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HomeMy WebLinkAboutGREATWEST - CONTRACT - RFP - P832 BENEFITSADMINISTRATIVE SERVICES CONTRACT BY AND BETWEEN CITY OF, FORT COLLINS (Herein called the Client) AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY (Herein called the Service Contractor) Whereas, the Client desires to provide benefits for certain classes of individuals (hereinafter called "Members") in accordance with a written employee welfare benefit plan established by the Client; Whereas, under said plan the Client will bear all liabilities but desires that the Service Contractor provide certain services in connection with the administration and operation of the plan without assuming any such liability (hereinafter called "the Plan"); Whereas, the Plan is an employee benefit plan and the Client, who is both the fiduciary of the Plan and the Plan Administrator, hereby retains the Service Contractor to provide services for the Plan in accordance with the following terms and conditions; Now, therefore, in consideration of the payments to the Service Contractor as provided in the Payment Schedule, Appendix A, and subject to the terms and conditions contained herein, it is hereby agreed as follows: Section 1. Definitions As used in this Contract, its Appendices and Attachments: a. Affiliate" means a person or entity within the same common control group as determined under Internal Revenue Code section 414(c) and the regulations thereunder, and for Service Contractor includes a person or entity with whom the Service Contractor operates under a joint marketing or joint venture contract. b. "Claim Overpayment" is a claim payment, or a portion thereof, with a minimum amount of $250, that (based on applicable Plan terms and provisions): i. is in excess of the benefit amount otherwise payable; ii. should not have been paid; or iii. is paid to wrong payee(s). C. "Health Information" means any information related to health care treatment, payment or operations that identifies or could reasonably be used to identify a Member. d. "Plan Administrator" shall have the meaning ascribed to the term "administrator" as defined in ERISA and shall have a comparable meaning for non-ERISA plans, e. "Plan Month" shall mean a calendar month. 11.3 Termination Upon Notice. This Contract may be terminated: a. at any time by either the Service Contractor or the Client, provided written notice of such termination is given at least ninety (90) days in advance of the effective date of the termination; b. upon amendment of the Plan irk a manner deemed unsatisfactory by the Service Contractor, and on notice to the Client, sucl)l termination shall be effective on the effective date of such amendment. 11.4 Immediate Termination. This Contract shall terminate immediately and without notice: a. at the option of the Service Contractor upon termination of the excess loss policy, if any; b. upon failure of the Client to: i. make payments set forth in Section 4 of this Contract, entitled `Payments to the Service Contractor'; or ii. fund the Transfer 'Account, in which instance the Service Contractor shall solely suspend plan operations for a period not to exceed twenty-four (24) hours, during which time the Client shall fund the Account in full. 11.5 Reinstatement after Termination. If the Service Contractor terminates this Contract under Section 11.3 or 11.4, and the Client desires to reinstate this Contract, it will be reinstated only if: a. the Service Contractor agrees; and b. the Client pays a Reactivation Fee of the greater of five hundred dollars ($500) or two percent (2%) of the average amount of the monthly claims for the last three months; and C. the Client pays all outstanding amounts plus interest accruing from the date of termination at the rate of the lesser of one and one-half percent (1.5%) per month or the maximum allowed pursuant to state law; and d. the Client reimburses the Service Contractor for any network access fees required to be paid by the Service Contractor on behalf of the Client following termination of this Contract. 11.6 Termination by Law. If any state or other jurisdiction enacts a law which prohibits or effectively prevents the continuance of this Contract, or the existing law is interpreted by a governmental entity to so prohibit or effectively prevent the continuance of this Contract, the Contract shall terminate automatically as to such time or jurisdiction on the effective date of such law or interpretation. I 11.7 Termination for Breach. In addition to the foregoing, if one Party has materially breached this Contract (the "Breaching Party") and the other Party (the "Nonbreaching Party") desires to terminate this Contract, the Nonbreaching Party shall give the Breaching Party specific written notice of the nature of the breach. The Breaching Party shall have 30 days to cure such breach. If the breach remains uncured 30 days following the notice of breach, this Contract shall terminate as of the end of such 30 day cure period. This Section shall not apply to immediate breaches as set forth in Section 11.4 above. 11.8 Effect of Termination. H 11.8.1 If on the date this Contract terminates the Client has not made all payments then due under this Contract, the Service Contractor will have the right to immediately stop providing the Services, including but not limited to processing claims, on the effective date of such terminatiop: In this case, information regarding all outstanding claims which are unpaid (regardless of when the claim was incurred and regardless of when the Service Contractor received the claim) or received after such date will be returned by the Service Contractor to the Client. In addition, the Client will notify each Member covered under the Plan of such termination. 11.8.2 Upon termination of this Contract or upon termination of individual Employee or Dependent coverages, it is the Client's responsibility to take reasonable steps to prevent further use of I.D. cards, including prescription drug cards, if applicable, by any Employees or their Dependents. post termination. If the Client fails to update the eligibility records in a timely manner using BENLink, the Client will be - responsible for reimbursing the Service Contractor for any claims incurred by the Service Contractor on behalf of a former Member who retains and uses a health plan card or a, prescription drug card after Coverage ends under the Plan. 11.8.3 With respect to claims incurred prior to and not processed before termination of this Contract, the Service Contractor shall not be responsible for adjudicating the claims unless Service Contractor agrees in writing to do so and the Client pays the terminal fee set forth in Appendix A. Such adjudication shall be limited to claims incurred prior to the termination of this Contract and submitted for, consideration within the 15-month period immediately following the termination date. If the Service Contractor does not process such claims, then the Service Contractor will send the claims to the Client or to Client's designated representative upon request. Section 12. Subcontracting The material and significant duties to be performed by the Service Contractor under this Contract may, with the prior approval of the Client, be performed directly, wholly or in part, under a contract with an organization of the Service Contractor's choosing. Such approval shall not be unreasonably withheld. Except as provided above, the Service Contractor may, at its discretion, contract with any organization to perform any other duties under this Contract. Section 13 Compensation to Agents or Brokers The Client acknowledges that Service Contractor may pay reasonable compensation to the agent or broker of record, if any. Any and all agents and brokers are hereby declared to be (an) agent(s) of the Client and not of the Service Contractor. The Client shall notify the Service Contractor, in writing, if the Client changes its agent or broker. Section 14. Advertising The Client will not use Service Contractor's name in any release or printed forms unless approved in advance by the Service Contractor. The Service Contractor will not use the Client's name in any release or printed forms unless approved in advance by the Client. Section 15.Other Financial Provisions 15.1 Savings Initiatives. 15.1.1 In its sole discretion, Service Contractor may undertake initiatives in addition to the services described in this Contract for the purpose of saving additional money for the Plan. Examples of such initiatives might include, but are not limited to subrogation and right of recovery, provider and incentive bonus arrangements, and provider bill/fee negotiation and discounts on claims from providers outside of the Service Contractor's primary network of providers. 15.1.2 For purposes of pursuing savings under this provision, the'Service Contractor may retain third party vendors. 15.1.3 For its services in obtaining savings fothe Plan, Service Contractor shall be entitled to retain: a. for subrogation and right of recovery, the amount referred to in 15.2 below; and b. for all other savings initiatives, 25% of the savings realized. Such charges are reflected as a claim expense for the applicable Member. 15.2 Subrogation and Right of Recovery. For purposes of subrogation and right of recovery, the Service Contractor in consultation with the Client, will have the sole right to make claims under the Subrogation and'Right of Recovery Provision contained in the Plan. In its sole discretion, the Service Contractor may litigate, negotiate, settle, compromise, release,or waive any such claim. The Client hereby assigns to the Service Contractor all of its rights to make, litigate, negotiate, settle, compromise, release or waive any such claim. 11 Recoveries under this Section will be distributed as follows: a. first, to the Service Contractor to be applied to reduce the Service Contractor's payment of specific stop -loss benefits under the ,excess loss contract, if any, issued by the Service Contractor to the Client for the employee or dependent for whom the recovery was obtained; and ' b. second, to the Service Contractor to be applied to reduce the Service Contractor's payment of aggregate stop -loss benefits under the excess loss contract, if any, issued by the Service Contractor to the Client, and C. third, 25% to the Service Contractor for its services in obtaining the recovery; and d. fourth, the remainder, if any, to the Client. Action taken under the Subrogation and Right of Recovery Provision contained in the Plan may result in incurring legal expenses. Such legal expenses will be borne by the Service Contractor and the Client in the same proportion as any money recovered under the Subrogation and Right of Recovery Provision and is distributed between the Service Contractor and the Client. Legal expenses will not be included in the calculation of specific stop -loss benefits, or the aggregate stop -loss benefits, if any, pursuant to the excess loss contract issued by the Service Contractor to the Client. 15.3 Compensation from Others. The Client acknowledges that in addition to the fees charged to the Client under this Contract, the Service Contractor may recei�Ae compensation from health care providers and vendors that contract with the Service Contractor. Such compensation may be paid to Service Contractor to defray its expenses in performing its duties under this Contract and for providing services for the providers or vendors in accordance with their contractual arrangements. The Service Contractor shall be entitled to receive and retain such compensation from the providers or vendors regardless of the form or manner in which it is received. 15.4 Access Fees. The Service Contractor may negotiate arrangements with third parties to provide Members services and benefits that are not otherwise covered under the Plan. The Service Contractor may retain any fees received from the third parties pursuant to their contractual arrangements. 15.5 Surcharge Payment. For any state in which a surcharge payment is required to be made to that state, to fund medical care for uninsured populations, finance the operation of risk pools or other purposes required by the 12 state, Service Contractor shall render such payments in accordance with that state's requirements and shall draw such funds from the Transfer Account. Section 16. Miscellaneous 16.1 Reliance: ,The Service Contractor shall be entitled to rely upon any communication believed by the Service Contractor to be genuine and to have been signed or presented by the proper party or parties. For verification of persons eligible for the coverages provided under the Plan, the Service Contractor will rely solely upon information in its computer records at the time eligibility verification is requested. These records will be based upon eligibility information provided to the Service Contractor by the Client. 16.2 Notices. Any notice which may be given under this Contract shall be in writing and may either b�b personally' delivered, sent by registered or certified mail through the United States Postal Service, return receipt requested, or by reputable overnight carrier, delivery prepaid addressed as follows. A notice so delivered shall be deemed given on the date of delivery if personally delivered or delivered by overnight carrier, and on the date indicated on the return receipt if delivered by the United States Postal Services. 16.2.1 To the Service Contractor: GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY Denver National Accounts Department, Employee Benefits 8505 E. Orchard Road Greenwood Village, CO 80111 With a copy to GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY General Counsel 8525 E. Orchard Road Greenwood Village, CO 80111 16.2.2 To the Client: CITY OF FORT COLLINS 215 North Mason, 2" Floor PO Box 580 Fort Collins, CO 80522-0580 Phone number: (970) 221-6843 16.2.3 A party's address may be changed by notice to the other in accordance with this section. 16.3 ' ,Waiver. Failure by the Client or the Service Contractor to insist upon compliance with any provision of this Contract at any given time or under any given set of circumstances shall not operate to waive or modify such provision or in any manner render it unenforceable, as to any other time or as to any other occurrence and no waiver of any of the terms or conditions of this Contract shall be valid or of any force or effect unless contained in a written instrument specifically expressing such waiver and signed by a person duly authorized to sign such waiver. 16.4 Amendments. Except with respect to modification of fees as described in Section 4 of this Contract, no alteration or modification of the terms and conditions of this Contract shall be valid or of any force or effect unless in each instance it is contained in a written instrument expressing such alteration or modification and executed for the Client and the Service Contractor by their officers duly authorized to execute such alteration or modification. 13 16.5 Assignment. Other than assigning the right to receive money, neither party shall transfer its rights or delegate its duties under this Contract except as permitted elsewhere in this Contract, without the express written consent of the other party; provided, however, that the Service Contractor may transfer any portion of its rights or delegate any portion of its duties under this Contract to its Affiliate. The Client's reorganization, any merger in which the Client is not the surviving company, and any transfer of the Client's assets whether by bulk sale or otherwise, shall be deemed to be a transfer or delegation by Client. Any transfer or delegation by a party in violation of this Section shall be void and of no force or effe t and shall entitle the other party to immediately terminate this Contract. 16.6 Inurement. This Contract shall be binding upon and shall inure to the benefit of the parties hereto and their permitted respective successors and permitted assigns and delegates. 16.7 Force Majeure. In the event that either party is unable to perform under this Contract on account of strikes, accidents, acts of Nature, severe weather conditions, fire, governmental restrictions, computer system failure or any other reason which is beyond the reasonable control of the parties, then performance under this Contract shall be excused for a reasonable period of time to enable the parties to resume performance. If a party is unable to resume, its�,performance within such reasonable period of time, the other party may terminate this Contract as provided herein. 16.8 Entire Contract. This Contract, including any schedules, appendices or supplements thereto, (together with the Great -West Life & Annuity Insurance Company Application for Group Coverage and other attached papers, if any), shall constitute the entire contract between the parties and shall govern the rights, liabilities and obligations of the parties hereto, except as it may be modified in. accordance with the provisions of this Contract. This Contract supersedes all prior proposals, representations, communications, negotiations and contracts between the parties, whether oral or written. 16.9 Controlling Law. This Contract shall be construed and enforced according to the laws of the state of Colorado to the extent that such laws are not preempted. 16.10 Provisions Separable. The provisions of this Contract are independent of and separable from each other. In the event any provision of this Contract shall be held illegal, invalid or unenforceable in whole or in part, for any reason by law or a court of competent jurisdiction, said illegality or invalidity shall not affect the remaining parts of this Contract, but it shall be construed and enforced as if said illegal or invalid provisions had not been included herein either initially, or beyond the date it is first held to be illegal or invalid if after the effective date of this Contract, provided the basic purposes hereof can be effectuated through the remaining valid and legal provisions. 16.11 Gender and Number. Any reference in the masculine gender herein shall be deemed to also include the feminine gender, unless expressly provided otherwise. Wherever appropriate, any reference in this Contract in the singular shall include the plural, and any references in the plural shall include the singular. 16.12 Counterparts. This Contract may be executed in any number of counterparts, each of which shall be deemed an original, and said counterparts shall constitute b6tbne and the same instrument. 16.13 Currency and Place of Payments. All sums payable to, or payable by, the Service Contractor pursuant to this Contract shall be payable in the lawful currency of the United States of America at its Greenwood Village, Colorado office. 16.14 Headinos. Section, sub -section or paragraph headings contained in this Contract are for reference purposes only and shall not affect the meaning or interpretation of this Contract. 14 IN WITNESS WHEREOF, the parties hereto have caused this Contract to be executed by their respective officers duly. authorized to do so, to be effective as of January 1, 2003. Dated at �� i C1NS LC-) , this ---t' (City) (State) (Date) day of�-�1_���� (Month) (Year) Qitq Clerk THE CITY OF FORT COLLINS, COLOR/A/DO By: Q�2 a - ! +� X, - v John . Fischbach City Manager By: J v/�` "� y� Jam s B. 'Neill II, CPPO, FNIGP Direct r of urchasing & Risk Management APPRQV D AS TO FORM: GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY Assistari ity Ktrorney By: D. (2. fie^ .. �� Secretary August 25, 2003 15 Appendix A Payment Schedule To be attached to and made a part of the Administrative Services Contract Effective Gate January 1, 2003 By and between CITY OF FORT COLLINS AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY Service Fees Schedule. The Service Contractor shall have the right to adjust the, fees listed below as specified under Section 4 of the Contract. A. The Client shall make payments to the Service Contractor in advance for service fees listed below by the first day of each Plan month in which the Service Contractor performs the listed services. A grace period of 30 days is granted after such monthly payment due date. Services Provided as described in Provided as described in A�endix BB: Includes: Basic Claims Adjudication Services, Direct Claim and Verification Service, and Actuarial and Underwriting Services ('Basic ASO Service Fee") Care Management (includes Utilization Management and Case Management) Disease Management Maternity Management Access to Managed Health Care Network Certificates of Creditable Coverage Document Preparation BENLink I.D. Cards Prescription Drug Card Service II The monthly amount due will be determined as follows for the Plan Year beginning on January 1, 2003 and ending on December 31, 2003: For Employees Covered under the PPO Plan For Employees Covered under the POS Plan For Employees Covered under the POS Vision Plan $ 21.78 $ 26.03 $0.80 The monthly amount due will be determined as follows for the Plan Year beginning on January 1, 2004 and ending on December 31, 2004: For Employees Covered under the PPO Plan For Employees Covered under the POS Plan $ 27.88 $ 32.43 16 For Employees Covered under the POS Vision Plan $ 1.00 .Of these fees, the Basic ASO Service Fee of $17.79/POS employee and $16.53/PPO emploype is subject to the 2003 IN Performance Standards Program as described in Appendix D. 17 B. The Client agrees to compensate the Service Contractor for services listed below as follows: Amount Due Subrogation and Recovery 25% of all recovered amounts The Service Contractor reserves the ri ht to offset the amount due for this service against recovery amounts. 2. The cost of customized or bulk printing will be billed as charged to the Service Contractor for any documents not specifically listed in Appendix B. 3. The cost of any mass mailings to plan participants will be billed separately. C. For the adjudication of claims incurred prior to the termination of this Contract and submitted for consideration within the15-month period immediately following the termination date, the Client shall pay to the Service Contractor an administrative fee of : $63.46 per Employee for the 2003 Plan Year beginning on January 1, 2003 and ending on December 31, 2003, and $73.95 per Employee for the 2004 Plan Year beginning on January 1, 2004 and ending on December 31, 2004 on the first day of the'last Plan month prior to the end of this Contract. 18 Appendix B Services to be Provided by the Service Contractor To be attached to and made a part of the Administrative Services Contract Effective Date January 1, 2003 By and between CITY OF FORT COLLINS AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY The Service Contractor will perform the following services which are included in the Basic ASO Service Fee: Basic Claims Adjudication Services and Direct Claim and Verification Service These Basic Services provide for the processing of all claims incurred and received while this Contract is ih force. The services to be performed by the Service Contractor are: 1. Preparation of claim checks and Explanation of Benefit forms on a universal check form to be mailed by the Service Contractor; 2. Claims and correspondence and telephone inquiries come directly to the Service Contractor; claim checks and correspondence are mailed directly to employees and/or assignees; copies of Explanation of Benefit forms are sent to the Client upon request; 3. Maintenance of individual benefit records for determination of plan benefits and satisfaction of deductibles; 4. Follow up for additional medical or service information from provider; 5. Coordinate benefit payments with other employee plans; Preparation of IRS Reports (1099) Medical Provider Fees; 7. Claim control practices; and 8. Verification of eligibility as to coverage and benefits. 9. Maintenance of records for the determination of overutilization or plan abuse by users and providers. Ill The first "Plan Year" shall begin on January 1, 2003 and shall continue until the beginning of the second Plan Year. The second Plan Year shall begin on January 1, 2004 and successive Plan Years shall begin with the anniversary of such date. Section 2. Services I The Service Contractor will provide the services listed in Appendices B through F subject to modification as provided herein, for the administration and, operation of the Plan; such services'will be coordinated by a representative of the Service Contractor to assure effective and efficient operation of the Plan. It is understood that the Service Contractor performs purely non -discretionary and ministerial functions for the Client within a framework of policies, interpretations, rules, practices and procedures made by the Client. The Service Contractor shall perform Services in accordance with the terms of the Plan, including but not limited to the terms of the summary plan description (SPD). Any review by the Service Contractor of a claim or of charges declined is made as a service for the Client, who retains the final responsibility for determining its liability under, the Plan. If the Client has not adopted a final SPD, the Service Contractor will process benefit payments in accordance with its standard policies and procedures for the benefits selected by the Client as set forth on the master application form or prior carrier booklet with appropriate modifications. When following such standard policies and procedures, the Service Contractor will not be responsible for any act taken that may conflict with the terms of the SPD that is ultimately adopted. However, in the event that the Client amends its Plan to include items that the Service Contractor cannot administer, nothing herein shall be construed to require the Service Contractor to so administer said amendments but, rather, this Contract shall remain in full force and effect as if said amendments had not been made. In the event a Plan amendment is administratively burdensome. for the Service Contractor to administer, a charge may be imposed or other fees, as applicable, may be adjusted pursuant to the Client's knowledge and consent. Section 3. Banking Arrangements 3.1 Establishment and Maintenance of Transfer Account. The Client shall establish and maintain a bank account ("the Transfer Account") with sufficient funds to comply with section 3.2 below. The Client shall make available funds in the Transfer Account sufficient to honor all of the Client's obligations under this Contract. 3.2 Rioht of Service Contractor to Demand Monies from Transfer Account. The Service Contractor shall have the right to demand monies from the Transfer Account on a weekly with week delay basis in an amount sufficient to satisfy all of the Client's obligations under this Contract incurred as of the date of demand, including: a. past due, overdue or other unsatisfied obligations, if any; and b. benefit claims paid by the Service Contrdctor to Members who were not eligible for Plan benefits and with respect to whom the Client does not in a timely manner notify Service Contractor of such Member's lack of eligibility. The Service Contractor shall not be authorized to demand monies from the Transfer Account for any purpose other than in order to satisfy the Client's obligations as set forth in this Contract. 3.3 Notice to Bank of Service Contractor's Rights. The Client shall notify the bank: a. that the Client has authorized the Service Contractor to demand monies from the Transfer Account; 2 Actuarial and Underwriting Services This includes those services which concern th'e pricing of benefit types and the actuarial estimate of the incurred but unreported claim reserve. Such services include: 1. Benefit design advice; 2. Annual re -rating of the existing plan; 3. Pricing proposed benefit plan alternatives; an� 4. Advice on the expected financial results of plan changes. The Service Contractor will perform the followinq services which are riot included in the Basic ASO Service Fee: Document Preparation Document Preparation includes basic drafting which consists of preparation of the employee Summary Plan Description. The cost of printing the Summary Plan Description and other documents if any is included. I.D. Cards Identification cards will be prepared for enrolled employees based on eligibility information provided by the Client. Certificates of Creditable Coverage In accordance with federal regulations, individuals will be provided with Certificates of Creditable Coverage at specified times which will contain documentation of prior coverage including coverage period. 20 Appendix C Managed Care Services (Not Included in the Basic ASO Service Fee) To be attached to and made a part of the Administrative Services Contract Effective Date January 1, 2003 By and between CITY OF FORT COLLINS AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY Managed Care Programs. The Service Contractor agrees to provide services to allow the Client to establish the following programs under its Plan: a. Provider Network. A Provider Network consisting of participating hospitals, physicians, other health care professionals and other types of providers as appropriate (collectively called "Providers"). A higher level of benefits is typically paid when the Member receives covered health care services from the Provider Network or as otherwise set forth in the Plan b. Medical Management. A medical management program known as Care Management ("CM"). A care manager will assess the health care needs of a Member with a long-term and/or complex illness or injury, develop appropriate discharge plans, and coordinate needed medical services. A care manager will also review medical necessity and appropriateness of care though pre-treatment authorization of inpatient hospitalization and certain outpatient procedures, review of continuinghospital stays, and an appeal process. Written notice will be promptly provided to the Member, the hospital where appropriate, and the treating physician of the status of each authorization. C. Subcontractors. The Service Contractor may occasionally utilize services of subcontractors to assist with assessment of the case. Payment of said subcontractor fees will be the responsibility of the Client. However, the Service Contractor will be liable for payment of the subcontractor fees if the benefits payable exceed the applicable amounts pursuant to the excess loss contract. The Service Contractor will develop mechanisms for early identification of potential cases to benefit from the CM program. In the CM Program, the Members' individual needs are assessed with both the Member and the attending physician. An alternative treatment -plan to traditional care is developed and presented to the Member and family members and the physician for approval. The alternative treatment plan is implemented via coordination by the CM medical professionals. Claims reflective of the alternative treatment plan are submitted and reviewed by the CM Program. The CM Program monitors the medical necessity of the care until case closure. The Service Contractor is not required to seek Client's approval prior to the implementation of any alternative treatment plan where: i. all expenses to be payable under the alternative treatment plan are normally covered under the Client's Plan; or 21 ii. with respect to the Client who has a separate excess loss policy in effect with the Service Contractor covering its excess loss under the Plan, expected benefits payable outside or within the alternative treatment' plan exceed the applicable stop loss protection. point. In all cases, the Client agrees that expenses for the alternative treatment plan may be included as eligible expenses even if they are not included as such under the Client's Plan. d. Adverse Determination/Additional Revi�L If a Member receives an adverse determination under one of these programs and seeks additional review (as entitled by law or by the terms of the Plan), by a third party or an independent utilization review organization, any cost or fee for such additional review shall be billed to the Client or charged against the Transfer Account. 2. Provider Network Product(s a. Networks. The Service Contractor shall contract with one or more networks of Providers to furnish health care services in conjunction with the Provider Network Product. b. Availability and Incentives to Members. 'The Service Contractor shall offer and the Client shall make the Networks available to Members. It is the duty and responsibility of the Client to include in the Plan incentives and/or disincentives to Members to encourage use of the services of the Networks. C. Provider Network Directories. The Service Contractor shall include a listing of Network Providers on the OneHealthPlan.com website, which will be periodically updated to reflect changes in the participation of Providers. d. Standard and Character of Performance. The Service Contractor, through its contracts with Networks, shall use customary and reasonable care and proper diligence in the performance of its services under this Appendix. ;For purposes of this contract, the Client will be deemed the "Administrator" and "Named Fiduciary" of the -Plan. 3. Disease Management Program for Chronic Medical Conditions Ir a. The Service Contractor, through its own employees, Affiliates and/or employees of contracted third -party vendor(s), will provide Disease Management services to Members identified as and consenting to be service recipients under the program. b. The Service Contractor, through its own employees, Affiliates and/or employees of contracted third -party vendor(s), will perform an initial identification of Members meeting predetermined medical criteria indicating the potential to be service recipients. This identification process will be based on information legally obtained through claims, Members' self -referral or other valid sources. C. The Member who consents and is accepted into the program ("Participant") will receive services consisting of assessment and education t?r targeted diseases. The services are designed to enable the Participant to gain knowledge and skills necessary to prevent severe chronic medical conditions, manage his or her life-long condition and improve quality of life. The program does not provide medical treatment, therapeutic services or hands-on home nursing. The program neither warrants nor guarantees the well-being or improvement of the Participant's chronic medical condition. d. The Client agrees to provide 100% benefit reimbursement under its Plan, without application of the deductible or copayment, for all services received under the disease management program. The benefit reimbursement amount does not apply to the Member's lifetime maximum under the self -funded plan. "Chronic Medical Condition" means an illness for which there is no cure; however, medical treatment is available. It is a long-term illness that does not ordinarily pose an immediate threat to one's life. Chronic medical conditions covered under this program may include, but are not limited to, intense diabetes, asthma or cardiac conditions. 22 4. Maternity Management Care Program This program monitors the health and well-being of pregnant mothers. Care managers are trained to identify potential difficulties and maintain regular phone contact with pregnant mothers, checking the status of their pregnancy and answering questions about pregnancy and delivery. The program neither warrants nor guarantees a normal or safe pregnancy or delivery. Nor does it guarantee the health or well-being of pregnant mothers or their newborn child(ren). i 23 Appendix D Performance Standards Program (Not Included in the Basic ASO Service Fee) Effective D�te January 1, 2003 By and between CITY OF FORT COLLINS AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY Great -West Life & Annuity Insurance Company ("Seraice Contractor') guarantees to provide an acceptable level of service as described below or to pay the penalties also described below. An executed copy of the Administrative Services Contract signed by an authorized representative of the Client is required in order for the Service Contractor to process the payment of any penalty. For purposes of this agreement, any penalty is calculated from the Basic Administration Fee which is defined as $17.78 per covered POS employee and $16.53 per covered PPO employee in each month of the guarantee period. 1. New Case Implementation Performance Standards — Applicable to initial issue of: Health Identification Cards Booklet Draft Network Directories a. Initial Medical/PCs Identification Cards: Service Contractor will initiate a request for identification cards and mail said cards by December 23, 2002 upon receipt, in the Service Contractor's Home Office, of complete and accurate eligibility information following the receipt of the completed "Application for Group Coverage." The City will submit eligibility information no later than November 13, 2002. b. Booklet Draft: The initial booklet draft will be sent via email on or about October 1, 2002. The final booklet will be sent via electronic .pdf file within 15 days of approval by the City but no later than December 13, 2002. This assumes receipt at the Service Contractor's Home Office, of the completed "Application for Group Coverage" and approval by the City no later than November 28, 2002. C. Network Directories: The initial s6pply of network directories will be delivered to the City prior to the Open Enrollment period that begins on October 7, 2002. Penalty: Performance will be measured by the Service Contractor's internal reports. Failure to achieve the minimum performance standard will result in a credit to the administration fee, less managed care fees and commissions, of 2% of such fee due and paid for the first Plan Month. A review of the Service Contractor's performance under the New Case Implementation Performance Standard will be completed at the end of the first three consecutive Plan Months of the first Plan Year. Any penalties owed by the Service Contractor will be used to reduce the administration fee in the first month following the review. 24 Claims Service Performance Standards: Applicable to: Claims Timeliness (Turnaround) Claims Financial Accuracy " Claims Payment Accuracy Claims Procedural Accuracy Claims Call Service a. Claims Timeliness (Turnaround): 90% of the claims will be processed (paid, pended for additional information or denied) within 14 calendar days and 98% will be processed ( paid, pended for additional information or denied) within 21 calendar days of the Service Contractor's receipt ati its designated National Imaging Center in Ft. Scott, Kansas. Penalty: Performance will be measured using the Service Contractor's BEN 501 Claims Service Report specific to the Client. Performance will be measured annually based on the Plan Year beginning with the first Plan Month. Failure to achieve the minimum performance standard will result in a credit to the Administration Fee, less managed care fees and commissions, if applicable, of 2% of such fee due and paid for the Plan Year. b. Claims Financial Accuracy: Claims will be processed with a financial accuracy of at least 99%. Financial accuracy is defined as the total dollar amount of claims paid correctly divided by the total dollar amount of claims paid during the time period covered by this guarantee. Penalty: Performance will be determined by an audit of the Wyoming Benefit Payment Office performed by the Service Contractor using claims selected at random of a sufficient quantity to guarantee the of statistical accuracy of the audit. Performance will be measured annually based on the Plan Year beginning with the first Plan Month. Failure to achieve the minimum performance standard will result in a credit to the Administration Fee, less managed care fees and commissions, if applicable, of 2% of such fee due and paid for the Plan Year. C. Claims Payment Accuracy: Claims will be processed with a payment accuracy of at least 98%. Payment accuracy is defined as the total number of claims paid with the correct dollar amount divided by the total number of claims paid for the time period covered by this guarantee. Penalty: Performance will be determined by an audit of the Wyoming Benefit Payment Office performed by the Service Contractor using claims selected at random of a sufficient quantity to guarantee the statistical accuracy of the audit. Performance will be measured annually based on the Plan Year beginning with the first Plan Month. Failure to achieve the minimum performance standard will result in a credit to the Administration Fee, less managed care fees and commissions, if applicable, of 1 % of such fee due and paid for the Plan Year. d. Claims Procedural Accuracy: Claims will be processed with a procedural accuracy of at least 98%. Procedural accuracy is defined as the total dollar amount of claims processed with nonpayment errors divided by the total number of claims processed for the time period covered by this guarantee. Penalty: Performance will be determined by an audit of the Wyoming Benefit Payment Office performed by the Service Contractor using claims selected at random of a sufficient quantity to guarantee the statistical accuracy of the audit. Performance will be measured annually based on the Plan Year beginning with the first Plan Month. Failure to achieve the minimum performance standard will result in a credit to the Administration Fee, less managed care fees and commissions, if applicable, of 1 % of such fee due and paid for the Plan Year. 25 e. Claims Call Service: The average monthly hold time in the Wyoming Benefit Payment Office will not exceed 30 seconds. Abandoned calls shall be no more than 2% of all incoming calls. Penalty: Performance will be determined from Great -West's internal Telephone Response Report for the Wyoming Benefit Payment Office. Performance will be measured annually based on the Plan Year beginning with the first Plan Month. Failure to achieve the minimum performance standard will result in a credit to the Administration Fee, less rronaged care fees and commissions, if applicable, of 2% of such fee due and paid for the Plan Year. II A review of the Service Contractor's performance under the Claims Service Performance Standard will be completed within 3 months of the end of the Plan Year. Any penalties owed by the Service Contractor will be used to reduce the administration fee in the first month following the review. However, performance will be monitored and reported to the City on a quarterly basis by the Denver Sales Office to allow for more timely intervention in the event a problem is identified. 3. Sunset Provision This Performance Standards Program covers the period from January 1, 2003 through December 31, 2003 and will not be automatically renewed. 26 Appendix E BENLink To be attached to and made a part of the Administrative Services Contract Effective Date January 1, 2003 By and Between CITY OF FORT COLLINS and GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY For Clients using BENLink online services, the following provisions shall apply: The Service Contractor grants the Client the non-exclusive, non -transferable right to use BENLink in accordance with this Contract while this Contract is in effect The Client is responsible for performing all BENLink functions in order to administer the Plan, including but not limited to the following: 1. Acquisition and maintenance of completed, executed and accurate enrollment applications for every eligible employee or dependent; 2. Updating information regarding all Members including, but not limited to, recording changes for name, beneficiary, benefits or primary care physicians, within 10 working days of the Client's receipt of notice or change. The Client shall be responsible for reimbursing the Service Contractor for any claims paid on behalf of a terminated Member where the Client failed to update BENLink and remove the Member therefrom in a timely manner. Such payments shall be funded through the Transfer Account as set forth in Section 3 of the Contract. . The Service Contractor is relieved of any duties imposed upon it under other terms of this contract to the extent those duties can be performed by the Client using BENLink. BENLink may be used only to administer the Plan. With the Service Contractor's prior consent, the Client may subcontract, delegate or assign its rights or duties related to BENLink, or allow a third party "read only access" to the Client's data on BENLink. In this event, the following terms apply: The Client shall retain ultimate responsibility for all duties and obligations under the Contract. Any third party shall be subject to such duties and obligations. The Client shall be responsible for monitoring and overseeing the third party's performance pursuant to said subcontract, delegation, or assignment and shall remain fully responsible as stated herein notwithstanding said delegation. The Client shall be responsible for any breach by a third party of such duties and obligations, and the Client indemnification provisions under the Contract shall apply to any such breach by a third party. 2. The Service Contractor shall have no obligations to any third party, nor any liability for the BENLink services performed by any third party. 3. The Client shall abide by the Privacy of Health Information requirements set forth in Section 5.5 of the Contract. 27 BENLink must not be used in any manner not expressly allowed by this Contract. Client acknowledges that Service Contractor' is under no obligation to provide support for BENLink, except for maintenance of the BENLink system itself and basic technical assistance via telephone, facsimile and electronic mail during the Service Contractor's regular business hours, The Client,shall be responsible for all Internet service provider charges, and all related long distance charges, if any. The Service Contractor shall have no liability with aspect to the Client's use of BENLink, and further, makes no representations or warranties with respect to BENLink. The Service Contractor is not responsible for mistakes make by the Client in its use of BENLink. BENLink online services will terminate immediately upon misuse of BENLink by the Client or its subcontractors, delegates or assigns and may terminate, in the sole discretion of the Service Contractor, upon discontinuation of the BENLink product. 28 Appendix F License Agreement for Pharmacy Benefit Manager Service To be attached to and made a part of the Administrative Services Contract By and between CITY OF FORT COLLINS AND GREAT -WEST LIFE & ANNUITY INSURANCE COMPANY 1. Services to be Provided by PBM The Service Contractor shall arrange for services to be provided by the pharmacy benefit manager (PBM) identified in this Appendix in support of the prescription drug benefit provided under the Client's Plan as follows: a. The PBM services shall be provided by AdvancePCS, L.P. b. The PBM shall perform pharmacy services for Members through its network of participating pharmacies. C. The PBM shall adjudicate claims for prescription drugs covered under the Plan submitted by participating pharmacies using the PBM's electronic on-line claim adjudication system. The PBM's claim adjudication system will include all Plan information regarding deductibles, copayments, coinsurance, Member out-of- pocket maximums, benefit maximums and any other features of the Plan to be used in processing claims. Participating pharmacies may collect from Members at point of sale the amount specified in the -Plan. The PBM shall reimburse participating pharmacies for such claims according to the terms of the PBM's contfact with the participating pharmacy. d. The PBM shall accept claims submitted by Members directly to the PBM on the PBM's standard,ciaim form, or otherwise agreed upon form, together with proof of payment. The PBM shall process such claims and produce and mail to the Member an explanation of benefits and, if any payment is due the Member, a check for the reimbursement amount specified in the Plan. 2. Services to be provided by Service Contractor The Service Contractor shall provide the following support for the prescription drug benefit provided under the Client's Plan: a. Based on information it receives from Client, timely notify PBM of the identity of each Member eligible for prescription drug benefits under the Plan, the date the Member becomes eligible, and the date the Member's eligibility ends. b. Reimburse PBM for the total of the amount of all payments due pursuant to Section [9] of this Appendix for drugs provided to Members during the preceding billing period. After reimbursing PBM, Service Contractor shall be entitled to initiate recovery to its own account by including the full amount of such reimbursement to PBM in the amount it next transfers from Client's account pursuant to Client's transfer schedule. C. Support Client's efforts to improve the cost -benefit relationship of its prescription drug benefit plan through regular consultation with Client and PBM. 29 b. that if, the Transfer Account does not have sufficient funds to cover any demand by the Service Contractor the bank shall honor such demand pursuant to a line of .credit established by the Client; and C. that the bank shall honor any such demand from the Service Contractor without reservation or proof of rights of any kind whatsoever. 3.4 Maintenance of Transfer Account After Termination of Contract. The Client shall continue to maintain the Transfer Account pursuant to the terms of this Section 3 for 15 months after the termination of this Contract in order for Service Contractor to process claims that were incurred prior to the termination of this Contract. Section 4. Payments to the Service Contractor 4.1 Service fees. The Client shall make payments to the Service Contractor of amounts due for monthly service fees and other service fees and expenses as set forth in the Payment Schedule in Appendix A. Charges for hourly services will be determined in accordance with the Service Contractor's established time allocation procedures, and those of other organizations from whom hourly services are purchased. These charges will be made only if both parties agree on the Service Contractor's providing any hourly services. Printed material created at the Client's request and not listed in Appendix A will be billed for separately when furnished. 4.1.1 The Client acknowledges that the Payment Schedule is based on information provided by the Client including but not limited to the number of employees and dependents that the Plan will cover. The Service Contractor has the right to revise any Payment Schedule retroactively to the effective date or the anniversary date, as applicable, to reflect actual participation in the Plan. Any difference between payments made under the Payment Schedule and the Revised Payment Schedule will be collected from or credited to the Client. 4.1.2 Any proposed Payment Schedule will become final when the.Service Contractor delivers a final written schedule, signed by its officer, to the Client. , 4.2 Amendment of Fees. 4.2.1 The Service Contractor or Client may propose changes to the fees under this Contract: W a. if the Client amends its Plan to modify benefits; or b. upon modification of the Service Contractor's administrative duties; or C. if the Service Contractor's cost of operation is increased by virtue of a change in charges to the Service Contractor by a governmental unit, but such adjustment shall be limited to the amount of the change; or d. on the first anniversary of the Plan Year and annually thereafter; or e. on any Plan Month subsequent to a Plan Year anniversary, provided that no renewal adjustments were made at the time of such anniversary; or upon addition or deletion of coverage for any subsidiary or Affiliate or corporate division of Client; or g. if the excess loss contract, if any, between the Service Contractor and Client is terminated; or d. Make available to Client the advisory and consulting services of Service Contractor's pharmacy services support unit. e. Provide Client with standard reports consisting of data, provided by the PBM describing claims, utilization, and other pertinent information. II f. Through Service Contractor's medical m�hagement unit support the prior authorization provisions of the Plan. 3. Third -Party Litigation Neither the Service Contractor nor the PBM shall have any duty on Client's behalf to participate in or in any way pursue any claim in any class action or other litigation commenced by a third -party to recover damages of any type whatsoever in connection with drugs provided to Members. 4. Prior Authorization The PBM and Service Contractor will cooperate to administer the Plan's provisions whereby certain prescription drugs or drug classes are subject to prior authorization before being approved as a covered benefit. 5. Mail Service Program The PBM shall administer the Plan's provisions whereby certain prescription drugs may be provided through the PBM's mail order pharmacy service. a. The PBM shall provide Client with appropriate numbers of its standard information material explaining its mail service and the forms necessary for Members to utilize the service. The PBM shall make available to Members toll -free telephone access to a pharmacist and customer service representative. Access to a pharmacist shall be available 24 hours per day, seven days per week. b. Subject to and in accordance with the Plan and applicable law, the PBM shall dispense through its mail service pharmacy new or refill prescription drug orders upon receipt from a Member of a valid prescription order or a completed refill order form, and the applicable copayment or coinsurance amount. The PBM shall cause the filled prescriptions to be mailed to each Member via common carrier at the address shown on the PBM's records, so long as such address is in the United States. Neither Service Contractor nor the PBM shall have any liability to Client or any Member for any delay in delivery due to circumstances beyond the PBM's control. C. PBM shall at all times while this Appendix is in effect operate its mail service pharmacy in compliance with all applicable state and federal laws and regulations, and shall dispense only those prescription drugs which, in its sole discretion, fulfill requiremeAts of the prescription writer and comply with such laws. The PBM shall have the right to refuse to fill or renew a prescription for any Member when, in the participating pharmacist's professional judgment, the filling or renewing of such prescription is not in the best interest of the Member, or the pharmacist has reason to doubt the authenticity of the prescription. The PBM may from time to'time implement programs through its mail service pharmacy to promote certain prescription drugs. d. Client acknowledges that the PBM's mail service pharmacy may from time to time engage in therapeutic interchanges. e. The PBM's mail service pharmacy may dispense drugs to Members even if the prescription is not accompanied by the correct copayment, coinsurance or deductible amount. If Service Contractor is charged 30 for any uncollectible copayment, coinsurance or deductible amount, Client shall be liable to Service Contractor for such amount if reasonable collection efforts by the PBM fail. 6. Plan Changes If Client elects to change the prescription drug benefits of the Plan, including but not limited to covered drugs, copayment, coinsurance or deductible amounts, or prior authorization, Client shall advise Service Contractor in writing, and Service Contractor shall inform PBM. Whether the changes can be implemented, and/or implemented by the date Client requests, will be determined at least in part by the PBM. 7. Proprietary Rights The format of all reports, printouts and copies therefrom, and any prior and future versions thereof by any name, are the property of the PBM and are protected by copyright which the PBM owns. 11 8. Limitations The Service Contractor does not direct or exercise any control over the professional judgment exercised by any pharmacist in dispensing prescriptions or providing pharmaceutical -related services at a PBM participating pharmacy. Participating pharmacies are independent contractors, not subcontractors or agents of the Service Contractor, and the Service Contractor shall not have any liability to Client or any Member for any loss or damage related to or in any way growing out of any act or omission of any PBM participating pharmacy or its agent or employee. 1'' 9. Payments For the PBM's services, Client shall pay Service Contractor the amounts Service Contractor bills for drugs provided to Members during the preceding billing period. Charges for drugs provided to Members may be based on the average wholesale price of a prescription drug'as calculated by the PBM using a variety of factors, including but not limited to the First DataBank National Drug Data. File or other nationally recognized pricing source. The PBM's method of calculating the average wholesale price of a prescription drug may change from time to time, as the PBM shall determine. Service Contractor, shall have no duty to notify Client of any such change. Client acknowledges that the Service Contractor's net cost to provide the pharmacy benefit management services described in this Appendix might be more or less than the payments called for by this section, and Client agrees ,that the Service Contractor is at risk for such difference. 10. Termination a.' This Appendix may be terminated at any time upon thirty (30) days prior written notice by either party to the other. In addition, this Appendix shall terminate automatically when the first of the following events occurs: the Administrative Services Contract ends; the Plan terminates; iii. the Service Contractor no longer administers the Plan; iv. the Plan no longer includes a prescription drug benefit that utilizes a PBM; 31 B V. Client commits a material breach of this Appendix or defaults in the performance of any of its duties or obligations under this Appendix and such breach or default continues for a period of fifteen (15) days after Service Contractor gives Client written notice specifying the nature of the breach or default. b. Termination of this Appendix while the Administrative Service Contract continues in effect shall be a modification of the Service Contractor's administrative duties for purposes of Section 4.2.1-b of the Contract. I 32 h. if there is a change in the number of employees and/or dependents covered under the Client's Plan for any benefit coverage provided under the Client's Plan which equals or exceeds: i. 10% in any Plan Month when compared to any prior Plan Month; or ii. 25% during any period of three consecutive months. The Client agrees to make vailable to the Service Contractor all information necessary to determine whether the changos set forth in Cor ii. above have occurred. If the change in the number of employees and/or dependents covered under the Plan is such that a change in fees results, then the Service Contractor will advise the Client of its intention to change the fees. I The effective date of the change in fees under subsections a. through In. above will be the effective date of the event that causes such change. 4.2.2 Modification of fees may be made by written notice to the Client by the Service Contractor. If the Client pays such revised fees or fails to object to such revision in writing within 15 calendar days of receipt, this Contract shall,be deemed modified to reflect the fees as communicated by the Service Contractor. 4.3 Claims. The Client shall pay the Service Contractor: a. an amount equivalent to the claims incurred by Members under Client's Plan as determined by the Service Contractor, including costs and expenses of investigation of claims. The Service Contractor will make a good faith attempt to contact Client to inform it of any such investigation and provide an estimate of the cost of it; b. the deficit permitted to be recovered by the Service Contractor, if any, and other payments owed , by the Client, other than premium, under an excess loss policy, if any; and C. the Client's portion of network access fees and provider incentive payments, if any, as determined by the Service Contractor, under fee arrangements negotiated by the Service contractor with health care providers. ' 4.4 Premiums for Insurance. The Client and the Service Contractor acknowledge that: a. the Client may have purchased one or more insurance policies from the Service Contractor, in its capacity as an insurer, including but not limited to insurance for group life and accidental death and dismemberment, excess loss insurance, long term disability insurance, dental insurance, vision insurance, or other insurance; and b. the Client is required to pay the Service Contractor a periodic premium for such policies. 4.5 Lack of Sufficient Funds. To the extent that the bank in which the Transfer Account is established and maintained honors any demand for funds by the Service Contractor in an amount less than the amount demanded, any funds that are made available to the Service Contractor from the Transfer Account shall be applied first to the payment of the Service Contractor's service fees, second to any premiums for insurance, and third to the payment of claims. To the extent that any check, draft, money order, or other financial instrument issued by or,on behalf of the Client is honored in an amount less than the face amount of that instrument any funds that are made available to the Service Contractor through such instrument shall be applied in the same manner. Nothing in this subsection shall limit the Service Contractor's rights under this Contract, including but not limited to the right to terminate this Contract. Section 5. Client Responsibilities 5.1 Payments to Service Contractor. The Client shall make all payments as set forth in this Contract. 4 5.2 , Enrollment and Determination of Eligibility. 5.2.1 The Client shall: a. handle routine inquiries from Members and prospective Members, including inquiries concerning enrollment in the Plan; and I . b. handle enrollment activity; and C. notify prospective Members of their right to enroll in the Plan. 5.2.2 In determining any person's right to benefits under the Plan, the Service Contractor shall rely on eligibility information consistent with the description in the Plan and information provided by the Client. It is mutually understood that the effective performance. of this Contract by the Service Contractor will require that it be advised on a timely basis by the Client of the identity of persons covered under the Plan, and the'effective date or the termination date of their coverage. For the purpose of determining fees under this Contract, a Member shall be considered to be: a. enrolled on the first day of the first month following the month in which the Member is eligible to receive benefits under the Plan; and b. terminated on the last day of the last month in which the Member is eligible to receive benefits under the Plan. Retroactive adjustments for Member enrollment or termination will be allowed for periods not exceeding sixty (60) days. Retroactive adjustments for termination are limited to Basic ASO Service Fees as set forth in Appendix A. 5.3 Plan Benefits. Except as otherwise explicitly provided in this Contract, the Client shall retain the responsibility for all Plan benefit claims and all expenses incident to the Plan. The Client shall be responsible for: a. Any state premium or similar tax, however denominated, including any penalties and interest if applicable, payable with respect thereto, assessed against the Service Contractor on the basis of and/or measured by the amount of Plan benefits administered by the Service Contractor pursuant to this Contract; b. The consequence of any acts or omissions by Client occurring during the operation of this Contract alleged to be a breach of fiduciary duty, or a breach of duty or trust, or other contractual duty regardless of the source of law serving as a basis for such allegation; C. Reimbursing the Service Contractor for any Plan benefit claims paid by the Service Contractor to Members who were not eligible for Plan benefits and with respect to whom the Client does not timely notify Service Contractor of such Member's lack of eligibility. 5.4 COBRA. If COBRA is applicable to the Client, the Client is responsible for performing the duties required by the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (COBRA), including but not limited to: a. notifying employees and covered spouses and dependents at their last known address of their rights under COBRA when they first become covered under the Plan; b. notifying qualified beneficiaries of their continuation rights upon occurrence of qualifying events; E C. notifying Service Contractor of COBRA -related eligibility changes as they occur. This includes but is not limited to termination of coverage under the Plan as a result of a qualifying event, subsequent election of'coverage and payment of premiums and reinstatement of coverage; d. processing elections from continuants; and e. billing and collection. At the Clients' option and for a fee payable to the Service Contractor, the Service Contractor will arrange with a third party administrator to perform some or all of the required duties. Whether the Client or a third party administrator performs COBRA administration, the Service Contractor shall have no Liability resulting from the failure of the Client, including its employees, directors, or officers', or a third party administrator, to fulfill any obligations under the COBRA laws or this Contract. 5.5 Privacy of Health Information. The Parties agree to protect the privacy of Health Information in accordance with the Privacy Agreement, which is incorporated herein by reference. 5.5.1 The Client or the, Service Contractor may terminate this Contract if the Service Contractor reasonably determines that the Client or any of its.subcontractors or agents, to whom Health Information has been disclosed under this Contract, has materially violated any provision of this Section. 5.6 Delays. It is mutually agreed that the Service Contractor shall not be responsible for delay in the performance of its duties under this Contract or for non-performance hereunder, if such delay or non -,performance is caused or contributed to in whole or in part by the failure of.the Client to promptly furnish any required information. 5.7 Furnishing of Information. The Client shall furnish the Service Contractor with correct and complete information required by the Service Contractor to provide services in accordance with this Contract, including, but not limited to, eligibility information, identity of agents and brokers, confirmation of overdraft protection on the Transfer Account, and information to verify contribution and participation requirements with respect to insurance policies issued by the Service Contractor. The information will be furnished at the times and in such manner as the Service Contractor may request. The Service Contractor will assume that all such information is complete and accurate and will be under no duty to question the accuracy of such information. The Service Contractor, of its discretion, may charge additional reasonable fees to the extent additional services are required because. information is not furnished, is incomplete or inaccurate or is not furnished at the time or in the manner as requested. 5.8 Member Appeals. The Client acknowledges that its Plan provides Members with the right to appeal benefit claims that have been denied and file other complaints and grievances with the Plan Administrator. The Client shall encourage Members to exhaust their opportunity to resolve such matters under the internal grievance and complaint procedure described in the SPD. The Client shall notify the Service Contractor of any appeal that the Client receives and shall notify the Service Contractor of the resolution of such appeal. The Service Contractor shall not be responsible for any costs related to such appeal and shall not be required to process any benefit payments approved by the Client as the result of an appeal by or on behalf of any Member without written direction from the Client. In the event Plan Administrator determines claims should be paid which are not considered covered benefits under the Plan, and Client has purchased excess loss coverage from Service Contractor, such amounts shall be paid outside of such agreements, and shall be the Client's full liability. The Client shall offer all appeals and make all appeal decisions with due regard for state and federal law to the extent it may apply including but not limited to Internal Revenue Code section 105(h), and ERISA if the Client's Plan is an ERISA plan. 5.9 Client's Affiliates. Employees and Dependents of Client's Affiliates may be added to the Plan by giving advance notice to and receiving approval from the Service Contractor. The Client will ensure that the Transfer Account is adequately funded and that all other required payments are rendered to reflect such additions. 6 5.10 Disclosure to Members. The Client will distribute SPDs to all Members as may be required by law. The Client will make all disclosures to employees and dependents under its Plan required by applicable law. including but . not limited to the Health Insurance Portability and Accountability Act, the Newborn's And Mother's Health Protections Act, the Women's Health and Cancer Rights Act, ERISA and COBRA. 5,11 Leaal Proceedinas. The Service Contractor shall consult with the Client or legal counsel designated by the Client in claim matters that are beyond the ordi ary. Client shall be responsible for its own defense of any legal action brought by a third party related to the PI n. Nothing herein shall require the Client to defend the Service Contractor in an action in which the Service Contractor is a named party. Nothing herein shall require the Service Contractor to defend the Client. The Service Contractor and the Client shall cooperate in the defense of any legal proceeding and each party will furnish the other and its legal counsel with all pertinent information regarding the proceeding. Section 6 Indemnification and Limitation of Liability 6.1 Client's Indemnification. To the extent permitted by law and The Charter of the City of Fort Collins, the Client shall indemnify, protect and hold the Service Contractor harmless from any and all loss, liability, claim, damage or expense (including attorney's fees, court costs and expenses of litigation) arising out of any act or omission of the Client, its Affiliates or subcontractors in connection with the Plan or in connection with this Contract, including compensatory, punitive, or other damages. The Client's duty to indemnify and hold the Servipe Contractor harmless shall not extend to acts or omissions of providers who render health care services to Members. Nothing herein shall be construed as a waiver of procedural and other requirements of the Colorado Governmental Immunity Act. 6.2 Service Contractor's Indemnification. To the extent permitted by law and The Charter of the City of Fort Collins, the Service Contractor shall indemnify, protect and hold the Client harmless from any and all loss, liability, claim, damage or expense (including attorney's fees, court costs and expenses of litigation) arising out of any act or omission of the Service Contractor, its Affiliates or subcontractors in connection with the Plan or in connection with this Contract, including compensatory, punitive, or other damages. The Service Contractor's duty to indemnify and hold the Client harmless shall not extend to acts or omissions of providers who render health care services to Members. 6.3 Exclusion from Indemnification. The Parties shall not be responsible for each other's lost profits, exemplary, special, punitive or consequential damages or be liable to the other for the same. 6.4 Survival. The terms of this Section shall survive the termination of this Contract Sectiop 7. Authority to Control and Manage the Plan 7.1 Agency Relationship. The Service Contractor in performing its duties under this Contract is acting only as an agent of the Client, and the rights and responsibilities of the parties shall be determined in accordance with the law of agency except as otherwise herein provided. 7.2 Service Contractor's Control and Authority. 7.2.1 The Service Contractor and the Client agree that while this Contract is in effect the Service Contractor and its delegates shall have exclusive authority to provide the Plan with the services listed in the attached Appendices, and that during such time the Client shall not undertake on its own nor shall it authorize or allow any other person or entity to provide any of those services without the prior written consent of the Service Contractor. 7 7.2.2 The Service Contractor and the Client agree that the Service Contractor shall have no liability under this or any other agreement between the said parties with respect to any payment of benefits or other act that violates the provisions of subsection 7.2.1 above. 7.3 Client's Control and Authority. The parties acknowledge that the Client and the Plan Administrator have the exclusive authority to control and manage the Plan. The Client expressly agrees that the Service Contractor is not the Plan Administrator. The Client expressl� agrees that the Service Contractor is not the named fiduciary or a fiduciary of the Plan and that neither the Client nor the Plan Administrator will designate the Service Contractor as the named fiduciary or,a fiduciary of the Plan. The Service Contractor shall have no power, discretion or authority or control over the Plan or Plan assets or responsibility for the terms or validity of the Plan or to alter, modify, or waive any terms or conditions of the Plan, or to waive any breach of any such terms or conditions, or to .bind the Client, or to waive any ,of its rights, by making any statement or by receiving at any time any notice or information. The Service Contractor shall have no power, discretion or authority to act for or on behalf of the Client other than as herein expressly granted, and no other or greater power or authority shall be implied by the grant or denial of power or authority specifically mentioned herein. 7.4 Plan Documents. The Client acknowledges that the Plan Administrator has the responsibility to provide Members with a summary plan description ("SPD") and to make available to Members certain other materials and information. To the extent that the Client uses documents, including but not limited,to the SPD, or other materials or information provided to the Client by the Service Contractor for the purpose of satisfying the Plan Administrator's obligations, the Client acknowledges that it adopts such documents and other material and information as its own as if they were drafted and made available to Members solely by the Client and under the authority of the Plan Administrator. The fact that the Service Contractor has drafted or assisted in drafting any document, including but not limited to the SPD, or provided any other materials or information to the Client, shall not be construed as the exercise of any discretion, authority or control by the Service Contractor with respect to the Plan, and shall not be construed as establishing any fiduciary, agency, trust, or other similar 'relationship whatsoever between the Service Contractor and any Member. 7.5 Relationship to Members. Nothing herein will be deemed to impose upon the Service Contractor any obligation to any Member under the Plan. Section 8. Right to Audit Each party shall have the right at all reasonable times to inspect and copy the records of the other that are pertinent to the operation of the Plan. Such inspection shall be conducted at the office of the party being inspected where the records are kept. Any costs of such inspection shall be borne'by the inspecting Party. The parties shall cooperate with each other and make all reasonable efforts to confine any audit to a reasonable' length of time. Section 9. Service Contractor's Use and Disclosure of Records 9.1 Confidentiality. The Service Contractor shall maintain confidentiality, in accordance with applicable law, with respect to all Health Information of Members, including but not limited to medical records, in its possession pertaining to,Members under the Plan.9.2 Use and Disclosure of Medical Records. The Service Contractor will use Health Information solely for the purpose of fulfilling its duties under this Contract, and will not disclose such information to anyone other than its officers, employees, its delegates, Affiliates, those parties with whom the Service Contractor has a contract or other arrangement whereby that third party assists the Service Contractor in performing its duties under this Contract and upon lawful order of a court or a public agency with appropriate jurisdiction over the subject matter; provided, however, that such disclosure shall not exceed the extent reasonably necessary for that third party to provide such assistance, and further provided, that the Service Contractor shall require that third party maintain those medical records as strictly confidential. 9.3 Custody of Records. The Service Contractor shall hold all papers, books, files, correspondence and records of. all kinds which at any time shall come into its possession or under its control relating to the transactions performed by the Service Contractor for the Client under this Contract, and shall, to the extent permitted by law, surrender them to the Client upon prior request, except the Service Contractor may periodically destroy such material as it would usually destroy in the normal course of business. i 10.1 Procedure. The Service Contractor shall take appropriate steps as it would for its own business under similar circumstances to collect claim overpayments, whether or not the overpayment results from the Service Contractor's error or mistake. 10.2 Responsibility. 10.2.1 The Service Contractor will be responsible for Claim Overpayments resulting from the Service Contractor's error or mistake, provided the overpayment is: a. discovered and determined to be a Claim Overpayment before the end of'a 24-month period immediately following the date on which the claim in question was paid; and b. uncollected at the end of the Service Contractor's collection process. Such process shall not last longer than 24 months after the date on which the claim is determined to be the claim overpayment. 10.2.2 The Service Contractor will not be responsible for claim overpayments that are caused directly or indirectly by the Client, its agents or employees, or providers. 10.2.3 The Client agrees to reimburse the Service Contractor a maximum of 25% of the returned overpayment for collection costs. Section 11. Term and Termination of Contract j 1.1 Contract Term. This Contract shall be effective on January 1, 2003, (the "Effective Date"), and shall continue in force for one year (the "Initial Term"), unless terminated earlier pursuant to this Section. This Contract shall expire at the end of the Initial Term, subject to the right of the parties to renew the Contract as set forth herein, in which case, the Contract shall remain in force until the expiration of the period for which the Contract was renewed (the "Renewal Term"), unless terminated earlier pursuant to this Section. 11.2 Contract Renewal. The Service Contractor shall submit to the Client, not later than sixty (60) days prior to the expiration of the Initial Term and 120 days prior >o any Renewal Term, the Service Contractor's proposed terms and conditions for the renewal of the Contract (the "Renewal Proposal"). If prior to the expiration of the Contract, the parties do not agree on the terms and conditions under which the Contract will be renewed, unless expressly directed by the Client to discontinue service as of the expiration date, the Service Contractor may elect to continue providing Services beyond the expiration date in order to facilitate continuity of service for Members. In that case, this Contract shall be deemed to have been renewed under the terms and conditions of the Renewal Proposal as if the Client had affirmatively assented to the Renewal Proposal and this Contract shall be deemed to have been renewed. Notwithstanding anything above to the contrary, the Service Contractor shall not be obligated to provide services after the expiration of this Contract, except to the extent expressly required to do so under another provision of this Contract. Once this Contract is renewed, whether by express agreement or deemed renewal, this Contract may be terminated only as set forth below in this Section. in the event Service Contractor does not provide Client with a timely Renewal Proposal, the current Contract terms shall apply until 30 days after such Renewal Proposal is sent. 9