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City and ESI Employer Participation Agreement Copyright 2014 City of Dubuque Consent Items # 11. ITEM TITLE: City and ESI Employer Participation Agreement SUMMARY: City Manager recommending approval of an Employer Participation Agreement between the City of Dubuque and Express Scripts, Inc., for the period January 1 , 2015 to December 31 , 2015. SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve ATTACHMENTS: Description Type ❑ Employer Participation Agreement with Express Scripts-MVM Memo City Manager Memo ❑ Memo-Employer Participation Agreement Staff Memo ❑ ESI Employer Participation Agreement Supporting Documentation ❑ Insurance Schedule C Supporting Documentation THE CITY OF Dubuque UBE I erica .i Masterpiece on the Mississippi 2007-2012-2013 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: July 28, 2015 Express Scripts, Inc. is the City of Dubuque's current pharmacy benefit manager. Personnel Manager Randy Peck recommends City Council approval of an Employer Participation Agreement between the City of Dubuque and Express Scripts, Inc. for the period January 1, 2015 to December 31, 2015. Express Scripts agreed to improved financial terms with an estimated annual savings of$58,609. Projected savings will come primarily from higher formulary rebates, larger discounts and lower dispensing fees. I concur with the recommendation and respectfully request Mayor and City Council approval. Mic ael C. Van Milligen MCVM:jh Attachment cc: Barry Lindahl, City Attorney Cindy Steinhauser, Assistant City Manager Teri Goodmann, Assistant City Manager Randy Peck, Personnel Manager THE CI'Ty OF �,, Dubuque DUB E AWAmedcaC Masterpiece on t1'te Mississippi ,nn ?niz•zia TO: Michael C. Van Milligen, City Manager FROM: Randy Peck, Personnel Manager K SUBJECT: Employer Participation Agreement between the City of Dubuque and Express Scripts, Inc. DATE: July 21, 2015 In 2004, the Health Care Committee participated in a RFP process for pharmacy benefit managers sponsored by the Iowa Employer Coalition and conducted by Gallagher Benefit Services Inc., our benefit and actuarial consultant. The Iowa Employer Coalition is a coalition of other Iowa cities and counties. There was no cost to the City to participate in the RFP process. Express Scripts was selected as the pharmacy benefit manager for the Iowa Employer Coalition. As a result of negotiations conducted by Gallagher Benefit Services Inc., Express Scripts agreed to improved financial terms. The estimated annual savings is $58,609. Projected savings will come primarily from higher formulary rebates, larger discounts and lower dispensing fees. The new agreement is in effect from January 1, 2015 to December 31, 2015. 1 have been working with Express Scripts for six months to resolve some language issues, particularly as it relates to the renewal provision. City Attorney Barry Lindahl has reviewed the applicable provisions of the Employer Participation Agreement and specifically, the renewal provision, and finds the terms acceptable. I request that the City Council approve a motion authorizing you to sign the agreement. RP:Imh 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; 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 Services 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 Obligations. ESI agrees to comply with the terms and conditions as set forth in the Coalition Umbrella Agreement. 2, Employer Obligations. Employer acknowledges that it h'as 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 Responsibility/Payment Terms. In accordance with the Coalition Umbrella 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 Employer 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. 217132,2 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) Confidentiality. Employer will hold the terms and conditions of this Employer Participation Agreement confidential except to the extent disclosure is required under applicable law. Employer will 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 Employer Participation Agreement. 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 -Payment. Notwithstanding anything to the contrary herein, ESI (and its wholly-owned subsidiaries) shall have the right to terminate this Employer 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 Fully 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. 217132.2 2 e) Termination of the Coalition Umbrella Agreement. 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 Umbrella 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) Obligations 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 claims in accordance with the Rebate payment schedule set forth in Exhibit B of the Coalition Umbrella Agreement. 5. HIPAA. The parties agree that as relates to use and disclosure of PHI, electronic transaction standards and security of electronic PHI under HIPAA, they are subject to the terms of a 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 implemented 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 Employer 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 217132.2 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 Management and Consulting 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 operational 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 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. 8. Analytics 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 facilitate the payment of the TH Fees to TH 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 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. 217132.2 4 10. CHECK APPLICABLE BENEFIT PLAN E 0 ; TRADITIONAL PASS THROUGH ESI NATIONAL PLUS NETWORK ESI NATIONAL NETWORK 11. Employer Information. Employer Name: Contact Name: Address: Telephone No.: Fax No.: City of Dubuque Randy Peck City Hall, 60 @, 13th Street Dubuque, IA 663-589-4125 -6025 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized officers or agents as of the date first above written. EXPRESS SCRIPTS, INC. Print Name: Vide Presiderlt - Title: Date: 21732.2 CITY OF DUBUQUE By: mercial Division Print Name: Michael C. Van Milligen Title: City Manager Date: i i I i I ATTACHMENT 1 TO CLIENT AGREEMENT FINANCIAL DISCLOSURE TO ESI PBM CLIENTS This disclosure provides an overvlew 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 affiliates, In addition,I 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 Pharmacles--ESI contracts for Its own account 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 Ilmited), and among pharmacies within a network, and by client arrangements. PBM agreements generally provide that a client pay ESI an ingredient 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-client specific aggregate guarantees with pharmacies and may realize positive margin. ESI may charge I pharmacies standard transaction fees to access ESI's pharmacy claims systems and for other related administrative I, purposes, Brand/Generic Class'f(cations—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, j Innovator, Drug Class and ANDA, The BGA uses these data elements in a hierarchical process to categorize the products as brand or,generic. The RGA 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 available upon request, Brand or generic classification for client reimbursement purposes Is either based on the BGA I or specific code indicators from Medi-Span or a combination of the two as reflected in the client'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")—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 criteria 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 drug 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 utilizatlon data, as allowed by law, for purposes of verifying and evaluating applicable 217132,2 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 service 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.com/services/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 provided 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 EST's PBM formulary rebate programs. However, certain purchase discounts received by EST'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 EST'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 Pharmacy Discount Arrangements — 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 Arrangements—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 Manufacturer Arrangements— 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 PBM formulary 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 EST'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 217132.2 7 i i 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 Party Data Sales— Consistent with any client contract limitations, ESI or its affiliates may sell HIPAA compliant information maintained in their 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. 217132.2 8 R ' COALITION,UMBRELLA AGREEMENT This Coalition Umbrella Agreement("Agreement"), effective January 1, 2012 ("Effective Date'), is entered Into by and between EXPRESS SCRIPTS, INC., a Delaware corporation ("ESI"), and Gallagher Benefit Services, Inc., a Denver corporation ("GBS") RECITALS A. ESI, either directly or through Its subsidiaries, e.ngages;in pharmacy benefit management services, including, among other things, pharmacy network contracting; pharmacy claims processing; mail and specialty drug pharmacy; clinical, safety, adherence.and other like programs; and formulary and rebate administration.("ESI Services");and B. GBS is conducting business hereunder as an employee benefits consultant for certain clients that sponsor self-funded employee benefit 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 containment efforts. Such GBS clients shall be referred to herein as the GBS Coalition (the"Coalition"). C. GBS and ESI have negotiated the terms :under which ESI has agreed to provide ESI Services to each Employer of the Coalition as set forth herein. NOW THEREFORE, in consideration of the mutual,covenants set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ESI and GBS hereby agree as follows: TERMS OF AGREEMENT ARTICLE i -DEFINITIONS The following terms shall have the meanings set forth below: "Ancillary-Supplies,.Equipment, and Services" or "ASES" means ancillary supplies, equipment, and services provided or coordinated by CuraScript in connection with CuraScript's dispensing of Specialty Products. ASES.may include all or some of the following: telephonic and/or in-person training, nursing/clinical monitoring, medication pumps, tubing, syringes, gauze pads, sharps containers, lancets, test strips, other supplies, and durable medical equipment, The aforementioned list is illustrative only(not exhaustive) and may Include other supplies, equipment, and services based on the patient's needs, prescriber instructions, payer requirements, and/or the Specialty Product manufacturer's requirements, "Average Wholesale Price" or "AWP" means the average wholesale price of a prescription drug as Identified by drug pricing services such as First DataBank or other source recognized in the retail prescription drug industry selected by ESI (the "Pricing Source"). The applicable AWP shall be the 11- digit NDC for the product on the date dispensed, and for prescriptions filled in (a) Participating Pharmacies and CuraScript will be the AWP for the package size from which the prescription drug was dispensed, and (b) In the Mail Service Pharmacy the AWP for the smaller of: (1) the NDC code for the package size from which the prescription drug was dispensed, or (ii) package sizes of 100 units or 16 ounce quantities, or the next larger quantity if such specified quantities 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 utilized for all clients. Notwithstanding the foregoing, certain prescription drug medications that are licensed and then currently marketed as brand name drugs, where there exists at least one (1) competing prescription medication that is 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 189129.7 Copayment means that portion of the charge for each Covered Drug dispensed to the Member 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 prescription drugs, supplies, Specialty Products and other items that are covered under the Plan, each as indicated on the Set-Up Forms. "CuraScript" means CuraScript, Inc. or another pharmacy wholly-owned or operated by ESI or its wholly-owned subsidiaries that primarily dispenses Specialty Products. "Eligibility Files" means the list submitted by Employer to ESI In reasonably acceptable electronic format indicating persons eligible for drug benefit coverage services under the Plan. "Employer" means a self-funded Employer benefit plan with at least 50 participating employees that is a client of GBS, that is in good standing with GBS, and that has entered into an Employer Participation Agreement with ESI. "Employer Participation Agreement"means the form of agreement set forth on Exhibit A. "ESI National Plus Network" means ESI's broadest Participating Pharmacy network.' "Formulary" means the list of FDA-approved prescription drugs and supplies developed by EST's Pharmacy and Therapeutics Committee and/or customized by Employer, and which is selected and/or adopted by Employer. Routine additions and/or deletions to the Formulary are hereby adopted by Employer, subject to Employer's discretion to elect not to implement any such addition or deletion through the Set-Up Form process. "Generic Drug" means a prescription drug,whether identified by Its chemical, proprietary, or non- proprietary name, that Is therapeutically equivalent and interchangeable with drugs having an identical amount of the same active ingredients)and approved by the FDA. For purposes of this Agreement, the Generic Drug determination is made using indicators from First Databank (or other source nationally recognized in the prescription drug Industry used by ESI for all clients) on the basis of a standard brand/generic algorithm utilized by ESI for all of its clients, a copy of which may be made available for review by Employer upon request. "HI PAN' shall mean the Health Insurance Portabllity and Accountability Act of 1996, as amended. "Ingredient Cost Charge" means the ingredient cost portion of the amount charged by ESI to Employer for each Prescription Drug Claim, subject to the "lesser of" logic set forth on Exhibit A, as applicable. "Mail Service Pharmacy" means a duly licensed pharmacy operated by ESI or Its subsidiaries, other than CuraScript, where prescriptions are filled and delivered to Members via mail delivery service. "Manufacturer Administrative Fees means those administrative 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 ESI's administering, invoicing, allocating and collecting the Rebates under the Rebate program. "CMAC List" means a list of prescription drug products identified as readily available as Generic Drugs, generally equivalent to•a Brand Drug (in which case the Brand Drug may also be on the MAC List) and which are deemed to require pricing management due to the number of manufacturers, utilization and pricing volatility. 1 The ESI National Plus Network is referred to as the"EN50 Network" in ESI's network provider agreements with Participating Pharmacies,subject to future name change. 2 189129.7 "Maximum Reimbursement Amount" or-"MRA" means the maximum reimbursement payment- schedules developed or selected by ESI. The payment schedules specify the maximum unit ingredient cost payable by Employer for drugs on the MAC Llst, The application of MRA pricing may be subject to Employer defined plan design and coverage policies, "Member" means each person who Employer determines is eligible to receive prescription drug benefits as indicated in the Eligibility Files. "Member Submitted Claim" means a paper claim submitted by a Member for Covered Drugs dispensed by a pharmacy other than a Participating Pharmacy or for which the Member paid cash. "Participating Pharmacy." means any licensed retail pharmacy with which ESl has executed an agreement to provide Covered Drugs to Members, but shall not include any mail order or specialty pharmacy affiliated with any such Participating Pharmacy. Participating Pharmacies are independent contractors of 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 remittances related to Employer's claims. "PEPM" means per employee per Month, if applicable, as determined by ESI from the Eligibility Files, "PMPM"means per Member per Month fee, If applicable, as determined by ESI from the Eligibility Files. "Plan" means the prescription drug benefit portion of Employer's welfare benefit plan(s), "Prescription Drug Claim" means a Member Submitted Claim, Subrogation Claim or claim for payment submitted to ESI by a Pharmacy as a result of dispensing Covered Drugs to a Member. "Rebates" mean retrospective rebates that are paid to ESI pursuant to the terms of a rebate contract negotiated independently by ESI with a pharmaceutical manufacturer, and directly attributable to the utilization of certain Covered Drugs by Members, Rebates do not include Manufacturer 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 pharmacies; fees received by ESI from manufacturers for care management or other services provided in connection with the dispensing of Specialty Products; or other fee-for-service arrangements whereby pharmaceutical manufacturers generally report the fees paid to ESI or its affiliates for services rendered as "bona fide service fees" pursuant to federal laws and regulations, including, but not limited to the Medicaid "Best Price" rule (collectively, "Other Pharma Revenue"), Such laws and regulations, as well as EST's contracts with pharmaceutical manufacturers, generally prohibit ESI from sharing any such "bona fide service fees" earned by ESI, whether wholely or in part, with any ESI client. ESI represents and warrants that it will not enter into any agreement with a pharmaceutical manufacturer for Other Pharma Revenue in exchange for a reduction of Rebates. "Set-Up Forms" means any standard ESI document or form, which when completed and signed by Employer, will describe the essential benefit elements and coverage rules adopted by Employer for its Plan. "Specialty Product List" means the standard list of Specialty Products maintained by ESI and their reimbursement rates under the applicable (exclusive or open) option, as updated by ESI from time to time, The Specialty Product List is available to Employer upon request. "Specialty Products" means those injectable and non-injectable drugs typically having one or more of several key characteristics, including: frequent dosing adjustments and intensive clinical monitoring to decrease the potential for drug toxicity and increase the probability for beneficial treatment 3 189129:7 - I I outcomes; intensive patient training and compliance assistance to facilitate therapeutic goals; limited or exclusive product availability and distribution; specialized product handling and/or administration requirements and/or cost in excess of $500 for a 30-day supply, . ESI updates the list of Specialty Products as new drugs are brought to market. "Subrogation Claim"means subrogation claims submitted by any state or a person or entity acting on behalf of a state under Medicaid or similar United States or state government 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" or "U&C" means the retail price charged by a Participating Pharmacy for the particular drug in a cash transaction on the date the drug is dispensed as reported to ESI by the Participating Pharmacy. I ARTICLE II—RESPONSIBILITIES OF BSI 2.1 ESI Services. In consideration of GBS entering into this Agreement with ESI, ESI guarantees the ESI Services, fees, pharmacy reimbursement rates, Rebates and other terms and conditions set forth In the attached Exhibit A for those Employers that agree to enter into Employer Participation Agreements with,ESI. (a) Participating_Network Pharmacies. (i) PharmacyNetwork. ' ESI has created and shall use commercially reasonable efforts to maintain a national network of Participating Pharmacies ("Pharmacy Network") consisting of at least 50,000 Participating Pharmacies, including national and regional chain Participating Pharmacies. ESI agrees to include all current (i.e., as of the Effective Date) Coalition filling pharmacies in the Pharmacy Network; provided that such pharmacies meet ESI's credentialing requirements and agree to ESI's contract terms, subject to any such pharmacy that is not currently in ESI's network contracting with ESI pursuant to ESI's standard Participating Pharmacy terms and conditions, unless otherwise agreed to in writing between the parties. Upon Coalition and/or Employer's request, ESI shall have the right to create for Coalition and/or Employer a subnetwork of Participating Pharmacies. For purposes of this Agreement, "Pharmacy Subnetwork"shall mean any Employer-specified single variation to the Pharmacy Network. ESI will make available a current list of Participating Pharmacies In such Pharmacy Network(s) on-line, such list to be updated by ESI no less often than quarterly and upon request to Coalition and/or Employer. Each Participating Pharmacy is contractually required to verify the Member's eligibility through ESI's on-line claims processing system prior to dispensing a prescription (ii) Access of Members. Subject to applicable law and pharmacy provider agreements, Coalition and/or Employer shall have the right to request that ESI add or delete a Participating Pharmacy or chain of Participating Pharmacies to or from the Pharmacy Network and the parties shall reach a mutual agreement regarding the addition or deletion of a Participating Pharmacy from the Pharmacy Network. ESI shall provide prior written notice to Coalition and Employers of additions or deletions that have a material 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. For purposes of this subsection, "material negative effect on Member's access to the Pharmacy Network" shall mean when any of the following occur: A) the Pharmacy Network no longer meets the access or availability standards required by state or applicable law or that Employer has represented it complies with to a state insurance department or other regulatory authority; If there is a materially negative effect on Members' access to the Pharmacy Network, then ESI will have sixty (60) days within which to cure such materially negative effect. If ESI is unable to cure the materially negative effect within sixty (60) days then GBS may terminate this Agreement upon written notice to ESI one 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) miles of a Participating Pharmacy drops below 96%, contingent upon the existence of a pharmacy and/or pharmacies with which ESI could contract: or C) the percentage of Members' residences in suburban and rural areas that are 4 189129.7 within five miles of a Participating Pharmacy drops below 96%, contingent upon the existence of a pharmacy and/or pharmacies with which ESI.could contract. (b): Coalition Audits. (i) Consistent with the Standard Audit Protocol attached hereto in the Exhibits, once each year(or more frequently if warranted, as reasonably determined by GBS)and for up to two (2)years after termination hereof, GBS's third party auditor("Auditor"), as approved by ESI (which approval shall not be unreasonably withheld) and provided such Auditor executes a mutually acceptable Confidentiality Agreement, may inspect and verify Prescription Drug Claim data, billing records, pricing discounts and terms, Brand Drug and Generic Drug Classifications, claims adjudication systems, pharmacy benefits, Rebate payment calculations, manufacturer agreements, clinical programs, and other compensation from any party directly related to Coalition and Employer's prescription drug ,utilization and services, performance guarantees, AWP rate adjustments, and operational processes relating to the services provided to Coalition and Employers pursuant to this Agreement to ensure ESI's compliance with the terms and conditions of this Agreement, as GBS reasonably deems appropriate, including but not limited to, 100% of the claims data for such reasonable time period Coalition then determines acting in good faith, taking into account EST's limitations to respond quickly to longer periods of time and older data. At the request of GBS, ESI shall provide all claims data, In a format suitable to Auditor, at EST's cost, . All audits shall be conducted during normal business hours at ESI offices upon sixty (60) days' prior written notice, If ESI 'performs a discount and dispensing fee guarantee calculation, ESI's guarantee report results will be shared with GBS's-Auditor prior to any payment being made to Employers (if applicable). Any payment that may result from ESI's discount and dispensing fee calculation will only be provided after Coalition's Auditor has completed its annual audit and coordinated appropriate reconciliation, Any and all costs and expenses of each party associated with Coalition's audit shall be borne by that party, Results of the most recent SAS-70 audit will be provided by ESI to Employers, The parties agree that the scope of audits by Coalition or Auditor will not be duplicative of the SAS-70 audit, but may include inspection and/or verification of certain Information provided In the SAS-70 audits to the extent necessary to give GBS and Employers a more thorough understanding of and support for such information, Audit materials or documentation provided by ESI will be confined to Coalition-specific information. (ii) If the audit discloses an overpayment of Fees or claim payments to ESi by Employer or an underpayment of Rebates or guarantees or performance standard penalties to Employer by ESI, or other economic benefits received.by ESI in excess of what ESI is entitled to under this Agreement, then ESI shall pay the amount owed to Employer within a commercially reasonable time period after ! completion of the audit, but not to exceed thirty (30) days, Overpayments, if 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 that contract with ESI for the pricing arrangement as forth in this Agreement, shall be paid in the aggregate to the Coalition, which shall then distribute such payments to the Employers in the Coalition 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 authorization to ESI to disclose Member information to the auditor subject to the terms, and conditions of this Agreement. 2.2 Employer Participation Agreements. I (a) Except as provided in Section 2.2(b), ESI agrees to enter into written Employer Participation Agreements with Employers in accordance with the terms herein, so long as the Employer is creditworthy, ESI has the right to update the form of Employer Participation Agreement to use for the specific Employer; provided that the ESI Services and d financial terms are as set forth in this Agreement. ESI also shall have the option to require existing Employers to execute new Employer Participation Agreements or amendments to existing 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 returned It to ESL 5 189129,7 , ... .. ... i .. .. ..... .... ...... III I i (b) Under no circumstances will ESI enter into Employer Participation Agreements with any Employer organized or incorporated In the State of Maine or any other state or governmental entity that adopts a law or rule requiring a pharmacy benefit manager ("ESI")to be a fiduciary and/or force the ESI to . surrender any revenue otherwise inuring to ESI under a Employer Participation Agreement in connection with the provision of any or all ESI Services, Finally, should a federal or state law be adopted that would require ESi to be a fiduciary to perform any or all of the ESI Services and such law does not grandfather existing agreements, ESI shall have the right to terminate any Employer Participation Agreement that would be subject to such law, 2,3 Reports to GBS. Upon written approval of each Employer 'as indicated in their respective Employer Participation Agreements, ESI shall provide GBS with copies of all reports provided pursuant to. the Employer Participation Agreements, subject to the terms and conditions set forth herein, ESI shall provide a written report no less frequently than quarterly, by Employer. 2.4 Management Fees. ESI shall pay GBS and Thompson Reuters ("TR" or "Auditor") quarterly fees in accordance with the terms and conditions of the applicable Employer Participation Agreement. Except for nonpayment y ESI in violation of the express terms set forth in the applicable Employer Participation Agreement, GBS shall hold ESI harmless in connection with any dispute betw been GBS, Thompson Reuters, and any Employer, or otherwise, regarding fees. 2.5 Performance Standards. ESI will conform to the performance standards set forth on Exhibit F hereto. The payments set forth in Exhibit F will be Coalition's sole monetary remedy for any failure by ES{ to meet a performance standard in addition to any correction or reimbursement associated with payment or billing errors. ARTICLE III-ESI SERVICES 3.1 General ESi Services, ESI will provide certain pharmacy benefit management services, including retail pharmacy network contracting and management, Mail Service and Specialty Pharmacies,formulary and Rebate management and clinical and trend programs for Employers, services shall be provided pursuant to the terms and conditions set forth in the applicable Employer Participation Agreement and Set-Up Forms, and GBS acknowledges and agrees to the same. (a) Program Reporting. ESI shall make available ESI's standard management information reporting capabilities to the person indicated in the Employer Participation Agreement, subject to applicable law. Upon request, ESI may perform ad hoc programming for any special reporting at EST's standard hourly rate,.as set forth in Exhibit B. (b) Clinical Programs. Subject to the terms and conditions set forth in Exhibit B and the Employer Participation Agreement, ESI will provide certain clinical programs adopted by the Employer. Clinical Programs are subject to change from time-to-time,at ESI's discretion. (c) Claims for Benefits. ESI will process initial "claims for benefits" for Member Submitted Claims and PA requests consistent with the ERISA claims rules set forth in 29 CFR Part 2564 (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 translation services as required under the Claims Rules for certain initial "claims for benefits", ESI will not conduct any appeals of denied "claims for benefits," 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 will route Member appeals to UM Company (Employer or other Employer designated entity). Employer must execute a standard ESI Internal Appeals Services"Set-Up Form, which may be requested through ESi Account Management, in order to receive such services from MCMC, (d) UM Company. In the event Employer elects to utilize the UM Company, the UM Company will be responsible for conducting the appeal on behalf of Employer in accordance with the Claims Rules, and Employer acknowledges and agrees that: 6 189129.7 I i I (i) ESi is not acting as a fiduciary in connection with the appeals being conducted by the UM Company, and ESI will not be named by Employer as a fiduciary in connection with such appeals; the UM,Company, and not ESI,will be conducting appeals on behalf of Employer; the UM Company Is an independent contractor of ESI and ESI does not in anyway control or. . direct the UM Company with respect to appeals conducted by the UM Company. (11)` ESI represents to Employer that UM Company has contractually agreed that: (A) UM Company will conduct appeals in accordance with the Claims Rules and Employer's plan,(B) Employer is a third party beneficiary of UM Company's agreement with ESI (a copy of which is available upon request) and the remedies set forth therein, and (C) UM Company will indemnify Employer for third party claims caused by the UM Company's negligence or willful misconduct in providing the appeal services. ESI will not be liable to Employer for any injury or damages arising as a result of the UM Company's acts or omissions: (e) ` External Review Services. ESI will not conduct any external review services (as defined in the Patient Protection and Affordable Care Act of 2410 and Its implementing regulations ("PPACA")); provided, however, Employer may elect to have UM Company facilitate the provision of external review services through MCMC contracted IROs (as such term is defined in PPACA, for the fees set forth on Exhibit A below (if applicable). Employer must execute a`standard ESI "External Appeals Services" Set-Up Form, which may be requested through ESI Account Management, in order to receive such services from MCMC. i In the event that Employer elects to utilize MCMC to facilitate the provision of external review services-through MCMC contracted IROS, MCMC will be responsible for facilitating all such appeals (and the TROs will be responsible for providing all such appeals) in accordance with PPACA and all other applicable federal and state laws, and Employer hereby acknowledges and agrees that: (1) MCMC (with respect to facilitating the external reviews) and the IROS (with respect to performing the external reviews), and not ESI, will be providing external review services; MCMC is an independent contractor of ESI; the IROS are independent contractors of MCMC and not ESI; and ESI does not in any way control or direct either MCMC or the IROs with respect to facilitation or performance of external review services provided by each respectively. (11) ESI represents to Employer that MCMC has contractually agreed that: (A) MCMC will facilitate all external review services In accordance with PPACA and all other applicable federal and state laws; (B) MCMC will contractually require its contracted IROS to perform all external reviews In accordance with PPACA and all other applicable federal and state laws; (C) to the extent not prohibited by law, MCMC will indemnify, defend and hold Employer harmless from and against any and all losses, damages, injuries, causes of action, claims, demands and expenses (including reasonable attorney's fees, costs and expenses), arising out of, resulting from, or related to any act, omission or default by the TROs in their performance of the external reviews; and (D) Employer has third party beneficiary rights to enforce the preceding indemnification and hold harmless provision. (f) Call Center, ESI will provide 24-hours a day, 7-days a week toll-free telephone, IVR and Internet support to assist Employer, Employer's agents and Members with Member eligibility and benefits verification, location of Pharmacies or other related Member concerns. 3.2 Rebates. Subject to the remaining terms of this Agreement, ESI will pay to GBS an amount equal to the Rebates specified on Exhibit B, subject to Employers meeting the terms and conditions set forth on Exhibit B. GBS represents and warrants that it will pass through any Rebates to its Employers that it receives from ESI to the extent it is not permitted to retain such Rebates under its arrangements with its Employers or applicable law. ESI will pay such Rebate amounts directly to Employers if instructed in writing by GBS. References in this Agreement(including Exhibits)to payment of Rebate amounts to GBS shall include payment of Rebate amounts to Employer as applicable, if and when so instructed by GBS In writing to pay such amounts directly to Employer. 7 189129.7 ARTICLE IV-RESPONSIBILITIES OF GBS 4.1 Endorsement. GBS agrees to endorse ESI as the provider of PBM Services, including pharmacy claims processing, retail pharmacy network, mail order and specialty product pharmacy services, formulary and rebate management services for all Coalition Employers and potential Employers, as GBS deem appropriate. ESI acknowledges that such endorsement does not guarantee participation by such Employers in an Agreement, and further, that such Employers have autonomy to choose an alternate vendor. 4.2 Marketing, Upon an Employer's request, GBS agrees to offer ESI's programs, products and services as set forth in the attached Exhibits to Member health and welfare funds, or other health plan entities representing 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 commercially reasonable efforts in accordance with the applicable laws and Industry practices, 4,3 Employer Participation.Agreements, GBS agrees to assist ESI in obtaining signed Employer Participation Agreements. (a) Proprietary Information. Both parties acknowledge and agree that, during the term of this Agreement, it may receive Confidential and Proprietary Information from the other, For these purposes, the term "Confidential and Proprietary Information" shall mean the financial terms set forth herein and the attached Exhibits, clinical programs, software and web (on-line) based reporting, modeling, eligibility and clinical and formulary program applications and formats, statistical data, business models and strategies, product or service pricing information, trade secrets, and all other similar information, Confidential.and Proprietary Information shall not Include information that Is: (i)generally known to the public at the time of disclosure, (ii) rightfully received from a third party not under obligation of confidentiality with respect to such information, or (Hi) publicly available through no act or omission of either 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, directly or indirectly, for its benefit, or shall disclose Confidential and Proprietary Information to any third party, except for the reasonable use of this information in making the Coalition services available to Employers in accordance with the terms of this Agreement. Upon termination of this Agreement, both parties agree and covenant that it will not disclose the contents of any Confidential and Proprietary Information without the prior written consent of the other(which consent may be withheld for any reason or granted subject to any conditions), and will return any Confidential and Proprietary Information in its possession or the possession of its officers, employees, directors and agents, including all copies of such Confidential and Proprietary Information, and computer software or programs, or other property that is or contains Confidential and Proprietary Information. Notwithstanding the above, each party may retain information necessary to maintain proper legal archives of the services relating to the Coalition. i 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 ESi Services for the pricing and financial terms set forth on Exhibits B- 1 — B-3. ESI agrees that Specific benefit designs and clinical programs elected by Individual Employers shall be affected through ESI's standard program implementation process. 4.5 HIPAA. GBS recognizes that in accordance with the privacy rule set forth in 45 CFR Part 164 pursuant to HIPAA, ESI may be prohibited from disclosing to GBS any PHI received from (or created or received by ESI on behalf of) any Employer, or relating to claims adjudicated through-the Mail Service Pharmacy or CuraScript, unless such Employer directs and authorizes ESI to release such PHI to GBS in CBS's capacity as a business associate of Employer. ESI and GBS further agree that: with respect to each Employer that has directed and authorized ESI to disclose PHI to GBS, ESI will provide GBS with drug utilization claims data and management Information reports relating to such Employer (collectively, "Employer Data"), subject to the terms and conditions set forth herein. GBS acknowledges and agrees i3 189129,7 i that such 'Employer Data shall be disclosed by ESI solely for the purpose of facilitating an Employer's "treatment, "payment"or"health care operations"-In connection.with the prescription benefit management. services provided pursuant to an Employer's particular Employer:P.anticipation Agreement. The Employer . authorization'to release Employer Data to;GBS shall be incorporated,--into the Employer Participation Agreement unless otherwise directed by the Employer, ARTICLE V-FEES AND AUDITS 5.1 Fees. In consideration of the ESI Services provided by ESI, Employer will pay,the applicable claims reimbursement amounts and other administrative fees ("Fees") set forth in Exhibit B. Fees and Rebates are conditioned on EST's exclusive status hereunder (the parties acknowledge that ESL's exclusivity hereunder does not apply to Specialty Products). - 5.2 Billing and,Payment. (a) Billing. ESI will invoice Employer twice per month for all applicable Fees. (b) Paymenk.. Employer will pay ESI by wire, ACH transfer or pre-authorized debit within seven (7) days from the date of Employer's receipt of each ESI invoice. ,Employer will be responsible for all costs of collection, and agrees to reimburse ESI for such costs and expenses, including reasonable attorneys' fees. Ali amounts not paid by the due date thereof will bear interest at the rate of.1.5% per month or, if lower, the highest interest rate permitted by law, In addition to any rights under Section 8.2, ESI may apply Rebate amounts otherwise owed to Employer against any unpaid Fees.. (6) De osit, If,:at any time, Employer has two or more invoices past due and outstanding, then ESI may require that the Employer provide to ESI.a deposit in an amount equal to the average of the last three (3) months of billing history as the basis for determining the one(1) month deposit amount or, if three (3) months billing history is not available, the most recent month of billing history as the basis. ESI will retain the deposit until the earlier of termination of this Agreement(following any.run-off period),,or six (6) consecutive months of timely payments of all Fees following submission of the deposit, and may apply the deposit to delinquent fees until return of the deposit, ARTICLE VI-CONFIDENTIALITY 6.1 Use and'Disclosure of PHI, GBS represents and warrants that it has entered.into a business associate agreement with Employers and has authority to disclose to, and receive from, ESI .PHI in connection with the services to be provided hereunder. GBS and ESI shall maintain the confidentiality and security of PHI in accordance with applicable laws and regulations. Each party acknowledges and agrees that all PHI provided by•ESI to GBS or GBS's Auditor under this Agreement is solely for the treatment, payment and health care operation functions associated with Employers' health benefit plans, If GBS desires that ESI disclose an Employer's PHI to a certain broker or consultant, GBS shall provide written authorization to 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 protect the integrity and confidentiality of any PHI electronically exchanged between them and other appropriate business associates, if any. 6.2 Proprietary Information. I (a) Each party agrees that information of the other party, Including, but not limited to, this Agreement, the following information shall constitute confidential and proprietary information ("Proprietary Information") unless otherwise public: (I) with respect to ESI: ESI's reporting and other web-based applications, eligibility and adjudication systems, system..formats and databanks (collectively, "EST's Systems"), clinical or formulary management operations or programs, anonymized claims data (de- identified in accordance with HIPAA); CuraScript and Mail Service Pharmacy data; information concerning Rebates, prescription drug evaluation criteria, drug pricing information, and Participating Pharmacy agreements; and (ii) with respect to GBS: Participating Pharmacy Employer and Member identifiable health information files and data, Eligibility Files, Set-Up Form information, business operations and 9 189129,7 ... ....... ...... I i , strategies. Neither party shall use the other party's Proprietary Information, or disclose it to any third party, at any time during or after termination 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 will not permit any Employer or third party acting on CBS's or an Employer's behalf to, access, attempt to access, test or audit ESI's Systems or any other system or network connected to ESI's Systems. Without limiting the foregoing, neither GBS nor Employers will: (i) access or attempt to access any portion or feature of ESI 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 ESI's System. ARTICLE VII -COMPLIANCE WITH LAW 7.1 Change in Law' Pricing Benchmarks. (a) Each party shalt be responsible for ensuring its compliance with any laws and regulations applicable to its business, including maintaining any necessary licenses and permits. Payor shall be responsible for any governmental or regulatory charges imposed upon this Prescription Drug Program, other than taxes passed on the net income of ESI. If there is a new or change in federal, state or local laws, court decisions, or regulations or the interpretation thereof, or a regulatory, judicial or legal action that, among other things, materially burdens ESI, requires ESI to increase payments or shorten payment times for Covered Drugs to Participating Pharmacies, or materially changes the scope of services hereunder (a "Change in Law"), then there shall be an appropriate modification of the services, reimbursement rates, Administrative Fees and/or Rebates such that the parties are returned to their comparable economic position as of the Effective Date. The parties shall negotiate an appropriate 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 prior 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 changes relating to, or elimination of, the AWP pricing Index that could alter the pricing intent under this Agreement. If the Pricing Source changes the methodology for calculating AWP or replaces AWP, or if, as a result of such change, ESi utilizes another recognized pricing benchmark other than AWP (e.g,, to Wholesale Acquisition Cost), then Participating Pharmacy, CuraScrlpt and Mail Service Pharmacy rates, rebates and guarantees, as applicable, will be modified as . reasonably and equitably necessary to maintain the pricing intent under this Agreement. ESI shall provide GBS with at least ninety (90) days notice of the change (or if such notice is not practicable, as much notice as is reasonable under the circumstances), and written illustration 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 resolve such disputes. 7.2 Fiduciary Acknowledgements. (a) ERISA. GBS acknowledges and agrees that it is responsible for disclosing to Employers and Members any and all information relating to the Prescription Drug Program as appropriate or required under applicable law to be disclosed by GBS, including any information relating to the calculation of Copayments and/or Deductibles, program coverage and eligibility requirements, commissions, administrative fees (including those it receives, if any), implementation credits or similar payments, network discount guarantees, Rebates;discounts, price differentials between the rates specified in•Exhibit B and rates a GBS charges a Employer, or provider differentials. GBS agrees to provide ESI with written Information, upon written request, of any differential pricing between the rates specified In Exhibit B and rates a GBS charges a Employer. In providing services under this Agreement, ESI nor any of ESI's wholly-owned subsidiaries or affiliates do not act on behalf of any Employer, any employee welfare benefit plan (as defined in Section 3(1)of ERISA) sponsored by a Employer, or participants in such plans, a 189129.7 i as a fiduciary (as defined in Section 3,21(a) of ERISA),and GBS represents and warrants that GBS shall not name'or`characterize ESI or any of EST's wholly-owned subsidiaries or affiliates as a plan fiduciary. Neither ESl nor any of ESI's wholly-owned subsidiaries or.affiliates exercises any contral or management of the Employer's plan or plan assets,if.any. (b) State Fiduciary Laws. .ESI shall have the right 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 Employer, a Member or other third party relating to this Agreement("State Fiduciary Laws"). In the event a court rules that a State Fiduciary Law is valid and would apply to this Agreement, the parties shall make a good faith effort to negotiate a revision to the Agreement, including an exclusion of Employers`or Members affected by the State Fiduciary Law.if feasible; otherwise, either party may terminate the ESI arrangement.upon ninety(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 Employer Participation Agreement, and Attachment 1 to the Employer Participation Agreement. ARTICLE Vlll-TERM AND TERMINATION; DEFAULT AND REMEDIES 8,1 Term, The initial term of this Agreement shall begin on the Effective hate and continue for a period of three(3) years (the"Initial Term").and.,may be terminated earlier or.extended in accordance with the terms hereof.,Not less than;one hundred twenty (120)days' prior to the end of the Initial Term or any Renewal Term of this. Agreement, GBS may notify.ESI in writing that it wishes to terminate this Agreement effective as of the end of the then current term. If no such written .notification is given, this Agreement shall automatically renew with the same terms and conditions as set forth herein for additional one (1) year renewal terms (each, a "Renewal Term"), subject to the right of termination as otherwise provided herein. 8.2 Termination. (1) Breach or Default. Either party may terminate this Agreement by providing the other party 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 the date such notice was sent, to the reasonable satisfaction of the non-breaching party, this Agreement may be terminated at the option of the non- breaching party effective as of the ninetieth day following written notice of the breach. (ii) Material Negative Effect, GBS shall have the right to terminate this Agreement upon ninety (90) days prior written notice when ESI gives notice to GBS of a material negative effect on Member's access to the Pharmacy Network, provided, however, that if ESi is able to cure the material negative effect on Member's access within the ninety (90) day notice period, GBS's notice of termination shall be considered null and void, 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). I (iii) Market Check. Following the first eighteen (18) months after the Effective Date (but not before), GBS reserves the right to renegotiate pricing terms and performance guarantees, to take advantage of favorable aggregate pricing terms and performance guarantees in the pharmacy benefit market, as determined in conjunction with GBS's auditor, Thomson Reuters. Favorable aggregate pricing terms may Include movements in market pricing terms for ESI services with regard to fees, discounts and Formulary Rebates offered, which have a positive impact to Coalition. Favorable performance guarantees may include improvement in current.or new performance guarantees for ESI services, which have a positive impact to Coalition. ESI will provide, after eighteen (18) montHs''and before twenty'(20) months Into this Agreement, a market check report to Thomson Reuters and to GBS identifying movements in market pricing terms and performance guarantees based on ESI's data base and knowledge of the market. If the market 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 revisions to the pricing terms and/or performance guarantees 11 189129.7 prior to twenty four (24) months into the Agreement, If ESI is unwilling to agree to the more favorable aggregate pricing terms and/or performance guarantees, then GBS may terminate this Agreement anytime during the third year of the Initial Term by giving ESI at least ninety (90) days' prior written notice designating the termination date. If GBS chooses to exercise its option under this section, Employers will also have the option to terminate their Agreements on the effective date of the date the GBS Agreement terminates with ESI and shall not be subject to any penalties associated with early termination, (iv) Membership Increase. Rates, Rebates and other pricing terms are based on the Coalition size of approximately 40,000 aggregate Members. Should the Coalition Increase and the total aggregate Members exceed 75,000 total Members (a"Membership Increase"), ESI agrees to negotiate in good faith an adjustment to the pricing terms, Rebates and performance guarantees. If the total aggregate number of Members exceeds 75,000 Members, at every additional increase of 25,000 Members, ESI agrees to negotiate in good faith an adjustment to the pricing terms, Rebates and performance guarantees. (v) Pricing Changes. The parties agree that in no event will the pricing be reevaluated for both a Market Check and a Membership Increase in the same calendar year. Any pricing changes agreed upon will become effective the following January or July, whichever comes first(and upon an amendment to this Agreement). Pricing Changes will automatically apply to Employers in the Initial Term (as defined In the Employer Participation Agreement) of their Agreement. (vi) Employer Participation Agreements, Notwithstanding anything to the contrary In this Agreement, termination of this Agreement by ESI or GBS may, at the Employer's request, require the termination of the Employer Participation Agreement. ESI agrees that the pricing contained herein is unique to the Coalition, and in the event that an Employer terminates their relationship with GBS, ESI will cease offering Coalition pricing to the Employer, and will offer different pricing (based on Employers size, utilization, market conditions, etc.) If the Employer wishes to enter into an agreement with ESI. To the extent the provisions set forth herein need to survive to facilitate the continuation of services under the Employer Participation Agreement, all such terms shall survive termination of this Agreement for such purpose. 83 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 this Agreement or otherwise, at law or in equity. (b) Neither party shall lose any rights under this Agreement or be liable in any manner for any delay to perform its obligations under this Agreement that are beyond a party's reasonable control, including, without limitation, any delay or failure due to strikes, labor disputes, riots, earthquakes, storms, floods or other extreme weather conditions, fires, explosions, acts of terrorism, epidemics, embargoes, war or other outbreak of hostilities, government acts or regulations, the failure or inability of carriers, suppliers, delivery services, or telecommunications providers to provide services necessary to enable a party to perform its obligations hereunder, or any other reason where failure to perform is beyond the party's reasonable control, and is not caused by the negligence, intentional conduct or misconduct of the defaulting party; provided, however, that this clause may not be invoked to excuse a party's payment obligations hereunder. (c) Each party's liability to the other hereunder shall in no event exceed the actual proximate losses or damages caused by breach of this Agreement. In no event shall either party or any of their respective affiliates, directors, employees or agents, be liable for any indirect, special, incldental, consequential, exemplary or punitive damages, or any damages for lost profits relating to a relationship with a third party, however caused or arising, whether or not they have been informed of the possibility of their occurrence. 8,4 Indemnification. 12 189129,7 (a) Each.;party ("Indemnitor") agrees to indemnify, hold harrniess and defend the other party ("Indemnitee"), In the event of any third party claims resulting from the Indemnitor's breach of this Agreement, or negligence or willful misconduct in the performance of its duties hereunder. (b) As a condition of indemnification, the Indemnitee shall promptly notify the other party of any claim asserted against it and shall tender the defense of the claim to the Indemnitor. Notwithstanding anything to the contrary herein, the indemnification provisions herein.shall not apply if the claim is settled without both party's consent,which consent shall not be unreasonably withheld. 8.6 Survival. The parties' rights and obligations under Section 4.1, Article V, and.Sections 6.2, 7.3, 7.4 and 7,5 shall survive the termination of this Agreement for any reason, ARTICLE IX-MISCELLANEOUS 9.1 Liability Insurance. Each party shall maintain such policies of general liability, professional liability and other insurance of the. types and in amounts customarily carried.by their respective businesses. Proof of such insurance shall be available upon request. ESI shall, at its sole expense, maintain during the term of this Agreement or any renewal hereof, commercial general liability insurance, pharmacists professional liability insurance and managed care liability with limits, excess of any self- Insured retention, in amounts of not less than $5,000,000 per occurrence, and, in the aggregate. ESI does not maintain liability insurance on behalf of any Participating Pharmacy, but does contractually require such Participating Pharmacies to maintain a minimum amount of commercial liability insurance or, when deemed acceptable by ESI, to have in place a self-insurance program. 9.2 Notice. All notices by ESI and GBS to each other relating to this Agreement or its subject matter shall be in writing and shall be deemed given if sent by or certified mail, postage prepaid, or by recognized overnight delivery service, addressed to the other party at the address set forth below or any other address designated by GBS or ESI in writing: Express Scripts, Inc, Attn: President One Express Way St.Louis, Missouri 63121 With copy to Legal Department Fax No.(800)4178163 Gallagher Benefit Services, Inc. 6399 South F'iddler's Green Circle Greenwood Village, Colorado 80111 Attn: Bill Robinson Fax No: 303-220-7010 All notices to Employers should be sent 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 Participation Agreement is intended to create or shall be construed to create any relationship between ESI, on the one hand, and GBS or Employer, on the other hand, other than that of independent entities contracting with each other solely 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, or representative of the other and neither party shall have the right to make any representations concerning the duties, 'obligations or services of the other except as consistent with. the express terms of this Agreement or as otherwise authorized in writing by the party about which such representation is asserted. 9.4 Assignment and Subcontracting. GBS may assign this Agreement upon first obtaining EST's written consent,which consent will not be unreasonably withheld following a standard credit review of the proposed assignee. GBS acknowledges and agrees that ESI may perform certain services hereunder 13 189129,7 mail service pharmacy and specialty pharmacy services) through one or more ESi subsidiaries or affiliates. GSI is responsible and liable for the performance of its subsidiaries and affiliates in the course of their performance of any such service. To the extent that ESI subcontracts any ESI Service under this Agreement to a third party, ESI is responsible and liable for the performance of any such third party, in addition, ESI may contraot with third parties to provide information technology support services and other ancillary services, which services are net ESI Services hereunder, but rather are services that support ESi's conduct of its business operations, This Agreement will be binding upon, and inure to the benefit of and be enforceable by,the respective successors and permitted assigns of the parties hereto. 9,6 Integration; Amendments. This Agreement and any Exhibits hereto constitute the entire understanding of the parties hereto and supersedes any prior oral or written communication between the parties with respect to the subject matter hereof. No modification, alteration, or waiver of any term, covenant, or condition of this Agreement shall be valid unless in writing and signed by both parties or the agents of the parties who are authorized in writing, except as may be otherwise permitted pursuant to the terms and conditions of this Agreement or any Exhibit hereto, 9.6C��olce of Law, This Agreement shall be construed and governed In all respects according to the laws In the State of Missouri,without regard to the rules of conflict of laws thereof, 9.7 Valver. The failure of either party to insist upon the strict observation or performance of this Agreement or to exercise any right or remedy shall not be construed as a waiver of any subsequent breach of this Agreement or impair or waive any available right or remedy, 9.8 Severability. In the event that any provision of this Agreement Is invalid or unenforceable, such invalid or unenforceable provision shall not invalidate or affect the other provisions of this Agreement which shall remain in effect and be construed as if such provision were not a part hereof; provided that if the invalidation or unenforceability of such provision shall, In the opinion of either party to the Agreement, have a material effect on such party's tights or obligations under this Agreement, then the Agreement may be terminated by such party upon thirty(30)days written notice by such party to the other party, 9,9 Third Party Beneficiary Excluslon. This Agreement Is not a third party beneficiary contract, nor shall this Agreement create any rights on behalf of Members as against ESI. GBS and ESi reserve the right to amend, cancel or terminate this Agreement In accordance with the terms hereof without notice to, or consent of, any Member or any Employer, 9.90 Trademarks. Each party acknowledges each other party's sole and exclusive ownership of its respective trade names, commercial symbols, trademarks, and servlcemarks, whether presently existing or later established "ESI Marks" and "GIBS Marks"(collectively referred to as"Marks"). No party shall use the other party's Marks in advertising or promotional materials or otherwise without the owner's prior written consent. IN WITNESS WHEREOF, the undersigned have executed this Prescription Drug Program Agreement as of the day and year below set forth, EXPRESS SCRIPTS, INC, GALLAGI,E ENEI'IT SERVICES, INC. gy,�.I c;zc-t lc�Z z J By: /,y Printed Name: Printed N e: Title: Title: Date: Federal iD Number: ?l nave Brodsky Date: aGi r a C RVP Commerrial Divislorr 14 1891293 City of Dubuque Insurance Requirements for Professional Services Insurance Schedule C 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. Providers 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. Each certificate shall include a statement under Description of Operations as to why issued. Eg: Project# or Project Location at or construction of 2. All policies of insurance required hereunder shall be with a carrier authorized to do business in Iowa and all carriers 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 contracting department of the City of Dubuque. 4. Failure to provide minimum coverage 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. Subconsultants and sub subconsultants performing work or service shall provide a Certificate of Insurance in accord with Exhibit I. 6. All required endorsements to various policies shall be attached to Certificate of insurance. 7. Whenever a specific ISO form is listed,an equivalent form may be substituted subject to the provider identifying and listing in writing all deviations and exclusions that differ from the ISO form. 8. Provider shall be required to carry the minimum coverage/limits,or greater if required by law or other legal agreement, in Exhibit 1. If provider's limits of liability are higher than the required minimum limits then the provider's limits shall be this agreement's required limits. 9. Whenever an ISO form is referenced the current edition of the form must be used. Page 1 of 3 Schedule C Professional Services July 2015.Doc City of Dubuque Insurance Requirements for Professional Services Insurance Schedule C 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 a) Coverage shall be written on an occurrence,not claims made,form. The general liability coverage shall be written in accord with ISO form CG0001 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. b) 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. c) Include endorsement indicating that coverage is primary and non-contributory. d) Include endorsement to preserve Governmental Immunity. (Sample attached). e) Include an endorsement that deletes any fellow employee exclusion. f) Include additional insured 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 their board members, employees and volunteers. Use ISO form CG 2026. B) AUTOMOBILE LIABILITY $1,000,000(Combined Single Limit) C) 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 Statutory—State of Iowa Coverage B Employers Liability Each Accident $100,000 Each Employee-Disease $100,000 Policy Limit-Disease $500,000 Policy shall include an endorsement providing a waiver of subrogation to the City of Dubuque. Coverage B limits shall be greater if required by Umbrella Carrier. D) UMBRELLA LIABILITY $1,000,000 Umbrella liability coverage must be at least following form with the underlying policies included herein. E) PROFESSIONAL LIABILITY $1,000,000 F) CYBER LIABILITY $1,000,000 Coverage for First and Third Party liability including but not limited to lost data and restoration, loss of income and cyber breach of information. Yes X No Page 2 of 3 Schedule C Professional Services July 2015.Doc City of Dubuque Insurance Requirements for Professional Services Preservation of Governmental Immunities Endorsement 1. Nonwaiver of Governmental Immunity.The insurance carrier 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 insurance carrier 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 insurance carrier. 4. Non-Denial of Coverage. The insurance carrier shall not deny coverage under this policy and the insurance carrier 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. SPECIMEN Page 3 of 3 Schedule C Professional Services July 2015.Doc