OptumHealth Financial Services - Master Services Agreement 2010 s
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MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT ("Agreement") is entered into and effective January 1, 2010 (the
"Effective Date") by and between Administration Resources Corporation, a Minnesota Corporation with a
principal business address of 11490 Xeon St. NW, Suite 200, Coon Rapids, Minnesota 55448, dba
OptumHealth Financial Services, ("Plan Supervisor"), and City of Rancho Palos Verdes ("Plan Sponsor"),
with a principal address of 30940 Hawthorne Blvd,Rancho Palos Verdes, California 90275.
WHEREAS, Plan Supervisor, itself and through its affiliates, is engaged in business as a provider of high
quality financial,recordkeeping and administrative products and services; and
WHEREAS, Plan Sponsor desires to acquire from Plan Supervisor, and Plan Supervisor desires to provide to
Plan Sponsor, certain products and services subject to the terms and conditions set forth herein in this
Agreement.
NOW, THEREFORE, in consideration of the promises and covenants contained herein and other good and
valuable consideration, the receipt, adequacy and sufficiency of which is hereby acknowledged, the parties
mutually agree to the following terms and conditions:
1. Services
1.1 Plan Supervisor Services. Plan Supervisor agrees to make available and perform, directly or through one
or more of its affiliates, and Plan Sponsor agrees to accept those certain services identified in one or more
schedules to this Agreement (collectively "Services"). Plan Supervisor will provide or make available such
Services to Plan Sponsor in accordance with the terms and conditions of this Agreement and the applicable
schedule (collectively"Schedule") and each Schedule executed by Plan Supervisor and Plan Sponsor shall be
deemed to incorporate all of the terms and conditions of this Agreement. In the event that a provision in a
Schedule conflicts with, waives, limits or releases a provision in this Agreement, the provision of this
Agreement will prevail unless the Schedule specifically states that the provision in the Schedule will prevail.
1.2 Customized Services. During the Term of this Agreement,Plan Sponsor may request in writing that Plan
Supervisor provide specific customized services ("Customized Services") or additional services ("Additional
Services") that Plan Supervisor does not already offer or provide to Plan Sponsor, including requests for
custom interfaces to its internal or operational systems. References to "Services" in this Agreement shall
include Customized and/or Additional Services. Within thirty (30) days of the request, Plan Supervisor will
respond in writing with an initial response based on the information provided by Plan Sponsor. Plan
Supervisor will, in its sole discretion, determine whether it will provide the requested Customized and/or
Additional Services. If Plan Supervisor elects to provide such Customized and/or Additional Services, the
parties will mutually agree on a statement of work ("SOW"), the form of which will be provided by Plan
Supervisor, which will, at a minimum: (a) detail the services to be provided and the term for which they are
being provided; (b) the fees to be paid by Plan Sponsor to Plan Supervisor for such services; (c) any service
level commitments to which the parties agree in connection with such services; and (d) any other terms and
conditions to which the parties agree. Each SOW executed by Plan Supervisor and Plan Sponsor shall be
deemed to incorporate all of the terms and conditions of this Agreement and in the event that a provision in an
SOW conflicts with, waives, limits or releases a provision in this Agreement,the provision of this Agreement
will prevail unless the SOW specifically states that the provision in the SOW will prevail.
1.3 Improvements and Modification of Services. Plan Supervisor reserves the right to upgrade, improve,
modify or discontinue any Services provided or made available to Plan Sponsor hereunder and in any Schedule
and SOW, including but not limited to, the improvement or modification of any Customized Services,
Additional Services, facility, system, equipment, and personnel in connection therewith. Subject to the terms
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and conditions set forth herein, after the Effective Date, Plan Sponsor may request changes to Services being
provided by Plan Supervisor, and if Plan Supervisor agrees to provide the requested changes, Plan Sponsor
shall bear all charges, fees, and costs, at Plan Supervisor's then-current time and materials rates for
professional development services, for each hour and all materials associated with any such changes.
1.4 Provision of Services and Standard of Care. In performing the Services contemplated under this
Agreement,each Schedule and any applicable SOW throughout the Initial Term and each Renewal Term,Plan
Sponsor shall not contract with any other party to provide services similar to the Services and Plan Supervisor
shall have the sole and exclusive right to provide the Services, including but not limited to, all facilities,
systems, equipment, networks and personnel in connection therewith. For so long as no event of default by
Plan Sponsor has occurred and is continuing, Plan Supervisor agrees to provide the Services in accordance
with the standards set forth in each Schedule and, if applicable, SOW (the "Standards"). In the absence of
such Standards, Plan Supervisor shall exercise ordinary care and diligence as typically provided in the normal
course and scope of business by the same or a similar service provider within the administration industry, in
providing the Services, including the selection and use of facilities, systems, equipment, networks, and
personnel required for such performance.
1.5 Intellectual Property Rights
(a) Intellectual Property. As used in this Agreement,any Schedule and applicable SOW,the term"Intellectual
Property" shall mean any of the following in any form or media: (i) formulae, algorithms, processes,
procedures and methods; (ii) Company name, trademarks, service marks, names, words, titles, phrases,
designs, ideas, concepts, research, discoveries, inventions (whether or not patentable or reduced to practice)
and invention disclosures; (iii) know-how, trade secrets and proprietary information and methodologies; (iv)
technology; (v) computer software (in both object and source code form); (vi) databases; (vii) expressions,
works and factual and other compilations; (viii)protocols and specifications; (ix)visual, audio and audiovisual
works (including art, illustrations, logos, icons, graphics, images, music, sound effects, recordings, lyrics,
narration, text, animation, characters, designs and all other audio, visual, audiovisual and textual content); (x)
records of each of the foregoing, including documentation, design documents and analyses, studies,
programming tools, plans, models, flow charts, reports, letters, memoranda and drawings; and (xi) any
updates,modifications, enhancements and derivatives thereto.
(b) Plan Sponsor IP. All Intellectual Property owned by Plan Sponsor and in existence on the Effective Date,
or, if created or acquired thereafter, created or acquired independently from and not based on Plan Supervisor
IP, Developed Works, or the receipt or performance of the Services, together with all related rights, title and
interests thereto, shall continue to be owned exclusively by Plan Sponsor (collectively, "Plan Sponsor IP").
Plan Supervisor shall have no right, title, or interest in or to Plan Sponsor IP, except for the limited right to
receive and use Plan Sponsor IP as is reasonably necessary in connection with the performance of the Services
hereunder.
(c) Plan Supervisor IP. All Intellectual Property owned by Plan Supervisor and in existence on the Effective
Date and created or acquired thereafter, together with all related rights, title and interests thereto, shall
continue to be owned exclusively by Plan Supervisor(collectively, "Plan Supervisor IP"). Plan Sponsor shall
have no right, title, or interest in or to Plan Supervisor IP except as enumerated in this Agreement and Plan
Sponsor shall retain or affix such evidences of ownership and proprietary notices as Plan Supervisor may
reasonably request.
(d) Developed IP. All Intellectual Property and any related rights, title and interests associated therewith
developed, in whole or in part, directly or indirectly in connection with this Agreement, any Schedule or
applicable SOW shall be exclusively owned by Plan Supervisor ("Developed Works"). Upon request, Plan
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Sponsor agrees to execute and deliver to Plan Supervisor all documents and provide all testimony to register
and enforce, solely in the name of Plan Supervisor, any rights in the Developed IP.
(e)License to Use Intellectual Property. Plan Sponsor hereby grants to Plan Supervisor a nonexclusive limited
license to use Plan Sponsor's Intellectual Property for advertising and other purposes necessary or desirable to
provide the Services. Plan Supervisor is authorized to permit a third party to use Plan Sponsor's Intellectual
Property to the extent needed or desirable to provide Services to Plan Sponsor hereunder.
(f) Systems. The Plan Supervisor System contains information and computer software that are proprietary
and Confidential Information of Plan Supervisor, their suppliers and licensors. Plan Sponsor agrees not to
attempt to circumvent the devices employed by Plan Supervisor to prevent unauthorized access thereto,
including but not limited to, alterations, decompiling, disassembling, modifications and reverse engineering
thereof. "Plan Supervisor System" shall mean Plan Supervisor's systems and equipment obtained for or used
by Plan Supervisor from time to time to perform tasks and services related to this Agreement, including
without limitation computers and related hardware, hardware configurations, operations systems and related
firmware, proprietary software and other software and related algorithms, and other data and facilities
(including Internet connectivity, as applicable), together with any modifications, enhancements and updates
thereto.
2. Taxes and Terms of Payment
2.1 Fees. Plan Sponsor hereby agrees to pay Plan Supervisor those amounts set forth in each Schedule and
applicable SOW for the Services, including but not limited to, any Additional and Customized Services. All
fees shall become effective as indicated on the applicable Schedule and/or SOW and Plan Supervisor shall
provide Plan Sponsor with at least sixty (60) days written notice prior to the effective date of any change,
modification or waiver of any such fees. Such notice shall act to amend, and shall be a part of,this Agreement
and any applicable Schedule or SOW. Plan Sponsor shall pay Plan Supervisor for any additional billable
services, which Plan Sponsor requests and Plan Supervisor performs and which are not specified in any
Schedule or SOW, at Plan Supervisor's then-current time and materials rates. Plan Sponsor will reimburse
Plan Supervisor for all reasonable out of pocket expenses incurred in performing under this Agreement,
including transportation, hotel accommodations, meals, telephone calls, and overnight couriers. Expenses
reimbursed under this Section 2.1 are not refundable by Plan Supervisor to Plan Sponsor for any reason.
2.2 Invoices. Plan Supervisor will send an invoice to Plan Sponsor on a monthly basis for all Services
applicable to each month during the Term, which shall include charges for all Services to be provided during
the current month for which a recurring fee is charged, and for time and material expenses incurred in the prior
month. Any invoice sent by Plan Supervisor to Plan Sponsor shall be stated in,and all payments made in,U.S.
dollars. Plan Sponsor agrees to pay all amounts invoiced by Plan Supervisor within thirty (30) days after the
date of each invoice. Payments not received by the due date shall bear interest at a rate equal to the lesser of
one and one-half percent(1'/2%)per month, or the maximum rate allowed by law.
2.3 Funding. Plan Supervisor shall have no responsibility, risk, liability or obligation for the funding of any
plan benefits. The responsibility and obligation for funding plan benefits shall be the sole and total
responsibility of the Plan Sponsor. Plan Supervisor is not responsible for requiring that any contributions be
made, or for determining that the contributions that are received by any trust comply with the terms of any
plan. Plan Sponsor understands and agrees that Plan Supervisor shall not be obligated to at any time extend or
otherwise grant any extension of credit or other financial accommodation to Plan Sponsor in connection with
the Services provided herein.
2.4 Taxes. "Taxes" shall mean any manufacturers, sales, use, gross receipts, excise, personal property or
similar tax or duty, including any interest or penalty thereon, assessed by any governmental or quasi-
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governmental authority upon or as a result of the performance of Services pursuant to this Agreement or
materials furnished with respect to the Agreement,except any income, franchise,privilege, or similar tax on or
measured by Plan Supervisor's net income, capital stock or net worth. Plan Sponsor will not be responsible
for any income or other tax imposed on any gross income, net income, or net worth of Plan Supervisor
incurred as a result of or otherwise in connection with this Agreement. Plan Sponsor shall be responsible for
all Taxes arising out of or related to this Agreement. In the event that Plan Supervisor is required to remit
payment of or for any such Tax, Plan Sponsor shall reimburse Plan Supervisor for such payment within five
(5)business days.
3. Records and Information
3.1 Records. Each party agrees to maintain accurate and complete records, data and other documentation
("Records") relating to the provision and receipt of Services under this Agreement and any applicable
Schedule or SOW. All of Plan Supervisor's Records will be maintained by Plan Supervisor in accordance
with Plan Supervisor's then current document retention practices ("Retention Practices") and nothing
contained in this Section shall be construed as requiring Plan Supervisor to maintain any Records for any
period of time in excess of the periods required by Plan Supervisor's Retention Practices, which periods shall
in no event be less than those required by applicable law.
3.2 Data and Information. Insofar as the performance of Services under this Agreement by Plan Supervisor
requires data, documents, information or materials of any nature to be furnished, in whole or in part, by Plan
Sponsor or Plan Sponsor's employees, agents or other representatives, or requires other services to be
performed by Plan Supervisor or Plan Supervisor's employees, agents or other representatives, Plan Sponsor
hereby agrees to furnish or cause its employees, agents or other representatives, to furnish all such data,
documents, information and materials and to perform all such services within a reasonable time, and in such
form or manner, as is necessary in order to enable Plan Supervisor to perform Services hereunder in a timely
manner.
4. Confidentiality
4.1 Confidentiality Obligations. From time to time, either party (the "Disclosing Party") may disclose or
make available to the other party (the "Receiving Party"), whether orally or in physical form, confidential or
proprietary information concerning the Disclosing Party and/or its business, vendors, products or services in
connection with this Agreement (together, "Confidential Information"). Confidential Information of Plan
Sponsor includes, without limitation, systems architecture, policies and procedures, customer, employee,
provider, vendors, member and beneficiary information, claims information, vendor information (including
agreements, software and products), product plans, and any other information which is normally and
reasonably considered confidential. Confidential Information of Plan Supervisor includes, without limitation,
software, the Plan Supervisor System and system architecture, processes, polices and procedures, and
customer, employee and provider information and product and business plans, and any other information
which is normally and reasonably considered confidential. The terms of this Agreement, each Schedule and
SOW and the negotiations leading thereto shall be the Confidential Information of both parties and may be
disclosed to third parties only with the consent of both parties hereto. Each party agrees that during the Term
and thereafter: (a) it will use Confidential Information belonging to the Disclosing Party solely for the
purpose(s) of this Agreement; and (b) it will take all reasonable precautions to ensure that it does not disclose
Confidential Information belonging to the Disclosing Party to any third party(other than the Receiving Party's
employees and/or professional advisors on a need-to-know basis who are bound by obligations of
nondisclosure and limited use at least as stringent as those contained herein) without first obtaining the
Disclosing Party's written consent. Upon request by the Disclosing Party, the Receiving Party will return all
copies of any Confidential Information to the Disclosing Party, or, if the return of such or a portion of such
Confidential Information is not possible using commercially reasonable efforts, the Receiving Party will
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destroy such Confidential Information. The Receiving Party will be responsible for any breach of this Section
by its employees, representatives,and agents.
4.2 Exclusions. The term "Confidential Information" will not include any information that the Receiving
Party can establish by written evidence: (a) was independently developed by the Receiving Party without use
of or reference to any Confidential Information belonging to the Disclosing Party; (b) was acquired by the
Receiving Party from a third party having the legal right to furnish same to the Receiving Party without
disclosure restrictions; or(c) was at the time in question (whether at disclosure or thereafter) generally known
by or available to the public(through no breach of this Agreement by the Receiving Party).
4.3 Required Disclosures. These confidentiality obligations will not restrict any disclosure required by order
of a court or any governmental agency, provided that in the case of an order,the Receiving Party gives prompt
notice(unless prohibited by applicable law from providing such notice)to the Disclosing Party of any such
order and reasonably cooperates with the Disclosing Party at the Disclosing Party's request and expense to
resist such order or to obtain a protective order.
4.4 Injunctive Relief. The parties acknowledge and agree that the disclosure of Confidential Information may
result in irreparable harm for which there is no adequate remedy at law. The parties therefore agree that the
Disclosing Party shall be entitled to seek an injunction in the event the Receiving Party violates or threatens to
violate the provisions of this Section and that no bond will be required. This remedy will be in addition to any
other remedy available at law or equity.
5. Term of the Agreement
5.1 Initial Term. The term of this Agreement shall begin on the Effective Date and shall continue in full force
and effect for a period of one(1)year("Initial Term").
5.2 Renewal. Upon the expiration of the Initial Term of this Agreement,this Agreement shall be
automatically renewed for consecutive one(1)year terms thereafter("Renewal Term")until and unless
terminated as provided in Section 5.3 hereunder.
5.3 Termination at End of Initial Term. Subject to providing ninety(90)days prior written notice, either party
hereto may terminate this Agreement at the end of the Initial Term or any time therafter.
5.4 Termination by Plan Supervisor. Plan Supervisor may terminate this Agreement at any time in the event
Plan Sponsor fails to make or adequately and timely provide for the payment of fees and expenses due
hereunder, but only if Plan Supervisor gives Plan Sponsor written notice of such failure and Plan Sponsor fails
to remedy such failure within thirty(30) days after its receipt of said notice. Upon the expiration of the thirty
(30) day period, Plan Supervisor may terminate this Agreement by giving Plan Sponsor written notice, which
termination shall be effective immediately upon Plan Sponsor's receipt of such notice. If such failure to pay is
remedied by Plan Sponsor within such thirty(30) day period,then this Agreement shall continue as though no
such notice had been given.
5.5 Early Termination by Plan Sponsor. Plan Sponsor may terminate this Agreement at any time during the
Initial Term or any subsequent Renewal Term by giving at least ninety (90) days prior written notice to Plan
Supervisor. In the event Plan Sponsor elects to terminate this Agreement without cause or for convenience at
any time pursuant to this Section 5, and such termination is effective before the last day of the Initial Term.
Plan Sponsor shall pay those amounts set forth in each Schedule and applicable SOW for the Services,
including but not limited to, any Additional and Customized Services for each month (prorated for partial
months)that the termination date requested by Plan Sponsor precedes the termination date of this Agreement
as set forth in this Section 5.
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5.6 Default and Remedies. If either party fails to observe, keep or perform any material term or condition of
this Agreement, any Schedule or SOW required to be observed, kept or performed by that party, the other
party, in addition to any other rights and remedies it may have, shall have the right to terminate this Agreement
without paying a termination fee; provided, however,that the party seeking to terminate this Agreement gives
the other party a written notice of such failure claimed to be a material breach of terms and conditions of this
Agreement and the party receiving said notice fails to remedy the breach within thirty (30) days after its
receipt of said notice. If the material breach is not remedied by the defaulting party within the thirty(30) day
period provided for above, the non-defaulting party may terminate this Agreement by giving the defaulting
party written notice effective immediately. If the material breach is remedied by the defaulting party within
such thirty(30)day period,then this Agreement shall continue as though no such notice had been given.
5.7 Effect of Termination. Termination of this Agreement shall not terminate Plan Sponsor's obligations to
pay Plan Supervisor fees for all Services performed and expenses incurred under this Agreement, according to
the agreed upon fee schedule, any Schedule and SOW prior to the discontinuance of performance of Services
by Plan Supervisor hereunder.
5.8 Deconversion. Plan Sponsor agrees to provide Plan Supervisor with at least ninety(90)days prior written
notice of any conversion from Plan Supervisor to another service provider providing the same or substantially
similar services to Plan Supervisor. Upon termination, Plan Supervisor and Plan Sponsor shall work together
to develop a suitable deconversion plan with the new vendor. Information and materials provided by Plan
Supervisor pursuant to this Section 5.8 shall be in a form and format used by Plan Supervisor at the time of
deconversion. Plan Supervisor shall Provide Plan Sponsor adequate instructions concerning the format and
means of accessing Plan Sponsor's data. Plan Supervisor shall be entitled to charge Plan Sponsor a fee based
upon Plan Supervisor's then current rate schedule for the services rendered pursuant to this paragraph 5.8(a).
6. Use of the Services and Indemnification
6.1 Use Of The Services.
(a) Plan Sponsor is solely responsible for any instruction it transmits, sends or gives Plan Supervisor,
including payment or other funds transfer instructions; for its failure to access the Services in the manner
prescribed by Plan Supervisor, and for its failure to supply accurate information and data to Plan Supervisor in
providing Services to Plan Sponsor. In connection with the Services to be provided by Plan Supervisor
pursuant hereto, Plan Sponsor hereby authorizes and designates Plan Supervisor, where applicable, to act as
the agent for Plan Sponsor in making payment to a third-party as identified or directed in the Schedule or
SOW and to receive payment on behalf of Plan Sponsor as directed in the Schedule or SOW. Plan Supervisor
shall provide only ministerial and nondiscretionary services pursuant to this Agreement and Plan Supervisor
does not assume Plan Sponsor's fiduciary, administrative, or other responsibilities for compliance with, and as
defined by, the Employee Retirement Income Security Act of 1974 (ERISA) and any other applicable federal
or state statutes.
(b) Plan Sponsor is responsible at implementation for providing accurate information on all current
participants and employees who are in their election period. In addition, the Plan Sponsor will review the
initial information provided by the Plan Supervisor to verify that the set up information is accurate. In no event
shall Plan Supervisor be liable with respect to any loss, liability, cost, damage or expense caused by Plan
Supervisor's failure to perform hereunder but not reported by Plan Sponsor to Plan Supervisor within fifteen
(15)business days of any errors in implementation information or set-up information. If the output information
provided by Plan Supervisor is in paper format only, Plan Sponsor's notice requirement under this Section
6.1(b) shall be extended up to thirty(30)days following the month in which the services were provided.
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(c) Not a Fiduciary or Administrator. It is agreed and understood by the Plan Sponsor that Plan Supervisor
shall not be designated or deemed the "Plan Administrator" or "Fiduciary" for any Plans as these terms are
construed under ERISA. Notwithstanding anything in the Agreement to the contrary, any delegation of
authority or duties pursuant to this Agreement shall not have the effect of making Plan Supervisor a fiduciary
and such duties or other similar duties are hereby retained by the Plan Sponsor.
6.2 Indemnification. Plan Sponsor shall be liable to and shall indemnify, defend and hold Plan Supervisor its
directors, officers, employees,representatives, successors and permitted assigns harmless from and against any
and all claims, demands by third parties, losses, liability, cost, damage and expense, including litigation
expenses and reasonable attorneys' fees and allocated costs for in-house legal services, to which Plan
Supervisor, its directors, officers, employees, representatives, successors and permitted assigns may be
subjected or which it may incur in connection with any claims which arise from or out of or as the result of(a)
Plan Sponsor's breach of this Agreement, as determined by a court or other tribunal having jurisdiction of the
matter; (b) any of Plan Sponsor's plans, coverage under a plan, plan design and/or interpretation, subject to
Plan Supervisor fulfilling its duties under this contract; (c) any violation of any state, federal or local statute,
regulation, rule or guideline; or (d) the negligence of Plan Sponsor, its directors, officers, employees, agents
and affiliates in the performance of their duties and obligations under this Agreement. Plan Sponsor shall bear
all risk of loss of items, records, data and materials during transit from Plan Sponsor to Plan Supervisor's
location or that of Plan Supervisor's agents or sub-contractors. Plan Sponsor shall be released from its
obligations under this Section 6.2 to the extent such third party claims, demands, damages, costs, liabilities,
losses and expenses result from the acts or negligence of Plan Supervisor, its directors, officers, employees,
representatives, successors and permitted assigns.
Plan Supervisor will indemnify and hold harmless Plan Sponsor against any and all losses, liabilities,penalties,
fines, costs, damages,and expenses that Plan Sponsor incurs, including reasonable attorney's fees,which arise
out of(i) Plan Supervisor's or Plan Supervisor's vendors' negligence in the performance of Plan Supervisor's
or Plan Supervisor's venders', subcontractors' or representatives' obligation sunder this Agreement or(ii)Plan
Supervisor's material breach of this Agreement, as determined by a court or other tribunal having jurisdiction
of the matter. Notwithstanding the foregoing, Plan Sponsor will remain responsible for payment of benefits
and Plan Supervisor's indemnification will not extend to indemnification of Plan Sponsor or the Plan(s)
against any claims, liabilities, damages,judgments or expenses that constitute payment of Plan benefits. This
provision shall survive the termination of this Agreement.
6.3 Data Transmission. In no event shall Plan Supervisor be liable with respect to any loss, liability, cost,
damage or expense arising from any loss,theft, disappearance of or damage to data transmitted by any dataline
or other means of electronic transmission that occurs during such transmission.
6.4 Force Majeure. In no event shall Plan Supervisor be liable with respect to the failure of its duties and
obligations under this Agreement, any Schedule or SOW, other than an obligation to pay money, which is
attributable to acts of God, war, terrorism, conditions or events of nature, civil disturbances, work stoppages,
equipment failures, power failures, fire or other similar events beyond its control, unless the failure to perform
such duties and obligations is a result of the breaching party's failure to maintain adequate business continuity
capabilities and to periodically ensure the effectiveness of same.
6.5 Operational Breakdowns. Plan Supervisor does not guarantee the absence of break downs, operational
failures, unavoidable delays or other similar causes beyond Plan Supervisor's control and Plan Supervisor
shall have no liability for loss, liability, cost, damage or expense resulting directly or indirectly from any such
cause, on the condition that Plan Supervisor made prompt and reasonable efforts to remedy the problems.
6.6 Special Damages. In no event will either party be liable for any special, consequential or punitive
damages, including but not limited to, lost profits, even if such party knew of the possibility of such damages.
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7. General Provisions
7.1 Controlling Law and Jurisdiction. This Agreement shall be interpreted, construed and governed in
accordance with the laws of the State of California, U.S.A., without reference to conflict of laws principles.
All disputes arising from or relating to this Agreement shall be arbitrated or litigated within the exclusive
jurisdiction of the state and/or federal courts located within the State of California and the parties hereby
consent to such exclusive jurisdiction and waive objections to venue therein, except for proceedings that need
to be brought in another jurisdiction to enforce an order or judgment of an arbitrator or court in California. To
the extent that a state and/or federal court located within the State of California refuses to exercise jurisdiction
hereunder,the parties agree that jurisdiction shall be proper in any court in which jurisdiction may be obtained
notwithstanding this Section.
7.2 Limitation of Liability. PLAN SUPERVISOR HEREBY DISCLAIMS ALL WARRANTIES WITH
RESPECT TO PLAN SUPERVISOR PRODUCTS AND SERVICES PROVIDED HEREIN, WHETHER
EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY
WARRANTY OF MERCHANTABILITY OR FITNESS FOR USE FOR A PARTICULAR PURPOSE.
Under no circumstances shall the financial responsibility of Plan Supervisor for any failure of performance by
Plan Supervisor under this Agreement exceed the fees or charges paid to Plan Supervisor for the transaction,
activity or equipment that is or was the subject of the alleged failure of performance. To the extent that third
party software is relicensed by Plan Supervisor to Plan Sponsor, Plan Supervisor shall use commercially
reasonable efforts to pass through to Plan Sponsor all warranties from such third party licensors to the extent
Plan Supervisor has the right to do so.
7.3 Dispute Resolution. Plan Supervisor and Plan Sponsor agree to work together in good faith to resolve any
and all disputes between them, including but not limited to all questions of arbitrability,the existence,validity,
scope or termination of this Agreement,any Schedule or SOW or any term thereof. In the event that a dispute
between Plan Sponsor and Plan Supervisor cannot be resolved in good faith by the parties, such dispute shall
be submitted to binding arbitration in accordance with the commercial arbitration rules of the American
Arbitration Association. Such disputes shall be heard by a board of three arbitrators selected as provided
herein, and the decision of any two(2) such arbitrators on any issue shall be final. The arbitration proceedings
shall be held in the state of California and during the pendency of any arbitration, this Agreement, any
Schedules or SOWs shall continue in full force and effect until terminated as allowed in accordance with the
terms and conditions thereof, and Plan Supervisor and Plan Sponsor shall continue to perform their respective
obligations.
Either party may request such arbitration by written notice to the other, specifying the name and address of the
arbitrator selected by the requesting party and a brief description of the dispute which such party wishes to
have arbitrated. Unless otherwise agreed to in writing by the parties, the party wishing to pursue a dispute
must initiate the arbitration within one(1)year after the date on which notice of the dispute was given or shall
be deemed to have waived its right to pursue the dispute in any forum. The other party shall by written notice
to the requesting party,within twenty(20)days of receipt of such request, specify the name and address of the
arbitrator selected by such other party. If the other party does not do so within such twenty (20) day period,
the requesting party may, upon notice to the other party, elect a second arbitrator. The two arbitrators
appointed shall select a third arbitrator within twenty(20) days of the appointment of the second arbitrator. In
the event they fail to do so within a twenty (20) day period, the third arbitrator shall be selected by the
American Arbitration Association.
Until such time as three arbitrators shall have been appointed, either party shall have the right, by written
notice to the other and to the arbitrators selected, to specify further disputes under this Agreement, any
Schedule or SOW to be determined through such arbitration. The arbitrators shall interpret this Agreement,
any Schedule or SOW in accordance with the ordinary meaning of language and commercial customs, usage,
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and practices as may be applicable. The arbitrators in hearing and deciding any matter presented pursuant to
this Agreement, any Schedule or SOW, shall have no power to amend, modify, or ignore any portion of this
Agreement, any Schedule or SOW and the arbitrators shall render any decision strictly in accordance with the
terms thereof. The parties shall be entitled to such discovery as the arbitrators deem appropriate to permit a
party to properly present its case. Awards made pursuant to such arbitration shall be in writing, setting forth
findings of fact and conclusions of law and judgment may be entered on any award made in any court having
jurisdiction.
In the event that any portion of this Section 7.3 or any part of this Agreement, any Schedule or SOW is
deemed to be unlawful, invalid, void or unenforceable, such unlawfulness, invalidity, voidness or
unenforceability shall not serve to invalidate any other part of this Section 7.3 or this Agreement, any Schedule
or SOW. In the event any court determines that this arbitration procedure is not binding or otherwise allows
litigation involving a dispute hereunder to proceed, the parties hereby waive any and all right to trial by jury
in, or with respect to, such litigation. Such litigation would instead proceed with the judge as the finder of
fact. This Section 7.3 governs any dispute between the parties arising before or after execution of this
Agreement, any Schedule or SOW and shall survive any termination of this Agreement, any Schedule or
SOW.
7.4 Plan and Trust Establishment. Plan Sponsor acknowledges and agrees that it is solely responsible for all
aspects of the Plan Sponsor's benefit plan(s) ("Plan"), including but not limited to: (i) establishment of any
plan, trust (if applicable) or other component deemed necessary and appropriate by Plan Sponsor to establish
the Plan; (ii) any operations, administration, recordkeeping, benefit eligibility determinations, and all other
actions necessary or required to maintain or operate all aspects of the Plan, except for Plan Supervisor's
Services listed in the applicable SOW; (iii) creating and maintaining all Plan documentation, including but not
limited to, the Plan Document, the Trust Document (if applicable), any Summary Plan Descriptions and
Summary of Material Modifications; (iv) any and all amendments or modifications to the Plan, any trust (if
applicable), or any Plan or trust documents associated with the Plan; and (v) the delivery to all individuals
within or otherwise participating in the Plan ("Participants") of all appropriate and necessary documents and
materials, including, but not limited to, the Plan Document, Trust Document, Plan and Trust amendments,the
Summary Plan Descriptions, enrollment forms, and application and notice forms, as may be necessary for the
operation of the Plan or to satisfy the requirements of state or federal laws and regulations.
7.5 Plan Amendments and/or Termination. If Plan Sponsor amends or modifies any documents related to the
Plan, Plan Sponsor agrees to notify Plan Supervisor in writing no later than the effective date of the
amendment or the date of adoption of any such amendment or modification. Plan Supervisor shall not be
responsible for modifying its Services or providing any Additional Services related to any such amendment or
modification until Plan Supervisor has received such notification and only after Plan Supervisor has given its
written consent of any such amendment or modifications, which consent not to be unreasonably withheld but
may be conditioned upon Plan Sponsor's agreement to pay increased administrative fees.
7.6 Entire Agreement. This Agreement, the documents or instruments referred to herein and all subsequent
amendments, modifications or substitutions, embody the entire agreement and understanding of the parties
hereto with respect to the subject matter herein. The parties have not relied upon any promises,
representations,warranties(either express or implied),agreements, covenants or undertakings, other than those
expressly set forth or referred to herein and save as expressly pro-vided herein, this Agreement may not be
altered, amended, discharged or terminated, nor may any consent to the departure from the terms hereof be
given, orally (even if supported by new consideration), but only by an instrument in writing signed by
authorized representa-tives of each party hereto. This Agreement shall supersede all prior agreements and the
understanding between the parties with respect to such subject matter.
City of Rancho Palo Verdes 1-1-10 9
7.7 Severability. In the event that any provision of this Agreement is held to be unenforceable or invalid by
any court of competent jurisdiction, the validity and enforceability of the remaining provisions will not be
affected, and in lieu of such invalid or unenforceable provision there will be added automatically, as part of
this Agreement, a provision as similar in terms as may be valid and enforceable. This Agreement does not
establish any type of agency, partnership, or joint venture relationship between the parties and neither party
shall perform any acts to bind or to purport to bind the other party in any way or to represent that the other
party is in any way responsible or liable for its acts, statements, or omissions.
7.8 Notices. All notices, demand or other communication required or permitted hereunder will be in writing
and will be given by hand delivery, overnight delivery service, charges prepaid, or certified mail,return receipt
requested, postage prepaid,to the addresses set forth below in this Agreement. All such notices, demands,and
other communications will be deemed to have been received and effective three (3) business days after
mailing.
If to Plan Sponsor: City of Rancho Palos Verdes
30940 Hawthorne Blvd
Rancho Palos Verdes,California 90275
Attention: Sara Singer
If to Plan Supervisor: OptumHealth Financial Services
11490 Xeon Street NW, Suite 200
Coon Rapids,Minnesota 55448
Attention: General Manager
With Copy to: OptumHealth Financial Services,Inc.
12501 Whitewater Drive
Minnetonka,Minnesota 55343
Attention: General Counsel
7.9 Independent Contractors. The parties are independent contractors and nothing in this Agreement or
otherwise shall be deemed or construed to create any other relationship, including one of employment,joint
venture or agency, except as expressly provided herein.
7.10 Electronic Signature/Counterparts. The parties acknowledge and agree that this Agreement may be
executed or accepted using electronic, stamped or facsimile signatures, and that such a signature shall be
legally binding to the same extent as a written signature by a party's authorized representative. Each party
waives any legal requirement that this Agreement be embodied, stored or reproduced in tangible media, and
agrees that an electronic reproduction shall be given the same legal force and effect as a signed writing.
Furthermore, this Agreement may be executed and delivered in as many counterparts as may be deemed
necessary or convenient each of which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one of the same Agreement.
7.11 Construction. This Agreement has been reviewed by all parties hereto and shall be construed and
interpreted according to the ordinary meaning of the words used so as to fairly accomplish the purposes and
intentions of the parties hereto. Unless the context of this Agreement clearly requires otherwise, references to
the plural include the singular, references to the singular include the plural, and references to the part include
the whole. The use of the word "including" shall be construed as providing examples only and shall not limit
the generality of any provision in which it is used. The use of the word "or" has the inclusive meaning
represented by the phrase"and/or". The words"hereof', "hereby", "hereunder", and similar terms used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
Section, subsection, clause, and exhibit references are to this Agreement unless otherwise specified.
City of Rancho Palo Verdes 1-1-10 10
7.12 Signature Authority. The undersigns hereby certify that they have been duly authorized by all necessary
and appropriate corporate action to execute this Agreement on behalf of their respective party to form a legally
binding contract and understand that acceptance of this Agreement constitutes an agreement to be bound to
perform in strict conformity with the terms and conditions set forth herein.
IN WITNESS WHEREOF,Plan Supervisor and Plan Sponsor have caused this Agreement to be
executed by their duly authorized officers, effective as of the date first above written.
Plan Supervisor Plan Sponsor
OptumHealth Financial Services City of Rancho Palo Verdes
f
/.:•
By: Ase B � / , - -�
a l
Print Name: /// Print Na e: Stefan Wo lowic
Title: et-0 Title: Mayor
City of Rancho Palo Verdes 1-1-10 11
BUSINESS ASSOCIATE CONFIDENTIALITY AND
NONDISCLOSURE AGREEMENT
This business associate agreement("Agreement") is made as of December 1, 2009,by and between City of
Rancho Palos Verdes("Covered Entity")and Administration Resources Corporation, d/b/a OptumHealth
Financial Services("Business Associate").
WHEREAS,Covered Entity and Business Associate have entered into or will enter into a services agreement
for the provision of services by OptumHealth Financial Services("Service Agreement");
WHEREAS,the parties may need to use and or disclose Protected Health Information("PHI")pursuant to
this Agreement and the Service Agreement;
WHEREAS,the parties intend to satisfy certain standards and requirements of the Administrative
Simplification provisions of the Health Insurance Portability and Accountability Act of 1996("HIPAA")to the
extent applicable to each party and as may be amended from time to time;
THEREFORE,in consideration of receiving certain confidential and other information from Covered Entity,
Business Associate hereby agrees as follows:
I.Definitions
A.Confidential Business Information.Proprietary information, including but not limited to,trade secrets,
customer lists,or patented,trademarked,trade-named, service-marked or copyrighted material or other
property belonging to a party performing under this Agreement and the Service Agreement.
B.Designated Record Set.Has the meaning established for purposes of 45 C.F.R. § 164.501,as amended
from time to time, and includes currently a group of records maintained by or for a Covered Entity(as this
term is defined by 45 C.F.R. §160.103)that is:
(i)the medical records and billing records about individuals maintained by or for a covered health
care provider;
(ii)the enrollment, payment, claims adjudication, and case or medical management records systems
maintained by or for a health plan; or
(iii)used, in whole or in part, by or for the Covered Entity to make decisions about individuals.
C.Electronic Protected Health Information("EPHI").Has the same meaning as the term "electronic
protected health information"established for purposes of 45 C.F.R. § 160.103 as hereafter amended, and
currently includes electronic protected health information that is created,received,transmitted or maintained
in electronic media by or on behalf of the Plan.
D.Health Care Operations.Has the meaning established for purposes of 45 C.F.R. § 164.501, as amended
from time to time.
E.Individual.The person who is the subject of the Protected Health Information and includes a person who
qualifies as a personal representative under 45 CFR§ 164.502(g).
F.Plan.A Covered Entity's plan of health care coverage that contains the terms and conditions of coverage
City of Rancho Palo Verdes 1-1-10 1 2
r
for health care services.
G.Protected Health Information("PHI").Has the meaning established for purposes of 45 C.F.R. §
160.103, as amended from time to time and includes any information:
(i)that relates to the past,present or future physical or mental condition of an individual;the
provision of health care to an individual; or the past, present or future payment for the provision of
health care to an individual;
(ii)that is transmitted or maintained by any electronic medium, including but not limited to,the
Internet(wide-open),Extranet(using Internet Technology to link a business with information only
accessible to collaborating parties), leased lines, dial up lines,private networks, and those
transmissions that are physically moved from one location to another using magnetic tape,disk, or
compact disk media;
(iii)that identifies the individual or with respect to which there is a reasonable basis to believe the
information can be used to identify the individual, and constitutes individually identifiable health
information as defined by and established for purposes of 45 C.F.R§ 106.103,as amended from
time to time.
H. Security Incident.Has the meaning established for purposes of 45 C.F.R. § 164.304,as amended from
time to time, and currently means the attempted or successful unauthorized access,use, disclosure,
modification,or destruction of information or interference with system operations in an information system.
Unless otherwise specified in this Agreement,all capitalized terms in this section not otherwise defined have
the meaning established for purposes of Title 45 parts 160, 162 and 164 of the United States Code of Federal
regulations, as amended from time to time.
II.Protected Health Information and Confidential Business Information
A.Protected Health Information and Confidential Business Information.To the extent that Business
Associate creates or receives Protected Health Information("PHI")from Covered Entity, or on Covered
Entity's behalf, both parties agree that Business Associate and its employees, subcontractors or representatives
needing access to such information may use and disclose PHI it receives from Covered Entity or on behalf of
Covered Entity to administer the Plan,perform under this Agreement and/or the Service Agreement, and for
Health Care Operations.
1. Additional Permissible Uses. Unless otherwise limited herein,Business Associate may:
a)use the PHI in its possession for its management and administration and to fulfill any
present or future legal responsibilities;
b)disclose the PHI in its possession to third parties for the purpose of its management
and administration or to fulfill any present or future legal responsibilities; provided,
however,that the disclosures are required by law or that the Business Associate has
received from the third party written assurances that:
(i)the information will be held confidentially and used or further disclosed
only as required by law or for the purpose for which it was disclosed to the
third party; and
City of Rancho Palo Verdes 1-1-10 13
,
• r
(ii)the third party will notify Business Associate of any instances of which
it becomes aware in which the confidentiality of the information has been
breached;
c)use and disclose PHI to report violations of law to appropriate Federal and State
authorities,as permitted or required by law;
d)aggregate the PHI as permitted by HIPAA;
e)de-identify any and all PHI provided that the information is de-identified in
accordance with HIPAA. De-identified information does not constitute PHI and is not
subject to the terms and conditions of this Agreement.De-identified information may
be used by Business Associate for research, creating comparative databases, statistical
analysis, or other studies, and is considered by Business Associate to be its Confidential
Business Information;
f)use or disclose PHI for research, as defined under the privacy regulations issued
pursuant to HIPAA including, but not limited to,projects for therapeutic outcomes
research, and for epidemiological studies. Business Associate may obtain and maintain,
on behalf of Covered Entity, any consents,authorizations or approvals that may be
required by the applicable federal or state laws and regulations for use or disclosure of
PHI for such purposes. The parties will maintain the confidentiality of such information
as it relates to any individual,provider or the Covered Entity's business. Any research,
including any databases,analyses, and studies related thereto are considered by
Business Associate to be its Confidential Business Information;and
g)create,receive, use,or disclose limited data sets as permitted under HIPAA,provided
however,that Business Associate agrees that use of the limited data set will be limited
to research,Health Care Operations or public health purposes and that it shall:
(i)not use or further disclose the limited data set other than as agreed upon
or as otherwise required by law;
(ii)use appropriate safeguards to prevent use or disclosure of the limited
data set other than as agreed upon;
(iii)report to the Covered Entity any use or disclosure of the limited data set
not provided for by this Agreement of which it becomes aware;
(iv)ensure that any of the Business Associate's agents, including a
subcontractor,to whom Business Associate provides the limited data set,
agrees to the same restrictions and conditions that apply to the limited data
set recipient with respect to such information; and
(v)not identify the limited data set or contact any individual who is the
subject of the PHI contained in the limited data set.
These limited data sets are considered by Business Associate to be its
Confidential Business Information. Business Associate may also disclose
limited data sets to Covered Entity and Covered Entity's vendors at Covered
City of Rancho Palo Verdes 1-1-10 14
Entity's direction subject to the recipient's agreement to abide by the
requirements of II.A.1.g(i)through(v).
B.Business Associate's Obligations.Both parties agree that Business Associate shall:
1. not use or further disclose the PHI other than as permitted by this Agreement;
2. use administrative,physical and technical safeguards to prevent use or disclosure of PHI and/or EPHI other
than as permitted or required by this Agreement;
3. report to Covered Entity any use or disclosure of any PHI and/or EPHI, or a Security Incident of which
Business Associate becomes aware that is not permitted by this Agreement;
4. ensure that any subcontractor or agent of Business Associate to whom Business Associate provides any PHI
and/or EPHI agrees to the same restrictions and conditions that apply to Business Associate with regard to the
use and/or disclosure of PHI pursuant to this section;
5. upon request by Covered Entity,make available to Covered Entity, or as directed by Covered Entity,to the
Individual, such PHI contained in a Designated Record Set maintained by Business Associate as necessary to
allow Covered Entity to respond to a request for access to PHI as required by HIPAA;
6. incorporate any amendments or corrections to the PHI in its possession that constitutes a Designated Record
Set maintained by Business Associate as required by HIPAA;
6. document disclosures of PHI in the same manner as would be required of Covered Entity to respond to a
request by an Individual for an accounting of disclosures of PHI as required by HIPAA;
7. make its internal practices, books and records relating to the use and disclosure of PHI available to the
Secretary of U.S. Department of Health and Human Services("DHHS")for purposes of determining Covered
Entity's compliance with HIPAA; and
8. except as provided for herein, or as required by law,upon termination of this Agreement and/or the Service
Agreement, return to Covered Entity or destroy the PHI and retain no copies in any form, if feasible. If
Business Associate determines that returning or destroying the PHI is infeasible,Business Associate agrees to
extend the protections, limitations and restrictions of this section to such PHI and to limit any further uses
and/or disclosures of such PHI retained to the purposes that make the return or destruction of the PHI
infeasible, for as long as Business Associate maintains such PHI.
C. Covered Entity's Obligations.Covered Entity agrees to:
1. be responsible for using administrative, physical and technical safeguards at all times to maintain and ensure
the confidentiality,privacy and security of PHI transmitted to Business Associate pursuant to this Agreement,
in accordance with the standards and requirements of HIPAA until such PHI is received by Business
Associate;
2. amend its Plan documents to include specific provisions to restrict the use or disclosure of PHI and to ensure
adequate procedural safeguards and accounting mechanisms for such uses or disclosures, in accordance with
the HIPAA privacy regulation;
3. obtain any consent or authorization that may be required by applicable federal or state laws and regulations
prior to furnishing Business Associate the PHI;
City of Rancho Palo Verdes 1-1-10 15
4. forward to Business Associate any requests for access to, or an accounting of disclosure of PHI that is part
of a Designated Record Set in such a timely manner that permits compliance with the required response time
frames for such requests. If Covered Entity does not forward the request to the Business Associate in a timely
manner,Covered Entity will be responsible for issuing an extension notice to the requestor of the PHI;
5. notify Business Associate of any limitation(s) in,or revisions to its notice of privacy practices of Covered
Entity in accordance with 45 C.F.R. §164.520,to the extent that such limitation may affect Business
Associate's use or disclosure of PHI. Should such limitations or revisions materially increase Business
Associate's cost of providing services under this Agreement and/or the Service Agreement, Covered Entity
shall reimburse Business Associate for such increase in cost;
6. in the event that the Covered Entity honors a request to restrict the use or disclosure of PHI pursuant to 45
C.F.R. § 164.522(a); Covered Entity agrees not to provide Business Associate any PHI that is subject to any
arrangements or restrictions, including,but not limited to,restrictions on the use and/or disclosure of PHI as
provided for by HIPAA,that may limit Business Associate's ability to use and/or disclose PHI under this
Agreement unless Covered Entity notifies Business Associate of the restriction or limitation and Business
Associate agrees to honor the limitation. Should such limitations or revisions materially increase Business
Associate's cost of providing services under this Agreement, Covered Entity shall reimburse Business
Associate for such increase in cost as mutually agreed to by the parties;
7. regardless of 45 C.F.R., § 164.522,provide Business Associate with the appropriate kind and amount of
information,which may include PHI, in order for the Business Associate to properly perform pursuant to this
Agreement and/or the Service Agreement.
D. Confidential Communications.Business Associate agrees to accommodate a reasonable request by an
Individual or on behalf of Covered Entity to receive communication of PHI by an alternative means or
alternative locations and document those alternative means or alternative locations pursuant to 45 C.F.R. §
164.522(b), in a prompt and reasonable manner consistent with the HIPAA regulations.
E. Confidential Business Information.Both parties acknowledge that in the course of performing under this
Agreement and/or the Service Agreement, each party may learn or receive confidential,trade secret or other
proprietary information concerning the other party, or third parties to whom the other party has an obligation
of confidentiality("Confidential Business Information"). Each party shall take all necessary steps to provide
the maximum protection to the other party's Confidential Business Information and records. Each party agrees
to take at least such precautions to protect the other party's Confidential Business Information as it takes to
protect its own Confidential Business Information. Such information shall not be disclosed to third parties
without the express written consent of the party to whom the information belongs. The parties shall not utilize
any Confidential Business Information belonging to the other party other than as expressly permitted by this
Agreement or otherwise in writing. Each party shall retain sole ownership of its own Confidential Business
Information.
III.Miscellaneous
A.Amendment.This Agreement cannot be altered or amended unless agreed to by both parties in writing.
Both parties agree to amend this Agreement from time to time to comply with the requirements of HIPAA and
other federal and state privacy and consumer rights laws and regulations.
B.Termination. Covered Entity may exercise its right to terminate this Agreement and the Service
Agreement upon 30 days written notice to Business Associate if Covered Entity reasonably determines that
Business Associate has breached a material term of this Agreement. Such written notice shall include a
City of Rancho Palo Verdes 1-1-10 16
description of the Covered Entity alleged material breach of this Agreement and afford Business Associate an
opportunity to cure said breach within the notice period. Failure to so cure a material breach shall be grounds
for termination of this Agreement and/or the Service Agreement upon expiration of the notice period. Business
Associate's nonperformance under this Agreement due to failure of Covered Entity to properly provide PHI,
shall neither constitute a breach of contract nor provide grounds for termination.
C. Survival Clause.Any provision of this Agreement that contemplates performance, observance or
enforcement subsequent to the termination of this Agreement, shall survive termination and remain of full
force and effect between the parties.
D.No assignment.Any assignment of this Agreement by Business Associate without Covered Entity's prior
written consent shall be void.
E.Interpretation.The terms and conditions of this Agreement shall be construed in light of any applicable
interpretation of and/or guidance on HIPAA issued by DHHS or any court of competent jurisdiction.Any
ambiguity in this Agreement shall be resolved in favor of a meaning that permits compliance with applicable
laws and regulations. In the event of a conflict between this Agreement and the Service Agreement regarding
the use and disclosure of PHI and/or Confidential Business Information,the terms of this Agreement shall
control.
F.Effective Date. Each term and condition of this Agreement required by HIPAA shall be effective on the
compliance date applicable to Covered Entity, or this Agreement, under the HIPAA privacy regulation.To the
extent that any provisions are subject to the Security Standards set forth by 45 C.F.R. Parts 160, 162 and Part
164 Subchapter C, such provisions shall be effective April 20,2005.
G.Business Associate shall comply with each and every obligation imposed on business associates under 42
USC 17921-17954(Subtitle D of Title XIII of the American Recovery and Reinvestment Act of
2009)("ARRA"), and each of those obligations is hereby incorporated by reference into this Agreement,with
the understanding that compliance with each of those obligations is required under this Agreement only as of
the date upon which compliance with each of those obligations is required under ARRA.
OptumHealth Financial Services City of Rancho Palos Verdes
11490 Xeon St NW, Suite 200 30940 Hawthorne Blvd
Coon Rapids, MN 55448 Rancho Palos Verdes, California 90275
//I�
By: By.
Print Name: / /' Print N.le: Stefan Wo lowi•
Title: Title: Mayor
Ma o r
City of Rancho Palo Verdes 1-1-10 1 7
•
Schedule of VEBA and Health Reimbursement Arrangement (VEBA/HRA) and
Recordkeeping Administrative Services
Overview:
City of Rancho Palos Verdes(Plan Sponsor)has entered into a Master Services Agreement dated January 1,
2010 with Administration Resources Corporation, dba OptumHealth Financial Services(Plan Supervisor)for
the purpose of providing certain employee health care benefit services. This document contains a detailed
description of the services to be provided by Plan Supervisor as well as the corresponding fee(s)for providing
said services. Certain services described in this document may be performed by an affiliated registered broker-
dealer or other qualified entity in compliance with applicable law.
The services described herein this Schedule of VEBA and Health Reimbursement Arrangement(VEBA/HRA)
and Recordkeeping Administrative Services,together with the Master Services Agreement and any
accompanying Schedules or Statements of Work,constitute the entire agreement of services to be provided on
behalf of Plan Sponsor by Plan Supervisor and its affiliates.No amendments to this Schedule of VEBA and
Health Reimbursement Arrangement(VEBAIHRA)and Recordkeeping Administrative Services will be
affected unless agreed upon in writing by both parties.
Plan Sponsor: City of Rancho Palos Verdes
Primary Contact Name: Sara Singer
Primary Contact Number: 310-544-5204
Primary Contact Email: saras@rpv.com
1. Definitions
51.1 "Agreement"means this Schedule Administration Services any attached Schedules and employer
adoption agreements incorporated into this Agreement by reference.
1.2 "COBRA"means the Consolidated Omnibus Budget Reconciliation Act of 1985,and as it appears in
the Public Health Services Act, and the regulations thereunder,as amended.
1.3 "Code"means the Internal Revenue Code of 1986, and regulations thereunder,as amended.
1.4 "ERISA"means the Employee Retirement Income Security Act of 1974,and the regulations
thereunder,as amended.
1.5 "HIPAA"means the Health Insurance Portability and Accountability Act of 1996, and the regulations
thereunder,as amended.
1.6 "Participant"means an individual that is participating in the Plan, including Participants on
continuation coverage as required by COBRA or other applicable continuation requirements.
1.7 "Plan Document"means the Plan Document for the City of Rancho Palos Verdes VEBA Health
Savings Plan.
1.8 "Plan Sponsor"means City of Rancho Palos Verdes.
1.9 "Plan Supervisor"means Administration Resources Corporation.
1.10 "Summary Plan Description"means the written document as distributed to the Participants of the plan,
describing the plan terms and conditions.
1.11 "Trust Document"means the Standard Trust document for the City of Rancho Palos Verdes VEBA
Health Savings Trust.
1.12 "VEBA"means Voluntary Employees' Beneficiary Association.
2. Plan Supervisor's Responsibilities
2.1 The Plan Supervisor shall perform VEBA/HRA plan services for the Plan Sponsor and any optional
services initialed by Plan Sponsor on this Schedule.
City of Rancho Palo Verdes 1-1-10 1
2.2 Initial Employee Communication and Ongoing Reporting. Upon initial eligibility,mail appropriate
employee communication materials to Participants. Thereafter,mail reimbursements and explanations
of benefit materials to Participants and maintain a participant web site.
2.3 2.1. Claim Reimbursement Processing. Process all claims for any and all services selected on this
Schedule presented for payment in accordance with the terms of the Plan, and any written claim
procedures or other practices established by the Plan Sponsor and communicated to the Plan Supervisor,
including, but not limited to, reasonable investigatory work to determine claim eligibility under the Plan
and preparing and distributing benefit checks or drafts to Plan Participants.
2.4 Inquiries. Answer inquiries from the Plan Sponsor, and plan participants concerning requirements,
procedures, or benefits of the Plan.
2.5 Claim Reimbursement File. Maintain claim reimbursement files.
2.6 Standard Reports. Provide Plan Sponsor the following reports:
(a) Quarterly Plan administration report, including all Participant transactions and balances by
fund and in total;
(b) Quarterly Trust reconciliation to the Plan report totals,by fund and in total;
(c) Quarterly Plan year-to-date claim activity;
(d) Annual Plan administration report, including all Participant transactions and balances by fund
and in total;
(e) Annual Trust reconciliation to the Plan report totals, by fund and in total;
(f) Annual Participant statements including Plan Year account statements provided to Plan
Sponsor for distribution to Participants;
(g) Annual forfeiture reports, if applicable.
2.7 Website Reports. Provide Plan Sponsor with the following website reports:
(a) Age demographics including reporting of Plan Participants by configurable age group,years of
service and average account balance;
(b) Claim distribution reports including Participant census data, claim amounts paid and
withdrawal dates within a selected date range;
(c) Employee census including Participant name, and address, dates and age;
(d) Termination reports for terminated Participant's census data and balance within a selected date
range;
(e) Web usage statistics by a number of categories and the number of web requests made by
Participants within a selected date range.
2.8 Recordkeeping. Perform recordkeeping services as described herein and in accordance with accurate
and timely data provided by the Plan Sponsor:
(a) Maintain records of allocations of the Plan's account by Participant and contribution type for
each investment fund selected by the Participant or the Plan Sponsor, as applicable.
(b) Perform calculations of allocations of Plan Sponsor contributions and earnings according to the
direction and information provided by Plan Sponsor.
(c) If applicable,perform allocation of existing account balances into investment funds according
to directions from Participants provided in accordance with procedures established by Plan
Supervisor. Such transactions will be processed each business day as requested by Participants
and in accordance with the Plan Supervisor's procedures, or, as soon as administratively
feasible.
(d) Confirmations of investment transfers directed by Participants will be sent to Participants, if
City of Rancho Palo Verdes 1-1-10 2
e
.
applicable.
2.9 Participant Access to Information. Provide Participants with on-going access to the recordkeeping
system via a voice response system("VRS")and/or website connection on a twenty-four(24)hour
basis. Plan Supervisor does not guarantee immediate access or uninterrupted service at any time. Plan
Supervisor shall use reasonable efforts to properly maintain the VRS and website using generally
accepted industry standards. Plan Supervisor will not be responsible for circumstances beyond Plan
Supervisor's reasonable control. Such circumstances shall include, but are not limited to,damage,wear
and tear,or maintenance work done to telephone lines, delays or damage due to man-made or natural
disasters,unauthorized use of a Participants personal identification number or claims resulting from
thereof, or failure or delay of the system for any other reason outside of the Plan Supervisor's control.
2.10 Reporting. If requested by Plan Sponsor,prepare IRS Form 990, subject to review by the Plan Sponsor,
based on information it may possess and information provided to Plan Supervisor by Plan Sponsor or
Plan Trustees. Plan Supervisor is not responsible for preparation of any other tax return, report or other
document required by any local, State or Federal law or agency with respect to the Plan. Plan Sponsor is
responsible for filing and/or distributing IRS Form 990, and all other tax returns,reports, or any other
such documents and forms. If chosen as an optional service as listed on this Schedule, Plan Supervisor
will assist Plan Sponsor with other reporting requirements, including IRS Form 5500, if applicable, and
Summary Annual Reports.
2.11 Shareholder Communications. For securities held in the account other than employer stock, Plan
Supervisor will cause all proxies and accompanying materials solicited by an entity, and all
prospectuses issued by a company whose securities are held in account("shareholder communications")
to be mailed to the Plan Sponsor within a reasonable period of time after the receipt of such shareholder
communications by Plan Supervisor. In the event a participant makes a request to the Plan Supervisor
for a copy of any shareholder communication,the Plan Supervisor shall forward such request,within a
reasonable time period,to the Plan Sponsor who shall be responsible for responding to such request.
(a) Plan Supervisor has no responsibility to disseminate copies of shareholder communications to
Participants who have invested their accounts in the securities for which such shareholder
communications have been received or to any other person. If the shareholder communications
include a requirement,request, or opportunity for action(such as a proxy, consent,election,
instruction, direction, approval, or similar action)("Proxies"),the Plan Sponsor will be solely
responsible for soliciting and forwarding Proxy votes in accordance with the plan document
and the requirements of the law.
(b) In no case will Plan Supervisor be under any duty to determine how,or if, Proxies are voted or
to take any other action in connection with any shareholder communication. Plan Supervisor
will be under no obligation to forward or return any other corporate material received on behalf
of the account unless required by law except to the extent provided in this paragraph.
2.12 Ministerial and Nondiscretionary. Plan Supervisor accepts responsibility only for the ministerial and
nondiscretionary services described in this Agreement and only to the extent that Plan Sponsor
furnishes accurate and timely information to Plan Supervisor. The services to be performed by Plan
Supervisor shall be performed within the framework of policies, interpretations, rules,practices and
procedures set or established by the Plan Sponsor. Plan Supervisor shall not have discretionary
authority or control respecting management of the Plan and shall not have authority to exercise any
control respecting disposition of the assets of the Plan and shall not render investment advice with
respect to any money or other property of the Plan Sponsor or the Plan and shall have no authority or
responsibility to do so.
2.13 Not a Fiduciary. Plan Supervisor does not assume Plan Sponsor's fiduciary, administrative,or other
City of Rancho Palo Verdes 1-1-10 3
responsibilities for compliance with and as defined by ERISA and any other applicable federal or state
statutes.
2.14 Prospectuses.Plan Supervisor is not responsible for distributing or mailing any fund prospectuses to the
Plan Sponsor or any Participant.
3. Plan Sponsor's Responsibilities
3.1 Plan Documentation. Plan Sponsor shall establish the Plan(s)and Trust(s), all Plan and Trust
documentation, including,but not limited to, Plan Documents, Trust Documents, Summary Plan
Descriptions,Plan and Trust amendments, Summary of Material Modifications and the application for
tax-exempt status, including IRS Form 1024,Application for Recognition of Exemption Under Section
501(a), for the Trust(s).
(a) Plan Provisions. Plan Sponsor shall determine the benefit and administrative provisions of the
Plan and Trust and shall be solely responsible for the terms of the Plan and Trust.
(b) Document Review. Plan Sponsor will review documents provided and be responsible for all
terms within the documents that define the parameters of the Plan and Trust.
3.2 Eligibility Determination. Plan Sponsor shall make all benefit eligibility determinations required under
any of the Plans covered by this Schedule.
3.3 Miscellaneous. The Plan Sponsor shall be responsible for taking the following actions:
(a) Provide the Plan Supervisor with a complete and accurate list of all individuals eligible for
benefits under the Plan(hereafter known as"Participants")and who are enrolled at any time
during the year in the Plan,changes in benefit eligible status, employee contributions if any, and
such other information as the Plan Supervisor may reasonably require in order to render the
services contemplated by this Agreement.
(b) Notify the Plan Supervisor of any changes in Participant eligibility. If Plan Sponsor amends or
modifies any plan or trust documents that may affect the services provided by Plan Supervisor
pursuant to this Agreement,Plan Sponsor agrees to notify Plan Supervisor no later than the
effective date of the amendment or the date of adoption of the amendment. Plan Supervisor shall
be responsible for providing services pursuant to such amendment only upon its written consent,
such consent not to be unreasonably withheld but may be conditioned upon Plan Sponsor's
agreement to pay increased administrative fees.
(c) Unless otherwise agreed to in a separate written administration services agreement between Plan
Supervisor and Plan Sponsor,the Plan Sponsor will be responsible for COBRA continuation
and any state continuation requirements if applicable.
(d) Plan Sponsor is responsible for compliance with HIPAA except as provided in the HIPAA
Business Associate Agreement in Schedule B. Plan Sponsor shall make all determinations with
regard to the Family and Medical Leave Act(FMLA). Plan Sponsor shall be responsible for
compliance with any Qualified Medical Child Support Orders(QMCSO). Plan Supervisor shall
be entitled to rely solely on Plan Sponsor's determinations and shall not be responsible for
verifying such determinations.
(e) Plan Sponsor shall distribute to Participants and provide or return to the Plan Supervisor as
needed, appropriate and necessary materials and documents, including,but not limited to,
Summary Plan Descriptions, if appropriate, or other plan summaries, Summary Annual Reports,
Plan amendments, Summary of Material Modifications or other change summaries, enrollment
forms, and claim reimbursement forms as may be necessary for the operation of the Plan or to
satisfy the requirements of law.
(f) Unless otherwise noted in this Schedule, Plan Sponsor shall satisfy reporting,notice,disclosure,
and annual return requirements and other regulatory requirements imposed by law. The
City of Rancho Palo Verdes 1-1-10 4
responsibility for filing and/or distributing IRS Form 990, and all other tax returns, reports, or
other documents shall be that of the Plan Sponsor.
(g) Utilize and maintain Plan Supervisor as the single, sole and exclusive Plan Supervisor to assist
Plan Sponsor in administering the Plan.
(h) Provide Plan Supervisor with any additional information as may be reasonably requested by
Plan Supervisor from time to time.
(i) Mail and/or otherwise distribute all fund prospectuses as necessary.
(j) Review all communication products and materials prepared by Plan Supervisor to ensure
consistency of the materials with the terms of the Plan.
3.4 Investments. Plan Sponsor has the sole responsibility to adopt the investment policy for Trust asset
investments and for determining how and with whom to invest Trust assets. Plan Supervisor shall have
no investment responsibility with respect to Trust assets.
4. Funding
Plan Sponsor will transmit contributions directly to the Trustee for the Trust. Plan Supervisor shall
coordinate with and receive funds directly from the Trustee for the Trust for purposes of reimbursing eligible
claims of Participants. Plan Sponsor shall, in a mutually agreed format, provide Plan Supervisor with such
contribution information as is reasonably required by Plan Supervisor in order to perform its duties hereunder,
including, but not limited to,the amount of the contribution to be allocated to each participant. Plan Sponsor is
responsible for the accuracy and completeness of the information submitted to Plan Supervisor and is solely
responsible for any adverse consequences that may result from errors or inaccuracies in such information. Plan
Supervisor shall have no responsibility,risk, liability or obligation for the funding of any plan benefits. The
responsibility and obligation for funding plan benefits shall be the sole and total responsibility of Plan
Sponsor. Plan Supervisor is not responsible for requiring that any contributions be made, or for determining
that the contributions that are received by any trust comply with the terms of any plan.
5. Records
During the term of this Agreement,the Plan Supervisor shall maintain the records and files in
conjunction with the administrative services to be performed by Plan Supervisor hereunder and consistent with
the federal record retention requirements.All records and files generated are, and will remain,the property of
the Plan Supervisor. Upon termination of this Agreement and upon execution of a waiver(on a form
acceptable to Plan Supervisor)of Plan Supervisor's responsibility by the Plan Sponsor,all records and files in
the Plan Supervisor's possession will be returned to the Plan Sponsor and Plan Sponsor will be solely
responsible for retention of such records and files. The term "records and files"shall include the claim files,
election forms, and claim reimbursement forms.
6. Fees
6.1 In exchange for the services rendered pursuant to this Agreement,the Plan Supervisor shall receive the
amount determined in accordance with the Fee Schedule. Generally, all such fees will be paid as
provided in the Adoption Agreement,provided per participant per month fees may be paid directly
from the accounts of Participants that are claims active(i.e. able to submit claims and obtain
reimbursement)only if such participants will not be receiving any future contributions.
6.2 Payment by Participants. Subject to the foregoing, if the Plan provides that administrative fees for
employees shall be paid from the Trust(including from a Participant's account),the Plan Supervisor
shall bill the Trust and/or the Participants' accounts directly as the fees become due.Notwithstanding
the forgoing, if the Plan provides that the administrative fees for a Participant who has terminated
employment with Plan Sponsor, shall be paid from the Participant's account every six(6)months(in
City of Rancho Palo Verdes 1-1-10 5
January and July)on a prospective basis(i.e.the January billing shall cover January through June). If
the participant terminates employment after the regularly scheduled billing dates(i.e. in January and
July),the first billing for that Participant shall occur on the date following the date of termination and
shall cover the months between that date and the date of the next regularly scheduled billing.
6.3 Minimum Fees. The minimum monthly fee described in the Fee Schedule shall apply if the sum of the
recordkeeping fees and standard claims processing fess(excluding such fees that are charged with
respect to participants not currently employed by the Plan Sponsor and that are deducted from their
health care reimbursement accounts)does not exceed the applicable minimum provided in the Fee
Schedule. If the minimum fee applies,the asset-based fees in the Fee Schedule and any recordkeeping
fees and standard claims processing fees deducted from the health care reimbursement accounts of
Participants not employed by Plan Sponsor will be charged and collected in addition to the applicable
minimum monthly fee.
6.4 Fees of Distributors. In the event Plan Sponsor or the Plan is responsible for authorized distributor fees
related to the Plan, Plan Supervisor reserves the right to bill and collect from the Trust any distributor
fees,which shall be in addition to the administrative fees described in the Fee Schedule.
6.5 Fees payable by Mutual Funds. Plan Supervisor, its agents and affiliates, may receive compensation
from certain mutual funds or their affiliates to cover expenses relating to services provided by Plan
Supervisor, its agents and affiliates,to the funds, including, but not limited to,the purchase and
redemption of shares and participant level recordkeeping. This compensation is paid directly to the
Plan Supervisor, its agents or affiliates,by the funds pursuant to a services agreement between the Plan
Supervisor and each fund or its affiliate. Plan Sponsor is not responsible for this payment. Payment
made to Plan Supervisor, its agents and affiliates,by the funds is based upon a percentage of the
average daily net asset value of shares invested in the fund, or a set fee per each fund in which a
participant invests. Plan Sponsor may contact Plan Supervisor to receive additional information
concerning this compensation, including which funds pay compensation to Plan Supervisor, its agents
and affiliates, and an estimate of the total amount of compensation received during a particular period
of time.
7. Fee Schedule
In exchange for the services rendered pursuant to this Schedule of Work,the Plan Supervisor shall
receive the amount determined in accordance with Schedule A that is attached hereto and herein incorporated
by reference.
IN WITNESS WHEREOF, pursuant and in accordance with the Agreement between the parties,the parties
have executed this Schedule of VEBA and Health Reimbursement Arrangement(VEBA/HRA)and
Recordkeeping Administrative Services effective as of the date first above written.
OptumHealth Financial Services City of Rancho Palos Verdes
By: Bye / • ,_
Name: W, e) Name: tefan Wolowicz
Title: C� Title: Mayor
City of Rancho Palo Verdes 1-1-10 6