CLAIM SERVICES AGREEMENT THIS AGREEMENT is made as of the First day of June 1, 1999 between: Brokers National Life Assurance Company (an Arkansas Corporation) (hereinafter referred to as “Brokers”) and Employer Plan Services, Inc. (a Texas...
Exhibit
10.5
THIS
AGREEMENT
is made
as of the First day of June 1, 1999 between:
Brokers
National Life Assurance Company
(an
Arkansas Corporation)
(hereinafter
referred to as “Brokers”) and
Employer
Plan Services, Inc.
(a
Texas
corporation)
(hereinafter
referred to as “EPSI”)
This
Agreement, together with any Schedules and Exhibits attached or referenced
within this Agreement and any amendments to the Agreement, constitute the entire
Agreement between Brokers and EPSI.
E-4
TABLE
OF CONTENTS
|
I.
|
Purpose
|
|
II.
|
Consideration
|
|
III.
|
Duties
of EPSI
|
|
A.
|
Payment
of Claims
|
|
B.
|
Claim
Determination
|
|
C.
|
Customer
Service
|
|
▇.
|
▇▇▇▇▇
Service
|
|
E.
|
Eligibility
Maintenance
|
|
F.
|
Reports
|
|
G.
|
Disputed
Claims
|
|
H.
|
Overpayment
and Underpayment
|
|
I.
|
Fidelity
Bond and Errors and Omissions Coverage
|
|
J.
|
Maintenance
of Records
|
|
K.
|
Notices
and Complaints
|
|
IV.
|
Restrictions
on Performance
|
|
A.
|
Trademarks
and Tradenames
|
|
B.
|
Subcontracting
|
|
V.
|
Rights
of Brokers
|
|
A.
|
Periodic
Audits
|
|
B.
|
Ownership
of and Access to Records
|
|
VI.
|
Duties
of Brokers
|
|
VII.
|
Compensation
|
|
VIII.
|
Printing
Costs
|
|
IX.
|
Liability
of EPSI and Brokers
|
|
A.
|
Liability
of EPSI
|
|
B.
|
Liability
of Brokers
|
|
X.
|
Termination
|
|
A.
|
Duration
|
|
B.
|
Termination
by EPSI
|
|
C.
|
Termination
by Brokers
|
|
XI.
|
General
Provisions
|
|
A.
|
Performance
of Service
|
|
B.
|
Amendments
|
|
C.
|
Notice
|
|
I.
|
E-5
Purpose
This
Agreement provides for the terms under which EPSI will provide dental claim
services for the current or future contracted Brokers dental insurance
Policyholders. EPSI will provide such services regarding claims for the
Policyholders’ covered persons (“Covered Persons”), in accordance with the terms
of the Policyholders’ policies (“Policy(ies)”).
|
II.
|
Consideration
|
The
consideration for this Agreement will be the mutual promises of the parties
contained herein.
|
III.
|
Duties
of EPSI
|
EPSI
will
perform the following services with respect to Brokers’
Policyholders:
|
A.
|
Payment
of Claims
-
EPSI will receive, review, evaluate, refer, adjust and promptly pay
or
deny all claims that are submitted to EPSI according to EPSI then
current
claims administration practices and procedures and as directed by
Brokers.
All claims will be paid in strict conformance with the Policy language,
unless directed otherwise by Brokers. Specific services will
include:
|
|
1.
|
Preparation
of checks for the payment of the amount of benefits determined to
be
payable under the Policy to the Beneficiary or to the assignee of
benefits
as the interests appear to EPSI.
|
|
2.
|
Release
benefit checks to the payee by regular mail. The frequency of such
check
releases shall be in accordance with the written instructions of
Brokers.
EPSI shall be entitled to rely upon such approval as a guarantee
of
funding.
|
|
3.
|
In
the event that a Claim is denied, in whole or in part, written notice
to
the Beneficiary of the reason(s) for the
denial.
|
|
4.
|
Preparation
and release of Explanation of Benefit forms to the Beneficiary in
conjunction with the payment or denial of each
Claim.
|
EPSI
will
reduce claim turnaround time, within a reasonable period of time after
the
effective
date of this agreement, in order to comply with the requirements of any
applicable
State Unfair Claims Practices Act or the requirements of any State
Insurance
Department law or regulation. Brokers will have sole responsibility to
notify
EPSI of any such State Insurance Department requirement or law.
|
B.
|
Claim
Determination
-
With respect to any specific claim, if EPSI deems appropriate, EPSI
may:
|
|
1.
|
Correspond
directly with the Covered Person, Policyholder and/or providers of
health-care services in the event that additional information appears
to
be necessary to properly process the
Claim;
|
|
2.
|
Consult
with professional medical or dental consultants (at the expense of
Brokers);
|
|
3.
|
Use
its standard procedures to determine whether there is other coverage
against which benefits provided under Brokers’ Policy may be
coordinated;
|
|
4.
|
Determine
whether the procedure, treatment or supplies appears to be medically
necessary in the opinion of
EPSI;
|
E-6
|
5.
|
Determine
the amount of benefits which appear to be payable under the Policy
with
respect to the indicated procedure, based upon the lesser of the
amount
due under any applicable PPO Fee Schedule, the amount actually charged
or
the 75th
percentile of the amount considered reasonable and customary in accordance
with the data base then loaded into the EPSI system. It is understood
and
agreed that such percentile shall be as determined by Brokers. The
reasonable and customary data base loaded into the EPSI system will,
unless otherwise disclosed to Brokers, be as provided to EPSI by
Medical
Data Research; updated not less frequently than every
6 months.
|
|
C.
|
Customer
Service
-
EPSI will maintain a Customer Service Unit trained to respond to
telephone
and written inquiries from Covered Persons and providers relating
to the
Policy and Claim matters.
|
|
▇.
|
▇▇▇▇▇
Service
-
EPSI will provide a toll-free telephone number so that Covered Persons
or
providers may contact EPSI regarding Claims matters during the regular
business hours of EPSI.
|
|
E.
|
Eligibility
Maintenance -
EPSI will maintain an eligibility file of Covered Persons entitled
to
receive benefits under the Policies based upon information provided
to
EPSI by Brokers as provided for in Section VI.D of this
Agreement.
|
|
F.
|
Reports
-
EPSI will:
|
|
1.
|
maintain
a system for the tracking of payments, refunds, stop payments, and
voids,
and report the transactions in the Monthly Claim Report;
and
|
|
2.
|
maintain
a system for and assume all reporting responsibilities for the preparation
and distribution of IRS Form 1099 for providers of dental
service.
|
|
3.
|
provide
reports as needed by Brokers for the timely completion of Brokers
financial statement and as requested by Brokers for analysis of Brokers
claim experience.
|
G.
Disputed
Claims
- EPSI
will refer all disputed claims to Brokers for determination. A claim which
is
pending
further information is not a disputed claim.
“Disputed
Claim” is a claim:
|
1.
|
which
has been denied in whole or in part by EPSI;
and
|
|
2.
|
for
which EPSI’s determination has been disputed or appealed in
writing.
|
In
referring a Disputed Claim to Brokers, EPSI will provide Brokers with the
following
information:
|
1.
|
a
copy of all documents in the claimant’s file, including the claim,
correspondence between EPSI and the claimant, and any other pertinent
documents relating to the Disputed Claim;
and
|
|
2.
|
an
analysis of the Disputed Claim and the basis for the claim denial
with
appropriate references to the applicable provisions of the
Policy(ies).
|
Brokers
will notify EPSI in writing of its determination with respect to the Disputed
Claim.
Brokers
retains final decision making authority as to how the Disputed Claim will be
handled.
E-7
|
H.
|
Rescissions
-
EPSI will refer all claims which contain information which would
be
grounds for
|
rescinding
a Covered Person’s coverage to Brokers along with the appropriate documentation.
Brokers
will have the sole authority to decide whether or not coverage should be
rescinded. Brokers
has
the
sole authority to issue all notices of rescission to Covered Persons. EPSI
will
be notified of all
rescissions.
|
I.
|
Overpayment
and Underpayment
-
If EPSI pays any person less than the amount to which he or she
is
|
entitled
under the Policy(ies), EPSI will promptly, upon learning of the underpayment,
adjust the
underpayment
to the correct amount.
If
EPSI
or Brokers discovers that an overpayment has been made on behalf of any person’s
claim, EPSI is hereby authorized to seek recovery from the dentist or insured
and or to offset the amount of any excess payment form any unpaid claim of
such
person or of any other person who is a member of such person’s family
unit.
|
J.
|
Fidelity
Bond and Errors and Omissions
Coverage
|
|
1.
|
EPSI
is required to purchase a Blanket Fidelity Bond in its own name in
an
amount of at least $1,000,000,000
|
The
Bond
will state that:
|
a.
|
loss,
if any, involving money or other property belonging to Brokers will
be
payable to Brokers as its interest may appear;
and
|
|
b.
|
if
the Bond is canceled, Brokers will be notified 30 days prior to such
cancellation.
|
EPSI,
upon request, will provide a copy of the Bond to Brokers.
|
2.
|
EPSI
is required to purchase and to maintain Liability Insurance in any
amount
not less than $1,000,000 per individual claim and $1,000,000 in the
aggregate to provide insurance coverage for liability related to
or
arising out of EPSI’s errors or omissions in the performance of its duties
under this Agreement.
|
EPSI
will
provide Brokers with evidence of such coverage, upon request, and will notify
brokers of any material change or cancellation of such coverage 30 days prior
to
such change or cancellation.
|
K.
|
Maintenance
of Records
-
All records will be maintained at EPSI’s principal administrative
offices
or
at Iron Mountain Storage Co., ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇, ▇▇ for:
|
|
1.
|
the
duration of this Agreement; or
|
|
2.
|
a
longer period of time as may be required under the Employee Retirement
Income Security Act of 1974, or any applicable state or commonwealth
statute.
|
EPSI
may
copy all claim forms and accompanying documentation on a record-keeping system.
All records will be maintained in accordance with prudent standards of record
keeping.
Notwithstanding
the above, it is hereby agreed that all records pertaining to the business
administered hereunder are the sole property of Brokers, and EPSI shall provide
Brokers any and all such documents on request by Brokers. Brokers agrees to
pay
the cost of retrieval of such records.
E-8
|
L.
|
Notices
and Complaints
-
If EPSI receives:
|
|
1.
|
notice
of the commencement of any legal proceeding involving any Covered
Persons;
or
|
|
2.
|
communication
from:
|
|
a.
|
any
Insurance Department or other administrative agency;
or
|
|
b.
|
any
other person identifying a complaint by any Covered Person or calling
a
hearing involving any Brokers
practice,
|
EPSI
will
immediately notify Brokers. EPSI will immediately send copies of any necessary
documentation to Brokers, for exclusive handling by Brokers.
EPSI
will
maintain a file containing any written letters of complaint received from
Covered Persons, Policyholders or service providers for a period of six (6)
years from receipt of the complaint letter, or a longer period of time as may
be
required under the employee retirement Income Security Act of 1974 or any
applicable state statute.
|
IV.
|
Restrictions
on Performance
|
A.
Trademarks
and Tradenames
- EPSI
will not use the claim files or Brokers’ name, trademarks, logo or the name of
any other affiliated Brokers’ company in any way or manner not specifically
authorized in writing by Brokers. EPSI may use only advertising
which:
|
1.
|
pertains
to the business underwritten by Brokers;
and
|
|
2.
|
has
been approved in writing by Brokers in advance of its
use.
|
B.
Subcontracting
- EPSI
will not subcontract any of its administrative functions, duties, or
responsibilities without the prior approval of Brokers. Brokers has the right
to
refuse approval for any reason whatsoever at its sole discretion.
|
V.
|
Rights
of Brokers
|
|
A.
|
Periodic
Audits
-
Brokers may audit the records of EPSI which pertain to the performance
of
the duties of EPSI with respect to the Policies. EPSI will fully
cooperate
with Brokers, or its designee, during any such audit. Brokers will
provide
15 calendar days prior written notice to EPSI of its intent to perform
an
audit and to include in such notice the name of the persons authorized
to
perform the audit. All such audits shall take place at the office
of EPSI
during its normal business hours.
|
|
B.
|
Ownership
of and Access of Records
-
All source documentation relating to the Policies which comes into
the
possession of EPSI is the property of Brokers. Accordingly, EPSI
will
retain all records pertaining to the Policies for the period required
by
law and will furnish information relating to claims for benefits
under the
policies which is in the possession of EPSI as requested by Brokers.
EPSI
reserves the right to charge its then current fee for the production
of
such information. Records will not be used for any purpose not authorized
in writing by Brokers.
|
|
VI.
|
E-9
Duties
of Brokers
Brokers
will provide EPSI with the following items:
A. Brokers’
general administrative instructions as applicable to Policyholders;
|
B.
|
A
copy of the master Policy(ies), booklet(s), rider(s), and Certificate
forms;
|
|
C.
|
Any
additional standard Brokers forms necessary for the administration
of the
Policy(ies);
|
|
D.
|
A
monthly, or more frequently if desired, eligibility file of persons
entitled to receive benefits from Policies based upon information
provided
to Brokers by Policyholders on EPSI’s standard electronic or other media
acceptable to EPSI. Brokers, and not EPSI, shall be responsible for
the
accuracy of such eligibility information; and EPSI shall be entitled
to
accept such information as accurate without inspection or
investigation;
|
E.
A
claims clearing Account which shall be established, maintained and adequately
funded solely by Brokers (“Account”). Such Account shall be used exclusively for
the payment of claims as provided in Section III.A.1. of this Agreement. Brokers
shall at all times be responsible for funding this account for the payment
of
benefits under the Policies by and through this Account. Brokers shall also
be
responsible for reconciling the Account. EPSI shall not be required to use
any
of its funds for the payment of any such benefits, and it is expressly
understood and agreed that Brokers, and not EPSI, shall be liable in the event
any such check or checks are not honored when presented for
payment.
Compensation
EPSI
shall be reimbursed by Brokers according to the attached Schedule A for all
services enumerated in this Agreement. Brokers understands and agrees that
additional services that it may request EPSI to perform or an increase in the
complexity if the services will generate additional fees that are not included
on Schedule A. EPSI will outline such additional fees and secure Brokers written
agreement to such fees prior to undertaking any action with respect to any
such
requested service.
Printing
Costs
If
EPSI
requests any forms in addition to or in replacement of forms available and
in
stock at Brokers, Brokers will review and prepare the form language, prepare
the
form language, prepare a mechanical proof(s) and cause such forms to be printed.
Brokers will bear the cost of printing such forms.
Liability
of EPSI and Brokers
|
A.
|
Liability
of EPSI
-
EPSI agrees to indemnify and hold Brokers harmless from any and all
liability, loss, damage, fines, penalties and costs, including expenses
and reasonable attorneys’ fees, which Brokers may sustain by reason of
EPSI’s actions or failure to act in carrying out its responsibilities
as
set forth in this Agreement. EPSI also agrees to indemnify and hold
Brokers harmless from any liability or loss resulting from the dishonest
acts of EPSIBrokers
employees or officers.
|
|
B.
|
Liability
of Brokers
-
Brokers agrees to indemnify and hold EPSI harmless from any and all
liability, loss, damage, fines, penalties and costs, including expenses
and reasonable attorneys’ fees, which EPSI may sustain by reason of
Brokers’ actions or failure to act in carrying out its responsibilities as
set forth in this Agreement. Brokers also
agrees
to indemnity and hold EPSI harmless from any liability or loss resulting
from the dishonest acts of Brokers employees or offrricers.
|
Termination
|
A.
|
Duration
-
Unless terminated as provided in paragraph X.B below, the term of
this
Agreement shall be three (3) years, commencing on the Effective Date
(“Initial Term”) and shall be automatically renewed for successive one (1)
year terms (“renewal Terms”). As used in this Agreement, “Term” means the
period during which the Agreement is in force, commencing on the
Effective
Date and ending on the effective date of
termination.
|
|
B.
|
Termination
by EPSI
-
EPSI may terminate this Agreement upon 15 days prior written notice
in the
event that:
|
|
1.
|
any
check issued for payment of benefits under the Policies is dishonored
for
any reason and Brokers fails to deposit funds to cover such check
within
10 days of being notified of the dishonored check,
or
|
|
2.
|
any
fee due and owing to EPSI remains unpaid for a period of 315
days after payment is due, or
|
|
3.
|
Brokers
refuses or neglects to provide information reasonably requested by
EPSI
for the performance of its duties under the Agreement,
or
|
|
4.
|
a
petition in voluntary or involuntary Bankruptcy is filed by, or with
respect to, Brokers.
|
EPSI
shall specify the “effective date of termination” in any such
notice.
|
C.
|
Termination
by Brokers
-
This Agreement may be terminated immediately by Brokers when and
if:
|
|
1.
|
EPSI
commits fraud or gross negligence in the performance of any of its
duties
under this Agreement, or
|
|
2.
|
wrongfully
withholds or misappropriates, for EPSI’s own use, funds of Brokers or any
of its Policyholders, or
|
|
3.
|
EPSI
refuses or neglects to provide information reasonably requested by
Brokers
for the performance of its duties under the Agreement,
or
|
|
4.
|
a
petition in voluntary or involuntary Bankruptcy is filed by, or with
respect to EPSI, or
|
|
5.
|
More
than 50% of EPSI outstanding stock is transferred to individuals
other
than the current shareholders.
|
|
D.
|
Either
Brokers or EPSI may terminate this Agreement at any time during any
Renewal Term, without cause, upon 90 days prior written notice to
the
other party.
|
|
E.
|
Effect
of Termination
-
EPSI shall not be obligated to perform any services whatever under
this
Agreement to or on behalf of Brokers on or after the effective date
of
termination of this Agreement, unless a written agreement providing
otherwise has been executed by EPSI and Brokers prior to such effective
date.
|
E-10
General
Provisions
|
A.
|
Performance
of Service
-
In the event that EPSI fails to perform services under this Agreement,
Brokers may assume those services and will be entitled to the fees
or
allowances otherwise payable to
EPSI.
|
|
B.
|
Amendments
-
This Agreement, any Schedules and Exhibits attached hereto can be
changed
at any time by an amendment signed by both
parties.
|
Brokers
may change the Policyholders, Policy(ies), Administrative policies or guidelines
at any time by providing EPSI at least sixty (60) days advance written notice
of
such change. All such changes will become prospectively binding on EPSI. IF
any
such change shall affect the scope of services performed by EPSI or require
extraordinary measures, the fees payable shall be adjusted as mutually agreed
to
by the parties in writing.
EPSI
will
not change any Policy language or any of Brokers practices unless authorized
in
writing by Brokers.
|
C.
|
EPSI
shall perform only ministerial duties to Brokers and shall be neither
the
fiduciary nor co-fiduciary as defined by the Employee Retirement
Income
Security Act of 1974 (ERISA). All reports or disclosures required
by law
or governmental authorities shall be the responsibility of Brokers.
EPSI
may provide information, assistance and advice to Brokers to meet
these
requirements.
|
|
D.
|
EPSI
shall make no representation to Brokers concerning any federal, state
or
local tax status of the Plan. All such questions should be referred
to
Brokers’ counsel or tax consultant. If, during the operation of the Plan,
the federal government, the government of any state of any political
subdivision or instrumentality of either shall assess any tax against
the
Plan and EPSI is required to pay such tax, EPSI shall report payment
to
Brokers and make a charge against the Plan for such
tax.
|
Notice
- Any
notification referenced under this Agreement will be effective:
|
1.
|
only
if it is in writing, unless otherwise indicated;
and
|
|
2.
|
when
hand-delivered or two (2) days after it is mailed by registered mail,
return receipt requested and addressed as
follows:
|
If
addressed to Brokers, to:
Brokers
National Life Assurance Company
▇▇▇▇
▇.
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇
▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇
If
addressed to EPSI, to:
EPSI
Benefits, Inc.
Insurance
Benefit Services, Inc.
Employer
Plan Services
▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
P.O.
Box
218969
Houston,
Texas 7701877218-8969
E-11
This
Agreement is made binding by the signatures of Brokers’ and EPSI’s
representatives who are duly authorized to enter into such
agreements.
FOR
EPSI: ▇▇▇▇▇▇
▇.
SmithSally
▇▇▇▇▇ Vice
President
(Name) (Title)
of
EMPLOYER
PLAN SERVICES, INC.
agrees
on its behalf to the terms of this Agreement. I am authorized to enter into
such
agreements.
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 6/1/1999
______________________________
____________
(Signature) (Date)
FOR
Brokers: ▇▇▇▇▇
▇▇▇▇▇▇ Executive
Vice President
(Name) (Title)
of
Brokers,
agree
on its behalf to the terms of this Agreement. I am authorized to enter into
such
agreements.
/s/
▇▇▇▇▇
▇▇▇▇▇▇ 6/1/1999
______________________________
____________
(Signature) (Date)
E-12
SCHEDULE
A
SCHEDULE
OF FEES
$
waived ANNUAL
MAINTENANCE FEE:
This fee
shall be collected in the twelfth month of each contract year for: revisions
to
the Plans, Plan review meetings, computer updates, claims reporting and
preparation of the IRS form 1099 for the Plan Providers.
ADMINISTRATION
FEE: The
fees
in this section are charged to administer the services as indicated. The fee
listed below shall be multiplied by the number of eligible employees in the
corresponding plan of benefits on the 15th
of each
month.
DENTAL
BENEFIT
$
1.68 1st
60,000
EE Lives
$
1.55 60,001
-
75,000 EE Lives
$
1.45 75,001
-
125,000 EE Lives
$
1.30 *125,000+
EE Lives
The
Company designates ▇▇▇▇▇
▇▇▇▇▇▇
as its
administrative contact with the Claims Administrator.
The
effective date of this schedule is June 1, 1999, and it shall remain in effect
until this Agreement is terminated or this schedule is amended by agreement
of
both parties. After 12 months and at the 125,000 EE Life level we will review
the fee between Brokers and EPSI to discuss possible increases.
By
their
signatures below, the undersigned:
|
a.
|
certify
that they have authority granted to them respectively by Company
and by
Claims Administrator, Inc., to execute this agreement on its behalf
and
|
|
b.
|
hereby
execute this agreement in their respective
names.
|
BROKERS
NATIONAL EMPLOYER
PLAN SERVICES, INC.
LIFE
ASSURANCE COMPANY
by:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/
▇▇▇▇▇▇ ▇▇▇▇▇
E-13