payments under this policy, the amount of the payments will
automatically be reduced by the amount of any income the person earns or is entitled to apply for and
receive with respect to his disability under any one or more of:
Any retirement program that is funded in whole or in part by you.
2. Your life insurance plan.
3. The Social Security Act, the Canada Pension Plan, the Quebec Pension Plan or any
similar plan or act. This includes dependents benefits by reason of such disability.
4. The Railroad Retirement Act. This includes dependents benefits by reason of such
disability.
5. Any Workers' Compensation Law.
6. Any No -Fault Motor Vehicle Coverage. This will not apply if either:
a. State law or regulation does not allow any reduction of group disability benefits
by benefits received under No -Fault Motor Vehicle Coverage.
b. The No -Fault Motor Vehicle Coverage, according to its rules or according to an
election of a person who is insured, determines its benefits after the benefits paid
or due under this policy have been paid.
7. Any employee benefit, union or labor-management trustee plans that are funded in whole
or in part by you.
8. Any program or coverage required or provided by law or any government agency.
9. Income from employment, as described in the Return to Work provision of this policy.
Benefits Due to Retirement
If a person is receiving payments under this policy, such payments will be further reduced by
either one or both of-
1. Any income the person is entitled to apply for and receive with respect to his retirement
under the Social Security Act, the Railroad Retirement Act, the Canada Pension Plan or
the Quebec Pension Plan.
2. Any income the person receives with respect to his retirement under any retirement
program that is funded in whole or in part by you.
GD600-309
The Canada Life Assurance Company Page 19 Dated August 1st, 1995.
n iti ns
If a person receives a lump sum settlement for any of the benefits shown above, our payments
under this policy will be reduced by the amount that he would normally receive if the payments were
being made on a monthly basis.
If, at the time of calculating the amount of any payments to be made under this policy, the benefit
which a person is entitled to apply for and receive under any other source described in this provision has
not been awarded nor denied, we will estimate the amount of such benefit. The estimate will be used
to reduce the amount of the payments under this policy until such time as the benefit under such source
has been awarded or denied. However, such estimate will not be used if, within six months of becoming
disabled, the person meets both the following conditions.
1. The person has applied for the benefit under the other source; and
2. The person completes and signs our Reimbursement Agreement. This agreement states
that the person promises to repay to us any overpayment caused by an award of the
benefit under the other source.
If we have reduced payments under this policy by an estimate of the amount of the benefit under
another source, we will adjust the amount of the payments under this policy when we receive written
notice that the amount of the benefit received under such source differs from the estimate or that the
benefit has been denied.
If the amount of the benefit received under another source is less than was estimated or the
benefit has been denied, we will make a lump sum refund of the amount by which we have underpaid
the payments the person is entitled to under this policy. If the amount of the benefit received under
another source is more than was estimated the person must make repayment to us of the amount of the
overpayment.
GD600-310
The Canada Life Assurance Company Page 20 Dated August 1st, 1995.
FREEZE ON REDUCTIONS
We will not reduce the amount of payments under this policy due to cost of living increases in
the payments a person receives from any of the sources described in the Reductions provision. This will
not apply to any increase in earnings from any employment.
GD600-226
Tile Canada Life Assurance Company Page 21 Dated August 1st, 1995.
RIGHT OF RECOVERY
A person will be required to reimburse us for any benefits we pay him if both of the following
conditions are met.
1. Benefits are paid or payable under this policy with respect to him.
2. He has a right to and does recover damages from any person, organization, or legal
entity that is or may be liable for any injury, accident, illness or other event giving rise
directly, or indirectly, to the disability for which benefits are payable.
The term damages will include any lump sum or periodic payments with respect to past, present
or future loss of income.
A person will reimburse us in the amount of any benefits we have paid out of the damages
recovered, which damages, when added to the benefits paid under this policy, are in excess of 100% of
his lost income.
If a person receives a lump sum payment or periodic payments under judgment or settlement for
damages we will stop making payments under this policy.
Payments will only resume when the payments which would otherwise be payable under this
policy equal the amount we are entitled to be reimbursed.
If a claim for damages is settled, a person will be required to reimburse us the amount that
reasonably reflects the benefits that would otherwise be payable by us; notwithstanding the actual terms
of the settlement.
A person must:
1. Notify us of any action started against a third party.
2. Notify us of any judgment or settlement which results from such action.
3. Provide us with all documents pertaining to such action that we may reasonably request
with respect to either:
a. The issues of liability.
b. The calculation or allocation of damages.
A person's lawyer may represent our rights of recovery. However, we reserve the right to:
l . Appoint another lawyer to act on our behalf.
2. Commence an action to pursue our rights of recovery directly against a third party. The
person agrees to fully co-operate with us in pursuing our claim against the third party.
GD600-332
The Canada Life Assurance Company Page 22 Dated August 1st, 1995.
LIMITATIONS
No amount of insurance will be payable under this policy with respect to the disability of a person
during any of the following periods.
1. Any period while the person is not under the continuing care of a physician.
2. With respect to mental disorder, any period while the person is not under the continuing
care of a specialist in psychiatric care.
3. With respect to alcoholism and/or drug addiction, any period while the person is not
being actively supervised by and receiving continuing treatment from a rehabilitation
center or a designated institution approved for such treatment by an appropriate body in
the governing jurisdiction or, if none, by us.
4. Any period in which the person fails to submit to any medical examination requested by
US.
5. Any period while the person is confined in a penal or correctional institution as a result
of a conviction for a criminal or other public offense.
GD600-340
The Canada Life Assurance Company Page 23 Dated August 1st, 1995.
LBUTATION ON BENEFITS FOR MENTAL DISORDER
Benefits for disability due to mental disorder will not exceed 24 months of monthly benefit
payments unless the person is disabled as defined in this policy and meets one of the following situations.
1. The person is confined in a hospital or medical facility at the end of the 24 month period.
The monthly benefit will be paid during the confinement.
If the person is still disabled when he is discharged, the monthly benefit will be paid for
a recovery period of up to 90 days.
If the person becomes reconfined during the recovery period for at least 14 days in a
row, benefits will be paid for the confinement and another recovery period of up to 90
more days.
2. The person continues to be disabled and becomes confined in a hospital or medical
facility:
a. after the 24 month period; and
b. for at least 14 days in a row.
The monthly benefit will be payable during the confinement.
GD600-335
The Canada Life Assurance Company Page 24 Dated August 1st, 1995.
LIMITATION ON BENEFITS FOR ALCOHOLISM AND/OR DRUG ADDICTION
Benefits for disability due to alcoholism and/or drug addiction will not exceed 24 months of
monthly benefit payments unless the person is disabled as defined in this policy and meets one of the
following situations.
The person is confined in a hospital or medical facility at the end of the 24 month period.
The monthly benefit will be paid during the confinement.
If the person is still disabled when he is discharged, the monthly benefit will be paid for
a recovery period of up to 90 days.
If the person becomes reconfined during the recovery period for at least 14 days in a
row, benefits will be paid for the confinement and another recovery period of up to 90
more days.
2. The person continues to be disabled and becomes confined in a hospital or medical
facility:
a. after the 24 month period; and
b. for at least 14 days in a row.
The monthly benefit will be payable during the confinement.
GD600-308
The Canada Life Assurance Company Page 25 Dated August 1st, 1995.
EXCLUSIONS
No amount of insurance will be payable under this policy for any disability that is caused by,
contributed to by, or resulting from any one or more of:
1. Intentionally self-inflicted injury.
2. War, declared or undeclared, or any act of war.
3. Active participation in any riot or violent disorder.
4. Committing or attempting to commit a felony.
GD600-229
Me Canada Life Assurance Company Page 26 Dated August 1st, 1995.
PRE-EXISTING CONDITION EXCLUSION
No amount of insurance will be payable under this policy for any disability which is caused by,
contributed to by, or resulting from a pre-existing condition. A pre-existing condition is any injury,
disease, illness, pregnancy or mental disorder for which a person did any of the following within 90 days
prior to the date on which he became insured under this policy.
1. He visited or consulted a physician, hospital or medical facility.
2. He took tests or received treatment. This includes (but is not limited to) taking pills,
injections or other medication to treat any condition.
This exclusion will not apply to a continuous period of disability starting after the person has been
insured under this policy for at least one year.
GD600-336
The Canada Life Assurance Company Page 27 Dated August 1st, 1995.
CONTINUITY OF COVERAGE UPON CHANGE OF INSURERS
In order to prevent loss of coverage for a person when this policy replaces a group disability
policy you had in force with another insurer immediately prior to the Effective Date, we will provide the
following coverage.
A person will automatically become insured under this policy on the Effective Date, subject to
all of the following conditions:
1. He was insured under such prior insurer's group disability policy immediately prior to
the Effective Date.
2. He is not actively at work on the Effective Date.
3. He is a member of a class or classes of persons who may be insured under this policy.
4. Premiums are paid with respect to him.
If such a person becomes disabled the benefits payable will be the lesser of the following:
1. The benefits which would have been paid under the prior insurer's policy had coverage
remained in force.
2. The benefits payable under this policy.
This will be reduced by any benefits for which the prior insurer is liable.
Benefits may be payable to a person who becomes disabled due to a pre-existing condition,
subject to all of the following conditions:
1. He was insured under such prior insurer's group disability policy immediately prior to
the Effective Date.
2. He was actively at work on the Effective Date.
3. He was insured under this policy on the Effective Date.
GD600-231
The Canada Life Assurance Company Page 28 Dated August 1st, 1995.
Such benefits will be determined as follows:
1. We will apply the pre-existing condition exclusion under this policy. If the person
satisfies our pre-existing condition exclusion, he will be paid the benefits payable under
our policy without regard to the prior policy.
2. If the person cannot satisfy this policy's pre-existing condition exclusion, the prior
policy's pre-existing condition exclusion will be applied.
a. If the person satisfies the prior policy's pre-existing condition exclusion, he will
be paid the lesser of the following:
1) The benefits which would have been payable under the prior policy.
2) The benefits payable under this policy.
The continuous time the person was insured under both policies will be taken into
consideration.
b. If the person cannot satisfy the pre-existing condition exclusion of either policy,
no benefits will be paid.
You must furnish us with a copy of any such prior insurer's policy.
All of the other terms and conditions of this policy will apply to a person covered under this
provision.
GD600-232
The Canada Life Assurance Company Page 29 Dated August 1st, 1995.
WHEN A PERSON'S INSURANCE TERMINATES
All of a person's insurance under this policy will terminate at the earliest time shown below:
1. When the person's employment terminates.
2. When the person ceases to be a member of a class or classes of persons who may be
insured.
3. On the date on which this policy is no longer in force.
4. If a person is absent from work due to a temporary lay-off or due to a leave of absence,
the earlier of:
a. The date that is stated in a written notice from you that the person's insurance
is to be terminated.
b. The last day of the month that follows the month in which his absence from
work began.
5. When the person goes on strike, or is locked -out. This will not apply if either:
a. There is a written agreement between you and us that all persons will continue
to be insured during the strike or lock -out.
b. There is applicable statutory legislation or regulations which requires the
continuation of insurance during a strike or lock -out.
6. The day before he enters service in any naval, military or air force.
7. On the date on which the person requests, in writing, to have his insurance terminated.
GD600-233
If, at the time the insurance of a person would otherwise terminate, he is disabled, his insurance
will not terminate until the earliest time applicable according to the When Disability Income Benefits
Cease provision.
If an event that is described above occurs, you must deposit written notice with us at our Head
Office within 31 days. Failure to give written notice within such 31 day period will not continue
insurance in force with respect to a person beyond the time it would otherwise have been terminated as
shown above.
GD600-234
The Canada Life Assurance Company Page 30 Dated August 1st, 1995.
PREMIUMS
Premiums are due each month in advance from the Effective Date. Each premium due will be
calculated on a basis that is established by us and will be O.XXX% of your insured payroll.
UD51-2
It is our right to change the premium rate shown above as follows:
1. As of the first anniversary of the Effective Date, and any date on which a premium is due after
such date.
2. At any time this policy is amended to change either one or both of.
a. The class or classes of persons who may be insured under this policy.
b. The amount of the benefits payable under this policy.
3. At any time the number of persons or the composition of the group of persons who are insured
under this policy changes by more than 25%.
4. At any time there is a change in federal or state legislation or regulation which affects the benefits
or provisions of this policy.
We must give you at least thirty-one days written notice prior to the date of a change.
If you request, and we agree, the frequency of premium payment may be changed, as of any date
on which a premium is due. You may change the frequency to yearly, half -yearly, quarterly or monthly.
If the frequency of premium payment is to be changed to one other than monthly, the terms of the first
paragraph of this provision will be read as if they had been changed to provide: for the new premium
frequency.
GD600-235
If, at any time prior to the date that a disability commences, we learn that the amount of
insurance that should be in force under this policy is not the amount on which the premium was based,
an adjustment premium will be paid by you or a refund will be made to you so that the actual premiums
for the true amount of insurance will be paid.
If there is any change in the amount of insurance in force under this policy between the dates on
which premiums are due, an adjustment premium or a refund will be due. The adjustment premium or
the refund will be due on whichever of the following dates apply.
1. If the change occurs on or prior to the 15th day of a policy month, the first day of such
policy month.
2. If the change occurs after the 15th day of a policy month, the first day of the next policy
month. However, an adjustment premium or refund will not be due if, on the first day
of the next policy month, a regular premium is due.
The Canada Life Assurance Company Page 31 Dated August 1st, 1995.
If we do not receive notice of a change due to a decrease in or the termination of an amount of
insurance on or prior to the first day of a policy year that follows the date of the change, we will limit
the refund to the amount that is due for the period from the first day of the current policy year to the date
on which we receive the notice.
The amount of insurance with respect to a person will be decreased or terminated in accordance
with the other terms of this policy. The payment of premiums with respect to a person's insurance after
the date of such decrease or termination will not continue to provide insurance of the amount which was
in effect with respect to such person prior to such decrease or continue insurance in force with respect
to such person after such termination, whether or not all or part of such premium is refunded.
Refunds will be applied in or toward the payment of any outstanding premiums and adjustment
premiums. Any balance will be held at your credit, without interest, and will be applied in or toward
payment of succeeding premiums and adjustment premiums as and when they fall due. However, you
may, at any time withdraw in cash any amount so held at your credit.
GD600-236
If this policy is terminated in accordance with the Termination of Policy provision, you will pay
to us all adjustment premiums that are due and have not been paid. You will also pay to us a pro rata
premium for the period (if any) elapsed from the date on which the last unpaid premium was due to the
date on which this policy is terminated.
We will not be required to accept the payment of any premium otherwise than from you.
GD600-237
The Canada Life Assurance Company Page 32 Dated August 1st, 1995.
PERIOD OF GRACE
A period of grace will be allowed for the payment of each premium after the first and each
adjustment premium. The period of grace for the payment of each premium will be thirty-one days after
the date on which it is due. The period of grace for the payment of each adjustment premium will be
thirty-one days after the date on which the next premium is due unless we, by written notice to you, limit
the days of grace. Such limit will not be less than thirty-one days after the date the notice is delivered
to you. The policy will remain in force during the period of grace unless terminated in accordance with
the Termination of Policy provision. In any event, premiums are payable for any period of grace during
which the policy continues in force.
CURRENCY
All amounts payable under this policy must be paid in United States currency.
PLACE OF PAYMENT
All amounts payable by us will be payable at our office in Atlanta, Georgia.
NOT ELIGIBLE FOR DIVIDENDS
This policy is not eligible for dividends and will not take part in the distribution of our surplus.
WORKERS' COMPENSATION NOT AFFECTED
This policy is not in place of, and does not affect any requirement for coverage by, Workers'
Compensation Insurance.
CLERICAL ERROR
Clerical error in keeping the records will not invalidate insurance otherwise validly in force nor
continue insurance otherwise validly terminated. Upon discovery of any such error an adjustment of
premiums will be made.
GD600-238
The Canada Life Assurance Company Page 33 Dated August 1st, 1995.
BOOKLET -CERTIFICATE
We will issue booklet -certificates to you that summarize the essential provisions of this policy.
You must deliver them to each person who is insured.
The provisions of this policy will govern if there is any discrepancy between the following:
The provisions of the booklet -certificate delivered to a person who is insured.
2. The provisions of this policy.
If a booklet -certificate is issued to a person who for any reason is not entitled to insurance under
this policy, such booklet -certificate will be of no effect.
GD600-239
The Canada Life Assurance Company Page 34 Dated August 1st, 1995.
STANDARD PROVISIONS
Contract
The whole contract is made up of.
1. This policy.
2. Any amendments to this policy.
3. The applications of the persons who are insured.
You will not be considered to be our agent for any purpose under this policy.
All statements made by any of the persons who are insured will be deemed representations and
not warranties. No statement made by any person who is insured will be used in any contest unless:
1. It is contained in a written instrument signed by the person.
2. A copy of the written instrument has been given to the person.
Only our President or Secretary may modify this policy or waive any of our rights or
requirements.
Any change in this policy must be in writing and be attached to it. The change must bear the
signature or a reproduction of the signature of one or both of the above officers. It must also bear the
signature of our Registrar or one of our Assistant Registrars.
Time Limit on Certain Defenses
After a person has been insured under this policy for two years, no misstatement of the person,
except a fraudulent misstatement, will be used to reduce or deny a claim.
GD600-241
Notice of Claim
Written notice of a claim must be given to us within thirty days of the date disability begins. If
this is not possible, we must be notified as soon as it is reasonably possible to do so. Notice must be
given to us at our Head Office or to an agent of ours. The notice should include the name of the person
with respect to whom the claim is made and the group policy number.
Claims Forms
When we receive a written notice of a claim, we will send the claimant our claim forms to file
proof of loss. If the claim forms are not received within fifteen days after written notice of claim is sent,
the claimant can send us written proof of claim without waiting for the claim forms.
The Canaria Life Assurance Company Page 35 Dated August 1st, 1995.
Proof of Loss
Proof of loss must be given to us no later than ninety days after the end of the elimination period.
If it is not possible to give proof within the time required, it must be given as soon as reasonably
possible.
Proof of continued disability and regular attendance of a physician must be given to us within
thirty days of the date we request the proof. The proof must cover:
1. The date disability began.
2. The cause of disability.
3. The severity of the disability.
Time of Payment of Claim
When we receive satisfactory proof of claim, benefits payable under this policy will be paid
monthly during any period for which we are liable. Any balance which remains unpaid at the end of the
period for which we are liable will be paid at that time.
GD600-242
Payment of Claims
All benefits will be payable to the person who is insured.
Physical Examination
We will have the right and opportunity, at our own expense, to have a physician of our choice
examine anyone in respect of whom a claim is being made. We will have the right to do this when and
as often as we may reasonably require. The benefits with respect to which the claim was made will not
be paid during any period in which the person fails to submit to any medical examination requested by
US.
Legal Actions
No action at law or in equity may be brought to recover under this policy until sixty days after
written proof of loss has been given to us. No such action may be brought more than three years after
the time within which proof of loss is required to be given.
Conformity with State Statutes
Any provision of this policy which, on its effective date, is in conflict with the statutes of the
State in which this policy was delivered or issued for delivery is hereby amended to conform to the
minimum requirements of such statute.
GD600-243
7he Canada Life Assurance Company Page 36 Dated August 1st, 1995.
AMENDMENTS TO THE POLICY
This policy may be amended at any time by written agreement between you and us without the
consent of or notice to any other individual. Any amendment to this policy must be in writing and be
attached to it. The amendment must bear the signature or a reproduction of the signature of one or both
of our President or Secretary. It must also bear the signature of our Registrar or one of our Assistant
Registrars.
If a person who is insured is not actively at work on the effective date of the amendment, the
effective date with respect to that person will be on the date that he is again actively at work. However,
if the amendment reduced the amount of insurance to which the person is entitled, the effective date will
be the effective date of the amendment.
It is understood that, if this policy is amended during a person's continuous period of disability,
the amendment will have no effect on the amount of his insurance during that same continuous period
of disability.
GD600-244
The Canada Life Assurance Company Page 37 Dated August 1st, 1995.
TERMINATION OF POLICY
If you give us written notice that this policy is to be terminated, it will terminate on the later of:
1. The date that is stated in the notice.
2. The date on which we receive the notice at our Head Office.
We may terminate this policy as of the date on which any premium is due if, at any time, the
number of persons who are insured is less than 20 or is less than 100% of the number of persons who
are then members of the class or classes of persons who may become insured under this policy as of the
date on which any premium is due. We may also, for any other reason, terminate this policy as of the
date on which any premium is due. We must give you at least 31 days written notice prior to the date
on which this policy is to terminate.
This policy will terminate, in any event, at the end of the period of grace allowed for the payment
of any premium or adjustment premium if such premium is still unpaid at that time.
You will be required to give each person at least 15 days written notice prior to the date on which
this policy is to terminate. Failure to give written notice within such 15 day period will not continue
insurance in force with respect to a person beyond the time this policy would otherwise have terminated.
GD600-245
The Canada Life Assurance Company Page 38 Dated August 1st, 1995.
SELF -ADMINISTRATION
At your request this policy is self-administered. For that reason it is expressly provided that:
1. All documents and notices that would otherwise be deposited with us at our Head Office in
accordance with the terms of this policy will be held by you. This will not apply to any evidence
of insurability required by us under this policy nor to any notice required by us to process any
claim.
2. Whenever we request, you will furnish us with all of the documents relating to a person's
insurance which have been completed in accordance with the terms of this policy and are being
held by you.
3. We may inspect and examine your records which pertain to a person in so far as the records
affect his insurance or his eligibility for insurance.
4. Whenever we request, you will deposit with us at our Head Office a statement listing the
following:
a. Each person who is then insured.
b. The Class of each person under the Schedule.
c. The amount of the benefits that apply to each person.
d. The date of birth of each person.
e. If applicable, the earnings of each person.
GD600-249
The Canada Life Assurance Company Page 39 Dated August 1st, 1995.
CANCERPAY PLUS INSURANCE
PAYROLL DEDUCTION AGREEMENT
between
PROTECTIVE LIFE INSURANCE COMPANY
("Protective")
and
City of Lubbock
("Employer")
1625 13th Street, Lubbock, Texas
Employer's Address
For the benefit and convenience of its employees, the Employer agrees to provide for payroll deduction for Cancer
Insurance.issued by Protective. Payroll deduction rates arc significantly Iess than regular direct bill rates.
Each employee will authorize payroll deduction in a manner agreeable to the Employer and Protective. An employee
may stop payroll deduction by providing appropriate notice to the Employer and Protective. Each employee will be
asked to sign either an "Authorization for Payroll Deduction" or the "Waiver Refusal Card". These signed cards will
be retained by the Employer for everyone's protection.
Monthly deductions will be made from salary paid to employees and such deductions will be paid promptly to Protective.
The Employer assumes no responsibility for payroll deduction after the termination of employment of an insured employee,
or after an employee stops payroll deduction by providing appropriate notice.
Either the Employer or Protective may terminate this Agreement as of any date by giving at least 90 days written notice
tordir-ethcr prior to such date. Protective has minimum requirements for payroll deduction - at least 3 employees insured
for Cancer. surance. Aft Lion of this Agreement, the payment of premiums shall be entirely and directly between
each emplsv a an rotect' .
Cit�of Lubbock'1h*Em
Davi R. langston, Mayor
Title
Date October 19, 1995
Ross-Shamburger iss--
Royce Bruce cc._
Ed Stephens �L�.
LieenscA Agent
ATTEST -
By
Protective Life Insurance Company
Title
Date
G009937
G020141
G00S592
Mom
Betty M. Johnson, CitUl Secretary P Approved
P OTECTIVE LIFE
NSU f�E COMPANY
CA003'R4
Agent's Number
as to Content:
Mary Andrews, Managi g Director of
Human Resources
Approved as to Form: Donald G. Vandiver, Asst. City Attorne
Cnsur
ancer CANCERPAY PLUS INSURANCEance
inistratian PAYROLL DEDUCTION TRANSMITTAL
T O : CANCER INSURANCE ADMINISTRATION, GROUP DEPARTMENT
PROTECTIVE LIFE INSURANCE COMPANY
EMPLOYER: City of Lubbock Personnel Department
ADDRESS: P.O. Box 2000 1625 13th Street #104
CITY. Lubbock STATE: Texas ZIP: 79457
CONTACT PERSON Lou Moore TELEPHONE: (0 6) 7 6 7 — 2 317
(PAYROLL) A.C.
PttOTECTIVE LIFE
IIYURAYWR COMIMRr
CA018-R2
MAIL ORDER PHARMACY SERVICES AGREEMENT
This Mail Order Pharmacy Services Agreement ("Agreement"), effective as of
December 1, 1995, is hereby entered into by and between Advance ParadigM Mail Service,
Inc., a Delaware corporation ("APMS") and City of Lubbock.
PRELIMINARY STATEMENT
Pursuant to the terms and conditions of this Agreement, Client desires to retain
APMS to provide, and APMS desires to provide for Client, mail service pharmacy in
accordance with Client's prescription drug benefit plan (the "Prescription Plan").
TERMS OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. Unless the context otherwise requires, the terms defined in this
Section I shall have the meanings herein specified for all purposes of this Agreement,
including singular and plural forms thereof.
(a) "AWP" shall mean the then current average wholesale price for a Prescription
Drug as listed in a pharmaceutical industry pricing guide, including but not limited to the
Medi- pan Prescription Pricing Guide.
(b) "Client" shall mean the City of Lubbock or its benefit administrator, as the
case may be.
(c) "Co -payment" shall mean that portion of the cost of the Prescription required
to be paid directly by an Eligible Member in accordance with the Prescription Plan.
(d) "Dispensing Fee" shall mean the amount payable by the Client for each
prescription dispensed by the mail service pharmacy to an Eligible Member.
(e) "Eligible Member" shall mean each individual entitled to benefits under the
Prescription Plan.
(f) "Effective Date" shall mean December 1, 1995.
(g) "Generic Drug" means the chemical and generic name as determined by the
United States Adopted Names Council and accepted by the Federal Food and Drug
Administration, of those drug products having the same active ingredients as a drug
product prescribed by its trade or brand name.
(h) "Prescription" shall mean a valid and legal order to dispense a drug legally
eligible for dispensing under the laws and regulations of the United States, including the
Food and Drug Administration, and the state and local jurisdiction in which the dispensing
facility is located.
(i) "Prescription Drug" shall mean drugs and biologicals which can be dispensed
only pursuant to a Prescription and which, by law, are required to bear the legend:
"Caution - Federal Law Prohibits Dispensing Without Prescription."
LU/FS&'C/Lubbmk
2 . Mail Service Pharmacy. APMS shall fill Prescriptions for Eligible Members
and shall mail such drugs or medications to such Eligible Members subject to the following
terms and conditions:
(a) Eligibilily List and Updates. At least seven (7) days prior to the Effective
Date, Client shall provide APMS with a complete and final eligibility tape or list in a format
consistent with APMS's requirements which shall fist all Eligible Members and set forth all
pertinent eligibility data (the "Eligibility List"). Client shall provide a complete and updated
Eligibility List to APMS as frequently as mutually agreed to by the parties hereto. For
purposes of this Agreement, an individual will be deemed an Eligible Member during the
period beginning on the third business day following delivery to APMS of a revised
Eligibility List which includes such individual and ending on the third business day
following delivery of a revised Eligibility List which excludes such individual.
(b) Notification and Program Promotion. Client shall notify, Eligible Members
that they have mail service pharmacy benefits. Client shall use its best efforts to promote to
Eligible Members utilization of mail service. Client shall permit APMS to meet with or
otherwise communicate directly with prospective Eligible Members concerning the services
provided hereunder in a reasonable manner and at various times as mutually agreed upon
by APMS and Client. APMS shall provide Client with copies of informational material
explaining the mail service and the forms necessary for Eligible Members to utilize mail
service. Client shall distribute the mail service informational materials and forms to all
Eligible Members.
(c) Delivery and Disl2gnsing. APMS shall dispense through its mail service
pharmacy new or refill Prescription orders upon receipt from an Eligible Member of (i) a
valid Prescription order or a completed refill order form and (ii) the applicable co -payment,
if any. APMS shall cause the filled Prescriptions to be mailed to each Eligible Member via
common carrier at the address set forth in the Eligibility List or as appearing on the face of
the Prescription. APMS shall not be liable to either Client or Eligible Member for any delay
in delivery resulting from circumstances beyond APMS's control as set forth in Section
2W of the Agreement.
(d ) Mail Service Pharmacy. APMS shall operate its mail service pharmacy in
compliance with state and federal pharmaceutical laws and regulations and shall dispense
only those prescription drugs which, in its sole discretion, fulfill the requirements of the
prescription writer and comply with applicable law. The licensed pharmacists employed by
APMS in the mail service pharmacy shall have the right to refuse to fill or renew a
Prescription for any Eligible Member when, in the pharmacist's professional judgment, the
filling or renewing of such Prescription is not in the best interest of the Eligible Member or
the pharmacist has reason to doubt the authenticity of the Prescription.
(e) Generic Substitution. If a Prescription allows, and the patient agrees to the
substitution of a less expensive Generic Drug, APMS's mail service pharmacy may fill the
Prescription with a Generic Drug which, in the professional judgment of the dispensing
pharmacist, fulfills the requirements of the Prescription and applicable laws.
(f) Patient Profiles and DUR. APMS shall request information from each
Eligible Member to submit with his or her first mail order Prescription a form containing
information regarding, among other things, any drug allergies of such Eligible Member.
APMS shall utilize this information to develop a patient profile on each Eligible Member
which will include the information submitted by such member as well as a history of
Prescription Drugs dispensed to such member during the term of this Agreement. Each
mail order Prescription will be subject to DUR based on the patient profiles and mail
LU/FSPCCJUbbmk 2
service utilization history as well as concurrent DUR through the Advance Rx® claims
adjudication system. APMS shall not be liable for any indirect, special or consequential
damages arising from the use or lack of use of such DUR services in accordance with
Section 8 of this Agreement.
(g) Quantities. APMS shall provide the quantity of the drug specified by a
Prescription or refill order in quantities of up to a 100 day supply; provided, that APMS
shall dispense the drugs under any Prescription or refill order in accordance with Plan
design. APMS shall comply with all limitations imposed on controlled substances.
(h) Toll Free Client Service. APMS shall maintain, at its sole expense, toll free
"800" numbers for patient counseling for Eligible Members, Client inquiries and other
Client service or informational needs.
(i) Reggrts. APMS shall provide management reports to the Client pertaining to
the services provided under this Agreement in a form and at intervals to be mutually agreed
upon by APMS and the Client.
0) Exclusivity. APMS shall have the exclusive right to provide mail order
pharmacy services for the Client during the duration of this Agreement.
3. Price For Services. In accordance with Sion 4 hereof, Client agrees to
reimburse APMS for the, Prescriptions dispensed by the mail service pharmacy at the
following rates:
Brand Drugs: AWP less 14% plia $2.75 Dispensing Fee, ]g.0 the Co -payment
Generic Drugs: AWP less 35% phi $2.75 Dispensing Fee,1u the Co -payment
4.
(a) The mail service pharmacy shall electronically transmit claims for payment of
Prescriptions dispensed to Eligible Members to the City of Lubboces claims administrator.
City of Lubbock agrees to pay such claims promptly in accordance with its agreement with
its claims administrator. City of Lubbock shall guarantee the payment of such claims. In
the event the claims administrator does not timely pay any such claims, APMS may make
demand upon the City of Lubbock, and the City of Lubbock shall pay the claims and shall
have full recourse against the claims administrator for repayment.
(b) Cessation of Services. Should Client, or its designated agent, for any reason,
fail to make timely payment, or become insolvent, or enter into voluntary or involuntary
bankruptcy, APMS shall be entitled to cease dispensing Prescriptions under this
Agreement, while maintaining all rights hereunder.
S. Audit. Client shall have access, at reasonable intervals and during normal
business hours, to the records of APMS relating to Eligible Members for the purpose of
examining records pertaining to the service rendered by APMS to either the Client or
Eligible Members hereunder.
6. Term. Subject to this SggfiQn 6, the initial term of this Agreement shall commence
on the December 1, 1995 and end on November 30, 1998. This Agreement shall
automatically renew on December 1, 1998, and on each year thereafter, for additional one-
year periods, unless at least ninety (90) days prior to such December 1 either party notifies
the other in writing of its intent to terminate this Agreement. In addition, this Agreement
may be terminated as follows:
LU/FS/ccn.unn«k 3
(a) Upon the mutual written consent of the parties hereto;
(b) At either parry's option, if the other party fails to comply with any provision
of this Agreement and fails to correct such failure within thirty (30) days of receipt of
written notice of such failure to comply (which notice shall describe the action that the other
party must take to correct such failure); or
(c) At either party's option, if the other party becomes insolvent or seeks
protection, voluntarily or involuntarily, under any bankruptcy laws.
Termination of this Agreement shall not relieve the Client, or its designated agent, of any
unfulfilled obligations hereunder, including all payments due, unless otherwise agreed to in
writing by APMS.
7. Indemnification. Each party and its officers, directors, employees, agents,
successors and assigns (each an "Indemnitee") shall be indemnified and held harmless by
the other party (the "Indemnifying Party") against any and all claims, loss, damage, costs
and expenses ("Loss"), including, without limitation, attorneys' fees and expenses,
actually incurred by any Indemnitee arising out of or resulting from the actions or
omissions of the Indemnifying Party. Client further agrees to indemnify and hold APMS,
its officers, directors, employees, agents, successors and assigns harmless from any Loss
actually suffered or incurred arising out or resulting from any claim or demand by current
or previous Eligible Members relating to this Agreement, including without limitation any
disclosures made by APMS, its officers, directors, employees, agents, successors and
assigns in accordance with the terms and conditions hereof.
8. Limitation Of Liability.
IN NO EVENT SHALL APMS BE LIABLE TO CLIENT OR ANY ELIGIBLE
MEMBER FOR ANY INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR
LOST PROFITS, ARISING OUT OF OR RELATED TO APMS'S PERFORMANCE
UNDER THIS AGREEMENT OR BREACH HEREOF, EVEN IF APMS HAS BEEN
ADVISED OF THE POSSIBILITY THEREOF. APMS'S LIABILITY TO CLIENT
UNDER THIS AGREEMENT, IF ANY, SHALL IN NO EVENT EXCEED THE TOTAL
AMOUNT OF COMPENSATION DUE APMS FOR THE PRIOR TWELVE (12)
MONTHS OF THIS AGREEMENT.
APMS RELIES ON MEDI-SPAN OR INDUSTRY COMPARABLE
DATABASES IN PROVIDING CLIENT AND ELIGIBLE MEMBERS WITH DRUG
UTILIZATION REVIEW SERVICES. APMS HAS UTILIZED DUE DILIGENCE IN
COLLECTING AND REPORTING THE INFORMATION CONTAINED IN THE
DATABASES AND HAS OBTAINED SUCH INFORMATION FROM SOURCES
BELIEVED TO BE RELIABLE. APMS, HOWEVER, DOES NOT WARRANT THE
ACCURACY OF REPORTS, ALERTS, CODES, PRICES OR OTHER DATA
CONTAINED IN THE DATABASES. THE CLINICAL INFORMATION CONTAINED
IN THE DATABASES AND THE FORMULARY IS INTENDED AS A SUPPLEMENT
TO, AND NOT A SUBSTITUTE FOR, THE KNOWLEDGE, EXPERTISE, SKILL,
AND JUDGMENT OF PHYSICIANS, PHARMACISTS, OR OTHER HEALTH-CARE
PROFESSIONALS IN ELIGIBLE MEMBERS' CARE. THE ABSENCE OF A
WARNING FOR A GIVEN DRUG OR DRUG COMBINATION SHALL NOT BE
CONSTRUED TO INDICATE THAT THE DRUG OR DRUG COMBINATION IS
SAFE, APPROPRIATE OR EFFECTIVE IN ANY ELIGIBLE MEMBER.
1M/P=CJUbbat 4
9. General.
(a) Notice. Any notice required to be given pursuant to the terms and
provisions of this Agreement shall be in writing and shall be sent by certified mail, return
receipt requested, or by overnight delivery service to the parties at the addresses below or
such other address as shall be specified by the parties by like notice:
to APMS at:
APMS ParadigM, Inc.
Attn: Vice President - Legal Affairs
P.O. Box 542906
Dallas, Texas 75354-2906
and to Client at:
City of Lubbock
Attn:
P.O. Box 2000
1625 13th Street
Lubbock, TX 79457
(b) Binding Nature and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors and assigns. Neither party
may assign this Agreement without the prior written consent of the other; provided,
however, that either party may transfer or assign its rights and obligations under this
Agreement, to any affiliate, and provided further that no such assignment shall have the
effect of releasing such party from any of its obligations under this Agreement.
(c) Headings and Intemretation. The headings of the various sections of this
Agreement are inserted for convenience only and do not, expressly or by implication, limit,
define or extend the specific terms of the section so designated.
(d) Governing Law. The validity, enforceability, and interpretation of this
Agreement shall be determined and governed by the internal laws of the State of Texas (and
not the law of conflicts).
(e) Entire Agreement. This Agreement contains all the terms and conditions
agreed upon by the parties, and supersedes all prior understandings, writings, proposals,
representations, or communications, oral or written, of the parties hereto.
(f) Authority. APMS and Client warrant that each has full power and authority
to enter into and perform this Agreement, and the person signing this Agreement on behalf
of each party certifies that such person has been properly authorized and empowered to
enter into this Agreement on behalf of such party.
(g) Force Majeure. APMS shall not be liable for any failure or delay in
performing all or part of its obligations under the terms of this Agreement resulting from
unavailability of pharmaceuticals, legislative action, war, acts of any person engaged in a
subversive activity, sabotage, riot, strikes, slow -downs, lock -outs, or labor stoppage,
freight embargoes, fires, explosions, flood, earthquake or other acts of God, or by reason
of the judgment, filing or order of any court or agency of competent jurisdiction occurring
subsequent to the signing of this Agreement, or any other circumstances beyond its control.
i.u/FSKr#Ubbwk 5
(i) Survival. Should any part, term or condition of this Agreement be declared
illegal or unenforceable or in conflict with any other laws, the remaining provisions shall be
valid and not affected thereby.
0) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken together
shall constitute one and the same instrument.
(k) Further Assurances. From time to time upon request and without further
consideration, the parties hereto shall, and shall cause their subsidiaries, to execute, deliver
or acknowledge such documents and do such further acts as the other party hereto may
reasonably require to effectuate its obligations contemplated by this Agreement.
By executing the Agreement, the undersigned individuals hereby warrant and represent that
they have read this Agreement in its entirety, both agree to all its terms, and are duly
authorized to execute this Agreement on behalf of their respective parties.
ADVANCE PARADIGM MAIL
SERVICES, INC.
ATTEST'-
&,t,- kk 3,49,,J
Bett M. Jo on, City Secretary
APPROVED AS TO ENT:
Mary Andobws, Director of Human
Resources
Attorney
LDIFMCILubbock
R
MNNBO M PREMIUM AGREEMENT
This Minimum Premium Agreement (*Agreement*) is made between Washington National Insurance Company
(•Washington National') and the City of Lubbock - EBSSW94 ('Policyholder').
The purpose of this Agreement is to define the financial obligations of the parties relative to the Group Policy or
Policies issued to the Policyholder by Washington National. Under this Agreement, the Policyholder and
Washington National will divide between each other responsibility sad liability for the payment of benefits. This
Agreement also specifies the type and calculation of Premium owed by the Policyholder to Washington National.
Form Ntanber. F1056-2 Rev. 1/95
Page 1 of 16
hE[NDII M PREMIUM AGREEMENT
TABLE OF CONTENTS
PAGE
ARTICLE I:
DEFINITIONS
3
ARTICLE II:
CLAIM RESPONSIBILITIES
S
ARTICLE III:
ACCOUNTING
7
ARTICLE IV:
PREMIUM
11
ARTICLE V:
BANKING
13
ARTICLE VI:
AMENDMENTS
14
ARTICLE VII:
TERMINATION
14
ARTICLE VIII:
LEGAL PROVISIONS
1S
SCBEDULE A
Page 2 of 16
hUND4UM PREMIUM AGREEMENT
ARTICLE I - DEFINITIONS
(A) 'Agreement' means this Minimum Premium Agreement by and between the Policyholder and Washington
National.
(B) 'Bank Aecount(s)' means the bank account(s) established by the Policyholder from which Washington
National is authorized to draw the Policyholder's fiords for Benefit Payments issued under the Group
Policy, as well as any Premium.
(C) 'Benefit Payments' means checks issued for eligible claims L,r insured employees and dependents under
Minimum Premium Coverages.
(D) 'Carryover Deficit' for any Contract Period is the deficit carried forward from the prior Contract Period
as determined by the End of the Contract Period Experience Accounting for the prior Contrail Period.
The Carryover Deficit includes deficits created by Minimum Premium Coverages, other experience
refunding coverages which are listed in Schedule A, and any deficit which exists on the effective date of
this Agreement which was created by refunding coverages under the Group Policy.
(E) 'Claim Payor' means the entity designated by Washington National to perform claim payment
administration.
(F) 'Contract Month' means a calendar month while this Agreement is in effect. The first Contract Month
will begin on the effective date of this Agreement, and the last Contract Month, will end on the termination
date of this Agreement.
(G) 'Contract Period' is specified in Schedule A. The first Contract Period will begin on the effective date
of this Agreement, and the last Contract Period will end on the termination data of this Agreement.
(I) OCmmulative Benefit Payments' for any Contract Month is equal to that Contract Month's Monthly Benefit
Payments for all Minimum Premium Coverages, plus the sum of the Monthly Benefit Payments for all
Minimum Premium Coverages for all previous Contract Months in that Contract Period.
(n 'Cumulative Claim Liability Limit' for any Contract Month is equal to that Contract Month's Monthly
Claim Liability Limit plus the sum of the Monthly Claim Liability Limits for all previous Contract Months
in that Contract Period.
(n 'Cumulative Reimbursements' up to any Contract Month is equal to the aura of the Reimbursemmmts for
all previous Contract Months in that Contract Period.
(1) •Cumulative Retrospective Premium' up to any Contract Month is equal to the sum of the Retrospective
Premium for all previous Contract Months in that Contract Period.
(L) 'Exposure' for a Minimum Premium Coverage during a Contract Month mesons the number of insured
employees and dependent units having that Minimum Premium Coverage at the beginning of the second
prior Contract Month. For the first three Contract Months of the first Contract Period, the Exposure for
a Minimum Premium Coverage is the number of insured employees and dependent units having that
Minimum Premium Coverage at the beginning of the first Contract Month.
(M) 'Group Policy' means the insurance policy or policies issued to the Policyholder by Washington National.
Page 3 of 16
WHKI 4 M PREMIUM AGREEMENT
(N) 'Minimum Premium Coverages' means the types of benefits, as specified in the Group Policy, that are
covered by this Agreement. The Minimum Premium Coverages are listed in Schedule A.
(0) 'Minimum Premium Premium' means the monthly premium due from the Policyholder to Washington
National, as described in Article IV, section (A), to cover retention costs, pooling charges, and any change
in Reserves if Reserves are held by Washington National.
(P) 'Monthly Benefit Payments' are the sum of Benefit Payments issued during a particular Contract Month
from the Policyholder's Bank Account, less refunds, voids, or other Benefit Payment credits. If Individual
Claim Pooling is elected, Medical Benefit Payments for any insured employee or dependent that exceed
the Individual Claim Pooling liability Amount during the Contract Period will not be included in Monthly
Benefit Payments, except during the Post Termination Period.
(Q) 'Monthly Claim Liability Limit' for any Contract Month is equal to the sum of the result of (1) multiplied
by (2), where:
(1) is the Exposures for each Minimum Premium Coverage for that Contract Month; and
(2) is the corresponding Monthly Claim Liability Limit Factoiv for each Minimum Premium
Coverage.
(R) 'Monthly Claim Liability Limit Factors' are dollar amotra set by Washington National which are used
for calculating the Policyholder's Monthly Claim Liability Limits. 1-he Monthly Claim Liability Limit
Factors are listed in Schedule A.
(S) 'Policyholder' mans the entity indicated in Schedule A.
in 'Post Termination Liability Claim Limit' is equal to the sum of the result of (1) multiplied by (2), where:
(1) is the average number of insured employees and dependent units for each Minimum Premium
Coverage for the final two months of the last Contract Period; and
(2) is the corresponding Post Termination Claim Liability limit Factors for each Minimum Premium
Coverage.
(U) 'Post Termination Claim Liability Limit Factors' are dollar amounts set by Washington National which
are used for calculating the Policyholder's Past Termination Claim Liability Limit. The Post Termination
Claim Liability Limit Factors are listed in Schedule A.
(V) 'Post Termination Premium' is equal to the sum of the result of (a) multiplied, by (b), where:
(a) is the Minimum Premium Premium for the last Contract Month of the last Contract
Period; and
(b) is the Post Termination Premium Factor shown in Schedule A.
(W) 'Post Termination Period' mans the period following termination of this Agreement during which the Post
Termination Claim Liability Limit applies. Schedule A indicates whether the Post Termination Claim
Liability Limit applies, and, if it does apply, the period for which the Post Termination Claim Liability
Page 4 of 16
MINIMUM PREMIUM AGREEMENT
Limit applies.
(X) 'Premium' means the Minimlm Premium Premium, and/or any Retrospective Premium, and/or the Post
Termination Premium if applicable.
(n 'Reimbursement• for any Contract Month is the amount due from Washington National to the Policyholder
for that Contract Month as calculated in Article III, sections (A). (B), and (D).
(Z) 'Reserves' are funds used to pay Run -Out Claims following the termination of this Agreement. Reserves
are an obligation with Minimum Premium funding and may be held by either Washington National or the
Policyholder. The holder of the Reserves is indicated in Schedule A.
(AA) 'Retrospective Premium' for any Contract Month is the amount due from the Policyholder to Washington
National for that Contract Month as calculated in Article III, sections (A), (B), (C), and (D).
(BB) 'Run -Out Claims* maws those Benefit Payments which are issued after the termination of this Agreement
and are:
(1) incurred while this Agreement is in effect; or
(2) payable under any extension of benefits provision of the Group Policy.
(CC) 'Surplus Position for the last Contract Period' is determined by (1) minus (2) plus (3) minus (4) where:
(1) is the Cumulative Claim Liability Limit for the last Contract Month of the last Contract Period;
(2) is Cumulative Benefit Payments for the last Contract Month of the last Contract Period;
(3) is Cumulative Reimbursements due or paid up to the last Contract Month of the last Contract
Period; and
(4) is Cumulative Retrospective Premium due or paid up to the last Contract Month of the last
Contract Period, plus any Retrospective Premium due or paid as a result of the Monthly or Annual
Claim Liability Accounting for the last Contract Month of the last Contract Period, plus any
Retrospective Premium due or paid as a result of the End of the Cantrad Period Experience
Accounting for the last Contract Period.
If the above calculation yields an amount greater than zero, then the Surplus Position for the last Contract
Period is equal to this amount. If the above calculation yields an amount less than or equal to zero, then
the Surplus Position for the last Contract Period is equal to zero.
ARTICLE II - CLAIM RESPONSIBILITIES
(A) Claims Incurred Prior to the Effective Date of this Agreement
For claim incurred prior to the effective date of this Agreement, the Policyholder will be financially liable
for benefit amounts and responsible for claim payment administration.
Page 5 of 16
TWI IuI Z1
(B) Claims Incurred and Paid While this Agreement is in Effect
For claims incurred and paid while this Agreement is in effect, the Policyholder will be financially liable
for Benefit Payments in accordance with Article III, and Washington National will be responsible for claim
payment administration.
(C) Claims Paid After Termination of this Agreement
(1) If Schedule A indicates Reserves are held by the Policyholder and a Post Termination Claim
Liability Limit DOES apply, the Policyholder will be financially liable for all Run -Out Claims,
except that there will be a limit to the Policyholder's financial liability during the Post Termination
Period. The maximum amount of Run -Out Claims for which the Policyholder will be financially
liable during the Post Termination Period will be determined by the Post Termination Final
Accounting as described in Article III, section (Dxl). Washington National will be responsible
for claim payment administration during the Post Termination Period. The Policyholder will be
financially liable for Run -Out Claims and responsible for claim payment administration for all
Run -Out Claims issued after the Post Termination Period. Washington National will not be
financially liable for Run -Out Claims or responsible for claim payment administration for Run -Out
Claims issued after the Post Termination Period.
(2) If Schedule A indicates Reserves are held by the Policyholder and a Post Termination Claim
Liability Unit DOES NOT apply, the Policyholder will be financially liable for all Run -Out
Claims and responsible for claim payment administration for all Run -Out Claims. Washington
National will not be financially liable for any Run -Out Claims pr mgponsible for claim payment
administration for any Run -Out Claims.
(3) If Schedule A indicates that Reserves are held by Washington National, Washington National will
be financially liable for all Run -Out Claims and responsible for claim payment administration for
all Run -Out Claims. However, the Policyholder may be liable for payment of Retrospective
Premium as calculated in Article III, section (D)(22).
The obligations stated in Article 11, section (C), will survive the termination of this Agreement and remain
in effect while any Rua -Out Claims are outstanding and payable.
(D) Benefit Payment Determination
During the period of this Agreement, Washington National has the right to make final determinations of
the Benefit Payments. Following termination of this Agreement, Washington National reserves the right
to make final Benefit Payment determinations for all Rua4)ut Calms. Washington National will determine
Benefit Payments in the same manner it would determine benefits under the Group Policy in the absence
of this Agreement. In the event Washington National exercises its right to make final Benefit Payment
determminations. the Policyholder agrees to accept Washington National's final Benefit Payment
determinations. Nothing in this paragraph &hall be construed to negate the Policyholder's obligation to Pay
Rua -Out Claims as described in Article II, sections (C)(1) and (2).
(E) Claim Submission
If the Policyholder receives claims from insureds, the Policyholder is obligatedto submit those claims to
the Claim Payor within five business days of receipt.
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bffiNDIUM PREMIUM AGREEMENT'
(F) Records
The Policyholder agrees to furnish Washington National information relating to this Agreement upon
request. All claim files, insured records, and other relevant records are the property of Washington
National during the term of this Agreement and following termination.
(G) Reporting
(1) Washington National is responsible for Form 1099 reporting.
(2) Washington National is responsible for providing Form 5500 information to the Policyholder. The
Policyholder is responsible for reporting Form 5500 information to applicable government
agencies.
(3) Washington National is responsible for FICA withholding administration and reporting and
payments of withheld amounts to applicable government agencies and the Policyholder. The
Policyholder is responsible for maldng employer matching FICA payments to applicable
government agencies.
ARTICLE III - ACCOUNTING
(A) Monthly or Annual Claim Liability Limit Accounting
(1) If Schedule A indicates that the Claim Liability limit Accounting Period is Monthly, then for each
Contract Month Washington National will perform the following Monthly Claim Liability Limit
Accounting calculation:
The Cumulative Claim Liability limit for that Contract Month, minus Cumulative Benefit
Payments for that Contract Month, plus Cumulative Reimbursements due or paid up to
that Contract Month, minus Cumulative Retrospective Premium due or paid up to that
Contract Month.
If the above Monthly Claim Liability Limit Accounting calculation yields an amount less than
zero, Washington National will pay to the Policyholder a Reimbursement equal to the absolute
value of this UXAM .
If the above Monthly Claim Liability limit Accounting calculation yields an amount greater than
or equal to zero, the Policyholder will pay to Washington National a Retrospective Premium equal
to the lesser of (a) or (b) where:
(a) is the amount resulting from the Monthly Claim Liability Limit Accounting calculation
above; and
If Schedule A indicates that the Deferred Carryover Deficit Recovery does not apply, then:
(b) is the absolute value of the Carryover Deficit, plus Cumulative Reimbursements due or
paid up to that Contract Month, minus Cumulative Retrospective Premium due or paid
up to that Contract Month.
Page 7 of 16
3H
If Schedule A indicates that the Deferred Carryover Deficit Recovery does apply, then:
(b) is Cumulative Reimbursements due or paid up to that Conuict Month, minus Cumulative
Retrospective Premium due or paid up to that Contract Month.
(2) If Schedule A indicates that the Claim liability Limit Accounting Period is Annual, then for the
last Contract Month of each. Contract Period, Washington National will perform the following
Annual Claim liability Limit Accounting calculation:
The Cumulative Claim Liability Limit for the last Contract Month of the Contract Period,
minus the Cumulative Benefit Payments for the last Contract Month of the Contract
Period.
If the above Annual Claim liability Limit Accounting calculation yields an amount less than zero,
Washington National will pay to the Policyholder a Reimbursement equal to the absolute value of
this amount.
If the above Annual Claim Liability Limit Accounting calculation yields an amount greater than
or equal to zero, the Policyholder will pay to Washington National a Retrospective Premium equal
to the lesser of:
(a) the amount resulting from the Annual Claim Liability Limit Accounting calculation
above; or
(b) the absolute value of the Carryover Deficit.
(3) Medical Benefit Payments issued by Washington National which exceed the Individual Claim
Pooling Liability Amount during the Contract Period will not be iwluded in Monthly Benefit
Payments used in the Monthly or Annual Claim liability Limit Accounting Formula.
(B) End of the Contract Period Experience Accounting
The End of the Contract Period Experience Accounting will be performed by Washington National after
the last Contract Month of each Contract Period and will include any Carryover Deficit and deficits or
surpluses created by other experience refunding coverages which am listed in Schedule A. It will also
include deficits or surpluses resulting from differences between actual and estimated Minimum Premium
Premium amounts, unless the Policyholder has selected the Minimum Premium Premium Guarantee as
indicated in Schedule A.
(1) If the Monthly or Annual Claim Liability Limit Accounting calculation for the but Contract Month
of the Contract Period yields an amount greater than zero, and the End of the Contract Period
Experience Accounting indicates that no deficit exists, no R eimbuxsemaot is due from Washington
National and no Retrospective Premium is due from the Policyholder.
(2) If the Monthly or Annual Claim Liability Limit Accounting calculation for the but Contract Month
of the Contract Period yields an amount greater than zero, and the End of the Contract Period
Accounting indicates that a deficit exists, the Policyholder will pity to Washington National a
Retrospective Premium equal to the lesser of:
Page 8 of 16
bEN MUM PREMIUM AGREEMENT
(a) the result of the Monthly or Annual Claim Liability Limit Accounting calculation for the
List Contract Month of the Contract Period, minus and Retrospective Premium due or
paid as a result of the Monthly or Annual Claim Liability Limit Accounting for the last
Contract Month of the Contract Period; or
(b) the absolute value of the deficit determined by the End of the, Contract Period Experie�cx
Accounting.
(C) Carryover Deficit Recovery Limit
(1) If Schedule A indicates that the Carryover Deficit Recovery Limit does apply, then for each
Contract Period, except for the last Contract Period while this Agreement is in effect, the amount
of Carryover Deficit that is recoverable from Retrospective Premium will be limited to the lesser
of
(a) the absolute value of the Carryover Deficit for that Contract Period; or
(b) the result of (i) multiplied by (ii) where:
(i) is the Carryover Deficit Recovery Limit Percentage indicated in Schedule A; and
(ii) is the result of (A) multiplied by (B) where:
(A) is the Cumulative Claim Liability limit for the last Contract Month of
the prior Contract Period, divided by the number of Contract Months
in the prior Contract Period; and
(B) is 12.
(2) If there is a deficit which exists as of the effective date of this Agreement created by experience
refunding coverages under the Group Policy, thee, for the first Conbiwt Period, the Cumulative
Claim Liability Limit referenced in Article III, section (C)(lxb)(u')(A) is replaced by earned
premium for the experience refunding coverages under the Group Policy.
(D) Post Termination Final Accounting and Reserves
(1) If Schedule A indicates that Reserves am held by the Policyholder and a Post Termination Claim
Liabiity Limit DOES apply, Washington National will perform the following Post Termination
Claim Liability Limit Accounting calculation after the Post Termination Period. -
The Post Termination Claim Liability Limit, minus Run -Out Claims issued during the
Post Termination Period.
Since Individual Claim Pooling terminates whoa this Agreement terminates, Medial Benefit
Payments issued during the Post Termination Period which exceed the Individual Claim Pooling
Liability Amount will be included in Run -Out Claims in the above Post Termination Claim
Liability Limit Accounting formula.
Page 9 of 16
,.t�,l�ut to .; yv_I, tu_ ri; ��l.,c�.1
(a) If the above Post Termination Claim liability Limit Accounting calculation yields an
amount less than zero, Washington National will pay to the Policyholder a
Reimbursement equal to the absolute value of this amount, mimes the Surplus Position for
the last Contract Period.
(b) If the above Post Termination Claim liability Limit Accounting calculation yields an
amount greater than or equal to zero, and the End of the Contract Period Experience
Accounting for the last Contract Period indicates that no deficit exists, no Reimbursement
is due from Washington National and no Retrospective Premium is due from the
Policyholder.
(c) If the above Post Termination Claim Liability Limit Accounting calculation yields an
amount greater than or equal to zero, and the End of the Contract Period Experience
Accounting for the last Contract Period indicates that a deficit exists, the Policyholder
will pay to Washington National a Retrospective Premium equal to the lesser of:
(i) the amount resulting from the above Post Termination Claim Liability Limit
Accounting calculation; or
(ii) the absolute value of the deficit determined by the End of the Contract Period
Experience. Accounting for the last Contract Period.
(2) If Schedule A indicates that Reserves are held by Washington National, Washington National will
perform the following calculation after it has been determined by Washington National that all
Run -Out Claims have been issued:
Reserves established at the End of the Contract Period Experience Accounting for the last
Contract Period, minus Rua -Out Claims.
If the above calculation yields an amount less than zero, and there is a positive Surplus Position
for the last Contract Period, the Policyholder will pay to Washington National a Retrospective
Premium equal to the lesser of:
(a) the amount by which the Run -Out Claims exceed the Reserves established at the Fad of
the Contract Period Experience Accounting for the last Cute Period; or
(b) the Surplus Position for the last Contract Period.
(E) Individual Claim Pooling
If Schedule A indicates that Individual Claim Pooling in included, Washington National will pool Per
Contract Period, certain individual Medical Benefit Payments over a specified amount, referred to as the
Individual Claim Pooling Liability Amount which is indicated in Schedule A. Prescription drug card and
mail order drug coverages. if applicable, are not considered 'Medical' covers M, .
The administration of Individual Claim Pooling will be as follows:
(1) Washington National will be financially liable for Medical Benefit Payments and will issue those
Medical Benefit Payments for any insured employee or dependent that exceed the Individual Claim
Page 10 of 16
hENEAUM PREMIUM AGREENMM
Pooling liability Amount during the Contract Period.
(2) Any Medical Benefit Payments issued by Washington National which exceed the Individual Claim
Pooling Liability Amount during the Contract Period will not be included in Monthly Benefit
Payments used in the Monthly or Annual Claim liability Limit Accounting Formula.
(3) Any Medical Benefit Payments issued by Washington National which exceed the Individual Claim
Pooling Liability Amount during the Contract Period will not be drawn from the Policyholder's
Bank Account.
(4) Individual Claim Pooling terminates on the date this Agreement terminates.
(F) Refunds, Recoveries, Voids, and Credits
(1) Except for recoveries received in connection with Medical Benefit Payments issued in excess of
the Individual Claim Pooling Liability Amount, any refimd or recovery of Benefit Payment
amounts, or voids or credits received or applied, will reduce Benefit Payments issued during the
Contract Month in which the recovery or refund is received, or the void or credit adjustment is
made.
(2) If Washington National issues Medical Benefit Payments for a claim in excess of the Individual
Claim Pooling Liability Amount during the Contract Period, with subsequent recovery by
Washington National or the Policyholder of monies paid on this claim either by the Policyholder
or Washington National, Washington National has the right of receipt of such monies up to the
total amount of such Benefit Payments issued by Washington National. The Policyholder agrees
to immediately pay to Washington National any such monies received by the Policyholder and
authorizes Washington National to negotiate payment of instruments written in the name of the
Policyholder, on behalf of the Policyholder. Recovery of Individual Claim Pooling Liability
amounts will not be used to reduce the total amount of Benefit Payments during the Contract
Period in which the Benefit Payment was originally issued or in the Contract Period in which the
recovery is received. This provision will apply regardless of the caautx of the recovery or when
it is received. This provision survives the termination of this Agreement and the Group Policy.
ARTICLE IV - PREN UUM
(A) Nfinimton Pt a nium Pre nitttn
(1) The Policyholder will pay to Washington National for each Contract idonth that this Agreement
is in effect a premiumm equal to the sum of the result of (a) multiplied by (b), where:
(a) is the Minimum Premium Premium rates for all Minimum Premium Coverages shown
in Schedule A for the Contract Month, and
(b) is the corresponding number of insured employees and dependent units for that Contract
Month.
(2) Each Minimum Premium Premium will be due an the first day of the month for which it applies.
(B) Reirospe ctive Ptvmitnn
Page 11 of 16
bU NIl41UM PREMIUM AGREEMENT`
(1) Retrospective Premium for any Coatract Month, as calculated in Article III, sections (A), (B),
(C), and (D), is the amount due from the Policyholder for that Contract Month to Washington
National.
(2) The Policyholder will make funds available for Washington National to transfer via electronic fund
transfer (EFT) immediately upon written notice.
(C) Post Termination Premium
(1) If Schedule A indicates Reserves are held by the Policyholder and a Post Termination Claim
Liability Limit DOES apply, the Policyholder will pay to Washington National a Post Termination
Premium following termination of this Agreement equal to the sum of the result of (a) multiplied
by (b), where:
(a) is the Minimum Premium Premium for the last Contract Month of the last Contract
Period; and
i
(b) is the Post Termination Premium Factor shown in Schedule A.
(2) The Post Termination Premium will be due immediately upon written notification by Washington
National to the Policyholder of the Post Termination Premium amount due.
(3) The Post Termination Claim Liability Limit option can only be elected or cancelled by written
agreement of both parties, typically at renewal. If the Post Termination Claim Liability Limit is
elected, it can not be unilaterally cancelled by the Policyholder at any time, including at
termination of this Agreement. Unless Washington National consents to the cancellation of the
Post Termination Claim Liability Limit, the Policyholder must pay the Post Termination Premium.
OD) Non -Payment of Premium
A grace period of the same length as that provided by the Group Policy Will be, granted for the payment
of each Premium due after the first Premium. If:
(1) any Premium is not paid by the Policyholder to Washington National within the grace period, this
Agreement will automatically terminate at the end of that grace period. No written notice of such
automatic termination is required. If this Agreement terminates for any reason, the Policyholder
will be liable for all Premium due and unpaid, including a pro rats Premium for any time this
Agreement is in effect during the grace period; or
(2) Washington National is notified that there were not sufficient funds (NSF) in the Policyholder's
Bank Account(s) to cover a check or electronic fund transfer (EF'I) in payment of Premium due,
they this Agreement will automatically terminate on the date on which the grace period for such
Premium ends. No Written notice of such automatic termination is required. This will be the can
even if the check presented for payment by Washington National is found to be NSF after the end
of the grace period. Washington National reserves the right to recover from the Policyholder
charges related to non -sufficient funds (NSF) in the Policyholder's Esmk Account(s) plus any
applicable interest.
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MIlVIMUM PREMIUM AGREEMENT'
ARTICLE V - BANKING
(A) The Policyholder will establish a checking account upon which Washington National is authorized to draw
checks for Benefit Payments issued by Washington National, and for which Washington National is allowed
to act on the Policyholder's behalf with regard to the administration of this account for purposes of
establishing and changing signature(s) which appear on chocks issued for Benefit Payments, for printing
of check stock, and for establishing electronic fund transfer (EFT) arrangements.
(B) Washington National may initiate electronic fund transfers (EFI) from one of the Policyholder's Bank
Accounts for Benefit Payments, and from another of the Policyholder's Bank Accoun(s) for Respective
Premium and Post Termination Premium due to Washington National.
(C) The Policyholder agrees to maintain funds in its Bank Account(s) both before and after termination of this
Agreement which are adequate to cover checks for Benefit Payments issued by Washington National,
Retrospective Premium, and Post Termination Premium.
s
(D) The Policyholder agrees to establish and maintain a line of credit as required in an amount specified by
Washington National upon which Washington National is authorized to draw is the event that the
Policyholder fails to maintain funds in its Bank Account(s) as described in Article V, section (Q.
(E) Washington National will imprint the routing and account number of the Policyholder's designated Bank
Account(s) at the bottom of its check stock.. This section shall not apply when Washington National is not
the Claim Payor.
(F) To establish these banking arrangements referenced above:
(1) the Policyholder is responsible for all of the following:
(a) a Bank Resolution;
(b) a W-9 form;
(c) electronic fimd transfer OTT) authorization forms;
(d) any special forms or instructions for making fiord transfers;
(a) all banking fees, if the Washington National designated bank is not used; and
(f) establishing and maintaining a king of credit as required.
(2) Washington National is irresponsible for all of the following:
(a) establishing a bank account with the Washington National designated bank, if used,
(b) administering escheats based on outstanding Benefit Payment chock information received
from the Policyholder;
(G) Washington National reserves the right to recover from the Policyholder charges related to non -sufficient
funds (NSF) in the Policyholder's Bank Account(s) plus any applicable interest.
Page 13 of 16
M3NI I [ M FREAIIUM AGREEMENT
ARTICLE V1- AMENDMENTS
(A) During the first Contract Period, Washington National has the right to change the Minimum Premium
Premium rates and/or the Factors of this Agreement at any time:
(1) if the Minimum Premium Coverages are changed; or
(2) if the provisions of the Group Policy have to be changed because of a change in law; or
(3) if there is a change in the number of insured employees or dependent units covered for any of the
Minimum Premium Coverages that equals or exceeds:
(a) 10% in any Contract Month when compared to the prior Contract Mouth; or
(b) 20 % at any time during a Contract Period. In this case, die change in the number of
insured employees or dependent units covered will be determined by comparing the
number of insured employees or dependent units covered for any Minimum Premium
Coverages at the beginning of the first Contract Month of the Contract Period with the
number of insured employees or dependent units covered for any Minimum Premium
Coverages at the beginning of any subsequent Contract Month in that Contract Period.
(4) upon addition or deletion of coverage for subsidiary or affiliated eomptnies or corporate divisions.
The effective date of the change in Premium Rates and Factors will be the first day of the Contract Month
following the effective date of the event in Article VI, sections (AX1), (2), (3), and (4) that roquirea such
change.
(B) For all Contract Periods following the first Contract Period, Washington National has the right to change
the Individual Claim Pooling Liability Amount, the Premium Rates, and the Fadors of this Agreement at
any time. The effective date of any such change will be the first day of a Contract Month.
ARTICLE VII - TERMWATION
(A) 'Ibis Agreement will terminate:
(1) upon 31 days advance, written notice of termination by either the Policyholder or Washington
National to the other party,
(2) immediately upon termination of the Group Policy issued by Washington National to the
Policyholder;
(3) immediately upon failure of the Policyholder, to comply with any . term or condition of this
Agreement, such as, but not limited to, failure to:
(a) pay any Premium as specified in this Agreement; or
(b) adequately find the Bank Accounts established to cover Benefit Payments and Premium;
or
Page 14 of 16
WiDU MUM PREMU M AGREEMENT
(4) if any state or other jurisdiction enacts or amends a law or regulEon which, in the opinion of
Washington National prohibits the continuance of this Agreement, this Agreement will terminate
on the effective date of the law, regulation or amendment, as determined by Washington National.
(B) The Group Policy will terminate automatically upon termination of this Agreement unless Washington
National and the Policyholder have reached prior written agreement that termination of this Agreement will
not automatically result in termination of the Group Policy.
ARTICLE VllII • LEGAL PROVISIONS
(A) Entire Agreement
This Agreement contains the entire agreement between the parties and sets forth in full the services to be
rendered by Washington National. It may only be modified or amended by written agreement of the parties
hereto and any representation or statement not expressly set forth hereunder will not be binding ca any
party hereto in any respect.
(B) Hold Harmless
The Policyholder agrees to indemnify and hold Washington National harmlesis from any liability or cost
from any demand, claim or action brought against, or settlement, award or judgement, including attorney
fees, levied against Washington National in connection with the Policyholder's failure to meet its
obligations under the terms of this Agreement.
(C) Invalid Provisions
If a provision of this Agreement is found to be illegal for any reason by statute, regulation, or court, the
finding will not affect the remaining provisions of this Agreement. This Agreement will be construed and
enforced as if the invalid or illegal provision had not been included in this Agreement either as the
effective date or the date the provision is held to be invalid or illegal. It is provided, however, that the
basic purpose of this Agreement must be achieved through the remaining valid and legal provisions.
(D) No Waiver
Failure to enforce any term or provision of this Agreement. shall not constitute a waiver of any term or
Provision-
(E) Litigation
If a lawsuit is brought with respect to a claim subject to this Agreement and processed by Washington
National pursuant to Washington National's right to make final Benefit Payment determinations,
Washington National will defend that suit. Washington National has the right to settle any lawsuit when,
in Washington National's judgment, it appears expedient to do so. If any settlement or judgment is paid
from Washington National funds and the Policyholder is obligated to pay these Benefits Payments in
accordance with the terms of this Agreement, the Policyholder will reimburse Washington National for the
amount of Benefit Payments included in the settlement or judgment.
Page 15 of 16
h1004UM PREMIUM AGREEMENT
In the event of a clerical error, the parties agree to revert to the position in which they would have been
had the clerical error not occurred.
Title Title
October 19, 1995
Date Date
ATTEST:
�2 � P, - C �_r P�
Betty IM. Yo-hns4in, City Secretary
APPROVED AS TO CONTENT:
Mary And ws, Managing Director of
Human Reh6urces
APPROVED AS TO FORM:
CI .. �...:�'r r ,-
Page 16 of 16
Office of O
Human Resources
City of Lubbock
P.O. Sox 2000
Lubbock, Texas 79457
(606) 767-231 1
December 20, 1995
Ms. Cassie Stennett
First Health Strategies
222 West Las Colinas Blvd
Suite 1360
Irving, TX 75039
Cassie:
Enclosed is the initialed replacement page 3 for the Alta RX Master Services
Agreement. Please send me a copy of the completed agreement signed by First
Health.
If additional information is needed, let me know.
Respectfully,
Lou L. Moore
Benefits/Payroll Coordinator
a:lmlpg3cntrtfjh
FERST
HEALTH.
222 West Las Colinas Boulevard • Suite 1360 • Irving, Texas 75039 • (214) 401-4021 • Fax. (214) 401-4020
December 6,1995
Ms. Lou Moore
City of Lubbock
1625 13th Street
Lubbock, TX 79412
Dear Lou:
Attached please find replacement page 3 for the ALTA RY portion of the. Master Services
Agreement. The original page submitted to you did not include costs for other than point -
of -service claims. Please replace with this page and have it initialed and returned to me.
Please call should you have any questions.
Sincerely,
a) 0 -) �-
Cassie Stennett
Senior Account Representative
CS/jd
Enclosure
IV. FEES.
The fees and costs payable to FIRST HEALTH for the services provided under this Exhibit shall be as
follows:
A. A start-up fee of S PEA for positive enrollment, eligibility tape transfer, plan loading
and other set-up services.
B. $ 0.60 per point -of --service electronic claim transaction processed (paid or denied).
$ 1.80
per processed claim transaction submitted via a claim form.
$ 0.60
per processed claim transaction submitted through a mail order program.
$ Abe
per processed claim transaction submitted via magnetic tape.
$ 0.10
per claim for concurrent drug utilization review.
$ NIA
per claim for retrospective drug utilization review.
C. All costs incurred by FIRST HEALTH for the preparation and printing of necessary
documents, at FIRST HEALTH's actual cost plus twenty percent for handling.
D. Any increase in the rate of any non -controllable cost beyond that in existence as of the effective
date of this Exhibit, or the most recent date of renewal. 'Noncontrollable cosy means any
expense FIRST HEALTH incurs which is directly attributable to FIRST HEALTH's
performance hereunder and which is beyond the reasonable control of FIRST HEALTH, e.g.,
postage rates.
E. Costs incurred for employee presentations, client specific network expansion or for the
preparation of employee promotional materials, as mutually agreed upon under paragraph V.D.
below, or in a separate writing.
F. Advance Payment of First Month's Fees.
Unless both Client and FIRST HEALTH initial below, prior to the commencement f services
under this Exhibit, Client shall a to FIRST HEALTH 'the amount of S ,
representing approximately one month's fees hereunder. Client shall receive credit for such
payment on the invoice for the first month of services.
No advance payment: -41A /
Client FIRST HEALTH
V. MISCELLANEOUS.
A. FIRST HEALTH may adjust its fees for any reason effective as of any renewal date of this
Exhibit upon at least thirty days advance written notice of the amount of the proposed
adjustment. FIRST HEALTH may also adjust its fees for any reason during any renewal term
effective as of the first day of any month upon at least ninety days advance written notice of the
amount and effective date of the proposed adjustment. FIRST HEALTH may also propose
such adjustments during the initial term of this Exhibit if the number of eligible Plan Claimants
decreases by ten percent from the number as of the effective date indicated above. Client may
terminate the Master Services Agreement with respect to this Exhibit, as provided under
paragraph I I.A.(4) of the Master Services Agreement, if it does not accept any fee adjustment
Copyright IW4 FIRST HEALTH Sawwgies. Inc. Co\RR-Ex3
0? W
FERST
HEALTH.
222 West Las Colinas Boulevard • Suite 1360 • Irving, Texas 75039 • (214) 401-4021 • Fax (214) 401.4020
MEMO
To:
Lou Moore
From:
Cassie Stennett
Subject:
City of Lubbock
Date:
November 14, 1995
Attached you will find Addendum #2 to retain for your files. Thanks.
CS/jb
Enclosure
ADDENDUM NUMBER 2
FEE EXHIBIT TO
ADMINISTRATIVE SERVICES AGREEMENT, HEALTH CARE MANAGEMENT &
ALTA RX
The Administration Contract, Health Care Management, and ALTA Rx Service Agreement is
hereby amended effective November 1, 1995, as follows:
Fee Exhibit page of Administration Contract:
Will Renew At the same rate of $3.19 per number of Covered Medical
Employees and $4.80 per number of Covered Medical Dependents
as of the first day of the month.
$1.21 per number of Covered Dental Employees and $1.82 per
Number of Covered Dental Dependents as of the first day of the
month.
And, $8.88 for medical and dental claims processed over 68%
annual utilization.
Fee Exhibit page of Health Care Management Contract:
Will Renew The Health Care Management - Inpatient program at $1.24 per
Covered Employee per month and $1.98 per Covered Dependent
per month.
Fee Exhibit page of ALTA Rx Services Agreement:
Will Renew At the same rate of $.95 per point of service claims transaction
processed (paid or denied) and $1.88 per processed claimis
transaction submitted via a claim form and $.20 per claim for
concurrent drug utilization review.
PPO Repricing:
Will Renew At the same rate of $1.00 per employee per month.
The renewal rates for FIRST HEALTH's Administration, Health Care Management, and
ALTA Rx Agreements will continue from November 1, 1995, to November 30, 1995.
FERST-
HMMO
In other aspects the Contract remains the same.
Accepted by City of Lubbock this day of , 1995.
Title:
Accepted for FI ALTH this % day of 1995.
By:
Title:
FIRST
N�TM�
FIRST
HEALTH.
222 West Las Colinas Boufevard • Suite 1360 • Irving, Texas 75039 • (214) 401-4021 • Fax (214) 401-4020
January 4, 1996
Lou Moore
City of Lubbock
1625 13th Street
Lubbock, Texas 79412
Re: Master Service Agreement
Dear Lou:
Attached you will find a copy of the Master Service Agreement for City of Lubbock. This copy
you should retain for your records.
If you have any other questions or concerns please let me know.
Sincerely,
Cassie Stennett
Senior Account Representative
CS/jb
attachments
This Master Services Agreement ("this Agreement") is made between the FIRST
HEALTH affiliate(s) identified in the attached Services and Fees Exhibit(s) (hereinafter
referred to as "FIRST HEALTH", either individually or collectively, as required by the
context), and CITY OF LUBBOCK
("Client"), as Plan Sponsor and/or Administrator of the ray nF i ngRa .K FHPI nYFF
BENEFIT Plan (the "Plan").
1. SERVICES TO BE PERFORMED. FIRST HEALTH shall perform the services
described in the attached Services and Fees Exhibit(s) (the "Exhibit(s)") in accordance
with the terms of the Plan and within the framework of directives, policies,
interpretations, rules, practices and procedures made by Client, to the extent, that such
are consistent with the Exhibit(s) and all applicable laws and regulations.
Notwithstanding any other provision of this Agreement or the Exhibit(s), FIRST
HEALTH's services shall not include the services of legal counsel, .investment
advisors, or certified public accountants. FIRST HEALTH may suggest the use of
such professional advisors but shall not be responsible for the quality or cost of any
services so provided.
2. ; .' STANDARD OF PERFORMANCE. FIRST HEALTH, shall exercise reasonable
care, diligence and skill in performing the services provided under this Agreement.
3. : AUTHORITY OF FIRST HEALTH. FIRST HEALTH is engaged to perform the
services under this Agreement as an independent contractor and not as a fiduciary of
the Plan or as an employee or agent of Client. FIRST HEALTH shall have no final
discretionary authority or control over the management or disposition of Plan assets,
and no authority over or responsibility for Plan administration. Because FIRST
':: HEALTH is neither the Plan Sponsor- or Administrator, nor a provider of health care
services to Plan participants or beneficiaries (collectively "claimants"), FIRST
HEALTH shall have no responsibility for: (a) any funding of Plan benefits; (b) any
insurance coverage relating to the Plan, claimants, or Client; or (c) the nature or
quality of professional health services rendered to claimants.
4. `•":' FEES. For the services provided under this Agreement, Client shall pay FIRST
HEALTH the fees described in the Exhibit(s). Unless otherwise noted in the
Exhibit(s), FIRST HEALTH is authorized to deduct any fees and other charges due
under this Agreement, as soon as they are properly determined, from any account
Copyright 1"3 FIRST HEALTH Stntegim Inc.
CONMSTR.1
09193
-: established by Client over which FIRST HEALTH has withdrawal authority.
Otherwise, Client shall pay any amounts due under this Agreement within ten calendar
$.,:,,,,..days after receiving a statement therefor, unless a different time period is expressly
stated in the Exhibit(s). Interest shall accrue on any past -due amounts at the lesser of
twelve percent per annum or the maximum rate allowed by law.
5. LIABILITIES OF THE PARTIES. The parties each acknowledge that the Plan
Administrator, and not FIRST HEALTH, has the final discretionary authority to
determine what benefits will be paid by the Plan. Accordingly, Client shall defend
FIRST HEALTH against any third -party claims relating to the Plan and indemnify
FIRST HEALTH against any expense or liability (including reasonable attorneys' fees)
arising from such claims; provided, however, that Client shall not be required to
.'defend or indemnify FIRST HEALTH hereunder if and to the extent that such claim,
expense or liability is due to FIRST HEALTH's breach of its obligations under this
Agreement, including without limitation those set forth in paragraphs 1 and 2 above.
Except as provided in the preceding sentence, FIRST HEALTH and Client shall each
be responsible for its own acts and omissions and those of its respective agents, and
shall- each indemnify the other against any claims, expense or liability (including
.reasonable attorneys' fees) arising out of its own acts or omissions. Rights of
indemnification under this paragraph 5 shall survive termination of this Agreement.
6. ;', COMPLIANCE WITH APPLICABLE LAWS. FIRST HEALTH and Client shall
each be solely responsible for compliance with all laws, rules and regulations that are
now or hereafter applicable to each of them and their own performance under this
r M t Agreement. FIRST HEALTH shall not be responsible for establishing or maintaining
the, Plan or the Plan Sponsor in compliance with applicable state or federal legal
requirements. Nor shall FIRST HEALTH be an entity that is responsible for payment
under, the Plan, as referenced in federal Medicare secondary payer laws and
regulations.
7. ` COSTS AND EXPENSES. FIRST HEALTH shall, at its own expense, make
arrangements for sufficient personnel and facilities to provide its services under this
;'.Agreement. Client shall be responsible for all other expenses relating to Plan
.:' establishment, administration and benefits, including any applicable tax -related
liabilities and all legal, accounting, and other professional fees.
8. II BOOKS AND RECORDS. Client shall provide to FIRST HEALTH, or cause it to
;. beprovided, all information reasonably required by FIRST HEALTH to properly
render its services under this Agreement ("Plan Records"), which shall remain the ,
' property of Client. FIRST HEALTH shall maintain all Plan Records received by it and
at Client's expense, shall make such records available for inspection or copying at
FIRST HEALTH's office(s) where such records are kept, during normal business hours
with reasonable advance notice. Upon Client's termination of this Agreement, FIRST
- Copyright 1993 FIRST HFIAL771 Sintegin, Inc. CONMS7R.1
09N3
s
HEALTH shall deliver to Client or its designee as soon as reasonably possible those
Plan Records in FIRST HEALTH's possession. The Plan Records may be delivered
%'= h:r in. the format in which they are maintained by FIRST HEALTH, but shall include
sufficient format explanations and documentation to enable the recipient to have
immediate use of the record information. Client shall reimburse FIRST HEALTH for
all costs reasonably incurred in providing such records, including the costs of any
` programming or other changes that may be required as the result of any requests by
Client for information in a format other than the format in which FIRST HEALTH has
F . i maintained such records. FIRST HEALTH shall maintain all Plan Records in its
possession for seven years, or until they have been transferred to Client or its designee,
,whichever occurs first. FIRST HEALTH shall be entitled to retain, at its own expense,
.' ; . copies of any Plan Records that FIRST HEALTH reasonably determines are relevant
to any existing or potential claims against FIRST HEALTH, but shall not use those
records for any purpose other than resolving such claims.
9: " fi CONFIDENTIALITY. FIRST HEALTH shall keep all Plan Records confidential,
and shall . disclose the information in such records only to Client or its designee;
provided, however, that FIRST HEALTH may condition the release of medical
- information identifiable with individual claimants ("personal information") upon the
Client's written confirmation that such information is being requested by an authorized
representative of the Plan Administrator for a lawful purpose. Personal information
may,also be disclosed by FIRST HEALTH to the claimant to whom such information
pertains, or to his/her legal guardian or other representative, upon receipt of written
°t authorization from such person. FIRST HEALTH may also disclose Plan Records
whenever required by order of a court or administrative agency with jurisdiction in the , •:
matter. FIRST HEALTH may use data relating to the Plan for statistical or reporting
purposes in a manner that will not disclose personal information or the identity of the
Plan.
10." PROPRIETARY INFORMATION.
A. As the result of this Agreement, each party to this Agreement and its
respective agents and contractors may have access to information of a
proprietary nature owned or licensed by the other, e.g., information
{ concerning the other's systems, programs, processes and methods
(collectively the "Information"). FIRST HEALTH and Client both
acknowledge that the Information of each has great value to the other
and, if disclosed or used in violation of this paragraph 10, would cause
the other immediate and irreparable injury. FIRST HEALTH and
Client, and their respective employees and agents, shall not disclose or
disseminate to anyone, or use for their own benefit, any Information of
the other except as contemplated b this Agreement.
:: �• : = P P Y gre
B. If either party to this Agreement is validly served with a subpoena,
t
discovery request, or other process lawfully compelling production of
CgV4g t M l9RST HEALTH Strnte`ia, Inc. CONNISTRJ
09/93
1
the other's Information ("Legal Process"), the party served shall
'
immediately notify the other party. The other party may, at its own
expense, take any actions it deems necessary to preserve the
confidentiality of its Information; provided, however, that no party shall
have any obligation to contest any Legal Process.
C.
Neither party to this Agreement will use without permission or
otherwise infringe upon the other's names, marks, copyrights or other
intellectual property.
11. _ :.TERM AND TERMINATION.
A.
The effective date(s) and term(s) of this Agreement with respect to each
service provided by FIRST HEALTH are indicated in the Exhibit(s).
r!fi .a► r"
If an Exhibit provides that a term of service will be automatically
s
renewed, either party may terminate this Agreement with respect to that
service by giving the other not less than sixty days written notice prior
to the beginning of any such renewal term. Additionally, either party .
shall have the right to terminate this Agreement, with respect to any
x
service(s), effective:
(1) Upon the failure of the other party to cure any monetary default
(including failure to pay FIRST HEALTH's fees and charges or
to properly fund a benefits account or otherwise provide for
allowed claims) within ten calendar days after written notice
thereof;
(2) Upon the failure of the other party to cure any material, non-
`" `
monetary default within twenty calendar days after written
notice thereof, or to commence within that same period to cure
any such default that cannot reasonably be resolved within
twenty days and to continue diligently working towards such
cure thereafter for a period not to exceed ninety calendar days;
(3) Immediately upon the date the other party becomes insolvent,
has a receiver or bankruptcy trustee appointed for it, or makes
a general assignment for the benefit of creditors; or
a Asa fi..ih'
(4) Upon the effective date of any fee adjustment proposed by
FIRST HEALT14 in accordance with the terms of an Exhibit, if
Client does not agree to such adjustment.
B.
Upon the effective date of the termination of this Agreement for any
reason, each party shall:
(1) Pay to the other party all amounts due under this Agreement
Coprti;ht 1993 FIRST HEALTH Stmetim Inc. CONMSTRA
09M
N
within the lesser of twenty calendar days or the time period
specified herein;
4; (2) Immediately cease to represent that FIRST HEALTH is a
service provider with respect to the Plan, and Client shall
immediately notify the Plan participants and beneficiaries of this
fact; and
(3) Immediately return to the other party any of its Information and
any materials, excluding Plan Records, bearing the other party's
names or marks. Alternatively, such Information or materials
may be destroyed with the other party's written consent.
NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement, express or
implied, is intended to confer upon any other entity or person (including without
limitation any claimant or other person receiving or eligible to receive Plan benefits)
any rights or remedies under or by reason of this Agreement.
i.
U....:. ENTIRE AGREEMENT; AMENDMENTS. This Agreement, together with the
Exhibit(s), constitutes the entire agreement between FIRST HEALTH and Client with
respect to the subject matter hereof, and supersedes all prior proposals, discussions,
negotiations, and writings between the parties relating to such subject matter. This
Agreement may only be modified by a writing executed by authorized representatives
of. both FIRST HEALTH and Client.
14. "" SEPARABILITY. If any provision of this Agreement is held to be illegal or
unenforceable by a court of competent jurisdiction, the remaining provisions shall
remain in effect and the illegal or unenforceable provision shall be modified so as to
conform to the original intent of this Agreement to the greatest extent legally
permissible.
Is..: ;;:;FORCE MAJEURE. The obligations of either FIRST HEALTH or Client under this
Agreement, except for the obligation to make monetary payments, shall be suspended
-during the continuance of any force majeure applicable to that party. The term "force
" majeure" shall mean any cause not reasonably within the control of the party claiming
suspension, including without limitation an act of God, industrial disturbance, war, riot,
weather -related disasters, earthquake, governmental action, and unavailability or break
down of equipment. The party claiming suspension under this paragraph 15 shall take
reasonable steps to resume performance as soon as possible without incurring
' unreasonably excessive costs.
Copyright M FIRST HEALTH S"in, Ina CONMSTR.3
09J93
' 16.'; ASSIGNMENT. Neither party may assign its rights or duties under this Agreement
without the prior written consent of the other, except that FIRST HEALTH may assign
this Agreement to a different subsidiary or affiliate of FIRST HEALTH, and may
subcontract certain duties to non-affiliated third parties, provided that such assignments
and subcontracts shall not relieve FIRST HEALTH of any liability under this
'Agreement. This Agreement shall be binding upon and inure to the benefit of the
parties' respective successors and permitted assigns.
17. 'ATTORNEYS' FEES. The prevailing party in any proceedings that concern the
interpretation or enforcement of this Agreement shall be entitled to recover reasonable
costs and attorneys' fees incurred in connection with such proceedings, including'any
appeal.
18. NOTICES. All notices given under this Agreement shall be in writing and shall be
hand -delivered, transmitted by. telecopy, sent by registered or certified mail (return
receipt requested), or delivered by a nationally -recognized overnight courier service,
to' the address(es) set forth on the signature page of the Exhibit(s), or to such other
address as a party may hereafter designate in writing. A hand -delivered, telecopied or
overnight-couriered notice shall be deemed given only when actually received. A
notice sent by registered or certified mail shall be deemed given on its actual receipt
or. the fifth day after the date mailed as evidenced by the sender's receipt, whichever
occurs first.
WHEREFORE, FIRST.HEALTH and Client have executed this Master Services Agreement
with respect to each service described in the Exhibit(s) as of the date(s) indicated therein.
Copyright 1991 FIRSr HEALTH Strategies, Inc. CONMST RA
09I9)
s
FIRST
SERVICES AND FEES EXHIBIT TO
MASTER SERVICES AGREEMENT
FOR ADMINISTRATIVE SERVICES
I. EFFECTIVE DATE AND TERM.
' 1 1 With respect to this Exhibit, the accompanying Master Services Agreement shall be effective from
" DECEMBER 1 , 1995 , toNOVEMBER 30 , 1996 Thereafter, with respect to this
_' Exhibit, the Master Services Agreement shall automatically renew for successive 1 year terns unless
initialed below by Client and FIRST HEALTH:
= Y No automatic renewal: %% / Xg
Client FIRST HEALTH
The amount of fees and costs payable to FIRST HEALTH during any renewal term shall be subject to
adjustment as provided under paragraph W.A. below.
II. 'SERVICES.
is
After its receipt and processing of all necessary Plan data and other information, the FIRST HEALTH
affiliate signing below shall provide the following administrative services in connection with the Plan:
A_ Provide information, based on records provided by the Plan, concerning Plan eligibility and
benefits provisions to all claimants and their health care providers by telephone during normal
business hours, including toll -free access if separately agreed upon, and by mail in response to
written inquiries. Such information shall not constitute a determination of benefits that will be
paid under the Plan, or a guarantee or certification to anyone that any amount will be paid.
''. Benefit determinations can only be made after a complete claim is submitted and fully processed
by FIRST HEALTH, and are subject to all eligibility requirements, limitations, exclusions and
other provisions of the Plan in effect when a claim is processed.
B. Perform the following claims administration services in accordance with the terms of the
accompanying Master Services Agreement and of the Plan, including any summaries or "write-
ups" of the Plan as may be approved by the Plan Sponsor or Plan Administrator as the correct
interpretation of Plan provisions:
1. Receive and review claims and claims -related documents.
2. Verify eligibility and calculate: amounts payable under the Plan in light of Plan provisions
concerning medical necessity, reasonableness of charges and preferred provider or other
service arrangements.
3. Correspond with claimants and/or their providers to obtain any required additional
information and to determine whether other coverage for the claim exists under other
benefit plans, insurance contracts, health maintenance organizations, or government -
sponsored benefit programs.
Copyright 1"3 FIRST HEALTH Strategic% Inc. CONFDM•ER.1
09/93
7.
:..
Prepare and mail explanations of benefits (or denials of benefits) and benefit payment
checks drawn on one or more demand deposit accounts. Such accounts shall be
designated by Client, who shall ensure that the accounts contain sufficient funds at all
times for the continuous and timely payment of benefits claims processed by FIRST
HEALTH hereunder. If FIRST HEALTH determines that the accounts do not contain
such funds, FIRST HEALTH may so notify Client and suspend further performance of
services under this Exhibit pending termination of the accompanying Master Services
Agreement as provided in paragraph I1.A.(1) thereof, with respect to the services
described in this Exhibit.
Provide any insurance carrier from which Client or the Plan obtains stop -loss or other
coverage with information reasonably required by the carrier for payment of claims under
such coverage. FIRST HEALTH assumes no responsibility or liability for the non-
payment of such claims by any insurance carrier.
Seek reimbursement of overpayments of Plan benefits and offset such erroneous payments
against subsequent claims in accordance with Plan provisions and applicable law. FIRST
HEALTH shall have no obligation to take legal action against anyone to recover
overpayments or to otherwise enforce any provisions of the Plan.
Conduct the claims review and appeals procedure in accordance with Plan provisions.
Consistent with FIRST HEALTH's lack of discretionary authority or control over Plan
administration, FIRST HEALTH shall advise the Plan Administrator of all appeals of
denied claims and the Plan Administrator shall make all final benefit determinations in
such cases.
C. Provide one copy of FIRST HEALTH's current form of plan document and/or summary plan
description and all related standard administrative forms and assist with the design and printing of
claims forms, ID cards, and other supplies designed specifically for the Plan.
D. Provide all reports included, from time to time, in FIRST HEALTH's standard reporting package.
E, Provide the Plan Sponsor with any data maintained by FIRST HEALTH that is required by the
"E+k' Plan in the preparation of required reports and filings.
F. j `i. Attend meetings with the Plan Sponsor as reasonably requested and necessary for the provision of
services under this Exhibit.
' G.....:, Obtain quotations, as requested by Client, for policies of insurance, if available, including stop -loss
or excess risk coverage and/or ancillary coverages such as life and AD&D. The decision to
a ! purchase any such insurance shall be made solely by Client. FIRST HEALTH may assist Client
t 'r in evaluating quotations but makes no representations or warranties regarding the adequacy of any
particular coverage or carrier. FIRST HEALTH may receive commissions or other compensation
in connection with Client's purchase of such insurance as described in the accompanying
Disclosure of Insurance Commissions form, which shall be completed by FIRST HEALTH and
acknowledged by Client or other named Plan fiduciary before such insurance is purchased.
H: ;' Correspond with claimants and their representatives regarding possible third -party liability for
4 40
expenses paid by the Plan on claimants' behalf-, request repayment of those expenses in accordance
with any subrogation provisions of the Plan. FIRST HEALTH shall have no responsibility or
liability for the refusal of claimants or their representatives to reimburse the Plan for such
expenses. FIRST HEALTH shall have no obligation to take any legal action to enforce the Plan
subrogation rights.
I. ' `. Provide the optional services for which a fee is indicated in Section III.C. below.
Copyright M FIRST IIEALTII Stntgtim Inc. CONAW-EX.2
o9ro3
III. FEES.,,,,
.::The fees and costs payable to FIRST HEALTH for the products and services provided under this Exhibit
-shall be as follows:
initial
one-time fee of $ N/A , payable prior to commencement of services
�} :under
this Exhibit.
'B. .'s'' The base monthly fees(s) indicated and initialed below by Client and FIRST HEALTH, for claims
incurred and received after the effective date of this Exhibit:
INITIAL APPLICABLE
FEES HERE:
r0: 1.
$ 6.40 er number of Covered Employees
as of the first day of the month. Client FIST HEAL TO
$1.50 per employee per month for dental as of the first day of the mot
a. "Covered Employees" means each covered active employee .and any other person '.
7 ."*XI "
covered by the Plan in his or her own right (such as former employees or others'"
,I .. 't.a::,;: .
electing COBRA continuation coverage) and not by reason of his or her status as a
dependent or spouse of a current or former employee.
b. If Claims Transactions exceed per month per 100 Covered Employees
during any [check one] three/ six/_twelve month period during any [check
one] flan/ calendar year, an additional fee of $ per excess Claims
W '
Transaction durin such nod, a able within sixt da s after the end of the nod. -.:.
8 I� P Y Y Y Pe
7
"Claims Transaction" means each separate disposition or step in the processing and * .
,
resolution of a claim, including an initial approval, denial, or request for additional '
information, and each such subsequent activity with respect to the claim until it is
resolved.
2.
$ per Claims Transaction per month. N/A / N/A
Client FIRST HEALTH
3,
A monthly fee equal to percent of H/A / H/A
t
t !
the aggregate dollar amount of claims paid Client FIRST HEALTH '
i.
during the month.
Other, including any combination of the above: /
Client FfAST HEALTH
.•` C:'f=si'cThe fee(s) for optional services indicated and initialed below by Client and FIRST HEALTH:
..
INITIAL BELOW IF THESE
i'
SERVICES ARE SELECTED:
7 "
FIRST HEALTH Interact.
Standard Report Package: $ N/A / H/A F
Client FIRST HEALTH
-_{.
'
- Analytical Services: $ N/A / N/A
or $_ per hour) Client FIRST HEALTH
- Sub -license: $ N/A / N/A
'
(and/or $ per Covered Employee Client FIRST HEALTH
per month)
Copyright M FIRST HEALTH Strategies, Inc. CONADM-F.X.3
"193
2.
.
3.
Run -In Claims.
- The following fees for processing claims
incurred prior to the effective date of this
Exhibit:
Run -Out Claims.
- The following fees for processing claims
incurred after the expiration of the Master
Services Agreement with respect to this
Exhibit (provided, however, that all other
provisions of the Agreement and this Exhibit
shall remain in effect during such processing):
i
N/A / N/A
Client FIRST HEALTH
N/A / N/A
Client FIRST HEALTH
4. Other Optional Services.
Client FIRST HEALTH
- The following fees for the additional
-` services hereafter described:
DICARE SECONDARY PAYOR - S20.00 per hour
SPECIAL REPORTS b SUPPLIES — Cott
D. Advance Payment of First Month's Fees.
". Unless both Client and FIRST HEALTH initial below, prior to the commencement of services under
this Exhibit, Client shall pay to FIRST HEALTH the amount of $ N/A , representing
1 approximately one month's fees hereunder. Client shall receive credit for such payment on the invoice
„. for the first month of services.
No advance payment:
Client FIR T HEALTH
I,
E. :' Increase in Non -controllable Costs.
Increases in the rate of any non -controllable cost beyond that in effect as of the date of this Exhibit
+' ror its most recent renewal shall be bome by Client. "Non -controllable cost" means any expense
FIRST HEALTH incurs which is directly attributable to FIRST HEALTH's performance under this
.• i ; Exhibit and which is beyond the reasonable control of FIRST HEALTH, e.g., postage rates.
Copyright M FIRST 11CALTII Strateaka, Im CONADM-RX.4
"193
8
.r :
IV.."`
MISCELLANEOUS.
t
A.: -FIRST HEALTH may adjust its fees for any reason effective as of any renewal date of this Exhibit
`upon at least thirty days advance written notice of the amount of the proposed adjustment. FIRST . ;
�..` HEALTH may also adjust its fees for any reason during any renewal term effective as of the first day
any month upon at least ninety days advance written notice of the amount and effective date of the
iof
proposed adjustment. FIRST HEALTH may also propose such adjustmc;n[s during the initial term of
"•`�, ` this Exhibit if the number of eligible Plan Claimants decreases by. ten percent from the number as of
the effective date of this Exhibit indicated above. Client may terminate the Master Services
Agreement with respect to this Exhibit, as provided under paragraph 11.9.(4) of the Master Services .:
/ Agreement, if it does not accept any fee adjustment proposed by FIRST HEALTH.
B. a , Mutually acceptable fee adjustments may be reflected in a letter which shall be signed by authorized
representatives of FIRST HEALTH and Client and attached to this Exhibit. Except for adjustments
fees and charges expressly set forth in such a letter, all terms and conditions of this Exhibit and the
i Master Services Agreement shall remain in effect until the Master Services Agreement is terminated
with respect to this Exhibit as provided therein.
C. y,t Other miscellaneous terms, if any:
i
I! 11
,,F 1
i
1
1 ,
J 1
Copyright 1"3 FIRST HEALTH Stnleghs, Inc. CONADM•EX3
"193
[Print Name of Client]
ISTRATOR
tp nship `d a -ent t e Plan,
an onsor and/or mimstrator
S► Kg,
FIRST HEALTH STRATEGIES (TPA),
INC.
Y111100" By: &ad
of ien s P
orized [Signature of RST HEA H
Representative] Corporate Officer]
DAVID R. LANGSTON
�t�-l►-►�k 7. Ear ( c
[Print Name of Person SigningAbove]
5R. vi,(R.. PrCS,'0., f
[Print Title of Person Signing Above]
Address: 222 W. LAS COLINAS BLVD.
SUITE 1360
IRVING, TX 75039
Attn: CASSIE STENNETT
APPROVED AS TO FORM:
nald G. Vandiver, First
Assistant City Attorney
CONADM-MG
09193
r
FIRST
HEALTH.
ERISA PTE 77-9 DISCLOSURE OF INSURANCE COMMISSIONS
'. THIS FORM MUST ACCOMPANY EACH ADMINISTRATIVE SERVICES
EXHIBIT TO A FIRST HEALTH MASTER SERVICES AGREEMENT
Name of Plan: CITY OF LUBBOCK EMPLOYEE BENEFIT PLAN
Insurer: ` "`` WASHINGTON NATIONAL
The products; being purchased by the above Plan or its Sponsor include the following:
Life` 3' I: AD&D Dependent Life X Stop Loss Other.
INITIAL AND RENEWAL COMMISSIONS
FIRST,HEALTH will receive the following initial and renewal sales commissions expressed as a percentage of the
gross annual premium payments (i.e. ):
Life
Initial: 0 % Each Renewal: 0 %
Stop Loss ra,
k �
' Initial: Each Renewal: Q %
FIRST.HEALTH has agreed to pay N/A (% or $) of the commissions received to (name and address):
ADDITIONAL COMPENSATION
FIRST HEALTH may receive additional compensation from the Insurer in the form of a production bonus, service
fees, override commissions or a profit sharing arrangbment. Such compensation may be based upon FIRST
HEALTH's potential volume of business with the Insurer, the overall profitability of the Insurer's business, or other
similar, factors.' The amount of such additional compensation, if any, will not be known until the end of the
agreement period with the Insurer.. Information regarding such additional compensation, insofar as it relates to the
Plan, will beavailable for the Plan fiduciaries' review after such amounts have been determined.
Copyright M FIRST HEALTH Strate`ic% Inc CONrrF F.X.1
09193
OTHER COSTS OR FEES
Other costs or fees (in addition to commissions disclosed above) that may be charged to the Plan or its Sponsor by
the Insurer include policy change fees and costs, early contract termination charges, or certain other fees, discounts,
penalties,"or adjustments which may be imposed under the terms of the recommended contract. These additional
costs or fees ' may be summarized as follows:
RELATIONSHIP TO INSURER
FIRST HEALTH [check one] is X is not an affiliate of the Insurer. FIRST HEALTH [check one]
'is q X is not limited by any agreement with the Insurer in its ability to recommend the purchase of
insurance products from other insurers or funding organizations.
Explanation. if applicable:
RELATIONSHIP TO PLAN
To avoid a possible prohibited transaction under the Employee Retirement Income Security Act of 1974 ("ERISA"),
if applicable to the above Plan, FIRST HEALTH may not be:
Affiliated with the Plan Sponsor or any other employer who has employees covered by the'Plan;
2 A Plan Trustee (other than a nondiscretionary trustee who does not render investment advice
concerning Plan assets);
'3 A named Plan Administrator; or
~ 'A named Plan Fiduciary or other fiduciary who is expressly authorized in writing to manage,
acquire or dispose of Plan assets on a discretionary basis.
ACKNOWLEDGEMENT
The undersigned acknowledges receipt of the informatign contained in this statement prior to any purchase of the
insurance products described above and approves the proposed transaction on behalf of the Plan or Plan Sponsor
without receiving, either directly or indirectly, any compensation or other consideration for his or her own personal
account from any party dealing with the Plan in connection with the transaction. The undersigned certifies that, to
the best of his or her knowledge and belief, FIRST HEALTH is not related to the Plan. in any capacity described
above.
(Signature
Of Plan Administrator or other named Fiduciary) Date
Copyright M FIRST HEALTH StrategIM Inc. CONPTE-XX.3
09/93
MASTER SERVICES AGREEMENT
FOR HEALTH CARE MANAGEMENT SERVICES
L . -:,EFFECTIVE DATE AND TERM.
With respect to this Exhibit, the accompanying Master Services Agreement shall be effective from
OECEMBER 1 , 1993-, to NOVEMBER 30 , 1996 . Thereafter, with respect to this Exhibit,
the Master Services Agreement shall automatically renew for successive I year terms unless initialed below
,,,by Client, and FIRST HEALTH:
r,
.No automatic renewal: XX / XX
Client FIRST HEALTH
The amount of fees and costs payable to FIRST HEALTH during any renewal term shall be subject to
adjustment as provided under paragraph III.A. below.
IL . SERVICES AND FEES.
After its receipt and processing of all necessary Plan data and other information, the FIRST HEALTH affiliate .
,,, signing,below shall perform those services for which a fee is indicated and initialed by Client and FIRST
«. HEALTH.
~...''. INITIAL BELOW IF THESE
SERVICES ARE SELECTED:
A . t HEALTH CARE MANAGEMENT -INPATIENT.
'i...'.C: Client FIRST HEALTH
Determination of whether unscheduled surgical procedures are cosmetic or medically
necessary ("preauthorization") and, if requested, determination of the amount that will be paid
by the Plan for such procedure(s) subject to certain specified conditions ("predetermination").
Requests for pre determinations must be submitted in writing.
y2. ; Determination of medical necessity of scheduled procedures ("precertification") for all ,.!
hospital admissions, including psychiatric and chemical dependency admissions. .
`. .
3. Admission review (all inpatient admissions).
.4. Cyclic concurrent continued stay management.
5. Discharge planning.
' 6 Catastrophic case management.
Copyright 1993 FIRST HEALTH Strolegim Inc. CONUCM-EX.1
09193
DA
7.
Inpatient behavioral case management.
Claims review (described in II.D. below).
.9. ,
Quality assurance studies.
'L lo.
Referrals to preferred provider physicians and hospitals..
�'` •`.,° 11.
Health information services via toll free number (if necessary).
'�='`�►F'4 :12.
Standard Activity reports.
2.00 ' ' per
Covered Employee per month
'
MatemiHealth may be added for the following additional fees (check selected services):
High Risk Maternity NO
1' Short Stay Maternity Nfl
$_S(,A_ per Covered Employee per month
B ,' 1 HEALTH CARE MANAGEMENT -COMPREHENSIVE. NIA NIA
Client FIRST HEALTH
I.
All services included in Health Care Management -Inpatient, above.
` 2:
Ambulatory precertification of medical necessity of the following services:
�.;
Arthroscopy (knee)
'
Carpal Tunnel
Hammertoe
Hemorrhoidectomy
r,.. ,:....:
Hysteroscopy
Infusion Chemotherapy
;•
Myringotomy
,
'
Pacemaker Implantation
PET/PERT/PETT Scan
Septoplasty
Tonsillectomy and/or Adenoidectomy
Thallium Stress Test
Tympanostomy
UGI Endoscopy
3.
Specialized management for alternative levels of care (check selected services):
~'a':•�'j,' i
Home Health Care Management,
Hospice Management
. `
Extended Care Facility Management
Podiatry Management
Chiropractic Management
t
MaterniHealth
High Risk Maternity
• Short Stay Maternity
per
Covered Employee per month
Copyright 1"3 FIRST HEALTH SlrnleglM Inc. CONIICM-EX2
09/93
i70,•' t;04, l Determination of whether unscheduled surgical procedures are cosmetic or medically
necessary ("preauthorization") and, if requested, determination of the amount that will be paid
by the Plan for such procedure(s) subject to certain specified conditions ("predetermination ).
Requests for predeterminations must be submitted in writing.
2: Notification by participants of any of the following services being scheduled for purposes of
Catastrophic Case Management screening ("prior notification"):
• Inpatient Hospital Admissions
• Inpatient Behavioral Admissions
• Home Health Care
• Hospice
• Extended Care Facilities
3. Catastrophic Case Management.
4. MatemiHeaIth (check selected services):
• High Risk Maternity
• Short Stay Maternity
5: Claims Review.
per Covered Employee per month
D. ° "CLAIMS REVIEW.
N/A / N/A.
Client FIRST HEALTH
Retrospective review of medical claims to determine appropriateness of charges by examining,
e.g., level of care, type of service, coding practices, etc.
N/A / N/A
Client FIRST HEALTH
I.; Specialized case management provided by professional staff with advanced degrees and/or
experience in the behavioral sciences.
2. ' Precertification and concurrent certification of medical necessity of services provided in a
• •,, ; provider's office or facility -based services (day/partial hospitalization).
Standard Activity Reports.
$ per Covered Employee per month
Copyright M FIRST HEALTH Strategies, Inc. CONIICM-EXJ
09197
4
DENTAL MANAGEMENT. N/A / N/A
Client FIRST HEALTH
Determination of whether unscheduled procedures are cosmetic or medically necessary
("preauthorization") and, if requested, determination of the amount that will be paid by the
Plan for such procedure(s) subject to certain specified conditions ("predetermination").
Requests for predeterminations must be submitted in writing.
} ': 2.
Claims Review.
. . ' 3.
Standard Activity Reports.
per Covered Employee per month
G. ' ;" DISABILITY MANAGEMENT. N/A / N/A
Client FIRST HEALTH
i..:+"'N.F.. I.,.'
Precertification and Concurrent/Follow-up Services.
'
Precertification, concurrent or follow-up reviews, and physician review services on a per -case
basis. Individual services (i.e., inpatient hospital admission, physical therapy, or chiropractic
i
L;
services) precertified for any given claimant will be billed as separate cases.
hour
a.'` ". 2.
Medical and/or Vocational Case Management. NIA / NZA
Client FIRST HEALTH
Telephonic or on -site services performed by a qualified RN or Vocational Rehabilitation
counselor for the purposes of medical assessment and/or coordination under workers'
�:.
compensation, short term disability, or long term disability coverage, and issues impacting
return to work. All activity will be pre -approved bythe adjuster, payor, or other designee of
Client.
$
/ hour plus expenses, e.g., long distance tolls, mileage and other travel expenses
€, iSy3.
Hospital Bill Review. N/A / N/A
�...1
Client FIRST HEALTH
�4Ui
- .
'
Hospital bills will be pre-screened for audit potential at no charge. All audits review length
of stay and fee adjustments required by state schedules, and recalculate for per diem rates.
Prescreen No Charge
Hospital Bill < $5,000 $ + access fee
Hospital Bill < $10,000 $ + access fee
tN ? I
Hospital Bill $10,000+ % of Billed Amount
; : " 40, ,
; :... Travel No Charge
_ ..;�"..`..;4...
Independent Medical Evaluation (IME) Scheduling¢. N/A / N/A
Client FIRST HEALTH
FIRST HEALTH Case Manager will identify an appropriate IME physician, schedule the IME
appointment, and notify the patient of the appointment.
.$
per IME
Copyright 1"3 FIRST HEALTH Strote=im Ire. CONHCM-F.X.4
09193
_ I
H. k HOSPITAL BILL NEGOTIATION/AUDIT. /
Client FIRST HEALTH
1. Negotiation of hospital bills greater than $20,000, with onsite audit if necessary.
2. Standard Activity Reports.
Negotiation Fees: 20% of the savings negotiated (the difference between the hospital's billed charges
and the negotiated charge).
Onsite Audit Fees: 3% of the audited charges.
MANAGED SECOND OPINION. N/A / N/A
Client FIRST HEALTH
' 1. Application of clinical criteria to identify cases which could benefit from a second opinion
for the following procedures:
ft Eyi:f C-Section Exploratory Laparotomy
,:: }; �i' '. Cholecystectomy Mastectomy
Hysterectomy Prostatectomy
Laminectomy
2. Standard Activity Reports.
$ per Covered Employee per month
J. SET-UP SERVICES. N/A / N/A
Client FIRST HEALTH
L One standard employee communication package (English only; Spanish version provided for -
►"�trii' ; t�� , h4} -. R extra fee) per Covered Employee. Any material describing FIRST HEALTH's services
distributed by the Plan must first be reviewed and approved by FIRST HEALTH, at the
hourly rate then currently charged by FIRST HEALTH for such review.
:f „=f,l
`2. Loading of Plan benefit information.
plus actual printing costs for employee communication packets.
. K." !:.:, �:ADVANCE PAYMENT OF FIRST MONTH'S FEES.
Unless both Client and FIRST HEALTH initial below, prior to the commencement of services under
t this Exhibit, Client shall pay to FIRST HEALTH the amount of $ N/A
i representing approximately one month's fees hereunder. Client shall receive credit for such payment
�= on the invoice for the first month of services.
Pr. No advance payment: XX / XX
Client FIRST HEALTH
;f
J;
:...:
Copyright M FIRST HEALTH Siateaie% Inc. CONIfCM•F:X3
09/93
M. MISCELLANEOUS.
• + � Hwy "f�'f'i'' ••
Li
.:i_FIRT HEALTH lA`'Smay adjust its fees for any reason effective as of any renewal date of this Exhibit
i i upon at least thirty days advance written notice of the amount of the proposed adjustment. FIRST
HEALTH may also adjust its fees for any reason during any renewal term effective as of the first day .
! of any month upon at least ninety days advance written notice of the amount and effective date of the
proposed adjustment. FIRST HEALTH may also propose such adjustments during the initial term of
�� .•ter.
:•this Exhibit if the number of eligible Plan Claimants decreases by ten percent from the number as of
'.' the effective date indicated above. Client may terminate the Master Services Agreement with respect
; E ;• to this Exhibit, as provided under paragraph I I.A.(4) of the Master Services Agreement, if it does not
Iz{ accept any fee adjustment proposed by FIRST HEALTH.
• fit,;, i
B 4 Mutually acceptable fee adjustments may be reflected in a letter which shall be signed by authorized
.representatives of FIRST HEALTH and Client and attached to this Exhibit. Except for adjustments ,141r.:
ri fees and charges expressly set forth in such a letter, all terms and conditions of this Exhibit and the
Master Services Agreement shall remain in effect until the Master Services Agreement is terminated
r ! `zty $� 3; with respect to this Exhibit as provided therein. 1
C 14.0[4As used in this Exhibit, "Covered Employee" means each covered active employee and any other
-person covered by the Plan in his or her own right (such as former employees or others electing
'=` { COBRA continuation coverage) and not by reason of his or her status as a dependent or spouse of a...
7�iq, , current or former employee.
D. `,` FIRST HEALTH shall have no responsibility or liability to anyone for the results of professional
:`.services rendered by healthcare providers. FIRST HEALTH shall have no right or obligation under
"�� t ,. • this Exhibit or the Master Services Agreement to intervene in the determination of what such services 1
shall be or how they shall be rendered. Decisions to obtain or deliver any health care service shall
i ., A
always be made only by the patient and/or the patient's treating professional.
. 'H 1 ,cicr r �Is,'='+��+91�•�-1fia'.� . ! ... ...
„FIRST HEALTH may rely on the recommendations of licensed health care professionals retained by
FIRST HEALTH to assist it in rendering the health care management services provided for under this
< ; Exhibit.,
,
rF `�+e.� FIRST HEALTH's health care management services do not include a guarantee or certification to
anyone that particular professional services are covered under the Plan or that benefits will be paid for
..�k„?,,:those services. Final eligibility and coverage decisions can be made by the Plan's claims payor only
x Ri after a complete claim is submitted and fully processed for payment.
G It Other miscellaneous terms, if any: ,
47. ME
Copyright IV03 FIRST HEALTH Strotexks• Inc CONHCM-F•XA
r
IV. ' • 'EXECUTION OF AGREEMENT.
CITY ' OF LUBBOCK
FIRST HEALTH REVIEW, INC.
}r [Print Name of Client]
I TRATOR
[Print Re ions ' o e Plan,
P Spons r and/o
,:�
}
y OF
_
'''' •: [Signature of nt's Author' d
B GI
y�
[Signature of FIRST HEALTH
Representative]
Corporate Officer]
~ DAVID R. LANGSTON
Pm +Ck ZT. Ear, 1,
.. [Print Name of Person Signing Above)
[Print Name of Person Signing A e]
MAYOR
SR . V + ct;: Prc !ri '
[Print Title of Person Signing Above]
[Print Title of Person Signing Above]
' t
�
Address:"1625 13TN STREET
Address: 222 W. LAS COLINAS BLVD.
i ,LHBB OCK, TX 7940i
SUITE 1360
IRYING„ TX 75039
"Attn: ='' 1.OU MOOgE
Attn: CASSIE STENNETT
APPROVED AS TO CONTENT:
APPROVED AS TO FORM:
Mary An ews, Director of
aid .Vandiver, First '
. ;:.. ,:.;..�.. Human Resources -
•
Assistant City Attorney
s
.::. ,� .: E' d r• ; ' Betty. Jo , City
Secretary
Copyright M FIRST HEALTH StrnteQks, Inc.
CONHCM-MI
i.:
@W3
FIRST
HEALTH
SERVICES AND FEES EXHIBIT To
MASTER SERVICES AGREEMENT
FOR PRESCRIPTION DRUG PROGRAM
I. EFFECTIVE DATE AND TERM.
With respect to this Exhibit, the accompanying Master Services Agreement shall be effective
from DECEMBER 1 , 199 5 , toNOVEMBER 30 , 1996 . Thereafter, with respect to this
Exhibit, the Master Services Agreement shall automatically renew for successive 1 year terms
unless initialed below by Client and FIRST HEALTH:
+; No automatic renewal: xX / ZX
Client FIRST HEALTH
The amount of fees and costs payable to FIRST HEALTH during any renewal term shall be subject to
adjustment as provided under paragraph V.A. below.
II.' " SERVICES.
After its receipt and processing of all necessary Plan data and other information, the FIRST HEALTH
affiliate signing below shall provide the following services in connection with the Plan's prescription drug
benefits:
A.:: % • Maintain eligibility records and provide information, based on records furnished by the Plan,
concerning Plan eligibility and benefits, to all claimants and health care providers, by a toll -free
telephone number available all days, twenty-four hours per day. FIRST HEALTH shall be
entitled to rely on all such eligibility information furnished by Client, and shall have no liability
to anyone for any inaccuracy in such information.
B. Receive and review claims; verify eligibility, based on the information described in the
preceding subparagraph A; and determine amounts payable under the Plan for claims received
by FIRST HEALTH after the effective date specified in Section I above. Payment rates for
both mail order and walk-in prescription claims shall include costs of the prescription, electronic
claims technology and network administration, plus any dispensing fees.
C_ Prepare benefit payment checks drawn on designated demand deposit accounts, which shall be
fully funded no less than two business days after FIRST HEALTH notifies Client of its drug
claim If such funding
payments. g is not timely made, FIRST HEALTH may withdraw the
amount of such deficit from the security deposit account described in Section III. A. below.
D. = Provide FIRST HEALTH's standard prescription drug program reporting package which shall
include the following:
1. Prescription Drug Summary (PDS)
2. Population Utilization Profile (PUP)
3. Group Detail Report
4. Weekly Statement of Account
CoFld&M IM FIRST HEALTH Stroeths, Inc CtNIRX-EX.1
tt M
a
Any change in this standard reporting package, and any agreement as to optional reports and
- the fees therefor, shall be set forth in a separate writing signed by both FIRST HEALTH and,
Client.
E. � ` Maintain a record of claims transactions.
F...•:. Electronically transmit eligibility information to, and capture prescription drug claims on
magnetic tape from, contracting pharmacies.
G. Administer the claims review and appeals procedure in accordance with Plan provisions, subject
to the Plan Administrator making all final benefit determinations in cases of benefits initially
denied by FIRST HEALTH.
H. Adjust payments to providers to account for underpayments. Seek reimbursement of
overpayments and offset such erroneous payments against future claims in accordance with Plan
provisions and applicable law. FIRST HEALTH shall have no obligation to take any legal
action against anyone to recover overpayments or otherwise enforce any provisions of the Plan.
I. Provide the Plan Administrator with any data maintained by FIRST HEALTH that is required
by the Plan in the preparation of required reports and filings. Client shall bear the cost of
providing any such data in a format other than FIRST HEALTH's then standard format.
J.: Perform drug utilization review services for which a fee or fees are designated in Section IV.B.
below, according to FIRST HEALTH's standard policies and procedures for such review
services.
K. Provide data analytical services and make recommendations regarding Plan design, eligibility
and utilization issues. Payment for such services is included in the drug utilization and/or
transaction fees described below and any applicable manufacturers' formulary arrangements.
III. SECURITY DEPOSIT ACCOUNT.
r�
This section shall be applicable unless initialed here by an authorized representative of FIRST
HEALTH:
A. Client shall maintain a minimum balance of $ N/A in a demand deposit
account designated by FIRST HEALTH. Such deposit shall serve as security for performance
of Client's obligations under this Exhibit and accompanying Master Services Agreement. Any
interest earned on this account shall be retained by Client.
B. At any time the balance of the security deposit account falls below one-half of the amount
specified in the preceding subparagraph A., FIRST HEALTH shall not be obligated to make
benefit payments. In such an event, FIRST HEALTH may: (1) advise claimants and their
providers as to the insufficiency of funds, but shall not be required to do so; and/or (2)
terminate the accompanying Master Services Agreement as provided in paragraph II.A.(1)
thereof, with respect to the services described in this Exhibit.
C.` At any time that Client is delinquent in the payment of any of the amounts provided in Section
IV of this Exhibit, FIRST HEALTH may directly withdraw the amount of such delinquency
from the security deposit account after giving Client five days advance written notice of its
intent to do so.
CoppW 1994 91RST HEALTIIStndegks, tw-
CONRX4X.2
03/94
' 'The fees and costs payable to FIRST HEALTH for the services provided under this Exhibit shall be as
follows:
A: `► A start-up fee of $ RSA for positive enrollment, eligibility tape transfer, plan loading
other set-up services.
0.60 per point -of -service electronic claim transaction processed (paid or denied).
1.80 per processed claim transaction submitted via a claim form.
$ 0.60 per processed claim transaction submitted through a mail order program.
$ NSA per processed claim transaction submitted via in.
tape.
$ 0.10 per claim for concurrent drug utilization review.
$ RSA per claim for retrospective drug utilization review.
C. , All costs incurred by FIRST HEALTH for the preparation and printing of necessary
documents, at FIRST HEALTH's actual cost plus twenty percent for handling.
:'D. ,;.: , Any increase in the rate of any non -controllable cost beyond that in existence as of the effective
date of this Exhibit, or the most recent date of renewal. "Non -controllable cost" means any
r expense FIRST HEALTH incurs which is directly attributable to FIRST HEALTH's
` t : performance hereunder and which is beyond the reasonable control of FIRST HEALTH, e.g.,
postage rates.
E..::;.,.,:.Costs incurred for employee presentations, client specific network expansion or for the
' preparation of employee promotional materials, as mutually agreed upon under paragraph V.D.
below, or in a separate writing.
F.:.11 :.:, Advance Payment of First Month's Fees.
i
Unless both Client and FIRST HEALTH initial below, prior to the commencement of services
under this Exhibit, Client shall pay to FIRST HEALTH 'the amount of $ BSA
representing approximately one month's fees hereunder. Client shall receive credit for such
payment on the invoice for the first month of services.
No advance payment: /
Client FIRST HEALTH
V. MISCELLANEOUS.
A: FIRST HEALTH may adjust its fees for any reason effective as of any renewal date of this
Exhibit upon at least thirty days advance written notice of the amount of the proposed
adjustment. FIRST HEALTH may also adjust its fees for any reason during any renewal term
s_ :{ ` � � effective as of the first day of any month upon at least ninety days advance written notice of the
amount and effective date of the proposed adjustment. FIRST HEALTH may also propose
` such adjustments during the initial term of this Exhibit if the number of eligible Plan Claimants
decreases by ten percent from the number as of the effective date indicated above. Client may
terminate the Master Services Agreement with respect to this Exhibit, as provided under
paragraph 11.A.(4) of the Master Services Agreement, if it does not accept any fee adjustment
Cepyrl& M FUM 11ULTHStracen, Im Corm-EC-3
03M
N
r
proposed by FIRST HEALTH.
B. Mutually acceptable fee adjustments may be reflected in a letter which shall be signed by
authorized representatives of FIRST HEALTH and Client and attached to this Exhibit. Except
for adjustments in fees and charges expressly set forth in such a letter, all terms and conditions
of this Exhibit and the Master Services Agreement shall remain in effect until the Master
Services Agreement is terminated with respect to this Exhibit as provided therein.
C. FIRST HEALTH shall have no responsibility or liability to anyone for the results of
professional services rendered by health care providers. FIRST HEALTH shall have no right
or obligation under this Exhibit or the Master Services Agreement to intervene in the
determination of what such services shall be or how they shall be rendered. Decisions to obtain
or deliver any health care service shall always be made only by the patient and/or the patient's
treating professional.
D. Other miscellaneous terms, if any:
Copes IM FAST HEALTH ftztegW, hr— CONMEX.4
03/94
i
f
Q VI. EXECUTION OF AGREEMENT.
CITY OF LUBBOCK FIRST HEALTH STRATEGIES (TPA),
[Print Name of Client] INC.
ADM STRATOR
[Print TOR
' o Clie o the Plan,
g. Spons an r Admin'
B ` BY:
&T14 Signature of C1 nt's Autho ' (Signature of IRSTH
Representative) Corporate Officer]
DAVID R. LANGSTON �jct-�-�C, icy
[Print Name of Person Signing Above] [Print Name of Person Signing Above]
MAYOR SR. Yiq- Pres-/dc,&
[Print Title of Person Signing Above] [Print Title of Person Signing Above]
Address: 1625 13TH STREET Address: 222 W. LAS COLINAS BLVD.
LUBBOCK, TX 79401 SUITE 1360
IRVING, TX 75039
-Attn:; LOU MOORE Attn: CASSIE STENNETT
APPROVED AS TO CONTENT: APPROVED AS TO FORM/---- �4QA
j.
Mary An ws, Director of al G. Vandiver, First
Human Resources Assistant City Attorney
ATTEST:
ettp K. John46n, City
Secretary
Cepye4bt M% MST WALTH Sh , 1w- COVRx4[7Cd
03M
HOSPITAL SERVICES AGREEMMNT
BETWEEN
CITY OF LUBBOCK
AND
ST. MARY OF THE PLAINS HOSPITAL
AND
UNIVERSITY MEDICAL CENTER
Article
1.
Definitions
2.
Provision of Services
3.
Educational and Health Screening Services
4.
Verification of Benefits, Utilization Review
5.
Billing Procedures
6.
Payment
7.
Rates
8.
Administration of Agreement Provisions
9.
Exclusivity
10.
Performance
11.
Miscellaneous
12.
Marketing, Advertising and Publicity
13. "
Dispute Resolution
14.
Term
15.
General Provision
Schedules - See Attached Rate Proposal and Explanation
A
Rates for Services -Inpatient Services
B
Rates for Services - Outpatient Services
C
In-Network/Out-of-Network Financial Incentive
Differentials
D
Exclusive Lubbock County Hospital Provider Listing
1
2
5
6
7
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It r
HOSPITAL SERVICES AGREEMENT
This Agreement is entered into this 1st day of December, 1995 by and between the City
of Lubbock, (-Payor") and St+ Mary of the Plains Hospital and University Medical Center
("Hospitals'), which are situated in Lubbock, Lubbock County, Texas.
WHEREAS, in response to a request for proposal by Payor, Hospitals submitted a joint
proposal for health care services pursuant to a Memorandum of Understanding between the
Hospitals; and
WHEREAS, Payor has decided to accept Hospitals' joint proposal to provide health care
services under Payor's Employee Benefit Plan; and
WHEREAS, Payor and Hospitals, as parties to this agreement, desire to establish a
relationship to ensure their mutual success and to define their respective rights and responsibili-
ties to each other;
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises
and covenants contained herein, Payor and Hospitals agree as follows:
ARTICLE 1: DEFINITIONS
1.1 General Meaning of Words and Terms:
The words and terms used in this Agreement are intended to have their usual
meanings unless specifically defined in this Article or otherwise in this Agreement.
1.2 HEALTH CARE SERVICES ('Services') means those medically necessary medical,
surgical and ancillary services which are normally performed on an inpatient or
outpatient basis at Hospitals or other facilities operated by Hospitals.
1.3 DAY OF STAY means a day of service on which a Participant occupies an inpatient
bed at 12:01 a.m. or where a Participant is admitted and discharged within the same
day.
1.4 HOSPITAL STAY means the consecutive days of service for which a Participant
occupies an inpatient acute care bed; provided that, if a Participant is discharged and
readmitted to Hospitals within a 24-hour period for treatment of the same condition
which occasioned the original hospitalization, the DAYS OF STAY before discharge
and following readmission until final discharge shall be considered to be one
HOSPITAL STAY.
1.5 RATES means amounts Payor and Participants shall pay in lieu of Usual and
Customary Charges for Health Care Services rendered by Hospitals which are covered
under the applicable Employee Benefit Plan. Such Rates are provided in Schedules
A and B which are attached.
1.6 USUAL AND CUSTOMARY CHARGES means the Rates determined by taking the
charges per unit of service from Hospitals' regular schedule of charges in effect on
the date of service times the number of units of service.
1.7 COORDINATION OF BENEFITS means the rules established by Payor for
Coordination of Benefits. .
1.8 EMPLOYEE BENEFITS means Medically Necessary and Reasonable professional
services rendered to Participants by Hospitals to the extent that such services are
eligible for payment or reimbursement under the terms of the Employee Benefit Plan
applicable to each Participant.
1.9 EMERGENCY SERVICES means necessary health services immediately required for
unforeseen illness or injury in order to avoid serious medical consequences.
K
1.10 EMPLOYEE BENEFIT PLAN(S) ("Plan") means the contract, certificate, policy,
Plan document or any other legally enforceable instrument and amendments issued or
sponsored by Payor under which a Participant is entitled to health services or health
service benefits, including, but not limited to, indemnity plans, insurance group health
plans, and worker's compensation plans.
1.11 INPATIENT SERVICES means the following acute care services which are normally
provided by Hospitals to a hospitalized Participant admitted to a room in accordance
with Hospitals' Usual and Customary practice when rendered in accordance with the
covered benefits under Payor's Plan:
(b) Medical, nursing, surgical, pharmacy and dietary services;
(c) All diagnostic and therapeutic services required by the Participant.
(d) Use of Hospitals facilities, as are required by the Participant and
ordered by the attending physician;
(e) Services rendered by Hospitals prior to the Participant's admission
as an inpatient, such as Outpatient or Emergency Services, exclud-
ing emergency transport, which are directly related to the condition
for which the Participant is admitted as an inpatient; and
(f) Administrative services required in providing Inpatient Services
under this Agreement.
1.12 MAY is used to indicate a permissive or discretionary term or function.
1.13 MEDICALLY NECESSARY AND REASONABLE includes due consideration of
whether services are: (1) appropriate and necessary for the symptoms, diagnosis or
direct care and treatment of a medical condition; (ii) provided for the diagnosis or
treatment of a medical condition, (iii) within standards of good medical practice within
the organized medical community; Civ) not primarily for the: convenience of the
Participant, the Participant's attending or consulting physician, or another health care
provider; and (v) the most appropriate level of service or supplies that can be
provided in accordance with accepted medical practice.
3
1.14 OUTPATIENT SERVICES means all services rendered by Hospitals in accordance
with the covered benefits under Payor's Plan when the Participant has not been
admitted as an inpatient to receive services.
1.15 PARTICIPANTS) means an eligible individual and his/her eligible dependents
covered for health benefits by the Payor's Plan(s) who are entitled to receive the
services which are the subject of this Agreement without reference to residence,
domicile or other geographical factors.
1.16 SHALL is used to indicate a mandatory term or function.
1.17 UTH.IZATION REVIEW means the function performed by an organization or entity
to review the necessity of hospital admissions and services, level of care, and lengths
of confinement.
1.18 CLEAN CLAIM ('Claim') is defined as a complete and accurate claim, as is
customary in the industry, for authorized services rendered to Participants that
includes the necessary details relating to the illness, accident or other coverage the
Participant may have.
4
ARTICLE 2: PROVISION OF SERVICES
2.1 Within the Usual and Customary capacity and capabilities of their facilities and
personnel, Hospitals shall provide to the Participants any and all necessary and
appropriate Health Care Services which Hospitals customarily maim available to the
general public. Charges for the Health Care Services rendered by another health rare
provider as the result of a Participant's transfer shall be billed by that health care
provider and will not be subject to the terms of this Agreement.
2.2 All Health Care Services shall be provided to the Participants in the same manner, in
accordance with the same standards, and within the same time availability as
Hospitals' services to other patients. Except in the case of an Emergency, such
services shall be provided to the Participants only upon the order of a member of
Hospitals' Medical Staff.
2.3 Hospitals agree to notify Payor in writing of any substantial change in the types of
Inpatient or Outpatient Services offered. Hospitals shall notify Payor of any such
change when reasonably possible in. writing sixty (60) days prior to the change.
Nothing in this Agreement shall require St. Mary Hospital to provide any services
which would cause that Hospital to violate its ethical and/or religious beliefs. Such
services would include but not be limited to: abortions not necessary to remedy a life-
flimtening condition of the mother, sterilizations, in vitro fertilization and euthanasia.
Hospitals and Payor recognize that the inpatient and outpatient hospital services
covered by this Agreement are personal and nondelegable. No assignment or
delegation of the rights, duties or obligation of this Agreement shall be made by
Hospitals without the express written approval of a duly authorized representative of
Payor.
2.4 Hospitals shall make available to Payor a complete listing by specialty of physicians
with medical staff or clinical privileges and contracted. This list shall be updated as
physicians are added. If a Participant needs assistance in contacting a physician with
staff privileges at Hospitals, Hospitals shall provide assistance in the same manner it
assists other patients.
5
ARTICLE 3: EDUCATIONAL AND HEALTH SCREENING SERVICES
3.1 Hospitals may provide Participants with information regarding programs offered by
the Hospitals, such as Dimensions, Seniors are Specials, Baby Grand, Senior Class,
Birth Advantage, etc.
3.2 Hospitals shall provide preventive medicine screening and educational services to
Participants. Programs may include such items as cholesterol, blood pressure,
glucose, fitness/wellness, skin/oral cancer, screening and/or testing, as well as trauma
prevention, lifting techniques, fitness evaluation, stress management and nutd-
tion/dietary information. Participants may also receive a copy of Hospitals'
preventive medicine newsletters. Hospitals may conduct an on -sight Health Fair
annually during the term of the Agreement.
3.3 Participants shall be eligible for selected special services offered by Hospitals such as
Dimensions, Seniors are Specials, Baby Grand, Senior Class, Birth Advantage, etc.
3.4 Hospitals' speakers bureau shall conduct educational programs, as mutually agreed,
on such issues as diabetes, home safety, and services offered by Hospitals, upon
request by Payor.
6'
ARTICLE 4: VERIFICATION OF BENEFITS, UTILIZATION REVIEW
4.1 Payor shall provide Hospitals with the following information concurrent with the
signing hereof, at the time of the renewal hereof, and at any other time that a change
occurs in such information:
(a) A list of Employee Benefits provided under each Plan which is
covered by this Agreement; and,
(b) A list of all co-insurance and deductible requirements of each such
Plan.
Hospitals shall be entitled to rely on the accuracy of the foregoing information.
4.2 Payor shalt notify .Hospitals 45 days prior to any changes in the financial incentives
contained in any Plan affected by this Agreement. In the event Hospitals are
dissatisfied with any change of any Plan affected by this Agreement, Hospitals shall
have the right to terminate this agreement on 45 days written notice.
4.3 The following procedures for benefits determination and treatment authorization shall
apply to Participants presented for admission to Hospitals:
(a) Each Plan covered by this Agreement shall contain a provision
requiring Payor to issue identity cards to all Participants in the Plan.
Each such card shall identify the particular plan in which the Partici-
pant is enrolled, , the name and telephone number of the entity
responsible for treatment benefits verification, treatment authoriza-
tion and Utilization Review, and such other information as is needed
to enable Hospitals to ascertain the Plan benefits applicable to such
Participant and to ascertain the entity which is to be billed for
services rendered. Each Plan shall require each Participant to
present such card to Hospitals at the time services are sought.
(b) Hospitals shall contact Payor orally (prior to the time of admission
or in case of an emergency, within 2 worldng days to verify the
Participant's Plan benefits and to obtain an authorization for the
treatment prescribed by the Participant's attending physician. Payor
agrees to verify Participant eligibility and to authorize, treat-
7
went at the time of admission to Hospital if requested during normal
working hours. Services initiated outside normal working hours will
not be denied due to lack of treatment authorization.
(c) Hospitals shall be entitled to rely upon the accuracy of any verifica-
tion and treatment authorization from Payor and upon proper iden-
tifying information as proof of Participant eligibility, and shall be
reimbursed for Health Care Services rendered to such Participants.
The information provided by Payor and/or Plans will not guarantee
full payment since the Participant may be responsible for deduct-
ibles, co-insurance amounts and noncovered services except as
otherwise provided herein.
(d) Payor has established a Utilization Review Program, outlined in the
Plan attached to this Agreement, which will provide preadmission
and concurrent review criteria.
(e) Payor and Hospitals agree to cooperate to maximize cost contain-
ment while providing quality health care.
(f) Payor shall have the right to perform concurrent and retrospective
Utilization Review of services rendered to Participants. In no event
shall there be a retrospective denial of reimbursement paid to
Hospitals hereunder after a period of one hundred twenty (120) days
from the date of payment.
(g) In the event Payor's Utilization Review questions treatment on the
basis of medical necessity, the Utilization Review Program shall
provide an opportunity for timely physician -to -physician dialogue on
the necessity of the services.
(h) If Payor's Plan permits retrospective determinations of eligibility,
medical necessity, or coverage issues, and such determinations are
undertaken, in no event, shall a determination result in the denial of
services so long as such services had been approved pursuant to a
preadmission certification, eligibility certification, length of stay
approval, or similar program.
n
ARTICLES: BILLING PROCEDURES
5.1 As soon as possible after providing services to a Participant, Hospitals shall furnish
to Payor a claim for service. Hospital must file the claim within twelve months after
providing services to the Participant.
5.2 Hospitals shall place any authorization numbers received from Payor on the
Participant's claim form.
5.3 Hospitals shall take reasonable steps to secure current information from Participants
with respect to the existence and source of other third -party liability or coverage of
Participants. In a case in which Payor is primary, under the applicable Plan and the
coordination of benefit rules, Hospitals shall receive,the Rates set forth in Schedules
A and B. In a case in which Payor is secondary, under the applicable Plan and
coordination of benefit rules, Payor shall pay an amount not to exceed the Rates set
forth in Schedules A and B, which then added to amounts received by Hospitals from
other sources does not exceed 100 % of Hospitals' Usual and Customary Charges are
covered medical services.
5.4 Nothing in this Agreement shall prevent Hospitals from holding Participants
financially responsible for:
(a) Deductible and coinsurance amounts pursuant to the Plan at the
appropriate Rates.
(b) Noncovered and medically unnecessary services at the Hospitals'
Usual and Customary Charges.
5.5 Hospitals shall not bill Participants for the difference between the Rates agreed to in
this Agreement and Hospitals' Usual and Customary Charges.
5.6 The Payor retains the right to perform charge audits comparing billed amounts to
those services, treatments and supplies provided by Hospitals as documented in the
medical records of the Participant. This audit will not delay the payment process as
defined in Section 6.1. Hospitals agree to refund Payor the difference between billed
charges that are not documented and charges that were not billed but are documented
in the medical record at the appropriate Rate. In the event unbilled but documented
charges exceed billed but not documented charges, then the Payor agrees to pay the
difference at the appropriate Rates.
9
5.7 In no event shall Payor demand or recover any sum from Hospitals in connection with
a claim for services rendered to a Participant more than 12 months following the
earlier of either:
(a) The payment by Payor of all sums which Payor at any time
contends constitutes full payment of the claim, or
(b) The receipt by Hospitals of all sums which it at any time contends
constitutes full payment of the claim.
5.8 Wherever and to the greatest extent possible, Payor shall accept the submission of
claims hereunder via electronic media.
10
ARTICLE 6: PAYNUgT
6.1 Payor shall arrange to pay Hospitals pursuant to this Agreement less any coinsurance
and deductible amounts and less the charges for any services not covered in
Participants' Plan. The Payor shall make payments to the Hospitals hereunder within
thirty (30) calendar days from the receipt of a Clean Claim.
6.2 Repeated delays of payment shall constitute a material breach of this Agreement.
6.3 The following services are excluded from Payor's payment obligations hereunder, and
are directly chargeable by Hospitals to Participants when furnished at the Participant's
request.
(a) Personal comfort and convenience items.
(b) Custodial care.
(c) Private rooms where not medically necessary. If a private room is
occupied when not medically necessary, Hospitals shall be entitled
to collect directly from the Participant the difference between
Hospitals' charges for a semi -private room and the private room.
6.4 Payor's payment obligation shall end for each Participant admitted as an inpatient
under this Agreement as of the day of discharge.
6.5 In the event of any overpayment, duplicate payment, or other payment in excess of
that to which Hospitals are entitled, Hospitals shall make repayment to Payor within
30 days of notification and proof by Payor of such overpayment, duplicate payment,
or other excess payment. Should Hospital discover excess payment of any land prior
to notification by Payor, Hospital will contact Payor and will hold the money until it
is determined to whom the money belongs.
6.6 Payor agrees that it shall provide and maintain differential financial incentives to
encourage Participants to obtain Health Care Services at Hospitals to the extent that
to do so is lawful, reasonable and protects the health and interest of the Participants.
Such incentives will include lower deductibles, lower co-insurance arrangements,
greater plan benefits, and other financial incentives as specified in Schedule C.
11
6.7 Payor shall reimburse Hospitals at the Rates specified in Schedule A for Inpatient
Services and in Schedule B for Outpatient Services less deductible and co-insurance
amounts as specified in Schedule C. Hospitals may, at their sole discretion, waive
deductible and co-insurance amounts.
6.8 Wherever and to the greatest extent possible, Payor shall reimburse Hospitals
hereunder in electronic clearing house funds paid by mutually agreed -upon automated
clearing house methodologies.
12
ARTICLE 7: RATES
7.1 Hospitals agree to render Participants inpatient and outpatient hospital services. The
reimbursement mechanism which shall be used as the basis for payment of covered
services by Payor to Hospital is described in Schedules A acid B attached to this
Agreement. Schedule A and B for both Hospitals is considered proprietary
information and disclosure of this could damage the business of the Hospitals.
7.2 Hospitals reserve the right to negotiate Rates with Payor for new services established
during the term of the Agreement. Hospitals and Payor agree to negotiate Rates in
good faith.
7.3 The Rates set forth in Schedule A and B are for Hospitals' services only and shall not
include any physician professional fees; unless otherwise designated.
7.4 Payor may access physician network at no charge.
7.5 Physician fee schedule to be used is through the St. Mary Health Alliance Network
which will be provided to Payor for its designated Third Party Administration to
administer. Clean claims must be paid within 30 calendar days.
13
ARTICLE 8: ADNO NISTRATION OF AG PROVISIONS
9.1 Access to Records
(a) Hospitals shall prepare and maintain patient business and medical
records for all services delivered to Participants. These records
shall be prepared and maintained as required by law.
(b) Except as otherwise provided herein, Payor will have the right to
inspect, at a mutually agreeable time, and on -site area of Hospitals,
any accounting, administrative and those medical records disclosable
pursuant to applicable law and maintained by Hospitals pertaining
to claims for services rendered under this Agreement. The Payor
will reimburse Hospitals for reasonable costs incurred for locating
and reproducing said records.
8.2 Confidentiality
(a) Each party covenants at all times to comply with all federal and
state statutes, regulations and court decisions pertaining to the
confidentiality and release of patient records and information.
Nothing in this Agreement shall require any party to violate any
right of privilege or confidentiality granted by law.
(b) Nothing in this Agreement shall require Hospitals to do anything
which would jeopardize the confidentiality of peer review and
quality assurance activities.
8.3 If practical, Payor shall provide Hospitals, at Hospitals expense, with reports on a
quarterly basis summarizing the Participant activity under this agreement during that
quarter. In addition, within 90 days of the close of each Agreement year, Payor shall
provide Hospitals with reports summarizing the Participant activity provided under the
Agreement during the Agreement year. One report shall include total discharges,
patient days, charges and payments segregated by provider for Inpatient Services.
Another report shall indicate total visits, charges and payments segregated by provider
for Outpatient Services.
14
SCHEDULE D
EXCLUSIVE LUBBOCK COUNTY HOSPITAL PROVIDER LISTING
• St. Mary of the Plains Hospital
4000 24th Street
Lubbock, Texas 79410
• University Medical. Center
602 Indiana Avenue
Lubbock, Texas 79415
32 -
ARTICLE 9: EXCLUSIVITY
9.1 The Rates, terms and conditions outlined herein are predicated on Payor agreeing to
the following obligations:
Attached to this Agreement as Schedule D is a list which Payor
represents to be all .Hospitals whose services will be offered to
Participants in Lubbock County. Payor shall not enter into any
hospital -provider arrangements for its group hospitalization with any
other hospital or ancillary providers such as mental health or
chemical dependency facilities, imaging center, home health or
preferred provider organizations operating in Lubbock County
during the term of this Agreement.
is
ARTICLE 10: PERFORMANCE
10.1 Hospitals shall, at their own expense, provide and maintain facilities and professional
and allied personnel to provide all necessary and appropriate Inpatient and Outpatient
Services.
10.2 Hospitals shall, at their own expense, provide and maintain the organizational and
administrative capabilities to carry out their duties and responsibilities under this
Agreement.
10.3 Hospitals, at their sole expense, agree to maintain adequate insurance for professional
liability and comprehensive general lability, and such other insurance, as shall be
reasonably adequate to insure Hospitals and their employees against any event or loss
which may impair the ability of Hospitals to fulfill their obligations as outlined in this
agreement, including their indemnification obligations. In lieu of such insurance,
Hospitals may maintain the ability to respond to any and all damages which would be
covered by such insurance. A certificate of insurance shall be submitted annually for
proof of these coverages. If insurance is not obtained, thce proof of financial
responsibility shall be provided, including a financial statement and notification of the
official claims process and any changes to insurance or financi2l responsibility made
during the contract period will be submitted to the Payor for approval prior to
implementation.
10.4 The Hospitals shall certify that all physicians with medical staff privileges at the
Hospitals are required by the medical staff bylaws to carry adequate insurance for
professional liability.
10.5 Hospitals represent to Payor that at the time this Agreement is entered into they
possess all licenses required by law to operate as a hospital in the State of Texas, that
they have been certified as meeting the Hospital Conditions of Participation for the
Medicare program (Title XVIII of the Social Security Act of 1972, as amended), and
that they are accredited by 7CAHO. Hospitals agree to maintain in good standing all
such licenses, certification and accreditation during such period of time as this
Agreement is in effect and Payor reserves the right to terminate this Agreement
immediately upon notice in writing to Hospitals if Hospitals fail to do so. Upon
request, Hospitals agree to furnish Payor with successive copies of JCAHO certificates
when received by Hospitals.
10.6 Hospitals shall send written notice to Payor of any legal governmental or other action
initiated or consummated against the Hospitals, which could materially impair the
ability of the Hospitals to carry out the duties and obligations of this Agreement.
16
10.7 To the extent allowed by law, each Hospital agrees to protect, defend, indemnify and
keep safe the Payor and respective officers, directors, agent and employees against
any and all liability, loss, damage, claim or expense of any kind, including legal costs
and attorneys fees, which result from negligent or willful acts or omissions by the
indemnifying Hospitals, their agents, officers, directors or employees, in connection
with the duties and obligations or activities of the Hospitals under this Agreement.
10.9 To the extent allowed by law, Payor agrees to protect, defend, indemnify and keep
safe Hospitals, their officers, directors, agents and employees against any and all
liability, loss, damage, claim or expense of any kind, including legal costs and
attorneys fees, which result from negligent or willful acts or omissions by the Payor
or its officers, directors or employees, in connection with the duties and obligations
or activities of the Payor under this Agreement.
10.9 In the event that either Payor or Hospitals institute any action, suit, or arbitration
proceeding to enforce the provisions of this Agreement, the prevailing party shall
recover costs and reasonable attorney fees.
10.10 If any provision of this Agreement is held to be illegal or invalid for any reason, such
illegality or invalidity shall not affect the remaining portions of the Agreement, unless
such illegality or invalidity prevents accomplishment of the objectives and purposes
of the Agreement. In the event of any such holding, the parties will immediately
commence negotiations to remedy such illegality or invalidity.
10.11 Notwithstanding mutual recognition that services under this Agreement will be
rendered by Hospitals to Participants, it is not the intention of either Payor or
Hospitals that Participants occupy the position of intended third .party beneficiaries of
the obligations assumed by either party to this Agreement and no Participant shall
have the right to enforce any such obligation.
10.12 Relationship of Parties
(a) No provision of this Agreement is intended to create any relation-
ship between Payor and Hospitals other than that of independent
entities contracting with each other solely for the purpose of
affecting the provisions of this Agreement. The relationship of
Payor and Hospitals will not be construed or interpreted to be a
partnership or joint venture.
17
(b) It is understood and agreed that the operation and management of
facilities and rendition of care and treatment by Hospitals shall be
solely and exclusively under their control, and Payor shall have no
right or authority over the operation of Hospitals, rendition of
medical care, or selection of professional and other staff.
(c) Neither of the parties to this Agreement, nor any of their respective
employees, agents or representatives, will be construed to be the
agent, employee or representative of the other, or liable for any acts
of omission or commission on the part of the other.
18
ARTICLE 11: MISCELLANEOUS
11.1 This Agreement shall be governed by and construed in accordance with all applicable
Federal laws and the laws of the State of Texas. This Agreement is performable in
Lubbock, Lubbock County, Texas, where venue shall he for all purposes. It is
understood that this agreement shall be assigned and binding to any successors to the
HOSPITALS as previously stated.
11.2 Any notice required to be given hereunder shall be made in writing and sent by
certified mail, return receipt requested, to:
PAYOR at:
City of Lubbock
P. O. Box 2000
Lubbock, Texas 79457
Attention: Lou Moore
HOSPITALS at:
St. Mary of the Plains Hospital
4000 24th Street
Lubbock, Texas 79410
Attention: President and Chief Executive Officer
University Medical Center
602 Indiana Avenue
Lubbock, Texas 79417
Attention: President and Chief Executive Officer
11.3 The captions contained herein are for reference purposes only and shall not
affect the meaning of this Agreement.
11.4 Payor will not be held to offering any HMO product until it deems appropriate to its
health plan. Any offering of any contract, HMO or otherwise, must be conducted
according to all state laws.
19
ARTICLE 12: MARKETING, ADVERTISING AND PUBLICITY
12.1 Payor and Hospitals each reserve the right to and the control of its name, symbols,
trademarks, or service marks presently existing or later established. In addition,
neither party shall use the other party's name, symbols, trademarks, or service marks
in advertising or promotional materials or otherwise without the prior written consent
of the party and shall cease any such usage immediately upon mrritten notice from that
party or upon termination of this Agreement, whichever is sooner.
F
ARTICLE 13: DISPUTE RESOLUTION
13.1 Payor and Hospitals agree to meet and confer in good faith to resolve any problems
. or disputes that may arise under this Agreement.
13.2 If Hospitals believe Payor incorrectly denied all or part of the charges and want to
obtain a review of the benefit determination, Hospitals shall:
(a) Submit a written request for review to Payor within 30 days of
denial, and
(b) Include in the written request the items of concern regarding
Payor's determination and all additional information (including
medical information) that Hospitals believe has a bearing on why
the determination was incorrect.
13.3 On the basis of the information supplied with the request for review to Payor,
together with any other information available to it, Payor will review its prior
determination for correctness. Hospitals will be notified in writing of Payor's
decision and the reasons for it within 30 days of Payor's receipt of the request
for review.
13.4 Either party may pursue its lawful remedies for any controversy or claim
arising out of or relating to this Agreement.
13.5 Nothing in this Agreement shall be construed to limit either party's lawful remedies
in the event of a breach of this Agreement.
13.6 The waiver by either party of any breach of any provision of this Agreement or
warranty or representation herein shall not be construed as a waiver of any subsequent
breach of the same or any other provision.
21
ARTICLE 14: TERM
14.1 This Agreement shall be effective for one year commencing December 1, 1995.
14.2 The terms of this Agreement shall apply to Hospital Stays or Hospital Services that
commence on or after the effective date of this Agreement.
14.3 This Agreement may be terminated upon the occurrence of any of the following
events:
(a) The date of dissolution or liquidation of Payor or the Hospital,
whichever first occurs;
(b) A material breach by either party of any covenants or obligations of
this Agreement, provided that such party fails to cure same within
30 days after written notice of default by the other party, as of the
31st day subsequent to such notice;
(c) Either party to this Agreement may, with or without cause, unilater-
ally terminate this Agreement at any time upon 90 days prior written
notice to the other.
(d) This Agreement may be terminated upon written notice if any party
to this Agreement makes or has made any untrue statements of
material fact or any other intentional misrepresentation of any fact,
whether or not material.
(e) In the event that either party shall become insolvent, make a general
assignment for the benefit of creditors, suffer or permit the appoint -
meat of a receiver for its business or its assets or shall avail itself
of, or become subject to, any proceedings under the Federal
Bankruptcy Act or any other statute of any state relating to insolven-
cy or the protection of rights of creditors, then, at the: option of the
other party, this Agreement shall terminate immediately and be of
no further force and effect.
22
(f) In the event Hospitals' relationship with Payor terminates at any
time during which any Participants are inpatients of Hospitals,
Hospitals agree to continue rendering normal and custDmary services
on behalf of such Participants and to continue accepting Rates for
such services, in accordance with the terms and provisions of this
Agreement, until such time. as Participant is discharged or trans-
ferred. Payor similarly agrees that Payor will rendex payment for
services so delivered.
(g) In the event of termination of this Agreement, Payor shall provide
timely notice to its Participants of the termination or payor shall pay
Usual and Customary Charges.
23
ARTICLE IS: GENERAL PROVISION
15.1 In this Agreement, the Payor and Hospitals are independent contractors and neither
party nor its respective agents or employees shall have any right or any authority to
assume or create any obligation on behalf of or in the name of the other party.
15.2 This Agreement, together with the Attachments hereto and all other documents
incorporated herein by reference, contains the entire agreement of the parties and
incorporates all prior proposals, discussions, negotiations and oral understanding or
agreements. No amendment, modification or alteration of the terms hereof shall be
binding unless the same be in writing, dated subsequent to the date hereof and duly
executed by authorized representatives of Payor and Hospitals.
IN S WEiE MOF, the undersigned parties have executed this Agreement as
of the dateArst written abmw..,
"P
Title: David R. Langston, May
HOSPITALS"
St. f the Plains H spital
1
Title:
Date: / 4r a%-
etty 14.'John4bn, City Secretary
University Medical Center
B L./
Title. w _ems 0
ATTEST:
APPROVED AS TO
APPROVED AS TO
Attorney
24
Date: 10 / i t (!a
Schedule A
Revised 9-25-95 Joint Proposal
St. Mary Rates Only
RATES FOR SERVICES
Hospital: St. Mary of the Plains Hospital
Network St. Mary hospital and University Medical Center
Payor. City of Lubbock
For. Group Health and Inpatient Services
Methodology: Inpatient Services - Per Diem
All rates for services are confidential.
Description
Payment
Method
Rate
I. Inpatient Services:
A. Adult and pediatric, medical or surgical services
Per diem
$ 500
B. Obstetrical and neonatal services:
(1) Maternity, uncomplicated vaginal delivery
Per diem
$ 520
(2) Maternity, cesarean section
Per diem
$ 550
(3) Neonatal intensive care
Per diem
$ 800
(4) Newborn(s)-boarder baby
Per diem
$ 140
C. Adult medical/surgical intensive care, pediatric intensive
Per diem
$ 900
care, coronary care unit services
D. Inpatient cardiovascular services:
(1) Cardiovascular Surgery (DRG 104-111)
Per diem
$ 1800
(2) Cardiac catheterization (DRG 124-125)
Per diem
$ 1100
(3) PTCA/Arthrectomy (DRG 112)
Per diem
$ 1100
STRICTLY CONFIDENTIAL
Payment
Description
Method
Rate
E. Psychiatric services:
(1) Adult acute services
Per diem
$ 290
(2) Partial hospitalization
Per diem
$ 135
F. Chemical dependency services:
(1) Adult acute services
Per diem
$ 240
(2) Adult detoxification
Per diem
$ 270
(3) Partial hospitalization
Per diem
$ 135
O. Physical rehabilitation services
Per diem
$ 300
H. Skilled nursing services
Per diem
$ 150
2. Exclusions from the per diem rate
Cost plus
Implants, prosthetic devices, etc.
% Add on
5 %
3. Inpatient Stop -Loss
For services provided to any Participant during an inpatient
stay for which Hospitals' Usual and Customary charges at
Rates then in effect exceed $35,000, Payor agrees to reim-
burse Hospital at the following percent of covered charges
for all services rendered during that particular inpatient stay.
% Charges
25 %
4. Rate Increase for year 2 and year 3
% Increase
4 %
Rates will be adjusted for annually for year 2 and 3
according to the date on the attached contract.
DR G Code
Description
104
Cardiac Valve Procedures with Cardiac Catheterization
105
Cardiac Valve Procedures without Cardiac Catheterization
106
Coronary Bypass with Cardiac Catheterization
107
Coronary Bypass without Cardiac Catheterization
108
Other Cardiothoracic Procedures
110
Major Cardiovascular Procedures with Cardiac Catheterization
III
Major Cardiovascular Procedures without Cardiac Catheterization
112
Percutaneous Cardiovascular Procedures
124
Circulatory Disorders except Acute Myocardial Infarction with Cardiac
Catheterization and Complex Diagnosis
125
Circulatory Disorders except Acute Myocardial Infarction with Cardiac
Catheterization without Complex Diagnosis
STRICTLY CONFIDENTIAL
l
Schedule B
Revised 9-2S-95 Joint Proposal
St. Mary Rates Only
RATES FOR SERVICES
Hospitals: St. Mary of the Plains Hospital
Other Facilities: St. Mary Imaging Center
St. Mary Surgicenter
St. Mary Family Healthcare Center - Northwest
St. Mary Family Healthcare Center - Southwest
St. Mary Family Healthcare Center - East
St. Mary Family Healthcare Center - Northeast
St. Mary Family Healthcare Center - South
St. Mary Family Healthcare Center Southeast
St. Mary Family Healthcare Center - West
St. Mary Family Healthcare Center - South Central
St. Mary/UMC Wolfforth Family Healthcare Center
UMC Chatman Community Health Center
UMC Freedom Square Community Health Center
UMC Parkway Community Health Center
UMC Slaton Primary Medical Clinic
Payor: City of Lubbock
For: (group Health Outpatient and Other Services
Methodology: Reimbursement based on Ambulatory Surgical Center Rates as grouped by
Medicare; Per visit Rates and percentage of charges
All rates for services are confidential.
STRICTLY CONFIDENTIAL
Payment
Description
Method
Rate
1. Ambulatory Surgical Center (ASC) Groups
A. Group 1
Per procedure
$ 550
B. Group 2
Per procedure
$ 750
C. Group 3
Per procedure
$ 950
D. Group 4
Per procedure
$ 1150
E. Group 5
Per procedure
$ 1400
P. Group 6
Per procedure
$ 1700
G. Group 7
Per procedure
$ 1800
H. Group 8
Per procedure
$ 1500
I. Group 9 (Kenai Lithotripsy)
Per procedure
$ 2700
J. Unclassified procedures
% Charges
50%
If more than one procedure is performed during a single
operative session, then the payment will be based on the
following methodology. The procedure with the highest
payment according to its assigned group will be paid at 100 %
of the quoted Rate. Any additional procedures will be paid at
50 % of the per procedure group to which they are assigned.
The maximum number of procedures that will be paid for any
single operative session will be three.
STRICTLY CONFIDENTIAL
� � J
Payment
Description Method Rate
2. Other Outpatient Services
A. Hospital Based % Charges 50 %
B. Other outpatient facilities
St. Mazy Imaging Center % Charges 50 %
St. Mary SurgiCenter % Charges 50 %
Home Health Preferred . % Charges 65 %
C. Emergency Room Services
(1) Level 1 (brief or basic)
Fixed fee
$ 72
(2) Level 2 (intermediate)
Fixed fee
$ 162
(3) Level 3 (comprehensive)
Fixed fee
$ 320
D. Primary Care and Healthcare Centers (professional
component only) *
(1) Initial patient visit ($5.00 co -pay required)
Fixed fee
$ 25
(2) Established patient visit ($5.00 co -pay required)
Fixed fee
$ 20
E. Primary Care and Healthcare Centers (Ancillary
% Charges
50 %
services)
(The employee will be responsible for payment of
$5.00 at the time of the visit. The Health Plan would
be responsible for the balance, unless the employee
has not met the required deductible.)
STRICTLY CONF )ENTIAL
i J
Description
Payment
Method
Rate
3. Other services
A. Benefit Programs **
St. Mary Senior Class
Yearly fee
Free
B. Health Screenings (Includes lipid profile cholesterol,
Yearly fee
Free
cardiopulmonary, skin cancer screening, CBC for
detection of anemia and infections, automated blood
chemistry for detection of high or low blood sugar,
liver disease, kidney disease and general health status)
C. Health Education Classes (includes on -site educational
programs to address the health concerns of the em-
ployees and their families. Sample programs will
Yearly fee
Free
include stress management, healthy cooking, child
Way, etc.)
Notes:
* Rate quoted for clinic visits includes the professional component only. If patient is referred
to another facility for more extensive testing or procedures, then Rates quoted from that
facility will be used.
** St. Mary Senior Class is a special program with benefits and services for people aged SS
and older. In addition, health screenings, educational programs and discounts at numerous
local businesses are available.
STRICTLY CONF DENTiAL
SCHEDULE A
RATES FOR SERVICES
Hospitals: St. Mary of the Plains Hospital
University. Medial Center
Payor. City of Lubbock
For: Group Health and Inpatient Services
Methodology: Inpatient Services - Per Diem
C>CA06 •+r 31, /qg�c � .
Proposal valid through Septem€�r30, 1995. All rates for services are confidential.
Description
Payment
Method
Rate
1. Inpatient Services:
A.
Adult and pediatric, medial or surgical services
Per diem
$
750
B.
Obstetrical and neonatal services:
(1) Maternity, uncomplicated vaginal delivery
Per diem
$
700
(2) Maternity, cesarean section
Per diem
$
800
(3) Neonatal intensive care
Per diem
$
11200
(4) Extracorporeal membrane oxygenation
Per diem
$
4,500
(5) Newborn(s)-boarder baby
Per diem
$
200
C.
Adult medical/surgical intensive care, pediatric intensive
Per them
$
1,700
care, coronary care unit services
D.
Burn intensive care
Per diem
$
3,000
E.
Telemetry, progressive care services/definitive observa-
Per diem
$
750
lion unit
F.
Inpatient cardiovascular services (DRG 104-125)
Per diem
$
1,750
G.
Bone marrow, Iddney and liver transplant services
% Charges
90 %
(excluding costs associated with organ acquisition)
SCHEDULE A
Payment
Description
Method
Rate
H. Psychiatric services:
(1) Adult acute services
Per diem
N/A
(2) Partial hospitalization
Per diem
N/A
I. Chemical dependency services:
(1) Adult acute services
Per diem
N/A
(2) Adult detoxification
Per diem
N/A
(3) Partial hospitalization
Per diem
N/A
J. Physical rehabilitation services
Per diem
N/A
K. Skilled nursing services
Per diem
N/A
2. Inpatient Stop -Loss
For services provided to any Participant during an inpatient
stay for which Hospitals' Usual and Customary charges at
Rates then in effect exceed $35,000, Payor agrees to reim-
burse Hospital at the following percent of covered charges
for all services rendered during that particular inpatient stay.
% Charges
60
3. Rate increase for per diems in second year (f contract ex-
% Increase
4 %
tended at City's option).
DRG Code Description
104
Cardiac Valve Procedures with Cardiac Catheterization
105
Cardiac Valve Procedures without Cardiac Catheterization
106
Coronary Bypass with Cardiac Catheterization
107
Coronary Bypass without Cardiac Catheterization
108
Other Cardiothoracic Procedures
110
Major Cardiovascular Procedures with Cardiac Catheterization
111
Major Cardiovascular Procedures without Cardiac Catheterization
112
Percutaneous Cardiovascular Procedures
124
Circulatory Disorders except Acute Myocardial Infarction with Cardiac
Catheterization and Complex Diagnosis
125
Circulatory Disorders except Acute Myocardial Infarction with Cardiac
Catheterization without Complex Diagnosis
a
SCHEDULE B
Payment
Description
Method
Rate
If more than one procedure is performed during a single
50 %
operative session, then the payment will be based on the
following methodology. The procedure with the highest
payment according to its assigned group will be paid at 100%
of the quoted Rate. Any additional procedures will be paid at
% of the per procedure group to which they are
assigned. The maximum number of procedures that will be
paid for any single operative session will be three.
2. Other Outpatient Services
A.' Hospital Based
% Charges
60 %
B. St. Mary Imaging Center
% Charges
N/A.
C. St. Mary SurgiCenter
% Charges
N/A
D. Emergency Room Services
(1) Level 1 (brief or basic)
Fixed fee
$ 120
(2) Level 2 (intermediate)
Fixed fee
$ 250
(3) Level 3 (comprehensive)
Fixed fee
$ 450
E. Emergency Medical Services (Ambulance)
% Charges
80 %
F. Community/Family Healthcare Centers or Clinics
(professional component only)*
(1) Initial patient visit
Fixed fee
$ 30
(2) Established patient visit
Fixed fee
$ 25
G. Community/Family Healthcare Centers or Clinics
(Ancillary services)
% Charges
60 %
(The employee will be responsible for payment of
$5.00 at the time of the visit. The Health Plan would
be responsible for the balance, unless the employee
has not met the required deductible.)
H. Drug testing (DOT Standards)
All-inclusive
$ 30
I. Pre -employment physicals (basic physicial exam)
All-inclusive
$ 25
• � s
Payment
Description
Method
Rate
3. Other Services
A Senior Programs"
(1) St. Mary Senior Class
Yearly fee
Free
(2) UMC Seniors are Special
Yearly fee
Free
B. Health Screenings (Includes lipid profile, cholesterol,
Yearly fee
Free
cardiopulmonary, skm cancer screening, CB C for detection of
anemia and infections, automated blood chemistry for
detection of high or low blood sugar, liver disease, kidney
disease and general health status).
C. Health Education Classes (Includes on -site educational
programs to address the health concerns of the employees and
Yearly fee
Free
their families. Sample programs will include stress
management, healthy cooking, child safety, etc.
4. Rate increase for all reimbursement methodologies excluding
% Increase
4%
percmuge of diarges to be utilized in the second or third year of
this agreement. (If contract is extended at Citys option.)
Notes:
* Rates quoted for clinic visits include the professional component only. Ifpatient is referred
to another facility for more extensive testing or procedures, then rates quoted from that
facility will be used.
** St Mary Senior Class and UMC Seniors are Special are special programs with benefits and
services for people age 55 and over. For members, Medicare and their approved
supplemental insurance are accepted as payment in fiM for any inpatient medical services
provided In addition, health screenings, educational programs and discounts at numerous
local business are available.
SCHEDULE B
Hospitals:
Other Facilities:
RATES FOR SERVICES
St. Mary of the Piains Hospital
University Medical Center
St. Mary Imaging Center
St. Mary Surgicenter
St. Mary Family Healthcare Center - Northwest
St. Mary Family Healthcare Center - South
UMC Freedom Square Community Health Center
UMC Parkway Community Health Center
UMC Chatman Community Health Center
UMC Slaton Primary Care Clinic
St. Mary/UMC Wolfforth Family Healthcare Center
Texas Tech University Health Sciences Center
Payor: City of Lubbock
For: . Group Health Outpatient and Other Services
Methodology: Reimbursement based on Ambulatory Surgical Center Rates as grouped by
Medicare; Per visit Rates and percentage of charges
Proposal valid through September 30, 1995. All rates for services are confidential.
Description
Payment
Method
Rate
1. Ambulatory Surgical Center (ASC) Groups
A.
Group 1
Per procedure
$
600
B.
Group 2
Per procedure
$
850
C.
Group 3
Per procedure
$
1,100
D.
Group 4
Per procedure
$
1,300
E.
Group 5
Per procedure
$
1,600
F.
Group 6
Per procedure
$
19700
G.
Group 7
Per procedure
$
2,000
H.
Group 8
Per procedure
$
29100
1.
Group 9 (Renal Uthotripsy)
Per procedure
$
3,500
J.
Unclassified procedures
% Charges
60 %
• M
IN-NETWORK/OUT-OF-NETWORK FINANCIAL INCENTIVE D
Plan Benefit Coverage
In -Network
Out -of -Network
Deductibles:
Hospital Confinement
$100
$250
Annual
$250
$500
Co -Insurance:
Percentage
20%
50%
Annual Limit Maximum
$2,000
$50000
32
�4*vID11
EXCLUSIVE LUBBOCK COUNTY HOSPITAL PROVIDER LISTING
St. Mary of the Plains Hospital
4000 24th Street
Lubbock, Texas 79410
• University Medical Center
602 Indiana Avenue If
Lubbock, Texas 79415
32
UNUM We Insurance
company of America
Dallas Employee Benefits office
Suite 956
5151 Belt-Une Road
Dallas, TX 75240
214 661-8686
SW 442-0915
FAX 214 490-5412
January 22, 1996
Lou Moore
City of Lubbock
P.O. Box 2000
Lubbock, Texas 79457
RE: Proposed LTC Program
Dear Lou,
I am sorry to inform you that due to a lack of participation, UNUM will be unable to offer
Long Term Care insurance to the City of Lubbock.
Thank you for the opportunity and please give me a call if you have any further questions.
Best regards,
Robert . Allen
Regional Sales Representative
West Texas
(�! UINUM®
APPLICATION FOR PARTICIPATION IN
THE SELECT GROUP INSURANCE TRUST
To: The Trustees of The Select Group Insurance Trust and UNUM Life Insurance Company of America
Name of Employer/Applicant THE CITY OF LUBBOCK
Address:
(City)
(State)
requests approval to participate in the above named Group Insurance Trust and that
❑ Group Life Benefit
❑ Group Short term Disability Benefits
❑ Group Lifestyle Protection Life Benefits
❑ Group Lifestyle Protection Accidental Death &
Dismemberment Benefits
(Zp)
❑ Group Accidental Death & Dismemberment Benefits
UGroup Long Term Care Benefits
❑ Group Lifestyle Security Protection Benefits
be made available to its eligible employees under the terms of the Policy(ies) issued to the Trustee(s) of the Trust. The effective
date of this insurance coverage is to be or such other date as the Insurance Company approves,
whichever is later. If this request is approved, no insurance for which evidence of insurability is required will become effective
until approved by the Insurance Company at its Home Office.
Is there any group life insurance plan in force or being applied for on. some or all employees? If so, complete the following:
Employee Class I Maximum Amounts I Name of Carrier (Effective Dates I Termination Dates
By this application, the Employer/Applicant agrees and accepts the terms of the Trust Agreement for the Trust named above
for so long as it elects to participate in the Trust. This includes all amendments to the Trust Agreement and any Rules and
Regulations adopted by the Trustee(s) under the same Agreement.
The Employer/Applicant authorizes the Trustee(s) to act as its agent for the purposes set forth in the Trust Agreement. This
Includes functions relevant to the administration of Group Insurance; including but not limited to:
1. collection of premiums;
2. holding insurance policy(ies); and
3. delegation of agency to insurers.
The Employer/Applicant also:
1. agrees to remit regularly the required premium payments; and
2. elects coverage as shown in the summary of benefits.
The Employer/Applicant acknowledges that the group policy(ies) under which insurance is provided contain(s) numerous
optional provisions which are available in order to ach employer with the ability to select provisions which meet its own
needs. It is understood and agreed that only ose provis s which appearthe Summary of Benefits provided to the
Employer/Applicant apply to its insurance cove age. ���
Only approval of this request in writing by the Tru:
Insurance will become effective upon approval of to
Date October ' 19. 1995By Employer/Applicant
• JV.
(Agent or Broker Signature)
Approved: Trustees of The Select Group Insurance Trust
Langston
Dated at
in the above Trust.
By
s,$q (Trustees or their Agent) (292)
CITY OF LUBBOCK:
ATTEST:
B tty ff. Johns , City Secretary
APPROVED AS TO
Mary Andreo, Managing Director of
Human Resources
AS TO FO
Don-G. V iVer, Assistant Ci
Attorney
Client Information
Because this information Initiates UNUM processing that ultimately produces your contract, employee booklets, and bills, it is
UNUM. important that you complete this information accurately and promptly return it.
The Company's legal Name (include appropriate punctuation and any abbreviations that apply)
Address
City State/Province
Zip/Postal Code Country
Employer Identification Number (EIN)
State/Province of Jurisdiction (where the corporate headquarters is located)
Are other divisions, subsidiaries, or affiliates covered under this plan? ❑ No ❑ Yes
If Yes, relationship Nature of business
Decision -maker for company's employee benefits
Plan Administrator/Correspondent Name
Telephone Number ( ) Fax Number ( )
Description of eligible employees
Number of eligible employees
Are any employees excluded? ❑ No ❑ Yes
If Yes, who
Minimum number of hours the employee must work to be covered
Type of Organization ❑ Profit
O Employer O Trust O Association ❑ Partnership ❑ Corporation ❑ Government Segment O Non -Profit Org.
O Sub -Chapter S Corporation ❑ Other (Please specify)
Nature of Business (please specify)
Are U.S. employees in other states or countries covered?
Are foreign nationals covered under this plan?
Does the company participate in a Workers'
CornpIPERA/PERS Program?
Canadian Employees
Does the company employ residents of Canada?
If Yes, are the employees covered under this plan?
❑ NO ❑ Yes — If Yes, List employees by state & country on census
O No ❑ Yes — If Yes, List employees by state & country on census
❑ No ❑ Yes
❑ No ❑ Yes
❑ NO ❑ Yes — If Yes, complete Canadian Resident Form
Waiting Period
Present Employees: Are all current employees covered as of the effective date? ❑ No ❑ Yes
If no, do they have the same waiting period as future hires? O No O Yes
If not all employees are being covered, does prior service apply? O No ❑ Yes
Future Employees: 1st of the month coinciding with or next following:.
❑ day(s) of active employment OR ❑_ month(s) of active employment
The day following completion of:
0—day(s) of active: employment OR ❑— month(s) of active employment
Payroll billed cases only — First pay period following:
❑ day(s) of active employment OR El—month(s) of active employment
O No Waiting Period
Other. please seecifv
IN
Contributions
❑ The employer pays 100% of the cost ❑ Partners — the partners pay for the plan'
O The employee pays 100% of the cost El All others — the employer pays for the plan
❑ Both the employer & employee pay for the plan: *Note: Partners' premiums cannot be paid withpre-tax salary
Percentage of employer contribution
% for employee coverage
% for dependent coverage
❑ Are premiums employees pay deducted from pre-tax salary? ❑ No ❑ Yes
❑ Is participation mandatory? ❑ No ❑ Yes (if not, have participation requirements
been met)
Prior Plan Information
Does this plan replace other coverage? O No ❑ Yes
If so, attach a copy of the prior plan's contract or employee booklet and complete the following:
Effective Date . Termination Date . Prior Carrier Name
Long Term Disability
Short Term Disability
Life (and/or Life AD&D)
Dental
LTC
Basic Monthly Earnings (please complete thorough as benefits w l be based on this Information)
❑ Salary Only ❑ Salary & Commissions ❑ Salary & Bonuses,
O Salary, Commissions & Bonuses ❑ W2 Earnings (circle one): Tax year (or) Calendar Year
❑ Teachers ❑ Partnership Agreement (1/12th of budgeted annual earnings)
❑ K-1 Partners Calendar Year ❑ K-1 Partners Tax Year
❑ Is Deferred Compensation to be included? ❑ No El Yes
❑ Other (please specify)
If earnings differ by employee group(s), class(es) or division(s), please specify difference below:
rSonus Questionnaire (only complete this section if the plan's basic monthly eamings included bonuses)
Is bonus based on a pre -determined formula? ❑ No ❑ Yes
If Yes, is the formula/payment of the bonus based on:
❑ Company performance (describe criteria)
El Individual performance (describe criteria)
❑ A combination of individual & company performance (describe criteria)
Indicate the percentage of each: % individual performance _% company performance
How long has the bonus plan been in effect? How many times has the bonus been paid?
Does the company plan to continue the bonus plan indefinitely? ❑ No ❑ Yes
Who is eligible for the bonus?
Are disabled employees eligible for the bonus? ❑ No ❑ Yes
If Yes, are they eligible only in the year in which they last worked? ❑ No ❑ Yes
If No, please explain
Effective Date for UNUM Plan
Anniversary Date for UNUM Plan
Please Confirm Sold rate(s):
LTD Life AD&D
STD Dental Dependent Dental
Your Name Signature
Dependent Life
LTC
Date
09i1945 17 :10
V207 770 3328
•-» UNUH DALLAS. TX ._ 10002
AMENDMENT NO. S TO TIM SELECT GROUP INSURANCE TRUST AGPIMMENT
This is an amendment to the Select Group Insurance Trust Agreement (the "A,gt=nent')
dated July 7, 1988 between School District of Affton and March of DimeslCBDMP as
Settlors and Fleet Bank of Maine as Trustee.
In accordance with Article IX of the Agreerneat, the following amendment is proposed to
Article DC by changing Section 2 as follows:
S2QC= 2. Automatac T
ermination. This Agreement shall terminate as of
any premium due date of the group insurance policy or policies then held
by the Trustee when there are fewer than two Participants Insured under
said policy or policies; except that this Agreement shall not terminate if
there are any insured persons remaining covered under a group long term
policy held by the Trustee. This Agreement shall In any event teaminate
upon the twentieth anniversary to the death of the last surviving person
whose signature appears below. Upon the happening of such event a
now trust agreement may be executed to further the purpose of this
Agreement.
IN WM-4ESS WHEREOF, the undersigned Trustee, by its duly authorized representative,
has signed and executed this amendment effective April 1, 1993.
OF MAINE
By:
Tide: // V'a' f"
AMENDMENT No. 4 To TRUST AGREEMENT '
This is an amendment to the 'Trust Agreement (the "Agreement") dated
July 7. 1988 between School. District of Affton and March of Dimes/CBDmP .
as Settlors and Maine National Bank as Trustee. ,
/0
In Accordance with Article -tC of the Agreement, the following amendment
is proposed as follows:
Wherbver the name Maine National Bank appears it shall now be knom
as Fleet Bank of Maine.
IN WITNESS WMMF this Amendment is proposed this 12th day of
July. 1991•
TRUSTEE:
MAINE NATIONAL BANK
Title:sistant Vice President
Date: - Ca m 2 7 /'F9/
09/ 19/95 17 :11 V207 770 3328 UNUM •LTC --- UNLIM DALLAS• L TX I� 003
AMDMT 90. 3 TO TRUST AGREQKOiT
This is an amendment to the Trust Agreement (the "Agreement") dated July
79 1968 between 84bool District of Aff ton and March of Dimes/CBDMP as
Settlora and Maine National Bank as Trustee. '
In Accordance with Article DC•of the Agreement, the follgving amendment is
proposed to ARTICLE I by adding Section 8 as follows:
ARTICLE I
SettioA S. Octup$tiodal'Gtdiips
The term "Occupational Groups" means the.following groups:
Retail Trade Insurance Fund
'Wholesale Trade Insurance Fund
Service - You Professional Insurance Fund
Service - Professional Insurance Fund '.
Transportation Insurance Fund
Manufacturing Insurance Fund
• Construction Insurance Fund
Agriculture Insurance Fund
Communication Insurance Pund
Finance - Insurance - Real Estate - Public Mgllcyees Insurance .
Fund
A participant whose business falls -into one of phe "occupational Groups"
may be consideied' to -be in the same or related business.
IN WITNESS WHEREOF this amendment is proposed the let day of -July, 1990.
TRUSTEE:
ifAINE RATIONAL BANK
By:
Title:
Date:
byilyiy5 17:12 M07 770 3328 UNUM LTC --- UNUM DALLAS,,TX 004
� �� .i ♦ r• a r,." � ,... .-.7;i.- °.�.. r�. '! w�:= rc.i _ s- _ ..s^-.. _r ....I i..4s-yc�rs _.r.. - _
AMENDMENT NO. 2 TO TRUST AG1tEM(ENT
This is an amendment to the Trust Agreement (the 'Agreement') d-ated
July 7. 1988 between School District of Affton and'Harch of Dimes/CBDMP as
Settlers and Haine National Back of Trustee.
In accordance with Article IX of the Agreement, the following amendment is
proposed to ARTICLES I, 11, IV, VIII and IX, by changing Section 3 of ARTICLE
I, Section 1 of ARTICLE II. Section 2 of ARTICLE IV, Sections 1 and 2 of
ARTICLE VI1I and Section 3 of ARTICLE IX as follows:
ARTICLE I--
Section 3. Participants. The term 'Participants' means the Settlers and all
other employers, associations, creditors and credit unions, who apply for
group life or health insurance. or other forms of coverage and insured
benefits. or any combination thereof, and agree is writing to be bound by the
provisions of this Trust Agreement;=provided that each participant be approved
for insurance coverage by the Company.
ARTICLE II
4 Section 1. purpose. The Settlers declare and create the Select Group
Insurance Trust (hereinafter called the *Trust') for the purpose of providing
and maintaining, through Policies issued by the Company. group Insurance for
the benefit of their employees. debtors or members and for the benefit of the
employee, debtors and members of all subsequent Participants and for the
benefit of member firms of all subsequent Participants and their employees.
ARTICLE IV
Section 2. litle. The title to the policies held in the Insurance Fund shall
be vested exclusively in the Trustee. Neither the Insurance Fund nor any
payments referred to in ARTICLE V belov, temporarily in the possession of the
Trustee, shall be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge by any Participant, and any attempt
to make it so subject shall be void. Payments made shall not constitute
compensation to the Participants, and such payments shall not in any manner be
liable for or subject to the debts, contracts or liabilities of the
Participants. Ito employee, debtor or member of a Participant shall have the
right to receive any portion of the assets of the Trust other than to the
extent that he qualifies for benefits in accordance with the terms of the
policies held by the Trustee.
1
09r19/95 17:12 V207 770 3328 UNUM LTC --- UNUM DALLAS.TX
i
ARTICLE VIII
$ecct_i--m_1. Designation. Bach Participant shall serve as Plan Administrator
for its Employees, Debtors or Members. or shall designate an individual or
group of individuals to serve in such capacity.
Section 2 ties, Each Plan Administrator shall maintain :records for all
employees. all debtors or all members in its Plan, in connection with their
participation in Policies issued, and shall be solely responsible for
complying with any provisions of the Employee Retirement Income Security Act
(ERISA) as it may be amended from time to time which may apply to their
participation in this Trust Agreement. In addition. each Plan Administrator
shall distribute to or collect from employee, debtors or members participating
in its Plan any information required by any other lax or regulation or'required
by the Company. including but not limited to certificated issued. under a group
contract.
ARTICLE IX
Section 3, Excess Funds. Should any surplus monies be held by the Trustee
upon the termination of this Agreement, the Trustee shall pay such monies over
to the Company to be applied toward the purchase of continued insurance
benefits under said policies then in fares until such monies are. exhausted;
provided, that if there are no employees, no debtors or no members then
insured under such policies, such monies shall be applied, in the discretion
of the. Company, toward the purchase of insurance benefits under such policies
for the employees or members of the last tan Participants in this Insurance
Fund.
IN VITNESS WHEREOF this amendment is proposed this 1st day of July, 1990.
TRUSTEE:
MAINE NATIONAL BANK:
By:
Title:
Date:
I
09/19/95 17:13 yV207 770 3328 _UNUM L?C --- UNUM DALLAS.TX
16006
.�� j
AXZT KM N0. 1 TO TRUST AGUMWT .
This is an amendment to the Trust Agreement (the "Agreement") dated July 7,
1988 between School District of Aff tau and March of Dimas/CBDle as Settlors
and Maine National Bank as Trustee.
In accordance with Article X of the Agreement, the following amendment is -
proposed to ARTICLES I, II, IV, VIII and 1%, by changing Section 3 of ARTICLE
1, Section I of ARTICLE II, Sections I and 2 of ARTICLE IV, Sections 1 and 2
of ARTICLE VIII and Section 3 of ARTICLE IX and by adding Section 7 to
ARTICLE I as follows:
ARTICLE I
Section 3_. Participants.- Tha term "Participants" means tLa Settlors and all
other employers, associations and credit unions, who apply for group life or
health insurance, or other forms of coverage and insured benefits, or any
combination thereof, and agree in writing to be bound by the provisions of
this Trust -Agreement, provided that each participant be approved for
insurance coverage by the Company. '
Section 7. Alternate Names. This Agreement may be referred to by the
following alternate names:
(A) Central States Legal Services Trust
(B) Uid-America Legal Services Trust
(C) Oklahoma Legal Services Trust _
(D) Southern Preferred Legal Services Trust
(E) Vestern States Legal Services Trust
(F) Capitol District Legal Services Trust
(G) Reystoae Legal Services Trust
(R) Texas Legal Services Trust
(I) Rocky Mountain Legal Services Trust_
VV/ iV/Vb V :14 UZU l l IV 30L0
it �� , a�•�. ._
VNUn L! 1.
»-» UnUn VALLAJ. 1A_ -bbl
ARTICLE II
Section 1 . Purpose. The Settlers declare and create the Select Group
Insurance Trust (hereinafter called the "Trust") for the purpose of providing
and maintaining, through Policies issued by the Company, group insurance for
the benefit . of their employees or members and for the benefit of the
employees and members of all subsequent Participants and for the benefit of
member firms of all subsequent Participants and their employees.
ARTICLE IV
Section 1. Group Insurance Benefits. The Trustee shall procures as the
policyholder, from the Company, or its successors or assigns, an insurance
policy or policies which shall provide such amounts of group life or health
insurance, or other forms of coverage and insured benefits, or any
combination thereof, as the Trustee and the Company may determine
appropriate, provided that the (A) types of insurance or combination of t�*pes
of insurance available to any Participant, (B) the amounts of insurance
available, (C) the eligibility and effective dace of insurance requireaents,
and the various other terms of the policy or policies to be issued by the
Company or the conditions precedent to their issuance. shall be determined by
the Company and requirements of applicable law. Any. successor Trustee stay
continue, and succeed as policyholders of, any group insurance policy or
policies procured by the predecessor Trustee. All benefits, provided by the
group insurance contract or contracts shall be payable to the partieipat:ts,
insureds or their beneficiaries, except that the dividends or comparable
rights, if any, shall Ve applied by the Company in accordance vich the terns
of this Trust Agreement. Upon acceptance of said policy or policies by the
Trustee, the Trustee shall hold same under the provisiems of this Trust
Agreement, and the terms of same shall be binding upon all parties.
Section 2. Title. The title to the policies held in the Insurance Fund
shall b ested exclusively is the Trustee. Neither the Insurance Fund nor
any payments referred to in ARTICLE Q belEv, temporarily in the possession of
the Trustee, shall be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge by any Participant, and any attempt
to make it so subject shall be void. Payments made shall not constitute
compensation to the Participants, and such payments shall not in any msnaer
be liable for or subject to the debts, contracts or liabilities of the
Participants. No employee or member of a Participant shall have the right to
receive any portion of the assets of the Trust other than to the extent that
he qualifies for benefits in accordance with- the terms of the policies held
by the Trustee.
09/19/95 17:15 V207 770 3328 UNUH LTC
ARTICLE 4III .
--- UNUM DALLAS.TX @Z008
Section 1. Desilnation. Each Participant shall. serve as Plan Administrator
for its Employees, or Hembers,•or shall designate an individual or group of
individuals to serve in such capacity.
Section 2. Duties. Each Plan Administrator shall maintain records for all
employees' or all members in its Plan, in connection with. their participation
in Policies issued, and shall be solely responsible for complying with any
provisions of the Employee Retirement Income Security Act (ERISA) as it may
be amended from time to time which may apply to their participation in this
Trust Agreement. In addition, each Plan Administrator shall distribute to or
collect from employees or members participating in its Plan any information
required by any other lav or regulation oT required by the Company, including
but not limited to certificates issued under a group contract.
ARTICLE IX
Section 3. Excess Funds. Should any surplus monies be held by the Trustee
upon the termination of this Agreement, the Trustee shall pay such monies
over to the Company to be applied toward the purchase of continued insurance
benefits under said policies then in force until such monies are exhausted; -
provided, that if there are no employees or no members that insured under
such policies, such monies shall be applied, in the discretion of the
Company, toward the purchase of insurance benefits under such policies for
(. the employees or members of the last ten Participants in this Insurance Fund.
ni VIiNESS WLFREBF this amendment is proP.osed this 1st day of April, 19 0.
TRUSTEE:
HAM FATIMAL 8M
By•
' Title:
Date 1/y�.kl• I��'p
_ �03i19i95 17:15 IT207 770 3328 UNUH.LTC •-• UNUH DALLAS.TX 009
f
TRUST AG21na F?
THIS•AGREEKENT is evade between the following parties whose authorized
signatures appear below: the SETTLCRS, who ere the initial Participants
in the Select Group Insurance Trust and the TRUSTEE. Maine National Bank.
In consideration of the covenants of the parties to this Agreement,
It is agreed:
• Section 1. Cam;g=. the term "the Company" means the insurer issuing
the policy or policies held by the Trustee.
"•'::'� Section�2. Parties. the parties to this Agreement are. the Settlers, all
subsequent Participants, and.the Trustee or the successors to same.
Section 3. PartlCbamu. The term "Participants" meaae, the Settlers and
all other employers vho apply for group life or health insurance and
agree in writing to be bound by the provisions of this Trust Agreement,
provided that each participant be approved for insurance coverage by the
Company.
Seetion 4. Policy. the terra "Policy" or "Policies" means the policy or
policies of group insurance issued by the Company pursuant to this Trust
Agreement and accepted by the Trustee including any amendments,
endorsements or riders.
I� •
09/19/95
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17:16 $207 770 3328
UNUM .LTC
2
I
••• UNUM DALLAS.TX 010
Section S. fit. ?wine National Bank, or its successor, it any, is
designated and referred to as the "Trustee" under this k9reement.
Section 9. fit. This Agreement shall be known as the Select Group
Insurance Trust.
is etion 1. Phu Bose. The Settlers declare and create the Select Group
Insurance Trust (hereinafter called the "Trust") for the purpose of
providing and maintaining, through Policies issued by the Company, group
insurance for the benefit of their employees or members and for the
benefit of the employees and members of.all subsequent Participants.
Section Z. 2r«st Assets. The trust assets shall consist of the Policies
together with monies, if any, which may be received by the Trustee, and
shall be used for the purposes set forth in this Trust Agreement. The
Trustee declares that it will receive, hold and disburse for the
appropriate Participant's account, all monies which coma into its hands,
solely for the purposes set forth in this Trust Agreement.
In accordance with Article 9, Section 1, the Trustee shall not receive
any premium payments from Participants. Such premium payments shall be
paid directly by the Participants to the Company.
09/19i95 17:17 $207 770 3328 UNUM.LTC --- UNUM DALLAS.TX �1011
• •a—
StSXjgM 1. C,ofRbeasa ±on and Expenses of Trustee. -The Trustee shall be
reimbursed for all reasonable and necessary espenses.incurred •in the
performance of its duties as Trustee. Any Trustee shall be entitled to
such fees for its services in reasonable amounts as may be agreed upon
from time to time between the Trustee and the Company.
Section 2. Successor Yr. % .
(A) A Trustee may resign on 60 days written notice to the Company.
In the event of the resignation of any Trustee, the resigning Trustee
;
shall appoint one or more successor Trustees who shall, upon agreeing in
71
writing'to be bound as a Trustee by the.provisions of Agreement, become
vested vith all the estate, rights, pavers, discretion and duties of the
predecessor Trustee. In the event of the resignation of a bank or trust
company as a Trustee, the Trustee shall -designate as the; successor
Trustee any other bank or trust company, having a combined capital and
surplus of at least Forty Killion Dollars ($40,000,000) which has a
principal office in the State of Maine and which is authorised by lav to
exercise trust powers. In the event such a bank or trust company shell
be so appointed and shall agree in writing to serve as a Trustee,. all
rights, powers, duties and obligations conferred or imposed upon the
Trustee by this Agreement shall be exercised and performed exclusively by
such bank or trust company. Upon surrender to such bank or trust company
of the records and assets of the Insurance Fund, and acceptance of the
final account of the predecessor Trustee by the successor Trustee, the
lae12
predecessor Trustee mall be discharged of the trusts and ob21ga0cns
created by this Agreement.
(8) A predecessor Truetee shall surrender to the successor Trustee
at the place of business of the Insurance fund all records, books,
documents, monies and other properties in its possession vbLch are held
by the Trustee for, or incident to, the fulfillment of the Agreement and
the administration of the Insurance rand, provided that the retiring
Trustee, except any individual, may reserve such reasonable sum for
payment of proper charges against the trust fund including expenses in
connection with such resignation or removal. Any balance of such reserve
remaining after the payment of such charges shall be paid over to the
successor Trustee.
h::x'
Sfttion 3. Eroneration.
(A) No Trustee shall be personally liable for:
(1) Any obligation of the Insurance fund or obligation incurred
by the Trustee acting as Trustee;
(2) She terns, conditions or coverage of the policy or policies
issued by the Company, nor for any claims, representations,
obligations, claims or settlements in respect of any beneficial
Interest by or in behalf of any Participants or options or
expenses arising out of such contracts; or
09i19/95 17:18 $207 770 3328 UNUM LTC --- UNUM DALLAS.TX 16013
,tip•`•,,` (3) Any action taken or omitted in good faith by such Trustee,
by any other Trustee, or by legal counsel, auditor, clerical
personnel, administrative personnel or other third party
selected by the Trustee with reasonable care.
(B) A third party dealing with the Trustee may conclusively preswna
that any exercise of powers by the Trustee are in aceordunee with the
provisions of the Agreement. No third party dealing with the Trustee
shall be obliged to take cognisance of the provisions of this Agreement,
nor to inquire into the necessity or expediency of any action of the
Trustee. The responsibility of a third party shall be limited to the
terms of its agreements with the Trustee.
ARTICLE ly, GROUP SI1R r-E BENEFITS
get en 1. rr m2 ;nsuran a B®nefits. The Trustee shall procure, as the
policyholder, from the Company, or its successors or assigns, an
insurance policy or policies which shall provide such amounts of group
life or health insurance, or other forms of coverage and, insured
benefits. or any combination thereof, as the Trustee and the Company may
determine appropriate, provided that the (A) types of insurance or
combination of types of insurance available to any Participant. (B) the
amounts of insurance available, (C) the eligibility and effective date of .
insurance requirements, and the various other terms of the policy or
policies to be issued by the Company or the conditions precedent to their
Issuance, shall be determined by the Company and requirements of
applicable law. Any successor Trustee may continue, and succeed as
09/19/95 17:19
%Y207 770 3328 UNUM ,LTC
--- UNUM DALLAS.TX
11014
- 6 -
policyholders of, any group insurance policy or policies procured by the
predecessor Trustee. All benefits provided by the group insurance
contract or contracts shall be payable to the participants or their
beneficiaries, except that the dividends or comparable rights, if any,
shall be applied by the Company in accordance with the taros of this
Trust Agreement. Upon acceptance of said policy or policies by the
Trustee, the Trustee shall hold same under the provisions of this Trust
Agreement, and the terms of same shall be binding upon all parties.
Seca as 2. fig. The title to the policies held in the, Insurance Fund
shall be vested exclusively in the Trustee. Neither the Insurance Fund
nor any payments referred to in Article V belov, temporarily in the
A possession of the Trustee, shall be subject to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance or charge by any
Participant, and any attempt to make it so subject shall be void.
Payments made shall not constitute compensation to the Participants, sad
such payments shall not in any manner be liable for or subject to the
debts, contracts or liabilities of the Participants. No employee of a
Participant shall have the right to receive any portion of the assets of
the Trust other than to the extent that he qualifies for benefits in
accordance with the terms of the policies held by the Trustee.
,Section 1. Premiums. In addition to any other rights available to the
Company under any group insurance policies issued to the Trustee.
authority is hereby designated to the Company to (A) receive premium
09-119/95 17:20
V207 770 3328 UNUM LTC
- 7 -
--- UNUM DALLAS.TX
c
payments from the Participants in the Insurance ruad, (8) determine the
amount of premium necessary from each Participant under any such policies
and (C) determine when such payments for insurance will be required.
Each Participant shall pay to the Company such amounts, and at such
intervals, as may be determined by the Company, under authority hereby
delegated to it, to be the appropriate portion of the premium due under
policies held by the Trustee with respect to the -Participants. Payments
shall be due on the first day of each policy month or at such other time
as the Participant may designate together with the concurrence of the
Trustee or the Company under authority delegated to it. Each Participant
shall be liable for his portion of the payment as so determined. The
Trustee shall not be responsible for determining the amount or source of
aay payment.
Eection_2. rgilure To !lakePa_vmeats. If any Participant fails to make
any required payment on or before the day it is due, such Participant
shall be in default. The effect of such default and the methods of
curing such default, if any, shall be as set forth in the policy or
policies.
section_1. Depositor. All monies received pursuant to this Agreement
by the Trustee shall be held, until expensed, in such banks or insurance
companies as they may select for that purpose, and need not be segregated
from other funds administered by the Trustee. The Trustee shall not be
i
09/19/95 17:20 $207 770 3328 UNUM •LTC --- UNUM DALLAS. TX Q016
•
'•` liable for interest on monies so received and shall not be required to
Y-.
.L-
deposit or invest such monies to produce an income.
Sectinn2. Dis ursem2=. denies received by the Trustee shall be
disbursed for the follaviag purpodesi
(A) To pay or provide for the payment of all premiums for group
insurance provided by the Trustee pursuant to the further provisions of
this Agreement;
(B) To pay all reasonable charges of any Trustee, including:
ems:, (1) All reasonable and necessary expenses incident to the
administration of the Insurance fund, including the employment
of legal counsel, auditors, clerical personnel, administrative
personnel and other third parties;
(2) The purchasing or leasing of such materials, supplies and
equipment as the Trustee, in its sole discretion, deems proper
and necessary for the sound and efficient administration of the
Insurance Fund; and
(3) The leasing of necessary office premises;
(c) To provide, in the discretion of the Trustee, fidelity bonds
r• issued by a reputable insurance company in amounts determined by the
lam'
09/19/95 17:21 V207 770 3328 UNUM LTC ••• UNUM DALLAS.TX 16017
'`r J
Trustee for such Trustee and for each ocher person authorized to handle
monies held in the Insurance.rund.
Sect;on 1. leaUgstc for _particiod ion. Requests for participation in
and under the terms of the policy or policies issued to the Txuatee shall
be investigated by the Company, and such requests for participation shall
be approved or disapproved by the Company. The Trustee shall have no
responsibility for any determination that any person is or is not
eligible for coverage under the policies issued, and the Trustee shell be
fully protected in relying upon any determination by the Company in that
- respect. No person that is not eligible for coverage, or that becomes
ineligible for coverage, under the policies issued shall be eligible for
participation.
Section i. Withgxawal/?ermiaation of PartleiRant. A Participant may
vithdrav or may be. terminated from the Insurance rand and the policies
Issued in accordance with the terms of said policies.
(A) The Trustee shall keep at the place of business of the Insurance
rund the policies held under this Trust Agreement, true and accurate
books of account, and records of its transactions as Trustee. Within 90
�.• days after the close of any year in which the Trustee receives any monies
under this Agreement, the Trustee shall render to the Company an account
09/19/95 17:22 %Y207 770 3328 UNUM LTC --- UNUH DALLAS,TX
la 018
,i
of such acts and transactions, which account shall be signed by the
Trustee and mailed in duplicate. A copy of such account shall be
retained at the place of business of the Insurance Lund for inspection by
any Participant or its duly authorised representative, and a copy shall
be delivered to a Participant on its request. If, after reviewing said
account, the Company finds the account to be correct as submitted, it
shall endorse upon same an instrument of settlement and its agreement
that the same shall constitute as account Stated. One counterpart of the
account to which is attached or endorsed such fully e:eeuted instrument
of settlement shall be returned to the Trustee.
(8) If within 90 days after the receipt of such account or. any
•- amended account the Company shall not have endorsed its approval of such
account and returned the same to the Trustee, nor have filed with the
Trustee notice of any objection which it may have to any act or
transaction of the Trustee, said account shall become an account stated.
If any such objection has been filed, and if the Company, is satisfied
that it should be withdrawn or if the account is adjusted to its
satisfaction, the Company shall in writing filed with the Trustee signify
its approval of the account and it shall become an account stated. When
the Trustee's account shall have become an account stated is herein
provided, such account shall be deemed to have been finally settled and
shall be conclusive between and among the Trustee, the Company, the
Participants, and all persons having or claiming to have any interest in.
the Insurance rand. Such settlement of the Trustee's account shall
constitute a full and complete discharge and release of the Trustee with
like effect as if such account has been settled and allowed by a judgment
88�i9�95 17:22 C207 770 3328 UNUM.LTC --- UNUM DALLAS.TX
• 11 -
1
or decree of a court of competent jurisdiction in an action or proceeding
in which the Trustee, the Company, the Participants, and all persons
having or claiming to have any interest in'the Inauranco rund were
parties. Notwithstanding any provision, the Trustee shall have the right
to apply at any time to a court of competent jurisdiction for the
judicial settlement of its account; and in any such action or proceeding
it shall be necessary to join as parties only the Trustee, the Company
and the Participants. In any such action or proceeding the Participants
shall receive notice of such action by serving each of them with a notice
sent to its last known address. Any judgment or decree which may be
entered in any such action or proceeding shall be conclusive upon all
person having or claiming to have any interest in the Insurance fund.
. , W.1 • v 0 4s b CipiZA � .
Sectioz1. 1ts.3sm&Lien. Each Participant shall serve as Plan
Administrator for its employees, or shall designate an individual or
group of individuals to serve in such capacity.
Se C iea 2. Dittlec. Each Plan Administrator shall maintain records for
all employees in its Plan, in connection with their participation in
Policies issued, and shall be solely responsible for complying with any
provisions of the Employee Retirement Income Security Act (ERISA) as it
may be amended from time to time which may apply to their participation
in this Trust Agreement. In addition, each Plan Administrator shall
`.. distribute to or collect from employees participating in its Plan any
Information required by any other law or regulation or required by the
0 019
09/19/95 17:23 V207 770 3328 UNUM LTC UNU'H DALLAS,TX
Eli Company, including but not limited to certificates issued under a group
contract.
gtetien i. J=. The parties contemplate that this Agreement will
continue in effect indefinitely. However, should the Trustee at any time
determine that the purpose for which the Insurance rand has been created
may be effectuated more properly by an amendment to this Agreement, the
Trustee shall be empowered to prepare such amendment. Any such amendment
shall become operative thirty (30) days following receipt by each
Participant of a copy of the amendment provided that the: Participant does
not give the Trustee written notice of dissent within such thirty (30)
day period.
,aeetion 2. Au&gm tic Terming iot. This Agreement shall terminate as of
any premium due data of the group insurance policy or policies then held
by the Trustee when there are fever than two Participants insured under_
said policy or policies. This Agreement shall is any event terminate
upon the twentieth anniversary to the death of the last surviving person
whose signature appears below. Upon the happening of such event a new
trust agreement may be executed to further the purpose of this Agreement.
Section 1. Exce&s Eunds. Should any surplus monies be held by the
Trustee upon the termination of this Agreement, the Trustee shall pay
such monies over to the Company to be applied toward the purchase of
continued insurance benefits under said policies then in force until such
17:24 V207 770 3328 UNUM LTC
--- UNUM VALLAS, TX d 021
�.' monies are exhausted; provided, that if there are no employees then
insured under such policies, such monies shall be applied, in the
discretion of the Company, toward the purchase of insurance benefits
under such policies for the employees of the last ten Participants 'it
this Insurance ruad.
This Trust is accepted by the Trustee in the State of Maine and all
questions pertaining to its validity, construction and administration
shall be determined in accordance with the applicable laws of that
jurisdiction. The Insurance Fund shall have its place of business at
such place in the State of Maine as the Trustee shall from time to time
determine.
IN WIWESS MMREOr, the undersigned Settlorc amd Trustee, by their duly
authorized representatives, have signed and executed this Agreement.
09/19/95 17:24 V207 770 3328 UNUM-LTC --- UNUM DALLAS,TX 022
:Its '
—14— .
TRUST AGREEKM
Settler Signatures
Settler: School District of Affton
BY: William C. Ahlers
Title: Business Manager
Date:
6/28/88
.,-. .
This Settler Signature page admowledges and is made apart of the
Select Group Insurance Trust Agreement between the Settlers and
Maine National Bank.
09/19/95 17:25 V207 770 3328 UNUM, LTC --- UNUM DALLAS. TX 023
• • •5
f TRUST AGREEMENT
Settler Signatures
0�1 tip
r
By: , /4)
Title: l
Date:
This Settler Signature page acknowledges and is made a part of the
Select Group Insurance Trust Agreement between the Settlors and
Maine Nationai Bank.
j
O9/19/95 17:26 V207 770 3328 UNUH LTC --- UNUH DALLAS. TX la024
r • '
TRUST AGREEMENT
Trustee Signatures
mAnm NATIONAL BANK
By •
Title; .$:i.:rli L w t+:r+•:�.tt
] A
Date:
7
This Trustee Signature page acknowledges and is made a part of the
Select Group Insurance Trust Agreement between the Settlers end
Maine National Bank.
Wasriington
national
INSURANCE COMPANY
3W TOWER PARKWAY • ARE. KMM= SOOS9.3655
SUPPLEMENT TO MASTER APPLICATION FOR GROUP INSURANCE
made to WASHINGTON NATIONAL INSURANCE COMPANY, LINCOLNSHIRE, ILLINOIS 60069
To: WASHINGTON NATIONAL GROUP OFFICE
2435 N. Central Expressway, Suite 890
Richardson, TX 75080
Attention: Michael D. Collins
Full Legal Name of Policyholder:
CITY OF LUBBOCK
Amend Group Plan Number: EB880994
Requested Effective Date: December 1, 1995
On behalf of the Policyholder, I request that Washington National Insurance Company ("Company") amend
the Pollcy(ies) for the plan shown above as follows:
The following changes are effective 12-1-95:
1) Revising to a 3 class Life/AD&.D schedule:
Class I $10,000 Basic Life/AD&D
Class II $10,000 Basic Life/AD&D plus Optional Life of 1X Salary rounded up to $1000
C1assM $10,000 Basic Life/AD&D plus Optional Life of 2X Salary rounded up to $1000
Reduction Formula 32% at age 70, 35% at 75, 35% at 90, 35 at 85.
Retiree life basic amount reduces to $5000. Retiree Optional amount reduces to $10,000.
2) Optional Dependent Life: $5000 increments not to exceed $50,000 or 1/2 of the Employees combined amount
Retiree Dependent Life Amounts reduces to $2500 for spouse and $1000 for dependents.
For Additional Changes, Please refer to Addendums I and 11
— TX
I acknowledge that certain optional benefits, which are summarized below, have been offered to the
Policyholder as required by state statutes and regulations, and I have either accepted or declined these on
behalf of the Policyholder as follows:
acce t decline
In Vitro Fertilization ................................... D xM
This optional benefit covers outpatient in vitro fertilization procedures for an Insured if:
1. only the Insured's spouse's sperm is used;
2. the Insured and the Insured's spouse have an infertility history of at least five continuous years'
duration or the infertility Is associated with specific conditions;
3. the Insured has not been able to attaln a successful pregnancy through less costly applicable
Infertility treatments covered by the policy; and
4. the in vitro fertilization procedures are performed at an approved medical facility.
PLEASE NOTE:
The Company's standard policy does not cover In vitro fertilization.
accept decline
Home Health Care .................................... W ❑
This optional benefit covers home health care services provided by a home health care agency
according to a doctor's care plan. The services include:
1. skilled nursing care;
2. physical, occupational, speech, nutritional, respiratory or inhalation therapy;
3. home health aide services; and
4. the furnishing of medical equipment and supplies.
PLEASE NOTE:
The Company's standard policy includes this benefit but a Policyholder may reject it.
accept decline
Speech or Hearing Loss or Impairment .................... M ❑
This optional benefit covers the necessary care and treatment of:
1. loss or Impairment of speech; and
2. doss or impairment of hearing.
PLEASE NOTE:
The Company's standard policy includes this benefit but a Policyholder may reject it.
TX
I,)_o,,%
accept decline
Serious Mental Illness ................................. IM ❑
This optional benefit covers the necessary care, diagnosis and treatment of serious mental illness the
same as any other Illness. Serious mental Illness means the following mental illnesses: schizophrenia,
paranoid and other psychotic disorders, bipolar disorders (mixed, manic and depressive), major
depressive disorders (single episode or recurrent) and schizo -affective disorders (bipolar or depressive).
PLEASE NOTE:
This benefit is mandatory for the following groups:
1. state and local government employees; and
2. state college, university and school district employees.
PLEASE NOTE:
If a Policyholder does not elect this option and mental disorders benefits are not otherwise specified in
this application, then such coverage for mental disorders, if any, currently in effect for the Policyholder
will remain In effect, and mental disorders benefits will Include coverage of serious mental Illness. Also,
state law requires that any Inpatient coverage of mental disorders Included In the Policy must apply not
only to treatment In a hospital but to treatment in a psychiatric day treatment facility, a residential
treatment facility for children and adolescents and a crisis stabilization unit.
TX
Benefits are subject to all provisions, limitations and terms of the Policy(les).
A change in Medical Benefits or benefit amounts takes effect on the date of the change except that neither
benefits nor benefit amounts will change (1) 'or an Insured Person not actively at work or (2) for an Insured
Dependent hospital confined.
An Increase In Life Benefits (Including Dependent Life) or Accidental Death and Dismemberment Benefits, if
applicable, is effective on the date of the change only If the Insured Person Is actively at work. A decrease In
Life Benefits (including Dependent Life) and, In some cases, Accidental Death and Dismemberment Benefits,
If applicable, Is effective on the date of the change whether or not the Insured Person Is actively at work.
Any changes required by state statutes or regulations shall also be Incorporated on the required dates.
understand that the actual terms and conditions of coverage are those contained In the amended Policy(les)
Into which this Supplement Application will become a part. I also understand that the amended Policy(les)
will not become effective, unless and until, the Company accepts this Supplement Application. Upon
acceptance, the Company will issue the necessary amendments to the Pollcy(les) to the Policyholder.
SIGNATURFPF AUTHORIZED PURCHASER DATE n ,, f
L.
TITLE f f WITNESS
CL-
SIGNATURE OF SALES REPRESENTATIVE / LICENSED RESIDENT AGENT
GROUP OFFICE
TX
Addendum I
3) Medical Plan has the following changes effective 12-1-95:
A Changing from Hospital Only PPO to an exclusive Hospital Physician PPO with St. Marys and University
Medical center.
Benefit Design as follows:
PPO
Non-PPO
Cal Year Ded
$250
S350
Per Admission Ded
0
$100
Coinsurance
80%
60%
Coinsurance Limit
$2000($4000)
$3000($6000)
Hospital
Pre Admission Testing
900/0
800/0
Inpatient Surgery
800/0
60%
Outpatient Surgery
800/0
60%
Emergency Treatment
Hosp. ER -Urgent
800/0
80%
Hosp. ER -Non -Urgent
800/0
600/a
Physician Services
Office Visits
S15 copay then 1000/a
800/0
Lab/X-ray
S 15 copay then 100%
800/0
Allergy Injections (includes Serum)
$15 copay then 1000/a
806/0
Preventative Services
Well Child Care &
Immunizations thru age S S 15 copay then 1000/a 80%
Routine Annual Physical S 15 copay then 1000/a 800/0
Gynecological Exam (Annual) S 15 copay then 1000/9 80%
Pap Smear (Annual) $15 copay then 1000/a 80%
Prostrate Exam (Males 45+) $15 copay then 1000/a 80%
Pre -Natal Care IS 15 copay then 100% 800/0
Mental & Nervous (S20.000 LTM) As any other illness As any other illness
Alcoholism & Substance Abuse As any other illness As any other illness
Other
Chiropractic Care 600/a after $350 ded 60% after $350 ded
TMJ S 1000 Lifetime Max $ 1000 Lifetime Max
Signature CkAuthorized Purchaser
02)A��
Title
/ -
4itn
ess
Signature of Sales RepresentativeALicensed Resident Agent Group Office
Addendum H
Dental
Calendar Year Ded
$75
Annual Maximum
$1200
Preventative
100%
Basic
80%
Major
50%
Orthodontic
50016
Ortho Deductible
0
Ortho Lifetime Max
$1000
Ortho available to Dependent Children only to age 19
Signature 6t Authorized Purchaser
Title
/-96-- s�
Date
I- Al"
ess
Signature of Sales Representative/Licensed Resident Agent Group Office
MAIL ORDER PHARMACY SERVICES AGREEMENT
This Mail Order Pharmacy Services Agreement ("Agreement"), effective as of
December 1, 1995, is hereby entered into by and between Advance ParadigM Mail Service,
Inc., a Delaware corporation ("APMS") and City of Lubbock.
PRELIMINARY STATEMENT
Pursuant to the terms and conditions of this Agreement, Client desires to retain
APMS to provide, and APMS desires to provide for Client, mail service pharmacy in
accordance with Client's prescription drug benefit plan (the "Prescription Plan").
TERMS OF AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto, intending to be legally bound, hereby agree as follows:
1. Definitions. Unless the context otherwise requires, the terms defined in this
Section 1 shall have the meanings herein specified for all purposes of this Agreement,
including singular and plural forms thereof.
(a) "AWP" shall mean the then current average wholesale price for a Prescription
Drug as listed in a pharmaceutical industry pricing guide, including but not limited to the
Medi-Span Prescription Pricing Guide.
(b) "Client" shall mean the City of Lubbock or its benefit administrator, as the
case may be.
(c) "Co -payment" shall mean that portion of the cost of the Prescription required
to be paid directly by an Eligible Member in accordance with the Prescription Plan.
(d) "Dispensing Fee" shall mean the amount payable by the Client for each
prescription dispensed by the mail service pharmacy to an Eligible Member.
(e) "Eligible Member" shall mean each individual entitled to benefits under the
Prescription Plan.
(f) "Effective Date" shall mean December 1, 1995.
(g) "Generic Drug" means the chemical and generic name as determined by the
United States Adopted Names Council and accepted by the Federal Food and Drug
Administration, of those drug products having the same active ingredients as a drug
product prescribed by its trade or brand name.
(h) "Prescription" shall mean a valid and legal order to dispense a drug legally
eligible for dispensing under the laws and regulations of the United States, including the
Food and Drug Administration, and the state and local jurisdiction in which the dispensing
facility is located.
(i) "Prescription Drug" shall mean drugs and biologicals which can be dispensed
only pursuant to a Prescription and which, by law, are required to bear the legend:
"Caution - Federal Law Prohibits Dispensing Without Prescription."
LIJ/FS/CC/Lubbock
2 . Mail Service Pharmacy. APMS shall fill Prescriptions for Eligible Members
and shall mail such drugs or medications to such Eligible Members subject to the following
terms and conditions:
(a) Eligibility List and Updates. At least seven (7) days prior to the Effective
Date, Client shall provide APMS with a complete and final eligibility tape or list in a format
consistent with APMS's requirements which shall list all Eligible Members and set forth all
pertinent eligibility data (the "Eligibility List"). Client shall provide a complete and updated
Eligibility List to APMS as frequently as mutually agreed to by the parties hereto. For
purposes of this Agreement, an individual will be deemed an Eligible Member during the
period beginning on the third business day following delivery to APMS of a revised
Eligibility List which includes such individual and ending on the third business day
following delivery of a revised Eligibility List which excludes such individual.
(b) Notification and Program Promotion. Client shall notify Eligible Members
that they have mail service pharmacy benefits. Client shall use its best efforts to promote to
Eligible Members utilization of mail service. Client shall permit APMS to meet with or
otherwise communicate directly with prospective Eligible Members concerning the services
provided hereunder in a reasonable manner and at various times as mutually agreed upon
by APMS and Client. APMS shall provide Client with copies of informational material
explaining the mail service and the forms necessary for Eligible Members to utilize mail
service. Client shall distribute the mail service informational materials and forms to all
Eligible Members.
(c) Delivery and Dispensing. APMS shall dispense through its mail service
pharmacy new or refill Prescription orders upon receipt from an Eligible Member of (i) a
valid Prescription order or a completed refill order form and (ii) the applicable co -payment,
if any. APMS shall cause the filled Prescriptions to be mailed to each Eligible Member via
common carrier at the address set forth in the Eligibility List or as appearing on the face of
the Prescription. APMS shall not be liable to either Client or Eligible Member for any delay
in delivery resulting from circumstances beyond APMS's control as set forth in Section
2W of the Agreement.
(d ) Mail Service Pharmacy. APMS shall operate its mail service pharmacy in
compliance with state and federal pharmaceutical laws and regulations and shall dispense
only those prescription drugs which, in its sole discretion, fulfill the requirements of the
prescription writer and comply with applicable law. The licensed pharmacists employed by
APMS in the mail service pharmacy shall have the right to refuse to fill or renew a
Prescription for any Eligible Member when, in the pharmacist's professional judgment, the
filling or renewing of such Prescription is not in the best interest of the Eligible Member or
the pharmacist has reason to doubt the authenticity of the Prescription.
(e) Generic Substitution. If a Prescription allows, and the patient agrees to the
substitution of a less expensive Generic Drug, APMS's mail service pharmacy may fill the
Prescription with a Generic Drug which, in the professional judgment of the dispensing
pharmacist, fulfills the requirements of the Prescription and applicable laws.
(f) Patient Profiles and DUR. APMS shall request information from each
Eligible Member to submit with his or her first mail order Prescription a form containing
information regarding, among other things, any drug allergies of such Eligible Member.
APMS shall utilize this information to develop a patient profile on each Eligible Member
which will include the information submitted by such member as well as a history of
Prescription Drugs dispensed to such member during the term of this Agreement. Each
mail order Prescription will be subject to DUR based on the patient profiles and mail
LU/FS/CGLubboct 2
service utilization history as well as concurrent DUR through the Advance Rx® claims
adjudication system. APMS shall not be liable for any indirect, special or consequential
damages arising from the use or lack of use of such DUR services in accordance with
Section 8 of this Agreement.
(g) Quantities. APMS shall provide the quantity of the drug specified by a
Prescription or refill order in quantities of up to a 100 day supply; provided, that APMS
shall dispense the drugs under any Prescription or refill order in accordance with Plan
design. APMS shall comply with all limitations imposed on controlled substances.
(h) Toll Free Client Service. APMS shall maintain, at its sole expense, toll free
"800" numbers for patient counseling for Eligible Members, Client inquiries and other
Client service or informational needs.
(i) Reports. APMS shall provide management reports to the Client pertaining to
the services provided under this Agreement in a form and at intervals to be mutually agreed
upon by APMS and the Client.
0) Exclusivity. APMS shall have the exclusive right to provide mail order
pharmacy services for the Client during the duration of this Agreement.
3. Price For Services. In accordance with Section 4 hereof, Client agrees to
reimburse APMS for the- Prescriptions dispensed by the mail service pharmacy at the
following rates:
Brand Drugs: AWP less 14% pli $2.75 Dispensing Fee, j= the Co -payment
Generic Drugs: AWP less 35% pl $2.75 Dispensing Fee, Le,s the Co -payment
4. Billing.
(a) The mail service pharmacy shall electronically transmit claims for payment of
Prescriptions dispensed to Eligible Members to the City of Lubbock's claims administrator.
City of Lubbock agrees to pay such claims promptly in accordance with,its agreement with
its claims administrator. City of Lubbock shall guarantee the payment of such claims. In
the event the claims administrator does not timely pay any such claims, APMS may make
demand upon the City of Lubbock, and the City of Lubbock shall pay the: claims and shall
have full recourse against the claims administrator for repayment.
(b) Cessation of Services. Should Client, or its designated agent, for any reason,
fail to make timely payment, or become insolvent, or enter into voluntary or involuntary
bankruptcy, APMS shall be entitled to cease dispensing Prescriptions under this
Agreement, while maintaining all rights hereunder.
S . Audit. Client shall have access, at reasonable intervals and during normal
business hours, to the records of APMS relating to Eligible Members for the purpose of
examining records pertaining to the service rendered by APMS to either the Client or
Eligible Members hereunder.
6. Term. Subject to this Section 6, the initial term of this Agreement shall commence
on the December 1, 1995 and end on November 30, 1998. This Agreement shall
automatically renew on December 1, 1998, and on each year thereafter, for additional one-
year periods, unless at least ninety (90) days prior to such December 1 either party notifies
the other in writing of its intent to terminate this Agreement. In addition, this Agreement
may be terminated as follows:
LUNS/CC/Lubbock 3
(a) Upon the mutual written consent of the parties hereto;
(b) At either parry's option, if the other party fails to comply with any provision
of this Agreement and fails to correct such failure within thirty (30) days of receipt of
written notice of such failure to comply (which notice shall describe the action that the other
party must take to correct such failure); or
(c) At either party's option, if the other party becomes insolvent or seeks
protection, voluntarily or involuntarily, under any bankruptcy laws.
Termination of this Agreement shall not relieve the Client, or its designated agent, of any
unfulfilled obligations hereunder, including all payments due, unless otherwise agreed to in
writing by APMS.
7. Indemnification. Each party and its officers, directors, employees, agents,
successors and assigns (each an "Indemnitee") shall be indemnified and held harmless by
the other party (the "Indemnifying Party") against any and all claims, loss, damage, costs
and expenses ("Loss"), including, without limitation, attorneys' fees and expenses,
actually incurred by any Indemnitee arising out of or resulting from the actions or
omissions of the Indemnifying Party. Client further agrees to indemnify and hold APMS,
its officers, directors, employees, agents, successors and assigns harmless from any Loss
actually suffered or incurred arising out or resulting from any claim or demand by current
or previous Eligible Members relating to this Agreement, including without limitation any
disclosures made by APMS, its officers, directors, employees, agents, successors and
assigns in accordance with the terms and conditions hereof.
8. Limitation Of Liabilitv.
IN NO EVENT SHALL APMS BE LIABLE TO CLIENT OR ANY ELIGIBLE
MEMBER FOR ANY INDIRECT, SPECIAL, OR CONSEQUENTIAL DAMAGES OR
LOST PROFITS, ARISING OUT OF OR RELATED TO APMS'S PERFORMANCE
UNDER THIS AGREEMENT OR BREACH HEREOF, EVEN IF APMS HAS BEEN
ADVISED OF THE POSSIBILITY THEREOF. APMS'S LIABILITY TO CLIENT
UNDER THIS AGREEMENT, IF ANY, SHALL IN NO EVENT EXCEED THE TOTAL
AMOUNT OF COMPENSATION DUE APMS FOR THE PRIOR TWELVE (12)
MONTHS OF THIS AGREEMENT.
APMS RELIES ON MEDI-SPAN OR INDUSTRY COMPARABLE
DATABASES IN PROVIDING CLIENT AND ELIGIBLE MEMBERS WITH DRUG
UTILIZATION REVIEW SERVICES. APMS HAS UTILIZED DUE DILIGENCE IN
COLLECTING AND REPORTING THE INFORMATION CONTAINED IN THE
DATABASES AND HAS OBTAINED SUCH INFORMATION FROM SOURCES
BELIEVED TO BE RELIABLE. APMS, HOWEVER, DOES NOT WARRANT THE
ACCURACY OF REPORTS, ALERTS, CODES, PRICES OR OTHER DATA
CONTAINED IN THE DATABASES. THE CLINICAL INFORMATION CONTAINED
IN THE DATABASES AND THE FORMULARY IS INTENDED AS A SUPPLEMENT
TO, AND NOT A SUBSTITUTE FOR, THE KNOWLEDGE, EXPERTISE, SKILL,
AND JUDGMENT OF PHYSICIANS, PHARMACISTS, OR OTHER HEALTH-CARE
PROFESSIONALS IN ELIGIBLE MEMBERS' CARE. THE ABSENCE OF A
WARNING FOR A GIVEN DRUG OR DRUG COMBINATION SHALL NOT BE
CONSTRUED TO INDICATE THAT THE DRUG OR DRUG COMBINATION IS
SAFE, APPROPRIATE OR EFFECTIVE IN ANY ELIGIBLE MEMBER.
LU/Fs/CGLobbmk 4
9. General.
(a) Notice. Any notice required to be given pursuant to the terms and
provisions of this Agreement shall be in writing and shall be sent by certified mail, return
receipt requested, or by overnight delivery service to the parties at the addresses below or
such other address as shall be specified by the parties by like notice:
,I &f•M
APMS ParadigM, Inc.
Attn: Vice President - Legal Affairs
P.O. Box 542906
Dallas, Texas 75354-2906
and to Client at:
City of Lubbock
Attn:
P.O. Box 2000
1625 13th Street
Lubbock, TX 79457
(b) Binding Nature and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors and assigns. Neither party
may assign this Agreement without the prior written consent of the other; provided,
however, that either party may transfer or assign its rights and obligations under this
Agreement, to any affiliate, and provided further that no such assignment shall have the
effect of releasing such party from any of its obligations under this Agreement.
(c) Headings and Interpretation. The headings of the various sections of this
Agreement are inserted for convenience only and do not, expressly or by implication, limit,
define or extend the specific terms of the section so designated.
(d) Governing Law. The validity, enforceability, and interpretation of this
Agreement shall be determined and governed by the internal laws of the State of Texas (and
not the law of conflicts).
(e) Entire Agreement. This Agreement contains all the terms and conditions
agreed upon by the parties, and supersedes all prior understandings, writings, proposals,
representations, or communications, oral or written, of the parties hereto.
(f) Authority. APMS and Client warrant that each has full power and authority
to enter into and perform this Agreement, and the person signing this Agreement on behalf
of each party certifies that such person has been properly authorized and empowered to
enter into this Agreement on behalf of such party.
(g) Force Majeure. APMS shall not be liable for any failure or delay in
performing all or part of its obligations under the terms of this Agreement resulting from
unavailability of pharmaceuticals, legislative action, war, acts of any person engaged in a
subversive activity, sabotage, riot, strikes, slow -downs, lock -outs, or labor stoppage,
freight embargoes, fires, explosions, flood, earthquake or other acts of God, or by reason
of the judgment, filing or order of any court or agency of competent jurisdiction occurring
subsequent to the signing of this Agreement, or any other circumstances beyond its control.
LUNS/CGLubbock 5
(i) Survival. Should any part, term or condition of this Agreement be declared
illegal or unenforceable or in conflict with any other laws, the remaining provisions shall be
valid and not affected thereby.
0) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which taken together
shall constitute one and the same instrument.
(k) Further Assurances. From time to time upon request and without further
consideration, the parties hereto shall, and shall cause their subsidiaries, to execute, deliver
or acknowledge such documents and do such further acts as the other party hereto may
reasonably require to effectuate its obligations contemplated by this Agreement.
By executing the Agreement, the undersigned individuals hereby warrant and represent that
they have read this Agreement in its entirety, both agree to all its terms, and are duly
authorized to execute this Agreement on behalf of their respective parties.
ADVANCE PARADIGM MAIL
SERVICES, INC.
ATTEST:
&,It,— kk 3,J2,,J
Bett M. Johridon, City Secretary
APPROVED AS TO ONTENT:
Mary Andobws, Director of Human
Resources
APPROVED AS TO FORM:
OolzaCld G. Vandiver, Assistant City
Attorney
LUTSXC/L.ubboct 6