1996-033-RES WHEREAS, CITY COUNCIL DID HERETOFORE ON THE 13TH DAY OF FEBRUARY 1995
RESOLUTION NO.
96-033
WHEREAS, the City Council of the City of Paris did heretofore, on the 13th day of
February, 1995, in Resolution No. 95-026, ratify the execution of a contract with Hea1thCare
Benefits, Inc. for the furnishing and delivery of (1) Term Life Insurance, (2) Stoploss Insurance,
(3) Third-Party Administrative Services, and (4) Maintenance Drug Program for employees of
the City of Paris, which contract expired January 31, 1996; and,
WHEREAS, bids for the furnishing and delivery of (1) Term Life Insurance, (2)
Stop1oss Insurance for its otherwise self-funded Medical/Dental/Vision Program, (3) Third-Party
Administrative Services for the above coverage, and (4) Maintenance Drug Program were
received until 10:00 a.m., Tuesday, March 5, 1996, and the best was received by the Texas
Municipal League; and,
WHEREAS, coverage by the Texas Municipal League will not be effective until May
1, 1996, and it is deemed appropriate that a contract be executed with HealthCare Benefits, Inc.
to continue current coverage until such time; and,
WHEREAS, the form of the contract with Hea1thCare Benefits, Inc., attached hereto as
Exhibit A, should, in all things be approved, and the Mayor of the City of Paris, Eric S.
Clifford, should be authorized to execute the same; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, that the
form of the contract with HealthCare Benefits, Inc., attached hereto as Exhibit A, be, and the
same is hereby, approved; and,
BE IT FURTHER RESOLVED, that Eric S. Clifford, Mayor of the City of Paris, be,
and he is hereby, authorized and directed to execute, on behalf of the City of Paris, the contact
with HealthCare Benefits, Inc. for (1) Term Life Insurance, (2) Stoploss Insurance, (3) Third-
Party Administrative Services, and (4) Maintenance Drug Program for employees of the City
of Paris for the period beginning February 1, 1996, and ending April 30, 1996, upon the terms
and conditions and in the form shown in Exhibit A, attached hereto.
PASSED AND AOOPI'ED th;, 8th <by of April, ~_
Eric S. lifford, Mayor
--
~
ATTEST:
Mattie Cunningham, City Clerk
THE CONTINENTAL INSURANCE COMPANY
(a stock company)
Administrative Offices:
180 Maiden Lane
New York, NY 10038
RENEW AL CERTIFICATE
Renewal of Policy Number: eRA 245046
Named Insured: City Of Paris
Renewal Effective Date: February 1, 1996
Renewal Expiration Date: February 1, 1997
RENEWAL SCHEDULE
A. SPECIFIC EXCESS INSURANCE
1) Attachment Point: $ 50 000
IX] Individual I ] Family
2) Limit of Liability: 100% of payments made by YOU in excess of the Specitic Attachment Point.
3)
Reimbursable Lifetime Maximum: $
2.000000
4)
Coverage Form:
IX] Paid in 12 Months
I ] Paid in 15 Months
I ] Incurred
I ] Other:
5) Extension of Coverage:
I 1 Yes I X] No
If yes,
I ] Up to 6 months
I ] 6 to 12 months
6)
Rates (PER MONTH): Employee $
10.72 Dependent $ 1 8 20 Composite $
B. AGGREGATE EXCESS INSURANCE
1) Monthly Factor: $ 237.25
2) Minimum Annual Aggregate Attachment Point: Twelve times the Aggregate Mo"thly Factor times the
number of Covered Units based on the first renewal month's actual enrollment.
3) Limit of Liability: 100% of payments made by YOU in excess of the Annual Aggregate Attachment
Point to a maximum of $2,000,000.
4) Coverage Form:
IX ] Standard
I ] Advance Funding Option
EXHIBJI A
T T<'n 1 AMf"lTiPU 1/0')
Page 1 of 2 "U~I'J'.I1
5) Supplementary Coverages:
Yes No
[ ] [X] Dental
[ ] [X] Prescription Drug Plan
[ ] [X] Weekly Income-Maximum per Policy Year: $5,200 per covered employee
[ ] [X] Other
6)
Rates (pER MONTH): Per Employee $
2.50
Annual Minimum and Deposit Premium $
C. OTHER PROVISIONS/FORMS ATIACHED:
Endorsement No.7 Manuscript Change (Claims Adv)
This renewal of the above captioned Policy is issued by US as of the Renewal Effective Date, but is not valid unless
countersigned by OUR duly authorized representative. The renewal will be effective upon acceptance by the Employer and
payment of the required premium.
/11(4t t ~
, .
Martin D. Haber
Secretary
~"- G? r:...""<<b
hn P. Masc tte
Chairman
Issued at Costa Mesa, California on February 14. 1996
Auth~
THE EMPLOYER UNDERSTANDS AND AGREES TO THE TERMS AND CONDITIONS OF THE RENEWAL. THE
EMPLOYER AGREES THAT STATEMENTS IN ANY MATERIALS SUBMITTED TO THE COMPANY TO INDUCE
IT TO ISSUE THIS RENEWAL ARE REPRESENTATIONS OF THE EMPLOYER AND SHALL BE DEEMED
MATERIAL TO ACCEPTANCE OF THE RISK BY THE COMPANY AND THAT THIS RENEWAL IS ISSUED BY
THE COMPANY IN RELIANCE ON THE TRUTH AND ACCURACY OF SUCH REPRESENTATIONS.
Dated at Paris, Texas
(city,state)
h 8th
, t e
day of April
,19.2.L
Witness: Lisa Wright
(Print or Type Name)
Employer: City Of Paris. Paris. Texas
By:
Signature Eric S. Clifford
Title:
Mayor
Signature
ATTEST:
APPROVED AS TO FORM:
Mattie Cunningham, City Clerk
T. K. Haynes, City Attorney
USB IOOOOEPR 1/92
Page 2 of 2 IOI~""'1'
THE CONTINENTAL INSURANCE COMPANY
EXCESS REIMBURSEMENT POLlCY
ENDORSEMENT
Policy Number: CRA
245046
Endorsement Number:
7
Issued To:
CITY OF PARIS
Effective:
February 1 1996
ENDORSEMENT FOR MANUSCRIPT CHANGES
YOU and WE agree that this Policy is amended as follows:
ARTICLE VIII. CLAIMS PROVISIONS, Paragraph C. CLAIMS ADVANCE is hereby amended to
read as follows:
1. The claim is eligible for reimbursement under this Policy;
2. YOU have Paid an amount equal to the Specific Attachment Point;
3. The amount of Plan Benefits applicable to the claim has been calculated within the time period
specified for the payment of Plan Benefits; and
4. The request for a Claim Advance is made not later than 30 calendar days after the expiration of
the time period specified for the payment of Plan Benefits.
THERE ARE NO POLlCY CHANGES UNDER THIS ENDORSEMENT OTHER THAN STATED ABOVE.
CITY OF PARIS, PARIS, TEXAS THECONTINENTALI~~ /
ATTEST: ~
Authorized Signature
Mattie Cunningham, City Clerk
Dated:
APPROVED AS TO FORM:
Accepted:
EMPLOYER
CITY OF PARTS. PART S. TEXAS
T. K. Haynes, City Attorney
Acceptance is required only if endorsement By:
is issued separate from the Policy.
Eric S. Clifford
Mavor
Tille:
Dated:
April 8. 1996
USBP 308 1/92
HBI-ASA/1l-93
ADMINISTRATIVE SERVICES AGREEMENT
ADMINISTRATIVE SERVICES AGREEMENT
THIS AGREEMENT is made and entered into by and between HealthCare Benefits, Inc., a corporation
organized, existing and doing business under and by virtue of the laws of the State of Texas (hereinafter
referred to as "Contractor") and City of Paris (hereinafter referred to as "Purchaser").
WITNESSETH:
WHEREAS, Contractor is in the business of providing independent third-party administration of employee
welfare benefit programs; and
WHEREAS, Purchaser desires to engage the service of a third-party administrator for a welfare benefit
program (hereinafter referred to as "Benefit Program") to be provided to Purchaser's employees and their
eligible dependents (hereinafter collectively referred to as "Participants"); and
WHEREAS, Contractor is willing to provide such services to Purchaser and other parties on an independent
contract basis.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants and Agreements hereinafter
set forth, the parties hereto agree as follows:
SECfION ONE
OBLIGATION OF PURCHASER
1.01 Purchaser shall furnish Contractor with a detailed description of the Benefit Program to be
administered.
1.02 Purchaser, in consultation with Contractor, shall determine the administrative practices and
procedures to be followed in the processing and payment of claims.
I. 03 Purchaser shall provide to Contractor a complete and current listing of all Participants
eligible to receive benefits prior to their date of eligibility--making timely changes to the
listing on a periodic basis.
1.04 Purchaser shall obtain the consent of Participants for the release of confidential medical
information required for administration and to process claims for the payment of fees for
medical services rendered to patients, including any fees for mental or emotional health
services performed by professionals, as may be required by state or federal law.
1.05 Purchaser shall establish and maintain a suitable banking arrangement to effectuate the
provisions of Section Six herein.
1.06 At Contractor's request, or at Purchaser's option, Purchaser shall make the final determination
of eligibility of Participants to receive benefits and any special issues arising in the course
of administration.
1.07 Purchaser shall designate in writing a contact person who will be empowered to act on behalf
of Purchaser with regard to the terms of the Agreement and with whom Contractor can
coordinate and resolve all questions arising in the course of administration.
SEcrION TWO
OBLIGATION OF CONTRAcrOR
2.01 Contractor shall administer Purchaser's Benefit Program in accordance with the benefit plan
description provided and the administrative practices and procedures established.
2.02 Contractor shall providc or arrange for suitable facilities, equipment and personnel necessary
for proper administration of the Benefit Program.
2.03 Contractor shall, upon request, assist Purchaser in establishing appropriate banking
arrangements for program administration.
2.04 Contractor shall provide standard administrative materials, including enrollment forms,
participant and provider claim forms and two identification cards for each participant in the
Benefit Program on the Effective Date of the Plan. The cost of reprinting additional
identification cards shall be the obligation of the Purchaser.
2.05 Contractor shall, upon request, assist Purchaser in incorporating the Benefit Program
description and design into a plan document and booklet for Participants. The Contractor
will provide one benefit booklet per participant enrolled in the Benefit Program on the
Effective Date of the Plan. The cost of reprinting additional benefit booklets shall be the
obligation of the Purchaser.
2.06 Contractor shall supply the initial check stock, thereafter the cost of additional checks shall
be the obligation of the Purchaser.
2.07 Contractor shall provide claims proccssing services to include:
a. Review and validation of all claims submitted for payment;
b. Determination of benefits in accordance with the specification of the Benefit
Program;
c. Coordination of benefits with other plans, where appropriate;
d. Preparation and mailing of explanation of benefit forms; and
e. Preparation and mailing of claim drafts drawn on Purchaser's bank account as
provided in Section Six herein.
2.08 Contractor shall establish liaison with Purchaser's designee, providers and Participants, as
required, to obtain and follow-up on additional service information, to verify eligibility of
Participants and to assist in resolving claims problems.
2
2.09 Contractor shall provide periodic written reports to include:
a. Monthly check reconciliation report;
b. Monthly benefit experience reports; and
c. Those reports specified in Item Four of the current Exhibit to this Agreement, if any.
2.10 Contractor will provide Purchaser copies of specific claim payment drafts upon request.
2.11 Contractor shall evaluate late applicants for evidence of good health on behalf of Purchaser.
2.12 Contractor shall maintain current individual benefit records on all Participants and shall
maintain the confidentiality of any medical information contained in such records.
2.13 Contractor shall prepare IRS form 1099 reports on medical provider fees.
2.14 Contractor shall kcep Purchaser informed with respect to non-routine "shock" claims and
matters of general interest, including recurring administration problems, local situations
meriting review and possible misuses of benefits.
2.15 Contractor shall refer to Purchaser any claim or class of claims Purchaser may specify for
consideration and final decision, to include:
a. Claims for services which do not appear to qualify for payment under the Benefit
Program;
b. Claims in which there is a question on the amount of payment due;
c. Claims involving any mattcr in controversy; and
d. Those claims or classes of claims specified in Item Three of the current Exhibit to
this Agreement, if any.
2.16 Contractor shall assist Purchaser in the analysis and resolution of disputed claims, provided,
however, that such assistance shall in no way include or be considered to include or constitute
legal advice or opinions.
2.17 Underwriting services will not be provided unless specifically identified in Item Two of the
Exhibit to this Agreement, if any. Any such services provided will include required
certifications by a qualified actuary.
2.18 Contractor shall also provide thosc services specified in Item Two of the current Exhibit to
this Agreement, if any.
3
SECfION THREE
RELATIONSHIP OF PARTIES
3.01 Contractor shall not be construed, represented or held out to be a partner, associate, joint
venturer or employee of Purchaser nor shall the Contractor be constmed, represented or held
out to be an agent of the Purchaser or agent of any insurance company. Contractor shall at
all times have the status of an independent contractor.
3.02 Contractor shall, upon request, assist purchaser in obtaining Stop Loss Reinsurance. If Stop
Loss reinsurance is purchascd, Contractor shall not be responsible for claims not timely filed
and not included within tlle Stop Loss coverage. Contractor shall attempt to assist Purchaser
in encouraging providers to file claims timely but Contractor assumes no responsibility for
the timely filing of such claims, and Purchascr commits not to sue contractor regarding any
claims arising out of Stop Loss reinsurance coverage so purchased.
3.03 Contractor is not a statutory fiduciary of Purchaser's Benefit Program nor is Contractor a plan
administrator within the meaning of the Employee Retirement Income Security Act of 1974,
Public Law 93-406.
3.04 This Agreement is not a contract of insurance, and Contractor is not an insurer or underwriter
of Purchaser's liability under the Benefit Program. Purchaser has and retains the ultimate
responsibility for payment of claims and other expenses under the Benefit Program.
SECfION FOUR
TERM AND TERMINATION
4.01 The tenn of this Agreement shall be for the period of one (I) year commencing on the
Effective Date specified herein and shall continue in full force and effect from year to year
thereafter unless tenninated as provided herein.
4.02 This Agreement may be tenninated as follows:
a. By either party on any anniversary of the Effective Date of this Agreement following
thirty (30) days' prior written notice to the other;
b. By Contractor upon Purchaser's failure to fund the bank account as provided for in
Paragraph 6.02 of Section Six below;
c. By Purchaser for cause, upon fiftecn (15) days' prior written notice, if Contractor
fails to correct any deficiency in the perfonnance of its obligations under the
Agreement witllin fifteen (15) working days after notice of such deficiency is given
to Contractor by Purchaser in writing; or
d. By both parties on a mutually agreeable date.
4
4.03 If this Agreement is terminated by Purchaser, except as provided in Paragraph 4.02, above,
Purchaser agrees to pay to Contractor a termination fee in an amount equal to twice the
average of the monthly administration fee due for all months immediately preceding
termination. Such termination fee is due and payable within thirty (30) days after notice of
termination, or immediately upon tennination ifno notice is given, and is in addition to any
monthly administration fee, or portion thereof, or any other monies due and payable to
Contractor under this Agreement.
4.04 If this Agreement is terminated for cause by Purchaser under Paragraph 4.02, above, the
Purchaser shall not be liable for any termination fees or charges. Moreover, Purchaser may
withhold from the current administration fees due Contractor, the costs incurred by Purchaser
in attempting to gain Contractor's performance of the Agreement.
SECTION FIVE
ADMINISTRATION FEES AND REIMBURSEMENT
5.01 Purchaser agrees to pay Contractor a monthly administration fee which shall be due and
payable in full on or before the first (I st) day of each month at its home office in Richardson,
Texas, during the term of this Agrcement.
a. In the event payment of the monthly administration fee is not paid by the twentieth
(20th) day of the month, Contractor may suspend its performance under this
Agreement without notice until such fees and late charges are paid.
b. After the twentieth (20th) day of the month, a late charge may be assessed each day
for late. payment of all monies owed to Contractor by Purchaser under this
Agreement. The late charge shall be charged as interest and equal to ten percent
(10%) of the past-due amount owed, or the maximum amount permitted by state law,
whichever is less.
c. After the thirty-first (3 I st) day the Contractor may terminate this Agreement for non-
payment of fees.
5.02 The amount of the administration fee shall be determined in accordance with the
specifications contained in Item One of the current Exhibit to this Agreement, if any.
5.03 The administration fee shall be subject to change by Contractor as follows:
a. On each anniversary of the Effective date of this Agreement, upon thirty (30) days'
prior written notice to purchaser;
b. On the implementation date of any changes in the Benefit Program which would
increase Contractor's cost of administration;
c. On any date that increased expenses are incurred by Contractor because of changes
imposed by governmental entities--limited to increases sufficient to recover the
additional expenses; or
5
d. On any date that Benefit Program enrollment changes by an amount equal to ten
percent (10%) or more of total enrollment.
5.04 Purchaser shall reimburse Contractor for the direct cost of any special supplies or forms
provided by Contractor for Purchaser-osuch reimbursement to be in addition to the monthly
administration fee.
5.05 Purchaser will reimburse Contractor for any taxes imposed or adjudged due by any lawful
authority with respect to the Benefit Program or its administration. In the case of imposition
of such tax liability, Purchaser may elect to terminate this Agreement upon thirty (30) days'
prior written notice without incurring liability for termination fees or charges.
SEcrION SIX
CLAIMS PAYMENT AND BANKING ARRANGEMENT
6.01 Purchaser shall establish a bank account on which Contractor shall write drafts for the
payment of Benefit Program claims and expenses. Purchaser agrees and is obligated to
arrange for sufficient funds to be available in such account to cover all drafts validly issued
against the account. Contractor shall notify Purchaser, simultaneous with the release of
checks, the amount that is required to be deposited by Purchaser to cover the checks issued.
6.02 Contractor shall have the right to terminate this Agreement upon notice to Purchaser in the
event that Purchaser fails to fund such account within three (3) banking days after notice is
given by Contractor that such funds are required to be deposited.
6.03 Notice by Contractor, as contemplated in paragraph 6.02, above, shall be sufficient if given
by telephone, fax or by United States mail, delivery services or personal delivery to
Purchaser's designee or the signatory to this Agreement at the telephone number or address
specified in Item Five of the current Exhibit to this Agreement, if any. Any telephonic notice
given will be confirmed in writing within twenty-four (24) hours.
SEcrION SEVEN
NOTICES
7.01 All notices given under in this Agreement, unless otherwise provided for herein, must be in
writing and shall be deemed to have been given for all purposes when personally delivered
and received or when deposited in the United States mail, first-class postage prepaid, certified
or registered, return receipt requested and addressed to the parties as set forth in Item Five
of the current Exhibit to this Agreement, if any.
6
SECfION EIGHT
INDEMNIFICATION AND HOLD HARMLESS
8.01 To the extent permitted by applicable law, Purchaser shall indemnify, hold harmless and
defend Contractor, its officers, directors, employees and agents against any and all liability,
obligations, risks, expenses, costs, damages, losses or judgements, (including reasonable
attorneys' fees) and against any and all claims or actions based upon, arising out of, or in any
way connected with the services rendered by Contractor pursuant to the terms of this
Agreement--except for willful misconduct or gross negligence in the performance of said
services by Contractor, its officers, directors, employees or agents.
8.02 To the extent permitted by applicable law, Contractor, its officers, directors, employees and
agents shall not be liable for any indirect, special, consequential or incidental damages in
connection with or arising out of services provided hereunder, and Contractor shall not be
liable to Purchaser, or anyone else claiming a right by way of any relationship with Purchaser,
for any acts or omissions in the performance of services by Contractor contemplated
hereunder, except when such acts or omissions are due to Contractor's willful misconduct or
gross negligence.
SECfION NINE
GENERAL PROVISIONS
9.01 ASSIGNMENT. No part of this Agreement, or any rights, duties or obligations described
herein, shall be assigned or delegated without the prior express written consent of both
parties, except for the use of a third party for printing and mailing services. Contractor's
acquisition and use of facilities, services, supplies, equipment and the use of temporary
personnel on site shall not constitute an assignment under this Agreement; provided,
however, that the supervision of all services provided under this Agreement will be
performed by Contractor's regular employees.
9.02 GOVERNING LAW. This contract shal1 be governed by and shall be construed in
accordance with the laws ofthc State of Texas.
9.03 MODIFICATION. This Agreement shall not be amended or modified in any manner except
by an instrument in writing executed by the parties.
9.04 CAPTIONS. Captions appearing in this Agreement and its Exhibits, if any, are provided for
convenience only and in no way define, limit, construe or describe the scope of sections or
paragraphs to which they are inserted.
9.05 GENDER AND MODE. The use herein of a personal pronoun in the masculine or feminine
gender or in the singular or plural modc, shall be deemed to include the opposite gender or
mode unless the context clearly indicates the contrary.
9.06 EXHIBIT. "Exhibit" means the attached document(s) setting out certain particulars of this
Agreement, or any replacement document(s) mutually agreed to by the parties.
7
9.07 LEGAL CONSTRUCTION. Should any provision(s) contained in this Agreement be held
to be invalid, illegal or otherwise unenforceable, the remaining provisions of the Agreement
shall be construed in their entirety as if separate and apart from the invalid, illegal or
unenforceable provision(s), subject to renegotiation by the parties if a material change in the
terms of the Agreement were to result.
9.08 ENFORCEMENT. Any delay or inconsistency in the enforcement of any part of this
Agreement shall not constitute a waiver of any rights with respect to the enforcement of this
Agreement at any future date, nor shall it limit any remedies which may be sought in any
aetion to enforce any provision of this Agreement.
9.09 FORCE MAJEURE. Neither party shall be liable for any failure to perform its obligations
under this Agreement if prevented from doing so by a eause or causes beyond its
commercially reasonable control, including, but not limited to, acts of God or nature, fires,
floods, storms, earthquakes, riots, strikes and wars or restraints of government.
9.10 ENTIRETY. This Agreement and any Exhibits or amendments and advertisement for bids
shall constitute the entire Agreement between the parties and shall supersede any and all prior
Agreements or understandings, either oral or in writing, between the parties respecting the
subject matter herein.
9.11 DISCLOSURE STATEMENT. Purchaser acknowledges that a disclosure of all payments to
be made to Contractor has been made to Purchaser and such disclosure statement is
incorporated herein by reference.
IN WITNESS HEREOF, the parties hereto have executed this Agreement for an Effective Date of February
1,1996.
FOR CITY OF PARIS, PURCHASER:
ATTEST:
Title: Mayor, Eric S. Clifford
Aoril 8. 1996
(Date)
Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
FOR HEAL THCARE BENEFITS, INC., CONTRACTOR:
T. K. Haynes, City Attorney
Roma Dixon
Viee President - HealthCare Benefits, Inc.
(Date)
8
EXHIBIT NUMBER ONE
Specifications For
ADMINISTRATIVE SERVICES AGREEMENT
Between
~
HEALTHCARE BENEFITS, INC. (CONTRACfOR)
and
CITY OF PARIS (PURCHASER)
These specifications are to apply beginning with the Effective Date of the Agreement between the parties to
which this Exhibit is attached and shall continue in force and effect until the Agreement is terminated or this
Exhibit is superseded in whole or in part by a later executed exhibit.
ITEM ONE
ADMINISTRATION FEE
As provided in Paragraph 5.02 of Section Five of the Agreement, for the first (1st) year this Agreement is in
effect, the monthly administration fee shall be an amount equal to eleven and 2511 00 dollars ($11.25)
multiplied by the number of Participants enrolled in the Benefit Program on the first (I st) day of each month,
of which the Purchaser's appointed agent is to receive none and 001100 dollars ($0.00).
ITEM TWO
OTHER SERVICES
As provided in Paragraph 2.18 of Section Two oftlle Agreement, the following additional services shall be
furnished:
A. Inpatient Certification Program will be administered by Blue Cross BIue Shield of Texas, Inc. acting
as agent of Contractor.
ITEM THREE
SPECIAL CLAIMS PROCESSING
As provided in Paragraph 2.15d of Section Two of the Agreement, the following special claims handling
procedures shall be followed: None.
ITEM FOUR
OTHER REPORTS
As provided in Paragraph 2.1 Dc of Section Two of the Agreement, the following additional reports shall be
furnished: None.
ITEM FIVE
NOTICE ADDRESS
As provided in Paragraph 7.01 of Section Seven of the Agreement, notice to Contractor shall be delivered or
mailed to:
HealthCare Benefits, Inc.
P.O. Box 833889
Richardson, TX 75083-3889
Written notice to Purchaser shall be delivered or mailed to:
City of Paris
135 SE First
Paris, Texas 75460
Fax notice to Purchaser shall be made to the following number:
(903) 785-8519
FOR CITY OF PARIS, PURCHASER:
ATTEST:
Mattie Cunningham, City Clerk
Title: Mayor, Eric S. Clifford
April 8, 1996
(Date)
APPROVED AS TO FORM:
T. K. Haynes, City Attorney
FOR HEAL THCARE BENEFITS, INC., CONTRAcrOR:
Roma Dixon
Vice President - HealthCare Benefits, Inc.
(Date)
2
CONTACT PERSON
Purchaser shall designate in writing a contact person who will be empowered to act on behalf of Purchaser
with regard to the terms of the Agreement and with whom Contractor can coordinate and resolve all questions
arising in the course of administration.
FOR CITY OF PARIS. PURCHASER: ATTEST:
April 8, 1996 Mattie Cunningham, City Clerk
Title: Mayor, Eric S. Clifford (Date) APPROVED AS TO FORM:
Biif,' ~aynes Clty Attorney
DESIGNATED PERSON EMPOWERED TO ACT ON E AL of PURCHASER:
W. E. Anderson.
Title: Finance Director
April 8, 1996
(Date)
EMPLOYEE BENEFIT PLAN
DISCLOSURE FORM
For
Citv of Paris
The agent and/or HealthCare Benefits, Inc. will contract with or represent the insurance carrier in conjunction
with the sale of certain group insurance polices. This disclosure does not limit the agent's ability to
recommend the products of other insurance companies or other funding organizations, but is intended to
disclose the financial interest of the parties as to the Employee Benefit Plan. HealthCare Benefits, Inc. is a
wholly-owned subsidiary of Blue Cross Blue Shield of Texas, Inc. As requested by the Purchaser, HealthCare
Benefits, Inc. has solicited bids from Stop Loss Carriers, Life Carriers, etc., and the Purchaser, after reviewing
the proposals, has selected certain coverage. The relationship and dealings of those companies are on file with
the State Board ofInsurance. If insurance is purchased through an insurance company, HealthCare Benefits,
Inc. may contract to facilitate the payment of insurance premiums, claims and eligibility and may receive
compensation for its services, but HealthCare Benefits, Inc. is not an agent of the insurance company and does
not receive commissions.
The following persons or companies are entitled to commissions as agents on the insurance contract issued
to you:
Product: Administration
Name of Broker: N/A
Commission: $000
Product: Stop Loss
Name of Broker: N/A
Commission: 0%
HealthCare Benefits, Inc., in addition to its administrative charge as indicated in the Administrative Services
Agreement, is entitled to the following payments and marketing allowances for its services:
Product: N/A
Administrative Charge: N/A
FOR CITY OF PARIS, PURCHASER:
ATTEST:
Title: Mayor, Eric S. Clifford
April 8, 1996
(Date)
Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
T. K. Haynes, City Attorney
The undersigned acknowledges receipt of the infonnation contained herein prior to any purchase and approves
the proposed transaction on behalf of the plan without receiving, either directly or indirectly, any personal
compensation in connection with the purchase of policies under this Plan.
FOR CITY OF PARIS, PURCHASER:
ATTEST:
Title: Mayor, Eric S. Clifford
April 8. 1996
(Date)
Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
FOR HEAL THCARE BENEFITS, INC., CONTRACfOR:
T. K. Haynes, City Attorney
Roma Dixon
Vice-President - HealthCare Benefits, Inc.
(Date)
2
ADDENDUM TO ADMINISTRATIVE SERVICES AGREEMENT
This Addendum to Administrative Services Agreement is made to provide a vehicle for determining
and providing for hospital discounts for hospital care rendered to the employees and eligible dependents of
City of Paris (hereinafter called Purchaser).
In consideration of the mutual covenants contained in this Addendum, the Purchaser and HealthCare
Benefits, Inc. (hereinafter called "Contractor") have executed this Addendum.
SECTION I EFFECTIVE DATE
This Addendum shall be effective as of Febmarv 1 1996, and shall continue in force until terminated as
provided herein.
SECTION 2 DEFINITIONS
2. I Defined terms in the Administrative Services Agreement between the Purchaser and the Contractor
shall have the same meaning for the purposes of this Addendum, unless otherwise indicated herein.
2.2 For the purposes of this Addendum the following terms shall have the following meanings:
a. "Hospital" means any institution that operates pursuant to the laws of the state in which it is
located, that primarily and continuously provides medical care and treatment of sick and injured
persons on an inpatient basis, and that has facilities for medical and surgical diagnosis and treatment
by or under the supervision of a staff of doctors and that provides 24-hour a day nursing service under
the supervision of registered graduate nurses.
b. "Contractin~ Hosoital" mcans any Hospital with which an Agreement has been executed providing
for discounts available to the Contractor, which has an effectivc datc on or after January I, 1992, and
which continues in effect during the teml of this Addendum.
c. "Covered Service" means a Contracting Hospital health care service which qualifies for the
application of payment under the terms of the Plan.
d. "Covered Service Amount" means the amount eligible for reimbursement under the Plan for any
Hospital health care service or supply provided to Participants for which benefits are provided by a
Contracting Hospital pursuant to the Plan after application of applicable co-payments and deductibles,
which amount is based on the regular rate charged by the Hospital for such services or supplies.
"Covered Service Amount" includes only those hospital admissions which commence after the
effective date of this Addendum which are paid by Contractor while this Addendum is in force and
effect.
e. "Discount" shall mean the difference between Covered Servicc Amount and the amount which the
Hospital requires to be paid for those Services as determined in accordance with its applicable
Discount Agreement.
SECTION 3. APPLICATION OF DISCOUNT
3.1 The Contractor shall perform claims administration services pursuant to the Administrative Services
Agreement between the parties. Subject to Section 5 hereof, all applicable Discounts allowed to the
Contractor shall be applied to Covered Service Amounts which are incurred in connection with the
admission of a Participant to a Contracting Hospital and which occur while this Addendum is in force
and effect and while a Member Hospital Agreement is in effect with the Hospital providing the care.
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3.2 The full amount of the Discount allowed to the Contractor on Contracting Hospital Covered Service
Amount under the Purchaser's Plan shall be allowed to the Employer for hospital admissions
commencing or beginning after the effective date of this Addendum and paid while this Addendum
is in force and effect.
3.3 The Contractor reserves the right to make payment of Covered Service Amounts directly to the
Hospital or the Participant. The Employer represents and warrants that during the term of this
Addendum, the terms of its Plan will provide for such discretion in determining the direction of
payment (including, but not limited to, the inclusion of a provision that a Participant may not assign
rights to receive payment under the Plan) that it will provide evidence satisfactory to the Contractor
of inclusion of such provisions in its Plan promptly at the request of tile Contractor, and that should
any change or amendment to its Plan be made which would aiter,limit or terminate such discretion,
the Employer will notify the Contractor forthwith.
3.4 Where a payment for Covered Services is subject to coordination of benefits between two or more
payors and the Plan is not the primary payor, the Discount shall be limited to those portions of
Covered Service Amounts which are identified as the Purchaser Plan's responsibility pursuant to
coordination of benefit rulcs contained in the Purchaser Plan or any applicable Texas statute or
regulation. No Discounts shall be available on claims for Covered Services where Medicare is the
primary payor.
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3.5 The Contractor shall prepare and providc to the Purchaser on a quarterly basis a report ("Discount
Report") which shall include the following infonnation:
I. Total Contracting Hospital Covered Service Amounts $....
2. Total Allowed to Contracting Hospitals (Less) -....
3. Total Amount of Discount $....
The report will not be hospital specific and will be on an overall quarterly hospital savings basis.
3.6 The Contractor shall in no case be required to provide infonnation pursuant to this Addendum, in its
Discount Report or otherwise, which is hospital-specific or which discloses or may lead to the
disclosure of the specific amount of Discount available from any hospital.
SECTION 4 COMPENSA nON OF THE CONTRACTOR
4.1 In addition to all sums required to be paid to the Contractor under the Administrative Services
Agreement, the Purchaser shall pay to the Contractor an additional monthly su.m equal to $2 50 per
employee.
4.2 Such additional monthly sum shall be guaranteed for 12 months and then subject to increase upon 30
days' notice.
4.3 Such payment shall be made by the Purchaser to the Contractor within 20 days of the first of each
month. It is hereby acknowledged and agreed that the Contractor may, at its sole option, draw its
compensation hereunder directly from the Purchaser's Claims Payment Aecount.
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SECTION 5 TERMINATION
5.1 This Addendum shall terminate on the earliest to occur of the following:
(A) At the option of the Contractor, on the date the Purchaser fails to make payment to the
Contractor of the compensation due under this Addendum. The Contractor shall immediately
communicate its election of this option to the Purchaser, and such termination shall be
effective immediately on the Purchaser's receipt of notification or made retroactive to the first
day of the period for which compensation was due but not received by Contractor.
(B) If the Purchaser breaches the warranty or fails to comply with the obligations contained in
Section 3.3 of this Addendum or any other terms and conditions hereof, this Addendum shall
automatically terminate, without notice, effective as of the date of the breach or failure to
comply.
(C) On the effective date of any state or other jurisdictions action which prohibits the activities
under this Addendum of either of the parties.
(D) On the effective date of termination of the Administrative Services Agreement between the
parties.
(E) On any other date mutually agreeable to the Purchaser and the Contractor.
(F) At the end of 90 days' advance notice given by either party.
5.2 On termination of this Addendum, the Discount shall be applied only to claims for Covered Service
Amounts paid by the Contractor prior to the effective date of termination.
5.3 In the event the Purchaser becomes no longer entitled to the Discount pursuant to the provisions of
this Addendum, the Purchaser shall reimburse the Contractor for the full amount of any Discount
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applied to any claims from the effective date of termination. This provision shall survive the
termination of this Addendum.
SECTION 6. CONFIDENTIALITY
The Purchaser acknowledges that all information concerning the Contractor's business operations, Participants'
Claims and any Discount information it may receive is confidential. It shall keep and maintain all such
information in strict confidence. In the event the Purchaser becomes subject to compulsory process to disclose
such information, it agrees to resist such disclosure and agrees to give the Contractor immediate oral and
written notice of such process.
SECTION 7. ARBITRATION
Any controversy arising out of or relating to this Addendum, or breach hereof, shall be settled by binding
arbitration in Dallas, Texas, in accordance with the rules of the American Arbitration Association then in
effect, and judgement upon the award may be entered in any conrt having jurisdiction thereof. The provision
in this section shall survive the termination of this Addendum.
SECTION 8 MERGER
8.1 All terms and conditions of the Administrative Services Agreement included in the Indemnification
Hold Harmless Agreement are incorporated herein; however, in the case of conflicts, the terms of this
Addendum shall apply.
8.2 This Addendum comprises the entire Addendum between the parties with regard to the subject matter
hereof and supersedes any and all prior discussions, negotiations, Addendums or representations,
either oral or in writing, with regard to the subject matter hereof.
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed by affixing the signatures
of duly authorized officers.
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HEALTHCARE BENEFITS, INC.
By
Roma Dixon
for Contractor
Title Vice-President
Date
CITY OF PARIS, PARIS, TEXAS
By
Erlc S. Clifford
for Purchaser
Title Mavor
Date April II. 1 qqfi
ATTEST:
Mattie Cunningham, City Clerk
APPROVED AS TO FORM:
T. K. Haynes, City Attorney
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