HomeMy WebLinkAboutResolution - 2006-R0370 - Professional Services Contract For Consulting - Wachovia Insurance Services - 07_25_2006 (2)Resolution No. 2006-RO370
July 25, 2006
Item No. 6.8
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, a Professional
Services/Consulting Agreement for health benefits consulting services, by and between
the City of Lubbock and Wachovia Insurance Services, Inc., and related documents. Said
Agreement is attached hereto and marked as Exhibit "A" and incorporated in this
resolution as if fully set forth herein and shall be included in the minutes of the City
Council.
Passed by the City Council this 25th day of July 2006.
�DAVID A. ILLER, MAYOR
ATTEST:
Rebe a Garza, City Secretary
APPROVED AS TO CONTENT:
Leisa Hutcheson, Risk Manager
APPROVED AS TO FORM:
M.
gs/ccdocs/Wachovia Ins. Services Amendment
8/25/ 2006
Resolution No. 2006-RO370
PROFESSIONAL SERVICES/ CONSULTING AGREEMENT
THIS PROFESSIONAL SERVICES/CONSULTING AGREEMENT (this
"Agreement") is entered into this day of July 25, 2006, by and between the City of
Lubbock, Texas (the "City") and Wachovia Insurance Services — Dallas Office (the
"Consultant").
WHEREAS, the City desires, pursuant to the terms and conditions of this
Agreement, to engage the Consultant to perform the services set forth herein; and
WHEREAS, the Consultant desires to perform the described services pursuant to
the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the promises contained herein and
other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the City and the Consultant hereby agree as follows:
1. Services of Consultant. The Consultant shall serve as an independent
contractor to provide the consulting services more particularly described in Exhibit "A",
the City's Health Benefits Consulting Services — RFP 06-044-MA and the Consultant's
response thereto, attached hereto and incorporated herein by reference for all purposes
(the "Services").
2. Services Provided by the City. The City, in its sole discretion, may
provide (at the City's sole cost and expense) the Consultant with such administrative
assistance as may be reasonably required by the Consultant for the performance of the
Services.
3. Term. This Agreement shall commence upon the complete execution
hereof and, except for the provisions of this Agreement which survive termination, shall
remain in full force and effect as between the City and the Consultant with regard to the
Services until July 25, 2007, with option to renew for two additional one year terms until
July 25, 2009 (the "Completion Date"). The Consultant hereby agrees to fully perform
all the Services by the Completion Date.
4. Compensation. As compensation for the Services, the City shall pay the
Consultant the sum of Eighty Thousand Dollars ($80,000.00) annually (the
"Compensation"). The Consultant acknowledges and agrees that the Compensation shall
constitute full payment to the Consultant and shall include, without limitation, costs of all
supplies, materials, equipment, travel expenses, lodging, meals and all other expenses of
any kind or nature incurred by the Consultant in the performance of the Services. The
Consultant acknowledges and agrees that the Compensation is a fixed sum which may
only be adjusted in accordance with the terms and conditions of this Agreement and after
written approval by the City. It is understood that Wachovia Insurance Services, Inc. will
not receive commissions / compensation from the insurance carriers for the policies that
it places for Client as described in Exhibit "A". It is understood that if, during the term of
this agreement, Wachovia Insurance Services cannot place a policy described in Exhibit
"A" on a non -commissions or fee basis, or if Wachovia Insurance Services is offered any
other form of remuneration for placement of a policy, Wachovia Insurance Services will
disclose the amount of commission, fee or remuneration to the City of Lubbock.
5. Payment. The Consultant shall provide the City with invoices for
consulting fees, in a form acceptable to the City, on a monthly basis. Invoices which are
acceptable to the City shall be paid within thirty (30) days of receipt.
6. Adiustment of Compensation and/or Completion Date. In the event of
any occurrence wholly beyond the Consultant's control which is not reasonably
anticipatable or any other cause which the City, in its sole discretion, determines justifies
an adjustment to the Compensation or the Completion Date, the City shall in writing
make such adjustments to the Compensation or the Completion Date as the City, in its
sole discretion, may approve.
7. Independent Contractor Arrangement. The Consultant is serving as an
independent contractor only, and this Agreement will in no way create any joint venture
or employment relationship between the Consultant and the City. The Consultant shall
have no authority to bind the City in any contract, agreement or otherwise. The City shall
have no obligation to: (i) provide training to the Consultant; (ii) instruct the Consultant as
to when, where, or how the Consultant is to work; (iii) hire or supervise or pay any
assistants for the Consultant; or (iv) furnish the Consultant with tools, materials or
equipment. The City shall have no obligation to withhold from the Compensation any
taxes, FICA, or federal or state unemployment insurance premiums. The Consultant shall
not accrue leave, retirement, insurance, bonding, retirement, profit-sharing or any other
benefits which may or may not be afforded employees of the City.
8. Ownership/Use of Documents. Any report(s) and any other documents
prepared by the Consultant with respect to the Services shall be the property of the City
with all common law and statutory rights related thereto. The City shall have the right to
use such documents for any purpose deemed appropriate by the City; provided however,
the Consultant shall have no liability for any use of such documents by the City for any
purpose unrelated to the Services. The Consultant shall provide the City with two copies
of each document requested by the City in both hard copy and electronic form.
THE CITY'S REVIEW, APPROVAL OR USE OF ANY AND ALL DOCUMENTS
PREPARED BY THE CONSULTANT SHALL BE FOR THE CITY'S SOLE
PURPOSE AND SHALL NOT IMPLY THE CITY'S REVIEW OF THE SAME,
NOR OBLIGATE THE CITY TO REVIEW SAME FOR QUALITY,
COMPLIANCE WITH ALL APPLICABLE STATUTES, CODES, RULES AND
REGULATIONS OR OTHER LIKE MATTERS. ACCORDINGLY,
NOTWITHSTANDING THAT ANY DOCUMENTS PREPARED BY THE
CONSULTANT AND REVIEWED BY THE CITY OR ANY AGENT OR
EMPLOYEE OF THE CITY, AND NOTWITHSTANDING ANY ADVICE OR
ASSISTANCE WHICH MAY BE RENDERED TO THE CONSULTANT BY THE
CITY OR THE CITY'S AGENTS OR EMPLOYEES, INCLUDING BUT NOT
LIMITED TO THE: CITY'S DESIGNATED REPRESENTATIVES, THE CITY
SHALL HAVE NO LIABILITY WHATSOEVER IN CONNECTION
THEREWITH AND SHALL NOT BE RESPONSIBLE FOR ANY OMISSIONS
OR ERRORS CONTAINED IN ANY SUCH DOCUMENT SUBMITTED TO THE
CITY FOR REVIEW AND APPROVAL AND ANY SUCH CITY APPROVAL
SHALL NOT CONSTITUTE A WAIVER OR RELEASE OF THE CONSULTANT
HEREUNDER OR AS PROVIDED BY APPLICABLE LAW. THE PROVISIONS
HEREOF AND THE ENFORCEMENT OF SUCH PROVISIONS SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT.
9. Insurance.
La)Unless otherwise agreed to in writing by the parties, the Consultant
acknowledges and agrees that the City shall have no duty to obtain and maintain any
insurance including, but not limited to, a workers' compensation insurance policy, for the
benefit of the Consultant.
(b)The Consultant hereby agrees to certificates of insurance in the types and
amounts outlined in Exhibit "A" attached hereto.
10. Dispute Resolution. The City and the Consultant are fully committed to
working with each other and agree to communicate regularly with each other at all times
so as to avoid or minimize disputes or disagreements with respect to the Services to be
performed by the Consultant pursuant to the terms of this Agreement. If disputes or
disagreements do arise, the City and the Consultant each commit to resolve such disputes
or disagreements in an amicable, professional, and expeditious manner so as to avoid
unnecessary losses, delays, and disruptions to completion of the Services. The City and
the Consultant will first attempt to resolve any disputes or disagreements at the field level
through discussions between the parties' respective designated representatives. The
Consultant shall continue to perform the Services and the City shall continue to satisfy its
payment obligations to the Consultant pending the final resolution of any dispute or
disagreement between the parties.
11. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of Texas.
12. Termination; Suspension.
(a) By the City. The City may terminate this Agreement immediately upon
any breach of this Agreement by the Consultant. The City may also terminate this
Agreement upon sixty days (60) days written notice to the Consultant for the City's
convenience and without cause. Upon written notice to the Consultant, the City may for
its convenience and without cause suspend performance of the Services by the Consultant
for a period not to exceed sixty (60) consecutive days. In the event of a suspension by
the City, the City shall equitably adjust the Compensation and the Completion Date as set
forth in Paragraph 7 above.
(b) By the Consultant. The Consultant may terminate this Agreement if
the City fails to pay the Consultant in compliance with Paragraph 3 herein. Provided,
however, that the Consultant must have first given the City written notice of such failure
to pay and the City must have failed to cure such nonpayment within sixty (60) days of
receipt of such notice. The Consultant may also terminate this Agreement if the City
suspends Consultant's performance of the Services for a period in excess of ninety (90)
consecutive days.
In the event of a termination of this Agreement, the City shall pay Consultant an amount
equal to the value of the Services actually rendered to the City by the Consultant as of the
date of such termination.
13. Indemnification. The Consultant shall indemnify and hold harmless the
City, its elected and appointed officials, employees, agents and representatives (the
"Indemnified Parties") from all losses, claims, liabilities, injuries, damages, actions or
causes of action, and any costs and expenses, including, without limitation, reasonable
attorney's fees, of any type or description, brought, asserted or made for or on account of
any injuries or damages received or sustained by any person or persons (including,
without limitation, one of the Indemnified Parties) or property, arising out of, relating to,
or occasioned by the performance or lack of performance, errors, omissions, negligence
or intentional acts of the Consultant, its agents, consultants, subcontractors or employees
related to the Services and its duties and obligations under or pursuant to this Agreement,
whether or not any other party contributes to such performance or lack of performance,
errors, omissions, negligence or intentional acts of the Consultant, its agents, consultants,
subcontractors or employees. Upon demand by the City, the Consultant shall diligently
defend any indemnified matter relating to the Services and which is made or commenced
against the City, whether alone or together with the Consultant or any other person, all at
the Consultant's own cost and expense and by counsel to be approved by the City in the
exercise of its reasonable judgment. In the alternative, at any time the City may elect to
conduct its own defense through counsel selected by the City and at the cost and expense
of the Consultant. Nothing in this Paragraph 13 shall limit or impair any rights or
remedies of the City against the Consultant or any other person under any other provision
of this Agreement or under applicable law. The Consultant shall not be required to
indemnify the City if such indemnification would be a violation of a Texas statute. The
terms of this Paragraph l3shall survive the termination of this Agreement.
14. Status of the Consultant. The Consultant hereby represents, promises
and warrants to the City: that the Consultant is financially solvent and possesses
sufficient experience, all required licenses, authority, personnel and working capital to
complete the Services required under this Agreement.
15. Business Ethics Standards. The Consultant hereby acknowledges that it
has reviewed the City's business ethics policy attached hereto in Exhibit "A" and
incorporated herein by reference for all purposes. The Consultant represents to the City
that it has not violated such standards in its dealings with the City and covenants that it
will abide by such standards in the Consultant's performance of this Agreement.
16. Confidentiality.
(a)The City considers all non-public information concerning the Services
to be performed under the terms of this Agreement as well as any reports or other
documentation related thereto to be confidential and proprietary unless otherwise
expressly indicated in writing by the City to the Consultant. The Consultant shall not
release any non-public information to any third party without the prior written consent of
the City.
(b) The Consultant and the City shall ensure compliance with federal
regulations under the Health Insurance Portability and Accounting Act (HIPAA)
regarding privacy of all protected health information (PHI) and shall take steps and do all
things reasonably necessary to ensure that the terms of this Agreement, all , all
information obtained during the term of this Agreement disclosed or made use of outside
the business of such other party for the purposes of meeting. their obligations under this
Agreement remains confidential; provided, however, that the foregoing shall not apply to
information: (i) provided to voluntary accreditation agencies, government agencies or
third party payors as required by Law or consented to by the affected party; ii
reasonable required by health care providers providing health care services to Eligible
Members; (iii) that either party can show was known to it prior to disclosure by the other
party; or (iv) that is or becomes public knowledge through no fault of the party to whom
the disclosure is made.
17. Assignment. The Consultant agrees that the duties and obligations of the
Consultant under this Agreement are not assignable or transferable and the Consultant
agrees not to subcontract any of the Services to be performed hereunder, without the prior
written approval of the City.
18. Entire Agreement. This Agreement constitutes and expresses the entire
agreement between the parties and supersedes all prior negotiations, representations or
agreements, either written or oral. This Agreement shall not be amended or modified
except by written instrument signed by both parties.
19. Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed to be an original, and all of which, when taken together,
shall constitute one and the same Agreement.
a a v11 i111J
AGREEMENT OR BY ANY CONDUCT OF ITS REPRESENTATIVES UNDER
TATC a r_1D'V'rxxry r. A w" !I!\ TT?T
.v i> a • •,t>t»,7 U
RIGHT TO ASSERT ALL CLAIMS AND DEFENSES IN ANY LEGAL
PROCEEDING.
EXECUTED this day of
Wachovia Insurance Services, Inc.
By:—�022LL-A At"-L-L-Ij)
Nam
Title:
CITY OF LUBBOCK
David A. Mil r, Mayor
ATTEST:
Re ecca Garza, City Secretary
APPROVED AS TO CONTENT:
C-S C Z",-""
:f -
Leisa Hutcheson, Risk Manager
APPROVED AS TO FORM:
rTo Knight,
'` Assistant City Attorney
Resolution No. 2006—RO370
RFP 06-044-MA Health Benefits Consulting Services
SUBMIT TO:
,
CITY OF LUBBOCK
`
CITY OF LUBBOCK, TEXAS
Purchasing &Contract Management
1625 136 Street, Rm 204
REQUEST FOR
Lubbock, Tx 79401-3830
AN EQUAL
PROPOSAL
CONTACT PERSON:
OPPORTUNITY
Marta Alvarez
EMPLOYER
#06-044-MA
TEL: 806.775.2167
FAX: 806.775.2164
http://purchasing.cilubbock.tx.us
TITLE: Health Benefits Consulting Services
SUBMITTAL DEADLINE:
July 6, 2006, 2:00 CST
PRE PROPOSAL DATE, TIME AND LOCATION: June 22, 2006 @a 1 1:00
Any proposals received after the rime and date listed above,
A.M., in the Purchasing Conference Room 204, Municipal Building,
regardless ofthe modeofdelivey, shall be returned unopened.
1625 1P Street, Lubbock, Texas.
RESPONDENT NAME:
IF RETURNING AS A "NO RESPONSE", PLEASE STATE REASON.
MAILING ADDRESS:
CITY — STATE — ZIP:
THE CITY OF LUBBOCK RESERVES THE RIGHT TO ACCEPT OR REJECT ANY AND
ALL PROPOSALS IN WHOLE OR IN PART AND WAIVE ANY
INFORMALITY IN THE COMPETITIVE PROPOSAL PROCESS.
TELEPHONE NO:
FURTHER, THE CITY RESERVES THE RIGHT TO ENTER INTO ANY
CONTRACT DEEMED TO BE IN THE BEST INTEREST OF THE CITY.
FAX NO:
IT IS THE INTENT AND PURPOSE OF THE CITY OF LUBBOCK THAT
THIS REQUEST PERMITS COMPETITIVE PROPOSALS. IT IS THE
E-MAIL:
OFFEROR'S RESPONSIBILITY TO ADVISE THE CITY OF LUBBOCK
PURCHASING MANAGER IF ANY LANGUAGE, REQUIREMENTS, ETC.,
OR ANY COMBINATIONS THEREOF, INADVERTENTLY RESTRICTS OR
FEDERAL TAX ID NO. OR SOCIAL SECURITY NO.
LIMITS THE REQUIREMENTS STATED IN THIS RFP TO A SINGLE
SOURCE. SUCH NOTIFICATION MUST BE SUBMITTED IN WRITING
AND MUST BE RECEIVED BY THE PURCHASING MANAGER NO
LATER THAN FIVE (5) BUSINESS DAYS PRIOR TO THE ABOVE
SUBMITTAL DEADLINE.
THE OFFEROR HEREBY ACKNOWLEDGES RECEIPT OF AND AGREES ITS PROPOSAL IS BASED ON ANY ADDENDA
POSTED ON RFPDEPOT.COM
The City of Lubbock Charter states that no officer or employee of the City can benefit from any contract, job, work or service for the
municipality or be interested in the sale to the City of any supplies, equipment, material or articles purchased. Will any officer or
employee of the City, or member of their immediate family, benefit from the award of this proposal to the above firm?_ YES
NO
IN COMPLIANCE WITH THIS SOLICITATION, THE UNDERSIGNED OFFEROR HAVING EXAMINED THE REQUEST FOR
PROPOSAL, AND BEING FAMILIAR WITH THE CONDITIONS TO BE MET, HEREBY SUBMITS THE FOLLOWING. AN
INDIVIDUAL AUTHORIZED TO BIND THE COMPANY MUST SIGN THE FOLLOWING SECTION. FAILURE TO EXECUTE
THIS PORTION MAY RESULT IN PROPOSAL REJECTION.
By my signature I certify that this offer is made without prior understanding, agreement, or connection with any corporation, firm,
business entity, or person submitting an offer for the same materials, supplies, equipment, or service(s), and is in all respects fair and
without collusion or fraud. I further agree that if the offer is accepted, the offeror will convey, sell, assign, or transfer to the City of
Lubbock all right, title, and interest in and to all causes of action it may now or hereafter acquire under the Anti-trust laws of the
United States and the State of Texas for price fixing relating to the particular commodity(s) or service (s) purchased or acquired by the
City of Lubbock. At the City's discretion, such assignment shall be made and become effective at the time the City tenders final
payment to the vendor.
RFP-06-44-MA.doc
Authorized Signature
Print/Type Name
RFP 06-044-MA Health Benefits Consulting Services
Title
Date
THIS FORM MUST BE COMPLETED AND RETURNED WITH YOUR RESPONSE.
RFP-06-44-MA.doc
Resolution No. 2006—RO370
RFP 06-044-MA Health Benefits Consulting Services
Health Benefits Consulting Services
CITY OF LUBBOCK, TEXAS
RFP #06-044-MA
The City of Lubbock appreciates your time and effort in preparing your proposal. All offerors should
familiarize themselves with the following INSTRUCTIONS TO OFFERORS and GENERAL
REQUIREMENTS:
I. INSTRUCTIONS TO OFFERORS
1 PROPOSAL DELIVERY, TIME & DATE
1.1 The City of Lubbock will receive written and sealed competitive proposals for Health
Benefits Consulting Services until 2:00 p.m. CST, July 6, 2006, if date/time stamped
on or before 2:00 at the office listed below. Any proposal received after the date and
hour specified will be rejected and returned unopened to the offeror. Each proposal and
supporting documentation must be in a sealed envelope or container plainly labeled in
the lower left-hand corner: 'RFP #06-044-MA, Health Benefits Consulting
Services" and the closing date and time. Offerors must also include their company
name and address on the outside of the envelope or container. Proposals must be
addressed to:
Marta Alvarez, Interim Purchasing Manager
City of Lubbock
1625 13th Street, Room 204
Lubbock, Texas 79401
1.2 Offerors are responsible for making certain proposals and proposed contracts are
delivered to the Purchasing Department. Mailing of a proposal does not ensure that the
proposal will be delivered on time or delivered at all. If offeror does not hand deliver
proposal, we suggest that he/she use some sort of delivery service that provides a
receipt. The City of Lubbock assumes no responsibility for errant delivery of proposals,
including those relegated to a courier agent who fails to deliver in accordance with the
time and receiving point specified.
1.3 Proposals will be accepted in person, by United States Mail, by United Parcel Service,
or by private courier service. No proposals will be accepted by oral communication,
telephone, electronic mail, telegraphic transmission, or telefacsimile transmission. THE
CITY WILL NOT ACCEPT FAX PROPOSALS.
1.4 Proposals may be withdrawn prior to the above scheduled time set for closing.
Alteration made before RFP closing must be initiated by offeror guaranteeing
authenticity.
1.5 The City of Lubbock reserves the right to postpone the date and time for accepting
proposals through an addendum.
RFP-06-44-MA.doc 3
RFP 06-044-MA Health Benefits Consulting Services
2 PRE -PROPOSAL MEETING
2.1 For the purpose of familiarizing offerors with the requirements, answering questions, and
issuing addenda as needed for the clarification of the Request for Proposal (RFP)
documents, a pre -proposal meeting will be held at 11.00 a.m., June 22 2006 in the
Purchasing Conference Room 204, Municipal Building, 1625 13'b Street,
Lubbock, Texas. All persons attending the conference will be asked to identify
themselves and the prospective offeror they represent.
2.2 It is the offerors responsibility to attend the pre -proposal meeting though the meeting is
not mandatory. The City will not be responsible for providing information discussed at
the pre -proposal meeting to offerors who do not attend the pre -proposal meeting.
2.3 The City of Lubbock does not discriminate against person with disabilities. City of
Lubbock pre -proposal meetings are available to all persons regardless of disability. If
you would lice information made available in a more accessible format or if you desire
assistance, please contact the City of Lubbock ADA Coordinator, 1625 13th Street,
(806)775-2018 at least forty-eight (48) hours in advance of the conference.
3 CLARIFICATION OF REQUIREMENTS
3.1 It is the intent and purpose of the City of Lubbock that this request permits competitive
proposals. It is the offeror's responsibility to advise the City of Lubbock Purchasing
Manager if any language requirements etc or any combinations thereof inadvertently
restricts or limits the requirements stated in this RFP to a single source. Such notification
must be submitted in writing and must be received by the City of Lubbock Purchasing
Office no later than five (5) business days prior to the proposal closing date. A review
of such notifications will be made.
V
3.2 ALL REQUESTS FOR ADDITIONAL INFORMATION OR
CLARIFICATION CONCERNING THIS REQUEST FOR PROPOSAL
(RFP) MUST BE SUBMITTED IN WRITING NO LATER THAN FIVE (5)
BUSINESS DAYS PRIOR TO THE PROPOSAL CLOSING DATE AND
ADDRESSED TO:
Marta Alvarez, Interim Purchasing Manager
City of Lubbock
1625 130' Street
Lubbock, Texas 79401
Fax: (806) 775-2164
Email: malvarez@mylubbock.us
RFPDepot: http://www.RFPdepot.com
4 ADDENDA & MODIFICATIONS
RFP-06-44-MA.doc
RFP 06-044-MA Health Benefits Consulting Services
4.1 Any changes, additions, or clarifications to the RFP are made by ADDENDA
information available over the Internet at http://w,,vw.RFpdeyot.com. We strongly
suggest that you check for any addenda a _ of forty-eight hours in
advance of the response deadline. BUSINESSES WITHOUT INTERNET
ACCESS may use computers available at most public libraries.
4.2 Any offeror in doubt as to the true meaning of any part of the RFP or other documents
may request an interpretation thereof from the Purchasing Department. At the request of
the offeror, or in the event the Purchasing Department deems the interpretation to be
substantive, the interpretation will be made by written addenda issued by the Purchasing
Department. Such addenda issued by the Purchasing Department will be available over
the Internet at _http://www.RFPdepot.com and will become part of the proposal
package having the same binding effect as provisions of the original RFP. No verbal
explanations or interpretations will be binding. In order to have a request for
interpretation considered, the request must be submitted in writing and must be received
by the City of Lubbock Purchasing Department no later than five (5) days prior to the
proposal closing date.
4.3 The City does not assume responsibility for the receipt of any addendum sent to
offerors.
5 EXAMINATION OF DOCUMENTS AND REQUIREMENTS
5.1 Each offeror shall carefully examine all RFP documents and thoroughly familiarize itself
with all requirements prior to submitting a proposal to ensure that the proposal meets
the intent of this RFP.
5.2 Before submitting a proposal, each offeror shall be responsible for making all
investigations and examinations that are necessary to ascertain conditions and
requirements affecting the requirements of this RFP. Failure to make such investigations
and examinations shall not relieve the offeror from obligation to comply, in every detail,
with all provisions and requirements of the Request for Proposal.
6 PROPOSAL COPIES
6.1 OFFEROR'S MUST SUBMIT THE ORIGINAL AND FIVE COPIES OF THE
SEALED PROPOSAL TO THE PURCHASING DEPARTMENT PRIOR TO
RESPONSE DUE DATE/TIME FAILURE TO SUBMIT THE ADDITIONAL
COPIES MAY RESULT IN THE PROPOSAL BEING DECLARED
UNRESPONSIVE. The original must be clearly marked "ORIGINAL" and the
copies must be clearly marked "COPY" .
6.2 All proposals, responses, inquiries, or correspondence relating to or in reference to this
RFP, and all electronic media, reports, charts, and other documentation submitted by
offerors shall become the property of the City of Lubbock when received.
7 PROPOSAL PREPARATION COSTS
RFP-06-44-MA.doc 5
RFP 06-044-MA Health Benefits Consulting Services
7.1 Issuance of this RFP does not commit the City of Lubbock, in any way, to pay any
costs incurred in the preparation and submission of a proposal.
7.2 The issuance of this RFP does not obligate the City of Lubbock to enter into contract
for any services or equipment.
7.3 All costs related to the preparation and submission of a proposal shall be paid by the
proposer.
S TRADE SECRETS, CONFIDENTIAL INFORMATION AND THE TEXAS PUBLIC
INFORMATION ACT
8.1 If you consider any portion of your proposal to be privileged or confidential by statute
or judicial decision, including trade secrets and commercial or financial information,
clearly identify those portions.
8.2 Proposals will be opened in a manner that avoids disclosure of the contents to
competing offerors and keeps the proposals secret during negotiations. All proposals
are open for public inspection after the contract is awarded, but trade secrets and
confidential information in the proposals are not open for inspection.
8.3 The City of Lubbock will honor your notations of trade secrets and confidential
information and decline to release such information initially, but please note that the final
determination of whether a particular portion of your proposal is in fact a trade secret or
commercial or financial information that may be withheld from public inspection will be
made by the Texas Attorney General or a court of competent jurisdiction. In the event
a public information request is received for a portion of your proposal that you have
marked as being confidential information, you will be notified of such request and you
will be required to justify your legal position in writing to the Texas Attorney General
pursuant to Section 552.305 of the Goverment Code. In the event that it is
determined by opinion or order of the Texas Attorney General or a court of competent
jurisdiction that such information is in fact not privileged and confidential under Section
552.110 of the Government Code and Section 252.049 of the Local Government
Code, then such information will be made available to the requester.
8.4 Marking your entire proposal CONFIDENTIAL/PROPRIETARY is not in
conformance with the Texas Open Records Act.
9 DISADVANTAGED BUSINESS ENTERPRISE (DBE) REQUIREMENTS
9.1 The City of Lubbock hereby notifies all offerors that in regard to any contract entered
into pursuant to this RFP, Disadvantaged Business Enterprises (DBE's) will be afforded
equal opportunities to submit proposals and will not be discriminated against on the
grounds of race, color, sex, disability, or national origin in consideration of an award.
9.2 A DBE is defined as a small business concern which is at least 51% owned and
controlled by one or more socially and economically disadvantaged individuals, or in the
case of any publicly owned business, at least 51 % of the stock of which is owned by
one ore more socially and economically disadvantaged individuals. Socially and
RFP-06-44-MA.doe
RFP 06-044-MA Health Benefits Consulting Services
economically disadvantaged include Women, Black Americans, Hispanic Americans,
Native Americans, Asian -Pacific Americans, and Asian -Indian Americans.
10 DELETED
11 CONFLICT OF INTEREST
11.1 The Offeror shall not offer or accept gifts or anything of value nor enter into any
business arrangement with any employee, official or agent of the City of Lubbock
11.2 By signing their proposal, the offeror certifies and represents to the City the offeror has
not offered, conferred or agreed to confer any pecuniary benefit or other thing of value
for the receipt of special treatment, advantage, information, recipient's decision, opinion,
recommendation, vote or any other exercise of discretion concerning this RFP.
12 ANTI -LOBBYING PROVISION
12.1 DURING THE PERIOD BETWEEN PROPOSAL SUBMISSION DATE AND
THE CONTRACT AWARD, PROPOSERS, INCLUDING THEIR AGENTS AND
REPRESENTATIVES, SHALL NOT DIRECTLY DISCUSS OR PROMOTE
THEIR PROPOSAL WITH ANY MEMBER OF THE LUBBOCK CITY
COUNCIL OR CITY STAFF EXCEPT IN THE COURSE OF CITY -
SPONSORED INQUIRIES, BRIEFINGS, INTERVIEWS, OR PRESENTATIONS,
UNLESS REQUESTED BY THE CITY.
12.2 This provision is not meant to preclude offerors from discussing other matters with City
Council members or City staff. This policy is intended to create a level playing field for
all potential offerors, assure that contract decisions are made in public, and to protect
the integrity of the RFP process. Violation of this provision may result in rejection of the
offeror's proposal.
13 AUTHORIZATION TO BIND SUBMITTER OF PROPOSAL
Proposals must show vendor name and address of offeror. The original proposal must be
manually signed by an officer of the company having the authority to bind the submitter to its
provisions. Person signing proposal must show title or AUTHORITY TO BIND THEIR FIRM
IN A CONTRACT. Failure to manually sign proposal will disqualify it.
14 ABOUT THIS DOCUMENT
This document is a Request for Proposal. It differs from an Invitation to Bid in that the City of
Lubbock is seeking a solution, as described in the following General Requirements section,
not a bid/quotation meeting firm specifications for the lowest price. As such, the lowest price
proposed will not guarantee an award recommendation. Sealed proposals will be evaluated
based upon criteria formulated around the rrost important features of a product or service, of
which quality, testing, references, availability or capability, may be overriding factors, and price
may not be determinative in the issuance of a contract or award. The proposal evaluation
criteria should be viewed as standards that measure how well an offeror's approach meets the
desired requirements and needs of the City of Lubbock. Those criteria that will be used and
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considered in evaluation for award are set forth in this document. The City will thoroughly
review all proposals received The City will also utilize its best judgment when determining
whether to schedule a pre -proposal conference (before proposals are accepted), or meetings
with offerors (after receipt of all proposals). A Purchase Order/Contract will be awarded to a
qualified offeror submitting the best proposal. The City reserves the right to select, and
subsequently recommend for an award, the proposed service which best meets its
required needs, quality levels, and budget constraints.
15 EVALUATION PROCESS
15.1 All proposals will be evaluated by an evaluation committee and may include senior
management representatives, a financial officer, and/or an independent consultant.
15.2 Respondents to this RFP may be required to submit additional information that the City
may deem necessary to further evaluate the offeror's qualifications.
15.3 The committee will evaluate and numerically score each proposal in accordance with the
evaluation criteria included in the Request for Proposal.
15.4 The committee will arrive at a short list of the top respondents and these short-listed
respondents may be scheduled for a structured oral presentation and interview. Such
presentations will be at no cost to the City of Lubbock. At the end of the oral
presentation and interview, the evaluation of the short-listed respondents will be
completed. The oral interview may be recorded and/or videotaped.
16 SELECTION
16.1 Selection shall be based on the responsible offeror whose proposal is determined to be
the most advantageous to the City of Lubbock considering the relative importance of
evaluation factors included in this RFP.
16.2 NO INDIVIDUAL OF ANY USING DEPARTMENT HAS THE AUTHORITY TO
LEGALLY AND/OR FINANCIALLY COMMIT THE CITY TO ANY
CONTRACT, AGREEMENT OR PURCHASE ORDER FOR GOODS OR
SERVICES, UNLESS SPECIFICALLY SANCTIONED BY THE
REQUIREMENTS OF THIS REQUEST FOR PROPOSAL.
17 EQUAL EMPLOYMENT OPPORTUNITY
Offeror agrees that it will not discriminate in hiring, promotion, treatment, or other terms and
conditions cf employment based on race, sex, national origin, age, disability, or in any way
violative of Title VII of 1964 Civil Rights Act and amendments, except as permitted by said
laws.
18 NONAPPROPRIATION
All funds for payment by the City under this contract are subject to the availability of an annual
appropriation for this purpose by the City. In the event of non -appropriation of funds by the
City Council of the City of Lubbock for the goods or services provided under the contract, the
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City will terminate the contract, without termination charge or other liability, on the last day of
the then -current fiscal year or when the appropriation made for the then -current year for the
goods or services covered by this contract is spent, whichever event occurs first. If at any time
funds are not appropriated for the continuance of this contract, cancellation shall be accepted by
the Seller on thirty (30) days prior written notice, but failure to give such notice shall be of no
effect and the City shall not be obligated under this contract beyond the date of termination.
19 PROTEST
19.1 All protests regarding the RFP process must be submitted in writing to the City
Purchasing Manager within five (5) business days following the opening of proposals.
This includes all protests relating to advertising of notices, deadlines, proposal opening,
and all other related procedures under the Local Government Code, as well as any
protest relating to alleged improprieties with the RFP process.
This limitation does not include protests relating to staff recommendations as to award
of contract. Protests relating to staff recommendations may be directed to the City
Manager.
All staff recommendations will be made available for public review prior to
consideration by the City Council as allowed by law.
19.2 FAILURE TO PROTEST WITHIN THE TEN4E ALLOTTED SHALL
CONSTITUTE A WAIVER OF ANY PROTEST.
The City of Lubbock is aware of the time and effort you expend in preparing and submitting
proposals to the City. Please let us know of any requirement causing you difficulty in responding
to our Request for Proposal. We want to facilitate your participation so that all responsible firms
can compete for the City's business. Awards should be made approximately two to six weeks
after the opening date. If you have any questions, please contact the City of Lubbock
Purchasing Manager at (806) 775-2572.
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TABLE OF CONTENTS
A. Introduction
• Background Information
• Benefits Offered and Current Vendors
• Proposal Rules
• Evaluation Criteria
B. Scope of Services
C. Format and Contents of Proposal
? Title Page
? Table of Contents
• Technical Proposal
• Qualification of Consultant
• Price Proposal and Contract Fee
D. Required Attachments
• Disclosure Agreement
• Disclosure Notice
• Sample Contract
E. Exhibits
• City of Lubbock Plan Document
• Schedule of Rates
Active Health
Retiree Dental
Active Dental
Retiree Health
• Claims Information
• Clinic Costs
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CITY OF LUBBOCK,TEXAS
REQUEST FOR PROPOSAL
HEALTH BENEFITS CONSULTING SERVICES
A: INTRODUCTION
BACKGROUND INFORMATION:
The City of Lubbock, Texas, (hereafter referred to as "City") is requesting proposals from
qualified providers of professional insurance consultant services to assist in the review and
procurement of employee benefits plans, both City provided and voluntary employee plans.
The City, like many organizations, has incurred dramatically increased costs for health insurance
coverage. It is the City's desire to explore any and all avenues for containing total heath
insurance costs, lowering the City's and member's contributions, if possible, while still providing
a competitive and comprehensive package to eligible members.
The City currently has 1887 active employees, 450 retirees and approximately 4600 total lives
insured on its health insurance plan.
BENEFITS OFFERED AND CURRENT VENDORS:
MEDICAL BENEFITS — The City offers its employees, retirees and their eligible dependents a
preferred provider organization (PPO) plan. Under this benefit there is also an Out -of -Area
plan which provides for participants living in an area where there are no PPO Network
Providers. The Out -of -Area plan is a traditional indemnity plan. Currently, there are 4,631
lives covered in the plan. The current vendor is HealthSmart Preferred Care. Our Third Party
Administrator is American Administrative Group. For the 2006 plan year medical benefits
remained unchanged from the prior coverage year. The City is a self -funded plan with individual
stop loss of $175,000 per participant. Our minimum aggregate attachment point for 2006 is
$18,845,756.62. Highmark Life and Casualty Group provide the City's stop loss and
aggregate coverage. Additionally, the City has an Organ and Tissue Transplant Policy as part
of our health plan. The policy is through AIG Life Insurance Company. The plan year is
January 1 to December 31. The City is in the final year of renewals.
PBM BENEFITS — Our current vendor for pharmacy benefits is MaxorPlus. Maxor has a
network of over 44,300 chain and retail pharmacies. The contract term is annual with an option
to renew for two (2) additional one (1) year terms. The contract began April 1, 2006.
DENTAL BENEFITS — The City's dental benefits are 100% self -funded. Participants can go
to the dentist of their choice. American Administrative Group is the claims payor for dental
benefits. The plan year is January 1 to December 31. The City is in the final year of renewals.
LIFE BENEFITS — The current vendor for life benefits is Standard Insurance Company. Every
eligible full time City employee is provided $10,000 term life and AD&D coverage. The City
pays for this coverage. The contract term is for three (3) years and expires December 1, 2007.
OPTIONAL LIFE (VOLUNTARY) — Employees may purchase an amount equal to 1X, 2X
or 3X their annual salary (rounded to the next highest $1,000 of benefit) to a maximum benefit
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of the lessor of $500,000. Dependent life is also available for the employee to purchase. A
spouse may be covered for 100% of the employee's coverage in $5,000 increments up to
$50,000. Dependent children ages 7 days to 6 months are covered for $1,500; ages 6 months
to 19/25 years they may be covered in $2,500 increments up to $10,000. Standard Insurance
Company is also the vendor for our voluntary life program. The contract term is for three (3)
years and expires December 1, 2007.
LONG TERM DISABILITY (VOLUNTARY) — The current vendor for this benefit is ING
Employee Benefits. Two choices are offered to employees for long term disability benefits.
The first plan is a 90 day elimination period which will provide 67% of an employee's base pay.
The second plan is a 180 day elimination period providing 60% of an employee's base pay.
The premiums are based on age, plan chosen and $100 of eligible salary. The contract term is
January 1, 2005 through December 31, 2006 with 30% participation or December 31, 2007
with 50% participation and may be extended for an additional one (1) year term.
SHORT TERM DISABILITY (SELF -FUNDED SICK LEAVE SHARING) — ING
Employee Benefits is the vendor on this Advise to Pay Agreement. The purpose of this benefit
is to assist all regular full time employees if a catastrophic illness or injury forces the employee to
exhaust all leave time, lose compensation from the City and the situation presents a financial
hardship to the employee. An employee must have at least 3 months continuous full time service
with the City and be classified as a full time employee. The City has a complete Sick Leave
Sharing Policy in their Personnel Policy Guidebook. The initial contract term was for January 1,
2005 to December 32, 1005. The Advise to Pay Agreement is automatically renewed for
successive twelve (12) month periods until terminated.
DEFERRED COMPENSATION (VOLUNTARY) — The City has two vendors for deferred
compensation, ING and ICMA.
FLEX PLAN (VOLUNTARY) — Our Flex Plan is administered by American Administrative
Group. A Medical Reimbursement Account and Dependent Care Assistant Account are
offered for enrollment. The plan year is January 1 to December 31. The City is in the final year
of renewals.
CANCER PLAN (VOLUNTARY) — EMC National Life Company provides the voluntary
cancer product for City employees. Rates are based on coverage selected. The Payroll
Deduction Agreement began October 19, 1995 and may be terminated at any time by either
party with 90 days written notice.
VISION (VOLUNTARY) — Coast to Coast 20/20 Select Vision Plan is administered by
Forrest T. Jones Consulting Company. This is a discount plan for exams and hardware. The
contract began December 1, 1999 and is renewed annually.
PRE -PAID LEGAL (VOLUNTARY) — Legal Plans USA is our vendor for pre -paid legal
services providing free legal consultations, free legal correspondence and reduced rates for
other legal services. The effective date is December 1, 1999 and is automatically renewed
annually. The agreement maybe terminated by either party with 60 days written notice.
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PERSONAL ACCIDENT INSURANCE (VOLUNTARY) — Personal Accident Insurance
(PAI) is Accidental Death and Dismemberment Insurance. Coverage and rates are based on
participant selection. The contract term is December 1, 2003 to November 30, 2006.
PROPOSAL RULES:
I. One original and five hard copies of sealed proposals must be submitted in writing (no
facsimiles, please) at or before 2:00 P.M. on July 6, 2006 to Marta Alvarez, Purchasing
Manager at the following address:
City of Lubbock (806) 775-2572
P. O. Box 2000
Lubbock, Texas 79457
The sealed envelope must clearly state it is a Health Benefits Consulting Services 06-044-MA,
and the date and time of the proposal closing.
2. If the proposal is contingent upon the City providing additional information such as claims
history, completed applications, or is subject to any other conditions, such requirements must be
stated clearly in the proposal.
3. We request all proposals remain valid without material change for at least 60 days after the
due date noted in "l ." above.
4. It is understood and agreed, in the event the consultant cannot meet the terms and conditions
agreed to in a signed proposal accepted by the City, then the City shall at its sole option have
the right to cancel the contract on a pro-rata basis.
5. The contract period shall commence on or about July 27, 2006 and shall continue for a term
of one year. After completion of the initial Contract term, the Contract may be renewed
annually for two additional years.
6. The City may require proposers to give oral presentations in support of their proposals or to
exhibit or otherwise demonstrate the information contained therein. Any and all expenses
involved in making any presentation(s) will be at the expense of the proposer.
7. The City may award a contract on the basis of initial offers received, without discussions.
Therefore, each initial offer should contain the proposer's best terms from a cost or price and
technical standpoint
8. Each proposal will be reviewed to determine if the proposal is responsive to the submission
requirements outlined in the RFP. A responsive proposal is one which follows the requirements
of the RFP, includes all required documentation, is submitted in the format outlined in the RFP,
is of a timely submission, and has the appropriate signatures as required on each document.
Failure to comply with these requirements may deem your proposal non -responsive. The City
reserves the right to use more than one Consultant in the placement of coverage.
9. Each proposer shall submit proof of insurance containing coverage for the following:
General Liability Insurance $1,000,000
Professional Liability Insurance $1,000,000
Auto Liability Insurance (Any auto) $ 300,000
Workers' Compensation Statutory
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Upon award of the Contract to the successful proposer, the Consultant shall submit a Certificate
of insurance naming the City as a primary additional insured on the General Liability Insurance
and Auto Liability Insurance policies. All policies shall be endorsed to include a waiver of
subrogation in favor of the City.
EVALUATION CRITERIA:
Broker Experience (30%) — The breadth of knowledge of municipal and/or large commercial
accounts and proven ability to assist others with their plans will be considered.
Service (30%) — The ability to provide an in depth analysis of the City's current plan, make
innovative recommendations to reduce costs, provide services in an expeditious and
professional fashion as verified by previous or current clients, the availability of qualified
personnel within the offeror's organization, demonstrated accessibility to the marketplace.
Financial Capacity (10%) — The capacity to provide coverage and services in the future with
minimum risk to the City will be considered. Such measurements as Best and/or submitted
certified financial statements may be used to measure this criteria.
Price (30%) — The cost of the service requested and proposed.
B. SCOPE OF SERVICES
It is the intent of the City to obtain proposals for professional consulting services to assist in the
analysis and implementation of the City's various insured and self -funded benefits programs. It
is also the City's intent that the successful consultant shall put all lines of insurance or plans in
place as outlined in "BENEFITS OFFERED AND CURRENT VENDORS' on January 1,
2007, unless another contract date is noted above. All plans and policies obtained through
the successful consultant must be net of commission. Any deviation from this will be
clearly stated in the proposer's quote.
Consultant responsibilities shall include the following:
• Assist in the creation and review of the goals and objectives of the benefit design.
Recommend alternative benefit designs as dictated by emerging plan costs or benefit
practices. Assist in developing the costs associated with various issues involving the
benefit plans.
• Advise and assist in reviewing the employees' benefits program on a continuing basis to
ensure that those plans are in compliance with federal and state requirements and their
adequacy of benefits with respect to other plans. Monitor and provide notification on
pending or new legislation and changes in tax law, as well as benefits and funding trends
that may affect the benefit program. Advise of market and like business benefit trends.
• Advise and assist with (1) writing plan modifications and new plans, (2) assist in the
amendment approval process and (3) submit written reports and other documents as
required by the Federal and State Government.
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• Develop and prepare "Request for Proposal(s)" for benefit vendors. Review proposals
and prepare a matrix outlining plan benefits, deficiencies and anticipated costs. Assist
with contract negotiations.
• Perform an operational review of benefit vendors, which would include the analysis of
the following:
o Claims procedure and office work flow;
o Forms and communication process;
o Training programs and employee evaluation process;
o Exception processing;
o Managed care;
o Cost containment procedures;
o Quality and quantity of procedural manuals provided to claims processing,
customer service, etc.;
o Internal audit system;
o Evaluation of the security of records and data;
o Evaluation of customer service, including communication of the plans, benefits,
policies, procedures; and
o Security and override procedures relating to approval of claims and access to
records.
• Advise and assist in reviewing contract renewals, plan documents, insurance policies
and other documents for applicability, accuracy and consistency.
• Prepare alternative funding analysis and conduct loss forecasts of claims reserves as
requested.
• Participate in the preparation and presentation of the monthly financial reports for the
self -funded plans. Provide projected funding needs for upcoming fiscal year.
• Maintain records of the financial and claims experience, condition, and progress of plans
and provide quarterly reports.
• Facilitate the communications and actions between the group and the benefits vendors.
• Assist with the development of employee communication materials, including legislative
updates that affect the employees. Help coordinate the design, editing, printing and
production of those materials and giving advice and recommendations when necessary
and appropriate.
• Personal availability for meetings as required. At least quarterly, provide a backup
service person that is knowledgeable about the employee benefits program.
• Assist with adjudication of specific claims when requested.
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• Discuss and coordinate information with other consultants.
• Provide liaison services between the group's employee benefits program and other
benefit contractors, including coordination of reporting and assistance resolving claims.
• Keep the City abreast of the activity on an aggregate basis with the member groups.
• Disclose all fee costs associated with the plan.
C. FORMAT AND CONTENTS OF PROPOSAL
TITLE PAGE:
The title page shall indicate "HEALTH BENEFITS CONSULTING SERVICES RFP" and
show the name and address of the brokerage firm as well as the contact person for the firm,
phone number, fax number and E-mail address.
TABLE OF CONTENTS:
The table of contents should outline in sequential order the major areas of the proposal, and all
pages of the proposal, including the enclosures. The proposal must be clearly and consecutively
numbered and correspond to the table of contents.
TECBMCAL PROPOSAL:
The technical proposal is a narrative that addresses the scope of work, the proposed approach
to the work, the schedule of the work, and any other information called for by the RFP which
the proposer deems relevant, including the following:
1. State the full name and home office address of your organization. Describe your
organizational structure (e.g. publicly help corporation, private, non-profit, partnership, etc.). If
it is incorporated, include the state in which it is incorporated. List the name and occupation of
those individuals serving on your organization's board of directors, and list the name of any
entity or person owning 10% or more of your organization.
2. List the name, title, telephone number, fax number and e-mail address of the contact
person for this proposal.
3. Confirm that you are a licensed consultant or broker. Provide documentation.
4. Confirm that you serve as a consultant or broker, independently, and are not affiliated
with any insurance company, third party administrative agency or provider network.
5. Describe your company's organization, philosophy, management and provide a brief
history. Describe your contractual relationships, if any, with organizations necessary to your
proposal's implementation (e.g. data information services).
6. How long has your organization been providing consulting services?
7. Provide the name(s) of the consultant(s) to perform the work for the City and a brief
statement as to why each consultant is qualified to provide services.
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8. Do you publish newsletters and other informative publications that are routinely
provided to your clients? Have you prepared reviews of topics related to the benefits that are
routinely provided to your clients? Provide sample copies.
9. Detail your ability to monitor regulatory and legislative developments at both the state and
federal level and how this will be communicated to our members.
10. Outline your ability to provide expertise and experience in the areas of health benefit
plan analysis and design. Explain in detail the types of analyses you have conducted relative to
benefits analysis and design for a health plan with approximately 1900 employees.
11. Provide a recent example of the selection and implementation of a third party claims
administrator for a health plan with approximately 4600 participants that was managed by your
company. Detail how your company's experience and expertise benefited the client.
12. List three current clients for whom you provide services related to health plan benefits
analysis and design. For each client, the list must specify the type of work performed by your
company, the size of the client's group and the period of time retained as a client. One of the
three must be the longest standing client; one must be the client with an approximate 1900
employee population and 450 retiree population; and the third must be the client for who the
largest impact was achieved through your company's services. If two or more of these are met
by the same client, list additional clients so that at least three clients are listed. For each client,
include the name, title, address, fax number and phone number of a contact person who we may
contact as a reference.
13. Describe the issues and challenges, as you view them, facing an employer with 1900
employees in regards to their benefit plan in the upcoming year and describe how your
organization can assist. What makes your organization different than other organizations that
may submit proposals for consideration?
14. Provide examples of communication materials developed and prepared by your
organization for use in client's health benefit communication campaigns.
15. Do you have access or contacts to benefit providers in the retirement program market?
How would you be able to provide brokerage services to our members in that area if the City
determines that it is in everyone's best interest to separate them from our current plan?
16. How would you envision the relationship and communication between your company
and the City? What would you expect as support from the City?
17. Does your organization have access to the carriers of the voluntary plans the City
currently offers? What other carriers does your organization have access to?
18. Has your organization recommended other voluntary plans, or cancellation of voluntary
plans, to your clients? On what basis do you make your recommendations of this nature?
QUALIFICATIONS OF CONSULTANT:
Describe in detail the qualifications of your company personnel specifically assigned, and supply
a list of current clients for references with names of individuals who can be contacted by the
City for discussion of your services to that client.
PRICE PROPOSAL AND CONTRACT FEE:
The price proposal and contract fee is a presentation of the proposer's total offering price
including the cost for providing each component of the required good or services. (Please be
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reminded, and address the fact, that all policies/plans obtained through the consultant
are net of commission.) Proposers should indicate the dollar amount that will be attributed to
each policy/plan and each sub -contractor, if any. Proposers may use fonnats of their choice.
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D. REQUIRED ATTACHMENTS
All of the following pages are required to be
completed and attached to your proposal.
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Disclosure Agreement
I certify that I nor, my company, any of its representatives, affiliates, contractors, or sub-
contractors have or will receive in the future any fees, commissions, or compensation of any kind,
including gratuities (IE meals, sporting tickets, gifts) from any 3rd party regarding any services I
will provide or recommend to the City of Lubbock. This includes, but is not limited to
compensation of any format from an insurance agent or broker, insurance carrier, PPO
organizations, HMO organizations or any other party that I may recommend the City of Lubbock
to select for insurance related coverages or services.
I, my representatives, affiliates, contractors, and sub -contractors further agree to not accept any
fees, salaries, commissions, income, compensation, or gratuities of any type for services regarding
this RFP other than what is paid to me by the City of Lubbock.
I further agree that I will return 100% of my fees for service to the City of Lubbock if I violate
any of the above.
The Offeror has read the foregoing Disclosure Agreement and fully understands it.
Signed, sealed and delivered this day of , 20
SIGNATURE:
Signature
Date
STATE OF TEXAS
COUNTY OF
This instrument was acknowledged before me on this day of , 2006, by
Notary Public, State of Texas
My commission expires:
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Disclosure Notice
Does your organization currently or have you ever received any fees or funds from any other vendor or payee
that you currently have a relationship with, pay claims to or on behalf of, including but not limited to any vendor
associated currently or in the past with the City of Lubbock? Complete the following chart. Include any type of
funds received (percentage or administrative fees, percentage of rebates, fees for data transfer, percentage of
savings, consulting fees, access fees, encounter fees, prompt payment discounts, referral fees, bonuses,
commissions, etc.). This issue is of utmost importance to the City of Lubbock. Full disclosure is required.
Failure to disclose this information can result in your proposal being disqualified or our contract terminated.
Third Party
Yes
No
Detail to any Yes Response
HealthCare Provider(s) (Hospitals or physicians)
Pharmacy Benefit Managers
Network Administrators
Utilization Review/Management Company
Laboratories/Ancillary Providers
Consultants, Brokers, Agents, Lobbyist
Insurance Companies/Carriers
Any other party other than the employer
SAMPLE CONTRACT
RFP 06-044-MA Health Benefits Consulting Services
Please attach a sample contract for Health Benefits Consulting Services between your company and
the City.
RFP 06-044-MA Health Benefits Consulting Services
E. EXHIBITS
RFP 06-044-MA Health Benefits Consulting Services
PLAN DOCUMENT AND
SUNIlVIARY PLAN DESCRIPTION
FOR
CITY OF LUBBOCK
EMPLOYEE BENEFIT PLAN
PLAN EFFECTIVE DATE: January 1, 2004
PLAN RESTATEMENT DATE: January 1, 2006
RFP 06-044-MA Health Benefits Consulting Services
TABLE OF CONTENTS
INTRODUCTION............................................................................................ Error! Bookmark not defined.
ELIGIBILITY, FUNDING, EFFECTIVE DATE AND TERMINATION PROVISIONS.........................................2
OPENENROLLMENT..................................................................................................................................9
SCHEDULEOF BENEFITS..........................................................................................................................10
MEDICALBENEFITS.................................................................................................................................19
COSTMANAGEMENT SERVICES.............................................................................................................. 26
DEFINEDTERMS...................................................................................................................................... 30
PLANEXCLUSIONS.................................................................................................................................. 37
DENTALBENEFITS...................................................................................................................................40
HOWTO SUBMIT A CLAIM.......................................................................................................................44
COORDINATIONOF BENEFITS................................................................................................................48
THIRD PARTY RECOVERY PROVISION.....................................................................................................51
COBRA CONTINUATION OPTIONS...........................................................................................................53
RESPONSIBILITIES FOR PLAN ADMINISTRATION..................................................................................58
HIPAAPRIVACY RULE.............................................................................................................................. 61
GENERAL PLAN INFORMATION...............................................................................................................64
INTRODUCTION
This document is a description of City of Lubbock Employee Benefit Plan (the Plan). No oral interpretations can change this
Plan. The Plan described is designed to protect Plan Participants against certain catastrophic health expenses.
Coverage under the Plan will take effect for an eligible Employee and designated Dependents when the Employee and such
Dependents satisfy the Waiting Period and all the eligibility requirements of the Plan.
The Employer reserves the right to terminate, suspend, discontinue or amend the Plan at any time and for any reason.
Changes in the Plan may occur in any or all parts of the Plan including benefit coverage, deductibles, maximums,
copayments, exclusions, limitations, definitions, eligibility and the like.
Failure to follow the eligibility or enrollment requirements of this Plan may result in delay of coverage or no coverage at all.
Reimbursement from the Plan can be reduced or denied because of certain provisions in the Plan, such as coordination of
benefits, subrogation, exclusions, timeliness of COBRA elections, utilization review or other cost management requirements,
lack of Medical Necessity, lack of timely filing of claims or lack of coverage. These provisions are explained in summary
fashion in this document; additional information is available from the Plan Administrator at no extra cost.
The Plan will pay benefits only for the expenses incurred while this coverage is in force. No benefits are payable for
expenses incurred before coverage began or after coverage terminated. An expense for a service or supply is incurred on the
date the service or supply is furnished.
If the Plan is terminated, amended, or benefits are eliminated, the rights of Covered Persons are limited to Covered Charges
incurred before termination, amendment or elimination.
This document summarizes the Plan rights and benefits for covered Employees and their Dependents and is divided into the
following parts:
Eligibility, Funding, Effective Date and Termination. Explains eligibility for coverage under the Plan, funding of the Plan and
when the coverage takes effect and terminates.
Schedule of Benefits. Provides an outline of the Plan reimbursement formulas as well as payment limits on certain services.
Benefit Descriptions. Explains when the benefit applies and the types of charges covered.
Cost Management Services. Explains the methods used to curb unnecessary and excessive charges.
This part should be read carefully since each Participant is required to take action to assure that the maximum
payment levels under the Plan are paid.
Defined Terms. Defines those Plan terms that have a specific meaning.
Plan Exclusions. Shows what charges are not covered.
Claim Provisions. Explains the rules for filing claims and the claim appeal process.
Coordination of Benefits. Shows the Plan payment order when a person is covered under more than one plan.
Third Party Recovery Provision. Explains the Plan's rights to recover payment of charges when a Covered Person has a
claim against another person because of injuries sustained.
COBRA Continuation Options. Explains when a person's coverage under the Plan ceases and the continuation options
which are available.
ERISA Information. Explains the Plan's structure and the Participants' rights under the Plan.
ELIGIBILITY, FUNDING, EFFECTIVE DATE
AND TERMINATION PROVISIONS
A PIan Participant should contact the Plan Administrator (City of Lubbock) to obtain additional information, free of charge,
about Plan coverage of a specific benefit, particular drug, treatment, test or any other aspect of Plan benefits or
requirements.
ELIGIBUffI'Y
Eligible Classes of Employees. All Active and Retired Employees of the Employer.
Eligibility Requirements for Employee Coverage. A person is eligible for Employee coverage from the first day that he or
she:
(1) is a Full -Time, Active Employee of the Employer. An Employee is considered to be Full -Time if he or she
normally works at least40 hours per week and is on the regular payroll of the Employer for that work.
(2) is a Retired Employee of the Employer. Retired Employees will be eligible for coverage only if they are eligible
for coverage when they are Employees and choose to remain eligible for coverage under this Plan after they
become a Retired Employee. An Employee who retires and declines the opportunity to remain eligible under the
Plan will no longer be eligible as a Retired Employee. A Retired Employee may not regain either medical or
dental coverage if coverage is terminated at any time during retirement. Enrollment in Medicare Parts A and B
is required, in order for a retiree who is age 65 or above to be eligible for, or to continue, coverage under this
Plan. A surviving spouse of a retired City of Lubbock Employee may retain coverages after the covered
Retired Employee's death.
Retired Employees are eligible for dental benefits.
(3) is in a class eligible for coverage.
(4) completes the employment Waiting Period of one full pay period as an Active Employee or first of the month
after reaching retiring status for Retired Employees. A "Waiting Period" is the time between the first day of
employment and the first day of coverage under the Plan. The Waiting Period is counted in the Pre -Existing
Conditions exclusion time.
Eligible Classes of Dependents. A Dependent is any one of the following persons:
(1) A covered Employee's Spouse and unmarried children from birth to the limiting age of 25 years. When a child
reaches the limiting age, coverage will end on the last day of the child's birthday month.
The term "Spouse" shall mean the person recognized as the covered Employee's husband or wife under the
laws of the state where the covered Employee lives. The Plan Administrator may require documentation
proving a legal marital relationship.
The term "children" shall include natural children of the Employee, adopted children or children placed with a
covered Employee in anticipation of adoption, or Foster Children Step -children may also be included as long
as a natural parent remains married to the Employee. The Plan Administrator may require documentation of
Legal Guardianship. Grandchildren shall also be included provided the Plan Participant has Legal Guardianship
of the children. The Plan Administrator will require documentation proving Legal Guardianship of
grandchildren.
If a covered Employee is the Legal Guardian of an unmarried child or children, these children may be enrolled in
this Plan as covered Dependents. The Plan Administrator may require documentation proving Legal
Guardianship.
2
The phrase "child placed with a covered Employee in anticipation of adoption" refers to a child whom the
Employee intends to adopt, whether or not the adoption has become final, who has not attained the age of 18
as of the date of such placement for adoption. The term "placed" means the assumption and retention by such
Employee of a legal obligation for total or partial support of the child in anticipation of adoption of the child.
The child must be available for adoption and the legal process must have commenced.
Any child of a Plan Participant who is an alternate recipient under a qualified medical child support order shall
be considered as having a right to Dependent coverage under this Plan.
A participant of this Plan may obtain, without charge, a copy of the procedures governing qualified medical
child support order (QMCSO) determinations from the Plan Administrator.
(2) A covered Dependent child who reaches the limiting age and is Totally Disabled, incapable of self-sustaining
employment by reason of mental or physical handicap, primarily dependent upon the covered Employee for
support and maintenance and unmarried. The Plan Administrator may require, at reasonable intervals during
the two years following the Dependent's reaching the limiting age, subsequent proof of the child's Total
Disability and dependency.
After such two-year period, the Plan Administrator may require subsequent proof not more than once each
year. The Plan Administrator reserves the right to have such Dependent examined by a Physician of the Plan
Administrator's choice, at the Plan's expense, to determine the existence of such incapacity.
These persons are excluded as Dependents: other individuals living in the covered Employee's home, but who are not
eligible as defined; the legally separated or divorced former Spouse of the Employee; any person who is on active duty in
any military service of any country; or any person who is covered under the Plan as an Employee.
If a person covered under this Plan changes status from Employee to Dependent or Dependent to Employee, and the person
is covered continuously under this Plan before, during and after the change in status, credit will be given for deductibles
and all amounts applied to maximums.
If both mother and father are Employees, their children will be covered as Dependents of the mother or father,
but not of both.
Eligibility Requirements for Dependent Coverage. A family member of an Employee will become eligible for Dependent
coverage on the first day that the Employee is eligible for Employee coverage and the family member satisfies the
requirements for Dependent coverage.
At any time, the Plan may require proof that a Spouse or a child qualifies or continues to qualify as a Dependent as defined
by this Plan.
FUNDING
Cost of the Plan. City of Lubbock pays the entire cost of Employee coverage under this Plan.
The covered Employees pay for coverage for their Dependents. The enrollment application for coverage will include a
payroll deduction authorization. This authorization must be filled out, signed and returned with the enrollment application.
The level of any Employee contributions is set by the Plan Administrator. The Plan Administrator reserves the right to
change the level of Employee contributions.
PRE-EXISTING CONDITIONS
NOTE: The length of the Pre -Existing Conditions Limitation may be reduced or eliminated if an eligible person has
Creditable Coverage from another health plan.
An eligible person may request a certificate of Creditable Coverage from his or her prior plan within 24 months after
losing coverage and the Employer will assist any eligible person in obtaining a certificate of Creditable Coverage
from a prior plan.
A Covered Person will be provided a certificate of Creditable Coverage if he or she requests one either before
losing coverage or within 24 months of coverage ceasing.
If, after Creditable Coverage has been taken into account, there will still be a Pre -Existing Conditions Limitation
imposed on an individual, that individual will be so notified.
Covered charges incurred under Medical Benefits for Pre -Existing Conditions are not payable unless incurred 12
consecutive months, or 18 months if a Late Enrollee after the person's Enrollment Date. This time may be offset if the person
has Creditable Coverage from his or her previous plan.
A Pre -Existing Condition is a condition for which medical advice, diagnosis, care or treatment was recommended or
received within six months prior to the person's Enrollment Date under this Plan. Genetic Information is not a condition.
Treatment includes receiving services and supplies, consultations, diagnostic tests or prescribed medicines. In order to be
taken into account, the medical advice, diagnosis, care or treatment must have been recommended by, or received from, a
Physician.
The Pre -Existing Condition does not apply to pregnancy, to a newborn child who is covered under this Plan within 31 days
of birth, or to a child who is adopted or placed for adoption before attaining age 18 and who, as of the last day of the 31-day
period beginning on the date of the adoption or placement for adoption, is covered under this Plan. A Pre -Existing Condition
exclusion may apply to coverage before the date of the adoption or placement for adoption.
The prohibition on Pre -Existing Condition exclusion for newborn, adopted, or pre -adopted children does not apply to an
individual after the end of the first 63-day period during all of which the individual was not covered under any Creditable
Coverage.
ENROLLMENT
Enrollment Requirements. An Employee must enroll for coverage by filling out and signing an enrollment application along
with the appropriate payroll deduction authorization. The covered Employee must also enroll any Dependents when
Dependent coverage is requested.
Enrollment Requirements for Newborn Children.
A newborn child of a covered Employee who has Dependent coverage is not automatically enrolled in this Plan. Charges for
covered nursery care will be applied toward the Plan of the newborn child. If the newborn child is required to be enrolled and
is not enrolled in this Plan on a timely basis, as defined in the section "Timely Enrollments" following this section, there will
be no payment from the Plan and the covered parent will be responsible for all costs.
Charges for covered routine Physician care will be applied toward the Plan of the newborn child. If the newborn child is
required to be enrolled and is not enrolled in this Plan on a timely basis, there will be no payment from the Plan and the
covered parent will be responsible for all costs.
If the child is required to be enrolled and is not enrolled within 31 days of birth, the enrollment will be considered a Late
Enrollment.
TIMELY OR LATE ENROLLMENT
(1) Timely Enrollment - The enrollment will be "timely" if the completed form is received by the Plan
Administrator no later than 31 days after the person becomes eligible for the coverage, either initially or under
a Special Enrollment Period.
4
If two Employees (husband and wife) are covered under the Plan and the Employee who is covering the
Dependent children terminates coverage, the Dependent coverage may be continued by the other covered
Employee with no Waiting Period as long as coverage has been continuous.
(2) Late Enrollment - An enrollment is "late" if it is not made on a "timely basis" or during a Special Enrollment
Period. Late Enrollees and their Dependents who are not eligible to join the Plan during a Special Enrollment
Period may join only during open enrollment.
If an individual loses eligibility for coverage as a result of terminating employment or a general suspension of
coverage under the Plan, then upon becoming eligible again due to resumption of employment or due to
resumption of Plan coverage, only the most recent period of eligibility will be considered for purposes of
determining whether the individual is a Late Enrollee.
The time between the date a Late Enrollee first becomes eligible for enrollment under the Plan and the first day
of coverage is not treated as a Waiting Period. Coverage begins on first of the month following Open
Enrollment. Late Enrollees will be subject to an 18 month pre-existing condition offset by the Covered Person's
certificate of creditable coverage.
SPECIAL ENROLLMENT PERIODS
The enrollment date for anyone who enrolls under a Special Enrollment Period is the first date of coverage. Thus, the time
between the date a special enrollee first becomes eligible for enrollment under the Plan and the first day of coverage is not
treated as a Waiting Period.
(1) Individuals losing other coverage. An Employee or Dependent who is eligible, but not enrolled in this Plan,
may enroll if each of the following conditions is met:
(a) The Employee or Dependent was covered under a group health plan or had health insurance coverage
at the time coverage under this Plan was previously offered to the individual.
(b) If required by the Plan Administrator, the Employee stated in writing at the time that coverage was
offered that the other health coverage was the reason for declining enrollment.
(c) The coverage of the Employee or Dependent who had lost the coverage was under COBRA and the
COBRA coverage was exhausted, or was not under COBRA and either the coverage was terminated
as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce,
death, termination of employment or reduction in the number of hours of employment) or employer
contributions towards the coverage were terminated.
(d) The Employee or Dependent requests enrollment in this Plan not later than 31 days after the date of
exhaustion of COBRA coverage or the termination of coverage or employer contributions, described
above. Coverage will begin no later than the first day of the first calendar month following the date
the completed enrollment form is received.
If the Employee or Dependent lost the other coverage as a result of the individual's failure to pay premiums or required
contributions or for cause (such as making a fraudulent claim), that individual does not have a Special Enrollment right.
(2) Dependent beneficiaries. If:
(a) The Employee is a participant under this Plan (or has met the Waiting Period applicable to becoming a
participant under this Plan and is eligible to be enrolled under this Plan but for failure to enroll
during a previous enrollment period), and
(b) A person becomes a Dependent of the Employee through marriage, birth, adoption or placement for
adoption,
then the Dependent (and if not otherwise enrolled, the Employee) may be enrolled under this Plan as a covered
Dependent of the covered Employee. In the case of the birth or adoption of a child, the Spouse of the covered
Employee may be enrolled as a Dependent of the covered Employee if the Spouse is otherwise eligible for
coverage.
The Dependent Special Enrollment Period is a period of 31 days and begins on the date of the marriage, birth,
adoption or placement for adoption.
The coverage of the Dependent enrolled in the Special Enrollment Period will be effective:
(a) in the case of marriage, as of the date of marriage;
(b) in the case of a Dependent's birth, as of the date of birth; or
(c) in the case of a Dependent's adoption or placement for adoption, the date of the adoption or
placement for adoption.
EFFECTIVE DATE
Effective Date of Employee Coverage. An Employee will be covered under this Plan as of the first day that the Employee
satisfies all of the following:
(1) The Eligibility Requirement.
(2) The Active Employee Requirement.
(3) The Enrollment Requirements of the Plan.
Active Employee Requirement.
An Employee must be an Active Employee (as defined by this Plan) for this coverage to take effect.
Effective Date of Dependent Coverage. A Dependent's coverage will take effect on the day that the Eligibility Requirements
are met; the Employee is covered under the Plan; and all Enrollment Requirements are met.
TERMINATION OF COVERAGE
When coverage under this Plan stops, Plan Participants will receive a certificate that will show the period of coverage
under this Plan. Please contact the Plan Administrator for further details.
When Employee Coverage Terminates. Employee coverage will terminate on the earliest of these dates (except in certain
circumstances, a covered Employee may be eligible for COBRA continuation coverage. For a complete explanation of when
COBRA continuation coverage is available, what conditions apply and how to select it, see the section entitled COBRA
Continuation Options):
(1) The date the Plan is terminated.
(2) The last day of the calendar month in which the covered Employee ceases to be in one of the Eligible Classes.
This includes death or termination of Active Employment of the covered Employee. (See the COBRA
Continuation Options.)
Continuation During Periods of Employer -Certified Leave of Absence or Layoff. A person may remain eligible for a limited
time if Active, full-time work ceases due to leave of absence or layoff. This continuance will end as follows:
For leave of absence or layoff only: the end of the 12 calendar month period that next follows the month in which the
person last worked as an Active Employee.
6
While continued, coverage will be that which was in force on the last day worked as an Active Employee. However, if
benefits reduce for others in the class, they will also reduce for the continued person.
Continuation During Family and Medical Leave. Regardless of the established leave policies mentioned above, this Plan
shall at all times comply with the Family and Medical Leave Act of 1993 as promulgated in regulations issued by the
Department of Labor.
During any leave taken under the Family and Medical Leave Act, the Employer will maintain coverage under this Plan on the
same conditions as coverage would have been provided if the covered Employee had been continuously employed during
the entire leave period.
If Plan coverage terminates during the FMLA leave, coverage will be reinstated for the Employee and his or her covered
Dependents if the Employee returns to work in accordance with the terms of the FMLA leave. Coverage will be reinstated
only if the person(s) had coverage under this Plan when the FMLA leave started, and will be reinstated to the same extent
that it was in force when that coverage terminated. For example, Pre -Existing Conditions limitations and other Waiting
Periods will not be imposed unless they were in effect for the Employee and/or his or her Dependents when Plan coverage
terminated.
Rehiring a Terminated Employee. A terminated Employee who is rehired will be treated as a new hire and be required to
satisfy all Eligibility and Enrollment requirements. However, if the Employee is returning to work directly from COBRA
coverage, this Employee does not have to satisfy any employment waiting period or Pre -Existing Conditions provision.
Employees on Military Leave. Employees going into or returning from military service may elect to continue Plan coverage
as mandated by the Uniformed Services Employment and Reemployment Rights Act under the following circumstances.
These rights apply only to Employees and their Dependents covered under the Plan before leaving for military service.
(1) The maximum period of coverage of a person under such an election shall be the lesser of.
(a) The 18 month period beginning on the date on which the person's absence begins; or
(b) The day after the date on which the person was required to apply for or return to a position or
employment and fails to do so.
(2) A person who elects to continue health plan coverage may be required to pay up to 102% of the full cost under
the Plan, except a person on active duty for 30 days or less cannot be required to pay more than the
Employee's share, if any, for the coverage.
(3) An exclusion or Waiting Period may not be imposed in connection with the reinstatement of coverage upon
reemployment if one would not have been imposed had coverage not been terminated because of service.
However, an exclusion or Waiting Period may be imposed for coverage of any Illness or Injury determined by
the Secretary of Veterans Affairs to have been incurred in, or aggravated during, the performance of uniformed
service.
When Dependent Coverage Terminates. A Dependent's coverage will terminate on the earliest of these dates (except in
certain circumstances, a covered Dependent may be eligible for COBRA continuation coverage. For a complete explanation
of when COBRA continuation coverage is available, what conditions apply and how to select it, see the section entitled
COBRA Continuation Options):
(1) The date the Plan or Dependent coverage under the Plan is terminated.
(2) The date that the Employee's coverage under the Plan terminates for any reason including death.
The Dependents of an Employee who dies during the course of their duty may remain eligible for
coverage if they had existing coverage under this Plan at the time of the Employee's death.
(3) The date a covered Spouse loses coverage due to loss of dependency status. (See the COBRA Continuation
Options.)
(4) On the last day of the calendar month that a Dependent child ceases to be a Dependent as defined by the Plan.
(See the COBRA Continuation Options.)
(5) The end of the period for which the required contribution has been paid if the charge for the next period is not
paid when due.
OPEN ENROLLMENT
OPEN ENROLLMENT
During the annual open enrollment period, which starts on the 15th of November and ends on the 15th of December each
year, Employees and their Dependents who are Late Enrollees will be able to enroll in the Plan.
Benefit choices for Late Enrollees made during the open enrollment period will become effective first of the month following
Open Enrollment.
Plan Participants will receive detailed information regarding open enrollment from their Employer.
SCHEDULE OF BENEFITS
Verification of Eligibility 1-800-658-9777
Call this number to verify eligibility for Plan benefits before the charge is incurred.
MEDICAL BENEFITS
All benefits described in this Schedule are subject to the exclusions and limitations described more fully herein including,
but not limited to, the Plan Administrator's determination that: care and treatment is Medically Necessary; that charges are
Usual and Reasonable; that services, supplies and care are not Experimental and/or Investigational. The meanings of these
capitalized terms are in the Defined Terms section of this document.
Note: The following services must be precertified or reimbursement from the Plan may be reduced. If the Covered
Person does not receive authorization as explained in this section, the benefit payment will be reduced by $250. This penalty
will not apply when a Covered Person utilizes a Network Provider. See the Cost Management section for further details.
The attending Physician does not have to obtain precertification from the Plan for prescribing a maternity length of stay
that is 48 hours or less for a vaginal delivery or 96 hours or less for a cesarean delivery.
All outpatient IV therapies
Back surgery
Breast surgery
Bypass surgery
Cardiac catheterization
Cardiac pacemaker implant
Cataract removal
Chemotherapy
Cholecystectomy (removal of gall bladder)
Coronary arteriography
Dialysis
Dilation and curettage of uterus
Ear surgery
Facial and jaw surgery
Hemorrhoid removal
Hernia repair
Hip surgery
Home Health
Home infusion therapy
Hospice care
Hysterectomy (removal of uterus)
Knee surgery
Ligation & stripping of varicose veins
Mental illness treatment
Nose surgery
Prostatectomy
Serious mental illness treatment
Substance abuse treatment
Toe & foot surgery
Tonsillectomy and/or adenoidectomy
Transfers to another facility or transfers to or from a specialty unit within a facility
Please see the Cost Management section in this booklet for details.
The Plan is a plan that contains a network Preferred Provider Organization (PPO or Network Provider). For further Network
Provider information, including contact information, please refer to the Employee ID Card.
10
This Plan has entered into an agreement with certain Hospitals, Physicians and other health care providers, which are called
Network Providers. Because these Network Providers have agreed to charge reduced fees to persons covered under the
Plan, the Plan can afford to reimburse a higher percentage of their fees.
Therefore, when a Covered Person uses a Network Provider, that Covered Person will receive a higher payment from the Plan
than when a Non -network Provider is used. It is the Covered Person's choice as to which Provider to use.
Under the following circumstances, the higher in -Network benefits will be made for non -Network services:
If a Covered Person has no choice of Network Providers for the treatment they are seeking within the PPO service
area.
If a Covered Person is out of the PPO service area and has a Medical Emergency requiring immediate care.
If a Covered Person does not live within a radius of 75 miles of a PPO facility.
Additional information about this option, as well as a list of Network Providers, will be given to Plan Participants, at no cost,
and updated as needed.
Deductibles/Copayments payable by Plan Participants
Deductibles/Copayments are dollar amounts that the Covered Person must pay before the Plan pays.
A deductible is an amount of money that is paid once a Calendar Year per Covered Person. Typically, there is one deductible
amount per Plan and it must be paid before any money is paid by the Plan for any covered services. Each January l st, a new
deductible amount is required. However, covered expenses incurred in, and applied toward the individual deductible in
October, November and December will be applied to the individual deductible in the next Calendar Year as well as the current
Calendar Year. Deductibles do not accrue toward the 100% maximum out-of-pocket payment.
A copayment is a smaller amount of money that is paid each time a particular service is used. Typically, there may be
copayments on some services and other services will not have any Copayments. Copayments do not accrue toward the
100% maximum out-of-pocket payment.
NETWORK PROVIDERS
I NON -NETWORK
OUT -OF AREA
PROVIDERS
MAJOMUM LIFETIME
BENEFIT AMOUNT
$1,000,000
Note: The maximums listed below are the total for Network and Non -Network expenses. For example, if a
maximum of 60 days is listed twice under a service, the Calendar Year maximum is 60 days total which
may be split between Network and Non -Network providers.
Amm�
$500
Per Covered Person
$500
$1,000
Per Family Unit
$1000
$2,000
$1000
The Calendar Year deductible is waived for the following Covered Charges:
- Skilled Nursing Facility- In -Network, Out -of -Area
- Home Health Care - In -Network, Out -of -Area
- Hospice — In -Network, Out -of -Area
- Routine Well Adult and Child Care — Out -of -Area
- Required Childhood Immunizations
- Office Surgery— In -Network
- Other Die nostic Medical Services— In -Network
Ev
... ,. ,,, ,, ,,.., ,. ,.<F..._ _ .-`. ✓.,v S."''n ,:!�fu�,' -... a%�. �YJ .c �fo�,.. a t"%_i burp" �<-�
Physician visits 1$25.00 50% after deductible 80% after deductible
11
NETWORK PROVIDERS
NON -NETWORK
OUT -OF AREA
PROVIDERS
Ancillary charges
$25.00
50% after deductible
80% after deductible
performed after the day
of the Physician's office
visit
Ancillary charges
$25.00
50% after deductible
80% after deductible
associated with Routine
Well Adult and Child
Care performed after the
day of the office visit
Emergency room facility
$75.00
$75.00
80% after deductible
charges
Mental Disorders
$25.00
50% after deductible
80% after deductible
Outpatient —
Physic ian/Consultant
visits
30 visit Calendar Year
maximum
Serious Mental Illness
$25.00
50% after deductible
80% after deductible
Outpatient —
Physician/Consultant
visits
60 visit Calendar Year
maximum
Second or Third Surgical
$25.00
50% after deductible
80% after deductible
Opinions
Routine Well Adult and
$25.00
50% after deductible
80%
Child Care
Per Covered Person
$2,000
$12,000
$2,000
Per Family Unit
$4,000
$24 000
$4 000
The Plan will pay the designated percentage of Covered Charges until out-of-pocket amounts are reached, at
which time the Plan will pay 100% of the remainder of Covered Charges for the rest of the Calendar Year
unless stated otherwise.
The following charges do not apply toward the out-of-pocket maximum and are never paid at 100%.
Deductible(s)
Cost containment penalties
Co a ents
';.. ... 4 � ...
a �
Eligible Medical Expense (EME) is the maximum allowable amount that will be eligible for a particular
Covered Service as determined by the Plan in accordance the Plan reimbursement schedule. See Eligible
Medical Expense in the Defined Terms section.
Second or Third Surgical
100% after copayment
50% after deductible
80% after deductible
Opinions
Pre -Admission Testing
80% after deductible
50% after deductible
80% after deductible
inpatient and outpatient
Outpatient/Ambulatory
80% after deductible
50% after deductible
80% after deductible
Surgical Procedures
12
NETWORK PROVIDERS NON -NETWORK OUT -OF -AREA
PROVIDERS
Dialysis — Outpatient 80% after deductible 80% after Network 80% after deductible
Inpatient Hospital
None
$200
$100
deductible per
confinement
Room and Board
80% after deductible
50% after deductible
80% after deductible
Limited to the semiprivate
Limited to the semiprivate
Limited to the semiprivate
room rate
room rate
room rate
Intensive Care Unit
80% after deductible
50% after deductible
80% after deductible
Limited to the Hospital's
Limited to the Hospital's
Limited to the Hospital's
ICU Charge
ICU Charge
ICU Char e
Emergency/Treat-ment
80% after copayment
80% after copayment
80% after deductible
Room (services rendered
within 48 hours of an
accident or medical
emergency)
Emergency/Treat-ment 80% after deductible
Room (services rendered
within 48 hours of an
accident or medical
emergency)
80% after deductible 1 80% after deductible
Skilled Nursing Facility 100% 50% 100%
Limited to the facility's Limited to the facility's Limited to the facility's
semiprivate room rate semiprivate room rate semiprivate room rate
$10,000 Calendar Year $5,000 Calendar Year $10,000 Calendar Year
inpatient visits
M/u after deductible
50% after deductible
80% after deductible
Office visits (including
100°/o after copayment
501/o after deductible
80% after deductible
ancillary charges
performed in the same
day as the Physician's
office visit)
The copayment benefit
does not apply to any
service requiring
precertification or
chiropractic benefits.
Ancillary charges
100% after copayment
50% after deductible
80% after deductible
performed after the day
of the Physician's office
visit
The copayment benefit
does not apply to any
service requiring
precertifi cation or
chiropractic benefits.
13
NETWORK PROVIDERS
NON -NETWORK
OUT-OFAREA
PROVIDERS
Office Sure
80%
50% after deductible
80% after deductible
Diagnostic Procedures —
80% after deductible
50% after deductible
80% after deductible
limited to: All
knee/shoulder
arthroscopies, Bone
Scan, Cardiac Stress
Test, CT Scan, Carotid
Ultrasounds, MRI,
Myelogram, PET Scan,
and Endoscopic
Procedures
Other Diagnostic
1000/0
50% after deductible
80% after deductible
Medical Services
(Freestanding facility)
Other Outpatient
80% after deductible
50% after deductible
80% after deductible
Services and Supplies
Allergy Testing and
80% after deductible
50% after deductible
80% after deductible
Treatment
Sure
80% after deductible
501/o after deductible
80% after deductible
Home Health Care
1000/0
501/o after deductible
100%
$10,000 Calendar Year
$5,000 Calendar Year
$10,000 Calendar Year
maximum
maximum
maximum
Outpatient Private Duty
801/o after deductible
50% after deductible
80% after deductible
Nursing
Hospice Care
1000/0
50% after deductible
1000/0
$20,000 inpatient and
$10,000 inpatient and
$20,000 inpatient and
outpatient Lifetime
outpatient Lifetime
outpatient Lifetime
maximum
maximum
maximum
Ambulance Service
801/o after deductible
50% after deductible
80% after deductible
Jaw Joint/TMJ (Coverage
801/o after deductible
50% after deductible
80% after deductible
excluded after Covered
Person's 19'' birthday
except orthognathic
surgery for treatment of
temporomandibular joint
disorders and conditions
of temporomandibular
joint disorders)
Speech and Hearing
80% after deductible
50% after deductible
80% after deductible
Services
Includes hearing aids
(limited to $1,000 per 36-
monthperiod)
Home Infusion Thera
80% after deductible
50% after deductible
80% after deductible
Durable Medical
80% (rental up to purchase
50% (rental up to purchase
80% (rental up to
Equipment
price) after deductible
price) after deductible
purchase price) after
deductible
Prosthetics
801/o after deductible
50% after deductible
80% after deductible
Orthotics
801/o after deductible
501/o after deductible
80% after deductible
Spinal Manipulation
80% after deductible
Not Covered
80% after deductible
Chiropractic
$1,000 Calendar Year
$1,000 Calendar Year
maximum
maximum
14
NETWORK PROVIDERS
NON -NETWORK
OUT -OF AREA
PROVIDERS
Physical Medicine
80% after deductible
50% after deductible
80% after deductible
Service which includes
$2,000 Calendar Year
$2,000 Calendar Year
$2,000 Calendar Year
physical and occupational
maximum
maximum
maximum
therapy
Inpatient
80% after deductible
50% after deductible
80% after deductible
30 day Calendar Year
15 day Calendar Year
30 day Calendar Year
maximum
maximum
maximum
Outpatient - 1001/6 after copayment 50% after deductible 80% after deductible
Physician/Consultant
visits
Outpatient - 80% after deductible 50% after deductible 80% after deductible
Facility/Outpatient
Professional Provider
Calendar Year maximum
for all Outpatient
combined 30 visits 15 visits 30 visits
� '�
„^ .' ,ems y "' e�.
.
r. , s, ;, �,'y`
n
.�'
... W
Inpatient
80% after deductible
50% after deductible
80% after deductible
45 day Calendar Year
45 day Calendar Year
45 day Calendar Ye ar
maximum
maximum
maximum
Outpatient - 100% after copayment 50% after deductible 80% after deductible
Physician/Consultant
visits
Outpatient - 80% after deductible 50% after deductible 80% after deductible
Facility/Outpatient
Professional Provider
60 visit Calendar Year maximum for all Ou atient combined
CREW '
Inpatient
801/o after deductible
50% after deductible
80% after deductible
Outpatient
80% after deductible
50% after deductible
80% after deductible
Inpatient / Outpatient
Combined 2 separate series of 2 separate series of 2 separate series of
treatment Lifetime treatment Lifetime treatment per Lifetime
maximum maximum Imaximurn
NOW
Routine Well Adult Care 100% after copayment 150010 after deductible 80%
Includes: office visits, routine physical examination, prostate screening and cancer exam, routine
mammography, colorectal cancer screenings annual hearing test, annual vision test and immunizations/flu
shots.
Annual limit for Mammogram: 1 per Calendar Year
Age 35 or older
Routine Well Newborn
801/o after deductible
50% after deductible
80% after deductible
Care
Routine Well Child Care
100% after copayment
50% after deductible
80%
15
NETWORK PROVIDERS
NON -NETWORK
7-OF-AREA
PROVIDERS
Includes: office visits, routine physical examination, annual hearing test and annual vision test. Includes
immunizations for children ages 6 and older.
Required Childhood 1000/0 1000/0 100%
Immunizations — for
children up to age 6
Covered immunizations are: Diphtheria, Hemophilus influenza type b, Hepatitis B, Measles, Mumps,
Pertussis, Polio, Rubella, Tetanus, Varicella, and any other immunizations required by law.
Ancillary charges
100% after copayment
50% after deductible
80% after deductible
associated with the
Routine Well Adult and
Child Care performed
after the day of the office
visit
Human organ and tissue benefits are provided by a separate policy, as explained in full in the AIG LIFE
Organ & Tissue Transplant Policy. All eligible Employees and their eligible Dependents requiring human
organ and tissue transplant services will have transplant -related charges covered under this separate AIG
LIFE policy, according to its terms and conditions, from the time of their evaluation through 365 days post
transplant operation. All transplant -related medical benefits incurred after this specified period of
coverage as well as all transplant related charges ineligible under the separate policy will revert to the
terms and conditions of health coverage under this health plan document.
Organ Transplants 80% after deductible 501/o after deductible 80% after deductible
Pregnancy
80% after deductible
50% after deductible
80% after deductible
Dependent daughters are
covered
Newborn Nursery Charges
will be applied to
Newborn's own
deductible and co-
insurance
All maternity expenses and treatment in progress as of the effective date of this Plan and currently covered
under this Plan, that is being provided by a BC BS network physician or facility, will continue to be eligible
for payment at the Network benefit level until the post partum follow up is complete.
16
PRESCRIPTION DRUG BENEFIT
Pharmacy Option (up to a 30-day supply)
Generic drug
Copayment........................................
Preferred Brand Name drugs
Copayment .........................
Non -Preferred Brand Name drugs
...................................................... $15.00
...................................................... $30.00
Copayment............................................................
Mail Order Prescription Drug Option (up to a 90-day supply)
Generic drug
Copayment............................................................
Preferred Brand Name drugs
............................. $50.00
Copayment...................................................................
Non -Preferred Brand Name drugs
........................ $38.00
.................. $75.00
Copayment.............................................................................................. $125.00
Please Note: If a generic drug is available and the prescription order does not permit the use of the generic
alternative or if the Covered Person chooses a brand name drug, the Covered Person will pay the Brand
Name drugs copayment plus the difference between the cost of the brand name drug and the generic drug.
This provision applies to the Pharmacy Option and Mail Order Option.
Participating pharmacies have contracted with the Plan to charge Covered Persons reduced fees for covered
Prescription Drugs. Medco Health is the administrator of the pharmacy drug plan. The copayment amount
is not a covered charge under the medical plan. For additional information about coverage and exclusions,
please contact Medco Health.
17
DENTAL BENEFITS
Calendar Year deductible,
perperson....................................................................
perFamily Unit..............................................................
The deductible applies to these Classes of Service:
Class B Services - Basic
Class C Services - Major
Dental Percentage Payable
Class A Services -
Preventive......................................................................
Class B Services -
Basic.............................
........................... $75.00
........................... $225.00
..
....................................................
Class C Services -
Major.................................................................................
Class D Services -
Orthodontia. _...
Orthodontia coverage is only available up to age 25.
Maximum Benefit Amount
For other than Class D-Orthodontia:
Per person per Calendar
50%
Year........................................................................................................ $1,200
For Class D-Orthodontia:
Lifetime maximum per person .....................................
................... $1,000
18
MEDICAL BENEFITS
Medical Benefits apply when Covered Charges are incurred by a Covered Person for care of an Injury or Sickness and while
the person is covered for these benefits under the Plan.
DEDUCTIBLE
Deductible Amount. This is an amount of Covered Charges for which no benefits will be paid. Before benefits can be paid in
a Calendar Year a Covered Person must meet the deductible shown in the Schedule of Benefits.
This amount will not accrue toward the 100% maximum out-of-pocket payment.
Deductible Three Mouth Carryover. Covered expenses incurred in, and applied toward the individual deductible in October,
November and December will be applied toward the individual deductible in the next Calendar Year.
Family Unit Limit. When the maximum amount shown in the Schedule of Benefits has been incurred by members of a Family
Unit toward their Calendar Year deductibles, the deductibles of all members of that Family Unit will be considered satisfied
for that year.
BENEFIT PAYMENT
Each Calendar Year, benefits will be paid for the Covered Charges of a Covered Person that are in excess of the deductible
and any copayments. Payment will be made at the rate shown under reimbursement rate in the Schedule of Benefits. No
benefits will be paid in excess of the Maximum Benefit Amount or any listed limit of the Plan.
OUT-OF-POCKET L1MIT
Covered Charges are payable at the percentages shown each Calendar Year until the out-of-pocket limit shown in the
Schedule of Benefits is reached. Then, Covered Charges incurred by a Covered Person will be payable at 100% (except for
the charges excluded) for the rest of the Calendar Year.
When a Family Unit reaches the out-of-pocket limit, Covered Charges for that Family Unit will be payable at 100% (except for
the charges excluded) for the rest of the Calendar Year.
M[A7OMUM BENEFIT AMOUNT
The Maximum Benefit Amount is shown in the Schedule of Benefits. It is the total amount of benefits that will be paid under
the Plan for all Covered Charges incurred by a Covered Person.
COVERED CHARGES
Covered charges are the Usual and Reasonable Charges that are incurred for the following items of service and supply.
These charges are subject to the benefit limits, exclusions and other provisions of this Plan. A charge is incurred on the date
that the service or supply is performed or furnished.
(1) Hospital Care. The medical services and supplies furnished by a Hospital or Ambulatory Surgical Center or a
Birthing Center. Covered charges for room and board will be payable as shown in the Schedule of Benefits.
After 48 observation hours, a confinement will be considered an inpatient confinement.
Room charges made by a Hospital having only private rooms will be covered at the average private room rate.
Charges for an Intensive Care Unit stay are payable as described in the Schedule of Benefits.
(2) Coverage of Pregnancy. The Usual and Reasonable Charges for the care and treatment of Pregnancy are
covered the same as any other Sickness.
19
Group health plans generally may not, under Federal law, restrict benefits for any hospital length of stay in
connection with childbirth for the mother or newborn child to less than 48 hours following a vaginal delivery,
or less than 96 hours following a cesarean section. However, Federal law generally does not prohibit the
mother's or newborn's attending provider, after consulting with the mother, from discharging the mother or her
newborn earlier than 48 hours (or 96 hours as applicable). In any case, plans and issuers may not, under
Federal law, require that a provider obtain authorization from the plan or the issuer for prescribing a length of
stay not in excess of 48 hours (or 96 hours).
(3) Skilled Nursing Facility Care. The room and board and nursing care furnished by a Skilled Nursing Facility
will be payable if and when:
(a) the patient is confined as a bed patient in the facility;
(b) the attending Physician certifies that the confinement is needed for further care of the condition that
caused the Hospital confinement; and
(c) the attending Physician completes a treatment plan which includes a diagnosis, the proposed course
of treatment and the projected date of discharge from the Skilled Nursing Facility.
Covered charges for a Covered Person's care in these facilities is limited to the covered daily maximum shown
in the Schedule of Benefits.
(4) Physician Care. The professional services of a Physician for surgical or medical services.
(a) Charges for multiple surgical procedures will be a covered expense subject to the following
provisions:
(i) If bilateral or multiple surgical procedures are performed by one (1) surgeon, benefits will be
determined based on the Usual and Reasonable Charge that is allowed for the primary
procedures; 50% of the Usual and Reasonable Charge will be allowed for each additional
procedure performed through the same incision. Any procedure that would not be an
integral part of the primary procedure or is unrelated to the diagnosis will be considered
"incidental" and no benefits will be provided for such procedures;
(ii) If multiple unrelated surgical procedures are performed by two (2) or more surgeons on
separate operative fields, benefits will be based on the Usual and Reasonable Charge for
each surgeon's primary procedure. If two (2) or more surgeons perform a procedure that is
normally performed by one (1) surgeon, benefits for all surgeons will not exceed the Usual
and Reasonable percentage allowed for that procedure; and
(iii) If an assistant surgeon is required, the assistant surgeon's covered charge will not exceed
20% of the surgeon's Usual and Reasonable allowance.
(5) Private Duty Nursing Care. The private duty nursing care by a licensed nurse (R.N., L.P.N. or L.V.N.). Covered
charges for this service will be included to this extent:
(a) Inpatient Nursing Care. Charges are covered only when care is Medically Necessary or not Custodial
in nature and the Hospital's Intensive Care Unit is filled or the Hospital has no Intensive Care Unit.
(b) Outpatient Nursing Care. Charges are covered only when care is Medically Necessary and not
Custodial in nature. The only charges covered for Outpatient nursing care are those shown below,
under Home Health Care Services and Supplies. Outpatient private duty nursing care on a
24-hour-shift basis is not covered.
(6) Home Health Care Services and Supplies. Charges for home health care services and supplies are covered
only for care and treatment of an Injury or Sickness when Hospital or Skilled Nursing Facility confinement
20
would otherwise be required. The diagnosis, care and treatment must be certified by the attending Physician
and be contained in a Home Health Care Plan.
Benefit payment for nursing, home health aide and therapy services is subject to the Home Health Care limit
shown in the Schedule of Benefits.
A home health care visit will be considered a periodic visit by either a nurse or therapist, as the case may be, or
four hours of home health aide services.
(7) Hospice Care Services and Supplies. Charges for hospice care services and supplies are covered only when
the attending Physician has diagnosed the Covered Person's condition as being terminal, determined that the
person is not expected to live more than six months and placed the person under a Hospice Care Plan.
Covered charges for Hospice Care Services and Supplies are payable as described in the Schedule of Benefits.
(8) Other Medical Services and Supplies. These services and supplies not otherwise included in the items above
are covered as follows:
(a) Local Medically Necessary professional land or air ambulance service. A charge for this item will be a
Covered Charge only if the service is to the nearest Hospital or Skilled Nursing Facility where
necessary treatment can be provided unless the Plan Administrator finds a longer trip was Medically
Necessary.
(b) Treatment of acquired brain injury. Covered charges for the following services, medically necessary
as a result of or related to an acquired brain injury: cognitive rehabilitative therapy; cognitive
communication therapy; neurocognitive therapy and rehabilitation; neurobehavioral,
neurophysiological, neuropsychological and psychophysiological testing or treatment;
neurofeedback therapy; remediation; post -acute transition services; and community reintegration
services.
The following definitions apply to this benefit:
Acquired brain injury means a neurological insult to the brain, which is not hereditary, congenital or
degenerative. The injury to the brain occurred after birth and results in a change in neuronal activity,
which results in an impairment of physical functioning, sensory processing, cognition or
psychosocial behavior.
Cognitive communication therapy means services designed to address modalities of comprehensive
and expression, including understanding, reading, writing and verbal expression of information.
Cognitive rehabilitation therapy means services designed to address therapeutic cognitive activities,
based on an assessment and understanding of the individual's brain -behavioral deficits.
Community reintegration services means services that facilitate the continuum of care as an affected
individual transitions into the community.
Neurobehavioral testing means an evaluation of the history of neurological and psychiatric difficulty,
current symptoms, current mental status and premorbid history, including the identification of
problematic behavior and the relationship between behavior and the variables that control behavior.
This may include interviews of the individual, family and others.
Neurobehavioral treatment means interventions that focus on behavior and the variables that control
behavior.
Neurocognitive rehabilitation means services designed to assist cognitively impaired individuals to
compensate for deficits in cognitive functioning by rebuilding cognitive skills and/or developing
compensatory strategies and techniques.
21
Neurocognitive therapy means services designated to address neurological deficits in
informational processing and to facilitate the development of higher level cognitive abilities.
Neurofeedback therapy means services that utilize operant conditioning learning procedure based on
electroencephalography (EEG) parameters and that are designed to result in improved mental
performance and behavior and stabilized mood.
Neurophysiological testing means an evaluation of the functions of the nervous system.
Neurophysiological treatment means interventions that focus on the functions of the nervous system.
Neuropsychological testing means the administering of a comprehensive battery of tests to evaluate
neurocognitive, behavioral and emotional strengths and weaknesses and their relationship to normal
and abnormal central nervous system functioning.
Neuropsychological treatment means interventions designed to improve or minimize deficits in
behavioral and cognitive processes.
Post -acute transition services means services that facilitate the continuum of care beyond the initial
neurological insult through rehabilitation and community reintegration.
Psychophysiological testing means an evaluation of the interrelationships between the nervous
system and other bodily organs and behavior.
Psychophysiological treatment means interventions designed to alleviate or decrease abnormal
physiological responses of the nervous system due to behavioral or emotional factors.
Remediation means the process or processes of restoring or improving a specific function.
Services means the work of testing, treatment and providing therapies to an individual with an
acquired brain injury.
Therapy means the scheduled remedial treatment provided through direct interaction with the
individual to improve a pathological condition resulting from an acquired brain injury.
(c) Anesthetic; oxygen; blood and blood derivatives that are not donated or replaced; intravenous
injections and solutions. Administration of these items is included.
(d) Cardiac rehabilitation as deemed Medically Necessary provided services are rendered (a) under the
supervision of a Physician; (b) in connection with a myocardial infarction, coronary occlusion or
coronary bypass surgery; (c) initiated within 12 weeks after other treatment for the medical condition
ends; and (d) in a Medical Care Facility as defined by this Plan.
(e) Radiation or chemotherapy and treatment with radioactive substances. The materials and services of
technicians are included.
(f) Initial contact lenses or glasses required following cataract surgery
(g) Rental of durable medical or surgical equipment if deemed Medically Necessary. These items may be
bought rather than rented, with the cost not to exceed the fair market value of the equipment at the
time of purchase, but only if agreed to in advance by the Plan Administrator.
(h) Medically Necessary services for care and treatment of jaw joint conditions, including
Temporomandibular Joint syndrome.
(i) Laboratory studies.
22
(j) Treatment of Mental Disorders and Substance Abuse Covered charges for care, supplies and
treatment of Mental Disorders and Substance Abuse will be limited as follows:
All treatment is subject to the benefit payment maximums shown in the Schedule of Benefits.
Physician's visits are limited to one treatment per day.
Psychiatrists (M.D.), psychologists (Ph.D.), counselors (Ph.D.) or Masters of Social Work (M.S. W.)
may bill the Plan directly. Other licensed mental health practitioners must be under the direction of
and must bill the Plan through these professionals.
(k) Injury to or care of mouth, teeth and gums. Charges for Injury to or care of the mouth, teeth, gums and
alveolar processes will be Covered Charges under Medical Benefits only if that care is for the
following oral surgical procedures:
Excision of tumors and cysts of the jaws, cheeks, lips, tongue, roof and floor of the mouth.
Emergency repair due to Injury to sound natural teeth. Charges must occur within 24 months of the
accidental injury.
Surgery needed to correct accidental injuries to the jaws, cheeks, lips, tongue, floor and roof of the
mouth.
Excision of benign bony growths of the jaw and hard palate.
External incision and drainage of cellulitis.
Incision of sensory' sinuses, salivary glands or ducts.
Removal of impacted teeth.
Reduction of dislocations and excision of temporomandibular joints (TMJs).
No charge will be covered under Medical Benefits for dental and oral surgical procedures involving
orthodontic care of the teeth, and periodontal disease. Dentures and preparing the mouth for the
fitting of or continued use of dentures are not covered except for the following conditions: if tooth
loss is related to, or necessitated by medical treatment of a covered illness or injury.
(l) Occupational therapy by a licensed occupational therapist. Therapy must be ordered by a Physician,
result from an Injury or Sickness and improve a body function. Covered expenses do not include
recreational programs, maintenance therapy or supplies used in occupational therapy.
(m) HUMAN ORGAN & TISSUE TRANSPLANT BENEFITS
Human organ and tissue benefits are provided by a separate policy, as explained in full in the AIG
LIFE Organ & Tissue Transplant Policy. All eligible Employees and their eligible Dependents
requiring human organ and tissue transplant services will have transplant -related charges covered
under this separate AIG LIFE policy, according to its terms and conditions, from the time of their
evaluation through 365 days post transplant operation. All transplant -related medical benefits
incurred after this specified period of coverage as well as all transplant related charges ineligible
under the separate policy will revert to the terms and conditions of health coverage under this health
plan document.
Benefits available for Human Organ and Tissue Transplants are subject to the following:
23
the Employee or Dependent is eligible for medical benefits under the group's plan document
the Employee or Dependent meets all the terms and conditions outlined in the AIG LIFE Organ
and Tissue policy / certificate
the Employee or Dependent does not have a pre-existing condition as defined in the AIG LIFE
Organ and Tissue Policy / Certificate
Those Employees and their Dependents who are initially excluded from human organ and tissue
transplant coverage under the AIG LIFE Organ & Tissue Transplant policy (due to a pre-existing
condition) will continue to receive health care benefits as they relate to transplantation according to
the terms and conditions of the company health plan document until eligible for benefits under the
separate AIG LIFE policy.
The transplant must be performed to replace an organ or tissue.
Charges for obtaining donor organs or tissues are Covered Charges under the Plan when the recipient
is a Covered Person. When the donor has medical coverage, his or her plan will pay first. The benefits
under this Plan will be reduced by those payable under the donor's plan. Donor charges include those
for:
evaluating the organ or tissue;
removing the organ or tissue from the donor; and
transportation of the organ or tissue from within the United States and Canada to the place where
the transplant is to take place.
(n) The initial purchase, fitting and repair of orthotic appliances such as braces, splints or other
appliances which are required for support for an injured or deformed part of the body as a result of a
disabling congenital condition or an Injury or Sickness.
(o) Physical therapy by a licensed physical therapist. The therapy must be in accord with a Physician's
exact orders as to type, frequency and duration and for conditions which are subject to significant
improvement through short-term therapy.
(p) Prescription Drugs (as defined).
(q) Routine Preventive Care. Covered charges under Medical Benefits are payable for routine Preventive
Care as described in the Schedule of Benefits.
Charges for Routine Well Adult Care. Routine well adult care is care by a Physician that is not for an
Injury or Sickness.
Charges for Routine Well Child Care. Routine well child care is routine care by a Physician that is
not for an Injury or Sickness.
(r) The initial purchase, fitting and repair of fitted prosthetic devices which replace body parts.
(s) Reconstructive Surgery. Correction of abnormal congenital conditions and reconstructive
mammoplasties will be considered Covered Charges.
This mammoplasty coverage will include reimbursement for:
(i) reconstruction of the breast on which a mastectomy has been performed,
24
00 surgery and reconstruction of the other breast to produce a symmetrical appearance, and
(Iii) coverage of prostheses and physical complications during all stages of mastectomy,
including lymphedemas,
in a manner determined in consultation with the attending Physician and the patient.
(t) Speech therapy by a licensed speech therapist. Therapy must be ordered by a Physician and follow
either: (i) surgery for correction of a congenital condition of the oral cavity, throat or nasal complex
(other than a frenectomy) of a person; (ii) an Injury; or (iii) a Sickness that is other than a learning or
Mental Disorder.
(u) Spinal Manipulation/Chiropractic services by a licensed M.D., D.O. or D.C.
(v) Sterilization procedures.
(w) Surgical dressings, splints, casts and other devices used in the reduction of fractures and
dislocations.
(x) Coverage of Well Newborn Nursery/Physician Care.
Charges for Routine Nursery Care. Routine well newborn nursery care is care while the newborn is
Hospital -confined after birth and includes room, board and other normal care for which a Hospital
makes a charge.
This coverage is only provided if a parent is a Covered Person who was covered under the Plan at the
time of the birth and the newborn child is an eligible Dependent and is neither injured nor ill.
The benefit is limited to Usual and Reasonable Charges for nursery care for the first 5 days after birth
while the newborn child is Hospital confined as a result of the child's birth.
Charges for covered routine nursery care will be applied toward the Plan of the newborn child.
Group health plans generally may not, under Federal law, restrict benefits for any hospital length of
stay in connection with childbirth for the mother or newborn child to less than 48 hours following a
vaginal delivery, or less than 96 hours following a cesarean section. However, Federal law generally
does not prohibit the mother's or newborn's attending provider, after consulting with the mother, from
discharging the mother or her newborn earlier than 48 hours (or 96 hours as applicable). In any case,
plans and issuers may not, under Federal law, require that a provider obtain authorization from the
plan or the issuer for prescribing a length of stay not in excess of 48 hours (or 96 hours).
Charges for Routine Physician Care. The benefit is limited to the Usual and Reasonable Charges
made by a Physician for routine pediatric care for the first 5 days after birth while the newborn child is
Hospital confined.
Charges for covered routine Physician care will be applied toward the Plan of the newborn child.
(y) Diagnostic x-rays.
25
COST MANAGEMENT SERVICES
Cost Management Services Phone Number
Please refer to the Employee ID card for the Cost Management Services phone number.
The patient or family member must call this nurrber to receive certification of certain Cost Management Services. This call
must be made at least in advance of services being rendered or within 2 business days after an emergency.
Any reduced reimbursement due to failure to follow cost management procedures will not accrue toward the 100%
maximum out-of-pocket payment.
UTILIZATION REVIEW
Utilization review is a program designed to help insure that all Covered Persons receive necessary and appropriate health
care while avoiding unnecessary expenses.
The program consists of:
(a) Precertification of the Medical Necessity for the following non -emergency services before Medical
and/or Surgical services are provided:
All outpatient IV therapies
Back surgery
Breast surgery
Bypass surgery
Cardiac catheterization
Cardiac pacemaker implant
Cataract removal
Chemotherapy
Cholecystectomy (removal of gall bladder)
Coronary arteriography
Dialysis
Dilation and curettage of uterus
Ear surgery
Facial and jaw surgery
Hemorrhoid removal
Hernia repair
Hip surgery
Home Health
Home infusion therapy
Hospice care
Hysterectomy (removal of uterus)
Knee surgery
Ligation & stripping of varicose veins
Mental illness treatment
Nose surgery
Prostatectomy
Serious mental illness treatment
Substance abuse treatment
Toe & foot surgery
Tonsillectomy and/or adenoidectomy
Transfers to another facility or transfers to or from a specialty unit within a facility
(b) Retrospective review of the Medical Necessity of the listed services provided on an emergency basis;
26
(c) Concurrent review, based on the admitting diagnosis, of the listed services requested by the
attending Physician; and
(d) Certification of services and planning for discharge from a Medical Care Facility or cessation of
medical treatment.
The purpose of the program is to determine what charges may be eligible for payment by the Plan. This program is not
designed to be the practice of medicine or to be a substitute for the medical judgment of the attending Physician or other
health care provider.
If a particular course of treatment or medical service is not certified, it means that either the Plan will not pay for the charges
or the Plan will not consider that course of treatmnt as appropriate for the maximum reimbursement under the Plan. The
patient is urged to find out why there is a discrepancy between what was requested and what was certified before incurring
charges.
The attending Physician does not have to obtain precertification from the Plan for prescribing a maternity length of stay that
is 48 hours or less for a vaginal delivery or 96 hours or less for a cesarean delivery.
In order to maximize Plan reimbursements, please read the following provisions carefully.
Here's how the program works.
Precertification. Before a Covered Person enters a Medical Care Facility on a non -emergency basis or receives other listed
medical services, the utilization review administrator will, in conjunction with the attending Physician, certify the care as
appropriate for Plan reimbursement. A non -emergency stay in a Medical Care Facility is one that can be scheduled in
advance.
The utilization review program- is set in motion by a telephone call from the Covered Person or provider. Contact the
utilization review administrator at the telephone number on your ID card at least before services are scheduled to be
rendered with the following information:
- The name of the patient and relationship to the covered Employee
- The name, Social Security number and address of the covered Employee
- The name of the Employer
- The name and telephone number of the attending Physician
- The name of the Medical Care Facility, proposed date of admission, and proposed length of stay
The diagnosis and/or type of surgery
The proposed rendering of listed medical services
If there is an emergency admission to the Medical Care Facility, the patient, patient's family member, Medical Care Facility or
attending Physician must contact the utilization review administrator within 2 business days of the first business day after
the admission.
The utilization review administrator will determine the number of days of Medical Care Facility confinement or use of other
listed medical services authorized for payment. Failure to follow this procedure may reduce reimbursement received from
the Plan.
If the Covered Person does not receive authorization as explained in this section, the benefit payment will be reduced by
$250. This penalty will not apply when a Covered Person utilizes a Network Provider.
Concurrent review, discharge planning. Concurrent review of a course of treatment and discharge planning from a Medical
Care Facility are parts of the utilization review program. The utilization review administrator will monitor the Covered
Person's Medical Care Facility stay or use of other medical services and coordinate with the attending Physician, Medical
Care Facilities and Covered Person either the scheduled release or an extension of the Medical Care Facility stay or
extension or cessation of the use of other medical services.
27
If the attending Physician feels that it is Medically Necessary for a Covered Person tar receive additional services or to stay
in the Medical Care Facility for a greater length of time than has been precertified, the attending Physician must request the
additional services or days.
SECOND AND/OR THIRD OPINION PROGRAM
Certain surgical procedures are performed either inappropriately or unnecessarily. In some cases, surgery is only one of
several treatment options. In other cases, surgery will not help the condition.
In order to prevent unnecessary or potentially harmful surgical treatments, the second and/or third opinion program fulfills
the dual purpose of protecting the health of the Plan's Covered Persons and protecting the financial integrity of the Plan.
Benefits will be provided for a second (and third, if necessary) opinion consultation to determine the Medical Necessity of
an elective surgical procedure. An elective surgical procedure is one that can be scheduled in advance; that is, it is not an
emergency or of a life -threatening nature.
The patient may choose any board -certified specialist who is not an associate of the attending Physician and who is
affiliated in the appropriate specialty.
While any surgical treatment is allowed a second opinion, the following procedures are ones for which surgery is often
performed when other treatments are available.
Appendectomy Hernia surgery
Cataract surgery Hysterectomy
Cholecystectomy Mastectomy surgery
(gall bladder removal)
Deviated septum Prostate surgery
(nose surgery)
Hemorrhoidectomy Salpingo-oophorectomy
(removal of tubes/ovaries)
PREADMISSION TESTING SERVICE
Spinal surgery
Surgery to knee, shoulder, elbow or toe
Tonsillectomy and adenoidectomy
Tympanotomy
(inner ear)
Varicose vein ligation
The Medical Benefits percentage payable will be for diagnostic lab tests and x-ray exams when:
(1) performed on an outpatient basis within seven days before a Hospital confinement;
(2) related to the condition which causes the confinement; and
(3) performed in place of tests while Hospital confined.
Covered charges for this testing will be payable at 80% for In -Network services and 50% for Out -of -Network services even if
tests show the condition requires medical treatment prior to Hospital confinement or the Hospital confinement is not
required.
28
CASE MANAGEMENT
Case Management is a program whereby a case manager monitors patients and explores, discusses and recommends
coordinated and/or alternate types of appropriate Medically Necessary care. The case manager consults with the patient, the
family and the attending Physician in order to develop a plan of care for approval by the patient's attending Physician and
the patient. This plan of care may include some or all of the following:
— personal support to the patient;
-- contacting the family to offer assistance and support;
-- monitoring Hospital or Skilled Nursing Facility;
-- determining alternative care options; and
-- assisting in obtaining any necessary equipment and services.
Case Management occurs when this alternate benefit will be beneficial to both the patient and the Plan
The case manager will coordinate and implement the Case Management program by providing guidance and information on
available resources and suggesting the most appropriate treatment plan. The Plan Administrator, attending Physician,
patient and patient's family must all agree to the alternate treatment plan.
Once agreement has been reached, the Plan Administrator will direct the Plan to reimburse for Medically Necessary expenses
as stated in the treatment plan, even if these expenses normally would not be paid by the Plan.
Note: Case Management is a voluntary service. There are no reductions of benefits or penalties if the patient and family
choose not to participate.
Each treatment plan is individually tailored to a specific patient and should not be seen as appropriate or recommended for
any other patient, even one with the same diagnosis.
29
DEFINED TERMS
The following terms have special meanings and when used in this Plan will be capitalized
Active Employee is an Employee who is on the regular payroll of the Employer and who has begun to perform the duties of
his or her job with the Employer on a full-time basis.
Ambulatory Surgical Center is a licensed facility that is used mainly for performing outpatient surgery, has a staff of
Physicians, has continuous Physician and nursing care by registered nurses (R.N.$) and does not provide for overnight
stays.
Birthing Center means any freestanding health facility, place, professional office or institution which is not a Hospital or in
a Hospital, where births occur in a home -like atmosphere. This facility must be licensed and operated in accordance with the
laws pertaining to Birthing Centers in the jurisdiction where the facility is located.
The Birthing Center must provide facilities for obstetrical delivery and short-term recovery after delivery; provide care under
the full-time supervision of a Physician and either a registered nurse (R.N.) or a licensed nurse -midwife; and have a written
agreement with a Hospital in the same locality for immediate acceptance of patients who develop complications or require
pre- or post -delivery confinement.
Calendar Year means January 1 st through December 31 st of the same year.
Chiropractic Care/Spinal Manipulation means skeletal adjustments, manipulation or other treatment in connection with the
detection and correction by manual or mechanical means of structural imbalance or subluxation in the human body. Such
treatment is done by a Physician to remove nerve interference resulting from, or related to, distortion, misalignment or
subluxation of, or in, the vertebral column.
COBRA means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended.
Cosmetic Dentistry means dentally unnecessary procedures.
Covered Person is an Employee, Retiree or Dependent who is covered under this Plan.
Creditable Coverage includes most health coverage, such as coverage under a group health plan (including COBRA
continuation coverage), HMO membership, an individual health insurance policy, Medicaid or Medicare.
Creditable Coverage does not include coverage consisting solely of dental or vision benefits.
Custodial Care is care (including room and board needed to provide that care) that is given principally for personal hygiene
or for assistance in daily activities and can, according to generally accepted medical standards, be performed by persons
who have no medical training. Examples of Custodial Care are help in walking and getting out of bed; assistance in bathing,
dressing, feeding; or supervision over medication which could normally be self-administered.
Dentist is a person who is properly trained and licensed to practice dentistry and who is practicing within the scope of such
license.
Durable Medical Equipment means equipment which (a) can withstand repeated use, (b) is primarily and customarily used to
serve a medical purpose, (c) generally is not useful to a person in the absence of an Illness or Injury and (d) is appropriate
for use in the home.
Eligible Medical Expense (EME) means the maximum allowable amount the Plan will pay for a particular Covered Service as
determined by the Plan in accordance with the Plan reimbursement schedule. In -Network providers have agreed to accept
the Plan's reimbursement as payment in full for Covered Services, less any applicable copayment deductible or coinsurance,
whereas Non -Network providers have not. Eligible Plan Participants who use the services of Non -Network providers will
receive no benefit payments or reimbursement for charges in excess of the Plan's reimbursement schedule for any Covered
30
Services. In no event will the Plan pay more than the maximum payment allowance established in the Plan's reimbursement
schedule.
Eligible Medical Expenses are determined by the following:
Physician charges: Medicare Allowable based on Resource Based Relative Value Scale (RBRVS)
Facility charges: Medicare Allowable based on Resource Based Relative Value Scale (RBRVS)
Employee means a person who is an Active, regular Employee of the Employer, regularly scheduled to work for the Employer
in an Employee/Employer relationship. For the purposes of this Plan, City Councilmen will be considered Employees of the
Employer.
Employer is City of Lubbock
Enrollment Date is the first day of coverage or, if there is a Waiting Period, the first day of the Waiting Period.
ERISA is the Employee Retirement Income Security Act of 1974, as amended.
Experimental and/or Investigational means services, supplies, care and treatment which does not constitute accepted
medical practice properly within the range of appropriate medical practice under the standards of the case and by the
standards of a reasonably substantial, qualified, responsible, relevant segment of the medical and dental community or
government oversight agencies at the time services were rendered.
The Plan Administrator must make an independent evaluation of the experimental/nonexperimental standings of specific
technologies. The Plan Administrator shall be guided by a reasonable interpretation of Plan provisions. The decisions shall
be made in good faith and rendered following a detailed factual background investigation of the claim and the proposed
treatment. The decision of the Plan Administrator will be final and binding on the Plan. The Plan Administrator will be
guided by the following principles:
(1) if the drug or device cannot be lawfully marketed without approval of the U.S. Food and Drug Administration
and approval for marketing has not been given at the time the drug or device is furnished; or
(2) if the drug, device, medical treatment or procedure, or the patient informed consent document utilized with the
drug, device, treatment or procedure, was reviewed and approved by the treating facility's Institutional Review
Board or other body serving a similar function, or if federal law requires such review or approval; or
(3) if Reliable Evidence shows that the drug, device, medical treatment or procedure is the subject of on -going
phase I or phase II clinical trials, is the research, experimental, study or Investigational arm of on -going phase
III clinical trials, or is otherwise under study to determine its maximum tolerated dose, its toxicity, its safety, its
efficacy or its efficacy as compared with a standard means of treatment or diagnosis; or
(4) if Reliable Evidence shows that the prevailing opinion among experts regarding the drug, device, medical
treatment or procedure is that further studies or clinical trials are necessary to determine its maximum tolerated
dose, its toxicity, its safety, its efficacy or its efficacy as compared with a standard means of treatment or
diagnosis.
Reliable Evidence shall mean only published reports and articles in the authoritative medical and scientific literature; the
written protocol or protocols used by the treating facility or the protocol(s) of another facility studying substantially the
same drug, service, medical treatment or procedure; or the written informed consent used by the treating facility or by
another facility studying substantially the same drug, device, medical treatment or procedure.
Drugs are considered Experimental if they are not commercially available for purchase and/or they are not approved by the
Food and Drug Administration for general use.
Family Unit is the covered Employee or Retiree and the family members who are covered as Dependents under the Plan.
31
Foster Child means an unmarried child under the limiting age shown in the Dependent Eligibility Section of this Plan for
whom a covered Employee has assumed a legal obligation. All of the following conditions mu st be met: the child is being
raised as the covered Employee's; the child depends on the covered Employee for primary support; the child lives in the
home of the covered Employee; and the covered Employee may legally claim the child as a federal income tax deduction.
A covered Foster Child is n1 a child temporarily living in the covered Employee's home; one placed in the covered
Employee's home by a social service agency which retains control of the child; or whose natural parent(s) may exercise or
share parental responsibility and control.
Genetic Information means information about genes, gene products and inherited characteristics that may derive from an
individual or a family member. This includes information regarding carrier status and information derived from laboratory
tests that identify mutations in specific genes or chromosomes, physical medical examinations, family histories and direct
analysis of genes or chromosomes.
Home Health Care Agency is an organization that meets all of these tests: its main function is to provide Home Health Care
Services and Supplies; it is federally certified as a Home Health Care Agency; and it is licensed by the state in which it is
located, if licensing is required.
Home Health Care Plan must meet these tests: it must be a formal written plan made by the patient's attending Physician
which is reviewed at least every 30 days; it must state the diagnosis; it must certify that the Home Health Care is in place of
Hospital confinement; and it must specify the type and extent of Home Health Care required for the treatment of the patient.
Home Health Care Services and Supplies include: part-time or intermittent nursing care by or under the supervision of a
registered nurse (R.N.); part-time or intermittent home health aide services provided through a Home Health Care Agency
(this does not include general housekeeping services); physical, occupational and speech therapy; medical supplies; and
laboratory services by or on behalf of the Hospital.
Hospice Agency is an organization where its main function is to provide Hospice Care Services and Supplies and it is
licensed by the state in which it is located, if licensing is required.
Hospice Care Plan is a plan of terminal patient care that is established and conducted by a Hospice Agency and supervised
by a Physician.
Hospice Care Services and Supplies are those provided through a Hospice Agency and under a Hospice Care Plan and
include inpatient care in a Hospice Unit or other licensed facility, home care, and family counseling during the bereavement
period.
Hospice Unit is a facility or separate Hospital Unit, that provides treatment under a Hospice Care Plan and admits at least
two unrelated persons who are expected to die within six months.
Hospital is an institution which is engaged primarily in providing medical care and treatment of sick and injured persons on
an inpatient basis at the patient's expense and which fully meets these tests: it is accredited as a Hospital by the Joint
Commission on Accreditation of Healthcare Organizations or the American Osteopathic Association Healthcare Facilities
Accreditation Program; it is approved by Medicare as a Hospital; it maintains diagnostic and therapeutic facilities on the
premises for surgical and medical diagnosis and treatment of sick and injured persons by or under the supervision of a staff
of Physicians; it continuously provides on the premises 24-hour-a-day nursing services by or under the supervision of
registered nurses (R.N.$); and it is operated continuously with organized facilities for operative surgery on the premises.
The definition of "Hospital" shall be expanded to include the following:
A facility operating legally as a psychiatric Hospital or residential treatment facility for mental health and
licensed as such by the state in which the facility operates.
A facility operating primarily for the treatment of Substance Abuse if it meets these tests: maintains permanent
and full-time facilities for bed care and full-time confinement of at least 15 resident patients; has a Physician in
regular attendance; continuously provides 24-hour a day nursing service by a registered nurse (R.N.); has a
32
full-time psychiatrist or psychologist on the staff, and is primarily engaged in providing diagnostic and
therapeutic services and facilities for treatment of Substance Abuse.
Illness means a bodily disorder, disease, physical sickness or Mental Disorder. Illness includes Pregnancy, childbirth,
miscarriage or complications of Pregnancy.
Injury means an accidental physical Injury to the body caused by unexpected external means.
Intensive Care Unit is defined as a separate, clearly designated service area which is maintained within a Hospital solely for
the care and treatment of patients who are critically ill. This also includes what is referred to as a "coronary care unit" or an
"acute care unit." It has: facilities for special nursing care not available in regular rooms and wards of the Hospital; special
life saving equipment which is immediately available at all times; at least two beds for the accommodation of the critically ill;
and at least one registered nurse (R.N.) in continuous and constant attendance 24 hours a day.
Late Enrollee means a Plan Participant who enrolls under the Plan other than during the first 31-day period in which the
individual is eligible to enroll under the Plan or during a Special Enrollment Period.
Legal Guardian means a person recognized by a court of law as having the duty of taking care of the person and managing
the property and rights of a minor child.
Lifetime is a word that appears in this Plan in reference to benefit maximums and limitations. Lifetime is understood to mean
while covered under this Plan. Under no circumstances does Lifetime mean during the lifetime of the Covered Person.
Medical Care Facility means a Hospital, a facility that treats one or more specific ailments or any type of Skilled Nursing
Facility.
Medical Emergency means a sudden onset of a condition with acute symptoms requiring immediate medical care and
includes such conditions as heart attacks, cardiovascular accidents, poisonings, loss of consciousness or respiration,
convulsions or other such acute medical conditions.
Medically or Dentally Necessary care and treatment is recommended or approved by a Physician or Dentist; is consistent
with the patient's condition or accepted standards of good medical and dental practice; is medically proven to be effective
treatment of the condition; is not performed mainly for the convenience of the patient or provider of medical and dental
services; is not conducted for research purposes; and is the most appropriate level of services which can be safely provided
to the patient.
All of these criteria must be met; merely because a Physician recommends or approves certain care does not mean that it is
Medically Necessary.
The Plan Administrator has the discretionary authority to decide whether care or treatment is Medically Necessary.
Medicare is the Health Insurance For The Aged and Disabled program under Title XVIII of the Social Security Act, as
amended.
Mental Disorder means any disease or condition, regardless of whether the cause is organic, that is classified as a Mental
Disorder in the current edition of International Classification of Diseases published by the U.S. Department of Health and
Human Services or is listed in the current edition of Diagnostic and Statistical Manual of Mental Disorders published by the
American Psychiatric Association.
Morbid Obesity is a diagnosed condition in which the body weight exceeds the medically recommended weight by either 100
pounds or is twice the medically recommended weight for a person of the same height, age and mobility as the Covered
Person.
No -Fault Auto Insurance is the basic reparations provision of a law providing for payments without determining fault in
connection with automobile accidents.
33
Out -of -Area covers Plan Participants who reside outside of the Plan Service Area (Plan Service Area is defined as the
geographical area designated by the Employer which determines eligibility for PPO benefits) and therefore do not have
access to Network Providers.
Outpatient Care and/or Services is treatment including services, supplies and medicines provided and used at a Hospital
under the direction of a Physician to a person not admitted as a registered bed patient; or services rendered in a Physician's
office, laboratory or X-ray facility, an Ambulatory Surgical Center, or the patient's home.
Physician means a Doctor of Medicine (M.D.), Doctor of Osteopathy (D.O.), Doctor of Dental Surgery (D.D.S.), Doctor of
Podiatry (D.P.M.), Doctor of Chiropractic (D.C.), Audiologist, Certified Nurse Anesthetist, Licensed Professional Counselor,
Licensed Professional Physical Therapist, Master of Social Work (M.S. W.), Midwife, Occupational Therapist, Optometrist
(O.D.), Physiotherapist, Psychiatrist, Psychologist (Ph.D.), Speech Language Pathologist and any other practitioner of the
healing arts who is licensed and regulated by a state or federal agency and is acting within the scope of his or her license.
Plan means City of Lubbock Employee Benefit Plan, which is a benefits plan for certain employees of City of Lubbock and is
described in this document.
Plan Administrator is the City of Lubbock
Plan Participant is any Employee, Retiree or Dependent who is covered under this Plan.
Plan Year is the 12-month period beginning on either the effective date of the Plan or on the day following the end of the
first Plan Year which is a short Plan Year.
A Pre -Existing Condition is a condition for which medical advice, diagnosis, care or treatment was recommended or
received within six months prior to the person's Enrollment Date under this Plan. Genetic Information is not a condition.
Treatment includes receiving services and supplies, consultations, diagnostic tests or prescribed medicines. In order to be
taken into account, the medical advice, diagnosis, care or treatment must have been recommended by, or received from, a
Physician.
The Pre -Existing Condition does not apply to pregnancy, to a newborn child who is covered under this Plan within 31 days
of birth, or to a child who is adopted or placed for adoption before attaining age 18 and who, as of the last day of the 31-day
period beginning on the date of the adoption or placement for adoption, is covered under this Plan. A Pre -Existing Condition
exclusion may apply to coverage before the date of the adoption or placement for adoption.
The prohibition on Pre -Existing Condition exclusion for newborn, adopted, or pre -adopted children does not apply to an
individual after the end of the first 63-day period during all of which the individual was not covered under any Creditable
Coverage.
Pregnancy is childbirth and conditions associated with Pregnancy, including complications.
Preferred Provider Organization/PPO/Network Provider means a group of medical providers who, as a group or
individually, agree to provide services or treatment to Covered Persons under the PIan at negotiated rates as a cost
containment measure for the Employer and participating Employees. Contact the Plan Administrator for current name and
address of participating providers.
Prescription Drug means any of the following: a Food and Drug Administration -approved drug or medicine which, under
federal law, is required to bear the legend: "Caution: federal law prohibits dispensing without prescription"; injectable
insulin; hypodermic needles or syringes, but only when dispensed upon a written prescription of a licensed Physician. Such
drug must be Medically Necessary in the treatment of a Sickness or Injury.
Serious Mental Illness means any of the eight major diagnostic categories; schizophrenia. Paranoid and other psychotic
disorders, Bipolar disorders, Major depressive disorders, and Schizo -affective disorders, Pervasive developmental disorders,
Obsessive -Compulsive disorders, and Depression in childhood and adolescence.
Resource Based Relative Value Scale (RBRVS) refers to a specific standardized scale of healthcare charges that bases
relative values on a computation of total work, practice cost, and malpractice cost involved in performing a procedure. These
34
three elements of the value are modified by a geographic index. After the geographic modification, the three values are
summed to reach a single value. The single value is then multiplied by a conversion factor, determined by Congress, to
arrive at a charge.
Retired Employee is a former Active Employee of the Employer who was retired while employed by the Employer under the
formal written plan of the Employer and elects to contribute to the Plan the contribution required from the Retired Employee.
A Retired Employee must be eligible to retire under the Texas Municipal Retirement System or the Firemen's Relief and
Retirement Fund and be employed by the Employer for five (5) consecutive years; or be approved for disability retirement
under the Texas Municipal Retirement System or Firemen's Relief and Retirement Fund. Eligible to retire means eligible to
draw an annuity from the Texas Municipal Retirement System or the Firemen's Relief and Retirement Fund at the time of
termination from the Employer. Members of the City Council will be considered a Retired Employee if they have served in -
office for at least five (5) years.
Sickness is a person's Illness, disease or Pregnancy (including complications).
Skilled Nursing Facility is a facility that fully meets all of these tests:
(1) It is licensed to provide professional nursing services on an inpatient basis to persons convalescing from
Injury or Sickness. The service must be rendered by a registered nurse (R.N.) or by a licensed practical nurse
(L.P.N.) under the direction of a registered nurse. Services to help restore patients to self -care in essential daily
living activities must be provided.
(2) Its services are provided for compensation and under the full-time supervision of a Physician.
(3) It provides 24 hour per day nursing services by licensed nurses, under the direction of a full-time registered
nurse.
(4) It maintains a complete medical record on each patient.
(5) It has an effective utilization review plan.
(6) It is not, other than incidentally, a place for rest, the aged, drug addicts, alcoholics, mental retardates, Custodial
or educational care or care of Mental Disorders.
(7) It is approved and licensed by Medicare.
This term also applies to charges incurred in a facility referring to itself as an extended care facility, convalescent nursing
home, rehabilitation hospital, long-term acute care facility or any other similar nomenclature.
Spinal Manipulation/Chiropractic Care means skeletal adjustments, manipulation or other treatment in connection with the
detection and correction by manual or mechanical means of structural imbalance or subluxation in the human body. Such
treatment is done by a Physician to remove nerve interference resulting from, or related to, distortion, misalignment or
subluxation of, or in, the vertebral column.
Substance Abuse is regular excessive compulsive drinking of alcohol and/or physical habitual dependence on drugs. This
does not include dependence on tobacco and ordinary caffeine -containing drinks.
Temporomandibular Joint (TMJ) syndrome is the treatment of jaw joint disorders including conditions of structures linking
the jaw bone and skull and the complex of muscles, nerves and other tissues related to the temporomandibular joint. Care
and treatment shall include, but are not limited to orthodontics, crowns, inlays, physical therapy and any appliance that is
attached to or rests on the teeth.
Total Disability (Totally Disabled) means: In the case of a Dependent child, the complete inability as a result of Injury or
Sickness to perform the normal activities of a person of like age and sex in good health.
Usual and Reasonable Charge is a charge which is not higher than the usual charge made by the provider of the care or
supply and does not exceed the usual charge made by most providers of like service in the same area. This test will consider
35
the nature and severity of the condition being treated. It will also consider medical complications or unusual circumstances
that require more time, skill or experience.
The Plan will reimburse the actual charge billed if it is less than the Usual and Reasonable Charge.
The Plan Administrator has the discretionary authority to decide whether a charge is Usual and Reasonable.
For Non -Network provider and facility charges, Usual and Reasonable Charge is considered to mean Eligible Medical
Expense (EME) or Usual and Reasonable Charge, whichever is less.
W
PLAN EXCLUSIONS
Note: All exclusions related to Dental are shown in the Dental Plan.
For all Medical Benefits shown in the Schedule of Benefits, a charge for the following is not covered:
(1) Abortion. Services, supplies, care or treatment in connection with an abortion unless the life of the mother is
endangered or when medically required.
(2) Acupuncture. Charges for acupuncture or acupressure treatment.
(3) Adolescent Behavior Disorders. Any services or supplies provided for the treatment of adolescent behavior
disorders, including conduct disorders and oppositional disorders.
(4) Artificial Insemination. Charges for artificial insemination
(5) Chelation Therapy. services or supplies rendered to any Covered Person as, or in conjunction with, chelation
therapy, except for the treatment of acute metal poisoning.
(6) Complications of non -covered treatments. Care, services or treatment required as a result of complications from
a treatment not covered under the Plan are not covered. Complications from a non -covered abortion are
covered.
(7) Cosmetic Surgery. Charges incurred as a result of or in relation to cosmetic surgery.
(8) Custodial care. Services or supplies provided mainly as a rest cure, maintenance or Custodial Care.
(9) Educational or vocational testing. Services for educational or vocational testing or training.
(10) Environmental Sensitivity. Services or supplies rendered to any Covered Person primarily for:
Environmental Sensitivity testing or treatment
Clinical Ecology testing or treatment; or
Inpatient allergy testing or treatment;
(11) Excess charges. The part of an expense for care and treatment of an Injury or Sickness that is in excess of the
Usual and Reasonable Charge or the Eligible Medical Expense.
(12) Exercise programs. Exercise programs for treatment of any condition, except for Physician -supervised cardiac
rehabilitation, occupational or physical therapy covered by this Plan.
(13) Experimental or not Medically Necessary. Care and treatment that is either Experimental/Investigational or not
Medically Necessary.
(14) Eye care. Radial keratotomy or other eye surgery to correct refractive disorders. Also, routine eye
examinations, including refractions, lenses for the eyes and exams for their fitting. This exclusion does not
apply to aphakic patients and soft lenses or sclera shells intended for use as corneal bandages or as may be
covered under the well adult or well child sections of this Plan.
(15) Foot care. Treatment of weak, strained, flat, unstable or unbalanced feet, metatarsalgia or bunions (except open
cutting operations), and treatment of corns, calluses or toenails (unless needed in treatment of a metabolic or
peripheral -vascular disease). A fungal (mycotic) infection of the toenail will be covered if there is:
Clinical evidence of mycosis of the toenail;
37
Medical evidence that the patient has a marked limitation of ambulation requiring active
treatment of the foot or, in the case of a non -ambulatory patient, has a condition that is likely to
result in significant medical complications in the absence of such treatment; and
Excision of a nail without using an injectable or general anesthetic.
(16) Foreign travel. Care, treatment or supplies out of the U.S. if travel is for the sole purpose of obtaining medical
services.
(17) Government coverage. Care, treatment or supplies furnished by a program or agency funded by any
government. This does not apply to Medicaid or when otherwise prohibited by law.
(18) Hair loss. Care and treatment for hair loss including wigs, hair transplants or any drug that promises hair
growth, whether or not prescribed by a Physician.
(19) Hearing aids and exams. Charges for services or supplies in connection with hearing aids or exams for their
fitting, except as may be listed as covered in the schedule of benefits this Plan.
(20) Hospital employees. Professional services billed by a Physician or nurse who is an employee of a Hospital or
Skilled Nursing Facility and paid by the Hospital or facility for the service.
(21) Illegal drugs or medications. Services, supplies, care or treatment to a Covered Person for Injury or Sickness
resulting from that Covered Person's voluntary taking of or being under the influence of any controlled
substance, drug, hallucinogen or narcotic not administered on the advice of a Physician. Expenses will be
covered for Injured Covered Persons other than the person using controlled substances and expenses will be
covered for Substance Abuse treatment as specified in this Plan. This exclusion does not apply if the Injury
resulted from an act of domestic violence or a medical (including both physical and mental health) condition.
(22) Impotence. Care, treatment, services, supplies or medication in connection with treatment for impotence unless
to be determined to be organic or because the condition is the result of an injury or use of a prescribed
medication.
(23) Infertility. Care, supplies, services and treatment for infertility, artificial insemination, or in vitro fertilization.
(24) No charge. Care and treatment for which there would not have been a charge if no coverage had been in force.
(25) Non -emergency Hospital admissions. Care and treatment billed by a Hospital for non -Medical Emergency
admissions on a Friday or a Saturday. This does not apply if surgery is performed within 24 hours of
admission.
(26) Non-prescription drugs. Charges for non-prescription drugs, vitamins, nutritional supplements, or special
diets.
(27) No obligation to pay. Charges incurred for which the Plan has no legal obligation to pay.
(28) No Physician recommendation. Care, treatment, services or supplies not recommended and approved by a
Physician; or treatment, services or supplies when the Covered Person is not under the regular care of a
Physician. Regular care means ongoing medical supervision or treatment which is appropriate care for the
Injury or Sickness.
(29) Not specified as covered. Non-traditional medical services, treatments and supplies which are not specified as
covered under this Plan.
(30) Obesity. Care and treatment of obesity, weight loss or dietary control whether or not it is, in any case, a part of
the treatment plan for another Sickness.
38
(31) Occupational. Care and treatment of an Injury or Sickness that is occupational -- that is, arises from work for
wage or profit including self-employment.
(32) Personal comfort items. Personal comfort items or other equipment, such as, but not limited to, air
conditioners, air -purification units, humidifiers, electric heating units, orthopedic mattresses, blood pressure
instruments, scales, elastic bandages or stockings, nonprescription drugs and medicines, and first -aid supplies
and nonhospital adjustable beds.
(33) Plan design excludes. Charges excluded by the Plan design as mentioned in this document.
(34) Relative giving services. Professional services performed by a person who ordinarily resides in the Covered
Person's home or is related to the Covered Person as a Spouse, parent, child, brother or sister, whether the
relationship is by blood or exists in law.
(35) Replacement braces. Replacement of braces of the leg, arm, back, neck, or artificial arms or legs, unless there is
sufficient change in the Covered Person's physical condition to make the original device no longer functional.
(36) Routine care. Charges for routine or periodic examinations, screening examinations, evaluation procedures,
preventive medical care, or treatment or services not directly related to the diagnosis or treatment of a specific
Injury, Sickness or pregnancy -related condition which is known or reasonably suspected, unless such care is
specifically covered in the Schedule of Benefits.
(37) Services before or after coverage. Care, treatment or supplies for which a charge was incurred before a person
was Covered under this Plan or after coverage ceased under this Plan.
(38) Sex changes. Care, services or treatment for non -congenital transsexualism, gender dysphoria or sexual
reassignment or change. This exclusion includes medications, implants, hormone therapy, surgery, medical or
psychiatric treatment.
(39) Sleep disorders. Care and treatment for sleep disorders unless deemed Medically Necessary.
(40) Social Services. Charges for any medical social services, except as provided for under Hospice Care services.
(41) Smoking cessation. Care and treatment for smoking cessation programs, including smoking deterrent patches,
unless Medically Necessary due to a severe active lung Illness such as emphysema or asthma.
(42) Surgical sterilization reversal. Care and treatment for reversal of surgical sterilization.
(43) TMJ. Any treatment of the temporomandibular (jaw) joint, or jaw related neuromuscular conditions with oral
appliances or splints, physical therapy, or alteration of the occlusal relationship of the teeth or jaws to
eliminate pain or dysfunction of the temporomandibular joint and all adjacent muscles and nerves after the
Covered Person's 190'birthday. Orthognathic surgery for treatment of temporomandibular joint disorders and
conditions of temporomandibular joint disorders will still be eligible for coverage after the Covered Person's
19fl' birthday.
(44) Travel or accommodations. Charges for travel or accommodations, whether or not recommended by a
Physician, except for ambulance charges as defined as a covered expense.
(45) War. Any loss that is due to a declared or undeclared act of war.
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DENTAL BENEFITS
This benefit applies when covered dental charges are incurred by a person while covered under this Plan.
DEDUCTIBLE
Deductible Amount. This is an amount of dental charges for which no benefits will be paid. Before benefits can be paid in a
Calendar Year, a Covered Person must meet the deductible shown in the Schedule of Benefits.
Deductible Three Month Carryover. Covered expenses incurred in, and applied toward the individual deductible in October,
November and December will be applied toward the individual deductible in the next Calendar Year.
Family Unit Limit. When the dollar amount shown in the Schedule of Benefits has been incurred by members of a
Family Unit toward their Calendar Year deductibles, the deductibles of all members of that Family Unit will be
considered satisfied for that year.
BENEFIT PAYMENT
Each Calendar Year benefits will be paid to a Covered Person for the dental charges in excess of the deductible amount.
Payment will be made at the rate shown under Dental Percentage Payable in the Schedule of Benefits. No benefits will be
paid in excess of the Maximum Benefit Amount.
MA3MVIUM BENEFIT AMOUNT
The Maximum dental benefit amount is shown in the Schedule of Benefits.
DENTAL CHARGES
Dental charges are the Usual and Reasonable Charges made by a Dentist or other Physician for necessary care, appliances
or other dental material listed as a covered dental service.
A dental charge is incurred on the date the service or supply for which it is made is performed or furnished. However, there
are times when one overall charge is made for all or part of a course of treatment. In this case, the Claims Supervisor will
apportion that overall charge to each of the separate visits or treatments. The pro rata charge will be considered to be
incurred as each visit or treatment is completed.
COVERED DENTAL SERVICES
Class A Services:
Preventive and Diagnostic Dental Procedures
The limits on Class A services are for routine services. If dental need is present, this Plan will consider for
reimbursement services performed more frequently than the limits shown.
(1) Routine oral exams. Limit of 2 per Covered Person each Calendar Year.
(2) Professional cleaning. Limit of 2 per Covered Person each Calendar Year.
(3) One bitewing x-ray series every 6 months.
(4) One full mouth x-ray every 36 months.
(5) Fluoride treatments for covered Dependent children under age 19. Limit of 2 fluoride treatments per Covered
Person each Calendar Year.
40
(6) Emergency palliative treatment for pain.
(7) Sealants on the occlusal surface of a permanent posterior tooth (once per Lifetime per tooth) for Dependent
children under age 14.
Class B Services:
Basic Dental Procedures
(1) Dental x-rays not included in Class A.
(2) Oral surgery. Oral surgery is limited to removal of teeth, preparation of the mouth for dentures and removal of
tooth -generated cysts of less than 1/4 inch.
(3) Periodontics (gum treatments).
(4) Endodontics (root canals).
(5) Extractions. This service includes local anesthesia and routine post -operative care.
(6) Space maintainers for Covered Persons under 19 years of age.
(7) Recementing bridges, crowns or inlays.
(S) Fillings, other than gold.
(9) General anesthetics, upon demonstration of Medical Necessity.
(10) Antibiotic drugs.
Class C Services:
Major Dental Procedures
(1) Gold restorations, including inlays, onlays and foil fillings. The cost of gold restorations in excess of the cost
for amalgam, synthetic porcelain or plastic materials will be included only when the teeth must be restored with
gold.
(2) Installation of crowns.
(3) Installing precision attachments for removable dentures.
(4) Installing partial, full or removable dentures to replace one or more natural teeth. This service also includes all
adjustments made during 6 months following the installation.
(5) Addition of clasp or rest to existing partial removable dentures.
(6) Initial installation of fixed bridgework to replace one or more natural teeth.
(7) Repair of crowns, bridgework and removable dentures.
(S) Rebasing or relining of removable dentures. Limit 1 service every 36 months.
(9) Replacing an existing removable partial or full denture or fixed bridgework; adding teeth to an existing
removable partial denture; or adding teeth to existing bridgework to replace newly extracted natural teeth.
However, this item will apply only if one of these tests is met:
(a) The existing denture or bridgework was installed at least five years prior to its replacement and cannot
currently be made serviceable.
41
(b) The existing denture is of an immediate temporary nature. Further, replacement by permanent dentures
is required and must take place within 12 months from the date the temporary denture was installed.
Class D Services:
Orthodontic Treatment and Appliances
This is treatment to move teeth by means of appliances to correct a handicapping malocclusion of the mouth.
These services are available for Covered Persons under age 25 and include preliminary study, including x-rays,
diagnostic casts and treatment plan, active treatments and retention appliance.
Payments for comprehensive full -banded orthodontic treatments are made in installments.
PREDETERMINATION OF BENEFITS
Before starting a dental treatment for which the charge is expected to be $300 or more, a predetermination of benefits form
must be submitted.
A regular dental claim form is used for the predetermination of benefits. The covered Employee fills out the Employee
section of the form and then gives the form to the Dentist.
The Dentist must itemize all recommended services and costs and attach all supporting x-rays to the form.
The Dentist should send the form to the Claims Supervisor at this address:
American Administrative Group, Inc.
P.O. Box 53070
Lubbock, Texas 79453
1-800-658-9777
The Claims Supervisor will notify the Dentist of the benefits payable under the Plan. The Covered Person and the Dentist
can then decide on the course of treatment, knowing in advance how much the Plan will pay.
If a description of the procedures to be performed, x-rays and an estimate of the Dentist's fees are not submitted in advance,
the Plan reserves the right to make a determination of benefits payable taking into account alternative procedures, services
or courses of treatment, based on accepted standards of dental practice. If verification of necessity of dental services cannot
reasonably be made, the benefits may be for a lesser amount than would otherwise have been payable.
Many dental conditions can be treated in more than one way. This Plan has an "alternate treatment" clause which governs
the amount of benefits the Plan will pay for treatments covered under the Plan. If a patient chooses a more expensive
treatment than is needed to correct a dental problem according to accepted standards of dental practice, the benefit payment
will be based on the cost of the treatment which provides professionally satisfactory results at the most cost-effective level.
For example, if a regular amalgam filling is sufficient to restore a tooth to health, and the patient and the Dentist decide to use
a gold filling, the Plan will base its reimbursement on the Usual and Reasonable Charge for an amalgam filling. The patient
will pay the difference in cost.
EXCLUSIONS
A charge for the following is not covered:
(1) Administrative costs. Administrative costs of completing claim forms or reports or for providing dental
records.
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(2) Broken appointments. Charges for broken or missed dental appointments.
(3) Crowns. Crowns for teeth that are restorable by other means or for the purpose of Periodontal Splinting.
(4) Excluded under Medical. Services that are excluded under Medical Plan Exclusions.
(5) Hygiene. Oral hygiene, plaque control programs or dietary instructions.
(6) Implants. Implants, including any appliances and/or crowns and the surgical insertion or removal of implants.
(7) Medical services. Services that, to any extent, are payable under any medical expense benefits of the Plan.
(8) No listing. Services which are not included in the list of covered dental services.
(9) Orthognathic surgery. Surgery to correct malpositions in the bones of the jaw.
(10) Personalization. Personalization of dentures.
(11) Replacement. Replacement of lost or stolen appliances.
(12) Splinting. Crowns, fillings or appliances that are used to connect (splint) teeth, or change or alter the way the
teeth meet, including altering the vertical dimension, restoring the bite (occlusion) or are cosmetic.
43
HOW TO SUBMIT A CLAIM
Benefits under this Plan shall be paid only if the Plan Administrator decides in its discretion that a Covered Person is
entitled to them.
When a Covered Person has a Claim to submit for payment that person must:
(1) Obtain and complete a group claim transmittal form from the Personnel Office or the Plan Administrator.
(2) Complete the Employee portion of the form. ALL QUESTIONS MUST BE ANSWERED.
(3) Have the Physician or Dentist complete the provider's portion of the form.
(4) For Plan reimbursements, attach bills for services rendered. ALL BILLS MUST SHOW:
- Name of Plan
- Employee's name
- Name of patient
- Name, address, telephone number of the provider of care
- Diagnosis
- Type of services rendered, with diagnosis and/or procedure codes
- Date of services
- Charges
(5) Send the above to the Claims Supervisor at this address:
American Administrative Group, Inc.
P.O. Box 53070
Lubbock, Texas 79453
I-800-658-9777
WHEN CLAIMS SHOULD BE FILED
Claims should be filed with the Claims Supervisor within 365 days of the date charges for the service were incurred. Benefits
are based on the Plan's provisions at the time the charges were incurred. Claims filed later than that date may be declined or
reduced unless:
(a) it's not reasonably possible to submit the claim in that time
The Claims Supervisor will determine if enough information has been submitted to enable proper consideration of the claim.
If not, more information may be requested from the claimant. The Plan reserves the right to have a Plan Participant seek a
second medical opinion.
CLAIMS PROCEDURE
Following is a description of how the Plan processes Claims for benefits. A Claim is defined as any request for a Plan benefit,
made by a claimant or by a representative of a claimant, that complies with the Plan's reasonable procedure for making
benefit Claims. The times listed are maximum times only. A period of time begins at the time the Claim is filed. Decisions will
be made within a reasonable period of time appropriate to the circumstances. "Days" means calendar days.
There are different kinds of Claims and each one has a specific timetable for either approval, payment, request for further
information, or denial of the Claim. If you have any questions regarding this procedure, please contact the Plan
Administrator.
44
The definitions of the types of Claims are:
Urgent Care Claim
A Claim involving Urgent Care is any Claim for medical care or treatment where using the timetable for a non -urgent care
determination could seriously jeopardize the life or health of the claimant; or the ability of the claimant to regain maximum
function; or in the opinion of the attending or consulting Physician, would subject the claimant to severe pain that could not
be adequately managed without the care or treatment that is the subject of the Claim.
A Physician with knowledge of the claimant's medical condition may determine if a Claim is one involving Urgent Care. If
there is no such Physician, an individual acting on behalf of the Plan applying the judgment of a prudent layperson who
possesses an average knowledge of health and medicine may make the determination.
In the case of a Claim involving Urgent Care, the following timetable applies:
Notification to claimant of benefit determination
72 hours
Insufficient information on the Claim, or failure to follow the Plan's procedure for filing a Claim:
Notification to claimant, orally or in writing 24 hours
Response by claimant, orally or in writing 48 hours
Benefit determination, orally or in writing 48 hours
Ongoing courses of treatment, notification of:
Reduction or termination before the end of treatment 72 hours
Determination as to extending course of treatment 24 hours
If there is an adverse benefit determination on a Claim involving Urgent Care, a request for an expedited appeal may be
submitted orally or in writing by the claimant. All necessary information, including the Plan's benefit determination on
review, may be transmitted between the Plan and the claimant by telephone, facsimile, or other similarly expeditious method.
Pre -Service Claim
A Pre -Service Claim means any Claim for a benefit under this Plan where the Plan conditions receipt of the benefit, in whole
or in part, on approval in advance of obtaining medical care. These are, for example, Claims subject to pre -certification.
Please see the Cost Management section of this booklet for further information about Pre -Service Claims.
In the case of a Pre -Service Claim, the following timetable applies:
Notification to claimant of benefit determination 15 days
Extension due to matters beyond the control of the Plan 15 days
Insufficient information on the Claim:
Notification of 15 days
Response by claimant 45 days
Notification, orally or in writing, of failure to follow the Plan's 5 days
procedures for filing a Claim
45
Ongoing courses of treatment:
Reduction or termination before the end of the treatment
Request to extend course of treatment
Review of adverse benefit determination
Reduction or termination before the end of the treatment
Request to extend course of treatment
Post -Service Claim
15 days
15 days
15 days per benefit appeal
15 days
15 days
A Post -Service Claim means any Claim for a Plan benefit that is not a Claim involving Urgent Care or a Pre -Service Claim; in
other words, a Claim that is a request for payment under the Plan for covered medical services already received by the
claimant.
In the case of a Post -Service Claim, the following timetable applies:
Notification to claimant of benefit determination 30 days
Extension due to matters beyond the control of the Plan 15 days
Extension due to insufficient information on the Claim 15 days
Response by claimant following notice of insufficient 45 days
information
Review of adverse benefit determination 30 days per benefit appeal
Notice to claimant of adverse benefit determinations
Except with Urgent Care Claims, when the notification may be orally followed by written or electronic notification within
three days of the oral notification, the Plan Administrator shall provide written or electronic notification of any adverse
benefit determination. The notice will state, in a manner calculated to be understood by the claimant:
(1) The specific reason or reasons for the adverse determination.
(2) Reference to the specific Plan provisions on which the determination was based.
(3) A description of any additional material or information necessary for the claimant to perfect the Claim and an
explanation of why such material or information is necessary.
(4) A description of the Plan's review procedures and the time limits applicable to such procedures. This will
include a statement of the claimant's right to bring a civil action under section 502 of ERISA following an
adverse benefit determination on review.
(5) A statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and
copies of, all documents, records, and other information relevant to the Claim.
(6) If the adverse benefit determination was based on an internal rule, guideline, protocol, or other similar criterion,
the specific rule, guideline, protocol, or criterion will be provided free of charge. If this is not practical, a
statement will be included that such a rule, guideline, protocol, or criterion was relied upon in making the
adverse benefit determination and a copy will be provided free of charge to the claimant upon request.
46
(7) If the adverse benefit determination is based on the Medical Necessity or Experimental or Investigational
treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the determination,
applying the terms of the Plan to the claimant's medical circumstances, will be provided. If this is not practical,
a statement will be included that such explanation will be provided free of charge, upon request.
Appeals
When a claimant receives an adverse benefit determination, the claimant has 180 days following receipt of the notification in
which to appeal the decision. A claimant may submit written comments, documents, records, and other information relating
to the Claim. If the claimant so requests, he or she will be provided, free of charge, reasonable access to, and copies of, all
documents, records, and other information relevant to the Claim.
The period of time within which a benefit determination on review is required to be made shall begin at the time an appeal is
filed in accordance with the procedures of the Plan. This timing is without regard to whether all the necessary information
accompanies the filing.
A document, record, or other information shall be considered relevant to a Claim if it:
(1) was relied upon in making the benefit determination;
(2) was submitted, considered, or generated in the course of making the benefit determination, without regard to
whether it was relied upon in making the benefit determination;
(3) demonstrated compliance with the administrative processes and safeguards designed to ensure and to verify
that benefit determinations are made in accordance with Plan documents and Plan provisions have been
applied consistently with respect to all claimants; or
(4) constituted a. statement of policy or guidance with respect to the Plan concerning the denied treatment option
or benefit.
The review shall take into account all comments, documents, records, and other information submitted by the claimant
relating to the Claim, without regard to whether such information was submitted or considered in the initial benefit
determination. The review will not afford deference to the initial adverse benefit determination and will be conducted by a
fiduciary of the Plan who is neither the individual who made the adverse determination nor a subordinate of that individual.
If the determination was based on a medical judgment, including determinations with regard to whether a particular
treatment, drug, or other item is Experimental, Investigational, or not Medically Necessary or appropriate, the fiduciary shall
consult with a health care professional who was not involved in the original benefit determination. This health care
professional will have appropriate training and experience in the field of medicine involved in the medical judgment.
Additionally, medical or vocational experts whose advice was obtained on behalf of the Plan in connection with the initial
determination will be identified.
47
COORDINATION OF BENEFITS
Coordination of the benefit plans. Coordination of benefits sets out rules for the order of payment of Covered Charges when
two or more plans — including Medicare -- are paying. When a Covered Person is covered by this Plan and another plan, or
the Covered Person's Spouse is covered by this Plan and by another plan or the couple's Covered children are covered
under two or more plans, the plans will coordinate benefits when a claim is received.
The plan that pays first according to the rules will pay as if there were no other plan involved. The secondary and
subsequent plans will pay the balance due up to 100% of the total allowable expenses.
Benefit plan. This provision will coordinate the medical and dental benefits of a benefit plan. The term benefit plan means
this Plan or any one of the following plans:
(1) Group or group -type plans, including franchise or blanket benefit plans.
(2) Blue Cross and Blue Shield group plans.
(3) Group practice and other group prepayment plans.
(4) Federal government plans or programs. This includes Medicare.
(5) Other plans required or provided by law. This does not include Medicaid or any benefit plan like it that, by its
terms, does not allow coordination.
(6) No Fault Auto Insurance, by whatever name it is called, when not prohibited by law.
Allowable charge. For a charge to be allowable it must be a Usual and Reasonable Charge and at least part of it must be
covered under this Plan.
In the case of HMO (Health Maintenance Organization) or other in -network only plans: This Plan will not consider any
charges in excess of what an HMO or network provider has agreed to accept as payment in full. Also, when an HMO or
network plan is primary and the Covered Person does not use an HMO or network provider, this Plan will not consider as an
allowable charge any charge that would have been covered by the HMO or network plan had the Covered Person used the
services of an HMO or network provider.
In the case of service type plans where services are provided as benefits, the reasonable cash value of each service will be
the allowable charge.
Automobile limitations. When medical payments are available under vehicle insurance, the Plan shall pay excess benefits
only, without reimbursement for vehicle plan deductibles. This Plan shall always be considered the secondary carrier
regardless of the individual's election under PIP (personal injury protection) coverage with the auto carrier.
Benefit plan payment order. When two or more plans provide benefits for the same allowable charge, benefit payment will
follow these rules.
(1) Plans that do not have a coordination provision, or one like it, will pay first. Plans with such a provision will be
considered after those without one.
(2) Plans with a coordination provision will pay their benefits up to the Allowable Charge:
(a) The benefits of the plan which covers the person directly (that is, as an employee, member or
subscriber) ("Plan A") are determined before those of the plan which covers the person as a
dependent ("Plan B").
(b) The benefits of a benefit plan which covers a person as an Employee who is neither laid off nor retired
are determined before those of a benefit plan which covers that person as a laid -off or Retired
48
Employee. The benefits of a benefit plan which covers a person as a Dependent of an Employee who
is neither laid off nor retired are determined before those of a benefit plan which covers a person as a
Dependent of a laid off or Retired Employee. If the other benefit plan does not have this rule, and if, as
a result, the plans do not agree on the order of benefits, this rule does not apply.
(c) The benefits of a benefit plan which covers a person as an Employee who is neither laid off nor retired
or a Dependent of an Employee who is neither laid off nor retired are determined before those of a
plan which covers the person as a COBRA beneficiary.
(d) When a child is covered as a Dependent and the parents are not separated or divorced, these rules
will apply:
(i) The benefits of the benefit plan of the parent whose birthday falls earlier in a year are
determined before those of the benefit plan of the parent whose birthday falls later in that
year;
(ii) If both parents have the same birthday, the benefits of the benefit plan which has covered
the patient for the longer time are determined before those of the benefit plan which covers
the other parent.
(e) When a child's parents are divorced or legally separated, these rules will apply:
(i) This rule applies when the parent with custody of the child has not remarried. The benefit
plan of the parent with custody will be considered before the benefit plan of the parent
without custody.
(ii) This rule applies when the parent with custody of the child has remarried. The benefit plan of
the parent with custody will be considered first. The benefit plan of the stepparent that
covers the child as a Dependent will be considered next. The benefit plan of the parent
without custody will be considered last.
(iii) This rule will be in place of items (i) and (ii) above when it applies. A court decree may state
which parent is financially responsible for medical and dental benefits of the child. In this
case, the benefit plan of that parent will be considered before other plans that cover the child
as a Dependent.
(iv) If the specific terms of the court decree state that the parents shall share joint custody,
without stating that one of the parents is responsible for the health care expenses of the
child, the plans covering the child shall follow the order of benefit determination rules
outlined above when a child is covered as a Dependent and the parents are not separated or
divorced.
(v) For parents who were never married to each other, the rules apply as set out above as long
as paternity has been established.
(f) If there is still a conflict after these rules have been applied, the benefit plan which has covered the
patient for the longer time will be considered first. When there is a conflict in coordination of benefit
rules, the Plan will never pay more than 50% of allowable charges when paying secondary.
(3) Medicare will pay primary, secondary or last to the extent stated in federal law. When Medicare is to be the
primary payer, this Plan will base its payment upon benefits that would have been paid by Medicare under
Parts A and B, regardless of whether or not the person was enrolled under both of these parts.
(4) If a Plan Participant is under a disability extension from a previous benefit plan, that benefit plan will pay first
and this Plan will pay second.
49
Claims determination period. Benefits will be coordinated on a Calendar Year basis. This is called the claims determination
period.
Right to receive or release necessary information. To make this provision work, this Plan may give or obtain needed
information from another insurer or any other organization or person. This information may be given or obtained without the
consent of or notice to any other person. A Covered Person will give this Plan the information it asks for about other plans
and their payment of allowable charges.
Facility of payment. This Plan may repay other plans for benefits paid that the Plan Administrator determines it should have
paid. That repayment will count as a valid payment under this Plan.
Right of recovery. This Plan may pay benefits that should be paid by another benefit plan. In this case this Plan may recover
the amount paid from the other benefit plan or the Covered Person. That repayment will count as a valid payment under the
other benefit plan.
Further, this Plan may pay benefits that are later found to be greater than the allowable charge. In this case, this Plan may
recover the amount of the overpayment from the source to which it was paid.
50
THIRD PARTY RECOVERY PROVISION
RIGHT OF SUBROGATION AND REFUND
When this provision applies. The Covered Person may incur medical or dental charges due to Injuries which may be caused
by the act or omission of a Third Party or a Third Party may be responsible for payment. In such circumstances, the Covered
Person may have a claim against that Third Party, or insurer, for payment of the medical or dental charges. Accepting
benefits under this Plan for those incurred medical or dental expenses automatically assigns to the Plan any rights the
Covered Person may have to Recover payments from any Third Party or insurer. This Subrogation right allows the Plan to
pursue any claim which the Covered Person has against any Third Party, or insurer, whether or not the Covered Person
chooses to pursue that claim. The Plan may make a claim directly against the Third Party or insurer, but in any event, the
Plan has a lien on any amount Recovered by the Covered Person whether or not designated as payment for medical
expenses. This lien shall remain in effect until the Plan is repaid in full.
The Covered Person:
(1) automatically assigns to the Plan his or her rights against any Third Party or insurer when this provision
applies; and
(2) must repay to the Plan the benefits paid on his or her behalf out of the Recovery made from the Third Party or
insurer.
In addition to, neither the Plan nor the Company shall be responsible for any of the Covered Individual's
attorney's fees or the costs of the Covered Individual's litigation.
Amount subject to Subrogation or Refund. The Covered Person agrees to recognize the Plan's right to Subrogation and
reimbursement. These rights provide the Plan with a 100%, first dollar priority over any and all Recoveries and funds paid by
a Third Party to a Covered Person relative to the Injury or Sickness, including a priority over any claim for non -medical or
dental charges, attorney fees, or other costs and expenses. Accepting benefits under this Plan for those incurred medical or
dental expenses automatically assigns to the Plan any and all rights the Covered Person may have to recover payments from
any Responsible Third Party. Further, accepting benefits under this Plan for those incurred medical or dental expenses
automatically assigns to the Plan the Covered Person's Third Party Claims.
Notwithstanding its priority to funds, the Plan's Subrogation and Refund rights, as well as the rights assigned to it, are
limited to the extent to which the Plan has made, or will make, payments for medical or dental charges as well as any costs
and fees associated with the enforcement of its rights under the Plan. The Plan reserves the right to be reimbursed for its
court costs and attorneys' fees if the Plan needs to file suit in order to Recover payment for medical or dental expenses from
the Covered Person. Also, the Plan's right to Subrogation still applies if the Recovery received by the Covered Person is less
than the claimed damage, and, as a result, the claimant is not made whole. In addition, the Plan shall not be responsible for
any of the Covered Person's attorney's fees or the costs of the Covered Person's litigation.
When a right of Recovery exists, the Covered Person will execute and deliver all required instruments and papers as well as
doing whatever else is needed to secure the Plan's right of Subrogation as a condition to having the Plan make payments. In
addition, the Covered Person will do nothing to prejudice the right of the Plan to Subrogate.
Conditions Precedent to Coverage. The Plan shall have no obligation whatsoever to pay medical or dental benefits to a
Covered Person if a Covered Person refuses to cooperate with the Plan's reimbursement and Subrogation rights or refuses to
execute and deliver such papers as the Plan may require in furtherance of its reimbursement and Subrogation rights. Further,
in the event the Covered Person is a minor, the Plan shall have no obligation to pay any medical or dental benefits incurred
on account of Injury or Sickness caused by a responsible Third Party until after the Covered Person or his authorized legal
representative obtains valid court recognition and approval of the Plan's 100%, first dollar reimbursement and Subrogation
rights on all Recoveries, as well as approval for the execution of any papers necessary for the enforcement thereof, as
described herein.
Defined terms: "Covered Person" means anyone covered under the Plan, including minor dependents.
51
"Recover," "Recovered," "Recovery" or "Recoveries" means all monies paid to the Covered Person by way of judgment,
settlement, or otherwise to compensate for all losses caused by the Injury or Sickness, whether or not said losses reflect
medical or dental charges covered by the Plan. "Recoveries" further includes, but is not limited to, recoveries for medical or
dental expenses, attorneys' fees, costs and expenses, pain and suffering, loss of consortium, wrongful death, lost wages and
any other recovery of any form of damages or compensation whatsoever.
"Refund" means repayment to the Plan for medical or dental benefits that it has paid toward care and treatment of the Injury
or Sickness.
"Subrogation" means the Plan's right to pursue and place a lien upon the Covered Person's claims for medical or dental
charges against the other person.
"Third Party" means any Third Party including another person or a business entity.
Recovery from another plan under which the Covered Person is covered. This right of Refund also applies when a Covered
Person Recovers under an uninsured or underinsured motorist plan (which will be treated as Third Party coverage when
reimbursement or Subrogation is in order), homeowner's plan, renter's plan, medical malpractice plan or any liability plan.
Rights of Plan Administrator. The Plan Administrator has a right to request reports on and approve of all settlements.
52
COBRA CONTINUATION OPTIONS
A federal law, the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), requires that most employers
sponsoring a group health plan ("Plan") offer Employees and their families covered under their health plan the opportunity
for a temporary extension of health coverage (called "COBRA continuation coverage") in certain instances where coverage
under the Plan would otherwise end. This notice is intended to inform Plan Participants and beneficiaries, in summary
fashion, of the rights and obligations under the continuation coverage provisions of COBRA, as amended and reflected in
final and proposed regulations published by the Department of the Treasury. This notice is intended to reflect the law and
does not grant or take away any rights under the law. Complete instructions on COBRA, as well as election forms and other
information, will be provided by the Plan Administrator to Plan Participants who become Qualified Beneficiaries under
COBRA.
Note: Special COBRA rights apply to employees who have been terminated or experienced a reduction of hours and who
qualify for a trade readjustment allowance or alternative trade adjustment assistance under a federal law called the Trade Act
of 1974. These employees must have made petitions for certification to apply for TAA on or after November 4, 2002.
The employees, if they do not already have COBRA coverage, are entitled to a second opportunity to elect COBRA
coverage for themselves and certain family members, but only within a limited period of 60 days or less and only during the
six months immediately after their group health plan coverage ended.
Any employee who qualifies or may qualify for assistance under this special provision should contact his or her Plan
Administrator for further information.
What is COBRA continuation coverage? COBRA continuation coverage is group health plan, coverage that an employer
must offer to certain Plan Participants and their eligible family members (called "Qualified Beneficiaries") at group rates for
up to a statutory -mandated maximum period of time or until they become ineligible for COBRA continuation coverage,
whichever occurs first. The right to COBRA continuation coverage is triggered by the occurrence of one of certain
enumerated events that result in the loss of coverage under the terms of the employer's Plan (the "Qualifying Event"). The
coverage must be identical to the Plan coverage that the Qualified Beneficiary had immediately before the Qualifying Event,
or if the coverage has been changed, the coverage must be identical to the coverage provided to similarly situated active
employees who have not experienced a Qualifying Event (in other words, similarly situated nonCOBRA beneficiaries).
Who is a Qualified Beneficiary? In general, a Qualified Beneficiary is:
(i) Any individual who, on the day before a Qualifying Event, is covered under a Plan by virtue of being on that
day either a covered Employee, the Spouse of a covered Employee, or a Dependent child of a covered
Employee. If, however, an individual is denied or not offered coverage under the Plan under circunstances in
which the denial or failure to offer constitutes a violation of applicable law, then the individual will be
considered to have had the Plan coverage and will be considered a Qualified Beneficiary if that individual
experiences a Qualifying Event.
00 Any child who is born to or placed for adoption with a covered Employee during a period of COBRA
continuation coverage. If, however, an individual is denied or not offered coverage under the Plan under
circumstances in which the denial or failure to offer constitutes a violation of applicable law, then the
individual will be considered to have had the Plan coverage and will be considered a Qualified Beneficiary if
that individual experiences a Qualifying Event.
(iii) A covered Employee who retired on or before the date of substantial elimination of Plan coverage which is the
result of a bankruptcy proceeding under Title 1 t of the U.S. Code with respect to the Employer, as is the
Spouse, surviving Spouse or Dependent child of such a covered Employee if, on the day before the
bankruptcy Qualifying Event, the Spouse, surviving Spouse or Dependent child was a beneficiary under the
Plan.
The term "covered Employee" includes not only common-law employees (whether part-time or full-time) but also any
individual who is provided coverage under the Plan due to his or her performance of services for the employer sponsoring
the Plan (e.g., self-employed individuals, independent contractor, or corporate director).
53
An individual is not a Qualified Beneficiary if the individual's status as a covered Employee is attributable to a period in
which the individual was a nonresident alien who received from the individual's Employer no earned income that constituted
income from sources within the United States. If, on account of the preceding reason, an individual is not a qualified
beneficiary, then a Spouse or Dependent child of the individual is not considered a Qualified Beneficiary by virtue of the
relationship to the individual. A domestic partner is not a Qualified Beneficiary.
Each Qualified Beneficiary (including a child who is born to or placed for adoption with a covered Employee during a period
of COBRA continuation coverage) must be offered the opportunity to make an independent election to receive COBRA
continuation coverage.
What is a Qualifying Event? A Qualifying Event is any of the following if the Plan provided that the Plan participant would
lose coverage (i.e., cease to be covered under the same terms and conditions as in effect immediately before the Qualifying
Event) in the absence of COBRA continuation coverage:
W The death of a covered Employee.
00 The termination (other than by reason of the Employee's gross misconduct), or reduction of hours, of a
covered Employee's employment.
(iii) The divorce or legal separation of a covered Employee from the Employee's Spouse.
(iv) A covered Employee's enrollment in the Medicare program.
(v) A Dependent child's ceasing to satisfy the Plan's requirements for a Dependent child (e.g., attainment of the
maximum age for dependency under the Plan).
(A) A proceeding in bankruptcy under Title 11 of the U.S. Code with respect to an Employer from whose
employment a covered Employee retired at any time.
If the Qualifying Event causes the covered Employee, or the Spouse or a Dependent child of the covered Employee, to cease
to be covered under the Plan under the same terms and conditions as in effect immediately before the Qualifying Event (or in
the case of the bankruptcy of the Employer, any substantial elimination of coverage under the Plan occurring within 12
months before or after the date the bankruptcy proceeding commences), the persons losing such coverage become Qualified
Beneficiaries under COBRA if all the other conditions of the COBRA law are also met. Any increase in contribution that
must be paid by a covered Employee, or the Spouse, or a Dependent child of the covered Employee, for coverage under the
Plan that results from the occurrence of one of the events listed above is a loss of coverage.
The taking of leave under the Family and Medical Leave Act of 1993 ("FMLA") does not constitute a Qualifying Event. A
Qualifying Event occurs, however, if an Employee does not return to employment at the end of the FMLA leave and all other
COBRA continuation coverage conditions are present. If a Qualifying Event occurs, it occurs on the last day of FMLA leave
and the applicable maximum coverage period is measured from this date (unless coverage is lost at a later date and the Plan
provides for the extension of the required periods, in which case the maximum coverage date is measured from the date when
the coverage is lost.) Note that the covered Employee and family members will be entitled to COBRA continuation coverage
even if they failed to pay the employee portion of premiums for coverage under the Plan during the FMLA leave.
What is the election period and how long must it last? An election period is the time period within which the Qualified
Beneficiary can elect COBRA continuation coverage under the Employer's Plan. A Plan can condition availability of COBRA
continuation coverage upon the timely election of such coverage. An election of COBRA continuation coverage is a timely
election if it is made during the election period. The election period must begin not later than the date the Qualified
Beneficiary would lose coverage on account of the Qualifying Event and must not end before the date that is 60 days after
the later of the date the Qualified Beneficiary would lose coverage on account of the Qualifying Event or the date notice is
provided to the Qualified Beneficiary of her or his right to elect COBRA continuation coverage.
Is a covered Employee or Qualified Beneficiary responsible for informing the Plan Administrator of the occurrence of a
Qualifying Event? In general, the Employer or Plan Administrator must determine when a Qualifying Event has occurred.
»�
However, each covered Employee or Qualified Beneficiary is responsible for notifying the Plan Administrator of the
occurrence of a Qualifying Event that is:
(i) A Dependent child's ceasing to be a Dependent child under the generally applicable requirements of the Plan.
(ii) The divorce or legal separation of the covered Employee.
The Plan is not required to offer the Qualified Beneficiary an opportunity to elect COBRA continuation coverage if the
notice is not provided to the Plan Administrator within 60 days after the later of. the date of the Qualifying Event, or the date
the Qualified Beneficiary would lose coverage on account of the Qualifying Event.
Is a waiver before the end of the election period effective to end a Qualified Beneficiary's election rights? If, during the
election period, a Qualified Beneficiary waives COBRA continuation coverage, the waiver can be revoked at any time before
the end of the election period. Revocation of the waiver is an election of COBRA continuation coverage. However, if a
waiver is later revoked, coverage need not be provided retroactively (that is, from the date of the loss of coverage until the
waiver is revoked). Waivers and revocations of waivers are considered made on the date they are sent to the Employer or
Plan Administrator, as applicable.
When may a Qualified Beneficiary's COBRA continuation coverage be terminated? During the election period, a Qualified
Beneficiary may waive COBRA continuation coverage. Except for an interruption of coverage in connection with a waiver,
COBRA continuation coverage that has been elected for a Qualified Beneficiary must extend for at least the period
beginning on the date of the Qualifying Event and ending not before the earliest of the following dates:
(i) The last day of the applicable maximum coverage period.
(ii) The first day for which Timely Payment is not made to the Plan with respect to the Qualified Beneficiary.
(iii) The date upon which the Employer ceases to provide any group health plan (including successor plans) to any
Employee.
(iv) The date, after the date of the election, that the Qualified Beneficiary first becomes covered under any other
Plan that does not contain any exclusion or limitation with respect to any pre-existing condition, other than
such an exclusion or limitation that does not apply to, or is satisfied by, the Qualified Beneficiary.
(v) The date, after the date of the election, that the Qualified Beneficiary first enrolls in the Medicare program
(either part A or part B, whichever occurs earlier).
(4) In the case of a Qualified Beneficiary entitled to a disability extension, the later of:
(a) (i) 29 months after the date of the Qualifying Event, or (ii) the first day of the month that is more than
30 days after the date of a final determination under Title 11 or XVI of the Social Security Act that the
disabled Qualified Beneficiary whose disability resulted in the Qualified Beneficiary's entitlement to
the disability extension is no longer disabled, whichever is earlier; or
(b) the end of the maximum coverage period that applies to the Qualified Beneficiary without regard to the
disability extension.
The Plan can terminate for cause the coverage of a Qualified Beneficiary on the same basis that the Plan terminates for cause
the coverage of similarly situated nonCOBRA beneficiaries, for example, for the submission of a fraudulent claim.
In the case of an individual who is not a Qualified Beneficiary and who is receiving coverage under the Plan solely because
of the individual's relationship to a Qualified Beneficiary, if the Plan's obligation to make COBRA continuation coverage
available to the Qualified Beneficiary ceases, the Plan is not obligated to make coverage available to the individual who is
not a Qualified Beneficiary.
What are the maximum coverage periods for COBRA continuation coverage? The maximum coverage periods are based on
the type of the Qualifying Event and the status of the Qualified Beneficiary, as shown below.
55
(i) In the case of a Qualifying Event that is a termination of employment or reduction of hours of employment, the
maximum coverage period ends 18 months after the Qualifying Event if there is not a disability extension and 29
months after the Qualifying Event if there is a disability extension.
(ii) In the case of a covered Employee's enrollment in the Medicare program before experiencing a Qualifying
Event that is a termination of employment or reduction of hours of employment, the maximum coverage period
for Qualified Beneficiaries other than the covered Employee ends on the later of.
(a) 36 months after the date the covered Employee becomes enrolled in the Medicare program; or
(b) 18 months (or 29 months, if there is a disability extension) after the date of the covered Employee's
termination of employment or reduction of hours of employment.
(iii) In the case of a bankruptcy Qualifying Event, the maximum coverage period for a Qualified Beneficiary who is
the retired covered Employee ends on the date of the retired covered Employee's death. The maximum coverage
period for a Qualified Beneficiary who is the Spouse, surviving Spouse or Dependent child of the retired
covered Employee ends on the earlier of the date of the Qualified Beneficiary's death or the date that is 36
months after the death of the retired covered Employee.
(iv) In the case of a Qualified Beneficiary who is a child born to or placed for adoption with a covered Employee
during a period of COBRA continuation coverage, the maximum coverage period is the maximum coverage
period applicable to the Qualifying Event giving rise to the period of COBRA continuation coverage during
which the child was born or placed for adoption.
(v) In the case of any other Qualifying Event than that described above, the maximum coverage period ends 36
months after the Qualifying Event.
Under what circumstances can the maximum coverage period be expanded? If a Qualifying Event that gives rise to an 18-
month or 29-month maximum coverage period is followed, within that 18- or 29-month period, by a second Qualifying Event
that gives rise to a 36-months maximum coverage period, the original period is expanded to 36 months, but only for
individuals who are Qualified Beneficiaries at the time of both Qualifying Events. In no circumstance can the COBRA
maximum coverage period be expanded to more than 36 months after the date of the first Qualifying Event.
How does a Qualified Beneficiary become entitled to a disability extension? A disability extension will be granted if an
individual (whether or not the covered Employee) who is a Qualified Beneficiary in connection with the Qualifying Event
that is a termination or reduction of hours of a covered Employee's employment, is determined under Title II or XVI of the
Social Security Act to have been disabled at any time during the first 60 days of COBRA continuation coverage. To qualify
for the disability extension, the Qualified Beneficiary must also provide the Plan Administrator with notice of the disability
determination on a date that is both within 60 days after the date of the determination and before the end of the original 18-
month maximum coverage.
Can a Plan require payment for COBRA continuation coverage? Yes. For any period of COBRA continuationi coverage, a
Plan can require the payment of an amount that does not exceed 102% of the applicable premium except the Plan may require
the payment of an amount that does not exceed 150% of the applicable premium for any period of COBRA continuation
coverage covering a disabled qualified beneficiary that would not be required to be made available in the absence of a
disability extension. A group health plan can terminate a qualified beneficiary's COBRA continuation coverage as of the first
day of any period for which timely payment is not made to the Plan with respect to that qualified beneficiary.
Must the Plan allow payment for COBRA continuation coverage to be made in monthly installments? Yes. The Plan is also
permitted to allow for payment at other intervals.
What is Timely Payment for payment for COBRA continuation coverage? Timely Payment means payment that is made to
the Plan by the date that is 30 days after the first day of that period. Payment that is made to the Plan by a later date is also
considered Timely Payment if either under the terms of the Plan, covered Employees or Qualified Beneficiaries are allowed
until that later date to pay for their coverage for the period or under the terms of an arrangement between the Employer and
56
the entity that provides Plan benefits on the Employer's behalf, the Employer is allowed until that later date to pay for
coverage of similarly situated nonCOBRA beneficiaries for the period.
Notwithstanding the above paragraph, a Plan cannot require payment for any period of COBRA continuation coverage for a
Qualified Beneficiary earlier than 45 days after the date on which the election of COBRA continuation coverage is made for
that Qualified Beneficiary. Payment is considered made on the date on which it is sent to the Plan.
If Timely Payment is made to the Plan in an amount that is not significantly less than the amount the Plan requires to be paid
for a period of coverage, then the amount paid will be deemed to satisfy the Plan's requirement for the amount to be paid,
unless the Plan notifies the Qualified Beneficiary of the amount of the deficiency and grants a reasonable period of time for
payment of the deficiency to be made. A "reasonable period of time" is 30 days after the notice is provided. A shortfall in a
Timely Payment is not significant if it is no greater than the lesser of $50 or 10% of the required amount.
Must a qualified beneficiary be given the right to enroll in a conversion health plan at the end of the maximum coverage
period for COBRA continuation coverage? If a Qualified Beneficiary's COBRA continuation coverage under a group health
plan ends as a result of the expiration of the applicable maximum coverage period, the Plan must, during the 180- day period
that ends on that expiration date, provide the Qualified Beneficiary with the option of enrolling under a conversion health
plan if such an option is otherwise generally available to similarly situated nonCOBRA beneficiaries under the Plan. If such a
conversion option is not otherwise generally available, it need not be made available to Qualified Beneficiaries.
57
RESPONSIBILITIES FOR PLAN ADMINISTRATION
PLAN ADMINISTRATOR. City of Lubbock Employee Benefit Plan is the benefit plan of City of Lubbock, the Plan
Administrator, also called the Plan Sponsor. It is to be administered by the Plan Administrator in accordance with the
provisions of ERISA. An individual may be appointed by City of Lubbock to be Plan Administrator and serve at the
convenience of the Employer. If the Plan Administrator resigns, dies or is otherwise removed from the posiion, City of
Lubbock shall appoint a new Plan Administrator as soon as reasonably possible.
The Plan Administrator shall administer this Plan in accordance with its terms and establish its policies, interpretations,
practices, and procedures. It is the express intent of this Plan that the Plan Administrator shall have maximum legal
discretionary authority to construe and interpret the terms and provisions of the Plan, to make determinations regarding
issues which relate to eligibility for benefits, to decide disputes which may arise relative to a Plan Participant's rights, and to
decide questions of Plan interpretation and those of fact relating to the Plan. The decisions of the Plan Administrator will be
final and binding on all interested parties.
Service of legal process may be made upon the Plan Administrator,
DUTIES OF THE PLAN ADMINISTRATOR
(1) To administer the Plan in accordance with its terms.
(2) To interpret the Plan, including the right to remedy possible ambiguities, inconsistencies or omissions.
(3) To decide disputes which may arise relative to a Plan Participant's rights.
(4) To prescribe procedures for filing a claim for benefits and to review claim denials.
(5) To keep and maintain the Plan documents and all other records pertaining to the Plan.
(6) To appoint a Claims Supervisorto pay claims.
(7) To perform all necessary reporting as required by ERISA.
(S) To establish and communicate procedures to determine whether a medical child support order is qualified
under ERISA Sec. 609.
(9) To delegate to any person or entity such powers, duties and responsibilities as it deems appropriate.
PLAN ADMINISTRATOR COMPENSATION. The Plan Administrator serves without compensation; however, all expenses
for plan administration, including compensation for hired services, will be paid by the Plan.
FIDUCIARY. A fiduciary exercises discretionary authority or control over management of the Plan or the disposition of its
assets, renders investment advice to the Plan or has discretionary authority or responsibility in the administration of the
Plan.
FIDUCIARY DUTIES. A fiduciary must carry out his or her duties and responsibilities for the purpose of providing benefits
to the Employees and their Dependent(s), and defraying reasonable expenses of administering the Plan. These are duties
which must be carried out:
(1) with care, skill, prudence and diligence under the given circumstances that a prudent person, acting in a like
capacity and familiar with such matters, would use in a similar situation;
(2) by diversifying the investments of the Plan so as to minimize the risk of large losses, unless under the
circumstances it is clearly prudent not to do so; and
(3) in accordance with the Plan documents to the extent that they agree with ERISA.
58
THE NAMED FIDUCIARY. A "named fiduciary" is the one named in the Plan. A named fiduciary can appoint others to carry
out fiduciary responsibilities (other than as a trustee) under the Plan. These other persons become fiduciaries themselves
and are responsible for their acts under the Plan. To the extent that the named fiduciary allocates its responsibility to other
persons, the named fiduciary shall not be liable for any act or omission of such person unless either:
(1) the named fiduciary has violated its stated duties under ERISA in appointing the fiduciary, establishing the
procedures to appoint the fiduciary or continuing either the appointment or the procedures; or
(2) the named fiduciary breached its fiduciary responsibility under Section 405(a) of ERISA.
CLAIMS SUPERVISOR IS NOT A FIDUCIARY. A Claims Supervisor is not a fiduciary under the Plan by virtue of paying
claims in accordance with the Plan's rules as established by the Plan Administrator.
FUNDING THE PLAN AND PAYMENT OF BENEFITS
The cost of the Plan is funded as follows:
For Employee Coverage: Funding is derived solely from the funds of the Employer.
For Dependent Coverage: Funding is derived from contributions made by the covered Employees.
Benefits are paid directly from the Plan through the Claims Supervisor.
PLAN IS NOT AN EMPLOYMENT CONTRACT
The Plan is not to be construed as a contract for or of employment.
CLERICAL ERROR
Any clerical error by the Plan Administrator or an agent of the Plan Administrator in keeping pertinent records or a delay in
making any changes will not invalidate coverage otherwise validly in force or continue coverage validly terminated. An
equitable adjustment of contributions will be made when the error or delay is discovered.
If, due to a clerical error, an overpayment occurs in a Plan reimbursement amount, the Plan retains a contractual right to the
overpayment. The person or institution receiving the overpayment will be required to return the incorrect amount of money.
In the case of a Plan Participant, if it is requested, the amount of overpayment will be deducted from future benefits payable.
AMENDING AND TERMINATING THE PLAN
If the Plan is terminated, the rights of the Plan Participants are limited to expenses incurred before termination.
The Employer intends to maintain this Plan indefinitely; however, it reserves the right, at any time, to amend, suspend or
terminate the Plan in whole or in part. This includes amending the benefits under the Plan or the Trust agreement (if any).
CERTAIN PLAN PARTICIPANTS RIGHTS UNDER ERISA
Plan Participants in this Plan are entitled to certain rights and protections under the Employee Retirement Income Security
Act of 1974 (ERISA). ERISA specifies that all Plan Participants shall be entitled to:
Examine, without charge, at the Plan Administrator's office, all Plan documents and copies of all
documents governing the Plan, including a copy of the latest annual report (form 5500 series) filed by the
Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee
Benefits Security Administration.
Obtain copies of all Plan documents and other Plan information upon written request to the Plan
Administrator. The Plan Administrator may make a reasonable charge for the copies.
59
Continue health care coverage for a Plan Participant, Spouse, or other dependents if there is a loss of
coverage under the Plan as a result of a qualifying event. Employees or dependents may have to pay for
such coverage.
Review this summary plan description and the documents governing the Plan or the rules governing
COBRA continuation coverage rights.
Reduction or elimination of exclusionary periods of coverage for Pre -Existing Conditions under this group
health Plan, if an Employee or dependent has Creditable Coverage from another plan. The Employee or
dependent should be provided a certificate of Creditable Coverage, free of charge, from the group health
plan or health insurance issuer when coverage is lost under the plan, when a person becomes entitled to
elect COBRA continuation coverage, when COBRA continuation coverage ceases, if a person requests it
before losing coverage, or if a person requests it up to 24 months after losing coverage. Without evidence
of Creditable Coverage, a Plan Participant may be subject to a Pre -Existing Conditions exclusion for 12
months (18 months for Late Enrollees) after the Enrollment Date of coverage.
If a Plan Participant's claim for a benefit is denied or ignored, in whole or in part, the participant has a right to know why this
was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain
time schedules.
Under ERISA, there are steps a Plan Participant can take to enforce the above rights. For instance, if a Plan Participant
requests a copy of Plan documents or the latest annual report from the Plan and does not receive them within 30 days, he or
she may file suit in a federal court. In such a case, the court may require the Plan Administrator to provide the materials and
to pay the Plan Participant up to $110 a day until he or she receives the materials, unless the materials were not sent because
of reasons beyond the control of the Plan Administrator. If the Plan Participant has a claim for benefits which is denied or
ignored, in whole or in part, the participant may file suit in state or federal court.
In addition, if a Plan Participant disagrees with the Plan's decision or lack thereof concerning the qualified status of a medical
child support order, he or she may file suit in federal court.
In addition to creating rights for Plan Participants, ERISA imposes obligations upon the individuals who are responsible for
the operation of the Plan. The individuals who operate the Plan, called "fiduciaries" of the Plan, have a duty to do so
prudently and in the interest of the Plan Participants and their beneficiaries. No one, including the Employer or any other
person, may fire a Plan Participant or otherwise discriminate against a Plan Participant in any way to prevent the Plan
Participant from obtaining benefits under the Plan or from exercising his or her rights under ERISA.
If it should happen that the Plan fiduciaries misuse the Plan's money, or if a Plan Participant is discriminated against for
asserting his or her rights, he or she may seek assistance from the U.S. Department of Labor, or may file suit in a federal
court. The court will decide who should pay court costs and legal fees. If the Plan Participant is successful, the court may
order the person sued to pay these costs and fees. If the Plan Participant loses, the court may order him or her to pay these
costs and fees, for example, if it finds the claim or suit to be frivolous.
If the Plan Participant has any questions about the Plan, he or she should contact the Plan Administrator. If the Plan
Participant has any questions about this statement or his or her rights under ERISA or the Health Insurance Portability and
Accountability Act (HIPAA), that Plan Participant should contact either the nearest area office of the Employee Benefits
Security Administration, U.S. Department of Labor listed in the telephone directory or the Division of Technical Assistance
and Inquiries, Employee Benefits Security Administration, at 200 Constitution Avenue, N.W., Washington, DC 20210.
A
HIPAA PRIVACY RULE
The City of Lubbock Employee Benefit Plan ("Health Plan") complies with the requirements of the Health Insurance
Portability and Accountability Act ("HIPAA") and it's implementing regulations ("HIPAA Privacy Rule") by establishing
the extent to which the Plan Sponsor will receive, use and/or disclose Protected Health Information ("PHI").
(1) Health Plan's Designation of Person/Entity to Act on its Behalf
The Plan has determined that it is a group health plan within the meaning of the HIPAA Privacy Rule, and the Health Plan
designates the Plan Sponsor to take all actions required to be taken by the Health Plan in connection with the HIPAA
Privacy Rule.
(2) Definitions
All terms defined in the HIPAA Privacy Rule, shall have the meaning set forth therein. The following additional definitions
apply to the provisions set forth in this Amendment.
Health Plan means the City of Lubbock Employee Benefit Plan.
Plan Documents mean the Health Plan's governing documents and instruments (i.e., the documents under which the
Health Plan was established and is maintained), including but not limited to the City of Lubbock Employee Benefit Plan
Document.
Plan Sponsor means "plan sponsor" as defined at section 3(16)(B) of ERISA, 29 U.S.C. § 1002(16)(B). The Plan sponsor
is City of Lubbock
(3) Certification of Compliance by Plan Sponsor
Except as provided below with respect to the Health Plan's disclosure of summary health information, the Health Plan will
disclose Protected Health Information to the Plan Sponsor, or permit the disclosure of Protected Health Information to the
Plan Sponsor by a health insurance issuer or HMO with respect to the Health Plan, only upon receipt of a certification by the
Plan sponsor that:
the Plan Documents have been amended to establish the permitted and required uses and disclosures of such
information by the Plan sponsor, consistent with the HIPAA Privacy Rule, and
the Plan Documents have been amended to incorporate the provisions set forth in this Amendment, and
the Plan Sponsor agrees to comply with the provisions as modified by this Amendment.
(4) Health Plan Is Disclosure of Individuals' Protected Health Information to Plan Sponsor
The Health Plan (and any business associate acting on behalf of the Health Plan), or any health insurance issuer or HMO
servicing the Health Plan, will disclose individuals' Protected Health Information to the Plan Sponsor only to permit the Plan
Sponsor to carry out plan administration functions. Such disclosure will be consistent with the provisions of this
Amendment.
All disclosures of the Protected Health Information of the Health Plan's individuals by the Health Plan's business
associates, health insurance issuer, or HMO to the Plan Sponsor will comply with the restrictions and requirements set
forth in this Amendment and in the HIPAA Privacy Rule.
The Health Plan (and any business associate acting on behalf of the Health Plan), may not disclose, and may not permit
a health insurance issuer or HMO to disclose, individuals' Protected Health Information to the Plan Sponsor for
employment -related actions and decisions or in connection with any other benefit or employee benefit plan of the Plan
Sponsor.
61
The Plan Sponsor will not use or further disclose individuals' Protected Health Information other than as described in
the Plan Documents and permitted by the HIPAA Privacy Rule.
The Plan Sponsor will ensure that any agent(s), including a subcontractor, to whom it provides individuals' Protected
Health Information received from the Health Plan (or from the Health Plan's health insurance issuer or HMO), agrees to
the same restrictions and conditions that apply to the Plan Sponsor with respect to such Protected Health Information.
The Plan Sponsor will not use or disclose individuals' Protected Health Information for employment -related actions and
decisions or in connection with any other benefit or employee benefit plan of the Plan Sponsor.
The Plan Sponsor will report to the Health Plan any use or disclosure of Protected Health Information that is
inconsistent with the uses or disclosures provided for in the Plan Documents (as amended) and in the HIPAA Privacy
Rule, of which the Plan sponsor becomes aware.
(5) Health Plan's Disclosure of Summary Health Information and Enrollment Information to the Plan Sponsor
The Health Plan (or a health insurance issuer or HMO with respect to the Health Plan) may disclose summary health
information to the Plan Sponsor, if the Plan sponsor requests the summary health information for the purpose of:
obtaining premium bids for providing health insurance coverage under the Health Plan, or
modifying, amending, or terminating the Health Plan.
The Health Plan (or a health insurance issuer or HMO with respect to the Health Plan) may disclose enrollment and
disenrollment information to the Plan Sponsor.
(6) Disclosure of Individuals' Protected Health Information by Plan Sponsor
The Plan Sponsor will make the Protected Health Information of the individual who is the subject of the Protected
Health Information available to such individual in accordance with the HIPAA Privacy Rule.
The Plan Sponsor will make individuals' Protected Health Information available for amendment and incorporate any
amendments to individuals' Protected Health Information in accordance with the HIPAA Privacy Rule.
The Plan Sponsor will make and maintain an accounting so that it can make available those disclosures of individuals'
Protected Health Information that it must account for in accordance with the HIPAA Privacy Rule.
The Plan Sponsor will make its internal practices, books and records relating to the use and disclosure of individuals'
Protected Health Information received from the Health Plan available to the U.S. Department of Health and Human
Services for purposes of determining compliance with the HIPAA Privacy Rule.
The Plan Sponsor will, if feasible, return or destroy all individuals' Protected Health Information that it still maintains in
any form after such information is no longer needed for the purpose for which the use or disclosure was made.
Additionally, the Plan Sponsor will not retain copies of such Protected Health Information after such information is no
longer needed for the purpose for which the use or disclosure was made. If, however, such return or destruction is not
feasible, the Plan Sponsor will limit further uses and disclosures to those purposes that make the return or destruction
of the information infeasible.
The Plan sponsor will ensure that the required adequate separation, described in paragraph 7 below, is established and
maintained.
62
(7) Adequate Separation
In accordance with the HIPAA Privacy Rule, the following employees or classes of employees or workforce members
under the control of the Plan Sponsor may be given access to individuals' Protected Health Information received from
the Health Plan or from a health insurance issuer or HMO servicing the Health Plan:
Benefit Staff
Accounting
Privacy Officer
This list reflects the employees, classes of employees, or other workforce members of the Plan Sponsor who receive
individuals' Protected Health Information relating to payment under, health care operations of, or other matters
pertaining to plan administration functions that the Plan Sponsor provides for the Health Plan. These individuals will
have access to individuals' Protected Health Information solely to perform these identified functions. For any use or
disclosure of individuals' Protected Health Information in violation of, or noncompliance with, the provisions of this
Amendment, they will be subject to disciplinary action and/or sanctions pursuant to the Plan Sponsor's employee
discipline and termination procedures.
Any suspected occurrences of improper use or disclosure of PHI may be reported to the Health Plan's Privacy Officer at
phone number (806) 775-2312. The Plan sponsor will promptly report any such breach, violation, or noncompliance to
the Health Plan and will cooperate with the Health Plan to correct the violation or noncompliance, to impose appropriate
disciplinary action and/or sanctions, and to mitigate any deleterious effect of the violation or noncompliance.
63
GENERAL PLAN INFORMATION
TYPE OF ADMINISTRATION
The Plan is a self -funded group health Plan and the administration is provided through a Third Party Claims Supervisor. The
funding for the benefits is derived from the funds of the Employer and contributions made by covered Employees. The Plan
is not insured.
PLAN NAME
City of Lubbock Employee Benefit Plan
PLAN NUMBER: 502
TAX ID NUMBER 75-600059
PLAN EFFECTIVE DATE: January 1, 2004
PLAN RESTATEMENT DATE: January 1, 2006
PLAN YEAR ENDS: December 31 st
EMPLOYER INFORMATION
City of Lubbock
Post Office Box 2000
1625 13 Street, City Manager's Office
Lubbock, Texas 79401
806-775-2317
PLAN ADMINISTRATOR
City Manager
City of Lubbock
Post Office Box 2000
1625 13 Street, City Manager's Office
Lubbock, Texas 79401
806-775-2317
NAMED FIDUCIARY
City Manager
City of Lubbock
Post Office Box 2000
1625 13 Street, City Manager's Office
Lubbock, Texas 79401
AGENT FOR SERVICE OF LEGAL PROCESS
City Manager
City of Lubbock
Post Office Box 2000
1625 13 Street, City Manager's Office
Lubbock, Texas 79401
64
CLAIMS SUPERVISOR
American Administrative Group, Inc.
P.O. Box 53070
Lubbock, Texas 79453
1-800-658-9777
M.
RFP #06-044-MA, Health Benefits Consulting Services
BY THIS AGREEMENT, City of Lubbock Employee Benefit Plan is hereby adopted as shown.
IN WITNESS WHEREOF, this instrument is executed for City of Lubbock on or as of the day and year first below
written.
BY
City of Lubbock
Date
Witness
Date
06-044-MARFP.doc 66
City Paid Employee Only Medical
Claims
Administration
Stop Loss
Transplant Rider
Insurance Reserve
Total
RFP #06-044-MA, Health Benefits Consulting Services
Schedule of Rates
2006 Monthly Rates - Active Medical
18% Budget -18% Insureds
12/I5 Specific -15/12 Aggregate
nh
$374.46
22.75
10.71
3.89
92.35
$504.16
Bi-weekly
$172.83
10.50
4.94
1.79
42.62
$232.68
Spouse
Claims
$524.25
$241.96
Administration
0.00
0.00
Stop Loss
14.14
6.52
Transplant Rider
5.07
2.34
Insurance Reserve
-308.57
-142.41
Total
$234.89
$108.41
Children
Claims
$524.25
$241.96
Administration
0.00
0.00
Stop Loss
14.14
6.52
Transplant Rider
5.07
2.34
Insurance Reserve
-358 28
Total
$185.18
165 35
$85.47
Fami1X
Claims
$524.25
$241.96
Administration
0 00
$0 00
Stop Loss
14.14
$6.52
Transplant Rider
5.07
$2.34
Insurance Reserve
-223.90
4103.33
Total
$319.56
$147.49
Cobra
Monthly
Single
$514.35
Single/Dependents
$1,069.20
06-044-MARFP.doc 67
RFP #06-044-MA, Health Benefits Consulting Services
2006 Monthly Rates - Retiree Dental
11% BUDGET -11% SUBSCRIBERS
Monthly
Retiree Dental
Claims $21.15
Administration 2.95
Insurance Reserve -1.90
Total $22.20
ouse
Claims
$29.60
Administration
0.00
Insurance Reserve
-14.53
Total
$15.07
Children
Claims
$29.60
Administration
0.00
Insurance Reserve
-17. 7
Total
$12.03
Famiy
Claims
$29.60
Administration
0.00
Insurance Reserve
-3.09
Total
$26.51
06-044-MARFP.doc 68
RFP #06-044-MA, Health Benefits Consulting Services
06-044-MARFP.doc 69
Cily Paid Employee Only
Dental
Claims
Administration
Insurance Reserve
Total
RFP #06-044-MA, Health Benefits Consulting Services
2006 Monthly Rates - Active Dental
I I% BUDGET -11% SUBSCRIBERS
Monthly
521.15
2.95
11-82
$35.92
B-Weekly
$9.76
$1.36
5.46
$16.58
S ouse
Claims
$29.60
S 13.66
Administration
0.00
$0.00
Insurance Reserve
-14.53
- La
Total
$15.07
$6.95
Children
Claims
$29.60
$13.66
Administration
0.00
$0.00
Insurance Reserve
-17.57
- 8.11
Total
$12.03
$5.55
Family
Claims
$29.60
$13.66
Administration
0.00
$0.00
Insurance Reserve-3.09
1.4
Total
$26.51
$12.23
Cobra Monthly
Single $40,58
Single/Dependents $70.77
06-044-MARFP.doc 70
RFP #06-044-MA, Health Benefits Consulting Services
2006 Monthly Rates - Retiree Medical
18% Budget -18% Insureds
Monthly
Retiree Medical
Claims
$374.46
Administration
22.75
Stop Loss
10.71
Transplant Rider
3.89
Insurance Reserve
-139.55
Total
$272.26
Retiree/Spouse
Claims
$524.25
Administration
0.00
Stop Loss
14.14
Transplant Rider
5.07
Insurance Reserve
' 0 •57
Total
$234.89
Retiree/Child
Claims
$524.25
Administration
0.00
Stop Loss
14.14
Transplant Rider
5.07
Insurance Reserve
-358.28
Total
$185.18
Retiree/Family
Claims $524.25
Administration 0.00
Stop Loss 14.14
Transplant Rider 5.07
Insurance Reserve-223.90
Total $319.56
Medicare
Claims
$374.46
Administration
22.75
Stop Loss
10.71
Transplant Rider
3.89
Insurance Reserve
-255.13
Total
$156.68
Medicare/Spouse
Claims $524.25
Administration 0.00
Stop Loss 14.14
Transplant Rider 5.07
Insurance Reserve-377.48
Total $165.98
06-044-MARFP.doc 71
RFP #06-044-MA, Health Benefits Consulting Services
Claims Information (please download document from rfpdepot website).
Clinic Cost (please download document from rfpdepot webs ite).
06-044-MARFP.doc 72
RFP #06-044-MA, Health Benefits Consulting Services
CITY OF LUBBOCK
INSURANCE REQUIREMENT AFFIDAVIT
To Be Completed by Bidder
And Attached to Bid Submittal
I, the undersigned Bidder, certify that the insurance requirements contained in this bid document have been
reviewed by me with the below identified Insurance Agent/Broker. If I am awarded this contract by the
City of Lubbock, I will be able to, within ten (10) days after being notified of such award by the City of
Lubbock, famish a valid insurance certificate to the City meeting all of the requirements defined in this
bid/proposal.
Contractor (Signature) Contractor (Print)
CONTRACTOR'S NAME:
(Print or Type)
CONTRACTOR'S ADDRESS:
Name of Agent/Broker:
Address of Agent/Broker:
City/State/Zip:
Agent/Broker Telephone Number: ( )
Date:
NOTE TO CONTRACTOR
If the time requirement specified above is not met, the City has the right to reject this
bid/proposal and award the contract to another contractor. If you have any questions
concerning these requirements, please contact the Purchasing Manager for the City of
Lubbock at (806) 775-2165.
06-044-MARFP.doc 73
RFP #06-044-MA, Health Benefits Consulting Services
SUSPENSION AND DEBARMENT CERTIFICATION
Federal Law (A-102 Common Rule and OMB Circular A 110) prohibits non -Federal entities from
contracting with or malting sub -awards under covered transactions to parties that are suspended or
debarred or whose principals are suspended or debarred. Covered transactions include procurement
contracts for goods or services equal to or in excess of $25,000 and all non -procurement transactions
(e.g., sub -awards to sub -recipients).
Contractors receiving individual awards of $25,000 or more and all sub -recipients must certify that their
organization and its principals are not suspended or debarred by a Federal agency.
Before an award of $25,000 or more can be made to your firm, you must certify that your organization and
its principals are not suspended or debarred by a Federal agency.
I, the undersigned agent for the firm named below, certify that neither this firm nor its principals are
suspended or debarred by a Federal agency.
COMPANY NAME:
Signature of Company Official:
Date Signed:
Printed name of company official signing above:
06-044-MARFP.doc 74
Proposal for City of Lubbock in Response to
Health Benefits Consulting Services RFP
Presented by:
Stan Self Joella Mullin
Senior Consultant Dallas Practice Leader
Wachovia Insurance Services
5956 Sherry Lane, Suite 2000
Dallas, TX 75225
(214) 365-4755
stan.self@wachovia.com
Douglas Sanford
Co -Chief Executive Officer
Sanford Insurance Agency
6303 Indiana Ave
Lubbock, Texas 79413
(806) 792-5564
sanfordd@sanins.com
WACHO"I'A
INSURANCE SERWCES
Table of Contents
iovia
ELI
/ References
ract Fee
Ns
WAGWOVrA
2 INSURANCE SERWCES
Introduction to Wachovia
Wachovia Insurance Service (WIS) is owned by Wachovia Corporation, a publicly traded company
on the New York Stock Exchange (WB). Wachovia is the fourth largest bank holding company in
the U.S. based on assets ($500 billion). We have over 95,000 employees and for the second
consecutive year ranked in the Top 10 Best Places to Work by Working Mother magazine and Top
50 Companies for Diversity, by Diversity, Inc. magazine. Business Ethics magazine named
Wachovia to its annual list of "100 Best Corporate Citizens" in its Spring, 2004 issue.
Wachovia Insurance Services (WIS) ranks in the top ten insurance brokers in the U.S. We have 46
offices in 23 states and employ over 1800 insurance professionals. Our expertise is in the property
and casualty and employee benefits fields. Our firm placed over $3 billion in premiums last year.
Our local office in Dallas, TX employs 50 employees, 42 of which are in Property and Casualty
Fields. The Dallas office generated approximately $10 million in revenue in 2005. Our office was
established locally in 1992 and was formerly known as McDonald & Company. McDonald &
Company was acquired in 1999 by Palmer & Cay which was acquired by Wachovia Corporation in
2005.
Awards and Recognition
• Rated as the nation's top bank by Business Week (April 2004)
• Business Ethics magazine named Wachovia to its annual list of "100 Best Corporate
Citizens" in its April 2004 issue
• The only financial services company recognized in the 2004 Customer First Awards by
Fast Company magazine
• Top 10 Best Places to Work by Working Mother magazine for the third consecutive
year
• Top 50 Companies for Diversity by Diversity, Inc. magazine for the third consecutive
year
Community Involvement
Building and sustaining communities together. Lending a helping hand when it's needed. Through
shared commitment and knowledge with our community partners, we can achieve uncommon
things, together.
Wachovia is committed to building strong and vibrant communities, improving quality of life, and
making a positive difference where we live and work. We focus resources and employee talents on
two key priorities:
• Improving education
• Strengthening neighborhoods
WACHOVIA
o 0 3 INSUPANCE SERVICES
OPEN
f f E--w Tml or l sTm
Introduction to Wachovia
Employer Solutions has a passion for education and learning. Recognizing that no one professional
can know everything, all Employer Solutions employees participate in one or more practice groups.
The groups meet every other week at a minimum and create educational presentations, tools, and share
best practices with the entire group monthly. We are currently pursuing a very aggressive and exciting
campaign to integrate our local practice groups within our national practice group network.
Practice Groups with Subject Matter Experts
■ Stay current
■ Report to team every two weeks
�AT.ACHOVIA
4 INSURANCE SERVICE S
Introduction to Wachovia
Employer Solutions consists of the following units:
Group Consulting is the largest Employer Solutions unit. Our consulting team consists of a Practice
Leader, a Senior Consultant, an Associate Consultant and Client Service Representatives who are
responsible for the overall strategy and execution of client action plans. The Practice Leader has the
responsibility of making sure that our clients are placed with a team of professionals that can best
serve each specific client's needs. Internally we believe that this structure promotes healthy
competition and exposure to multiple ideas.
• The support teams have to be at their best because they are always
auditioning for new business.
• The Practice Leader works with multiple teams. This environment is
a great benefit because it allows exposure to our full intellectual
capital.
Our Group Consulting team is supported by the following teams within Employer Solutions. After
our initial planning session, we may determine that it is necessary to engage additional employees
from other teams.
Benefits Administration wraps voice -to -voice call center and fulfillment services around client or
third party benefits management systems to enhance the benefits administration and communication
experience for clients and their employees.
Executive Benefits specializes in solutions for executives and highly compensated employees to
protect and accumulate wealth including individual disability, non -qualified and other savings plans,
buy sell and key man arrangements, and medical reimbursement plans.
HR Consulting is available to supplement client HR departments by providing management
training, policy and procedure development or review, and other "on -call" or special project work.
Technical Proposal
1. State the full name and home office address of your organization. Describe your organizational structure (e.g.
publicly held corporation, private, non-profit, partnership, etc.). If it is incorporated, include the state in which it
is incorporated List the name and occupation of those individuals serving on your organization's board of
directors, and list the name of any entity or person owning 10% or more of your organization.
Wachovia Corporation
301 South College Street, Suite 4000
Charlotte, North Caroline 28288-0013
Wachovia Corporation is a public held corporation incorporated in North Carolina. The Board of Directors are
listed below.
John D. Baker II
President and Chief
Executive Officer,
Florida Rock Industries, Inc.
Jacksonville, Florida
James S. Balloun
Private Investor
Atlanta, Georgia
Robert J. Brown
Chairman and Chief
Executive Officer,
B&C Associates, Inc.
High Point, North Carolina
Peter C. Browning
Non -executive Chairman,
Nucor Corporation
Charlotte, North Carolina
WACHOVIA
6 INSURANCE SERVICES
John T. Casteen III
President,
University of Virginia
Charlottesville, Virginia
William H. Goodwin Jr.
Chairman, CCA Industries, Inc.
Chairman, Chief Executive Officer and Chief Operating Officer,
The Riverstone Group, LLC
Richmond, Virginia
Robert A. Ingram
Vice Chairman Pharmaceuticals,
GlaxoSmithKline plc
Research Triangle Park, North Carolina
Donald M. James
Chairman and Chief Executive Officer,
Vulcan Materials Company
Birmingham, Alabama.
Mackey J. McDonald
Chairman, President and Chief Executive Officer,
VF Corporation
Greensboro, North Carolina
Joseph Neubauer
Chairman and Chief Executive Officer,
ARAMARK Corporation
Philadelphia, Pennsylvania
Technical Proposal
%VACIROVZA
7 INSURANCE SERVICES
Lloyd U. Noland III
Chairman Emeritus,
Noland Company
Newport News, Virginia
Van L. Richey
President and Chief Executive Officer,
American Cast Iron Pipe Company
Birmingham, Alabama
Ruth G. Shaw
President and Chief Executive Officer,
Duke Power Company, Duke Energy Corporation
Charlotte, North Carolina
Lanty L. Smith
Lead Independent Director,
Wachovia Corporation
Chairman,
Soles Brower Smith & Co.
Greensboro, North Carolina
G. Kennedy Thompson
Chairman, President and Chief Executive Officer
Wachovia Corporation
Charlotte, North Carolina
John C. Whitaker Jr
Chairman and Chief Executive Officer,
Inmar, Inc.
Winston-Salem, North Carolina
Technical Proposal
WACHOV A
$ 7NSL7R NICE SERVICES
Technical Proposal
Dona Davis Young
Chairman, President and Chief Executive Officer,
The Phoenix Companies, Inc.
Hartford, Connecticut
Z List the name, title, telephone number, fax number and e-mail address of the contact person for this
proposal
Stan Self, Senior Consultant
Wachovia Insurance Services
(214) 365-4755 — phone (469) 232-0726 — fax
3. Confirm thatyou are a licensed consultant or broker. Provide documentation.
This is confirmed. License documentation is shown as an attached exhibit.
4. Confirm that you serve as a consultant or broker, independently, and are not affiliated with any insurance
company, third party administrative agency or provider network.
This is confirmed.
5. Describe your company's organization, philosophy, management and provide a brief history. Describe your
contractual relationships, if any, with organizations necessary to your proposal's implementation (e.g. data
information services).
The Wachovia Philosophy of Service is Based on Three Key Themes:
Distinctive Knowledge — We have a foundation of knowledge that helps us form a unique perspective, which
produces solutions that match your needs.
Human Understanding — We respect and value you. We listen to your concerns and strive to understand your
needs. We always have your best interests at heart.
Sense of Purpose — We practice professionalism with a purpose. We take ownership of your needs and satisfy or
exceed them in a manner that best suits your goals. We succeed when you do.
Wachovia Insurance Services partners with Ingenix to provide the ingenix eSuite Reporting. TM These
services provide insight on costs and trends that will help your clients better manage their programs,
develop strategies, and make informed decisions through:
• An integrated data warehouse
• Client -specific report packages
• Normative comparisons
• Standard reports and ad hoc reporting with drill down capabilities
5 ..
Technical Proposal
6. How long has your organization been providing consulting services?
Wachovia Insurance Services, formerly Palmer and Cay, has been providing brokerage and consulting services since
1868.
7. Provide the name(s) of the consultant(s) to perform the work for the City and a brief
statement as to why each consultant is qualified to provide services.
Joella Mullin — Sr. Vice President, Practice Leader, Stan Self — Sr. Consultant, Andrea Davenport — Associate
Consultant. Other members of our national team of resource leaders will, from time to time, support the local consulting
team. Please refer to the "Qualifications of Consultant" section for summarized biographies on each of these individuals.
8. Do you publish newsletters and other informative publications that are routinely provided to your clients? Have you
prepared reviews of topics related to the benefits that are routinely provided to your clients? Provide sample copies.
Yes. Newsletters and subject briefs are provided regularly to our clients. Samples are provided as exhibits to this
proposal.
9. Detail your ability to monitor regulatory and legislative developments at both the state and federal level and how
this will be communicated to our members.
Wachovia Insurance Services maintains a staff of ERISA attorneys and support paralegal staff to keep our consultants
and our clients apprised of all relevant legislative and regulatory activity both for national and state policy.
10. Outline your ability to provide expertise and experience in the areas of health benefit plan analysis and design.
Explain in detail the types of analyses you have conducted relative to benefits analysis and design for a health plan
with approximately 1900 employees.
It is our experience that most benefits plans are the cumulative result of problems that have risen and been solved over
time. Rarely do we find strategic direction, supported by senior management and a budget that is consistent with
corporate culture. All our activities are driven by the individual client action plan incorporating your scope of
work. The plan is the result of an annual comprehensive strategic planning session which covers a broad range of issues
from corporate culture to COBRA administration.
The crafting and execution of these action plans is the core of the WIS value proposition.
Accordingly, our review process covers at a minimum:
✓ What do we need to know about your culture? Employee population? HR challenges?
✓ Do your benefit plans support your culture? Does your new hire kit and other employee communications
reflect it?
✓ Why do you offer benefits? Can you articulate your commitment to your employees? Have you?
✓ Is the commitment the same for all employees? Have you profiled your most productive, hard to replace
employees?
WACHOVIA
10 INSURANCE SERVICES
Technical Proposal
✓ Do employees understand and appreciate the plans? How do you know?
✓ Do the plans cover all risks equally? (or are they all about healthcare at the expense of income protection)
✓ Are the networks as efficient as possible? How do you know? What is driving cost? How do you know?
✓ Do employees know how to be better consumers of healthcare? Do they care?
✓ Do your employees want to learn how to be healthier? Does it matter?
✓ What tax tools do you provide to help employees handle otherwise unreimbursed expenses?
✓ How do you fund the plans? Why? How are they running? Compared to what?
✓ How integrated and efficient are your medical, sick leave, vacation, STD, LTD and FMLA plans? Could there
be gaps or overlaps?
✓ What are the best mediums for communicating with your employees? How involved are spouses?
✓ Do employees know the actual gross costs of the plans? (Prior to getting a COBRA notice)
✓ How do you get employees on and off the plans? Is it working? How much effort is it taking?
✓ Where applicable, are you in compliance with state and federal mandates? Is it important?
✓ What about dental, vision, legal, financial planning?
✓ Who pays for all of this? Is it affordable to the employee? To the City? What is affordable? What are the
thresholds?
As a result of these sessions, we come up with a direction and multi -year plan.
They may also include:
✓ Benchmarking of the benefit levels and contributions
✓ An employee survey
✓ Data mining project to determine cost drivers and to model plan design savings
✓ Creating and driving a strategic benefits communication campaign and a wellness campaign
✓ Electronic enrollment and eligibility application
✓ Compliance review and monitoring including plan documents, SPDs and 5500 assistance.
Wachovia Insurance Services has the capability and resources to include services beyond the required Scope of Work.
✓ HR Consulting Services
✓ Financial planning as an employee benefit
✓ Contribution strategy modeling
We then add the more routine activities of a brokerage or consulting engagement;
✓ Pre and post renewal planning sessions
✓ End of year stop loss strategy session
✓ Annual focus group session
✓ Annual review of plan and planning session for next year
✓ Ongoing plan and contract review and modeling
Optionally, and priced separately, we may pursue:
✓ A claim or eligibility audit
✓ Benefits Administration
WACHO V'IA
0 D 11 INSURANCE SERVICES
Technical Proposal
We then add responsible parties, due dates, and sign off on our plan. Just as important, it is our
practice to provide detailed minutes of every client meeting which include all material
discussions, decisions, commitments, responsible parties, and due dates. That is the way we do
business, and we are religious about it. We would start this process immediately upon you selecting
Wachovia Insurance Services.This planning and execution process is perhaps our most important
unique competitive advantage. The steps that are undertaken within each relevant task are outlined
in the tables below.
Strategic Planning
Service Description
A. I Conduct Strategic Planning Session
B. Produce Annual Plan
C. I Stewardship Reporting
Service Description
A Analyze claim experience to identify large
claims and trends
Comments
Planning Sessions typically result in the discovery of
multiple initiatives the client wishes to implement.
We weave these initiatives along with normal
brokering activities into the Annual Plan. We assign
responsible parties and deadlines then execute the
plan.
The Stewardship Report is designed to make sure
WIS stays accountable for fulfillment of the plan.
Comments
Financial projections are the heart of the technical
Analyze claim utilization data and identify areas services that WIS provides to our clients. In this
B. of over -utilization, including recommendations area, we will work with you and your internal staff
for cost management opportunities to continually monitor the financial integrity of the
plan in relation to projections.
C.Laccounting
ticipated financial impacts for making
benefit design
D. negotiate year-end financial
E nding alternatives as appropriate for
F. analyze trends affecting client
G. Assist with internal budgeting and meetings
with financial groups
12
While projections are subject to change based on
claim activity, inflation, medical advances and
regulatory pressures, our goal is to continuously
keep you involved and updated on the status of the
plan relative to projections.
We will also review any year-end carrier accounting
ensuring that a proper accounting of all your funds is
made. We utilize Intelligence on Health (i on health)
for health plan data mining.
iW.ACHOVYA
INSURANCE SERVICES
Carrier Marketing
Service Description
A Develop marketing objectives and evaluation
criteria
B. Prepare specifications, provide competitive analysis I
of proposals and make recommendations
C. Facilitate all carrier interviews/presentations with
client
D. IAs necessary, market for new products for cost
competitiveness or service improvement
Provide assistance in the areas of implementation,
E. communication, enrollment meetings,
contractibooklet review and carrier monitoring
Technical Proposal
Comments
Changing carriers or vendors is never an easy process,
and our focus is to always monitor the relationship to
ensure things proceed in the fashion consistent with
your objectives and carrier commitments. However,
from time to time, bidding out plans becomes required.
The need for competitive bidding can be brought about
by the need to check bid costs, resolve service issues
that cannot be resolved by performance guarantees, or
to introduce additional choices or new benefit programs.
Once the bidding has been conducted and finalist
interviews have occurred, we will assist in the
implementation of the new product or vendor.
Financial/Accounting Services
Service Description Comments
A Analyze claim experience to identify large claims Financial projections are the heart of the technical
and trends services that WIS provides to our clients. In this area,
Analyze claim utilization data and identify areas of we will work with you and your internal staff to
B. over -utilization, including recommendations for continually monitor the financial integrity of the plan in
cost management opportunities relation to projections.
C. Provide anticipated financial impacts for making While projections are subject to change based on claim
changes in benefit design activity, inflation, medical advances and regulatory
pressures, our goal is to continuously keep you involved
D. Review & negotiate year-end financial accounting and updated on the status of the plan relative to
projections.
[G.
Analyze funding alternatives as appropriate for
client We will also review any year-end carrier accounting
. Identify & analyze trends affecting client ensuring that a proper accounting of all your funds is
made.
Assist with internal budgeting and meetings with
financial groups We utilize Intelligence on Health (i on health) for health
plan data mining.
WACHO.A.
0 13 INSL ANCE SERVICES
IN
����
Technical Proposal
Renewal Analysis & Negotiation
Service Description
Comments
A.
Establish renewal objectives
The renewal process is an integral part of the overall
financial service provided to you. We are able to
B.
Request early notification from carriers
C.
Analyze & negotiate carrier renewal to meet
client's objectives
independently project costs and negotiate each and
every aspect of the renewal (projected claims,
reserves, network fees, administration, etc.). Using
an analytical approach assures realistic and effective
negotiation.
D.
Develop cost projections for benefit plan design
changes
E.
Propose benefit changes
The establishment of performance guarantees
F.
Communicate renewal & negotiations to client
enables you to annually review the service and
performance levels provided by the selected carriers
and vendors. By including this review as part of the
renewal process, financial and service levels receive
the same level of importance.
G.
Offer contribution strategies which reflect
client's human resource and budgetary
objectives
H.
Establish performance guarantees
!' ACHOMEA.
14 INSURANCE SERVICES
Legislative and Market Information
Service Description
A. I Inform client on legislative compliance issues
B. Conduct periodic seminars on pertinent I
legislative topics
I C I Monitor insurance companies for financial I
solvency
D. Assist in contract/legislative interpretations,
legal compliance
E. Review SPD's for compliance
F. Review insurance contracts for accuracy
G
Prepare Welfare and Flex 5500s
G.
(if required)
H. IAssistance with ERISA questions, COBRA,
HIPAA, etc.
Provide periodic bulletins addressing pertinent
I. issues such as healthcare reform, statutory
updates, flex benefits and managed care
Technical Proposal
Comments
WIS's legal compliance group serves as both an
internal and external resource. They keep the
consultants current on legislative issues, and are
available to review specific legislative implications
that affect your plan.
Our services also include contract and SPD review,
as well as updating you on changes in interpretation
that may affect the guidance they deliver to
employees.
WIS does not practice law; documents should be
reviewed by outside counsel. Having stated this, we
believe that our service in this area makes the
external review process cleaner and more efficient.
We understand benefits from the client standpoint;
our goal is to make sure the legal requirements of
the plan are met in language that is readily
understood by all parties.
WACHOV A
15 INSURANCE SERVICES
Communications and Enrollment Support
Service Description
A. Review employee communication
B. Assist in the identification of interactive Web -
based Communication resource
C. Assist in Health Fair initiatives
D. Facilitate open enrollment meetings
E. Provide Train the Trainer counseling
F. Develop and provide Benefits Statements
(Optional — Separate Fee)
G. Develop and administer employee surveys
(Optional — Separate Fee)
Develop basic print communication from
H. enrollment guides to overall summaries
(Professional communications materials can
be provided under a separate fee)
Technical Proposal
Comments
Your investment in your employee benefits
program is significant and needs to be understood
and appreciated by your employees. We assist
you with annual and ongoing communications —
design, drafting, and presentation.
WACHOVL4 ,
16 7NSURA NCIE SFHWCES
Technical Proposal
11. Provide a recent example of the selection and implementation of a third party claims administrator
for a health plan with approximately 4600 participants that was managed by your company. Detail
how your company's experience and expertise benefited the client.
ABC -Independent School District TPA Implementation
Client had several issues that needed to be strategically addressed for 2006.
Issues:
High pregnancy complications rate
Carve out vendors not coordinating together (PBM, EAP, Lab Network, UM)
High claim rates with low plan designs
Low network discounts, with no discounts for certain specialists
Poor reporting/ coordinating capability offered by current TPA
No disease management programs
Solution:
We Marketed the TPA, Disease Management, PBM, EAP/Behavioral Health, Wellness programs.
Emphasis on ability to integrate with other vendors, customized programs and resources targeted at
client problems, and costs.
After marketing and considering all the options available to the client we chose to keep the current
TPA but required them to start exchanging data with the PBM, EAP, DM vendors and our data
warehouse. We changed networks to Aetna Signature Network and already seeing savings in the first qtr
of 2006. We added a DM vendor with a strong Pre -natal program, new EAPBH vendor and kept the
current PBM and Wellness vendors. The client now has vendors who are focused in their areas providing
a custom cost effective solution for the client.
We meet with all of the vendors quarterly to update and coordinate efforts to deliver an integrated
solution for the client.
12. List three current clients for whom you provide services related to health plan benefits analysis
and design. For each client, the list must specify the type of work performed by your company, the size
of the client's group and the period of time retained as a client. One of the three must be the longest
standing client; one must be the client with an approximate 1900 employee population and 450 retiree
population; and the third must be the client for who the largest impact was achieved through your
company's services. If two or more of these are met by the same client, list additional clients so that at
least three clients are listed. For each client, include the name, title, address, fax number and phone
number of a contact person who we may contact as a reference.
Please refer to the "Qualifications of Consultant / References" section of the proposal for the relevant
references.
WACHOVTA
17 IzvSURANCF SERVIEC 4 S
M-EI�-�
Technical Proposal
13. Describe the issues and challenges, as you view them, facing an employer with 1900
employees in regards to their benefit plan in the upcoming year and describe how your
organization can assist. What makes your organization different than other organizations that
may submit proposals for consideration?
The challenges that all employers face center around the sharply angled trend line of medical
and pharmaceutical inflation. With 1,900 employees, the City can be thought of as a large
employer, especially in a market the size of Lubbock.
Local providers must regard the City as one of the regions top payers, and this clout should not
be discounted. Beyond plan design changes that shift expense to employees and their
dependents, a number of innovative organizations are moving to address the root cause of much
of this excessive inflation in health care. As employers look to drive patient behavior to better
manage personal health, local providers, especially hospitals often are able to play a more
proactive role. Tapping into these organizations can produce resources for wellness initiatives,
hands-on disease management for chronic condition patients, preventive care and more. The
visibility that they gain provides solid rationale for their enthusiastic involvement.
Whether working with local providers for interactive patient outreach, or fine tuning plan
design, a comprehensive understanding of plan utilization is essential. Wachovia Insurance
Services works with detailed claims data from claims administrators and pharmacy benefit
managers to create reports that reveal the pure drivers of cost. Working with our data mining
partners, we are able to ascertain the waste within practice patterns and where more aggressive
utilization management and/or education can have an impact.
Wachovia Insurance maintains clinical management and actuarial teams that separate theory
from reality. The changes recommended have been tested against what is truly achievable and
what actual financial impact can be expected. Our expert resources keep us grounded and keep
our clients in a conservatively aggressive posture.
14. Provide examples of communication materials developed and prepared by your
organization for use in client's health benefit communication campaigns
Full time communications specialist are in place at Wachovia Insurance to provide any level of
assistance in developing customized communications campaigns. Samples are provided as
exhibits to this proposal.
WACROVIA
18 INSURANCE SERVICES
Technical Proposal
15. Do you have access or contacts to benefit providers in the retirement program market?
How would you be able to provide brokerage services to our members in that area if the City
determines that it is in everyone's best interest to separate them from our current plan?
Yes, Wachovia Insurance Services has contacts with providers in the retirement program
market. We would provide the same type of due diligence, marketing and implementation as
we would for your active employees.
16. How would you envision the relationship and communication between your company
and the City? What would you expect as support from the City?
The following Service Model spells out our desired relationship for day to day interaction with
our clients.
Service Description Comments
[A. Respond to daily questions
Assist on claims problems, billing questions,
policy interpretation & other carrier issues WIS will assist you in the outlined areas assuring
vendor relationships are effective. We have
C. Confn-m plan design coverage questions excellent working relationships with carriers and
vendors and are able to intercede when necessary
D. Monitor vendor services to ensure services are being provided appropriately
and that you are obtaining professional and timely
E. Analyze all documents before presenting to support.
client
F. Manage performance contracts
WACHOVTA
19 INSURANCE SERVICES
Technical Proposal
In an on -going capacity, our service model is extended to a full partnership with our clients as
described below.
Service Description
Comments
A.
Keep client advised of any new products
We will meet regularly with you to talk about the
plan. During these meetings, we will discuss the
regulatory climate, comment on issues we have
B.
Hold mid -year projection meetings to update
status of plan performance
experienced with our other clients, talk about new
products and benefit offerings, and comment on the
Maintain overall picture of client's goals &
C.
objectives and assist in having benefit plans
financial performance of the plan.
meet those objectives
Of equal importance will be the discussions
D.
Anticipate issues before they become problems
revolving around your needs. We believe we can
be of the most value to our client when we
understand your needs, not just in the benefits
Review or complete benchmarking & survey
E.
information used to determine plan
arena, but in other aspects of your organization as
competitiveness & strategies
well.
17. Does your organization have access to the carriers of the voluntary plans the City
currently offers? What other carriers does your organization have access to?
Wachovia Insurance Services has access to all carriers of voluntary benefit plans. We have a
fully -staffed department that provides assistance with marketing, selection, communication
and implementation of only voluntary benefits. All of this staff specialize in this field.
18. Has your organization recommended other voluntary plans, or cancellation of
voluntary plans, to your clients? On what basis do you make your recommendations of
this nature?
Yes, Wachovia Insurance Services has both recommended and cancelled voluntary plans for
our clients. Our voluntary benefits unit along with your service team evaluate the positive
and negative qualities of each plan and each carrier. We also review service performance
and financial stability.
WACHO tom.
20 INSURANCE SERiTICES
Qualifications of Consultant
Biographies
Stan Self 24,yrs
Senior COnsvlrwa
214.365.4733
stmrself
Andrea Davenportsyrs
Associate Consultant
214-365-4742
a *eadavenport
Kim Ursery 3yrs
Amanda Aguilar 4yrs
Idministrative,twslant
_ Client Service Representative
214-365-4716
214-36$ 4733
kiat.arsery
anamcagaikq
National Resources
Frasier Ives
C—PGance
yrs
Diane Boxley
ACnavialServices
- 20
Melissa Tobler
Climcalstraegies
10
Steve Maike
Pharmacist
Teresa Freeman
Communications
Mary Mosqueds
Work Life Sohatons
=Lackey
Steve Farris6
Wor�fsitelo+
yrs yrs toyrs
19 ws
8+yrs
13 yrs
21 INSURA►NCE SERVICES
Joella Mullin
Vice President
Practice Leader
Dallas, TX
Biography
Joella brings over 27 years of employee benefits
consulting experience to her position of Practice
Leader in our Dallas office.
Joella's background includes:
Management, consulting and sales with a major risk
management/consulting firm as the Practice Leader
for Middle Market Employee Benefits, Middle
Market Practice Leader for Benefits and P&C and as
Business Development Director;
Large account consulting with the largest privately
owned consulting firm in Dallas;
Public entity and higher education health and welfare
consulting and claims system and procedures auditing
for a large accounting firm; and
Underwriting, policy issue and marketing with a large
insurance carrier.
Joella has expertise in all phases of employee benefit
health and welfare consulting, including strategic
planning, plan design, funding arrangements, renewal
negotiations, plan marketing, contribution analysis,
network review, utilization data review and analysis
and claims systems and procedures auditing.
Joella has a Bachelors Degree in Political Science
and Computer Science from East Texas State. She is
a member of SHRM and Dallas/Ft. Worth Business
Group on Health. She has completed 5 courses in the
Certified Employee Benefit Specialist program.
WACHOViA.
22 INStTRANCE SER CES
Stan Self
Senior Consultant
23
Biography
Stan Self most recently held the position of Senior
Client Manager at CIGNA HealthCare. During his
24 year career in employee benefits, Stan has focused
on large corporate and public entity employers with
special emphasis in managed care.
Among the public sector employers that he has
served are Fort Worth ISD, City of Dallas, Irving
ISD, City of Mesquite, Birdville ISD, Parkland
Hospital, State of Louisiana, Commonwealth of
Kentucky, Galveston ISD and City of Kerrville.
Higher education employer clients have included
Texas A & M University, University of Houston and
Vernon College.
Stan attended Abilene Christian University, Lamar
University and University of Houston.
He is in the process of earning the Certified
Employee Benefits Specialist (CEBS) designation
with 5 of the requisite 10 courses and exams
completed.
WACHOVIA
INSURANCE SERVICES
Andrea Davenport
Associate Consultant
Dallas, TX
Biography
Andrea brings several years of benefits consulting
experience to her position of Associate Consultant in
our Dallas office.
Andrea's background includes:
Consulting and marketing experience for both Middle
and Large Market Employee Benefits
Large account consulting with the largest privately
owned consulting firm in Kansas City, Missouri
Andrea has experience in all areas of employee
benefit health and welfare consulting, including
renewal negotiations, plan marketing, contribution
analysis and network review.
Andrea has a Bachelors Degree in Marketing
Management from Southwest Missouri State
University.
WA.CHO''V°IA
24 INSURANCE SER`WCES
Melissa Tobler
Vice President
Clinical Strategies Consultant
Milwaukee, WI
Biography
Melissa is a Vice President, Clinical Strategies
Consultant. Melissa has been a registered nurse for over
twenty years, during which time she has actively been
involved in developing and overseeing case management,
utilization review, quality assurance/improvement, and
disease management strategies for insurance plans, vendors,
and employers. Melissa is a patient advocate who has
created win -win solutions for groups and employees,
balancing the needs of the individual with the fiscal
responsibilities of the group.
Melissa's key areas of expertise include:
Utilization and outcome data analysis and interpretation to
assist clients in identifying and understanding clinical needs
within their population. This analysis is the first step towards
building a customized solution to meet each client's needs.
Strategic planning within the total benefits design model for
medical care management strategies, including those targeted
at utilization review, large case management, disability,
wellness, disease management, EAP, predictive modeling,
health risk assessments, and behavioral health.
Evaluation of vendor activities, strategies, and outcomes pre
and post program implementation.
Assistance in implementing medical care management
strategies, with a special focus on outreach initiatives to the
member.
Prior to joining Wachovia, Melissa was the Director of
Disease Management Product Development for APS
Healthcare, Inc.
WACHOVIA
25 INSURANCE SERVICES
Steve Maike
Pharmacy Benefit Consultant
Milwaukee, WI
Biography
EDUCATION
Bachelor of Pharmacy
University of Wisconsin School of Pharmacy
Madison, Wisconsin
PROFESSIONAL CERTIFICATIONS
Registered Pharmacist (State of Wisconsin)
SUMMARY OF EXPERIENCE
Prior to joining Wachovia, Steve served as Director
of Pharmacy Programs for APS Healthcare where he
led a clinical and operational staff managing the
pharmacy programs for multiple health plans and
provided pharmacy benefit consulting services to
numerous clients.
Steve became involved in the infancy stages of home
infusion therapy as a founder of a regional home
infusion company in the mid 1980's where he served
as Operations Director for 8
years. Steve's interaction with managed care led to a
position managing the capitated infusion therapy and
mail order programs at BCBS of WI. His experience
also includes; Manager of Clinical Pharmacy
Programs and Director of Pharmacy Programs for
BCBS of WI owned companies.
At Wachovia, Steve will work closely with our
clinical consulting practice to provide pharmacy
benefit consulting to our clients. In this role he will
promote pharmacy program content that supports
client health & productivity initiatives.
WACHOVYA,
ZNSLTR"Cl@ SERVICES
Teresa Freeman
Communications
Atlanta, GA
27
Biography
Teresa is in the Atlanta office of Wachovia. She is a
seasoned benefits consulting professional with over
10 years of in-depth experience in the development
and delivery of employer benefit programs and 9
years of financial underwriting experience. Her
expertise includes the redesign of benefit programs to
meet the financial goals of the organization, program
implementation, development of employee
communications and ongoing financial analysis of
the programs. Teresa is adept in developing creative
solutions, project planning, and program assessments
which are tied to the business objectives for the
organization.
Teresa's specific experience includes 9 years of
group insurance underwriting experience with
Confederation Life Insurance Company and 5 years
with William M. Mercer, Inc. as a Principal. Teresa
has extensive experience in conducting data analysis,
claims forecasting, flexible benefit plans, financial
analysis for all group benefit programs and employee
communications. She has served as the Project
Manager in multiple public and private sector client
projects. Some of her prior projects include assisting
large multi -national organizations with the review,
marketing and implementation of their benefit
programs, consolidation and standardization of
programs for multi -site national organizations, the
assistance to several regional HMOs in the selection
of a Third Party Administrator and the design,
development and implementation of all employee
communication materials.
Teresa received her Degree of Business
Administration from Clayton State College.
WACHO V'TA
INSURANCE SER ICES
Mary Mosquesa
Principal, Work Life Solutions
Chesterfield, MO
Biography
Ms. Mosqueda is a Principal and Work/Life Practice
Leader in the St. Louis office of Palmer & Cay. She
has over 12 years experience in compensation, human
resources and work/life programs including
development and design of both public and private
sector salary management systems, performance
management and incentive plans.
Prior to joining Wachovia, Ms. Mosqueda was CEO
of a work/life consulting firm, Work/Life Solutions.
Ms. Mosqueda also worked for the University of
Missouri -St. Louis.
Among the clients Ms. Mosqueda has served are
Anheuser-Busch Companies, Inc., Central Bank, The
Council of State Governments, Culpeper County,
Hospice of the Bluegrass, Inc., Jackson Products,
Mary Engelbreit Studios, MasterCard International,
SBC Communications, Stafford County, St. Louis
Public Library, TrustMark Corporation, United
Methodist Family Services, Virginia Housing
Development Authority, Yamaha Motor and
Manufacturing Corporation.
Ms. Mosqueda graduated from Rockhurst College in
Kansas City with a Bachelor of Arts in Business
Communication with emphasis in Public Speaking.
Ms. Mosqueda is a member of the Alliance for
Work/Life Professionals, the Employee Benefits
Association of St. Louis, and WorldatWork. Ms.
Mosqueda also is a member of the WorldatWork
Compensation Advisory Board.
WACHOVIA
28 INSURANCE SERWCFS
Steven L. Farish, HIA
Vice President
Worksite National Practice Leader
Columbia, SC
Biography
Steve Farish is a Vice President and National Practice
Leader for Worksite Marketing for Wachovia
Insurance Services, Inc. His responsibilities include
serving as the primary point of contact to WIS
brokers and bankers for their client's Voluntary
Worksite Benefits needs.
Steve has been affiliated with Wachovia since 2005,
performing in various capacities prior to joining
Wachovia Insurance Services. He served as a
Managing Partner with Palmer & Cay for 9 years
where he was responsible for the management of the
health and welfare offices in South Carolina and
Wachovia Worksite. Prior to that, Steve served as
Regional Sales Manager for Provident Life &
Accident Insurance Company where he served in
various capacities for 19 years.
Steve is a graduate of Presbyterian College with a BS
degree in Biology. He has obtained his HIA from
Health Insurance Association of America, his GEBS
from CEBS and is currently enrolled in the LTCP
program. Steve resides in Columbia, SC with his
wife Nancy and their three children.
W.ACxo`TA
29 INSURANCE SERVICES
Sanford Insurance Agency
Biographies
Douglas Sanford, CIC
Co -CEO, Commercial Lines Sales
Douglas Stanford is Co -Chief Executive Officer of Sanford Insurance Agency and a
principal (owner). He has been a full time employee of Sanford since June of 1970.
He graduated from Vanderbilt University in 1970 and obtained his Certified Insurance
Councilor designation in 1985. He is a Licensed Risk Manager. Douglass has been the
lead agent or co -agent on accounts such as the City of Lubbock, Covenant Health
System, Glass Control, Inc., Texas Tech University, Brandon & Clark and other
complex accounts.
Douglas has been published in Rough Notes and Texas Insurance Journal magazines
and was a speaker at the National Association of Independent Insurers National
Underwriting Conference in April on "The Return to Traditional Underwriting."
Douglas is a past president of the Independent Insurance Agents of Texas and is past
Texas National Director of the Independent Insurance Agents and Brokers of America.
Douglas has been a member of Texas Tech Continuing Education Staff, teaching
insurance principles for Executive Directors of Non -Profit Organizations.
Working with Senator Duncan, Douglas successfully petitioned for a change in the
Charitable Immunity Act of Texas to allow the benefits of the act to reach more
organizations. Douglas testified before Congressional Committees in the process.
WACHOVTA
30 INSURANCE SERWCI@S
s5c,nFo�d
Sanford Insurance Agency
Rhonda Thomack, ACSR, CIC Biographies
Assistant VP, Group Health Insurance Sales
Rhonda Thomack joined the agency in 1984 specializing in Personal Lines Insurance as a Customer
Service Representative. She received her Accredited Customer Service Representative designation
(ACSR) for Personal Lines in 1990. In January of 1994, Rhonda was promoted to Personal Lines
Producer. She expanded her horizons into Commercial Lines small business insurance while
continuing sales in Personal Lines. In 1997, Rhonda received her ACSR accreditation in Commercial
Lines.
Rhonda was promoted to Employee Benefits Producer in 1997. She has the resources to access several
major insurance companies specializing in employee products including major medical, life, dental and
disability coverages. Rhonda has served on the board of the Lubbock Area Association of Health
Underwriters in several capacities, and received the designation of Certified Insurance Counselor in
2003.
In December 2004, Rhonda was promoted to an officer at Sanford Insurance Agency. She is our
Assistant Vice President and Employee Benefits Manager.
One of the strengths of our Benefits Department includes two licensed customer service representatives
working in the office to assist our clients. Cindy Shook and Darlene Gill have many years of
experience in the Life and Health insurance industry as well as a friendly and helpful attitude.
Education is continuous. We attend seminars to keep us up to speed with company changes, new
products, and COBRA compliance.
Our client base varies from small to large. We encourage employees to contact us if there is a question
or problem. We also take a hands on approach to assist with claims.
WACHOVY
31 ]NSURANCE SERVICES
References
Plano Independent School District — 6,150 Covered Employees
6301 Chapel Hill Blvd. Plano, TX 75093 (469) 752-4755
Becky Garrett, Director of Benefits and Risk
Client since 2005 for Health & Welfare Brokerage Consulting Services
Walco International, Inc. — 685 Employees
520 South Main Street Grapevine, TX 76051 (817) 601-3038
Kathy Hassenpflug, Vice President - Human Resources
Client since 2001 for Health & Welfare Brokerage Consulting Services
Sanden International (U.S.A.), Inc. — 640 Covered Employees
601 South Sanden Blvd. Wylie, TX 75089 (972) 442-8514
Stephanie Caraway, Human Resource Manager
Client since 2002 for Health & Welfare Brokerage Consulting Services
Ennis, Inc. — 6,235 Covered Employees
2441 Presidential Pkwy. Midlothian, TX 76065 (972) 775-9818
Richard Maresh, Human Resources Director
Client since 2004 for Health & Welfare Brokerage Consulting Services
ACHOVIA
32 INSURANCF, r►,.t" FR-WCES
Sanford Insurance Agency
Client References
Brandon & Clark, Inc. Ellis Kight, Controller
806-771-5618
City of Lubbock Leisa Hutcheson, Insurance/Risk Management
806-775-2277
Covenant Health System Christine Newman, Manager Workers' Compensation
806-725-1011
D&L Masonry, Inc. Bill Sisson, President
806-795-3141
Glass Control, Inc. Jim Lupton, President/Vice President, Risk Management
714-347-7561
South Plains Compost Wayne Schilling, President
806-745-3559
Texas Medical Liability Trust Don Chow, Vice President Marketing
512-425-5933
Texas Tech University Steve Bryant, Director/Risk Management
806-742-3031
Center for Orthopedic Surgery Seth Crouch, Administrator
806-797-4985
Covenant Medical Group
Hillcrest Family Health Clinic
Lubbock Diagnostic Radiology
Lubbock Surgical Associates
Neurosurgical Associates
Scott Laboratories
Southwest Diagnostic Clinic
S.W.A.T.
West Texas Pediatric Associates
Sanford Insurance Agency
Client References
James Burrell, MD, Administrator
806-725-9966
Terry Witter, Administrator
254-754-2600
Joe Maddux, Administrator
806-792-2767
Allison Mooney, Administrator
806-771-2222
David Langston, Administrator
806-797-2222
Dana Rains, Administrator
806-785-0777
Brad White, Administrator
806-771-5550
Chad Southard, Administrator
806-788-8503
Margaret Bennett, Administrator
806-780-6868
WAGHO A
34 INSURANCE SERVICES
■ ■
Price Proposal and Contract Fee
$3.08
2006/2007 2300 Per Employee $7,084 Per Month $85,000 Annually
Per Month
$3.08
2007/2008 2300 Per Employee $7,084 Per Month $85,000 Annually
Per Month
12008/2009 I 2300 I Not to exceed 5% I Not to exceed 5% I Not to exceed 5%
increase increase increase
We have confidence that we will meet your expectations and help you provide the
most comprehensive benefits to your employees at the best possible price. We are
willing to put a portion of our compensation at risk to ensure your satisfaction. The
suggested performance review criteria will be based on input from the City.
WACHOVIA
35 INSURANCE SERVICES
Compensation Policy
Transparency regarding our sources of income is critical to maintaining the confidence of our
clients. Wachovia Insurance Services, Inc. receives the majority of its remuneration for
insurance placement or related services from commissions paid by insurance companies or fees
paid by the client.
All forms of our compensation are described below.
-Commission
Commissions are paid to us by the insurer for the placement or renewal of insurance policies,
day-to-day servicing of the account, claims handling and other services. Commission rates
differ by type of policy and insurer.
-Fee
Fees we receive from the client are agreed to in writing by us and the client for the placement
of insurance, account servicing, claims handling, and other client services. If the client pays us
a fee, we will receive no other compensation from the insurer without written consent of the
client.
-Interest
Wachovia Insurance Services receives interest income on insurance monies in our bank
accounts. If we finance or assist with the financing of your insurance premiums, Wachovia
Insurance Services may receive income from the premium finance company.
-Expense Reimbursement / Administrative Service Fee
Occasionally, insurance companies will pay Wachovia Insurance Services' fees to provide
services on their behalf for the client. These services can include policy issuance, record
retention, risk control, or other services not reflected in normal policy commission rates. No
such fees will be accepted for services on behalf of this agreement with City of Lubbock.
Wachovia Insurance Services does not accept contingent, profit sharing, override, or incentive -
based compensation. We voluntarily discontinued all such arrangements in 2004.
In the event insurance is placed through a Wachovia Insurance Services -affiliated company,
including wholesale insurance brokers E-Risk or Besso, that entity may also receive
compensation.
If you have any questions or require more information regarding our compensation for the
placement of insurance or other client services, please contact your client executive or local
office manager. We will disclose to our clients, upon request, all commission or other
compensation we receive while acting on our clients' behalf.
Y ACHOVIA
INSUP.ANCE SEIE WCES
Resolution No. 2006-R0370
Additional Services
,
Finally, in addition to our core and value-added Health & Welfare consulting services, you will
have access to the following consulting resources:
• Full data mining and subsequent analytical reporting
• Compensation Consulting
• Human Resource Consulting
• Healthcare Actuarial Services Consulting
• Executive Benefits and Compensation Consulting
• Deferred Compensation Consulting
• Communications Consulting
Additional compensation will be required for these areas and is discussed during our
annual planning meeting.
WACHO'VIA
37 INSUP.ANCE SFIMC.EP,
WACI" OVI.A.
INSURANCE SEEWCES
L nford