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ADMINISTRATIVE SERVICES AGREEMENT - COBRA SERVICES , < BEIEFIT ONE OF AMERICA, INd ADMINISTRATIVE SERVICES AGREEMENT COBRA SERVICES TillS AGREEMENT (hereinafter referred to as the "Agreement") is made as of this I" day of February , 2000 (effective date) by and between Benefit One of America, Inc. (hereinafter referred to as "Benefit One"), a Florida corporation, and The City of Clearwater, Florida (hereinafter referred to as the "Plan Sponsor") which sponsors an employee group health insurance plan. WITNESSETH THAT: WHEREAS, the Plan Sponsoris responsible for the administration of its employee health insurance plan (hereinafter referred to as the "Plan"); and WHEREAS, the Plan Sponsor desires to retain Benefit One and Benefit One desires to accept such appointment to provide administrative services for the Plan related to assisting the Plan Sponsor in complying with certain requirements of the Internal Revenue Code of 1986, as amended ("The Code") and the Employment Retirement Income Security Act of 1974 ("ERISA") that pertain to continuation of health benefits coverage regulated by the Consolidated Omnibus Budget Reconciliation Act of 1986 and as amended ("COBRA"): NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements contained herein, Benefit One and the Plan Sponsor agree upon the following terms and conditions: 1. Services to Be Performed. The Plan Sponsor hereby contracts with Benefit One to provide the COBRA administrative services specified in Schedule A attached hereto. 2. Effective Date: Term and Termination. This Agreement shall be effective on the date stated above as the effective date and shall continue in effect for an initial three-year term. This Agreement shall automatically renew for successive one year terms (with a maximum of five years) unless canceled by Plan Sponsor, upon notice given in accordance with paragraph 9, at least thirty (30) days prior to the expiration of the then current term or otherwise in accordance with this agreement, or for a stated extended period by mutual agreement of the parties as hereinafter provided. The Plan Sponsor may terminate this Agreement at any time by giving Benefit One written notice of the termination of the Agreement at least thirty (30) days prior to the date of termination specified in such notice. 3. Relationship of Parties. Plan Sponsor and Benefit One are separate and independent entities. The relationship between them is purely contractual, and neither is an agent, employee or servant of the other. As independent contracting parties, the Plan Sponsor and Benefit One maintain separate and independent management and they each have full authority and responsibility regarding their own organization, method of operation and structure. Except as may be otherwise expressly provided herein, neither party shall have the right or authority to assume or create any obligation, express or implied, on behalf of the other party. Plan Sponsor understands that Benefit One is not the Plan Administrator of the Plan for purposes of ERISA or a fiduciary as defined under ERISA. Benefit One shall provide only administrative -1- n:worddata\jo\agreement\COBRA.doc ore? Y ("". :~ and ministerial serviceJ to the Plan under this Agreement and sIll not exercise any discretionary authority or control with respect to the Plan. 4. ResDonsibilities of Plan SDonsor. In providing the services described in Schedule A, Benefit One shall rely upon the Plan Sponsor to do the following: A. Provide complete and accurate information regarding plans, rates and current COBRA participants and all data requested on the set up forms. B. Determine and accurately report, on a timely basis, the occurrence of qualifYing events for Plan participants. C. Review the reports provided by Benefit One and advise of any discrepancies in such reports within thirty (30) days after receipt. D. Use written forms of communication in relaying information to Benefit One. 5. Indemnification and Hold Harmless. In performing the benefits administrative services provided under this Agreement, Benefit One may rely without qualification on the information provided by Plan Sponsor. Benefit One shall not be responsible for the consequences of any action taken or omitted by the Plan Sponsor or Plan Administrator in cOffilection with the administration of the Plan, including but not limited to incomplete or inaccurate information and/or the failure of the Plan Sponsor to act or supply information on a timely basis. The Plan Sponsor shall indemnifY and hold harmless Benefit One, its officers, directors, employees, shareholders, successors and assigns, from and against any and all liabilities, claims, costs, demands, expenses or loss including but not limited to reasonable attorney's fees and other costs oflitigation whether suit be instituted or not, at pretrial, trial and appellate levels resulting from or attributable to any action or omission by the Plan Sponsor, except to the extent that such action or omission is the result of the Plan Sponsor's reasonable reliance on Benefit One to provide the services specified in Schedule A. Benefit One shall indemnifY and hold harmless the Plan Sponsor from any claim, expense or liability including but not limited to reasonable attorney's fees and other costs of litigation, incurred by the Plan Sponsor as a consequence of any such reasonable reliance on the services of Benefit One. Benefit One shall maintain a professional errors and omissions insurance policy with single limit coverage of $1,000,000 and affilual aggregate coverage of $2,000,000 to insure this liability. 6. DeDartment of Labor Model Notice. Plan Sponsor acknowledges receipt of the enclosed Department of Labor Model Notice required under COBRA. If the Plan Sponsor has not contracted with Benefit One to perform the Initial Notification Service, Plan Sponsor shall be responsible and takes full legal responsibility and liability to distribute this initial n9tice properly per the requirements by The Code section 4980B(f)(6)(A). Benefit One shall have no liability or responsibility for compliance with this portion of the law unless specifically contracted for in Schedules A and B. 7. SamDle COBRA Letters. The enclosed sample COBRA letters includes the texts ofletters that will be sent by Benefit One to Qualified Beneficiaries of the Plan Sponsor. The Plan Sponsor agrees that the text of each letter is satisfactory. Benefit One accepts responsibility for compliance to COBRA regulations for the text of the enclosed standard set ofletters. The Plan - 2- n:worddata\jo\agreement\COBRA.doc Sponsor will provide anl modifications to the text of any letter tJBenefit One. for letter text, if modified, is that of the Plan Sponsor. The responsibility 8. ComDensation: To Benefit One: Benefit One shall be compensated for providing COBRA services specified in Schedule A by a fee described under Schedule B attached hereto for years one through three of this agreement. Such Schedule B may be increased for years four and five of this agreement, but not more than 10% of the fees described under the attached Schedule B. If Plan Sponsor does not pay any service fee due to Benefit One hereunder within forty-five (45) days from the day that the bill is rendered, Benefit One may suspend and/or cancel its services hereunder until payment is made. In the event Benefit One suspends its services because of Plan Sponsor's failure to pay the service fee described in Schedule B within forty-five (45) days from the due date, Benefit One shall have no liability or responsibility for any claims, taxes or liabilities incurred by Plan Sponsor or the employees of the Plan Sponsor as a result of such suspension. Benefit One will add a finance charge of 1 y,% per month to any unpaid service fee balance after thirty (30) days from the due date. The Plan Sponsor agrees to pay all collection costs, including but not limited to Attorney fees and court costs that are necessary to collect any unpaid service fee balance and to reimburse Benefit One for sums expended on behalf of Plan Sponsor or its COBRA participants. 9. Notices. All notices, requests, demands and other communications hereunder required by the provisions of this Agreement shall be in writing and shall be deemed to have been properly given or served by depositing the same with the United States Postal Office, or any official successor thereto, designated as registered or certified mail, return receipt requested, bearing adequate postage at the addresses set below: Plan Sponsor Name and Address: The City of Clearwater, Florida PO. Box 4748 Clearwater, FL 34618 Benefit One of America, Inc. 5999 Central Avenue, Suite 400 St. Petersburg, FL 33710 Each such notice shall be effective upon being deposited as aforesaid. The time period within which a response to any such notice must be given, however, shall commence to run from the date of receipt of the notice by the addressee thereof 10. Successors and Assil!ns. This Agreement and each and every covenant, agreement and provision hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns. 11. Governinl! Law. Except as provided by federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of Florida. To the extent that (a) the Plan Sponsor initiates legal proceedings against Benefit One relating to this Agreement; or (b) any legal proceedings relating to this Agreement are initiated by Benefit One against the Plan 12. Sponsor, the parties consent and agree to the exclusive jurisdiction of the state courts of Pinellas County, Florida or the district court of the Middle District of Florida, as appropriate. -3 - n:worddata\jo\agreement\COBRA.doc The parties hereby agrel to waive their respective rights to a triJ by jury in any legal proceeding against the other with respect to this Agreement. 12. CaDtions and Headinl!s. The captions and headings of the various sections of this Agreement are for convenience only and are not to be construed as confining or limiting in any way the scope or intent of the provisions hereof 13. Modifications. This agreement may not be changed or terminated orally. This agreement or any of its provisions may be modified, terminated or waived only by written agreement signed by both parties except for that provided in paragraph 8. 14. Severability. If any term or provision of this Agreement or portion thereof is declared unenforceable or invalid, such unenforceable or invalid term or provision shall be deemed severable from all other terms of this Agreement. The remaining terms and provisions shall continue in full force and effect. 15. CounterDarts. This Agreement may be executed in counterparts, all of which taken together shall constitute one instrument. Delivery of executed signature pages hereof by facsimile transmission shall constitute effective and binding execution and delivery thereof 16. Entire Al!reement. Except as specifically provided for herein, this Agreement constitutes the entire Agreement and supersedes all other prior agreements and undertakings, both written or oral, among the parties, or any of them, with respect to the subject matter hereof IN WITNESS WHEREOF, by placing their duly authorized signatures below, the parties hereby execute this Agreement and agree to be bound by its terms. Benefit One of America Inc. The City of Clearwater, Florida t!I~.U.: I), Aanb- Signa I . ~1a~J !) lJS Print. Name VP r ODt-raiWAJ5 Title I 3Je)Cb I , Date (':J ~JlAa, ~p /lnLtr Slgna e G J; rlWi/fA /3endLt Print Name /--1-. /2 mCU/() 3Pf Title Tax ID No. r9,/(;)g'Joo Date' , - 4. n:worddllta\jo\agreement\COBRA.doc I I SCHEDULE A COBRA ADMINISTRATION SERVICES I. Notices to Oualified Beneficiaries A. Eligibility Notice (Employee, Spouse or Dependent) - notification with continuation fact sheet, enrollment form and CA resident data, if applicable. B. Enrollment Confirmation - Initial Billing (with payment coupons and mailing labels) C. Reinstatement Notice to Carrier (upon receipt of first premium payment) D. Cobra Enrollment Expiration Notice E. Notice of Partial Premium PaymentJNotification of Credit F. Grace Period Notice (optional) G. Continuation Coverage Termination Notice - Failure to make full initial payment - Request to terminate (i.e. other coverage) - Failure to make regular payment - Attainment of the end of eligibility period H. Notice of Loss of Coverage to Carrier I. Open Enrollment Notice/Package Support (provide client with mailing labels for their open enrollment materials; further support may be provided at an additional cost) 1. Rate Change Notice/Coverage Change Notification (with coupons and mailing labels) K. End of Eligibility Conversion Notice L. Medicare Eligibility Notice M. Corrected Address Notice N. Secondary Qualifying Event Confirmation Notice O. Non-Sufficient Funds Notice P. Participant Billing Statement Q. HIP AA Certificates of Creditable Coverage - Upon termination of COBRA coverage (for COBRA coverage period only) II. Initial Notice of COBRA Ril!hts (Employer Responsibility) A. Initial notice advising employee and any dependents newly enrolled in active plan of their COBRA rights III. Accountinl! for Premium Pavments A. Confirmation of Payments (entered into system) B. Monthly Premium Receipts Report IV. Collection Services and ReDorts A. Qualified Beneficiaries Premium Collection and Reporting B. Monthly Lump Sum Transmittal of Collected Premiums C. Payment of All Carrier Premiums (optional) V. Other Optional Monthlv ReDorts A. Eligibility Report to Insurance Carriers B. Termination Report to Carriers C. Rate Detail Listing D. Payment Detail Report E. Billing History Report G. Current Status Report F. Census Report H. Payment Detail Report I. Mailing Labels VI. Adiudication and Customer Service - 5- n:worddata\jo\agreement\COBRA.doc , .. I , I A. Full Adjudication of notices and payments B. Professional, Personalized Customer Service I SCHEDULE B COBRA ADMINISTRATION FEE SCHEDULE I. Annual Set Up Fee Waived Includes establishing client master record on Benefit One computer system as well as rates for all plans subject to COBRA (two medical plans and two dental plans) plus access to COBRA hotline. n. One Time Charge per Qualifying Event Notification $28.00 Includes First Class Mail with USPS proof of mailing and all billing, collecting, reporting and other services. Benefit One retains the 2% administrative fee paid by the continuant. One Time charge includes all future services! m. One Time Charge per Takeover for Current COBRA Participants N/A Includes billing, collecting, reporting and other services for each takeover of a current COBRA participant. Benefit One retams the 2% administrative fee paid by the continuant. One Time charge includes all future services! IV. Initial Notification of COBRA Rights Includes notification of "newly covered" employees and dependents as they become covered under the plan. Also includes mailing of notification by first class mail with USPS proof of mailing, document archiving and toll free information hotline. - If data is received in electronic format n:worddata\jo\agreement\COBRA.doc -6- N/A N/A