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HomeMy WebLinkAboutOrd 3231 07/06/1982 RDINANCE NO. 3231 AN ORDINANCE AUTHORIZING EXECUTION OF AN AGREEMENT BETWEEN FORT DEARBORN ADMINISTRATORS AND THE VILLAGE OF MOUNT PROSPECT, INCLUDING CLAIM PAYMENT PROCEDURES FOR HEALTH INSURANCE PASSED AND APPROVED BY THE PRESIDENT AND BOARD OF TRUS'i'~S THE 6th DAY OF July , 1982 ~folished in imm~phlet forum by authority of the corporate authorities of the Village of ~bunt Prospect, IllLnois the 7th d~y of July , A.D. 1982. RDINANCE NO. 3231 AN ORDINANCE AUTHORIZING EXECUTION OF AN AGREEMENT BETWEEN FORT DEARBORN ADMINISTRATORS AND THE VILLAGE OF MOUNT PROSPECT, INCLUDING CLAIM PAYMENT PROCEDURES FOR HEALTH INSURANCE WHEREAS, the Village of Mount Prospect is a Home Rule Unit, by virtue of the provisions of the Constitution of the State of Illinois of 1970; and WHEREAS, the Village of Mount Prospect, as a Home Rule Unit, may exercise power and perform any function pertaining to its government and affairs; and WHEthEAS, the corporate authorities of the Village of Mount Prospect deem it to be in the best interests of the Village of Mount Prospect to adopt procedures which will facilitate the operation of its self-funding insurance program. NOW, THEREFORE, BE IT ORDAINED BY THE PRESIDENT ~D BOARD OF TRUSTEES OF THE VILLAGE OF MOUNT PROSPECT, COOK COUNTY, ILLINOIS: SECTION ONE: That the President of the Village of ~ount Prospect and the Village Clerk be and are hereby authorized and directed to execute for and on behalf of the Village of Mount Prospect that certain Agreement with Fort Dearborn Administrators, which Agreement is attached hereto and hereby made a part hereof as Exhibit "A". SECTION TWO: That the corporate authorities of the Village of Mount Prospect hereby specifically authorize and approve the claim payment procedure set forth in'Section 5 of said Agreement attached hereto ~s Exhibit "A". SECTION THREE: That this Ordinance shall be in full force and effect from and after its passage, approval and publication in pamphlet form in the manner provided by law. AYES: Farley Floros Miller NAYS: None ABSENT: Arthur Murauskis Wattenberg PASSED and APPROVED this 6th day of July · 1982. ATTEST: Village ~re~sident ORT 233 NORTH MICHIGAN AVENUE _,,~'~=~ IHSURANCE CO,~PANY · CHICAGO, ILLINOIS 60601 (312) 938-6500 August 10, 1982 VILLAGE OF MT PROSPECT Attention: Mr. Richard L. Jesse 100 South Emerson Mt. Prospect, Illinois 60056 Re: L-003143 Dear Mr. Jesse: We have received your initial premium payment of $6,689.22.This together with the information contained in the Group Application Information Form and in the employee application .cards has enabled us to place your insurance in effect as of July 1, 1982. This letter hereby acknowledges the Group Term Life Insurance rate to be $.32/$1,000 and the Accidental Death and Dismemberment rate to be $.05/$1,000. Within the next few weeks, you will be receiving your policy, master application, certificates, administration kit and bills. S~cerely, Martha L. Buratto Manager, Policy IssUance' The Dfe Affiliate of Heahh Care Service Corporation, an Illinois-based BLUE CROSS and BLUE SHIELD PLAN~ ADMINISTRATIVE AND INSURANCE SERVICES AGREEMENT This Agreement made by and between Fort Dearborn Life Insurance Company, Inc. (hereinafter referred to as the "Administrator"), and Health Care Service Corporation (hereinafter referred to as "H.C.S.C."), and the Village of Mount Prospect (hereinafter referred to as the "Employer"), WITNESSETH AS FOLLOWS: WHEREAS the Employer has established an employee welfare benefit plan (hereinafter referred to as the "Plan"); and WHEREAS the Employer desires to retain the Administrator to provide certain administrative services with respect to the Plan; NOW THEREFORE, in consideration of these premises and the mutual promises and agreements set forth, the parties hereto hereby agree as follows: I. Appointment The Employer hereby retains and appoints the Administrator to provide services as hereinafter described in connection with the administration of the Plan. II. Services to be Provided by the Administrator During th~ continuance of this Agreement, the Administrator will per- form such services as are set forth in Appendixes A and D, and H.C.S.C. will perform such services as are set forth in Appendix B and C, attached hereto and made a part hereof~ III. Certain Responsibilities of the Employer and the Administrator It is understood and agreed that, subject to the provisions of Appendix A, the Employer retains full final authority and respon- sibility for the Plan and its operation and further that the Ad- ministrator is empowered to act on behalf of the Employer in connection with the Plan only as expressly stated in this Agree- ment or as mutually agreed to in writing by the parties hereto. B. It is understood and agreed that the Administrator shall have no responsibility for the compliance of the Plan with any applicable federal, state or local rule or law, and that the Employer shall have the sole responsibility for and shall bear the entire cost of compliance with all federal, state and local rule~ and laws including, but limited to, any licensing, filing, reporting and disclosure requirements a$'ma~ apply to the Plan, and all costs, expenses and fees relating thereto. C. The Administrator shall, to the extent possible, advise the Employer as to matters which come to its attention involving potential legal actions involving the Plan and shall promptly advise the Employer of legal actions commenced against the Employer which come to its attention. The costs of defense of any legal action involving the Plan shall be the responsibility of the Employer; however, it is understood and agreed that the Administrator (provided no conflicts of interest exist) shall fully cooperate with the Employer, at no cost to the Administrator, in the Employer's defense of any action arising out of matters related to the Plan or this Agreement.. D. The Administrator shall use ordina~ care and due diligence in the exercise of its powers and the performance ~ its'duties here- nnder, but shall not be liable for any loss 1) resulting from any mistake, judgment or other action it takes in good faith 2) re- sulting from any delay in the performance of its duties hereunder caused or contributed to in whole or in part by failure of the Employer to perform any of its duties hereunder in a timely manner, or - 2 - 3) unless resulting from its gross negligence; provided however, that the Administrator hereby agrees to indemnify and hold harm- less the Employer and its directors, officers and employees against any and all claims, lawsuits, settlements, judgments, costs, penal- ties and expenses with respect to this Agreement resulting from or arising out of any dishonest, fraudulent or criminal acts of the Administrator or its employees. E. The Employer agrees to indermnify and hold harmless the Administrator and its directors, officers and employees against any and all loss, liability, damages, penalties and expenses, including attorney's fees, or other cost or obligation resulting from or arising out of claims, lawsuits, demands, settlements or judgments brought against the Administrator in connection with the administration of the Plan or in connection with a claim for benefits under the Plan unless it is determined that the liability therefor was the direct consequence of dishonest or criminal conduct, gross negligence or fraud on the part of the Administrator or any of its directors, officers or employees. F. If the Administrator er Employer determine that any payment has been made under this Agreement to an ineligible employee or dependent, or if the Administrator or Employer determine that more or less than than the correct ~mount of any payment hereunder has been paid by the Administrator, the Administrator will make a diligent' attempt tp recover any such payment made to an ineligible person or overpayment' or will adjust the underpayment, but the Administrator shall not be required but shall have the option to initiate court proceedings for any such recovery, subject to section III, D., above. G. It is mutually agreed that H.C.S.C. shall furnish to the Employer -3- and its employees conversion provileges. This conversion policy shall be available for terminated employees within 30 days of termination. It shall be the standard group conversion policy of- fered by H.C.S.C. IV. Employer Duties The Employer shall furnish on a timely basis to the Administrator certain information concerning the Plan and employees and dependents covered under the Plan as may from time to time be required by the Administrator for the performance of its duties including, but not limited to, the following: A. Ail documents by which the Plan is established and any amend- ments or changes to the Plan as may from time to time be adopted. B. Such information with respect to the employees and dependents covered under the Plan as may be necessary for the Administrator to determine eligibility for Plan benefits and the amount of bene- fits payable under the Plan, and to calculate Administrative Ser- vice Charges in accordance with Paragraph VIII hereinafter. C. Such information as to Plan benefits as will enable the Adminis- trator to prepare accurately any Plan cost estimates or ~eports required in Appendix A or to assist in the preparation of any ma- terials for distribution to employees. The Employer, furthermore, shall use its best efforts to cooperate with and assist the Administrator, as applicable, in the performance of its duties hereunder. V. Bankin~ Arrangements A. During the term of this Agreement 1. The Employer shall establish and maintain a Bank Account in a Bank mutually acceptable to the parties hereto. VI. VII. 2. All benefit payments under the Plan will be made on checks payable through said Bank Account. B. The Employer through this Agreement and its enacting Ordinance ex- pressly authorizes the Administrator to issue and execute checks for benefit payments under the Plan on behalf of the Employer. C. The Employer agrees that it will, in accordance with arrangements agreed to between the parties hereto, maintain in said Bank Account funds sufficient for the payment of such checks. The Administrator shall have no obligation to i~sue or accept checks for Plan benefit payments when insufficient funds exist in said Bank Account. Agreement Period and Effective Date A. This Agreement shall be effective as of July 1, 1982. B. The first Agreement period shall be the period from the effective date hereof to June 30, 1983. C. This Agreement shall be continued automatically, unless discon- tinued in accordance with Section IIX hereinbelow, for successive Agreement Periods of twelve months each. Administrative Service Charges The Employer shall pay a monthly Service Fee to the Administrator in an amount equal to the number of eligible employees and annuitants each month times $2.99. The Employer shall submit payment on the first day of each month reflecting the Service Fee calculated in accordance with the foregoing. This Service Fee is guaranteed'~or the period July 1, 1982 thru June 30, 1985. In the event the expense of providing services under this Agreement is at any time increased due to the ad- dition of a new line of coverage or change in the plan of benefits, the Administrator shall have the right to adjust the Service Fee, such adjust- ment to be effective on the date the additional line of coverage or plan '5 IIX. change takes effect, provided that such adjustment has been agreed to in writing by the Employer. The Service Fee may also be adjusted by the Administrator to the extent of the tax or charge, to be effective on the date on which increased expenses are incurred by reason of the following: A. A ruling, or other determination by an Insurance Department having jurisdiction, to the effect that either the Service Fee or the amount paid as benefits in accordance with the provisions of the Plan, or both, is an insurance premium and subject to the premium tax provisions of the applicable statutes. The provisions of this Section shall apply retroactively to any prior period with respect to which the Administrator is required to pay a premium tax on such Service Fee or amount paid as benefits. B. A change in the charges imposed on the Administrator by any other public body. Notwithstanding the foregoing provisions of this Section, the Ad- ministrator shall also have the right to ~hange the Service Fee on the'first anniversary of this Agreement after June 30, 1984, or on any subsequent anniversary date upon giving not less than 30 days prior written notice to the Employer. · Termination of Agreement A. This Agreement shall terminate immediately as of the earliest of the following dates: ~' 1o As of the date of termination or discontinuance of the Plan, as specified to The Administrator by the Employer, subject to item E below of this Section IIX. 2. As of any date agreed to in writing by and between the parties hereto. 3. As of the last day of an Agreement Period when either party has given thirty-one (31) days prior written notice to that effect to the other party. 4. As of the end of a period of thirty-one (31) days after written notice has been given by either party to the other of the other's breach of material obligation under this Agreement; provided such breach bas not been cured within such thirty-one (31) day period. B. The Administrator may, as its'sole option, terminate this Agree- ment by giving written notice to the Employer to that effect that the Employer failed to provide funds in the Bank Account established pursuant to paragraph V.A. above as necessary for the payment of Plan benefits within seven (7) banking days after receipt of notice from the Administrator that such funds are required. C. Application of this Agreement to or in any state or other juris- diction may be discontinued by either of the parties hereto as of the date either party determines that it will be penalized by such state or other jurisdiction for proceeding with its performance of duties or services unde~ this Agreement. D. Termination of this Agreement shall not terminate the rights om liabilities of either party arising out of a period prior to such termination. E. Upon termination of this Agreement due to termination'or discon- tinuance of the Plan, the Administrator shall complete the pro- cessing of all requests for benefit pa)~ents under the Plan. F. Upon termination of this Agreement in a case where the Plan continues in force, the Administrator shall complete the processing of all claims for benefits under the Plan made prior to the effective date of termination, following such terms and conditions which would have been applicable if this Agreement remained in full force and effect. G. The Employer will be liable for all checks issued by the Adminis- trator within the terms of this Agreement during the continuance of this Agreement and within a reasonable time following termina- tion of this Agreement. Ail checks issued by the Administrator which are outstanding upon termination of this Agreement or issued thereafter in accordance wi~h~he preceding paragraphs E and F of this Section IIX will continue to be the responsibility and liability of the Employer. A reasonable Administrative Charge will be payable for any benefit payment activity taking place after the effective date of termination of this Agreement. H. Other than as set forth above in this Section IIX, all duties and obligations of the Administrator shall cease upon termination of this Agreement. Records A. During the continuance of this Agreement, the Employer shall have the right to examine any records of the Administrator relating to benefit payments under the Plan and the issuing of checks for pay- ment of benefits under the Plan; provided that any examination of individual benefit payment records shall be carried out in a manner agreed to between the parties hereto desi'gned to protect the confidentiality of the individual's medical information. In the event this Agreement terminates, records of benefit payments made hereunder on behalf of the Employer by the Administrato~ shall · be returned to the Employer as soon as practicable. -8- XII. XIII. X. Assignment NO assignment 6f rights or delegation of duties hereunder in any manner by either party shall be valid without the prior written consent of the other party. XI. Relationship of Parties A. The Administrator is an independent contractor with respect to the Employer, and nothing in this Agreement shall create, or be construed to create, the relationship of employer and employee between the Administrator and. the Employer, nor shall the Employer's agents, officers or employees be considered or construed to be em- ployees of the Administrator for any purposes whatsoever. B. It is understood and agreed that nothing contained in this Agree- ment shall confer or be construed to confer any benefit on per- sons who are not parties to this Agreement including, but not limited to, employees of the Employer and their dependents. Applicable Law This Agreement shall be governed by the laws of the State of Illinois. Amendments ~ This Agreement may he amended by mutual agreement of the parties here- to at any time, but to be effective any amendment hereto must be in writing. XIV. Notices The Administrator shall not be 5ound by any notice,'direction or request unless and until it shall have been received in writing, by the Administrator at its Home Office at 233 N. Michigan Ave., Chicago, IL 60601, or at such other address as may be specified by the Administrator for this purpose. 9 IN WITNESS WHEREOF the parties hereto have executed this Agreement at the places and on the dates specified below: FORT DEARBORN LIFE INSURANCE CO. (Administrator) Vice-President On: .Inly 28, 1982 /~ At: Chicago. %llinois By ~a r~ Cla · On: July 28, 1982 At:___C~o. Illinois July 21, 1982 Chicago, Illinois July 21, 1982 On: At: On: HEALTH CARE SER-~!ICE! CORPORATION Underwriting Vice-President By Underwriting Officer At: On: At: On: Mount Prospect VILLAGE OF MOUNT PROSPECT (Employer) Mayor Witnessed by~J~j~ Village Clerk - 10 - APPENDIX A ADMINISTRATIVE SERVICES OF FORT DEARBORN LIFE INSURANCE COMPANY, tNC, Claims Services A. Provide information and assistance to.employees and dependents concern- ing claims for benefits under the Plan. B. Receive and process claims for benefit payments on forms satisfactory to the Administrator. C. Compute benefits and issue checks in payment thereof which, subject to the terms and provisions of this Agreement, shall be paid from th~ Employer's Bank Account. D. Keep such records and files of benefit payments and denials as is pru- dent, and forward them to the Employer as soon as there is no further need therefor by the Administrator. E. Provide reports to the Employer summarizing benefits paid as follows: 1. Monthly listing of paid claims by employee. 2. Monthly listing of paid claims by benefit coverage. 3. Monthly summary of claims paid by incurred date. F. .With respect to benefit claim denials or reductions, notify applicable persons thereof and of such rights of review as may exist pursuant to applicable law. G. Provide the Employer with analyses of issues involved where decisions denying or reducing benefits claimed under the Plan have been made and are being reviewed by the Employer.- II. Administrative Services A. Assist the Employer in Plan Benefit Development initially and subse- quently in connection with revisions to the Plan by providing under- writing and actuarial services, including estimates of Plan costs and costs of potential Plan revisions. B. Assist the Employer in the preparation of documents describing Plan benefits, and otherwise assist the' Employer in discharging his reporting and/or disclosure responsibilities under applicable law. C. Assist the Employer in connection with the general administration of the Plan, including enrollment of eligible persons and record keeping procedures for the ongoing operations of the Plan. D. Prepare necessary reports to the Internal Revenue Service as to benefit payments made under the Plan. E. Provide the Employer with such information with respect to the Plan available to the Administrator and needed by the Employer to fulfill the Employer's reporting responsibilities under applicable law. APPENDIX B HEALTH CARE SERVICE CORPORATION AND THE VILLAGE OF MOUNT PROSPECT PROVIDING INDIVIDUAL STOP LOSS COVERAGE If during the Coverage Period, the sum of paid claims under the provisions of the Administration Agreement exceeds the Individual Stop Loss Limit below, H.C.S.C., in consideration of the Premium specified below, will provide the Stop Loss Benefit Amount Payable. The amount payabl~ will equal item #4 below. The deter- mination of amounts payable will be made by the Plan within sixty (60) days after the end of the Coverage Period. Coverage Period: 1st term: 2nd term: 2. P'aid Claims 1st term: Paid Claims 2nd term: 3. Individual Stop Loss Limit: 4. Stop Loss Benefit Amount Payable: 5. Monthly Premium: The Plan shall have the right to adjust July 1, 1984. July 1, 1982 through June 30, 1983 July 1, 1983 through June 30, 1984 Equals claims incurred on or after July 1, 1982 and paid through the end of the coverage period June 30, 1983. Equals claims paid on or .after July 1, 1983 and paid through the end of the coverage period June 30, 1984, $30,000 per member per coverage period. Claims paid or incurred as outlined in #2 above less the Individual Stop Loss Limit. $1.75 times the number of employee units plus $2.61 times the number of dependent units due the first day of each month during the coverage period. the Individual Stop Loss Limit effective APPENDIX C HEALTH CARE SERVICE CORPORATION AND THE VILLAGE OF MOUNT PROSPECT PROVIDING AGGREGATE STOP LOSS COVERAGE If during th e Coverage Period, the sum of paid claims under the provisions of the Administration Agreement exceeds the Aggregate Stop Loss Limit below, H.C.S.C., in consideration of the Premium specified below, will provide the Stop Loss Benefit Amount Payable. The amount payable will.equal item #5 below. The determination of amounts payable will be made by H.C.S.C. within sixty (60) days after the end of the Coverage Period. Coverage Period: 1st term: 2nd term: July 1, 1982 through June 30, 1983 July 1, 1983 through June 30, 1984 2. Paid Claims 1st term: Equals claims incurred on or after July 1, 1982 and paid through the end of the coverage period June 30, 1983. Paid Claims 2nd term: Average Claim Value: 1st term: 2nd term: Equals claims paid on or after July 1, 1983 and paid through the end of the coverage period June 30, 1984. $1,009.51 per subscriber during the coverage period. To be determined. Aggregate Stop Loss Limit 1st term: 2nd term: Average number of subscribers during the coverage period multiplied by $1,261.89 (125% of the average claim value). To be determined. 5. Stop Loss Benefit Amount Payable: Claims paid or incur{~d as'outlined in #2 above less the Aggregate Stop Loss Limit. 6. Monthly Premium: $341.67 due the first day of each month during the coverage period. The Plan shall have an immediate right to adjust the Average Claim Value when- ever the number of eligible Subscribers is reduced below 243 or whenever ther& is a change in the Group's health care benefit program. APPENDIX D SERVICE GUARANTEE Claim performance is guaranteed through the following: For cliams not requiring additional information: - payment will be made within ten (10) working days of receipt of claim. Should claims not be processed within ten (10) working days of receipt in any Plan month, a .penalty equal to the per capita monthly administration charge will be assessed° - the Villag~ of Mount Prospect will receive a credit toward the fol- lowing months service charge until normal service is restored or until such time as such penalties assessed have been satisfied.