1991-124-RES WHEREAS, the City Council of the City of Paris, is desirous of providing health care for the City of Paris
RESOLUTION NO. 91-124
WHEREAS, the City Council of the City of Paris, is
desirous of providing health care for the City of Paris
employees at the most reasonable price available for adequate
coverage; and,
WHEREAS, the Director of Finance of the City of Paris
has negotiated a health care contract with Health Care
Benefits, Inc., for the employees of the City of Paris which
will result in a savings to the City of Paris and a savings
to the individual employees who choose to cover their
dependents; and,
WHEREAS, the contract so negotiated is attached hereto
as Exhibit A and should be approved; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS,
that the form of contract for health care coverage for City
of Paris employees with Health Care Benefits, Inc., in the
form of Exhibit A attached hereto, is in all things approved;
and,
BE IT FURTHER RESOLVED, that the Mayor of the City of
Paris, George Fisher, be, and he is hereby authorized and
directed to execute on behalf of the City of Paris, the
contract for health care for City of Paris employees with
Health Care Benefits, Inc., in the form of Exhibit A attached
hereto.
Passed and adopted this 9th day of December, 1991.
<7~~~~Lt~
ATTEST:
~~,.. \~\.=l""~
Mattie Cunning am, Ci y C er
T. K. Haynes, City Attorney
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").
WITNESSEl1I:
WHEREAS, Contractor is in the business of in 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 referred to as "Participants"); and
WHEREAS, Contractor is willing to provide such services to Purchaser and other parties on an
independent contractor basis.
NOW, THEREFORE, for and in consideration of the mutual promises, covenants, and agreements
hereinafter set forth, the parties hereto agree as follows:
SECTION ONE
OBUGATION OF PURCHASER
1.01 Purchaser shall furnish Contractor with a detailed description of the Benefit Program
to be administered;
1.02 Purchaser, in consultation with Contractor, shall determine the administrative
practices and procedures to be followed in the processing and payment of claims;
1.03 Purchaser shall provide to Contractor a complete and current listing of all Participants
eligible to receive benefits prior to their date of eligibility--making timely changes to
the listing on a periodic basis;
1.04 Purchaser shall obtain the consent of Participants for the release of confidential
medical information required for administration and to process claims for the payment
of fees for medical services rendered to patients, including any fees for mental or
emotional health services performed by professionals, as may be required by state or
federal law;
1.05 Purchaser shall establish and maintain a suitable banking arrangement to effectuate
the provisions of Section Six herein.
1.06 At Contractor's request, or at Purchaser's option, Purchaser shall make the final
determination of eligibility of Participants to receive benefits and any special issues
arising in the course of administration; and
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HCB-ASA/3-91
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ADMINISTRATIVE SERVICES AGREEMENT
EXHIBIT A
1.07 Purchast. shall designate in writing a contact person who will be empowered to act
on behalf of Purchaser with regard to the terms of the Agreement and with whom
Contractor can coordinate and resolve all questions arising in the course of
administration.
SECTION lWO
OBUGATION OF CON1RACfOR
2.01 Contractor shall administer Purchaser's Benefit Program in accordance with the
benefit plan description provided and the administrative practices and procedures
established;
2.02 Contractor shall recommend to Purchaser appropriate changes and modification to
the Benefit Program and its administrative practices and procedures where required;
2.03 Contractor shall provide or arrange for suitable facilities, equipment, and personnel
necessary for proper administration of the Benefit Program;
2.04 Contractor shall, upon request, assist Purchaser in establishing appropriate banking
arrangements for program administration;
2.05 Contractor shall, upon request, install standard administrative materials, including an
administration manual, participant and provider claim forms, and participant
identification cards;
2.06 Contractor shall, upon request, assist Purchaser in incorporating the Benefit Program
description and design into a plan document and booklet for Participants;
2.07 Contractor shall provide claims processing services to include:
a. Review and validation of all claims submitted for payment,
b. Determination of benefits in accordance with the specifications 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:
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;
2.09 Contractor shall provide periodic written reports to include:
a. Monthly check reconciliation reports,
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b.
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~nthly 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 annually;
2.14 Contractor shall keep Purchaser informed with respect on 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 matter in controversy, and
d. Those claims or classes of claims specified in Item Three of the current
Exhibit to this Agreement, if any;
2.16 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; and
2.17 Underwriting services will not be provided unless specifically identified in Item Two
of the Exhibit. Any such services provided will include required certifications by a
qualified actuary; and
2.18 Contractor shall also provide those services specified in Item Two of the current
Exhibit to this Agreement, if any.
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SECTION TIIREE
RElATIONSHIP OF PARTIES
3.01 Contractor shall not be construed, represented or held out to be a partner, associate,
joint venturer or employee of Purchaser nor shall the Contractor be construed,
represented, or hold 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 Purchaser agrees not to engage any other party to perform the same work that
Contractor performs hereunder while this Agreement is in effect, unless notice of
termination has been given under paragraph 4.02 below.
3.03 Contractor is not a statutory fiduciary of Purchaser's Benefit Program nor is
Contractor a plan administrator within the meaning of the Employee Retirement
Income Security Act of 1974, Public Law 93-406.
3.04 This Agreement is not a contract of insurance and Contractor is not an insurer or
underwriter of Purchaser's liability under the Benefit Program. Purchaser has and
retains the ultimate responsibility for payment of claims and other expenses under the
Benefit Program.
SECTION FOUR
TERM AND TERMINATION
4.01 The term of this Agreement shall be for the period of one (1) year commencing on
the Effective Date specified herein and shall continue in full force and effect from
year to year thereafter unless terminated as provided herein.
4.02 This Agreement may be terminated as follows:
a. By 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, or
c. By Purchaser for cause, upon 15 days prior written notice, if Contractor fails
to correct any deficiency in the performance of its obligations under this
Agreement within 15 working days after notice of such deficiency is given to
Contractor by Purchaser in writing,
d. By both parties on any date mutually agreed to.
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 termination if no notice is
given, and is in addition to any monthly administration fee, or portion thereof, or any
other monies due and payable to Contractor under this Agreement.
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4.04
If this a~ment is terminated for cause by purch~ under paragraph 4.02c above,
the Purchaser shall not be liable for any termination fees or charges and, moreover,
Purchaser may withhold from then 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 day of each month. at its home office in
Richardson, Texas during the term of this Agreement.
a. In the event payment of the monthly administration fee is not paid by the
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 20th day of the month, a late charge can 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
(10%) percent of the past due amount owed, or the maximum amount
permitted by state law which ever is less.
5.02 The amount of the administration fee shall be determined in accordance with the
specifications contained in Item One of the current Exhibit to this Agreement.
5.03 The administration fee shall be subject to change by Contractor as follows:
a. On each anniversary of the Effective date of this Agreement, upon a 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 entitiesulimited to increases sufficient to
recover the additional expenses, or
d. On any date that Benefit Program enrollment changes by an amount equal to
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--such reimbursement to be in addition to
the monthly administration fee.
5.05 Purchaser will reimburse Contractor for any taxes imposed or adjudged due by any
lawful authority with respect to the Benefit Program or its administration. In the case
of imposition of such tax liability, Purchaser may elect to terminate this Agreement
upon 30 days prior written notice without incurring liability for termination fees or charges.
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SECTION SIX
CLAIMS PAYMENT AND BANKING ARRANGEMENT
6.01 Purchaser shall establish a bank account on which Contractor shall write drafts for the
payment of Benefit Program claims and expenses. Purchaser agrees and is obligated
to arrange for sufficient funds to be available in such account to cover all 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 u.s. mail, delivery service or personal delivery to
Purchaser's designee or the signatory to this Agreement at the telephone number or
address specified in Item Five of the current Exhibit to this Agreement. Any
telephonic notice given will be confirmed in writing within 24 hours.
SECTION SEVEN
NOTICES
7.01 All notices given under in this Agreement. unless otherwise provided for herein, must
be in writing and shall be deemed to have been given for all purposes when personally
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.
SECTION 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 judgments, (including
reasonable attorney's 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.
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SECTION NINE
GENERAL PROVISIONS
9.01 ASSIGNMENT. No part of this Agreement, or any rights, duties, or obligations
described herein, shall be assigned or delegated without the prior express written
consent of both parties. Contractor's acquisition and use of facilities, services,
supplies, equipment and the use of temporary personnel on site shall not constitute
an assignment under this Agreement; provided however, that the supervision of all
services provided under this Agreement will be performed by Contractor's regular
employees.
9.02 GOVERNING LAW. This contract shall be governed by, and shall be construed in
accordance with, the laws of the State of Texas.
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 are provided for
convenience only and in no way define, limit, construe or describe the scope of
sections or paragraphs to which they are inserted.
9.05 GENDER AND MODE. The use herein of a personal pronoun in the masculine or
feminine gender or in the singular or plural mode, shall be deemed to include the
opposite gender or mode unless the context clearly indicates the contrary.
9.06 EXHIBIT. "Exhibit" means the attached document(s) setting out certain particulars
of this Agreement, or any replacement document(s) mutually agreed to by the parties
hereto.
9.07 LEGAL CONSTRUCfrON. Should any provision(s) contained in this Agreement
be held to be invalid, illegal, or otherwise unenforceable, the remaining provisions of
the Agreement shall be construed in their entirety as if separate and apart from the
invalid, illegal or unenforceable provision(s), subject to renegotiation by the parties
if a material change in the terms of the Agreement were to result.
9.08 ENFORCEMENT. Any delay or inconsistency in the enforcement of any part of this
Agreement shall not constitute a waiver of any rights with respect to the enforcement
of this Agreement at any future date nor shall it limit any remedies which may be
sought in any action to enforce any provision of this Agreement.
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 cause or causes
beyond its commercially reasonable control including, but not limited to, acts of God
or nature, fires, floods, storms, earthquakes, riots, strikes, and wars or restraints of
government.
9.10 ENTIRETY. This Agreement and any exhibits or amendments and advertisement for
bids shall constitute the entire Agreement between the parties and shall supersede
any and all prior Agreements or understandings, either oral or in writing, between the
parties respecting the subject matter herein.
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9.11 Disclosure Statement. Purchaser acknowledges that. a disclosure of all payments to
be made to Contractor has been made to Purchaser and such disclosure statement is
incorporated herein by reference.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement for an Effective Date
of December 31, 1991.
FOR CITY OF PARIS, Purchaser:
Title
(Date)
FOR HEALTIICARE BENEFITS, INC., Contractor:
Jeffery Langmead (Date)
Senior Vice President - HealthCare Benefits, Inc.
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EXmBIT NUMBER ONE
Specifications For
ADMINIS1RATIVE SERVICES AGREEMENT
Between
HEALTIICARE BENEFITS, INe. (CONTRACfOR)
and
CITY OF PARIS
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 year this
Agreement is in effect, the monthly administration fee shall be an amount equal to 8.00 times
the number of Participants enrolled in the Benefit Program on the first day of each month,
of which Purchaser's appointed agent is to receive $0.00.
ITEM TWO
OTIIER SERVICES
As provided in paragraph 2.18 of Section Two of the Agreement, the following additional
services shall be furnished:
A This service will be provided by Inpatient Certification Program Blue Cross and Blue
Shield of Texas, Inc. acting as agent of Contractor.
B. Toll-Free number has been included in the Administration Charge.
ITEM THREE
SPECIAL CLAIMS PROCESSING
As provided in paragraph 2.15d of Section Two of the Agreement, the following special
claims handling procedures shall be followed: None
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TIEM FOUR
OTIIER REPORTS
As provided in paragraph 2.09c of Section Two of the Agreement, the following additional
reports shall be furnished: None
TIEM FIVE
NOTICE ADDRESS
As provided in paragraph 7.01 of Section Seven of the Agreement, notice to Contractor shall
be delivered or mailed to:
HealthCare Benefits, Inc.
1201 South Sherman
Suite 200
Dallas County
Richardson, TX 75081
Written notice to Purchaser shall be delivered or mailed to:
P.O. Box 9037
Paris, Texas 75461-9037
Fax notice to Purchaser shall be made to the following number:
FOR CITY OF PARIS, PURCHASER:
Title:
(Date)
FOR HEALTIICARE BENEFITS, INC., CONTRAcroR:
Jeffery Langmead (Date)
Senior Vice President - HealthCare Benefits, Inc.
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CONTACf 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:
Title:
(Date)
DESIGNATED PERSON EMPOWERED TO ACf ON BEHALF OF PURCHASER:
Title:
(Date)
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EMPLOYEE BENEFIT PLAN
DISCLOSURE FORM
For
CIYf OF PARIS
The agent and/or TP A listed above will contract with or represent the insurance carrier in
conjunction with the sale of certain group insurance policies. This disclosure does not limit the
agent's ability to recommend the products of other insurance companies or other funding
organizations, but is intended to disclose the financial interest of the parties as to the employee
benefit plan. HealthCare Benefits, Inc. is a wholly owned subsidiary of Blue Cross and Blue Shield
of Texas, Inc. As requested by the Purchaser, HealthCare Benefits. Inc. has solicited bids from Stop
Loss, Life, etc. and the Purchaser, after reviewing the proposals has selected certain coverage. The
relationship and dealings of those companies are on file with the State Board of Insurance. If
insurance is purchased through an insurance company, HealthCare Benefits, Inc. may contract to
facilitate the payment of insurance premiums, claims, and eligibility and may receive compensation
for its services but HealthCare Benefits, Inc. is not an agent of the insurance company and does not
receive commissions.
The following persons or companies are entitled to commissions as agents on the insurance contracts
issued to you:
Product: Administration
Name of Agent:
N/A
Commission: N/A
Product: Stoploss
Name of Broker:
N/A
Commission: N/A
HealthCare Benefits, Inc. in addition to its administrative charge as indicated in the Administrative
Service Agreement is entitled to the following payments and marketing allowances for its services:
Product:
N/A
Payment:
N/A
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The undersigned ackno\\ !,es receipt of the information containel ,rein 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:
(Date)
Title:
FOR HEALTIlCARE BENEFITS, INC., CONTRAcroR:
Jeffery Langmead (Date)
Senior Vice President - HealthCare Benefits, Inc.
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