CONTRACT 5001 Service AgreementAgreement No. 5001
Eik C1 -t I C a
Tl -ilyd Pc3rty ^cli- "1m1strcjtors
ADMINISTRATIVE SERVICES AGREEMENT -- RETIREE
HEALTH REIMBURSEMENT ACCOUNT
This Administrative Services Agreement — Retiree Health Reimbursement Account (Agreement)
is made by and between, City of El Segundo ("Plan Sponsor "), whose principal address is 350 Main
Street, El Segundo, California 90245 and HealthComp, a California Corporation dba HealthComp
Administrators ( "HealthComp "), whose principal address is 621 Santa Fe Avenue, Fresno, California,
93721 with respect to the Health Reimbursement Account Plan issued by the Plan Sponsor. This
Agreement is to be in effect as of June 1, 2016 (Effective Date) and shall continue until terminated as
herein provided.
HWEREAS, the Plan Sponsor has established a Health Reimbursement Account Plan (Plan)
pursuant to the Internal Revenue Code Section 105 as amended, (the "Plan ") for eligible Retirees of the
Plan Sponsor (the "Participants "); and
iYt-jfi,'j ?11j8, HealthComp is in the business of providing administrative services in conjunction
with such Plans, and Plan Sponsor desires to engage HealthComp to perform the services enumerated
herein below:
NOW, THEREFORE, in consideration of the premises and of the mutual promises and covenants
contained therein, the parties agree as follows:
I. PLAN
1.1 Plan Document. Plan Sponsor understands that ERiSA requires that its employee
welfare benefit plan be established and be maintained pursuant to a written instrument(s), including a Plan
Document. All services to be provided by HealthComp hereunder shall be performed pursuant to the
provisions of the Plan Document, as amended by Plan Sponsor. A copy of the Plan Document and any
amendments thereto shall be deemed to form part of this Agreement for such purpose.
Plan Sponsor shall provide HealthComp with the Plan Document at least thirty (30) days prior to
the Effective Date of this Agreement or such other date as may be mutually agreed upon by the parties in
writing. Plan Sponsor shall notify HealthComp in writing of any changes to the Plan Document or Plan
benefits at least thirty (30) days prior to the effective date of such changes. HealtlrCoinp shall have thirty
(30) days following receipt of the Plan Document or such notice to inform Plan Sponsor of whether it will
administer the Plan Document or such proposed changes, HealthComp's decision not being unreasonably
withheld, conditioned or delayed.
1.2 Interpretation of the Plan. Plan Sponsor shall be the final arbiter as to the
interpretations of the Plan and as to the payment of benefits thereunder. HealthComp steal I consult with
Plan Sponsor in the event extraordinary benefit matters arise. In the event an exception is to be made,
Plan Sponsor will notify HealthComp in writing of such exception.
Page t of 8
Agreement No. 5001
II. SCOPE OF RELATIONSHIP
2.1 Parties. This Agreement is between HealthComp and the Plan Sponsor, and does not
create any rights or legal relationships between HealthComp and any of the Participants or beneficiaries
under the Plan, or to any other third party. In the event that the Plan Sponsor fails to comply with any
federal or state law, required filings, or the terms of the Plan, HealthComp shall not be liable in any action
brought with such regard. HealthComp's relationship with the Plan Sponsor shall be that of an
independent contractor, and nothing in this Agreement shall be construed as creating the relationship of
the employer and employee, partnership or joint venture between the parties. Plan Sponsor also
acknowledges that HealthComp shall not be deemed a party to any contract entered into on behalf of Plan
Sponsor for any purpose intended primarily to benefit the Plan, and Plan Sponsor assumes all contractual
and financial obligations related thereto.
2.2 Fiduciary. HealthComp shall not be deemed to be a fiduciary of the Plan, nor shall
HealthComp be considered to be the "Plan Administrator" for purpose of ERISA or any other purpose.
Rather, the duties of HealthComp hereunder are ministerial in nature, and this Agreement shall not be
deemed to confer or delegate to HealthComp any discretionary authority or discretionary responsibility in
the administration of the Plan. Rather, HealthComp shall exercise its obligations under the Agreement in
accordance with and by applying industry accepted, or commonly accepted, standards and practices
regarding the common interpretation, definition, and application of the Plan Document provisions.
2.3 Communications. HealthComp shall be entitled to rely, without question, upon any
written or oral communication from the Plan Sponsor, including, but not limited to, its directors, officers,
human resource and benefit personnel, other authorized employees and its appointed agents /brokers.
Any written notice required by this Agreement shall be delivered personally or sent by Registered
Mail, return receipt requested, to the persons and at the addresses listed herein, unless a party designates a
different address in writing:
HealthComp
City of El Segundo
621 Santa Fe
350 Main Street
Fresno, CA 93721
El Segundo, CA 90245
Attn: Phil Musson
Attn: Martha Dijkstra
President & CEO
Human Resources Director
2.4 PIan Sponsor's Representatives, Plan Sponsor, wherever referenced in the Agreement,
includes its directors, officers, employees, agents /brokers and others retained to or acting on Plan
Sponsors behalf.
2.5 HeaIthComp's Representatives. HealthComp, wherever referenced in the Agreement,
includes its directors, officers, employees, agents and others retained to or acting on HealthComp's
behalf.
III. DUTIES OF HEALTHCOMP
3.1 Documentation. At the request of Plan Sponsor, HealthComp may review, update or
prepare a proposed Plan Document or proposed Plan Document Amendments describing the benefits of
the Plan pursuant to Exhibit A. Plan Sponsor understands its responsibility to review, approve and
execute the Plan Document and Plan Document Amendments. Plan Sponsor agrees that HealthComp
shall have no responsibility with respect to the validity of the Plan Document and Plan Document
Amendments.
3.2 Standard Administrative Services. HealthComp agrees to provide the below-
numerated services for the Plan:
Page 2 of 8
Agreement No. 5001
a) Provide standard enrollment materials;
b) Prepare monthly reimbursement checks for the amount of benefits determined to be
payable under the Plan;
c) Provide Participants with online access to their own account(s) through HCOnLine,
including mobile app;
d) Provide Plan Sponsor monthly list billings and analysis reports;
e) Correspond with the Participants if additional information is deemed necessary by
HealthComp to complete the processing of claims;
f) Provide a toll -free 800 Customer Service telephone number to Participants;
g) Facilitate direct deposit to Participant's account from Plan Sponsor's account;
h) Provide annual Participant statements; and
i) Posting of periodic health reimbursement account contributions.
3.3 Records and Files. HealtlComp shall establish and maintain a record keeping system
concerning the services to be performed hereunder. All such records, including an accumulator report and
member eligibility listing of such, and all hard copy files shall be the property of Plan Sponsor and shall
be delivered to Plan Sponsor upon termination of the Agreement, subject to the right of HealthComp to
copy and retain all or any of such records as it may be required by law to retain. All such records shall be
available for inspection by Plan Sponsor upon reasonable prior written notice, and at any time during
HealthComp's normal business hours.
3.4 Practices and Procedures. In performing such services, HealthComp shall employ its
standard practices and procedures, whether written or otherwise provided, however, such performance
shall be subject to the provisions of this Agreement, including, but not limited to Section 1.2.
3.5 Annual Form 5500. At the request of Plan Sponsor pursuant to Exhibit A, HeaIthComp
shall prepare for Plan Sponsor's review the annual form 5500. The approval and filing of the annual form
5500 shall remain the responsibility of Plan Sponsor.
3.6 Confidentiality of Personal Information. HealthComp maintains a Privacy Policy.
HealthComp shall take all reasonable precautions to prevent disclosure or use of the information for a
purpose unrelated to administration of the Plan, except in the following instances:
a) In response to a court order;
b) For an examination conducted by the Commissioner of Insurance;
c) For an audit or investigation conducted under the ERISA or by any authorized
governmental department with jurisdiction;
d) To, or at the request of, Plan Sponsor; or
e) With the written consent of the individual identified by the information, or his or her -
legal representative.
Page 3 of 8
Agreement No. 5001
Nothing in this section is to be inconsistent with any Business Associate Agreement executed by
and between Plan Sponsor and HealthComp,
3.7 Recovery of Payment. The parties will cooperate to make reasonable efforts to recover
overpayments of benefits under the Plan. In the event payment is made to or on behalf of an ineligible
employee, Participant or any ineligible dependent of an employee Participant or a payment is made in
excess of the amount properly payable, HealthComp will:
a) Promptly advise in writing the Plan Sponsor of such event; and
b) Make a minimum of three demands to the payee in writing for the return of such payment
or overpayment and report the result of such efforts to the Plan Sponsor.
HealthComp shall have no further obligation with respect to any such payment or overpayment,
except that HealthComp is hereby authorized to offset such payment or overpayment against any unpaid
claim of such payee or any dependent thereof unless advised otherwise by the Plan Sponsor. HealthComp
in its sole discretion may choose to use additional reasonable methods in an attempt to recover such
payment or overpayment.
1V. DUTIES OF PLAN SPONSOR
4.1 Account. Plan Sponsor shall establish, maintain and timely fund a checking account
( "Account ") for the payment of benefits under the Plan. Plan Sponsor shall be liable for all claim checks
issued against the Account. HealthComp shall provide Plan Sponsor monthly with a report for
reconciliation.
4.2 Service Fees. Plan Sponsor agrees to pay to HealthComp the Service Fees asset forth in
Exhibit A in advance and not later than thirty (30) days following the date of HealthComp's statement for
Services Fees,
4.2.1 Change of Service Fees. HealthComp reserves the right to change the Service Fees
applicable to the Agreement at any time, provided the then - current Service Fees have been applicable for
a period of twelve (12) months, and provided that written notice of such change is furnished to the Plan
Sponsor at least thirty (30) days prior to the effective date for the new Service Fees.
4.2.2 Audit Fees. HealthComp recognizes that from time to time Plan Sponsor may wish to
perform (or have performed) an audit for purposes of financial statements, performance standards, claims
payment, or other proposes. Plan Sponsor shall provide reasonable written notice to HealtlComp prior to
such audits, and HealthComp shall make all requested information available to Plan Sponsor or their
designated auditor within a reasonable time frame, but in no instance less than fifteen (15) business days
from receipt of notice of the audit. Plan Sponsor agrees to pay HealthComp the hourly Administrative
Service Fee shown in Exhibit A for any HealthComp staff time required by such an audit and any other
costs incurred by HealthComp within thirty (30) days following the date of HealthComp's statement for
the hourly Administrative Service Fee and incurred costs. Plan Sponsor also agrees that HealtlComp will
have the right to submit written responses to any audit findings, and that such written responses will be
included in any audit report which is prepared.
4.3 Liability for Benefits. It is understood and agreed that liability for payment of benefits
under the Plan is the sole liability of Plan Sponsor, and that HealthComp shall not have any liability for
such benefits. Plan Sponsor shall be responsible for any damages, losses, liabilities, or expenses incurred
by HealthComp which are related to claims by any employee, Participant, dependent of employee
Participant or a provider of health care services for benefits under the Plan. Both parties recognize that
Page 4 of 8
Agreement No. 5001
this includes claims or liabilities to which either Party is determined to be obligated either contractually or
statutorily, regardless if such claims are allowed under the Plan Document.
4.4 Taxes, Assessments and Liability. It is understood and agreed that nothing in this
Agreement will be deemed to confer on HealthComp any obligation, responsibility or liability for any tax
(exclusive of HealthComp's Federal or State income and payroll taxes), assessment, levy, fee, subsidy or
charge which may be imposed upon Plan Sponsor, Trust, Administrator, Fiduciary or any Participant or
beneficiary of the Plan.
It is understood and agreed Plan Sponsor will reimburse HealthComp within thinly (30) days after
HealthComp's notice to Plan Sponsor for all amounts HealthComp pays for any tax, assessment, levy,
fee, subsidy or charge imposed by any public body or governmental authority against HealthComp, the
Plan or Plan Sponsor (exclusive of HealthComp's Federal or State income and payroll taxes) which may
be incurred by reason of or as a result of the existence of the Plan, this Agreement or HealthComp's
services pursuant to this Agreement.
4.5 Plan Sponsor Responsibilities. The Plan Sponsor agrees to;
a. Determine the eligibility of employees to participate in the Plan;
b. Provide HealthComp with completed enrollment forms and reports necessary to properly
administer the Plan;
c. Remit in a timely manner City of El Segundo's contributions to the employees' health
reimbursement account and fees;
d. Furnish HealthComp such information in writing as may be necessary or required by
HealthComp from time to time to maintain adequate records for eligibility of Plan
Sponsor's Participants;
e. Immediately provide HealthComp with such information regarding administration of the
Plan as HealthComp may request from time to time, HealthComp is entitled to rely on
the information most recently supplied by Plan Sponsor in connection with
HealthComp's services and its other obligations under the Agreement. HealthComp shall
not be responsible for any delay or error caused by Plan Sponsor's failure to furnish
correct information in a timely manner; and
f. Take all other actions necessary to maintain and operate the Plan in compliance with
applicable provisions of the Plan, the Internal Revenue Code, and any other applicable
state and /or federal law. Unless otherwise agreed to in writing between HealthComp and
Plan Sponsor, Plan Sponsor agrees that it is solely responsible for satisfying any and all
Plan reporting and disclosure requirements imposed by law.
V. GENERAL PROVISIONS
5.1 Entire Contract. This Agreement, together with any Exhibits, Attachments and
Amendments hereto, constitutes the entire Agreement between the parties and supersedes any and all
prior or contemporaneous oral or written communications or proposals not expressly included herein. No
representation, understanding, or agreement which is not expressly contained herein shall be binding or
enforceable. No modification of the terms or provisions of the Agreement shall be effective unless
evidenced by writing signed by an authorized officer of both Plan Sponsor and HealthComp.
Page 5 of 8
Agreement No. 5001
5.2 Choice of Law and Attorney's Fees. This Agreement shall be deemed to have been
made and entered into in the State of California, and shall be construed and enforced according to the
internal laws of the State of California, applicable to contracts entered into and performed solely within
that state. In the event suit is brought to enforce or interpret any part of this contract, the prevailing party
shall be entitled to recover reasonable attorney's fees as an element of their costs of suit. The "prevailing
party" shall be the party who is entitled to recover costs of suit, whether or not the suit ends with a final
judgment.
5.3 Fair Reading and Joint Construction. The Agreement is a result of negotiations
between the parties, and will not be construed strictly against or in favor of any party hereto, but shall be
considered to have been jointly drafted by the parties. The parties intend that the Agreement will be
given a fair reading and reasonable construction in accordance with the intentions of the parties and
without regard to, or aid of, §1654 of the California Civil Code.
5.4 Section Headings. The paragraph, section and article headings used in the Agreement
are intended solely for convenience and reference and shall not in any manner amend, limit, modify or
otherwise be used in the interpretation of any of the provisions of the Agreement.
5.5 No Waiver. No waiver of any breach of any term or provision of the Agreement shall
be construed to be, or shall be, a waiver of any other breach of the Agreement. No waiver shall be
binding unless in writing and signed by the Party or Parties waiving the breach.
5.6 Severability. If any term or provision of the Agreement is determined to be illegal,
unenforceable, or invalid in whole or in part for any reason, such illegal, unenforceable, or invalid
provision or part thereof shall be stricken from this Agreement and such provision shall not affect the
legality, enforceability, or validity of the remainder of this Agreement. If any provision or part thereof of
the Agreement is stricken in accordance with the provisions of this section, then this stricken provision
shall be replaced, to the extent possible, with a legal, enforceable, and valid provision that is as similar in
tenor to the stricken provision as is legally possible.
5.7 Warranty of Authority. The parties signing below warrant they are authorized to enter
into this Agreement on behalf of their designated party, and do so with that party's full consent and
knowledge.
5.8 Indemnification of Plan Sponsor. In the event of any claim or cause of action against
Plan Sponsor, HealthComp agrees to indemnify Plan Sponsor and hold it harmless from and against any
and all resultant liabilities, damages and expenses incurred by Plan Sponsor, including court costs and
attorneys' fees, to the extent that the liabilities, damages or expenses arise as a result of the negligence of
HealthComp or HealthComp's intentional, willful, reckless or grossly negligent acts or omissions in the
performance of its duties under this Agreement.
5.9 Indemnification of HeaItliComp. In the event of any claim or cause of action against
HealthComp by any employee, Participant, dependent of employee Participant or health care provider
claiming benefits or right to payment under the Plan, Plan Sponsor agrees to indemnify HealthComp and
hold it harmless from and against any and all resultant liabilities, damages and expenses incurred by
HealthComp, including court costs and attorneys' fees, to the extent that liabilities, damages or expenses
arise other than as a result of the negligence of HealthComp or HealthComp's reckless acts or omissions
in the performance of its duties under this Agreement. Provided further, nothing in this Section or any
other provision of this Agreement shall entitle HealthComp to be indemnified, reimbursed, or held
harmless for any negligent or wrongful acts or omissions of HealthComp, its employees, officers,
directors, affiliates, or subcontractors.
Page 6 of 8
Agreement No. 5001
VI. TERM OF AGREEMENT
6.1 Term, This Agreement shall continence on the Effective Date and shall remain effective
unless terminated as provided herein.
6.2 Termination by Notice. Either party may terminate this Agreement for any reason at
any time by providing written notice to the other party. The notice shall specify an effective date of
termination, which shall be not less than sixty (60) days after the date of the notice. If the notice does not
specify a date of termination, the effective date of termination shall be sixty (60) days after receipt of (lie
notice by the other party.
6.3 Termination by Default. Should either party default in the performance of any of the
terms or conditions of the Agreement, the other party shall deliver (personally or by Registered Mail,
return receipt requested) to the defaulting party written notice thereof specifying the matters in default.
The defaulting party shall have ten (10) calendar days after its receipt of the written notice to cure such
default. If the defaulting party fails to cure the default within such ten -day period, this Agreement shall
terminate at 11:59 p.m. on the tenth day after the receipt of the notice by the defaulting party.
6.4 Termination by Law. If any state or federal law or regulation is enacted or promulgated
which prohibits the performance of any of the duties hereunder, or if any law is interpreted by a court of
competent jurisdiction or any governmental agency or instrumentality to prohibit such performance, this
Agreement shall automatically terminate as of the effective date of sach prohibition.
6.5 Termination via Bankruptcy. This Agreement shall automatically and immediately
terminate if either party: (t) becomes insolvent, seeks bankruptcy protection, or is adjudicated as a
bankrupt entity; (2) if their business or operations come into possession of or under the control of any
trustee in bankruptcy; (3) a receiver is appointed for the party's business or operations; or (4) it makes a
general assignment for the benefit of creditors. But this provision may be waived if the other party
affirmatively elects in writing to waive said termination.
6.6 Effect of Termination, As of the effective date of termination of this Agreement,
flea €thComp shall have no further duties of performance hereunder. This period between notice of
termination and the effective date of termination shall be used to facilitate an orderly transfer of records
and funds, if any, from HealthCornp to the Plan Sponsor or to such person as Plan Sponsor may designate
in writing. Any record transfer shall be completed within fifteen (15) calendar days of the termination
date. HealthComp's obligation under Section 5.8 and Plan Sponsor's obligation under Section 5.9 shall
survive the termination of this Agreement,
CITY OF EL SEGUNDO HEALTHCOMP
Date:, ._m
B _.
y. _ --
(Signature ) ����
(Print or type name)
Title:
Date ." �4
_.m ,.._ s ... ......,_.
age 7 of 8
Agreement No. 5001
EXHIBIT A - FEE SCHEDULE
CITY OF EL SEGUNDO
EFFECTIVE: NNE 1, 2016
S250.00 Standard Plan Amendment.
S 6,00 Health Reimbursement Account Standard Administration Per Participant per Month.
(The minimum monthly administration fee is $195.00). Services include the following:
1. Provide standard informational materials;
2. Prepare monthly reimbursement checks for the amount of benefits determined to be
payable under the Plan;
3. Provide Participants with access to their own account(s) with HCOnLine including
mobile app;
4. Provide monthly list billings and monthly year -to -date analysis reports;
5. Correspond with the Participants if additional information is deemed necessary by
HealthConip to complete the processing of claims;
6. Provide a toll -free 800 Customer Service telephone number to Participants;
7. Facilitate direct deposit to Participant's account from Plan Sponsor's account;
8. Provide annual Participant statements; and
9. Posting ofHRA contributions
$ 80,00 Per Hour Administrative Service Fee or for services not previously listed,
$ 0.50 Bank ccou t Reconciliation Pet. Participant per Month.
Accelst��+` !� Decline:
Signatud Signature
$ 2,00 Debit card P r Participant per Month ($10 card replacement).
Acce t.rrat�itt Decline:
..
Signature
$ 250,00 Per Plan -- An wal Form 5500 preparation.
Accept:v , "� �, . Decline:
..�... _ ..__.._. _..
Sigiratuue Signature
CIT4_;S&ijgnature)
,UNDO
SYm_ 1
..�...
Greg Carpenter
(Print or °I ype blame)
Date:.. P ° 17 A_-__
HEALTHCOMP
(Signature)
(Print or Type Name)
Title: . .._� ...
Date:a�
Page 8 of 8