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Ordinance No. 8,395980910 -14 ORDINANCE NO. 8395 ®_ AN ORDINANCE AUTHORIZING AND DIRECTING THE CITY MANAGER TO EXECUTE AND THE CITY CLERK TO ATTEST TO A RENEWAL OF THE AGREEMENT WITH INTERCARE HEALTH CARE PLANS AS A THIRD PARTY ADMINISTRATOR FOR THE ADMINISTRATION OF MEDICAL AND DENTAL CLAIMS AND FOR NETWORK SERVICES ON BEHALF OF THE CITY OF BAYTOWN; AUTHORIZING PAYMENT OF ONE HUNDRED FIFTY - FIVE THOUSAND THREE HUNDRED SIXTY AND NO /100 DOLLARS ($155,360.00); AND PROVIDING FOR THE EFFECTIVE DATE THEREOF. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN, TEXAS: Section 1: That the City Council of the City of Baytown, Texas, hereby authorizes and directs the City Manager and the City Clerk of the City of Baytown to execute and attest to a renewal of the agreement with InterCare Health Plans as the third party administrator for the administration of medical and dental claims and for network services on behalf of the City of Baytown. A copy of said contract is attached hereto, marked Exhibit "A," and made a part hereof for all intents and purposes. Section 2: That the City Council of the City of Baytown authorizes payment to Intercare Health Care Plans, of the sum of ONE HUNDRED FIFTY -FIVE THOUSAND THREE HUNDRED SIXTY AND NO /100 DOLLARS ($155,360.00), pursuant to the Agreement. Section 3: This ordinance shall take effect immediately from and after its passage by the City Council of the City of Baytown. INTRODUCED, READ and PASSED by the affirmative vote of the City Council of the City of Baytown this the i 01h day of September, 1998. /!�� P� PETE C. ALFARO, Mayor ATTEST: EILEEN P. HA4, City Clerk APPROVED AS TO FORM: q4t4��o /'&�l _a�4 ACIO RAMIREZ, SR., t ttorney cAMy Doc uments\ Council) Meetings \September\RenewTPAOrdinance I O.doc n El &Hlbl , ti • is ADMINISTRATION SERVICE AGREEMENT THIS AGREEMENT, made and executed the 1st day of October, 1998, by and between City of Baytown (the "Plan Sponsor ") and InterCare Health Plans, a Colorado Corporation having its principal office located at 5500 Greenwood Plaza Blvd., #105, Englewood, CO. (the "Contract Administrator "). RECITALS The Plan Sponsor maintains the Health Benefit Plan (the "Plan ") for the benefit of its eligible employees. The Plan Sponsor desires to arrange for the performance of all administrative services required for the maintenance of the Plan. In addition, the Plan Sponsor desires to obtain advisory and consulting services related to its maintenance of the Plan and changes to the Plan. The Contract Administrator is engaged in the business of performing employee benefit administration and related advisory and consulting services. AGREEMENTS NOW THEREFORE, in consideration of the premises and the mutual covenants, and agreements hereinafter set forth, the parties hereto, intending to be legally bound hereby, agree as follows: 1. The Plan Sponsor hereby engages the services of the Contract Administrator to provide administration services for the Plan, and advisory and consulting services related to the Plan and changes to the Plan. 2. Services to be Performed. The Contract Administrator shall perform for the Plan Sponsor administrative services in conjunction with the administration and operation of the Plan. In addition, the Contract Administrator shall perform advisory and consulting services related to the Plan and changes to the Plan. The administrative, advisory and consulting services to be performed by the Contract Administrator include those services set forth in Exhibit A, Exhibit B and Exhibit C, attached hereto, and by this reference those Exhibits are incorporated into and made a part of this Agreement. (a) The Contract Administrator shall maintain and operate an administrative office through which it will perform the services to be provided for under this Agreement and it shall pay all normal costs and expenses related to the maintenance and operation of that office (except as herein set forth). Rcv. 6197 2 11k11 W !l9LTrADP • (b) The Contract Administrator shall employ a sufficient staff of employees, or otherwise provide for, subject to the limitations on assignment provided under this Agreement, to perform the services required of the Contract Administrator under this Agreement. The Contract Administrator, however, will not provide or be responsible for the expense or cost of legal counsel, actuaries, consulting physicians or dentists, certified public accountants, investment counselors, investment analysts or similar type services (each a "Professional Consultant ") for the Plan or the Plan Sponsor. The Contract Administrator shall not be authorized to engage any Professional Consultant to be paid or reimbursed by the Plan Sponsor without written consent of the Plan Sponsor. If a Professional Consultant is engaged by the Contract Administrator at the request of the Plan Sponsor, the Professional Consultant shall not be deemed the agent of the Contract Administrator and the Plan Sponsor shall be responsible for any cost and expense of the Professional Consultant. (c) The administrative services to be performed by the Contract Administrator pursuant to this Agreement shall be ministerial only, and shall be performed within the framework of policies, interpretations, rules, practices and procedures made or established by the Plan Sponsor. The Contract Administrator shall not have discretionary authority to exercise any control respecting management of any trust fund and shall not have authority to exercise any control respecting management or disposition of the assets of any trust fund and shall not render investment advice with respect to any money or other property of any trust fund. 3. Records and Files. The Contract Administrator shall maintain all records in conjunction with the administrative services to be performed hereunder. The confidentiality of those records shall be maintained by the Contract Administrator and the information therein shall not be disclosed or made available to persons other than the Plan Sponsor without the prior written approval of the Plan Sponsor or a court of competent jurisdiction. If this Agreement is terminated, the Contract Administrator shall deliver to the Plan Sponsor the information on all claim histories for the two (2) years preceding the termination date, provided the Plan Sponsor gives written direction to the Contract Administrator to make the transfer. The transfer shall occur at a mutually agreeable time, but not to exceed one month from the date of notice of the termination of this Agreement. The claim histories will be provided on the standard format then available. The Contract Administrator shall also deliver additional information requested by the Plan Sponsor subsequent to the termination of this Agreement. Rcv.6197 3 INNIMCARE 11 4. Liabilities and Obligations. The Contract Administrator shall have no responsibility, risk, liability or obligation for the funding of the Plan. The responsibility and obligation for funding the Plan shall be the liability solely of the persons or entities as provided in the Plan. (a) The Contract Administrator shall have no responsibility or obligation to take, or to provide for, action, legal or otherwise, against any employer or employees or other persons to enforce provisions of the Plan. (b) The Contract Administrator shall not be responsible or obligated for the investment of any assets or funds of the Plan. However, the Contract Administrator agrees to prepare and maintain records of the investment of the assets or funds of the Plan if the Plan Sponsor requests the Contract Administrator to do so and provides the information and documents necessary to prepare and maintain those records. (c) The Contract Administrator will process and pay benefits in accordance with the Plan and policies adopted by the Plan Sponsor. The Contract Administrator will incorporate sound business practices and be responsible for reasonable internal audits. Where an overpayment is made, the Contract Administrator shall use reasonable efforts to recover the overpayment, but will not be required to initiate legal process. (d) The Contract Administrator will timely assist the Plan Sponsor in the preparation and distribution of summary plan descriptions for the Plan required under the Employee Retirement Income Security Act of 1974 ( "ERISA "), as amended. (e) The Contract Administrator shall implement written policies and procedures which may be given by the Plan Sponsor, provided that the instructions are consistent and compatible with the Plan and the description of services to be performed by the Contract Administrator under this Agreement, and are not in violation of, or contrary to, any laws or regulations, including but not limited to ERISA. (f) If requested by the Plan Sponsor, the Contract Administrator will administer continuation of coverage ( "COBRA ") under 4980B of the Internal Revenue Code (the "Code ") as follows: The Plan Sponsor will notify the Contract Administrator of all employee terminations and COBRA qualifying events for plan participants. Upon receipt of this information, the Contract Administrator will: (i) Send by certified mail an election letter for continuation of medical benefits under COBRA to the terminated employee or plan participant. If the employee has dependent coverage, an election letter will also be sent to the dependents. Letters will be sent to the last known address. (ii) Receive and record the returned election letter signed by the terminated employee or ® plan participant. Rev. 6/97 Cl IIkb1M:1:TrAPip: • n (iii) Receive all COBRA participant monthly payments and deposit into the Plan Sponsor's fund account. (iv) Monitor COBRA participant status monthly, terminating coverage if COBRA participant fails to remit payment within thirty (30) days from the due date. (v) Notify the COBRA participants sixty (60) to ninety (90) days prior to the end of their coverage. 5. Independent Contractor. The Contract Administrator is engaged to perform services under this Agreement as an independent contractor. 6. Reliance. The Contract Administrator shall be entitled to rely upon written notices or instructions given by the Plan Sponsor to the Contract Administrator. 7. Term. The initial term of this Agreement shall be the one year period beginning October 1, 1998. Should the Contract Administrator, at the end of the initial term or any subsequent term, desire to renew the Agreement under the same terms and conditions contained herein, the Contract Administrator shall request such renewal in writing at lease sixty (60) days prior to the end of the applicable term for the City's approval. If either party desires to extend this Agreement but with amendments, including an increase in the fees stated in paragraph 8, the party desiring the amendment shall provide written notice of the desired amendment to the other party. The notice shall be given at least sixty (60) days in advance of the end of the then current one -year term. If the parties agree in writing to the amendments before the end of the then current one year term, the Agreement, as amended, shall be continued for an additional one year term beginning with the day following the end of the then current one year term. Either party shall have the right to terminate this Agreement for any reason by notifying the other party in writing. The notice shall be given at least sixty (60) days in advance of the end of desired termination date. If this Agreement is to be ten- ninated, but the parties agree that the Contract Administrator is to continue to process claims which were incurred under the Plan prior to the end of this Agreement, this Agreement shall be continued for a final term of less than one year as determined by the parties (a "Short Term ") with fees to be calculated as provided for in Paragraph 8, below. If the Contract Administrator reasonable and in good faith believes that the Plan assets are insufficient to meet the Plan Sponsor's obligation under the Plan and can provide proof of the same, the Contract Administrator may after providing notice in writing to the Plan Sponsor of such insufficiency and proof thereof, and after providing the Plan Sponsor a thirty (30) day Rev. 6/97 E I WIN 1:0 *ZCARE 0 • period in which to cure such insufficiency, the Contract Administrator may terminate this Agreement upon sixty (60) days' written notice of its intent to terminate the Agreement, which may not be sent until the expiration of the Plan Sponsor's opportunity to cure has expired. The Contract Administrator will have no further responsibility or obligation hereunder after the termination of this Agreement and tendering all of the documents concerning, in any way, the Plan to the Plan Sponsor. Service Fees. The Plan Sponsor shall pay to the Contract Administrator for the services to be performed hereunder the following fees: N/A (a) An initial one -time set up fee (b) Monthly fee of $10.10 medical; $1.60 dental per participating employee to be covered by the Plan during the month. (c) Pre - certification and Medical Management fee $7..90 per employee per month. (d) Monthly COBRA administration fees of $0.25 per employee, per month plus $10.00 per continuing COBRA participant per month. (e) HIPAA certification letter fee of $4.00 per letter. The Contract Administrator shall provide a monthly statement to the Plan Sponsor of the above fees and deduct the amount from the Plan account on or after the 30th' day of each month based upon eligible employee enrollment as of the first of the month. If the Plan's assets are insufficient, or if the Plan Sponsor does not submit to the Contract Administer the information necessary to determine the amount of the fees, interest will be charged on the fees due to the Contract Administrator at the rate of one percent (1 %) per month, simple interest until the Contract Administrator's fees are paid. All ongoing printing costs not specifically included in the set -up fee, including, but not limited to, the printing or reprinting of ID cards, summary plan description booklets, custom checks, custom claim forms, custom enrollment cards or any other custom printing, are the responsibility of the Plan Sponsor. 110.00 RCARE • v The fees for printing or reprinting ID cards are as follows: 1 - 500 cards - $1.00 per card, minimum $100.00 501 - 1,000 cards - $0.75 per card 1,001 or more cards - $0.55 per card Note: Number of ID cards printed or reprinted is at least 2%2 times enrollment. The fees for restating current or prior plan documents or summary plan descriptions is also the responsibility of the Plan Sponsor. The fees are per book, as follows: Minimum Changes (a simple addition of wording, or a change that is specific to one section or statement contained in the document) - $50.00 - $75.00 Restatement (a change or changes that impact more than one area of the document, where multiple sections need to be referred to and/or changed)- $250.00 - $500.00 Printing - Printer charges only The fees for preparing amendments are as follows: Single Amendment - $35.00 Multiple Amendments (prepared at the same time) - $50.00 If this Agreement is effective for a short term as provided for under paragraph 7, above, the fees for the Contract Administrator's services shall be; as agreed to by the parties, based on the average of fees during the last two (2) months of the immediately preceding one year term of this Agreement (the "Average Fees "), as follows: % of the Average Fees 100% 75% 50% 25% Months After the Immediately Precedin; One Year Term 1st 2nd 3rd 4th* Each month thereafter until the short term ends, as determined by the parties, or until no further claims are processed, if earlier. 9. The Contract Administrator may receive compensation in the form of commission from the various reinsurance carriers involved in the plan which may be disclosed through the form 5500 or upon request of the Plan Sponsor in writing. Rev, 6197 IIsII��EC"ARE • The Contract Administrator may receive additional compensation from the Insurer in the form of a production bonus, override commissions or a profit sharing arrangement. Such compensation is based upon the Contract Administrator's potential volume of business with the Insurer, the overall profitability of the business or other similar factors. The amount of such additional compensation, if any, will not be known until the end of the agreement period with the Insurer. Information regarding such additional compensation, insofar as it relates to the Plan, will be available for the Plan fiduciaries' review after such amount has been determined. These various compensations are for services such as consulting, underwriting, reporting, acting as agent or broker, etc., and other additional services to routine plan administration. 10. Relationship to Insurer: The Contract Administrator is not an affiliate of the Insurer. The Contract Administrator is not limited by any agreement with the Insurer in its ability to recommend the purchase of insurance products from other insurers or funding organizations. The Contract Administrator is independent of any Insurer it may recommend or with whom it may contract. InterCare Health Plans will maintain an underwriting department which will assist the plan sponsor with location and placement of the appropriate insurance coverages for the plan needs. The cost of salaries and other expenses will not be the responsibility of the plan sponsor but will be paid by the various overrides or commissions paid by the Insurer. 11. Relationship to Plan: To avoid a possible prohibited transaction under the Employee Retirement Income Security Act of 1974 ( "ERISA "), InterCare Health Plans may not be: (a) Affiliated with the Plan Sponsor or any other employer who has employees covered by the Plan. (b) A Plan Trustee (other than a nondiscretionary trustee who does not render investment advice concerning Plan assets). (c) A named Plan Administrator. (d) A named Plan Fiduciary or other fiduciary who is expressly authorized in writing to manage, acquire or dispose of Plan assets on a discretionary basis. 12. Indemnification. CONTRACT ADMINISTRATOR HEREBY AGREES TO INDEMNIFY, HOLD HARMLESS, PROTECT AND DEFEND PLAN SPONSOR, ITS OFFICERS, AGENTS, AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS AND LIABILITY OF EVERY KIND, INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS AND ATTORNEYS' FEES, FOR ANY INJURY TO ANY PERSON OR FOR DAMAGE TO ANY PROPERTY Rev. 6/97 IDhNI MI N rrARF • LJ INCURRED IN CONNECTION WITH ALL CLAIMS, INCLUDING ANY ACTION OR PROCEEDINGS THROUGHOUT, THEREON, ARISING FROM, AS A RESULT OF, OR N ANY WAY RELATED TO SERVICES REQUIRED HEREIN, WHERE SUCH NJ DRIES OR DAMAGES ARE CAUSED BY THE JOINT NEGLIGENCE OF PLAN SPONSOR, ITS OFFICERS, AGENTS AND /OR EMPLOYEES, AND /OR BY THE JOINT OR SOLE NEGLIGENCE OF CONTRACT ADMINISTRATOR. IT IS THE EXPRESS INTENTION OF BOTH PLAN SPONSOR AND CONTRACT ADMINISTRATOR THAT THE INDEMNITY PROVIDED FOR N THIS PARAGRAPH IS AN INDEMNITY BY CONTRACT ADMINISTRATOR TO INDEMNIFY, HOLD HARMLESS, PROTECT, AND DEFEND PLAN SPONSOR, ITS OFFICERS, AGENTS AND EMPLOYEES FROM (I) THE CONSEQUENCES OF THE NEGLIGENCE OF PLAN SPONSOR, ITS OFFICERS, AGENTS AND /OR EMPLOYEES, WHERE THAT NEGLIGENCE IS A CONCURRING CAUSE WITH THAT OF CONTRACT ADMINISTRATOR, ITS OFFICERS, AGENTS, AND /OR EMPLOYEES OF THE INJURY OR DAMAGE AND /OR (II) CONTRACT ADMINISTRATOR'S OFFICERS', AGENTS', AND /OR EMPLOYEES' JOINT AND /OR SOLE NEGLIGENCE. FURTHERMORE, THE INDEMNITY PROVIDED FROM THIS PARAGRAPH SHALL HAVE NO APPLICATION TO ANY CLAIM, LOSS, DAMAGE, CAUSE OF ACTION, SUIT OR LIABILITY WHERE THE INJURY, DEATH OR DAMAGE RESULTS FROM THE SOLE NEGLIGENCE OF PLAN SPONSOR. N THE EVENT THAT ANY ACTION OR PROCEEDING IS BROUGHT AGAINST THE PLAN SPONSOR BY REASON OF ANY OF THE ABOVE, CONTRACT ADMINISTRATOR FURTHER AGREES AND COVENANTS TO DEFEND THE ACTION OR PROCEEDING BY LEGAL COUNSEL ACCEPTABLE TO THE PLAN SPONSOR. 13. Plan Amendments. The Plan Sponsor shall, subject to pre - approval, reimburse the Contract Administrator for any additional reasonable expenses incurred by the Contract Administrator, including additional programming, reporting or service costs, resulting from a change in the Plan. 14. Other applicable Agreements. The Plan, by this reference, is incorporated into and made a part of this Agreement. 15. Assignment. This Agreement shail not be assigned by the Contract Administrator (including a delegation of the Contract Administrator's duties, obligations or responsibilities hereunder) to any other person or entity without the prior written approval of the Plan Sponsor, which may be withheld for any reason. This Agreement shall bind and inure to the successors and assigns of the Plan Sponsor; but no assignment shall relieve the Plan Sponsor of its obligations hereunder without the written consent of the Contract Administrator. Rev. 6/97 9 IW��f��sEi�Hl[r 0 Contract Administrator shall comply with all rules, regulations, and laws of the United States of America, the State of Texas, and all laws, regulations and ordinances of the City of Baytown as they now exist or may hereafter be enacted or amended. The Contract Adminsitrator shall use reasonable care and diligence in the exercise of its powers and the performance of its duties as Contract Administrator hereunder. If any payment is made hereunder to an ineligible employee or dependent, or if it is determined that more or less than the correct amount has-been paid to the Administrator regardless of whether such error resulted from the fault of the Contract Administrator or the Plan Sponsor, the Contract Adminsitrator shall use its best efforts to recover the payment made to an ineligible person or an overpayment or will adjust the underpayment. It is expressly agreed and understood by all parties hereto that Contract Administrator is an independent contractor in its relationship to the City. Nothing herein contained at any time or in any manner shall be construed to effect a contract of partnership or joint venture or render any party hereto the employer or master of any other party and/or its employees, agents or representatives. All necessary personnel shall be deemed employees of Contract Administrator. The City, besides all other rights or remedies it may have, shall have the right to terminate this Contract with or without cause upon ten (10) days' written notice from the City Manager to Contract Administrator of the City's election to do so. Furthermore, the City may immediately and without notice terminate this Contract if Contract Administrator breaches this Contract. A breach of this Contract shall include, but not be limited to, the following: failing to pay any payments due the City, State or Federal Government from Contract Administrator or its principals, including, but not limited to, any taxes, fees, assessments, liens, or any payments identified in this Contract; the institution of voluntary or involuntary bankruptcy proceeding against Contract Administrator; the dissolution of Contract Administrator; q. the violation of any provision of this Contract; and/or 5. the abandonment of the Contract or any portion thereof and discontinuance of Contract Administrator's services or any portion thereof. Upon delivery of any notice of termination required herein, Contract Administrator shall discontinue all services in connection with the performance of the Contract. Within ten (10) days after receipt of the notice of termination, Contract Administrator shall refund any monies prepaid by the City prorated to the date of the termination. ® All notices required to be given hereunder shall be given in writing either by telecopier, overnight, Rev. 6/97 10 1160M RCARE or facsimile transmission, certified or registered mail at the respective addresses of the parties set forth herein or at such other address as may be designated in writing by either party. Notice given by mail shall be deemed given three (3) days after the date of mailing thereof to the following addresses: CONTRACT ADMINISTRATOR InterCare Health Plans Attn: James M. Beardall, President 5500 Greenwood Plaza Blvd. Suite 100 Englewood CO 80111 Fax: (303) 770 -2743 CITY City of Baytown Attn: City Manager P.O. Box 424 Baytown TX 77522 Fax: (281) 420 -6586 Failure of either party hereto to insist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder to exercise any right or remedy occurring as a result of any future default or failure of performance. This Contract shall in all respects be interpreted and construed in accordance with and governed by the laws of the State of Texas, regardless of the place of its execution or performance. The place of making and the place of performance for all purposes shall be Baytown, Harris County, Texas. All parties agree that should any provision of this Contract be determined to be invalid or unenforceable, such determination shall not affect any other terns of this Contract, which continue in frill force and effect. This Contract contains all the agreements of the parties relating to the subject matter hereof and is the full and final expression of the agreement between the parties. This Contract shall not be amended or modified without the express written consent of both parties hereto. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and said counterpart shall constitute but one and the same instrument. The officers executing this Contract on behalf of the parties hereby represent that such officers have full authority to execute this Contract and to bind the party he /she represents. Rev. 6/97 11 IOk19 itlI err ADP: • r: IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed and delivered this Agreement as of the date first written above. City of Baytown Date By C� q l ! 9 InterCare Health Plans Date Rev. 6/97 12 I16'! 11:3:RCARE • 0 EXHIBIT A ADMINISTRATIVE SERVICES TO BE PROVIDED BY InterCare Health Plans 1. Provide an automated computer system for the processing of health claims. 2. Furnish standard administrative internal forms to include: (a) Standard Explanation of Benefits (b) Standard Enrollment Form (c) Standard Claim Form 3. Coordinate with the Plan Sponsor the custom designing and printing of other supplies and documents, including but not limited to the following: (a) Bank Drafts or Checks and Deposit Slips (b) Employee Identification Cards (c) Employee Plan Booklets 4. Provide a standard monthly premium billing statement for the Plan, satisfactory to meet the needs of the Plan Sponsor. 5. Coordinate the determination and reporting of employee eligibility with the Plan Sponsor. G. Provide Customer Service for the Plan Sponsor's employees. 7. Review, coordinate and process all claims in accordance with policies, guidelines and directions of the Plan Sponsor. Prepare all checks or drafts for disbursements from the Plan with documentation to support these disbursements. 8. Assemble materials for an administrative review of denied claims. Rev. 6197 13 IILI 1r:4t(CARE • n EXHIBIT A (continued) 9. Provide claims analysis reports. Monthly Reports: (a) Claims Experience Report (b) Monthly Plan Funding Report (c) Monthly Check Register Special Reports (no additional cost): Name of Report Frequency (a) As requested by the Plan Sponsor. (b) (c) 10. Assemble appropriate renewal documentation and financial analysis. 11. Provide the necessary data for ERISA reports and filings for submission by the Plan Sponsor. 12. Attend meetings with the Plan Sponsor as necessary for proper administration of the Plan. Rev. 6/97 14 I1�b��I:ZC�AI?F I• t. EXHIBIT B ADVISORY AND CONSULTING SERVICES TO BE PROVIDED BY InterCare Health Plans 1. Advise and assist in the design of custom administrative forms. 2. Make recommendations and suggestions to the Plan Sponsor on any problems that may arise in relation to the Plan. 3. Advise as to the employee and employer contribution levels. 4. Provide evaluation and underwriting services related to Plan provisions, changes and renewals. 5. Advise the Plan Sponsor concerning the financial status of the Plan to assure proper accumulation of reserves. 6. Provide medical cost data and analyze medical cost trends which would aid in Plan benefit design changes. 7. Coordinate with Plan Sponsor's legal counsel and others regarding ERISA requirements. 8. Assemble competitive bidding information on insured elements of the Plan. Rey-. 6/97 15 II�1,0r:4:ZCARE � 0 • EXHIBIT C UTILIZATION REVIEW SERVICES TO BE PROVIDED BY InterCare Health Plans 1. Pre - Admission Review - Inpatient, Outpatient (a) Confirm medical necessity (b) Assign length of stay (c) Request second surgical opinion (d) Recommend alternative health care where appropriate (e) Recommend same day surgery 2. Concurrent Review/Retrospective Review (a) Confirm and monitor the treatment plan. 3. Discharge Planning 4. Second Surgical Opinion Rev. 6/97 16 ADMINISTRATION SERVICE AGREEMENT PLAN SPONSOR: City of Baytown CONTRACT ADMINISTRATOR: InterCare Health Plans October 1998 IINUI CARE ADMINISTRATION SERVICE AGREEMENT THIS AGREEMENT, made and executed the 1st day of October, 1998, by and between City of Baytown (the "Plan Sponsor") and InterCare Health Plans, a Colorado Corporation having its principal office located at 5500 Greenwood Plaza Blvd., #105, Englewood, CO. (the "Contract Administrator"). RECITALS The Plan Sponsor maintains the Health Benefit Plan (the "Plan") for the benefit of its eligible employees. The Plan Sponsor desires to arrange for the performance of all administrative services required for the maintenance of the Plan. In addition,the Plan Sponsor desires to obtain advisory and consulting services related to its maintenance of the Plan and changes to the Plan. The Contract Administrator is engaged in the business of performing employee benefit administration and related advisory and consulting services. AGREEMENTS NOW THEREFORE, in consideration of the premises and the mutual covenants, and agreements hereinafter set forth, the parties hereto, intending to be legally bound hereby, agree as follows: 1. The Plan Sponsor hereby engages the services of the Contract Administrator to provide administration services for the Plan, and advisory and consulting services related to the Plan and changes to the Plan. 2. Services to be Performed. The Contract Administrator shall perform for the Plan Sponsor administrative services in conjunction with the administration and operation of the Plan. In addition, the Contract Administrator shall perform advisory and consulting services related to the Plan and changes to the Plan. The administrative, advisory and consulting services to be performed by the Contract Administrator include those services set forth in Exhibit A, Exhibit B and Exhibit C, attached hereto, and by this reference those Exhibits are incorporated into and made a part of this Agreement. a) The Contract Administrator shall maintain and operate an administrative office through which it will perform the services to be provided for under this Agreement and it shall pay all normal costs and expenses related to the maintenance and operation of that office except as herein set forth). Rev.6/97 2 II.IIE(CARE b) The Contract Administrator shall employ a sufficient staff of employees, or otherwise provide for, subject to the limitations on assignment provided under this Agreement, to perform the services required of the Contract Administrator under this Agreement. The Contract Administrator,however,will not provide or be responsible for the expense or cost of legal counsel, actuaries, consulting physicians or dentists, certified public accountants, investment counselors, investment analysts or similar type services (each a "Professional Consultant") for the Plan or the Plan Sponsor. The Contract Administrator shall not be authorized to engage any Professional Consultant to be paid or reimbursed by the Plan Sponsor without written consent of the Plan Sponsor. If a Professional Consultant is engaged by the Contract Administrator at the request of the Plan Sponsor,the Professional Consultant shall not be deemed the agent of the Contract Administrator and the Plan Sponsor shall be responsible for any cost and expense of the Professional Consultant. c) The administrative services to be performed by the Contract Administrator pursuant to this Agreement shall be ministerial only, and shall be performed within the framework of policies, interpretations, rules, practices and procedures made or established by the Plan Sponsor. The Contract Administrator shall not have discretionary authority to exercise any control respecting management of any trust fund and shall not have authority to exercise any control respecting management or disposition of the assets of any trust fund and shall not render investment advice with respect to any money or other property of any trust fund. 3. Records and Files. The Contract Administrator shall maintain all records in conjunction with the administrative services to be performed hereunder. The confidentiality of those records shall be maintained by the Contract Administrator and the information therein shall not be disclosed or made available to persons other than the Plan Sponsor without the prior written approval of the Plan Sponsor or a court of competent jurisdiction. If this Agreement is terminated, the Contract Administrator shall deliver to the Plan Sponsor the information on all claim histories for the two (2) years preceding the termination date, provided the Plan Sponsor gives written direction to the Contract Administrator to make the transfer. The transfer shall occur at a mutually agreeable time, but not to exceed one month from the date of notice of the termination of this Agreement. The claim histories will be provided on the standard format then available. The Contract Administrator shall also deliver additional information requested by the Plan Sponsor subsequent to the termination of this Agreement. Rev.6/97 3 II0II LZCARE 4. Liabilities and Obligations. The Contract Administrator shall have no responsibility, risk, liability or obligation for the funding of the Plan. The responsibility and obligation for funding the Plan shall be the liability solely of the persons or entities as provided in the Plan. a) The Contract Administrator shall have no responsibility or obligation to take, or to provide for, action, legal or otherwise, against any employer or employees or other persons to enforce provisions of the Plan. b) The Contract Administrator shall not be responsible or obligated for the investment of any assets or funds of the Plan. However, the Contract Administrator agrees to prepare and maintain records of the investment of the assets or funds of the Plan if the Plan Sponsor requests the Contract Administrator to do so and provides the information and documents necessary to prepare and maintain those records. c) The Contract Administrator will process and pay benefits in accordance with the Plan and policies adopted by the Plan Sponsor. The Contract Administrator will incorporate sound business practices and be responsible for reasonable internal audits. Where an overpayment is made, the Contract Administrator shall use reasonable efforts to recover the overpayment,but will not be required to initiate legal process. d) The Contract Administrator will timely assist the Plan Sponsor in the preparation and distribution of summary plan descriptions for the Plan required under the Employee Retirement Income Security Act of 1974 ("ERISA"), as amended. e) The Contract Administrator shall implement written policies and procedures which may be given by the Plan Sponsor,provided that the instructions are consistent and compatible with the Plan and the description of services to be performed by the Contract Administrator under this Agreement, and are not in violation of, or contrary to, any laws or regulations, including but not limited to ERISA. f) If requested by the Plan Sponsor, the Contract Administrator will administer continuation of coverage ("COBRA") under 4980B of the Internal Revenue Code (the "Code") as follows: The Plan Sponsor will notify the Contract Administrator of all employee terminations and COBRA qualifying events for plan participants. Upon receipt of this information, the Contract Administrator will: i) Send by certified mail an election letter for continuation of medical benefits under COBRA to the terminated employee or plan participant. If the employee has dependent coverage, an election letter will also be sent to the dependents. Letters will be sent to the last known address. ii) Receive and record the returned election letter signed by the terminated employee or plan participant. Rev.6/97 4 IIIIII (CARE iii) Receive all COBRA participant monthly payments and deposit into the Plan Sponsor's fund account. iv) Monitor COBRA participant status monthly, terminating coverage if COBRA participant fails to remit payment within thirty(30) days from the due date. v) Notify the COBRA participants sixty(60)to ninety(90) days prior to the end of their coverage. 5. Independent Contractor. The Contract Administrator is engaged to perform services under this Agreement as an independent contractor. 6. Reliance. The Contract Administrator shall be entitled to rely upon written notices or instructions given by the Plan Sponsor to the Contract Administrator. 7. Term. The initial term of this Agreement shall be the one year period beginning October 1, 1998. Should the Contract Administrator, at the end of the initial term or any subsequent term, desire to renew the Agreement under the same terms and conditions contained herein, the Contract Administrator shall request such renewal in writing at lease sixty(60)days prior to the end of the applicable term for the City's approval. If either party desires to extend this Agreement but with amendments, including an increase in the fees stated in paragraph 8, the party desiring the amendment shall provide written notice of the desired amendment to the other party. The notice shall be given at least sixty(60) days in advance of the end of the then current one-year term. If the parties agree in writing to the amendments before the end of the then current one year term,the Agreement, as amended, shall be continued for an additional one year term beginning with the day following the end of the then current one year term. Either party shall have the right to terminate this Agreement for any reason by notifying the other party in writing. The notice shall be given at least sixty(60) days in advance of the end of desired termination date. If this Agreement is to be terminated,but the parties agree that the Contract Administrator is to continue to process claims which were incurred under the Plan prior to the end of this Agreement, this Agreement shall be continued for a final term of less than one year as determined by the parties (a "Short Term") with fees to be calculated as provided for in Paragraph 8,below. If the Contract Administrator reasonable and in good faith believes that the Plan assets are insufficient to meet the Plan Sponsor's obligation under the Plan and can provide proof of the same, the Contract Administrator may after providing notice in writing to the Plan Sponsor of such insufficiency and proof thereof, and after providing the Plan Sponsor a thirty (30) day Rev.6/97 5 II►II RCARE period in which to cure such insufficiency, the Contract Administrator may terminate this Agreement upon sixty(60) days' written notice of its intent to terminate the Agreement,which may not be sent until the expiration of the Plan Sponsor's opportunity to cure has expired. The Contract Administrator will have no further responsibility or obligation hereunder after the termination of this Agreement and tendering all of the documents concerning, in any way,the Plan to the Plan Sponsor. 8. Service Fees. The Plan Sponsor shall pay to the Contract Administrator for the services to be performed hereunder the following fees: N/A(a) An initial one-time set up fee b) Monthly fee of$10.10 medical; $1.60 dental per participating employee to be covered by the Plan during the month. c) Pre-certification and Medical Management fee $7..90 per employee per month. d) Monthly COBRA administration fees of$0.25 per employee, per month plus $10.00 per continuing COBRA participant per month. e) HIPAA certification letter fee of$4.00 per letter. The Contract Administrator shall provide a monthly statement to the Plan Sponsor of the above fees and deduct the amount from the Plan account on or after the 30th' day of each month based upon eligible employee enrollment as of the first of the month. If the Plan's assets are insufficient, or if the Plan Sponsor does not submit to the Contract Administer the information necessary to determine the amount of the fees, interest will be charged on the fees due to the Contract Administrator at the rate of one percent (1%) per month, simple interest until the Contract Administrator's fees are paid. All ongoing printing costs not specifically included in the set-up fee, including,but not limited to, the printing or reprinting of ID cards, summary plan description booklets, custom checks, custom claim forms, custom enrollment cards or any other custom printing, are the responsibility of the Plan Sponsor. Rev.6/97 6 NIIIMRCARE The fees for printing or reprinting ID cards are as follows: 1 - 500 cards - $1.00 per card,minimum $100.00 501 - 1,000 cards - $0.75 per card 1,001 or more cards - $0.55 per card Note: Number of ID cards printed or reprinted is at least 2%2 times enrollment. The fees for restating current or prior plan documents or summary plan descriptions is also the responsibility of the Plan Sponsor. The fees are per book, as follows: Minimum Changes (a simple addition of wording, or a change that is specific to one section or statement contained in the document) - $50.00 - $75.00 Restatement (a change or changes that impact more than one area of the document, where multiple sections need to be referred to and/or changed)- $250.00 - $500.00 Printing - Printer charges only The fees for preparing amendments are as follows: Single Amendment- $35.00 Multiple Amendments (prepared at the same time) - $50.00 If this Agreement is effective for a short term as provided for under paragraph 7,above,the fees for the Contract Administrator's services shall be, as agreed to by the parties, based on the average of fees during the last two (2)months of the immediately preceding one year term of this Agreement (the "Average Fees"), as follows: Months After the Immediately of the Average Fees Preceding One Year Term 100% 1st 75% 2nd 50% 3rd 25% 4th* Each month thereafter until the short term ends, as determined by the parties, or until no further claims are processed, if earlier. 9. The Contract Administrator may receive compensation in the form of commission from the various reinsurance carriers involved in the plan which may be disclosed through the form 5500 or upon request of the Plan Sponsor in writing. Rev.6/97 7 I12Irm(CARE The Contract Administrator may receive additional compensation from the Insurer in the form of a production bonus, override commissions or a profit sharing arrangement. Such compensation is based upon the Contract Administrator's potential volume of business with the Insurer, the overall profitability of the business or other similar factors. The amount of such additional compensation, if any,will not be known until the end of the agreement period with the Insurer. Information regarding such additional compensation, insofar as it relates to the Plan,will be available for the Plan fiduciaries'review after such amount has been determined. These various compensations are for services such as consulting, underwriting, reporting, acting as agent or broker, etc., and other additional services to routine plan administration. 10. Relationship to Insurer: The Contract Administrator is not an affiliate of the Insurer. The Contract Administrator is not limited by any agreement with the Insurer in its ability to recommend the purchase of insurance products from other insurers or funding organizations. The Contract Administrator is independent of any Insurer it may recommend or with whom it may contract. InterCare Health Plans will maintain an underwriting department which will assist the plan sponsor with location and placement of the appropriate insurance coverages for the plan needs. The cost of salaries and other expenses will not be the responsibility of the plan sponsor but will be paid by the various overrides or commissions paid by the Insurer. 11. Relationship to Plan: To avoid a possible prohibited transaction under the Employee Retirement Income Security Act of 1974 ("ERISA"), InterCare Health Plans may not be: a) Affiliated with the Plan Sponsor or any other employer who has employees covered by the Plan. b) A Plan Trustee (other than a nondiscretionary trustee who does not render investment advice concerning Plan assets). c) A named Plan Administrator. d) A named Plan Fiduciary or other fiduciary who is expressly authorized in writing to manage, acquire or dispose of Plan assets on a discretionary basis. 12. Indemnification. CONTRACT ADMINISTRATOR HEREBY AGREES TO INDEMNIFY, HOLD HARMLESS, PROTECT AND DEFEND PLAN SPONSOR, ITS OFFICERS, AGENTS, AND EMPLOYEES FROM AND AGAINST ANY AND ALL CLAIMS, LOSSES, DAMAGES, CAUSES OF ACTION, SUITS AND LIABILITY OF EVERY KIND, INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS AND ATTORNEYS' FEES,FOR ANY INJURY TO ANY PERSON OR FOR DAMAGE TO ANY PROPERTY Rev.6/97 8 II0IME:(CARE INCURRED IN CONNECTION WITH ALL CLAIMS, INCLUDING ANY ACTION OR PROCEEDINGS THROUGHOUT,THEREON,ARISING FROM,AS A RESULT OF,OR IN ANY WAY RELATED TO SERVICES REQUIRED HEREIN, WHERE SUCH INJURIES OR DAMAGES ARE CAUSED BY THE JOINT NEGLIGENCE OF PLAN SPONSOR,ITS OFFICERS,AGENTS AND/OR EMPLOYEES,AND/OR BY THE JOINT OR SOLE NEGLIGENCE OF CONTRACT ADMINISTRATOR. IT IS THE EXPRESS INTENTION OF BOTH PLAN SPONSOR AND CONTRACT ADMINISTRATOR THAT THE INDEMNITY PROVIDED FOR IN THIS PARAGRAPH IS AN INDEMNITY BY CONTRACT ADMINISTRATOR TO INDEMNIFY, HOLD HARMLESS, PROTECT, AND DEFEND PLAN SPONSOR,ITS OFFICERS, AGENTS AND EMPLOYEES FROM I) THE CONSEQUENCES OF THE NEGLIGENCE OF PLAN SPONSOR, ITS OFFICERS, AGENTS AND/OR EMPLOYEES, WHERE THAT NEGLIGENCE IS A CONCURRING CAUSE WITH THAT OF CONTRACT ADMINISTRATOR, ITS OFFICERS,AGENTS,AND/OR EMPLOYEES OF THE INJURY OR DAMAGE AND/OR II)CONTRACT ADMINISTRATOR'S OFFICERS',AGENTS',AND/OR EMPLOYEES' JOINT AND/OR SOLE NEGLIGENCE. FURTHERMORE, THE INDEMNITY PROVIDED FROM THIS PARAGRAPH SHALL HAVE NO APPLICATION TO ANY CLAIM, LOSS, DAMAGE, CAUSE OF ACTION, SUIT OR LIABILITY WHERE THE INJURY,DEATH OR DAMAGE RESULTS FROM THE SOLE NEGLIGENCE OF PLAN SPONSOR. IN THE EVENT THAT ANY ACTION OR PROCEEDING IS BROUGHT AGAINST THE PLAN SPONSOR BY REASON OF ANY OF THE ABOVE, CONTRACT ADMINISTRATOR FURTHER AGREES AND COVENANTS TO DEFEND THE ACTION OR PROCEEDING BY LEGAL COUNSEL ACCEPTABLE TO THE PLAN SPONSOR. 13. Plan Amendments. The Plan Sponsor shall, subject to pre-approval, reimburse the Contract Administrator for any additional reasonable expenses incurred by the Contract Administrator, including additional programming, reporting or service costs, resulting from a change in the Plan. 14. Other applicable Agreements. The Plan,by this reference, is incorporated into and made a part of this Agreement. 15. Assignment. This Agreement shall not be assigned by the Contract Administrator(including a delegation of the Contract Administrator's duties, obligations or responsibilities hereunder) to any other person or entity without the prior written approval of the Plan Sponsor,which may be withheld for any reason. This Agreement shall bind and inure to the successors and assigns of the Plan Sponsor; but no assignment shall relieve the Plan Sponsor of its obligations hereunder without the written consent of the Contract Administrator. Rev.6/97 9 II.IIE(CARE Contract Administrator shall comply with all rules, regulations, and laws of the United States of America,the State of Texas, and all laws,regulations and ordinances of the City of Baytown as they now exist or may hereafter be enacted or amended. The Contract Adminsitrator shall use reasonable care and diligence in the exercise of its powers and the performance of its duties as Contract Administrator hereunder. If any payment is made hereunder to an ineligible employee or dependent, or if it is determined that more or less than the correct amount has been paid to the Administrator regardless of whether such error resulted from the fault of the Contract Administrator or the Plan Sponsor, the Contract Adminsitrator shall use its best efforts to recover the payment made to an ineligible person or an overpayment or will adjust the underpayment. It is expressly agreed and understood by all parties hereto that Contract Administrator is an independent contractor in its relationship to the City. Nothing herein contained at any time or in any manner shall be construed to effect a contract of partnership or joint venture or render any party hereto the employer or master of any other party and/or its employees, agents or representatives. All necessary personnel shall be deemed employees of Contract Administrator. The City, besides all other rights or remedies it may have, shall have the right to terminate this Contract with or without cause upon ten(10)days' written notice from the City Manager to Contract Administrator of the City's election to do so. Furthermore, the City may immediately and without notice terminate this Contract if Contract Administrator breaches this Contract. A breach of this Contract shall include,but not be limited to, the following: 1. failing to pay any payments due the City, State or Federal Government from Contract Administrator or its principals,including,but not limited to, any taxes, fees, assessments, liens, or any payments identified in this Contract; 2. the institution of voluntary or involuntary bankruptcy proceeding against Contract Administrator; 3. the dissolution of Contract Administrator; 4. the violation of any provision of this Contract; and/or 5. the abandonment of the Contract or any portion thereof and discontinuance of Contract Administrator's services or any portion thereof. Upon delivery of any notice of termination required herein, Contract Administrator shall discontinue all services in connection with the performance of the Contract. Within ten(10)days after receipt of the notice of termination, Contract Administrator shall refund any monies prepaid by the City prorated to the date of the termination. All notices required to be given hereunder shall be given in writing either by telecopier, overnight, Rev.6/97 10 IkIUE(CARE or facsimile transmission, certified or registered mail at the respective addresses of the parties set forth herein or at such other address as may be designated in writing by either party. Notice given by mail shall be deemed given three (3) days after the date of mailing thereof to the following addresses: CONTRACT ADMINISTRATOR InterCare Health Plans Attn: James M. Beardall, President 5500 Greenwood Plaza Blvd. Suite 100 Englewood CO 80111 Fax: (303) 770-2743 CITY City of Baytown Attn: City Manager P.O. Box 424 Baytown TX 77522 Fax: (281) 420-6586 Failure of either party hereto to insist on the strict performance of any of the agreements herein or to exercise any rights or remedies accruing thereunder upon default or failure of performance shall not be considered a waiver of the right to insist on and to enforce by an appropriate remedy, strict compliance with any other obligation hereunder to exercise any right or remedy occurring as a result of any future default or failure of performance. This Contract shall in all respects be interpreted and construed in accordance with and governed by the laws of the State of Texas,regardless of the place of its execution or performance. The place of making and the place of performance for all purposes shall be Baytown, Harris County, Texas. All parties agree that should any provision of this Contract be determined to be invalid or unenforceable, such determination shall not affect any other term of this Contract,which continue in full force and effect. This Contract contains all the agreements of the parties relating to the subject matter hereof and is the full and final expression of the agreement between the parties. This Contract shall not be amended or modified without the express written consent of both parties hereto. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and said counterpart shall constitute but one and the same instrument. The officers executing this Contract on behalf of the parties hereby represent that such officers have full authority to execute this Contract and to bind the party he/she represents. Rev.6/97 11 II►IMM(CARE IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, have duly executed and delivered this Agreement as of the date first written above. By 724J 11 9 1 City of Baytown ate By b-S ic9 ? InterCare Health Plans Date Rev.6/97 12 II.IIE(CARE EXHIBIT A ADMINISTRATIVE SERVICES TO BE PROVIDED BY InterCare Health Plans 1. Provide an automated computer system for the processing of health claims. 2. Furnish standard administrative internal forms to include: a) Standard Explanation of Benefits b) Standard Enrollment Form c) Standard Claim Form 3. Coordinate with the Plan Sponsor the custom designing and printing of other supplies and documents, including but not limited to the following: a) Bank Drafts or Checks and Deposit Slips b) Employee Identification Cards c) Employee Plan Booklets 4. Provide a standard monthly premium billing statement for the Plan, satisfactory to meet the needs of the Plan Sponsor. 5. Coordinate the determination and reporting of employee eligibility with the Plan Sponsor. 6. Provide Customer Service for the Plan Sponsor's employees. 7. Review,coordinate and process all claims in accordance with policies, guidelines and directions of the Plan Sponsor. Prepare all checks or drafts for disbursements from the Plan with documentation to support these disbursements. 8. Assemble materials for an administrative review of denied claims. Rev.6/97 13 II0.IUI:(CARE EXHIBIT A(continued) 9. Provide claims analysis reports. Monthly Reports: a) Claims Experience Report b) Monthly Plan Funding Report c) Monthly Check Register Special Reports (no additional cost): Name of Report Frequency a) As requested by the Plan Sponsor. b) c) 10. Assemble appropriate renewal documentation and financial analysis. 11. Provide the necessary data for ERISA reports and filings for submission by the Plan Sponsor. 12. Attend meetings with the Plan Sponsor as necessary for proper administration of the Plan. Rev.6/97 14 II0IUI (CARE EXHIBIT B ADVISORY AND CONSULTING SERVICES TO BE PROVIDED BY InterCare Health Plans 1. Advise and assist in the design of custom administrative forms. 2. Make recommendations and suggestions to the Plan Sponsor on any problems that may arise in relation to the Plan. 3. Advise as to the employee and employer contribution levels. 4. Provide evaluation and underwriting services related to Plan provisions,changes and renewals. 5. Advise the Plan Sponsor concerning the financial status of the Plan to assure proper accumulation of reserves. 6. Provide medical cost data and analyze medical cost trends which would aid in Plan benefit design changes. 7. Coordinate with Plan Sponsor's legal counsel and others regarding ERISA requirements. 8. Assemble competitive bidding information on insured elements of the Plan. Rev.6/97 15 II IUE(CARE EXHIBIT C UTILIZATION REVIEW SERVICES TO BE PROVIDED BY InterCare Health Plans 1. Pre-Admission Review - Inpatient, Outpatient a) Confirm medical necessity b) Assign length of stay c) Request second surgical opinion d) Recommend alternative health care where appropriate e) Recommend same day surgery 2. Concurrent Review/Retrospective Review a) Confirm and monitor the treatment plan. 3. Discharge Planning 4. Second Surgical Opinion Rev.9 97 1 6 II0IUE(CARE