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1988-040-RES WHEREAS, the City Council of the City of Paris, is desirous of continuing to provide health coverage for RESOLUTION NO. 88-040 WHEREAS, the City Council of the City of Paris, is desirous of continuing to provide health coverage for City of Paris employees; and, WHEREAS, the City Council of the City of Paris did heretofore in Ordinance No. 85-049 authorize health care coverage through Blue Cross and Blue Shield of Texas, Inc.; and, WHEREAS, Blue Cross and Blue Shield of Texas, Inc., has proposed a Prospective Risk Agreement with Flex Pay Arrangement effective November 1, 1985, for the contract year beginning November 1, 1985, and ending on October 31, 1986, attached hereto as Exhibit A, and an amendment effective November 1, 1986, for the contract year beginning November 1, 1986, and ending on October 31, 1987, attached hereto as Exhibit B, and an amendment effective November 1, 1986, for the contract year beginning November 1, 1987, and ending October 31, 1988, attached hereto as Exhibit C; and, WHEREAS, it is deemed to be appropriate to approve and authorize execution of said agreement and the two amendments thereto, in the form of Exhibits A, Band C, respectively, attached hereto; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PARIS, That the Director of Finance, W. E. Anderson, be, and is hereby authorized and directed to execute the Prospective Risk Agreement with Flex Pay Arrangements and the two amendments thereto, with Blue Cross and Blue Shield of Texas, Inc., in the form of Exhibits A, Band C, respectively, for health care services for City of Paris employees. Passed and adopted this 9th day of May, 1988. ~ B1. e Burnett, Mayor ------ ATTEST: ~~'.~~~~ Mattie Cunning am, Cit C er PROSPECTIVE RISK AGREEMENT WITH FLEX PAY ARRANGEMENT This Agreement is entered into by and between BLUE CROSS AND BLUE SHIELD OF TEXAS. INC. Dallas. Texas and CITY OF PARIS Paris. Texas Group No. 25724 (hereinafter called the Employer) Effective: November 1. 1985 for the purpose of providing the ultimate consideration to be paid by the Employer for the coverage provided by the Experience Rated Group Comprehensive Blue Cross and Blue Shield Contract. hereinafter called the Health Contract. as numbered herein and on the Exhibit. and to provide for a funding method for payment of-Health Contract benefits. ARTICLE I - DEFINITIONS As used in this Agreement: A. Exhibit means the attached specifications setting out certain particulars of this Agreement or any other subsequent set of specifications supplied by Blue Cross and Blue Shield of Texas, Inc. as a replacement Exhibit. The specifications or items of the Exhibit except as otherwise provided herein may be changed at any time by notifying the Employer of such change. B. Contract Year means each consecutive period of time commencing and ending on the dates indicated in Item I of the Exhibit. C. Accounting Period means each consecutive period of time commencing and ending on the dates indicated in Item II of the Exhibit. D. Specific Health Stop Loss Benefits means that portion of any Health Benefits in excess of the amount indicated in either Item IV (a) or Item IV (b) of the Exhibit paid from the Employer's Account during the 12 month period ending coincidental with the Accounting Period which are incurred on or subsequent to the effective date of this Agreement. The 12 month period shall be adjusted 'downward to coincide with the Final Accounting Period. This definition applies to this Agreement only if Item IV (a) or Item IV (b) of the Exhibit is indica ted "applied for". Such Specific Hesl th Stop Loss Benef its will not extend beyond the end of the Final Accounting Period. 1 . ,,~Vt' ...,,....~.J;..,: ,~~,"(. ..~"..~~'!t..,.-':_,'t--f'l' Sf.~""^...~'~ .. ,'. j'u.\~I. :t.,.....-:,.t..-:r .'!"f"..-.~~'",,'t.t~1'l,~ ;r*,,!..""~~- ., 1T,1r~~.... \:v " '.~..,' ':lit 1';0, ,~ .~,;>o;t4"" ...., "'~',o.- }-''-i~"i',~-::.':;:~...?'( _..' ." EXHIBIT A E. Incurred Health Benefits means: 1. The total amount of all Benefit Checks issued during the Accounting Period involved, provided however if Item IV (a) or IV (b) of the Exhibit is indicated "applied for" Specific Health Stop Loss Benefits shall not be included within this definition of Incurred Health Benefits, plus 2. The total amount of Health Benefits estimated by Blue Cross and Blue Shield of Texas, Inc. in accordance with their normal accounting practices as specified under Article IV of this Agreement to be incurred but unpaid at the end of an Accounting Period, minus 3. The corresponding estimated reserve appearing in the last previous experience statement. F. Health Certificate means each certificate number used by Blue Cross and Blue Shield of Texas, Inc. to evidence coverage for an individual employee and covered dependent(s), if any. G. Health Contract Underwritten Premium means the monthly premiums due and payable by the Employer to Blue Cross and Blue Shield of Texas, Inc. for the Accounting Period involved under the terms of the article in the Health Contract captioned "Premiums" as may be adjusted from time to time. The monthly Health Contract Underwritten Premium rates are indicated in Item IX of the Exhibit. While this Agreement is in effect and while the Draft Authority provided for in Article II of this Agreement is honored by the Employer's Bank, the Employer is not required to pay the monthly Health Contract Underwritten Premium, as outlined in the Health Contract, but is required to pay the Remaining Health Contract Underwritten Premium on termination in accordance with Article III. H. Health Contract Adnnistration Charge means the consideration calculated in accordance with Item VI of the Exhibit, which is required by Blue Cross and Blue Shield of Texas, Inc. for the administration of the Health Contract. The Health Contract Administration Charge will be due and payable to Blue Cross and Blue Shield of Texas, Inc. monthly on the due date of Health Contract Underwritten Premium as indicated in the "Premiums" Article of the Health Contract or within 10 days after the end of the Final Accounting Period as described in Article III, Section D and Item VI of the Exhibit. Such consideration will be automatically increased by the amount of increase or imposition of premium taxes whenever imposed by lawful authority on or after the effective date of this Agreement. 1. Specific Health Contract Stop Loss Premium means the monthly consideration required by Blue Cross and Blue Shield of Texas, Inc. for the risk assumed for the Specific Health Contract Stop Loss Insurance. Specific Health Contract Stop Loss Premium shall be calculated in accordance with Item VII of the Exhibit. The Specific Health Contract Stop Loss Premium shall be payable to Blue Cross and Blue Shield of Texas, Inc. monthly on the due date of the Health Contract Underwritten Premium as indicated in the "Premiums" Article of the Health Contract. This definition applies to this Agreement only if Item IV (a) or Item IV (b) of the Exhibit is indicsted "spplied for". ., J. Re.aining Hea1th Contract Underwritten Preaium means the amount of money to be deposited in the Employer's Account by the Employer at the end of the Final Accounting Period as provided for in Article III, Section D of this Agreement. The Remaining Health Contract Underwritten Premium is equal to the Heal th Contract Underwritten Premium, cumulative for the entire term of this Agreement. minus: 1. any Health Contract Administration Charge paid to Blue Cross and Blue Shield of Texas, Inc. and 2. any Specific Health Contract Stop Loss Premium paid to Blue Cross and Blue Shield of Texas, Inc. and 3. the Minimum Balance maintained as required in the Employer's Account at the end of the Final Accounting Period, and 4. the total of all funds drafted by Blue Cross and Blue Shield of Texas, Inc. from the Employer's Account for payment of Health Contract Benefit checks issued and clearing the Employer's Bank, less any Stop Loss Benefit amounts paid to the Employer, cumulative for the entire term of this Agreement, and 5. the amount by which any Health Contract Accounting Period Surplus is reduced to zero (0) in accordance with Article III, Section B.2. ARTICLE II - FLEX PAY BANKING ARRANGEMENTS A. As used in this Agreement 1. Employer's Bank means the bank with which the Employer has entered into an agreement to carry out its banking obligations in accordance with this Agreement. The Employer's Bank is identified in Item V of the Exhibit. 2. Suspense Account means a Ledgered account maintained by Blue Cross and Blue Shield of Texas, Inc. to identify amounts deposited by Blue Cross and Blue Shield of Inc. in Employer's Bank to be used to reimburse Employer's Account on a temporary basis, if funds are not available in the Employer's Account or when the guaranteed Cumulative Draft Authority is exceeded. 3. Employer's Account means an account established by the Employer with the Employer's Bank, by executing an agreement as required by the Employer's Bank for opening an sccount, which will be used to issue Health Benefit Checks and reimburse the Blue Cross and Blue Shield of Texas, Inc. any Suspense Account amounts paid and due. The Minimum Balance to be maintained in the Employer's Account is indicated in Item VIII of the Exhibit. 4. Draft means the drawing of funds by Blue Cross and Blue Shield of Texas, Inc. from Employer's Account under this Agreement. 5. Hea1th Benefit Checks means all Benefit Payments made on behalf of the Employer by Blue Cross and Blue Shield of Texas, Inc. issuing a check drawn on the Employer's Account for benefits under the provisions of the Heal th Contract. ., 6. Draft Authority means the monthly amount of funds that Blue Cross and Blue Shield of Texas is authorized to draw from the Employer's Account for the issuance of Health Benefit Checks. calculated in accordance with Item III of the Exhibit. 7. Cuaulative Draft Authority means the sum of the monthly Draft Authority from the effective date of this Agreement through the month in which the Employer's Account is drafted less the amount, if any. by which any Health Contract Accounting Period Surplus is reduced to zero in accordance with Article III, Section B.2. hereof. In no case shall such cumulative Draft Authority be less than zero. B. Banking Authorization and Procedures: 1. Blue Cross and Blue Shield of Texas. Inc. is authorized to issue checks drawn on the Employer's Account to employees and providers of seIVices in amounts equal to Health Benefits payable under the Employer's Health Contract. 2. Employer agrees to arrange for Employer's Bank to notify Blue Cross and Blue Shield of Texas. Inc. of the dollar amount of checks clearing Employer's Bank each month by copy of a Bank Statement or other document acceptable to Blue Cross and Blue Shield of Texas. Inc. 3. Employer agrees to maintain, or arrange for the transfer of. sufficient funds in Employer's Account to cover all amounts drafted on the account up to the cumulative monthly Draft Authority amount. 4. Blue Cross and Blue Shield of Texas. InC. agrees to fund or reimburse Employer's Account for any amount paid in excess of cumulative Draft Authority for any month said cumulative Authority Draft is exceeded upon receipt by Blue Cross and Blue Shield of Texas, Inc. of a bank statement, or other notice acceptable to Blue Cross and Blue Shield of Texas. Inc.. from the Employer or Employer's Bank showing that cumulative Draft Authority has been reached. If notice is not given. Employer will continue to provide sufficient funds in Employer'S Account to cover all amounts drafted on the account. As soon as funds become available in the Employer's Account. Blue Cross and Blue Shield of Texas. Inc. will draft the account for reimbursement of the amounts paid into the Employer's Account as reflected in the Suspense Account subject to adjustments made for Specific Health Stop Loss Benefits paid. if any. C. Benefit Checks to the extent ultimately reimbursed or paid from the employer's Account shall be considered self-insured benefits. not a Health Contract Benefit. III - CONSIDERATION: SE'1'TLEHKII'TS A. On the first of each month the Employer will remit to Blue Cross and Blue Shield of Texas. Inc. the Health Contract Administration Charge. and if applicable. the Specific Health Contract Stop Loss Premium. +v B. Blue Cross and Blue Shield of Texas, Inc. will furnish the Employer a Health Contract report within ninety (90) days after the end of each Accounting Period, detailing Specific Health Stop Loss Benefits, if any. Health Contract Underwritten Premium, Incurred Health Benefits, Specific Health Contract Stop Loss Premium and Heal th Contract Administration Charge for such Accounting Period and all other data required for settlement, as provided herein. If the report reflects that the Health Contract Underwritten Premium exceeds the sum of: (1) Incurred Health Benefits plus (2) Health Contract Administration Charge, plus (3) Specific Health Contract Stop Loss Premium (if any), such excess shall be termed herein as the Health Contract Accounting Period Surplus; if the results thus obtained is a negative figure, such amount shall be termed herein as the Health Contract Accounting Period Deficit. Based on the report, the following applies: 1. If the report reflects a Health Contract Accounting Period Deficit, such deficit shall be combined with any deficits carried forward from previous Accounting Periods and the total of such deficits shall, for the accounting required for the next succeeding Accounting Period, be termed the Health Contract Standing Deficit. 2. If the report reflects a Health Contract Accounting Period Surplus, any such surplus shall be first applied against the Health Contract Standing Deficit, if any, such excess shall be reduced to zero. C. If Item IV (a) of IV (b) of the Exhibit is indicated "Applied For" and the report provided for in Section B above reflects Specific Health Stop Loss Benef its for the Accounting Period involved, Blue Cross and Blue Shield of Texas, Inc. will settle with the employer within 30 days of such report for any Specific Health Stop Loss Benefits. D. On termination of the Health Contract or the 30th day following the notice provided for in Paragraph C of Article IV of this Agreement, the time intervening between the end of the last previous Accounting Period and the termination date or the 30th day following such notice shall, regardless of the number of months involved, be considered an Accounting Period and shall be termed herein as the Final Accounting Period. Except as otherwise provided below, reports and settlements for the Final Accounting Period shall be effected in accordance with the provisions of the foregoing Sections of this Article III, and Specific Health Stop Loss Benefits will not extend beyond the end of the Final Accounting Period. Within ten (10) days after the end of the Final Accounting Period, all the Remaining Health Contract Administration Charges as specified in Item VI of the Exhibit are to be paid to Blue Cross and Blue Shield of Texas, Inc. within fifteen (15) days of the end of the Final Accounting Period, the Remaining Heal th Contract Underwritten Premium shall be transferred to the Employer's Account by the Employer and the Flex Pay Banking arrangements provided for in Article II hereof shall continue for twenty-four (24) months following the end of the Final Accounting Period. After transfer of Remaining Health Contract Underwritten Premium, Draft Authority is the Remaining Health Contract Underwritten Premium and no further drafts will be made on the Employer's Bank. In the event that the Remaining Health Contract Underwritten Premium is insufficient to pay for the remaining claims liability, Blue Cross and Blue Shield of Texas, Inc. will bill the Employer for such remaining claim liability up to the amount of any Health Contract Accounting Period Surplus developed by the accounting for the Final +v Accounting Period. In the event funds in the hat. of Blue Cross and Blue Shield of Texas, Inc. are still insufficient to pay the remaining claims liability, Blue Cross and Blue Shield of Texas, Inc. will bill the Employer for funds equal to the amount by which any Health Contract Standing Surplus was reduced to zero, in accordance with Article III, Section B.2. for the two (2) Accounting Periods immediately preceding the Final Accounting Period: except that if the Final Accounting Period is of a duration of less than six (6) months then Blue Cross and Blue Shield of Texas, Inc. will bill the Employer for funds equal to the amount by which any Heal th Contract Standing Surplus was reduced to zero, for the three (3) Accounting Periods immediately preceding the Final Accounting Period. Final settlement of all Remaining Health Contract Underwritten Premium and any Health Contract Accounting Period Surplus for the Final Accounting Period if any, not necessary to cover any remaining claims liability will be made during the 27th month following the end of the Final Accounting Period by Blue Cross and Blue Shield of Texas, Inc. IV - GENERAL PROVISIONS A. This Agreement does not alter the Health Contract provisions regarding the setting of premium rates. B. At the date of execution hereof, the normal accounting practice of Blue Cross and Blue Shield of Texas, Inc. in estimating benefits incurred but unpaid during an Accounting Period is a combination of the following: (1) an amount obtained by multiplying that portion of Underwritten Premium attributable to Hospital Expense (as specified in Item IX of the Exhibit) on an annualized basis by 16%, plus (2) an amount obtained by multiplying that portion of Underwritten Premium attributable to Other Medical Expense (as specified in Item IX of the Exhibit) on an annualized basis by 24%. This formula is designed to produce a reliable estimate: therefore, the result attained is subject to modification for known claim liabilities. Appropriate modi fica tions will also be made for Accounting Periods of a duration other than twelve (12) months. Blue Cross and Blue Shield of Texas, Inc. reserves the right to refine and/or revise their normal accounting practice in accordance with sustained experience upon furnishing the Employer a statement of such change. C. This Agreement automatically following the date the Health month following written notice thirty (30) days in advance. terminates the last day of the 24th month Contract terminates or the last day of the 24th given by any party to the other not less than D. A daily charge equal to the lesser of .05% of the amount of the billing or the maximum rate permitted by State Law may be charged for late remittance of any amounts owed by the Employer under this Agreement. A reaittance will be considered received when actually delivered into the possession or control of Blue Cross and Blue Shield of Texas, Inc. as provided under this agreement. E. This Agreement shall be null and void and of no force or effect if not executed by the Employer named below and received by Blue Cross and Blue Shield of Texas, Inc. at its home office in Dallas County, Texas within ninety (90) days from the date Blue Cross and Blue Shield of Texas, Inc. executes this Agreement, as shown below. +. F. Along with the Master Contract, this Agreement. including any Exhibits and Amendments, shall constitute the entire understanding of the parties hereto and all prior or contemporaneous representations, statements, understandings, negotiations or agreements between the parties, whether written or oral, are hereby superceded. No modification, amendment, change, or waiver of any provision of this Agreement shall be valid unless executed in writing by both Blue Cross and Blue Shield of Texas, Inc, and the Employer. For Blue Cross and Blue Shield of Texas, Inc. : D. Melton, Pres]. ent J~ ~ /9J'7 ute For the Employer: ;D.L.~ Name and Title 1/- 5- J' 7 Date ., EXHIBIT for CITY OF PARIS Group Name 25724 Group Number ITEK I These specifications are for the CONTRACT YEAR which shall commence on November 1. 1985 and end on October 31. 1986. ITEM II The ACCOUNTING PERIOD shall commence on November 1. 1985 and end on October 31. 1986. ITEM III The DRAFT AUTHORITY (Column C)shall be calculated monthly and be equal to the sum of the products obtained by multiplying respectively the number of Health Certificates exposed for a particular month by $36.50 for each single Health Certificate. $63.78 for each Health Certificate with child(ren). $95.24 for each Health Certificate with spouse. and $117.62 for each Health Certificate with family. ITEM IV SPECIFIC STOP LOSS INSURANCE for benefits paid under the Health Contract is either: (a) applied for and all Health Contract benefits paid in excess of $ per Health Certificate per Contract Year shall not be included as an Incurred Health Benefit. This amount is guaranteed for the indicated Contract Year. or (b) x applied for and all Health Contract benefits paid in excess of $30.000 per Participant per Contract Year shall not be included as an Incurred Health Benefit. This amount is guaranteed for the indicated Contract Year. or (c) not applied for. ., ITEK V The EMPLOYER'S BANK is identified as LIBERTY NATIONAL BANK Name 305 LAMAR Address PARIS, City TEXAS State 75460 Zip ITEM VI The HEALTH CONTRACT ADMINISTRATION CHARGE for the Contract Year shall be calculated monthly by multiplying, respectively, the number of Health Certificates exposed for a particular month by the rates for the category of the Certificate as indicated below and totaling the results thus obtained: Employee Only Employee and Child(ren) Employee and Spouse Employee and Family Heal th $ 4.30 $ 7.50 $11.19 $13.83 Of that total charge, an amount to be calculated by applying the following portion of the above rates is to be paid monthly to Blue Cross and Blue Shield of Texas, Inc. : Employee Only Employee and Cbild(ren) Employee and Spouse Employee and Family Heal th $ 3.44 $ 6.00 $ 8.96 $11.07 The rema1n1ng Health Contract Administration Charge amount as calculated by applying the remaining portion of each rate as follows, is to be held by the employer and paid to Blue Cross and Blue Shield of Texas, Inc. within ten (10) days after the end of the final Accounting Period as provided in Article III, Section D of this agreement: Employee Only Employee and Child(ren) Employee and Spouse Employee and Family Heal th $ .86 $ 1.50 $ 2.23 $ 2.76 These amounts are guaranteed for the indicated Contract Year and are included in the Health Contract Underwritten Premium. ., The rema1n1ng Health Contract Administration Charge amount as calculated above. if any. will be carried forward each Contract Year. The cumulative remaining Health Contract Administration Charge amount deferred from prior accounting periods. if any. is shown in the Remaining Heal th Contract Underwritten Calculation Schedule provided to the Employer after the end of each Accounting Period. ITKK VII The SPECIl!'IC HEALTH COllTRACT STOP LOSS PRBKIUM for the Contract Year shall be calculated monthly by mu1 tiplying. respectively. the number of Health Certificates exposed for a particular month by $3.94 for each single Health Certificate. $6.89 for each Health Certificate with child(ren). $10.28 for each Health Certificate with spouse. and $12.70 for each Health Certificate with family. These amounts are guaranteed for the indicated Contract Year and are included in the Health Contract Underwritten Premium. ITEM VIII The KINIHDH BALANCE to be maintained by the Employer in the Employer's Account at The Bank is $6.035 for November 1, 1985 through April 30. 1986. and $9,847 for May 1. 1986 through October 31. 1986 ITKK IX The HEALTH COllTRACT UNDERWRITTEN PRBKIUM rates for the Contract Year shall be: Employee Employee & Employee & Employee & Only Child (ren) Spouse Family Hospitalization: $32.93 $ 57.55 $ 85.92 $106.12 OME: $21. 96 $ 38.36 $ 57.28 $ 70.75 TOTAL : $54.89 $ 95.91 $143.20 $176.87 z).~_.(!~ S1gnature of the Employer's Group Executive //- j-- 37 Date -~'__ / f Signature of Represeqta ive of Blue Cross and Blue sl1 Id of Texas. Inc. /1. S" - ,g7 Date ., Blue Cross <cd Blue Shield ., ci Tellas. Ire D 0 8ex 225 -:'"3C Jl,:,)S, Te;(Js ;'5265-5730 September 3, 1987 Mr. Gene Anderson, Finance Director Ci ty of Paris Post Office Box 1037 Paris, Texas 75460 Dear Mr. Anderson: This letter, when accepted by you, shall constitute our agreement to amend the Prospective Retention Agreement effective November 11, 1985 between City of Paris and Blue Cross and Blue Shield of Texas, Inc., in the following manner: 1. By amending, effective November 1, 1986, Article I, ("Detini tions") , Section H, ("Heal th Contract Administration Charge"), by deleting it in its entirety and substituting therefor the following: H. Health Contract Administration Charge means the consideration calculated in accordance with Item VI of the Exhibit, which is required by Blue Cross and Blue Shield of Texas, Inc. for the administration of the Health Contract. The Health Contract Administra tion Charge will be due and payable to Blue Cross and Blue Shield of Texas, Inc. monthly on the due date of Health Contract Underwritten Premium as indicated in the "Premiums" Article of the Health Contract or wi thin 10 days after the end of the Final Accounting Period as described in Article III, Section D and Item VI of the Exhibit. Such consideration will be automatically increased by the amount of any taxes imposed, increased or adjudged due by any lawful authority on or after the effective date of this agreement, which Blue Cross and Blue Shield of Texas, Inc. is required to payor remit, whether relating to fees, services, benefits, payments or any other aspect of the Health Contract or this Agreement. 2. By amending, effective November 1, 1986, Article III, ("Consideration: Settlements"), Section C, by deleting its wording in its entirety and substituting therefor the following: EXHIBIT 8 Mr. Gene Anderson September 3, 1987 Page two C. If Item IV (a) or IV (b) of the Exhibit is indicated "applied for," Blue Cross and Blue Shield of Texas Inc. will furnish the Employer a Specific Health stop LOSS Benefit report after the end of each month occurring within an Accounting Period in which Specific Health stop Loss Benefits were paid. The report will detail for the month cumulative Specific Health stop Loss Benefits, Cumulative Draft Authority, Health Benefit Checks and all other data required for settlement, as provided herein. within 10 days after issuance of such report, Blue Cross and Blue Shield of Texas, Inc. will settle with the Employer for any Specific Health stop Loss Benefits involved. Based on the report, the following appl ies: 1. If the report reflects that the Cumulative Draft Authority was exceeded, the amount of Specific Health stop Loss Benefits paid during the month will be compared to that excess amount. If the Specific Health Stop Loss Benefit amount is greater than said excess amount, an amount equal to the difference between those two amounts will be paid to the Employer and the Suspense Account will be reduced by an amount equal to said excess amount. If the Specific Health Stop Loss Benefit amount is less than said excess amount, the Suspense Account will be reduced by an amount equal to the Specific Health stop Loss Benefi t amount. 2. If the report reflects that the Cumulative Draft Authori ty was not exceeded for the month, an amount equal to the amount of Specific Health stop Loss Benefits paid during the month will be paid to the Employer. 3. To the extent that amounts are paid to the Employer by Blue Cross and Blue Shield of Texas, Inc. as a result of any monthly Specific Health stop Loss Benefit settlement, as described in paragraphs 1 or 2 above, available Draft Authority will be restored by those amounts. Mr. Gene Anderson September 3, 1987 Page three If the above adequately reflects your understanding of the amendments to be made to the Prospective Retention Agreement, please sign in the space provided below, retaining a copy for your file and forwarding the original back to us. Sincerely, ''1,'., ,. ." __ 'lIt') --;---/ ";p../ll.".~ L' fl_C__(.U.>L.- John D. Melton President JDM:fn ACCEPTED: Ti t1 e Signature Date Name (Printed) EXHIBIT for CITY OJ!' PARIS Group Name 25724 Group Number ITEM I These specifications are for the CONTRACt YEAR which shall commence on November 1. 1986 and end on October 31. 1987. ITEM II The ACCOUllTING PERIOD shall commence on November 1. 1986 and end on October 31. 1987. ITEM III The DRArr AUTHORITY (Column C)shall be calculated monthly and be equal to the sum of the products obtained by multiplying respectively the number of Health Certificates exposed for a particular month by $46.69 for each single Health Certificate. $81.59 for each Health Certificate with child (ren) . $121.82 for each Health Certificate with spouse. and $150.46 for each Health Certificate with family. ITEM IV SPECIJ!'IC STOP LOSS INSURANCE for benefits paid under the Health Contract is either: (a) applied for and all Health Contract benefits paid in excess of $ per Health Certificate per Contract Year shall not be included as an Incurred Health Benefit. This amount is guaranteed for the indicated Contract Year. or (b) x applied for and all Health Contract benefits paid in excess of $30,000 per Participant per Contract Year shall not be included as an Incurred Health Benefit. This amount is guaranteed for the indicated Contract Year. or (c) not applied for. +v ITEM V The EMPLOYER'S BANK is identified as LmBRTY NATIONAL BANK Name 305 LAMAR Address PARIS. City TEXAS State 75460 Zip ITEM VI The HEALTH CONTRACT ADMINISTRA7ION CHARGE for the Contract Year shall be calculated monthly by multiplying. respectively. the number of Health Certificates exposed for a particular month by the rates for the category of the Certificate as indicated below and totaling the results thus obtained: Employee Only Employee and Child(ren) Employee and Spouse Employee and Family Heal th $ 4.30 $ 7.50 $11.19 $13.83 Of that total charge. an amount to be calculated by applying the following portion of the above rates is to be paid monthly to Blue Cross and Blue Shield of Texas. Inc. : Employee Only Employee and Child(ren) Employee and Spouse Employee and Family Heal th $ 4.30 $ 7.50 $11.19 $13.83 The rema~n~ng Health Contract Administration Charge amount as calculated by applying the remaining portion of each rate as follows. is to be held by the employer and paid to Blue Cross and Blue Shield of Texas. Inc. within ten (10) days after the end of the final Accounting Period as provided in Article III, Section D of this agreement: Employee Only Employee and Child(ren) Employee and Spouse Employee and Family Heal th $ .00 $ .00 $ .00 $ .00 These amounts are guaranteed for the indicated Contract Year and are included in the Health Contract Underwritten Premium. -tv The remaining Health Contract Administration Charge amount as calculated above, if any, will be carried forward each Contract Year. The cumulative remaining Health Contract Administration Charge amount deferred from prior accounting periods, if any, is shown in the Remaining Health Contract Underwritten Calculation Schedule provided to the Employer after the end of each Accounting Period. ITEM VII The SPECIFIC HEALTH OOIlTRACT S'l'OP LOSS PREMIllH for the Contract Year shall he calculated monthly by multiplying, respectively, the number of Health Certificates exposed for a particular month by $4.63 for each single Health Certificate, $8.09 for each Health Certificate with child (ren), $12.09 for each Health Certificate with spouse, and $14.93 for each Health Certificate with family. These amounts are guaranteed for the indicated Contract Year and are included in the Health Contract Underwritten Premium. ITEM VIII The HINIHllH BALANCE to be maintained by the Employer in the Employer's Account at The Bank is $10,193 for November I, 1986 through October 31, 1987. ITEM IX The HEALTH COIlTRACT UHDERWRITl'EN PRBIUlJK rates for the Contract Year shall be: Employee Employee & Employee & Employee & Only Child (ren) Spouse Family Hospitalization: $32.93 $ 57.55 $ 85.92 $106.12 OME: $21. 96 $ 38.36 $ 57.28 $ 70.75 TOTAL : $54.89 $ 95.91 $143.20 $176.87 Signature of the Employer's Group Executive Date Date Signature of Representative of Blue Cross and Blue Shield of Texas, Inc. .v ~/ Blue Cross 11'<1 Blue Shield .\9J " d:-.lJC.lS. :rc :.:J ,~) 3u( --::.~)~::G :\,:,13 T:-,:<,JS 7'~;':S::-S7?O March 15, 1988 Hr. Gene Anderson, Finance Director City of Paris Post Office Box 1037 Paris, Texas 75460 Dear Hr. Anderson: This letter, when accepted by you, shall constitute ou, agreement to amend the Prospective Retention Agreement effective November 1, 1986 between City of Paris and Blue Cross and,Blue Shield of Texas, Inc., in the following manner: 1. By amending, effective September 1, 1987, Article IV, ("General Provisions"), by adding the following Paragraph G: G. In addition to the other services enumerated in this Agreement, Blue Cross and Blue Shield ().f Texas, Inc. agrees to provide an accounting to the Employer of the total amount of benefits paid under this Agreement, according to Blue Cross and Blue Sheild of Texas, Inc.'s accounts and records, which Employer can use as a basis for determining Administrative Services Taxes due under the provisions of Article 4.11A of the Texas Insurance Code, if any. It is hereby acknowledged and accepted that any such Administrative Services Taxes due and owing for benefits paid under this Agreement are the sole obligation of Employer and are apart from and in addition to any other amounts due under this Agreement. Employer will pay directly to the State Board of Insurance the amount of any such Administrative Services Taxes due. 2. By amending, effective November 1, 1987, Article III, ("Consideration: Settlements"), Section D, by deleting its wording in its entirety and substituting therefor the following: D. On termination of the Health Contract or the 30th day following the notice provided for in Paragraph C of Article IV of this Agreement, the time intervening between the end of the last previous Accounting Period and the termination date or the 30th day following such notice shall, regardless of the number of months involved, be considered an Accounting Period and shall be termed herein as the Final Acconnting Period. Except as otherwise provided below, reports and settlements for the Final Accounting Period shall be effected in accordance with , , EXHIBIT C Mr. Gene Anderson March 15. 1987 Page two provisions of the foregoing Sections of this Article III. and Specific Health Stop Loss Benefits will not extend beyond the termination date of this Agreement. Within 10 days after the end of the Final Accounting Period. all the remaining Health Contract Administration Charges as specified in Item VI of the Exhibit are to be paid to Blue Cross and Blue Shield of Texas. Inc. within fifteen (15) days of the end of the Final Accounting Period. the Remaining Health Contract Underwritten Premium shall be transferred to the Employer's Account with The Bank by the Employer and the Flex Pay Banking arrangements provided for in Article II hereof shall continue for fifteen (15) months following the end of the Final Accounting Period. After transfer of Remaining Health Contract Underwritten Premium. Draft Authority is the Remaining Health Contract Underwritten Premium and no further drafts will be made on the Home Bank. In the event that the Remaining Health Contract Underwritten Premium is insufficient to pay for the remaining claims liability. Blue Cross and Blue Shield of Texas. Inc. will bill the Employer for such remaining claim liability up to the amount of any Health Contract Accounting Period Surplus developed by the accounting for the Final Accounting Period. In the event funds in the hands of Blue Cross and Blue Shield of Texas. Inc. are still insufficient to pay the remaining claims liability, Blue Cross and Blue Shield of Texas. Inc. will bill the Employer for funds equal to the amount by which any Health Contract Standing Surplus was reduced to zero, in accordance with Article III. Section B.2. for the two (2) Accounting Periods immediately preceding the Final Accounting Period; except that if the Final Accounting Period is of a duration of less than six (6) months then Blue Cross and Blue Shield of Texas, Inc. will bill the Employer for funds equal to the amount by which any Health Contract Standing Surplus was reduced to zero. for the three (3) Accounting Periods immediately preceding the Final Accounting Period. Final settlement of all Remaining Health Contact Underwritten Premium and any Health Contract Accounting Period Surplus for the Final Accounting Period if any. not necessary to cover any remaining claims liability will be made during the 15th month following the end of the Final Accounting Period by Blue Cross and Blue Shield of Texas, Inc.. 2. By amending. effective November 1. 1987. Article IV, ("General Provisions"). Section B. by deleting therefrom the following percentages: (1) "24%," (2) "15%." and substituting therefor the following percentages: (1) "15%." (2) "15%." Mr. Gene Anderson March 15. 1988 Page three If the above adequately reflects your understanding of the amendments to be made to the Prospective Retention Agreement. please sign in the space provided below, retaining a copy for your file and forwarding the original back to us. Sincerely. 2~~#x-' John D. Melton President JDM:cl ACCKP'l'IID : S1.gnature T~tle Name (Printed) Date EXHIBIT for CITY OF PARIS Group Name 25724 Group Number ITEK I These specifications are for the CONTRACT YEAR which shall commence on November 1, 1987 and end on October 31. 1988. lTEK II The ACCOUNTING PERIOD shall commence on November 1, 1987 and end on October 31, 1988. ITEK III The DRAFT AUTHORITY shall be calculated monthly and be equal to the sum of the products obtained by mul tiplying respectively the number of Health Certificates exposed for a particular month by the Expected Paid Benefits for Health specified below: Employee Only Employee and Chi1d(ren) Employee and Spouse Employee and Family HEALTH $ 44.44 $ 77.65 $115.93 $143.19 ., ITEM IV SPECIFIC HEALTH STOP LOSS INSURANCE for benefits paid under the Health Contract is either: (a) applied for and all Health Contract benefits paid in excess of $ per Health Certificate per Contract Year shall not be included as an Incurred Health Benefit. This amount is guaranteed for the indicated Contract Year, or (b) x applied for and all Health Contract benefits paid in excess of $30.000 per Participant per Contract Year shall not be included as an Incurred Health Benefit. This amount is guaranteed for the indicated Contract Year. or (c) not applied for. ITEM V The HOKE BANK is identified as: LIBERTY NATIONAL BANK Name 305 LAHAR Address PARIS. City TEXAS Sta te 75460 Zip ITEM VI The total HEALTH CONTRACT ADMINISTRATION CHAllGE for the Contract Year shall be calculated monthly by multiplying, respectively. the number of Heal th Certificates exposed for a particular month by the rates for the category of the Certificate as indicated below and totaling the results thus obtained: Employee Only Employee and Child(ren) Employee and Spouse Employee and Family HEALTH $ 5.23 $ 9.14 $13.65 $16.86 ., Of that total charge. an amount to be calculated by applying the following portion of the above rates is to be paid monthly to Blue Cross and Blue Shield of Texas. Inc.: Employee Only Employee and Child{ren) Employee and Spouse Employee and Family HEALTH $ 4.97 $ 8.69 $12.97 $16.03 The remaining Heal th Contract Administration Charge amount as calculated by applying the remaining portion of each rate as follows. is to be held by the Employer and paid to Blue Cross and Blue Shield of Texas. Inc. within ten (10) days after the end of the Final Accounting Period as provided in Article III. Section D of this Agreement: Employee Only Employee and Child(ren) Employee and Spouse Employee and Family HEALTH $ .26 $ .45 $ .68 $ .83 These amounts are guaranteed for the indicated Contract Year and are included in the Health Contract Underwritten Premium. ITEM VII The SPECIFIC HEALTH CONTRACT srop LOSS PREMIUH for the Contract Year shall be calculated monthly by multiplying. respectively. the number of Health Certificates exposed for a particular month by the rates for the category of certificate indicated below and totaling the results thus obtained. These amounts are guaranteed for the indicated Contract Year and are included in the Health Contract Underwritten Premium. Employee Only Employee and Child(ren) Employee and Spouse Employee and Family HEALTH $ 6.13 $10.71 $15.99 $19.75 ITEM VIII The MINIHllH BALANCE to be maintained by the Employer in the Employer's Account at The Bank is $10.672 for November 1. 1987 through October 31. 1988. .v ITEM IX The HEALTH CONTRACT UNDERWRITTEN PREMIUM rates for the Contract Year shall be: Employee Employee & Employee & Employee & Only Child (ren) Spouse Family HOSPITALIZATION: $32.93 $ 57.55 $ 85.92 $106.12 OME: $21. 96 $ 38.36 $ 57.28 $ 70.75 TOTAL: $54.89 $ 95.91 $143.20 $17 6.87 Signature of the Employer's Group Executive Date Date Signature of Representative of Blue Cross and Blue Shield of Texas, Inc. ..