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HomeMy WebLinkAboutR-1998-054 Agreement / Greg Ahmann / Health & Benefit Program / Health MGMT Administrators• • 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: