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HomeMy WebLinkAboutA7117 - BLUE SHIELD OF CALIFORNIA - Group HealthAPPLICATION IS HEREBY MADE TO Blue Shield of California (California Physicians' Service) FOR A GROUP HEALTH SERVICE CONTRACT BY: City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 This Contract, number VV0002421-M0018795, shall be effective January 1, 2019. it has been read and approved, and the terms and conditions are accepted by the Contractholder. The Contractholder. on behalf of itself and its Subscribers, hereby expressly acknowledges its understanding that this agreement constitutes a Contract solely between the Contractholder and Blue Shield of California (hereafter referred to as "the Plan"), which is an independent corporation operating under a license from the Blue Cross and Blue Shield Association ("Association"), an Association of independent Blue Cross and Blue Shield plans, permitting the Plan to use the Blue Shield Service Mark in the State of California, and that the Plan is not contracting as the agent of the Association. The Contractholder further acknowledges and agrees that it has not entered into this agreement based upon representations by any person other than the Plan and that neither the Association nor any person, entity, or organization affiliated with the Association, shall be held accountable or liable to the Contractholder or its Subscribers for any of the Plan's obligations to the Contractholder created under this agreement. This paragraph shall not create any additional obligations whatsoever on the part of the Plan, other than those obligations created under other provisions of this agreement. The Contractholder shall sign, date and return this original application page to Blue Shield of California, 50 Beale Street, 18"' Floor, San Francisco, California 94105, Attention: Customer Contract Development. The Contract shall be retained by the Contractholder. Payment of Dues and acceptance of Blue Shield's performance hereunder by the Contractholder shall be deemed to constitute the Contractholder's acceptance of the tenns hereof, whether or not this agreement is signed by the Contractholder. The Contractholder is responsible for communicating any changes to Benefits as set forth in Part IX., Contractholder Responsibility for Distribution and Notification Requirements. Please see this section for important timelines for distribution of information. It is agreed that tins application supersedes any previous application for this Contract. Dated at _ (Citv. State) OJ ►vT"20il (Legal PLEASE SIGN, DATE "AND RETURN THE ORIGINAL APPLICATION PAGE TO BLUE SHIELD OF CALIFORNIA AT THE ABOVE ADDRESS. RETAIN THE CONTRACT. Inquiries concerning any problems that may develop in the administration of this Contract should be directed to Blue Shield of California at the address provided on page GC-1 . blue®of California GC-AP 1-19 APPROVED AS TO FORM / f " approved BY CITY COUNGII , ^ ' i.e. J blue II of California 50 Beale Street San Francisco, California 94105 (415) 229-5000 GROUP HEALTH SERVICE CONTRACT Blue Shield of California PPO Plan between City of Palm Springs ("Contractholder ") and California Physicians' Service dba Blue Shield of California a not-for-profit corporation In consideration of the applications and the timely payment of Dues, Blue Shield agrees to provide Benefits of this Contract to covered Employees and their covered Dependents. This Contract shall be effective as of January 1, 2019, for a term of 12 months, subject to the provisions entitled, "Changes: Entire Contract". Ken Lautsch Vice President and General Manager Core Accounts Blue Shield of California Group Number: WD002421-M0018795 Original Effective Date: July 1,1998 GC-1 IMPORTANT No person has the right to receive the Benefits of this Contract for Services or supplies furnished following termination of coverage, except as specifically provided in the Group Continuation Coverage and Extension of Benefits sections of the Evidence of Coverage and Disclosure Form (EOC). Benefits of this Contract are available only for Services and supplies as included in the applicable sections of the EOC, furnished during the term the Contract is in effect and while the individual claiming Benefits is actually covered by this Contract. Benefits may be modified during the term of this Contract under the applicable section in Part V. Dues, Part VIII. General Provisions, D. Changes: Entire Contract, or upon renewal. If Benefits are modified, the revised Benefits (including any reduction in Benefits or the elimination of Benefits) apply for Services or supplies furnished on or after the effective date of the modification. There is no vested right to receive the Benefits of this Contract. C-1 TABLE OF CONTENTS Page C- PART 1. INTRODUCTION 3 PART II. DEFINITIONS 3 PART III. ELIGIBILITY 4 A. Employee Eligibility, Waiting Periods and Open Enrollment 4 B. Associated Employers 5 C. Termination of Benefits 6 PART IV. GROUP RENEWAL PROVISIONS 7 PART V. DUES 8 PART VL INTER-PLAN ARRANGEMENTS (BLUECARD® PROGRAM AND OTHERS) 10 PART VII. CANCELLATION/REINSTATEMENT/GRACE PERIOD 12 A. Cancellation Without Cause 12 B. Cancellation for Non-Payment of Dues 12 C. Cancellation/Rescission for Fraud, Intentional Misrepresentations of Material Fact 12 D. Grace Period 12 E. Payment or Refund of Dues Upon Cancellation 12 F. Termination of Benefits 12 G. Employer to Provide Subscribers with Notice Confirming Termination of Coverage 12 PART VIII. GENERAL PROVISIONS 13 A. Choice of Providers 13 B. Use of Masculine Pronoun 13 C. Workers' Compensation 13 D. Changes; Entire Contract 13 E. Statutory Requirements 13 F. Legal Process 14 G. Time of Commencement or Termination 14 H. Records and Information to be Furnished 14 I. Inquiries and Complaints 14 J. Confidentiality 14 K. ERISA Plan Administrator 14 L. Producer Service Fee 14 PART IX. CONTRACTHOLDER RESPONSIBILITY FOR DISTRIBUTION AND NOTIFICATION REQUIREMENTS 17 A. Obtaining Declinations or Waivers of Coverage 17 B. Distribution of Summary of Benefits and Coverage (SBC) 17 C. Distribution of Member ID Cards and EOC Booklets 17 D. Notice of Cancellation for Nonpayment of Premiums and Grace Period or Notice of Cancellation, Rescission or Nonrenewal 18 E. Notification of COBRA and Cal-COBRA Coverage Option and Other COBRA/Cal-COBRA Notices 18 EVIDENCE OF COVERAGE AND DISCLOSURE FORM 20 Refer to the Table of Contents in the EOC Supplements: Outpatient Prescription Drugs C-2 PART I. INTRODUCTION This Blue Shield of California Health Plan will provide or arrange for the provision of Services to eligible Subscribers and Dependents of the Contractholder in accordance with the terms, conditions, limitations, and exclusions of this Group Health Service Contract. The Evidence of Coverage and Disclosure Form (EOC) is included and made part of this Contract. PART II. DEFINITIONS In addition to the provisions contained in the "Definitions" section of the EOC, the following provisions apply to this Group Health Service Contract: Employee - (1) an individual engaged on a full-time basis in the conduct of the business of the Employer, whose normal work week is at least 30 hours, and whose duties in such employment are performed at the Employer's regular places of business; or (2) a sole proprietor or partner of a partnership engaged on a full-time basis, at least 30 hours per week, in the Employer's business and who is included as an Employee under a health care Plan Contract of the Employer. An individual is ineligible for coverage who works part-time, temporary, or is employed on a substitute basis. C-3 PART III. ELIGIBILITY A. Employee Eligibility, Waiting Periods and Open Enrollment In addition to the provisions contained in the Eligibility section of the EOC, the following provisions apply to this Group Health Service Contract: 1. The date of eligibility of Employees who enroll during the initial enrollment period shall be determined as follows: a. Inasmuch as this Contract replaces a Contract between Blue Shield and the Employer, each individual in the employ of the Employer on the effective date of this Contract who was a Subscriber of Blue Shield by virtue of the Employer's previous Contract on the date immediately preceding the effective date of this Contract, who lives and/or works in the Plan Service Area is eligible on the effective date of this Contract. b. Each individual, except as provided in paragraph a. above, shall be eligible to enroll on the first of the month following the completion of any applicable waiting period established by the Employer. c. If associated Employers are added, the effective date of the amendment adding an associated Employer shall be treated as the effective date of this Contract for the purpose of determining the date of eligibility of the Employees of such Employer. 2. The date of eligibility of a former Employee, who has been re-employed, shall be determined as follows: The Employee's period of service prior to termination of employment shall be included in the determination of his date of eligibility, provided: a. he has resumed active work within 6 months after such termination; or b. if his previous employment was terminated due to entry into the Armed Forces, he has resumed active work within the time set by law for reinstatement of employment rights. However, there will be no waiting periods as prohibited by The Military & Veterans Code; or c. if termination was due to disability, he has resumed active work within one month after ceasing to be disabled; otherwise he shall be considered as an Employee entering the employ of the Employer on the date he resumed work and shall be eligible on the date he completes the period of service specified in A.I.b. 3. If any class of Employees is not eligible under A. I., and if an Employee transfers from such ineligible class to an eligible class, he shall be considered as having entered the employ of the Employer on the date of such transfer. Service in an ineligible class shall not be included in the determination of the date of eligibility. 4. The Employer agrees to offer health Benefits coverage to all eligible Employees during the initial enrollment period and distribute information as set forth in Part IX., Contractholder Responsibility for Distribution and Notification Requirements. In addition, the Employer agrees to get the Employee's signed acknowledgment of an explicit written notice in bold type specifying that failure to elect coverage during the initial enrollment period permits the Plan to impose, at the time of the Employee's later decision to elect coverage, an exclusion from coverage for a period of 12 months, or at the Employer's next Open Enrollment Period, whichever is earlier, unless the Employee meets the criteria specified in paragraph I. of the definition of Late Enrollee. Blue Shield will not consider applications for earlier effective dates. 5. An Employee may transfer enrollment for himself or his Dependent(s) from another group health plan sponsored by the Employer to the health Plan covered by this Contract only during the Open Enrollment Period in December of each year. The effective date of Benefits for such Employee and Dependent(s) shall be the first day of each subsequent January. Submission of evidence of acceptability is not required when application is made during this Open Enrollment Period. 6. The Employer shall timely report any additions or terminations of Employees or Dependents so that retroactive Dues adjustments are avoided and claims are not paid for ineligible individuals. However, if the Employer determines that it has made an administrative error in the processing of eligibility for an Employee or Dependent, Blue Shield will accept the retroactive changes subject to the following limitations: C-4 PART III. ELIGIBILITY a. Blue Shield will accept enrollment of the Employee or Dependent retroactively for a maximum of 60 days, as long as Dues are paid by the Employer for the entire retroactive enrollment period. If an Employee or Dependent is retroactively enrolled pursuant to this, and the Employee or Dependent received covered health care services during that retroactive period, Blue Shield will reimburse the Employee for payments made for Covered Services received in accordance with the rules of the EOC, minus the Member s Copayments or Coinsurance as stated in the EOC; b. Blue Shield will accept termination/disenrollment of the Employee or Dependent retroactive for a maximum of 60 days and will refund appropriate Dues paid for the retroactive termination period. In such case. Blue Shield reserves the right to request refund from the Employee for any payments made for services rendered during the retroactive termination period. In making a request for retroactive termination or disenrollment, Contractholder shall comply with all applicable state and federal law, including, but not limited to, the Patient Protection & Affordable Care Act and any related regulations. 7. The Employer agrees to comply with the requirements of Section 2708 of the Patient Protection & Affordable Care Act (Section 2708), which prohibits an employer from imposing a prohibited waiting period. "Waiting period" means a period that is required to pass before an otherwise eligible Employee will be able to enroll in coverage under the Group Contract. Specifically, Employer agrees: a. Any conditions of eligibility or waiting periods imposed on the eligible Employee will comply with the requirements of Section 2708 and California state law and any rules and regulations implementing those requirements. b. Employer will notify Blue Shield if Employer imposes a waiting period on an eligible Employee that would exceed the time-period permitted by Section 2708. c. The Employer must ensure that any orientation period that may be imposed by the Employer prior to the start of the waiting period is consistent with federal regulations. The Employer will notify Blue Shield of the Employee's eligibility for coverage after the orientation period. d. Employer will notify Blue Shield if any changes are made regarding these representations. e. Employer will hold Blue Shield harmless for any violation of the requirements of Section 2708 or California state law. B. Associated Employers Employees of the following listed Employers associated with the Employer as subsidiaries or affiliates are eligible for Benefits in accord with this Contract. For the purposes of this Contract only, service with any associated Employers shall be considered service with the Employer. The Employer may act for and on behalf of any associated Employers in all matters pertaining to this Contract, and every act done by, agreement made with, or notice given to the Employer shall bind all associated Employers. list of associated Emolovers None C-5 PART HI. ELIGIBILITY C. Termination of Benefits In addition to the provisions contained in the Termination of Benefits section of the EOC, the following provisions apply to this Group Health Service Contract: 1. The Benefits of a Member shall cease on the first day of the month following the month in which the Subscriber retires, is pensioned, leaves voluntarily, or is dismissed from the employ of the Contractholder or otherwise ceases to be a member of a class eligible for coverage, unless a different date on which the Subscriber no longer meets the requirements for eligibility has been agreed to between Blue Shield and the Contractholder, except that. a. if the Subscriber ceases active work because of a disability due to illness or bodily injury, or because of an approved leave of absence or temporary layoff, payment of Dues for that Subscriber shall continue coverage in force in accordance with the Employer's policy regarding such coverage; or, b. if the Employer is subject to the California Family Rights Act of 1991 and/or the Federal Family & Medical Leave Act of 1993, and the approved leave of absence is for family leave pursuant to such Acts, payment of Dues for that Subscriber shall keep coverage in force for the duration(s) prescribed by the Acts. The Employer is solely responsible for notifying Employees of the availability and duration of family leaves. 2. With respect to a newborn child or a child placed for adoption, coverage will cease on the 3H' day at 11.59 p.m. Pacific Time following the Dependent's effective date of coverage, except that coverage shall not cease if a written or electronic application for the addition of the Dependent is submitted to and received by Blue Shield prior to the 3 day following the effective date of coverage. C-6 PART IV. GROUP RENEWAL PROVISIONS A. Advance Notification of Blue Shield's Intent to Renew the Group Health Service Contract The Employer shall be notified by Blue Shield of its intent to renew this Group Health Service Contract at least 90 days prior to the proposed effective date of the renewal. However, this renewal advance notification is distinct from, and does not alter the notification periods specified in Part V. Dues, Paragraph D., or in Part VIII. General Provisions, Paragraph D. Changes'. Entire Contract. B. Renewal of the Group Health Service Contract Blue Shield will renew this Group Health Service Contract at the option of the Contractholder except in the following instances I the Contractholder violates a material contract provision relating to Employer or other group contributions or group participation rates by the Contractholder or Employer; 2. the Contractholder fails to pay the required Dues as specified under Part V. Dues; 3. the Contractholder commits fraud or other intentional misrepresentation of material fact, 4. the Contractholder relocates outside of California; 5.Blue Shield ceases to offer a plan type purchased by the Contractholder; 6. Blue Shield ceases to offer health benefit plans in the state (withdrawal of all products). C-7 PART V. DUES A. Dues Monthly Dues MOni S795-1001/100A/102A „ . $1,042.30Subscriber $05033 Additional for one Dependent Additional for two or more Dependents $1,086.97 MOOI8795-1002 c, . .. $1,042.30Subscriber ' Additional for one Dependent J Additional for two or more Dependents $800.68 MOO 18795-1003 e u $905.33Subscriber $748 74 Additional for one Dependent 87 Additional for two or more Dependents MOOI 8795-1004 „ . $790.36Subscriber Additional for one Dependent Additional for two or more Dependents $660.89 B. When and Where Payable 1. The initial Dues are due on the effective date of this Contract and subsequent Dues shall be due on the same date of each succeeding month ("the first month's transmittal date") thereafter, provided that the Dues due on any transmittal date shall not be deemed to have been paid unless the total Dues for all parts in force on such transmittal date have been paid. 2 Dues for Employees and/or Dependents who become eligible on a date other than the bill date are waived for the month during which eligibility for covered Benefits is attained. Dues for Employees and/or Dependents whose eligibility for covered Benefits terminates on a date other than the bill date are due in full for the month during which eligibility is terminated. 3. All Dues are payable by the Employer to Blue Shield of California. The payment of any Dues shall not maintain the Benefits under this Contract in force beyond the date immediately preceding the next transmittal date except as otherwise provided in Part V. F. C. The terms of this Contract or the Dues payable therefor may be changed from time to time as set forth in Fart VIII., D. Changes: Entire Contract. D. The Employer shall remit to Blue Shield the amount specified in Part V. A. ("the Dues"). If a Federal, State or any other taxing or licensing authority imposes upon Blue Shield any tax or fee on account of any of the Employer s health benefit plans that is not included in the Dues, whether such tax or fee is based on Dues, gross receipts, enrollment or any other basis Blue Shield may amend the Contract to increase the Dues by an amount sufficient to cover any such tax or ee rounded to the nearest cent. This amendment shall be effective as of the date stated in the notice, which shall not be earlier than the date of the imposition of such tax or fee, by mailing a postage prepaid notice of the amendment to the Ernployer at its address of record with Blue Shield at least 60 days before the effective date of the amendment. In the case of Federal excise taxes, Blue Shield may also amend the Dues to include any increased Federal income taxes to Blue Shield associated with such Federal excise taxes. E. If benefit amounts are changed due to a change in the terms of this Contract or if a tax is levied under Part V. D., the Dues charged therefor may be made, or the Dues credit therefor may be given, as of the effective date of such change. C-8 PART V. DUES F. A grace period of 31 days to pay all delinquent Dues and avoid cancellation will be granted for the payment of Dues accruing other than those due on the effective date of this Contract, during which period this Contract shall continue in force, but the Employer shall be liable to Blue Shield for the payment of all Dues accruing during the period the Contract continues in force during the grace period. Cancellation for non-payment of Dues shall be in accordance with PART VII.B. C-9 PART VI. INTER-PLAN ARRANGEMENTS (BLUECARD® PROGRAM AND OTHERS) Out-of-Area Services Blue Shield has a variety of relationships with other Blue Cross and/or Blue Shield Licensees referred to generally as Inter- Plan Arrangements. Whenever a Member accesses Covered Services outside of California, the claim for those services may be processed through one of these Inter-Plan Arrangements and presented to Blue Shield for payment in accordance with the Blue Cross Blue Shield Association rules and procedures then in effect. The Inter-Plan Arrangements available to Members under this agreement are described generally below. When Members access Covered Services outside of California, within the BlueCard Service Area, they may obtain care from participating health care providers that have a contractual agreement with the local Blue Cross and/or Blue Shield Licensee in that other geographic area (Host Blue). In some instances. Members may obtain care from health care providers in the Host Blue geographic area that do not have a contractual agreement with the Host Blue (non-participating providers). Blue Shield's payment practices in both instances are described below. BlueCard® Program The BlueCard® Program is an Inter-Plan Arrangement. Under this arrangement, when Members access Covered Services within the geographic area served by a Host Blue, Blue Shield will remain responsible for fulfilling our contractual obligations. However, the Host Blue will be responsible for providing such services as contracting and handling substantially all interactions with its participating health care providers. The financial terms of the BlueCard Program are described generally below. Liability Calculation Method Per Claim Calculation of Member liability on claims for Covered Services processed through the BlueCard Program, if not a flat dollar copayment, will be based on the lower of the participating provider's billed charges for Covered Services or the negotiated price made available to Blue Shield by the Host Blue. The negotiated price may represent one of the following: (i) an actual price. An actual price is a negotiated rate of payment in effect at the time a claim is processed without any other increases or decreases, or (ii) an estimated price. An estimated price is a negotiated rate of payment in effect at the time a claim is processed, reduced, or increased by a percentage to take into account certain payments negotiated with the provider and other claim- and non- claim-related transactions. Such transactions may include, but are not limited to, anti-fraud and abuse recoveries, provider refunds not applied on a claim-specific basis, retrospective settlements, and performance-related bonuses or incentives; or (iii) an average price. An average price is a percentage of billed charges for Covered Services in effect at the time a claim is processed representing the aggregate payments negotiated by the Host Blue with all of its health care providers or a similar classification of its providers and other claim- and non-claim-related transactions. Such transactions may include the same ones as noted above for an estimated price. Host Blues determine whether or not they will use an actual price, estimated price, or average price. Host Blues using either an estimated price or an average price may prospectively increase or reduce such prices to correct for over- or underestimation of past prices (i.e., a prospective adjustment may mean that a current price reflects additional amounts or credits for claims already paid to providers or anticipated to be paid to or received from providers). However, the BlueCard Program requires that the amount paid by the Member is a final price; no future price adjustment will result in increases or decreases to the pricing of past claims. The method of claims payment by Host Blues is taken into account by Blue Shield in determining the Employer's Premiums. Return of Overpayments Under the BlueCard Program, recoveries of overpayments from a Host Blue or its participating and non-participating health care providers can arise in several ways, including, but not limited to, anti-fraud and abuse recoveries, health care provider/hospital audits, credit balance audits, utilization review refunds, and unsolicited refunds. Recoveries will be applied C-10 PART VI. INTER-PLAN ARRANGEMENTS (BLUECARD® PROGRAM AND OTHERS) in general, on either a claim-by-claim or prospective basis. If recovery amounts are passed along on a claim-by-claim basis from a Host Blue to Blue Shield, they will be credited to your account. In some cases, the Host Blue will engage a third party to assist in identification or collection of recovery amounts. The fees of such a third party may be charged to your account as a percentage of the recovery. Inter-Plan Arrangements: Federal/State Taxes/Surcharges/Fees In some instances, federal or state laws or regulations may impose a surcharge, tax, or other fee that applies to insured accounts. If applicable. Blue Shield will include any such surcharge, tax, or other fee in determining Employer's Premiums. Special Cases: Value-Based Programs Blue Shield Value-Based Programs Enrollees may access covered services from providers that participate in a Blue Shield Value-Based Program. Blue Shield Value-Based Programs include, but are not limited to. Accountable Care Organizations, Episode Based Payments, Patient Centered Medical Homes and Shared Savings arrangements. Blue Shield has included any associated costs in the Premium for Blue Shield Value-Based Programs when applicable under this agreement. BlueCard® Program Blue Shield has included a factor for bulk distributions from Host Blues in the premium for Value-Based Programs when applicable under this agreement. Non-Participating Providers Outside of California When Covered Services, other than Emergency Services, are received from non-participating providers outside of California, but within the BlueCard Service Area, the amount(s) a Member pays for such services will generally be based on the Host Blue's non-participating provider local payment, the Allowable Amount Blue Shield pays a Non-Participating provider in California if the Host Blue has no non-participating provider allowance, or the pricing arrangements required by applicable state law. In these situations, the Member may be responsible for the difference between the amount that the non-participating provider bills and the payment Blue Shield will make for the Covered Services as set forth in this paragraph. Claims for covered Emergency Services are paid based on the Allowable Amount as defined in the EOC. Blue Shield Global Core If Members are outside the BlueCard Service Area, they may be able to take advantage of Blue Shield Global Core when accessing Out-of-Area Covered Health Care Services. Blue Shield Global Core is unlike the BlueCard Program available in the BlueCard Service Area. Although Blue Shield Global Core assists Members with accessing a network of inpatient, outpatient, and professional providers, the network is not served by a Host Blue plan. As such, when Members receive care from providers outside the BlueCard Service Area, Members will typically have to pay the providers and submit the claims themselves to obtain reimbursement for these services. Details for Blue Shield Global Core claim submission are provided in the Inter-Plan Arrangements section of the EOC. C-11 PART VII. CANCELLATION/REINSTATEMENT/GRACE PERIOD A. Cancellation Without Cause The Employer may cancel this Contract at any time by written notice delivered or mailed to Blue Shield, effective on receipt or on such later date as specified in the notice. B. Cancellation for Non-Payment of Dues Blue Shield may cancel this Contract for non-payment of Dues. If Dues are not received when due, coverage will end 31 days after the date for which Dues are due. The Employer will be liable for all Dues accrued while this Contract continues in force including those accrued during the 31 day grace period. In such case, a Notice Confirming Termination of Coverage will be mailed to the Employer by Blue Shield. A new application for coverage will be required by the Employer and a new Contract will be issued only upon demonstration that the Employer meets all underwriting requirements at the time of application. C. Cancellation/Rescission for Fraud, Intentional Misrepresentations of Material Fact Blue Shield may cancel or rescind this Contract within 24 months following issuance for fraud or intentional misrepresentation of material fact by the Employer; or with respect to coverage of Employees or Dependents, for fraud or intentional misrepresentation of material fact by the Employee, Dependent, or their representative. Fraud or intentional misrepresentations of material fact on an application or a health statement (if a health statement is required by the Employer) may, at the discretion of Blue Shield, result in the cancellation or rescission of this Contract. A rescission voids the Contract retroactively as if it was never effective; Blue Shield will provide written notice prior to any rescission. D. Grace Period The Employer shall be entitled to a grace period of 31 days for payment of Dues, as described in PART V.F. hereof. If during a grace period written notice is given by the Employer to Blue Shield that the Contract or (subject to the consent of Blue Shield) any part of the Contract is to be discontinued before the expiration date of the grace period, the Contract or such part shall be discontinued as of the date specified by the Employer or the date of receipt of such written notice by Blue Shield, whichever is the later date, and the Employer shall be liable to Blue Shield for the payment of pro rata Dues for the period commencing with the last transmittal date and ending with the date of such discontinuance. E. Payment or Refund of Dues Upon Cancellation In the event of cancellation, the Employer shall promptly pay any earned Dues which have not previously been paid. Blue Shield shall within 30 days of cancellation (1) return to the Employer the amount of prepaid Dues, if any, that Blue Shield determines have not been earned as of the effective date of cancellation, and (2) provide Benefits of the Plan for Services incurred during the time coverage was in effect up to and including the effective date of cancellation. F. Termination of Benefits No Benefits shall be provided for Services rendered after the effective date of cancellation, e.xcept as specifically provided in the Group Continuation of Coverage and Extension of Benefits sections of the EOC. In the event this Contract is cancelled for any reason, including but not limited to for non-payment of Dues, no further Benefits will be provided after cancellation unless the Member is a registered Inpatient or is undergoing treatment for an ongoing condition and obtains an extension of Benefits in accordance with the Extension of Benefits section of the EOC. G. Employer to Provide Subscribers with Notice Confirming Termination of Coverage If this Contract is rescinded, or cancelled by either party, the Employer shall notify the Subscribers. If rescinded or cancelled by Blue Shield, the Employer shall promptly mail a copy of Blue Shield's Notice Confirming Termination of Coverage to each Subscriber and provide Blue Shield proof of such mailing and the date thereof. C-12 PART VIII. GENERAL PROVISIONS In addition to the provisions contained in the EOC, the following provisions apply to this Group Health Service Contract: A. Choice of Providers A Subscriber or Dependent may select any Hospital or Physician to provide covered Services hereunder, including providers outside of California. Benefits differ depending on whether a Participating Provider or a Non-Participating Provider is selected. It is to the Subscriber's advantage to select Participating Providers whenever possible. A Participating Provider Directory is available to all Subscribers by calling Blue Shield at (800) 331-2001 or writing to them at: P.O. Box 7168 San Francisco, CA 94120 or P.O. Box 92945 Los Angeles, CA 90009 In the event that the inability to perform of a Participating Provider, the breach of the Contract to furnish Services by a Participating Provider, or the termination of a Participating Provider's Contract with Blue Shield may materially and adversely affect the Employer, Blue Shield will, within a reasonable time, advise the Employer in writing of such inability to perform, breach, or termination. B. Use of Masculine Pronoun Whenever a masculine pronoun is used in this Contract, it shall include the feminine gender unless the context clearly indicates otherwise. C. Workers' Compensation This Contract is not in lieu of, and shall not affect, any requirements for coverage by Workers' Compensation Insurance. D. Changes: Entire Contract This Contract, including appendices, attachments, or other documents incorporated by reference constitutes the entire agreement between the parties, and any statement made by the Employer or by any Subscriber shall, in the absence of fraud, be deemed a representation and not a warranty. The terms of this Contract, the Dues payable therefor, and the benefits of this Plan, including but not limited to Covered Services, Deductible, Copayment and annual Out-of-Pocket Maximum amounts, may be changed from time to time. Blue Shield will provide at least 60 days' written notice of any such change, and these changes shall not become effective until at least 60 days after written notice of such change is delivered or mailed to the Employer's last address as shown on the records of Blue Shield. Benefits for services furnished on or after the effective date of any Benefit modification shall be provided based on the modification. No change in this Contract shall be valid unless approved by an executive officer of Blue Shield and a written endorsement is issued. No other representative has authority to change this Contract or to waive any of its provisions. Notice of changes in Benefits, and any documents that may be delivered to the Employer or the Employer's representative for the purpose of informing Members of the details of their coverage under this Contract, will be distributed by the Employer or his representative as set forth in Part IX., Contractholder Responsibility for Distribution and Notification Requirements. E. Statutory Requirements This Contract is subject to the requirements of the Knox-Keene Health Care Service Plan Act, Chapter 2.2 of Division 2 of the California Health and Safety Code and Title 28 of the California Code of Regulations. Any provision required to be in this Contract by reason of the Act or Regulations shall bind Blue Shield whether or not such provision is actually included in this Contract. In addition, this Contract is subject to applicable state and federal statutes and regulations, which may include the Employee Retirement Income Security Act, Health Insurance Portability and Accountability Act C-13 PART VIII. GENERAL PROVISIONS ("HIPAA") and applicable Centers for Medicare and Medicaid Services ("CMS") requirements. Any provision required to be in this Contract by reason of such state and federal statutes shall bind the Group and Blue Shield whether or not such provision is actually included in this Contract. F. Legal Process Legal process or service upon Blue Shield must be served upon a corporate officer of Blue Shield. G. Time of Commencement or Termination Wherever this Contract provides for a date of commencement or termination of any part or all of this Contract, commencement or termination shall be effective as of 12:01 a.m. Pacific Time of the commencement date and as of 11:59 p.m. Pacific Time of the termination date. H. Records and Information to be Furnished The Employer shall furnish Blue Shield with such information as Blue Shield may require to enable it to administer this Plan, to determine the Dues and to enable it to perform this Contract. CMS specifically requires Blue Shield to obtain the following information: Social Security numbers for Subscribers and dependents over forty-five (45) years of age. Subscriber employment status. Employer identification number and Employer size. Failure to provide any such information required by this Section may result in immediate Cancellation of this Contract. I. Inquiries and Complaints Inquiries concerning any problems that may develop in the administration of this Contract should be directed to Blue Shield at the address or telephone number indicated on page GC-1 of this Contract. (See also the Customer Service section of the EOC.) J. Confidentiality The Contractholder shall comply with all applicable state and federal laws regarding the privacy and confidentiality of the personal and health information of Subscribers and Dependents. The Contractholder shall not require the Plan to release the personal and health information of individual Subscribers or Dependents without written authorization from the Subscriber, unless permitted by law. No information may be disclosed by either party in violation of Cal. Civ. Code §§ 56, et seq. At the request of the Contractholder, the Plan may provide aggregate, encrypted, or encoded data regarding Subscribers and Dependents to the Contractholder, unless such data would explicitly or implicitly identify specific Subscribers or Dependents. To the extent the Contractholder receives, maintains, or transmits personal or health information of Subscribers or Dependents electronically, the Contractholder shall comply with all state and federal laws relating to the protection of such information including, but not limited to, the Health Insurance Portability and Accountability Act (HIPAA) provisions on security and confidentiality. K. ERISA Plan Administrator If the Contractholder's Plan is governed by ERISA (29 USC Sections 1001, et seq.), it is understood that Blue Shield is not the plan administrator for the purposes of ERISA. The plan administrator is the Contractholder. L. Producer Service Fee The Contractholder has selected and entered into an agreement with Wells Fargo Insurance Services ("Producer"), under which the Producer has agreed to provide consulting services to the Contractholder in connection with the Contractholder's Plan(s) (the "Service Agreement"), in return for payment from the Contractholder of compensation negotiated directly between the Contractholder and the Producer (the "Fee"). Blue Shield is not a party to the Service Agreement. The Contractholder requests that Blue Shield receive from the Contractholder and pay to the Producer certain amounts comprising payment for the Producer's services under the Service Agreement (the "Pass-Through Arrangement" or "Arrangement"). C-14 PART VIII. GENERAL PROVISIONS 1. Blue Shield Duties and Responsibilities: a. Blue Shield agrees to accept from the Contractholder payment of the monthly Fee amount with the Contractholder's payment of Blue Shield's monthly Premium invoice to the Contractholder. b. Blue Shield will forward the Fee to the Producer within 30 days of receipt of the Fee from the Contractholder. c. Blue Shield will provide to the Contractholder a summary of the aggregate Fee paid by Blue Shield on behalf of the Contractholder to the Producer for each Calendar Year within 15 business days following the end of such Calendar Year. d. Blue Shield is not responsible for determining or confirming the correctness of any information provided by the Contractholder, including the amount of the Fee or the name or other payment information of the Producer to whom the Fee is to be paid; rather. Blue Shield is responsible only for the ministerial functions of receiving payment of the Fee and forwarding such payment to the Producer. 2. The Contractholder Duties and Responsibilities: a. The Contractholder acknowledges and agrees that the Fee is not a part of the Premium charged to the Contractholder by Blue Shield, that using the Producer or any other agent or broker is not a requirement for the Contractholder to obtain coverage from Blue Shield and the Contractholder may obtain insurance policies directly from Blue Shield, and that the Contractholder, and not Blue Shield owes and is fully responsible to the Producer for the Fee. b. The Contractholder agrees to pay the Fee at the same time payment is made for the Premium for Blue Shield coverages. c. The Contractholder will notify Blue Shield immediately if the Service Agreement between the Contractholder and the Producer is terminated. d. The Contractholder will be responsible for any and all ta.\ reporting related to the payment of the Fee to the Producer, including Form 1099s, if required. 3. Payments and Adjustments: a. The Contractholder and the Producer have agreed that the amount of the Fee initially shall be 3.63% of the monthly Premium amount per month. b. The Contractholder will notify Blue Shield of any change to the Fee or the manner in which it is to be paid in writing. For purposes of Blue Shield's duties and responsibilities under this Arrangement, any such change will be effective the first day of the month following Blue Shield's receipt of such written notice of the change. c. The Contractholder will notify Blue Shield of a producer of record change in writing. For purposes of Blue Shield's duties and responsibilities under this Arrangement, any such change will be effective the first day of the month following Blue Shield's receipt of such written notice of the change. Following the change, Blue Shield will remit the Fee to the new producer. d. The parties acknowledge that any payment received by Blue Shield from the Contractholder will be applied first to Premiums due to Blue Shield, and any amount in addition to such Premiums to payment of the Fee. The Contractholder's failure to pay the Fee through Blue Shield will not subject the Contractholder to termination of any Blue Shield coverages for non-payment of Premium. e. The Contractholder acknowledges and agrees that Blue Shield may deposit the Fee into a general account that may collect interest. Blue Shield may retain any interest or investment income on funds held in the account. f. The Contractholder acknowledges and agrees that its Blue Shield coverages may, if otherwise eligible, be taken into account in the calculation of any bonus program offered by Blue Shield to the Producer. C-15 PART VIII. GENERAL PROVISIONS 4. Term and Termination: a. This Pass-Through Arrangement will automatically terminate as of the effective date of the termination of the Contractholder's Blue Shield coverages. b. The Contractholder may terminate this Arrangement at any time by providing written notice to Blue Shield. Such termination will be effective the first day of the month following Blue Shield's receipt of the notice of termination. c. Blue Shield may terminate this Arrangement by providing no less than si.xty (60) days' prior written notice to the Contractholder. C-16 PART IX. CONTRACTHOLDER RESPONSIBILITY FOR DISTRIBUTION AND NOTIFICATION REQUIREMENTS The Contractholder has various distribution of notices and Member materials and other notification requirements under this Group Health Service Contract. Some of the major Contractholder distribution and notification requirements are summarized below; however, this is a summary only and is not to be construed as an all-inclusive list. A. Obtaining Declinations or Waivers of Coverage All eligible Employees will be offered health benefits coverage during the initial and subsequent enrollment periods. If an Employee elects to decline or waive coverage, the Employer is responsible for obtaining the Employee's signed acknowledgment of receipt of an explicit written notice in bold type specifying that failure to elect coverage during the Open Enrollment Period permits the Plan to impose an e.xclusion from coverage for a period of 12 months, or at the Employer's next Open Enrollment Period, whichever is earlier, unless the Employee meets the criteria specified in paragraph 1. of the definition of Late Enrollee as set forth in the EOC. B. Distribution of Summary of Benefits and Coverage (SBC) A summary of benefits and coverage (SBC) will be issued by the Plan for all eligible Employees and Dependents. The Employer is solely responsible for the timely distribution of a complete SBC for each benefit plan offered. The Employer will distribute the SBCs free of charge to Members and prospective Members as required by applicable federal law and regulations. The Employer shall distribute the SBCs in a manner which complies with applicable federal law and regulations, if the Employer does not distribute paper SBCs, then the Employer will ensure that any alternative or electronic distribution method used complies with applicable federal requirements. If a material modification is made to the Employer's group health plan that impacts the SBC, other than at the time of renewal, then notice of the material change, as provided by Blue Shield, will be distributed by the Employer to the Subscriber and any Dependents no later than sixty (60) days prior to the date on which the modification will become effective. The notice shall be distributed in a manner that complies with applicable federal requirements. In the event that the Employer fails to distribute SBCs to Members or prospective Members as required herein. Blue Shield will, after notice to the Employer, distribute SBCs as necessary to comply with applicable federal statutes and regulations. In such case, the Employer agrees to reimburse Blue Shield for the reasonable costs incurred by Blue Shield to generate and distribute the SBCs. C. Distribution of Member ID Cards and EOC Booklets 1. Member ID Cards Membership identification cards will be issued by the Plan for all Subscribers and will either be sent to the Contractholder for distribution to the Subscribers, or sent directly to the Subscribers, depending on the Contractholder's instructions. 2. EOC Booklets An EOC which summarizes the Benefits of this Contract and how to obtain covered Services will be issued by the Plan for all Subscribers. The Plan will send the EOC to the Contractholder, and, the Contractholder is responsible for distributing the EOC to Subscribers whether in printed, hardcopy or electronic form. EOCs will be provided to the Contractholder in electronic form (such as by Compact Disk (CD) or posted on Blue Shield's employer website) or in paper hard copy form. If Contractholder receives the EOC in electronic form, Contractholder is not authorized to modify or alter in any way the te.xt or the formatting of the electronic EOC file. Blue Shield assumes no responsibility for any changes in text or formatting that may occur in the EOC after it is provided to Contractholder. If Contractholder receives the EOC in hard copy form, Contractholder will notify Subscribers that printed hard copies of the EOC are available and will promptly distribute to Subscribers. C-17 PART IX. CONTRACTHOLDER RESPONSIBILITY FOR DISTRIBUTION AND NOTIFICATION REQUIREMENTS Contractholder may ensure electronic distribution of the EOC to Subscribers by one of the following methods: (I) by posting the EOC in a read-only format on an intranet site which is accessed by Employees of Contractholder; (2) by emailing the EOC directly to Subscribers; or (3) by providing Subscribers with Blue Shield's instructions for accessing the EOC from the Blue Shield website. If Contractholder posts the electronic EOC on its intranet site, it shall do so in such a way so as to permit Employees of Contractholder to download and print a complete and accurate copy of the EOC. Contractholder will notify Employees enrolled with Blue Shield that the EOC for their plan is available to review, download and print from Contractholder's intranet site, and will provide Subscribers with reasonable and appropriate instructions by which to access and print the document from its intranet site. Contractholder will provide a hard copy of the EOC to an Employee upon request. If Blue Shield receives an inquiry from an Employee of the Contractholder regarding obtaining a copy of the EOC, Blue Shield will refer that individual to Contractholder's human resources benefits staff with instructions that a copy of the EOC is available from Contractholder on request. Contractholder has the option to request a supply of hard copies of the EOC in an amount not to exceed 10% of the total subscriber count at no additional charge. In the event Blue Shield reasonably concludes that Contractholder is either using the electronic EOC in a matter not permitted by this Agreement or is not providing Subscribers with access to the EOC in accordance herewith, then Blue Shield will print copies of the EOC, and Contractholder will cooperate with Blue Shield to ensure that printed copies of the EOC are timely provided to all Employees of Contractholder enrolled with Blue Shield. Contractholder agrees to reimburse Blue Shield for the reasonable cost of printing and delivering the EOC documents. D. Notice of Cancellation for Nonpayment of Premiums and Grace Period or Notice of Cancellation, Rescission or Non renewal Upon receipt of a Notice of Cancellation for Nonpayment of Premiums and Grace Period or a Notice of Cancellation, Rescission or Nonrenewal from the Plan, the Employer shall promptly send any such Notice to each subscriber in a manner which complies with applicable law. E. Notification of COBRA and Cal-COBRA Coverage Option and Other COBRA/Cal-COBRA Notices The following provisions are applicable only when the Contractholder is subject to Title X. of the Consolidated Omnibus Budget Reconciliation Act (COBRA) as amended or the California Continuation Benefits Replacement Act (Cal- COBRA). See the Continuation of Group Coverage and Extension of Benefits sections of the EOC for additional information. 1. COBRA Blue Shield is not the plan administrator or plan sponsor, as those terms are defined by ERISA, for any purpose, including but not limited to COBRA, and has no responsibility for the Contractholder's COBRA administration obligations To the extent required by COBRA, and upon timely receipt of Dues and proper enrollment forms. Blue Shield will continue the group coverage to qualified beneficiaries after the period that their coverage would normally terminate under the Contract. Blue Shield will not be responsible for determining whether a Subscriber or Dependent is eligible to receive continuation coverage; such determination is based on the requirements of COBRA and the procedures established by the Contractholder or its COBRA administrator. If the Contractholder or any Subscriber or Dependent fails to meet its obligations under the Contract and COBRA, Blue Shield shall not be liable for any claims of the Subscriber or Dependent affer his/her termination of coverage, except as expressly provided in other applicable provisions of the Contract. C-18 PART IX. CONTRACTHOLDER RESPONSIBILITY FOR DISTRIBUTION AND NOTIFICATION REQUIREMENTS The Contractholder is solely responsible for all aspects of the administration of Title X. of the Consolidated Omnibus Budget Reconciliation Act (COBRA) and any amendments with respect to the group health coverage provided by this Contract. The obligations of the Contractholder, in the event that federal continuation of coverage requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended, apply to the Contractholder, are as set forth below: a. Contractholder or its COBRA administrator will complete and timely provide all notices and enrollment forms to all eligible Subscribers and Dependents (including the initial notice of COBRA rights) required under COBRA. b. Contractholder or its COBRA administrator will establish procedures to verify eligibility for COBRA coverage and receive COBRA election forms from Qualified Beneficiaries. c. The Contractholder will notify its COBRA administrator (or the Plan administrator if the Contractholder does not have a COBRA administrator) of the Subscriber's death, termination, or reduction of hours of employment, or of the Subscriber's Medicare entitlement, or the Employer's (Contractholder's) filing for reorganization under Title XI, United States Code. d. Contractholder or its COBRA administrator will establish a determination date upon which applicable COBRA rates may be annually changed and determine the applicable premium amount for qualified COBRA beneficiaries in accordance with its Contract with Blue Shield, adding the 2% administrative fee permitted by COBRA. e. Contractholder or its COBRA administrator will bill and collect premiums from COBRA Qualified Beneficiaries, and provide timely notification of nonpayment of COBRA continuation coverage premiums, per the terms of the Contract and the COBRA law. f. Contractholder or its COBRA administrator will remit premiums to Blue Shield on behalf of the COBRA qualified beneficiary until Blue Shield receives notice from the Contractholder that such beneficiary is no longer entitled to COBRA coverage. g. Contractholder or its COBRA administrator will provide notification of continuation of coverage rights to the extent required by COBRA or any other federal or state laws as applicable, on termination of COBRA coverage. The Contractholder or its COBRA administrator is responsible for notifying COBRA enrollees of their right to possibly continue coverage under Cal-COBRA at least 90 calendar days before their COBRA coverage will end. h. Contractholder or its COBRA administrator will inform eligible Subscribers and Dependents of changes in the COBRA law as they occur, including an explanation of the impact of these changes upon COBRA coverage. i. The Contractholder agrees to assume responsibility for any and all COBRA violations resulting from the failure of the Contractholder or its COBRA administrator to perform its COBRA administration responsibilities. 2. Cal-COBRA Contractholders subject to the California Continuation Benefits Replacement Act (Cal-COBRA) are responsible for notifying Blue Shield in writing within 30 days when the Contractholder becomes subject to Section 4980B of the United States Internal Revenue Code or Chapter 18 of the Employee Retirement Income Security Act, 29 U.S.C. Section 1161 et seq. Contractholders subject to the California Continuation Benefits Replacement Act (Cal-COBRA) are responsible for notifying Blue Shield in writing of the Subscriber's termination or reduction in hours of employment within 30 days of the Qualifying Event. C-19 EVIDENCE OF COVERAGE AND DISCLOSURE FORM An EOC booklet and any applicable Supplements will be issued by Blue Shield for all Subscribers covered under this Group Health Service Contract. The following pages contain the exact provisions of this EOC and any applicable Supplements and are included as part of this Contract. Note: In the EOC, references to "you" or "your" shall mean the eligible Subscriber and/or Dependent of this Plan. References to "we" or "us" shall mean the Plan and/or Blue Shield of California. C-20