Loading...
R-01-11-08-14A1 - 11/8/2001RESOLUTION NO. R- 01- 11- 08 -14A1 WHEREAS, the City of Round Rock desires to retain professional consulting services for insurance advisory, consulting, and insurance reporting information, and WHEREAS, Watson Wyatt & Co. has submitted an Advanced Benefits Solutions Agreement to provide said services, and WHEREAS, the City Council wishes to enter into said agreement with Watson Wyatt & Co., 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 agreement with Watson Wyatt & Co. for insurance advisory, consulting, and insurance reporting information, a copy of said agreement being attached hereto as Exhibit "A" 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. .e OLMA\ WORLDOX\ O , \WOOX \RESOLUTI \R11108A1.WP0 /ec AT EST: RESOLVED this 8th day of November, 2001. CHRISTINE R. MARTINEZ, City Secreta 2. dr Ai 4 0 R0: •T A. STLUKA, JR , Mayor City of Round Rock, Texas CLIENT: City of Round Rock CLIENT SHORT NAME: "the City" or "City" CONTACT: (9 u.Yr'-A t, Tel ad Bledso L 4 q DIRECT INVOICES TO: Teresa Bledsoe L i ' c q (9 vff hy r EFFECTIVE DATE: November 1, 2001 DRAFT — For Discussion Purposes Only WATSON WYATT WORLDWIDE ADVANCED BENEFITS SOLUTIONS AGREEMENT DRAFT This ADVANCED BENEFITS SOLUTIONS AGREEMENT ( "Agreement") by and between Watson Wyatt & Co. ( "Watson Wyatt") and the City of Round Rock, ( "City"). The Agreement is made and is effective as of the effective date shown above and sets forth the terms and conditions under which the City engages Watson Wyatt to provide advisory services and reports to the City. The Agreement shall include any future written amendments, modifications, or supplements that are agreed to and executed by both parties, pursuant to the terms of this Agreement. I. INTRODUCTION The City sponsors various health and welfare Plans (the "Plans ") as employee benefits for its employees. The City understands that the responsibilities for administering the Plans and for carrying out their provisions rests with the Plan Administrators, as that term is defined in the Employee Retirement Income Security Act of 1974, as amended ( "ERISA "). Watson Wyatt shall not serve as the Plan Administrator, but shall, subject to the direction of the City, perform certain services as defined in this Agreement. The City shall pay Watson Wyatt all reasonable fees for providing such services and reports, as described herein II. TERM This Agreement shall remain in effect for a term of two (2) years commencing on the effective date of this agreement, unless terminated by either party in accordance with Section X. ( ExITUR IC ) Advanced BPnefils Snlulinns DRAFT — For Discussion Purposes Only III. DESCRIPTION OF SERVICES A. Under the terms of this Agreement, Watson Wyatt will provide the City with those services specified in Attachment "A" to the extent relevant for a Plan, as specified by the City; provided however that Watson Wyatt shall not perform any service which would cause Watson Wyatt to be a fiduciary (as defined in ERISA) of any Plan. B. Watson Wyatt may also perform services outside of the scope of those services described in Attachment "A." Billing for such "out -of- scope" services will be in addition to the fees set forth in this agreement and will be subject to the terms and conditions to be negotiated by the parties, separate and apart from this agreement. C. The City understands and agrees that nothing contained in this agreement, or in any attachments hereto, shall be construed so as to obligate Watson Wyatt in any way with respect to any state, federal, or other, filings due on or before the effective date of this agreement. While Watson Wyatt may, at the City's request, prepare or complete delinquent fillings, the City understands and agrees that such services shall constitute "out -of- scope" services, subject to the terms of paragraph `B," above. D. The City understands that it retains complete and final authority and responsibility regarding Plan policy, interpretations, practices, and procedures and recognizes that Watson Wyatt is not a fiduciary, as defined in ERISA, under this Agreement. E. This Agreement shall not be deemed a contract of insurance under any laws or regulations. Watson Wyatt does not insure, guarantee, or underwrite the liability of the City under the Plans. The City has total fiduciary responsibility under the Plans and responsibility for all expenses incidental to the Plans. F. The City understands that Watson Wyatt is not a law firm and is not engaged nor authorized to provide legal services. Many of the matters for which Watson Wyatt may advise the City may involve the application of federal, state and local law. In some cases, foreign laws may apply. Watson Wyatt disclaims any responsibility to advise the City concerning the proper interpretation or application of law affecting the matters for which the City has engaged Watson Wyatt. It is therefore recommend that the City consult with legal counsel concerning any legal matters. IV. FEES AND PAYMENTS FOR SERVICES AND PRODUCTS A. The fees for the services provided hereunder are specified in Attachment B and shall remain in effect during the term of this Agreement, unless changed by the agreement of the parties. B. Watson Wyatt shall submit invoices to the City on a monthly basis for the services provided hereunder. The City shall pay the undisputed portion of each invoice within thirty (30) days of its receipt of such invoices. 2 Advanced Renefiic Snlulinnc DRAFT — For Discussion Purposes Only C. Unless otherwise clearly specified, all Professional Fees and Expenses, as defined in Attachment `B," or in any supplement or written amendment hereto are exclusive of reasonably related and incidental travel, subsistence and other expenses incurred by Watson Wyatt in connection with providing such services. Such expenses are set forth in Attachment "B." In addition, the City agrees to pay Watson Wyatt an office administration and technology charge, equal to five percent (5 %) of all Professional Fees. D. In addition to all charges made hereunder, the City shall be responsible for all sales and excise taxes and any related interest and penalties that are or may be applicable for the services provided under this Agreement and are required to be collected by Watson Wyatt or paid by Watson Wyatt to any tax authority, except in instances when fines or penalties are due to the negligence or Watson Wyatt's failure to adequately or timely perform services pursuant to this Agreement. E. Watson Wyatt may cease providing services hereunder if the City is more than sixty (60) days late in payment of invoices, provided Watson Wyatt notifies the City in writing of its intention in this regard. Such cessation of services shall not relieve the City of its obligations hereunder and shall not be deemed to be termination of this Agreement, unless Watson Wyatt shall so specify as provided in Section IX. Notwithstanding the foregoing, a continuation of services shall not be deemed a waiver by Watson Wyatt of any rights hereunder. F. The City shall pay Watson Wyatt for any time charges and out -of- pocket expenses (including reasonable attorneys' fees) incurred by Watson Wyatt in responding to any subpoena or other legal process that may be issued to Watson Wyatt or any of its officers, directors or employees in connection with litigation or other proceedings to which the City is a party and which seeks production of documents or testimony relating to the City, any of its employee compensation and benefit plans, or the services performed pursuant to this agreement. V. CITY OF ROUND ROCK'S RESPONSIBILITY City of Round Rock will: A. Maintain current and accurate eligibility and coverage records for the Plans, verify participant eligibility and submit this information timely as requested by Watson Wyatt. B. Resolve all Plan ambiguities and disputes relating to the Plan eligibility of a Plan participant, Plan coverage, or any other Plan interpretation questions. C. Provide Watson Wyatt with copies of any and all revisions or changes or amendments to the Plans within 15 working days of the effective date of the changes. D. Provide and timely distribute all notices and information required to be given to Plan participants, maintain and operate the Plans in accordance with applicable federal and state 3 Advanced Benefits Solutions DRAFT — For Discussion Purposes Only law, maintain all recordkeeping, and file all forms relative thereto pursuant to any federal, state, or local law, unless this Agreement specifically assigns such duties to Watson Wyatt. E. Acknowledge that The City of Round Rock is the Plan Sponsor, Plan Administrator, and Named Fiduciary, as these terms are defined in ERISA. As such, the City retains full discretionary control and authority and discretionary responsibility in the operation, administration and compliance of the Plans. F. Pay any and all taxes, licenses, and fees levied, if any, by any local, state, or federal authority in connection with the Plans. G. Warrant and represent that the only entities that participate, or will participate, in the Plans are in the City's "control group" as that term is used in ERISA. H. Maintain responsibility for the accuracy and timeliness of all Plan records and act as the sole authority to communicate with Plan participants. I. Maintain any fidelity bond or other insurance as may be required by state or federal law for the protection of the Plans and Plan participants. J. The City shall timely provide Watson Wyatt with such information as Watson Wyatt reasonably requires for it to perform services under this agreement. The City shall deliver the information described in this paragraph in the format, and within reasonable time frames, as specified by Watson Wyatt. VI. PROPRIETARY DATA A. During the term of this agreement, each party shall use the information furnished to it solely for the purpose of performing their respective obligations under the agreement. During the term of this agreement, and for five years thereafter, neither party shall disclose such information to any person other than to its directors, officers, employees, lenders, counsel, representatives or affiliates, if any, who require the information ( "Representatives "), or for any purpose other than as set forth above. If a party desires to disclose the information furnished to it under this agreement to a Representative, that party shall first inform the Representative of the confidential nature of the information and of the requirement that it not be used for purposes other than as set forth above. In any event, and without limiting the preceding obligation, the party receiving the information shall be and remains legally responsible for any breach of this agreement, and shall reasonably safeguard the information from unauthorized use or disclosure by its Representatives. Except as may be required by applicable law, regulation or stock exchange rules, without the prior written consent of the party supplying the information, the party receiving the information will not, and will not permit its Representatives to, disclose to any person either the fact that the information has been made available to that party, or that the party has inspected any portion of the information. If a party who has received the information is requested or required (by oral question, interrogatories, request for information or documents, subpoena, civil investigative 4 Advanced RenpRly Soluiinn¢ DRAFT — For Discussion Purposes Only demand or similar process) to disclose any information, that party, to the extent it may legally do so, will promptly notify the other party of such request or requirement so that the other party may seek an appropriate protective order. To the extent the other party is unable to obtain a protective order and the party receiving the information is legally compelled to disclose information, the party receiving the information may disclose such of the information to the party compelling disclosure as is required by law. B. For the purposes of this agreement, confidential information shall not include: (1) information that is, or comes, within the public domain through no fault of either party; (2) information learned by either party from third parties; or (3) information known to, or disclosed by, either party independent of this agreement. C. All records maintained by Watson Wyatt under this Agreement are exclusively the property of the City. If upon termination the City requests a change in the format or content of the records maintained by Watson Wyatt, the City shall be responsible for payment of any reasonable costs associated with such changes. If the City becomes aware of any breach of this section or other conditions under which such system, documentation or other information or any part thereof is lost or comes into possession of an unauthorized person, firm or organization, the City shall promptly notify Watson Wyatt and provide Watson Wyatt with all information regarding such breach or improper possession and take reasonable action as necessary to recover the system, documentation or other information or any part thereof at the request and cost of Watson Wyatt. The obligations of the City and Watson Wyatt under this section shall survive the termination of this Agreement. VII. AUTHORIZED REPRESENTATIVES The City hereby represents and warrants that it has the authority to act on behalf of the Plans under this Agreement. The City shall from time to time designate in writing one or more of its employees who shall be authorized to provide instructions to Watson Wyatt under this Agreement. VIII. INDEMNIFICATION: LIMITATION OF LIABILITY A. The City understands that the obligations and duties of Watson Wyatt with respect to the Plans shall be those specifically listed in this Agreement, and Watson Wyatt shall not have any other obligation, duty, responsibility or liability with respect to any other aspect of the operation or administration of the Plans. Watson Wyatt has no contractual obligation with the Plans or their sponsor or participants, and neither the Plans nor their sponsors or participants shall be third party beneficiaries of this Agreement. Watson Wyatt shall have no liability to the City for damage suffered by the City or a Plan in connection with the services provided by Watson Wyatt under this Agreement unless such damage is due to the negligence or willful misconduct of Watson Wyatt in the performance of such services. Any such liability shall be limited solely to providing corrective reports or services and monetary damages; provided, however, that Watson Wyatt's liability for monetary damages with 5 Advanced Brnefic Solulinno DRAFT — For Discussion Purposes Only respect to any Plan or all Plans in the aggregate, shall in no event exceed the amount of fees received by Watson Wyatt from the City pursuant to this Agreement for the 12 consecutive months immediately preceding the month during which the event (or, if liability is related to a series of events, the first event in such series) occurs which gives rise to such liability. B. Each party shall indemnify the other, and each other harmless from, any and all loss, damage, penalty, liability, cost and expense, including without limitation, reasonable attorney's fees and disbursement, that may be incurred by, imposed upon, or asserted by reason of any claim, regulatory proceeding, or litigation arising from any act done or omitted to be done by any individual or person with respect to the Plan or trust, excepting only any loss, damage, penalty, liability, cost or expenses resulting from negligence or willful misconduct. C. The City shall have until (i) ninety (90) days after completion of the annual audit of the Plan, or (ii) nine (9) months after the Plan's fiscal year end, whichever is earlier, to notify Watson Wyatt of any error or inaccuracy. Any such notice from the City must be in writing and must specify the error or omission in Watson Wyatt's services. Unless such notice is given, Watson Wyatt shall not be subject to any liability to any person for any transaction, report or service. D. In the event that Watson Wyatt is retained to provide nondiscrimination testing for any of the Plans, Watson Wyatt shall have no liability for correcting data compiled by or relied upon by the City or the Plans that is necessary for Watson Wyatt's performance of such nondiscrimination testing and that is determined by Watson Wyatt to be inaccurate, unless such inaccuracy is due to the negligence or willful misconduct of Watson Wyatt in the performance of such duties. Watson Wyatt assumes no responsibility for records, reports, or testing generated or performed by persons other than Watson Wyatt for periods prior to the effective date of this Agreement. E. The parties agree that, in no event shall they be liable to the other for any incidental, indirect, special, punitive, consequential or similar damages of any kind including without limitation, loss of profits, loss of business or interruptions of business, whether such liabilities are predicated on contract, tort, strict liability or any other legal theory. F. The City agrees that Watson Wyatt shall have no responsibility or liability with respect to the plans' compliance in form or in operation with any of the requirements of the Internal Revenue Code or ERISA, other than those duties expressly performed by Watson Wyatt under this agreement. G. The provisions of this Section shall survive the termination of this Agreement. IX. ASSIGNMENT Watson Wyatt shall have the right to assign or delegate all or part of its rights, responsibilities or duties hereunder to any qualified and capable Watson Wyatt affiliate. Prior to any such assignment however, Watson Wyatt shall provide the City with written notice of its intention to 6 Z Advanced arnetlfa SnIWinns DRAFT — For Discussion Purposes Only make any such assignment or delegation. Any other assignment or delegation shall require prior written approval by the City. Such approval shall not be unreasonably withheld. X. TERMINATION A. In addition to such other provisions of this Agreement related to the power of Watson Wyatt or the City to terminate this Agreement, this Agreement may be terminated as follows: 1. By either party: a. At any time, with or without cause, with not less than sixty (60) days prior written notice by either party; b. Due to a material breach or default of the other party in the performance of its responsibilities and obligations under this Agreement, provided such material breach is not cured with thirty (30) days from the date of written notice of such breach or default, unless immediate termination is permitted under paragraphs 5 or 6 below; c. In the event the other party shall become insolvent, make a general assignment for the benefit of creditors, suffer or permit the appointment of a receiver for its business or assets, become subject to any proceeding under any bankruptcy or insolvency law whether domestic or foreign, or become liquidated, voluntarily or otherwise; d. Immediately, in the event the other party fails to comply with the limitations of use set forth in Article VI; e. If the other party engages in any unethical business practice or conducts itself in a manner which, in the reasonable judgment of the terminating party, is in violation of any federal, state, or other government statute, rule, or regulation; or f. If one party, through its acts, practices, or operations, exposes the other party to any existing or potential investigation or litigation. 2. By Watson Wyatt if the City fails to pay the undisputed portion of any Watson Wyatt invoice upon presentation for payment and in accordance with the Fee Schedule. B. Upon termination of this Agreement, Watson Wyatt shall return all documents, information and data relating to the Plans of the City. Watson Wyatt may not retain input or output materials or the Plans' data files without the City's written permission. Watson Wyatt agrees not to disclose such data to any third party unless otherwise directed by the City or as required by law. C. Save and except for those sums due and owing, or which may later be determined to be due and owing, pursuant to section VIII of this Agreement, should this Agreement be terminated 7 Advanced Benefiic Snlulinnc DRAFT — For Discussion Purposes Only by either party, the City shall be liable only for those fees, expenses, and office administration and technology charges incurred prior to the effective date of termination. D. If this agreement is extended to a second year, in addition to those sums due and owing, or which may later be determined to be due and owing, pursuant to section VIII of this Agreement, if the City terminates this Agreement during the second year of this Agreement, the City agrees to pay to Watson Wyatt all expenses and office administration and technology charges incurred prior to the effective date of termination, in addition to the greater of: (1) all monthly retainer fees due and owing as of the effective date of termination (see Fee Schedule); or (2) the number of hours actually expended between the start of the second year and the effective date of termination, multiplied by the contract termination rate of $250 per hour, less the sum of the monthly retainer fees actually paid by the City during this period. XI. GENERAL A. Any notice required or permitted to be given hereunder shall be deemed given if hand - delivered or mailed by certified or registered first -class mail, postage prepaid, or delivered by a reliable courier service to a party at the address specified above. B. Watson Wyatt will take reasonable measures to preserve the confidentiality of any proprietary or confidential information that the City provides to Watson Wyatt in connection with this engagement, provided that no claim may be made for any failure to protect information that occurs more than two years after the termination or expiration of this agreement. At the conclusion of the engagement, Watson Wyatt shall return to the City all materials, data and documents that you have provided to us, except that we may retain one copy of these materials for our archival purposes, subject to our confidentiality obligations hereunder. C. Any waiver by either party of any requirement hereunder shall not be deemed to be a continuing waiver nor a waiver of any other requirement hereof. D. If any part of this Agreement shall be adjudicated by any court of competent jurisdiction to be invalid or unenforceable, the remaining terms shall survive intact, and this Agreement shall be construed as if the invalid or unenforceable term had never been contained herein. E. This Agreement is for the mutual and exclusive benefit of Watson Wyatt and the City and shall not be deemed to be for the direct or indirect benefit of clients or customers of Watson Wyatt or the City, including the Plans. Clients or customers of Watson Wyatt and the City, including the Plans shall not be deemed to be third party beneficiaries of this Agreement or have any other contractual relationship with Watson Wyatt or the City by reason of this Agreement. F. The relationship between Watson Wyatt and the City shall be that of independent contractors. The employees of one party shall not be deemed to be employees of the other party for any purpose. 8 Advanced DRAFT — For Discussion Purposes Only G. No change or modification of this Agreement will be valid or binding, nor will any waiver of any term of condition of this Agreement be effective, unless in writing and signed by an authorized representative of both parties hereto. H. Watson Wyatt shall have the right to make changes or modify procedures associated with its services and to establish procedures in addition to those expressly provided hereunder as it deems necessary for the proper performance of its duties. Watson Wyatt shall notify the City in writing of any such changes that have a material impact on the services provided hereunder. I. This Agreement shall be construed and enforced in accordance with the laws of the State of Texas. J. Any remedies of either party hereunder are cumulative and exercise by a party of one remedy shall not preclude its exercising any other remedy it may have hereunder. K. The City shall provide Watson Wyatt with copies of any proposed amendments to the Plans that have a material impact on the services to be provided hereunder at least ninety (90) days prior to their adoption. If Watson Wyatt determines that any Plan amendment materially impacts the services to be provided hereunder, Watson Wyatt shall notify the City within sixty (60) days following receipt of the amendment of any impact such change may have on the services to be provided under this Agreement. The parties will then enter into good faith negotiations regarding any changes to this Agreement necessitated by the Plan amendment. In the event the parties are unable to agree as to any such changes, either party may terminate this agreement in accordance with paragraph X.A.1.a, above. L. Force Majeure: Neither party shall be liable for failure to perform its obligations hereunder where such failure results from acts to God, fires, storms, accidents, actions and decree of governmental bodies or communication line failure or any other event beyond its reasonable control. The party who has been so affected promptly shall give notice to the other party and shall use its best efforts to resume performance. M. Both parties agree that they have read this agreement and existing attachments, understand it and agree to be bound by its terms and conditions. It is further agreed that this agreement, and existing attachments hereto, all of which are hereby incorporated by reference herein and made a part of this agreement, constitute the complete and exclusive agreement between the City and Watson Wyatt and supersede all prior agreements and communications, oral and written between the parties in relation to the subject matter of this agreement. N. It is not anticipate that any dispute will arise between the parties to this Agreement, but if one does the parties shall try to resolve it by appropriate internal means, including referral to each party's senior management. If mutually satisfactory resolution cannot be reached, then any dispute or claim arising from this agreement will be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ( "AAA "), and the Federal Arbitration Act, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The arbitration will be conducted in Dallas, Texas 9 Advanced Re■rrilc Snlulinnc DRAFT — For Discussion Purposes Only before a panel of three arbitrators, with one arbitrator named by each party and the third named by the two party - appointed arbitrators, or (if they should fail to agree on the third) by the AAA. The arbitrators may not award non - monetary or equitable relief, punitive damages or any other damages not measured by the prevailing party's actual damages. 0. Attached hereto and made a part hereof for all purposes are the following: DATE: Attachment A - Attachment B - Attachment C - Description of Services Plan Services Schedule of Fees Authorized Representatives Accepted By: Accepted To: City of Round Rock By: By: TITLE: TITLE: 10 DATE: Advanced Re,, fli; Sntulinn; DRAFT — For Discussion Purposes Only PROGRAM PLANNING ATTACHMENT A ADVISORY SERVICES Assist in developing goals and objectives, annually Meet quarterly to: 1. Review toward established goals and objectives 2. Review status of any special projects 3. Review claim reports and results (experience & utilization) 4. Administrative update (reports, costs, accruals) 5. Provide recommendations, as necessary Develop standard reporting formats. Create financial overview including: 1. Claims experience by coverage class, company, location and plan type 2. Claims cost by major expense category 3. Effectiveness of managed care programs and savings 4. Plan administrative expenses Prepare annual stewardship report to summarize performance and plans for next year 11 Advanced Renefiic Solutions DRAFT — For Discussion Purposes Only ATTACHMENT A ADVISORY SERVICES PLAN DESIGN AND PRICING Evaluation of current benefit program costs, with comparisons to alternate programs. Calculate required reserve for claims incurred but not reported (IBNR) for self - insured plans Calculate COBRA rates and premium - equivalent rates for self - insured plans Model effect of potential plan changes on company and participant contributions Assist the City of Round Rock in development of employee option prices /cost sharing Develop annual benefits budget Conduct post - enrollment reconciliation Identify trends and develop recommendations to avert risks and improve plan performance Overview of industry trends, recent or pending legislation and compliance issues Respond to ad hoc inquiries from City of Round Rock human resource representatives. 12 Advanced Renefitc Snlutinnc DRAFT — For Discussion Purposes Only VENDOR MANAGEMENT Assist with claim/plan administration issues: 1. Claims problems 2. Eligibility issues 3. Premium/fee payment issues ATTACHMENT A ADVISORY SERVICES Perform quarterly assessments of the vendors concerning reporting and customer service practices. Answer day -to -day questions from City of Round Rock human resources representatives regarding vendor management issues as needed. Evaluate performance of current vendors Establish/negotiate vendor performance goals Review status of vendor performance standards: quarterly reports required Conduct vendor service meetings Review of funding arrangements, annually Analyze and review all insurance /vendor contracts and make recommendations (performance guarantees, vendor /client liability, fiduciary responsibility) Renewal assistance, including the following steps: 1. Obtain initial renewal offers from the current vendors 2. Engage in negotiations with the vendors on renewal rates and performance guarantees 3. Investigate plan design recommendations, as needed 4. Prepare a report outlining the financial impact of the renewal. 5. Prepare communications to carriers /vendors The work associated with a change in the medical plan vendors (third -party administrator and/or health care network) will be performed no more than once during the two -year agreement. Vendor selection for other group insurance products (medical reinsurance, dental, vision, life insurance, and disability) is included. 13 Advanced DRAFT — For Discussion Purposes Only ATTACHMENT A ADVISORY SERVICES COMPLIANCE Prepare Form 5500 and related schedules Perform non - discrimination testing as required by IRC Sections 125, 129 and 105(h) Prepare Summary Annual Reports Review existing plan documents annually Prepare amendments to plan documents, as needed Assist in technical review and of Summary Plan Description(s) Assist in technical review of Summary Material Modifications Review of employee communication materials for technical accuracy, to include: 1. Graphical presentations 2. Employee newsletters 3. Enrollment communications for open enrollment and new hires. Respond to ad hoc compliance questions from City of Round Rock human resources representative. Please note that assistance with resolution of plan administration issues does not include direct contact with employees of the City of Round Rock. 14 Advanced ReneRlc Snlulinnc DRAFT — For Discussion Purposes Only ATTACHMENT 13 PLAN SERVICES SCHEDULE OF FEES MASTER BENEFIT SERVICE AGREEMENT Professional Fees: 1 Year — November 1, 2001— October 31, 2002 City of Round Rock agrees to pay $6,500 per month. 2nd Year — November 1, 2002 — October 31, 2003 City of Round Rock agrees to pay $6,500 per month. Expenses: City of Round Rock agrees to pay for out of pocket expenses including expenses related to travel, telephone charges, photocopying and materials reproduction charges, express mail services (including overnight and courier packages), and printing and postage charges. These expenses are estimated to be 10 -12% of our professional fees. City of Round Rock agrees to pay an office administration and technology charge equal to 5% of professional fees. City of Round Rock furthermore understands that monthly payment is due 30 days from the date of receipt of the monthly invoice. For any amount that is outstanding for more than 30 days, a 1% interest charge will be added on a monthly basis. NOTE: It is the practice of Watson Wyatt & Company to accept commissions from group insurance products for which we are involved in the ongoing management of these products. All commissions received are used to offset our professional fees. The actual commissions received will be documented on invoices sent to the City of Round Rock as part of our standard billing practice. 15 A DRAFT — For Discussion Purposes Only ATTACHMENT C AUTHORIZED REPRESENTATIVES Currently, the authorized representatives are listed below: NAME TITLE NAME TITLE NAME TITLE 16 Advanced BeneGf< Snlulinna DATE: November 2, 2001 SUBJECT: City Council Meeting — November 8, 2001 ITEM: 14.A.1. Consider a resolution authorizing the Mayor to execute an Advanced Benefits Solutions Agreement with Watson Wyatt & Company for insurance advisory, consulting, and insurance reporting information. Resource: Teresa S. Bledsoe, Human Resources Director History: Council previously approved an agreement for Watson Wyatt & Co. to conduct a review and analysis of our current health and supplementary benefits plan. As a result of the information gleaned and discussions with our current agent -of- record we have determined that it is in the best interest of our plan to pursue an agreement with Watson Wyatt & Co. This agreement would change our agent -of- record from Keith Carmichael, Neiman Hanks to Jerry Turner, Watson Wyatt. Funding: Cost: $78,000 plus expenses not to exceed $90,000. Watson Wyatt & Co. has agreed this amount will not exceed actual cost of service provided plus expenses. Source of funds: General Fund — Health Plan and Utility Fund — Health Plan Outside Resources: N/A Impact: For the past seven years we have maintained the same agent of record. While we understand that overall costs of health care are increasing we became concerned that we did not receive any recommendations from our agent -of- record as to what to consider in light of national trends or just general cost containment suggestions. The information presented by Watson Wyatt & Co., under a consulting agreement, for a specific review of our health and `welfare' plans targeted some specific areas that we should take a look at for ongoing plan management. Benefit: This agreement formalizes with an agent -of- record whose general focus is to make every effort to minimize the cost of the City's employee benefit program without sacrificing the quality of the plan. This agreement enables us to: • Take a more strategic approach to managing the benefits programs • Improve cost management and employee satisfaction with the benefit programs • Allow for ease and fluidity of future changes /modifications to the benefit program • Access pertinent information impacting employee benefits • Reduce burden for administrative and operational staff regarding benefit programs. Public Comment: N/A Sponsor: N/A CLIENT: CLIENT SHORT NAME: CONTACT: DIRECT INVOICES TO: EFFECTIVE DATE: City of Round Rock "the City" or "City" Linda Gunther Linda Gunther November 1, 2001 This ADVANCED BENEFITS SOLUTIONS AGREEMENT ( "Agreement ") by and between Watson Wyatt & Co. ( "Watson Wyatt ") and the City of Round Rock, ( "City"). The Agreement is made and is effective as of the effective date shown above and sets forth the terms and conditions under which the City engages Watson Wyatt to provide advisory services and reports to the City. The Agreement shall include any future written amendments, modifications, or supplements that are agreed to and executed by both parties, pursuant to the terms of this Agreement. 1. INTRODUCTION II. TERM WATSON WYATT & CO. ADVANCED BENEFITS SOLUTIONS AGREEMENT This Agreement shall remain in effect for a term of two (2) years commencing on the effective date of this agreement, unless terminated by either party in accordance with Section X. QRIGINAL K- 01- 11 -0B -1 A The City sponsors various health and welfare Plans (the "Plans ") as employee benefits for its employees. The City understands that the responsibilities for administering the Plans and for carrying out their provisions rests with the Plan Administrators, as that term is defined in the Employee Retirement Income Security Act of 1974, as amended ( "ERISA "). Watson Wyatt shall not serve as the Plan Administrator, but shall, subject to the direction of the City, perform certain services as defined in this Agreement. The City shall pay Watson Wyatt all reasonable fees for providing such services and reports, as described herein III. DESCRIPTION OF SERVICES A. Under the terms of this Agreement, Watson Wyatt will provide the City with those services specified in Attachment "A" to the extent relevant for a Plan, as specified by the City; provided however that Watson Wyatt shall not perform any service which would cause Watson Wyatt to be a fiduciary (as defined in ERISA) of any Plan. B. Watson Wyatt may also perform services outside of the scope of those services described in Attachment "A." Billing for such "out -of- scope" services will be in addition to the fees set forth in this agreement and will be subject to the terms and conditions to be negotiated by the parties, separate and apart from this agreement. C. The City understands and agrees that nothing contained in this agreement, or in any attachments hereto, shall be construed so as to obligate Watson Wyatt in any way with respect to any state, federal, or other, filings due on or before the effective date of this agreement. While Watson Wyatt may, at the City's request, prepare or complete delinquent fillings, the City understands and agrees that such services shall constitute "out -of- scope" services, subject to the terms of paragraph `B," above. D. The City understands that it retains complete and final authority and responsibility regarding Plan policy, interpretations, practices, and procedures and recognizes that Watson Wyatt is not a fiduciary, as defined in ERISA, under this Agreement. E. This Agreement shall not be deemed a contract of insurance under any laws or regulations. Watson Wyatt does not insure, guarantee, or underwrite the liability of the City under the Plans. The City has total fiduciary responsibility under the Plans and responsibility for all expenses incidental to the Plans. F. The City understands that Watson Wyatt is not a law firm and is not engaged nor authorized to provide legal services. Many of the matters for which Watson Wyatt may advise the City may involve the application of federal, state and local law. In some cases, foreign laws may apply. Watson Wyatt disclaims any responsibility to advise the City concerning the proper interpretation or application of law affecting the matters for which the City has engaged Watson Wyatt. It is therefore recommend that the City consult with legal counsel conceming any legal matters. IV. FEES AND PAYMENTS FOR SERVICES AND PRODUCTS A. The fees for the services provided hereunder are specified in Attachment B and shall remain in effect during the term of this Agreement, unless changed by the agreement of the parties. B. Watson Wyatt shall submit invoices to the City on a monthly basis for the services provided hereunder. The City shall pay the undisputed portion of each invoice within thirty (30) days of its receipt of such invoices. 2 C. Unless otherwise clearly specified, all Professional Fees and Expenses, as defined in Attachment `B," or in any supplement or written amendment hereto are exclusive of reasonably related and incidental travel, subsistence and other expenses incurred by Watson Wyatt in connection with providing such services. Such expenses are set forth in Attachment "B." In addition, the City agrees to pay Watson Wyatt an office administration and technology charge, equal to five percent (5 %) of all Professional Fees. D. In addition to all charges made hereunder, the City shall be responsible for all sales and excise taxes and any related interest and penalties that are or may be applicable for the services provided under this Agreement and are required to be collected by Watson Wyatt or paid by Watson Wyatt to any tax authority, except in instances when fines or penalties are due to the negligence or Watson Wyatt's failure to adequately or timely perform services pursuant to this Agreement. E. Watson Wyatt may cease providing services hereunder if the City is more than sixty (60) days late in payment of invoices, provided Watson Wyatt notifies the City in writing of its intention in this regard. Such cessation of services shall not relieve the City of its obligations hereunder and shall not be deemed to be termination of this Agreement, unless Watson Wyatt shall so specify as provided in Section IX. Notwithstanding the foregoing, a continuation of services shall not be deemed a waiver by Watson Wyatt of any rights hereunder. F. The City shall pay Watson Wyatt for any time charges and out -of- pocket expenses (including reasonable attorneys' fees) incurred by Watson Wyatt in responding to any subpoena or other legal process that may be issued to Watson Wyatt or any of its officers, directors or employees in connection with litigation or other proceedings to which the City is a party and which seeks production of documents or testimony relating to the City, any of its employee compensation and benefit plans, or the services performed pursuant to this agreement. V. CITY OF ROUND ROCK'S RESPONSIBILITY City of Round Rock will: A. Maintain current and accurate eligibility and coverage records for the Plans, verify participant eligibility and submit this information timely as requested by Watson Wyatt. B. Resolve all Plan ambiguities and disputes relating to the Plan eligibility of a Plan participant, Plan coverage, or any other Plan interpretation questions. C. Provide Watson Wyatt with copies of any and all revisions or changes or amendments to the Plans within 15 working days of the effective date of the changes. 3 D. Provide and timely distribute all notices and information required to be given to Plan participants, maintain and operate the Plans in accordance with applicable federal and state law, maintain all recordkeeping, and file all forms relative thereto pursuant to any federal, state, or local law, unless this Agreement specifically assigns such duties to Watson Wyatt. E. Acknowledge that The City of Round Rock is the Plan Sponsor, Plan Administrator, and Named Fiduciary, as these terms are defined in ERISA. As such, the City retains full discretionary control and authority and discretionary responsibility in the operation, administration and compliance of the Plans. F. Pay any and all taxes, licenses, and fees levied, if any, by any local, state, or federal authority in connection with the Plans. G. Warrant and represent that the only entities that participate, or will participate, in the Plans are in the City's "control group" as that term is used in ERISA. H. Maintain responsibility for the accuracy and timeliness of all Plan records and act as the sole authority to communicate with Plan participants. I. Maintain any fidelity bond or other insurance as may be required by state or federal law for the protection of the Plans and Plan participants. J. The City shall timely provide Watson Wyatt with such information as Watson Wyatt reasonably requires for it to perform services under this agreement. The City shall deliver the information described in this paragraph in the format, and within reasonable time frames, as specified by Watson Wyatt. VI. PROPRIETARY DATA A. During the term of this agreement, each party shall use the information furnished to it solely for the purpose of performing their respective obligations under the agreement. During the term of this agreement, and for five years thereafter, neither party shall disclose such information to any person other than to its directors, officers, employees, lenders, counsel, representatives or affiliates, if any, who require the information ( "Representatives "), or for any purpose other than as set forth above. If a party desires to disclose the information furnished to it under this agreement to a Representative, that party shall first inform the Representative of the confidential nature of the information and of the requirement that it not be used for purposes other than as set forth above. In any event, and without limiting the preceding obligation, the party receiving the information shall be and remains legally responsible for any breach of this agreement, and shall reasonably safeguard the information from unauthorized use or disclosure by its Representatives. Except as may be required by applicable law, regulation or stock exchange rules, without the prior written consent of the party supplying the information, the party receiving the information will not, and will not permit its Representatives to, disclose to any person either the fact that the information has been made available to that party, or that the party has inspected any portion of the 4 177,7 information. If a party who has received the information is requested or required (by oral question, interrogatories, request for information or documents, subpoena, civil investigative demand or similar process) to disclose any information, that party, to the extent it may legally do so, will promptly notify the other party of such request or requirement so that the other party may seek an appropriate protective order. To the extent the other party is unable to obtain a protective order and the party receiving the information is legally compelled to disclose information, the party receiving the information may disclose such of the information to the party compelling disclosure as is required by law. B. For the purposes of this agreement, confidential information shall not include: (1) information that is, or comes, within the public domain through no fault of either party; (2) information leamed by either party from third parties; or (3) information known to, or disclosed by, either party independent of this agreement. C. All records maintained by Watson Wyatt under this Agreement are exclusively the property of the City. If upon termination the City requests a change in the format or content of the records maintained by Watson Wyatt, the City shall be responsible for payment of any reasonable costs associated with such changes. If the City becomes aware of any breach of this section or other conditions under which such system, documentation or other information or any part thereof is lost or comes into possession of an unauthorized person, firm or organization, the City shall promptly notify Watson Wyatt and provide Watson Wyatt with all information regarding such breach or improper possession and take reasonable action as necessary to recover the system, documentation or other information or any part thereof at the request and cost of Watson Wyatt. The obligations of the City and Watson Wyatt under this section shall survive the termination of this Agreement. VII. AUTHORIZED REPRESENTATIVES The City hereby represents and warrants that it has the authority to act on behalf of the Plans under this Agreement. The City shall from time to time designate in writing one or more of its employees who shall be authorized to provide instructions to Watson Wyatt under this Agreement. VIII. INDEMNIFICATION: LIMITATION OF LIABILITY A. The City understands that the obligations and duties of Watson Wyatt with respect to the Plans shall be those specifically listed in this Agreement, and Watson Wyatt shall not have any other obligation, duty, responsibility or liability with respect to any other aspect of the operation or administration of the Plans. Watson Wyatt has no contractual obligation with the Plans or their sponsor or participants, and neither the Plans nor their sponsors or participants shall be third party beneficiaries of this Agreement. Watson Wyatt shall have no liability to the City for damage suffered by the City or a Plan in connection with the services provided by Watson Wyatt under this Agreement unless such damage is due to the negligence or willful misconduct of Watson Wyatt in the performance of such services. Any such 5 liability shall be limited solely to providing corrective reports or services and monetary damages; provided, however, that Watson Wyatt's liability for monetary damages with respect to any Plan or all Plans in the aggregate, shall in no event exceed the amount of fees received by Watson Wyatt from the City pursuant to this Agreement for the 12 consecutive months immediately preceding the month during which the event (or, if liability is related to a series of events, the first event in such series) occurs which gives rise to such liability. B. Each party shall indemnify the other, and each other harmless from, any and all loss, damage, penalty, liability, cost and expense, including without limitation, reasonable attorney's fees and disbursement, that may be incurred by, imposed upon, or asserted by reason of any claim, regulatory proceeding, or litigation arising from any act done or omitted to be done by any individual or person with respect to the Plan or trust, excepting only any loss, damage, penalty, liability, cost or expenses resulting from negligence or willful misconduct. C. The City shall have until (i) ninety (90) days after completion of the annual audit of the Plan, or (ii) nine (9) months after the Plan's fiscal year end, whichever is earlier, to notify Watson Wyatt of any error or inaccuracy. Any such notice from the City must be in writing and must specify the error or omission in Watson Wyatt's services. Unless such notice is given, Watson Wyatt shall not be subject to any liability to any person for any transaction, report or service. D. In the event that Watson Wyatt is retained to provide nondiscrimination testing for any of the Plans, Watson Wyatt shall have no liability for correcting data compiled by or relied upon by the City or the Plans that is necessary for Watson Wyatt's performance of such nondiscrimination testing and that is determined by Watson Wyatt to be inaccurate, unless such inaccuracy is due to the negligence or willful misconduct of Watson Wyatt in the performance of such duties. Watson Wyatt assumes no responsibility for records, reports, or testing generated or performed by persons other than Watson Wyatt for periods prior to the effective date of this Agreement. E. The parties agree that, in no event shall they be liable to the other for any incidental, indirect, special, punitive, consequential or similar damages of any kind including without limitation, loss of profits, loss of business or interruptions of business, whether such liabilities are predicated on contract, tort, strict liability or any other legal theory. F. The City agrees that Watson Wyatt shall have no responsibility or liability with respect to the plans' compliance in form or in operation with any of the requirements of the Internal Revenue Code or ERISA, other than those duties expressly performed by Watson Wyatt under this agreement. G. The provisions of this Section shall survive the termination of this Agreement. 6 IX. ASSIGNMENT Watson Wyatt shall have the right to assign or delegate all or part of its rights, responsibilities or duties hereunder to any qualified and capable Watson Wyatt affiliate. Prior to any such assignment however, Watson Wyatt shall provide the City with written notice of its intention to make any such assignment or delegation. Any other assignment or delegation shall require prior written approval by the City. Such approval shall not be unreasonably withheld. X. TERMINATION A. In addition to such other provisions of this Agreement related to the power of Watson Wyatt or the City to terminate this Agreement, this Agreement may be terminated as follows: 1. By either party: a. At any time, with or without cause, with not Less than sixty (60) days prior written notice by either party; b. Due to a material breach or default of the other party in the performance of its responsibilities and obligations under this Agreement, provided such material breach is not cured with thirty (30) days from the date of written notice of such breach or default, unless immediate termination is permitted under paragraphs 5 or 6 below; c. In the event the other party shall become insolvent, make a general assignment for the benefit of creditors, suffer or permit the appointment of a receiver for its business or assets, become subject to any proceeding under any bankruptcy or insolvency law whether domestic or foreign, or become liquidated, voluntarily or otherwise; d. Immediately, in the event the other party fails to comply with the limitations of use set forth in Article VI; e. If the other party engages in any unethical business practice or conducts itself in a manner which, in the reasonable judgment of the terminating party, is in violation of any federal, state, or other government statute, rule, or regulation; or f. If one party, through its acts, practices, or operations, exposes the other party to any existing or potential investigation or litigation. 2. By Watson Wyatt if the City fails to pay the undisputed portion of any Watson Wyatt invoice upon presentation for payment and in accordance with the Fee Schedule. 7 B. Upon termination of this Agreement, Watson Wyatt shall return all documents, information and data relating to the Plans of the City. Watson Wyatt may not retain input or output materials or the Plans' data files without the City's written permission. Watson Wyatt agrees not to disclose such data to any third party unless otherwise directed by the City or as required by law. C. Save and except for those sums due and owing, or which may later be determined to be due and owing, pursuant to section VIII of this Agreement, should this Agreement be terminated by either party, the City shall be liable only for those fees, expenses, and office administration and technology charges incurred prior to the effective date of termination. D. If this agreement is extended to a second year, in addition to those sums due and owing, or which may later be determined to be due and owing, pursuant to section VIII of this Agreement, if the City terminates this Agreement during the second year of this Agreement, the City agrees to pay to Watson Wyatt all expenses and office administration and technology charges incurred prior to the effective date of termination, in addition to the greater of: (1) all monthly retainer fees due and owing as of the effective date of termination (see Fee Schedule); or (2) the number of hours actually expended between the start of the second year and the effective date of termination, multiplied by the contract termination rate of $250 per hour, less the sum of the monthly retainer fees actually paid by the City during this period. XI. GENERAL A. Any notice required or permitted to be given hereunder shall be deemed given if hand - delivered or mailed by certified or registered first -class mail, postage prepaid, or delivered by a reliable courier service to a party at the address specified above. B. Watson Wyatt will take reasonable measures to preserve the confidentiality of any proprietary or confidential information that the City provides to Watson Wyatt in connection with this engagement, provided that no claim may be made for any failure to protect information that occurs more than two years after the termination or expiration of this agreement. At the conclusion of the engagement, Watson Wyatt shall return to the City all materials, data and documents that you have provided to us, except that we may retain one copy of these materials for our archival purposes, subject to our confidentiality obligations hereunder. C. Any waiver by either party of any requirement hereunder shall not be deemed to be a continuing waiver nor a waiver of any other requirement hereof. D. If any part of this Agreement shall be adjudicated by any court of competent jurisdiction to be invalid or unenforceable, the remaining terms shall survive intact, and this Agreement shall be construed as if the invalid or unenforceable term had never been contained herein. 8 E. This Agreement is for the mutual and exclusive benefit of Watson Wyatt and the City and shall not be deemed to be for the direct or indirect benefit of clients or customers of Watson Wyatt or the City, including the Plans. Clients or customers of Watson Wyatt and the City, including the Plans shall not be deemed to be third party beneficiaries of this Agreement or have any other contractual relationship with Watson Wyatt or the City by reason of this Agreement. F. The relationship between Watson Wyatt and the City shall be that of independent contractors. The employees of one party shall not be deemed to be employees of the other party for any purpose. G. No change or modification of this Agreement will be valid or binding, nor will any waiver of any term of condition of this Agreement be effective, unless in writing and signed by an authorized representative of both parties hereto. H. Watson Wyatt shall have the right to make changes or modify procedures associated with its services and to establish procedures in addition to those expressly provided hereunder as it deems necessary for the proper performance of its duties. Watson Wyatt shall notify the City in writing of any such changes that have a material impact on the services provided hereunder. I. This Agreement shall be construed and enforced in accordance with the laws of the State of Texas. J. Any remedies of either party hereunder are cumulative and exercise by a party of one remedy shall not preclude its exercising any other remedy it may have hereunder. K. The City shall provide Watson Wyatt with copies of any proposed amendments to the Plans that have a material impact on the services to be provided hereunder at least ninety (90) days prior to their adoption. If Watson Wyatt determines that any Plan amendment materially impacts the services to be provided hereunder, Watson Wyatt shall notify the City within sixty (60) days following receipt of the amendment of any impact such change may have on the services to be provided under this Agreement. The parties will then enter into good faith negotiations regarding any changes to this Agreement necessitated by the Plan amendment. In the event the parties are unable to agree as to any such changes, either party may terminate this agreement in accordance with paragraph X.A.1.a, above. L. Force Majeure: Neither party shall be liable for failure to perform its obligations hereunder where such failure results from acts to God, fires, storms, accidents, actions and decree of governmental bodies or communication line failure or any other event beyond its reasonable control. The party who has been so affected promptly shall give notice to the other party and shall use its best efforts to resume performance. M. Both parties agree that they have read this agreement and existing attachments, understand it and agree to be bound by its terms and conditions. It is further agreed that this agreement, and existing attachments hereto, all of which are hereby incorporated by reference herein and 9 made a part of this agreement, constitute the complete and exclusive agreement between the City and Watson Wyatt and supersede all prior agreements and communications, oral and written between the parties in relation to the subject matter of this agreement. N. It is not anticipate that any dispute will arise between the parties to this Agreement, but if one does the parties shall try to resolve it by appropriate internal means, including referral to each party's senior management. If mutually satisfactory resolution cannot be reached, then any dispute or claim arising from this agreement will be settled by arbitration in accordance with the Commercial Arbitration Rules of the American Arbitration Association ("AAA "), and the Federal Arbitration Act, and judgment upon the award rendered by the arbitrator(s) may be entered in any court having jurisdiction. The arbitration will be conducted in Dallas, Texas before a panel of three arbitrators, with one arbitrator named by each party and the third named by the two party - appointed arbitrators, or (if they should fail to agree on the third) by the AAA. The arbitrators may not award non - monetary or equitable relief, punitive damages or any other damages not measured by the prevailing party's actual damages. 0. Attached hereto and made a part hereof for all purposes are the following: Attachment A - Attachment B - Attachment C - ACCEPTED BY: City o • ock / Watson Wyatt & Company , By. �[� 441, ,J 4 . .1 / /' By 1-t Printed Name: eOeele? . 577—am ��'QPrinted Name: TITLE: Mayor, City of Round Rock Description of Services Plan Services Schedule of Fees Authorized Representatives 10 ACCEPTED TO: TITLE: DATE: I I — S" D / DATE: l /z /lam W PROGRAM PLANNING ATTACHMENT A ADVISORY SERVICES Assist in developing goals and objectives, annually Meet quarterly to: 1. Review toward established goals and objectives 2. Review status of any special projects 3. Review claim reports and results (experience & utilization) 4. Administrative update (reports, costs, accruals) 5. Provide recommendations, as necessary Develop standard reporting formats. Create financial overview including: 1. Claims experience by coverage class, company, location and plan type 2. Claims cost by major expense category 3. Effectiveness of managed care programs and savings 4. Plan administrative expenses Prepare annual stewardship report to summarize performance and plans for next year 11 ATTACHMENT A ADVISORY SERVICES PLAN DESIGN AND PRICING Evaluation of current benefit program costs, with comparisons to alternate programs. Calculate required reserve for claims incurred but not reported (IBNR) for self - insured plans Calculate COBRA rates and premium - equivalent rates for self - insured plans Model effect of potential plan changes on company and participant contributions Assist the City of Round Rock in development of employee option prices /cost sharing Develop annual benefits budget Conduct post - enrollment reconciliation Identify trends and develop recommendations to avert risks and improve plan performance Overview of industry trends, recent or pending legislation and compliance issues Respond to ad hoc inquiries from City of Round Rock human resource representatives. 12 • VENDOR MANAGEMENT Assist with claim/plan administration issues: 1. Claims problems 2. Eligibility issues 3. Premium/fee payment issues ATTACHMENT A ADVISORY SERVICES Perform quarterly assessments of the vendors conceming reporting and customer service practices. Answer day -to -day questions from City of Round Rock human resources representatives regarding vendor management issues as needed. Evaluate performance of current vendors Establish/negotiate vendor performance goals Review status of vendor performance standards: quarterly reports required Conduct vendor service meetings Review of funding arrangements, annually Analyze and review all insurance /vendor contracts and make recommendations (performance guarantees, vendor /client liability, fiduciary responsibility) Renewal assistance, including the following steps: 1. Obtain initial renewal offers from the current vendors 2. Engage in negotiations with the vendors on renewal rates and performance guarantees 3. Investigate plan design recommendations, as needed 4. Prepare a report outlining the financial impact of the renewal. 5. Prepare communications to carriers /vendors The work associated with a change in the medical plan vendors (third -party administrator and/or health care network) will be performed no more than once during the two -year agreement. Vendor selection for other group insurance products (medical reinsurance, dental, vision, life insurance, and disability) is included. 13 1 ATTACHMENT A ADVISORY SERVICES COMPLIANCE Prepare Form 5500 and related schedules Perform non - discrimination testing as required by IRC Sections 125, 129 and 105(h) Prepare Summary Annual Reports Review existing plan documents annually Prepare amendments to plan documents, as needed Assist in technical review and of Summary Plan Description(s) Assist in technical review of Summary Material Modifications Review of employee communication materials for technical accuracy, to include: 1. Graphical presentations 2. Employee newsletters 3. Enrollment communications for open enrollment and new hires. Respond to ad hoc compliance questions from City of Round Rock human resources representative. Please note that assistance with resolution of plan administration issues does not include direct contact with employees of the City of Round Rock. 14 ATTACHMENT B PLAN SERVICES SCHEDULE OF FEES MASTER BENEFIT SERVICE AGREEMENT Professional Fees: 1s` Year — November 1, 2001 — October 31, 2002 City of Round Rock agrees to pay $6,500 per month. 2nd Year — November 1, 2002 — October 31, 2003 City of Round Rock agrees to pay $6,500 per month. Expenses: City of Round Rock agrees to pay for out of pocket expenses including expenses related to travel, telephone charges, photocopying and materials reproduction charges, express mail services (including overnight and courier packages), and printing and postage charges. These expenses are estimated to be 10 -12% of our professional fees. City of Round Rock agrees to pay an office administration and technology charge equal to 5% of professional fees. City of Round Rock furthermore understands that monthly payment is due 30 days from the date of receipt of the monthly invoice. For any amount that is outstanding for more than 30 days, a 1% interest charge will be added on a monthly basis. NOTE: It is the practice of Watson Wyatt & Company to accept commissions from group insurance products for which we are involved in the ongoing management of these products. All commissions received are used to offset our professional fees. The actual commissions received will be documented on invoices sent to the City of Round Rock as part of our standard billing practice. 15 W ATTACHMENT C AUTHORIZED REPRESENTATIVES Currently, the authorized representatives are listed below: NAME TITLE NAME TITLE NAME TITLE 16