CONTRACT 2568 Other CLOSED ORIGINAL
CITY OF EL SEGUNDO
FLEXIBLE SPENDING ACCOUNT ADM I NISTRATION AGRI EMI,N'I'
THIS AGREEMENT, effective this 1st Day of January 1998, between the CITY
OF EL SEGUNDO, a political subdivision of the State of California, hereinafter called the
"CITY," and HEALTHCOMP, INC., 621 Santa Fe, Fresno, California, 93 72 1, a California
Corporation, hereinafter called the "ADMINISTRATOR."
WITNESSETH
WHEREAS the CITY maintains an employee benefit entitled "Flexible Benefits Plan of
City of El Segundo," hereinafter called the"Plan," under which benefits may be acquired using
pre-tax dollars by employees, and
WHEREAS the CITY desires to contract for administration services in connection with
the operation of its Plan, and
WHEREAS the ADMINISTRATOR is engaged in the business of performing such
administrative services.
NOW, THEREFORE, it is agreed as follows:
1. ENGAGI-�ME1 1' 1° ADMINIS"I"ItA'rOR. CITY hereby engages
ADMINISTRATOR, an(4ADMI,NISTRATOR hereby accepts such engagement, to perform
those services specified in-this Agreement required in connection with the operation of the Plan
under the terms and subject to the conditions provided in this Agreement. In the performance of
this Agreement, ADMINISTRATOR will develop and utilize systems, practices and procedures
which recognize the specific features of the Plan,
2. SERVICES OF ADMINISTRATOR.
A. The desired services as described in Administrator's "Overview-Flexible
Benefits Administration", (Appendix A) and Administrator's brochure,
"Section 125 Flexible Benefits", (Appendix B) are incorporated as part of
this Agreement, and are included by reference. In the event of any
inconsistency, the inconsistency shall be resolved by giving precedence in
the following order of priority: FIRST, to this Agreement and
THEREAFTER to "Overview-Flexible Benefits Administration",
(Appendix A) and LASTLY to "Section 125 Flexible Benefits" (Appendix
B).
B. ADMINISTRATOR will administer PLAN in accordance with Internal
Revenue Service (IRS) regulations.
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CITY OF EL SEGUNDO
C. ADMINISTRATOR will utilize the City's existing "Plan Document", in
accordance with all relevant Internal Revenue Service Regulations and
other applicable laws. If Administrator determines that said Plan Document
does not conform to current Internal Revenue Service Regulations and
other applicable laws, Administrator will advise City of same and propose
amendment which will bring Plan Document into conformity.
The Plan may be amended only upon the written direction of CITY.
ADMINISTRATOR may not vary from Plan language without the written
approval of CITY.
D, The ADMINISTRATOR will receive requests for reimbursement, evaluate
them under the terms of the Plan, request funds from the City to reimburse
the City employee participants, and issue checks, subject to funds being
made available by the City, in payment thereof in a timely and expeditious
manner. "A timely and expeditious manner" shall mean that each claim
shall be processed and/or remittance advice mailed within ten (10) working
days of ADMINISTRATOR's receiving the claim. In cases in which
additional information is required from the employee in order to process
the claim, ADMINISTRATOR shall inform the employee of the reason(s)
and/or information needed to process said claim within one (1) working
day of receiving the claim. Interpretation of benefits shall be governed by
th Plan Document.
E. ADMINISTRATOR will provide consulting services in regard to the
maintenance of the Plan as well as advising CITY as reflected in paragraph
C.
F. ADMINISTRATOR will assist, if requested, in the enrollment of new
hires. New hires who wish to enroll may do so at the beginning of a
biweekly pay period.
G. ADMINISTRATOR will educate CITY employees on the benefits of
PLAN through:
(i) technical assistance in explaining PLAN to city management;
(ii) ADMINISTRATOR will be available to provide telephone
consultation and assistance to new employees who wish to enroll in
PLAN;
H. ADMINISTRATOR will maintain records of claims entered and claims
paid for each CITY employee and covered dependent.
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CITY OF EL SEGUNDO
I. ADMINISTRATOR to provide the following reports:
PARTICIPANTS: ADMINISTRATOR to prepare and distribute to each
Plan participant:
a. Quarterly Statement for Reimbursement Account showing the
amount of the claim, amount paid, the amount left in the
participant's account, and any amount not paid due to a shortage of
funds in the participant's account.
b. Last month Run-out Statements will be distributed no later than the
first week of the month following the end of the statement period
showing the amount of money in the participant's account, and a
warning that if the participant does not incur additional expenses in
that plan year that are equal to or greater than the amount in the
account, and if the participant does not claim these funds within
ninety (90) days after the end of the plan year, they will forfeit these
funds pursuant to IRS regulations.
ADMINISTRATOR to provide CITY:
a. Monthly Summary Reports which will be available no later than the
first week of the month following the end of the report period.
b. Monthly accounting for all funds received and disbursed by
ADMINISTRATOR which will be available no later than the first
week of the month following the end of the report period.
J. ADMINISTRATOR will prepare and submit to the City Internal Revenue
Service Form 5500 and other reports that may be required by other
governing bodies in a timely manner.
K. ADMINISTRATOR will perform the discrimination testing for CITY
required by the IRS Code.
L. ADMINISTRATOR will upon request consult with CITY regarding
management of the Plan, improvements in benefit definition to facilitate
Plan administration, and assist CITY data processing staff to develop a
program of payroll deductions under this Plan.
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CITY OF EL SEGUNDO
M, ADMINISTRATOR will maintain duplicate data processing media in a
location separate from the claims processing and data processing location
to provide for continuity of operation in the event of fire or other casualty.
N. ADMINISTRATOR will respond to all questions from employees
concerning claims and the methods and procedures used to evaluate and
pay claims. ADMINISTRATOR will provide and publicize a toll-free
telephone number for this purpose. The line will be in service, Monday
through Friday, from 8:00 a.m. to 5:00 p.m.
O. ADMINISTRATOR will notify CITY of"Qualifying Status" changes
within two (2) days of receipt of notice from participant.
R All materials distributed to participants must be reviewed and approved in
advance by CITY.
Q. ADMINISTRATOR will furnish all forms, required for the processing of
claims and enrollment and re-enrollment of employees into the Plan.
R. ADMINISTRATOR will monitor and keep CITY informed of legislation
impacting Plan.
S �DMINIS"1 BATOR agrees to keep full and accurate records and shall
lollow genet-ally accepted accounting methods and practices. The CITY or
its duly authorized representatives shall have full and free access to said
records during normal working hours and upon 48 hours advance notice to
ADMINISTRATOR.
3. CITY OBLIGATIONS. CITY will provide timely notification of employee new
hires and terminations. ,
4. COMI' ;NSATION. ADMINISTRATOR agrees to accept as their total fee for all
services herein provided based upon an Administration Fee of$4.00 per month per
participant with spending account(s) to be paid on a monthly basis; $1.00 per
month per participant with premium only account to be paid on a monthly basis.
Annual Form 5500, Annual Return/Report of Employee Benefit Plan will be
prepared at no cost to City. Minimum monthly administration fees - $70. Any
additional services shall be quoted in advance and agreed upon by both parties
before the services are rendered
5. RELATIONSHIP. It is agreed that ADMINISTRATOR is and shall remain an
independent contractor with respect to the services being performed by
ADMINISTRATOR pursuant to this Agreement and shall not for any purpose be
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CITY OF EL SEGUNDO
deemed an employee of the CITY nor shall the parties be deemed partners,joint
venturers or governed by any legal relationship other than that of independent
contractor.
6. INSUI�ANC E` l(l L KI:`ME1' TS. ADMINISTRATOR shall provide and
maintain insurance acceptable to the City Attorney in full force and effect
throughout the term of this Agreement, against claims for injuries to persons or
damages to property which may arise from or in connection with the performance
of the work hereunder by ADMINISTRATOR, its agents, representatives or
employees. Insurance is to be placed with insurers with a current A.M. Best's
rating of no less than A:VII. ADMINISTRATOR shall provide the following
scope and limits of insurance:
A. Mi►lid►►r►►►► Scope of Insurance.
Coverage shall be at least as broad as:
(i) Insurance Services Office form Commercial General Liability
coverage (Occurrence Form CG 0001).
(ii) Errors and omissions liability insurance appropriate to the
ADMINISTRATOR's profession.
fi-
B. Minimum Limits of Insurance.
ADMINISTRATOR shall maintain limits of insurance no less than the
following; or, at an amount satisfactory to the Director of Finance:
(i) General Liability: $1,000,000 per occurrence for bodily injury,
personal injury and property damage. If Commercial General
Liability Insurance or other form with a general aggregate limit is
used, either the general aggregate limit shall apply separately to the
activities related to this Agreement or the general aggregate limit
shall be twice the required occurrence limit.
(ii) Errors and Omissions Liability: $1,000,000 per occurrence.
C. Other Provisions
Insurance policies required by this Agreement shall contain the following
provisions:
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CITY OF EL SEGUNDO
(i) All Policies
Each insurance policy required by this paragraph 6. shall be
endorsed and state the coverage shall not be suspended,
voided, canceled by the insurer or either party to this
Agreement, reduced in coverage or in limits except after 30
days' prior written notice by Certified mail, return receipt
requested, has been given to the CITY.
(ii) C: eneral Liability Coverag
(a) CITY, its officers, officials, and employees and volunteers
are to be covered as additional insureds as respects: liability
arising out of activities ADMINISTRATOR performs,
products and completed operations; premises owned,
occupied or used by ADMINISTRATOR, or automobiles
owned, leased or hired or borrowed by
ADMINISTRATOR. The coverage shall contain no special
limitations on the scope of protection afforded to CITY, its
officers, officials, or employees.
_ (b) ADMINISTRATOR'S insurance coverage shall be primary
insurance as respect to CITY, its officers, officials,
employees and volunteers. Any insurance or self insurance
maintained by CITY, its officers, officials, employees and
volunteers shall apply in excess of, and not contribute with
ADMINISTRATOR's insurance.
(c) ADMINISTRATOR'S insurance shall apply separately to
each insured against whom claim is made or suit is brought,
except with respect to the limits of the insurer's liability.
(d) Any failure to comply with the reporting or other provisions
of the policies including breaches of warranties shall not
affect coverage provided to the CITY, its officers, officials,
employees and volunteers.
D. Other lte(Igir.rmmrl ent,s.
ADMINISTRATOR agrees to deposit with CITY, at or before the
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CITY OF EL SEGUNDO
effective date of this contract, certificates of insurance necessary to satisfy
("I'I*Y that the insurance provisions of this contract have been complied
with. 1"'he City Attorney may require that ADMINISTRAJ'OR furnish
CITY with copies of original endorsements effecting coverage required by
this Section. The certificates and endorsements are to be signed by a
person authorized by that insurer to bind coverage on its behalf. CITY
reserves the right to inspect complete, certified copies of all required
insurance policies, at any time.
(i) Any deductibles or self-insured retentions must be declared to and
approved by CITY. At the option of the CITY, either the insurer
shall reduce or eliminate such deductibles or self-insured retentions
as respect the CITY, its officers, officials, employees and
volunteers; or the ADMINISTRATOR shall procure a bond
guaranteeing payment of losses and related investigations, claim
administration, defense expenses and claims.
(ii) The procuring of such required policy or policies of insurance shall
not be construed to limit ADMINISTRATOR'S liability hereunder
nor to fulfill the indemnification provisions and requirements of this
Agreement.
Ea*insurance policy required by this paragraph 6. shall be endorsed and
state the coverage shall 110t be suspended, voided, canceled by the insurer
or either party to thisAgreemerit, reduced in coverage or in litnits except
atler 30 days' prior written notice by Certified Mail, return receipt
requested, has been given to the CITY,
7, INDEMN IFS ICA,rION. HealthComp agrees to indemnify the Plan Sponsor and
hold it harmless from and against any and all claims, losses, liabilities, damages and
expenses incurred by the Plan Sponsor, including court costs and reasonable
attorneys' fees, to the extent that such claims, losses, liabilities, damages and
expenses arising out of or are based upon HealthComp's intentional, willful,
reckless or negligent acts or omissions in the performance of its duties under this
plan.
The Plan Sponsor agrees to protect, to indemnify and to hold harmless
HealthComp from and against any and all claims, losses, liabilities, damages and
expenses arising against or incurred by HealthComp including court costs and
reasonable attorneys' fees, to the extent that such claims, losses, liabilities,
damages and expenses arising out of or are based upon Plan Sponsor's intentional,
willful, reckless or negligent acts or omissions in the performance of its duties
under this agreement.
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CITY OF EL SEGUMO
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CITY OF EL SEGUNDO
13. OWNERSHIP OF RECORDS. All records of the Plan, exclusive of computer
programs developed by ADMINISTRATOR in the administration of the Plan, shall
be the property of the CITY. If ADMINISTRATOR utilizes procedures and
guidelines prepared by others to administer the Plan, CITY shall have access to
said procedures and guidelines.
14. INSPECTION OF RECORDS. The ADMINISTRATOR agrees to keep full and
accurate records and shall follow the accounting methods and practices
customarily employed in businesses of like character. All dealings and transactions
relating to the performance of services hereunder shall be duly entered therein in
the usual and ordinary course of business, and the CITY or its duly authorized
representatives shall have full and free access, upon giving of reasonable notice,
said records and accounts and may inspect or audit same at reasonable times at
CITY expense and during normal business hours of the ADMINISTRATOR.
15, BINDING EFFECT. This Agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties hereto.
16. ATTORNEY'S FEES. If litigation is reasonably required to enforce or interpret
the provisions of this Agreement, the prevailing Party in such litigation shall be
entitled to an award of reasonable attorney's fees, in addition to any other relief to
which it y?y be entitled.
17, NOTICES. Any notices to-be given pursuant to terms of this Agreement may be
given either by personal delivery in writing or by mail, registered or certified, with
postage prepaid and return receipt requested. Mailed notices shall be addressed to
the parties at their respective business addresses as follows:
To CITY: Director of Human Resources/Risk Manager
c/o City of El Segundo
350 Main Street
El Segundo, CA 90245
To ADMINISTRATOR: HEALTHCOMP, INC.
Attn: Sylvia De La Torre
621 Santa Fe
Fresno, CA 93721
18. ASSIGNMENT. This Agreement shall not be assigned by any party without the prior
written consent of the other.
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CITY OF EL SEGUNDO
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19. GOVERNING LAW. This agreement shall be construed and interpreted according
to the laws of the State of California.
20, EFFECTIVE DATE AND EXECUTION. This Agreement shall be effective from
and after the date it is signed by the representatives of the City. This Agreement
may be executed in counterparts.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above-written.
FOR HEALTHCOMP, INC.
r
63y ... 1...?-'..2� - r7
Mich,el Enzenbacher, President Date
FOR(:I`I") F EL SEGUNDO:
Y,,jtiyi, � � s es . M on Date
C Manager
ACCEPTED AS TO FORM;
4_r�Mark Hensley,City Attorney
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