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HomeMy WebLinkAboutResolution - 2012-R0174 - Agreement - Milliman Inc. MHBT Inc.- Health Benefits Brokerage And Consulting - 04/26/2012Resolution No. 2012—RO174 April 26, 2012 Item No. 5.11 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock is hereby authorized and directed to execute for and on behalf of the City of Lubbock, a Professional Services/Consulting Agreement for health benefits brokerage and consulting services, by and between the City of Lubbock and Milliman, Inc. and MHBT, Inc., 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. Passed by the City Council on April 26, 2012 TOM MARTIN, MAYOR ATTEST: Reb ca Garza, City Secretary APPROVED AS TO CONTENT: Quincy Whit`ssistant City Manager APPROVE AS T FORM: Chad Weaver, Assistant City Xttorney vw:ccdocs/RES.Agrmt-MHBT, Inc. [consulting] March 30, 2012 Contract: 10753 Resolution No. 2012—RO174 SERVICES AGREEMENT This Services Agreement is entered into between and among Milliman, Inc. (Milliman), MHBT Inc. (MHBT), and City of Lubbock (Client) as of June 11, 2012. Milliman and MHBT have an existing contractual relationship pursuant to which Milliman provides certain services, including actuarial analysis, for the benefit of MHBT's clients. In consideration for Milliman agreeing to perform certain services for the benefit of Client, and in support of the Consulting Agreement entered into between Client and MHBT, Client agrees as follows: 1. Services Milliman will perform services under this Services Agreement as proposed and in accordance with Exhibit A attached hereto, including specifically (i) Comprehensive Assessment of Health Plans Report; (ii) Renewal Projection and Evaluation Reports (iii) Reserve Analysis; and (iv) Financial Monitoring Report. 2. Billiniz Terms The fee for Milliman's services shall be as proposed on Exhibit A at "City of Lubbock — Core Platform Fee Schedule." Milliman shall submit its periodic billings to MHBT, which MHBT shall (after review and approval), submit the same to Client for payment. Client shall be obligated to pay MHBT for such billings in a commercially reasonable manner; and MHBT shall be liable to make payment to Milliman immediately upon receipt of such payments from Client. 3. Business Associate Aereement Under the Health Insurance Portability and Accountability Act of 1995 (HIPAA), employer plans operating as Covered Entities are required to maintain the privacy and security of their participants' Protected Health Information (PHI). Pursuant to its services under this Agreement, Milliman will receive PHI from Client. Accordingly, Milliman and Client agree to execute a Business Associate Agreement in the form attached hereto as Exhibit B. 4. Term The term of this Services Agreement will be June 11, 2012 and end June 10, 2013 and may be renewed annually for two additional one-year terms at the direction of the City Manager of Client. However, in no event will this Services Agreement exceed the term of the Consulting Agreement between the Client and MHBT. Client or Milliman or MHBT may terminate this Services Agreement at any time during this term by providing 30 -day written notice to the other parties. This Services Agreement shall automatically terminate on notice to Milliman of termination of the Consulting Agreement by either Client or MHBT. If this Services Agreement is terminated, MHBT and Client shall be obligated to pay Milliman for services actually performed by Milliman prior to the effective date of termination. 5. Limitation of Liability of incidental or consequential damages. The foregoing limitations shall not apply in the event of the intentional fraud or willful misconduct of Milliman. b. Choice of Law The construction, interpretation and enforcement of this Services Agreement shall be governed by the substantive contract law of the State of Texas without regard to its conflict of laws provisions. In the event any provision of this Services Agreement is held by a court of competent jurisdiction to be invalid or unenforceable as a matter of law, the remaining provisions will stay in full force and effect to the extent appropriate and legally permissible, or as modified by such court. Any dispute arising between the parties in connection with this Agreement shall be resolved in federal district court, North District of Texas, Lubbock Division. In the event that federal court does not have subject matter jurisdiction over the claim, the dispute will be resolved in state court in Lubbock County, 'Texas. Each party hereby agrees to waive its right to a trial by jury in any dispute arising from or related to this Services Agreement. 7. Third Party Distribution While Milliman's work product is prepared solely for the use and benefit of the Client, the Client is a public entity and subject to open records laws. Such information may be disclosed if the information is considered "open" pursuant to the Public Information laws of the state of Texas. However, Milliman does not intend to benefit and assumes no duty or liability to any third parties who receive Milliman's work product and may include disclaimer language on its work product so stating. The Client agrees not to remove any such disclaimer language from Milliman's work product. To the extent that Milliman's work product is not subject to disclosure under applicable public records laws, the Client agrees that it shall not disclose Milliman's work product to third parties without Milliman's prior written consent; provided, however, that the Client may distribute Milliman's work product in its entirety to (i) its professional service providers who are subject to a duty of confidentiality and who agree to not use Milliman's work product for any purpose other than to provide services to the Client, or (ii) any applicable regulatory or governmental agency, as required. S. Contingent Effect The parties hereto acknowledge and agree that this Services Agreement shall be of no effect unless that certain Consulting Agreement by and between the Client and MHBT shall have been approved by the City Council of the Client and other parties thereto. 9. Non -Arbitration The City 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 City 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 of any conflict between this provision and another provision, in or related to, this document, this provision shall control. Minim , I By: Name: Ronald M. Cornwell Title: Principal & Consulting Actuary Date: April 9, 2012 Address: 1120 South 1013` Street, Suite 400 Omaha, NE 68124-1088 MHBT I By: P "n ame: Date:— I0 2.61' Address: 8144 Walnut Hill Lane, Suite 1600 Dallas, TX 75231 ATTEST: ReblhEca Garza City Secretary APPROVED AS TO CONTENT: r uincy Whit, sistant City Manager AP 0 D AS a FARM: Chad Weaver, Assistant City Attorney City of Lubbock (Client) By: Tom Markin, Mayor Date: April 26, 2012 Address: 1625 13th Street, Suite 104 Lubbock, Texas 79401 Resolution No. 2012--RO174 BUSINESS ASSOCIATE AGREEMENT THIS BUSINESS ASSOCIATE AGREEMENT (the "Business Associate Agreement") is made this 11th day of June, 2012 (the "Effective Date") by and between City of Lubbock (the "Covered Entity") and Milliman, Inc. (the "Business Associate"). RECITALS WHEREAS, the United States Department of Health and Human Services has promulgated regulations at 45 C.F.R. Parts 160 and 164 relating to standards for privacy and security of individually identifiable health information (the "Privacy and Security Rules") pursuant to Subtitle F (Administrative Simplification) of the Health Insurance Portability and Accountability Act of 1996, (Pub. L. 104-191, August 21, 1996, 110 Stat. 1936), 42 U.S.C. § 1320d - 1320d-8 ("HIPAA"); WHEREAS, the Covered Entity has engaged the Business Associate to perform certain services (the "Services") in accordance with one or more agreements (the "Agreement") between the parties and, in the course of such engagement, the Business Associate may receive individually identifiable health information from the Covered Entity that is subject to the Privacy and Security Rules and Subtitle D of the Health Information Technology for Economic and Clinical Health Act ("HITECH") enacted as part of the American Recovery and Reinvestment Act of 2009 (collectively, the Privacy Rule, Security Rule, HIPAA and HITECH shall be referred to herein as the "HIPAA Regulations"); and WHEREAS, the Covered Entity is required under the HIPAA Regulations to enter into a business associate agreement with any entity that receives Protected Health Information, as defined below, in the course of performing services on the Covered Entity's behalf. AGREEMENT NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Covered Entity and the Business Associate, intending to be legally bound, agree as follows. Section 1. DEFINITIONS 1.1 "Covered Entity". For purposes of this Business Associate Agreement "Covered Entity" shall mean the entity identified above as the Covered Entity and all entities as may be from time -to -time covered by the privacy practices of Covered Entity. 1.2 "Individual" shall have the meaning given in 45 C.F.R. §160.103 and shall include a person who qualifies as a personal representative in accordance with 45 C.F.R. §164.502(8). 1.3 "Protected Health Information" or "PHI" shall have the meaning given in 45 C.F.R. §160.103, limited to the information received by the Business Associate MHBT.BAA.01-06-11 1 from or on behalf of the Covered Entity. "Electronic Protected Health Information" or "EPHI" is a subset of PHI and shall have the meaning given in 45 C.F.R. §160.103. 1.4 "Required by Law" shall have the same meaning given in 45 C.F.R. §164.103. 1.5 "Secretary" shall mean the Secretary of the United States Department of Health and Human Services. 1.6 "Security Incident" means the attempted or successful breach of unsecured protected health information, unauthorized access, use, disclosure, modification, or destruction of information or interference with system operations in an information system. Section 2. OBLIGATIONS AND ACTIVITIES OF THE BUSINESS ASSOCIATE 2.1 Uses and Disclosures by the Business Associate. The Business Associate may use or disclose Protected Health Information only as authorized by this Business Associate Agreement or as Required by Law. Unless otherwise expressly limited by this Business Associate Agreement, the Business Associate may: (a) use the PHI in its possession to carry out the responsibilities of the Business Associate to the Covered Entity, (b) use the PHI, if necessary, to assist the Covered Entity in the management and administration of the Covered Entity or to carry out the management and administration of the Business Associate, and (c) disclose PHI to third parties to carry out the responsibilities of the Business Associate to the Covered Entity or for the proper management and administration of the Business Associate, provided that the disclosure is either Required by Law, or the Business Associate obtains reasonable assurance from the third party that it will use or further disclose the PHI only as Required by Law or for the purpose for which the PHI was disclosed, and the third party agrees to notify the Covered Entity of any instances of which it is aware in which the confidentiality of the information has been breached. In addition, Business Associate may: d) use PHI to provide Data Aggregation services to Covered Entity as permitted by the Privacy Rule, e) de -identify PHI in accordance with the requirements of the Privacy Rule, provided that all identifiers are destroyed or returned in accordance with this Business Associate Agreement; and f) create a Limited Data Set for the purpose of providing the Services, provided that Business Associate complies with its obligations under this Business Associate Agreement. 2.2 Responsibilities and Activities of the Business Associate. With respect to the Protected Health Information, the Business Associate agrees to: a. Use reasonable efforts to safeguard the security of the PHI and to prevent unauthorized use and/or disclosure of the PHI by the Business Associate, its employees, agents and subcontractors. b. Report to the Covered Entity any unauthorized use and/or disclosure of the PHI within ten (10) calendar days of the Business Associate's discovery of such unauthorized use and/or disclosure. MHBT.BAA.Q 1-D6-11 2 C. Require all subcontractors or other agents of the Business Associate that receive or use, or have access to, PHI to agree to adhere to the same restrictions and conditions on the use and/or disclosure of PHI that apply to the Business Associate under this Business Associate Agreement. d. Upon prior request and during normal business hours, make available to the Secretary or his/her designee, all internal policies and procedures and records relating to the use and/or disclosure of PHI by the Business Associate and the PHI in the Business Associate's possession, for purposes of determining the Business Associate's compliance with the Privacy and Security Rules. e. To the extent Business Associate makes any disclosures of PHI that are not excepted from the disclosure accounting requirements, provide to the Covered Entity, within fifteen (15) days of receipt of a request from the Covered Entity, such information as is requested by the Covered Entity to permit the Covered Entity to respond to a request by an Individual for an accounting of the disclosures of the Individual's PHI, including those disclosures by the Business Associate, in accordance with 45 C.F.R. §154.528. Subject to Section 4.3 of this Business Associate Agreement, return to the Covered Entity or destroy, within thirty (30) days of the termination of this Business Associate Agreement, the PHI in the Business Associate's possession and retain no copies, backup tapes, or any other reproduction, electronic or otherwise, of the PHI. g. Disclose to subcontractors, agents or other third parties only the minimum Protected Health Information necessary to perform or fulfill a specific function required or permitted hereunder. 2.3 Electronic Protected Health Information. With respect to Electronic Protected Health Information, the Business Associate agrees to: a. Ensure that its administrative, physical and technical safeguards reasonably and appropriately protect the confidentiality, integrity and availability of the Electronic Protected Health Information that it creates, receives, maintains or transmits on behalf of the Covered Entity. b. Ensure that any agent, including a subcontractor, to whom it provides EPHI agrees to implement reasonable and appropriate safeguards to protect it. C. Report to the Covered Entity any Security Incident of which it becomes aware; provided, however, that the parties acknowledge and agree that this section constitutes notice by Business Associate to Covered Entity of the ongoing existence and occurrence of attempted but Unsuccessful Security Incidents of which no additional notice to Covered Entity shall be MHBT.BAA.01-06-11 required. Unsuccessful Security Incidents shall include, but not be limited to, pings and other broadcast attacks on Business Associate's firewall, port scans, unsuccessful log -on attempts, denials of service and any combination of the above, so long as such incidents do not result in unauthorized access, use or disclosure of Covered Entity's electronic PHI. Section 3. OBLIGATIONS OF THE COVERED ENTITY 3.1 The Covered Entity hereby agrees: a. To inform the Business Associate of any changes in or withdrawals of authorizations by individuals provided to the Business Associate that are applicable to the Protected Health Information. b. To notify the Business Associate of any limitation(s) developed in accordance with 45 C.F.R. §164.520 to the extent that such limitation(s) may affect the Business Associate's use or disclosure of Protected Health Information. C. To notify the Business Associate of any restriction(s) on the use and/or disclosure of Protected Health Information as provided for in 45 C.F.R. §164.522 which may affect the Business Associate's use or disclosure of Protected Health Information. d. To not request Business Associate to use or disclose PHI in any manner that would not be permissible under the HIPAA Regulations if done by Covered Entity. e. To not provide Business Associate with more PHI than that which is minimally necessary for Business Associate to provide the Services and, where possible, Covered Entity shall provide any PHI needed by Business Associate to perform the Services in the form of a Limited Data Set, in accordance with the HIPAA Regulations. Section 4. TERM AND TERMINATION 4.1 Term. The term of this Business Associate Agreement shall commence on the Effective Date and shall terminate concurrently with the termination of all other Agreements between the parties that require the parties to maintain in full force and effect this Business Associate Agreement. In addition, certain enumerated provisions and requirements of this Business Associate Agreement shall survive its termination in accordance with Section 4.3 herein. 4.2 Termination for Cause. In the event the Covered Entity has reason to believe the Business Associate has engaged in a pattern of activity or practice that constitutes a material breach or violation of the Business Associate's obligations under this Business Associate Agreement, the Covered Entity shall provide the Business Associate with written notice describing with particularity the nature of the alleged material breach or violation. Upon receipt of such notice, the MHBT.BAA.O 1-06-11 4 Business Associate shall promptly take all reasonable steps necessary to cure the breach and end the violation as soon as practicable. If the material breach or other violation has not been corrected within the lesser of the period of time required by applicable law or the period of time required by the Agreement, the Covered Entity may deem the Agreement to be in breach and terminate this Business Associate Agreement in accordance with its terms. In the event the Covered Entity determines, in its sole discretion, that termination is not feasible, Covered Entity may report the material breach or violation to the Secretary. 4.3 Obligations of the Business Associate Upon Termination. a. Upon the termination of this Business Associate Agreement, the Business Associate agrees to return or destroy all PHI in its possession or in the possession of its subcontractors or agents, if it is feasible to do so. b. If it is not feasible for the Business Associate to return or destroy the PHI, the Business Associate will notify the Covered Entity of the reasons why it is not feasible and will retain the information in a manner consistent with this section. C. If the information is not returned or destroyed upon termination, the Business Associate agrees to extend the protections set forth in this Business Associate Agreement to the Protected Health Information and to limit further uses or disclosures of the PHI to the purposes that make the return or destruction of the PHI infeasible for as long as the PHI is maintained by the Business Associate. Covered Entity hereby acknowledges and agrees that infeasibility includes Business Associate's need to retain PHI for purposes of complying with its work product documentation standards and that for such a retention no further notice to Covered Entity is required. Section 5. MISCELLANEOUS 5.1 5.1 Regulatory References. A reference in this Business Associate Agreement to a section in the HIPAA Regulations means the section as in effect at the relevant time. 5.2 Amendments: Waiver. This Business Associate Agreement may not be modified, nor shall any provision hereof be waived or amended, except in a writing duly signed by authorized representatives of the parties. Notwithstanding the foregoing, this Business Associate Agreement shall be deemed to be amended without action by the parties as necessary to comply with the HIPAA Regulations, as may be amended from time to time. Following amendment of the Business Associate Agreement in this manner, the parties shall, as necessary, work together to clarify their respective obligations with respect to any new requirements under the modified regulations. A waiver with respect to one event shall not be construed as continuing, or as a bar to or waiver of any right or remedy as to subsequent events. MHBT.BAA.01-06-11 5.3 Survival. The provisions of Section 4.3 shall survive termination or expiration of this Business Associate Agreement. 5.4 No Third Party Beneficiaries. Nothing express or implied in this Business Associate Agreement is intended to confer, nor shall anything herein confer, upon any person other than the parties and the respective successors or assigns of the parties, any rights, remedies, obligations, or liabilities whatsoever. 5.5 Incorporation. The recitals set forth above are true and correct and are incorporated into this Business Associate Agreement by this reference. 5.6 Notices. Any notices to be given hereunder to a party shall be made via hand delivery, U.S. Postal Service Certified Mail Return Receipt Requested, or nationally recognized express courier with proof of delivery, to such party's address as set forth below and shall be effective upon actual delivery. 5.7 Counterparts, Facsimiles. This Business Associate Agreement may be executed in any number of counterparts, which may be delivered by facsimile or other electronic transmission, including email, each of which shall be deemed an original. 5.8 Further Assurances. Each party hereto agrees to do all acts and things and to make, execute and deliver such written instruments as shall from time to time be reasonably required to carry out the terms, conditions and provisions of the HIPAA Regulations, as promulgated from time to time. Such amendment shall be entered into on or before the date on which the parties are required to be in compliance with such law and the regulations published pursuant thereto. 5.9 Remedies. The parties acknowledge that a breach of Section 2 or Section 3 of this Business Associate Agreement may cause irreparable harm for which there is no adequate remedy at law. In the event of a breach, or if either party has actual notice of an anticipatory breach, the non -breaching party shall be entitled to seek a remedy of specific performance and/or injunctive relief, in addition to any other relief a court of competent jurisdiction may award, to enjoin the other party from breaching or violating the terms and conditions of this Business Associate Agreement. 5.10 Conflicts. In the event that any terms of this Business Associate Agreement are inconsistent with the terms of the Agreement, then the terms of this Business Associate Agreement shall control. 5.11 Entire Agreement. This Business Associate Agreement shall constitute the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior agreements, oral or written, and all other communications between the parties hereto relating to such subject matter. MHBT.BAA.01-06-11 6 IN WITNESS WHEREOF, each of the undersigned has caused this Business Associate Agreement to be duly executed in its name and on its behalf. COVERED ENTITY City of Lubbock Name: Director of HR and Risk Title: Mgmt , Privacy Of f icer Date: April 9, 2012 Address: 1625 13th Street, Room 104 Lubbock, Texas 79401 MHBT.BAA.01-06-11 7 BUSINESS ASSOCIATE Millirn , C. By: 1W &/— &� 0 Name: Ronald M. Cornwell Title: Principal & Consulting Actuary Date: April 9, 2012 Address: 1120 South 101St Street, Suite 400 Omaha, NE 68124 Exhibit "A" Proposal for City of Lubbock Proposal to provide health and welfare actuarial & consulting services March 30, 2012 Resolution No. 2012-&0174 - M i I I i m a n 1120 South 101itl Street, Suite 400 Omaha, NE 68124 USA Tel +1 402 393 9400 Fax +1 402 384 5776 milliman.com Milliman Proposal Mr Travis L. Sartain McQueary Henry Bowles Troy 8344 Walnut Hill Lane, 16th Floor Dallas, TX 75231 Dear Mr. Sartain: Milliman, Inc. (Milliman) is pleased to present this proposal to City of Lubbock for employee benefit's consulting services. The objectives and deliverables requested are tasks and services that Milliman has a high level of expertise in performing and many years of experience in delivering. In short, we believe we are uniquely qualified to meet your needs AS A PREMIER INTERNATIONAL CONSULTING FIRM, WE PROVIDE SUPERIOR ANALYSIS TOOLS, EXPERIENCE AND EXPERTISE. Recognized as an industry leader in the areas laid out in this response, Milliman is an independent firm of consultants and actuaries. We are not affiliated with other organizations that might impair our objectivity or our focus on your needs. We are experts at what we do. We do not do everything in every location, but the services we deliver are performed exceptionally well because our Flexible internal structure allows us to assemble collaborative project teams with specialized expertise. At the same time, you can expect a local team to support your organization. In summary, we will provide you broad national expertise through the service and availability of a local office that understands City of Lubbock and their unique needs. Our work stands out for its thoroughness, relevance, and value. Milliman's innovative application of technology adds value through creative use of data, analytical tools, and effective client communications. Through information, expertise, and technology, we help you meet and exceed your goals in the design and operation of your benefit plans. Milliman benefits consultants listen to what our clients need and find responses that relate directly to what we hear. Our clients receive advice and services tailored to their circumstances, both in content and scope. We are not a firm of packaged solutions. Our clients use us because we consistently deliver the services they need in a uniquely personal, professional, and creative way. They trust us as partners in their success. Proposal for City of Lubbock Proposal to provide health and welfare actuarial & consulting services March 30, 2012 Milliman Proposal A. DETAILED COMPANY BACKGROUND Identification & Information Milliman, Inc. is a Milliman Global Firm. Founded in 1947 and incorporated in Washington State in 1957 as Milliman and Robertson, Inc., Milliman is located in 55 cities in principal cities worldwide. Owned and managed by approximately 400 Principals, Milliman has over 2,600 employees including a staff of more than 700 qualified consultants and actuaries. With almost $725 million in annual revenue, Milliman is considered one of the premier actuarial firms internationally. In the U.S., Milliman is recognized as an industry expert in assisting employers, governmental organizations, carriers, and providers with financial analysis, risk management, product development and rating and operational strategies. Milliman has built a reputation of high standards and creative solutions since its inception in 1947. Please refer to our website: www.milliman.com for additional details. The corporate headquarters contact information is: Milliman, Inc. 1301 Fifth Avenue, Suite 3800 Seattle, WA 98101-2605 (206) 624-7940 (206) 340-1380 Fax Federal Employer Identification Number: 91-0675641 2. Resumes of Assigned Staff LOCAL OFFICE INFORMATION AND BIOGRAPHICAL PROFILES Milliman, Inc. 1120 South 101st Street, Suite 400 Omaha, NE 68124-1088 (402) 393.9400 (402) 384.5776 Fax ron.cornwell@milliman.com Cornwell, F.S.A. X X X X y Principal & Practice Leader ason Speer, F.S.A X X X X Consulting Actuary & Production Manager Blaine Weber X X X X Senior Benefits Consultant & Underwriter Proposal for city of Lubbock Proposal to provide health and welfare actuarial & consulting services March 30. 2012 Milliman Proposal 3. City of Lubbock Service Team Ron Cornwell, F.S.A, M.A.A.A.: Ron serves as the practice leader of the Omaha Health and Welfare office. As an equity principal and actuary with Milliman, Ron is an expert in the design, funding, rating and administration of employee benefit plans. He has written numerous articles for trade journals, such as Employee Benefits Journal, and is frequently asked to give presentations at industry meetings. He is available for consulting with City of Lubbock as needed and will be involved in the review of most, if not all, City of Lubbock's deliverables. Jason Speer, F.S.A, E.A., M.A.A.A.: Jason is a Consulting Actuary & Production Manager with Milliman. Jason has more than 13 years of experience including 2 years as a senior benefits manager at ConAgra Foods. He will serve as the project manager and technical team manager for your work. Blaine Weber: Blaine is a Senior Benefits Consultant and Underwriter with Milliman. Blaine has over 20 years of experience in the group and individual health industry. He has extensive experience underwriting employer groups ranging in size from small to jumbo, specifically assessing risk, setting premium rates and winning competitive bid processes. He will be responsible for the overall quality and timelines of our work by coordinating resources, communicating results, and handling any special requests, Mifliman takes a team -oriented approach to their projects. Communication is vital and weekly meetings are held to review the status of each client to ensure that needs are being met most efficiently to the client's satisfaction. The project manager must sign off on each client deliverable before release as well as giving approval at critical steps in the process. Additionally, each deliverable is reviewed by a credentialed benefits consultants and actuaries to ensure accuracy, appropriateness, and a level of quality consistent with Milliman's philosophies. The project manager delegates many of the day-to-day aspects of the projects to the appropriate consultants, getting involved where needed. This allows us to keep our fees as tow as possible, yet assure our clients that they are receiving a high level of expertise. S. ACTUARIAL SERVICES Milliman is proposing the following actuarial services to be performed on an ongoing basis: • Comprehensive Assessment of Health Plans (CARP) Report Designed for the mid -market employers, Milkman's CAHP Report is a customized report covering plan designs, employee contribution strategy, funding, and risk management. It includes the following: 1, Plan design benchmarking with national and local mid -market surveys 2. Demographic analysis 3. Contribution strategy benchmarking, with national and local mid -market surveys 4. Actuarial analysis of rates 5. Analysis of risks involved with different levels of stop -loss 6. General recommendations for each fine of coverage • Renewal Projection and Evaluation Reports Our renewal projection and evaluation reports contain multi -step processes to help you evaluate fully -insured renewals as well as begin preliminary budgeting on self-insured plans. This processes include the following steps: o Pricing Our SenefitsCFO suite of tools, incorporates the following information to accurately forecast your costs in the coming year and evaluate your renewals for your self-insured plans: • claims experience • historical enrollment • catastrophic claims Proposal for City of Lubbock Proposal to provide health and welfare actuarial & consulting services March 30, 2012 Miiliman Proposal • trend assumptions ■ plan design changes ■ provider contract changes ■ stop -loss premium • administration fees and expenses As fully credentialed health and welfare actuaries, we use your data to evaluate the renewal received from each carrier or third party administrator. Additionally, a trend analysis allows outliers or seasonality problems to be identified and addressed. When limited or no claims data is available, we rely on the Health Cost Guidelines, our proprietary actuarial model, census and plan designs to calculate a manual rate. If there is sufficient claim data available the manual rates are used as an additional estimate confirming the experience rate calculation. o Stop Loss Analysis Designed for groups that are currently self-funded, stop -loss analysis assesses the risks and costs for various stop -loss coverage levels. Using Monte Carlo simulation, we provide a graphic display of potential scenarios to determine what options fit the employer's risk preferences and help the employer determine if their current premium is appropriate. o Plan Design Analysis Milliman's extensive experience with healthcare providers and carriers offers a distinct advantage in designing health and welfare plans within the ever-changing dynamics of the healthcare industry. Using our experience in the industry, our consultants can help design a healthcare program that meets participant and City of Lubbock's needs. With healthcare costs on the rise, this analysis has gained increased importance for many employers. Milliman's proprietary actuarial models, Health Cost Guidelines and Dental Cost Guidelines are recognized as the industry standards for pricing insurance plans. Over 45 of the 50 largest health insurance carriers use the Guidelines to help them rate their plans. Using these models, our consultants and actuaries can readily value benefit design changes to ensure your healthcare program meets your financial constraints. With the recent increase in medical trend, this analysis has gained increased importance for many employers. o Premium Equivalency and Employer Contribution Milliman's fully credentialed health and welfare actuaries and consultants calculate your total annual cost by pian and tier and display variances to show the total dollar impact. This portion of the renewal shows the relative value of plans and coverage tiers to make sure your plan rates equitably reflect the differences in cost. After the premium equivalencies are established, we model employee contributions according to your desired strategy. This is only one of Milliman's many customizable and interactive models that can provide immediate answers to "what if' types of questions with multiple variables. o Trend Analysis A trend analysis allows outliers or seasonality problems to be identified and addressed. In addition, our actuaries will review the renewal for proper calculation of reserves, benefit changes, large claims, retention, administration and profit. • Reserve Analysis Using actuarial projection techniques to estimate incurred claims, our actuaries can help you can determine how much you should be holding in reserves and avoid IRS and DOL compliance issues. We incorporate the following into our reserve calculations: o incurred and paid claim triangles a enrollment history and projections o trend assumptions o various reserving techniques ■ Financial Monitoring Report Milliman's Financial Monitoring Report (FMR) provides the answers a benefits manager needs to facilitate communications with participants, accounting and finance. FMR brings together claims experience, benefits paid, expenses, and gross and net costs, to name just a few items, in one financial report. It performs preliminary Proppsal for City of Lubbock Proposal to provide health and welfare actuarial & consulting services March 30, 2012 Milliman Proposal auditing of data to confirm accuracy of reports. Up-to-date forecasting leveraged through actuarial analysis turns "data" into "information" giving proactive management of expectations through finance. C. PROJECT MANAGEMENT PLAN As described above, we work as a team to ensure we meet or exceed your expectations. With that said, Blaine Weber wili be your primary contact and will be responsible for the management of the City of Lubbock deliverables with support as needed from Jason and Ron. Ron Cornwell has overall responsibility for the Omaha Health and Welfare Practice and will be involved with peer review and consulting as needed. Jason Speer has primary responsibility for management and review of all our deliverables. Blaine, with the support of Ron, Jason and the entire Milliman Omaha office of 15+ consultants will work closely with you in the following areas: • scheduling meetings and timelines • preparing data requests • soliciting the proper resources and expertise • utilizing the correct models • applying the correct actuarial methodology • primary contact for any questions In addition to the specific services mentioned, we will be available on an ongoing basis for future questions on these or other topics. Please note that Milkman holds quality and accuracy in the highest regard. We believe that documented peer review of all our deliverables is necessary to ensure the highest quality. Most, if not all, of our clients feel this is time and money well spent given the large financial ramifications of the decisions we advise them on. D. TECHNICAL CONSIDERATIONS Many of our technical capabilities are described within the preceding paragraphs. To summarize, • Health Cost Guidelines - used by 45 of the 50 largest health carries, Health Cost Guidelines is recognized as the industry standard for measuring group health costs. • Our actuaries use the Benefits CFO suite of tools, to forecast costs and calculate reserves based on your unique claims experience. • Familiarity with insurance carrier systems reports - with extensive experience from previous clients, we are familiar with the format and structure of their reports and have developed a template for processing data efficiently that ensures we can keep the schedule and budget. • Research - as a large international firm we produce an extensive amount of research for our clients as well as general industry knowledge. Some of these are listed below and are produced on a regular basis or as the environment dictates o Client Action Bulletins o Benefits Perspectives newsletter o Research Reports o Industry surveys o Health Cost Index Report • Ongoing industry knowledge - given our position within the industry, we take a proactive role in monitoring our clients' needs and looking for opportunities for improvement. o Legislative: State and Federal o Trends o Carriers o Defined Contribution Proposal for City of Lubbock Proposal to provide health and welfare actuarial & consulting services March 30, 2012 Milliman Proposal E. COST PROPOSAL As you requested, for this project we are bidding on an annual fee basis according to the following schedule: • We have a long tradition of providing maximum value to our clients. Our clients tell us that our services are of the highest quality and our fees are a worthy investment for the service and expertise uniquely provided by Milliman. We trust you will feel the same. Proposal for City of Lubbock Proposal to provide health and welfare actuarial & consulting services March 30, 2012