Exh 8F AGENDr~ ITEM 8F
JITNE 9, 2003
CITY OF ATLANTIC BEACH
CITY COMMISSIONER MEETING
STAFF REPORT
ACTION REQUESTED: Authorize. City Manager to sign an Annual Accounting and
Retention Agreement with Blue Cross and Blue Shield of Florida.
SUBMITTED BY: George Foster, Human Resource Manager.
DATE.: June 3; 2003
BACI~GROI~JND: In April 2002, the City changed it's health insurance from AIIL t®
BCBS after a proposalwa received from BOBS and other health
insurance providers declined to bid.
BCBS has advised that based upon the City's. relatively short
experience period and claims potential, that they have been unable.
to reduce-the City's premium-rates; however, they are offering the
City an opportunity to receive. a return of premiums paid. if Earned
Premiums are greater than the stun of Incurred Claims, Capitation
..Charges, and Administrative Charges.
Note: Capitation Charges are payments provided to a participating
.
physicianper each employee that has selected them as their
primary care. physician. These payments: are paid regardless of the
actual utilization.
FUNDING: This is a "no cost" option being offered by BCBS as they are.
unable to reduce our premiums based upon our short experience
period and claims potential.
COMMENDATIONS: That the City Commission authorize the. City Manager to sign the
Annual Accounting and Retention Agreement with BCBS for the
period April 1, 2003 through.March 31, 2004.
ATTACHMENT: Agreement.
CITY MANAGER:
AGENDA ITE11~I 8F
JUNE 9, 2003
BLUE CRASS AND BLUE SH1EL® OF FLORI®A, 7NC.
HEALTH OPTIONS, INC.
ANNUAL ACCOUNTING AND RETENTION AGREEMENT
This is an Agreement (.hereinafter "Agreement") between Blue Cross and Blue Shield of
Florida, Inc. -and Health Options, Lnc:, (hereinafter jointly referred to as ''BCBSF"); located
at 532 Riverside Avenue, Jacksonville, Florida 32231 and City of Atlantic Beach,
(hereinafter "the Group") located at 800 Seminole Road, Atlantic Beach, .Florida 32233..
WHEREAS, the.Group requests.BCBSF to provide a health maintenance organization
(herein. "HMO"} and aPoint-of-Service Program, (hereinafter "the Program°') to its
employees/members (herein "Group Members}"); and
WHEREAS,. Health Options, Inc., has agreed to provide the HMO part of the, Program,
and Blue Cross and. Blue Shield of Flarida,lnc., has agreed to provide the insurance part of
the Program; and
WHEREAS, each of the parties to this Agreement seeks to set forth, in writing, the terms
and conditions of their Agreement;
NO1l1d THEREFORE, for good and valuable.consideration, the parties,agree as follows:
I. TERM
The term of this Agreement shall begin on April 1, 2003,
(the effective. date) and shall end on March 31, 2004, (the termination
date), unless atherwise terminated or renewed in accordance with the
provisions of this Agreement. ,
ll. BENEFIT PLAN
BCBSF agreesto administer the-Group's health benefit plans (hereinafter
referred to as the "Benefit Contracts"), which;are hereby. incorporated by
,reference into this Agreement..
BlueGrass B~ueShield
AGENDA ITEM 8F
JITNE 9;.2003
111. PREMIUM PAYMENTS
The Premium Rates., Prepayment.Fees, -and Supplemental Charges for the
Program are payable in advance to BCBSF at the address set forth above.
The premiums far the program are set forth in Exhibit A.
IV: .ANNUAL ACCOUNTING
A. Within one=hundred twenty (120) days after each anniversary of this Agreement,
BCBSF shall. prepare and famish to the Group an accounting of such. year's
operations.
B. This accounting. shall include operations under all coverages of the
program and shall- set forth-the following:
(a} Earned Premium
(b) Incurred Claims
(c} Capitation Charges
(d) Administrative Charges as set forth. on Exhibit A
If Earned Premium is greater than the sum of Incurred Claims, Capitation
Charges, and Administrative Charges, a portion of this excess: will be r•etumed
to the Group as determined by the following:.
(a}...After completion of the 1st policy year - 30°/® of the excess
(b) After completion of the 2nd policy year.- 35% of the.. excess
(c) After completion of the 3rd policy year - 50°/® of the excess
If the Group cancels prior to any anniversary of the effective date, no
excess premium will be returned for the prior policy year or the current
policy year: Excess premium for each policy will. be determined solely from the
results of that year. Prior gains or deficits will not be carried forward to
subsequent years.
If Earned Premium is less than the sum of incurred Claims, Capitation
Charges; and Administrative Charges, the deficit will be retained by
BCBSF.
AGENDA ITEM 8F
JUNE 9, 2003
V. TERMINATION
f.
This Agreement maybe terminated at any anniversary of the effective date by
either party. by giving the other party at least 45 days prior written notice of
'.such .termination.
0li. MODIFICATION OF RATES
Rates for the term ®f this Agreement will remain in effect, as set forth in Exhibit
A, provided-there is no material change to the Benefit Contracts,-the
enrollment; or any other risk factor, as determined by BCBSF. Thereafter,. all
rates set forth in Exhibit A of this Agreement are subject to change by BCBSF
at any time-following at least forty-five (45) days prior written: notice to the
Group. The modified rates, including renewal rates, will be set forth and
presented to the Group on a revised Exhibit A. Ail other`provisions of this
Agreement shall remain in effect without modification.
Vli. LATE PAYMENT/CHARGE-
In the event the Group fails to make any payment due-under this Agreement,
in full; prior to the applicable due date, such payment may be made to BCBSF
up to ten. (10) days aftersuch due date without a late paymentcharge.
Paymentsreceived by BCBS eleven (11) o thirty-one (31) days after such due
date are subject to a late payment charge. The Group shall pay any Jate:
payment charge to BCBSF immediately upon receipt of the notice of such
charge.. In the event. any charge under this Agreement is .not paid, in full, by
the. Group. to BOBS within thirty-one (31 }days: after. the applicable due date,
this Agreement will automatically terminate as of the applicable due date. In
the. event this Agreement terminates retrospectively for any reasan, the Group
shall be liable, in addition to all other liabilities set forth in this Agreement,. for
any claim(s) paid by BCBSF which were incurred after the termination date.
V111. RENEWAL
This Agreement shall automatically: renew/extend for additional one-year
periods}, after the termination date,. at the rates then in effect (the renewal.
rates), .unless either party notifies the other party of its ,intent not to extend this
Agreement at least forty-five (45) days. prior to the applicable Anniversary
-Date. The renewal rates will be set forth and presented to the Group on a
revised Exhibit A.
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B1ueCross B1ueShield
AGENDA ITEM 8F
JUNE 9, 2003
1~. A. INCONSISTENCIES
if the. provisions of this Agreement are,; in_any way, inconsistent with the
provisions of the Benefit Contract(s), then the provisions of this
Agreement shall prevail, and the other provisions shall be deemed
modified but only to the extent necessary te:implement the intent of the
parties expressed herein:
B. SURVIVAL
The rights and obligations of the parties, as set forth herein,. shall survive
the termination of this Agreement to the extent necessary to .effectuate
the intent of the parties as expressed herein:
C. < WAIVER OF BREACH
.The failure by either party, at any time, to enforce or to require the strict
adherence- to any provision of this Agreement shall ..not be deemed to be
a waiver of such provision or any other provision of this Agreement.
D. GOVERNING LAW
This Agreement, and_the rights of the parties hereunder, shall be
construed according to the laws of the State of Florida.
E. SEVERABILITY
In the event any provision of this Agreement is deemed to be invalid or
unenforceable, all. other provisions shall remain in full force and effect..
F. 'AMENDMENT
This Agreement may be amended at any time upon mutual, written
agreementof both parties, except that BCBS may make changes
necessary. to comply with State .and Federal Paws. upon 60 days notice to
the Corporation.
G. ENTIRE AGREEMENT...
This Agreement, including its- Exhibits, the application(s) for coverage,
and the Benefit Contract(s) constitute the entire Agreement between the
Corporation and BCBSF. Any prior agreements, promises, or
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B1ueCross BlueShield
~I+L~ 1'~J' ;VA Zua
AGENDA ITEM 8F
JUNE 9, 2003
representations, either oral or written, relating to the subject matter of
this Agreement, and not expressly set forth in this Agreement, are of no
.force or effect.
N.. NOTICES
Any notice, required. or permitted under this Agreement, shall be deemed
given if hand delivered or if mailed by United States mail, or an overnight
mail service (e.g.,.Federal,Express}, postage prepaid, to the applicable
address as set forth above. or to such other address as a party may
designate, in writing, to the other party. Such notice shall be deemed
effective as of the date so deposited or delivered..
!. SEPARATE CORPORATION
Blue. Cross and Blue Shield of Florida, Inc., acid Health Options, lnc., are
separate corporations. Nothing in this Agreement shall be construed,. for.
any purpose whatsoever, to .make either liable for the actions of the:.
. 'other:
J. PROVIDER NETWORKS
BCBSF's Health Care Provider Networks are subject to change and may
be modified at any time during the term of this Agreement without notice
to or consent of the Group or any Group Member.
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BlueGrass B1ueShield
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.AGENDA ITEM 8F
JTJNE 9, 2003
AGENDA ITEM SF
JUNE 9, 2003
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