R-93-11-23-9J - 11/23/1993 RESOLUTION NO. 'h-�3-�.L S
WHEREAS, the Council of the City of Round Rock has previously
determined that it is in its best interest to self-fund its employees'
health care benefits, and
WHEREAS, in order to keep health costs as low as possible, it
is desirable to enter into a preferred provider agreement with health
care providers, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK,
TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the City a preferred provider agreement, a copy of which is
attached hereto and incorporated herein.
RESOLVED this 23rd day of November, 1993.
CHARLES CULP P Mayor
City of Round Xock, Texas
ATTEST:
6"E LAND, City Secretary
RS/RPSOLLMON
RS11233J
e
DATE: November 22, 1993
SUBJECT: City Council Meeting, November 23, 1993
ITEM: 9.J. Consider a resolution authorizing the Mayor to enter into an agreement for
City health care plan providers.
STAFF RESOURCE PERSON: David Kautz
STAFF RECOMMENDATION:
The City will implement a self—funded health plan beginning December 1, 1993. Part of
the health care self—funding responsibility includes negotiating agreements with the
health care providers.
A recommendation will be provided to the Council at the meeting for the health care providers.
EXECUTED
DOCUMENT
FOLLOWS
HealthC
Z-
1201 South Sherman Street,Suite 200 ❑ Richardson,Texas 75081-4854 ❑Telephone(214)669-4660
January 21, 1994
LINDA GUNTHER
CITY OF ROUND ROCK
221 E MAIN
ROUND ROCK TX 78664
Dear Linda:
HealthCare Benefits,Inc.is pleased to welcome City of Round Rock as a new group. We are looking forward to working with
you and your employees. We want to be accessible to you and assist your group with a smooth transition to HBI. Here are
the people you will be communicating with:
Ralph Seewald is your Claims Representative. He is a knowledgeable, experienced claims processor. He will process your
group's claims and answer any questions you or your employees may have about benefits, claim status or payment. Contact
Shelli Chancellor or Elaine Kingsley for stop-loss information.
Ralph's Unit Leader is Sandra Tippett. Jeann Blevins is Supervisor of the Claims Department. Should Ralph be unavailable
to assist you, please do not hesitate to contact one of them.
Brinda Moore will assist your group with your bank draft totals for check runs. Tressie Chisley is Brinda's Unit Leader. Donna
Fendley is the Manager of the Systems & Support Department. Donna is a great source of information about your group's
reports.
Demi Cullen is the Eligibility Clerk for your group. She can answer any membership, prescription drug program or billing
questions you may have. Donna Fendley is her Manager.
Jo Aldridge is responsible for Plan Documents. You may call her about any amendments or changes. Linda Fuller writes and
revises benefit booklets and programs system benefits for HBI.
You may reach any of us by calling (214)6694600. We appreciate your business and will strive to give your employees the
service they deserve.
--Sincerely,
Roma Dixon, Sr. Director
RD:lh
cc: Leah Ochoa, Donna Fendley,
ADM NISTRATIVE SERVICES AGREEMENT
HBI-ASA/11-93
ADM NISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made and entered into by and between HealthCare Benefits, Inc., a
corporation organized, existing and doing business under and by virtue of laws of the State of Texas
(hereinafter referred to as "Contractor"), and City of Round Rock (hereinafter referred to as
"Purchaser").
WITNESSETH:
WHEREAS, Contractor is in the business of providing independent third-party administration of
employee welfare benefit programs; and
WHEREAS, Purchaser desires to engage the service of a third-party administrator for a welfare benefit
program (hereinafter referred to as "Benefit Program") to be provided to Purchaser's employees and
their eligible dependents (hereinafter collectively referred to as "Participants"); and
WHEREAS, Contractor is willing to provide such services to Purchaser an other parties on an
independent contract basis.
NOW, THEREFORE, for an in consideration of the mutual promises, covenants and Agreements
hereinafter set forth, the parties hereto agree as follows:
SECTION ONE
OBLIGATION OF PURCHASER
1.01 Purchaser shall furnish Contractor with a detailed description of the Benefit Program
to be administered.
1.02 Purchaser, in consultation with Contractor, shall determine the administrative practices
and procedures to be followed in the processing and payment of claims.
1.03 Purchaser shall provide to Contractor a complete and current listing of all Participants
eligible to receive benefits prior to their date of eligibility--making timely changes to
the listing on a periodic basis.
1.04 Purchaser shall obtain the consent of Participants for the release of confidential medical
information required for administration and to process claims for the payment of fees
for medical services rendered to patients, including any fees for mental or emotional
health services performed by professionals, as may be required by state or federal law.
1.05 Purchaser shall establish and maintain a suitable banking arrangement to effectuate the
provisions of Section Six herein.
1.06 At Contractor's request, or at Purchaser's option, Purchaser shall make the final
determination of eligibility of Participants to receive benefits and any special issues
arising in the course of administration.
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1.07 Purchaser shall designate in writing a contact person who will be empowered to act on
behalf of Purchaser with regard to the terms of the Agreement and with whom
Contractor can coordinate and resolve all questions arising in the course of
administration.
SECTION TWO
OBLIGATION OF CONTRACTOR
2.01 Contractor shall administer Purchaser's Benefit Program in accordance with the benefit
plan description provided and the administrative practices and procedures established.
2.02 Contractor shall recommend to Purchaser appropriate changes and modification to the
Benefit Program and its administrative practices and procedures where required.
2.03 Contractor shall provide or arrange for suitable facilities, equipment and personnel
necessary for proper administration of the Benefit Program.
2.04 Contractor shall, upon request, assist Purchaser is establishing appropriate banking
arrangements for program administration.
2.05 Contractor shall provide standard administrative materials, including enrollment forms,
participant and provider claim forms and two identification cards for each participant
in the Benefit Program on the Effective Date of the Plan. The cost of reprinting
additional identification cards shall be the obligation of the Purchaser.
2.06 Contractor shall, upon request, assist Purchaser in incorporating the Benefit Program
description and design into a plan document and booklet for Participants. The
Contractor will provide one benefit booklet per participant enrolled in the Benefit
Program on the Effective Date of the Plan. The cost of reprinting additional benefit
booklets shall be the obligation of the Purchaser.
2.07 Contractor shall supply the initial check stock, thereafter the cost of additional checks
shall be the obligation of the Purchaser;
2.08 Contractor shall provide claims processing services to include:
a. Review and validation of all claims submitted for payment;
b. Determination of benefits in accordance with the specification of the Benefit
Program;
C. Coordination of benefits with other plans, where appropriate;
d. Preparation and mailing of explanation of benefit forms; and
e. Preparation and mailing of claim drafts drawn on Purchaser's bank account as
provided in Section Six herein; and
f. Other services as set forth in the Bid Specifications and Bid
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2.09 Contractor shall establish liaison with Purchaser's designee, providers and Participants,
as required, to obtain and follow-up on additional service information, to verify
eligibility of Participants and to assist in resolving claims problems.
2.10 Contractor shall provide periodic written reports to include:
a. Monthly check reconciliation report;
b. Monthly benefit experience reports; and
C. Those report specified in Item Four of the current Exhibit to this Agreement,
if any; and
d. Other reports as set forth in Bid Specifications and Bid
2.11 Contractor will provide Purchaser copies of specific claim payment drafts upon request.
2.12 Contractor shall evaluate late applicants for evidence of good health on behalf of
Purchaser.
2.13 Contractor shall maintain current individual benefit records on all Participants and shall
maintain the confidentiality of any medical information contained in such records.
2.14 Contractor shall prepare IRS form 1099 reports on medical provider fees.
2.15 Contractor shall keep Purchaser informed with respect to non-routine "shock" claims
and matters of general interest including recurring administration problems, local
situations meriting review and possible misuses of benefits.
2.16 Contractor shall refer to Purchaser any claim or class of claims Purchaser may specify
for consideration and final decision, to include:
a. Claims for services which do not appear to qualify for payment under the
Benefit Program;
b. Claims in which there is a question of the amount of payment due;
C. Claims involving any matter in controversy; and
d. Those claims or classes of claims specified in Item Three of the current Exhibit
to this Agreement, if any.
2.17 Contractor shall assist Purchaser in the analysis and resolution of disputed claims,
provided, however, that such assistance shall in no way include or be considered to
include or constitute legal advice or opinions.
2.18 Underwriting services will not be provided unless specifically identified in Item Two
of the Exhibit to this Agreement, if any. Any such services provided will include
required certifications by a qualified actuary.
2.19 Contractor shall also provide those services specified in Item Two of the current Exhibit
to this Agreement, if any.
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SECTION THREE
RELATIONSHIP OF PARTIES
3.01 Contractor shall not be construed, represented or held out to be a partner, associate,
joint venturer or employee of Purchaser nor shall the Contractor be construed,
represented or held out to be an agent of the Purchaser or agent of any insurance
company. Contractor shall at all times have the status of an independent Contractor.
3.02 Contractor shall, upon request, assist purchaser in obtaining Stop Loss Reinsurance. If
Stop Loss reinsurance is purchased, contractor shall not be responsible for claims not
timely filed and not included within the Stop Loss coverage. Contractor shall attempt
to assist Purchaser in encouraging providers to file claims timely but contractor assumes
no responsibility for the timely filing of such claims and Purchaser commits not to sue
contractor regarding any claims arising out of Stop Loss reinsurance coverage so
purchased.
3.03 Contractor is not a statutory fiduciary of Purchaser's Benefit Program nor is Contractor
a plan administrator within the meaning of the Employee Retirement Income Security
Act of 1974, Public Law 93-406.
3.04 This Agreement is not a contract of insurance and Contractor is not an insurer or
underwriter of Purchaser's liability under the Benefit Program. Purchaser has and
retains the ultimate responsibility for payment of claims and other expenses under the
Benefit Program.
SECTION FOUR
TERM AND TERNIINATION
4.01 The term of this Agreement shall be for the period of two (2) years commencing on the
Effective Date specified herein and shall continue in full force and effect from year to
year thereafter unless terminated as provided herein.
4.02 This Agreement may be terminated as follows:
a. By the Contractor on any anniversary of the Effective Date of this Agreement
following sixty (60) days' prior written notice to the Purchaser;
b. By the Purchaser on any anniversary of the Effective Date of this Agreement
following thirty (30) days' prior written notice to Contractor.
C. By Contractor upon Purchaser's failure to fund the bank account as provided
for in Paragraph 6.02 of Section Six below;
d. By Purchaser for cause, upon fifteen (15) days' prior written notice, if
Contractor fails to correct any deficiency in the performance of its obligations
under the Agreement within fifteen (15) working days after notice of such
deficiency is given to Contractor by Purchaser in writing; or
e. By both parties on a mutually agreeable date.
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4.03 If this Agreement is terminated by Purchaser, except as provided in Paragraph 4.02,
above, Purchaser agrees to pay to Contractor a termination fee in an amount equal to
twice the average of the monthly administration fee due for all months immediately
preceding termination. Such termination fee is due an payable within thirty (30) days
after notice of termination, or immediately upon termination if no notice is given, and
is in addition to any monthly administration fee, or portion thereof, or any other monies
due and payable to Contractor under this Agreement.
4.04 If this agreement is terminated for cause by Purchaser under paragraph 4.02, above, the
Purchaser shall not be liable for any termination fees or charges. Moreover, Purchaser
may withhold from the current administration fees due Contractor, the costs incurred
by Purchaser in attempting to gain Contractor's performance of the Agreement.
SECTION FIVE
ADMINISTRATION FEES AND REIMBURSEMENT
5.01 Purchaser agrees to pay Contractor a monthly administration fee, as described in
EXHIBIT NUMBER ONE attached hereto, within twenty (20) days after the day on
which a correct invoice for the services is received.
a. The fee shall be due and payable as of the first of each month beginning with
the first month of this Agreement. Any adjustments to the monthly fee shall
be added to the next months invoice
b. If the fee remains unpaid after twenty one (21 )lays from the receipt of a
correct invoice , the Contractor may charge a late fee equal to ten percent
(10%) per annum of the past due amount or the maximum amount permitted by
state law whichever is less.
C. After the thirty-first (31st) day the Contractor may suspend its performance
under this agreement and terminate this Agreement for non-payment of Fees
with (10) days prior written notice.
5.02 The amount of the administration fee shall be determined in accordance with the
specifications contained in Item One of the current Exhibit to this Agreement.
5.03 The administration fee shall be subject to change by Contractor as follows:
a. On each anniversary of the Effective date of this Agreement, upon a ninety(90)
days prior written notice to purchaser;
b. On the implementation date of any changes in the Benefit Program which
would increase Contractor's cost of administration;
C. On any date that increased expenses are incurred by Contractor because of
changes imposed by governmental entities--limited to increases sufficient to
recover the additional expenses; or
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d. One any date that Benefit Program enrollment changes by an amount equal to
ten percent (10%) or more of total enrollment.
5.04 Purchaser shall reimburse Contractor for the direct cost of any special supplies or forms
provided by Contractor for and at the request of the Purchaser--such reimbursement to
be in addition to the monthly administration fee.
5.05 Purchaser will reimburse Contractor for any taxes imposed or adjudged due by any
lawful authority with respect to the Benefit Program or its administration. In the case
of imposition of such tax liability, Purchaser may elect to terminate this Agreement
upon thirty(30)days' prior written notice without incurring liability for termination fees
or charges.
SECTION SIX
CLAIMS PAYMENT AND BANKING ARRANGEMENT
6.01 Purchaser shall establish a bank account on which Contractor shall write drafts for the
payment of Benefit Program claims and expenses. Purchaser agrees and is obligated
to arrange for sufficient funds to be available in such account to cover all draft validly
issued against the account. Contractor shall notify Purchaser, simultaneous with the
release of checks, the amount that is required to be deposited by Purchaser to cover the
checks issued.
6.02 Contractor shall have the right to terminate this Agreement upon notice to Purchaser in
the event that Purchaser fails to fund such account within three (3) banking days after
notice is given by Contractor that such funds are required to be deposited.
6.03 Notice by Contractor, as contemplated in paragraph 6.02, above, shall be sufficient if
given by telephone, fax or by United States mail, delivery services or personal delivery
to Purchaser's designee or the signatory to this Agreement at the telephone number or
address specified in Item Five of the current Exhibit to this Agreement. Any telephonic
notice given will be confirmed in writing within twenty four (24) hours.
SECTION SEVEN
NOTICES
7.01 All notices given under in this Agreement, unless otherwise provided for herein, must
be in writing and shall be deemed to have been given for all purposes when personally
delivery and received or when deposited in the United States mail, first-class postage
prepaid, certified or registered, return receipt requested and addressed to the parties as
set fort in Item Five of current Exhibit to this Agreement, if any.
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SECTION EIGHT
8.01 To the extent permitted by applicable law, Purchaser shall covenant not to sue
Contractor, its officers, directors, employees and agents regarding all claims or actions
based upon, arising out of , or in any way connected with the services rendered by
Contractor pursuant to the terms of this Agreement except for willful misconduct or
gross negligence on the performance of said services by contractor, its officers, directors,
employees or agents.
SECTION NINE
GENERAL PROVISIONS
9.01 ASSIGNMENT. No part of this Agreement, or any rights, duties, or obligations
described herein, shall be assigned or delegated without the prior express written
consent of both parties. Contractor's acquisition and use of facilities, services, supplies,
equipment and the use of temporary personnel on site shall not constitute an assignment
under this Agreement; provided however, that the supervision of all services provided
under this Agreement will be performed by Contractor's regular employees.
9.02 GOVERNING LAW. This contract shall be governed by and shall be construed in
accordance with, the laws of the State of Texas, and venue for any and all action
brought hereunder shall be in Williamson County.
9.03 MODIFICATION. This Agreement shall not be amended or modified in any manner
except by an instrument in writing executed by the parties.
9.04 CAPTIONS. Captions appearing in this Agreement and its exhibits, if any, are provided
for convenience only and in no way define, limit, construe or describe the scope of
sections or paragraphs to which they are inserted.
9.05 GENDER AND MODE. The use herein of a personal pronoun in the masculine or
feminine gender or in the singular or plural mode, shall be deemed to include the
opposite gender or mode unless the context clearly indicates the contrary.
9.06 EXHIBIT. "Exhibit" means the attached document(s) setting out certain particulars of
this Agreement, or any replacement document(s) mutually agreed to by the parties.
9.07 LEGAL CONSTRUCTION. Should any provision(s) contained in this Agreement be
held to be invalid, illegal or otherwise unenforceable, the remaining provisions of the
Agreement shall be construed in their entirety as if separate and apart from the invalid,
illegal or unenforceable provision(s), subject to renegotiation by the parties if a material
change in the terms of the Agreement were to result.
9.08 ENFORCEMENT. Any delay or inconsistency in the enforcement of any part of this
Agreement shall not constitute a waiver of any rights with respect to the enforcement
of this Agreement at any future date nor shall it limit any remedies which may be
sought in any action to enforce any provision of this Agreement.
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9.09 FORCE MAJEURE. Neither party shall be liable for any failure to perform its
obligations under this Agreement is prevented from doing so by a cause or causes
beyond its commercially reasonable control including, but not limited to, acts of God
or nature, fires, floods, storms, earthquakes, riots, strikes and wars or restraints of
government.
9.10 ENTIRETY. This Agreement and any exhibits or amendments and advertisement for
bids shall constitute the entire Agreement between the parties and shall supersede any
and all prior Agreements or understandings, either oral or in writing, between the parties
respecting the subject matter herein.
9.11 DISCLOSURE STATEMENT. Purchaser acknowledges that a disclosure of all
payments to be made to Contractor has been made to Purchaser and such disclosure
statement is incorporated herein by reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement for an Effective Date of
December 1, 1993.
FOR City of Roun oc , ur aser•
Title: te)
FOR HEALTHCARE BENEFITS, INC., Contractor:
J ie Hamilton (Date)
ice President - HealthCare Benefits, Inc.
8
EXIIIBIT NUMBER ONE
Specifications For
ADMINISTRATIVE SERVICES AGREEMENT
Between
HEALTHCARE BENEFITS, INC. (CONTRACTOR)
and
City of Round Rock (PURCHASER)
These specifications are to apply beginning with the Effective Date of the Agreement between the
parties to which this Exhibit is attached and shall continue in force and effect until the Agreement is
terminated or this Exhibit is superseded in whole or in part by a later executed exhibit.
ITEM ONE
ADMINISTRATION FEE
As provided in paragraph 5.02 of Section Five of the Agreement, for the first(1st) year this Agreement
is in effect, the monthly administration fee shall be an amount equal to Nine dollars and fifty cents
dollars ($9.50) multiplied by the number of Participants enrolled in the Benefit Program on the first
(1st) day of each month.
ITEM TWO
OTHER SERVICES
As provided in paragraph 2.18 of Section Two of the Agreement, the following additional services shall
be furnished:
A. Inpatient Certification Program will be administered by Blue Cross and Blue Shield of Texas,
Inc. acting as agent of Contractor.
B. Prescription Drug Program by arrangement with Blue Cross and Blue Shield of Texas, Inc.
acting as agent of Contractor to provide benefits substantially the same as its insured
Prescription Drug Program. Your billing will include applicable dispensing fees, Discounted
pricing and one and 50/100 dollars ($1.50) per prescription filed payable to the drug card
company.
ITEM THREE
SPECIAL CLAIMS PROCESSING
As provided in paragraph 2.15d of Section Two of the Agreement, the following special claims handling
procedures shall be followed: None.
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ITEM FOUR
OTHER REPORTS
As provided in paragraph 2.09c of Section Two of the Agreement, the following additional reports shall
be furnished: None.
ITEM FIVE
NOTICE ADDRESS
As provided in paragraph 7.01 of Section Seven of the Agreement, notice to Contractor shall be
delivered or mailed to:
HealthCare Benefits, Inc.
1201 South Sherman, Suite 200
Richardson, Texas 75081
Written notice to Purchaser shall be delivered or mailed to:
City of Round Rock
221 E. Main
Round Rock, TX 78664-5299
Fax notice to Purchaser shall be made to the following number:
512-255-6676
FOR City of Round Rock, PURCHASER:
14
Title: te)
FOR HEALTHCARE BENEFITS, INC., CONTRACTOR:
a % %"qLL
'j. a I , -hkh6�z
kie Hamilton V (Date)
ice President - HealthCare Benefits, Inc.
2
CONTACT PERSON
Purchaser shall designate in writing a contact person who will be empowered to act on behalf of
Purchaser with regard to the terms of the Agreement and with whom Contractor can coordinate and
resolve all questions arising in the course of administration.
FOR City of Round Rock, PURCHASER:
Title: (Date)
DESIGNATED PERSON EMPOWERED TO ACT ON BEHALF OF PURCHASER:
Title: (Date)
1
EMPLOYEE BENEFIT PLAN
DISCLOSURE FORM
For
City of Round Rock
The agent and/or HealthCare Benefits, Inc. will contract with or represent the insurance carrier in
conjunction with the sale of certain group insurance polices. This disclosure does not limit the agent's
ability to recommend the products of other insurance companies or other funding organizations, but is
intended to disclose the financial interest of the parties as to the Employee Benefit Plan. HealthCare
Benefits, Inc. is a wholly owned subsidiary of Blue Cross and Blue Shield of Texas, Inc. As requested
by the Purchaser, HealthCare Benefits, Inc. has solicited bids from Stop Loss Carriers, Life Carriers,
etc. and the Purchaser, after reviewing the proposals, has selected certain coverage. The relationship
and dealings of those companies are on file with the State Board of Insurance. If insurance is purchased
through an insurance company, HealthCare Benefits, Inc. may contract to facilitate the payment of
insurance premiums, claims and eligibility and may receive compensation for its services but HealthCare
Benefits, Inc. is not an agent of the insurance company and does not receive commissions.
The following persons or companies are entitled to commissions as agents on the insurance contract
issued to you:
Product: Administration
Name of Broker: The Romine Group Commission: JQ..00
Product: Stop Loss
Name of Broker: The Romine Group Commission: 6%
HealthCare Benefits, Inc. in addition to its administrative charge as indicated in the Administrative
Services Agreement is entitled to the following payments and marketing allowances for its services:
Product:N/A Commission:N/A
FOR City of Round ck, CHASER:
Title: (Date)
1
The undersigned acknowledges receipt of the information contained herein prior to any purchase and
approves the proposed transaction on behalf of the plan without receiving, either directly or indirectly,
any personal compensation in connection with the purchase of policies under this Plan.
FOR City of Round Roc PUR SER:
Title: (Date)
C
FOR HEALTHCARE BENEFITS, INC., CONTRACTOR:
Jacki amilton (Date)
Vice President - HealthCare Benefits, Inc.
2
R � '
CITY OF ROUND ROCK
INTEROFFICE MEMORANDUM
TO: Steve Sheets , City Attorney
FROM: Linda Gunther , Personnel Manager
DATE: February 7 , 1994
SUBJ : HBI Plan Document/Administrative Service
Agreement/Delaware American Life Insurance Indemity
Policy.
Could you please review enclosed documents and return.
Thank you for your assistance and time in reviewing the
documents .
PLAN DOCUMENT NO.: 1168
PLANHOLDER: City of Round Rock
PLANHOLDER'S PRINCIPAL LOCATION: Round Rock, Texas
PLAN EFFECTIVE DATE: December 1, 1993
PLAN ANNIVERSARIES: December 1, 1994 and each year thereafter
STOP LOSS CARRIER: Delaware American Life Insurance Company
The Planholder has established a self-funded Employee Welfare Benefit Plan,and the Planholder
has adopted this'PLAN DOCUMENT" (hereinafter'PLANJ providing for certain medical benefits
as herein described for certain Employees and certain Dependents of such Employees of the
Planholder and other Participant Employers as herein listed.
The Planholder AGREES to pay, subject to all the provisions of this Plan, including any
amendments to this Plan,the benefits hereinafter described to the person or persons entitled to
such payments while covered hereunder.
The provisions of the following pages are a part of this Plan. Such provisions alone constitute
the agreement under which payments will be made and are a part of this 'Plan' as fully as If
recited over the signatures hereto affixed.
IN WITNESS HEREOF, City of Round Rock has caused this Plan to be executed this 1 st day of
December, 1993.
SIG D WITNESSED BY:
ly
A5/5;r,0,4/r eIry I rvA5c6e/
Title Title /ry
a&�12 4 /9
Dati Date
2