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HomeMy WebLinkAboutResolution - 2010-R0461 - Reimbursement Account Agreement - Payflex Systems USA, Inc. - 09/27/2010Resolution No. 2010-RO461 September 27, 2010 Item No. 5.7 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Reimbursement Account Administrative Services Agreement, by and between the City of Lubbock and PayFlex Systems USA, Inc., and related documents. Said Administrative Services Agreement is attached hereto and incorporated in this resolution as if fully set forth herein and shall be included in the minutes of the City Council. THAT the City Manager, or her designee, may execute any routine documents and forms associated with said services. Passed by the City Council on September 27, 2010 TOM MARTIN, MAYOR ATTEST: Rebe a Garza, City Secretary APPROVED AS TO CONTENT: f h Leisa Hutcheson, Director of Human Resources and Risk Management APPROVED AS TO FORM: Chad Weaver, Assistant City Attorney vw: ccdocs/RES. Risk Mgmt-PayFlex Systems USA, Inc. September 10, 2010 I Coll b•act:9760 Resolution No. 2010—RO461 REIMBURSEMENT ACCOUNT ADMINISTRATIVE SERVICES AGREEMENT This Agreement made this 27th day of September 2010, effective January 1, 2011 by and between PayFlex Systems USA, Inc. ("PFS"), a Nebraska corporation and City of Lubbock ("Plan Administrator"). WITNESSETH: WHEREAS, the Plan Administrator is serving as such pursuant to a cafeteria benefit plan known as the Flexible Spending Account Plan for certain employees and/or their dependents ("Participants"); and WHEREAS, PFS provides certain administrative services; and WHEREAS, the Plan Administrator desires to engage PFS to provide certain administrative services for the Plan and PFS is willing to provide such services; NOW THEREFORE, in consideration of the mutual promises and duties set forth in this Agreement, the parties agree as follows: ARTICLE I ADMINISTRATIVE SERVICES 1.1 PFS shall provide administration services in accordance with the Services listed in Exhibit A. 1.2 PFS shall, at its expense, maintain adequate and necessary records on each Participant for the proper administration of the Plan. The Plan Administrator shall furnish PFS with all information necessary for the preparation of such records. The records maintained on each Participant shall include, but are not limited to: a. Full name and address; b. Social Security Number or comparable Employee Identification Number c. Election amount; and d. Effective date of coverage. 1.3 PFS shall provide the Plan Administrator with forms or comparable electronic means for the enrollment and maintenance of a Participant's records and for the Participant's submission of claim for payment of benefits provided in the Plan. 1.4 PFS shall provide the Plan Administrator an administration manual for the orderly operation of the Plan. 1.5 PFS shall assist the Plan Administrator, or its designated agent, with information relating to the preparation and filing of any report, form or document required by any state or federal authority with respect to the Plan. PFS will assist the Plan Administrator by providing the following, where required: a. Softcopy drafts of the Plan Document and Summary Plan Description at the request of the Plan Administrator b. Necessary information to the Plan Administrator for the filing of the 5500 Form when required -1- 1.6 The Plan Administrator shall be responsible for final preparation and filing of the following documents in connection with the Plan where such documents are required to be filed: a. The Plan Document and Summary Plan Description b. A corporate resolution adopting the Plan c. Filing of Annual Report Form 5500, where required d. Non-discrimination testing PFS shall provide no legal advice or services in connection with the Plan. 1.7 In accordance with the Plan Administrator's instructions and pursuant to an agreement to reimburse PFS for any expenses incurred, PFS may solicit professional advice and/or services as may be deemed advisable for the Plan. Such advice or service may include, but is not limited to: a. Accounting advice, b. Tax counsel, and c. Legal counsel. PFS shall confer with the Plan Administrator in regard to these issues and obtain written approval from Plan Administrator prior to incurring expense associated with professional advice and/or services. 1.8 PFS shall hold all funds received from the Plan Administrator in an account established for such purpose at a financial institution. PFS shall pay all fees associated with said account. 1.9 PFS shall maintain Professional Liability Insurance to cover liability resulting from any error or omission caused by the performance of professional services under this Contract. PayFlex shall maintain Crime Insurance to cover liability from any wrongful act by a PFS employee. ARTICLE II PLAN ADMINISTRATOR'S RESPONSIBILITIES 2.1 The Plan Administrator shall provide PFS with the necessary enrollment records of the Plan Participants as of the effective date of this Agreement. Thereafter, the Plan Administrator shall notify PFS of all changes, including but not limited to, termination, changes in status or addition of new Participants. PFS shall not be liable for any action it has taken on behalf of a Participant prior to its receipt of information that would have caused a different decision. 2.2 The Plan Administrator shall be responsible for any delay in the performance of the administrative and claims service caused by the failure of the Plan Administrator to furnish promptly any required enrollment information or claim funds to PFS. 2.3 The Plan Administrator shall provide PFS with true and accurate information including, but not limited to, accounting of all Participants and changes. PFS shall not be liable for any loss incurred as a result of any inaccurate information furnished to PFS by the Plan Administrator. 2.4 The Plan Administrator shall maintain a supply of forms, and shall distribute or make available such forms to the Participants for the filing of claims to benefits or to report changes in participation. 2.5 The Plan Administrator shall be solely responsible for the collection and administration of the contributions to the Plan. -2- 2.6 The Plan Administrator shall provide to PFS all materials, documents and information as may be necessary for the operation of the Plan or to satisfy the requirements of governing law. 2.7 The Plan Administrator shall be responsible for satisfying any and all reporting and disclosure requirements imposed on the Plan under applicable law. PFS will assist with such requirements upon written request from the Plan Administrator. 2.8 The Plan Administer is responsible for maintaining reasonable internal control mechanisms as they relate to the services that PFS provides. a. The Plan Administrator shall have its own security administration functions and should implement controls that users are removed promptly when they no longer need access to system resources. b. The Plan Administrator shall implement controls to ensure that PFS -generated reports are reviewed for accuracy and participant activity on a timely basis. c. The Plan Administrator shall implement controls to ensure that erroneous input data is corrected and re -submitted. d. The Plan Administrator shall reconcile all cash activity to PFS reports on an interval that is deemed necessary, which may be up to daily. e. The Plan Administrator shall implement controls to ensure the list of employee eligibility information is accurate. f. The Plan Administrator shall implement controls to make sure that all data that is electronically transmitted to PayFlex meets the Plan Administrator's security standards. g. The Plan Administrator shall insure that the necessary Administrative Service Agreement(s) are in place to properly define the scope of services to be rendered and to define the risks and responsibilities assigned to each of the parties involved. h. The Plan Administrator shall report any identified errors to PFS within one (1) month of the occurrence. ARTICLE III FEES 3.1 The Plan Administrator agrees to pay PFS the fees set forth in Exhibit A of this Administrative Services Agreement. Fees are payable via an ACH debit that shall be initiated by PFS ten (10) days after invoice delivery to the Plan Administrator. PFS shall initiate the ACH debit against an account designated for this purpose by the Plan Administrator. This may be the same account designated for ACH funding, or may be a unique account at the Plan Administrator's discretion. 3.2 If, during the term of this Agreement, any tax (other than local, state or federal income taxes) or any other assessment or premium charge, shall be assessed against PFS, with respect to this agreement, PFS shall report the payment of such assessment to the Plan Administrator and the Plan Administrator shall reimburse PFS for the same. 3.3 Nothing in this Article III shall prohibit PFS from performing any service not enumerated in this Agreement for a reasonable fee. Any such service and corresponding fee may be provided only if agreed to by the Plan Administrator and PFS, in writing, in advance of such performance. 3.4 If the Plan Administrator, for any reason whatsoever, fails to make a required payment on a timely basis, PFS may suspend the performance of its services until such time as the Plan Administrator makes the proper remittance. PFS shall provide the Plan Administrator with prior notice of its intent to take such action. -3- 3.5 If the agreement is terminated by either party and claims are still being processed by PFS for the three month run -out period, a fee of three times the last active plan year month's bill will be charged to the Plan Administrator. This fee shall be assessed during the last month of the plan year. This fee is due in full prior to processing of any claims during the three month run -out period. ARTICLE IV MISCELLANEOUS PROVISIONS 4.1 PFS is not and shall not be deemed the "plan administrator," a "named fiduciary" or a "fiduciary" of the Plan as defined in the Employee Retirement Income Security Act of 1974, as amended, or for purposes of any other applicable state or local law affecting or regulating the Plan. 4.2 PFS shall not be required to advance its funds for the payment of claims under the Plan. PFS shall not be considered the insurer or underwriter of the liability of the Plan Administrator to provide benefits for the Participants. The Plan Administrator shall have the final responsibility and liability for payment of claims under the Plan. The Plan Administrator shall be responsible for all expenses incident to the operation of the Plan. 4.3 The Plan Administrator agrees to indemnify PFS, to the extent allowed by law, against damages, losses and expense, including court costs and reasonable attorneys' fees incurred by PFS in connection with the defense of any action, suit or proceeding (including settlement of same) in which it is made or threatened to be made a party by reason of any acts or conduct arising out of the performance of its duties under this Agreement, except in relation to matters as to which PFS shall be finally adjudged to be liable for negligence or willful misconduct in the performance of its duties; provided, in no event shall PFS be liable if PFS' action was based on directions or instructions from the Plan Administrator or its designee. 4.4 PFS agrees to indemnify the Plan Administrator against damages, losses and expenses, including court costs and reasonable attorneys' fees incurred in connection with the defense of any action, suit or proceeding (including settlement of same) in which it is made or threatened to be made a party by reason of any acts or conduct arising out of the performance of is administrative duties under this Agreement where PFS is proven negligent or willful misconduct in the performance of its duties. 4.5 PFS agrees to assist the Plan Administrator in meeting their requirements of the Health Insurance Portability and Accountability Act as set forth in Exhibit B of this Administrative Services Agreement. 4.6 Neither the Plan Administrator nor PFS makes any commitment or guarantee that any amounts paid to or for the benefit of a Participant under the Plan will be excludable from the Participant's gross income for federal, state or local income tax purposes. It shall be the obligation of each Participant to determine whether each payment under the Plan is excludable from the Participant's gross income for federal, state and local income tax purposes. 4.7 Notices under this Agreement will be delivered by first class mail (postage paid) or by overnight commercial delivery service or delivered by hand to Plan Administrator's address as follows: Employer: City of Lubbock, Texas Attn: Terri Smith, Benefits and Wellness Manager Address: P. O. Box 2000 City: Lubbock State: Texas ZIP: 79457 and to PFS' address as follows: PayFlex Systems USA, Inc. Attn: CEO 10802 Farnam Street, Suite 100 Omaha, NE 68154 4.8 This document constitutes the entire agreement of the parties with respect to the subject matter hereof. This Agreement shall be governed by the internal laws of the State of Texas except to the extent superseded by ERISA. ARTICLE V AMENDMENTS 5.1 This Agreement may be amended by a written instrument executed by the Plan Administrator and PFS. ARTICLE VI DURATION OF THIS AGREEMENT 6.1 This Agreement shall have an initial term of three (3) years from the effective date of this Agreement, and shall automatically be renewed for each succeeding period of twelve (12) consecutive months; provided, this Agreement may be terminated by either party following the initial three-year period in writing to the other party at least sixty (60) days prior to the plan renewal date for each successive twelve-month period. The fees stated in Exhibit A shall be guaranteed through the initial term of the Agreement. Fees shall be subject to negotiation on the anniversary date of the initial term, providing PFS has provided the Plan Administrator 30 -days notice of intent to adjust the fees. The new fees and Agreement would then be in force upon the first day of the subsequent term. ARTICLE VII TERMINATION OF THIS AGREEMENT 7.1 In the event of a material breach by PFS, the Plan Administrator shall provide an opportunity for PFS to cure the breach or end the violation within 30 days. If PFS does not cure the breach or end the violation within the time specified, this Agreement shall, at the option of the Plan Administrator, terminate upon written notice to PFS. 7.2 This Agreement shall, at the option of PFS, terminate immediately following three days written notice from PFS to the Plan Administrator, in the event of: a. The Plan Administrator's failure to pay the fees provided in Exhibit "A" by the due date; b. Failure of the Plan Administrator to either fund a claim payment or reject the claim in writing, in either case within thirty days after receipt by the Plan Administrator of the check history with respect to such claim; c. Bankruptcy or insolvency of the Plan Administrator; -5- d. Failure of the Plan Administrator to promptly deliver any required data necessary for the proper performance of PFS duties; e. Merger, sale or consolidation of the Plan Administrator, unless provisions have been made with PFS to continue services with the successor Plan Administrator in advance of such event; or f. The enactment of any law or regulation which makes illegal or uneconomical the continuance of this agreement. 7.3 In the event of termination of this Agreement, PFS shall complete the processing of all requests for claim payments under the Plan which were received by it and are due and payable prior to the termination of this Agreement, but PFS shall have no obligation: a. To complete the processing of any such claim if the Plan Administrator has failed to provide funds for its payment; or b. To process requests for claim payments presented after the termination date. 7.4 All payments made in accordance with section 7.3 above shall continue to be the responsibility and liability of the Plan Administrator. 7.5 PFS shall, upon written request, deliver to the Plan Administrator within a mutually agreed upon timeframe a complete and final accounting and report of the financial status of the Plan. All books and records in its possession with respect to the Plan, all claims files, and all reports and other papers pertaining to the Plan will be maintained by PFS for a period of six years. All claims systems, computer systems and software developed by PFS in connection with the administrative services rendered hereunder constitutes the property of PFS and shall be retained by PFS upon the termination of this Agreement. 7.6 The respective rights and obligations of Business Associate under Exhibit B of this Agreement shall survive the termination of this Agreement. Plan Administrator/Covered Entity Employer: City of Lubbockck Name: Tom Martin Title: Mayor Date: September 27, 2010 ATTEST: j-.04 Reb cca Garza, City Secretary 0 PayFlex Systems USA, Inc. By: Name: S. Robert utler Title: President Date: _9/15/10 APPROVED AS TO CONTENT: Leisa Hutcheson, Director of Human Resources and Risk Management APPROVED AS TO FORM: Chad Weaver, Assistant City Attorney -7- EXHIBIT A Resolution No. 2010-RO461 Flexible Spending Account Services Effective January 1, 2011 This Exhibit itemizes the scope of services, fees and expense reimbursements PFS is entitled to pursuant to the Administrative Services Agreement to which this Exhibit "A" is attached. CLAIM SERVICES 1.1 PFS shall process any application for benefits made by the Participant on the forms approved by the Plan Administrator or via approved electronic means, and after due investigation and verification of the statements contained therein, will assist in the determination of the eligibility of the Participant to benefits under the Plan. 1.2 PFS shall conduct such examination as is reasonable to determine that the claim for benefit is consistent with the terms of the Plan and will assist in the determination of the amounts due and payable pursuant to the Plan. 1.3 PFS shall make available to the Plan Administrator, a check history showing the name of Participant, name of payee and amount of benefit payable based on PFS' determination as to the allowability of the claim. 1.4 PFS shall arrange for the payment of all valid claims from the funds made available by the Plan. The claim checks shall be made payable to the Participant, his assignee or to such other person designated by the Participant not otherwise restricted or prohibited by the Plan. The Plan Administrator authorizes PFS to prepare and issue checks signed by PFS from an account funded by the Plan Administrator for the purpose of paying claims. PFS shall request payment from the Plan Administrator on a periodic basis for the total amount of reimbursements representing payment of claims. Funding shall take the form of an ACH debit that PFS will initiate against the Plan Administrator's designated bank account. This may be the same account designated for administration fees, or may be a unique account at the Plan Administrator's discretion. Such reimbursements will not be released until current funds are received by PFS from the Plan Administrator. The Plan Administrator shall advise a Participant of any delays in payment of any claim due to the failure of the Plan Administrator to fund a claim payment and the effect of such delay on the payment of the claim processed pursuant to this Agreement. In the event that claims are released prior to funds receipt by PFS, the Plan Administrator shall be subject to a Failure to Fund Claims fee as outlined in Exhibit A. 1.5 The Plan Administrator shall have the final authority to authorize or disallow benefit payments. PFS shall assume no liability and shall be held harmless by the Plan and the Plan Administrator in complying with instructions communicated by the Plan Administrator to PFS orally or in writing. 1.6 In the event the claim is determined to be not payable, PFS shall notify the Participant of such decision, including the reason for the denial. The Participant shall have the right to appeal such denial. PFS will evaluate the appeal and advise the Plan Administrator of its recommendation as to the allowability of the claim. The final disposition of the claim will be made by the Plan Administrator. N 1.7 PFS shall maintain current, accurate, and complete records and files of all claim submissions and payments administered by PFS for each Participant for a period of at least seven years after the filing of the Plan information to which they relate. cost: 1.8 PFS shall make available to the Plan Administrator with the following standard reports at no a. Ledger Summary Report (Monthly) — List of deposits, payments and account balances by employee account for the period and YTD. b. Election Report (Beginning of plan year) — List of elections by employee account. Allows employer to verify deductions and annual elections. c. Funding Notification Reports (Settlement and Production) — Voucher -style report sent every time funding transactions are initiated. d. Production and Settlement Payment Registers — Supporting detail for the Funding Notification Report. Lists participant reimbursements by account type, plan year and division. Provided for all manual and commuter claim payments. 1.9 Custom reports shall be provided subject to feasibility and data availability. Custom reports are not standard and shall be subject to cost. The Plan shall be billed for programming time in accordance with the Exhibit A. 1.10 The claims services listed in this Article maybe expanded by written agreement between the parties. 1.11 PFS, in accordance with its efforts to be an environmentally responsible company, shall provide participants with current account balance and activity information via electronic means, including web portal and call center. Periodic balance information shall be provided via Explanation of Benefits documents that accompany claims reimbursements. PayFlex shall not produce and mail separate, periodic statements to participants. -9- FEES AND EXPENSE REIMBURSEMENTS 1. Implementation Setup Fees* FSA Administration 2. Annual Renewal Fees* FSA Administration 3. Monthly Administration Fee Per Participant** FSA Without Debit Card (Minimum $100 per month) 4. Other Fees Special Requests: Custom Reporting: Special Handling Fee: Rejected/NSF Client Funding ACH transactions Failure to Fund Released Claims: Wire Transfer Fee Open Enrollment Meeting Support Participant Statements Waived $750 $4.25 pppm As mutually agreed upon by the Plan Administrator and PFS $150 per hour If a check is reissued at the request of the employer earlier than 14 days from the time it originally left PFS, a $25 fee will be assessed $50 per occurrence of any client funding ACH pull that is rejected An interest charge assessed for each day in which an outstanding balance is not funded; calculated at a rate not to exceed regulatory rates and based on the average daily balance outstanding across all non- funded days $15 per wire transfer One day of meetings at a primary location is included. Additional days are billed at $250 per day + travel expenses. $0.20 per participant per month, optional service for quarterly delivery of statements. *Annual Administration Fee includes: ■ Standard Enrollment Materials, limited to the number of eligible employees ■ Preparation of Plan Document and Summary Plan Description ■ One series of discrimination tests per year, upon written request ■ Form 5500 information provided (if applicable) **Participants are defined as: ■ An employee in an active status ■ A terminated employee with a balance greater than $10.00 — Billing for terminated employees continues for a three billing cycles after termination, or until the participant's balance drops below $10. -10- Resolution No. 2010—R0461 EXHIBIT B Business Associate Agreement Flexible Spending Account Plan Administrative Services Agreement This Exhibit is effective as of the date signed and supplements and is made a part of the Administrative Services Agreement for Flexible Spending Account plan administration. I. Preamble WHEREAS, the Health Insurance Portability and Accountability Act ("HIPAA") of 1996, and its implementing regulation, the Standards for Privacy of Individually Identifiable Health Information, 45 CFR Part 160 and Part 164, Subparts A and E (hereinafter the "HIPAA Privacy Rule"), applies to certain group health plans ("Covered Entity") maintained by the employer; and WHEREAS, PayFlex Systems USA, Inc. ("Business Associate") provides certain administrative services in various aspects of cafeteria plan administration; and WHEREAS, PayFlex Systems USA, Inc. will assist Covered Entity in meeting the requirements of the HIPAA Privacy Rule as described herein; and, WHEREAS, Covered Entity and PayFlex Systems USA, Inc. (jointly "the Parties") wish to enter into an Agreement that addresses the requirements of the HIPAA Privacy Rule with respect to "business associates," as the term is defined in the HIPAA Privacy Rule; and WHEREAS, this Agreement is specifically intended to ensure the Business Associate will establish and implement appropriate safeguards (including certain administrative requirements) for "Protected Health Information" ("PHI") the Business Associate may create, receive, use, or disclose in connection with certain functions, activities, or services (collectively "services") to be provided by Business Associate to Covered Entity. The services to be provided by Business Associate are identified in this agreement between the Parties entitled Administrative Services Agreement; and WHEREAS, the Parties acknowledge and agree that in connection with the services to be provided, Business Associate will create, receive, use or disclose Protected Health Information. As set forth in the HIPAA Privacy Rule and as used herein, PHI is defined as Individually identifiable health information maintained or transmitted in any form or medium, including, without limitation, all information (including demographic, medical, and financial information), data, documentation, and materials that relate to: (i) the past, present, or future physical or mental health or condition of an Individual; (ii) the provision of health care to an Individual; or (iii) the past, present, or future payment for the provision of health care to an Individual. PHI does not include health information that has been de -identified in accordance with the standards for de -identification provided for in the HIPAA Privacy Rule. NOW THEREFORE, in connection with Business Associate's creation, receipt, use or disclosure of PHI, Business Associate and Covered Entity agree as follows: -11- II. General Terms a. All capitalized terms of the Agreement shall have the meanings set forth in the HIPAA Privacy Rule, unless otherwise defined herein: Agreement. "Agreement" shall mean the Business Associate Agreement between the Business Associate and Covered Entity. Business Associate. "Business Associate" shall mean PayFlex Systems USA, Inc. Covered Entity. "Covered Entity" shall mean the flexible benefit plan of the employer. Electronic Protected Health Information. "Electronic Protected Health Information" shall have the same meaning as the term "electronic protected health information" in 45 CFR Section 160.103. Individual. "Individual" shall have the same meaning as the term "individual" in 45 CFR Section 160.103 and shall include a person who qualifies as a personal representative in accordance with 45 CFR Section 164.502(g). Privacy Rule. "Privacy Rule" shall mean the Standards for Privacy of Individually Identifiable Health Information at 45 CFR Part 160 and Part 164, Subparts A and E. Protected Health Information. "Protected Health Information" (PHI) shall have the same meaning as the term "protected health information" in 45 CFR Section 160.103, limited to the information created or received by Business Associate from or on behalf of Covered Entity. Required By Law. "Required By Law" shall have the same meaning as the term "required by law" in 45 CFR Section 164.103. Secretary. "Secretary" shall mean the Secretary of the Department of Health and Human Services or his designee. Security Incident. "Security Incident" shall have the same meaning as the term "security incident" in 45 CFR Section 164.304. Security Rule. "Security Rule" shall mean the Security Standards and Implementation Specifications at 45 CFR Part 160 and Part 164, subpart C. Standards for Electronic Transactions Rule. "Standards for Electronic Transactions Rule means the final regulations issued by HHS concerning standard transactions and code sets under the Administration Simplification provisions of HIPAA, 45 CFR Part 160 and Part 162. b. In the event of an inconsistency between the provisions of the Agreement and the mandatory terms of the HIPAA Privacy Rule, as may be expressly amended from time to time by the Department of Health and Human Services (HHS) or as a result of interpretations by HHS, a court, or another regulatory agency with authority over the Parties, the interpretation of HHS, such court or regulatory agency shall prevail. In the event of a conflict among the interpretations of these entities, the conflict shall be resolved in accordance with rules of precedence. c. Where provisions of this Agreement are different from those mandated by the HIPAA Privacy Rule, but are nonetheless permitted by the Rule, the provisions of the Agreement shall control. d. Except as expressly provided in the HIPAA Privacy Rule or this Agreement, this Agreement does not create any rights in third parties. III. Obligations and Activities of Business Associate a. Business Associate agrees to not use or disclose PHI other than as permitted or required by this Agreement or as required by law. b. Business Associate agrees to use appropriate safeguards to prevent use or disclosure of the PHI other than as provided for by this Agreement. -12- Business Associate agrees to implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of electronic PHI that it creates, receives, maintains, or transmits on behalf of Covered Entity as required by the Security Rule. d. Business Associate agrees to report to Covered Entity, within a reasonable time after discovery, any use or disclosure of the PHI not provided for by this Agreement of which it becomes aware and/or any Security Incident of which it becomes aware. e. Business Associate agrees to require that any agent, including a subcontractor, to whom it provides PHI received from, or created or received by Business Associate on behalf of Covered Entity agrees to the same restrictions and conditions that apply through this Agreement to Business Associate with respect to such information. Moreover, Business Associate agrees to require that any agent, including a subcontractor, to whom it provides electronic PHI agrees to implement reasonable and appropriate safeguards to protect such information of Covered Entity. f. Business Associate agrees to provide access, at the request of Covered Entity, within a reasonable time after request, to Protected Health Information in a Designated Record Set (if available), to Covered Entity, or, as directed by Covered Entity, to an individual in order to meet the requirements of 45 CFR 164.524. g. Business Associate agrees to make any amendment(s) to PHI in a Designated Record Set (if available) that the Covered Entity directs or agrees to pursuant to 45 CFR 164.526 at the request of Covered Entity or an individual, within a reasonable time after request. h. Business Associate agrees to make internal practices, books and records, including policies and procedures and PHI, relating to the use and disclosure of PHI received from, or created or received by Business Associate on behalf of, Covered Entity available to the Secretary, within a reasonable time after request, or designated by the Secretary, for purposes of the Secretary determining Covered Entity's compliance with the Privacy Rule. Business Associate agrees to document such disclosures of PHI and information related to such disclosures as would be required by Covered Entity to respond to a request by an individual for an accounting of disclosures of PHI in accordance with 45 CFR 164.528. Business Associate agrees to provide to Covered Entity or an individual, within a reasonable time after request, information collected in accordance with Section IIIb) of this Agreement, to permit Covered Entity to respond to a request by an individual for an accounting of disclosures of PHI in accordance with 45 CFR 164.528. k. Business Associate may charge Covered Entity a reasonable fee for copying, summarizing or mailing information. IV. Permitted Uses and Disclosures by Business Associate Except as otherwise limited in this Agreement, Business Associate may use or disclose PHI to perform functions, activities or services for, or on behalf of, Covered Entity as specified in the Administrative Services Agreement, provided that such use or disclosure would not violate the Privacy Rule if done by Covered Entity or the minimum necessary policies and procedures of the Covered Entity. Additionally, Business Associate may use and disclose PHI as follows: -13- a. Except as otherwise limited in this Agreement, Business Associate may use PHI for the proper management and administration of the Business Associate or to carry out the legal responsibilities of the Business Associate. b. Except as otherwise limited in this Agreement, Business Associate may disclose PHI for the proper management and administration of the Business Associate, provided that disclosures are required by law, or Business Associate obtains reasonable assurances from the person to whom the information is disclosed that it will remain confidential and used or further disclosed only as required by law or for the purpose for which it was disclosed to the person, and the person notifies the Business Associates of any instances of which it is aware in which the confidentiality of the information has been breached. C. Except as otherwise limited in this Agreement, Business Associate may use PHI to provide data aggregation services to Covered Entity as permitted by 42 CFR 164.504(e)(2)(i)(B). d. Business Associate may use PHI to report violations of law to appropriate Federal and State authorities, consistent with Section 164.5020)(1). V. Obligations of Covered Entity Provisions for Covered Entity to Inform Business Associate of Privacy Practices and Restrictions. a. Covered Entity shall notify Business Associate of any limitation(s) in its notice of privacy practices of Covered Entity in accordance with 45 CFR 164.520, to the extent that such limitation may affect Business Associate's use or disclosure of PHI. b. Covered Entity shall notify Business Associate of any changes in, or revocation of, permission by individual to use or disclose PHI to the extent that such changes may affect Business Associate's use or disclosure of PHI. C. Covered Entity shall notify Business Associate of any restriction to the use or disclosure of PHI that Covered Entity has agreed to in accordance with 45 CFR 164.522, to the extent that such restriction may affect Business Associate's use or disclosure of PHI. d. Upon mutual agreement, Covered Entity shall pay Business Associate its reasonable fees for the services of Business Associate for complying with the HIPAA Privacy Rule. VI. Term and Termination a. Term. The Term of this Agreement shall be effective as of the later of April 14, 2003 (April 14, 2004 for small plans), or the effective date of the Administrative Services Agreement, and shall terminate when all of the PHI provided by Covered Entity to Business Associate, or created or received by Business Associate on behalf of Covered Entity, is destroyed or returned to Covered Entity, or, if it is infeasible to return or destroy PHI, protections are extended to such information, in accordance with the termination provisions in this Section. b. Termination for Cause. Upon Covered Entity's knowledge of a material breach by Business Associate, Covered Entity shall either: (1) Provide an opportunity for Business Associate to cure the breach or end the violation and terminate this Agreement if Business Associate does not cure the breach or end the violation within the time specified by Covered Entity; -14- (2) Immediately terminate this Agreement if Business Associate has breached a material term of this Agreement and cure is not possible; or (3) If neither termination nor cure are feasible, Covered Entity shall report the violation to the Secretary. C. Effect of Termination. (1) Except as provided in paragraph (2) of this section, upon termination of this Agreement, for any reason, Business Associate shall return or destroy all PHI received from Covered Entity, or created or received by Business Associate on behalf of Covered Entity. This provision shall apply to PHI that is in the possession of subcontractors or agents of Business Associate. Business Associate shall retain no copies of the PHI. (2) In the event that Business Associate determines that returning or destroying the PHI is infeasible, Business Associate shall provide to Covered Entity notification of the conditions that make return or destruction infeasible. Upon written notice to Covered Entity that return or destruction of PHI is infeasible, Business Associate shall extend the protections of this Agreement to such PHI and limit further uses and disclosures of such PHI to those purposes that make the return or destruction infeasible, for so long as Business Associate maintains such PHI. VII. Miscellaneous a. Amendment. The parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for Covered Entity to comply with the requirements of the Privacy Rule and the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104-191. Survival. The respective rights and obligations of Business Associate under Section VI(c) of this Agreement shall survive the termination of this Agreement. C. Interpretation. Any ambiguity in this Agreement shall be resolved to permit Covered Entity to comply with the Privacy Rule. a. The Health Information Technology for Economic and Clinical Health Act ("HITECH Act") was adopted as part of the American Recovery and Reinvestment Act of 2009 on February 17, 2009. The HITECH Act and its implementing regulations impose new requirements on business associates with respect to privacy, security, and breach notification. b. The provisions of the HITECH Act and the regulations thereto applicable to business associates shall be collectively referred to herein as the "HITECH BA Provisions." C. The HITECH BA Provisions shall commence on the respective effective date set out in the HITECH Act for each respective HITECH BA Provision, or such other effective date as may be specified in the applicable regulations thereto, whichever is later ("Applicable Effective Date"). -15- d. Business Associate agrees that to the extent it is functioning as a business associate of Covered Entity, Business Associate will comply with the HITECH BA Provisions and with the obligations of a Business Associate as prescribed by HIPAA and the HITECH Act commencing on the Applicable Effective Date of each respective HITECH BA Provision. e. Business Associate and the Covered Entity agree that the HITECH BA Provisions that apply to business associates and that are required to be incorporated by reference in a business associate agreement are hereby incorporated into this Agreement as if set forth in the Agreement in their entirety and that each HITECH BA Provision shall be effective as of the Applicable Effective Date. Employer: City of Lubbock By: ,a✓ Name: Tom Martin Title: Mayor Date: September 27, 2010 ATTEST: . 1) a;e� - _5K Reb cca Garza, City Secretary ePl Itexcelad:104 1� Leisa Hutcheson, Director of Human Resources and Risk Management APPROVED AS TO FORM: C ad Weaver, Assistant City Attorney -16- PayFlex Syste SA By: < zorz- Name: S. Robert Butler Title: President Date: 9/15/10