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HomeMy WebLinkAbout1987-1782045L NO Y 1._IV— AN L OF SYSTEMS,NINC E TO PROVIDE ROV DE THIRD PPARTY AADMINISTRATIVE COORDINATED BENEFIT SERVICES FOR THE CITY'S EMPLOYEE HEALTH INSURANCE PROGRAM, AUTHORIZING THE EXOURE ST UN S THEREFOR, AND PROVIDING AN EFF ZING CTIOVEITHE DATE EXPENDITURE OF WHEREAS, the City has advertised and received proposals for third party administrative services for the City's employee health insurance program, and WHEREAS, the City Manager having recommended to the City Council that the proposal of Coordinated Benefit Systems, Inc for administrative said proposal should be accepted, receivedal the NOW,THEREFORE, cityandthat THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS SECTION I That the City hereby accepts for proposalthird of Coor mate enefit Systems, Inc to provide ty administrative services for the City's employee health insurance program, and the Mayor is hereby authorized toagment execute an d of is agreement for said services, a copy attached hereto and incorporated reference herein SECTION II That the expenditure of funds pursuant to said agreement is iereby authorized SECTION III That this ordinance shall become effective imme iate y upon its passage and approval PASSED AND APPROVED this thea�2�day of October, 1987 RAY S P ENS, MAYOR ATTEST il��r�a� JE ALTERS, C T ETARY AP OVED AS TO LEGAL FORM DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY �� �� a ' In / �.ls/ 2045L THE STATE OF TEXAS S AGREEMENT BETWEEN THE CITY OF DENTON AND COORDINATED BENEFITS SYSTEMS, INC COUNTY OF DENTON S THIS AGREEMENT, effective October 1, 1987 is made and entered into by and between Coordinated Benefits Systems, (CBS) Inc and City of Denton ("Employer") having its offices at Denton, Texas PREMISES WHEREAS, the City has established a self -funded Employee Welfare Benefit Plan pursuant to the Employee Retirement Income Security Act of 1974, as amended, (the "Plan") for certain employees of the City and for certain dependents of such employees ("Participants"), and WHEREAS, CBS, Inc is in the business of providing services in conjunction with such Plans, and the City desires to engage CBS, Inc to perform the services enumerated herein below, NOW, THEREFORE, in consideration of the premises and of the mutual promises and covenants contained herein, the parties agree as follows TABLE OF CONTENTS I TERM OF AGREEMENT 1 1 Term 1 1 2 Termination 1 1 2 1 By the Parties 1 1 2 2 By Law 1 1 3 Effect of Termination 1 II PLAN III IV V VI 2 1 Plan Document 1 2.2 Interpretation of Plan 1 2.3 Stop -Loss Insurance 2 SCOPE OF RELATIONSHIP 3 1 Agency 2 3 2 Fiduciary 2 3 3 Communications 2 3 4 Parties 2 DUTIES OF CBS, INC 4 1 Documentation 2 & 3 4 2 Claims Services 3 4 2 1 Practices and Procedures 3 4 2 2 Services 3 4 2 3 Additional Services 3$ 4 4 2 4 Reports 4 4 3 Records and Files 4 4 4 Reports 4 4 5 Duty of Care 5 DUTIES OF CITY 5 1 Account 5 5 1 1 Draft Authority on the Account 5 5 2 Determination of Service Fee 5 5 2.1 Payment of Service Fee 5 5 2 2 Change of Service Fee 5 5 3 Taxes 6 5 4 Conversion Fee 6 5 5 Census 6 5 6 Liability for Benefits 6 5 7 Indemnification 6 GENERAL PROVISIONS 6 1 Entire Contract 6 6 2 Applicable Law 7 6 3 Assignment 7 I TERM OF AGREEMENT 1 1 Term This Agreement shall commence October 1, 1987 and shall continue in effect for three (3) years, unless terminated as provided herein below In the third year, the parties may agree to renegotiate the scope of services and the consideration provided for herein and extend the term of this agreement 1 2 Termination 1 2 1 By the Parties Either Party may terminate this Agreement at any time, FOR OR WITHOUT CAUSE, by providing written notice to the other Party Such termination shall become effective ONE HUNDRED AND TWENTY (120) DAYS after the date of receipt of such notice or a date specified therein Either Party may terminate this Agreement if the other party fails to perform any of the provisions of this Agreement Such termination shall become effective THIRTY (30) WORKING DAYS after the date of receipt of written notice of such default(s) by the other Party, unless such other Party shall have cured such default(s) prior to the expiration of the THIRTY (30) DAY period 1 2 2 By Law If any State or Federal law or regulation is enacted or pr�gated which prohibits the performance of any of the duties hereunder, or if any law is interpreted to prohibit such performance, this Agreement shall automatically terminate as of the effective date of such prohibition 1 3 Effect of Termination As of the effective date of termination of this Agreement, CBS, Inc shall have no further duties of performance hereunder The period between notice of termination and the effective date of termination shall be used to effect an orderly transfer of records and funds, if any, from CBS, Inc to the City of Denton or to such person as the City may designate in writing II PLAN 2 1 Plan Document No GH-265 All services to be provided by CBS, Inc hereunder shall e performed pursuant to the provisions of the Plan Document, as amended A copy of the Plan Document and any amendments thereto shall be deemed to form part of this Agreement for such purpose 2 2 Interpretation of the Plan The City shall be the final arbiter as to t�—in erpretation of the Plan and as to the payment of benefits thereunder CBS, Inc shall consult with the City in the event questions concerning benefit matters arise PAGE 3 2 3 Stop -Loss Insurance Not withstanding any provision of this Agreement to the contrary and, in particular, Section 2 2 above, Washington National Life Insurance Company hereby retains the sole right to determine whether any payment of benefits under the Plan shall be deemed to be a "claim" as defined in any individual or aggregate stop -loss policy of insurance issued by Washington National Life Insurance Company to the City III SCOPE OF RELATIONSHIP 3 1 Agency In performing the services hereunder, CBS, Inc is acting solely as the agent of the City, and the respective rights of the Parties shall be determined in accordance with the laws of agency In the event that the City fails to comply with any federal or state law, CBS, Inc shall not be liable for any action brought against the Plan with regard to such failure 3 2 Fiduciary CBS, Inc is not and shall not be deemed to be a fiduciary o� the Plan Rather, the duties of CBS, Inc hereunder are ministerial in nature, and this Agreement shall not be deemed to confer or delegate any discretionary authority or control of the management of the Plan or of the management or discretion of the assets of the Plan or to confer or delegate any discretionary authority or discretionary responsibility in the administration of the Plan 3 3 Communications CBS, Inc shall be entitled to rely, without question, upon any written or oral communication of the City, and the agents and employees thereof, which are believed by CBS, Inc to be genuine and to have been presented by a person having the apparent authority to do so 3 4 Parties This Agreement is between CBS, Inc and the City, and not create any rights or legal relationships between CBS, Inc and any of the Participants or Beneficiaries under the Plan IV DUTIES OF CBS, INC 4 1 Documentation CBS, Inc shall draft the Plan Document for the review and approval of the City, and produce initial booklets (describing the benefits of the Plan) in a quantity sufficient for distribution by the City to the employee Participants who are covered as of the effective date of the Agreement The City agrees to review and approve the booklets as to form and content prior to such distribution and further agrees that such approval shall act as a release of CBS, Inc of and from any liability to the City as to both form and content The City understands that ERISA requires that its employee welfare benefit plan be established and maintained pursuant to a written PAGE 4 instrument (plan instrument or trust instrument), and the City agrees that CBS, Inc shall have no responsibility with respect to such instrument or with respect to the preparation or validity of such instrument 4 2 Claims Services CBS, Inc agrees to perform the below enumerated services wit respect to the processing and payment of claims under the Plan 4 2 1 Practices and Procedures In performing such services, CBS, Inc shall employ its standard practices and procedures, whether written or otherwise, provided, however, such performance shall be subject to the provisions of this Agreement, and in particular, but without limitation, Section 2 2 above 4 2 2 Services CBS, Inc agrees to (a) provide claim forms to the City for submitting claims to CBS, Inc , (b) receive claims and claims documentation, (c) correspond with the Participants and providers of services if additional information is deemed by CBS, Inc to be necessary to complete the processing of claims, (d) coordinate benefits payable under the Plan with other benefit plans, if any, (e) determine the amount of benefits payable under the Plan, (f) pay from the Account (as described in Section 5 1 below) the amount of benefits determined to be payable under the Plan, the time for payment shall average not more than fifteen (15) days from the receipt of complete information to process the claim (g) provide notice to Participants as to the reason(s) for denial of benefits and provide for the review of denied claims, provided, however, that such review shall be advisory to the City in accordance with Section 2 2 above and shall not be deemed to be an exercise of discretion by CBS, Inc in accordance with Section 3 2 above, (h) advise the City in writing of any rights to subrogation of which CBS, Inc may become aware 4 2 3 Additional Services CBS, Inc agrees to provide the following services for a charge to be assessed at the time the service is provided PAGE 5 (a) hospital audits for claims exceeding $10,000, (b) large case management, and (c) outside investigations and reviews These services are provided only after City approval has been obtained 4 2 4 Recovery of Payment In the event payment is made to or on behalf of an ineligible employee Participant or any ineligible dependent of an employee Participant or that a payment is made in excess of the amount properly payable, CBS, Inc shall (a) promptly advise the City of such event, and (b) make a single demand with respect to the Participant in writing for return of such payment or overpayment and report the result of such effort to the City CBS, Inc shall have no further obligation with respect to any such payment or overpayment, except that CBS, Inc is hereby authorized to offset against any unpaid claim of such employee Participant of any dependent thereof unless advised otherwise by the City 4 3 Reports and Files CBS, Inc shall establish and maintain a recor - eeping system concerning the services to be performed hereunder All such records shall be the property of the City and shall be delivered to the City upon termination of this Agreement, subject to the right of CBS, Inc to copy and retain all or any of such records as it deems in its interest to do so All such records shall be available for inspection by the City at any time during normal business hours at the office of CBS, Inc in Dallas, Texas, upon reasonable prior notice 4 4 Reports CBS, Inc shall provide the following to the City (a) Explanation of Benefit Forms (as issued), (b) Check register (weekly), (c) Report of claims paid identified as to Participants (monthly), (d) Lag Summary Report (monthly), (e) Report of claims incurred but not reported (annually), PAGE 6 (f) Report of Plan's operation during the preceding year and cost estimates and guidelines for the ensuing year (annually), (g) Claim Exceed Report (monthly), and (h) Top 50 Provider Report (quarterly) 4 5 Duty of Care CBS, Inc shall not be liable for any loss resulting from the performance of its duties hereunder, except for losses resulting directly from (a) the negligence of CBS, Inc , or (b) the failure of CBS, Inc to follow the written directions of the City in the processing of a particular claim, or (c) the fraudulent or criminal acts of the agents or employees of CBS, Inc , whether acting alone or in concert with others Subject to the above, the defense of any legal action brought by or on behalf of any person, including, without limitation, any Participant, Beneficiary, or fiduciary of the Plan, shall be the obligation of the City and shall not be the obligation of CBS, Inc V DUTIES OF THE CITY 5 1 Account The City shall establish, maintain, and fund a checking account ("Account") via Grand Bank, Lakewood for the payment by CBS, Inc of benefits under the Plan The City shall be liable for all claim checks issued against the Account CBS, Inc agrees to provide, at its own expense, all claim checks for the purpose of issuing benefits for claims on the Account 5 1 1 Draft Authority on the Account The City hereby grants to CBS, Inc authority to draft against the Account 5 2 Determination of Service Fee The City agrees to pay to CBS, Inc a Service Fee equal o per Employee Benefit Plan Participant per month S 5 2 1 Payment of Service Fee Upon receipt of the Invoice, which is furnished by CBS, Inc on a monthly basis, the City agrees to pay to CBS, Inc the Service Fee as determined by Section 5 2 above 5 2 2 Change of Service Fee CBS, Inc reserves the right to change t e.,, Service Fee applicable to this Agreement. Sherri no PAGE 7 P'A eeseir i ;20b or—moFe, The total' of any increase; shall not exceed seven percent (7%) Written notice of such change shall be furnished to the City at least thirty-one (31) days prior to the effective date of such change 5 3 Taxes The City agrees to pay any and all taxes, licenses and --Fees levied, if any, by any Local, State, or Federal authority in connection with the operation of the Plan or in connection with the duties of CBS, Inc hereunder CBS, Inc agrees to notify the City and make arrangements for payment thereof is any such levy appears imminent 5 4 COBRA Fee The City does elect to provide for COBRA health coverage in the event of termination by a Participant, and the City agrees to pay a Service Fee of 2% of contribution per covered Participant per month for COBRA administration plus the $5 75 per month per Participant for claims administration 5 5 Census The City agrees to verify the eligibility of Participants and to furnish to CBS, Inc such information as may be necessary or required by CBS, Inc from time to time to discharge its obligations under Section 4 4 (f) above 5 6 Liability for Benefits It is understood and agreed that liability for payment o benefits under the Plan is the liability of the City and that CBS, Inc shall not have any duty to use any of its funds for the payment of such benefits 5 7 Indemnification Subject to Section 4 5, the City agrees to indemnify an old harmless CBS, Inc , its agents, and employees against any and all liability, damages, expenses and costs, including, without limitation, extra -contract damages, court costs, and attorneys' fees, resulting from or arising out of any claim, demand, or legal or administrative proceeding made or brought against CBS, Inc by or on behalf of any person including, without limitation, any Participant, Beneficiary, or fiduciary under the Plan VI GENERAL PROVISIONS 6 1 Entire Contract This Agreement, together with any exhibits, attachments an amendments appended hereto, constitutes the entire Agreement between the Parties No representations, understandings, or agreements which are not expressly contained herein shall be binding or enforceable No modification of the terms or provisions of this Agreement shall be effective unless evidenced by a written amendment hereto, signed by an authorized office of both the City and of CBS, Inc 6 2 Applicable Law This Agreement shall be deemed to have been made and entered into in the State of Texas, and shall be construed and enforced according to the laws of the State of Texas PAGE 8 6 3 Assignment This Agreement shall not be assigned by CBS, Inc , nor shall CBS, Inc 's duties, obligations or responsibilities hereunder be delegated to any other person or entity without the prior written consent of the City IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective authorized officers CITY OF DENTON, TEXAS ATTEST NIFEKIWALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM DEBRA ADAMI DRAYOVITCH, CITY ATTORNEY CBS, INC BY ,,R ESIDENT DATE Z61 PAGE 9