EXHIBIT 10.4
MINIMUM PREMIUM ADMINISTRATIVE SERVICES AGREEMENT
BY AND BETWEEN
ADMINISTAFF OF TEXAS, INC.
AND
UNITED HEALTHCARE INSURANCE COMPANY
HARTFORD, CONNECTICUT
*** indicates material has been omitted pursuant to a Confidential
Treatment Request filed with the Securities and Exchange Commission. A
complete copy of this agreement has been filed separately with the
Securities and Exchange Commission.
MINIMUM PREMIUM ADMINISTRATIVE SERVICES AGREEMENT
TABLE OF CONTENTS
Section 1: Definitions
Section 2: Performance under the Policies
Section 3: Additional Services
Section 4: Maintenance of Records and Reporting to the Employer
Section 5: Information Access, Audit and Confidentiality
Section 6: Additional Duties of the Employer
Section 7: Disputes and Indemnification
Section 8: Taxes and Assessments
Section 9: Effective Date and Agreement Period
Section 10: Service Fees
Section 11: Termination of Agreement
Section 12: Costs of Collection
Section 13: Assignment
Section 14: Choice of Law
Section 15: Entire Agreement, Amendment and Waiver
Section 16: Notices
Exhibit A Performance Standards
Exhibit B Additional Services [RESERVED]
Exhibit C Reporting by the Company
Exhibit D Third Party Disclosure Agreement
Exhibit E Eligibility Reporting by the Employer
Exhibit F Alternate Vendors
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MINIMUM PREMIUM ADMINISTRATIVE SERVICES AGREEMENT
BY AND BETWEEN
ADMINISTAFF OF TEXAS, INC.
AND
UNITED HEALTHCARE INSURANCE COMPANY
HARTFORD, CONNECTICUT
WHEREAS, the Employer is a "professional employer organization" that establishes
co-employment relationships with the employees of its Clients; and
WHEREAS, the Employer has established an employee welfare plan for certain
employees, former employees and their dependents of the Employer; and
WHEREAS, the Employer desires the Company to furnish medical and dental
insurance, as well as certain administrative services with respect to the Plan;
NOW THEREFORE, in consideration of the mutual promises contained in the
Agreement, the Employer and the Company agree as follows:
SECTION 1: DEFINITIONS
(a) "Agreement" means this Minimum Premium Administrative Services
Agreement, including any attached Exhibits, as amended from time to
time.
(b) "Check" means the instrument of payment issued by the Company for the
payment of Health Benefits pursuant to the Agreement whether such
instrument is a draft, a check, or an electronic funds transfer or
similar instrument.
(c) "Claims Account" has the meaning assigned to it in section 1(e) of the
MP Financial Agreement.
(d) "Client" means any organization that has a client service agreement or
other similar agreement with the Employer.
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(e) "Company" means United HealthCare Insurance Company.
(f) "Confidential Participant Information" has the meaning assigned to it
in section 5(a)(i) of the Agreement.
(g) "Effective Date" has the meaning assigned to it in section 9 of the
Agreement.
(h) "Employee" means an employee or former employee of the Employer or of a
member of Employer's controlled group as defined in Section 414(b) and
(c) of the Internal Revenue Code of 1986, as amended, which is a
participating employer under the Plan who is covered under the Plan,
and a "qualified beneficiary" who is covered under the Plan pursuant to
Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended from time to time ("COBRA"), except that members of a family
unit who elect COBRA coverage as a single family unit shall be
considered a single "Employee."
(i) "Employer" means Administaff of Texas, Inc.
(j) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
(k) "Health Benefits" or "Benefits" has the meaning assigned to it under
the MP Financial Agreement.
(l) "Incurred" when referring to Health Benefits means that the Company has
become liable for payment of such Health Benefits under a Policy.
(m) "Investment Grade" has the meaning assigned to it under the MP
Financial Agreement.
(n) "MP Arrangement" means the Minimum Premium Arrangement as defined in
the MP Financial Agreement.
(o) "MP Financial Agreement" means the Minimum Premium Financial Agreement
between the Employer and the Company, as amended from time to time.
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(p) "Non-MP Policy" means a group health insurance policy or group contract
issued by the Company to the Employer that is identified as a Non-MP
Policy in the MP Financial Agreement. "Non-MP Policies" refers
collectively to two or more such Policies, group contracts or both.
(q) "Paid" when referring to Health Benefits, means that a Check for
payment of such Health Benefits has been ***.
(r) "Participant" means an Employee or his or her dependent who is covered
under the Plan and who has been identified by the Employer as such
pursuant to section 6(a) of the Agreement.
(s) "Plan" means the employee health benefit plan maintained by the
Employer that is insured by a Policy, but only to the extent benefits
under the employee benefit plan are subject to the MP Financial
Agreement. Any benefits that are insured by a Policy but not subject to
the MP Financial Agreement are excluded from the term "Plan".
(t) "Policy" means a group health insurance policy issued by the Company to
the Employer that is identified as a Policy in the MP Financial
Agreement. "Policies" refers collectively to two or more such policies.
(u) "Proprietary Business Information" has the meaning assigned to it in
section 5(d)(iii) of the Agreement.
(v) "Security Deposit" has the meaning assigned to it in the Security
Deposit Agreement.
(w) "Security Deposit Agreement" means the Security Deposit Agreement
between the Company and the Employer, as amended from time to time.
(x) "Scope" has the meaning assigned to it in section 5(b)(i) and 5(c)(i),
as appropriate, of the Agreement.
(y) "Third Party Disclosure Agreement" is the agreement attached as Exhibit
D of the Agreement.
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SECTION 2: PERFORMANCE UNDER THE POLICIES
(a) The Company shall perform each of its duties and obligations under each
Policy in accordance with such Policy's terms and all applicable laws
and regulations. To the extent that, pursuant to a Policy, the Company
is responsible for the performance of any duty imposed on the Employer
and/or the Plan under applicable laws and regulations, including but
not limited to ERISA and the Health Insurance Portability and
Accountability Act, the Company shall perform such duty in accordance
with such laws and regulations.
(b) The Employer hereby and under the Policies designates the Company,
pursuant to a procedure set forth in the Plan, as the "fiduciary" as
defined by ERISA for the purpose of (i) reviewing, making decisions on
and paying claims for Health Benefits and (ii) reviewing and making
decisions on denials of such Health Benefits. The Company shall serve
as the final review committee under the Plan to determine for all
parties all questions relating to the payment of Health Benefits and
shall have the discretion, authority, and responsibility to construe
and interpret the terms of the Plan and to make factual determinations.
(c) The rate of accuracy of Health Benefit payments by the Company under
each Policy and each Non-MP Policy shall be consistent with the
accuracy rate that a reasonably prudent claims administrator would be
expected to achieve under similar circumstances. The amounts payable by
the Employer under the Agreement, the MP Financial Agreement and the
Policies and Non-MP Policies shall be subject to the modifications
specified in the performance standards set out in Exhibit A.
(d) The Company shall provide services to recover Overpayments, as defined
below, paid under the Policies and Plan benefits that were paid under
the Policies and are recoverable by the Plan because payment was or
should have been made by a third party (other than in connection with
coordination of benefits, Medicare, or other Overpayments) for the same
expense.
(i) The Company engages affiliated and unaffiliated vendors to
assist in the recovery of Overpayments and third party claims
made with respect to the Policies and Non-MP Policies. The
fees charged by both affiliated and
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unaffiliated vendors are netted against any recoveries. If the
fee charged by any affiliated vendor exceeds ***% of the
recovery, the Company shall notify the Employer within 30
calendar days of the effective date of such charge. The
Employer shall not be responsible for the cost of recovering
any Overpayments made by the Company due to the Company's
gross negligence as determined by mutual agreement of the
parties or by a court or other tribunal.
(ii) The Employer delegates to the Company the discretion and
authority to develop and use standards and procedures for any
recovery under this section, including but not limited to,
whether or not to seek recovery, what steps to take if the
Company decides to seek recovery, and under what circumstances
to compromise a claim or settle for less than the full amount
of the claim. The Employer recognizes that use of these
standards and procedures may not result in recovery or in full
recovery for any particular case. The Company will not pursue
any recovery if any applicable law does not permit it, or, if
recovery would be impractical. The Company may choose to
initiate litigation to recover payments, but it shall have no
obligation to pursue litigation. If the Company initiates
litigation, the Employer shall cooperate with the Company in
the litigation.
(iii) If the Agreement terminates, or, if the Company's recovery
services terminate, the Company may, but is not required to,
continue to recover any Overpayments. The Company shall
include Overpayments recoveries in the Termination Review (as
defined in Exhibit A to the MP Financial Agreement) in the
manner reflected in Exhibit A to the MP Financial Agreement,
and the Company shall otherwise be authorized to retain all
Overpayments recoveries obtained after the Claims Recognition
Date (as defined in the MP Financial Agreement).
(iv) The Employer will not engage any entity except the Company to
provide these recovery services without the Company's prior
approval.
(v) For purposes of the Agreement, "Overpayments" shall mean
payments that exceed the amount payable under a policy (for
example, because of a provider billing error,
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retroactive or inaccurate eligibility information,
coordination of benefits, Medicare disputes, or missing
information), and other overcharges made by providers,
including hospitals, discovered during the course of a
hospital ▇▇▇▇ audit.
(e) Claims Incurred prior to termination of any Policy shall be processed
in accordance with such Policy.
SECTION 3: ADDITIONAL SERVICES
The Company shall provide to the Employer those additional services identified
in Exhibit B. Fees for those services are specified in the Exhibit.
SECTION 4: MAINTENANCE OF RECORDS AND REPORTING TO THE EMPLOYER
(a) The Company will maintain all claims records for the period required by
ERISA. Following termination of the Agreement, the Company will supply
the Employer with historical information in the Company's possession
reasonably needed by the Employer to administer the Plan. In addition,
during the year following termination, the Employer may request and the
Company shall provide, at its prevailing charge, the following
information:
(i) As to each Policy and Non-MP Policy that terminates at any
date other than December 31, the following reports for the
relevant period of the calendar year in which such Policy or
Non-MP Policy terminates:
(A) Year-to-date claims analysis for such year
reflecting, for each Participant, total charges,
deductibles, co-insurance and out-of-pocket maximum
charges; and
(B) Per Participant, year-to-date report regarding
relevant annual benefit maximums.
(ii) For each Policy and Non-MP Policy:
(A) Per Participant, lifetime maximum report and
(B) Per Participant, lifetime maximum report regarding,
as applicable, specific medical conditions,
treatments, therapies, services and/or benefits.
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(b) The Company shall make the necessary reporting to the United States
Internal Revenue Service regarding payments that are made by the
Company on behalf of the Plan to health care providers pursuant to the
Agreement.
(c) The Company shall provide the Employer with information, as required by
ERISA, in a manner that enables the Employer to comply with ERISA's
annual reporting requirements.
(d) The Company shall provide to the Employer the reports identified in
Exhibit C to the Agreement.
(e) The Company receives payments from prescription drug manufacturers in
connection with pharmacy benefit services provided to its customers,
including the Employer. The estimated average payment for 2001 for the
Company's small group segment was $*** per employee per month. The
Company shall promptly notify the Employer if this average payment per
employee per month (determined annually) varies by more than 25% from
the previous estimate.
SECTION 5: INFORMATION ACCESS, AUDIT AND CONFIDENTIALITY
(a) Employer's Access to Information. During the term of the Agreement, if
in order to administer the Plan, the Employer reasonably requests
information, for an auditor or otherwise, that the Company has in its
possession, the Company will provide access to that information, if
legally permissible, as long as the information relates to the
Company's services under the Agreement, and the Employer provides (60)
sixty calendar days prior notice of the need for the information.
(i) The Employer hereby represents that any request by the
Employer for disclosure of any information that contains
personally identifiable information about a Participant
("Confidential Participant Information") shall constitute the
Employer's representation to the Company that the Participant
has authorized disclosure to the Employer or the Employer
otherwise has the legal authority to have access to the
information. The Employer must also represent at the time of
the disclosure request that it has a reasonable procedure in
place for handling Confidential
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Participant Information as required by any then current law.
(ii) The Company will provide information only while the Agreement
is in effect, unless the Employer demonstrates that the
information is required for Plan purposes and such disclosure
is permitted by law. The Employer shall pay the Company's
reasonable expenses in providing information after the
termination of the Agreement.
(iii) The Company will also provide reasonable access to information
to an entity providing services to the Employer, such as an
auditor or other consultant, upon request. Before the Company
gives access to Confidential Participant Information to that
entity, that entity will be required to sign a Third Party
Disclosure Agreement, substantially in the form of Exhibit D.
(b) Audits by the Employer. During the term of the Agreement, the Employer
or a mutually agreeable entity may audit the Company to determine
whether it is fulfilling its obligations under the Agreement.
(i) The Employer shall advise the Company at least sixty (60)
calendar days in advance of its intent to audit. The place,
time, type, duration, and frequency of all audits must be
reasonable and agreed to by the Company, which consent shall
not be unreasonably withheld. All audits shall be limited to
information relating to the calendar year in which the audit
is conducted and/or the immediately preceding calendar year.
With respect to the Company's transaction processing services,
the audit scope and methodology shall be consistent with
generally acceptable auditing standards, including a
statistically valid random sample or other acceptable audit
technique as reasonably approved by the Company (for purposes
of this subsection (b), "Scope").
(ii) The Employer will pay any expenses that the Employer incurs,
and will be charged a reasonable additional fee, determined by
the Company, for more than one audit every twelve (12) months,
for any on-site audit visit that is not completed within five
(5) business days, or for sample
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sizes exceeding the Scope set forth above. The Employer will
incur a reasonable per claim charge for samples in excess of
the Scope, and a $1000 charge for each day an audit exceeds
the five (5) day on-site review limit per year. The additional
fees cover the additional resources, facility fees, and other
incremental costs associated with an audit that exceeds the
Scope. The Employer will also pay any unanticipated reasonable
expenses the Company incurs and all expenses incurred by the
Company on any audit initiated after a termination notice is
provided but before the effective date of the termination of
the Agreement.
(iii) The Employer will provide the Company with a copy of any final
audit report.
(c) Audits by the Company. During the term of the Agreement, the Company
may audit the Employer to determine whether the Employer is fulfilling
its obligations under the Agreement.
(i) The Company shall advise the Employer at least sixty (60)
calendar days in advance of its intent to audit. The place,
time, type, duration, and frequency of all audits must be
reasonable and agreed to by the Employer, which consent shall
not be unreasonably withheld. All audits shall be limited to
information relating to the calendar year in which the audit
is conducted and/or the immediately preceding calendar year.
The audit scope and methodology shall be consistent with
generally acceptable auditing standards, including a
statistically valid random sample or other acceptable audit
techniques as reasonably approved by the Employer (for
purposes of this subsection (c), "Scope"). The Company will
bear any expenses that it incurs in conducting an audit. The
Company shall provide the Employer with a copy of any final
audit report.
(ii) The Company shall pay any expenses that the Company incurs,
and will be charged a reasonable additional fee, determined by
the Employer, for more that one audit every twelve (12)
months, for any on-site audit visit that is not completed
within five (5) business days, or for sample sizes exceeding
the Scope set forth above. The Company shall incur a $1000
charge for each day an audit exceeds the five (5) day on-site
review limit per year. The
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Company shall incur a reasonable per Client charge for samples
in access of the Scope. The additional fees cover the
additional resources, facility fees, and other incremental
costs associated with an audit that exceeds the Scope. The
Company will also pay any unanticipated reasonable expenses
the Employer incurs and all expenses incurred by the Employer
on any audit initiated after a termination notice is provided
but before the effective date of the termination of the
Agreement.
(d) Confidentiality. Except as otherwise provided herein or required by
law, Proprietary Business Information and Confidential Participant
Information will be the used solely to administer the Plan or to
perform under the Agreement.
(i) Except as provided in paragraph (ii) of this subsection (d),
Confidential Participant Information and Proprietary Business
Information will not be disclosed to any person or entity
other than either party's employees, subcontractors, or
representatives needing access to such information to
administer the Plan or perform under the Agreement.
(ii) The Company or a related entity may the use Confidential
Participant Information for research, creating comparative
databases, statistical analysis, or other studies, provided
that the information is de-identified or the use of the
Confidential Participant Information is otherwise in
accordance with then current law. The Company will maintain
the confidentiality of such information as it relates to or
could be identified with any individual Participant, provider,
the Employer, any Client or the Employer's or Client's
business. Such research, databases, analyses, and studies are
considered by the Company to be Proprietary Business
Information as defined in the following clause.
(iii) "Proprietary Business Information" means information about the
business of the Company or the Employer that is confidential,
proprietary, trade secret or is not readily available to the
general public, or information that has been designated by
either of the parties as confidential or proprietary.
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(e) Publicity. The Company and the Employer acknowledge the important legal
and economic interests each party has in the protection of its
respective trademarks and tradenames, as well as in the accuracy and
appropriateness of information released to the public concerning such
party. Accordingly, each party shall obtain the consent of the other
for the use of the other party's name as follows:
(i) With respect to any media release, advertising campaign and
other similar public announcement by one party referring to
the other party ("Media Release"), the disclosing party shall
provide to the other party a Disclosure Notice (as defined
below).
(A) An Authorized Person shall provide written objections
or written approval on behalf of the non-disclosing
party within 24 hours. For purposes of this
subsection, with respect to the Company, its General
Counsel and President, Small Business Operations, are
both Authorized Persons. With respect to the
Employer, the Vice President, Benefits, and the
General Counsel are Authorized Persons. By written
notice to the other party, either party may change
its Authorized Persons.
(B) In no event may a disclosing party publish (or cause
to be published) a Media Release without the prior
written approval of an Authorized Person of the other
party.
(ii) With respect to a filing or written communication with a state
department of insurance or department of health, or other
similar regulatory body, by one party referring to the other
party ("Special Regulatory Filing"), the disclosing party
shall provide to the other a Disclosure Notice. The disclosing
party may file or publish the Special Regulatory Filing if the
other party does not object in writing within 5 business days
of the Disclosure Notice. In no event may a party file or
publish a Special Regulatory Filing if the other party
provides a timely written objection unless the stated
objection has been resolved by the parties or unless required
by law or pursuant to a valid court order.
(iii) With respect to all other regulatory filings, public
announcements and public disclosures referring to the
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other party, other than such releases, announcements,
disclosures, employee enrollment and communication materials
as are used on a regular basis in the ordinary course of a
party's business, ("Other Disclosures") a disclosing party
shall use its best efforts to provide to the other a
Disclosure Notice at least 5 business days in advance of the
proposed announcement or disclosure date of such Other
Disclosure. In no event may a party file or publish Other
Disclosures if the other party provides a timely written
objection unless the stated objection has been resolved by the
parties unless required by law or pursuant to a valid court
order.
"Disclosure Notice" means a written statement identifying and attaching
the relevant portion of the proposed disclosure, indicating the
proposed disclosure date and time, and identifying to whom any
objections should be delivered.
SECTION 6: ADDITIONAL DUTIES OF THE EMPLOYER
(a) The Employer will identify to the Company those Employees, dependents
and/or other persons eligible to be Participants. In processing claims
and providing other services under the Agreement, the Company will be
entitled to rely on the most current information in its possession
regarding Participant eligibility. The Employer shall report
eligibility to the Company as provided in Exhibit E of the Agreement,
and eligibility information will be effective in claims processing as
described in such Exhibit.
(b) The Employer shall conduct its business with each Client and administer
the Plan to ensure that -
(i) each Employee has available no more than one open enrollment
period per calendar year (other than qualifying status change
events or otherwise in accordance with section 125 of the
Internal Revenue Code of 1986, as amended) and the Employer
administers the Benefits under the Plan on a calendar year
basis notwithstanding the effective date of the Client's
participation in the Plan;
(ii) at least ***% of the eligible Employees of the Employer
participate in the Plan (for this purpose, an eligible
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employee who is covered as a dependent under such employee's
spouse's group health coverage is deemed covered under the
Plan), and, as to each Client, no Employee contributes more
than ***% of the contribution required for "employee only"
coverage; provided that for so long as at least ***% of the
total Clients meet this contribution standard, then Employer
may continue or renew service agreements with Clients under
which Employees' contribution for "employee only" coverage is
more than ***%; provided further that no new service
agreements violative of this contribution standard shall be
executed on or after June 1, 2002.
(iii) each Employee is offered concurrently no more than *** in
addition to the Company's dental benefit plan (where offered);
(iv) except as provided in Exhibit F to the Agreement, the Company
shall be the exclusive provider of health and dental benefits
for each Employee;
(v) if the Employer terminates coverage for all or substantially
all Employees at a worksite, that termination *** as of the
date of notice to the Company of the termination.
(c) Except to the extent that (i) the Agreement specifically requires the
Company to have fiduciary responsibility, or (ii) a Policy imposes
responsibility on the Company for a specific Plan administrative
function, the Employer accepts complete responsibility for the Plan,
including its design, and for compliance with any laws that apply to
the Plan.
(d) The Employer will provide to Participants the information and documents
they need to obtain Health Benefits within a reasonable period of time
after coverage begins. In the event of the termination of the
Agreement, the MP Financial Agreement or the Policy, the Employer will
notify all affected Participants of the termination.
(e) Upon the Company's request, the Employer shall provide to the Company
documentation of the Employer's current debt rating, if applicable. In
addition, the Employer shall notify the Company
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immediately upon learning that the Employer's debt rating has fallen
below Investment Grade.
(f) The following provisions govern coverage provided to new Clients
obtained by the Employer as a result of the Employer's acquisition of,
joint venture with, or any similar type of transaction with another
professional employer organization ("New PEO Clients").
(i) The Employer may not add New PEO Clients to the MP Arrangement
or to the Non-MP Policies without the express written consent
of the Company. Within not more than 30 calendar days
following the Company's receipt of all information required by
the Company to evaluate the economic risk associated with the
proposed addition of the New PEO Client(s) to the MP
Arrangement as a result of any such acquisition or
transaction, the Company shall inform the Employer of its
decision regarding such proposed addition and, if such
addition is approved, any condition(s), including separate
rating for a designated period, which the Company intends to
impose as a condition to such addition.
(ii) Within a reasonable period of time not to exceed six (6)
months after consummation of the transaction, the Employer
must provide to New PEO Clients coverage under the MP
Arrangement or a Company product that is *** to that which the
New PEO Clients ***, but different and separate from the MP
Arrangement, if offered by the Company. In either case, within
such six (6) month period, the Company shall be the ***
coverage for such ***.
(iii) If the Company exercises its right under section 6(f)(i) of
the Minimum Premium Services Agreement to decline the addition
to the MP Arrangement and to the Non-MP Policies of such New
PEO Clients, or imposes conditions on such a proposed addition
that are unacceptable to the Employer in its sole discretion,
the exclusivity provisions of section 6(b)(iv) above shall not
apply and the Employer may contract with any other *** New PEO
Clients on such terms as it shall determine.
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(iv) A Client once covered under the MP Arrangement may not be
deemed a New PEO Client or covered under any arrangement
exclusively for New PEO Clients.
SECTION 7: DISPUTES AND INDEMNIFICATION
(a) The Employer agrees to indemnify and hold harmless the Company from any
and all liability, loss, damages, fines, penalties and costs, including
but not limited to, expenses and reasonable attorneys' fees, which the
Company shall sustain arising out of or in connection with (1) any
gross negligence or material breach of the Agreement on the part of the
Employer, (2) any determination by the Employer regarding the
eligibility for coverage under a Policy or a Non-MP Policy of an
Employee or Employee's dependent, (3) any direction of the Employer to
the Company, (4) the offering or termination of the Policies or Non-MP
Policies, or the manner of the offering or termination of the Policies
or Non-MP Policies, to Clients, or (5) the release or use by Employer
of any information obtained from the Company pursuant to section 5(a),
unless the parties agree or it is determined in a final non-appealable
decision by a court or regulatory agency having jurisdiction of the
matter that the liability therefore was the direct consequence of
criminal conduct or fraud on the part of the Company or negligence or a
material breach of the Agreement on the part of the Company.
(b) The Company agrees to indemnify and hold harmless the Employer and/or
the Plan from any and all liability, loss, damages, fines, penalties
and costs, including but not limited to, expenses and reasonable
attorneys' fees, that the Employer or Plan shall sustain arising out of
or in connection with gross negligence or material breach of the
Agreement on the part of the Company or any direction of the Company to
the Employer, unless the parties agree or it is determined in a final
non-appealable decision by a court or regulatory agency having
jurisdiction of the matter that the liability therefore was the direct
consequence of criminal conduct or fraud on the part of the Employer or
negligence or a material breach of the Agreement by the Employer. The
Company shall not indemnify or hold harmless the Employer or the Plan
for any losses arising out of Overpayments. If Health Benefits are
required to be paid pursuant to any judgment in favor of the plaintiff
or a settlement with the plaintiff or the order of a regulatory agency
having
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jurisdiction of the matter and such judgment or settlement is final or
payable during the term of the Agreement, any portion of such judgment
or settlement attributable to Health Benefits shall be treated as a
claim for Health Benefits at the time that the judgment or settlement
is final and shall be paid by the Company to the same extent as any
other claim for Health Benefits under the provisions of section 5 of
the Agreement and section 2 of the MP Financial Agreement.
(c) The Company and the Employer shall promptly advise each other as to
matters which come to their respective attentions involving potential
legal actions or regulatory enforcement activity which involve the Plan
or are related to the activities of either party with respect to the
Plan or the Agreement and shall promptly advise each other of legal
actions or administrative proceedings which have actually commenced.
(d) In the event that a lawsuit or administrative proceeding is brought
against the Employer or the Plan but not the Company, the defense and
associated costs of such action or proceeding shall be paid by the
Employer, provided that the costs, including attorneys' fees, of such
defense shall be reimbursed to the Employer or Plan by the Company to
the extent the Employer or the Plan is entitled to indemnification by
the Company under subsection (b) of this section 7. The Company shall
cooperate fully with the Employer in the defense of any such action or
proceeding arising out of matters related to the Agreement. The
Employer agrees not to oppose any attempt made by the Company to
intervene in such action or proceeding, provided there is no conflict
of interest between the Company and the Employer or the Plan.
(e) In the event that a lawsuit or administrative proceeding is brought
against the Company arising out of the performance of its duties under
the Agreement, the defense of and associated costs of such action or
proceeding shall be paid by the Company, provided that the costs,
including reasonable attorneys' fees, of such defense shall be
reimbursed to the Company by the Employer to the extent the Company is
entitled to indemnification by the Employer under subsection (a) of
this section. The Employer shall cooperate fully with the Company in
the defense of any such action or proceeding arising out of matters
related to the Agreement. The Company agrees not to
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oppose any attempt made by the Employer to intervene in such action or
proceeding, provided there is no conflict of interest between the
Company and the Employer or the Plan. If the Employer or the Plan is
also named as a party in such action or proceeding, the Employer may
request that the counsel engaged by the Company also provide for the
defense of the Employer and/or the Plan. If there is no conflict of
interest between the Company and the Employer or the Plan, the Company
shall take all reasonable measures to comply with the Employer's
request. If such counsel does not provide for the Employer's or Plan's
defense, then the Employer and Plan shall pay for the defense and
associated costs as provided in subsection (d) of this section, subject
to the Employer's and/or the Plan's right to reimbursement under such
subsection.
SECTION 8: TAXES AND ASSESSMENTS
(a) In the event that a state or other jurisdiction, in accordance with
existing or future law, determines that the Company is liable for
payment of any tax, surcharge or assessment (other than taxes based
upon net income) (individually or collectively, "Tax") with respect to
any aspect of the Plan, the Policies, the Non-MP Policies, the MP
Arrangement, or the Agreement, the Employer agrees to reimburse the
Company for the amount of any such Tax, any interest expense assessed
against or incurred by the Company before or after payment of such Tax,
and any other charges, penalties or fines in connection therewith,
including reasonable attorneys' fees, that the Company may sustain in
connection with the payment of such Tax, provided, however, that the
Company shall have given the Employer prompt notification of the
imposition of any such Tax.
(i) Subject to the provisions of section 8(a)(ii), any such amount
shall be due and payable upon written notification by the
Company to the Employer, regardless of whether such
notification occurs during the term or following the
termination of the Agreement. The Employer shall indemnify and
hold harmless the Company from any liability, loss, damages,
fines, penalties and costs, including reasonable attorneys
fees, which the Company may sustain arising out of or in
connection with any compromise, litigation or appeal by the
Employer of any
19
Tax or any delay in payment of such Tax as a result of such
compromise, litigation or appeal.
(ii) With respect to any Tax imposed on the Company solely as a
result of the Employer's status as policyholder or sponsor of
the Plan, upon Employer's compliance with any bond, security
or other legal requirement imposed on a party contesting such
a Tax, the Employer shall have the sole discretion in
determining whether any such Tax shall be paid, compromised,
litigated or appealed and as to all matters of procedure,
compromise, defense or appeal of any other aspects concerning
liability for any such Tax, except to the extent that the
Company would thereby be in violation of any applicable law or
rule or would suffer any injury, loss or liability that would
not be fully compensable under section 8(a).
(iii) The Employer shall not be obligated to reimburse the Company
for that portion of any premium tax assessed against the
Company that was taken into account by the Company in
establishing the Quoted Premium (as defined in the MP
Financial Agreement) under a Policy or the premium under a
Non-MP Policy.
(b) In the event that a state or other jurisdiction, in accordance with
existing or future law, imposes upon the Company the duty to act as
agent for collection of any Tax imposed on the Plan or the Employer or
with respect to any aspect of the Plan, a Policy, the MP Financial
Agreement, or the Agreement, the Employer will pay over any such amount
to the Company when requested to do so by the Company, subject to
receipt by the Employer from the Company of prompt notice concerning
such matter and exercise by the Employer of its rights as stated under
subsection 8(a) above.
SECTION 9: EFFECTIVE DATE AND AGREEMENT PERIOD
The Agreement shall be effective as of January 1, 2002 ("Effective Date") for a
period of twelve (12) months ("Agreement Period") and shall continue
automatically for successive Agreement Periods of twelve (12) months each unless
it is discontinued earlier in accordance with section 11 of the Agreement.
20
SECTION 10: SERVICE FEES
The fees for the services provided by the Company under the Agreement are
included in the Monthly Premiums as defined in the MP Financial Agreement and
any fees for any additional services are described in Exhibit B of the
Agreement.
SECTION 11: TERMINATION OF AGREEMENT
(a) The Agreement shall terminate on the date that the MP Financial
Agreement terminates.
(b) In the event that either party reasonably believes that any state or
other jurisdiction may impose a penalty on it for proceeding with its
performance under the Agreement, such party will promptly advise the
other party of such belief and the basis therefore. In such event the
parties agree to cooperate in good faith to resolve such matter to the
satisfaction of both parties. After a good faith effort by the parties
to eliminate the risk of a material penalty being imposed, if the
matter is not resolved to the satisfaction of both parties, the party
upon which such penalty may be imposed may immediately discontinue the
Agreement's application in such state or jurisdiction by providing
notice to that effect to the other party. In that event, the Agreement
will continue to apply in all other states or jurisdictions.
(c) Termination of the Agreement shall not extinguish the rights or
liabilities of either party arising prior to termination.
SECTION 12: COSTS OF COLLECTION
The Employer and the Company agree to pay all reasonable costs of collection,
including reasonable attorneys' fees, of any amounts due the other party under
the Agreement.
SECTION 13: ASSIGNMENT
Services to be performed by the Company under the Agreement may be performed by
the Company, by any of its affiliates or by any subcontractor selected by it,
provided that the Company shall not be relieved of any of its obligations
hereunder. Except as set forth in the preceding sentence, neither party may
assign or delegate any of the
21
rights and obligations hereunder to any third party without the prior written
consent of the other party.
SECTION 14: CHOICE OF LAW
The Agreement shall be governed by applicable federal law and, to the extent not
governed by federal law, the laws of the State of Texas.
SECTION 15: ENTIRE AGREEMENT, AMENDMENT AND WAIVER
(a) Upon execution of the Agreement, all prior or contemporaneous letters
of understanding, agreements, requests for proposal, proposals,
representations, statements, negotiations and understandings, whether
oral or written, are hereby terminated and superseded by the Agreement,
the MP Financial Agreement, the Security Deposit Agreement, the
Policies and Non-MP Policies and all riders thereto.
(b) Any amendments or modifications to the Agreement must be in writing,
and must be signed by the duly authorized representatives of each
party. Each party shall provide to the other a written certification of
the names of those persons duly authorized to execute amendments or
modifications on behalf of the party. Each party shall be entitled to
rely on the other's certification of authority unless and until it is
modified.
(c) No term or provision of the Agreement shall be deemed waived and no
breach excused, unless the party claimed to have waived the term or
provision or to have excused the breach does so in a signed writing.
(d) In the event of any conflict between the terms and conditions of the
Agreement, the MP Financial Agreement, the Security Deposit Agreement
or the Policies or Non-MP Policies, the following order of precedence
shall be followed in resolving the conflict. The terms of the Security
Deposit shall first control, then the MP Financial Agreement, then the
Agreement and lastly the Policies or the Non-MP Policies, as
applicable.
(e) The parties' respective rights and obligations under sections 2(a)-(d),
4(a)-(d), 5(a), 5(d), 7, 8 and 12 of the Agreement shall survive
termination of the Agreement.
22
SECTION 16: NOTICES
(a) Any notice required to be given under the Agreement shall be given in
writing by sending or delivering such notice to the receiving party (i)
by prepaid registered or certified first class U.S. mail, return
receipt requested, (ii) by overnight express courier with recipient's
signature required, (iii) by hand delivery with recipient's signature
required, (iv) by facsimile, provided that the other party has
specifically requested that a specifically designated notice be made by
facsimile, or (v) or by any other method by which the date of receipt
by the party entitled to such notice may be determined. Notice shall be
effective when sent.
(b) Notices to a party shall be sent or delivered:
To the Company at:
UnitedHealthcare
Small Business Group
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: President, Small Business Group
With a Copy to:
UnitedHealthcare
Legal Department
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: General Counsel
And:
UnitedHealthcare
Small Business Group
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Vice President, Underwriting
23
And to the Employer at:
Administaff of Texas, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
Attention: Vice President of Benefits
With a Copy to:
Administaff of Texas, Inc.
Attention: General Counsel
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇)▇▇▇-▇▇▇▇
(c) Each party may change the person(s) designated to receive notice on
behalf of the party, or the address or facsimile number to which such
notice should be sent, upon written notice to the other party.
24
In witness whereof, the undersigned have executed the Agreement effective as of
the Effective Date.
ADMINISTAFF OF TEXAS, INC. UNITED HEALTHCARE
INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------- -----------------------------
Authorized Signature Authorized Signature
Name ▇▇▇▇▇▇ ▇. ▇▇▇▇ Name ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------- ---------------------------
Title Vice President - Benefits Title Senior Vice President
------------------------- --------------------------
Date: 6/25/02 Date: 6/25/02
------------------------- --------------------------
25
EXHIBIT A - PERFORMANCE STANDARDS
1. GENERAL DESCRIPTION
a. Performance Standards and Guarantee Period
Pursuant to section 2(c) of the Agreement, this Exhibit describes the
performance standards applicable to services provided under the Agreement with
respect to medical Policies and Non-MP Policies ("Performance Standard" or
"Performance Standards"). These standards apply to the annual period that begins
on January 1 and ends on December 31 of the same calendar year ("Guarantee
Period").
The reports and metrics referenced in this Exhibit are those reports
and metrics utilized by the Company on the Effective Date. From time to time,
the Company may change the reports and metrics that it uses. If so,
substantially similar metrics and reports will be substituted for those set
forth in this Exhibit A. In addition, if a report or metric is changed, the
Company will modify any affected Performance Standard to the extent necessary to
carry out the intent of the parties, provided that the modified Performance
Standard shall be at least as favorable to the Employer as the standard offered
by the Company to other key account customers at the time of the modification.
b. Premium Credits
To the extent provided below, the Employer shall be entitled to a
Premium Credit if the Company fails to meet *** or more of the Performance
Standards during a Guarantee Period. The Premium Credit due for a Guarantee
Period shall be applied to premiums due to the Company for the first Arrangement
Month following the Quarterly Review for the fourth Arrangement Quarter of each
year.
c. Reporting
The Company shall report to the Employer the Performance Standards
results as part of each Quarterly Review. Performance Standard results will be
summarized and reported for the Guarantee Period as part of the Annual Review.
The amount of Premium Credit due as a result of the Company's failure to meet
any of the Performance Standards will be determined as part of the Quarterly
Review.
26
d. Special Provision for 2002
For 2002, the Guarantee Period will be modified to begin on July 1,
2002 and end on December 31, 2002. For 2002, the sum of the Premium Credits for
all categories described below shall not exceed $*** with the dollar amount
described in each category below reduced by *** percent. In years after 2002,
Premium Credits in the aggregate may not exceed $***. The potential Premium
Credits by category are listed in sections 2 through 5 below.
e. Non-Performance by the Company May be Excused
The Company shall not be required to provide a Premium Credit where the
Company's failure to meet any Performance Standard is due to fire, embargo,
strike, war, accident, act of god, voluntary or involuntary compliance with any
valid or invalid law or regulation of any governmental agency or authority or
***.
2. ELIGIBILITY LOADING
The Company will load eligibility transmissions to the UnitedHealth
Group Eligibility System within *** business days of receipt. A tape load will
be considered to have met this standard if the elapsed time between the date the
tape is received by the Company and the date upon which the tape is loaded to
the eligibility system(s) is *** business days or less. The guarantee applies to
tapes submitted consistent with the format outlined in the UnitedHealth Group
Eligibility Handbook (last updated version June 19, 2001) and is not applicable
to tapes that cannot be loaded due to tape errors or for tapes that require
reformatting of data. Tapes must be received prior to 12:00 noon, Eastern Time,
on the date as determined by scheduled tape delivery dates. Otherwise, written
notification of tape delivery must be provided and receipt confirmed by the
Company. If the tape is received after 12:00 noon, Eastern Time, the period for
completion of the loading under this standard commences the following business
day.
Failure to load ***% of eligibility tapes to the UnitedHealth Group
Eligibility System within *** business days of receipt during the Guarantee
Period will result in a Premium Credit of $***.
27
3. CUSTOMER REPORTING
a. The following set of reports will be available on-line to the
Employer for all Policies and Non-MP Policies administered on the Company's UNET
system within *** calendar days of the close of each month:
o Premium Versus Claims
o Claim Expenses by Size of Payment
o Payments by Benefit Type
o Health Care Cost Management Summary
o Claim Experience
o Membership by Market
o Membership by Month
o Membership with Demographic Factors and Geographic Factors
b. The following reports will be available to the Employer for all
Non-MP Policies administered on the Company's PRIME system (Maryland Small
Business PPO clients) within *** calendar days of the close of each month:
o Claim Expenses by Size of Payment
o Payments by Benefit Type
c. The Quarterly Review report described in Exhibit A of the Minimum
Premium Financial Agreement will be provided to the Employer within *** calendar
days of the end of the Arrangement Quarter.
d. Failure to deliver at minimum ***% of the total number of reports
identified in this section 3 during the Guarantee Period will result in a
Premium Credit of $***.
4. CLAIM OPERATIONS PERFORMANCE STANDARDS
For purposes of this section 4, the term "claim" shall mean a written
or electronic request for payment of a Plan Benefit made by a member or
provider.
28
a. Time to Pay
During a Guarantee Period, the Company will process ***% of all claims
received by the Company within *** business days of receipt, as evidenced by the
Company's date stamp. Timeliness will be measured using the "Time to Pay" report
produced by the Company on a monthly basis. The overall Guarantee Period result
is recalculated using the raw data for such period. The "Time to Pay" results
are always rounded to the nearest whole percent.
For the Agreement, the criteria will be based upon the results of the
Plano Service Center team servicing the Employer.
A claim will be considered processed when the claim has been completely
reviewed and a payment determination has been made.
Time to pay is measured the same way regardless of the timing of the
Company's responses to a claimant.
Failure to process ***% of all claims received within *** business days
during the Guarantee Period will result in a Premium Credit in the maximum
amount of $***. Credits against this Performance Standard will be applied on a
gradient as follows:
***% WITHIN *** BUSINESS DAYS - $ ***
***% WITHIN *** BUSINESS DAYS - $ ***
***% WITHIN *** BUSINESS DAYS - $ ***
***% WITHIN *** BUSINESS DAYS - $ ***
***% IN MORE THAN *** BUSINESS DAYS - $ ***
b. Financial Accuracy
The Company will maintain a Financial Accuracy rate of not less than
***% for the Guarantee Period. Financial Accuracy is measured by collecting a
statistically significant random sample of claims processed. The sample is
reviewed to determine the percentage of claim dollars processed correctly out of
the total claim dollars submitted for payment. The measurement will be done by
the Company's standard internal quality assurance program based on a periodic
audit of all claims processed by the Plano Service Center team servicing the
Employer. The overall Guarantee Period result is recalculated using the raw data
for such period.
Failure to maintain a Financial Accuracy rate of at least ***% for the
Guarantee Period will result in a Premium Credit in the maximum
29
amount of $***. Credits against this Performance Standard will be applied on a
gradient as follows:
***% - ***% PAID CORRECTLY - $***
***% - ***% PAID CORRECTLY - $***
***% - ***% PAID CORRECTLY - $***
***% - ***% PAID CORRECTLY - $***
LESS THAN ***% PAID CORRECTLY - $***
c. Procedural Accuracy
The Company will maintain a Procedural Accuracy rate of not less than
***% for the Guarantee Period. Procedural Accuracy is measured by collecting a
statistically significant random sample of claims processed by the Plano Service
Center team servicing the Employer. The sample is reviewed to determine the
percentage of claims processed without non-financial errors.
The measurement will be done by the Company's standard internal quality
assurance program based on a periodic audit of all claims processed by the Plano
Service Center team servicing the Employer. The overall performance period
result is recalculated using the raw data for such period.
Failure to maintain a Procedural Accuracy rate of at least ***% for the
Guarantee Period will result in a Premium Credit in the maximum amount of $***.
Credits against this Performance Standard will be applied on a gradient as
follows:
***% - ***% PAID CORRECTLY - $***
***% - ***% PAID CORRECTLY - $***
***% - ***% PAID CORRECTLY - $***
***% - ***% PAID CORRECTLY - $***
LESS THAN ***% PAID CORRECTLY - $***
d. Items Excluded From Claim Operations Performance Measurements
With some products (e.g., HMO), financial reimbursement arrangements
are contractually negotiated with providers (physicians, labs, etc.), that
budget the payment they receive for certain services. Periodic payments are made
to the providers in return for their agreement to provide the negotiated
services to network members. Services provided under these arrangements are not
processed as a
30
typical "claim" and, as a result, results from the networks featuring these
arrangements are not included in the performance statistics outlined above.
The claims that are included in Claim Operations performance categories
are limited to medical claims processed through the UNET claims system(s).
Claims processed through any other system, including claims for other products
such as *** coverage, are not included in the calculation of the performance
measurements stated above.
5. MEMBER PHONE SERVICE PERFORMANCE STANDARDS
a. Average Speed to Answer
This standard applies to the claim team and/or the member service team
that provide service for the Employer's Employees. The Company will guarantee
that calls will sequence through the Company's automated telephone call
distribution system and be answered by a customer service representative in ***
seconds or less, on average. The Average Speed to Answer will be measured by the
standard tracking reports produced by the Company's automated phone system for
all the calls handled by the Plano Service Center team servicing the Employer.
If the Average Speed to Answer for the Guarantee Period is greater than
*** seconds, a Premium Credit will be due. The maximum amount of the Premium
Credit will be $***. Credits against this performance measure will be applied on
a gradient as follows:
*** SECONDS OR LESS - $***
*** SECONDS OR LESS - $***
*** SECONDS OR LESS - $***
*** SECONDS OR LESS - $***
MORE THAN *** SECONDS TO ANSWER - $***
b. Abandonment Rate
This standard applies to the claim team(s) and/or the member services
team(s) which provide service for the Employer's Employees. The Company will
guarantee that calls will sequence through the Company's automated telephone
call distribution system such that the average abandonment rate will be no
greater than *** percent. The Abandonment Rate results will be measured by the
standard tracking reports produced by the Company's automated phone system for
all calls handled by the Plano Service Center team servicing the Employer.
31
If the Abandonment Rate for the Guarantee Period is greater than ***%
on average, for all locations providing member phone service to the Employer's
Employees, a Premium Credit will be made due. The maximum amount of the credit
will be $***. Credits against this performance measure will be applied on a
gradient as follows:
***% - ***% OF CALLS ABANDONED - $***
***% - ***% OF CALLS ABANDONED - $***
***% - ***% OF CALLS ABANDONED - $***
***% - ***% OF CALLS ABANDONED - $***
MORE THAN ***% OF CALLS ABANDONED - $***
6. OVERALL MEMBER SATISFACTION PERFORMANCE STANDARD
This standard applies to the member service teams that provide HMO,
EPO, PPO and Managed Indemnity services for the Employer's Employees. The
Company will conduct, on *** basis, a Uniprise Customer Satisfaction Survey. The
Overall Satisfaction question used reads:
"Overall, how satisfied are you with the way the Company administers
your medical health insurance plan, such as processing your claim or
helping answer any questions or resolving any problems you may have?"
If less than ***% of the respondents for the Plano Service Center team
providing services for the Employer's Employees are satisfied overall (i.e., if
***% of respondents do not respond with either completely satisfied, very
satisfied or somewhat satisfied), a Premium Credit of $*** will be due.
32
EXHIBIT B - ADDITIONAL SERVICES
[RESERVED]
33
EXHIBIT C - REPORTING BY THE COMPANY
1. By August 1, 2002, the Company shall provide the Employer with the
reports listed below. The parties acknowledge and agree that many of these
reports or samples of these reports have already been provided to the Employer
and that the Company is using its best efforts to supply the full range of these
reports on or before August 1, 2002.
2. The Company shall provide the Employer on line access to the
Customer Reporting System (CRS) reports available to its fully insured customers
that are listed below. However, the reports that are listed below may not be
available for all Policies or Non-MP Policies or for all system platforms (UNET
or PRIME) on which the Employer's Plan is administered. Those reports that are
available on a monthly basis will be updated and available to the Employer by
the 15th of the subsequent month. The Company will review with the Employer
those reports that are available on an other than monthly basis or on a limited
Policy or Non-MP Policy basis or on a limited system platform basis. The CRS
reports are as follows:
Premium Versus Claims
Claims Expenses by Size of Payment
Payments by Benefit Type
Detailed Payment Report
Health Care Cost Management Summary
Claim Experience
Claim Lag Study
Inpatient Utilization and Costs by Admission Types
Utilization by Diagnosis Chapters
Managed Pharmacy Plan Performance
Surgical Costs and Utilization by Procedure Chapters
Membership by Market
Membership by Month
Membership with Demographic and Geographic Factors
Distribution of Discounts
Distribution of Ineligible Charges
Distribution of Other Savings
Inpatient Utilization by Diagnosis Chapters
Managed Pharmacy Cost and Utilization by Month
Managed Pharmacy Critical Indicators
Managed Pharmacy - Key Generic Substitution Indicators by Month
34
Managed Pharmacy - Top Drug Utilization Ranked by Cost &Top Drug
Utilization Ranked by Volume
Managed Pharmacy - Top Therapeutic Class Utilization Ranked by Cost &
Top Therapeutic Class Utilization Ranked Volume
Managed Pharmacy Utilization by Gender and Age
Network Utilization
Network Utilization (including Capitation)
Network Utilization by Provider Type
Network Utilization by Provider Type (including Capitation)
Outpatient Utilization by Diagnosis Chapters
Surgical Utilization by Procedure Category and Place of Service
Surgical Utilization by Procedure CPT Codes
Top Hospitals Ranked by Total Net Paid & Top Physicians Ranked by Total
Net Paid
Utilization by Age Group
Utilization and Costs by Provider Type
▇▇▇▇ Count by Month
Annual Customer Reporting & Analysis Executive Summary Report
3. The Company shall provide to the Employer the following monthly
banking system reports in an electronic format by the 15th of the subsequent
month. These reports reflect activity processed through the Claims Account for
the Policies. The reports are as follows:
Summary Report for Daily Transfer Evaluation
Monthly Summary Report of Net Charge Distribution
Detailed Report for Transfer Evaluation
Outstanding Report
4. The Company shall provide to the Employer the following monthly
detailed claim extracts in an electronic format consistent with the detailed
file layouts previously supplied for the Policies and Non-MP Policies by the
15th of the subsequent month. These claim extracts were modified by the Company
to include the Employer's Client code and include the following:
CRS Medical Claim Financial Extract
CRS Medical Claim Statistical Extract
CRS Pharmacy Claim Extract
Dental Claim Statistical Extract
35
EXHIBIT D - THIRD PARTY DISCLOSURE AGREEMENT
This THIRD PARTY DISCLOSURE AGREEMENT ("Agreement") is entered into by
and between Administaff of Texas, Inc. ("Employer"), [Examiner Name]
("Examiner") and United HealthCare Insurance Company for itself and its
affiliated companies ("United HealthCare"). These parties acknowledge and agree
as follows:
Employer and United HealthCare entered into the Minimum Premium
Administrative Services Agreement ("the Agreement") under which United
HealthCare provides claims administration and other services for Employer's
employee welfare benefit plan ("Plan"). Employer has retained Examiner to
perform an examination, audit or other evaluation of the files, books, and/or
records of United HealthCare pertaining to the Plan ("Examination").
Employer has requested that solely for purposes of the Examination,
United HealthCare disclose to Examiner certain documents, statistical
information and other information which is commercially valuable, confidential,
proprietary, or trade secret ("Proprietary Information") and also materials
which may contain medical or other individually identifiable information
("Confidential Medical Information"). Proprietary Information and Confidential
Medical Information shall collectively be referred to in the Agreement as
"Confidential Information". United HealthCare has agreed to disclose this
Confidential Information subject to the terms of the Agreement.
The Examination shall take place on the date or date(s) mutually agreed
upon by the parties.
Confidential Information disclosed by United HealthCare, its agents,
subsidiaries and affiliates, to Examiner in connection with the Examination,
including all copies thereof, shall be used by Examiner only as permitted by the
Agreement. Confidential Information shall not include information: (i) generally
available to the public or generally known in the insurance industry or employee
benefit consulting community prior to or during the time of the Examination
through authorized disclosure; (ii) obtained from a third party who is under no
obligation to United HealthCare not to disclose such information; or (iii)
required to be disclosed by subpoena, or other legal process.
USE: Examiner shall: (a) not use (deemed to include, but not be limited
to, using, exploiting, duplicating, recreating, modifying,
36
decompiling, disassembling, reverse engineering, translating, creating
derivative works or disclosing Confidential Information to another person or
permitting any other person to do so) Confidential Information except for
purposes of the Examination; (b) limit use of Confidential Information only to
its authorized employees (deemed to include employees as well as individuals who
are agents or independent contractors of Examiner) who have a need to know for
purposes of the Examination; and (c) may release Confidential Information in
response to a subpoena or other legal process to disclose Confidential
Information, after giving United HealthCare reasonable prior notice of such
disclosure.
At the conclusion of the Examination, Examiner shall either relinquish
to United HealthCare, or destroy (with such destruction to be certified to
United HealthCare), all Confidential Information. If during the course of the
Examination it is discovered that the Agreement has been breached by Examiner
then all Confidential Information shall be relinquished to United HealthCare
upon demand.
The Agreement binds the parties and their respective successors,
assigns, agents, employers, subsidiaries and affiliates.
Unauthorized use of Confidential Information by Examiner is a material
breach of the Agreement resulting in irreparable harm to United HealthCare for
which the payment of money damages is inadequate. It is agreed that United
HealthCare, upon adequate proof of unauthorized use, and in addition to any
other remedies at law or in equity that it may have, may immediately obtain
injunctive relief in any court of competent jurisdiction enjoining any
continuing or further breaches and may obtain entry of judgment for injunctive
relief. Examiner consents to said injunctive relief and judgment. Employer and
Examiner agree to indemnify and hold harmless United HealthCare with respect to
any claims and any damages caused by Examiner's breach of the Agreement.
The requirement to treat all Confidential Medical Information, as
Confidential Information shall survive the termination of the Agreement. The
requirement to treat all Proprietary Information as Confidential Information
under the Agreement shall remain in full force and effect so long as any
Proprietary Information remains commercially valuable, confidential, proprietary
and/or trade secret, but in no event less than a period of three (3) years from
the date of the Examination.
Neither the Agreement nor Examiner's rights or obligations hereunder
may be assigned without United HealthCare's prior written approval.
37
GENERAL: (a) The Agreement is the entire understanding between the
parties as to the subject matter hereof. (b) No modification to the Agreement
shall be binding upon the parties unless evidenced in writing signed by the
party against whom enforcement is sought. (c) Headings in the Agreement shall
not be used to interpret or construe its provisions. (d) The alleged invalidity
of any term shall not affect the validity of any other terms. (d) The Agreement
may be executed in counterparts.
The parties have caused their authorized representatives to execute the
Agreement.
ADMINISTAFF OF TEXAS, INC.
By
--------------------------------------------
Authorized Signature
Print Name
-----------------------------------
Print Title
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Date
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UNITED HEALTHCARE INSURANCE COMPANY
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EXHIBIT E - ELIGIBILITY REPORTING BY THE EMPLOYER
For purposes of this Exhibit E, "Plan" shall include the plan of benefits
provided by the Employer under the Policies and the Non-MP Policies.
1. The Employer shall provide to the Company an accounting of the number
of Clients participating in the Plan as of January 1, 2002.
2. The Employer understands that the Company requires a seven business day
period from the date notification is received by the Company of a
Participant's eligibility or termination of coverage under the Plan in
order to update the UnitedHealth Group Eligibility System and the
subsidiary eligibility systems for pharmacy, dental and mental
health/substance abuse benefits. This seven business day period is
predicated upon such eligibility information being provided by the
Employer to the Company in the format consistent with that outlined in
the UnitedHealth Group Eligibility Handbook (last updated on June 19,
2001). The Employer agrees to pay the claims of such Participant(s)
whose coverage has been terminated to the extent they would otherwise
constitute Health Benefits required to be paid by the Company if the
Company authorized the payment of the claims during this period, even
if such persons are no longer eligible for Plan benefits during this
period.
3. The Company shall not be required to make retroactive corrections in
Participant eligibility for benefits Incurred under Policies or Non-MP
Policies on dates more than 60 calendar days before the date on which
the corrected information is received by the Company.
4. In calculating the Quoted Premiums under the Policies and the monthly
premiums under the Non-MP Policies administered on the Company's UNET
system (as designated in Exhibit B to the Minimum Premium Financial
Agreement), the following rule shall apply. A *** shall be due for
Employees whose effective date of coverage is on or before the 15th of
that month and no premium shall be due for Employees whose effective
date of coverage is after the *** of that calendar month. A *** shall
be due for Employees whose coverage is terminated after the *** of that
calendar month, and *** shall be due for Employees whose coverage is
terminated on or before the *** day of that calendar month.
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5. Monthly premiums for the Non-MP Policies administered on the Company's
PRIME system (as designated in Exhibit B to the Minimum Premium
Financial Agreement) are calculated by the system on an individual
Non-MP Policy basis using a roster billing process which reflects the
amount due for individual Participants. The calculation of monthly
premiums on PRIME uses a *** rule to determine the premium due for
partial month's coverage as opposed to the *** of the month rule
described in paragraph 4 above.
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EXHIBIT F - ALTERNATE VENDORS
A. Except as otherwise set forth in this Exhibit F, the Company shall have
the right to be the exclusive provider of health and dental coverage
for Employees.
B. Exceptions to the Company's Right to be Exclusive Provider
1. ***: The Employer may offer alternate HMO or PPO coverage (but
not dental coverage) to Clients in ***.
2. ***: The Employer shall offer to each Client the following
coverage options for Employees at *** worksites: (i) existing
*** coverage options (medical and/or dental) or (ii) coverage
options offered by the Company (medical and/or dental).
3. CIGNA ***s: CIGNA ***s may be offered with, at the option of
the Company, the Company's ***s, in the following markets
effective on or after May 1, 2002, provided that each market
listed below shall be treated as a New Market (as defined in
section B(7) below) and subject to the provisions of section
B(5)(b) below at such time as the Company shall offer an ***
option which is Competitive (as defined in section B(7) below)
in such market.
a. ***
b. ***
c. ***
d. ***
e. ***
f. ***
g. ***
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4. New Markets
a. The Employer shall offer the Company's PPO option in
New Markets. Subject to subsection (b) below, if the
Employer wishes to also offer an HMO option in a New
Market, the Employer shall (i) notify the Company of
its plan, and (ii) offer such HMO option exclusively
through the Company, provided that the Company's HMO
is Competitive in such New Market at the time of the
Employer's notice to the Company or becomes
Competitive not more than *** months after receipt of
the Employer's notice to the Company.
b. If the Employer provides an HMO option through a
Competing Vendor in a New Market consistent with the
provisions of this Exhibit F, the Company may elect
to offer the Company's PPO option to Employees along
with the Competing Vendor's HMO. If the Company's PPO
option is provided to Employees, the Company may upon
*** days notice to the Employer, cease such offering
in the New Market effective on the January 1
following the notice.
5. Removal or Addition of the Company's HMOs
a. If at any time an HMO offered by the Employer through
the Company ceases to be Competitive, the Employer
may in its sole discretion cease offering such HMO
and, in any case, the respective market in which such
HMO operates shall be deemed a New Market. In any
such case, the Employer shall notify the Company of
its opinion concerning the Competitive status of such
HMO at least *** months before it ceases offering the
HMO and shall have the burden of undertaking the
steps required to confirm the same in accordance with
section B(7)(b) of this Exhibit F. If the Company's
HMO becomes Competitive within *** months after its
receipt of the Employer's notice, the Employer may
not replace it unless and until it is again not
Competitive, in which
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case a new notice shall be required and a new ***
month corrective period will begin.
b. If at the time the Company begins to offer an HMO
option which is Competitive, the Employer is offering
an HMO option through a Competing Vendor consistent
with the provisions of this Exhibit F, the Employer
shall offer each Client in such New Market coverage
options for Employees in such New Market not later
than the *** of such *** consisting of either (i) the
Company's *** and *** options or (ii) such Competing
Vendor's *** and, at the Competing Vendor's option,
its ***.
6. Acquisition by Employer of another Professional Employer
Organization: The Employer's use of Competing Vendors to
provide coverage to New PEO Clients will not violate the
provisions of section 6(b)(iv) of the Agreement or this
Exhibit F if such coverage complies with the provisions of
section 6(f) of the Agreement.
7. Definitions: As used in this Exhibit F, capitalized terms
shall have the meanings assigned to them in the Minimum
Premium Administrative Services Agreement to which this
Exhibit F is attached or, if no meaning is so assigned, the
meaning set forth in this section B(7) of Exhibit F.
a. "Competing Vendor" means a vendor of medical coverage
products in a particular geographic market other than
the Company.
b. "Competitive" when referring to an HMO option means
that either (i) the Company and the Employer agree or
(ii) an independent consultant chosen by mutual
agreement of the parties has determined, that such
product ranks either *** as compared to competing
products of other vendors in the designated market.
In making any determination of the rank of a product
in a market, such consultant shall apply such
criteria relating to *** as it shall determine
appropriate. All fees and expenses of any such
consultant shall be paid by the Employer.
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c. "HMO" means a product offered as a network only or
lock in product, including an EPO.
d. "New Market" means a geographic area in which the
Employer does not offer an *** option as of the
Effective Date.
e. "PPO" means any product for network coverage that is
not an HMO.
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