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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.