R-00-10-26-13F2 - 10/26/2000 i
RESOLUTION NO. R-00-10-26-13F2
WHEREAS, the City of Round Rock desires to retain professional
services to provide independent third-party administration of the
City' s self-funded health plan, and
WHEREAS, HealthFirst TPA, Inc. has submitted an Administrative
Services Agreement to provide said services, and
WHEREAS, the City Council desires to enter into said
Administrative Services Agreement with HealthFirst TPA, Inc. , 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 an Administrative Services Agreement with
HealthFirst TPA, Inc . to provide independent third-party administration
of the City' s self-funded health plan, a copy of said Agreement being
attached hereto and incorporated herein for all purposes.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended, and the Act .
RESOLVED this 26th day of O ober, 000
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R RT A STLUKA, Mayor
A T City of Round Rock, Texas
Vr r /a4t,6C -
JO E LAND, City Secretary
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ADMINISTRATIVE SERVICES AGREEMENT
FOR
CITY OF ROUND ROCK
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TABLE OF CONTENTS
ARTICLE I - DEFINITIONS .................................................................................................2
ARTICLE II - RELATIONSHIP OF PARTIES............................................................................4
ARTICLE III -THE CLAIMS ADMINISTRATOR'S RESPONSIBILIES...........................................6
ARTICLE IV -THE EMPLOYER'S RESPONSIBILITES............................................................. 10
ARTICLE V - DURATION OF AGREEMENT........................................................................... 13
ARTICLE VI - MISCELLANEOUS ......................................................................................... 15
EXHIBIT A - SCHEDULE OF SERVICES ............................................................................... 19
EXHIBIT B - FEE SCHEDULES............................................................................................ 20
EXHIBIT C- BROKERAGE FEE........................................................................................... 21
EXHIBIT D-INSURANCE COVERAGE................................................................................ 22
EXHIBIT E-COBRA ADMINISTRATION ............................................................................. 25
EXHIBIT F- HIPAA ADMINISTRATION............................................................................... 26
EXHIBIT G -OUTSOURCE OF PRINTING............................................................................ 27
EXHIBIT H - MAINTENANCE OF RECORDS......................................................................... 28
EXHIBIT I - PHARMACY BENEFIT MANAGEMENT COMPANY................................................ 29
EXHIBITJ - RENEWAL PROCESS....................................................................................... 30
EXHIBIT K- ELECTRONIC COMMERCE.............................................................................. 31
EXHIBIT L- PPO NETWORK.............................................................................................. 32
EXHIBIT M - UTILIZATION MANAGEMENT COMPANY......................................................... 33
EXHIBIT N - NEW YORK SURCHARGE ............................................................................... 34
EXHIBITO - REPORTS...................................................................................................... 35
EXHIBIT P- INVITATION FOR BID AND BID SPECIFICATION...................................................36
EXHIBIT Q- SECTION 125 ADMINISTRATION...........................................................................54
ADMINISTRATIVE SERVICES AGREEMENT
THIS Service Agreement (the "Agreement") is made and entered into effective this 1st day of
December 2000 ("Effective Date") by and between City of Round Rock ("Employer"), a
Municipality with its principal place of business at 221 E. Main Street Round Rock, TX 78664-
5299 and HealthFirst TPA, Inc., a Texas corporation duly organized and existing under the laws
of the state of Texas with its principal place of business at 821 E.S.E. Loop 323, Suite 200,
Tyler, Texas 75701 (hereinafter referred to as the "Claims Administrator").
The Employer is a MUNICIPIALITY that sponsors a self-funded employee benefit plan (the
"Plan") within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA),
as amended; and
The Employer desires to make available a program of health care benefits under the Plan; and
The Employer wishes to contract with an independent third party to perform certain services
with respect to the Plan as enumerated below; and
The Claims Administrator desires to contract with the Employer to perform certain services with
respect to the Plan as enumerated below; and
THEREFORE, in consideration of the premises and mutual covenants contained in this
document, the Employer and the Claims Administrator enter into this Agreement for
administrative services for the Plan.
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ARTICLE I.
DEFINITIONS
For the purposes of this Agreement, the following words and phrases have the meanings set
forth below, unless the context clearly indicates otherwise and wherever appropriate, the
singular shall include the plural and the plural shall include the singular.
1.1 Calendar Year means January 1st through December 31st of the same year.
1.2 Claim means a request by a Claimant for payment or reimbursement for Covered
Services from the Plan.
1.3 Claimant means any person or entity submitting claims for payment or reimbursement
from the Plan.
1.4 Claims Administrator means HealthFirst TPA, Inc. (TPA)
1.5 Claims Payment Account means an account established by and owned by the
Employer for payment or reimbursement for Covered Services, which Account shall be
an asset of the Employer and not the Plan.
1.6 COBRA means the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended.
1.7 Covered Services means the care, treatments, services, or supplies described in the
Plan Document as eligible for payment or reimbursement from the Plan.
1.8 Employer means and any successor organization or affiliate of such Employer which
assumes the obligations of the Plan and this Agreement.
1.9 ERISA means the Employee Retirement Income Security Act of 1974, as amended.
1.10 Fee Schedule means the listing of TPA fees or charges for services provided under this
Agreement. This Fee Schedule may be modified from time to time in writing by the
mutual agreement of the parties. It is contained in Exhibit"B"and is a part of this
Agreement.
1.11 Health Care Providers means physicians, dentists, hospitals, or other medical
practitioners or medical care facilities that are duly licensed and authorized to
receive payment or reimbursement for Covered Services provided under the terms of
the Plan Or such other providers Employer may approve.
1.12 The Specification means Specification No. 958-56 Revised August 2000.
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1.12 Plan means the self-funded employee benefit plan, which is the subject of this
Agreement and which the Employer has established pursuant to the Plan Document,
which includes medical, dental, vision, prescription, and Section 125.
1.13 Plan Document/Summary Plan Description means the instrument or instruments
that set forth and govern the duties of the Plan Sponsor and eligibility and benefit
provisions of the Plan which provide for the payment or reimbursement of Covered
Services and is required to be provided under Sec. 102 of ERISA that describes the
terms and conditions under which the Plan operates.
1.14 Plan Fiduciary means City of Round Rock.
1.15 Plan Participant means any person who is properly enrolled and entitled to benefits
from the Plan.
1.16 Plan Sponsor means City of Round Rock.
1.17 Plan Year means the period of time specified as such in the Plan Document.
1.18 Fiscal Year means the Employers fiscal year October 1, through September 30.
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ARTICLE II.
RELATIONSHIP OF PARTIES
2.1 The Employer delegates to the Claims Administrator only those powers and
responsibilities with respect to development, maintenance, and administration of the
Plan which is specifically enumerated in this Agreement. Any function not specifically
delegated to and assumed by the Claims Administrator pursuant to this Agreement shall
remain the sole responsibility of the Employer.
2.2 The parties enter into this Agreement as independent contractors and not as agents of
each other. Neither party shall have any authority to act in any way as the
representative of the other, or to bind the other to any third party, except as specifically
set forth herein.
2.3 The parties acknowledge that
(a) this is a contract for administrative services only as specifically set forth herein;
(b) the Claims Administrator shall not be obligated to disburse more in payment for
Claims or other obligations arising under the Plan than the Employer shall have
made available in the claims payment account; and
(c) this Agreement shall not be deemed a contract of insurance under any laws or
regulations. The Claims Administrator does not insure, guarantee, or underwrite
the liability of the Employer under the Plan. The Employer has total responsibility
for payment of Claims under the Plan and all expenses incidental to the Plan.
2.4 except as specifically set forth herein, this Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective legal representatives and
successors.
2.5 The Claims Administrator will consult with the Employer at least monthly and more
often if circumstances dictate through the term of this Agreement.
2.6 The work to be performed by the Claims Administrator under this Agreement may, at its
discretion and with the prior written approval of the Employer, be performed directly by
it or wholly or in part through a subsidiary or affiliate of the Claims Administrator or
under an agreement with an organization, agent, advisor, or other person of its
choosing.
2.7 The Claims Administrator agrees to be duly licensed as a Third Party Administrator to
the extent required under applicable law and agree to maintain such license throughout
the term of this Agreement. The Claims Administrator will possess throughout the term
of this Agreement, an in-force fidelity bond or other insurance as may be required by
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state and federal laws for the protection of its clients. Additionally, the Claims
Administrator agrees to comply with any state or federal statutes or regulations
regarding its operations and to obtain any additional licenses or registrations that may
apply in the future.
2.8 The Claims Administrator will indemnify, defend, save, and hold the Employer harmless
from and against any and all claims, suits, actions, liabilities, losses, fines, penalties,
damages, and expenses of any kind including, but not limited to, direct, indirect,
consequential, or punitive expenses or fees, including court costs and attorney's fees,
with respect to the Plan which directly result from or arise out of the dishonest,
fraudulent, grossly negligent, or criminal acts of the Claims Administrator or its
employees, except for acts taken at the specific direction of the Employer.
2.9 The Claims Administrator shall be entitled to rely, without investigation or inquiry, upon
any written or oral information or communication of the Employer or agents of the
Employer.
2.10 The Employer will indemnify, defend, save, and hold the Claims Administrator harmless
from and against any and all claims, suits, actions, liabilities, losses, fines, penalties,
damages, and expenses of any kind including, but not limited to, direct, indirect,
consequential, or punitive expenses or fees, including court costs and attorney's fees, to
the extent that such claims, losses, liabilities, damages, and expenses arise out of or are
based upon the Employer's negligence in the performance of its duties under this
Agreement, a release of Claims data by the Claims Administrator to the Employer, an
interpretation of the Plan or this Agreement, or any other written or oral communication
by the Employer or any of its authorized representatives upon which the Claims
Administrator relies or any breach of this Agreement by the Employer, including, but not
limited to, failure to fund the Claims Payment Account.
2.11 The Order of Precedent shall be (1) this Agreement, (2) Specification Number 958-56
Revised August 2000 (attached).
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ARTICLE III.
THE CLAIMS ADMINISTRATOR'S RESPONSIBILITIES
The Claims Administrator will provide the following Plan administrative services for the
Employer in addition to those specified in Specification No. 958-56 revised August 2000:
3.1 Maintain Plan records based on eligibility information submitted by the Employer as to
the dates on which a Plan Participant's coverage commences and terminates.
Maintain Plan records of Plan coverage applicable to each Plan Participant based on
information submitted by the Employer.
Maintain Plan records regarding payments of Claims, denials of Claims, and Claims
pended.
3.2 Verify Plan Participant eligibility and coverage upon request by a Plan Participant, an
authorized member of a Plan Participant's family unit, or an authorized Health Care
Provider treating a Plan Participant.
3.3 Administer initial enrollment of Plan Participants, including but not limited to, assisting
in application completion at on-site information sessions; creating and distributing
enrollment forms and answering inquiries; creating and maintaining enrollment records
for Plan Participants; distributing identification cards; creating and distributing a list of
current primary Health Care Providers and other Plan materials supplied by the
Employer to new Plan Participants.
3.4 Adjudicate Claims incurred by Plan Participants according to the terms of the Plan
Document as construed by the Employer. These Claims will be adjudicated in
accordance with industry practices and the Claims Administrator will use an
industry-recognized method of determining usual, customary, and reasonable charges.
Process with due diligence and according to the terms of the Plan Document as
construed by the Employer, pre-existing conditions requirements, disability
determinations, subrogation, and coordination of benefits situations. Unless otherwise
agreed by the parties, the Claims Administrator's duties with respect to subrogation
situations shall be limited to informing the Employer that subrogation rights may exist.
If additional information is needed, send through the U.S. Mail to the appropriate
persons (with a copy to the Plan Participant) a request for this information. If the
information is not received within 30 days of the request, the claim will be closed and
no payment will be made. If the requested information is received within the filing
provision of the Plan, the Claims Administrator will process the claim according to the
benefit guidelines.
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When all necessary documents and Claim information have been received and the Claim
has been approved, a Claim check will be remitted on the next dispersal date.
3.5 Refer any doubtful or disputed Claims to Employer for a final decision in accordance
with Section 4.2.
3.6 Process, issue, and distribute Claims checks as instructed by the Employer to Plan
Participants, Health Care Providers, or others as may be applicable.
Claims paid in good faith but in error by the Claims Administrator shall be chargeable to
the Claims Payment Account as any other Claim, but the Claims Administrator shall
make good faith attempts to recover any overpayments.
3.7 Notify Plan Participants in writing through the U. S. Mail of ineligible Claims received,
indicating the specific Plan provisions attributable to the declination of the Claims
pursuant to the written Claims review and appeal procedure in the Plan. This notification
will be made within 10 working days of the date the Claims Administrator receives the
complete Claim, including any information received in accordance with Section 3.4 and
any Plan interpretations by the Employer.
3.8 Respond to Claims inquiries by a Plan Participant, the estate of a Plan Participant, an
authorized member of a Plan Participant's family unit, or an authorized Health Care
Provider.
3.9 Maintain information that identifies a Plan Participant in a confidential manner. The
Claims Administrator agrees to take all reasonable precautions to prevent disclosure or
the use of Claims information for a purpose unrelated to the administration of the Plan.
The Claims Administrator will only release this information for certificate of need
reviews; for medical necessity determinations; to verify eligibility; to comply with
federal, state or local laws; at the request of the insurer or the City; for coordination of
benefits; for subrogation; in response to a civil or criminal action upon issuance of a
subpoena; or with the written consent of the Plan Participant or his or her legal
representative. The following statistical data only (no personal identity) may be released
to set uniform data standards; to update relative values scales; to use in Claims
analysis; or to further cost containment programs
3.10 Prepare a draft Plan Document and Summary Plan Description for review and final
approval by the Employer and the Employer's legal counsel. A separate fee will be
charged for this service.
Upon acceptance by the Employer, the Claims Administrator will furnish copies of the
Summary Plan Description/Plan Document to the employer sufficient for distribution to
all Plan Participants. A separate fee for printing of these documents will be billed.
Additional copies and future amendments or modifications may be an additional cost
negotiated between the Claims Administrator and the Employer.
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3.11 Maintain a Claim file on every Claim reported to it by the Plan Participants. Such files
and all Plan-related information shall be made available to the Employer for
consultation, review, and audit upon reasonable notice and request, during the business
day and at the office of the Claims Administrator. Any such audit will be at the sole
expense of the Employer.
This audit shall be conducted by an auditor mutually acceptable to the Employer and the
Claims Administrator and will include, but not necessarily be limited to, a review of
procedural controls, a review of system controls, a review of Plan provisions, a review of
the sampled Claims, and comparison of results to performance standards and statistical
models previously agreed to by the Employer and the Claims Administrator.
Such approval of an auditor will not be unreasonably withheld.
3.12 Capture data and prepare the reports for the Employer to file upon payment of a
separate fee for IRS form 5500 filings.
3.13 Administer COBRA continuation coverage to qualified beneficiaries from eligibility
information supplied by the Employer. This administration will consist of notification to
eligible Employees and/or their Dependents following a qualifying event, billing,
collection of money, forwarding of premiums to the Employer, payment of Claims,
ending coverage upon lack of timely payment, or at the end of the COBRA continuation
period. A separate fee will be charged for these services.
3.14 Perform special Claims history research projects upon request by the Employer and
upon payment of a separate fee if said research is in addition to those reports and
information required in the Specification.
3.15 Procure excess loss or stop loss (specific and aggregate) insurance proposals and
policies for the Employer's consideration and selection, which excess loss or stop loss
insurance will be an asset of the Employer and not of the Plan.
3.16 Notify the excess loss insurance company of any potential large claims which may
become a Claim under.the excess loss coverage.
On behalf of the Plan, the Claims Administrator will file in a timely manner any Claims
for benefits under the excess loss policies.
Promptly forward to the Employer any premium and other notices received from the
excess loss insurance company concerning the policy.
3.17 Generate and mail certificates of Creditable Coverage to Plan Participants and former
Plan Participants from information supplied by the Employer. A separate fee will be
charged for this service.
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3.18 Establish and maintain a network of Health Care Providers who will deliver, as
independent contractors, the Covered Services of the Plan. The Claims Administrator
shall be entitled to rely upon any and all representations made by Health Care Providers
regarding their qualifications as Health Care Providers, and shall have no obligation or
liability to obtain, verify or monitor such qualifications.
The Claims Administrator will periodically provide the Employer with a list of currently
participating Health Care Providers and changes in the network.
A separate fee will be charged for these services.
The Claims Administrator will not be responsible for any services provided (or any
failure to provide services) by participating Health Care Providers.
3.19 Upon termination of this Agreement, all Claim files, eligibility information filings with
governmental entities, and plan documentation will be remitted to the Employer. Until
that time, these records will be maintained at the Claims Administrator's principal
administrative office or secure storage facilities for at least seven (7)years following the
termination of a Plan Year. The Employer will pay a separate fee for this storage. Do the
records need to be retained 7 years from closure of the claim, not 7 years from
termination of the Plan Year, also what is the statue of limitations on medical claims?
At the end of the seven (7) year period or termination of this Agreement, if earlier, the
Claims Administrator shall notify the Employer that these records will be destroyed
unless the Employer requests, in writing,that all or some of the records are to be
forwarded to the Employer. The Claims Administrator will forward the requested records
to the Employer and destroy the remainder upon payment of a separate fee.
3.20 The Claims Administrator will file the necessary 1099 Forms with the Internal Revenue
Service in the required format with respect to the checks printed by the Claims
Administrator which are payable to persons who have provided medical services to
covered persons under the Plan.
3.21 Provide the following in support of the requirements stated in the Specification a toll-
free telephone number.so that covered persons may contact the Claims Administrator's
"Customer Service Unit" during the regular business hours of 8:00 AM- 5:00 PM Central
Standard Time:
(a) answer questions concerning member's eligibility and Plan benefits,
(b) research questions concerning Claim payments,
(c) refer Claims to the processors when any adjustment is necessary,
(d) monitor complaints regarding quality of care received from covered persons, and
(e) answer written correspondence regarding any of the issues necessary
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ARTICLE IV.
THE EMPLOYER'S RESPONSIBILITIES
The Employer will:
4.1 Maintain current and accurate Plan eligibility and coverage records and submit this
information as it occurs and/or no less often than monthly to the Claims Administrator.
This information shall be provided in a format reasonably acceptable to the Claims
Administrator and include the following for each Plan Participant; name and address,
Social Security number, date of birth, type of coverage, sex, relationship to employee,
changes in coverage, date coverage begins or ends, and any other information
necessary to determine eligibility and coverage levels under the Plan. Termination
notices must be submitted to the Claims Administrator no later than 30 days from the
date of the termination. The Employer assumes all responsibility for claim payments or
verification of benefits on a terminated employee due to a late termination notice.
The Employer assumes the responsibility for the erroneous disbursement of benefits by
the Claims Administrator in the event of error or negligence on the Employer's part of
providing eligibility and coverage information to the Claims Administrator, including but
not limited to, failure to give timely notification of ineligibility of a former Plan
Participant.
4.2 Resolve all Plan ambiguities and disputes relating to the Plan eligibility of a Plan
Participant, Plan coverage, denial of Claims or decisions regarding appeal or denial of
Claims, or any other Plan interpretation questions.
The Claims Administrator will administer and adjudicate Claims in accordance with
Article III if the Plan Document and Summary Plan Description are clear and
unambiguous as to the validity of the Claims and the Plan Participants' eligibility for
coverage under the Plan, but will have no discretionary authority to interpret the Plan or
adjudicate Claims. If adjudication of a Claim requires interpretation of ambiguous Plan
language, and the Employer has not previously indicated to the Claims Administrator the
proper interpretation of the language, then the Employer will be responsible for
resolving the ambiguity or any other dispute.
The Employer authorized representative to resolve any ambiguities, interpretation, or
any other issue is: Linda Gunther, Phone 512 218-5491, Fax 2185493, email:
lg@round-rock.tx.us.
In any event, the Employer's decision as to any Claim (whether or not it involves a Plan
ambiguity or other dispute) shall be final and binding.
4.3 Provide required COBRA notice to Plan Participants upon initial eligibility to participate in
the Plan, maintain COBRA eligibility records, submitting this information to the Claims
Administrator in a timely manner for administration of the COBRA continuation option.
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4.4 Prospectively fund the Claims Payment Account as requested. The Claims payment
cycle will be run every Thursday. The Claims account will be funded by the Employer
within 10 days from receipt of the first request from the Claims Administrator. Failure to
fund the claims payments after 30 days following the first notification of funds due will
result in the Claims Administrator having the right to terminate this Service Agreement.
Notice of the termination must be given to the Employer in writing with an additional
notice of 30 days.
The Claims Payment Account shall be set up by the Employer who shall execute and
deliver to the Claims Administrator and a depository selected by the Employer, any and
all documents necessary to empower the Claims Administrator to act as signatory on
such account.
4.5 Not require the Claims Administrator, under any circumstances, to issue payment(s) for
Claims, excess loss premiums, or any other costs arising out of the subject matter of
this Agreement, unless the Employer has so authorized and has previously deposited
sufficient funds to cover such payment(s).
4.6 Provide the Claims Administrator with copies of any and all revisions or changes to the
Plan within 120 working days of the effective date of the changes. The Employer
understands no changes in benefit payments will be made until the Plan
Document/Summary Plan Description has been amended and the employees are
notified of the change.
4.7 Provide and timely distribute all notices and information required to be given to Plan
Participants, maintain and operate the Plan in accordance with applicable law, maintain
all record keeping, and file all forms relative thereto pursuant to any federal, state, or
local law, unless this Agreement specifically assigns such duties to the Claims
Administrator.
4.8 Acknowledge that it is the Plan Sponsor, Plan Administrator, and Named Fiduciary, as
these terms are defined in ERISA. As such, Employer retains full discretionary control
and authority and discretionary responsibility in the operation and administration of the
Plan.
4.9 Pay any and all taxes, surcharges, licenses, and fees levied, if any, by any local, state,
or federal authority in connection with the Plan.
4.10 Hold confidential information obtained that is proprietary to the Claims Administrator or
information or material not generally.known by personnel other than management
employees of the Claims Administrator. Such information includes, but is not limited to,
provider contracting arrangements, reasonable and customary Claims levels, and Claims
administration guidelines. Notwithstanding the preceding sentence, the parties
recognize and understand that the Employer is subject to the Texas Public Information
Act and its duties run in accordance therewith.
4. 11 Provide information necessary to submit to the Claims Administrator for timely
generation of Certificates of Creditable Coverage to Plan Participants and former Plan
Participants.
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4.12 Warrant and represent that the only entities that participate, or will participate, in the
Plan are in the Employer's "controlled group of corporations" as that term is used in
ERISA.
4.13 The amount of the monthly fees charged hereunder will be calculated by the Employer's
monthly enrollment based on the number of Employees on the first day of each month.
The Claims Administrator or its authorized representative may, upon reasonable notice
to Employer, review the personnel information at Employer's place of business, which
relates to Employer's determination of the fees charged hereunder. Each monthly fee
charged hereunder is due and payable to the Claims Administrator on the first day of
the month.
The Employers Prompt Payment Policy states that payments will be made within thirty
(30) days after the Employer receives the supplies, materials, equipment, or the day on
which the performance of services was completed or the day on which the Employer
receives a correct invoice for the supplies, materials, equipment or services, whichever
is later. The TPA may charge a late fee ( fee shall not be greater than that which is
permitted by Texas law)for payments not made in accordance with the Prompt
Payment Policy, however, this policy does not apply to payments made by the Employer
in the event:
a. There is a bona fide dispute between the Employer and the TPA concerning
the supplies, materials, or equipment delivered or the services performe3d
that causes the payment to be late; or
b. The terms of a federal contract, grant, regulation, or statute prevent the
Employer from making a timely payment with Federal Funds; or
c. There is a bona fide dispute between the TPA and a subcontractor or
between a subcontractor and its suppliers concerning supplies, materials, or
equipment delivered or the services performed which causes the payment to
be late; or
d. The invoice is not mailed to the Employer in strict accordance with
instructions, if any, on the purchase order or contract or other such
contractual agreement.
4.14 Maintain excess loss insurance with a carrier in the minimum amount set forth on the
Fee Schedule.
Promptly notify the Claims Administrator of any termination, expiration, lapse, or
modification of this insurance.
4.15 Maintain any fidelity bond or other insurance as may be required by state or federal law
for the protection of the Plan and Plan Participants.
The Employer will establish in its name a checking account(referred to as the ("Plan
Checking Account") in an insured financial institution for the limited purposes of paying
claims. The Employer will execute any necessary documents to empower the Plan
Claims Administrator with signatory authority for checks on such account during the
term of the Service Agreement.
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ARTICLE V.
DURATION OF AGREEMENT
5.1 This Agreement shall commence and end as specified in the Specification.
5.2 At any time during the term of this Agreement, either the Employer or the Claims
Administrator may amend or change the provisions of this Agreement. These
amendments or changes must be agreed upon in advance in writing by both the
Employer and the Claims Administrator. If any such amendment increases the
anticipated Claims experience under the Plan or the Claims Administrator's cost of
administering the Plan, the Employer agrees to pay any increase in Claims expenses, as
well as increases in administrative fees or other costs which the Claims Administrator
reasonably expects to incur as a result of such modification. Any such increases must
be documented in any amendment change.
5.3 This Agreement may be terminated by either the Employer or the Claims Administrator,
for cause, at any time, either upon giving 90 days advance written notice to the other
party unless both parties agree to waive such advance notice, or with no notice, as
stated below. The party initiating the termination shall permit a cure period of not less
than thirty (30) days to cure any default.
5.4 The Claims Administrator may, at its option, terminate this Agreement effective
immediately upon the occurrence of any one or more of the following events on written
notice to the Employer:
(a) The Employer fails to properly fund the claims payments within the defined time
frames as described in Article IV, 4.5;
(b) The Employer is adjudicated as bankrupt, becomes insolvent, a temporary or
permanent receiver is appointed by any court for all or substantially all of the
Employer's assets, the Employer makes a general assignment for the benefit of
its creditors, or a voluntary or involuntary petition under any bankruptcy law is
filed with respect to the Employer and it is not dismissed within forty-five(45)
days of such filing;
(c) The Employer fails to pay administration fees or other fees for the Claims
Administrator's services upon presentation for payment and in accordance with
the Fee Schedule;
(d) The Employer engages in any unethical business practice or conducts itself in a
manner which in the reasonable judgment of the Claims Administrator is in
violation of any federal, state, or other government statute, rule, or regulation;
(e) The Employer, through its acts, practices, or operations, exposes the Claims
Administrator to any existing or potential investigation or litigation; or
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(f) The Employer permits its excess loss insurance to lapse, whether by failure to
pay premiums or otherwise. Why does this matter to the TPA?
5.5 The Employer may, at its option, terminate this Agreement effective immediately upon
the occurrence of any one or more of the following events on written notice to the
Claims Administrator:
(a) The Claims Administrator is adjudicated as bankrupt, becomes insolvent, a
temporary or permanent receiver is appointed by any court for all or
substantially all of the Claims Administrator's assets, the Claims Administrator
makes a general assignment for the benefit of its creditors, or a voluntary or
involuntary petition under any bankruptcy law is filed with respect to the Claims
Administrator and it is not dismissed within forty-five (45) days of such filing;
(b) The Claims Administrator engages in any unethical business practice or conducts
itself in a manner which in the reasonable judgment of the Employer is in
violation of any federal, state, or other government statute, rule, or regulation;
(c) The Claims Administrator, through its acts, practices or operations, exposes the
Employer to any existing or potential investigation or litigation; or
(d) If at the end of the Employers fiscal year the City Council does not appropriate
moneys sufficient to pay the monthly service charges, termination charges or
any other contractual charges coming due in the Employer's next fiscal year, as
determined by the Employer's budget for the fiscal year in question.
5.6 After the termination of this agreement and after the written request of the Employer,
the Claims Administrator may agree to process incurred but not reported Claims. A
separate fee will be charged for this service.
14
l
ARTICLE VI.
MISCELLANEOUS
6.1 This Agreement, together with all exhibits and appendices supersedes any and all prior
representations, conditions, warranties, understandings, proposals, or other agreements
between the Employer and the Claims Administrator hereto, oral or written, in relation
to the services and systems of the Claims Administrator, which are rendered or are to
be rendered in connection with its assistance to the Employer in the administration of
the Plan.
6.2 This Agreement, together with the exhibits, constitutes the entire Administrative
Services Agreement of whatsoever kind or nature existing between or among the
parties.
6.3 The parties, having read and understood this entire Agreement, acknowledge and agree
that there are no other representations, conditions, promises, agreements,
understandings, or warranties that exist outside this Agreement which have been made
by either of the parties hereto, which have induced either party or has led to the
execution of this Agreement by either party. Any statements, proposals,
representations, conditions, warranties, understandings, or agreements which may have
been heretofore made by either of the parties hereto, and which are not expressly
contained or incorporated by reference herein, are void and of no effect.
6.4 This Agreement may be executed in two or more counterparts, each and all of which.
shall be deemed an original and all of which together shall constitute but one and the
same instrument.
6.5 Except as provided in Article V. (regarding termination without advance notice), no
changes in or additions to this Agreement shall be recognized unless and until made in
writing and signed by all parties.
6.6 In the event any provision of this Agreement is held to be invalid, illegal, or
unenforceable for any reason and in any respect, such invalidity, illegality, or
unenforceability shall in no event affect, prejudice, or disturb the validity of the
remainder of this Agreement, which shall be in full force and effect, enforceable in
accordance with its terms.
6.7 In the event that either party is unable to perform any of its obligations under this
Agreement because of natural disaster, labor unrest, civil disobedience, acts of war
(declared or undeclared), or actions or decrees of governmental bodies (any one of
these events which is referred to as a "Force Majeure Event"), the party who has been
so affected shall immediately notify the other party and shall do everything possible to
resume performance.
15
Upon receipt of such notice, all obligations under this Agreement shall be immediately
suspended. If the period of non-performance exceeds ten (10) working days from the
receipt of notice of the Force Majeure Event, the party whose ability to perform has not
been so affected may, by giving written notice, terminate this Agreement.
6.8 All notices required to be given to either party by this Agreement shall, unless otherwise
specified in writing, be deemed to have been given three (3) days after deposit in the
U.S. Mail, first class postage prepaid, certified mail, return receipt requested.
6.9 This Agreement shall be interpreted and construed in accordance with the laws of the
state of Texas except to the extent superseded by federal law.
6.10 No forbearance or neglect on the part of either party to enforce or insist upon any of
the provisions of this Agreement shall be construed as a waiver, alteration, or
modification of the Agreement.
16
MOV-09-00 13:22 From: T-ZZZ P.02/03 Job-095
6.11 Other applicable agreements:The following exhibits are this reference incorporated in this
Agreement:
Employer TPA
Attachment Initials Tide of Exhibit Initials Date
A Schedule of Services 11/9100
r
B Fee Schedules I 11/9100
C -A" Brokerage Fees 11/9/00
D Insurance Coverage �� 11/9/00
E COBRA Administration �� 11/9100
F HIPAA Administration S 11/9/00
GAW Outsource of Printing _S7 11/9/00
H Maintenance of Records 11/9/00
I Pharmacy Benefit Management / s 11/9/00
J Renewal Process l 11/9/00
K Electronic Commerce 11/9/00
L PPO Network 1119/00
M Utilization Management l S 11/9/00
N New York Surcharge 11/9/00
,t-
O Reports [ 11/9/00
P The Specification 11/9/00
Q Section 125 L 11/9/00
17
11/09/2000 THU 14:12 [TX/RX NO 65571 Q002
IN WITNESS WHEREOF,the parties have caused this Agreement to be executed on their behalf
by their duly authorized representatives'signatures,effective this 151 day of December 2000.
EMPL R CLAIMS ADMINISTRA'
PRINTED NAME: PRINTED NAME:Tom W. Slack,Jr.
TITLE: M n�0 TITLE:Chief Executive Officer
FULL LEGAL NAME OF EMPLOYER:
City of Round Rock
AFFILIATES AND/OR SUBSIDIARIES OF EMPLOYER SUBJECT TO THIS AGREEMENT:
18
EXHIBIT "A"
Schedule of Services
The numerous functions and activities of the Claims Administrator, when combined with
creative benefits design and excess loss coverage selected by the Employer, make the self-
funded plan a most viable and service-oriented alternative to more traditional insured
programs. Recognizing the specialized nature of such activities and services, the Employer
engages the Claims Administrator to provide initial installation assistance and administrative
services in conjunction with the operation of the Plan.
A) The Claims Administrator will assist the Employer with the installation service necessary to
establish the Plan, as follows:
1. Employee communication materials announcing the Plan when requested by the
Employer
2. Enrollment materials and meetings with Plan Participants
I Banking arrangements
4. Preparation of the Summary Plan Description
5. Preparation of the Plan Document
The cost of the printing and distribution of the Summary Plan Description will be the
Employer's expense.
A) The Claims Administrator will perform the following specific Administrative Services in
conjunction with the operation of the Plan and as required by The Specification:
1. Provide forms and handle correspondence for claims administration, including
procedures for filing claims, claim forms, request forms for obtaining additional
information, and claim payment explanation of benefits.
2. Process all claims presented for benefits under the Plan, audit claims, prepare and
distribute benefit checks to employees, employers, and/or service providers, and
provide an explanation of claim settlements to the Plan Participants.
I Verify and handle inquiries, from the Employer, Plan Participants, hospitals, doctors,
and other service providers concerning requirements, procedures, or benefits of the
plan.
4. Maintain all the claim files.
5. Request from the Employer a monthly update of participants eligible for the plan and
provide forms for the Employer to comply with this requirement.
6. Request funds from the Employer on a scheduled basis from which checks are
issued
to cover expenses of the plan.
7. Complete and submit all premium reports, statements, claim reports, and other
reports required to all insurers and reinsurers of the plan.
19
EXHIBIT "B"
Fee Schedule
The following fees shall apply during the term of this agreement. In the event of a
termination of this agreement, the payment of fees shall be governed by the applicable
provisions of the agreement or the insurance policy.
Services Employer Fees
Medical Benefits Including:
Direct Employee Service Administration 12.50 PEPM
COBRA Administration $1.00 PEPM
HIPAA Administration $.50 PEPM
Pre-Certification Fee MM Solutions $1.35 PEPM
Prescription Drug Program SYSTEMED $.65 Per Claim
Setup and Installation $2.50 Per Employee
Plan Document/ Summary Plan Description Design $1,500
Amendments $150 Single Change
Run Out Claims Processing 10.00 Per Claim
New York Surcharge $25.00
Reports N/C
20
EXHIBIT "C"
Brokerage Fee
21
EXHIBIT "D"
Insurance Coverage
Under the terms of this Agreement City of Round Rock has chosen Mega Life through
Excess Inc. for their Specific &Aggregate Stop Loss Coverage beginning December 1, 2000.
Stop Loss coverage has been obtained with a $30,000 Specific deductible. Contract basis is
15/12 for both the Specific and the Aggregate.
Incurred in 15 Months and Paid in 12 Months
Specific Rates Aggregate Rates
Employee Only $ 49.81 $3.85
Employee/Family $116.36
In the event of a termination of either this Agreement or an insurance policy covered under
this agreement, the payment of fees shall be governed by the applicable provisions of the
Agreement or the insurance policy.
Employee Benefit Plan Disclosure
The Department of Labor and the Internal Revenue Service require certain disclosure to be
made to the Employer, Plan Administrator, or other fiduciary of the Employee Benefit Plan
before any transaction occurs with respect to the plan purchase of any insurance policies or
contracts. This notice serves to satisfy the disclosure requirements of PTE 84-24.
The following entities names are not a trustee of the plan, plan administrators, names
fiduciaries of the plan, or a fiduciary who is expressly authorized in writing to manage,
acquire, or dispose to the assets of the above plan on a discretionary basis. HealthFirst TPA
is a licensed third party administrator (TPA) providing services to City of Round Rock
Employee Benefit Plan.
22
1. Description of Transaction: Stop Loss Coverage
2. Name of Insurer: Mega Life
3. Intermediary: Excess Inc.
There is no corporate affiliation between HealthFirst TPA and
the carrier Mega Life nor is there any limiting agreement
existing between the above mentioned firms.
4. Commission (expressed as a percentage of gross annual premium), paid by Mega Life and
payable to:
Keith Carmichael (Nieman Hanks Puryear Benefits)— 15%
5. Compensation Schedules for the Claims Administrator:
$.35 PEPM from MM Solutions for the administration of the UM/CM Program
$.40 Per Claim from SYSTEMED for the administration of the RX Program
Any COBRA 2%Administrative charge received from COBRA participants
6. Description of any other fees, service charges of other compensation which should be
disclosed to permit the independent fiduciary to determine that total compensation from the Plan
assets or from Plan assets received by the contract administrator and the Broker is "reasonable".
7. Service Fees: Administrative Fee: Refer to Exhibit B
Broker Fee: Refer to Exhibit C
By the signature as affixed below, the Employer/Plan Fiduciary acknowledges the accuracy and
completeness of the above declarations.
FIDUCIARY'S ACKNOWLEDGEMENT
I hereby acknowledge that my capacity as an independent fiduciary with authority to act on
behalf of the Plan, I have received the above information concerning the above transaction,
and I approve the transaction on behalf of the Plan. I am not an insurance agent or broker,
pension consultant or Insurance Company involved in the transaction. Further, I will not
receive any compensation or other consideration directly or indirectly for my own personal
account from any part ealing with the Plan in connection with the transaction.
For: HEALT T A
Tom W.glack,Jr., Date
Chief Executive Officer
or: Cit f R d Rock
/0- Q69
o�
TITLE: Date
23
Since the COBRA law is between the Employer and the Participant, it is the responsibility of the
Employer to advise the Plan Participant with information outlining the rights and guidelines for
continuance.
25
EXHIBIT "F"
HIPAA
The Employer engages the Claims Administrator to provide assistance and administrative
services for the Employer responsible functions of Health Insurance Portability and
Accountability Act of 1996. (HIPAA)
A. Upon enrollment of new employee, the Claims Administrator will aggressively pursue the
Certificate of Coverage from the Employee's previous employer. This information will be
maintained in the Claims Administrator's system for verification of previous coverage and
waiver of pre-existing condition.
B. Once the Certificate of Coverage is received, the Claims Administrator notifies the Employee
by letter of the amount of credit applied towards the new Employer's pre-existing limitation
period.
C. Upon termination of the employee, the Claims Administrator will issue the required
certificate of coverage to the employee's home address.
26
EXHIBIT if
Outsource of Printing
Under the terms of this agreement, the Claims Administrator has chosen to outsource the
printing of checks and explanation of benefits to AdminiSource, Dallas, Texas. This function is
achieved with an electronic interface. If the situation should prevail that AdminiSource is
unable to complete the contracted functions allocated to them, the Claims Administrator
maintains the resources internally to perform this function.
Checks will be drawn on the client's bank account. Checks/Explanations of Benefits are
outsourced to AdminiSource for printing and distribution. A copy of the check/Explanation of
Benefits is provided to the employee and, if applicable, the provider of service. Any reprints of
the explanation of benefits at the employee or employer's request will be processed for $1.00
per page and payable to the Claims Administrator.
27
EXHIBIT "H"
Maintenance of Records
Under the terms of this Agreement, the Claims Administrator has chosen an off sight storage
facility to maintain claim files belonging to the Employer. The Claims Administrator reserves
the right to place all files older than 24 months in this storage facility. Should the files of the
Employer exceed 20 boxes, the Claims Administrator reserves the right to charge the Employer
a fee for the storage space. This fee will be based upon the actual fee charged to the Claims
Administrator, plus 20% for handling.
During the existence of the Agreement remaining active, the Claims Administrator will maintain
all records for this Employer for seven (7) years. After the expiration of this period the Claims
Administrator reserves the right to destroy these records. The Claims Administrator will contact
the Employer prior to the destruction of the records as notification of this procedure. The
Employer may chose for the records to be shipped to an address of their choice at the
Employer's expense.
28
EXHIBIT ITT
Pharmacy Benefit Management Company
Under the terms of this agreement, the Employer has chosen SYSTEMED to administer their
pharmacy benefits. The Employer has agreed to pay $.65 per claim plus dispensing fee, for
this service:
Refer to Exhibit"B"for this fee.
For each paperclaim submitted to SYSTEMED that requires manual intervention, the fee is
$1.50 per claim billed on a monthly basis.
SYSTEMED will provide the Employer with reports on a per requested basis in detail or in
summary format.
HealthFirst TPA will issue the prescription ID cards as the Plan ID card including information
disclosing the PPO Network, brief benefit summary and prescription co-pay.
29
EXHIBIT 11.7"
Renewal Process
The Claims Administrator will assist the Employer with the renewal process prior to the
anniversary of the Plan year.
The Claims Administrator will provide information and assistance with the appropriate reporting
of claim dollars paid, past year experience with the specific and aggregate carrier. Large dollar
or potential large claims that the Employer or the Claims Administrator has knowledge of will be
reported to all quoting carriers.
Any changes in benefits to the Plan, PPO network or carriers will be communicated to all parties
by the Claims Administrator.
Any information or reports required by The Specification.
There is no expense for this service to the Employer.
30
EXHIBIT "K"
Electronic Commerce
Under the terms of this agreement, the Claims Administrator may or may not receive claims
electronically using the ANSI 837 X 12 standards.
In the event the claims are received electronically a manual claim copy as we know it in the
HCFA 1500 form, will not be produced by the Claims Administrator. A facsimile that is
sufficient to meet the requirements of the carrier and any auditor will be available. The Claims
Administrator has outsourced with ETC (Electronic Transmission Corporation), Dallas,Texas to
function as a clearinghouse for data exchange.
The Claims Administrator has a Payor ID number (75234) that allows claims to be received
electronically following NEIC guidelines.
31
EXHIBIT "Lrr
PPO Network
Group is contracting direct with PPO Network
Under the terms of this Agreement, the Employer has chosen to participate with one or more
PPO networks. The benefits are defined accordingly to encourage participation with network
providers.
The PPO Network chosen for this Plan is: St. David's Health Partnership
The access fee for this network is $ 0 PEPM. The repricing will be done by HealthFirst TPA.
If more than one network is chosen the employees will be placed on a "plan" indicator defined
by the Claims Administrator and the Employer must submit enrollment material defining the
plan in which the employee will be participating in.
The PPO Network chosen by the Employer is responsible for supplying the provider directories
and provider relation's services to the Employees.
If the PPO network chosen by the Employer is unable to re-price claims electronically, the
Claims Administrator reserves the right to adjust the administration fee accordingly to
compensate for the manual handling of the claims. The Employer will be notified of this fee
prior to the implementation of the network.
32
EXHIBIT "M"
Utilization Management Company
Under the terms of this Agreement, the Employer has chosen as a Utilization Management
Company, MM Solutions. The duties to be performed by MM Solutions will be In-Facility pre-
certification.
Refer to Exhibit"B"for this fee.
Large case management will be accessed on a case by case basis as deemed necessary by the
Claims Administrator, MM Solutions and the Employer. The fee for large case management will
be $100.00 per hour , when utilized.
MM Solutions will be responsible for providing the Employer upon request with reports to
evaluate the activity of the Plan.
33
EXHIBIT "N"
New York Surcharge
Under the terms of this Agreement, should this employer have one or more
employee/dependents living in the State of New York, the Claims Administrator will charge a
$25 per month billing fee to administer the requirements of New York Surcharge Pool.
If the Employer chooses to complete the 16-page report, the Claims Administrator will charge
$10 per employee per month to supply the Employer with the data required to complete the
reports. The service fee will be billed to the Employer on a monthly basis. The Employer agrees
to submit the service fee amount requested by the Claims Administrator within 5 working days
of the request in order to meet the timeframes requirements of the New York Surcharge Pool.
The Claims Administrator agrees to submit the required data in the timeframes set forth in the
New York Surcharge guidelines.
34
EXHIBIT 110"
Reports
The Claims Administrator will provide (in addition to those required by The
Specification) the standard financial reports listed below, the standard monthly medical
reports, and standard quarterly reports:
(a) Financial
(1) Check register every two weeks on Thursday, including the refund
register.
(2) Notification by faxed register that checks have been created and are
waiting on funding. The Employers agrees to fax the authorization form
to the Money Management department when checks that have been
funded are ready for release.
(b) Medical (monthly)
(1) Claims analysis from Plan Year to Date.
(2) Aggregate report year to date
(c) Semi-annual
(1) Payment History report
(d) Annual
(1)Total Claims Paid By Year Comparison
(2) PPO Savings
(3) Most Frequent ChargeType
(4)Top 10 Diagnosis
Medical reports are to be provided to the Employer monthly and quarterly by the 10th
day of the following months end.
If any report is requested by the Employer that is not listed above, the Claims
Administrator shall charge the Employer a fee for any programming that is required to
produce the requested report. The fee will be discussed and agreed upon between the
Employer and Claims Administrator prior to any charges occurring.
Reports will be converted to charts and graphs when applicable for easier
comprehension of the data. Two color copies will be presented to the Employer.
Additional copies are available for a fee.
35
EXHIBIT 'T"
CITY OF ROUND ROCK
SPECIFICATION NO. 958-56
REVISED: August 2000
THIRD PARTY ADMINISTRATION (TPA)FOR SELF FUNDED
GROUP HEALTH,DENTAL,DRUG AND VISION PROGRAM
PART
GENERAL
1.0 BIDDER QUALIFICATION:
1.1 Bidders shall be approved by the appropriate regulatory authorities in the State of
Texas to provide the services herein described.
1.2 Bidders' contracts shall comply with applicable Federal, State, and Local statutes,
rules, and regulations and bidder shall provide certification stating said compliance.
1.3 Bidders shall furnish the latest statements showing the bidder's financial condition
and any subsidiary statements or explanation as the City may request.
1.4 If Bidder can provide repricing and pay claims that correspond with the
current St. David's Health Network Fee Schedule, Bidder should submit such
as an alternate bid. The alternate bid shall be in addition to a bid to
administer the current plan. If a Bidder cannot provide repricing and pay
claims utilizing the current St. David's Health Network, then the Bidder may
submit their own network configuration as an alternate bid.
1.5 BIDDERS SHALL PROVIDE PRESCRIPTION COVERAGE EQUAL TO OR
BETTER THAN THE COVERAGE CURRENTLY PROVIDED BY
ADVANCED PARADIGM
1.6 Successful Bidder shall provide a toll free telephone number for claims assistance and
information.
1.7 Successful Bidder shall provide access to or perform services including but not limited
to:
1.7.1 Medical Administration
36
1.7.2 Dental Administration
1.7.3 Vision Administration
1.7.4 Prescription Card Services
1.7.5 Utilization Review
1.7.6 Large Case Management
1.7.7 PPO Network Coordination
2.0 REJECTION: The City reserves the right to reject any or all bids for any reason.
3.0 PAYMENT FOR INFORMATION: The City shall not pay for information solicited in
connection with this bid, or cost incurred by Bidder in responding to this Invitation for Bid.
4.0 COMMISSIONBROKERAGE: The City shall not pay any commission or brokerage in
connection with this bid.
5.0 AGENT OF RECORD: The following is the City's Agent of Record:
Keith Carmichael
Nieman Hanks Puryear Benefits
515 Congress Avenue, Thirteenth Floor
Austin, Texas 78701
6.0 PROPRIETARY INFORMATION: Information identified by Bidder as trade secrets or
proprietary information, and contained in the bid, shall be kept confidential. Any information
provided to the bidder by the City shall be considered confidential and is to be used only for
preparing the bid. Notwithstanding the above, the parties recognize and understand that the
City is subject to the Texas Public Information Act and its duties run in accordance
therewith.
7.0 INTENT: It is the intent of the City to enter into an agreement with the successful Bidder
with terms, conditions, and language mutually acceptable to the City and the successful Bidder.
8.0 ASSIGNMENT: The successful Bidder shall not assign,transfer, convey, sublet, or
otherwise dispose of any award or any or all of its rights, title or interest therein, without prior
written consent of the City. Such consent shall not relieve the assignor of the liability in the
event of default by the assignee.
9.0 AWARD OF BID: There are many important considerations involved in selecting a TPA.
Therefore, the City will make an award based on the best responsible bid,which may be to a
Bidder who is not the lowest Bidder.
37
10.0 CLARIFICATION OF SPECIFICATION: For clarification of specifications, Bidders may
contact:
Ms. Linda Gunther Howard Baker
City of Round Rock City of Round Rock
Telephone: 512-218-5491 Telephone: 512-218-5455
The individuals listed above may be contacted by telephone or visited for clarification of
the specifications only. No authority is intended or implied that specifications may be
amended or alterations accepted prior to bid opening without written approval of the
City of Round Rock through the Purchasing Agent.
11.0 DISCLAIMER: Some of the information contained herein has been secured from
sources other than the records and files of the City. It is deemed reliable and the City has
no reason to doubt its accuracy, however, it is not guaranteed.
12.0 OVERCHARGES: Successful Bidder hereby assigns to the City any and all claims for
overcharges associated with the contract resulting from this bid which arise under the
antitrust laws of the United States, 15 USGA Section 1 et 5N., and which arise under the
antitrust laws of the State of Texas,Bus. And Com. Code, Section 15.01, et seMc.
13.0 PRE-BID CONFERENCE: A PRE-BID CONFERENCE WILL BE CONDUCTED
ON SEPTEMBER 7, 2000, AT 11:00 A.M. IN THE COUNCIL CHAMBERS, 1sT
FLOOR, CITY HALL, 221 EAST MAIN STREET, ROUND ROCK, TX.
PART H
SPECIFICATIONS
This specification describes the minimum requirements for a TPA.
1.0 DEVELOPMENT,COMMUNICATION AND INSTALLATION: The TPA shall provide:
1.1 Development and design of the Plan and Plan Document and future revisions thereof as
approved by the City, to include compatibility with any State or Federal Health Care
Program. BID RESPONSE SHALL BE BASED UPON THE CURRENT PLAN
AS AMENDED AND ATTACHED AS EXHIBIT D.
1.2 Assistance in complying with any and all State and Federal statutes, rules or
regulations, including ERISA.
1.3 Cost projections of benefits and administration.
1.4 Communication to and enrollment of employees and dependents through meetings
provided and arranged by the City.
38
1.5 Assistance in preparation of employee communications material. To include,but not
limited to:
1.5.1 Benefit booklet development and coordination of printing
1.5.2 Development, printing and issuance of identification cards
1.6 Development and design of forms and procedures for processing requests for benefits
payment.
1.7 Written notice to the covered person of the identity of the Administrator and the
relationship of the Administrator to the insurer, if any, or the Plan and the City. TPA
shall obtain City approve prior to distribution of any notice.
1.8 Advertising relating to the Plan and shall submit same to the City for approval prior to
its use.
1.9 A suggested rate structure for City and employee contribution utilizing a 4-tier
concept.
2.0 REPORTS AND RECORDS: The TPA shall provide:
2.1 Accounting reports as needed in the financial management and administration control
of the Plan,to include, but not limited to the following:
2.1.1 Projections of initial and renewal unit cost and total cost
2.1.2 Utilization reports, to include claims incurred, claims paid and discounted
services.
2.1.3 Estimates of incurred but unpaid claim liabilities.
2.2 Assistance with preparation of the Summary Plan Description, Summary Annual
Report, and other items that are required for reporting and disclosure under Title I,
Part I of the Employee Retirement Income Security Act of 1974.
2.3 Assistance in submitting any required license applications.
NOTE: All files, records and reports prepared and maintained by the TPA pursuant to any
agreement, entered into by the City and the TPA, shall be the property of the City, but the right of
possession of such files, records, and reports shall be and remain with the TPA during the term of
any said agreement. All files, records, and reports shall be made available for review and
inspection during normal business hours.Within fifteen(15)working days of completion of duties
under any said agreement, all such files, records, and reports shall be turned over to the City on
request and in exchange for its receipt.
39
3.0 MINIMUM REQUIRED RESPONSIBIL US : The TPA shall be responsible for,but not
limited to, the following functions:
3.1 Maintaining computer eligibility and an adequate claims status system. This includes
entry and tracking of all necessary data and updating the status of all claims.
3.2 Completing calculation of the benefits payable, investigation, follow-up, coordination
of benefits and mailing checks.
3.3 Paying contracted services such as PPO access fees, large case management fees, and
other expense items for contracted fixed costs charged to the City.
3.4 Providing a satisfactory and timely answer to questions by employees, representatives
of the City, or the City's consultant regarding the settlement or status of claims.
3.5 Not charging against the plan experience any claim payment not authorized under the
terms of the policy(except those specifically authorized in writing by the City).
4.0 BENEFIT PAYMENTS: The TPA shall, as a minimum in accordance with the terns and
conditions of the Plan Documents:
4.1 Process benefits with respect to covered persons and determine the amount due and
payable.
4.2 Process any written requests, issues or comments received from covered persons on
appeals of denied benefits and forward the information to the City for review and
decision.
4.3 Upon receipt of the City's decision of benefit appeals, calculate any amount due and
payable and make payment, or issue a denial notice, all in accordance with written
instructions of the City.
4.4 Issue checks in payment of benefits to covered persons or to such other person or
assignee entitled thereto.
4.5 Maintain records and files of benefit payments for each covered person.
4.6 Submit reports of benefit payments as agreed upon with the City at mutually agreeable
times.
4.7 Take all reasonable precautions to maintain as confidential all benefit payments and
material furnished, obtained or developed in regard to its service under the TPA
Agreement for a purpose unrelated to administration of the Plan. The Administrator
shall disclose information only as follows:
4.7.1 In response to a court order
40
4.7.2 For an examination required by law
4.7.3 For an audit or investigation conducted under the Employees Retirement
Income Security Act of 1974(29 U.S.C. 1001, et seq.)
4.7.4 At the request of the insurer or City
4.7.5 With the written consent of the covered person or his or her legal
representative.
4.8 Maintain records of medical expenses incurred for each covered person.
4.9 When directed by the City, the TPA shall suspend payment of benefits until resumption
is authorized by the City.
4.10 Bring to the immediate attention of the City any and all protests of any benefit
payments.
5.0 SERVICE ACTIVITIES AND STANDARDS: The TPA shall conduct service activities within
the following minimum standards:
5.1 Maintain a fourteen(14)day claims turn-around time as measured beginning the day
the claim is received by the TPA until the check is mailed by the TPA. The measure
will be on the City's Specific Group Plan and includes non-investigative or"clean"
claims only. For TPAs who issue provider payments on a timed basis, the claim will be
considered paid on the date the claim passes all claim edits.
5.2 Maintain a ninety-five percent (95%)processing accuracy rate. Accuracy is defined as
the number of claims accurately processed. The standard is to be made on a group-
specific basis.
5.3 Maintain a ninety-eight percent (981/o)financial accuracy. Accuracy is defined as the
number of dollars accurately processed. The standard will be measured on a group-
specific basis.
5.4 Maintain a ninety-five percent (95%)performance standard for resolving written or
telephone inquiries and complaint within fourteen(14)days of receipt. The standard
will be measured on a group-specific basis. Inquiry resolution response time and
complaint resolution results shall be reported monthly.
41
5.5 Achieve an abandoned call result of better than seven percent(7%). Abandoned calls
are defined as calls calculated over the complete work day that reach the customer
service facility and are placed in queue and are not answered because a caller hangs up
before a service representative becomes available. The standard may be periodically
measured.
5.6 Achieve a maximum of thirty(30)seconds for wait time in queue. Wait time in queue
is calculated over the complete workday and is defined as the time a caller spends in
queue until a service representative becomes available. The standard will be measured
on a general basis.
NOTE: THE TPA WILL PROVIDE MONTHLY REPORTING OF EACH OF THE
ABOVE REQUIREMENTS. A REDUCTION OF TEN PERCENT (10%) OF THE
ADMINISTRATIVE CHARGES (NOT TO EXCEED TWENTY-FIVE PERCENT
(25%) IN ANY ONE (1) MONTH) MAY BE ASSESSED (AT THE SOLE OPTION OF
THE CITY) FOR EACH AREA OF UNDERACHIEVEMENT IN A GIVEN MONTH.
6.0 STATISTICS/REOUIRED REPORTING: The TPA shall provide (but not limited to)the
following:
6.1 DAILY OR WEEKLY REPORTS(depending on payment schedule)detailing
checks to be paid including the following:
6.1.1 Employee name with social security number
6.1.2 Check number
6.1.3 Voided checks with numbers if applicable
6.1.4 Claim number
6.1.5 Payee
6.1.6 Provider
6.1.7 Claimant
6.1.8 Amount of check
6.1.9 Total amount of report with subtotals for:
6.1.9.1 Medical
6.1.9.2 Dental
6.1.9.3 Vision
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6.1.9.4 Prescription Drugs
6.2 MONTHLY REPORTS:
6.2.1 Aggregate year to date for all claims
6.2.2 Prescription drug claims by brand name/generic
6.2.3 Claims over fifty percent(50%)of specific
6.2.4 Specific claims and any diagnosis and prognosis,information available
6.2.5 Pre-log claims if applicable
6.2.6 Pended claims
6.2.7 Lag study
6.2.8 Paid claims by group and COBRA
6.2.9 Number of employees and dependents
6.2.10 Top ten types of service
6.2.11 Top ten service providers
6.2.12 Top ten diagnosis
6.2.13 Top ten providers in dollars
6.2.14 Turnaround report for claims processing
6.2.15 Paid claims analysis by covered employee and dependent
6.2.16 Billing report grouped by cost center using the following information headings:
6.2.16.1 Cost center
6.2.16.2 Employee name
6.2.16.3 Effective date of coverage
6.2.16.4 Administrative fee, medical
6.2.16.5 Administrative fee, dental
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6.2.16.6 Administrative fee,vision
6.2.16.7 Administrative fee,prescription
6.2.16.8 Specific premium(if applicable)
6.2.16.9 Aggregate premium(if applicable)
6.2.16.10 PPO usage
6.2.17 Summary of coverage by the following categories:
6.2.17.1 Employee only
6.2.17.2 Employee and child
6.2.17.3 Employee and spouse
6.2.17.4 Employee and family
6.2.17.5 COBRA
6.2.17.6 Retirees(if applicable)
6.2.18 An electronic file of checks issued.
6.2.19 Service activities and standards report (see 5.0).
6.3 OUARTERLY REPORTS:
6.3.1 All monthly reports.
6.3.2 Summation of monthly reports and claims experience.
6.3.3 Savings on:
6.3.3.1 Coordination of benefits
6.3.3.2 Subrogation
6.3.3.3 Duplicate charges
6.3.3.4 Total number of hospital days and length of stay by diagnosis and
hospital
6.3.3.5 Provider reports including:
44
6.3.3.5.1 Inpatient/outpatient
6.3.3.5.2 Surgical procedures
6.3.3.5.3 Emergency usage
6.3.3.5.4 Other applicable and useful information
6.4 ANNUAL REPORTS:
6.4.1 All monthly and quarterly reports
6.4.2 Top twenty-five(25):
6.4.2.1 Charges paid
6.4.2.2 Diagnosis
6.4.2.3 Prognosis
6.5 FORMAT OF REPORTS: Reporting as required in this section(6)represents the data
deemed necessary by the City to monitor its plan. It is understood that the format of
reports may vary by systems used;however, the TPA shall outline system capabilities
and provide sample reports and other illustrations it considers pertinent.
6.6 EXTRRANEOUS CHARGES: Report generations indicated herein, shall not result in
extraneous charges. It is understood, however, that the City may incur additional costs
with the occasional customized report.
7.0 AGREEMENT/CONTRACT:
7.1 TERM: The mutually agreed upon agreement shall be for the following periods.
Period Inclusive Dates
First 0000:01 hours December 1, 2000 through
2400 hours November 30, 2001
Second Beginning at the end of the first period and
ending 2400 hours November 30, 2002
Third Beginning at the end of the second period and
ending 2400 hours November 30, 2003.
45
The agreement may be renewed for two (2) additional periods of time not to
exceed twelve (12) months each provided both parties agree in writing.
7.2 The City reserves the right to review the bidders' performance at the end of each period
and cancel all or part of the agreement(s)or continue the agreement(s)through the
next period.
7.3 If the TPA fails to perform its duties in a reasonable and competent manner, the City shall
give written notice to the TPA of the deficiencies and the TPA shall have thirty(30)
calendar days to correct such deficiencies. If the TPA fails to correct the deficiencies
within the thirty(30)days the City may terminate the agreement by giving the TPA
written notice of termination and the reason for the termination.
7.4 If the agreement is terminated the TPA shall complete the processing of all requests for
benefit payments under the Plan that were received by the TPA on or before the date of
termination and which are due and payable prior to termination, but shall not:
7.4.1 Complete the processing of any requests if the City has not provided funds for
the benefit payments.
7.4.2 Process requests for benefit payments presented to the TPA for claims incurred
after the date of termination.
7.4.3 Issue benefit checks for claims incurred after termination date.
7.5 If the agreement is terminated, for any reason, the TPA shall turn over all records to the
City within fifteen(15)working days after completion of duties contained in the
agreement.
7.6 The contract resulting from this IFB shall make reference to this Specification and
make this Specification a part of the Contract.
7.7 Increases in Administrative Fees may be allowed, at the sole option of the City, due to
qualifying changes in circumstances such as,but limited to, inflationary trends and high
utilization. Increases shall not exceed nine percent (9%)for any one(1)plan year nor
more than an aggregate of thirty-six percent(36%)for the five years of the Contract.
Arbitrary increases shall not be allowed.
7.8 The TPA shall notify the City,in writing,at least ninety(90) days prior to the
anniversary date of each contract year of any contemplated change in
administrative service fees. Changes may only be effective on December 1 of
each contract year.
8.0 OPTIONAL SERVICES: When mutually agreed upon, the City may request any one or
more of the following:
46
8.1 Remote site eligibility capabilities
8.2 Remote site inquiry and input capabilities
8.3 Remote site report printing
8.4 Additional managed care network arrangements that may be any one or any
combination of the following:
8.4.1 Health Maintenance Organization(HMO)
8.4.2 Preferred Provider Organization(PPO)
8.4.3 Point of Service(POS)
8.4.4 Indemnity Insurance
8.5 Data analysis reporting
8.6 Healthcare information reporting
8.7 Cost management services
8.8 COBRA administration
8.9 Cafeteria(Section 125)flexible benefits administration
8.10 Actuary services
8.11 Wellness programs
8.12 Filing IRS form 1099 for providers
8.13 Preparation of 5500 forms
8.14 Health Insurance Portability and Accounting Act(HIPAA)Administration services
9.0 SPECIAL SERVICES: Other special services as the parties mutually agree.
10.0 HEALTHCARE SERVICES: The TPA, with City approval, shall:
10.1 Secure agreements with Health Care Provider Organizations.
10.2 Provide or provide access to utilization management review services.
10.3 Provide or provide access to case management services.
47
10.4 Provide or provide access to specialty care referral services.
10.5 Provide or provide access to pre-certification services.
11.0 CONTRACT WITH NEW TPA: In the event the City elects to contract with a new
TPA, the successful Bidder shall continue to provide services for 120 days following the end
of the contract.
12.0 STOP LOSS INSURANCE: The City is also soliciting Bids for Reinsurance(Stop Loss).
Bidders are encouraged to form an alliance with or solicit Reinsurance entities with whom the TPA
has a working relationship to submit a bid. Any such bid shall be in accordance with Bid Number
00-024 with the accompanying bid specification.
13.0 SUBROGATION: The TPA shall be responsible for actively pursuing subrogation claims.
Any cost for such services shall be the responsibility of the TPA.
14.0 VENUE: Venue shall be in the applicable court,Williamson County, Texas.
15.0 APPLICABLE LAW: The laws of the State of Texas shall govern any Agreement entered
into as a result of this IFB. No rights, remedies and warranties available to the City under any
agreement or by operation of law will be waived or modified unless expressly waived or modified
by the City in writing.
16.0 REFERENCES: Bidders shall attach to the bid response a list of not less than five(5)
references, three of which are current and two(2) of which have terminated Bidders services within
the last two(2)years.
NOTE: Exhibit "A" (questionnaire) attached hereto is hereby made a part of this specification.
Bidders shall respond to all questions. FAILURE TO RESPOND TO ALL QUESTIONS IN THE
QUESTIONNAIRE(EXHIBIT A)MAY DISQUALIFY BID.
PART IV
EXHIBITS:
Exhibit A - Questionnaire
Exhibit B-Census
Exhibit C -Health Utilization and Cost Data
48
w �
EXHIBIT A
QUESTIONNAIRE
PART I
INSTRUCTIONS
1.0 Each of the questions shall be addressed clearly and concisely so that the City may properly
evaluate your bid. Use an answer format which identifies questions by number, e.g. 1.0, 1.4, 3.3,
4.5, etc., followed by your response.
PART H
QUESTIONS
1.0 ORGANIZATION:
1.1 Describe the structure and ownership of your organization. Are you owned or
operated by a parent company and if so identify the parent and primary business.
1.2 How long have you been in business and are you licensed to do business in Texas?
1.3 Do you have fiduciary, professional liability, errors and omissions, directors and officers
insurance, or any other protective bonding and insurance you maintain? If so, describe
the coverage, including limits and carrier(s).
1.4 Has the Texas Department of Insurance received any complaints or inquiries about your
organization, or investigated your organization in the past four(4)years? If yes,
provide details.
1.5 Has your license to operate in Texas ever been revoked by the Texas Department of
Insurance? If yes, explain.
1.6 Have you ever had to suspend operations pending an investigation or for any other
reason?If yes, explain.
1.7 Do you have any outstanding claims for health care services or other legal actions? If yes,
provide details.
1.8 Describe your training and quality control program.
1.9 What is your turnover rate among your service and processing units? How much
experience would the personnel assigned to our account have?
49
1.10 Has your organization conducted any recent client and/or member satisfaction surveys? If
yes, what were the results.
1.11 Do you employ legal staff in order to respond to legal and legislative issues? If not, how
do you stay up to date in these areas?
1.12 Have you ever filed for protection under any Bankruptcy Laws? If yes, explain.
2.0 GENERAL SERVICES:
2.1 What office location will service the City's account?
2.2 Describe your procedures for subrogation.
2.3 Provide a sample explanation of benefits statement.
2.4 Provide not less than five(5)references,three of which are current and two which have
terminated Bidders services within the last two(2) years, of equal employee base as
this City, including name, address, telephone number, and contact person.
2.5 Provide sample letters you use to request additional information or providing information
in connection with claims and benefits.
2.6 Will you require additional personnel, equipment or facilities to serve this account? If so,
will this requirement affect the effective date of any contract for your services, as
shown in Part II, paragraph 7 of the specification?
2.7 What type of back-up arrangements do you have in case of computer failure?
2.8 Describe your training and quality control programs.
2.9 What is your turnover rate among your service and processing units? How much
experience would the personnel assigned to our account have?
3.0 CLAIM ADMINISTRATION SERVICES:
3.1 Describe your claim processing procedures and accounting system.
3.2 What is your claims turnaround time? Specify in calendar days for average and maximum
allowed turnaround time.
50
3.3 Define all terminology used in claims paid, denied, and other communications with
claimant and providers.
3.4 Where will benefit checks be written? How often will benefit checks be written? Will
checks be mailed from the same office that processes the claim?
3.5 What is your notification process for denied or disputed claims? Do you notify the City
of same?
3.6 Will questions regarding claims be handled by the next available processor or will this
account be assigned to specific personnel?
3.7 Explain your approach to coordination of benefits when the insured is covered by more
than one plan.
3.8 How do you determine medically unnecessary claims?
3.9 How do you process claims involving Medicare?
3.10 How do you arrive at usual and customary fee data? How often is it updated? Can you
pay at differing percentiles if requested by the City?
3.11 What is your ratio of benefit analyst to covered employee or dependent unit? How will
the addition of our account affect this ratio?
3.12 Do you have toll-free Texas and national 800 telephone lines available for covered
individuals and providers?
3.13 How do you determine eligibility of covered persons?
3.14 How do you determine pre-existing conditions? What causes the process to be initiated?
How are medical histories maintained when a pre-existing condition is identified?
3.15 How do you resolve complaints by covered persons about coverage, amounts of
payments, eligibility, and promptness of payment?
3.16 Do you have access to or employ a medical director and/or nursing services?
3.17 Do you have an internal and external audit process? How is a claim identified for further
review? Do you use an independent claim auditor?
3.18 Do you advise the City on the payment of claims and the reasonableness of charges?
3.19 Do you furnish explanation of benefits with the check or separately and why?
3.20 How do you identify individuals who have reached the stop-loss amount?
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3.21 How do protect the City from exceeding the aggregate stop-loss amount?
3.22 Who is financially responsible for overpayment and uncorrectable overpayments? Can
you report overpayment, collection percentages, collection time line, and reasons for
overpayment?
3.23 Do you have fraud controls? If yes, explain the process.
4.0 PROVIDER ADMINISTRATION:
4.1 Do you have and maintain fee profiles? What action is taken when charges exceed limits?
4.2 Do you maintain provider profiles? Are they used for paying and/or authorizing claim
payments?
4.3 Are all hospitalizations, regardless of diagnosis, included in Utilization Review?
4.4 How do you assure that all provider discounts are properly taken? How do you confirm
that the provider's rates to be discounted are not excessive and that extra services and
fees are not added to offset the benefit of any discount obtained?
4.5 What are your pre-certification procedures? What are the hours of operation of the
center? Does it have a toll free number? Where is it located?
4.6 What are your second opinion procedures?
4.7 Do you perform post-discharge hospital audits?Explain.
4.8 What arrangements do you have for prescription drugs?
4.9 For each of the following,what is the timetable for certification (period of elapsed time
from the first request to point of approval)?
4.9.1 Emergency Admissions
4.9.2 Urgent Admissions
4.9.3 Elective Admissions
4.9.4 Normal Childbirth
4.9.5 Extended Stays
4.10 How is each party involved in the instances listed in 4.9 above kept informed?
52
4.10.1 Patient
4.10.2 Provider
4.10.3 City
4.11 How are certifications obtained and transmitted to the parties named in 4.10 above?
4.12 Are length of stay guidelines provided with initial admission approval?
5.0 FINANCIAL:
5.1 How are claim funds processed? Will you require individual bank accounts or general
claim account?
5.2 Are any reserve accounts required? If yes, how are they calculated?
5.3 Do you require any documents or security deposits?
5.4 How often are requests for fund transfers made and how?
5.5 Do you require any special banking arrangements?
5.6 What is your definition of a paid claim? Do you record a claim paid when the check is
issued or when the check is cashed?
5.7 What inflation and utilization factors are you currently using?
5.8 Who will maintain the check register and reconcile same?
6.0 GENERAL SUNEVURY:
It is the goal of the City to provide and partially self-fund an affordable user-friendly health,
dental and vision benefits plan. Customer(patient)service and satisfaction is an extremely
important consideration in selecting a TPA.
Please feel free to offer supporting or clarifying data which will help the City to determine the
maximum potential cost of the plan, any and all applicable limitations of the bid services, extent
of support services, or capabilities of your organization under this plan.
53
EXHIBIT-Q
SECTION 125 ADMINISTRATION
Administrative Services for the on-going administration of the Employer's IRC Section 125
Plan(s).
Employer has established a Cafeteria Plan (the "Plan") pursuant to S125 of the Internal Revenue
Code of which Employer shall be the Plan Administrator and HealthFirst, TPA, Inc. shall be the
Third Party Administrator.
HealthFirst TPA, Inc. shall provide, as specified, administrative services for the
Employer's Plan. The various services of HealthFirst TPA, Inc. and fees ("Service
Fees") charged therefore are described in the Schedule of Services and Fees
("Addendum One") attached hereto and made a part hereof..
HealthFirst TPA, Inc. may terminate this Agreement upon (30) days written notice
to the Employer in the event the Employer fails to make prompt payment of
charges or otherwise breaches this Agreement. The Employer may terminate this
Agreement with (30) days written notice to HealthFirst TPA, Inc. provided,
however, that the Employer shall be liable for the appropriate fees for work in
progress as of the date of this Agreement.
The Employer shall furnish HealthFirst TPA, Inc. with all information required by
HealthFirst TPA, Inc. to perform its services hereunder. HealthFirst TPA, Inc.
shall rely entirely and conclusively upon such information furnished by the
Employer, except to the extent that it may be contrary to the provisions of the Plan
or applicable law.
HealthFirst TPA, Inc. shall have no duty to investigate the source or accuracy of
such information or to question any action of the Employer.
The Employer hereby agrees that all Fees and Penalty Charges levied by the
Internal Revenue Service, Department of Labor, and Pension Benefit Guaranty
Corporation are the responsibility of the Employer or Plan and not HealthFirst
TPA, Inc. except to the extent that such Fees and Penalty Charges arise out of the
negligence of HealthFirst in administering the Plan or are a result of HealthFirst's
breach of this Agreement. The Employer further hereby agrees to pay any and all
taxes, licenses and fees levied, if any, by local, State, or Federal authority, in
connection with the operation of the Plan or in connection with the duties of
HealthFirst TPA, Inc. hereunder.
54
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The Employer hereby acknowledges that HealthFirst TPA, Inc., except where
otherwise specifically requested, and except as set forth on Addendum One, shall
be solely and exclusively responsible for the routine administrative services for the
Employer's Plan. If specifically requested, HealthFirst TPA, Inc. may provide
certain consulting services with respect to the Plan, provided, however, all legal,
accounting, and tax decisions shall be made by the Employer's other professional
representatives. HealthFirst TPA, Inc. shall have no power, authority, or control
with respect to the management of the Plan, except as set forth on Addendum One
and where otherwise specifically agreed upon in writing. The Employer further
acknowledges that HealthFirst TPA, Inc. is not, and therefore shall not be held
responsible as the Plan Administrator, as such term is defined by Section 3 (16) of
the Employee Retirement Income Security Act of 1974, for the Employer's IRC
Section 125 Plan.
All reports and data shall remain the property of the Employer. HealthFirst TPA,
Inc. will provide the Employer all data, upon request, in the electronic or printed
format used by HealthFirst TPA, Inc. in its administrative procedures.
Miscellaneous services will be provided as requested at the rate specified in the
prevailing Schedule of Fees.
SCHEDULE OF SERVICES AND FEES
1. Design an IRC Section 125 Plan Document, including(options chosen by group) to be
reviewed
by the Employer and the Employer's legal counsel.
2. Design a Summary Plan Description to be distributed to each eligible Employee.
3. Provide Employer with Administrative forms.
4. Process Election forms and Revocation forms to initiate the administration function.
5. Prepare letters to notify Employees of missing documentation and information needed to
pre-
pare administrative files.
6. Provide Contribution Report (Billing).
7. Process Employer contributions, including individual account maintenance.
8. Provide reimbursement checks to Employees and Employer. Automatic reimbursement
is included and available at Employee's option.
9. Provide Transaction Report and Payment Records.
55
10. Claim processing of Reimbursement Requests.
11. Provide Discrimination Testing Reports and interpretations.
12. Provide statements of participation by Plan Participant the last quarter of the Plan Year
and
at the end of each Plan Year.
13. Provide forms to the Employer for use by the Employer in communicating Participant
termination and changes in status.
14. Provide the Employer with Reimbursement Request, as needed.
15. Prepare Re-Enrollment Forms at the end of each Plan Year for Employer's re-enrollment.
16. Provide Employer annual list of Participants and dollar amounts paid through the
Dependent
Care Expense Account.
ADMINISTRATIVE FEE SCHEDULE FOR SECTION 125 SERVICES
1. Development and Implementation Fee $1,000.00
(One-time only fee payable upon
completion of enrollment)
2. Monthly administration Fee $ 3.00
(per participant Per Month-
Payable monthly)
3. Annual Year-End account processing, $250.00
Including the completion of the required
IRS From 5500.
Responsibilities Of The Employer:
1. Secure legal review of the Plan Document and Summary Plan Description from
Employer's
legal counsel.
2. Provide salary reductions for Participants and forward contributions to HealthFirst, TPA,
Inc.
56
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3. Report Participant termination's and changes in status.
4. Upfront additional funds needed to reimburse a Participant for health care expenses, as
needed.
5. Initiate any action required in the event the plan becomes discriminatory.
6. Distribution of Participant statements of account annually.
7. Report Dependent Care Plan Expenses on Participant's W-2 form in Box 15.
57
DATE: October 18, 2000
SUBJECT: City Council Meeting—October 20, 2000
ITEM: 13.F.2. Consider a resolution authorizing the Mayor to execute an
Administrative Services Agreement with HealthFirst TPA,Inc. to
provide independent third party administration of the City's self-
funded health plan. This agreement with HealthFirst TPA provides
for independent third-party administration of the City's self-funded
health plan which includes the payment of medical, dental, and vision
I
laims, administration of the Flexible Spending Accounts for medical
and dependent care reimbursement,monthly and quarterly reports
and the coordination of benefits within the plan document.
Funding:
General Fund,Water/Wastewater Utility Fund
Cost:
The cost of this agreement is a function of the number of employees covered by the insurance
plan. For 460 employees the annual cost is $91,908.
Benefit:
This agreement provides skilled medical plan claims administration in an efficient manner.
History:
The City's self-insured medical plan has three principal components: a health care provider
(St. David's Health Network and Round Rock Hospital), claims administration(HealthFirst),
stop loss reinsurance(Mega Life). The City has no history with HealthFirst as claims
administrator.
EXECUTED
DOCUMENT
FOLLOWS
City of Round Rock
Amendment No. l
Effective December 1,2001
In order to comply with the provisions of the Interim Final Rules for Nondiscrimination in Health
Coverage in the Group Market(the"Non-Discrimination Rules")and the Health Insurance Portability
and Accountability Act of 1996("HIPAA"),City of Round Rock (the "Plan")is hereby amended as
follows:
1. With respect to any injury which is otherwise covered by the Plan, the Plan will not deny
benefits otherwise provided for treatment of the injury if the injury results from an act of
domestic violence or a medical condition(including both physical and mental health conditions).
2. In the event any provision of this Plan conflicts with the Non-Discrimination Rules or
HIPAA, the Plan shall be deemed to be automatically amended so that it is in compliance with
the Non-Discrimination Rules and HIPAA.
All other terms and conditions of the Plan which are not affected by this Amendment are unchanged.
Accepted:
(�4MA4L4" " zd=L
Si ture of Authorized Representative of Plan Sponsor
Date: ,200L
nALTH"FiR- ST
r
TW- 4 E
"A
821 E.S.E. Loop 323,Ste. 200•Tyler,Texas 75701
P.O. Box 130187 •Tyler,Texas 75713
(903) 581-2600•(800)477-2287•Fax(903)509-5723 f
www.hftpa.com
February 15, 2002
Linda Gunther
City of Round Rock
221 E. Main Street
Round Rock, TX 78664
Re: Addendum 1 to the Administrative Services Agreement
Dear Linda:
Enclosed you will find two (2) copies of Addendum 1 to the Administrative
Services Agreement for the City of Round Rock. This is an update to the existing
Agreement showing the updated rates, etc. for the 2001 — 2002 Plan Year.
Please have both copies signed. Retain one for your records and return the
other to HealthFirst. Should you have any questions, please do not hesitate to
contact us.
Sincerely,
Danica Key
Support Representative
t
ADDENDUM 1
To the Administrative Services Agreement for
The City of Round Rock
This Addendum to the Service Agreement (the "Agreement") is made and
entered into effective this 1 sl day of December, 2001. ("Effective Date")
The following sections are amended as follows:
EXHIBIT "B" - Fee Schedule:
The following fees shall apply during the term of this agreement. In the event of a
termination of this agreement, the payment of fees shall be governed by the
applicable provisions of the agreement or the insurance policy.
Services Employer Fees
Medical Benefits Including:
Direct Employee Service Medical Administration $11.00 PEPM
Direct Employee Service Dental Administration $1.50 PEPM
COBRA/HIPAA Administration (CompLink) $1.50 PEPM
Broker Fee N/A
Pre-Certification (MMS ) $1.35 PEPM
Prescription Drug Program (SYSTEMED—Merck-Medco) $.85 Per Claim
Amendments $150 Single Change
PPO Network Access Fee $1.50 PEPM
Access Direct "A Preferred Network"
New York Surcharge N/A
Reports N/A
EXHIBIT "D" - Insurance Coverage
Under the terms of this Agreement City of Round Rock has chosen Ace
American through Excess, Inc. for their Specific & Aggregate Stop Loss
Coverage beginning December 1, 2001. Stop Loss coverage has been obtained
with a $50,000 Specific deductible. Contract basis is 15/12 for the Specific and
the aggregate.
Specific Rates Aggregate Rates
Employee Only $33.95 $3.04
Employee/Family $83.85
1 of 3
1. Description of Transaction:Stop Loss Coverage
2. Name of Insurer: Ace American
3. Intermediary: Excess Inc.
There is no corporate affiliation between HealthFirst TPA and the carrier
Ace American nor is there any limiting agreement existing between the
above mentioned firms.
4. Commission (expressed as a percentage of gross annual premium), payable to:
0% Commission added
5. Compensation Schedules for the Claims Administrator:
$.35 PEPM from MMS for the administration of the Utilization Program
$.55 Per Claim from UPS for the administration of the Drug Card
Program
$.35 PEPM from CompLink for the administration of the COBRA/HIPAA
program.
EXHIBIT "E" - COBRA
The Employer engages the Claims Administrator to provide initial assistance with
CompLink - The COBRA Administrator, for the setup and web training for ongoing
administration.
Refer to Exhibit B—Schedule of Selected Services and Fees, in the CompLink Service
Agreement to review all fee's.
EXHIBIT "F" -HIPAA
The Employer engages the Claims Administrator to provide initial assistance with
CompLink - The HIPAA Administrator, for the setup and web training for ongoing
administration.
EXHIBIT "I" - Pharmacy Benefit Management Company
Under the terms of this agreement, the Employer has chosen SYSTEMED — Merck-
Medco to administer their pharmacy benefits. The Employer has agreed to pay $.85 per
claim plus dispensing fee, for this service:
2 of 3
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on their behalf by their duly authorized representatives' signatures, effective this 1' day
of December, 2001.
EMPLOYER CLAIMS ADMINIST
BY: BY:
PRINTED NAME: &t-47- A, 61;Wa,fie , PRINTED NAME: Tom W. Slack, Jr.
TITLE: I-n,4VTITLE: Chief Executive Officer
Date: Date:
3of3