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Express Scripts, Inc. Employer Participation Agreement Copyrighted June 18, 2018 City of Dubuque Consent Items # 29. ITEM TITLE: Express Scripts, Inc. Employer Participation Agreement SUMMARY: City Manager recommending approval of an Employer Participation Agreement between the City of Dubuque and Express Scripts, Inc. SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve ATTACHMENTS: Description Type Express Scripts Employer Participation Agreement- City Manager Memo NNM Memo Staff Memo Staff Memo Amendment to Employer Participation Agreement Supporting Documentation Employer Participation Agreement Supporting Documentation Coalition Umbrella Agreement Supporting Documentation Insurance Schedule J Supporting Documentation THE CITY OF Dubuque � AIFA�erlwGh UB E '�� III► Masterpiece on the Mississippi Z°°'�w'2 7A13 2017 TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Employer Participation Agreement between the City of Dubuque and Express Scripts, Inc. DATE: June 12, 2018 Personnel Manager Randy Peck recommends City Council approval of an Employer Participation Agreement between the City of Dubuque and Express Scripts, Inc. Gallagher Benefit Services, Inc., the City's benefit and actuarial consultant, provides management and consulting services in connection with the pharmacy benefit management program. Prior to September 1 , 2016, Express Scripts, Inc., the City's pharmacy benefit manager, paid Gallagher Benefit Services a management fee in the amount equal to $.12 per each approved prescription drug claim processed by Express Scripts, Inc., for the City of Dubuque. This amendment increases the management fee Express Scripts pays to Gallagher Benefit Seroices for each approved prescription drug claim they process for the City of Dubuque to $.25. Approving this amendment does not create any additional expense for the City nor does it impact the negotiated prescription drug discounts and rebates that are currently in effect. Approving this amendment allows Express Scripts to pay the additional fee to Gallagher Benefit Services. The new agreement is in effect from September 1 , 2016 to July 1 , 2018. I concur with the recommendation and respectfully request Mayor and City Council approval. �� Mic ael C. Van Milligen �� MCVM:jh Attachment cc: Crenna Brumwell, City Attorney Teri Goodmann, Assistant City Manager Cori Burbach, Assistant City Manager Randy Peck, Personnel Manager �� I�I �'I�3��'�I'�� _: � �� _�� 1 �� i � . . � . � ��e�� '�� _�� TO: Michael C. Van Milligen, City Manager FROM: Randy Peck, Personnel Manager SUBJECT: Employer Participation Agreement between the City of Dubuque and Express Scripts, Inc. DATE: June 14, 2018 � Gallagher Benefit Services, Inc., our benefit and actuarial consultant, provides management and consulting services on behalf of the City in connection with the pharmacy benefit management program. Prior to September 1, 2016, Express Scripts, ! Inc., the City's pharmacy benefit manager, paid Gallagher Benefit Services a � management fee in the amount equal to $.12 per each approved prescription drug claim j process by Express Scripts, Inc., for the City of Dubuque. The attached amendment to the Employer Participation Agreement increases the management fee Express Scripfis , pays to Gallagher Benefit Services for each approved prescription drug claim they � process for the City of Dubuque to $.25. Approving this amendment does not create any additional expense for the City. Nor does it impact the negotiated prescription drug discounts and rebates that are currently in effect. Approving fihis amendment allows Express Scripts to pay the additional fee to � Gallagher Benefit Services. On July 1, 2018, we will be changing our purchasing coalition for our prescription drug program from Gallagher Benefit Services to RXBenefits. This amendment will allow us to make this change without any penalty owed to Gallagher Benefit Services. The amendment is in effect from September 1, 2016 to July 1, 2018. Senior Counsel Barry Lindahl has reviewed the amendment and finds the terms acceptable. I request that the City Council approve a motion authorizing you to sign the amendment. RP:alk AMENDMENT TO EMPLOYER PARTICIPATION AGREEMENT � This AMENDMENT (the "AmendmenY') is entered into as of the Effective Date, by and between EXPRESS SCRIPTS, INC., a Delaware corporation ("ESI"), and CITY OF DUBUQUE ("Employer"). RECITALS A. ESI and Gallagher Benefit Services ("GBS") have entered into the Coalition Umbrella �greement dated effective as of January 1, 2012 (the"Coalition Umbrella Agreement"); B. ESI and Employer are parties to an Employer Participation Agreement dated as of January 1, 2015, as amended from time to time (the "Employer Participation AgreemenY'), pursuant to which ESI provides certain prescription drug benefit management services to Employer in accordance with the Coalition Umbrella Agreement; C. Employer and ESI desire to update and amend the Employer Participation Agreement in accordance with the terms and conditions set forth herein. NOW, THEREFORE, in consideration of the premises and other conditions contained herein, the parties hereto hereby agree as follows: TERMS OF AMENDMENT 1. Definitions. For purposes of this Amendment, any capitalized term not otherwise defined herein shall have the meaning set forth in the Employer Participation Agreement. 2. GBS Manaqement and Consultinq Fees. Section 6 of the Employer Participation Agreement is hereby deleted in its entirety and replaced as follows. 6. _ GBS Manaqement and Consultinq Fees. Employer hereby confirms that GBS is providing management and consulting services on behalf of Employer in connection with the pharmacy benefit management program administered pursuant to this Employer Participation Agreement. Employer hereby directs and authorizes ESI to facilitate, on behalf of Employer, the payment of a monthly fee in an amount equal to $0.25 per each approved Prescription Drug Claim processed by ESI for Employer during such month ("Management and Consulting Fees"). ESI agrees to facilitate the payment of the Management and Consulting Fees subject to the following: (a) Employer has executed this Agreement and Employer is current in its payment obligations to ESI. (b) Employer hereby represents and warrants that the GBS Fees are fair and reasonable for the actual services to be perFormed by GBS in connection with Employer's prescription drug program; are commensurate with other consulting fees in the industry; and are not in violation of any law or regulation, including ERISA. ESI will not pay per prescription fees on Medicare subsidy utilization. (c) ESI will comply with any request by Employer to stop GBS Fee payments. Employer shall hold ESI harmless in connection with any dispute between GBS and Employer regarding GBS Fees. , 3. Effective Date, Term. This Amendment shall be effective September 1, 2016. The current term of the Employer Participation Agreement will end July 1, 2018 without penalty to Sponsor. 4012370.v3 4. Effect of Amendment. Except as expressly provided herein, the terms and conditions ,of the Employer Participation Agreement shall remain In full force and affect. In the event of a conflict between this Amendment and the Employer Participation Agreement, the, terms of this Amendment shall prevail, IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day an'd year below set forth. EXPRESS SCRIPTS, iN L Printed Name: Title; CITY QF DUBUQUE By; Printed Name:Michael C. Van Milligen Title: City Manager Date: !' Date:. 40 1.2370 4. Effect of Amendment. Except as expressly provided herein, the terms and conditions of the Employer Participation Agreement shall remain in full force and effect. In the event of a conflict between this Amendment and the Employer Participation Agreement, theterms of this Amendment shall prevail. IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the day and year below set forth. EXPRESS SCRIPTS, INC. By: Printed Name: Title: Date: 4012370.v:4 CITY OF DUBUQUE By: Printed Name:Michael C. Van Milligen Title: City Manager 61/ 9/( j Date: EMPLOYER PARTICIPATION AGREEMENT THIS EMPLOYER PARTICIPATION AGREEMENT (the "Employer Participation Agreement") is made as of January 1, 2015 (the "Effective Date"), by and between City of Dubuque ("Employer") and Express Scripts, Inc., a Delaware corporation ("ESI"), for the purpose of delineating the terms and conditions under which ESI will provide certain pharmacy benefit management services to Employer under the Coalition Umbrella Agreement(as defined below) between ESI and Gallagher Benefit Services, Inc. RECITALS; A. Gallagher Benefit Services ("GBS"), a Denver corporation;manages healthcare vendor relationships on behalf of the Employer and its counterparts who participate in coalition purchasing programs; B, ESI and GBS have entered into that certain Pharmacy Benefit Management Agreement dated effective as of January 1, 2012 (the"Coalition Umbrella Agreement"); ' C. The parties acknowledge and intend that the Coalition Umbrella Agreement is incorporated herein by reference, Defined terms used herein shall have the same meaning assigned to such terms in the Coalition Umbrella Agreement; and D. Employer desires that ESI provide ESI �ervices to the Employer in accordance with the Coalition Umbrella Agreement. NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by reference, and in consideration of the mutual covenants herein contained, the parties hereto agree as follows: 1. ESI'S Obliqations. ESI agrees to comply with the terms and conditions as set forth in the Coalition Umbrella Agreement. 2. Employer Obli. ations. Employer acknowledges that it has read and hereby agrees to the terms and conditions set forth in the Coalition Umbrella Agreement, which Employer acknowledges are hereby incorporated into this Employer Participation Agreement by reference. Furthermore, Employer agrees to the following: a) Financial Resqonsibilitv/Pavment Terms. In accordance with the Coalition Umbrelia Agreement, Employer will pay to ESI the fees due under the Coalition Umbrella Agreement pursuant to the payment terms set forth in the Coalition Umbrella Agreement, Employer has sole responsibility for timely payment of such fees. GBS may facilitate the payment process, but Employer retains all financial responsibility for timely payment of the applicable fees, b) Member Authorizations and Disclosures. When such services are requested by Employer, Employer will obtain all Member authorizations required by law for ESI to ' perform any ESI Services provided for in this Empioyer Participation Agreement or in ' any addendum or amendment hereto, and for ESI to contact Members, Members' ��, physicians, and Participating Pharmacies in order to promote therapeutic and generic substitution opportunities and to perform any other ESI Services or activities contemplated by this Employer Participation Agreement that may require such contact. �i�ii2.z 1 Employer shall provide ESI with Members'addresses and such other information as may be reasonably necessary to facilitate such communications. Employer will disclose to Members any and all matters relating to the plan design that are required by law to be disclosed, including information relating to the calculation of co-payments, coinsurance amounts, deductibles or any other amounts that are payable by a Member in connection with the plan design. c) Confidentialitv. Employer will hold the terms and conditions of this Employer Participation Agreement confidential except to the extent disclosure is required under appiicable law. Employer wiil not share the terms of this Agreement with its consultant or other third party without the express permission of ESI and GBS. 3. Term and Renewal. The initial term of this Employer Participation Agreement shall commence on the Effective Date and remain in effect for one (1) year thereafter (the "Initial Term"). Thereafter, this Employer Participation Agreement shall automatically renew for successive one (1) year terms unless terminated by either party as described in Section 4 of this Employer Participation Agreement. 4. Termination of Emplover Particiqation Aqreement. ESI and Employer may terminate this Employer Participation Agreement as follows: a) Non-Renewal Upon Notice, Not less than ninety (90) days prior to the end of the Initial Term or any renewal term of this Agreement either party may notify the other party in writing that it desires to terminate this Agreement effective as of the end of the then current term. Notwithstanding any provision in this Agreement to the contrary, this Agreement is terminable "without cause" by either party. b) Breach or Default. Either party may give the other written notice of a material, substantial and continuing breach of this Agreement. If the breaching party has not cured said breach within thirty(30) days from the date such notice was sent, this Agreement may be terminated at the option of the non-breaching party. If the amount of time commercially reasonable for the breach to be cured is longer than thirty(30) days, this Agreement may not be terminated by the non-breaching party pursuant to this provision until such commercially reasonable period of time has elapsed; provided, however, that in no event will such period exceed sixty(60)days, � c) Non-Pavment, Notwithstanding anything to the contrary herein, ESI (and its wholly-owned subsidiaries) shall have the right to terminate this Empioyer Participation Agreement or suspend performance hereunder (and the Coalition Umbrella Agreement) and cease providing or authorizing the provision of Covered Drugs to that Employer's Members upon forty-eight (48) hours written notice if Employer fails to pay ESI or provide a deposit, if required, in accordance with the terms of this Agreement. ESI attempts collection through written and verbal communications with Employer prior to sending the notice described herein. d) Move to Fullv Insured Plan. In the event Employer moves to a fully insured plan which includes both pharmacy and medical coverage, Employer may terminate this Agreement upon ninety (90) days written notice of the move to a fully insured plan. zi�i3z.� 2 ' e) Termination of the Coalition Umbreila Aqreement If GBS terminates the Coalition Umbrella Agreement, Employer will also have the option to terminate this Employer Participation Agreement as of the effective date of the date the Coalition Umbrelia Agreement terminates. In the event the Coalition Umbrella Agreement is terminated, ESI will cease offering Coalition pricing to Employer, and will offer different pricing (based on Employer's size, utilization, market conditions, etc.) if the Employer wishes to enter into an Agreement with ESI. If the parties cannot agree on revised pricing terms, either party may terminate this Employer Participation Agreement upon ninety (90) days prior written notice. f) Obliqations Upon Termination. Upon notice of termination of this Employer Participation Agreement, the parties will mutually develop a run-off plan providing for: (a) Employer notification to Members of the timing of any transition to a successor pharmacy benefit manager at least thirty (30) days prior to the effective date of such termination; (b) ESI provision of open Mail Service Pharmacy refill files and standard claims data and PA files for transition to the successor pharmacy benefit manager in accordance with then existing industry protocol; and (c) whether Employer elects for ESI to process Participating Pharmacy or Member Submitted Claims for prescriptions filled during the Term but filed with ESI after the effective date of termination ' ("Termination Date"). Employer will continue to pay ESI in accordance with this Employer Participation Agreement and the Coalition Umbrella Agreement for any Fees for ESI Services provided during the term and any run-off period, ESI will continue filing for Rebates for claims incurred prior to the Termination Date and will pay Employer Rebates for such ciaims in accordance with the Rebate payment schedule set forth in Exhibit B of the Coalition Umbreila Agreement. 5. HIPAA. The parties agree that as relates to use and disclosure of PHI, electronic transaction ' standards and security of eleckronic PHI under HIPAA, they are subject to the terms of a I separate Business Associate Agreement, 6. PMF, ESI has agreed to pay a Pharmacy Management Fund ("PMF") to Employer in the � amount of $5.00 per Member impiemented as of the Effective Date of this Employer Participation Agreement to reimburse Employer for the actual, fair market value of expenses incurred by Employer in transitioning to ESI, subject to the following: (i) Employer must submit adequate documentation of implementation expenses within 180 days of implementation, at which time a final reimbursement of eligible expenses will be made. (ii) Employer represents and warrants that: (A) it will only use the Implementation Payment as reimbursement for its actual implementation expenses incurred in transferring to ESI (including amounts Empioyer owes to GBS for transition services); (B) the amount of the Implementation Payment is equal to or less than the fair market value of the actual implementation expenses incurred by Employer in transitioning to ESI; and (c) the expenses are reasonable and consistent with the fair market value associated with such expenses in an arm's length transaction. Implementation Payments may not be used in connection with the Medicare Part D program unless otherwise agreed by ESI, Employer may elect to have its payment directed to GBS if indicated to ESI in writing. ESI intends to amortize the Implementation Payment over the Initial Term of the Agreement on a straight-line basis, unless otherwise ' required by law or accepted accounting principles. Employer shall notify and disclose the amount and the terms of the PMF to Members and other third parties to the extent required by applicable laws and regulations. If Employer terminates this Employer Participation Agreement for any reason other than ESI's uncured material breach, Employer shall reimburse ESI the unamortized 2��i�?.? 3 portion of the PMF. Any payment made to ESI by Employer pursuant to this Section will not be in lieu of any other rights.or remedies ESI may have in connection with the termination of this Employer Participation Agreement. 7. GBS Manaqement and Consultinq Fees, Employer hereby confirms that GBS is providing management and consulting services on behalf of Employer in connection with the pharmacy benefit management program administered pursuant to this Employer Participation Agreement. Employer hereby directs and authorizes ESI to facilitate, on behalf of Employer, the payment of a monthly fee in an amount equal to $0,12 per each approved Prescription Drug Claim processed by ESI for Employer during such month ("Management and Consulting Fees and Operational Fees"), In addition, Employer hereby confirms that GBS Benefit Services is providing day to day operationai services in connection with the pharmacy benefit management program administered pursuant to this Employer Participation Agreement. ESI agrees to facilitate the payment of the Management and Consulting Fees and the Operational Fees subject to the following: (a) Employer has executed this Agreement and Employer is current in its payment obligations to ESI. (b) Employer hereby represents and warrants that the GBS Fees are fair and reasonable for the actual services to be performed by GBS in connection with Employer's prescription drug program; are commensurate with other consulting fees in the industry; and are not in violation of any law or regulation, including ERISA. ESI will not pay per prescription fees on Medicare subsidy utilization. (c) ESI wiil comply with any request by Employer to stop GBS Fee payments. Employer shall hold ESI harmless in connection with any dispute between GBS and Employer regarding GBS Fees, 8, Analvtics Fees. Employer hereby confirms that Truven Health ("TH" or "Auditor") provides services for the benefit of Employer, in connection with the pharmacy benefit management program administered pursuant to this Employer Participation Agreement, In addition to the GBS fee described herein, Employer hereby directs and authorizes ESI to facilitate, on behalf of Employer, the payment of a monthly fee to TH, in an amount equal to $0,18 per approved Prescription Drug Claim processed by ESI for Employer during such month. ESI agrees to facilit�te the payment of the TH Fees to TH subject to the following; (a) Empioyer has executed this Agreement and Employer is current in its payment obligations to ESI. (b) Employer hereby represents and warrants that the TH Fees are be remitted on behalf of Employer are fair and reasonable; are commensurate with other TH Fees in the industry for the actual services to be performed by Broker in connection with the Employer's prescription drug program; and are not in violation of any law or regulation, including ERISA. ESI will not pay per prescription TH Fees on Medicare subsidy utilization. (c) ESI will comply with any request by Employer to stop TH Fee payments. Employer shall hold ESI harmless in connection with any dispute between TH, and Employer regarding TH Fees, (c) ESI will comply with any request by Employer to stop Analytical Fee payments. Employer shall hold ESI harmless in connection with any dispute between GBS and Employer regarding Analytical Fees. zi�i3�.� 4 10, CHECK APPL.IC�,F3l.E B�N��IT PLAN RELOW: � i RAAITIOMAL ❑ PASSTH4QUGH C7 �SI�lAi'lO�JAL FI.US PIETNIOR'r( Cl ESI PJATIOPIA!N�PNORK 11, ��r�.I,.2a aF Q,�. �mplayer Namec Clfy of[7ubuque � Cant«ct Nama: aandy Pack �lddress; Cffy Hall, 5p a, 13`h Scrae! Dubuqus, lA T�lepnone No.; fi63•6£3J-4125 Fax No.: b63•Gaasoz� ._..y..�...�..._ ___ -----.-�---..._.w.�,...�.__..�„M..�.,._.w.�. __�_., fN Nll"1'N�5S V�/N�f�EO�, tha partlos her�fo havq caus0d this Agreemonl to be executed by fheir respecflve duly a�iihorfzod afFicers or agents as of fhe dafa flrsl�bovo wrltten. �XPRCSS SCFt1pT5,IAlC. GI'i`Y 0�pU�UQU� .,� .-� �, � , ��.:}�GG�� ' ��..,.��.,�, By, ` �'�.`,. (7avid l..E3n;c7s�Cy� __..._ _,._.__ _,_.__T___.W....;. F'rint N�rrie,, _ Vicn President- ,mm�raial Division -�-----.�.�.- ._..._._:...... F�rIC1t Nai11e; tiflch2ei C.Van tiiil�ige� ..__....^....�.�..,_..__._.._..._..�_... ..... Tlfle; Tiflo: Ci�y Manager D�tA;Y..._.. M��..._�� .� _.w._.._ O�fp,�� ;�,/ `j� _ _�_...__.`�..�.._...�.___-�____ , , .... , , ___.W. �t.�_.....�_.t.._........__..�_�.,._�_.. .�..., � i I i � i t �� I i I I � i �Ci tJ2.l � � � i ' , ! ; I � I City of Dubuque Insurance Requirements for Professional Services INSURANCE SCHEDULE J 1. Express Scripts, Inc. shall furnish a signed certificate of insurance to the City of Dubuque, Iowa for the coverage required in Exhibit I prior to commencing work and at the end of the project if the term of work is longer than 60 days. Contractors presenting annual certificates shall present a certificate at the end of each project with the final billing. Each certificate shall be prepared on the most current ACORD form approved by the Iowa Department of Insurance or an equivalent approved by the Finance Director. Each certificate shall include a statement under Description of Operations as to why the certificate was issued. Eg: Project # or Project Location at or construction of 2. All policies of insurance required hereunder shall be with an insurer authorized to do business in Iowa and all insurers shall have a rating of A or better in the current A.M. Best's Rating Guide, ' 3. Each certificate shall be furnished to the Personnel Department of the City of Dubuque. 4. Failure to provide coverage required by this Insurance Schedule shall not be deemed a waiver of these requirements by the City of Dubuque. Failure, to obtain or maintain the required insurance shall be considered a material breach of this agreement. 5. Contractors shall require all subconsultants and sub-subconsultants to obtain and maintain during the performance of work insurance for the coverages described in this Insurance Schedule and shall obtain certificates of insurances from all such subconsultants and sub-subconsultants. Contractors agree that they shall be liable for the failure of a subconsuitant and sub- subconsultant to obtain and maintain such coverages. The City may request a copy of such certificates from the Contractor. 6. All required endorsements shall be attached to certificate of insurance. 7. Whenever a specific. ISO form is listed, required the current edition of the form must be used, or an equivalent form may be substituted if approved by the Finance Director and subject to the contractor identifying and listing in writing all deviations and exclusions from the ISO form. 8. Contractors shall be required to carry the minimum coverage/limits, or greater if required by law or other legal agreement, in Exhibit 1. If the contractor's limits of liability are higher than the required minimum limits then the provider's limits shall be this agreement's required limits. Page 1 of 4 Schedule J Professional Services November 2017 City of Dubuque Insurance Requirements for Professional Services INSURANCE SCHEDULE J (continued) Exhibit I A) COMMERCIAL GENERAL LIABILITY General Aggregate Limit $2,000,000 Products -Completed Operations Aggregate Limit $1,000,000 Personal and Advertising Injury Limit $1,000,000 Each Occurrence $1,000,000 Fire Damage Limit (any one occurrence) $50,000 Medical Payments $5,000 1) Coverage shall be written on an occurrence, not claims made, form. The general liability coverage shall be written in accord with ISO form C00001 or business owners form BP0002, All deviations from the standard ISO commercial general liability form CG 0001, or business owners form BP 0002, shall be clearly identified. 2) Include ISO endorsement form CG 25 04 "Designated Location(s) General Aggregate Limit" or CG 25 03 "Designated Construction Project (s) General Aggregate Limit" as appropriate, 3) Include endorsement indicating that coverage is primary and non-contributory, 4) Include Preservation of Governmental Immunities Endorsement. (Sample attached). 5) Include additional insured endorsement for: The City of Dubuque, including all its elected and appointed officials, ail its employees and volunteers, all its boards, commissions and/or authorities and their board members, employees and volunteers. Use ISO form CG 2026, 6) Policy shall include Waiver of Right to Recover from Others endorsement. B) AUTOMOBILE LIABILITY Combined Single Limit $1,000,000 G) WORKERS' COMPENSATION & EMPLOYERS LIABILITY Statutory benefits covering all employees injured on the job by accident or disease as prescribed by Iowa Code Chapter 85 as amended. Coverage A Coverage B Statutory—State of Iowa Employers Liability Each Accident $100,000 Each Employee -Disease $100,000 Policy Limit -Disease $500,000 Policy shall include Waiver of Right to Recover from Others endorsement, Nonelection of Workers' Compensation or Employers' Liability Coverage under Iowa Code sec. 87.22 yes form attached Page 2 of 4 Schedule J Professional Services November 2017 City of Dubuque Insurance Requirements for Professional Services INSURANCE SCHEDULE J (continued) D) UMBRELLA/EXCESS LIABILITY $1,000,000 Umbrella/excess liability coverage must be at least following form with the underlying policies included herein, E) PROFESSIONAL LIABILITY $1,000,000 Provide evidence of coverage for 5 years after completion of project. F) CYBER LIABILITY $1,000,000 X yes no Coverage for First and Third Party liability including but not limited to lost data and restoration, loss of income and cyber breach of information. Page 3 of 4 Schedule J Professional Services November 2017 City of Dubuque Insurance Requirements for Professional Services PRESERVATION OF GOVERNMENTAL IMMUNITIES ENDORSEMENT 1, Nonwaiver of Governmental Immunity. The insurer expressly agrees and states that the purchase of this policy and the including of the City of Dubuque, Iowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the City of Dubuque, Iowa under Code of Iowa Section 670,4 as it is now exists and as it may be amended from time to time. 2. Claims Coverage. The insurer further agrees that this policy of insurance shall cover only those claims not subject to the defense of governmental immunity under the Code of Iowa Section 670.4 as it now exists and as it may be amended from time to time. Those claims not subject to Code of Iowa Section 670,4 shall be covered by the terms and conditions of this insurance policy. 3, Assertion of Government Immunity, The City of Dubuque, Iowa shall be responsible for asserting any defense of governmental immunity, and may do so at any time -and shall do so upon the timely written request of the insurer. 4. Non -Denial of Coverage. The insurer shall not deny coverage under this policy and the insurer shall not deny any of the rights and benefits accruing to the City of Dubuque, Iowa under this policy for reasons of governmental immunity unless and until a court of competent jurisdiction has ruled in favor of the defense(s) of governmental immunity asserted by the City of Dubuque, Iowa. No Other Change in Policy. The above preservation of governmental immunities shall not otherwise change or alter the coverage available under the policy. SPECIIVI (DEPARTMENT MANAGER: FILL IN ALL BLANKS AND CHECK BOXES) Page 4 of 4 Schedule J Professional Services November 2017 ATTACHMENT 1 TO CLIENT AGREEMENT FINANCIAL DISCLOSURE TO ESI PBM CLIENTS This disclosure provides an overview of the principal revenue sources of Express Scripts, Inc. and Medco Health Solutions, Inc. (individually and collectively referred to herein as "ESI"), as well as ESI's afFliates. In addition to administrative and dispensing fees paid to ESI by our clients for pharmaceutical benefit management ("PBM") services, ESI and its affiliates derive revenue from other sources, including arrangements with pharmaceutical manufacturers, wholesale distributors, and retail pharmacies. Some of this revenue relates to utilization of prescription drugs by members of the clients receiving PBM services. ESI may pass through certain manufacturer payments to its clients or may retain those payments for itself, depending on the contract terms between ESI and the client. Network Pharmacies-�ESI contracts for its own acc�unt with retail pharmacies to dispense prescription drugs to client members, Rates paid by ESI to these pharmacies may differ among networks (e.g., Medicare, Worker's Comp, open and limited), and among pharmacies within a network, and by client arrangements, PBM agreements generally provide that a client pay ESI an ingredlent cost, plus dispensing fee, for drug claims. If the rate paid by a client exceeds the rate contracted with a particular pharmacy, ESI will realize a positive margin on the applicable claim. The reverse also may be true, resulting in negative margin for ESI. ESI also enters into pass-through arrangements where the client pays ESI the actual ingredient cost and dispensing fee amount paid by ESI for the particular claim when the claim is adjudicated to the pharmacy, In addition,when ESI receives payment from a client before payment to a pharmacy, ESI retains the benefit of the use of the funds between these payments. ESI may maintain non-ciient specific aggregate guarantees with pharmacies and may realize positive margin, ESI may charge pharmacies standard transaction fees to access ESI's pharmacy claims systems and for other related administrative purposes. Brand/Generic Classifications—Prescription drugs may be classified as either a "brand"or"generic;" however, the reference to a drug by its chemical name does not necessarily mean that the product is recognized as a generic for adjudication, pricing or copay purposes. Associated with pharmacy reimbursement, ESI distinguishes brands and generics through a proprietary algorithm ("BGA") that uses certain published elements provided by First DataBank (FDB) including price indicators, Generic Indicator, Generic Manufacturer Indicator, Generic Name Drug Indicator, Innovator, Drug Class and ANDA. The BGA uses these data elements in a hierarchical process to categorize the products as brand or generic. The BGA also has processes to resolve discrepancies and prevent"flipping" between brand and generic status due to price fluctuations and marketplace availability changes. The elements listed above and sources are subject to change based on the availability of the specific fields. Updated summaries of the BGA are avallable upon request. Brand or generic classification for client reimbursement purposes is either based on the BGA or specific code indicators from Medi-Span or a combination of the two as reflected in the ciient's specific contract terms, Application of an alternative methodology based on specific client contract terms does not affect ESI's application of its BGA for ESI's other contracts. Maximum Allowable Cost ("MAC")/Maximum Reimbursement Amount ("MRA"1 —As part of the administration of the PBM services, ESI maintains a MAC List of drug products identified as requiring pricing management due to the number of manufacturers,utilization and/or pricing volatility, The oriteria for inclusion on the MAC List are based on whether the drug has readily available generic product(s),is generally equivalent to a brand drug,is cleared of any negative clinical implications, and has a cost basis that will allow for pricing below brand rates, ESI also maintains MRA price lists for drug products on the MAC List based on current price reference data provided by MediSpan or other nationally recognized pricing source, market pricing and availability information from generic manufacturers and on-line research of national wholesale dru� company files, and client arrangements. Similar to the BGA, the elements listed above and sources are subject to change based on the availability of the specific fields, Updated summaries of the MAC methodology are available upon request. Manufacturer Formulary Rebates Associated Administrative Fees and PBM Service Fees—ESI contracts for its own account with manufacturers to obtain formulary rebates attributable to the utilization of certain brand drugs ' and supplies(and possibly certain authorized generics marketed under a brand manufacturer's new drug application), Formulary rebate amounts received vary based on client specific utilization, the volume of utilization as well as formulary position applicable to the drug or supplies, and adherence to various formulary management controls, benefit design requirements, claims volume, and other similar factors, and in certain instances also may vary based on the product's market-share, ESI often pays an amount equal to all or a portion of the formulary rebates it receives to a client based on the client's PBM agreement terms. ESI retains the financial benefit of the use of any funds held until payment of formulary rebate amounts is made to the client. ESI may maintain non-client specific aggregate guarantees with manufacturers and may realize positive margin. In addition, ESI provides administrative services to contracted manufacturers, which include, for example, maintenance and operation of the systems and other infrastructure necessary for managing and administering the PBM formulary rebate process, pharmacy discount programs, access to drug utilization data, as allowed by law, for purposes of verifying and evaluating applicable zui3�.2 6 payments, and for other purposes related to the manufacturer's products. ESI receives administrative fees from the participating manufacturers for these services, These administrative fees are calculated based on the price of the drug or supplies along with the volume of utilization and do not exceed the greater of (i) 4.58% of the average wholesale price, or(ii)5.5% of the wholesale acquisition cost of the products, In its capacity as a PBM company, ESI also may receive other service fees from manufacturers as compensation for the performance of various services, including, for example, formulary compliance initiatives, clinical services, therapy management services, education services, medical benefit management services, and the sale of non-patient identifiable claim information. These servfce fees are not part of the formulary rebates or associated administrative fees. Copies of ESI's standard formularies may be reviewed at www,_express-scripts,comiservices/clientsadvisors. In addition to formulary considerations, other plan design elements are described in ESI's Plan Design Review Guide, which may be reviewed at www.express-scripts,com/services/clientadvisors. ESI Subsidiary Pharmacies — ESI has several licensed pharmacy subsidiaries, including our specialty pharmacies. These entities may maintain product purchase discount arrangements and/or fee-for-service arrangements with pharmaceutical manufacturers and wholesale distributors. These subsidiary pharmacies contract for these arrangements on their own account in support of their various pharmacy operations. Many of these subsidiary arrangements relate to services providetl outside of PBM arrangements, and may be entered into irrespective of whether the particular drug is on one of ESI's national formularies. Discounts and fee-for-service payments received by ESI's subsidiary pharmacies are not part of the PBM formulary rebates or associated administrative fees paid to ESI in connection with ESI's PBM formulary rebate programs, However, certain purchase discounts received by ESI's subsidiary pharmacies, whether directly or through ESi, may be considered for formulary purposes if the value of such purchase discounts is used by ESI to supplement the discount on the ingredient cost of the drug to the client based on the client's PBM agreement terms. From time to time, ESI and its affiliates also may pursue and maintain for its own account other supply chain sourcing relationships not described below as beneficial to maximize ESI's drug purchasing capabilities and efficiencies, and ESI or affiliates may realize an overall positive margin with regard to these initiatives. The following provides additional information regarding examples of ESI subsidiary discount arrangements and fee-for-service arrangements with pharmaceutical manufacturers, and wholesale distributors: ESI Subsidiary Pharmacv Discount Arranpements — ESI subsidiary pharmacies purchase prescription drug inventories, either from manufacturers or wholesalers, for dispensing to patients. Often, purchase discounts off the acquisition cost of these products are made available by manufacturers and wholesalers In the form of either up-front discounts or retrospective discounts, These purchase discounts, obtained through separate purchase contracts, are not formulary rebates paid in connection with our PBM formulary rebate programs. Drug purchase discounts are based on a pharmacy's inventory needs and, at times, the performance of related patient care services and other performance requirements. When a subsidiary pharmacy dispenses a product from its inventory, the purchase price paid for the dispensed product, including applicable dispensing fees, may be greater or less than that pharmacy's acquisition cost for the product net of purchase discounts. In general, our pharmacies realize an overall positive margin between the net acquisition cost and the amounts paid for the dispensed drugs. ESI Subsidiary Fee-For-Service Arranqements— One or more of ESI's subsidiaries, including, but not limited to, its subsidiary pharmacies also may receive fee-for-service payments from manufacturers or wholesalers in conjunction with various programs or services, including, for example, patient assistance programs for indigent patients, dispensing prescription medications to patients enrolled in clinical trials, various therapy adherence and fertility programs, administering FDA compliance requirements related to the drug, product reimbursement support services, and various other clinical or pharmacy programs or services. As a condition to having access to certain products, and sometimes related to certain therapy adherence criteria or FDA requirements, a pharmaceutical manufacturer may require a pharmacy to report selected information to the manufacturer regarding the pharmacy's service levels and other dispensing-related data with respect to patients who receive that manufacturer's product. A portion of the discounts or other fee-for-service payments made available to our pharmacies may represent compensation for such reporting. Other Nlanufacturer Arranqements— ESI also maintains other lines of business that may involve discount and service fee relationships with pharmaceutical manufacturers and wholesale distributors. Examples of these businesses include a wholesale distribution business, group purchasing organizations, a medical benefit management company, and United BioSource Corporation ("UBC"). Compensation derived through these business arrangements is not part of the PBfvi formu�ary rebates or associated administrative fees paid to ESI in connection with ESI's PBM formulary rebate programs. Services related to these arrangements are provided to manufacturers irrespective of whether a drug is on one of ESI's national formularies. Of particular note, UBC partners with life sciences and pharmaceutical companies to develop, commercialize, and support safe, effective use and access to pharmaceutical products. UBC maintains a team of research scientists, biomedical experts, research operations professionals, technologists and clinicians who work with clients to zut3?.� 7 t � conduct and support clinical trials, create, and validate and administer pre and post product safety and risk management programs, UBC also works on behalf of pharmaceutical manufacturers to provide product and disease state education programs, reimbursement assistance, and other support services to the public at large, These service fees are not part of the formulary rebates or associated administrative fees. Third Partv Data Sales — Consistent with any client contract limitations, ESI or its affiliates may sell HIPAA compliant information maintained in fheir capacity as a PBM, pharmacy, or otherwise to data aggregators, manufacturers, or other third parties on a fee-for-service basis or as a condition of discount eligibility. All such activities are conducted in compliance with applicable patient and pharmacy privacy laws and client contract restrictions. , April 7, 2014 THIS EXHIBIT REPRESENTS ESI'S FINANCIAL POLICIES, ESI MAY PERIODICALLY UPDATE THIS EXHIBIT AND THE FINANCIAL DISCLOSURES CONTAiNED HEREIN TO REFLECT CHANGES IN ITS BUSINESS PROCESSES• THE CURRENT FINANCIAL DISCLOSURE IS AVAILABLE UPON REQUEST AND ACCESSIBLE ON EXPRESS-SCRIPTS,COM FOR CLIENTS&ADVISORS, ?I?I 3?.? $ COAL1TIOry,UNiBRELLA AGREEM�N7" . - Thls Caalition Umbrella Agreement ("Agreement"), effective�January 1, 2012'("Effective Date°:), is enterad inta by and between EXPRESS SCRIPTS, INC,, a Delaware carporation ("ESI"), and Gallagher Benefit Services, Inc., a Denve�corporation ("GSS"} , - RECI7ALS " � . A. ESI, either directly or fhrough its subsidlar(es, engages,in pharmacy b�nefit management services, inclucling, among other things, pharmacy networic contrac#ing; pharmacy claims processing; mai{ and specialty drug pharmacy; clinical, safety, adherence,-and other.like programs; and Pormulary and rebate administration.("�SI Services"}; and -� . B; � GBS is conducting business .hereunder as an employee benefits consultant far certafn � clients that sponsor self-funded employee beneflt plans, and GBS has established.an opportunity to. access certain bundled services for the benefit of such Employers that chose.to undertake health care quality and cost confainment efforts. Such GBS clients shall be referred to herein as the GBS Coa{ition (the"Coalitian") � . - , C. GBS�and E61 have negotiated the terms under .which ESI.has agreed to provide ESI Services to each Employer of the Coalition as set forth herein, NOW THER�F'ORE, in consideration of the mutual covenants set forth herein and other good and valuable cansfderation, the recelpt and sufficiency of which are hereby acknowledyed, ESI and GSS hereby agree as fo{lows' • -. - TERMS 4F AGREEMENT ARTICL� (-QEFINITIONS The foilowing terms shall have the meanings set forth below: . "Anciilary Supplies, Equipment, and Seryices° or "ASES" means ancillary supplies, equipment, and services provided or aoordinated by CuraScrlpt in connection with CuraScript's ,dispensing of Spec(alty Products. ASES may include ail or some af the foilowing; telephonic and/or in-person training, nursfng/clinical monitoring, medication pumps, tubing, syringes, gauze pads, sharps containers, lancets, test strips, other supplies, and durable medical equipment.The aforementloriad list is fllustrative only(nak exhaustive) and may lnclude other supplies, equipm.ent, and services bas�d on the patient's needs, prescriber instructions, payer requirements, and/or the Speclalty Product manufacturer's requlrements, , "Average Wholesale Price" or "AWP" means the average wholesale price of a prescription drug as Identified by drug pricing services such as First pataBank or other source recognized in the retail prescription drug industry selected by ESI (the "Pricfng Source"). The applicable AWP shall be the 11- � digit NDC for the product on the date dispensed, and for prescriptions filled in (a) Participating Pharmacfes and CuraScript will be the AWP far the package size from which the prescriptlon drug was dispensed, and (b) in the Mail Service Pharmacy the AWP for the smaller of: (i) th� NDC code for the package size frorn which the prescription drug was dispensed, ar (ii} package sizes of 100 units or 16 ounce quantities, ar the next larger quantity if such specified quanti#ies are not available, "Brand Drugs"mean single�source and multisource drug products based on indicators set forth in various drug pricing sources recognized in the retail prescription drug industry, as reasonably determined by ESI consistent with its standard practice utifized for all clients. Notwithstanding the foregoing, certain prescrlption drug medications that are licensed and then currently marketed as brand name drugs, where there exists at least one (1) competing prescription medicatinn that ls a generic equivalent and interchangeable with the marketed brand name drug, may process as "Generic Drugs" for Prescription Drug Claim adjudication and Member Copayment purposes. 1 I 89129.7 Copayment means that portion of the charge far each Covered Drug dispens�d ta the Member u n that is the responsibility of the Member(e,g,, copayment, coinsurance and/or deductible) as indicated on the Set-Up Forms. � "Covered Drug(s)" means those prescriptian drugs, supplies, Specialty Products and other items that are covered under the Plan, each as indicaked on the Set-Up Forms. • CuraScript means CuraScript, Inc. or another pharmacy wholly-owned or operated by ESI ar its �� wholly-owned subsidiaries that primarily dispenses Specialty Producfs. "Eligibility Files" means the list submitted by Employer to ESI in reasonably accepfable electronic format indicating persons eligible far drug benefit caverage services under the Plan, Emplayer means a self-funded Employer 6enefit plan with ah least 50 pa�ticipating employees �� that fs a client of GBS, that (s in good standing with GBS, and that has entered into an Employer Participatlon Agreement with ESI. . "Employer Participation Agreement" means the form of agreement set forth on Exhibit A. "ESI Natianal Plus Network" means�SI's broadest I'articipating Pharmacy network.' "Formulary" means the list of�'DA-approved prescription drugs and supplies developed by �Sl's Pharmacy and Therapeutics Gammittee �nd/or cusfomized by Employer, and which is selec#ed andlor adapted by Employer. Routine additions and/or deletians to the �'ormulary are hereby adopted by Employer, subject ta Employer's discretion to elect not to implement any such addition or delet(on through . the Set-Up Form pracess, "Generic Drug" means a prescription drug, whether identified by fts chemical, proprietary, or non- proprietary name, that is therapeutically equivalent and interchangeable with drugs having an identical amount of the sarne active ingredient(s} and approved by the FDA. Far purposes of this Agreemenf, the Generic prug determination is made using indlcators from First Databank (or other source nationally recognized in the prescription drug lndustry used by ES1 for all clients} vn the basis of a standard brand/generic algorithm utilized by ESI for all of its clients, a copy oP which may be made avaflable for review by Employer upon request. "Hlf'AA" shall mean the Health fnsurance Pottabllity and Accountability Act of 1996, as amended. "Ingredient Cost Charge" means the (ngredient cost portion of the amount charged by ESI ta Employer for each Prescription Drug Claim, subject to the "lesser oP lagic set forth on Exhibit A, as applicable. • "Mail Service Pharmacy" means a duly licensed pharmacy operated by �SI or its subsidlaries, other than CuraScripE, where prescriptions are filied and delivered to Members via mail delivery service, "Manufacturer Administrative Fees" means 4hose adminis#rative fees paid by pharmaceutical manufacturers to, or otherwise retained by, ESI pursuant to a contract between ESI and the manufacturer and directly in connection with �SI's administering, invoicing, allocating and collecting the V�ebates under the Rebate program, "MAC List" me�ns a list of prescription drug products identified as readily available as Generic Drugs, generally equivalent ta a Brand Drug (in which case the Brand Drug may afso be on the MAC List) and which are deemed to require prlcing management due to the number of manufacturers, utiliza4ion and pricing volatility. �The ESI National Plus Network is referred fo as the"EN50 Neiwork" in�SI's network provider agreements wifh Participating Pharmacies, subject to future name change. 2 l 89129.7 - "Maxirrium Re(mbursement Anmount" or-"MRA" means the maximum reirnbursement payment- schedules developed or selected by'ESI.��The paymenf schedules specify the maximum unit ingredlent . cost payabie by Erriployer for drugs on the MAC Llst, The application of MRApricing may be subject to Employer deflned plan design and coverage policies. . . . , '"Member" means each person who �mployer determ(nes Is eligibie to receiva prescription drug benefits as indicated in the Elfgibility:Flles. "Member Submitted Claim" means a paper clalm submitted by a M�mber for Covered Drugs dispensed`by a pharmacy other than a Participating Pharrrtacy ar for which the Member paid cash. "Participating Pharmacy" means any licensed retail pharmacy with whfch ES{ has executed an : agreement to provide Covered Drugs to Members, but shall not include any mail order or speclalty pharmacy affilfated with any such Participating Pharmacy. Participating Pharmacies are independent contractors af ESI. � "Pass-Through" means °the actual ingredient cost and dispensing fee paid by ESI to the Participating' Pharmacy, as set forth in the specific Participating Pharmacy rernittances related to Employer's claims, "P�PM" means per employee per Month, if applicable, as determined by ESI fram the Eligibility Files, "PMPM"means per Member per Month fee, if applicable, as determin�d by ESI from the Eligib(lity FUes, "Plan" means the prescription drug ben�fit poition of Employer's welfare benefit plan(s). "Prescription Drug Claim" means a Member Submltted Claim, Subrogation Claim or claim for paymant submitted to ESI by a Pharmacy as a result of dispensing Covered Drugs ta a Member, ' °Rebates" mean retrospective rebates ,that are paid to ESI pursuant to the terms oP a rebate ' contract negatiated independently by �SI with a pharmaceutical manufacturer, and directly attributable to ' the utilizafion of certain Covered Drugs by Members, Rebates do not include Manufacturer I� Administrative Fees; product discounts or fees related to the procurement of prescription drug inventories � by or on behalf of ESI owned and operated specialty or mail order pharmacles; fees received by ESl from ! manufacturers for care management or other services provided in connection with the dispensing af I Specialty Products; or other fee-for-service arrangements whereby pharmaceutical manufacturers � generally report iha fees paid to �SI or Its affiliat�s for services rendered as "bona fide service.fees" pursuant to federal laws and regulations, including, 6ut not limited to the Medicaid "Best Price" rule (collectively, "Other Pharma Revenue"), Such laws and regulations, as well as ESI's contracts with pharmaceutical manufacturers, generaily prohibit ESI from sharing any such "bona fide seNice fees" earned by �SI, whether whalely or in part, with any �SI cilent, ESI represents and warrants that it will not enher into any agreement with a pharmaceutical manufacturer Por Other Pharma Revenue in exchange for a reduction oP Rebates. "Set-Up Forms" means any standard ESI dacument or form, which when completed and s(gned by Employer, wiil describe the essential benefit elements and coverage rules adopted by Employer for its Plan, "Specialty Product List" means fhe standard list of Specialty Products maintained by ESI and thelr reimbursement rafes under the applicable (exclusive or open) option, as updated by ESI from time to time. The Specialty Product L.ist Is available to Employer upon request. "Specialty Products" means those injecfable and non-injectable drugs typically having one or more af several key characteristics, including: frequent dosing adjustments and intensive clinical monitaring to decrease the potential for drug toxicity and increase the prnbability for beneficial treatment 3 _ - - -- _ is�izy.� - __ outcames; intensive patient training and compliance assistance to facilitate therapeutic goals; I(mlted or exclusive product availability and diskribut(on; specialized product handling and/or administration requirements and/or cost in excess of $500 for a 30-day supply; . �SI updafes the list of Specialty Products as new drugs are brought to rnarket. "Subrogation Claim"means subrogation claims submitted by any state or a persan or entity acting on behalF of� state under Medicaid or similar United States or state goverqment health care programs, for which Employer is deemed to be the primary payor by operation of applicable federal or state laws. "Usual and Customary Price" ar "U&C" means the retail price charged by a Participating Pharmacy for the particular drug ln a cash transaction on the date the drug is dispensed as reported to �SI by the Participating Pharmacy. • ARTICL� II— RESPQNSIBILITIES OF �SI 2.1 ESI Services. In consideration of GBS entering into this Agreement with �SI, ESI guarantees the ESI Services, fees, pharmacy reimbursement rates, Rebates and other terms and conditions set forth in the attached �xh(bit A for those Employ�rs that agree ta enter into Employer Participatfon Agreements with,ESl, � (a) Participatinq Network Pharmacies. . (i) Pharmac}LNerNor{<, ' ESI has created and shall use commercially reasonable efforts to maintain a national netwark of Participating Pharmacies ("Pharmacy Network") consisting of at least 50,Q00 Participating Pharmacies, including national and reg(onal chaln Pa�ticipating Pharmacies, ESi agrees to include all current (i.e,, as of the Effective Date) Coalition fllling pharmacies in the Pharmacy Netwvrk; provided that such pharmacies meet E51's credentialing requirements and agree to E51's contract #erms, subject to any such pharmacy that is not currently in ESI's network contracting wfth ESI pursuant to ESI's standard Participating Pharmacy terms and conditions, unless otherwlse agreed to in .writing between the parties. Upon Coalitlon and/or Employer's request, ES� shall have the right to create for Coalition and/or Employer a subnetwark af Participating Pharmacies. For purpa$es of this Agreement, "Pharmacy Subnetworl<" shall mean any �mployer-speci�ed single variation to the Pharmacy Netwark. ESI will make available a current(ist of Participating Pharmacies in such Pharmacy Network(s) on-line, such list to be updated by ESI no less often than quar�erly and upon request to Coalitlon and/or �mployer, Each Participating Pharmacy is contractually required ta verify the Member's eligibility through ESI's on-line claims processing system prior fo dispensing a prescription (ii) Access of Members, Subject to applicable (aw and pharmacy provider agreements, Coalition and/or Employer shali have the right to request that ESI add or delefe a Participahing Pharmacy or chain oP Participating Pharmacies ta or from the Pharmacy Netwark and the parties shall reach a mutual agreemertt regarding the addition or deletion of a Particfpating Pharmacy from the Pharmacy Netwark. ESI shall provide prior written notice to Coalition and �mployers of additions or deletions that have a makerial negative effect on Member's access to the Pharmacy Network on a quarterly basis, excluding pharmacies that termed due to no fault of ESI, such as mergers, pharmacies closing, etc, Far purposes of this subsection, "materiai negative effect on Member's access to the Pharmacy Network" shall mean when any of the fol(owing occur: A) the Pharmacy Netwark no longer meets khe access or availability standards required by state or applicable law ar that Employer has represented lt complles with to a state Insurance department or other regulatory authority; If there is a materialiy negative effect on Members' access to the Pharmacy Network, then ESI will have sixty (60) days within which ta cure such materially negative effect. If ESI is unable to cure the materlally negative effect withln sixty (60) days then GBS may t�rminate this Agreement upon wriEten notice to ESI ona hundred twenty (120) days from the date that the parties were unable to reach agreement; B) the percentage of Members residences in urban areas that are within five (5} mll�s of a Participating , Pharmacy drops below 9f,%, contingent upon the existence of a pharmacy and/or pharmacies with which , ESI could co�tract: or C) the p�rcentage of Members' residences in suburban and rural areas that are , q is��z�.� I' within five miles of .a Participating Pharmaoy drops below 96%, contin.genf upon the sxistence of a pharmacy andLor pharmacies with which �Sl could contract. ; , - . , , ;.. . •.. . •,. . :: i. , (b)�. Coalition Audits. � `'(i) Consistent with the Standard Audit Protocol attached hereto in the Exhibits, ance each year{or more frequently if warranted, as reasonably detsrmined by GBSJ and for up to two (2) years after termination hereof, GBS's third party auditor("Auditor°}, as approved by ESI (which approval,shall nat.be unreasonably wfthheid) and provided such Auditor executes a mutually acceptable Confidentiality Agreement,' may.inspect and verify Prescription Drug Clafm data,,billing records, pricing disco�mts ancf terms;Brand Drug and Generic Qrug Classfficafions, claims adjudication syskems;:,pharmacy benefits, Rebate payment cafculations, inanufacturer agreements, clin)cal programs, and other compensatian from any party directly related ta Coalition and Employer's prescription drug ,utilizatfon .and services, perfarmance guarantees, AWP rate adjustments, and operational processes relating to the services pravided to �Coalition and Employers pursuant to this Agreement to ensure E,SI's�compliance with the terms and conditions of this Agreement, as GBS reasonably�deems ap�ropriate,.includ'ing;but not limited to, �00°/a of fhe claims data for such reasonable time period Coalition then d,e#ermines acting:in good faith,'taking into accdunt ESI's Ifmitations to respand quickly to`langer periods of time and older data: At the request oP GBS, �SI shall provide all claims data, fn a format suitable ta Auditor, at ESI's cost,. All audits shail be conducted during norma( business hours at �SI offices upon s'ixty (60} days' prior writfen ' nokice: lf ESI performs a discount and dispensing fee guarantee_calculatlon; ESI's guarantee report ' results wiil be shared with GBS's�Auditor prlar to any payment being made to Employers (if applicable). Any payment thaf may result from ESI's discoun� and dispensin.g:fee;caiculation will only be_ provided after Coalition's Audifor has completed its annual audit and coordinated appropriate reconciliation, ,Any and all costs and expenses of each party associated with Coalition's audit shall �e borne by that party, Results of the most recent SAS-70 audit wilf be pravided by ESI to Empioyers,. The parties agree that the scope of audits by Coalitian or Auditor will not be duplicafive of the SAS=70 audit, but rtmay include inspection and/or verification of certaln informakion.provided In the SAS-70 audits to the extent necessary to give GBS and Employers a more tharaugh understanding of and support for such information. Audit materfals or documentation provided by ESI will be confined to Coalition-specific informa#ion. (ii) If the audit discioses an overpayment of Fees or claim_payments to ESi by Employer or an underpayment of Rebates ar guarantees or pertormance standard penalties to Employer by ESI, or other economic benefits received,by ESl in excess of what ESI is entitled to under thls Agreement, khen �Sl shall pay the arnaunt owed to Employer within a commercially re�sonable kime period after camp(etion af the audit, but not to exceed thirty (30) days. Overpayments, jf,any, resulting from audits of AWP pricing guarantees, which are measured, reconciled, and audited in the aggregate across all Coalition Employers (and corresponding utilization) in the Coalition fhat contract with ESI for khe pricing arrangement as:set forth in this Agreement,.shali be paid in the aggregate to the Coalition, whlch shall then distribufie such payments to the Employers in the Coalitian on an a pro rata basis, (iii) Any requests by GBS or Employers or a third party auditor designated by GBS shall constitute GBS's direction and authorizatian to ESI to disclose Member informatlan to the auditar subject ta the terms, and conditians of this Agreement. 2.2 Employer Participation Apreements. (a} Except as pravided in Secfion 2,2(b), ESI agrees to enter into written Employer Participation Agreements with Employers in accordance w(th the Eerms herein, sa long as the �mployer is creditworthy. ESI has the rlght to update the form of Employer Participafion Agreement ta use for the specific Employer; provided that the ESI Services and financfal terms are as set forth in this Agreement. ESI also shall have the option to require existing Employers to execute new �rnployer Participation Agreements or amendments to exisEing Employer Participation Agreements. ESI shall not be obligated to implement a Employer unless and until the Employer has executed the Employer Participation Agreement (and/or an Amendment) and rekurned it to ESI. 5 1 R9129.7 I�, , . . , - , , . ... , _.... , ...� . .. ... ... � _ . ..... (b) Under no circumsfiances w(II ESI enter inta Employer Particip�tion Agreements with any Employer arganized or Incorporated in the State of Malne or any other state or govemm�ntal entity that adopts a law or rule requiring a pharmacy benefit manager ("ESI") to be a fiduclary�nd/or force the ESI to . surrender any revenue otherwise inuring to ESI under a Empioyer Participation A�reement in connection with the provision of any or all ESI Services, Finally, should a federal or state law be adopted that wauld requlre ESI to be a fiduciary to perPorm any or all af the ESI Services and such law does not grandfather existing agreements, ESI shall have the ric�ht to terminate any Employer Participation Agreernent that would be subject to such law, 2,3 ,Reports to GBS. Upon written approval of each �mployer�as indicated in thelr resp�ctive Employer Participation Agreements, �SI shall provide GBS with copies of all reports provided pursuant to. the Employsr Participation Agreements, subject to the terms and conditions set forth herein, ESI shall provide a written repart no less frequently than quarterly, by Emplayer. 2.4 Managemerit Fees, ESI shalt pay GBS and Thompson Reuters ("TR" or "Auditor") quarterly fees in accardance with the terms and conditions of the �pplicable Employer Participation Agreement. Except far nonpaymenf by ESI in v(olatian of the express terms set fo�th in the applicable Employer Participation Agreement, GBS shall hold ESI harmless in connec#ion with any dispute between GBS, Thompson Reuters, and any �mployer, or otherwise, regarding fees. , 2.5 Perfarmance Standards, ESI will conform to ti�e perfarmance standards sefi forth on Exhibit F hereta. The payments set forth in Exhibit F will be Coalition's sole monetary remedy for any failure by ES1 to meet a performance standard in addition to any co�rectian or reimbursement associated with payment or billing eirars. AhTICLE Iil-ESI SER1/ICES 3.1 Gener�l ESI Services, �SI will provide certain pharmacy �enefit management services, inciuding retail pharrnacy network contracting and management, Mail Service and Specialty Pharmacies, formulary and Rebate management and clinical and trend pragrams for Employers, services shall be provided pursuant to the terms and conditions set forth in the applicable Employer P�rticipation Agreement and Set-Up �orms, and GBS acknowledges and agrees to the same, (a) Program Reaorting, ESI shall make available �SI's standard management information reparting capabilities to the person indicated in khe Employer Participation Agreement, subject to applicable law. Upon request, ESI may perform ad hac pragramming for any speclal repartfng at ESI's stand�rd hourly rate,.as set forth in Exhihit B, (b} Clinical Proqrams. Subject to the terms and conditions set Por�h ln Exhibit B and the Ernployer Participation Agreement, ESI will prov(de cer�ain clinical programs adopted by the Employer, Clinical Programs are sub)ect to change from time�to-time.at ESI's discretion. (c) Glaims for Benefits. �SI will process initial "claims for benefits" for Member Submitted Claims and PA requests consistent with the ERISA c{aims rules set forth in 29 CFR Part 2560 {or applicable state law If a non-ERISA plan) ("Claims Rules"). At Employer's election, and for the fees set forth in Exhibit A, ESI will offer language translatian services as required under the Clafms Rules for ' certain initial "claims for benefits", ESI will not conduct any appeals of denied "clalms for benefi#s," however, Employer may elect to have ESI facilitate appeals through MCMC, LLC ("UM Company")for the fees set forth in Exhibit A, or through a third party of Employer's choice, In any case, ESI wlll route Member appeals to UM Company (Employer or other �mployer designated entity), �mpioyer must execute a standard ESI "Internal Appeals Services" Set-Up Forrn, which may be requested through ESI Account Management, in order fo receive such services from MCMC, (d) UM Companv. In the event Employer elects to utilize the UM Company, the UM Company will be responsible for conducting the appeaf an behalf of Empioyer in accordance with the Claims Rules, and Employer acknawledges and agrees that: 6 (89129.7 . q � ... ...... . : ; � . ,-. .. . i �. .. ..-.. ' ' � i . ' (i) �SI is not acting as a fiduciary in connection with the appeals being conducted by the UM Company, and ESl will not be named by Employer,as a fiduciary:in_connection wlth • such appeais; the UPhCompany, and not �SI, will be cnnducfing appeals on behalf of Employe�; 'the UM "Company`is'an intlependenE•contraotor of ESf�and �SI does not in any way control ar: .. 'direct the UM Company with respect to appealsconducted by the UM Company. � � (il)° � ESI represents to'�mployer that UM Gompany.has confractually agreed that;�(A}.. UM Company will conduct appeals in acco�dance=with the Claims Rules and Ernployer's plan,.(B) Employer is a third party beneficiary of UM Company's agreement with �SI (a copy of which {s. avaifabfe upon request) and.the remedies set forth therein, and (C) UM Company will indemnify Erriployer for third party ciaims caus�d by fhe:UM Company's negligence or willful misconduct in �prov'iding the appeal services, ESI wlil not be liabls to Employer-far any injury or damages arising as a result of Ehe UM Campany's acts or omissions: . - _ ,_ _ . '(e) ` Exfernal f�evfew Services. . � �SI will not conduct any.external revfew services (as defined in the Patient Protection and Affordable Care Act of�2p10 and iEs implemenfing regulations ("PPACA")); pravided, however;.Employer may elect to have UM Gompany facilitate the provision of external review services through MCMC conkracfed IROs (as such term is deflned in f'PACA), for the fees set farth on Exhibit A below (if � applicable) �_Errmpioyer must�execute a"standard ESI "Exfernal Appeais. SerVices° Set-Up Form, which may 6e��equested through �SI Account Management, In order to recefve such services from MCMC, .. , , _ ln the event that Erriployer �lects to utilize MCMC to.facilitate the provlsion :of,external rev(ew• service's`through MCMC contracted 1ROs; MGMC wlll be responsible for facilitating.all such appeals (and the IR�s will be responsible for provlding all such.appeals)'in accardance with PPACA and all other applicable federai and state laws, and Employer hereby acknowledges and agrees that: (i) MCMC (with respect to faciliEating the external reviews) and the IROs (with respect to perfo�ming the external reviews), and not ESI, will be providing e�ernal review seNices; MCN1C is an independent contracfor af E51; the IROs are independent contractors of MCMC and not ESI; and ESl does not in any way control or direqt either MCMC or the IROs with respect to facilitatian or performance of external review servfces�provided by each respectively. (ii) ESI represents to Employer that MCMC has contractually agreed that: (A) MCMC will facilitate all extemal �eview services (n accordance with PPACA and'ail other appiicable federal and state laws; (B) MGMC will cantractually require its cantracted IROs to perform all `external reviews in accordance with PPACA and all otiier applicable federal and state laws; (C) to the extent not prohibited by law, MCMC will indemnify, defend and hold �mpiayer harmless from and against any and all losses, damages, injuries, causes `of action, claims, demands and expenses (including reasonable attorney's fees; costs and expanses), arising out of, resulting ' from, or related to any act, omission or default by th� IROs in their performance of the external reviews; and (D) Ernployer has third party beneficiary rights to enfarce the preceding indemnification and hold harmless provision. � (f) Call Center, ESI will provide 2�-hours a day, 7�days a week toll-free tel�phone, IVR and Internet support to �ssist Employer, Employer's agents and Members with Member eligibility and ben�fits verification, location of Pharmacies or other relaked Member concerns. 3,2 Rebatas. Subject to th� remalning terms of this Agreement, �SI will pay to GBS an amount equal to the Rebates speci�ed on Exhibit B, subject to Employers meeting the terms and conditions set forth on Exhibit B. GBS represents and warrants that it will pass khrough any Rebates to its Employers that it receives from �SI to the extent (t is not permitted to retain such Rebates under its arrangements with its �mpioyers or applicable law, ESI will pay such Rebate amounts directly to Employers if instructed in wrifing by GSS. References in this Agreement(including �xhibits)to payment of Rebate amounts ta GBS shall include payment of Rebate a►nounts to Employer as applicable, if and when sa instructed by GBS In writing ta pay such amounts directly to Employer. 7 is�i2y,� ......... ; � '..� .. i r . , . ....... . . .. i i ... . . . . . . . . . . . . ARTICL,E N- RESPONSIB(LITIES OF G�S �4,1 Endorsement, GSS agrees to endorsa ESI as the provider of PBM Se�vices, including pharmacy claims processing, retail pharmacy nefwork, mail order and specialty product pharm�cy services, formulary and rebate management servlces for all Coalition Employers and potentiai Employ�rs, as GBS deem approprlate, �SI acknow(edges that such endorsement does not guarantee participation by such �mployers in an Agre�ment, and further, that such Emplaysrs have autonomy fo choose an alternate vendor. • 4.2 Marketinq. Upon an Employer's request, GBS agress to offer ESI's pragrams, products and services as set forth in the attached Exhibits to Member health and welfare funds, or othar heaith plan entities represanting collectively bargained individuals, provide information, solicit expressions of interest, and assist with closing and implementing various ESI products programs and services. In performing these services, GBS agrees to act diligently and use cornmercially reasonable efforts in accordance with the applicable laws and industry practices. 4,3 Em lo er Partici ation A reements. GBS agrees to assist ESI in obtaining signed Employer Participation Agreements. (a) Provrlefary Informatian, Bath parties acknowledge and agrae that, during the term of this Agreement, it may receive Confldential and �roprietary Information from the other. �For these purpvses, the term Con�denfial and F'ropri�tary Information" shall mean the financial terms set fo�th herein and the �� attached Exhibits, clinical programs, software and wob (on-line) based reporting, modeling, eligibility and clinical and formulary pragram applications and formats, statistical data, business models and strategles, product or servfce pricing information, trade secrets, and all other simllar information, Confidential and Proprietary Information shall nat include information that is: (i) generally known to the public af the time of disclosure, (ii} rightfully received from a third party not under obligation of confidentiality with raspect to such information, or (iii} publiciy avaflable through no act or omissian of elther party or its agents or employees. (b) Covenant. Both parties hereby represents and covenants that neither it, nor any of its officers, employees, agents or directors shall use Confidential and Proprietary Information, direcfly or indirectly, for its benefit, or shall disclose Confidential and Proprietary Information to any thlyd party, except for the reasonable use of this information in making the Coalition services avallable to �mployers In accordance with the terms of this Agreement. Upon termination of this Agreement, both parfies agree and covenant that ft will ndt clisclose the contents of any Canfidential and Proprietary Information without the prior written cansent of the ofher(which consent may be withheld for any reason or granted subject to any conditions), and will return any Confidentiai and Praprietary Information in its possession or the ppssession of its officers, employees, directors and agents, including all copies of such Confidential and Proprietary Information, and cpmputer saftware ar programs, or okher property that is or contafns Confidential and Proprietary Infarmation. Notwithstanding the above, each party may refain informatian necessary to maintain proper legal archives of the services relating to the Coal(tion. 4.4 ESI Services Terms and Conditions. Subject to Section 2.2(b), all Employers shall be eligible to receive, and ESI shall provide, the E�SI Services for tha pricing and financia!terms set forth on Eachibits B- 1 -- B-3. ESI agr�es that Specific benefit designs and clinical programs elected by individual Employers shall be affected fhrough ESI's standard pragram implementation process. 4.5 HIPAA. GBS recognizes fhat in accordance with the privacy rule set forth in 45 CFR Part 164 pursuant to H{PAA, ESI may be prohibited fram disclosing to GBS any PNI received from (or created or received by ESI on behalf o� any �mployer, or relating to claims adjudicated through-the Mail SerVice Pharmacy ar CuraScript, unisss such Employer direcfs and authorizes ESI to release such PHI to GBS in GSS's capacity as a buslness associate of Employer. �SI and G8S further agree that: with respect to each �mpioyer thaf has directed and authorized ESI to disclose PHI to GBS, �SI will pravide GBS with drug utilization claims data and management information reports relating tn such Employer (collectively, "Employ�r Data"), subject to the terms and conditions set forth herein. GBS acknowledges and agrees 8 ts�iz�,� � �....--- � ...� . , .. . ....... , ,. that such Employer Data shall be disciosed_by ESI salely for.the pu►-pose of facilitating an Empioyer',s. "treatment,"�-"payment"or°he�lth care operations°_in connection-with the prescription benefit management services pravided pUrsuant to an �mployer's particular Employer�.P..arficipafion Agreemenf. The Erpploye� .' auttio�ization'fo rel�ase 'Employer Dafa to�GBS�shall be incorporated�i,nto the �mployer Paiticlpation Agreemvnf unless otherwise directed by the Employer • _ _. . . � ARTICLE V�`FEES AND AUDITS - ., - . . . .,: , . , : . _ .., , .; _ :. 5.1 'Fees:-`In consideration of:the.ESt Services provided by ESI;.Employer wi{I pay,the appllcable claims relmburserrient amounts and other administrative fees ("Fees"} set forth in Exhibit B. Fees.,and Rebates'are conditioned on ESI's exclusfve status hereunder (the parties ackno�Nledge_fhat ESI's exclusivity hereunder does not apply to Specialty Products)._ . ; � _� � 5,2 Billinc7 an_d Payment. ` (a) Billinq. �SI will invoice Employer twice per month far ail applicabie Fees; - �.. (b) Pa ment.. Employer will pay ESI by wire, ACH transf�r�or pre-authorized debit within seven (7) days from the`clate of Empioyer's recelpt of each ESI invoice, ;;Employer.wpl be responsible for all costs of�collection, and agrees ta reimburse ESI for such costs and expenses, inclu,ding reasonable attorneys' fees, Ail amounEs not pafd by the due:date thereof will bear interest at the rate of-1.5% per month or, if lower; the`highest interest rate permltted bylaw. In addition ko an'y righks.under.Section 8:2; ESI may apply Rebate amounts otherwise owed to Employer against any unpaid Fees.: .. . � (c) De osifi. If,°-at any �ime, Employer has two or more invoices.past due and outstanding, then ESI rrm�y require that the Employer provid�to ESI a deposit in an amount equal to the average of the last three (3) inonths of billing history as the basis for determining the one (1) month deposit amount or, if three (3} months billing histary is not available, the most recent month of billing history as the basis. ESI will �etain the deposit until the earlier of termination of this Agreement(following any.run-of�period), arsix (6) consecutive montfis of timely payments of all �ees foilowing submission af the deposit, and may apply the deposit to delinquent fees until return of the deposft, ARTICLE VI-CONPIQENTIALITY 6.1 Use and Disclosure of PHi, GBS represents and w�rrants that it has entered_Into a business assoclate agreement with Employers and has authority to disclase to, and receive fram, ESI .PHI in connection with the services to be provided hereunder. GBS and �SI shall malntain the,confidentiality and security of PHI in accordance with applicable laws and regulations, Each par�j acknowledges and agrees that all PHI provided by ESI to GBS or GBS's Auditor under this Agreement is solely for the treatment, paymenk �nd health care operation functions associafed wikh �mployers' health benefit plans. If GBS desires th�t �SI disclose an Employer's PHI ko a certain broker or consultant, GBS shall provlde written authorization fo ESI to provide the PHI to such broker or consultant, and GBS represents and warrants that it has Employers' permission to authorize such disclosure of PHI, ESI and GBS each agree to pratect the integrity and confidenEiality of any PHI electronically exchanged between them and other appropriate business associates, if any, 6.2 f'roprietary Information. (a) Each parry agrees that information of the other party, (ncluding, but not limited to, this Agreement, the follow(ng information shall constitute confidential and proprietary information ("Proprfetary Information"} unless otherwise public: (i) with respect to ESI; ESI's reporting �nd other web-based applications, eligibility and adjudication systems, system formats and databanks (collectively, "ESI's Systems"), clinical or formulary management operations or programs, anonyrnized claims data (de- idenfified in accordance with H1PAA); CuraScript and Mail Service Pharmacy dafa; infarmation concerning F2ebates, prescription drug evaluation criteria, drug pricing information, and P�rkicipating Pharmacy agreements; and (ii] with respect to GBS; Participating Pharrnacy Employer and Member identifiable health information files and data, Eligibility Files, Set-Up Form information, business operations and g i s��2�.� , ..... . . , . � � : . . ..._. . � . .._... � , . . . strategies. Neither party shall use the other parfy's Proprietary Information, or disclose it to any third party, at any time during or after t�rmination of this Agreement, except as specifically.contemplated by this Agreement, upon prior written consent or as otherwise required by law. Upon termination of this Agreement, each party shall cease using the other's Proprietary Information, and all such information shall be returned or destroyed upon the owner's direction. (b} Unless GBS has received the prior, written permission of ESI, GBS will not, and wiil not permit any �mployer or third party acting on GBS's ar an Empioyar's behalf to, access, aftempt to access, test or audit ESI's Systems or any other system or network connected to ESI's Systems, Without lim(ting the foregoing, neither GBS nor �mployers will: (i} �ccess or atternpt to access any portlon or feakure of E51 Systems, by circumventing the ESI Systems' access control measures, either by hacking, password mining or any other means; or (ii) probe, scan, audit or test the vulnerability of ESI's Systems, nor breach the security or authentication measures of�SI's System. ARTICLE VII -COIViPLIANCE WITH LAW 7.1 Chanqe in Law� Pricing Benchmarks. (a) . �ach party shal!be responsible for ensuring its compiiance with any laws and regulations applicable to (ts business, including maintaining any nscessary (icenses and permits. Payor shall be responsible for any governmental or regulatory charges impased upon this Prescriptian Drug f'rogram, other than taxes passed on the net income of ESI, If there is a new or change in federal, state or local laws, court decfsions, or regulations or the Interpretatlan thereof, or a regulatory, judicial or legal action that, among other things, materlally burdens ESI, requires ESI to increase payments or shorten payment times for Covered Drugs ta Participating Pharmacies, or materlally changes the scope af services hereunder (a "Change in Law"), then there shal) be an apprapriate modi�cation of.the services, reimbursement rates, Administrative Fees and/or Rebates such that the parties are returned to their comparabfe ecanomic position as of the ,Effect(ve Date. The parties shall negotiat� an apprapriate adjustment to the fees paid to ESI. If the parties cannot agree on an adjusted fee, then either party may terminate this Agreement upon thirty (30)days prlor written notice to the non-terminating party. (b) The parties understand there are extra-market industry, legal, government and regulatory activities which may lead to ch�nges relating to, or eliminatlon of, the AWP prlcing lndex that could alter the pricing intent under this Agreement. If the Pricing Source changes the methodology for calculating AWP or replaces AWP, or iP, as a result of such change, ESI utilizes another recognized pricing benchmark other than AWP (e.g,, to Whalesale Acquisition Cost), then Participating Pharmacy, CuraScript and Mail Service Pharmacy rates, rebates and guarantees, as applicable, will be modified as reasonably and equftably necessary to maintain the pricing intent under this Agreement, �SI shal� provide GBS with at least ninety (90) days notice of the change (ar if such notice is not practicable, as much notice as is reasonable under the c(rcumstances), and written illustratlon of the financial impact of the pricing source or index change (e.g., specific drug examples). If GBS or Employer disputes the illustration or the financial impact of the pricing source, the parties agree to cooperate in good faith to resalve such disputes. 7,2 Fiduciary Acknowledgements. (a) ERISA. GBS acknawledges and agrees that it is responsible for disclosing to Employers and Members any and all Informatlon relating to the Prescription Drug Program as appropriate ar required under �pplicable law to be disclosed by GBS, including any infarmation relating to the calculation of Copayments and/or I�eductibles, program coverage and eligibility requirements, commissions, administrative fees (including those lt receives, (f any), implementation credits or similar payments, network discoUnt guarantees, Rebates;discounks, price differentiais between the rates specified in-Exhibit ' B and rates a GBS charges a �mployer, or provider differentials. GBS agrees to provide ESI with written , inFarmatian, upon written request, of any differential pricing betw�en the rates specified In Exhibit B and �i rates a GBS charges a Employer, In providing services under this Agreement, ESl nor �ny oP �SI's I wholly-owned subsidiaries or affiliates do noC act on behalf of any Employer, any emplayee welfare I benefit pian (as defined in Sectian 3(1) oP ERISA) spansored by a Employer, or participants fn such pians, �p 189129.7 . ....... . .. , . .... . . . , .... � � .. ... � : . . .... as a ftduciary (as defined in Sectlon 3,21(a) of ERISA), and GBS represents;and warrants that GBS shall not narrie�or characte�ize`ESI`or any of �SI's wholly-owned suhsidiaries or affiliates,as a plan fiduciary, Neither�Sl no�any of`ESI's wholly-owned subsidiaries or affillates exercises any control or management of the Employer's plan or plan asseks, if.any:� : - �-- ' (b) State Fiduciary La�Ns, �SI shall have the r(ght to immediately terminate ESI Services to any Employer (or, if applicable, Members) located in a state requiring a pharmacy benefit manager to be a fiduciary to GBS,�a �mpfoyer, a Member or other.third party relating to thls Agreement ("State �'lduciary � Laws"): 'In the'eVent a court rules fhat a State Fiduc(ary Law is valid and would appiy fo:this Ag�eement, the parties shall rriake a good faith effort to negotiate a revis(on to the Ayreement, including.an ex;clusion of Empioyers�or°Members affected by the State..Fiduciary;Law:if feasible; otherwise,.,efther:party�may terminate the ESI arrangement_upon nlnety(90)days written notice. : . � :: . . _: ,._..: . ,-.. 7.3 Disclosure of Certain Financial Matters, GBS acknowledges that it has read, and agrees to, the "Disclosure of Certain, Financial Matters" section in,the.attached form Ernployer Participation Agreement, and Attachment 1 to the Employer Participation Agreement, , -� . ARTICL�VII{ -TERM AND TERMINATfON: QEFAULT AND REM�DIES 8,1 Term. The fnitiai term of this Agreement shall begln on tha Effecfive Rate and confinue for a period of three(3} years(the."Initial Term°).and,may be terminated earlier or extended in accardance with the terms hereof;_Not less than.one hundred twenty (120}days' prfor to;tha end of the lnifi�l Term ar any Renewal:Term .of khis Agreement, G�S may notify:,E51 iri writing tfiat it wishes to terminate this Ag�eement effective as of the end of the then curr�nt term. If no such written nqtffication is given, this Agreement shall automatically renew with the same te�ms and conditions as set for�h herein for additional one (1) year renewai terms (each, a "Renewal Term"), subject #o ttie right of terminatfon as otherwlse provided herein. - 8,2 Termination, (i) Breach or DEfault. Either parfy may terminate this Agreement by providing the other parry with written notice of a material breach or nonperformance of this Agreement. If the breaching party has not cured said breach within.sixty �60) days from th,e date such notice was sent, to the reasonable satisfaction of the non-breaching party, this Agreement may be terminated at the optian of the non- breaching party effective as of the nlnetieth day following written notice of the breach: (ii} Material Negative Effect, GBS shall have the rlght to terrriinate this Agreement upon ninety (90) days priar vvritten notice when ES1 gives nofice to GBS of a materiai negative effect on Member's access to the Pharmacy Network, provided, howaver, Ehaf if E51 is able ko cure the mate�ial negative effecE on Member's access within the ninety (90)day notice period, GBS's notice af terrnination shali be �considered null and vaid, and this Agreement shall remain in effect, For purposes of this subsection, "material negative effect on Members' access to the Pharmacy Network" shall be defined as set forth in Section 2,1(a) (ii). (iii) Mar4tet Check. Folldwing the first eighteen (18) months after the Effective Date (but not before), GBS reserves the right to renegotfate pricing terms and perfarmance guarantees, to take advantage oP favorable aggr�gate pricing terms and performance guarantess in the pharmacy benefit market, as defermined In conjunction with GBS's auditar, Thomson Reuters. Favorable aggregate pricing terms may Incfude movements in market pricing terms for ESI services with regard to fees, discounts and Formulary Rebates offered, which have a posifive impact to Coalitian. Favorable performance � guarantees may include improyement in current or new performance guarantees far ESI services which . . have a positive impact to Coalition, �SI will provide,�after eighteen (18) rrionths and be(ore twenty (20) months into this Agreement, a mar�cet ch�ck fBpQl� f0 Thomson Reuters and to GBS identif�jing movements in market pricing terms and performance guarantees based on �SI's data base and knowledge of the market. If the mar'�et check report and discussions results in a finding that market conditions can enable Coalition more favorable aggregate pricing terms and/or performance guarantees then the parties will discuss in good faith ravisions ta the pricing terms and/or performance guarantees 11 �s��z�a . i , ; .. , �----t.. i ::::: . •... �. , . , prior ta twenty four (24) months into the Agreement, If ESI is unwllling to agree to the mare favorable aggregate pricing terms anci/or performance guarantees, then GBS may terminate this Agreement anytime during the third year of the Initlal Term by giving ESI at least ninety (90) days' prior written notice deslgnating the termination date. If GBS chooses to exerclse its optlon under this section, �mployers will also have the optlon to term(nate their Agreements on khe etfective dafe af the date the GBS Agreement terminates with ESI and shall not be subjecf to any penalties associat�d with early termination, (iv) Membershi� Incre�se, Rates, Rebates and okher pricing terms are based an the Coalition s(ze of approximately�10,000 aggregate Members. Should the Goalition increase and the tota!aggregate Members exceed 75,000 total Members (a "Membership Increase"), ESI agrees to negotiate in good f�ith an adjusfinent ta the pricing terms, Rebates and performance guarantees, If the total aggregate number of Members exceeds 75,000 Members, at every additional Increase af 25,000 Members, �SI agrees to negotiate in goad faith an adjustment to the pricing terms, Rebat�s and perfarmance guarantees, (v) Pricfnq Chanqes, The parties agree that in no event will the pricing be reevaluated for both a Market Checl<and a Membership Increase in the same calendar year. Any pricing changes agreed upan will become effective the following January or July, wh(chever comes first(and upon an amendment to this Agreement), Pr(cing Changes will aiatomatically apply to Employers in the Initiai Term (as.defined fn the Employer Particfpation Agreement)of their Agreement. (vi} Emplover Participatlon Ac�reements, Notwithstanding anything to the contrary (n th(s Agreement, termination of #his Agreement by �SI or G�S may, at the Employ�r's request, require the termination of the �mplayer Participation Agreernent. �SI agrees that the pricing contained herein is unique to the Coalition, and in the event that an �mployer terminafes their relationship with GBS, CSI will cease offering Coalition pricing to the Employer, and wil! offer difFerent pricing (based on Employer's size, utilization, market conditions, etc.) {fi the �mployer wishes to enter inko an agreement with ESI. To the extent the provisions sek farth hereln need to survive to facilitate the continuatfon of services under the Empioy�r Participation Agreement, �II such terms shall survive terminatian of this Agre�ment for such purpose. 8,3 Remedies. (a} A party's right to terminate this Agreement under Section 8,2 shall not be exclusive of any other remedies available to the terminating party under fhis Agreement or otherwise, at law or in equlty. (b) Neither party shall lose any rights under this Agreement or be liable in any manner for any delay to perform its abligations under this Agreement that are beyond a party's reasonable control, including, without limitation, any delay or failure due ta strikes, labor disputes, riots, earthquakes, storms, floods or other extrern� weather canditions, fires, explosions, acts aP terrorism, epidemics, 'embargoes, war or other outbreak of hostilities, government acts or regulations, the failure or inability of carriers, suppliers, delivery services, ar telecommunicatians praviders to provide serv(ces necessary to enable a party to perfarm its obligations hereunder, or any other reaso� wh�re faiiure to perform is beyond the party's reasonable cantrol, and is not caused by the negligence, intentionai conduct or misconduct of the defaulting party; provided, however, that this clause may not be invoked to excuse a par(y's payment obligations hereunder. (c} Each party's li�bility to the other hereunder shall in no event exceed the actual proximate losses or damages caused by breach of thfs Agreement. In no event shall either party or any of thelr respective affiliates, directors, employees or agents, be liable for any indir�ct, special, inc(dental, consequential, exernplary or punitive damages, or any damages for lost profits relating to a relationship with a third party, hawever caused or arising, whether or not they have been informed of the possibility of kheir occurrence, 8,4 Indemnification. �2 1a�iz�.� ; , . , . . � . ...... . ..... .. � . . .. ... , . ._...� , � ; . : . (a) Each-party ("Indemnitor") agrees,to;Inciemnify, hold harmless and defend the othec party (°Indemnitee") in the,event,of.any third:party claims resulting from the Indemnitor`s breach of this Agreement, or negligence or willfui misconduct in fhe performance of its duties h�reunder. � �. - , , _ .{.. ,. •(b) As a condition of indemnificati�n, the Indemnitee shall promptly`notify the other party of any�claim asse�ted against if and shall tender the,defense of the claim to,the fndemnifor. Notwithstanding anything to the confrary herein, th� indemnificatian provisions herein,shall_not apply if the.ciaim is settled without bath party's consent, which consent shall not be unreasonably withheld. � ' 8.5 �Survival. The partles':rights and obligations undar Section �.1,,Article V, .and�Sections 6,2, 7.3, 7.4 and 7,5 shalf survive the fermination of#his Agreement for any reason, � ARTICLE IX�MISC�I.l.�1NE0US. � 9.1 Liabilitv Insurance, Each party shall maintain such policies of general liability, professional liability and other insurance oP .the::types and_in amaunts, customarify carried,.by their �espective businesses. Proof of such insu[ance shali be available upon request. , ESI shall,-.at its sole�expense, maintain during the term of this Agreement ar any renewa! hereaf, cammercial general liability lnsurance, pharmac(sts professional liability insuranc� and..managed care.liability with limits, excess of,any self- insurad retention, ln amaunts of not,-less.than $5,000,000 per occurrence, and. in fhe aggregate, ESI does not mainfafn liability insurance ron behalf of any Participating Pharmacy; but does_contractually require such Participating Pharmacies to maintain a minimum amnunt of commerclal liability insuranc� or, when deemed acceptable by ESI, to have in pl�ce a selF-insurance program. 9.2 . Notice, All notices by ESI and GBS to each ather relating ta thls�Agreenient or its subject matter shall be in writing and.shall be <deemed given if senf.by or ce�tified mail, .postage prepaid,_or by recognized overnighf d�livery service, addressed to the other party at the address set forth below ar any other address designat�d by GBS or ESl in writing: . � Express Scripts, Inc. � Attn: :Presidenk One Express Way � St. Louis, Missouri 63121 With copy to Legal pepartment � Fax No. (8Q0) 417-8163 Gallagher Benefit Services, Inc, 6399 South Fiddler's Green Circle Greenwood Village, Colorado 80111 � Attn: Bill Robinson Fax No; 303-�24-7010 All notices to Employers should be senk to the address specified in the Employer Participation Agreement and to GBS, or as otherwise designated in writing by the Employer. 9,3 Independent Parties, No provision of this Agreement or any Employer Participat(on Agreement is intended to creake or shall be c�nstrued to create any relatianship between ESI, on the one hand, and GBS or Employer, on the ather hand, other than that of independent entities c�ntracting with each other solaly for the purpose of effecting the provisions of this Agreement. Neither party, nor any of their respective representatives, shall be construed to be the partner, agent, fiduciary, employee, ar representative of the other and neither party shall have the right to make any representations concerning the duties, obligatians or services of the other except as consistent with- the express terms of this Agreement ar as othe�Nise aukhorized in writing by the party about which such representation is asserted. 9.4 Assignment and Subcontracting.. GBS may assign this Agreement upon first obtaining ESI's written consent, which consent will not be unreasonably �vithheld following a standard credit raview of the proposed assignee. GBS acknowledges and agrees that ESI may perform certain services hereunder �� 189129.7 � � ;� � , , t . .......... . ............� i .:::.::... .. i � _.. ... . .. . . . . . . . . � .. .. . . _ �� (e.g., ma(i s�rvice pharmacy and specialty pharmacy services) through ohe or more �SI subsidlartes or affili�tes. FSf is r�sponsible and fiable for the performance of its subsidi�ries and aCfiflates in khe course o�thelr perParm�nce of any such s�rvice. To the extent thak�SI subcan#r�cts any ESI Servic� under this , Agr�emenk to � khird parfy, ESI is responsible and I(able for tha per�ormanc� af �ny such khird party. In �dditfon, ESI may cantra�t��vith thlyd parties to provide in�orm�tion fechnofog�suppart services and other anaillary services, wh(ePi services �re nat ESI Services her�under, but ratfler are services that support �Si's cnncluct ofi its buslness operatl�rzs. This Agreemant will be binding upan, and inure to the beneflt of �nd be enfor.ceabla by,the respea�ive succeasors and p�rmitte�l assigns of the p��ies hereto. g,5 Inteqra#ion' Amendments. Thls /�graement and any �xhibits hereto constltute the entire underst�nding ofi the p�rtias hereto and sup�rsedes any prior oral or written cammunic�'tlan between the partles with respect Fo fha subJecf mattier hereof. No modification, alteratian, or walver of any term, coven�nt, ar condikion oP this Agr�ament shall be valfd unless in writing and sigrted by bokh part(es ar the ag�n#s af the parties who aro auti�iarizecl fn writing, exGept as may be oth�rw(sa perrnitted �ursuant to the � terms and conditiQns af thfs Agre�menfi or any�xhlfait herefo, 3.6 C�alce o�l.�w, This A�r'eement shall �e construod and govor�ned in all respects according to the laws In khe 5tate oP Mlssouri, without regard tn the rules of conflict of laws thoreof, . �,7 Waiver. Tho fallure of elther party to Insist upon th� striak abservatlon ar perfarmance of this Agreernent ar t� ex�raise a�y right or remedy shall not bo construed as a waiver af any subsequent broach nf#hIs Agreemant or impair ar waive any av�ilab(o righk or remedy, 9.8 Sev�r�bil(kv. In the event that any pravision of thfs Agreement is invalid or unenPorcaable, such invafld or unenforceabla provisian shall not lnvalidat� ar affect the Ather pravislans af tf�ls Agreement � whlch shall remain in effect and be consfrued as if such provislan were not a part herenf; �rovlded that If fhe invalldatlon or unenforceability of such provlsioh shall, In the apinion of aithsr party ta the Agreement, have a ma�erial efPect on such parfy's rights or obiigations under this Agreement, then the Agreement may be terminated by such p�tty upon Ehirty(3p)days written notice by such parfy to the ather party, g,9 Third Pa�tv Beneficiary �xcluslon, Th(s Agrasment is not a third pariy beneficiary contract, nor shal{ khis Agreement create any rights on beh�if of Members as against �51. GSS and ESI reserve the right t4 �mend, c�ncel or terminafe this Agreern�nt in acaordance with th�t�rms hereof withou4 natice to, or consent of, any IVlember ar any Employer, � J.10 Trademarks. �ach party aakttowiedges each other parfy's sale and exelusive own�rshlp nf its respective tracie narnes, cammerclal symbols, trademarks, and servlc�rn�rl<s, whetl�er pres�ntly �xisting ar later established "ESf Marits" ancl °G�S M�rl<s" (collectively referred to as "Marics"). .No p�rty shall use th� ofher party's Marks in adverkising or proma#fon�l mat�ri�ls or otherwfse without the owne�'s prlor written consent, � IN WlTNESS WI-I�RCOF, fhe unders(gned hays exec�il�cl this Prescription Drug F�rogram Agreement as of the d�y anci yoar below s�t forth. • EXPR�S�SCRIPTS, INC, GALLAGI � �NEFIT S�RVIGCS, INC. gy-�-i.�G�GCc:�G�'`c�i,/c�Z�`�z'��t,, By; Printed Nam�: , �rintad N� e: /''l. Tiflo: Titlo:�/2?� rr�sr �e�l � i�ate: ^� ''�~ / `. . f=ederal ID Number: ^ I ?'l � av��radsky Date; o��r� � � ��/a? I�VP Commercl�l Dlvfsfdri � 1� � is9iz�.7 Clty of Dubuque Insurance F2equfrements Far Professional Services 1NSUR�NCE SCHE�ULE J � 1, Ex�ress Scri�ts, Inc. sh�ll furnish a signed certiflcate of insurance to the City of Dubuque, lowa for the coverage required in Exhibit I prlor to commencing work and at the end of the project If tho term of work is longer than 60 days, Contractors presenting annual certificates shall present a certlficate at the end oF each project with the final billing, Each certlficate shall be prepared on th� most current ACORC7 form approved by the lowa Department of Insurance or an equivalent appraved by the �inance Director, Each certificate shall Include a statement under Description of Operations as to why the certific�fa was issued, Eg; Project# or ProJect Location at or canstruction of 2. All policies of insurance required hereundor shall be with an insurer autharized to dn business in lowa and all insurers shali have a rating of A or better in the current A,M. BesYs Rating Guide, ' 3, Each certificate shall be furnisheci to the Personnel p�p�rtment of the City of Dubuque, 4. Fa(lure ta provide caverago required by this Insuranca Schedule shall not be deemed a waiver of these requirements by the City of Dubuque. Fallure to obfain or maintaln the required insurance sh�ll be considered a material breach of this agroement, 5, Contractors sh�ll requfre all subconsultants and sub-subconsultants to obtain and malntafn during the performance of work insurance for the coverages described in this Insurance 5chedule and shaii obtain cerfificat�s oF Insur�nces from all such subcansultants and sub-subconsultants, Contractors �gree that they shall bo liable for the failure of a subconsultant and sub- subconsult�nt to obtain and rnaintain such covoragos, The City may request a copy of such �} certif(cates from the Contractor, 6, All required endorsements shall be attached to cortificate of Insurance. 7, Whenever a specific,ISO farm is Iisted, requireci the current edition of the form musfi be used, or � an �quivalent form may be substituted if approv�d by the Finance �irector and subject to the confr�ctor identifying and listing In writing all devlations and exclusions from tl�e ISO form. 8, Contractors shall be required to carry the minimum coverage/limits, or greater if required by law nr other legal agreement, in Exhibit I, If the oontractor's limits of Ilability are higher than the required minimum limits then the provid�r's Iimits shall be thfs agreement's requlr�d I(mits, ) Page 1 of 4 Sch�dulo J Professional Services Na��ember 2017 City af Dubuque Insurance Requlrements far Professional Services INSUR..�I.NCE S�FIEDULE J (continu�d) Exhibit I A) COMM�RCIAL GCN�RAL LIABII.ITY General Aggregate Limit _ � $2,000,000 F'roducts-Completed Operations Aggregate �imit $1,000,000 Personal and Advertising Injury Limit $1,Q00,000 . E�ch Occurrence $1,000,000 Fire Damage Limit(any one occurrence) $50,000 Meciical Payments $5,000 1) Coverage shall bo written on an occurrence, not claims made, form, The general liabillty coverage shail be written in accord with ISO form CG0001 or business owners form BP0002, All deviations from the standard ISO commercial generai 1(ability form CG 0001, or business owners form BP 0002, shall be clearly identified, 2) Include ISO endorsement form CG 25 04"Designated Location(s) Goneral Aggregate Limit"or CG 25 03"Designated Construction Project(s)General Aggregate Lim(t"as approprlate, � 3) Include endorsement Indicating that coverage is primary�nd non-contrfbutory, 4) Include Preservatfon of Governmentai Immunities Endorsement, (Sample attachecl). � 5) Includo additlonal insurod endorsement for; The City of Dubuque, including all its elected and appointed officials, all its � employees and volunteers, all Its boards, commissions and/or authorities and _ thelr board members, employees and volunteers, Use ISO form CG 2026, 6) Policy shall includo Wafver of Right to Recaver from Others endorsement. R) AUTOMOBII,� I.IABII.ITY , Combined Single L.imit $1,000,000 C) WORKERS' COMPENSATION &EMI�L.OY�RS I,IABII.ITY Statutory beneFits cavoring all employees injured on the job by accfdent ar disease as prescribed by lowa Code Chapter�5 as amended. Coverage A Statutory—State of lowa Coverage B �mployers LlabiHty ' Each Accident $100,000 E�ch �mployee-Disease $�00,000 Pnlicy Limit-Disease $500,000 Policy shali include Waiver oP F2ight to Recover from Others enclorsement, Nonelectinn of Wprl<ers' Compensation or Employ�rs' LlabiUty Coverage under lawa Code sec, 87.22 �yes �form attached � Page 2 of 4 Schedul� J Prof�ssion�l Sorvices November 2017 City of Dubuque Insurance Requirements foc Professinn�l Services INSURANCE SCHEDULE J (continued) Q) UMBR�LLA/�XCESS LIABILITY $1,000,000 � Umbr�lla/excess Ilability coverage must be at loast following form wlth the underlying policies included herein, �) PROFESSIONAI.. LIABILITY $1,000,000 Provide evidence of coverage for 5 years after compietion of proJect. F) CY13�R LIABILlTY $1,000,000 ' �yes _na �Coverage for �'irst and Third Party liabllity including but nat limited to last data �nd restoration, loss of income and cyber breach of information, ) ,� Pa�e 3 af 4 Schedule J Profossional Services November 2017 City of Dubuque Insurance Requir�ments for I'rofesslonal Services PRESERVATI�N OF GOVERNMEN°TAL IMMUNNTIE� CNDpRSI�MENT 1, Nonwaiver of Governmental Immunftv,The insurer expressly agrees and statos that tho purchase of this policy and the including of the City of Dubuque, lowa as an Additional Insured does not waive any of the defenses of governmental immunity available to the Clty of C�ubuque, lowa uncler Code of lowa Section 670,4 �s it is now oxists and as it may bo amended frorn time ta time. 2, Claims Coveraqe,The insurer further agrees that this policy of insurance shall cover only those claims not subject to the defense oF governmental immunity under the Code of lowa Soctlon 670,4 as it now exists and as It may.be amended from time to t(me,Those claims not subJect to Code of lowa Soction 670,4 sh�ll be coverecl by the terms and conclitions of this Insurance policy, 3, Assertion of Gavernment Immunitv, The City of Dubuque, lowa shall be responsible for asserting � any defense of governmental immunity, and may do so at any time and shall do so upon the tfinely written I request of tho Insurer, I 4�. Non-Denial of Coveraqe, The insurer shall not deny coverage under this policy and the insurer shall not deny any of the rfghts and benefits accruing to the City of Dubuque, low� under this policy for i reasdns of gov�rnmental immunity unless ancl until a court af comnotent jurisdiction has ruled in favor of the defense(s)of governmental immunity asserted by the City of Dubuque, lowa. No Other Chanqe in Policy, The above preservation of governmental immunities shall not otherwise chanc�� ar alt�r the cover�g� available under the pollcy, ) . I (DEPARTM�NT MANAGER: FIL,L IN ALL �LANKS AND Ch{ECK BOXES) ) Page 4 of� Scheclu(e J f'rofession�l Sorvices Novemb�r 2017