HomeMy WebLinkAboutR-1998-054 Agreement / Greg Ahmann / Health & Benefit Program / Health MGMT Administrators•
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RESOLUTION NO. R-98- 54
A RESOLUTION: authorizing the City Manager and the City Clerk to execute a plan
services agreement with Healthcare Management Administrators, Inc.,
to perform claims processing, claims administration services, and
customer service functions in connection with the health and welfare
benefit programs of the City.
WHEREAS, the City desires claims administration, claims processing services, and
customer service in connection with its health and welfare benefits programs; and
WHEREAS, the City does not have the staffing levels and expertise necessary to
provide said claims processing, claims administration services„ and customer service
functions; and
WHEREAS, the City's Broker recommends the City continue its contract with
Healthcare Management Administrtors, Inc.; and
WHEREAS, Healthcare Management Administrators, Inc., has satisfactorily
provided these services to the City in the past and is willing to continue to provide these
services in accordance with the terms and conditions of the attached agreement; and
WHEREAS, the City Council deems it to be in the best interest of the City of Yakima
to enter into an agreement with Healthcare Management Administrators, Inc. for said
services in accordance with the terms and conditions of the attached agreement, now,
therefore;
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager and the City Clerk are hereby authorized and directed to execute
the attached and incorporated "Plan Supervisor Agreement" between the City of Yakima
and Healthcare Management Administrators, Inc. The final agreement shall be approved
as to form by the City Attorney.
ADOPTED BY THE CITY COUNCIL this 9( day of i4/214-- , 1998.
ATTEST:
City Clerk
John Puccinelli, Mayor
AGREEMENT FOR PLAN SUPERVISOR
This agreement is effective the 1st day of May, 1998 between City of Yakima ("Company") and Healthcare
Management Administrators, Inc. ("Plan Supervisor"), a Washington corporation.
SECTION I.
The Plan
1.1 Company has adopted an employee welfare benefit Plan (the "Plan") providing means by which eligible
employees of the Company can secure the benefits set forth in the Plan.
1.2 The Administrator of the Plan is the Company.
1.3 All contributions to the Plan are deposited in trust with N/A Trustee or are otherwise accounted for
by the Company. Disbursements in payment of covered claims from the trust shall be made upon order of
the Plan Supervisor. To aid in such disbursements, the Trustee may cause a special bank account subject to
the signature of any duly authorized agent of the Plan Supervisor or of the Trustee to be opened and to be
funded periodically with money required to pay covered claims and other expenses of the Plan such as
premiums and administrative fees.
SECTION II.
The Plan Supervisor
2.1 The Plan Supervisor, within the scope of its duties under this agreement, shall provide services for and shall
assist the Company and the Administrator in the Administration of the Plan pursuant to the terms and
conditions of the Plan as it may be requested and authorized from time to time. The Plan Supervisor shall
prepare a Summary Plan Description (SPD) setting forth the benefits and rights of the Plan Participants.
The SPD shall be reviewed and approved by the Company.
2.2 The Plan Supervisor agrees to provide the following claims processing and payment services to the
Company including but not limited to:
a) Providing the Company forms for use by employees and dependents (hereinafter "Participants") in
submitting claims to the Plan Supervisor;
b) Receiving claims and processing payment of covered benefits for Participants in accordance with
the provisions of the Plan, for claims incurred on and after the commencement date as stated in
this agreement;
c) Obtaining from Participants and health care providers of services any additional information
deemed necessary by the Plan Supervisor to process claims;
d) Determining the amount of benefits payable to a Participant under the Plan and to pay those
amounts to Participants from funds supplied by the employer;
e) Notifying Participants of the reasons for denial of any benefits and to provide for the review of any
denied claims;
f) Providing for the coordination of benefits, subrogation collection activities, and collection of
overpayments or improper payments made to any Participants;
Healthcare Management Administrators, Inc. Agreement -1-
g)
Providing adequate customer service representatives between the hours of 8:00 a.m. and 5:00 p.m.
on non -holiday weekdays;
h) Assisting the Company in communicating to Participants any and all subsequent changes to the
Plan;
i) If a fee is stated and accepted on the "Schedule of Fees" page for:
1)
1. "Full COBRA administration," notifying Participants of continuation coverage rights upon the
occurrence of a qualifying event, as required by COBRA, as well as responsibility for calculation
and collection of premiums for continuation coverage;
2. "HIPAA pre-existing conditions compliance administration," reprogram the system to administer
and document compliance activity and accommodate changes in pre-existing condition periods;
evaluate incoming Certificates of Coverage; calculate the pre-existing condition period, in days,
based upon creditable coverage; communicate balance, in days, of any remaining pre-existing
condition period to new plan participants; mailing of the "Notice to Individual of Period of Pre-
existing Condition Exclusion;" report compliance activity to clients, reinsurers, and/or
Department of Labor upon request; assist in the investigation and determination of disputed
calculation of pre-existing period;
3. "HIPAA certificates of creditable coverage administration," mail certificates to last recorded
address of plan participant within 14 days of notification of termination from the plan, or upon
request for up to 24 months after termination;
4. "Administration of the Utilization Management Program," provide pre -authorization services in
compliance with the "Plan," screen claims for medical necessity and assist in making pre-existing
conditions determinations;
5. "Administration of Large Case Management," screen catastrophic and potentially high dollar
claims, assign length of stay and monitor admissions, promote appropriate patient care and
optimize benefits usage.
Preparing and assisting the Company in distributing benefit booklets to Plan Participants. Initial
booklet supply is not included as a part of the Plan set-up fee. Subsequent supplies are also at
Company's cost.
2.3 The Plan Supervisor is authorized to do all things it deems necessary or convenient to carry out the terms
and purposes of this agreement.
2.4 The Plan Supervisor shall have the full responsibility for approval of claims under the Plan and for arranging
for the payment thereof from funds available to the Plan either by issuing a check or draft upon the Plan
bank account if such account is provided for this purpose or by written order and authorization delivered to
the Trustee or other person authorized to issue such check or draft in payment of claims. The Plan
Supervisor shall honor any assignment of benefits of a person eligible for benefits under the Plan ("Covered
Person") to any person or institution which is a proper and qualified assignee under the terms of the Plan
Supervisor as to the amounts approved and the person entitled thereto and the validity of any claim.
2.5 The Plan Supervisor shall pay from the Plan bank account, if provided, or shall issue an order to the Trustee
or other person with authority to disburse funds of the Plan to pay, all of the expenses of operation of the
Plan incurred pursuant to the performance of this agreement (excluding plan administration fees unless
specifically authorized). The Trustee or other person receiving such written order from the Plan Supervisor
shall have the right to rely absolutely upon such order for the payment of such expenses.
2.6 The Plan Supervisor, subject to the approval of the Company, shall arrange for the purchase of policies of
insurance to provide any of the benefits provided for in this agreement, the Plan, or the Trust. The premium
Healthcare Management Administrators, Inc. Agreement -2-
for these policies of stop -loss or individual and aggregate excess risk or similar type of insurance shall be
paid by the Company.
2.7 The Plan Supervisor, where applicable, shall furnish the "Schedule C" information necessary for the
preparation of IRS form 5500. The Plan Supervisor shall not be required to assist the Company and / or
the Administrator in the preparation or filing of any report, returns, tax returns, or similar papers required by
any local political subdivision, state or the Federal Government pertaining to the operation or management
of the Plan. If necessary, professional fees for preparing government required forms and / or auditing of
the Plan shall be the responsibility of the Company.
2.8 The Plan Supervisor shall render monthly reports to the Company which shall include the following:
a) Receipts of the Plan other than deposits made by the Company from its own funds or from
collections from employees;
b) Disbursements, by category, made or authorized by the Plan Supervisor from the Plan;
c) A statement of the fees due the Plan Supervisor.
2.9 The Plan Supervisor shall maintain and pay the cost of a fidelity bond in the amount of not less than One
Hundred Thousand Dollars ($100,000.00) covering the Plan Supervisor and any of its agents or employees
who may collect, disburse, or otherwise handle or have the authority to authorize or order disbursements or
payments on behalf of the Plan.
2.10 Professional Liability Insurance Provided by Plan Supervisor. On or before the date this Agreement is fully
executed by the parties, Plan Supervisor shall provide the City with a certificate of insurance as evidence of
professional liability coverage with a limit of One Million Dollars ($1,000,000.00) per claim and an annual
aggregate limit of at least One Million Dollars ($1,000,000.00). The certificate shall clearly state who the
provider is, the amount of coverage, the policy number, and when the policy and provisions provided are in
effect. The insurance shall be with an insurance company rated A -VII or higher in Best's Guide. If the policy
is on a claims made basis, the retroactive date of the insurance policy shall be on or before January 1, 1998,
or shall provide full prior acts. The insurance coverage shall remain in effect during the term of this
Agreement and for a minimum of one (1) year following the termination of this Agreement.
2.11 The Plan Supervisor shall maintain all records relating to the investigation, processing, and payment of all
applications for benefits for a period of not less than six (6) years from the date of application for benefits
under this agreement. These records may be transferred to the Company at the Company's request upon
termination of this agreement.
SECTION III.
Procedure for the Making and Payment
Of Claims for Benefits from the Fund
3.1 Any Covered Person may make application for benefits from the Plan as provided by the Plan under the
form or forms provided by the Plan Supervisor. The applicant shall fully and truthfully complete such
application for benefits and the applicant shall supply such pertinent information from personal or
professional sources as may be required by the Plan Supervisor.
3.2 The Plan Supervisor shall accept any application for benefits made in the appropriate manner, and after due
investigation and verification of the statements contained in the application, determine the eligibility of the
Covered Person for benefits. If the facts, as stated in such application or determined on investigation by
the Plan Supervisor, entitle the Covered Person to receive payment of benefits from the Plan, the Plan
Supervisor shall forthwith arrange for the proper payment from the Plan. If the Plan Supervisor finds that
the Covered Person is not entitled to benefits under the Plan, the applications shall be denied and referred
to the Company with the Plan Supervisor's reasons for the denial. The Plan Supervisor may compromise or
Healthcare Management Administrators, Inc. Agreement -3-
adjust any disputed claim, application, or application previously denied. The Plan Supervisor shall be
responsible for the review of all denials requested to be reviewed. The final determination of the Plan
Supervisor made in accordance with Plan procedures on any application for benefits is final and conclusive
upon the Covered Person, subject only to the final review by the Company. The Plan Supervisor shall be
the primary contact for answering questions regarding benefits available under the Plan.
3.3 The Plan Supervisor shall not be liable for any failure or refusal by the Plan Administrator to pay or honor
any application for benefits made pursuant to this agreement.
SECTION IV.
Costs of Administration
4.1 The Plan Supervisor shall be entitled to a fee for its services to the Plan and under this agreement which
shall be payable on a monthly basis in accordance with the Schedule of Fees attached to this agreement
and signed by a representative of the Company for identification.
SECTION V.
The Company
5.1 As of the effective date of this agreement, if requested, the Company shall provide the Plan Supervisor with
a complete list of all Plan participants of the Company who are eligible for benefits from the Plan.
Thereafter, the Company shall notify the Plan Supervisor on a monthly or more frequent basis of all changes
in participation whether by reason of termination, change in classification, or any reason.
5.2 The Company shall collect the contributions, if any, made by the employees of the Plan in the manner it
may deem appropriate and shall account for the money so collected on a monthly or more frequent basis.
The Company, upon notice from the Plan Supervisor, shall pay to the Plan in the manner provided in this
agreement any deficiency in the Plan which the Company is obligated to pay under the terms of the Plan.
5.3 The Company shall assist in the enrollment of the employees in the Plan, cooperate with the Plan Supervisor
with regard to proper settlement of claims, and transmit any inquiries pertaining to the Plan to the Plan
Supervisor. The Plan Supervisor shall provide and the Company shall maintain a supply of forms,
enrollment cards or other documents and shall distribute or make available such documents to the
employees.
5.4 The Company shall provide directly or through the Plan Supervisor all materials and documents, including
summaries for employees, reports and applications and notice forms, as may be necessary or convenient
for the operation of the Plan or to satisfy the requirements of governing law as might from time to time be
determined or prepared by the Plan Supervisor. Where distribution to employees is required, such
materials shall be furnished in sufficient quantity and shall be appropriately distributed by the Company.
SECTION VI.
Termination of the Agreement
6.1 The initial term of this agreement is stated in the Schedule of Fees. Renewal of this agreement shall be
accomplished by attaching to this agreement a revised Schedule of Fees to be signed by the parties to this
agreement. Following the initial term, this agreement may be terminated by either the Company or the
Plan Supervisor by wntten notice of intention to terminate given to the other party, to be effective as of a
date certain set forth in the written notice, which shall not be less than ninety days from the date of such
notice. In the event of willful misconduct by a party to this agreement, the other party may terminate this
agreement immediately. All obligations of the Plan Supervisor related to the relevant nghts of the
employees for payment of benefits from the Plan will be terminated and extinguished on the effective date
Healthcare Management Administrators, Inc. Agreement -4-
of termination given in the notice even though the claim for such benefits arose prior to termination of this
agreement.
6.2 Upon termination by either party, the Plan Supervisor within thirty days after the date of termination, shall
prepare and deliver a complete and final accounting and report as of the date of termination of the financial
status of the Plan to the Company, together with all books and records in its possession and control
pertaining to the administration of the Plan. All claim files, enrollment materials and other papers necessary
for claim payments under the Plan shall be available to the Company upon the date of termination of this
agreement. The Plan Supervisor, if requested, will process run -out claims (claims incurred prior to the date
of termination) at the prevailing monthly fees for a mutually agreed upon length of time. The Plan
Supervisor at the time of the final accounting shall deliver any funds of the Plan in its possession or control
to the Company on its order.
SECTION VII.
Miscellaneous Provisions
7.1 In the event of resignation or inability to serve of the Plan Supervisor, the Company may appoint a
successor. Any successor, upon appointment and their acceptance, shall succeed to and be invested with
all powers conferred on the Plan Supervisor.
7.2 If during the operation of the Plan, the Federal Government, the government of any state, or any political
subdivision or any instrumentality of either shall assess any tax against the Plan and the Plan Supervisor is
required to pay such tax, the Plan Supervisor shall report the payment to the Company and make a charge
against the Plan for such tax.
7.3 Indemnification.
a) Except as otherwise limited by subsection (c) of this Section, Plan Supervisor agrees to hold
harmless, indemnify, and defend the City, its elected officials, officers, employees, and agents from
and against any and all suits, actions, claims, liability, damages, judgments, costs and expenses
(including reasonable attorney's fees) which result from or arise out of the sole negligence of Plan
Supervisor, its officers, employees, and agents in connection with or incidental to the performance
or non-performance of this Agreement.
b) The City agrees to hold harmless, indemnify, and defend Plan Supervisor, its officers, employees,
and agents from and against any and all suits, actions, claims, liability, damages, judgments, costs
and expenses (including reasonable attorney's fees) which result from or arise out of the sole
negligence of the City, its elected officials, officers, employees, and agents in connection with or
incidental to the performance or non-performance of this Agreement.
c) The City agrees to hold harmless, indemnify, and defend Plan Supervisor, its officers, employees,
and agents from and against any and all suits, actions, claims, liability, damages, judgments, costs
and expenses (including reasonable attorney's fees) which result from or arise out of the failure or
refusal by the Plan Administrator to pay or honor any application for benefits made pursuant to this
Agreement.
d) In the event that the officials, officers, agents, and/or employees of both the City and Plan
Supervisor are negligent, each party shall be liable for its contributory share of negligence for any
resulting suits, actions, claims, liability, damages, judgments, costs and expenses (including
reasonable attorney's fees).
e) Nothing contained in this Section or this Agreement shall be construed to create a liability or a right
of indemnification in any third party.
Healthcare Management Administrators, Inc. Agreement -5-
7.4 No person dealing with the Plan Supervisor in relation to the Plan will be obliged to determine the Plan
Supervisor's authority to act pursuant to this agreement.
7.5 Where the context of the agreement requires, the singular shall include the plural and the masculine gender
shall include the feminine.
7.6 This agreement may be amended by the Company and the Plan Supervisor at any time by mutual written
consent of said parties; provided, however, that this agreement may not be amended to reduce any
benefits which might be paid for any cause occurring prior to the amendment, or to in any way prejudice
such a claim.
7.7 The Company is hereby designated the agent for service of legal process on behalf of the Plan at its
principal office address in Yakima, Washington.
IN WITNESS WHEREOF, the Company and the Plan Supervisor have executed this agreement this
3 ' day of A2 rt 1 , 19 l .
CITY OF YAKIMA
R. A. Zais,Jr. ,
hmaagree-10/97
ATTEST
City Manager
HEALTHCARE MANAGEMENT ADMINISTRATORS, INC.
By:
City Clerk
Date: '`F,)- vc1
City Contract No.
Resolution No.:
98-49
R-98-54
Ly
. Stone, V.P. of Aerations
Healthcare Management Administrators, Inc. Agreement -6-
PLAN SUPERVISOR & AGENT/BROKER/CONSULTANT SCHEDULE OF COMMISSIONS AND FEES
Effective 5 / 1 / 98 to 12 / 31 / 98 administrative fees shall be:
$ 13.75 For administration of medical/vision claims;
$ 2.10 For administration of dental claims;
$ N/A For administration of disability claims;
$ 1.00 For HIPAA pre-existing conditions compliance administration;
$ Included For consolidated billing of other insurance coverage;
$ Included For Customer Service Administrative Functions as outlined in Appendix A;
$ 2.75 For administration of the Preferred Provider Program;
$ N/A For Agent/Broker/Consultant Monthly Service Fees.
Accept Decline
®
® ❑ $
❑ ® $
$
1.95 For administration of the Utilization Management Program;
.80 For administration of Large Case Management;
1.05 For full COBRA Administration;
.40 For administration of the HIPAA Certificates of Coverage;
$ 1.37 For combined administration of COBRA and HIPAA Certificates of Cov'g.
Fees shown above are payable per covered employee per month subject to a minimum monthly fee of
$ N/A
$ N/A HMA Plan Set -Up Fees for this Plan Year.
Commissions Payable on Excess Loss Insurance Premium 0% HMA
10% Broker
If applicable, administration of PCS prescription drug claims is payable monthly to Healthcare Management
Administrators, Inc. and to Pharmaceutical Card Service, Inc. The total combined fee is $ 0.95 per claim paid.
These fees shall remain in effect beyond the above stated term until changed by mutual agreement of the parties.
IN WITNESS WHEREOF, the Company, the Broker/Consultant and the Plan Supervisor have executed this
agreement this day of , 19
FISHER CLT ► " GRO
By:
D : n fisher
CITY OF YAKIMA
City Clerk
Healthcareli wient Administrators, Inc. Agreement -7-
HEALTHCARE MANAGEMENT ADMINISTRATORS, INC.
By:
Tum
LyD. Stone, V.P. of Operations
Appendix A
CUSTOMER SERVICE
ADMINISTRATIVE FUNCTIONS
Administrative and local, Yakima customer services functions to be performed by Healthcare Management
Administrators, Inc. include but may not be limited to the following:
•
Providing retiree/COBRA mailing labels.
• Mailing initial medical identification cards, duplicate cards and life insurance certificates to employee's
home address.
• Preparing and mailing notices to retirees when they turn age 65.
• Preparing the monthly Summary Eligibility Report (labeled "Division Reporting Form").
• Preparing the Request For Funds Summary (summary itemizes medical, dental and vision incurred claims
including voids and refunds by calendar year).
• Verifying monthly the City's adds, transfers and deletes are properly inputted on monthly eligibility report.
Transfers may include changes between departments, locations, seasonal status, retiree status and COBRA.
Verifies proper life insurance class is used.
• Delivering the Request For Funds to the City twice each week for payment processing.
Healthcare Management Administrators, Inc. Agreement -8-
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No.
For Meeting Of 4/21/98
ITEM TITLE: Resolution Authorizing the Execution of a Professional Services
Agreement for Third Party Claims Administration Services for the
Health and Welfare Benefit Program
SUBMITTED BY: Greg Ahmann, Chair, Employee's Welfare Benefit Program Board
Sheryl M. Smith, Deputy Personnel Officer
John Hanson, Director of Finance and Budget
CONTACT PERSON/TELEPHONE: Sheryl M. Smith, 575-6090
SUMMARY EXPLANATION:
At the April 7, 1998 meeting Council authorized the execution of a professional services
agreement for Broker services for our self insured health and welfare benefit program.
Council was notified then that subsequent legislation for third party claims administration
services would be forthcoming. The attached resolution authorizes the execution of a Plan
Supervisors Agreement for third party claims administration, processing and customer
services with Healthcare Management Administrators, Inc., with whom the City has
previously had experience with as a subcontractor under both the Direct Administrators
and Sedgwick broker contracts. The basic fee per employee for medical/vision/dental
claims administration is approximately $15.00 per month. The costs of these services are
accommodated within existing budget appropriations.
Resolution X Ordinance Contract X Other (Specify)
Funding Source Health Bene ' eserve Fun
APPROVED FOR SUBMITTAL:
City Manager
STAFF RECOMMENDATION: Adopt resolutions authorizing execution of agreements.
BOARD/COMMISSION RECOMMENDATION:
COUNCIL ACTION: