Delta Dental Plan AgreementMEMORANDUM
December 26, 2001
TO:
FROM:
SUBJECT:
The Honorable Mayor and City Council Members
Michael C. Van Milligen, City Manager
Administrative Services and Financial Agreement Between the City of
Dubuque and Delta Dental Plan of Iowa
Personnel Manager Randy Peck is recommending approval of the Administrative
Services and Financial Agreement Between the City of Dubuque and Delta Dental Plan
of Iowa for services related to the administration of the City's dental plan.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Michael C. Van Milligen
MCVM/jh
Attachment
cc: Barry Lindahl, Corporation Counsel
Cindy Steinhauser, Assistant City Manager
Randy Peck, Personnel Manager
CITY OF DUBUQUE, IOWA
MEMORANDUM
December 7, 2001
TO:
Michael C. Van Milligen, City Manager
FROM:
Randy Peck
Personnel Manager
SUBJECT: Administrative Services and Financial Agreement Between the City of
Dubuque and Delta Dental Plan of Iowa
Attached is the Administrative Services and Financial Agreement between the City
of Dubuque and Delta Dental Plan of Iowa for services related to the administration of the
City's dental plan. The effective date of this agreement is July 1,2001. The administrative
fee for processing dental claims was increased from $2.53 per contract per month to $2.65
per contract per month. The administrative fee went into effect on July 1, 2001 and will
remain in effect through June 30, 2002, and was approved by the Health Care Committee
on May 13, 2001.
The only changes from the previous agreement involve substituting the word
"Deltal" to read "Delta Dental", substituting "schedule of fees" to read "financial exhibit" and
including a paragraph stating that the City has elected to waive aggregate stop-loss
coverage through Delta Dental. The reason for the extensive delay in receiving the final
version of the Administrative Services Agreement is due to the fact that we had to work out
some language issues with Delta Dental.
This agreement has been reviewed by Barry Lindahl and the Segal Company, our
benefit and actuarial consultant, and they found the terms to be acceptable. The Health
Care Committee has also approved the agreement.
I recommend that the agreement be approved. If you have any questions, please
feel free to call.
RP:bf
ADMINISTRATIVE SERVICES and FLNANCIAL AGREEMENT
TillS AGREEMENT is by and between Delta Dental Plan of Iowa (Delta Dental), and
City of Dubuque (Employer).
Group name
WHEREAS, the following circumstances exist:
Delta Dental is a nonprofit corporation authorized by the Commissioner of Insuranco for the
state of Iowa to transact business as a dcn'ttal service plan.
Employer desires to create or has established a dental benefits plan for its eligible
Employees.
Employer desires to enter into a financial arrangement with Delta Dental under which
Employer is solely responsible for the Claims Paid for covered dental services provided to its
Members subject to the limitation on Employer's financial liability set forth in the stop loss
coverage propulsions of this Agreement.
Employer desires that Delta Dental pay claims for dental services furnished to Members and
pro~qde other administrative serv/ees.
NOW, 't'It~REFORE~ in consideration of the mutual promises and covenants hereinafter
set forth, it is hereby agreed as follows:
1. Definitions.
"Administrative Fee" means either an amount per contract or a percentage
of Claims Paid, whichever is applicable, that Delta Dental charges the
Employer and which includes allocations for Delta Dental's cost of
administering Employer's plan and general operating costs. The
Administrative Fee during the Contract Period is stated in the Financial
Exhibk attached to this Agreement.
"Administrative Services" means those services to be performed by Delta
Dental for Employer in connacrion with this Agreement, iacluding, but not
limited to the following: claims processing, customer services, accounting
services, actuarial services, enrollment services, data processing services,
and such other related services as the parties may agree am appropriate and
necessary to accomplish the objectives of this Agreement. Administrative
Services expressly excludes any services for the administration of
continued dental coverage pursuant to the Consolidated Onmibus Budget
Reconciliation Act of 1985 (COBRA), as amended, or any state or federal
taw relating to continuation coverage of the Employer's plan.
"Agreement" means this Administrative Services and Financial
Agreement. Group Application. Financial Exhibit attached to it initially
and as such may be revised or amended, the Benefits Certificate(O, and the
Subscribers' names and/or applications for coverage.
"Benefits Certificate" means the written document(s) which describe and
define a welfare benefit plan for dental services which the Employer
established for its Members.
"Claims" means claims for dental services that are furnished to Members
with a date of service as defined in the Financial Exhibit as Claims Eligible
for Payment.
"Claims Paid" means the amount calculated by deducting from the
Covered Charges any amounts attributable to Provider Savings,
deductibles, copayment, coinsurance, or Contract Limitations as defared in
the Benefits Certificate(s). ~ll~e amount of Claims Paid during the Contract
Period is determined by the date of Delta Dental's check or remittance.
"Contract Limitations" means the amounts which are the liability of the
Subscriber under this Agreement. 2~hese include the services which are not
covered, charges for dental services which are not dentally necessary,
penalties for failure to follow notification requirements, and charges for
services that have reached a contract max/mum.
"Contract Period" means the period of lime set forth in the Financial
Exhibit or the most recent revision to the Financial Exhibit.
"Covered Charges" means the amount a provider bills a Member, or Delta
Dental, less services not covered. Services which are covered are those
dentally necessary and dentally appropriate procedures as outlined in the
Benefits Section of the Benefits Certificate(s).
'~Delta Dental Allowance" means the amount which equals the lesser of
the Covered Charge for a service, supply, or any dental procedure covered
under the dental plan or an amount which Delta Dental establishes,
annually, as its maximum allowable fee for the same service or supply.
For all dental procedures covered trader the plan, the maximum allowable
fee is established by Delta Dental Plan of Iowa for a covered dental
procedure that is dentally necessary and dentally appropriate. It is
developed from various sources, such as contracts with dentists, input from
our dentist consultants, the simplicity or complexity of the procedure, and
the billed charge for the same procedures by dentists in Iowa.
For services billed by providers outside of Iowa, the maximum allowable
fee is based on information from that state's Delta Dental Plan.
"Employee" means an active Employee of Employer for purposes of
Social Security laws or who otherwise is included as an Employee as
required by law (or a member of the Board of Directors of an Employer).
"Incurred Date" means the date dental services are provided. With
regard to inpatient hospital or facility sea'vices, the date of admission is the
Incurred Date.
"Member" means any person entitled to receive dental benefits as defined
in the Benefits Certificate(s).
"Provider Savings" means the amount saved due to Delta Dental's
~ontracts w/th providers. It is calculated as the difference between the
overed Charge and the Delta Dental Allowance.
2
"Subscriber" means any individual identified by Employer as a person
eligible for dental coverage subject to the terms, conditions and limitations
described in the Benefits Certificate(s) and who is named on an
identification card issued by Delta Dental.
Responsibilities of Employer.
Furnishing Information. Employer agrees to furnish Delta Dental with
timely reports and information in a form and mannar required by Delta
Dental so that Delta Dental properly may discharge its responsibilities
under this Agreement, including but not limited to, information pertaining
to Members for the purpose of determining eEgibility for coverage under
the Benefits Certificate(s), and information necessary for the proper
administration of coordination of benefits and other limitations and
exclusions contained in the Benefits Certificate(s).
Persons Eligible for Coverage. Piior to the Effective Date of this
Agreement, Employer shall deliver to Delta Dental a list of the names
and/or completed applications for each person that Employer shall
designate as being eligible for benefits set forth in the Benefits
Cei~ficate(s).
On or before the first of each month thereafter Employer shall notify Delta
Dental in writing of those persons who are no longer eligible as of that
month, and thereafter Delta Dental shall not pay C/aims for services
furnished such persons on or after the date of termination.
At any 15me during the Contract Period, Employer may certify to Delta
Dental the names of additional eligible persons. Delta Dental shall, from
and after the commencement date of coverage Delta Dental establishes for
such person, pay Claims with Incurred Dates on or after the effective date
of coverage in accordance with the terms and conditions set forth in this
Agreement.
Failure to Provide Information. Employer's failure to provide timely
and accurate information may cause Delta Dental to make incorrect
payments. In that event, Employer may be liable for ali or par~ of any
incorrect payments made.
Payment of Claims and Administrative Fee. Employer authorizes Delta Dental
and Delta Dental agrees to process Ch/ms on a regular basis, subject to the
limitations, conditions, and exclusions stated in the Benefits Certificate(s).
Employer will pay or reimburse Delta Dental for the Claims Paid and
Administrative Fee as set forth in this paragraph.
Weekly Actual Claims Payment. Delta Dental will bill Employer weekly.
Once each week, Delta Dental will notify Employer of the total billing for
the week by fax (normally on Tuesday). Delta Dental will generate an A CH
transaction and draft the amount of the billing from the bank account
designated by Employer (normally on Friday). The weekly billing will
include the total of claims for the week and the last week of the month will
also include the Administrative Fee for the current month.
Late Payments. All payments must be paid on time in accordance with paragraph
3. If the Employer fails to make timely payments in full, Delta Dental may, at its
option, immediately stop the payment of all claims for the Employer's Members,
regardless of the Incurred Date and may terminate this Agreement retroactively to
the last day of the month for wl~ch full payment was made without any further
notice. Payments not made when due also will be subject to an interest charge at
the then prevailing prime rate plus two percent (2%) per annum. The accc~ptance by
Delta Dental of any late payments or partial payments shall not constitute a waiver
of this provision.
Aggregate Stop Loss Requirements for Public Entities
As a public entity the State of Iowa requires the Employer to have Aggregate Stop
Loss Coverage for self-funded health plans as defined th the Iowa Administrative
Code. Employer has elected to waive Aggregate Stop Loss Coverage through Delta
Dantal, therefore it is the Employer's responsibility to ensure that the Employer
maintains Aggregate Stop Loss as required by the Iowa Administrative Code.
Examination of Books and Records.
Delta Dental may examine the fmancial records of Employer reasonably
related to the administration of this Agreement, upon reasonable notice, as
often as Delta Dental deems appropriate, to deteimine whether Employer
has sufficient amounts on deposit to ensure payment of Claims and
Administrative Fee.
Employer or its authorized representative may examine or audit Delta
Dental's records reasonably related to Delta Dental's discharge of
Employer's l/ability to pay Claims. Suclt examination shall be conducted
during regular business hours, upon reasonable advance written notice.
Records subject to examination sltall include case listings, third-patty
explanations of dental benefits, eligibility records, claims history, and
coordination ofbanefits procedures. The examination period may cover
the current Contract Period and the two years previous only. Upon
completion of the examination, Employer shall share its examination
findings with Delta Dental and conduct an exit conference with Delta
Dental.
It is agreed that disclosure of any information trader tiffs paragraph to
Employer or Delta Dental has been made in reliance upon the other party's
representation that such information shall be used by it for the sole and
exclusive purpose of examining or auditing information related to the
administration of the dental plan. Suclt information shall not be disclosed
or otherwise made available to any person or organization not directly
involved in the examination or audit and Delta Dental and Employer shall
implement whatever reasonable safeguards are necessary to ensure that
such information remains comfidential, subject to the Iowa Public Records
Act, Iowa Code chapter 22.
Change of Agreement.
Delta Dental will provide Employer ninety (90) days prior written notice of
any amendment or termination under this paragraph.
Changes to this Administrative Services and Financial Agreement or
Benefits Certificate(s) will be effective only when the written amendmant
has been signed by authorized representatives of Delta Dental and the
Employer.
8. Liabilities of the Parties.
Employer has the liability for all Claims payments for its Members. Delta
Dental has no liability for Claims if Employer fails to pay or reimburse
Delta Dental in accordance with this Agreement.
Employer agrees to hold harmless and indemnify Delta Dental or any of its
directors, officers, or employees for any and all loss, 1/ability, damage,
expense, or other cost or obligation, including masunable attorneys' fees,
resulting fi:om and arising out of claims, dcmmnds, or lawsuits brought
against Delta Dental by Members, or other persons by reason of the
performance or nonperformance of Employer's responsibilities under this
Agreement, or in connection with benefits or covorage information
disclosed at Employer's request or disclosed during an examination or
audit of books and records, provided the directors, officers, or employees
of Delta Dental shall have performed their duties with ordinary care and
such directors, officers, or eanployees of Delta Dental shall not be liable for
any m/stake of judgement or other acfiun taken in good faith.
Delta Dental has made a good faith determination of what the premium tax
liability shall be under this Agreement based upon Iowa Code Chapter 432.
If the governmental authority responsible for collecting such taxes
determines that additional taxes should have been assessed for the charges
collected by Delta D~ntal under this Agreement, the Employer agrees to
indemnify Delta Dental for such liability.
Delta Dental agrees to hold harmless and indemnify Employer or any of its
directors, officers, or employees for any and ail loss, liability, damage,
expense, or other cost or obligation, including reasonable attorneys' fees,
resulting from and arising out of claims, dmnands, or lawsuits brought
against Employer by reasons of Delta Dental's failure to perform its
responsibilities under this Agreement (or policy).
Use of Trademarks. Delta Dental and Employer reserve the right to control the use
of their respective corporate names and any other respective symbols, assumed
names, trademarks, and service marks, presently existing or subsequently
established. Delta Dental and Employer agree not to use the corporate name,
symbol, assumed names, trademarks, or service marks of the other in advertising,
promotional material, or othc~wvise without the prior written consent of the other.
Any previously approved usage will cease mediately upon the termination of this
Agreement and any materials using such names or marks are the property of the
appropriate namesake and will be returned to the appropriate property owner upon
request or at the tenrfiaation of this Agreement.
10. Term and Termination.
Term and Notice of Termination. This Agreement shall become
effective on the date defined on the Financial Exhibit and shall continue in
force for the time period del'reed in the Financial Exhibit. However, either
party may terminate this Agreement at any time by giving written notice of
terminafion delivered to the other party at least sixty (60) days in advance
of the effective date of termination.
Renewal Terms. The parties may agree to renew the Agreament for
successive Contract Periods as def'med in the Financial Exhibit. Delta
11.
12.
13.
14.
15.
Dental may change Administrative Fee, stop loss premktms and other
f'mancial factors upon renewal.
Immediate Termination. Delta Dental may terminate this Agreement at
any time without notice if Employer fails to make timely and complete
payments in accordance with this Agreement, or Delta Dental determines
that the Employer has inadequate funds to make payments required by this
Agreement. Delta Dental may terminate the Agreement retroactively to the
hst day of the month for which Employer made full payment. Employer is
solely responsible for notifying its Subscribers of the termination of this
Agreement for nonpayment or for any other reason.
Effects of Termination. If Delta Dental terminates this Agreement for
nonpayment by the Employer, Delta Dental will not pay any Claims
beyond the effective date of the termination regardless of when the services
were received.
Any liability of either party to the other for amounts owed or owing, or for
indemnification for premium taxes under this Agreement shall not be extinguished
by the termination of this Agreement.
Termination and Claims Payments. If, following termination of this Agreement for
reasons other than Employer's nonpayment, Claims for the most recent Cunlract Period
are submitted to Delta Dental for payment in the period specified in the Benefrts
Certificate(s) for timely filing of claims, Delta Dental will pay claims in accordance with
this Agreement and bill Employer in accordance with the procedures set forth in
paragraph 4 above.
Force Majeure. The parties to this Agreement shall be excused from performance
under this Agreement for any period during which they are prevented from performing
any responsibilities under this Agreement, in whole or in part, as a result of an Act of
God, war, civil disturbance, court order, labor dispute, or other cause beyond/ts
reasonable control and such nonperformance shall not be grounds for termination or
default.
Complete Agreement. The patties agree that this Agreement, including ali Benefit
Certificate(s), Financial Exhibit, Amendments, Group Application for Coverage, and the
Subscribers' names and/or applications for coverage constitutes the "Complete
Agreement" between the parties and supersedes all related discussions and
communications between the parties. All statements made by the employer to the
Employee or statements made by the Employee or his/her family members to their
dentist concerning what is covered in the Complete Agreement is deemed to be a
representation and not a Warranty. No statement by the Employer, Employee, or
members of the Employee's family concerning matters allegedly covered in the
Complete Agreement shall be relied upon by the Employee's dental provider without
verifying that the coverage is set forth in the Complete Agreement.
Governing Law. To the extent not superseded by the laws of the United States, this
Agreement shall be construed in accordance with the laws of the State of Iowa. Any
action in regard to this Agreement or arising out of the terms of this Agreement shall be
instituted and litigated in the state or federal courts located in the State of Iowa and no
other.
Notices and Communication. Delta Dental shall be entitled to rely upon any
communication or notice from the Employer to Delta Dental in connection with this
Agreement to be genuine, tmthfal, and accurate, and to have been authorized, signed, or
6
issued by an officer or agorot of Employer empowered to make such representation on
behalf of the Employer.
16. Delta Dental shall secure and maintain dining the term of this Agreement insurance
coverage as set forth on the attached Financial Exhibit and shall cause the City of
Dubuque, Iowa, to be listed as an additional insured on said Delta Dc~ntal insurance
coverage.
The ma/ling of written notices or other communications by regular U.S. Mall,
postage prepaid, shall be deemed sufficient service for the purpose of this
Agreement ff addressed to the last address furnished in writing.
Notice to Delta Dental Plan of Iowa may be addressed:
Delta Dental Plan of Iowa
240I SE Tones Dr., Suite 13
Ankeny, LA 50021
And until another address is furnished in writing, notice to Employer may be
addressed:
City of Dubuque
City Hall - 50 West Thiiteenth Street
Dubuque, Iowa 52001-4864
IN WITNESS WHEREOF, the parties have executed this Agreement, in duplicate
counterparts, each counterpart being deemed as original, on the date stated below.
Employer
By
Title City Manager
Date
Delta D~an of Io~
By _rff~"~,~:
Title President and CEO
Date
Title Se' ~m~ar~ ~
Date ~//tSP/
FINANCIAL EXHIBIT
Employer/Plan Sponsor Ftdl Legal Name and Address
City of Dubuque
City Hall - 50 West Thirteenth Street
Dubuque, IA 52001-4864
Contract Period
Original Effective Date ofFending Arrangement
Schedule Date 07/01/01
Contract Period to Which this Schedule is Applicable
Begins 07/01/01 and Ends
07/01/89
06/30/02
Claims Eligible for Payment
1. [] Incurred means Claims with dates of service within the Contract Period
2. "Paid" means all Claims regardless of Incurred Date
Aggregate Total
Administrative Stop Loss Fixed
Fee Premium Fees
Single $2.65 $0.00 $2.65
Family $2.65 $0.00 $2.65
Aggregate Stop Loss Coverage
Aggregate Attachment Point is N/A of projected Claims Paid.
Aggregate Attachment Point
Single N/A
Family N/A
Losses Eligible for Reimbursement
1. [] "12/12" means the Losses were Incurred and Paid within the Con~'act Petiod
2. "Paid" means the Losses were Paid within the Contract Period. Losses must
have been incurred on or after the effective date of the Agreement.
3. "12/18" means the Losses were Incurred and Paid within that same Contract
Petiod or within the six months following the end of the Contract Petiod.
4. [] Not Applicable
Weekly Transfer Amount Weekly Actual
INSURANCE SCHEDULE C
INSURANCE REQUIREMENTS FOR PROFESSIONAL SERVICES
All policies of insurance required hereunder shall be with an insurer authorized to
do business in Iowa. All insurers shall have a rating of A or better in the current
A.M. Best Rating Guide.
All policies of insurance required hereunder shall be endorsed to provide a thirty
(30) day advanced notice to the City of Dubuque of any cancellation of the policy
pdor to its expiration date. This endorsement supersedes the standard
cancellation statement on the Certificate of Insurance.
shall furnish Certificates of Insurance to the
City of Dubuque, Iowa for the coverage required in Paragraph 7. Such
certificates shall include copies of the endorsements set forth in Paragraphs 2
and 5 to evidence inclusion in the policy, shall
also be required to provide Certificates of Insurance of all subcontractors, and all
sub-subcontractors who perform work or services pursuant to the provisions of
this contract. Said certificates shall meet the same insurance requirements as
are required of
Each Certificate of Insurance shall be submitted to the contracting department of
the City of Dubuque, Iowa prior to commencement of work/service. (The
contracting department shall submit the certificates to the Finance Director.)
All policies of insurance required in Paragraph 7 shall include the City of
Dubuque, Iowa under the attached Additional Insured Endorsement (CG2026)
and the attached Governmental Immunities Endorsement.
Failure to provide evidence of minimum coverage shall not be deemed a waiver
of these requirements by the City of Dubuque..Failure to obtain or maintain the
insurance required herein shall be considered a material breach of this
agreement.
., subcontractors, and all sub-subcontractors
shall be required to carry the following minimum insurance coverages or greater
if required by law or other legal agreement:
PROFESSIONAL LIABILITY:
$1,000,000
COMMERCIAL GENERAL LIABILITY:
General Aggregate Limit
Products-Completed Operation Aggregate Limit
Personal and Advertising Injury Limit
Each Occurrence Limit
Fire Damage Limit (any one occurrence)
Medical Payments
$ 2,000,000
$'1,000,000
$1,000,000
$1,000,000
$ 50,O0O
$ 5,000
Commercial general liability shall be written on an occurrence form, not a claims
made form. Coverage to include premises-operations-products-completed
operations, independent contractors coverage, contractual liability, broad form
property damage, and personal injury.
UMBRELLA OR EXCESS LIABILITY:
* TO be determined on a case-by-case basis by Finance Director.
· o ~OIJCY NUMI~ER:
THIS ENDORSEMENT CHANGES THE POLICY.
COMMERCIAL GENERAL L~A8111TY
PLEASE READ IT CAREFULLY.
ADDITIONAL INSURED - DESIGNATED PERSON OR
ORGANIZATION
This endorsement modifies insurance provided under the following:
COMMERC/AL GENERAL LIABILITY COVERAGE PART.
SCHEDULE
Name of Person or Organization:
1"ne City of Dubuque, including ail ice elecCed and appointed offici~l;,
a.t[-its employees and volunteers, a11 its boards, co~issioas and/or
authoriClee and chair board members, employees, and volunteers.
(If' no entry appears above, information required to complete this endorsement will be shown in the
Declarations as applicable to this endorsement.)
WHO IS AN INSURED (Section Ii} is amended to include as an insured the person or organization shown
in the Schedule as an insured but only with respect to liability arising out of your operations or premises
owned by or rented to you.
CITY OF DUBUQUE, IOWA
GOVERNMENTAL IMMUNITIES ENDORSEMENT
Nonwaiver of Governmental Immunity. The insurance carder 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 form time to time.
CJ~[D:E~C~ 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.
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.
Non-Denial of Ceverage. 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.