HomeMy WebLinkAboutHR1996-0092 - Original - Blue Cross of Washington and Alaska - Administrative Service Contract - 01/01/1996 BLUE CROSS OF WASHINGTON AND ALASKA
CONTRACT ADMINISTRATION AGREEMENT
This Agreement is effective this first day of January 1996, by and
between the City of Kent (hereinafter referred to as the "Plan
Sponsor") , and Blue Cross of Washington and Alaska (hereinafter referred
to as the "Contract Administrator") .
WHEREAS, the Plan Sponsor has established an employee benefit plan
(hereinafter referred to as the "Plan") which provides for payment of
certain welfare benefits to and for certain eligible individuals as
defined by the Plan Document, such individuals being hereinafter
referred to as "Participants, Dependents and Beneficiaries" ; and,
WHEREAS, the Plan Sponsor has chosen to self-insure the benefit
program(s) provided under the Plan; and
WHEREAS, the Plan Sponsor desires to engage the services of the Contract
Administrator to provide administrative services for the Plan;
NOW THEREFORE, in consideration of the mutual covenants and conditions
as contained herein the parties hereto agree as follows:
SECTION I DUTIES AND RESPONSIBILITIES OF THE PLAN SPONSOR
1.01 The Plan Sponsor shall provide the Contract
Administrator with a copy of the Plan Document and any
other documents describing the benefit program(s) which
the Contract Administrator may rely upon in performing
its responsibilities under this Agreement.
1.02 The Plan Sponsor shall have final discretionary
authority to determine the benefit provisions and to
construe and interpret the terms of the Plan.
1.03 The Plan Sponsor shall have final discretionary
authority to determine eligibility for benefits and the
amount to be paid by the benefit program(s) .
1. 04 Unless specifically delegated to the Contract
Administrator by this Agreement, the Plan Sponsor shall
be responsible for the proper administration of the Plan
including:
a. providing the Contract Administrator a complete and
accurate list of all individuals eligible for
benefits under the benefit program(s) upon which
the Contract Administrator shall be entitled to
rely until it receives documentation of any change
thereto;
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b. notifying the Contract Administrator on a monthly
basis of changes in eligibility;
C. distributing to all eligible Participants,
Dependents and Beneficiaries all appropriate and
necessary materials and documents, including but
not limited to benefit program booklets, summary
plan descriptions, material modifications, the Plan
Document, amendments to the Plan Document,
identification cards, enrollment applications and
notice forms necessary for the operation of the
Plan;
d. providing the Contract Administrator with any
additional information necessary to perform its
functions under this Agreement as may be requested
by the Contract Administrator from time to time;
e. maintaining adequate funds from which the total
cost of all claims for each preceding [week/month]
will be paid to the Contract Administrator by wire
transfer. Funds must be provided within forty-
eight (48) hours of phone notification by the
Contract Administrator to a person designated by
the Plan Sponsor.
1.05 The Plan Sponsor shall be responsible for all taxes,
assessments and fees levied by any local, state or
federal authority in connection with the Contract
Administrator's duties pursuant to this Agreement.
1.06 The Plan Sponsor shall be responsible for the Plan's
continuing compliance with federal, state and local laws
and regulations, including but not limited to the
Internal Revenue Code, the Employee Retirement Income
Security Act of 1974 (ERISA) , and the Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA) . The
Plan Sponsor, and not the Contract Administrator, is the
"plan administrator" for purposes of 29 USC Section
1002 (16) (a) and 26 USC Section 4980B(g) (3) and the
"plan sponsor" for purposes of 29 USC Section 1161, et
seq. The Plan Sponsor shall be responsible for
determining whether it is subject to COBRA and for
notifying Participants, Dependents and Beneficiaries of
their COBRA rights both initially and upon the
occurrence of a qualifying event, for calculating and
collecting premiums for COBRA continuation of coverage
and for promptly notifying the Contract Administrator
when an individual is no longer eligible for COBRA
continuation of coverage.
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1.07 The Plan Sponsor shall be responsible for defending any
legal action brought against the Plan, including a claim
for benefits by or on behalf of any individual or
entity, including but not limited to any Participant or
former Participant, Dependent, Beneficiary, any
fiduciary or other party. This responsibility includes
the selection and payment of counsel. The Plan Sponsor
shall not settle any legal action or claim without the
prior consent of the Contract Administrator if the
action or claim could result in the Contract
Administrator being liable, including for example, any
liability for contribution to or indemnification of the
Plan Sponsor or other third party either directly or
indirectly.
SECTION II DUTIES AND RESPONSIBILITIES OF THE CONTRACT
ADMINISTRATOR
2 .01 The Contract Administrator agrees to perform the
following administrative services for the Plan Sponsor:
a. assist in the preparation and printing of the Plan
Document, benefit program booklets, identification
cards, and other materials necessary for the
operation of the Plan;
b. process all eligible claims incurred after the
effective date of this Agreement which are properly
submitted in accordance with the procedures set
forth in the Plan Document. Checks will be issued
on the contract Administrator' s check stock, but
the responsibility for funding benefits is the Plan
Sponsor' s and the Contract Administrator is not
acting as an insurer. The Contract Administrator
shall make reasonable efforts to determine that a
claim is covered under the terms of the benefit
program(s) , to apply the coordination of benefits
provisions, identify subrogation claims, and make
reasonable efforts to recover subrogated amounts
administratively, and prepare and distribute
benefit payments to Participants, Dependents and
Beneficiaries and/or service providers;
C. perform reasonable internal audits;
d. answer inquiries from the Plan Sponsor,
Participants, Dependents and Beneficiaries, and
service providers regarding the terms of the Plan,
although final authority for construing the terms
of the Plan's eligibility and benefit provisions is
the Plan Sponsor's;
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e. prepare and provide to the Plan Sponsor monthly
reports of claims paid under the Plan in accordance
with Attachment C;
f. prepare and provide the Plan Sponsor with an annual
report of the operations of the Plan in accordance
with Attachment C;
g. provide information to the Plan Sponsor for
preparing Form 55001s; however, the Plan Sponsor
shall be solely responsible for insuring timely
filing of the Form 5500's;
h. coordinate with any stop-loss insurance carrier;
i. when "preferred provider" benefits are provided,
maintain a network of hospital and professional
providers; paid claims will reflect any negotiated
provider discounts;
j . perform utilization management services including,
preadmission review, admission review, length of
stay assignment, focused concurrent review,
discharge planning, individual case management and
retrospective review.
SECTION III LIMITS OF THE CONTRACT ADMINISTRATOR'S RESPONSIBILITY
3 . 01 It is recognized and understood by the Plan Sponsor that
the Contract Administrator is not an insurer and that
the Contract Administrator's sole function is to provide
claims administration services and the Contract
Administrator shall have no liability for the funding of
benefits.
3 .02 If during the course of an audit performed internally by
the Contract Administrator pursuant to Section 2 .Ol,c.
or by the Plan Sponsor pursuant to Section V of this
Agreement any error is discovered, the Contract
Administrator shall use reasonable efforts to recover
any loss resulting from such error.
3. 03 The Contract Administrator is an independent contractor
with respect to the services being performed pursuant to
this Agreement and shall not for any purpose be deemed
an employee of the Plan Sponsor.
3 .04 This Agreement is between the Contract Administrator and
the Plan Sponsor and does not create any legal
relationship between the Contract Administrator and any
Participant, Dependent, Beneficiary or any other
individual.
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3 .05 It is recognized by the parties that errors may occur
and it is agreed that the Contract Administrator will
not be held liable for such errors unless they resulted
from its gross negligence or willful misconduct. The
Plan Sponsor agrees to defend, indemnify, and hold
harmless the Contract Administrator from all claims,
damages, liabilities, losses, and expenses arising out
of the Contract Administrator' s performance of
administration services under the terms of this
Agreement, so long as they did not arise out of the
Contract Administrator's gross negligence or willful
misconduct.
SECTION IV FEES OF THE CONTRACT ADMINISTRATOR
4.01 By the first of each month, The Plan Sponsor shall pay
the Contract Administrator in accordance with the fee
schedule set forth in Attachment D which is incorporated
herein by reference.
4 .02 Late Payments
a. If, for any reason whatsoever, the Plan Sponsor
fails to make a timely payment required under this
Agreement, the Contract Administrator may suspend
performance of services to the Plan Sponsor,
including processing and payment of claims, until
such time as the Plan Sponsor makes the required
payment, including interest as set forth in b.
below.
b. The Contract Administrator will charge interest to
the Plan Sponsor on all late payments, including
amounts paid to reinstate this Agreement after
termination pursuant to Section 9.05, at the
average annual prime rate posted by Seattle First
National Bank plus two (2) percent on the amount of
the late payments for the number of days late.
Interest will be in addition to any other amounts
payable under this Agreement.
C. In the event of late payment, the Contract
Administrator may terminate this Agreement pursuant
to Section 9.05 . Acceptance of late payments by
the Contract Administrator shall not constitute a
waiver of its right to cancel this Agreement due to
delinquent or nonpayment of fees.
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SECTION V OUT-OF-AREA PROGRAM
5.01 Information About Access Fees Charged Through The Out-
Of-Area Program
Blue Cross and Blue Shield Plans outside of our service
area (called Host Plans) may charge Blue Cross of
Washington and Alaska a fee (called an access fee) for
making their discounted rates and the resulting savings
available on claims incurred by our enrollees. The
access fee, if one is charged, is up to 10 percent (but
not to exceed $2, 000 for any claim) of the discount the
Host Plan has obtained from its providers. The access
fee may be charged only if the Host Plan's gement
with the provider prohibits billing employea for
amounts in excess of the discounted rate. However,
providers may bill for deductibles and/or coinsurance.
5.02 How The Access Fee Affects You
When Blue Cross of Washington and Alaska is charged an
access fee, we will pass the charge along to you as a
claims expense. If we receive an access fee credit, we
will give you a claims expense credit. Access fees are
considered a claims expense because they represent
claims dollars we were unable to or, in the case of a
credit, were able to avoid paying.
Instances may occur in which we do not pay a claim (or
pay only a small amount) because the amounts eligible
for payment were applied to the deductible or
coinsurance. If the Host Plan' s arrangement with its
provider allows the discounted payment rate to apply
when the amount is fully or mostly a patient obligation,
we will pay the Host Plan' s access fee and pass it along
to you as a claims expense even though you paid little
or none of the claim.
5.03 How Employee Coinsurance Liability Is Affected When The
Host Plan's Discount Arrangement Does Not Apply
In some cases, a Host Plan's provider contracts require
that employee coinsurance be calculated as a percentage
of billed charges rather than as percentage of the
discounted payment rate the provider has agreed to accept
from the Host Plan. In these cases, Blue Cross of
Washington and Alaska will not be able to take advantage
of the Host Plan's provider discount, because Blue Cross
of Washington and Alaska only accepts provider discounts
when the discounted rate applies to both the Group's
claim expense and the Employee's coinsurance liability.
When this occurs, Blue Cross of Washington and Alaska
will pay the provider on the basis of the billed charge,
and no discount or access fee will apply.
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Because of the many different arrangements between Host
Plans and their providers, it is not possible to give you
specific information for each out-of-area provider.
However, if your employees contact us prior to incurring
out-of-area services, we may be able to give them
information regarding providers who will agree to accept
coinsurance calculated as a percentage of the discounted
rate.
SECTION VI AUDIT
6.01 Within thirty (30) days of written notice from the Plan
Sponsor, the Contract Administrator shall allow an
authorized agent of the Plan Sponsor to inspect or audit
all records and files maintained by the Contract
Administrator which are directly pertinent to the
administration of the Plan. Such documents shall be
made available at the administrative office of the
Contract Administrator during normal business hours.
The Plan Sponsor shall be liable for any and all fees
charged by the auditor. Any agent or auditor that has
access to the records and files maintained by the
Contract Administrator shall agree not to disclose any
proprietary or confidential information used in the
business of the Contract Administrator.
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SECTION VII SUBROGATION
7 .01 The Contract Administrator shall make reasonable efforts
to pursue subrogation claims administratively on behalf
of the Plan. However, the Contract Administrator shall
have no affirmative duty to pursue subrogation claims
beyond those specified in section 2 . 01,b. The Plan
Sponsor shall have the sole discretion to bring any
legal claim or action to enforce the Plan' s subrogation
provisions. The Contract Administrator will cooperate
with the Plan Sponsor in the event the Plan Sponsor
brings any legal action to enforce the subrogation
provisions of the Plan. Any costs and attorneys ' fees
incurred in pursuing such subrogation claims shall be
the responsibility of the Plan Sponsor.
SECTION VIII TERM OF AGREEMENT
8. 01 The term of this Agreement shall be the period from
12 :01 a.m. on January 1, 1996, to midnight on December
31, 1996 (hereinafter referred to as the "Agreement
Period") .
8 .02 Except as stated otherwise in section 9.03 below, the
terms and conditions of this Agreement and the fee
schedule set forth in Attachment D are established for
the Agreement Period.
8.03 The Plan Sponsor acknowledges that the fee schedule set
forth in Attachment D and the services provided for in
this Agreement are based upon the terms of the Plan and
the enrollment as they exist on the effective date of
this Agreement. Any substantial change, whether
required by law or otherwise, in the terms and
provisions of the Plan or in enrollment may require that
the Contract Administrator incur additional expenses .
The parties agree that any substantial change, as
determined by the Contract Administrator, shall result
in the alteration of the fee schedule, even if the
alteration is during the Agreement Period. The phrase
"any substantial change" shall include, but not be
limited to:
a. a fluctuation of ten (10) percent or more in the
number of Participants, Dependents and
Beneficiaries as set forth on the census
information included in Attachment B which is
herein incorporated by reference and made a part of
this Agreement;
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b. the addition of benefit program(s) or any change in
the terms of the Plan's eligibility rules, benefit
provisions or record keeping rules that would
increase administration costs by more than $2, 000;
C. any change in claims administrative services,
benefits or eligibility required by law;
d. any change in administrative procedures from those
in force at the inception of this Agreement which
is agreed upon by the parties;
e. any additional services which the Contract
Administrator undertakes to perform at the request
of the Plan Sponsor which are not specified in this
Agreement such as the handling of mailings or
preparation of statistical reports and surveys not
specified in this Agreement.
SECTION IX TERMINATION
9. 01 The Plan Sponsor may terminate this Agreement at any
time by giving the Contract Administrator thirty (30)
days written notice.
9.02 This Agreement will terminate on the last day of the
Agreement Period or the last day of any extension of the
Agreement Period granted by the Plan Administrator.
9. 03 Either party may terminate this Agreement effective
immediately by giving written notice to the other if a
party becomes insolvent, makes a general assignment for
the benefit of creditors, files a voluntary petition of
bankruptcy, suffers or permits the appointment of a
receiver for its business or assets, or becomes subject
to any proceeding under any bankruptcy or insolvency
law, whether foreign or domestic. A party is insolvent
if it has ceased to pay its debts in the ordinary course
of business; cannot pay its debts as they become due; or
the sum of its debts is greater than the value of its
property at a fair valuation.
9. 04 If loss of services is caused by, or either party is
unable to perform any of its obligations under this
Agreement, .pr to enjoy any of its benefits because of
natural disaster, action or decrees of governmental
bodies or communication failure not the fault of the
affected party, such loss or inability to perform shall
not be deemed a breach. The party who has been so
affected shall immediately give notice to the other
party and shall do everything possible to resume
performance. Upon receipt of such notice, all
obligations under this Agreement shall be immediately
suspended. If the period of nonperformance exceeds
thirty (30) days from the receipt of such notice, the
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party whose performance has not been so affected may, as
its sole remedy, terminate this Agreement by written
notice to the other party effective immediately. In the
event of such termination, the Plan Sponsor shall remain
liable to the Contract Administrator for all payments
due, together with interest thereon as provided for in
Section 4.02 .
9.05 The Contract Administrator may, in its sole discretion,
terminate this Agreement effective as of a missed
payment due date in the event that the Plan Sponsor
fails to make a timely payment required under this
Agreement.
9.06 In the event this Agreement is terminated prior to the
end of the Agreement Period, the Plan Sponsor shall
remain liable to the Contract Administrator for all
delinquent sums together with interest thereon as
provided for in section 4 .02 above. Furthermore,
because the Contract Administrator will have incurred
fixed costs which, but for the termination, would have
been recouped over the course of the Agreement Period,
as liquidated damages, and not as a penalty, the Plan
Sponsor shall pay the Contract Administrator an amount
equal to two (2) months administration fee at the rate
set forth in Attachment D multiplied by the average
number of Participants, Dependents and Beneficiaries
covered by the Plan for the immediately preceding six
(6) month period or such shorter period if this
Agreement has not been in effect for a period of six (6)
months. The Plan Sponsor shall remain liable for claims
incurred during the Agreement Period but not paid during
the Agreement Period and for the claims run-out
processing fee set forth in subsection C of Attachment
D.
9. 07 within one hundred twenty (120) days of termination by
either party, the Contract Administrator shall deliver
to the Plan Sponsor an interim accounting. Within
fifteen (15) months of termination the Contract
Administrator shall deliver to the Plan Sponsor a
complete and final accounting of the status of the Plan.
At the expense of the Plan Sponsor, the Contract
Administrator shall make available a record of
deductibles and coinsurance levels for each Participant,
Dependent and Beneficiary and deliver this information
to the Plan Sponsor or its authorized agent.
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9.08 For the twelve (12) month period following termination
of this Agreement, the Contract Administrator shall
continue to process eligible claims incurred prior to
termination at the claims run-out processing fee rate
set forth in Attachment D.
SECTION X DISCLOSURE
10. 01 It is recognized and understood by the Plan Sponsor that
the Contract Administrator is subject to all laws and
regulations applicable to contract administrators and
health care service contractors.
10. 02 It is recognized and understood by the Plan Sponsor that
the Contract Administrator is not acting as an insurer
and also is not providing stop-loss insurance.
SECTION XI OTHER PROVISIONS
11. 01 Choice of Law
The validity, interpretation, and performance of this
Agreement shall be controlled by and construed under the
laws of the State of Washington, unless federal law
applies. Any and all disputes concerning this Agreement
shall be resolved in King County Superior Court. The
party substantially prevailing shall be entitled to
recover its reasonable costs, including attorneys' fees.
11.02 Trademarks
The Contract Administrator reserves the right to, the
control of, and the use of the words "Blue Cross of
Washington and Alaska" and all symbols, trademarks and
service marks existing or hereafter established. The
Plan Sponsor shall not use such words, symbols,
trademarks or service marks in advertising, promotional
materials, materials supplied to Participants,
Dependents and Beneficiaries or otherwise without the
Contract Administrator's prior written consent which
shall not be unreasonably withheld.
11. 03 Independent Corporation
The Plan Sponsor hereby expressly acknowledges, on
behalf of itself and all of its eligible employees and
their eligible dependents, its understanding that this
Contract Administration Agreement constitutes an
Agreement solely between the Plan Sponsor and the
Contract Administrator, that the Contract Administrator
is an independent corporation operating under a license
with the Blue Cross and Blue Shield Association, an
association of independent Blue Cross and Blue Shield
Plans (the "Association") permitting the Contract
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Administator to use the Blue Cross Service Mark in the
States of Washington and Alaska, and that the Contract
Administrator is not contracting as the agent of the
Association.
The Plan Sponsor further acknowledges and agrees that it
has not entered into this Contract Administration
Agreement based upon representations by any person other
than the Contract Administrator, and that no person,
entity or organization other than the Contract
Administrator shall be held accountable or liable to the
Plan Sponsor for any of the Contract Administrator's
obligations to the Plan Sponsor created under this
Contract Administration Agreement. This provision shall
not create any additional obligations whatsoever on the
Contract Administrator' s part other than those
obligations created under other provisions of this
Contract Administration Agreement.
11. 04 Notice
Except for the notice given pursuant to section 1.04,e. ,
any notice required or permitted to be given by this
Agreement shall be in writing and shall be deemed
delivered three (3) days after deposit in the United
States mail, postage fully prepaid, return receipt
requested, and addressed to the other party at the
address as shown below.
11.05 Integration
This Agreement, including any appendices or attachments
incorporated herein by reference, embodies the entire
Agreement and understanding of the parties and
supersedes all prior oral and written communications
between them. The terms hereof may be modified only by
a writing signed by both parties hereto.
11.06 Assignment
Neither party shall assign this Agreement or any of its
duties or responsibilities hereunder without the prior
written approval of the other.
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SECTION XII ATTACHMENTS TO THE CONTRACT ADMINISTRATION AGREEMENT
12. 01 The following attach to and become part of the body of
this Agreement and they are herein incorporated by
reference.
Attachment A - Plan Document No. 7486T
Program Number 13595
Program Number 13596
Program Number 13597
Program Number 17620
Program Number 17884
Attachment B - Census
Attachment C - Reporting
Attachment D - Fee Schedule
Attachment E - Right Of Conversion
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The parties below have signed as duly authorized officers and have
hereby executed this Agreement. If this Agreement is not signed and
returned to the Contract Administrator within sixty (60) days of its
delivery to the Plan Sponsor or its agent, the Contract Administrator
will assume the Plan Sponsor's concurrence and the Plan Sponsor will be
bound by its terms.
IN WITNESS WHEREOF the parties hereto sign their names as duly
authorized officers and have executed this Agreement.
CITY OF KENT
� l
BY: DATE:IV
•r , ��
T' e
BY: DATE:
Title
Address:
BLUE CROSS OF WASHINGTON AND ALASKA
BY: DATE:
Title: President and
Chief Executive Officer
Address: P.O. Box 327
Seattle, WA 98111-0327
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Attachment A
CITY OF KENT
(Plan Sponsor)
PLAN DOCUMENT
The employee benefit programs set forth in the Plan Document are
available to certain eligible individuals as defined within the benefits
programs. All benefits of this Plan Document are subject to the terms
and conditions stated herein and any endorsements or riders included or
issued thereafter. The City of Kent has the discretionary authority to
determine eligibility for benefits and to construe the terms used in
this Plan Document.
Blue Cross of Washington and Alaska has been selected by the City of
Kent to administer the benefits of this Plan Document. Blue Cross of
Washington and Alaska is not the Underwriter of this Plan Document. The
City of Kent is solely and totally responsible for: funding benefits
under the benefit programs; compliance with all applicable laws and
regulations affecting the benefit programs; and fiduciary liability for
the benefit programs. If, for any reason, the Contract Administration
Agreement between Blue Cross of Washington and Alaska and the City of
Kent terminates, Blue Cross of Washington and Alaska shall be relieved
of its administrative duties under this Plan Document, except as
otherwise provided in the Contract Administration Agreement.
This Plan Document attaches to and becomes a part of the Contract
Administration Agreement effective January 1, 1996.
CIT OF KENT
By: Dater/J r
i le
By. Date:
Title
PLAN DOCUMENT EFFECTIVE DATE: January 1, 1996
PLAN DOCUMENT NUMBER: 7486T
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STANDARD PROVISIONS
PLAN DOCUMENT
The entire Plan Document consists of the following:
• The Plan Document face page and "Standard Provisions. "
• The attached benefit booklet for:
Program Number 13595
Program Number 13596
Program Number 13597
Program Number 17620
Program Number 17884
• The enrollment applications of eligible persons on file with the City
of Kent.
• All attachments, endorsements, and riders included or issued
hereafter.
LATE ENROLLMENT
This section explains the requirements that eligible indiv' als must
meet if they wish to become covered er one of the P1 Document
benefit programs but did not enr when they were st eligible.
If an individual is not e olled within 60 da of the date he or she
first became eligible, e or she cannot be nrolled until the City of
Kent' s next open e ollment. However, i application for late
enrollment unde this health care p gram is made within thre months of
the date cov age under a simila ealth care program to nates, the
individu may be enrolled o date other than the y of Kent's next
open ollment. In such ' stance, coverage wil ecome effective on
th irst of the month ollowing our receipt the completed enrollment
plication and pa nt of applicable su ription charges .
In the event n employee enrolls r coverage under a different group
health c program also offe d by the City of Kent, enrollment for
covera under this progr can only be made during the City of Kent's
nex open enrollment, ess otherwise specified in the Plan Document.
L ` �Q
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Attachment B
Census Information
Administration Fees effective January 1, 1996 are based on the
following:
Number of Active [and Retired] Enrollees :
Employee Spouse Children
Medical 569 369 595
Dental 615 394 658
Vision/RX 545 364 594
Number of COBRA Enrollees:
Medical 1 0 0
Dental 2 1 0
Vision/RX 1 0 1
Other Carriers Offered: Group Health Cooperative.
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Attachment C
Reporting
The following reports will be provided to the Plan Sponsor within the
fees set forth in Attachment D:
Report Title Frequency
Weekly Claims Recap Weekly
Detail Claim Runs Monthly
Premium/Claims Report Monthly
Large Claims Analysis Yearly
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Attachment E
Right of Conversion for Terminated
Plan Participants and their Dependents
The Plan Sponsor requests that the Contract Administrator provide a
conversion privilege to terminated Plan Participants and their
dependents in consideration of the following:
Responsibilities of the Contract Administrator
The Contract Administrator shall make available to Plan Participants and
their dependents an opportunity to obtain health care coverage
(hereinafter referred to as Conversion Contract) when they are no longer
eligible for coverage under the Plan due to:
• Termination of employment.
• Termination of benefits for the class in which the Plan Participant
or dependent belongs.
• A covered dependent's attainment of the limiting age.
• A covered spouse's legal separation or divorce.
• Death of a covered employee.
The Contract Administrator shall not be required to issue a Conversion
Contract if the Plan Participant or dependent becomes covered under a
group health insurance policy within 31 days after termination of his or
her coverage under the Plan.
Application and payment of the applicable rate for the Conversion
Contract must be made by the Plan Participant or dependent within 31
days after such individual's conversion privilege of its group health
coverage contracts .
Rates for the Conversion Contract shall be determined by the Contract
Administrator and be the same as those then in effect for coverage
offered under the standard conversion privilege of its group health
coverage contracts. Rates will not be guaranteed and the Contract
Administrator will have the right to change the rate of any Conversion
Contract.
Compensation
The Plan Sponsor shall pay the Contract Administrator a $1, 000 .
conversion privilege fee for each conversion contract issued to a former
Plan Participant or dependent. The Contract Administrator shall notify
the Plan Sponsor of the conversion privilege fees owed in connection
with the weekly notification of claims paid.
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FEE-14-96 WED 10:21 Fin ' . 206 448 8589 F, 02
LATE ENROLLMENT (Effective October 1, 1994)
The "Late Enrollment" section found under "STARTING OUT IN THE PROGRAM" on page 13
of your benefit booklet is replaced by the following:
"Late Enrollment
If an individual is not enrolled within 60 days of the date he or she first becomes eligible, he or she
cannot be enrolled until the Plan Sponsor's next open enrollment. However, if application for late
enrollment under this health care program is made within three months of the date coverage under a
similar health care program terminates, the individual may be enrolled on a date other than the Plan
Sponsor's next open enrollment. In such instance, coverage will become effective on the first of the
month following the date of insurance loss, provided the completed enrollment application and
payment of applicable required charges are received within 30 cays of the loss in coverage or the
qualifiying event, whichever is earlier. If the enrollment application is received after this initial 30 days.
coverage will become effective the first of the month following the receipt of the enrollment
application.
In the event an employee enrolls for coverage under a different .health care program also offered by
the Plan Sponsor, enrollment for coverage under this program can only be made during the Plan
Sponsor's next open enrollment, unless otherwise specified in the Plan Document."
GENERAL LIMITATIONS AND EXCLUSIONS(Effective July 1, 1994)
The following provision is added to the "Limitations" section located on page 30 of your
benefit booklet for clarification purposes:
"The following are deemed service start dates:
• For root canals, the date the canal is opened.
• For inlays, onlays, laboratory-processed labial veneers, crowns, and bridges, the preparation
date.
• For partial and complete dentures, the impression date.
The following are deemed service completion dates:
• For root canals, the date the canal is filled.
• For inlays, onlays, laboratory-processed labial veneers, crowns, and bridges, the seat date.
• For partial and complete dentures, the seat or delivery date."
Benefits for covered services with multiple treatment dates are subject to the Dental Benefit
maximum of the calendar year in which the services were started. Benefit payment will be
made after the date the services are completed.
INDIVIDUAL CASE MANAGEMENT (Effective January 1 , 1995)
The section of the benefit booklet entitled "Individual Case Management" located on page 20
of your benefit booklet is revised to comply with new Washington State regulatory
requirements pertaining to coverage for home health care as an alternative to institutional
care. The revised Individual Case Management section reads as follows:
"Individual Case Management We provide benefits for cost and care-effective alternatives to
institutional and other high cost care through our Individual Case Management (ICM) program. For
example, when recommended by your physician and part of an approved ICM agreement, we will
provide benefits for home care rendered by Participating home health, hospice, and home care
agencies as an alternative to inpatient care. Your participation in an ICM program is voluntary.
However, when you agree to participate, you and your physician must sign an ICM agreement which
specifies the terms under which alternative benefits will be provided. In no event will deductibles.
coinsurance, and benefit maximums specified by the ICM agreement be different than those that
would have applied had you remained confined as an inpatient. We reserve the right to determine
whether providing alternative benefits is cost and care-effective. The lCM agreement may be