The URL can be used to link to this page

Home My WebLink AboutResolution - 2013-R0284 - Agreement - Blue Cross Blue Shield - Medical Administrative Services Only - 09/10/2013Resolution No. 2013—RO284 September 10, 2013 Item No. 5.17 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, an Agreement to provide medical Administrative Services Only (ASO), by and between the City of Lubbock and Blue Cross Blue Shield of Texas, and related documents. Said 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 may execute any routine documents and forms associated with said coverage. Passed by the City Council on September 10, 2013 GLEN kOBEATSON, MAYOR ATTEST: eb cca Garza, City SecrelarQ APPROVED AS TO CONTENT: r Leisa Hutcheson, Director of Human Resources and Risk Management APPROVED AS TO FORM: Chad Weaver, Assistant City Attorney Vw:ccdocs/RES. Risk Mgmt-BCBSTX August 20, 2013 Resolution No. 2013-RO284 B1ueCross B1ueShield RD_ Texas ADMINISTRATIVE SERVICES AGREEMENT HCSC TX Gen ASA Med Non ERISA REG -CF Rev.2 13 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. A Division of Health Care Service Corporation, a Mutual Legal Reserve Company, An Independent Licensee of the Blue Cross and Blue Shield Association TABLE OF CONTENTS ADMINISTRATIVE SERVICES AGREEMENT................................................................................................................ 1 SECTION1: APPOINTMENT.................................................................................................................................................. 4 SECTION 2: AGREEMENT DEFINITIONS............................................................................................................................ 4 SECTION 3: SERVICES TO BE PROVIDED BY THE CLAIM ADMINISTRATOR........................................................... 7 SECTION 4: CERTAIN RESPONSIBILITIES OF THE EMPLOYER AND THE CLAIM ADMINISTRATOR .................. 8 SECTION 5: THIRD PARTY DATA RELEASE...................................................................................................................... 9 SECTION 6: REFERRAL OF CERTAIN CLAIMS/INQUIRIES........................................................................................... 10 SECTION 7: CLAIM DISPUTE RESOLUTION.................................................................................................................... 10 SECTION 8: FINAL DETERMINATION OF CLAIMS/INQUIRIES.................................................................................... 10 SECTION 9: COOPERATION OF THE PARTIES................................................................................................................. 10 SECTION 10: HIPAA CERTIFICATE OF CREDITABLE COVERAGE.............................................................................. 11 SECTION 11: INDEMNIFICATION....................................................................................................................................... 11 SECTION 12: AUDIT AND CORRECTION OF AUDIT ERRORS...................................................................................... 12 SECTION 13: TERM AND TERMINATION OF AGREEMENT.......................................................................................... 13 SECTION 14: RELATIONSHIP OF PARTIES....................................................................................................................... 13 SECTION 15: NON ERISA GOVERNMENT REGULATIONS............................................................................................ 14 SECTION 16: PROPRIETARY MATERIALS........................................................................................................................ 14 SECTION 17: ELECTRONIC DOCUMENTS........................................................................................................................ 14 SECTION18: RECORDS........................................................................................................................................................ 15 SECTION 19: APPLICABLE LAW........................................................................................................................................ 15 SECTION20: ENTIRE AGREEMENT................................................................................................................................... 15 SECTION 21: NOTICE AND SATISFACTION..................................................................................................................... 15 SECTION22: INSURANCE.................................................................................................................................................... 16 SECTION 23: NON-ARBITRATION...................................................................................................................................... 16 SECTION 24: OBLIGATION TO CONTINUE PERFORMANCE........................................................................................ 16 SECTION25: NOTICES.......................................................................................................................................................... 16 SECTION 26: SEVERABILITY/GRANDFATHERED AFFORDABLE CARE ACT........................................................... 17 SECTION27: ENFORCEMENT............................................................................................................................................. 17 SECTION28: FORCE MAJEURE.......................................................................................................................................... 17 SECTION 29: INDUSTRY IMPROVEMENT, RESEARCH AND SAFETY........................................................................ 17 HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 2 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 30: CLAIM ADMINISTRATOR USE OF THIRD PARTY RECOVERY VENDOR .......................................... 17 SECTION 31: NOTICE OF ANNUAL MEETING................................................................................................................. 18 EXHIBIT1.............................................................................................................................................................................. 20 CLAIM ADMINISTRATOR SERVICES................................................................................................................................ 20 EXHIBIT2.............................................................................................................................................................................. 23 FEE SCHEDULE, FINANCIAL RESPONSIBILITIES & REQUIRED DISCLOSURES...................................................... 23 SECTION1: FEE SCHEDULE................................................................................................................................................ 23 SECTION2: EXHIBIT DEFINITIONS................................................................................................................................... 23 SECTION 3: COMPENSATION TO CLAIM ADMINISTRATOR....................................................................................... 24 SECTION4: CLAIM PAYMENTS......................................................................................................................................... 25 SECTION5: EMPLOYER PAYMENT................................................................................................................................... 25 SECTION 6: CLAIM SETTLEMENTS................................................................................................................................... 26 SECTION 7: LATE PAYMENTS AND REMEDIES.............................................................................................................. 26 SECTION 8: FINANCIAL OBLIGATIONS UPON AGREEMENT TERMINATION.......................................................... 27 SECTION 9: REQUIRED DISCLOSURE PROVISIONS....................................................................................................... 27 SECTION 10: PAYMENT OF CLAIMS AND ASSIGNMENT OF BENEFITS.................................................................... 27 SECTION 11: COVERED PERSON/PROVIDER RELATIONSHIP..................................................................................... 28 SECTION 12: CLAIM ADMINISTRATOR'S SEPARATE FINANCIAL ARRANGEMENTS WITH PRESCRIPTION DRUGPROVIDERS................................................................................................................................................................ 28 SECTION 13: CLAIM ADMINISTRATOR'S SEPARATE FINANCIAL ARRANGEMENTS WITH PHARMACY BENEFITMANAGERS........................................................................................................................................................... 29 SECTION 14: INTER -PLAN ARRANGEMENTS................................................................................................................. 30 SECTION 15: MEDICARE SECONDARY PAYER ("MSP") INFORMATION REPORTING ........................................... 34 SECTION 16: REIMBURSEMENT PROVISION.................................................................................................................. 35 EXHIBIT3.............................................................................................................................................................................. 36 RECOVERY LITIGATION AUTHORIZATION.................................................................................................................... 36 EXHIBIT4.............................................................................................................................................................................. 38 COBRA HEALTH BENEFITS CONTINUATION COVERAGE.......................................................................................... 38 EXHIBIT5.............................................................................................................................................................................. 45 BENEFIT PROGRAM APPLICATION ("ASO BPA")........................................................................................................... 45 HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 1 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. This Agreement made as of the Effective Date specified on page 1 of this Agreement, by and between Blue Cross and Blue Shield of Texas, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company (hereinafter referred to as the "Claim Administrator"), and the City of Lubbock, (hereinafter referred to as the "Employer"), for the Account Number set forth on page 1 of this Agreement, WITNESSETH AS FOLLOWS: RECITALS WHEREAS, the Employer on behalf of the Group Health Plan has executed an ASO Benefit Program Application ("ASO BPA") and the Claim Administrator has accepted such ASO BPA attached hereto as Exhibit 5 with such ASO BPA and this Agreement collectively referred to hereinafter as the "Agreement", unless specified otherwise; and WHEREAS, the Employer has established and adopted an employee benefit plan ("Plan") as described in its plan document, which shall be provided by the Employer to the Claim Administrator; and WHEREAS, the Employer on behalf of the Group Health Plan desires to retain the Claim Administrator to provide certain administrative services with respect to the Plan; and WHEREAS, it is desirable to set forth more fully the obligations, duties, rights and liabilities of the Claim Administrator and the Employer, as representative of the Group Health Plan, with respect to the Plan; NOW, THEREFORE, in consideration of these premises and the mutual promises and agreements hereinafter set forth, the parties hereby agree as follows: SECTION 1: APPOINTMENT The Employer hereby retains and appoints the Claim Administrator to provide services as hereinafter described in connection with the administration of the Plan. SECTION 2: AGREEMENT DEFINITIONS 2.1 "Administrative Charge" means the monthly service charge that is required by the Claim Administrator for the administrative services performed under this Agreement. The Administrative Charge(s) is indicated in the Fee Schedule specifications of the most current Exhibit 5 - ASO BPA of this Agreement. 2.2 "Allowable Amount" means the maximum amount determined by the Claim Administrator to be eligible for consideration of payment for a Covered Service in accordance with the type of medical and dental benefits coverage(s) elected on the most current Exhibit 5 - ASO BPA. a. For Medical Covered Services. The Allowable Amount means: i. For Network Providers. For a Provider who has a written agreement with the Claim Administrator or another Blue Cross and/or Blue Shield Plan to provide care to a Covered Person at the time Covered Services for medical benefits are rendered ("Network Provider"), the contracting Allowable Amount is based on the terms of the Network Provider's contract and the payment methodology in effect on the date of the Covered Service. The payment methodology used may include diagnosis-related groups (DRG), fee schedule, package pricing, global pricing, per diems, case -rates, discounts, or other payment methodologies. ii. For Non Network Providers. For a Provider who does not have a written agreement with the Claim Administrator or another Blue Cross and/or Blue Shield Plan to provide care to a Covered Person at the time Covered Services for medical benefits are rendered ("Non -Network Provider"), the Allowable Amount will be the lesser of. (a) the Non -Network Provider's Claim Charge, or; (b) the Claim Administrator's non -contracting Allowable Amount. Except as otherwise provided in this section ii, the non -contracting Allowable Amount is developed from base Medicare reimbursements adjusted by a predetermined factor established by the Claim Administrator. Such factor shall be not less than 750 o and will exclude any Medicare adjustment(s) which is/are based on information on the Claim. Notwithstanding the preceding sentence, the non -contracting Allowable Amount for Home Health Care is developed from base Medicare national per visit amounts for low utilization payment adjustment ("LUPA") episodes by Home Health discipline type adjusted for duration and adjusted by a predetermined factor HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. established by the Claim Administrator. Such factor shall be not less than 751'0 and shall be updated on a periodic basis. When a Medicare reimbursement rate is not available or is unable to be determined based on the information submitted on a Claim, the non -contracting Allowable Amount for Non -Network Providers will represent an average contract rate in aggregate for Network Providers adjusted by a predetermined factor established by the Claim Administrator. Such factor shall be not less than 75% and shall be updated not less than every two years. The Claim Administrator will utilize the same Claim processing rules and/or edits that it utilizes in processing Network Provider Claims for processing Claims submitted by Non -Network Providers which may also alter the Allowable Amount for a particular Covered Service. In the event the Claim Administrator does not have any Claim edits or rules, the Claim Administrator may utilize the Medicare claim rules or edits that are used by Medicare in processing the Claims. The Allowable Amount will not include any additional payments that may be permitted under the Medicare laws or regulations which are not directly attributable to a specific Claim, including, but not limited to, disproportionate share and graduate medical education payments. Any change to the Medicare reimbursement amount will be implemented by the Claim Administrator within ninety (90) days after the effective date that such change is implemented by the Centers for Medicaid and Medicare Services, or its successor. The non -contracting Allowable Amount does not equate to the Provider's Claim Charge and Covered Persons receiving Covered Services from a Non -Network Provider will be responsible for the difference between the non -contracting Allowable Amount and the Non -Network Provider's Claim Charge, and this difference may be considerable. To find out the Claim Administrator's non -contracting Allowable Amount for a particular Covered Service, Covered Persons may call customer service at the number on the back of the Claim Administrator -issued identification card. iii. For multiple surgeries. The Allowable Amount for Covered Services for all surgical procedures performed on the same Covered Person on the same day will be the amount for the single procedure with the highest Allowable Amount plus a determined percentage of the Allowable Amount for each of the other Covered Service procedures performed. iv. For procedures, services, or supplies provided to Medicare recipients. The Allowable Amount will not exceed Medicare's limiting charge. b. For Prescription Drug Covered Services. The Allowable Amount for a Provider which has a written agreement with the Claim Administrator to provide prescription drug services to a Covered Person at the time Covered Services for prescription drug benefits are rendered ("Network Provider Pharmacies and the Mail -Order Program") will be based on the provisions of the contract between the Claim Administrator and such pharmacy or such pharmacy for the Mail -Order Program in effect on the date of the Covered Service. The Allowable Amount for a Provider which does not have a written agreement with the Claim Administrator to provide prescription drug services to a Covered Person at the time Covered Services for prescription drug benefits are rendered ("Non -Network Provider Pharmacies") will be based on the Average Wholesale Price ("AWP"). c. For Dental Covered Services. If dental benefits coverage is elected on the most current Exhibit 5 — ASO BPA, the Allowable Amount means: L For Contracting Dentists. For a Provider who has a written agreement with the Claim Administrator to provide care to a Covered Person at the time Covered Services for dental benefits are rendered ("Contracting Dentist"), the Allowable Amount is based on the terms of the Contracting Dentist's contract with the Claim Administrator and the Claim Administrator's methodology in effect on the date of the Covered Service. The methodology used may include relative value, global pricing, or a combination of methodologies. ii. For Non -Contracting Dentists. For a Provider who does not have a written agreement with the Claim Administrator to provide care to a Covered Person at the time Covered Services for dental benefits are rendered ("Non -Contracting Dentist"), the Allowable Amount is based on the amount the Claim Administrator would pay for the same Covered Service if performed or provided by a Contracting Dentist. Unless otherwise stipulated by a contract between a dental Provider and the Claim Administrator: iii. For Covered Services performed in Texas. The Allowable Amount is based upon the applicable methodology for dentists with similar experience and/or skills. iv. For Covered Services performed outside Texas. The Allowable Amount will be established by identifying dentists with similar experience or skills in order to establish the applicable amount for the Covered Service. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. v. For multiple surgical procedures performed in the same operative area. The Allowable Amount for Covered Services for all surgical procedures performed on the same Covered Person on the same day will be the amount for the single procedure with the highest Allowable Amount plus an additional Allowable Amount for covered supplies or services. vi. When a less expensive professionally acceptable service, supply, or procedure is available. The Allowable Amount will be based upon the most economical supply, appliance, or level of dental Covered Service that is appropriate for the safe and effective treatment of the Covered Person. This is not a determination of whether a service is Dentally Necessary, but merely a contractual benefit allowance of a dental Covered Service. The Allowable Amount for all dental Covered Services also includes the administration of any local anesthesia and necessary infection control as required by state and federal mandates. 2.3 "Alternative Compensation Arrangement Payments" means additional payments made to Network Providers for Covered Services for which no formal Claim form may be submitted, including, but not limited to, capitation payments, performance based reimbursement payments, care coordination payments, and other alternative funding arrangements as set forth in Claim Administrator's arrangement with the Network Provider. 2.4 "Certificate of Creditable Coverage" means a document which is generated for Covered Persons terminating coverage under the Plan. The certificate is provided to Covered Persons as evidence for credit of health coverage held under the Plan during the term of this Agreement. 2.5 "Claim" means notification in a form acceptable to the Claim Administrator that service has been rendered or furnished to a Covered Person. This notification must set forth in full the details of such service including, but not limited to, the Covered Person's name, age, sex and identification number, the name and address of the Provider, a specific itemized statement of the service rendered or furnished, the date of service, applicable diagnosis, the Claim Charge, and any other information which the Claim Administrator may request in connection for such service. 2.6 "Claim Charge" means the amount which appears on a Claim as the Provider's regular charge for service rendered to a patient, without further adjustment or reduction. 2.7 "Claim Payment" means the benefit calculated by the Claim Administrator, plus any related Surcharges, upon submission of a Claim, in accordance with the benefits specified in the Plan. All Claim Payments shall be calculated on the basis of the Provider's Allowable Amount for Covered Services rendered to the Covered Person. Claim Payment also includes Employer's pro rata share of Alternative Compensation Arrangement Payments. 2.8 "Covered Employee" shall have the same meaning as defined in the Employer's Plan. 2.9 "Covered Person" shall have the same meaning as defined in the Employer's Plan. 2.10 "Covered Service" means a service or supply specified in the Plan for which benefits will be provided. 2.11 "ERISA" means the Employee Retirement Income Security Act of 1974, as amended. 2.12 "Fee Schedule" means the specifications setting out certain particulars of this Agreement as set forth in Exhibit 5 — ASO BPA of this Agreement including, but not limited to, the Administrative Charge and other service charges; or any such other subsequent set of specifications supplied by the Claim Administrator as set forth in a subsequent ASO BPA as replacement to the initial Exhibit 5 — ASO BPA. The specifications or items of the Fee Schedule shall be applicable to the Fee Schedule Period therein, except that any item of the Fee Schedule may be changed in accordance with such Exhibit 2's "COMPENSATION TO CLAIM ADMINISTRATOR" provisions. 2.13 "Fee Schedule Period" means the period of time indicated in the Fee Schedule specifications of the most current Exhibit 5 ASO BPA of this Agreement. 2.14 "Group Health Plan" means, as applied to this Agreement, the self—insured employee benefit plan adopted by Employer on December 15, 2005 by Resolution 2005-R0596, and amended on April 13, 2006 by Resolution 2006- R0177, and amended on January 1, 2008 by Resolution 2007-R0523 and by Resolution 2007-R0524, and amended on January 1, 2010 by Resolution 2010-R0001 and by Resolution 2010-R0002 and by Resolution 2010-R0003, and amended August 1, 2011 by Resolution 2011-R0315 and amended January 1, 2012 by Resolution 2011-R0501 and amended January 1, 2013 by Resolution 2012-R0399 and as may be further amended from time to time, and as defined by Section 160.103 of the Health Insurance Portability and Accountability Act of 1996. 2.15 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996. 2.16 "Home Health Agency" means a business that provides Home Health Care and is licensed, approved, or certified by the appropriate agency of the state in which it is located or be certified by Medicare as a supplier of Home Health Care. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 2.17 "Home Health Care" means the health care services for which benefits are provided under the Plan when such services are provided during a visit by a Home Health Agency to patients confined at home due to a sickness or injury requiring skilled health services on an intermittent, part-time basis. 2.18 "Network" means identified Providers, including physicians, other professional health care providers, hospitals, ancillary providers, and other health care facilities, that have entered into agreements with the Claim Administrator (and, in some instances, with other participating Blue Cross and/or Blue Shield Plans) for participation in a participating provider option health benefit coverage program, if applicable to the Plan under this Agreement. 2.19 "Provider" means any hospital, health care facility, laboratory, person or entity duly licensed to render Covered Services to a Covered Person or any other provider of medical or dental services, products or supplies which are Covered Services. 2.20 "Supplemental Charge" means a charge for costs due and payable to the Claim Administrator by the Employer that is separate and apart from the service charges detailed in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of this Agreement. A Supplemental Charge may be applied for any customized reports, forms or other materials or for any additional services or supplies not documented in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA. Such services and/or supplies and any applicable Supplemental Charge(s) are to be agreed upon by the parties in writing prior to the Claim Administrator's performance and/or provision of such. 2.21 "Surcharges" means local, state or federal taxes, surcharges or other fees or amount, including, but not limited to World Access Fees and amounts due in connection with the Affordable Care Act Transitional Reinsurance Programs (or successor or alternate program amounts) (the "Reinsurance Contribution") (the "Reinsurance Contribution"), paid by the Claim Administrator which are imposed upon or resulting from this Agreement or are otherwise payable by or through Claim Administrator. Upon request, the Employer shall furnish to the Claim Administrator in a timely manner all information necessary for the calculation or administration or any surcharges. Surcharges may or may not be related to a particular claim for benefits. In no event will the Claim Administrator be responsible for the Reinsurance Contribution. 2.22 "Timely" means the following, unless an alternative standard is specified in this Agreement or is mutually agreed to by the parties in writing: a. With respect to all payments due the Claim Administrator by the Employer under this Agreement, within ten (10) calendar days of notification of the Employer by the Claim Administrator; or b. With respect to all information due the Claim Administrator by the Employer concerning Covered Persons, within thirty—one (3 1) calendar days of a Covered Person's effective date of coverage or change in coverage status under the Plan; or c. With respect to all Plan information due the Claim Administrator by the Employer, upon the effective date of this Agreement and at least ninety (90) calendar days prior to the effective date of change or amendment to the Plan thereafter. 2.23 "World Access Fee" means the Surcharge imposed upon the Claim Administrator under the B1ueCardo Worldwide program for the administration of an international Claim. SECTION 3: SERVICES TO BE PROVIDED BY THE CLAIM ADMINISTRATOR 3.1 Subcontractors. During the continuance of this Agreement, the Claim Administrator will perform such services as set forth in Exhibit 1 of this Agreement, attached hereto and made a part hereof. The Claim Administrator, at its sole discretion, may contract with other entities for performance of any of the services to be performed by the Claim Administrator hereunder; provided, however, the Claim Administrator shall remain fully responsible and liable for performance of any such services to be performed by the Claim Administrator but delegated to other entities. 3.2 Subsidiaries. Further, any of the services to be performed by the Claim Administrator under this Agreement may be performed by the Claim Administrator, or any of its subsidiaries (including any successor corporation, whether by merger, consolidation, or reorganization), without prior written approval by the Employer. Any reference in this Agreement to the Claim Administrator shall include its directors, officers and employees as well as the directors, officers and employees of any of its subsidiaries and the Claim Administrator shall be responsible and liable for all performance or failure to perform by such subsidiaries in connection with this Agreement. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 4: CERTAIN RESPONSIBILITIES OF THE EMPLOYER AND THE CLAIM ADMINISTRATOR 4.1 Employer responsibility. The Employer retains full and final authority and responsibility for the Plan and its operation. The Claim Administrator is empowered to act on behalf of the Employer in connection with the Plan only as expressly stated in this Agreement or as mutually agreed to in writing by the parties hereto. 4.2 Claim Administrator responsibility. The Claim Administrator shall have no responsibility for or liability with respect to the compliance or non—compliance of the Plan with any applicable federal, state and local rules, laws and regulations; and the Employer shall have the sole responsibility for and shall bear the entire cost of compliance with all federal, state and local rules, laws and regulations, including, but not limited to, any licensing, filing, reporting, modification requirements and disclosure requirements as may apply to the Plan, and all costs, expenses and fees relating thereto, including but not limited to local, state or federal taxes, penalties, surcharges or other fees or amounts regardless of whether payable directly by the Employer or by or through the Claim Administrator; provided, however, the Claim Administrator shall have the responsibility for and bear the cost of compliance with any federal, state or local laws as may apply to the Claim Administrator in connection with the performance of its obligations under this Agreement. 4.3 Litigation. Each party shall, to the extent possible, advise the other party of any legal actions against it or the other party which involve the Plan or the obligations of either party under the Plan or this Agreement. The Employer shall undertake the defense of such action and be responsible for the costs of defense; provided, however, that the Claim Administrator shall have the option, at its sole discretion, to employ attorneys selected by it to defend any such action, the costs and expenses of which shall be the responsibility of the Claim Administrator. It is further agreed that each party (provided no conflicts of interest exist) shall fully cooperate with the other party in the defense of any action arising out of matters related to the Plan or this Agreement. 4.4 Claim overpayments. The Employer acknowledges that unintentional administrative errors may occur. When the Claim Administrator becomes aware of a Claim overpayment, the Claim Administrator will make a diligent attempt to recover any such payment. The Claim Administrator, however, will not be required to enter into litigation to obtain a recovery, unless specifically provided for elsewhere in this Agreement, nor will the Claim Administrator be required to reimburse the Plan, except for gross negligence or intentional acts by the Claim Administrator. 4.5 Required Plan information. The Employer shall furnish on a Timely basis to the Claim Administrator certain information concerning the Plan and Covered Persons as may from time to time be required by the Claim Administrator for the performance of its duties including, but not limited to, the following: a. All documents by which the Plan is established and any amendments or changes to the Plan. b. All data as may be required by the Claim Administrator regarding Covered Persons who are to be covered under this Agreement. It is the Employer's obligation to Timely notify the Claim Administrator of any change in a Covered Person's status under this Agreement. All such notifications by the Employer to the Claim Administrator (including, but not limited to, forms and tapes) must be furnished in a format mutually agreed to by the parties and must include all information reasonably required by the Claim Administrator to effect such changes. 4.6 Plan eligibility errors. Clerical errors in keeping or reporting data relative to coverage under this Agreement will not invalidate coverage that would otherwise be validly in force or continue coverage which would otherwise validly terminate. Such errors will be corrected by the Claim Administrator subject to the terms and conditions of this Agreement and the Claim Administrator's reasonable administrative practices in the administration of the Plan including, but not limited to, those related to Timely notification of a change in a Covered Person's status. The Employer is liable for any benefits paid for a terminated Covered Person until the Employer has notified the Claim Administrator of such Covered Person's termination. 4.7 Claim information disclosure. The Claim Administrator will disclose Claim information in accordance with HIPAA privacy regulations and the Business Associate Agreement entered into by the parties. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 4.8 Electronic exchange of information. In the event the Employer and the Claim Administrator exchange various data and information electronically, the Employer agrees to transfer on a Timely basis all required data to the Claim Administrator via electronic transmission on the intranet and/or internet or otherwise, in a format mutually agreed to by the parties. Further, the Employer is responsible for maintaining any enrollment applications and change forms completed by Covered Persons and to allow the Claim Administrator reasonable access to this information as needed for administrative purposes. The Employer authorizes the Claim Administrator to submit reports, data and other information to the Employer in the electronic format mutually agreed to by the parties. In the event the Employer is unable or unwilling to transfer data in the electronic format mutually agreed to by the parties, the Claim Administrator is under no obligation to receive or transmit data in any other format unless required by law to do so. In the event garbled or intercepted transmissions occur, the parties agree to redirect the information via another mutually agreeable means. SECTION 5: THIRD PARTY DATA RELEASE 5.1 Types of data and use. In the event the Employer directs the Claim Administrator to provide data directly to its third party consultant and/or vendor and the Claim Administrator accepts, the Employer acknowledges and agrees, and will cause its third party consultant and/or vendor to acknowledge and agree: a. The personal and confidential nature of the requested documents, records and other information (for purposes of this Section 5, "Confidential Information"). b. Release of the Confidential Information may also reveal the Claim Administrator's confidential, business proprietary and trade secret information (for purposes of this Section 5, "Proprietary Information"). c. To maintain the confidentiality of the Confidential Information and any Proprietary Information (for purposes of this Section 5, collectively, "Information"). d. Not to use the name, logo, trademark or any description of each other or any subsidiary of each other in any advertising, promotion, solicitation or otherwise without the express prior written consent of the consenting party with respect to each proposed use. 5.2 Third party obligations. The third party consultant and/or vendor shall: a. Use the Information only for the purpose of complying with the terms and conditions of its contract with the Employer. b. Maintain the Information at a specific location under its control and take reasonable steps to safeguard the Information and to prevent unauthorized disclosure of the Information to third parties, including those of its employees not directly involved in the performance of duties under its contract with the Employer. c. Advise its employees who receive the Information of the existence and terms of these provisions and of the obligations of confidentiality herein. d. Use, and require its employees to use, at least the same degree of care to protect the Information as is used with its own proprietary and confidential information. e. Not duplicate the Information furnished in written, pictorial, magnetic and/or other tangible form except for purposes of this Agreement or as required by law. f. Execute the Claim Administrator's then—current confidentiality agreement. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 5.3 Employer obligations. The Employer shall: a. Designate the third party consultant and/or vendor on the appropriate HIPAA documentation. b. Provide the Claim Administrator with the appropriate authorization and specific written directions with respect to data release or exchange with the third party consultant and/or vendor. c. To the extent permitted by applicable law indemnify, defend (at the Claim Administrator's request) and hold harmless the Claim Administrator and its employees, officers, directors and agents against any and all losses, liabilities, damages, penalties and expenses, including attorneys' fees and costs, or other cost or obligation resulting from or arising out of claims, lawsuits, demands, settlements or judgments brought against the Claim Administrator in connection with any claim based upon the Claim Administrator's disclosure to the third party consultant and/or vendor of any information and/or documentation regarding any Covered Person at the direction of the Employer SECTION 6: REFERRAL OF CERTAIN CLAIMS/INQUIRIES As provided in this Agreement, the Claim Administrator will receive eligibility information, review and process Claims, and respond to customer inquiries; however, the Claim Administrator does not have final authority to determine Covered Persons' eligibility or to establish or construe the terms and conditions of the Plan. Therefore, in certain instances, the Claim Administrator may refer certain Claims to the Employer for review and final decision. Such referral shall be at the sole discretion of the Claim Administrator. SECTION 7: CLAIM DISPUTE RESOLUTION 7.1 Claim Appeals. After exhaustion of all remedies offered by the Claim Administrator, a Covered Person may appeal all adverse determinations with the Employer. The Claim Administrator will cooperate in providing Claim information pursuant to Section 4 above. 7.2 Claim reviews. On occasion the Claim Administrator may deny all or part of submitted Claims. The Claim Administrator will provide a full and fair review of any determination of a Claim, any determination of a request for pre—authorization, and any other determination made in accordance with the benefits and procedures detailed in the Plan. SECTION 8: FINAL DETERMINATION OF CLAIMS/INQUMES 8.1 Employer authority and responsibility. The Employer retains the final authority and responsibility to establish and construe the terms and conditions of the Plan and to determine Covered Persons' eligibility. 8.2 Referrals to Employer. Certain claims and/or inquiries will be referred to the Employer for final review and determination in the following instances: a. When Claims for services do not appear to qualify for payment under the Plan, claims or inquiries where there is a question of eligibility, claims where there is a question as to the amount of payment due, and claims involving litigation or the threat of litigation; and b. When a Covered Person chooses to appeal adverse determinations with the Employer after exhaustion of all remedies offered by the Claim Administrator. SECTION 9: COOPERATION OF THE PARTIES The parties shall use their best efforts to cooperate with and assist each other, as applicable, in the performance of their duties under this Agreement. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 10 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 10: HIPAA/CERTIFICATE OF CREDITABLE COVERAGE 10.1 HIPAA requirement The Health Insurance Portability and Accountability Act of 1996 ("HIPAA") requires the preparation and distribution of a Certificate of Creditable Coverage to individuals who terminate coverage under the Employer's Group Health Plan. 10.2 Responsible party. In accordance with the Employer's election indicated on the most current Exhibit 5 — ASO BPA of this Agreement: a. If the Employer elects the Clain: Administrator to issue certificates, the Claim Administrator shall issue a Certificate of Creditable Coverage consistent with the requirements under HIPAA. The Certificate of Creditable Coverage shall be based upon coverage under the Plan during the term of this Agreement and information provided to the Claim Administrator by the Employer. b. If the Employer does not elect the Claim Administrator to issue certificates, the Employer acknowledges that the Claim Administrator is not the Group Health Plan issuer offering group coverage under the Group Health Plan nor the plan administrator and, therefore, the Claim Administrator has no obligation to prepare or distribute a Certificate of Creditable Coverage. The Employer further acknowledges that the obligation to provide such Certificate of Creditable Coverage is the obligation of the Employer. SECTION 11: INDEMNIFICATION 11.1 Claim Administrator indemnifies Employer. The Claim Administrator hereby agrees to indemnify and hold harmless the Employer and its directors, officers, elected officials, and employees against any and all loss, liability, damages, penalties and expenses, including attorneys' fees, or other cost or obligation resulting from or arising out of claims, lawsuits, demands, settlements or judgments with respect to the Plan or this Agreement resulting from or arising out of any acts or omissions of the Claim Administrator or its directors, officers or employees which have been adjudged to be (i) grossly negligent, dishonest, fraudulent or criminal or (ii) in material breach of the terms of this Agreement; provided, however, notwithstanding anything herein to the contrary pursuant to Section 12.2 below, the Claim Administrator shall be responsible for the correction of Claim Payment errors by the Claim Administrator. 11.2 Employer indemnifies Claim Administrator. The Claim Administrator does not insure or underwrite the liability of the Employer under the Plan and has no responsibility for designing the terms of the Plan or the benefits to be provided thereunder. The Employer retains the ultimate responsibility for claims under the Plan and all expenses incident to the Plan, except as specifically undertaken in this Agreement by the Claim Administrator. To the extent permitted by applicable law, the Employer agrees to indemnify and hold harmless the Claim Administrator and its directors, officers and employees against any and all loss, liability, damages, penalties and expenses, including attorneys' fees, or other cost or obligation resulting from or arising out of claims, lawsuits, demands, settlements or judgments brought against the Claim Administrator in connection with the design or administration of the Plan, unless the liability therefor was the direct consequence of the acts or omissions of the Claim Administrator or its directors, officers or employees and is adjudged to be (i) grossly negligent, dishonest, fraudulent or criminal or (ii) in material breach of the terms of this Agreement; provided, however, notwithstanding anything herein to the contrary pursuant to Section 12.2 below, the Claim Administrator shall be responsible for the correction of Claim Payment errors by the Claim Administrator. 11.3 Examples of actions brought against Claim Administrator. The following list is intended to exemplify types of actions related to design and administration of the Plan(s), but not to allocate indemnification responsibility with respect to such examples, which shall be determined in accordance with Section 11.1 or 11.2, as applicable. a. Any claim in connection with a claim for benefits under the Plan. b. Any claim based upon the disclosure of any information regarding a Covered Person by the Claim Administrator to the Employer. c. Any claim in connection with un -Timely and/or inaccurate eligibility data or Claim information data provided by the Employer to the Claim Administrator, or any such data provided by the Employer in a format not approved by the Claim Administrator. d. Any claim arising from the Employer's use or posting of electronic files on the intranet and/or internet pursuant to Section 17 below. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 11 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. e. Any claim that may arise from or in connection with the Claim Administrator's suspension of Claim Payments due to the Employer's failure to pay when due any amounts owed the Claim Administrator under this Agreement and/or the termination of this Agreement in accordance with Section 13.2 below. f. Any claim arising from the Employer's directive to the Claim Administrator to print Employer—assigned unique identification numbers on membership identification cards or to otherwise use such assigned numbers in violation of any applicable federal, state and local rules, laws and regulations. g. Any claim arising from Plan documentation and compliance with reporting and disclosure requirements applicable to the Plan Document and Summary Plan Description. h. Any claim based upon Medicare Secondary Payer ("MSP) laws or regulations including, but not limited to, the untimely and/or inaccurate provision by the Employer to the Claim Administrator of Employer Acknowledgement Forms ("EAFs") as and when requested by the Claim Administrator. L Any claim that may arise from or in connection with the Claim Administrator's issuance of Certificate(s) of Creditable Coverage if elected on the most current Exhibit 5 — ASO BPA, based upon un Timely and/or inaccurate data provided by the Employer to the Claim Administrator with respect to individuals whose coverage under this Agreement terminates. j. Any claim that may rise from or in connection with the Claim Administrator's issuance of written statements of creditable coverage and/or the filing of electronic reports to the Massachusetts Department of Revenue, if elected on the most current Exhibit 5 - ASO BPA, based upon untimely and/or inaccurate data or certification provided by the Employer to the Claim Administrator with respect to Covered Persons under the Agreement subject to the Massachusetts Health Care Reform Act. SECTION 12: AUDIT AND CORRECTION OF AUDIT ERRORS 12.1 Employer audits Claim Administrator. During the term of this Agreement and within one hundred eighty (180) days after its termination, the Employer or an authorized agent of the Employer (subject to Claim Administrator's reasonable approval) may, upon at least ninety (90) days prior written notice to the Claim Administrator, conduct reasonable audits of records related to Claim Payments to verify that Claim Administrator's administration of the covered health care benefits is performed according to the terms of this Agreement and the benefits specified in the Plan(s). The audit must be free of bias, influence or conflict of interest. Contingency fee based audits are deemed to have an inherent conflict of interest and will not be supported by Claim Administrator. Audit samples will be limited to no more than three hundred (300) randomly selected Claims. The Employer will be responsible for all costs associated with the audit. Employer will reimburse Claim Administrator for any reasonable personnel time in excess of eighty (80) person -hours required to support audits conducted during the term of this Agreement. Employer will reimburse Claim Administrator for all reasonable expenditures necessary to support audits conducted after termination of this Agreement. All such audits shall be subject to the Claim Administrator's current external audit policy and procedures, a copy of which shall be furnished to the Employer upon request to the Claim Administrator. The audit period will be limited to the current Agreement year and the immediately preceding Agreement year. No more than one (1) audit shall be conducted during a twenty- four (24) consecutive -month period, except as required by state or federal government agency or regulation. The Employer and such agent that have access to the information and files maintained by the Claim Administrator will agree not to disclose any proprietary information. The Employer, and authorized agent, to the extent permitted by applicable law agree to hold harmless and indemnify the Claim Administrator in writing of any liability from disclosure of such information by executing an Audit Agreement with the Claim Administrator that sets forth the terms and conditions of the audit. 12.2 Errors identified. The Claim Administrator shall be responsible only for the correction of errors identified in specific Claim Payments subject to the terms and conditions of the Agreement and shall not be responsible for errors calculated to exist in a population of Claim Payments on the basis of a sample drawn from that population. Further, the Claim Administrator has the right to implement reasonable administrative practices in the administration of this Agreement. 12.3 Claim Administrator audits Employer. During the term of this Agreement and within one hundred eighty (180) days after its termination, the Claim Administrator may, upon at least thirty (30) days prior written notice to the Employer, conduct reasonable audits of Employer's membership records with respect to eligibility. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 12 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 13: TERM AND TERMINATION OF AGREEMENT 13.1 Term. This Agreement will continue in full force and effect from the effective date and continue for four (4) additional one year terms unless terminated as provided herein. 13.2 Termination. This Agreement may be terminated as follows: a. By either party at the end of any month after the end of the Fee Schedule Period indicated in the Fee Schedule specifications of the most current Exhibit 5 - ASO BPA upon ninety (90) days prior written notice to the other party; or b. By both parties on any date mutually agreed to in writing; or c. By either party, in the event of fraud, misrepresentation of a material fact or not complying with the terms of this Agreement, upon written notice as provided under Section 22 below. d. By the Claim Administrator, upon the Employer's failure to pay all amounts due under this Agreement including, but not limited to, all amounts pursuant to and in accordance with the specifications of the Fee Schedule of the most current Exhibit 5 — ASO BPA. 13.3 Notice of termination to Covered Employees. If this Agreement is terminated pursuant to this Section 13, the Employer agrees to notify all Covered Employees. The parties agree that the Employer will give such notice because the Employer maintains direct and ongoing communication with, and maintains current addresses for, all such Covered Employees. SECTION 14: RELATIONSHIP OF PARTIES 14.1 Regarding the parties. The Claim Administrator is an independent contractor with respect to the Employer. Neither party shall be construed, represented or held to be an agent, partner, associate, joint venturer nor employee of the other. Further, nothing in this Agreement shall create or be construed to create the relationship of employer and employee between the Claim Administrator and the Employer; nor shall the Employer's agents, officers or employees be considered or construed to be considered employees of the Claim Administrator for any purpose whatsoever. 14.2 Regarding non—parties. It is understood and agreed that nothing contained in this Agreement shall confer or be construed to confer any benefit on persons who are not parties to this Agreement including, but not limited to, employees of the Employer and their dependents. 14.3 Exclusivity. The Employer agrees not to engage any other party to perform the same services that the Claim Administrator performs hereunder while this Agreement is in effect, unless the Employer gives notice of termination pursuant to the terms of this Agreement. 14.4 Assignment. Except as otherwise permitted by Section 3 of this Agreement, no part of this Agreement, or any rights, duties or obligations described herein, shall be assigned or delegated without the prior express written consent of both parties. Any such attempted assignment shall be null and void. The Claim Administrator's standing contractual arrangements for the acquisition and use of facilities, services, supplies, equipment and personnel shall not constitute an assignment under this Agreement. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 13 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 15: NON ERISA GOVERNMENT REGULATIONS 15.1 In relation to the Plan. Although the Employer is exempt from ERISA, the Employer hereby acknowledges (i) its employee benefit plan is established and maintained through a separate plan document which may include the terms hereof or incorporate the terms hereof by reference, and (ii) its employee benefit plan document may provide for the allocation and delegation of responsibilities thereunder. However, notwithstanding anything contained in the Plan or any other employee benefit plan document of the Employer, the Employer agrees that no allocation or delegation of any fiduciary or non—fiduciary responsibilities under the Plan or any other plan document of the Employer is effective with respect to or accepted by the Claim Administrator. 15.2 In relation to the Plan AdministratorINamed Fiduciary(ies). The Claim Administrator is not the plan administrator of the Employer's separate employee benefit plan and is not a fiduciary of the Employer, the plan administrator or of the Plan. 15.3 In Relation to the Claim Administrator's Responsibilities. The Claim Administrator's responsibilities hereunder are intended to be limited to those of a contract claims administrator rendering advice to and administering claims on behalf of the plan administrator of the Employer's plan. As such, the Claim Administrator is intended to be a service provider but not a fiduciary with respect to the Employer's employee benefit plan. The Employer acknowledges and agrees that the Claim Administrator may render advice with respect to claims and administer claims on behalf of the plan administrator of the Employer's benefit plan. The Claim Administrator has no other authority or responsibility with respect to Employer's employee benefit plan. SECTION 16: PROPRIETARY MATERIALS 16.1 Types of materials as used by the parties. The parties acknowledge that each party has developed operating manuals, certain symbols, trademarks, service marks, designs, data, processes, plans, procedures and information, all of which are proprietary information ("Business Proprietary Information"). Neither party shall use or disclose to any third party Business Proprietary Information without prior written consent of the other party, except as required by law. Neither party shall use the name, symbols, copyrights, trademarks or service marks ("Proprietary Marks") of the other party or the other party's respective clients in advertising or promotional materials without prior written consent of the other party; provided, however, that the Claim Administrator may include the Employer in its list of clients. 16.2 Clain: Administrator/Association ownership. The Employer acknowledges that the Claim Administrator's Proprietary Marks and Business Proprietary Information are the sole property of the Blue Cross and Blue Shield Association or of the Claim Administrator and agrees not to contest the Blue Cross and Blue Shield Association's or the Claim Administrator's ownership or the license granted to the Claim Administrator for use of such Proprietary Marks. 16.3 Infringement" The Claim Administrator agrees not to infringe upon, dilute or harm the Employer's rights in its Proprietary Marks. The Employer agrees not to infringe upon, dilute or harm the Blue Cross and Blue Shield Association's ownership rights or the Claim Administrator's rights as a licensee in its Proprietary Marks. SECTION 17: ELECTRONIC DOCUMENTS 17.1 Employer's consendintended use. The Employer consents to receive via an electronic file or access to an electronic file any document the Employer requests from the Claim Administrator describing the benefits under, or the administration of, the Plan. 17.2 Employer acknowledgemendresponsibilities The Employer further acknowledges and agrees that it is solely responsible for providing employees access, via the intranet, internet, or otherwise, to the most current version of any electronic file provided to the Employer by the Claim Administrator at the Employer's request. In addition, in all instances, the electronic file of the most current document issued to the Employer by the Claim Administrator for use by the Employer is the legal document used to administer the Employer's Plan and will prevail in the event of any conflict between such electronic file and any other electronic or paper file. The Employer is solely responsible for any and all claims for loss, liability or damages, arising either directly or indirectly from the use or posting of the electronic file on the intranet and/or internet. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 14 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 18: RECORDS All Claim records, excluding any and all of the Claim Administrator's Business Proprietary Information, in the possession of the Claim Administrator are and shall remain the property of the Employer upon termination of this Agreement. The Claim Administrator shall return such property upon request in a form as agreed upon by the parties at the cost of preparing such property for transmittal to be borne by the Employer. All such Claim records shall be retained by the Claim Administrator until the Claim Administrator receives a request from the Employer for transmittal or for a period of ten (10) years from the date of a Claim's adjudication, whichever occurs first. SECTION 19: APPLICABLE LAW This Agreement shall be governed by, and shall be construed in accordance with, the laws of the state of Texas without regard to any state choice—of—law statutes, and any applicable federal law. All disputes arising out of this Agreement will be resolved in Lubbock, Texas. SECTION 20: ENTIRE AGREEMENT 20.1 Definition. This Agreement, including all Exhibits and Addenda, represents the entire agreement and understandings of the parties hereto and all prior agreements, understandings, representations and warranties, whether written or oral, in regard to the subject matter hereof, including any proposal document submitted by the Claim Administrator to the Employer pursuant to this Agreement, are and have been merged herein to the extent applicable. In the event of a conflict, the provisions of this Agreement and the Exhibits and Addenda of this Agreement shall prevail. 20.2 Components. The Exhibits and Addenda of this Agreement as of the Agreement's effective date are: a. Exhibit 1 - Claim Administrator Services b. Exhibit 2 - Fee Schedule, Financial Responsibilities & Required Disclosures c. Exhibit 3 - Recovery Litigation Authorization d. Exhibit 4 - COBRA Health Benefit Continuation Coverage e. Exhibit 5 - ASO Benefit Program Application (ASO BPA) L Exhibit 6 Network Discount Guarantee *The parties agree to share in the risk of anticipated savings by utilization of the Provider Networks established by the Claim Administrator and other Blue Cross and Blue Shield Plans. The details of this risk sharing program are contained in the Network Discount Guarantee Exhibit ("Exhibit ND") attached to and made part of this Agreement. 20.3 Amending. This Agreement may be amended or altered in any of its provisions, including the addition or deletion of any Exhibits and/or Addenda as provided herein, by the parties hereto and any such change shall become effective when reduced to writing and signed by an authorized representative of the parties or at such time as said amendment may provide. SECTION 21: NOTICE AND SATISFACTION Unless specifically stated otherwise in this Agreement, the Employer and the Claim Administrator agree to give one another written notice (pursuant to Section 26 Notices below) of any complaint or concern the other party may have about the performance of obligations under this Agreement and to allow the notified party thirty (30) days in which to make necessary adjustments or corrections to satisfy the complaint or concern prior to taking any further action with regard to such. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 15 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 22: INSURANCE Claim Administrator shall submit to the Employer proof of insurance containing coverage for the following: General Liability Insurance Per Occurrence $1,000,000.00 Including: Products and Completed Operations Personal and Advertising Injury Errors and Omissions Insurance $1,000,000.00 Auto Liability Insurance — Any Auto $ 300,000.00 Workers' compensation and Employers Liability Insurance Statutory Coverage or Texas Equivalent Employer's Liability with limits of at least $500,000.00 each accident, $500,000.00 by disease each employee shall also be obtained and maintained throughout the term of this Agreement. Workers Compensation shall include a waiver of subrogation in favor of the Employer. The Employer will be an additional insured on the Commercial General Liability policy on a primary and non-contributory basis. Additional insured status can be granted by Blanket endorsement. SECTION 23: NON -ARBITRATION 24.1 Non Arbitration. The Employer reserves the right to exercise any right or remedy available to it by law, contract, equity, or otherwise, including without limitation, the right to seek any and all forms of relief in a court of competent jurisdiction. Further, the Employer shall not be subject to any arbitration process prior to exercising its unrestricted right to seek judicial remedy. The remedies set forth herein are cumulative and not exclusive, and may be exercised concurrently. To the extent any conflict between this provision and another provision in, or related to, this document, this provision shall control. SECTION 24: OBLIGATION TO CONTINUE PERFORMANCE Except as provided otherwise in this Agreement, each party is required to continue to perform its obligations under this Agreement pending final resolution of any dispute arising out of or relating to this Agreement. SECTION 25: NOTICES 26.1 How to notify. All notices given under this Agreement must be in writing and shall be deemed to have been given for all purposes when personally delivered and received or when deposited in the United States mail, first—class postage prepaid, and addressed to the parties' respective contact names at their respective addresses or when transmitted by facsimile via their respective facsimile numbers as indicated on the most current Exhibit 5— ASO BPA of this Agreement. 26.2 Change of address. Each party may change such notice mailing and/or transmission information upon Timely prior written notification to the other party. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 16 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 26: SEVERABILITY/GRANDFATHERED UNDER AFFORDABLE CARE ACT Should any provision(s) contained in this Agreement be held to be invalid, illegal, or otherwise unenforceable, the remaining provisions of the Agreement shall be construed in their entirety as if separate and apart from the invalid, illegal or unenforceable provision(s) unless such construction were to materially change the terms and conditions of this Agreement. The parties hereto agree and acknowledge that the intent of the parties is that the Employer's Grandfather Status remain in place. The parties agree to renegotiate any term of this agreement that is reasonably determined to be in violation of the Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act in order that Employer's Grandfather Status be preserved. SECTION 27: ENFORCEMENT Any delay or inconsistency in the enforcement of any part of this Agreement shall not constitute a waiver of any rights with respect to the enforcement of this Agreement at any future date nor shall it limit any remedies which may be sought in any action to enforce any provision of this Agreement. SECTION 28: FORCE MAJEURE Neither party shall be liable for any failure to Timely perform its obligations under this Agreement if prevented from doing so by a cause or causes beyond its commercially reasonable control including, but not limited to, acts of God or nature, fires, floods, storms, earthquakes, riots, strikes, wars or restraints of government. SECTION 29: INDUSTRY IMPROVEMENT, RESEARCH AND SAFETY Notwithstanding any other provision of this Agreement, Claim Administrator may use and or disclose a limited data set or de -identified data for purposes of providing the services under this Agreement and for other purposes required or permitted by applicable law (the "Permitted Purposes" as defined herein). For purposes of this paragraph, "Permitted Purposes" means the studies, analyses or other activities that are designed to promote quality health care outcomes, manage health care and administrative costs, and enhance business and plan performance, including but not limited to, utilization studies, cost analyses, benchmarking, modeling, outcomes studies, medical protocol development, normative studies, quality assurance, credentialing, network management, network development, fraud and abuse monitoring or investigation, administrative or process improvement, cost comparison studies, or reports for actuarial analyses. For purposes of this paragraph, a "limited data set" has the meaning set forth in HIPAA and "de -identified" means both member de -identification (as defined by HIPAA) and Employer de -identification (unless the work is being done in connection with the Employer's Plan). Solely for the Permitted Purposes, the Claim Administrator may release, or authorize the release of, a limited data set or de -identified data to a third party data aggregation service or data warehouse and its customers. Such data warehouse and data aggregation service providers may charge their customers a fee for such services. Nothing in the paragraph is intended to expand or limit the terms and conditions of the Business Associate Agreement with respect to the permitted use or disclosure of PHI. The foregoing notwithstanding, the Blue Cross and Blue Shield Association and its support vendors are permitted to have internal access to the Claim Administrator -assigned Employer Group and Identification numbers. SECTION 30: CLAIM ADMINISTRATOR USE OF THIRD PARTY RECOVERY VENDOR Recoveries from healthcare providers can arise in several ways, including, but not limited to, anti -fraud and abuse recoveries, healthcare provider/hospital audits, credit balance audits, data mining, utilization review refunds, and unsolicited refunds. The Claim Administrator may engage a third party to assist in identification or collection of recovery amounts related to Claim Payments made under the Agreement. In such event, the recovered amounts will be applied according to the Claim Administrator's refund recovery policies, which generally require correction on a Claim -by Claim basis. Third parties' audit fees associated with such audits and the Claim Administrator's fee for its related administrative expenses to support such third party audits will be paid by the Employer. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 17 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 31: NOTICE OF ANNUAL MEETING The Employer is hereby notified that it is a Member of Health Care Service Corporation (HCSC), a Mutual Legal Reserve Company, and is entitled to vote either in person, by its designated representative, or by proxy at all meetings of Members of said Company. The annual meeting is held at its principal office at 300 East Randolph Street, Chicago, Illinois each year on the last Tuesday in October at 12:30 P.M. For purposes of this Agreement, the term "Member" means the group, trust, association or other entity with which this Agreement has been entered. It does not include Covered Employees or Covered Persons under the Plan. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 18 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. The Effective Date of this Administrative Services Agreement (the "Agreement') is January 1, 2014. . IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year specified below. BLUE CROSS AND BLUE SHIELD OF TEXAS, a CITY OF LUBBOCK Division of Health Care Service Corporation, a Mutual Legal Reserve Company By: By: --� V/ Title: Vice President and Chief Underwriter Date: August 12, 2013 APPROVED AS TO CONTENT: Leisa Hutcheson, Director of Human Resources and Risk Management HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 19 Title: Mayor Date: September 10, 2013 ATTEST: Reb ca Garza, City Secret APPROVED AS TO FORM: Chad Weaver, Assistant City Attorney Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. EXHIBIT 1 CLAIM ADMINISTRATOR SERVICES • CLAIMS ADJUDICATION Examination of Claims and determination of payment levels, including data entry of Claims by Claims departments, maintenance of Claims experience files, use of medical consultants, review of utilization and allowable amounts; or if dental benefits coverage is elected on the most current Exhibit 5 - ASO BPA, use of dental consultants and review of allowable amounts and Coordination of Benefits (COB). • EXPLANATION OF BENEFITS (EOB) Preparation of EOBs. • CLAIMS/MEMBERSHIP INQUIRIES Handling of inquiries — written, phone or in person related to membership, benefits, and Claim Payment or Claim denial. • ALTERNATIVE PROVIDER COMPENSATION ARRANGEMENTS Employer agrees to participate in other performance based reimbursement and alternative provider compensation arrangements as applicable based on Covered Person criteria established by Claim Administrator. Employer agrees that certain benefits will be covered at 100% when a Covered Person meets these criteria and participates in a medical home program, and will make any necessary benefit plan changes. • ENROLLMENT SERVICE Upon Employer request, assist Employer, in accordance with Claim Administrator's standard procedures, in initial enrollment activities, including education of Covered Persons about benefits, the enrollment process, selection of health care providers and how to file a Claim for benefits; issue Claim submission instructions on behalf of Employer to health care providers who render services to Covered Persons. • CLIENT SERVICES AND MATERIALS Provision of those items as elected by Employer from listing below: a. Enrollment Materials. Implementation materials to be provided by Claim Administrator's Marketing Administration Division during the enrollment process; any custom designed materials may be subject to Supplemental Charge. b. Standard Identification Cards. Provision of identification cards appropriate to health benefit Plan coverage(s) selected. c. Standard Provider Directories. Access to Network Provider directories and periodic updates to such, if applicable to the health benefit Plan coverage(s) under the Agreement. d. Customer Service. Access to toll-free customer service telephone number. e. Medical Pre -authorization Helpline. For those services determined by Employer and provided in writing to Claim Administrator that require pre -authorization, advance Claim Administrator review of medical necessity of such services covered under the Plan; access to toll-free medical pre -authorization helpline for Covered Persons and their health care providers to call for assistance. MEMBERSHIP VALIDATION Verification of membership by wire, listing, electronic on-line query or other method prior to or during adjudication. MEMBERSHIP FILE UPDATES Maintenance of membership status files, processing of inter -plan transfers, and processing of contract changes; and, if elected in the Fee Schedule specifications of the most current Exhibit 5 - ASO BPA, processing of contract conversions, subject to conversion fee as set forth therein.. OTHER MEMBERSHIP SERVICES Contact Employer and/or Covered Employees regarding adding, changing or renewing coverage. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2/13 20 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. • STANDARD REPORTS Make available Claim data, Claim Settlement statements (as outlined in Exhibit 2, Section 6) and periodic reports in Claim Administrator's standard format(s) in accordance with Claim Administrator's standard reporting policy at no additional charge. Any additional reports required by Employer must be mutually agreed upon by the parties in writing prior to their development and may be subject to a Supplemental Charge.. • STOP LOSS COORDINATION Coordinate all necessary reporting, tracking, notification and other similar financial and/or administrative services pursuant to settlements under stop loss policy(ies) purchased from Claim Administrator in conjunction with the Agreement. For stop loss coverage purchased from entity(ies) other than Claim Administrator, such coordination is limited to this Exhibit's STANDARD REPORTS to be made available to Employer subject to the Agreement's disclosure requirements. • REPORTING SERVICES Preparation and filing of annual Internal Revenue Service (IRS) 1099 forms for the reporting of payments to health care providers who render services to Covered Persons and who are reimbursed by the Plan for those services. • ACTUARIAL AND STATISTICAL Determination of claims projections and pricing of administrative services and stop—loss coverage. • FINANCIAL SERVICES Financial functions such as cash receipts, cash disbursements, payroll and general ledger processing, general accounting, preparation of financial statements, billing, group settlement and wire transfers. • FRAUD DETECTION AND PREVENTION Identify and investigate suspected fraudulent activity by Providers and/or Covered Persons and inform Employer of findings and proof of fraud; address any related recovery litigation as set forth in Exhibit 3 of the Agreement. • BLUE ACCESS® FOR EMPLOYERS Provides Employer on—line access to conduct a variety of secure membership, enrollment, reporting, administrative and billing transactions faster, more accurately and in real—time. • BLUE ACCESS® FOR MEMBERS An on—line resource for personalized information about a Covered Person's health care coverage, including, but not limited to, Claims status, email notification when a Claim has been finalized, access to health and wellness information, verification of dependents covered on their plan and health risk assessment and such other services as become available. • PROVIDER NETWORK(S) If applicable to the health benefit Plan coverage(s) under the Agreement, establish, arrange and maintain a Network(s) through contractual arrangements with Providers within the designated service area(s). • CERTIFICATE OF CREDITABLE COVERAGE (If elected on the most current Exhibit 5 ASO BPA) At the direction of Employer, issuance of Certificates of Creditable Coverage. • BLUE CARE CONNECTION® PROGRAM (If elected on the most current Exhibit 5 — ASO BPA) A program that may include utilization management, case management, condition management, lifestyle management, predictive modeling, 24/7 nurseline and access to a personal health manager or such other features as determined by the Employer. • DISEASE/CARE MANAGEMENT PROGRAM(S) Any disease and/or care management program(s) as elected and described on the most current Exhibit 5 ASO BPA. • MASSACHUSETTS STATEMENTS OF CREDITABLE COVERAGE AND ELECTRONIC REPORTING (If elected on the most current Exhibit S - ASO BPA) At the written direction of Employer, issuance of written statements of creditable coverage and related electronic reporting to the Massachusetts Department of Revenue with respect to Covered Persons under the Agreement subject to the Massachusetts Health Care Reform Act. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 21 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. MSP INFORMATION REPORTING Pursuant to Exhibit 2, Section 15 entitled "MEDICARE SECONDARY PAYER ("MSP") INFORMATION REPORTING," reporting preparation and filing as required of Claim Administrator as Responsible Reporting Entity ("RRE") for the Plan as that term is defined in Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007. UNCASHED CHECKS Regarding outstanding checks that are or become "stale" (over 365 days old), issue notification letters to payees and upon completion of notification process, reissue such checks to payees based upon payee response, if any. When check reissuance is not possible and unless stated otherwise in the Agreement, escheat such checks to state of payee's last known residence on behalf of Employer or escheat amounts pursuant to such checks to Employer, as elected by the Employer, less any amount(s) owed by payee to Claim Administrator, in accordance with Claim Administrator's established procedures and/or the applicable state's unclaimed property law. ADDITIONAL SERVICES NOT SPECIFIED Claim Administrator may provide additional services not specified in the Agreement; such services will be mutually agreed upon between the parties in writing prior to their performance and may be subject to Supplemental Charge. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 22 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. EXHIBIT 2 FEE SCHEDULE, FINANCIAL RESPONSIBILITIES & REQUIRED DISCLOSURES SECTION 1: FEE SCHEDULE Service charges and other service specifications applicable to the Agreement are set forth in the Fee Schedule section of the most current Exhibit 5 - ASO BPA of the agreement. They are to apply for the period(s) of time indicated therein and shall continue in full force and effect until the earlier of. i) the end of the Fee Schedule Period noted on such ASO BPA; ii) the date a Fee Schedule is amended or replaced in its entirety by the execution of a subsequent ASO BPA; and iii) the date the Agreement is terminated. FEES FOR INTER -PLAN ARRANGEMENTS B1ueCardo Program/Network access fees *(as applicable): Additional information is available upon request; included in the Medical Administrative Charge(s) noted in the ASO BPA and in any Termination Administrative Charge(s) noted in the ASO BPA calculated on the basis of such Medical Administrative Charge(s). Negotiated National Account Arrangement/Custom fees (as applicable): Additional information is available upon request; included in the Medical Administrative Charge(s) noted in the ASO BPA and in any Termination Administrative Charge(s) noted in the ASO BPA calculated on the basis of such Medical Administrative Charge(s). Non -Participating Healthcare Providers Outside Claim Administrator's Service Area/processing fees (as applicable): Additional information is available upon request; included in the Medical Administrative Charge(s) noted in the ASO BPA and in any Termination Administrative Charge(s) noted in the ASO BPA calculated on the basis of such Medical Administrative Charge(s). *Such fees may not exceed the lesser of the applicable annual percentage of the discount (dependent upon group size) permitted under the BlueCard Program or S2, 000 per Claim. SECTION 2: EXHIBIT DEFINITIONS Other definitions applicable to this Exhibit are contained in Section 2 AGREEMENT DEFINITIONS of the Agreement. 2.1 "Copayment" means a specified dollar amount that a Covered Person is required to pay toward a Covered Service. 2.2 "Coshare" means a percentage of an eligible expense that a Covered Person is required to pay toward a Covered Service. 2.3 "Employer Payment" means the amount owed or payable to the Claim Administrator by the Employer for a given Employer Payment Period in accordance with Section 5 of this Exhibit which is the sum of Net Claim Payments made plus applicable service charges incurred during that Employer Payment Period. 2.4 "Employer Payment Method" means the method elected in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of the Agreement by which Employer Payments will be made. 2.5 "Employer Payment Period" means the time period indicated in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of the Agreement. 2.6 "Inpatient" means the Covered Person is a registered bed patient and treated as such in a health care facility. 2.7 "Medicare Secondary Payer ("MSP")" means those provisions of the Social Security Act set forth in 42 U.S.C. §1395 y (b), and the implementing regulations set forth in 42 C.F.R. Part 411, as amended, which regulate the manner in which certain employers may offer group health care coverage to Medicare—eligible employees, their spouses and, in some cases, dependent children. (See Section 15 of this Exhibit titled "MEDICARE SECONDARY PAYER ("MSP") INFORMATION REPORTING.") HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 23 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 2.8 "Run—Off Claim" means a Claim incurred prior to the termination of the Agreement that is submitted for payment during the Run—Off Period. 2.9 "Run—Off Period" means the time period immediately following termination of the Agreement, as indicated in the Fee Schedule specifications of the most current Exhibit 5 ASO BPA of the Agreement, during which the Claim Administrator will accept Run—Off Claims submitted for payment. 2.10 "Termination Administrative Charge" means the consideration indicated in the Fee Schedule of the most current Exhibit 5 — ASO BPA of the Agreement that is required by the Claim Administrator upon termination of the Agreement, notwithstanding any services that may be performed by the Claim Administrator during the Run Off Period indicated on such ASO BPA. SECTION 3: COMPENSATION TO CLAIM ADMINISTRATOR 3.1 Intent of service charges. The Employer will pay service charges to the Claim Administrator, in accordance with the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of the Agreement, as compensation for the processing of Claims and administrative and other services provided to the Employer. 3.2 Determining service charges. The service charges, which are guaranteed for the Fee Schedule Period indicated in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of the Agreement, have been determined in accordance with the Claim Administrator's current regulatory status and the Employer's existing benefit program. 3.3 Changing service charges. Such service charges shall be subject to change by the Claim Administrator as follows: a. At the end of the Fee Schedule Period indicated in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of the Agreement, provided that sixty (60) days prior written notice is given by the Claim Administrator; b. On the effective date of any changes or benefit variances in the Plan, its administration, or the level of benefit valuation which would increase the Claim Administrator's cost of administration; c. On any date changes imposed by governmental entities increase expenses incurred by the Claim Administrator, provided that such increases shall be limited to an amount sufficient to recover such increase in expenses; d. On any date that the number of Covered Employees enrolled in the Plan changes by an amount equal to ten percent (10%) or more of total enrollment over a one (1) month period or twenty—five percent (25%) or more of total enrollment over a three (3) month period; or e. On any date an affiliate, subsidiary, or other business entity is added or dropped by the Employer. 3.4 Service charges upon termination. In the event the Agreement is terminated in accordance with the "TERM AND TERMINATION" provisions of the Agreement, the Employer will Timely pay the Claim Administrator the Termination Administrative Charge indicated in the Fee Schedule specifications of the most current Exhibit 5 ASO BPA of the Agreement. 3.5 Additional service charges. In addition to the amounts due and payable each month in accordance with the Fee Schedule specifications of the most current Exhibit 5 ASO BPA of the Agreement, the Claim Administrator may charge the Employer for: a. Any applicable Supplemental Charge(s); b. Reasonable fees for the reproduction or return of Claim records requested by the Employer, a governmental agency or pursuant to a court order; and/or c. Any other fees that may be assessed by third parties for services rendered to the Employer and/or any other fees for services mutually agreed upon by the parties in writing. 3.6 Effect of Plan enrollment Administrative Charges will be paid based upon information the Claim Administrator receives regarding current Plan enrollment as of the first day of each month. Appropriate adjustments will be made for enrollment variances or corrections. 3.7 Timely payment Performance of all duties and obligations of the Claim Administrator under the Agreement are contingent upon the Timely payment of any amount owed the Claim Administrator by the Employer. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 24 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 4: CLAIM PAYMENTS 4.1 Claim Administrator's Payment Upon receipt of a Claim, the Claim Administrator will make a Claim Payment provided that all payments due the Claim Administrator under the terms of the Agreement are paid when due. 4.2 Employer's Liability. Any reasonable determination by the Claim Administrator in adjudicating a Claim under the Agreement that a Covered Person is entitled to a Claim Payment is conclusive evidence of the liability of the Employer to the Claim Administrator for such Claim Payment pursuant to Section 6 below titled "CLAIM SETTLEMENTS." 4.3 Covered Person's certain liability. Under certain circumstances, if the Claim Administrator pays the healthcare Provider amounts that are the responsibility of the Covered Person under this Agreement, the Claim Administrator may collect such amounts from the Covered Person. 4.4 Cessation of Claim Payments. If the Employer has failed to pay when due any amount owed the Claim Administrator, the Claim Administrator shall be under no obligation to make any further Claim Payments until such default is cured. SECTION 5: EMPLOYER PAYMENT 5.1 Intent. In consideration of the Claim Administrator's obligations as set forth in the Agreement and at the end of each Employer Payment Period, the Employer shall pay to the Claim Administrator or shall provide for the Claim Administrator to obtain the Employer Payment amount due for that Employer Payment Period. 5.2 Confirmation or notification of amount due and payment due date. The Employer shall confirm with the Claim Administrator or the Claim Administrator shall notify the Employer's Financial Division of the Employer Payment for each Employer Payment Period and when such payment is due. Confirmation or notification shall be in accordance with the Employer Payment Method elected in the Fee Schedule specifications of the most current Exhibit 5 - ASO BPA of the Agreement and the following: a. If the Employer Payment Method is by check, the Claim Administrator shall issue the Employer a settlement statement to include the Claim Administrator's mailing address for check remittance and the date payment is due. b. If the Employer Payment Method is other than check, the Employer shall confirm on-line the amount due by accessing the Claim Administrator's "Blue Access for Employers" (as provided in Exhibit 1 of the Agreement) or the Claim Administrator shall advise the Employer by email, facsimile (at an email address or facsimile number to be furnished by the Employer prior to the effective date of the Agreement) or by such other method mutually agreed to by the parties of the amount due. The Employer Payment must be made or obtained within forty-eight (48) hours of confirmation by the Employer or the Employer's notification by the Claim Administrator. If any day on which an Employer Payment is due is a holiday, such payment will be made or obtained on the next business day. 5.3 Federal Regulation of the Employer. Beginning in 2014 (or such other date required by law), the Employer will be responsible for contributing to the funding of the Transitional Reinsurance Programs established by the Affordable Care Act. In no event will the Claim Administrator be responsible for the reinsurance contribution. If required by applicable law, the Employer will promptly forward to the Claim Administrator all such contributions (or successor or alternate program amounts) and all information necessary for the calculation or administration of such contributions (or successor or alternate program amounts). Late payments are subject to the penalties outlined in section 7 of this exhibit. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 25 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 6: CLAIM SETTLEMENTS 6.1 Determining what Employer owes. A Claim Settlement shall be determined for each Claim Settlement Period indicated in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of the Agreement. The Claim Settlement shall reflect the sum of the following: a. All Claim Payments paid by the Claim Administrator in the particular Claim Settlement Period. b. All Claim Payments paid by the Claim Administrator in prior Claim Settlement Periods that have not been included in a prior Claim Settlement. c. The Administrative Charges and Credits and other applicable service charges as indicated in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of the Agreement and any applicable Supplemental Charge(s). The sum of a., b., and c. above shall be referred to as the Claim Settlement Total. 6.2 Employer underpayment. If, within the Claim Settlement Period, the Claim Settlement Total exceeds the Employer Payments, the Employer will pay the difference to the Claim Administrator. The Claim Settlement will be determined within sixty (60) days from the last day of the Claim Settlement Period. The Claim Administrator will notify the Employer in writing of the results of the Claim Settlement. Any sums due the Claim Administrator will be paid Timely by the Employer. 6.3 Employer overpayment. If, within the Claim Settlement Period, the Employer Payments exceed the Claim Settlement Total, the Claim Administrator may, at its option, pay such difference to the Employer, apply the difference against amounts then owed the Claim Administrator by the Employer or authorize a reduction equal to such difference from the next Claim Settlement Total due the Claim Administrator from the Employer. SECTION 7: LATE PAYMENTS AND REMEDIES 7.1 When Employer Fails to Pay. If the Employer fails to pay when due any amount required to be paid to the Claim Administrator under the Agreement, and such default is not cured within ten (10) days of written notice to the Employer, the Claim Administrator may, at its option: a. Suspend Claim Payments; or b. Terminate the Agreement as of the effective date specified in such notice. 7.2 When Claim Administrator Fails to Timely Notify. Pursuant to Section 28 "ENFORCEMENT" of the Agreement, the Claim Administrator's failure to provide the Employer with timely notice of any amount due hereunder shall not be considered a waiver of payment of any amount which may otherwise be due hereunder from the Employer. 7.3 Late Charge. If the Employer fails to make any payment required by the Agreement on a Timely basis, the Claim Administrator, at its option, may assess a daily charge for the late remittance from the due date of any amount(s) payable to the Claim Administrator by the Employer. This daily charge shall be an amount equal to the amount resulting from multiplying the amount due times the lesser of: a. The rate of .0329° o per day which equates to an amount of twelve percent (12%) per annum; or b. The maximum rate permitted by state law. 7.4 Insolvency. In addition, if the Employer becomes insolvent, however evidenced, or is in default of its obligation to make any Employer Payment as provided hereunder, or if any other default hereunder has occurred and is continuing, then any indebtedness of the Claim Administrator to the Employer (including any and all contractual obligations of the Claim Administrator to the Employer) may be offset and/or recouped and applied toward the payment of the Employer's obligations hereunder, whether or not such obligations, or any part thereof, shall then be due the Employer. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 26 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 8: FINANCIAL OBLIGATIONS UPON AGREEMENT TERMINATION 8.1 Run -Off Claims. The Employer hereby acknowledges that on the date of termination of the Agreement in accordance with the provisions of either Section 7 of this Exhibit or Section 13 of the Agreement, there may be an undetermined but substantial number of Claims for services rendered or furnished prior to that date which have not been submitted to the Claim Administrator for reimbursement and also an undetermined but substantial number of Claims submitted for reimbursement which have not been paid by the Claim Administrator ("Run—Off Claims"). The Employer shall be responsible for the reimbursement of all Run -Off Claims, whether or not such Claims have been submitted, or whether or not Claim Payments for such Claims have been made by the Claim Administrator, as of the date of termination, including, but not limited to, Claim Payments made in accordance with MSP laws, and for the payment of the Termination Administrative Charge and any other applicable service charges indicated in the Fee Schedule specifications of the most current Exhibit 5 — ASO BPA of the Agreement and any applicable Supplemental Charge(s) pursuant to the processing of such Claims after the Agreement's termination date. 8.2 Corresponding Employer Payments. In consideration of the Claim Administrator's continuing to make Claim Payments in accordance with Section 4 of this Exhibit for Run—Off Claims, the Employer shall continue to make Employer Payments for all such Claims paid by the Claim Administrator up to the Final Settlement outlined below. 8.3 Final Settlement. A Final Settlement shall be made within sixty (60) days after the last day of the Run—Off Period. This Final Settlement shall compare the Employer Payments against the Claim Settlement Totals for all Run—Off Claims paid up to the date of the Final Settlement. The difference shall be paid or applied as set forth in Section 6 of this Exhibit. However, if the Employer Payments exceed the Claim Settlement Totals for all Run Off Claims paid up to the Final Settlement, the Claim Administrator shall pay such difference to the Employer after applying the difference against amounts, if any, then owed to the Claim Administrator by the Employer. 8.4 Uncashed checks. As of the date of termination of the Agreement, any outstanding checks that are or become "stale" (over 365 days old) will be escheated by the Claim Administrator, on the Employer's behalf, less any amount(s) owed by such checks' payees to the Claim Administrator, in accordance with the applicable state's unclaimed property law. SECTION 9: REQUIRED DISCLOSURE PROVISIONS The Employer represents that it acknowledges and has communicated the provisions stated in each of the following sections to its Covered Persons. SECTION 10: PAYMENT OF CLAIMS AND ASSIGNMENT OF BENEFITS: 10.1 Claim payment assignment. All payments by the Claim Administrator for the benefit of any Covered Person may be made directly to any Provider furnishing Covered Services for which such payment is due, and the Claim Administrator is authorized by such Covered Person to make such payments directly to such Providers. However, the Claim Administrator reserves the right in its sole discretion to pay any benefits that are payable under the terms of the Plan directly to the Covered Person or Provider furnishing Covered Services. All benefits payable to the Covered Person which remain unpaid at the time of the death of the Covered Person will be paid to the estate of the Covered Person. 10.2 Claim dispute. Once Covered Services are rendered by a Provider, the Covered Person has no right to request the Claim Administrator not to pay the Claim submitted by such Provider and no such request by a Covered Person or his agent will be given effect. Furthermore, the Claim Administrator will have no liability to the Covered Person or any other person because of its rejection of such request. 10.3 Plan coverage assignment Neither the Plan nor a Covered Person's claims for payment of benefits under the Plan are assignable in whole or in part to any person or entity at any time. Coverage under the Plan is expressly non—assignable or non—transferable and will be forfeited if a Covered Person attempts to assign or transfer coverage or aids or attempts to aid any other person in fraudulently obtaining coverage under the Plan. However, if the Claim Administrator makes payment because of a person's wrongful use of the identification card of a Covered Person, such payment will be considered a proper payment and the Claim Administrator will have no obligation to pursue recovery of such payment. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 27 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 11: COVERED PERSON/PROVIDER RELATIONSHIP 11.1 Choosing a Provider. The choice of a Provider is solely the choice of the Covered Person and the Claim Administrator will not interfere with the Covered Person's relationship with any Provider. 11.2 Claim Administrator's role. It is expressly understood that the Claim Administrator does not itself undertake to furnish hospital, medical or dental service, but solely to make payment to a Provider for the Covered Services received by Covered Persons. The Claim Administrator is not in any event liable for any act or omission of any Provider or the agent or employee of such Provider, including, but not limited to, the failure or refusal to render services to a Covered Person. Professional services which can only be legally performed by a Provider are not provided by the Claim Administrator. Any contractual relationship between a Provider and the Claim Administrator shall not be construed to mean that the Claim Administrator is providing professional service. 11.3 Intent of terminology. The use of an adjective such as Approved, Administrator, Participating, In -Network or Network in modifying a Provider shall in no way be construed as a recommendation, referral or any other statement as to the ability or quality of such Provider. In addition, the omission, non-use or non -designation of Approved, Administrator, Participating, In -Network, Network or any similar modifier or the use of a term such as Non -Approved, Non - Administrator, Non -Participating, Out -of -Network or Non -Network should not be construed as carrying any statement or inference, negative or positive, as to the skill or quality of such Provider. 11.4 Provider's role. Each Provider provides Covered Services only to Covered Persons and does not deal with or provide any services to the Employer (other than as an individual Covered Person) or the Plan. SECTION 12: CLAIM ADMINISTRATOR'S SEPARATE FINANCIAL ARRANGEMENTS WITH PRESCRIPTION DRUG PROVIDERS 12.1 All amounts payable to the Claim Administrator by the Employer for Claim Payments provided by the Claim Administrator and applicable service charges pursuant to the terms of the Agreement and all required Copayment, deductible and Coshare amounts under the Agreement shall be calculated on the basis of the Provider's Allowable Amount or the agreed upon cost between the Participating Prescription Drug Provider as defined below, and the Claim Administrator, whichever is less. 12.2 The Claim Administrator hereby informs the Employer and all Covered Persons that it has contracts, either directly or indirectly, with prescription drug Providers ("Participating Prescription Drug Providers") for the provision of, and payment for, prescription drug services to all persons entitled to prescription drug benefits under individual certificates, group health insurance policies and contracts to which the Claim Administrator is a party, including the Covered Persons under the Agreement, and that pursuant to the Claim Administrator's contracts with Participating Prescription Drug Providers, under certain circumstances described therein, the Claim Administrator may receive discounts for prescription drugs dispensed to Covered Persons under the Agreement. Actual network savings achieved by the Employer will vary. Some rates are currently based on Average Wholesale Price ("AWP"), which is determined by a third party and is subject to change. 12.3 The Employer understands that the Claim Administrator may receive such discounts during the term of the Agreement. Neither the Employer nor Covered Persons hereunder are entitled to receive any portion of any such discounts except as such items may be indirectly or directly reflected in the service charges specified in the Agreement. The drug fees/discounts that Claim Administrator has negotiated with Prime Therapeutics LLC ("Prime") through the Pharmacy Benefit Management (PBM) Agreement, will be passed -through to the Employer for both retail and mail/specialty drugs. Except for mail/specialty drugs, the PBM Agreement requires that the fees/discounts that Prime has negotiated with pharmacies (or other suppliers) are passed -through to Claim Administrator (and ultimately to the Employer as described above). For the mail pharmacy and specialty pharmacy program owned by Prime, Prime retains the difference between its acquisition cost and the negotiated prices as its fee for the various administrative services provided as part of the mail pharmacy and/or specialty pharmacy program. Claim Administrator pays a fee to Prime for pharmacy benefit services, which is reflected in the administrative fee charged by Claim Administrator to the Employer. A portion of Prime's PBM fees are tied to certain performance standards, including, but not limited to, claims processing, customer service response, and mail-order processing. The allowable amount reimbursed for prescriptions obtained at out -of -network pharmacies is determined by the Employer's benefit design, but is usually based on 75% of the cost of the prescription if it were obtained at an in -network pharmacy. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 28 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 12.4 "Weighted paid claim" refers to the methodology of counting claims for purposes of determining the Claim Administrator's fee payment to Prime. Each retail (including claims dispensed through PBM's specialty pharmacy program) paid claim equals one weighted paid claim; each extended supply or mail order (including Mail Service) paid claim equals three weighted paid claims. However, Claim Administrator pays Prime a Program Management Fee ("PMF") on a per paid claim basis. "Funding Levers" means a mechanism through which Claim Administrator funds the fees (net fee, ancillary fees and special project fees) owed to PBM. Funding Levers always include manufacturer administrative fees, mail order utilization, participating pharmacy transaction fees, and, if elected by Claim Administrator, may include rebates and retail spread. Claim Administrator's net fee owed to Prime for core services will be offset by the Funding Levers. Claim Administrator pays Prime the net fee for core services, ancillary fees and special project fees, offset by all applicable Funding Levers as agreed upon under the terms of its agreement with Prime. The net fee is calculated based on a fixed dollar amount per Weighted Paid Claim. 12.5 The amounts received by Prime from Claim Administrator, pharmacies, manufacturers or other third parties may be revised from time to time. Some of the amounts received by Prime may be charged each time a claim is processed (or, in some instances, requested to be processed) through Prime and/or each time a prescription is filled, and include, but are not limited to, administrative fees charged by Prime to Claim Administrator (as described above), administrative fees charged by Prime to pharmacies, and administrative fees charged by Prime to pharmaceutical manufacturers. Currently, none of these fees will be passed on to the Employer as expenses, or accrue to the benefit of the Employer, unless otherwise specifically set forth in the Agreement. Additional information about these types of fees or the amount of these fees is available upon request. The maximum that Prime will receive from any pharmaceutical manufacturer for certain administrative fees will be 3% of the total sales for all rebatable products of such manufacturer dispensed during any given calendar year to members of Claim Administrator and other Blue Plan operating divisions. SECTION 13: CLAIM ADMINISTRATOR'S SEPARATE FINANCIAL ARRANGEMENTS WITH PHARMACY BENEFIT MANAGERS 13.1 The Claim Administrator hereby informs the Employer and all Covered Persons that it owns a significant portion of the equity of Prime Therapeutics LLC and that the Claim Administrator has entered into one or more agreements with Prime Therapeutics LLC or other entities (collectively referred to as "Pharmacy Benefit Managers"), for the provision of, and payment for, prescription drug benefits to all persons entitled to prescription drug benefits under individual certificates, group health insurance policies and contracts to which the Claim Administrator is a party, including the Covered Persons under the Agreement. Pharmacy Benefit Managers have agreements with pharmaceutical manufacturers to receive rebates for using their products. Pharmacy Benefit Managers may share a portion of those rebates with the Claim Administrator. 13.2 Based upon previous experience with such rebates, the Claim Administrator has estimated that any drug rebate for the Employer would be based on an average dollar amount per prescription ("Expected Rebate"). One—hundred percent (100%) of the Expected Rebate is shared with employers based upon the benefit design and the retail and mail order usage rate. The Expected Rebate passed back to the Employer is determined by multiplying the sum of the estimated dollars times the expected number of annual prescriptions dispensed, then divided by the expected number of Covered Employees, then divided by twelve (12) months. The Expected Rebate amount is reflected as a prescription drug rebate credit per Covered Employee per month. 13.3 The Employer understands that the Claim Administrator may receive such rebates during the term of the Agreement. Neither the Employer nor Covered Persons hereunder are entitled to receive any portion of any such rebates except as such items may be indirectly or directly reflected in the service charges specified in the Agreement. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 29 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 14: INTER -PLAN ARRANGEMENTS 14.1 Out -of -Area Services Claim Administrator has a variety of relationships with other Blue Cross and/or Blue Shield Licensees referred to generally as "Inter -Plan Programs." Whenever Covered Persons access healthcare services outside the geographic area Claim Administrator serves, the Claim for those services may be processed through one of these Inter -Plan Programs and presented to Claim Administrator for payment in accordance with the rules of the Inter -Plan Programs policies then in effect. The Inter -Plan Programs available to Covered Persons under this Agreement are described generally below. Claim Administrator's services under this Agreement are governed by and subject to the Inter -Plan Programs policies in effect during the term of this Agreement. Typically, Covered Persons, when accessing care outside the geographic area Claim Administrator serves, obtain care from healthcare providers that have a contractual agreement (i.e., are "participating healthcare providers") with the local Blue Cross and/or Blue Shield Licensee in that other geographic area ("Host Blue"). In some instances, Covered Persons may obtain care from non -participating healthcare providers. Claim Administrator's payment practices in both instances are described below. 14.2 BlueCard' Program Under the BlueCard® Program, when Covered Persons access Covered Services within the geographic area served by a Host Blue, Claim Administrator will remain responsible to Employer for fulfilling Claim Administrator's contractual obligations. However, in accordance with applicable Inter -Plan Programs policies then in effect, the Host Blue will be responsible for providing such services as contracting and handling substantially all interactions with its participating healthcare providers. The financial terms of the BlueCard Program are described generally below. Individual circumstances may arise that are not directly covered by this description; however, in those instances, our action will be consistent with the spirit of this description. a. Liability Calculation Method Per Clain: The calculation of the Covered Person's liability on Claims for Covered Services processed through the BlueCard Program will be based on the lower of the participating healthcare provider's billed covered charges or the negotiated price made available to Claim Administrator by the Host Blue. The calculation of Employer's liability on Claims for Covered Services processed through the BlueCard Program will be based on the negotiated price made available to Claim Administrator by the Host Blue. Sometimes, this negotiated price may be greater than or equal to billed charges. Examples of this are (i) when a Host Blue has negotiated with its participating healthcare provider(s) an inclusive allowance (e.g., per case or per day amount) for specific healthcare services, and (ii) when such negotiated price is necessary or appropriate, as determined by the Host Blue, to provide for a Host Blue's geographic access or availability of particular types of health care services. Host Blues may use various methods to determine a negotiated price, depending on the terms of each Host Blue's healthcare provider contracts. The negotiated price made available to Claim Administrator by the Host Blue may represent a payment negotiated by a Host Blue with a healthcare provider that is one of the following: (1) an actual price. An actual price is a negotiated payment without any other increases or decreases, or (2) an estimated price. An estimated price is a negotiated payment reduced or increased by a percentage to take into account certain payments negotiated with the provider and other Claim- and non -Claim -related transactions. Such transactions may include, but are not limited to, anti -fraud and abuse recoveries, provider refunds not applied on a Claim -specific basis, retrospective settlements, and performance -related bonuses or incentives, or (3) an average price. An average price is a percentage of billed covered charges representing the aggregate payments negotiated by the Host Blue with all of its healthcare providers or a similar classification of its providers and other Claim- and non -Claim -related transactions. Such transactions may include the same ones as noted above for an estimated price. Host Blues using either an estimated price or an average price may, in accordance with Inter -Plan Programs policies, prospectively increase or reduce such prices to correct for over- or underestimation of past prices (i.e., prospective adjustments may mean that a current price reflects additional amounts or credits for Claims already paid to providers or anticipated to be paid to or received from providers). However, the amount paid by the Covered HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 30 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. Person and Employer is a final price; no future price adjustment will result in increases or decreases to the pricing of past Claims. The BlueCard Program requires that the price submitted by a Host Blue to Claim Administrator is a final price irrespective of any future adjustments based on the use of estimated or average pricing. If a Host Blue uses either an estimated price or an average price on a Claim, the Host Blue is required to hold any difference between the amount paid to the provider and the amount that Employer pays in a variance account, pending settlement with its participating healthcare providers. Because all amounts paid are final, neither variance account funds held to be paid, nor the funds expected to be received, are due to or from Employer. Such payable or receivable would be eventually exhausted by healthcare provider settlements and/or through prospective adjustment to the negotiated prices. Some Host Blues may retain interest earned, if any, on funds held in variance accounts. A small number of states require Host Blues either (i) to use a basis for determining Covered Person's liability for Covered Services that does not reflect the entire savings realized, or expected to be realized, on a particular Claim or (ii) to add a surcharge. Should the state in which healthcare services are accessed mandate liability calculation methods that differ from the negotiated price methodology or require a surcharge, Claim Administrator would then calculate Covered Person's liability and Employer's liability in accordance with applicable law. b. Return of Overpayments Under the BlueCard Program, recoveries from a Host Blue or its participating healthcare providers can arise in several ways, including, but not limited to, anti -fraud and abuse recoveries, healthcare provider/hospital audits, credit balance audits, utilization review refunds, and unsolicited refunds. In some cases, the Host Blue will engage a third party to assist in identification or collection of recovery amounts. The fees of such a third party may be netted against the recovery. Recovery amounts determined in this way will be applied in accordance with applicable Inter -Plan Programs policies, which generally require correction on a Claim -by -Claim or prospective basis. Unless otherwise agreed to by the Host Blue, Claim Administrator may request adjustments from the Host Blue for full refunds from healthcare providers due to the retroactive cancellation of membership but only for one year after the date of the Inter -Plan financial settlement process for the original Claim. In some cases, recovery of Claim payments associated with a retroactive cancellation may not be possible if, as an example, the recovery conflicts with the Host Blue's state law or healthcare provider contracts or would jeopardize the Host Blue's relationship with its healthcare providers. C. BlueCard Program Fees and Compensation Employer understands and agrees to reimburse Claim Administrator for certain fees and compensation which Claim Administrator is obligated under the BlueCard Program to pay to the Host Blues, to the Blue Cross and Blue Shield Association (BCBSA), and/or to BlueCard Program vendors, as described below. Fees and compensation under the BlueCard Program may be revised in accordance with the Program's standard procedures for revising such fees and compensation, which do not provide for prior approval by Employer. Such revisions typically are made annually as a result of Program policy changes and/or vendor negotiations. These revisions may occur at any time during the course of a given calendar year, and they do not necessarily coincide with Employer's benefit period under this Agreement. Claim Administrator will charge these fees as follows: It is expected that, unless the number of Employer's Blue enrolled contracts falls below 50,000, that the access fee and all other BlueCard Program -related fees are included in Claim Administrator's Administrative Charge set forth in the Agreement's Fee Schedule. In the event that the number of Employer's Blue enrolled contracts falls below 50,000, only the BlueCard Program access fee may be charged separately each time a Claim is processed through the BlueCard Program. If one is charged, it will be a percentage of the discount/differential Claim Administrator receives from the Host Blue, based on the current rate in accordance with the Program's standard procedures for establishing the access fee rate. The access fee will not exceed $2,000 for any Claim. In this situation the access fee is set forth in the Agreement's Fee Schedule. All other BlueCard Program -related fees will then be factored into Claim Administrator's determination of its general administrative fee, also set forth in the Agreement's Fee Schedule. (1) BlueCard Program Access Fees HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 31 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. A BlueCard Program access fee may be charged only if the Host Blue's arrangement with its healthcare provider prohibits billing Covered Persons for amounts in excess of the negotiated payment. However, a healthcare provider may bill for non -covered healthcare services and for Covered Person cost sharing (for example, deductibles, copayments, and/or coinsurance) related to a particular Claim. (2) How the BlueCard Program Access Fee Affects Employer When Claim Administrator is charged a BlueCard Program access fee, Claim Administrator may pass the charge along to Employer as a Claim expense or as a separate amount. The access fee will not exceed $2,000 for any Claim. If Claim Administrator receives an access fee credit, Claim Administrator will give Employer a Claim expense credit or a separate credit. Instances may occur in which the Claim payment is zero or Claim Administrator pays only a small amount because the amounts eligible for payment were applied to patient cost sharing (such as a deductible or coinsurance). In these instances, Claim Administrator will pay the Host Blue's access fee and pass it along to Employer as stated above even though Employer paid little or had no Claim liability. 14.3 Negotiated National Account Arrangements As an alternative to the BlueCard Program, some of Employer's Covered Persons' Claims for Covered Services may be processed through a negotiated National Account arrangement with a Host Blue. Pursuant to such negotiated arrangements, the Host Blue(s) [has/have] agreed to provide, on the Claim Administrator's behalf, Claim Payments and certain administrative services for those Covered Persons of the Employer receiving Covered Services in the state and/or service area of the Host Blues. Pursuant to the agreement between the Claim Administrator and the Host Blues, the Claim Administrator has agreed to reimburse each Host Blue for all Claim Payments made on the Claim Administrator's behalf for those Covered Persons of the Employer receiving Covered Services in the state and/or service area of such Host Blue. If Claim Administrator and Employer have agreed that (a) Host Blue(s) shall make available (a) custom healthcare provider network(s) in connection with this Agreement, then the terms and conditions set forth in Claim Administrator's negotiated National Account arrangement(s) with such Host Blue(s) shall apply, unless otherwise agreed in the Agreement's Fee Schedule. In negotiating such arrangement(s), Claim Administrator is not acting on behalf of or as an agent for Employer, Employer's Group Health Plan or Employer's Covered Persons. a. Covered Person and Employer Liability Calculation Covered Person liability calculation will be based on the lower of either billed covered charges or negotiated price (refer to the description of negotiated price under 14.2.a., BlueCard Program) made available to Claim Administrator by the Host Blue that allows Employer's Covered Persons access to negotiated participation agreement networks of specified participating healthcare providers outside of Claim Administrator's service area. Employer's liability calculation will be based on the negotiated price (refer to the description of negotiated price under 14.2.a., BlueCard Program). Employer also acknowledges that pursuant to the Host Blue's contracts with Host Blues' participating Providers, under certain circumstances described therein, the Host Blue (i) may receive substantial payment from Host Blues' participating Providers with respect to services rendered to such persons for which the Host Blue was initially obligated to pay the Host Blues' participating Providers, (ii) may pay Host Blues' participating Providers more or less than their billed charges for services, by discounts or otherwise, or (iii) may receive from Host Blues' participating Providers other allowances under the Host Blue's contracts with them. One example of this is quality improvement programs/payments. If charged by the Host Blue to Claim Administrator, Employer shall reimburse Claim Administrator for any payments made to the Host Blue, unless otherwise set forth in the Agreement's Fee Schedule, including "claim - like" charges, which are those charges for payments to Host Blues' participating Providers on other than a fee for services basis which include, but are not limited to, incentive payments and capitations. The Employer acknowledges that, in negotiating the Administrative Charge set forth in the Agreement's Fee Schedule, it has taken into consideration that, among other things, the Host Blue may receive such payments, discounts and/or other allowances during the term of its agreement with the Claim Administrator. Further, all amounts payable by Covered Person and Employer shall be calculated on the basis described in this subsection, HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 32 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. irrespective of any separate financial arrangement between the Host Blue's participating Provider that rendered the applicable Covered Service and the Host Blue other than the negotiated price as described in this subsection. b. Fees and Compensation Employer understands and agrees to reimburse Claim Administrator for certain fees and compensation which Claim Administrator is obligated under applicable Inter -Plan Programs requirements to pay to the Host Blues, to the Blue Cross and Blue Shield Association, and/or to Inter -Plan Programs vendors. Fees and compensation under applicable Inter -Plan Programs may be revised in accordance with the Programs' standard procedures for revising such fees and compensation, which do not provide for prior approval by Employer. Such revisions typically are made annually as a result of Inter -Plan Programs policy changes and/or vendor negotiations. These revisions may occur at any time during the course of a given calendar year, and they do not necessarily coincide with Employer's benefit period under this Agreement. In addition, the participation agreement with the Host Blue may provide that Claim Administrator must pay an administrative and/or a network access fee to the Host Blue, and Employer further agrees to reimburse Claim Administrator for any such applicable administrative and/or network access fees. For this type of negotiated participation arrangement, any such administrative and/or network access fees will not be greater than the comparable fees that would be charged under the BlueCard Program. Claim Administrator will charge these fees as follows: It is expected that the access fee and all other Negotiated National Account Arrangement -related fees are included in Claim Administrator's Administrative Charge set forth in the Agreement's Fee Schedule. Employer acknowledges that Host Blues may have contracts with certain Providers in their service areas ("Host Blues' participating Providers") for the provision of, and payment for, health care services. As a result of these contracts with their Providers, Host Blues are able to make provider networks available to persons and entities, including Claim Administrator, entitled to health care benefits under various health policies and contracts to which the Host Blue is a party. Such network availability extends to Covered Persons covered under the Agreement. All other Inter -Plan Program fees related to this negotiated National Account arrangement are factored into Claim Administrator's determination of its Administrative Charge, also set forth in the Agreement's Fee Schedule. The Claim Administrator hereby informs the Employer, and the Employer acknowledges, that the Claim Administrator's, the Host Blues' participating Provider contracting arrangements, operational practices and procedures, and the policies and procedures governing software used to process Claims for services rendered by the Claim Administrator's Providers and the Host Blues' participating Providers may result in minor deviations in Claim processing and/or pricing of Claims for some services. From time -to -time, Claim Administrator, Host Blues and their respective vendors may receive compensation in connection with services provided by Claim Administrator to our group customers, which are not necessarily passed on to our group customers or to members. Additional information about these types of fees, the amount of these fees and the sources of these fees is available upon request. 14.4 Non -Participating Healthcare Providers Outside Claim Administrator's Service Area a. Covered Person Liability Calculation (1) In General When Covered Services are provided outside of Claim Administrator's service area by non -participating healthcare providers, the amount(s) a Covered Person pays for such services will be calculated using the methodology described in the Agreement for non -Participating providers located inside our service area. The Covered Person may be responsible for the difference between the amount that the non -participating healthcare provider bills and the payment Claim Administrator will make for the Covered Services as set forth in this paragraph. (2) Exceptions In some exception cases, Claim Administrator may, but is not required to, in its sole and absolute discretion, negotiate a payment with such non -participating healthcare provider on an exception basis. b. Fees and Compensation HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 33 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. Employer understands and agrees to reimburse Claim Administrator for certain fees and compensation which Claim Administrator is obligated under applicable Inter -Plan Programs requirements to pay to the Host Blues, to the Blue Cross and Blue Shield Association, and/or to Inter -Plan Programs vendors. Fees and compensation under applicable Inter -Plan Programs may be revised in accordance with the specific Program's standard procedures for revising such fees and compensation, which do not provide for prior approval by Employer. Such revisions typically are made annually as a result of Inter -Plan Programs policy changes and/or vendor negotiations. These revisions may occur at any time during the course of a given calendar year, and they do not necessarily coincide with Employer's benefit period under this Agreement. In addition, Claim Administrator must pay an administrative fee to the Host Blue, and Employer further agrees to reimburse Claim Administrator for any such administrative fee as set forth below. Claim Administrator will charge these fees as follows: All fees related to Claims for Covered Services delivered by non -participating healthcare providers outside Claim Administrator's service area are factored into Claim Administrator's determination of its Administrative Charge, which is set forth in the Agreement's Fee Schedule. SECTION 15: MEDICARE SECONDARY PAYER ("MSP") DATA MATCH 15.1 In an effort to facilitate the processing of Claims consistent with the requirements of the MSP statute, and to assist in meeting the statutory obligations, certain Blue Cross and Blue Shield Plans together with the Centers for Medicare & Medicaid Services ("CMS"), formerly known as Health Care Financing Administration ("HCFA"), the federal government agency which administers Medicare, have developed a new enrollment and membership system. The system, also referred to as the "Data Match," is aimed at obtaining, in a Timely and current fashion, information necessary for the Claim Administrator to identify dual coverage situations which fall within the MSP statute, and to determine whether primary or secondary payment should be made for a particular Claim. 15.2 Under the system, the Claim Administrator will provide basic information to CMS about individuals enrolled in Group Health Plans who are also covered by Medicare so that CMS can better detect dual coverage situations. 15.3 The Employer hereby authorizes and directs the Claim Administrator to disclose to CMS periodically, information pertaining to Medicare—eligible Covered Persons under the Plan. 15.4 The Employer agrees that the Claim Administrator's ability to make accurate primary/secondary MSP determinations depends on the breadth and accuracy of the Claim Administrator's files concerning Covered Persons. The Employer agrees to use best efforts in responding promptly and accurately to the Claim Administrator's requests for information and to require and facilitate its Covered Persons' cooperation in responding promptly and accurately to such requests. 15.5 Further, to assure the continuing accuracy of the Claim Administrator's files, the Employer agrees that it is the Employer's responsibility to notify the Claim Administrator promptly of any change in the size of the Employer's work force or status of its employees that might affect the order of payment under the MSP statute, such as information regarding working aged persons who retire and changes in the size of the Employer's work force that place it in, or take it out of, the scope of the MSP statute. If the Claim Administrator does not receive such information from the Employer, the Claim Administrator will assume that all relevant factors remain unchanged and will process Claims accordingly. The Employer acknowledges and agrees that the Claim Administrator will be using the information provided by the Employer and Covered Persons to update the Claim Administrator's files, and will also forward this information to CMS so that CMS can revise its file to reflect relevant changes in primary/secondary status. 15.6 The Claim Administrator may, in its sole discretion, discontinue its participation in the Data Match system as described above. Nothing in the Agreement shall be construed as obligating the Claim Administrator to continue its participation in the Data Match system. 15.7 Disclosure Statement: The Employer acknowledges that the Claim Administrator has furnished it with a copy of a pamphlet entitled "Information Regarding the Medicare Secondary Payer Statute" (also referred to as the "Disclosure Statement"), prepared by the Blue Cross and Blue Shield Association and reviewed by CMS, which administers Medicare. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 34 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SECTION 16: REIMBURSEMENT PROVISION Applicable only if this service is elected in the Fee Schedule specifications of the most current Exhibit S —ASO BPA. 16.1 If a Covered Person incurs expenses for sickness or injury that occurred due to the negligence of a third party and benefits are provided for Covered Services described in the Plan, the following provisions will apply: a. The Claim Administrator on behalf of the Employer has the right to reimbursement for all benefits the Claim Administrator provided from any and all damages collected from the third party for those same expenses whether by action at law, settlement, or compromise, by the Covered Person, the Covered Person's parents, if the Covered Person is a minor, or the Covered Person's legal representative as a result of that sickness or injury, in the amount of the Provider's Allowable Amount for Covered Services for which the Claim Administrator has provided benefits to the Covered Person. b. The Claim Administrator is assigned the right to recover from the third party, or his or her insurer, to the extent of the benefits the Claim Administrator provided for that sickness or injury. 16.2 The Claim Administrator shall have the right to first reimbursement out of all funds the Covered Person, the Covered Person's parents, if the Covered Person is a minor, or the Covered Person's legal representative is or was able to obtain for the same expenses for which the Claim Administrator has provided benefits as a result of that sickness or injury. The Covered Person is required to furnish any information or assistance or provide any documents that the Claim Administrator may reasonably require in order to obtain its rights under this provision. This provision applies whether or not the third party admits liability. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 35 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. EXHIBIT 3 RECOVERY LITIGATION AUTHORIZATION The Employer hereby acknowledges and agrees that the Claim Administrator may, at its election, pursue claims of the Employer and/or the Plan, which are related to claims that the Claim Administrator pursues on its own behalf, subject to the following terms and conditions: 1. The Claim Administrator shall have the right to select and retain legal counsel. 2. Any lawsuit filed or arbitration initiated by the Claim Administrator will be done in the name of the Claim Administrator for its own benefit, as well as on behalf of the Employer and possibly other parties. The Claim Administrator will not cause any litigation to be filed or arbitration to be initiated in the name of the Employer and/or the Plan without the Employer's express advance consent. With such permission, any such litigation can be filed or arbitration initiated in the name of the Employer and/or the Plan with attorneys identified as counsel for the Employer or in the name of two or more parties, including the Employer and the Claim Administrator, with attorneys identified as counsel for the Employer, the Claim Administrator and possibly other parties. 3. The parties agree to cooperate with each other in pursuit of recovery efforts pursuant to the provisions of this Exhibit, including providing appropriate authority to communicate with the Employer concerning issues pertaining to any class actions and pursuant to which the Employer specifically declines representation by class litigation counsel. 4. The Claim Administrator shall control any recovery strategy and decisions, including decisions to mediate, arbitrate or litigate. 5. The Claim Administrator shall have the exclusive right to approve any and all settlements of any claims being mediated, arbitrated or litigated. 6. Any and all recoveries, net of all investigative and other expenses relating to the recovery, including costs of settlement, mediation, arbitration or litigation including attorney's fees, made through any means pursuant to the provisions of this Exhibit, including, but not limited to, settlement, mediation, arbitration or trial, will be prorated based upon each party's percentage interest in the recoverable compensatory monetary damages, which allocation shall be done by the Claim Administrator on any reasonable basis it deems appropriate. 7. Any and all information, documents, communications or correspondence provided to or obtained by attorneys from either party, as well as communications, correspondence, conclusions and reports by or between attorneys and either party, shall be and are intended to remain privileged and confidential. Each party intends that the attorney—client and work product privileges shall apply to all information, documents, communications, correspondence, conclusions and reports to the full extent allowed by state or federal law. The Claim Administrator shall be permitted to make such disclosures of such privileged and confidential information to law enforcement authorities as it deems necessary or appropriate in its sole discretion. The Employer shall not waive the attorney—client privilege or otherwise disclose privileged or confidential information received in connection with the provisions of this Exhibit or cooperative efforts pursuant to the provisions of this Exhibit without the express written consent of the Claim Administrator. 8. The discharge of attorneys by one party shall not disqualify or otherwise ethically prohibit the attorneys from continuing to represent the other party pursuant to the provisions of this Exhibit. 9. Nothing in the provisions of this Exhibit shall require the Claim Administrator to assert any claims on behalf of the Employer and/or the Plan. 10. Nothing in the provisions of this Exhibit and nothing in attorneys' statements to either party and/or the Plan will be construed as a promise or guarantee about the outcome of any particular litigation, mediation, arbitration or settlement negotiation; therefore, the Employer acknowledges that the efforts of the Claim Administrator may not result in recovery or in full recovery in any particular case. 11. The terms and conditions described herein shall survive the expiration or termination of the Agreement; however, nothing herein shall require the Claim Administrator to assert any claims on the Employer's and/or the Plan's behalf following the termination of the Agreement. If the Agreement is terminated after the Claim Administrator has asserted a claim on behalf of the Employer and/or the Plan but before any recovery, the Claim Administrator may in its sole discretion continue to pursue the claim or discontinue the claim. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 36 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 12. If the Employer should desire to participate in a class or multi—district settlement rather than defer to the Claim Administrator, the Employer may reverse the exercise of discretion authorized herein by affirmatively opting into a class settlement and by notifying the Claim Administrator of its decision in writing, immediately upon making such determination as provided for under Section 26 NOTICES of the Agreement. 13. The Employer further acknowledges and agrees that, unless it notifies the Claim Administrator to the contrary in writing as provided for under Section 26 NOTICES of the Agreement, it consents to the terms and conditions of this Exhibit and authorizes the Claim Administrator, on behalf of the Employer and/or the Plan, consistent with Section 2 above, to: a. Pursue claims that the Claim Administrator pursues on its own behalf in class action litigation, federal multi district litigation, or otherwise, including, but not limited to, antitrust, fraud, unfair and deceptive business or trade practice claims pursuant to and in accordance with the provisions of this Exhibit effective immediately; b. Opt out of any class action settlement or keep the Employer and/or the Plan in the class, if the Claim Administrator believes it is in the best interest of the parties to do so; c. Investigate and pursue recovery of monies unlawfully, illegally or wrongfully obtained from the Plan. 14. The Employer further acknowledges and agrees that the Claim Administrator's decision to pursue recovery in connection with particular claims shall be in the Claim Administrator's sole discretion and the Claim Administrator does not enter into this undertaking as a fiduciary of the Plan or its Covered Persons, but only in connection with its undertaking to pursue recovery of claims of the Employer and/or the Plan when, as, and if, the Claim Administrator determines that such claims may be pursued in the common interest of the parties. 15. The parties agree in the event that the language in the Agreement shall be in conflict with this Exhibit, the provisions of this Exhibit shall prevail. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 37 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. EXHIBIT 4 COBRA HEALTH BENEFITS CONTINUATION COVERAGE ARTICLE 1: DEFINITIONS As used in this Agreement: 1.1 Applicable Premium means the amount the Plan will require a Qualified Beneficiary (or others permitted by Continuation of Coverage) to pay, for any period of COBRA continuation coverage, that does not exceed one hundred and two percent (102%) of the premium for that period or does not exceed one hundred and fifty percent (150%) of the premium after the 18th month of coverage for Qualified Beneficiaries eligible for extended coverage due to disability. 1.2 Agreement Period means the twelve month period beginning on the effective date of this Agreement. The parties may by amendment, designate an initial Agreement Period which is less than a year, to coordinate with the Employer's next plan year anniversary provided all succeeding Agreement Periods shall mean the twelve month period coinciding with the Employer's plan year. 1.3 COBRA means the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended or as may be amended. 1.4 Continuation of Coverage means the continuation of group health coverage mandated by COBRA and its regulations. 1.5 Covered Qualified Beneficiary means a Qualified Beneficiary who is (or was) provided Continuation of Coverage by the Employer's Plan. 1.6. Election period means the period of at least sixty (60) days duration beginning not later than the date on which coverage under the health benefit program terminates by reason of a Qualifying Event and ending not earlier than sixty (60) days after the later of (1) the beginning date or (2) the date a Participant has been notified of the right to elect Continuation of Coverage after the occurrence of a Qualifying Event. 1.7 Employer means the individual proprietor, partnership or corporation identified in the Plan and any predecessor thereto, and any corporation with which the Employer shall be merged or consolidated, or any corporation resulting in any manner from a reorganization of the Employer or any individual, firm or corporation which shall assume the Health Benefits Continuation Coverage obligations of the Employer. 1.8 Plan means an employee welfare benefit plan that is a considered a Plan within the meaning of Section 4980 B(g)(2) of the Internal Revenue Code of 1986. 1.9 Health Benefits Continuation Coverage means the administrative services Claim Administrator offers to assist Employer in fulfilling Employer's responsibilities under COBRA. 1.10 Qualifying Event means the occurrence of an event which would result in the loss of eligibility of a Participant under the Employer's health benefit program but for the requirements of COBRA. 1.11 Plan Administrator means the term "administrator" as defined in Section 3(16)(a) of ERISA. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 38 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 1.12 Qualified Beneficiary means: 1. In general, the term "Qualified Beneficiary" shall mean, with respect to an employee eligible for health coverage under the Plan, any individual who, on the day before a Qualifying Event is covered under the Plan. a. as the spouse of the covered employee, or b. as the dependent child of the covered employee. 2. In the case of a Qualifying Event which is caused by termination (other than by reason for such employee's gross misconduct), or reduction of hours of the employee's employment, the term "Qualified Beneficiary" includes the employee. 1.13 Subscriber means each Covered Qualified Beneficiary who (1) elected to continue group coverage under COBRA; (2) submitted an application, and (2) has a certificate number for continuation coverage under COBRA. Depending upon the timing and nature of a Qualifying Event, a family may have more than one Subscriber. ARTICLE 2 - SERVICES TO BE PROVIDED BY CLAIM ADMINISTRATOR During the duration of this Agreement, Claim Administrator will perform such services as described in this Article 2. 2.1 Once the Employer has notified Claim Administrator in writing of the occurrence of a Qualifying Event and has given Claim Administrator the name and current address of a Qualified Beneficiary, Claim Administrator will timely provide the Qualified Beneficiary notice of the right to continue group coverage directed to the address provided Claim Administrator by the Employer. 2.2 The notice provided a Qualified Beneficiary pursuant to Paragraph 2.1 of this Article 2 will also include information regarding Applicable Premium and an application form, and will state the Election Period for the election of Continuation of Coverage. Any Qualified Beneficiary electing Continuation of Coverage will be directed to communicate such election in writing to Claim Administrator. Claim Administrator will bill and collect the initial Applicable Premium from the date of the loss of coverage because of the Qualifying Event to the end of the month in which such election is received. 2.3 When an employee is a Qualified Beneficiary and makes an election, the election is deemed to include all Qualified Beneficiaries listed in the notice except as otherwise stated in such election. When the employee is not a Qualified Beneficiary and a dependent spouse is a Qualified Beneficiary, an election by the dependent spouse is deemed to include all Qualified Beneficiaries except as otherwise stated in such election. For purposes of this Section 2.3, an election includes a declination. 2.4 Once a Qualified Beneficiary is established as a Subscriber, Claim Administrator will establish the membership information in the Claim Administrator claims system. 2.5 Claim Administrator will provide a monthly statement to each Subscriber. Such statement shall indicate a due date for receipt of the Applicable Premium. When Applicable Premium is not paid or not paid timely, Claim Administrator will terminate Continuation of Coverage and provide a written letter of termination to the Subscriber. Claim Administrator will deem payments that are less than 90% of the Applicable Premium to be insufficient and shall terminate coverage. Payment of Applicable Premium less than the lesser of $50 or 10% of Applicable Premium shall be governed by 54 CFR § 498013-8, A -5(d). 2.6 A Subscriber will be notified ninety (90) days prior to the maximum period of coverage that such coverage will terminate in ninety (90) days. The notice will contain information concerning the right, if any, to any additional type of continued coverage. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 39 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 2.7 Upon receipt of evidence satisfactory to Claim Administrator that a Covered Qualified Beneficiary has become, after the date of election, ineligible for Continuation of Coverage for reasons other than failure to pay the Applicable Premium or the expiration of the maximum period of coverage, Claim Administrator will notify such ineligible Covered Qualified Beneficiary that the coverage is being terminated and the date and reason for such termination, whether or not such termination date precedes the date of the notice. 2.8 Claim Administrator shall notify the Subscriber of any change in the Applicable Premium. 2.9 Claim Administrator will provide the Employer a written report giving the status of each Covered Qualified Beneficiary as of the end date of such report. 2.10 Claim Administrator shall bill Employer monthly for Applicable Premium for each of Employer's Covered Qualified Beneficiaries. The Applicable Premium shall be payable to Claim Administrator in the same manner as for similarly situated persons covered by the Plan for whom no Qualifying Event has occurred. 2.11 On a monthly basis Claim Administrator will furnish a check payable to Employer in the amount of Applicable Premium received from or on behalf of each Subscriber, less COBRA administration fees described in Article 5. 2.12 Claim Administrator will respond to written or telephone inquiries regarding Health Benefits Continuation Coverage. ART :CLE 3 - RESPONSIBILITIES OF THE EMPLOYER 3.1 The Employer retains full responsibility for and shall bear the cost of compliance with Continuation of Coverage. 3.2 Employer shall provide all persons eligible for coverage under its Plan(s) the general notice of Continuation of Coverage in conformity with 29 CFR Section 2590.606-1. 1. In the event Employer receives a notice from a person seeking Continuation of Coverage and determines that the person is not entitled to Continuation of Coverage, Employer shall provide such person an explanation as to why the person is not entitled to Continuation of Coverage. 2. In the event Employer receives information from a Covered Qualified Beneficiary regarding an extension of Continuation Coverage whether as the result of a second Qualifying Event or a social security disability determination, Employer shall notify Claim Administrator within 14 days. 3.3 Employer will provide Claim Administrator a written notice of the occurrence of a Qualifying Event. 1. Within thirty (30) days after the occurrence of a Qualifying Event, the Employer will provide a written notice of such event to Claim Administrator. The written notice will be on a form satisfactory to Claim Administrator and will describe the nature and date of the Qualifying Event, the name, last known address and certificate number of each Qualified Beneficiary, the date coverage under the Plan terminates and the type(s) of coverage held by each Qualified Beneficiary on the date of the Qualifying Event. Upon request, Claim Administrator will provide the Employer with an appropriate notice form. 2. If the Qualifying Event is either the divorce of the Employee or a Dependent child ceasing to be a Dependent child under the provisions of the Employer's Plan, and the Employer had no notice of such Qualifying Event within 30 days of such Qualifying Event, the notice required by this Paragraph 3.3 will be provided in writing to Claim Administrator no later than fourteen (14) days following the Employer's receipt of notice of the occurrence of such Qualifying Event. 3.4 Should any Qualified Beneficiary communicate or attempt an election or declination of Continuation of Coverage directly with the Employer or its officers or agents, the Employer shall immediately present any and all information regarding such action to Claim Administrator. For purposes of this Paragraph 3.4, "immediately" means within three (3) work days. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 40 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 3.5 It is understood by the Employer that agencies enforcing Continuation of Coverage requirements may impose penalties on an Employer or Plan Administrator who fails to comply. It is further understood by the Employer that Claim Administrator shall in no way be responsible for any said penalties nor does Claim Administrator agree to be liable for damages resulting from any said penalties which may be imposed on the Employer or Plan Administrator for non-compliance. 3.6 The Employer hereby agrees to identify its employee who shall act as the sole contact between the Employer and Claim Administrator in regard to matters under this Agreement. 3.7 The Employer shall furnish on a timely basis to Claim Administrator certain information concerning the Employer's Plan or Covered Qualified Beneficiaries as may from time to time be required by Claim Administrator for the performance of its duties under this Agreement including, but not limited to, the following: 1. All documents by which the Continuation of Coverage is established and any amendments or changes to the coverage as may from time to time be adopted including thirty (30) days prior written notification to Claim Administrator when the Employer plans a reduction in force, lay-off, strike, or shutdown or filing for bankruptcy, or makes changes to any of the following: its Continuation of Coverage; benefit pricing; Applicable Premium; or Plan carriers. 2. All data as may be required by Claim Administrator regarding the Covered Qualified Beneficiaries who are to be covered under this Agreement. a. Such data may include, without limitation, a list of Covered Qualified Beneficiaries who are to be covered under this Agreement, and completed Continuation of Coverage forms. Further, the Employer will notify Claim Administrator of the effective date of coverage for all Covered Qualified Beneficiaries who are to be covered under this Agreement. Clerical errors or delays in keeping or reporting data relative to coverage under this Agreement will not invalidate coverage which would otherwise be validly in force or continue coverage which would otherwise validly terminate. However, the Employer is liable for any benefits paid for a Covered Qualified Beneficiary if the Employer had not timely notified Claim Administrator of such Covered Qualified Beneficiary's termination or ineligibility under COBRA. b. All such notification by the Employer to Claim Administrator must be furnished on forms or in a format approved by Claim Administrator and must include all information reasonably required by Claim Administrator to effect such changes. 3. Such information as to Continuation of Coverage benefits as will enable Claim Administrator to accurately prepare any reports required under this Agreement. The Employer, furthermore, shall use its best efforts to cooperate with and assist Claim Administrator as applicable, in the performance of its duties hereunder. 3.8 Employer shall notify Claim Administrator within three (3) work days upon receipt of information which employer has regarding any possible early termination of Continuation of Coverage such as health coverage under another Plan or Medicare. 3.9 In the event of termination of this Agreement, the Employer shall notify Subscribers of such termination and the procedures to be followed to retain Continuation of Coverage. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 41 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. ARTICLE 4 — RESPONSIBILITIES OF CLAIM ADMINISTRATOR 4.1 Claim Administrator is empowered to act on behalf of the Employer in connection with Continuation of Coverage only as expressly stated in this Agreement or as mutually agreed to in writing by the parties hereto. 4.2 Claim Administrator shall, to the extent possible, advise the Employer of any legal actions against it or the Employer which involve the obligations of the Employer or Claim Administrator under this Agreement. Claim Administrator, provided no conflicts of interest exist, shall fully cooperate with the Employer, at no cost to Claim Administrator in the Employer's defense of any action arising out of matters related to the Continuation of Coverage, or this Agreement. 4.3 Except as provided in Article 5, Claim Administrator shall be responsible for expenses arising out of its performance of Health Benefits Continuation of Coverage. ARTICLE 5 - COMPENSATION The Employer shall compensate Claim Administrator for the Health Benefits Continuation of Coverage provided by Claim Administrator under this Agreement as described in Schedule 1. ARTICLE 6 — TERM AND TERMINATION 6.1 This Exhibit shall run concurrent with the Agreement and shall terminate when the Agreement terminates, subject to Run -Out provisions. The Agreement shall renew automatically for successive twelve (12) month periods unless terminated as provided in this Article 6. 6.2 Either party may terminate this Agreement without cause by giving at least ninety (90) days prior written notice to the other party. In the event of such termination Claim Administrator agrees to use its best efforts to assist the Employer in notifying Subscribers, transferring data, files, and all other relevant information to the Employer or its delegate. 6.3 This Agreement will terminate on the last date the Employer ceases to have an obligation to provide Continuation of Coverage under COBRA. In the event that the Employer ceases to have an obligation to provide Continuation of Coverage, the Employer will provide Claim Administrator with at least ten (10) days advance written notice of the cessation of its obligations. 6.4 When this Agreement terminates, 1. Claim Administrator shall have no further duty or responsibility after the date of termination. The Employer shall immediately have complete responsibility for Health Benefits Continuation of Coverage and any other responsibilities contained in this Agreement. Further, the Employer agrees to notify all Subscribers of the termination. 2. Any and all compensation due Claim Administrator, whether or not previously billed, will be due and payable within thirty (30) days of the date of termination. ARTICLE 7 — RELATIONSHIP OF PARTIES 7.1 Claim Administrator is an independent contractor with respect to the Employer, and nothing in this Agreement shall create, or be construed to create, the relationship of employer and employee between Claim Administrator and the Employer, nor shall the Employer's agents, officers or employees be considered or construed to be considered employees of Claim Administrator for any purpose whatsoever. Claim Administrator is not the Plan Administrator and makes no discretionary decisions regarding eligibility for, or termination of, Continuation of Coverage. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 42 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. 7.2 It is understood and agreed that nothing contained in this Agreement shall confer or be construed to confer any benefit on persons who are not parties to this Agreement including, but not limited to, beneficiaries or former beneficiaries of the Employer or the Plan. 7.3 The Employer acknowledges that this Agreement is separate and distinct from any other agreement(s) between the parties regarding certain administrative services or policies of insurance issued to said Employer. All amounts due hereunder shall be in addition to the amounts, service fees, or premiums due Claim Administrator under any such agreement(s). ARTICLE 8 - GENERAL PROVISIONS 8.1 TAXES: In the event any taxing authority having jurisdiction over either (or both) of the parties determines that the compensation paid to Claim Administrator by the Employer results in any tax liability (other than an income tax) to Claim Administrator, such tax shall be the responsibility of the Employer, and the amount of such tax shall be paid by the Employer to Claim Administrator upon written request pursuant to Article 5 of this Agreement. 8.2 NOTIFICATION: Claim Administrator is not obligated to notify any Qualified Beneficiary (regardless of whether or not the Qualified Beneficiary has elected Continuation of Coverage) of the termination of this Agreement. 8.3 INFORMATION: All written information (including billings and compensation) and notices provided pursuant to this Agreement will be posted by first class mail, postage prepaid to Claim Administrator at P.O. Box 1180, Marion, IL 62959-7680 and to the Employer at the Employer address indicated on Exhibit 5, the Benefit Program Application ("BPA"). HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 43 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. SCHEDULE I ADMINISTRATIVE FEE The Employer will pay a separate and distinct Administrative Fee to Claim Administrator as payment for the Administrative Services Claim Administrator provides under this Agreement. This Administrative Fee will be due and payable as follows: (i) The Employer will pay Claim Administrator a Seventy -Five Dollar ($75.00) monthly administrative fee. The sum of Seventy -Five Dollars ($75.00) will be deducted from the monthly remittance to the Employer pursuant to Article 2, Section 2.11. If the Seventy -Five Dollar ($75.00) fee exceeds the amount of Applicable Premium received, the excess will be due and payable to Claim Administrator upon receipt of a monthly invoice. (ii) The Employer will pay Claim Administrator a sum of Ten Dollars ($10.00) per Covered Qualified Beneficiary on a monthly basis as the payment for the services Claim Administrator provides under this Agreement. The sum of Ten Dollars ($10.00) per Covered Qualified Beneficiary per month will be deducted from the monthly remittance to the Employer pursuant to Article 2, Section 2.11. If the total of Ten Dollars ($10.00) per Qualified Beneficiary per month fee exceeds the amount of Applicable Premium received, the excess will be due and payable to Claim Administrator upon receipt of a monthly invoice. (iii) The Employer will pay BCBSTX a sum of Ten Dollars ($10.00) per Qualified Beneficiary for each notice of their COBRA rights. The sum of Ten Dollars ($10.00) per notice will be deducted from the monthly remittance to the Employer, pursuant to Article 2, Section 2.11. If the Ten Dollars ($10.00) per Qualified Beneficiary notice fee exceeds the amount of premium received, the excess will be due and payable to BCBSTX upon receipt of a monthly invoice. (iv) The Employer will pay Claim Administrator a sum of One Hundred Dollars ($100.00) per hour for any system programming costs associated with non-standard administration services. The sum of One Hundred Dollars ($100.00) per hour will be deducted from the monthly remittance to the Employer pursuant to Article 2, Section 2.11. If the One Hundred Dollars ($100.00) per hour fee exceeds the amount of Applicable Premium received, the excess will be due and payable to Claim Administrator upon receipt of a monthly invoice. HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 44 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. EXHIBIT 5 BENEFIT PROGRAM APPLICATION ("ASO BPA") HCSC TX Gen ASA Med Non ERISA REG -CF Rev. 2 13 45 Proprietary Information Not for use or disclosure outside Claim Administrator, Employer, their respective affiliated companies and third party representatives, except under written agreement. ASO Benefit Program Application ("ASO BPA") Application to Administrative Services Only (ASO) Group Accounts Administered by Blue Cross and Blue Shield of Texas, a division of Health Care Services Corporation, A Mutual Legal Reserve Company, hereinafter referred to as the "Claim Administrator" or "HCSC" Group Status: Renewing ASO Account Employer Account Number (6 -digits): 010097 Effective Date: 01/01/2014 Legal Employer Name: City of Lubbock Group Number(s): 010097, Section Number(s): 106837 Anniversary Date (AD): 01/01 Employer Identification Number: SIC: Nature of Business: Primary Address: Public Entity? ❑ Yes ❑ No City: State: Zip: Administrative Contact: Title: Phone Number: Fax Number: Email Address: Physical Address (if different from Primary - required): City: State: Zip: Billing Address: City: State: Zip: Billing Contact: Title: Phone Number: Fax Number: Email Address: Blue Access for Employers (BAE) Contact: (The BAE Contact is the Employee of the account authorized by the Employer to access and maintain its account via BAE.) Title: Phone Number: Fax Number: Email Address: Subsidiary/Affiliated Companies: Subsidiary/Affiliated Companies Address: Contact: Title: City: State: Zip: Phone Number: Fax Number: Email Address: ERISA Plan: ❑Yes ❑ No If yes, specify ERISA Plan Year: (mm/dd/yy) ERISA Plan Administrator: Plan Administrator's Address: Effective: If applicable, the below -named producer(s)or agency(ies) is/are recognized as Employer's Producer of Record (POR) to act as representative in negotiations with and to receive commissions from Blue Cross and Blue Shield of Texas, a division of Health Care Service Corporation (HCSC), a Mutual Legal Reserve Company, and HCSC subsidiaries for Employer's employee benefit programs. This statement rescinds any and all previous POR appointments for Employer. The POR is authorized to perform membership transactions on behalf of Employer. This appointment will remain in effect until withdrawn or superseded in writinq by Emplover. 1. *Producer(s) or Agency(ies) to whom commissions are to be paid: Tax ID Number (TIN) of ❑ Producer or ❑ Agency: Producer #: Producer Street: City: Zip: Address: Phone: Fax: Email: Is Producer/Agency appointed with BCBSTX? ❑ Yes ❑ General Agent? ❑ Yes ❑ No No Affiliated with General Agent? ❑ Yes ❑ No 2. *Producer(s) or Agency(ies)** to whom commissions are to be paid: Tax ID Number (TIN) of ❑ Producer or ❑ Agency: Agency Address: Street: City: Phone: Fax: Email: Producer #: Is Producer /Agency appointed with BCBSTX? ❑ Yes ❑ General Agent? ❑ Yes ❑ No No Zip: Affiliated with General Agent? ❑ Yes ❑ No If commission split, designate percentage for each producer/ Producer /Agency 1: Producer /Agency 2: agency. Note: total commissions paid must equal 100% % % 3. Multiple Location Agency(ies): If servicing agency is not listed above as Item 1 or 2, specify location below: * The Producer or agency name(s) above to whom commissions are to be paid must exactly match the name(s) on the appointment application(s). ** If commissions are split, please provide the information requested above on both producers/agencies. BOTH must be appointed to do business with BCBSTX. Eligible Person means: ❑ A full-time employee of the Employer. ❑ A full-time employee who is a member of: (name of union) ❑ A part-time employee of the Employer. ❑ A retiree of the Employer. ❑ Other: Are any classes of employees to be excluded from coverage? ❑ Yes ❑ No If yes, please identify the classes and describe the exclusion: 2. Full -Time Employee means: ❑ A person who is regularly scheduled to work a minimum of hours per week and who is on the permanent payroll of the Employer. ❑ Other: 3. Domestic Partners covered: ❑ Yes ❑ No If yes: A Domestic Partner, as defined in the Plan, shall be considered eligible for coverage. The Employer is responsible for providing notice of possible tax implications to those Covered Employees with Domestic Partners. If yes, are Domestic Partners eligible to continue coverage under COBRA? ❑ Yes ❑ No If yes, are dependents of Domestic Partners eligible for coverage? ❑ Yes ❑ No If yes, the Limiting Age for covered children of Domestic Partners means twenty-six (26) years, regardless of presence or absence of a child's financial dependency, residency, student status, employment, marital status or any combination of those factors. 4. Are children of any age who are medically certified as disabled and dependent on the employee for support and maintenance eligible for coverage? ❑ Yes ❑ No Are children over the Limiting Age who are medically certified as disabled and dependent on the employee for support and maintenance eligible for coverage under the plan if they were not covered under the plan prior to reaching the Limiting Age? ❑ Yes ❑ No 5. Are unmarried grandchildren eligible for coverage? ❑ Yes ❑ No If yes, must the grandchild be dependent on the employee for federal income tax purposes at the time application is made? ❑ Yes ❑ No 6. The effective date for a newly eligible person who becomes effective after the employer's initial enrollment date: ❑ The date of employment. ❑ The day of the month following the date of employment. ❑ The day of the month following days of employment. ❑ The day of the month following month(s) or days of employment. ❑ The day of employment. ❑ Other: Is the waiting period requirement to be waived on initial group enrollment? (The waiting period means the waiting period an Employee must satisfy in order for coverage to become effective. Covered family members do not have to satisfy a waiting period to become effective.) ❑ Yes ❑ No Are there multiple new hire employee waiting periods? ❑ Yes ❑ No If yes, please attach eligibility and contribution details for each section. 7. The Effective Date of termination for a person who ceases to meet the definition of Eligible Person: ❑ The date such person ceases to meet the definition of Eligible Person. ❑ The last day of the calendar month in which such person ceases to meet the definition of an Eligible Person. ❑ Other: 8. The Limiting Age for covered children is Twenty-six (26) years, regardless of presence or absence of a child's financial dependency, residency, student status, employment, marital status or any combination of those factors. For plan years beginning before January 1, 2014, an ASO grandfathered group health plan may exclude an adult child under 26 from coverage only if the child is eligible to enroll in an eligible employer sponsored health plan (as defined in Section 5000A(f)(2) of the Internal Revenue Code) other than a group health plan of a parent. To cover children age twenty-six (26) and over, you must select option i. or ii. below: i. ❑ The Limiting Age for covered children age twenty-six (26) or over, ❑ who are unmarried ❑ regardless of marital status, is years. Twenty-seven (27) through thirty (30) are the available options. ii. ❑ The Limiting Age for covered children who are full-time students and age twenty-six (26) or over, ❑ who are unmarried ❑ regardless of marital status, is years. Twenty-seven (27) through thirty (30) are the available options. Student certification: ❑ Account or ❑ BCBSTX or ❑ None Frequency of Certification Letters: Annually (AN) ❑ Quarterly (QU) ❑ Semi -Annually (SA) ❑ " Certification Schedule: Month 1: Month 2: Month 3 Month 4: * For Annual Notification, indicate one month (Jan -Dec) for notification, for Semi-annual, select 2 months, for quarterly, select 4 months Automatically cancel dependents who reach the maximum limiting age? ❑ Yes ❑ No However, such cancellation shall be postponed in accordance with any applicable federal or state law. 9. Termination of coverage upon reaching the Limiting Age: ❑ Coverage is terminated on the birthday. ❑ Coverage is terminated on the last day of the month in which the Limiting Age is reached. ❑ Coverage is terminated on the last day of the billing month. ❑ Coverage is terminated on the last day of the year (12/31) in which the Limiting Age is reached. ❑ Coverage is terminated on the group's Anniversary Date. Will coverage for a child who is medically certified as disabled and dependent on the parent terminate upon reaching the Limiting Age even if the child continues to be both disabled and dependent on the parent? ❑ Yes ❑ No However, such coverage shall be extended in accordance with any applicable federal or state law. 10. Enrollment: Special Enrollment: An Eligible Person may apply for coverage, Family coverage or add dependents within thirty-one (31) days of a qualifying event if he/she did not apply prior to his/her Eligibility Date or when eligible to do so. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be the effective date of the qualifying event or, in the event of Special Enrollment due to termination of previous coverage, the first day of the Plan Month following receipt of the application. In the case of a qualifying event due to loss of coverage under Medicaid or a state children's health insurance program, however, this enrollment opportunity is not available unless the Eligible Person requests enrollment within sixty (60) days after such coverage ends. Late Enrollment: An Eligible Person may apply for coverage, Family coverage or add dependents if he/she did not apply prior to his/her Eligibility Date or did not apply when eligible to do so. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be a date mutually agreed to by the Claim Administrator and the Employer. An Eligible Person may apply for coverage, Family coverage or add dependents if he/she did not apply prior to his/her Eligibility Date or did not apply when eligible to do so, during the Employer's Open Enrollment Period. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be a date mutually agreed to by the Claim Administrator and the Employer. Such date shall be subsequent to the Open Enrollment Period. Late applicant enrollment options: ❑ Annual open enrollment — late applicant may apply during open enrollment and for applicants nineteen (19) years of age or older, be subject to a 12 -month pre-existing waiting period (credit will always be applied). ❑ No Annual Open Enrollment — late applicants are never eligible for coverage (dental only). ❑ Annual open enrollment — no pre-existing waiting period. ❑ Late applicants may apply at any time — coverage is effective first of the month following receipt of the application. For applicants nineteen (19) years of age or older, an 18 -month pre-existing waiting period applies. Specify Open Enrollment Period: 11. Pre-existing waiting period: ❑ Pre-existing waiting period waived for all participants up to age nineteen (19). All other participants age nineteen (19) and over must serve pre-existing waiting period. Benefits for treatment incurred during the months prior to the effective date of membership will not be covered for months after the effective date. ❑ Pre-existing is waived on the account's initial enrollment. All other participants age nineteen (19) and over must serve pre-existing waiting period. Benefits for treatment incurred during the months prior to the effective date of membership will not be covered for months after the effective date. ❑ Pre-existing waiting period waived for all participants. 12. Extension of benefits due to Temporary Layoff, Disability or Leave of Absence: Temporary Layoff: days Disability: days Leave of Absence: days However, benefits shall be extended for the duration of an Eligible Person's leave in accordance with any applicable federal or state law. 13. COBRA Auto Cancel? ❑ Yes ❑ No Member's COBRA/Continuation of Coverage will be automatically cancelled at the end of the member's eligibility period. Total number of Employees/Subscribers: 1. on payroll 2. on COBRA continuation coverage 3. with retiree coverage (if applicable) 4. who work part-time 5. serving the new hire waiting period 6. declining because of other group coverage (e.g., other commercial group coverage, Medicare, Medicaid, TRICARE/Champus) 7. declining coverage (not covered elsewhere) ❑ Managed Health Care Coverage: ® PPO ❑ EPO ❑ Dual Option ❑ POS High Plan Name: ❑ HMO Low Plan Name: ❑ with Drug coverage ❑ without Drug coverage ❑ Consumer Driven Health Plan ❑ HCA, if selected, complete separate HCA Benefit Program Application (BlueEdge) ❑ HSA, if selected, provide HSA Administrator or trustee name: ❑ FSA (vendor: ConnectYourCare) (available 1/1/2013) ❑ Traditional coverage: ❑ Out -of -Area (Indemnity) ❑ Benefit Offering ® Prescription Drug Coverage: ® Prescription Drug Program ❑ Stand -Alone Prescription Drug Program ® Comprehensive Dental Coverage ® Plan PDENT Employer -paid ❑ Dual Option: Plan 1 Choose an item Plan 2 Choose an item ❑ Comprehensive Vision Coverage ❑ In -Hospital Indemnity (IHI) ❑ Wellness Incentives ® Stop Loss Coverage - If selected, complete separate Stop Loss exhibit ❑ Dearborn National Life Insurance - If selected, complete separate Life application ® HCSC COBRA Administrative Services - If selected, complete separate COBRA Administrative Services Addendum ❑ Blue Directions (Private Exchange) COMMENTS: City of Lubbock is renewing with same medical plan,dental plan, and HCSC COBRA admin. Group is adding Stop Loss Coverage and Prime as RX vendor. FINANCIAL DOCUMENT ADMINISTRATION FEE SCHEDULE 1. Type: ® Medical ❑ Medical / Dental ❑ Other: 2. Administrative Charge Chart: Product / Service PPO PPO Base Administrative Charge (Medical) $41.08 $ $ $ Choose an Item $ $ $ $ Choose an Item $ $ $ $ Choose an Item $ $ $ $ *Prescription Drug Rebate Credit per Covered Employee per month is the guaranteed Prescription Drug Rebate savings reflected as a Prescription Drug Rebate credit. Expected rebate amounts to be received by the Claim Administrator are passed back to the Employer with one hundred percent (100%) of the expected amount applied as a credit on the monthly billing statement on a per Covered Employee per month basis. Rebate credits are paid $(7.86) $ $ $ prospectively to the Employer and shall not continue after termination of the Prescription Drug Program. (Further information concerning this credit is included in the governing Administrative Services Agreement to which this ASO BPA is attached under the section titled "CLAIM ADMINISTRATOR'S SEPARATE FINANCIAL ARRANGEMENTS WITH PHARMACY BENEFIT MANAGERS.") Blue Care Connection® ("BCC") Program: $included $ $ $ Enhanced BCC Program Buy Up(s): $ $ $ $ Description: Choose an Item Description: Choose an Item $ $ $ $ Other: $ $ $ $ Other: $ $ $ $ Other: $ $ $ $ Other: $ $ $ $ Other: $ $ $ $ Total $33.22 $ $ $ Additional Comments: Dental: PDENT 1 $3.20 1 $ I $ I $ 3. Termination Administrative Charge: The Termination Administrative Charge applicable to the Run -Off Period shall be equal to the sum of the amounts obtained by multiplying the total number of Covered Employees by category (per Covered Employee per individual or family composite) during the three (3) months immediately preceding the date of termination by the appropriate factors shown below. Service Medical Run-off Administration Charge 1 $21.28 1 $ 1 $ I $ Dental Run-off Administration Charge I $ I $ I $ I $ Additional Comments: 4. BlueCard Program/Network access fee: $ (Available upon request) 5. Not applicable to Grandfathered Plans External Review Coordination: Employer acknowledges and agrees: (i) to a fee of $700 for each external review requested by a Covered Person that the Claim Administrator coordinates for the Employer in relation to the Employer's Plan; (ii) that the Claim Administrator's coordination shall include reviewing external review requests to ensure that they meet eligibility requirements, referring requests to accredited external independent review organizations, and reversing the Plan's determinations if so indicated by external independent review organizations; and (iii) that the external reviews shall be performed by an independent third party entity or organization and not the Claim Administrator. Amounts received by Claim Administrator and external independent review organizations may be revised from time to time and may be paid each time an external review is undertaken. Further, Employer elects for external reviews to be performed under the Federal Affordable Care Act external review process. 6. Reimbursement Provision: ® Yes ❑ No If yes: It is understood and agreed that in the event the Claim Administrator makes a recovery on a third -party liability claim, the Claim Administrator will retain 25% of any recovered amounts other than amounts recovered as a result of or associated with any Workers' Compensation Law. 7. Claim Administrator's Third Party Recovery Vendor: It is understood and agreed that in the event the Claim Administrator's Third Party Recovery Vendor makes a recovery on a claim, the Employer will pay no more than 25% of any recovered amount. 1. Benefit booklets — Is BCBSTX providing benefit booklets? ❑ Yes ❑ No ❑ Standard benefit booklet (no additional charge) ❑ Customized benefit booklets ❑ No additional charge ❑ Supplemental Billing" ❑ Customized booklet covers* ❑ No additional charge ❑ Supplemental Billing— ❑ ERISA plan information ❑ No additional charge ❑ Supplemental Billing - 2. Subscriber ID cards ❑ Standard subscriber ID cards (no additional charge) ❑ Customized ID card services ❑ No additional charge ❑ Supplemental Billing - 3. Network provider directories ❑ No additional charge ❑ Supplemental Billing" 4. Subscriber claim forms, enrollment forms, enrollment materials ❑ No additional charge ❑ Supplemental Billing" 5. Special mailings Provider directories to be mailed to home addresses: ❑ Yes ❑ No ❑ Cost included in admin charge ❑ Supplemental Billing"` 6. Other: Additional charge: $ * Custom booklet covers are not available on electronic documents. "`As indicated in fee table on previous page. PAYMENT SPECIFICATIONS NO CHANGES SEE ADDITIONAL PROVISIONS Employer Payment Method: ❑ Online Bill Pay ❑ Electronic ❑ Check Employer Payment Period: ❑ Weekly (cannot be selected if Check is selected as payment method above) ❑ Twice -Monthly ❑ Monthly ❑ Other (please specify) Claim Settlement Period: Monthly Run -Off Period: Transfer Payments are to be made for twelve (12) months following the end of the Fee Schedule Period. Final Settlement: Final Settlement to be made within (60) days after end of Run -Off Period. BROKER/CONSULTANT COMPENSATION The Employer acknowledges that if any broker/consultant acts on its behalf for purposes of purchasing services in connection with the Employer's Plan under the Administrative Services Agreement to which this ASO BPA is attached, the Claim Administrator may pay the Employer's broker/consultant a commission and/or other compensation in connection with such services under the Agreement. If the Employer desires additional information regarding commissions and/or other compensation paid the broker/consultant by the Claim Administrator in connection with services under the Agreement, the Employer should contact its broker/consultant. Certificate of Creditable Coverage: ❑ Yes ❑ No If yes: The Employer directs the Claim Administrator to issue to individuals, whose coverage under the Plan terminates during the term of the Administrative Services Agreement to which this ASO BPA is attached, a Certificate of Creditable Coverage. The Certificate of Creditable Coverage shall be based upon information required for issuance of a Certificate of Creditable Coverage to be provided to the Claim Administrator by the Employer and coverage under the Plan during the term of the Administrative Services Agreement. 2. Summary of Benefits & Coverage: a. Claim Administrator will create Summary of Benefits & Coverage (SBC)? ❑ Yes. If yes, please answer question b. The SBC Addendum is attached. ❑ No. If No, then the Employer acknowledges and agrees that the Employer is responsible for the creation and distribution of the SBC as required by Section 2715 of the Public Health Service Act (42 USC 300gg-15) and SBC regulations (45 CFR 147.200), as supplemented and amended from time to time, and that in no event will the Claim Administrator have any responsibility or obligation with respect to the SBC. The Claim Administrator is not obligated to respond to or forward misrouted calls, but may, at its option, provide participants and beneficiaries with Employer's contact information. A new clause (e) is added to Subsection C. in the Additional Provisions as follows: "(e) the SBC". (Skip question b.) b. Claim Administrator will distribute Summary of Benefits & Coverage (SBC) to participants and beneficiaries? ❑ No. Claim Administrator will create SBC (only for benefits Claim Administrator administers under the Agreement) and provide SBC to Employer in electronic format. Employer will then distribute SBC to participants and beneficiaries (or hire a third party to distribute) as required by law. ❑ Yes. Claim Administrator will create SBC (only for benefits Claim Administrator administers under the Agreement) and provide SBC to Employer in electronic format. Employer will then distribute to participants and beneficiaries as required by law, except that Claim Administrator will send the SBC in response to the occasional request received directly from individuals. ❑ Yes. Claim Administrator will create SBC (only for benefits Claim Administrator administers under the Agreement) and distribute SBC to participants and beneficiaries via regular hardcopy mail or electronically. Distribution Fee for hardcopy mail is $1.50 per package. The distribution fee will not apply to SBCs that Claim Administrator sends in response to the occasional request received directly from individuals 3. The Massachusetts Health Care Reform Act requires employers to provide, or contract with another entity to provide, a written statement to individuals residing in Massachusetts who had "creditable coverage" at any time during the prior calendar year through the employer's group health plan and to file a separate electronic report to the Massachusetts Department of Revenue verifying information in the individual written statements. a. The Employer directs Claim Administrator to provide written statements of creditable coverage to its Covered Employees who reside, or have enrolled dependents who reside, in Massachusetts and file electronic reports to the Massachusetts Department of Revenue in a manner consistent with the requirements under the Massachusetts Health Care Reform Act. Such written statements and electronic reporting shall be based on information provided to the Claim Administrator by the Employer and coverage under the Plan during the term of the Administrative Services Agreement. The Employer hereby certifies that, to the best of its knowledge, such coverage under the Plan is "creditable coverage" in accordance with the Massachusetts Health Care Reform Act. The Employer acknowledges that the Claim Administrator is not responsible for verifying nor ensuring compliance with any tax and/or legal requirements related to this service. The Employer or its Covered Employees should seek advice from their legal or tax advisors as necessary. ❑ Yes ❑ No b. If no: The Employer acknowledges it will provide written statements and electronic reporting to the Massachusetts Department of Revenue as required by the Massachusetts Health Care Reform Act. 4. Employer contribution. The percentage of premium to be paid by the employer is: Health -- % or $ 1Dental -- % or $ Emp: % $ 1 Dep: % $ 1 Emp: % $ Dep: % $ 5. This ASO Benefit Program Application (ASO BPA) is incorporated into and made a part of the Administrative Services Agreement with both such documents to be referred to collectively as the "Agreement' unless specified otherwise. ADDITIONAL PROVISIONS: A. Grandfathered Health Plans: Employer shall provide Claim Administrator with written notice prior to renewal (and during the plan year, at least 60 days advance written notice) of any changes that would cause any benefit package of its group health plan(s) (each hereafter a "plan") to not qualify as a "grandfathered health plan" under the Affordable Care Act and applicable regulations. Any such changes (or failure to provide timely notice thereof) can result in retroactive and/or prospective changes by Claim Administrator to the terms and conditions of administrative services. In no event shall Claim Administrator be responsible for any legal, tax or other ramifications related to any plan's grandfathered health plan status or any representation regarding any plan's past, present and future grandfathered status. The grandfathered health plan form ("Form"), if any, shall be incorporated by reference and part of the BPA and Agreement, and Employer represents and warrants that such Form is true, complete and accurate. B. Retiree Only Plans, Excepted Benefits and/or Self -Insured Nonfederal Governmental Plans: If the BPA includes any retiree only plans, excepted benefits and/or self-insured nonfederal governmental plans (with an exemption election), then Employer represents and warrants that one or more such plans is not subject to some or all of the provisions of Part A (Individual and Group Market Reforms) of Title XXVII of the Public Health Service Act (and/or related provisions in the Internal Revenue Code and Employee Retirement Income Security Act) (an "exempt plan status"). Any determination that a plan does not have exempt plan status can result in retroactive and/or prospective changes by Claim Administrator to the terms and conditions of administrative services. In no event shall Claim Administrator be responsible for any legal, tax or other ramifications related to any plan's exempt plan status or any representation regarding any plan's exempt plan status. C. Employer shall indemnify and hold harmless Claim Administrator and its directors, officers and employees against any and all loss, liability, damages, fines, penalties, taxes, expenses (including attorneys' fees and costs) or other costs or obligations resulting from or arising out of any claims, lawsuits, demands, governmental inquires or actions, settlements or judgments brought or asserted against Claim Administrator in connection with (a) any plan's grandfathered health plan status, (b) any plan's exempt plan status, (c) any plan's design (including but not limited to any directions, actions and interpretations of the Employer), (d) any provision of inaccurate information, and/or (e) the SBC. Changes in state or federal law or regulations or interpretations thereof may change the terms and conditions of administrative services. The provisions of paragraphs A -C (directly above) shall be in addition to (and do not take the place of) the other terms and conditions of administrative services between the parties. I UNDERSTAND AND AGREE THAT: 1. The proposed fees are effective for 12 months, subject to contract provisions, and are based on the information and conditions stated. Final fees are subject to review based on actual enrollment results. If there is a 10% or greater variance in the enrollment and/or less than the minimum enrollment requirement of , BCBSTX reserves the right to review the final fees. The information provided in this application is complete and accurate to the best of my knowledge. If this information is incomplete or inaccurate, BCBSTX may rerate the plan, withdraw the proposal or cancel the contract. 2. Has there been a significant change in the claims experience previously provided? ❑Yes ® No If significant changes have been made, complete and attach Account Experience (Addendum to BPA). 3. Have there been any significant changes in the previously provided location(s) of eligible employees? ❑ Yes ®No If significant changes have been made, attach new census. 4. Receipt by BCBSTX of the advance administrative fee (where applicable), in the amount of $n/a, and completed enrollment forms does not constitute approval and acceptance by the BCBSTX Home Office. 5. If applicable, effective n/a, the above-named producer(s)or agency(ies) is/are recognized as Employer's Producer of Record (POR), to act as representative in negotiations with and to receive commissions from Blue Cross and Blue Shield of Texas, a division of Health Care Service Corporation (HCSC), a Mutual Legal Reserve Company, and HCSC subsidiaries for our employee benefit programs. This statement rescinds any and all previous Producer of Record appointments for this company. The above named agent(s) or agency(ies) is authorized to perform membership transactions on behalf of the Employer. This appointment will remain in effect until withdrawn or superseded in writing by our company. 6. Producer Statement (if applicable): I certify that I have reviewed all enrollment materials. I have also advised the Employer that I have no authority to bind these coverages, to alter the terms of the Contract(s)/Policy(ies), this Benefit Program Application or enrollment material in any manner or to adjust any claims for benefits under the Contract(s)/Policy(ies). 7. BCBSTX will report the value of all remuneration by BCBSTX to ERISA plans with 100 or more participants for use in preparation of ERISA Form 5500 schedules. Reporting will also be provided upon request to non -ERISA plans or plans with fewer than 100 participants. Reporting will include base commissions, bonuses, incentives, or other forms of remuneration for which your Producer/consultant is eligible for the sale or renewal of self-funded and/or insured products. Julie Vazquez Authorized BCBSTX Representative Signature oiVALAhi Glen C. Robertson Acct Exec 09/05/2013 Mayor Title Date Title 972-766-2147 and 972-385-1304 September 10, 2013 BCBSTX Telephone and Fax numbers Date Producer Representative (if applicable) Date ProducerTelephone and Fax numbers ATTEST: -'tf-d &-, , SJ(7- - Rebe ca Garza, City Secreta(y APPROVED AS TO CONTENT: Leisa Hutcheson, Director Human Resources and Risk Management APPROVED AS TO FORM: Chad Weaver, Assistant City Attorney PROXY The undersigned hereby appoints the Board of Directors of Health Care Service Corporation, a Mutual Legal Reserve Company, or any successor thereof ("HCSC"), with full power of substitution, and such persons as the Board of Directors may designate by resolution, as the undersigned's proxy to act on behalf of the undersigned at all meetings of members of HCSC (and at all meetings of members of any successor of HCSC) and any adjournments thereof, with full power to vote on behalf of the undersigned on all matters that may come before any such meeting and any adjournment thereof. The annual meeting of members shall be held each year in the corporate headquarters on the last Tuesday of October at 12:30 p.m. Special meetings of members may be called pursuant to notice mailed to the member not less than 30 nor more than 60 days prior to such meetings. This proxy shall remain in effect until revoked in writing by the undersigned at least 20 days prior to any meeting of members or by attending and voting in person at any annual or special meeting of members. Group No.: By: y Group Name: Address: City Dated this day of Print Signer's Name Here Signature and Title State: Zip Code: Month Year hrcr tv non men hno 7 11 /nn Ii—