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HomeMy WebLinkAboutItem 07 PacificSource Health Plans AGENDA ITEM SUMMARY Meeting Date: 3/2/2020 Meeting Type: Regular Meeting Staff Contact/Dept.: Tom Mugleston Staff Phone No: 726-3724 Estimated Time: Consent Calendar S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Financially Responsible and Stable Government Services ITEM TITLE: APPROVE A CONTRACT WITH PACIFICSOURCE HEALTH PLANS TO PROVIDE THIRD PARTY ADMINISTRATIVE SERVICES FOR CITY’S SELF-FUNDED MEDICAL/Rx/VISION INSURANCE ACTION REQUESTED: Authorize City Manager to negotiate and execute a contract amendment with PacificSource Health Plans, to 1) provide 2020 third party administration (TPA) Services for City self-funded medical, prescription and vision claims and 2) purchase stop-loss medical insurance coverage. ISSUE STATEMENT: The existing contract with PacificSource Health Plans for TPA services and stop-loss coverage expired on December 31, 2019. This contract amendment will allow the City to continue to obtain these services. ATTACHMENTS: Attachment 1: Third Party Administrative Services Agreement Amendment and Stop-Loss Policy Agreement DISCUSSION/ FINANCIAL IMPACT: The City provides a comprehensive self-funded health insurance plan for eligible employees, dependents, and retirees. PacificSource has been the City’s third party administrator (TPA) since going self-funded in January 2013. The city pays all claims valued less than $150,000 and purchases stop-loss insurance to cover claims more than $150,000. Overall health plan costs were forecasted to increase by 9%. Our overall projected plan cost increases are listed in the table below. 2019 2020 Percent Change Medical/Rx/Vision $213,492 ($42.87 PEPM) $220,578 (43.87 PEPM) 3.3% Stop Loss Coverage $695,506 ($139.66 PEPM) $762,295 ($151.61 PEPM) 9.6% Total $908,998 $982,873 8.1% *PEPM – Per Employee Per Month. 419 employees Our broker estimates that the City would have seen more than a 15% increase in overall costs had we remained fully- instead of self-insured. This is primarily due to increased State and Federal taxes on fully-insured plans and large health insurance premium increases due to market volatility and uncertainty about future health market changes. Staff requests Council give the City Manager Pro Tem the approval to negotiate and sign the attached TPA and stop-loss agreements. DRAFT1 Third Party Administrative Services Agreement_ Amendment #1_0120_City of Springfield THIRD PARTY ADMINISTRATIVE SERVICES AGREEMENT AMENDMENT #1 Client Name: City of Springfield Group Number: G0020720 Effective 1/1/2020, the Third Party Administrative Services Agreement is amended as follows, all other language and sections remains the same: 2.1 Effective Date and Term The Effective Date of this Agreement is the 1st day of January, 2020. The initial term of this Agreement shall be a twelve (12) month period commencing on the Effective Date, unless terminated earlier in accordance with the terms of this Agreement. After the initial term, this Agreement may be renewed for successive one-year periods by the mutual, written agreement of the Parties. 5.4 Claims Pre Fund Sponsor may be required to pay a claim pre fund upon the Effective Date of this Agreement. This claim pre fund may be modified by written agreement of the Parties upon each renewal date based on expected paid claim changes to the Plan and covered Participants. This claim pre fund will be held in an interest bearing account by PacificSource until the termination date, including the run out period if applicable, of this Agreement. The claim pre fund will be paid with interest to the Sponsor 30 days following the end of the first twelve (12) months of run-out administration. 6.3 Service Charges All charges under this Section VI shall be determined by PacificSource and billed to Sponsor. Sponsor shall make payment to PacificSource within fifteen (15) business days of receipt of notice of the amount due. 9.9 Notices and Communications (b) Addresses. Sponsor’s address for notices is: City of Springfield Attn: Tom Mugleston Address: 225 5th St Springfield, OR 97477 Exhibit II: Coverage Services Addendum Please see the attached Exhibit. “Plan Sponsor” “PacificSource” City of Springfield PacificSource Health Plans By:________________________ By: Print:______________________ Print: Kenneth P. Provencher Title:______________________ Title: President and CEO Date:______________________ Date: 11/18/19 AIS ATTACHMENT 1, Page 1 of 15 DRAFT1 Exhibit II: Fees_City of Springfield_0120 EXHIBIT II: COVERAGE SERVICES ADDENDUM Between City of Springfield and PacificSource Health Plans Policy Period: 01/01/2020 through 12/31/2020 I. INTRODUCTION This Exhibit II: Coverage Services is effective as of the date noted in Section 2.1 of the Third Party Administrative Services Agreement entered into by and between City of Springfield (“Plan Sponsor”) and PacificSource Health Plans (“PacificSource”), and to which this Exhibit is attached. In the event of any discrepancy or contradiction between the terms of the Agreement and this Exhibit, the terms of this Exhibit shall control. Claim Fund Deposit Received in 2013 $200,000 II. FEES The fees and costs payable for the services provided under this Exhibit II shall be as follows: Number of Subscribers on Effective Date 419 Administrative Fees Broker Fees Network Fees Claims Administration PEPM Medical / RX $38.85 Vision Included in Medical/RX Fee Coverage PEPM Medical/RX $0 Network PEPM PacificSource Access Fee $4.60 First Choice Access Fee $4.60 First Health Access Fee $4.60 AIS ATTACHMENT 1, Page 2 of 15 DRAFT2 Exhibit II: Fees_City of Springfield_0120 Travel Wrap programs are available for coverage when members travel outside of your chosen network(s). The Fees noted above are pass through costs. Optional Programs Other III. PHARMACY IV. INCLUDED SERVICES Travel Wrap Network FEE First Choice First Health 12% of Savings 13% of Savings Programs Accept /Decline ACS Quit for Life – Tobacco Cessation $ PEPM Declined Assist America – Global Emergency Services $0.42 PEPM Accepted Biometric Screening Pass through Declined Teladoc PEPM Declined Weight Watchers Pass through Accepted Health Education Programs Pass through Accepted Medicare Part B Premium Reimbursement - (dialysis program) Pass through Accepted Coordination of Benefits - True FEE Comprehensive COB – One-time fee per identified member $40.00 Pharmacy Benefit Manager (PBM) - Caremark Pharmacy Rebates 80% of rebates shared with Plan Sponsor. Services 24 Hour Nurseline Condition Support and AccordantCare – Rare Disease Management Prenatal Management Standard Identification Cards Standard Plan Amendments Standard Reporting Standard Summary Plan Document (SPD) State Surcharge Reporting Summary of Benefits and Coverage (SBC) as administered by PacificSource Utilization Review & Large Case Management Wellness Programs Level I AIS ATTACHMENT 1, Page 3 of 15 DRAFT3 Exhibit II: Fees_City of Springfield_0120 V. STANDARD ADDITIONAL FEES *Custom Programming available to groups with 500 or more enrolled subscribers. This is defined as programming beyond implementation that 1) is specific to Customer’s operations or benefits; or 2) results in the need for system enhancements. VI. PACIFICSOURCE CONTACT INFORMATION  Any correspondence mailed to PacificSource will be mailed to: PacificSource Health Plans Attn: Sales PO Box 7068 Springfield, OR 97475-0068 Phone: (541) 686-1242 Fax: (541) 485-0915  Any Enrollment Information, billing information, and payments mailed to PacificSource will be mailed to: PacificSource Health Plans Attn: Membership Services PO Box 7068 Springfield, OR 97475-0068 Phone: (866) 999-5583 Fax: (541) 225-3642 E-mail: membership@pacificsource.com Other Fee Run-In Claims Processing Not Available Run-Out Claims Processing Two months claims administration fees for 36 months of run-out services Custom Ad Hoc Reporting $175 per hour Custom Programming* $150 per hour Independent Medical Review (IMR) Pass through cost to Plan Sponsor Independent Review Organization (IRO) Pass through cost to Plan Sponsor SBC & SPD Printing and Shipping Pass through cost to Plan Sponsor Applicable taxes, surcharges and assessments Claim audits, vendor set-up and similar charges Pass through cost to Plan Sponsor Pass through cost to Plan Sponsor AIS ATTACHMENT 1, Page 4 of 15 DRAFTPSGSL.OR.0115 Page 1 City of Springfield_0120 STOP LOSS POLICY Between City of Springfield and PacificSource Health Plans WITNESSETH: In consideration of the Policyholder’s payment of monthly premium in the amounts and at the time required, PacificSource will provide stop loss insurance for each Covered Participant in accordance with the provisions and subject to the conditions of this Stop Loss Policy. This Stop Loss Policy, including all certificates of coverage, application, endorsements, schedules, or amendments affixed hereto, shall be the entire policy of stop loss insurance fully as if recited over the signature affixed hereto. IN WITNESS WHEREOF, PacificSource has caused this Self-Funded Group Health Plan Policy (the “Plan”) to be executed as of 12:00:01 a.m. this 1st day of January, 2020. PacificSource Health Plans Kenneth P. Provencher President, CEO POLICYHOLDER’S ACCEPTANCE Payment of premium will constitute acceptance of this policy and the changes contained within. PacificSource Health Plans PO Box 7068, Springfield OR 97475-0068 AIS ATTACHMENT 1, Page 5 of 15 DRAFTPSGSL.OR.0115 Page 2 City of Springfield_0120 TABLE OF CONTENTS I. INTRODUCTION………………………………………………………………………….. 3 II. DEFINITIONS……………………………………………………………………………… 3 III. FEE SCHEDULE ……………………………………………………………………….… 5 IV. STOP LOSS PROVISIONS ……………………………………………………………... 6 V. GENERAL EXCLUSIONS AND LIMITATIONS ………………………………………. 8 VI. TERMINATION……………………………………………………………………………. 10 VII. CONTACT INFORMATION ……………………………………………………………...10 AIS ATTACHMENT 1, Page 6 of 15 DRAFTPSGSL.OR.0115 Page 3 City of Springfield_0120 STOP LOSS POLICY I. INTRODUCTION This Stop Loss Policy is entered into by and between the City of Springfield (the “Plan Sponsor”) and PacificSource Health Plans (“PacificSource). WHEREAS, Plan Sponsor has established the City of Springfield Employee Benefit Plan, a self- funded group health plan (“SFGHP”) for its Covered Participants (as defined below); WHEREAS, Plan Sponsor has retained Claim Administrator to provide claim processing and other administrative services for the SFGHP during the Term (defined below) as set forth in an agreement entitled “Administrative Services Agreement” (“ASA”); WHEREAS, Plan Sponsor assumes liability for and funds all benefits under the SFGHP, except as otherwise provided in this Stop Loss Policy; THEREFORE, in consideration of the mutual agreements and covenants contained herein and other good and valuable consideration, the Parties agree as set forth herein. Policy Period: 01/01/2020 through 12/31/2020 II. DEFINITIONS Aggregate Attachment Point means the sum of the Monthly Aggregate Claims Factors that is multiplied by the number of monthly Covered Participants each month during the Policy Period. Aggregate Reimbursement Maximum means the limit of PacificSource liability in excess of the Aggregate Stop Loss Attachment Point per Policy Period under the Stop Loss Provision of this Policy. The Aggregate Stop Loss Limit of Liability is shown in Stop loss Fee Schedule. Expenses that are the responsibility of the Covered Participant, such as deductibles and coinsurance, do not count toward this maximum. Covered services in excess of the Aggregate Reimbursement Maximums are the responsibility of the Plan Sponsor. Aggregating Specific means an additional deductible applied to the Individual Specific Deductible. Claims in excess of the Specific Deducible, during the term of the contract, will be added until the cumulative total exceeds the Aggregating Specific amount. The Aggregating Specific must be satisfied prior to reimbursements on any Individual Specific Deductible. Aggregate Stop Loss means the stop loss provided by PacificSource under the Stop Loss Provision of this Policy. Additionally, it is a form of stop loss coverage that provides protection for the employer against the accumulation of total claims for the group as a whole exceeding a stated level. Aggregate Stop Loss Attachment Point is the total amount of Paid Claims for which the Plan Sponsor shall be liable while this Policy and the Third Party Administrative Services Agreement remain in effect. The Aggregate Stop Loss Attachment Point must be met in each Policy Period and will be determined at the end of each Policy Period. Claim Administrator means PacificSource Health Plans. The term “Claim Administrator” as used in this Policy does not refer to the Plan Administrator used in the Employee Retirement Income Security Act (ERISA) of 1974. AIS ATTACHMENT 1, Page 7 of 15 DRAFTPSGSL.OR.0115 Page 4 City of Springfield_0120 Covered Expenses means the eligible charges payable under the terms of the Plan. Covered Expenses do not include the following: 1. Amounts in excess of Plan benefits, or services not covered by the Plan; or 2. Amounts or Services specifically excluded or limited by this Policy, the Stop Loss and Aggregate Monthly Premiums, any endorsements, or any amendments to the Plan. Covered Participant means an eligible individual and that individual’s dependents that become covered for benefits under the terms of the Plan. Disclosure Statement means the signed statement outlying any and all potential Large Claims from the Plan Sponsor. This is provided to and accepted by PacificSource that proves certain Underwriting information regarding Covered Participants which include disabled persons. Domestic Expenses means any hospital Inpatient, hospital outpatient, clinic or staff physician charges Incurred in a facility that is a parent, subsidiary or affiliate of the Plan Sponsor. Domestic reimbursement percentages are applied to existing contracted rates. Domestic Partnership means individuals of any gender ages 18 or older who are joined in a domestic partnership and share jointly the same permanent residence; have an exclusive domestic partnership; and are not in a legally binding marriage. Expected Claim means an estimate of the dollar value of claims to be paid during a policy period. Incurred means the date on which services for Covered Expenses were rendered for a Covered Participant according to the terms of the Plan Sponsor’s Plan. Incurred and Paid period means the period of time specified in the Schedule benefit plan in which a Covered Expense must be Incurred by a Covered Participant and paid by the Plan to be eligible for reimbursement under this Policy. This period does not alter the Effective Date, Policy Period, or waive this Policy's eligibility requirements. Individual Specific Stop Loss Deductible means the amount shown on the Stop Loss Fee Schedule for which the Plan Sponsor is responsible to pay. The Individual Specific Stop Loss Deductible applies separately to each Covered Participant for each Policy Period. Large Claim means paid or pending Covered Expenses greater than or equal to 50% of the Individual Specific Stop Loss Deductible. Lasering means a situation where a higher Individual Specific Stop Loss Deductible is assigned to a Covered Participant (“Lasered Deductible”). Lasered Participants will be identified in the Stop loss Fee Schedule. Minimum Aggregate Margin Attachment Point means the minimum claims level (deductible) at which the Aggregate Stop Loss insurance policy applies. This level is determined by multiplying the enrollment in the first month of the policy times 12 months the Aggregate Claim Factors. Paid Claims means that: 1. The Covered Expense is adjudicated according to the terms of the Plan; 2. A check is written and mailed or electronically deposited directly to the payee within the Policy Period; and 3. Funds are available to honor the check. To be sure those funds are available; they must be on deposit no later than the first working day following the end of the Policy Period. AIS ATTACHMENT 1, Page 8 of 15 DRAFTPSGSL.OR.0115 Page 5 City of Springfield_0120 Reimbursement Percentage means the rate at which PacificSource will reimburse the Plan Sponsor. Specific Stop Loss shall mean the stop loss provided by PacificSource under the Fees section of this Policy. Specific Stop Loss Attachment Point is the total amount of Paid Claims per covered individual that is not subject to reimbursement or credit by PacificSource under the Specific Stop Loss provision during the period when the Third Party Administrative Services Agreement and this Policy remain in effect, for each covered insured of the Plan Sponsor. Spouse means any individuals who are lawfully married under any state law, including individuals married to a person of the same sex who were legally married in a state that recognizes such marriages, but who are domiciled in your policy’s state of issuance. Similarly, the term ‘marriage’ will be read to include a same-sex marriage that is legally recognized as a marriage under any state law. The terms ‘spouse’ and ‘marriage,’ however, do not include individuals in a domestic partnership. (See definition for Domestic Partnership.) Stop Loss Benefit means the excess risk coverage that provides protection for the Plan Sponsor against a high claim on any one Covered Participant. Stop Loss Premium means the fees due to PacificSource each month for the specific and Aggregate Stop Loss insurance provided under the Stop Loss Provision section of this Policy. The Stop Loss Premium shall be computed and paid in accordance with the Payment section of this Policy. Underwriting means the review of prospective and renewing cases for appropriate pricing, risk assessment and administrative feasibility. III. FEES SCHEDULE The fees and costs payable for the services provided under this Policy shall be as follows: Number Covered Participants on Effective Date 419 Specific Stop Loss Coverage: Yes  Policy Period 24/12  Claims must be Incurred and Paid within the following dates: Claims Incurred from January 1st, 2019 through December 31st, 2020 Claims Paid from January 1st, 2020 through December 31st, 2020  Covered Expenses eligible for Specific Stop Loss Coverage include: Medical Yes Prescription Drug Card Yes Dental No Vision No  Specific Stop-loss Deductible per Covered Participant: $150,000  Aggregating Specific Stop-loss Deductible: Not applicable  Plan expenses Incurred prior to the effective date of the Policy Period are limited to: AIS ATTACHMENT 1, Page 9 of 15 DRAFTPSGSL.OR.0115 Page 6 City of Springfield_0120 Not applicable  Specific Stop Loss Reimbursement Percentage in excess of Stop Loss deductible: 100%  Specific Stop Loss Monthly Premiums: Per employee per month Composite $151.61  Specific Stop Loss Agent Commission: Not applicable  Are any Covered Participants lasered and assigned a higher Specific Stop-loss Deductible? Not applicable  Specific Terminal Liability: Not applicable Aggregate Stop Loss Coverage: Not Applicable IV. STOP LOSS PROVISIONS Individual Specific Stop Loss Deductible. Upon acceptance of proof of loss, PacificSource will reimburse the Plan Sponsor for payments made by the Plan Sponsor that PacificSource determines are Covered Expenses; provided that such payments exceed the Individual Specific Stop Loss Deducible as shown in this Policy and are: 1. Incurred while the Plan is in force; 2. Paid for Covered Participants according to the terms of the Plan; and 3. Incurred during the Policy Period or during the Incurred Period and paid during the Policy Period or during the Paid Period as shown in this Policy. Payments for Covered Expenses that are eligible for more than one Policy Period will apply toward the Policy Period in which Covered Expenses were actually Incurred. The benefit reimbursed by PacificSource will be at the Reimbursement Percentage shown in this Policy. Individual Specific Stop Loss Deductible Exclusion and Limitations. The following exclusions and limitations apply to all Individual Specific Stop Loss Deductible provisions. PacificSource will not reimburse the Plan Sponsor for Paid Claims that: 1. Have been reimbursed by another insurance company or reinsurance company; 2. Are Incurred after the Individual Specific Stop Loss Benefit terminates; Disclosure Statement. For new business, PacificSource Underwriting procedures requires the Plan Sponsor to complete and sign a Disclosure Statement. Upon receipt of the initial individual request for reimbursement, PacificSource will review the Disclosure Statement to determine if the claimant is listed. When listed, PacificSource will continue with our normal pricing process. When the claimant is not listed, PacificSource may review the documentation received with the claim submission or request additional information to determine coverage and pricing. This form may also be required at the time of reinstatement for terminated groups. Aggregate Reimbursement Maximum. This benefit applies only if indicated in this Policy. AIS ATTACHMENT 1, Page 10 of 15 DRAFTPSGSL.OR.0115 Page 7 City of Springfield_0120 Aggregate Reimbursement Maximum Benefit. Upon acceptance of proof of loss, PacificSource will reimburse the Plan Sponsor for payments made by the Plan Sponsor that PacificSource determines are Covered Expenses; provided that such payments exceed the Aggregate Stop Loss Attachment Point for Paid Claims and are: 1. Incurred while the Plan is in force; 2. Paid for Covered Participants according to the terms of the Plan; and 3. Incurred during the Policy Period or during the Incurred Period and paid during the Policy Period or during the Paid Period shown in this Policy. Payments for Covered Expenses that are eligible for more than one Policy Period will apply toward the Policy Period in which Covered Expenses are actually Incurred. Reimbursement will be subject to the Incurred Limit or Paid Limit shown in this Policy. The benefit reimbursement by PacificSource will be at the Reimbursement Percentage shown in this Policy and will not exceed the Aggregated Liability Reimbursement Maximum shown in this Policy. Aggregate Stop Loss Attachment Point. The Aggregated Stop Loss Attachment Point is equal to or the greater of: 1. The sum of the Aggregate Stop Loss Attachment Points for the Policy Period shown in this Policy; or 2. The Aggregate Minimum Attachment Point shown in this Policy. If the Aggregate Stop Loss Benefit terminates before the end of the Policy Period, the Minimum Aggregate Margin Attachment Point is equal to or the greater of: 1. The sum of the Aggregate Stop Loss Attachment Points to the date of termination; or 2. The Minimum Aggregate Margin Attachment Point as shown in this Policy. Calculation of the Monthly Aggregate Stop Loss Attachment Point. Aggregate Stop Loss Attachment Point is calculated by multiplying the number of Covered Participants for that month by the Aggregate Attachment Rates as shown in this Policy. If any of the Covered Participants are absent from work due to strike, lock out, or work stoppage, the number of Covered Participants will remain at the same level as the month before such Covered Participants interruption began. Aggregate Stop Loss Attachment Point Exclusions and Limitations. The following exclusions and limitations apply to all Aggregate Stop Loss Attachment Point provisions. PacificSource will not reimburse the Plan Sponsor for Paid Claims that: 1. Have been reimbursed by another insurance company or reinsurance company; 2. Are Incurred after the Aggregate Stop Loss Benefit terminates; 3. Have been reimbursed by under the Individual Stop Loss Deducible benefit; 4. Exceed the Aggregate Reimbursement Maximum Per Plan Year as shown in this Policy. AIS ATTACHMENT 1, Page 11 of 15 DRAFTPSGSL.OR.0115 Page 8 City of Springfield_0120 V. GENERAL EXCLUSIONS AND LIMITATIONS. PacificSource will not reimburse the Plan Sponsor for Covered Expenses Incurred by Covered Participants that qualify as potential Large Claims, unless disclosed prior to policy issuance and accepted by PacificSource. In the event of nondisclosure by the Plan Sponsor, PacificSource reserves the right to: 1. Change or modify any all Stop Loss or Aggregate Premiums, Aggregate Claim Factors, or Individual Specific Stop Loss Deductible level(s); 2. Adjust the terms of the Aggregate and Individual Specific Stop Loss Benefits; or 3. Adjust the Individual Specific Stop Loss Deductible of non-disclosed Covered Participant(s). PacificSource will not reimburse any loss or expense caused by, or resulting from, any of the following; 1. Have been reimbursed by another insurance company or reinsurance company; 2. Payment for treatment or services which are considered experimental or investigational as defined by the Plan; 3. Payment for treatment or services which are excluded as defined by the Plan; or 4. Deductibles, co-payment amounts, or any other charges which are not payable under the terms of the Plan or charges which are payable to the Plan Sponsor from any other source. 5. Exceed PacificSource’s Aggregate Reimbursement Maximum Per Plan Year as shown in this Policy. Covered Participant Benefit Plan Changes or Amendments. PacificSource must be notified of any change to the Plan. Notices of changes must be in writing and provided to PacificSource prior to the effective date of the changes. PacificSource must approve changes in writing before the benefits provided by the changes will be included as Covered Expenses and the Plan Sponsor has agreed to pay any additional premium to accept a higher Aggregate Claim Attachment Rate(s) as a result of the benefit change. If notice is not received prior to the effective date of the change, PacificSource will determine the date, if any, that the benefits approved by this change will be considered Covered Expenses. If PacificSource does not approve a submitted change, PacificSource will not consider the benefits provided by the change as Covered Expenses. Only those Covered Expenses for benefits provided under the most current PacificSource approved Plan will be considered for reimbursement. Changes in Fees and Monthly Aggregate Stop Loss Claims Factor(s). PacificSource has the right to establish new Stop Loss or Aggregate Monthly Premiums, and Monthly Aggregate Stop Loss Claims Factor(s) each Policy Period. PacificSource reserves the right to change the Stop Loss and Policy Fees and/or Monthly Aggregate Attachment Factors for a Policy Period if the average Paid Claims for the last two Policy Months of the immediately preceding Policy Period exceeds 125% of the average Paid Claims for all prior Policy Months in that preceding Policy Period. PacificSource has the right to establish new Stop Loss and Aggregate Monthly Premiums, and Monthly Aggregate Claims Factor(s) at any time during a Policy Period if: AIS ATTACHMENT 1, Page 12 of 15 DRAFTPSGSL.OR.0115 Page 9 City of Springfield_0120 1. The number of enrolled in Covered Participant changes by more than 10% from the enrollment at beginning of Policy Period as shown in this Policy; 2. PacificSource discovers a Covered Participant who was not disclosed and whom PacificSource determines to be an unacceptable risk; or 3. Any amendment is made to the Plan. Adjudication of Claims. PacificSource will provide payment for benefits under the Policy, and the direction of the Plan Sponsor, if the Plan Sponsor directs PacificSource to: 1. Pay a Claim, which in the opinion of PacificSource is not for a Covered Service according to the Plan Document; or 2. Pay a Claim on behalf of an individual who, in the opinion of PacificSource, would otherwise not be eligible for participation in the Plan. PacificSource agrees to pay such Claims provided, however, that such Claim will not be included in the accumulation of the Claims expense toward the Individual Stop Loss or Aggregate Stop Loss Attachment Point. These claims will be a separate and additional liability of the Plan Sponsor, and PacificSource will have no liability, either directly or indirectly, for such claims. Should a dispute arise with respect to Claims paid under the paragraphs above, and should either the Individual Stop Loss or Aggregate Stop Loss Attachment Point be reached by the inclusion of the disputed Claims in the accumulation of the Claims expense, the Plan Sponsor and PacificSource will meet and agree upon a procedure for submission of the dispute for decision by a neutral third party, including the criteria upon which the third party’s decision shall be based, whereby the third party will determine whether the disputed Claims should not be included in the accumulation of the Claims expense. The cost of the neutral third party used in this procedure will be split equally between the parties. Third-Party Recovery. It is understood that the Plan, or the Plan Sponsor, may become entitled to partial or full recovery from a third party with respect to a Claim paid under the Plan, whether directly through subrogation or indirectly through reimbursement from the Covered Participant or otherwise (“Recovery”), and that any Recovery by the Plan, and/or the Plan Sponsor, for Claims paid during the Term of this Policy may occur during or after the Term of this Policy. Unless PacificSource has agreed to perform such services as outlined in this Policy or a separate agreement, the Plan Sponsor shall promptly undertake to prosecute any and all valid claims for such Recoveries that the Plan may have against Covered Participants and/or third parties. It is agreed that the net amount of such recoveries, whether recovered by the Plan Sponsor, PacificSource, or other third party, remaining after deduction of the reasonable cost of prosecuting the recoveries, shall be treated as a reduction of the Plan’s Claim expense as hereinafter provided. Such amounts, recovered during the same Term or renewal Term of this Policy in which the related Claims were paid, shall be applied to reduce the amount of Paid Claims applied toward the Specific Stop Loss and Aggregate Stop Loss. Should this Policy have been terminated at the time one or more such recoveries occur, or if the recovery or recoveries occur in a renewal Term after a Term in which (1) the related Claims were paid and (2) PacificSource has reimbursed the Plan Sponsor for Claims reported in excess of the Specific Stop Loss or Aggregate Stop Loss, the Plan Sponsor agrees to reimburse PacificSource in the aggregate net amount recovered, up to the amount of such Claims paid by PacificSource. Liability and Indemnification. Except as specifically provided in any rider or endorsement, attached to and forming part of this Policy, PacificSource has no obligation to any third party. Our liability under this Policy is limited to reimbursing the Plan Sponsor, pursuant to the terms of this Policy, for payments the Plan Sponsor makes on behalf of Covered Participants for expenses covered under this Policy AIS ATTACHMENT 1, Page 13 of 15 DRAFTPSGSL.OR.0115 Page 10 City of Springfield_0120 Fiduciary Responsibility. PacificSource is acting only as a provider of insurance to the Plan Sponsor. PacificSource is not and will not be considered to have any discretion in the administration or management of the SFGHP’s operation. PacificSource assumes no obligation required by the Employer Retirement Income Security Act (ERISA) of 1974, as amended. PacificSource has no responsibility or obligation to directly reimburse any Covered Participant. This Policy will not create any right or legal relationship between PacificSource and any Covered Participant. PacificSource’s sole obligation under this Policy is to the Plan Sponsor. VI. TERMINATION Automatic Unless specifically agreed to otherwise in a written amendment to this Stop Loss Policy, this Stop Loss Policy shall automatically terminate as of the earliest of the following: 1. The end of the Policy period; 2. The effective date of any legislation which makes the Plan and/or this Policy illegal; 3. The date either party becomes insolvent, bankrupt, subject to liquidation, receivership, or conservatorship; or 4. The termination date of the Plan, subject to any policy between the Plan Sponsor and PacificSource regarding payment of benefits after the Plan is terminated. Discretionary This Plan may be terminated as of the earliest of the following: 1. By PacificSource upon the failure of the Plan Sponsor to pay any charges within ten (10) business days after they are due and payable; 2. By PacificSource upon the failure of the Plan Sponsor to perform its obligations in accordance with this Policy; 3. By the Plan Sponsor upon the failure of PacificSource to perform its obligations in accordance with this Policy; or 4. By the Plan Sponsor in a written request The Plan shall not be liable to reimburse the Plan Sponsor under Section III for any claims not specifically defined in Section III. VII. PLAN CONTACT INFORMATION 1. Any correspondence mailed to the Plan Sponsor will be mailed to: City of Springfield Attn: Tom Mugleston 225 5th St Springfield, OR 97477 Phone: (541) 726-3724 E-Mail: tmugleston@springfield-or.gov 2. Any copy of correspondence and invoices mailed to the Administrator will be mailed to: City of Springfield Attn: Ali Gray 225 5th St Springfield, OR 97477 Phone: (541) 726-2242 E-Mail: agray@springfield-or.gov AIS ATTACHMENT 1, Page 14 of 15 DRAFTPSGSL.OR.0115 Page 11 City of Springfield_0120 3. Any correspondence mailed to PacificSource will be mailed to: PacificSource Health Plans Attn: Sales PO Box 7068 Springfield, OR 97475-0068 Phone: (541) 686-1242 Fax: (541) 485-0915 4. Any Enrollment Information, billing information, and payments mailed to PacificSource will be mailed to: PacificSource Health Plans Attn: Membership Services PO Box 7068 Springfield, OR 97475-0068 Phone: (866) 999-5583 Fax: (541) 225-3642 E-mail: membership@pacificsource.com The Plan Sponsor agrees to notify PacificSource within twenty-four (24) hours of any changes to the Plan Contact Information contained in this Policy. IN WITNESS WHEREOF, Plan Sponsor and PacificSource have caused this Stop Loss Policy to be executed in their names by their undersigned officers, who are duly authorized to do so. “Plan Sponsor” “PacificSource” City of Springfield PacificSource Health Plans By:________________________ By: Print:______________________ Print: Kenneth P. Provencher Title:______________________ Title: President and CEO Date:______________________ Date: 11/18/2019 AIS ATTACHMENT 1, Page 15 of 15