Loading...
1l City's Health Insurance Provider CITY OF CHANHASSEN 7700 Market Boulevard PO Box 147 Chanhassen, MN 55317 Administration Phone 952227.1100 Fax 952227.1110 Building Inspections Phone 952227.1180 Fax 952227.1190 Engineering Phone 952227.1160 Fax 952227.1170 Finance Phone 952227.1140 Fax 952227.1110 Park & Recreation Phone 952227.1120 Fax 952227.1110 Recreation Center 2310 Coulter Boulevard Phone 952227.1400 Fax 952227.1404 Planning & Natural Resources Phone: 952227.1130 Fax 952227.1110 Public Works 1591 Park Road Phone 952227.1300 Fax 952227.1310 Senior Center Phone 952227.1125 Fax 952227.1110 Web Site www.ci.chanhassen.mn.us 1.J.. ,.,,,....."'-~'...~ MEMORANDUM TO: Todd Gerhardt, City Manager FROM: Justin Miller, Assistant City Manager{)t'J~ November 3, 2005 ~ . DATE: RE: Joint Powers Agreement with Appletree Institute for Health Insurance Benefits BACKGROUND Each year, the city solicits bids from the marketplace for health insurance benefits. Traditionally, Medica has been the provider for the City of Chanhassen employees, however, their rates for 2006 came in 27.66% higher than our 2005 premiums. Clearly, this was not an option, and therefore staff and our agent, Unison Benefits, solicited bids from other companies. Two companies provided bids, with Blue Cross/Blue Shield providing the lowest bid, coming in with an 11.58% increase over our 2005 premiums for a similar plan structure. While this was significantly lower than the Medica proposal, staff and Unison Benefits wanted to see if another option was available. During the search, the Appletree Institute provided a proposal for the same Blue Cross/Blue Shield plan for an increase of only 7.09%. The Appletree Institute is a cooperative arrangement of southwest Minnesota and metropolitan cities, counties, and non- profit organizations that have pooled their resources to create a more competitive bidding environment for health benefits. A list of the member communities and organizations is attached to this report. Joining this cooperative will allow the city to leverage the size of the group and hedge against large claims that otherwise would penalize a smaller group such as ours. There is no cost to join this cooperative, and all billing is done directly through Appletree. The one detriment to joining the cooperative is that the city must agree not to solicit competitive bids on our own each year. If we do, we can be forced to leave the cooperative for a period of two years. However, our agents are very aware of the trends in the health insurance industry, and they would only recommend that we solicit bids individually in they believe we can secure a better rate than is provided by the Appletree Institute. RECOMMENDA TION Staff recommends that the Chanhassen City Council approve the attached Joint Powers Agreement with the Appletree Institute for providing health care benefits for the City of Chanhassen employees. Approval of this item requires a majority vote of the city council. The City of Chanhassen · A growing community with clean lakes, quality schools, a charming downtown, thriving businesses, winding trails, and beautiful parks A glBat place to live, work, and play DGII.,...."" CITIES Adrian Anoka Appleton Atwater Belview - Parkview Nursing Home Benson Bird Island Buffalo Lake Canby Carver Clara City - Nursing Home Cosmos Cottonwood Ellsworth Fairfax Franklin Fulda Ghent Granite Falls Greenfield Hanley Falls Hendricks Hugo Ivanhoe Jackson Jasper Jordan Kerkhoven Lake Elmo Lakefield Lamberton Madison Marshall Maynard Mendota Heights Milroy Minneota Montevideo Mountain Lake Newport Oak Grove Oakdale Pipestone Plymouth Prior Lake Rosemount Russell Sacred Heart St. Paul Park Slayton Spicer Springfield Stewart Stillwater Tracy Tyler Vesta Waconia West St. Paul Willmar Windom Chippewa Jackson Kandiyohi Lac qui Parle Lincoln Lyon Meeker Murray Nobles Pipestone Redwood Renville Rock Swift Yellow Medicine Area II Minnesota River Basin Projects, Inc. Augsburg Fortress Publishing Avera Marshall Regional Medical Center Chippewa County Hospital Countryside Public Health Granite Falls Municipal Hospital and Manor Heartland Community Action, Inc. Hiawatha Manor, Inc. HRA of Redwood Falls Jackson Housing and Redevelopment Authority Johnson Memorial Health Services Lakeview Home Lincoln/Pipestone Rural Water Lincoln Soil and Water Conservation District Lyon County Developmental Achievement Center Mid-Minnesota Development Commission Murray County Developmental Achievement Center New Life Treatment Center Nobles County Developmental Achievement Center Nobles Soil and Water Conservation District Ortonville Area Health Services Parkview Manor Pipestone Soil and Water Conservation District Pioneerland Library System Prairie Five Community Action Council Prairie Lakes Youth Program Progress, Inc. Red Rock Rural Water System Redwood Area Hospital Redwood Soil and Water Conservation District Rock County Developmental Achievement Center Rural Enterprise for Acceptable Living, Inc. Southwestern Minnesota Housing Partnership Southwestern Minnesota Opportunity Council Southwest Regional Development Commission Swift County/Benson Hospital Tracy Nursing Home Upper MN Valley Regional Development Commission Westbrook Public Utilities Western Community Action, Inc. Willmar Municipal Utilities Presented to you by Appletree Institute JOINT POWERS AGREEMENT FOR GROUP EMPLOYEE BENEFITS AND OTHER FINANCIAL AND RISK MANAGEMENT SERVICES February 1, 2000 JOINT POWERS AGREEMENT FOR GROUP ElVIPLOYEE BENEFITS AND OTHER FINANCIAL AND RISK MANAGEMENT SERVICES TABLE OF CONTENTS Page SECTION 1. PURPOSE, INTENT AND OBJECTNE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Purpose 1.2 Compliance with Applicable Laws SECTION 2. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 \~. .It: 7::,1 '.i:j1 2.1 Advisory Committee(s) 2.2 Agreement 2.3 Associate Member 2.4 Board or Joint Powers Governing Board 2.5 CBA 2.6 CBA Employee Benefits 2.7 Discretionary Employee Benefits 2.8 Group Contract 2.9 Group Employee Benefits 2.10 Other Financial and Risk Management Services 2.11 Operating Agreement 2.12 Participant 2.13 Participant Member 2.14 Pool 2.15 Program Funds 2.16 Provider 2.17 SC SECTION 3. JOINT POWERS GOVERNING BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 990902:1424 3.1 3.2 3.3 Board Membership Upon Dissolution of SC Acknowledgment by Associate Members -1- SECTION 4. RIGHTS AND RESPONSIBILITIES OF THE BOARD . . . . . . . . . . . . . . . . . . 4 4.1 Authorized Powers 4.2 Group Employee Benefits 4.2.1 CBA Employee Benefits 4.2.2 Discretionary Employee Benefits 4.2.3 Reserves 4.2.4 Self-Insurance of Health Benefits 4.3 Other Financial and Risk Management Services 4.4 Operating Agreements 4.5 S'C Service Fees 4.6 Service Providers 4.6.1 Selection 4.6.2, Governmental Unit Bidding and Contracting Laws 4.6.3 Service Provider Rate Increases 4.7 Premiums and/or Contract Charges 4.8 Advisory Committee(s) 4.9 Authority of Board 4.10 Liability Limited 4.11 'Withdrawal by Board SECTION 5. RIGHTS AND RESPONSIBILITIES OF PARTICIPANTS. . . . .. ... . . . . . ..8 5.1 Enrollment and Renewal 5.2 Participants to Furnish Data 5.3 Remittance of Premiums and Contract Charges 5.4 CBA Employee Benefits 5.5 Participant Withdrawal 5.5.1 Voluntary Withdrawal 5.5.2 Withdrawal Relating to Participant Rate Solicitation 5.5.3 Withdrawal Relating to Dual Offering 5.5.4 Withdrawal at Annual Renewal 5.6 Effect of Participant Withdrawal 5.6.1 Withdrawal from this Agreement 5.6.2 Withdrawal from a Pool 5.6.3 Program Funds 5.6.4 Future Participation Limited SECTION 6. PROGRAM FUNDS ADMINISTRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 6.1 6.2 6.3 Program Funds General Rules Regarding Management and Disposition of Program Funds Investment of Program Funds 990902:1424 -11- 6.4 Withdrawal of Participant 6.5 Termination of Pool 6.6 Funding of Risk SECTION 7. LENGTH OF AGREEMENT AND TERMINATION................... 12 SECTION 8. LIABll...ITY OF PARTIES ........................................12 SECTION 9. AGREEMENT BY PARTICIPATION ..............................12 SIGNATURES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 ADDENDUM A ............................................................. 14 990902: 1424 -lll- JOINT POWERS AGREEMENT FOR GROUP EMPLOYEE BENEFITS AND OTHER FINANCIAL AND RISK MANAGEMENT SERVICES This Jaint Powers Agreement, hereinafter referred ta as "Agreement," is made between Participant Member and other Participant Members as are naw .or may hereafter become parties ta this Agreement, and the hereinafter called the "SC." RECITALS Whereas, Minn. Stat. 471.59, Subds. I and 10 authorizes two .or more gavernmental units to exercise jaintly or caaperatively pawers which they passess in comman, and Whereas, Minn. Stat. 123A21, establishes service caoperatives, the purpase .of which amang ather things, is ta assist participating governmental units in meeting certain specific needs which can mast advantageausly be met an a regional basis, and Whereas, the Participant Members wish to autharize the SC Baard of Directars to act as a joint baard for the purpase .of exercising certain powers as set forth in this Agreement, and Whereas, the Participant Members acknowledge that the Baard .of Directors .of the SC is representative .of the parties to this Agreement; NOW THEREFORE, the parties hereto agree as follows: SECTION 1 PURPOSE, IN'fENT AND OBJECTIVE 1.1 Purpose. Under the provisions of Minnesota law, governmental units may enter into cantracts for the purposes .of providing Group Employee Benefits for their emplayees and to obtain Other Financial and Risk Management Services deemed necessary or beneficial far their .operation. Under the provisians of Minn. Stat. 471.59, two or mare governmental units (including, but not limited ta, schaal districts, counties, towns, other governmental agencies and service coaperatives) may agree to exercise jaintly .or coaperatively pawers which they passess in common. The purpose .of this Agreement is ta autharize the Board to exercise the comman pawers .af the participating governmental units in connection with certain matters pertaining to the administration and funding .of Group Employee Benefits and the provision of Other Financial and Risk Management Services, all as described herein. It is not the purpose of this Agreement ta transfer ta the Baard the authority ta execute contracts on behalf .of Participants, .or to in any manner became involved in any callective bargaining pracess. 990902:1424 1.2 Compliance with Applicable Laws. It is the parties' intent to co~ply with the applicable statutory requirements pertaining to requests for proposals for group insurance, self-insurance, COBRA and its Minnesota extensions, service cooperatives, and all other applicable federal and state statutes. Pursuant to the laws governing service cooperatives, it is also intended that nonprofit non-governmental units be allowed to participate as Associate Members in the Group Employee Benefits and Other Financial and Risk Management Services made available pursuant to this Agreement, although it is not intended that such nonprofit, non-governmental units exercise any of the powers or authorities exclusively delegated to governmental units described in Minn Stat. 471.59 Subd. 1. SECTION 2 DEFINITIONS 2.1 Advisory Committee(s) means committees appointed by the Board in accordance with Section 4.8 of this Agreement which are representative of the Participan~ as deemed appropriate by the Board for the purpose of recommending policies, procedures and actions to the Board. 2.2 Agreement means this Joint Powers Agreement as the same may be amended from time to time. This document, and all other documents in the same form executed (or deemed executed as provided in Section 9 of this Agreement) by SC and other Participant Members, all as amended from time to time, shall together constitute a single Agreement. 2.3 Associate Member means any nonprofit or non-governmental entity which participates in any of the Group Employee Benefits or Other Financial and Risk Management Services made available to Associate Members by the Board, and agrees in writing to be bound by the terms of this Agreement other than those terms explicitly applicable only to Participant Members (or is deemed to have so agreed as provided in Section 9 of this Agreement). 2.4 Board or Joint Powers Governing Board means the SC Board of Directors acting as the joint board authorized to exercise certain powers of the Participant Members, as permitted by Minn. Stat. 471.59, Stibd. 2 and as set forth in this Agreement. 2.5 CBA means collective bargaining agreement. 2.6 CBA Employee Benefits means employee welfare and retirement benefits made available . by the Board from time to time for adoption by a Participant pursuant to the terms of a CBA, and may include, but shall not be limited to health benefits coverage, wellness and employee assistance programs, life.insurance, disability income protection, dental insurance, flexible spending programs, retirement programs and long term care insurance. In no event shall any Discretionary Employee Benefits be considered CBA Employee Benefits unless and until they become part of a collective bargaining agreement between a union and a Participant. 990902: 1424 -2- 2.7 Discretionary Employee Benefits means employee welfare and retirement benefits ma~e available by the Board. from time to time for adoption by a Participant, exclusive of any CBA Employee Benefits, and may include, but shall not be limited to health benefits coverage, wellness and employee assistance programs, life insurance, disability income protection, dental insurance, flexible spending programs, retirement programs and long term care insurance. Discretionary Employee Benefits may be terminated or reduced by the Board at any time. In the event any Discretionary Employee Benefit is terminated by the Board but continued by one or more Participants, the provision of such Discretionary Employee Benefit shall become the sole responsibility of such Participants. 2.8 Group Contract shall mean an agreement for the rendering of services by and between a Participant and a Provider of such services. In connection with the self-insurance of employee health benefits, such an agreement may also mean a Participant's agreement to participate in a program of self-insurance. 2.9 Group Employee Benefits shall mean CBA Employee Benefits ~d Discretionary Employee Benefits. 2.10 Other Financial and Risk Management Services may include, but shall not be limited to, technical.advice regarding borrowing programs, contracted legal services, property/casualty safety group protection, personal property and casualty protection, student accident, coverage, and other services as made available by Group Contract for Participants from time to time by the Board. 2.11 Operating Agreement means an agreement by and between the Board and a Provider which establishes terms for the benefits, administration or funding of Group Employee Benefits or Other Financial and Risk Management ServiCes. 2.12 Participant means both Participant Members and Associate Members. It does not refer to individual employees obtaining insurance or other benefit coverage pursuant to a plan offered by a Participant which is funded or administered in whole or in part pursuant to this Agreement. . 2.13 Participant Member means any governmental unit as defined in Minn. Stat. 471.59 which is accepted for participation in this Agreement by the Board, certifies that its employee benefit plans qualify as "governmental plans" that are exempt from application of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), and agrees in writing to be bound by the terms of this Agreement (or is deemed to have so agreed as provided in Section 9 of this Agreement). 2.14 Pool means the collective group of Participants in a given program of Group Employee Benefits or Other Financial and Risk Management Services, as the context shall require. Absent an agreement expressly to the contrary, a separate Pool shall exist for each such program and a separate Group Contract shall exist between the Provider and each Participant for the rendering of services or benefits for which such Pool is formed. 990902: 1424 -3- 2.15 Program Funds means any monies, reserves, excesses or other amounts, whether acquired through contributions, payments, discounts, dividends, refunds, credits, reserves, savings, interest or otherwise, that are held and administered in accordance with Section 6 of this Agreement. 2.16 . Provider means the person, insurance carrier, third party administrator, or other entity which is selected by the Board, in its discretion, to provide Participants with Group Employee Benefits or Other Financial and Risk Management Services or, as in the case of self-insured health benefits, to provide administrative or other services in connection with such Benefits or Services. _ 2.17 SC means the SW/ wr. ' Servjce Cooperative, a governmental agency and public corporation, whose existence is authorized by Minn. Stat. 123A.21. SECTION 3 JOINT POWERS GOVERNING BOARD 3.1 Board Membership. The SC Board of Directors, when exercising the joint powers authorized by this Agreement, will also serve as the Board referred to in this Agreement. The Board will be elected pursuant to the Bylaws of the Sc. As appropriate, the Board may designate one or more representatives to act on its behalf. 3.2 Upon Dissolution of SC. ill the event that the SC is dissolved, the Board shall continue to exist and its members shall be elected solely from the governing bodies of the Participant Members to this Agreement in a manner consistent with the provisions of the Joint PowerS Act, Minn. Stat. 471.59, Subd.2. Any administrative services provided by the SC prior to its dissolution shall be provided thereafter as determined by the Board in its discretion. 3.3 Acknowledgment by Associate Members. Associate Members acknowledge that Minn. Stat. 471.59 does not authorize their participation in a Joint Powers Agreement, eVen though Minn. Stat. 123A.21, Subd.3 authorizes nonprofit, non-governmental organizations to participate in Group Employee Benefits, Other Financial and Risk Management Services, and other programs made available from time to time by service cooperatives. By participating in any such program made availaqle by the SC, such non-governmental Associate Members agree to be bound by the terms of this Agreement (other than those'terms explicitly applicable only to Participant Members) and that the Board is representative of their interests. SECTION 4 RIGHTS AND RESPONSmILITIES OF THE BOARD 4.1 Authorized Powers. Pursuant to Minn. Stat. 471.59, Subd. 2, in addition to any other powers specifically delegated to the Board by this Agreement, the Board is hereby authorized to: 990902:1424 -4- (a) establish, procure and administer Group Employee Benefits and Other Financial and Risk Management Services; (b) define and clarify requests for proposals, rights and responsibilities, length of contract, premium or contribution rates and other costs, termination guidelines, the relative liability of the parties, and the method(s)by which parties to this Agreement shall exercise their common powers; and (c) receive, collect, hold, invest, expend and disburse Program Funds in connection with the exercise of its powers under this Agreement. 4.2 Group Employee Benefits. 4.2.1 CBA Employee Benefits. The Board may from time to time make employee welfare and retirement benefits available for adoption by Participants pursuant to a CBA. The Board may arrange alternative financing arrangements respecting such benefits, and may administer or arrange for the administration of such benefits. Any employee or cOllective-bargaining representative notification of alternative fmancing arrangements shall be the responsibility of the Participant. The Group Contract for the provision of such benefits shall be between the Participant and the Provider. Pursuant to Minn. Stat. 471.6161, Subd.5, the Board has no authority nor authorization to change a policy or benefit respecting a Participant's CBA Employee Benefits in a manner that would reduce the aggregate value of such benefits. 4.2.2 Discretionary Employee Benefits. The Board may from time to time make available for adoption by Participants Discretionary Employee Benefits. The Board may arrange alternative financing arrangements respecting such benefits, and may administer or arrange for the administration of such benefits. The Group Contract for the provision of stich benefits shall be between the Participant and the Provider. Notwithstanding that a Group Contract for Discretionary Employee Benefits be between a Participant and a Provider, the Board, upon reasonable notice to Piuticipants, may prospectively amend, reduce or terminate any such Discretionary Employee Benefits in its sole and absolute discretion. 4.2.3 Reserves. The Board shall from time to time determine the minimum amount of funds needed for purposes of risk management and rate stabilization. Any such funds shall be held and used in accordance with, and subject to the limitations set forth in, Section 6. 4.2.4 Self-Insurance of Health Benefits. In accordance with Minn. Stat. 471.617, Group Employee Benefits that are employee health benefits may be self-insured. A self-insurance Pool made available by the Board shall be a pool established and operated by the Board, or by the Board and one or more other joint powers governing boards governed by Minn. Stat. 471.59 or service cooperatives governed by Minn. Stat. 123A.21. 990902:1424 -5- . 4.3 Other Financial and Risk Management Services. The Board may make available Other Financial and Risk Management Services for electing Participants and may administer, or arrange for the administration of such services. The Board will determine the most cost-effective and appropriate manner in which to deliver Other Financial and Risk Management Services and the service fees and other costs pertaining to the same. 4.4 Operating Agreements. The Board, alone or in collaboration with other governmental units, whether acting alone or jointly, including other service cooperatives, may negotiate Operating Agreements for the benefit of the SC and each of the Participants with respect to any Group Employee Benefit or Other Financial and Risk Management Service. Such Operating Agreements may establish, among other things: (a) the terms and conditions for any program, (b) premium or contribution rates and other costs, (c) funding arrangements, (d) administrative arrangements, including the extent to which the SC shall provide administrative services, (e) the applicable responsibilities of the Board, and (f) the amount of service fees payable to the Sc. ... The Operating Agreement is a proprietary document between the Service Cooperative and the provider. Howeve.r:, at the request of any Participant, the Board may provide that Participant with any information regarding the applicable Operating Agreement that is reasonably necessary for the Participant to understand its rights and obligations thereunder. . 4.5 SC Service Fees. The SC may be paid a service fee in consideration for services rendered pursuant to this Agreement and any Operating Agreements. The amount and source of such service fee shall be established from time to time by the Provider and the SC and shall be approved by the Board. Such service fee may include, but shall not be limited to, a percentage of premiums collected from Participants for the payment of Group Employee Benefits, a fixed fee, or such other arrangements approved from time to time by the Board. At the time a Participant elects to participate in any of the Group Employee Benefits made available by the Board, the Participant shall, by execution of this Agreement (or by the deemed execution of this Agreement as provided in Section 9), be deemed to have acknowledged and agreed to the amount of such service fee as set forth in Addendum A attached hereto (as in effect from time to time), and the source of its payment, including any part thereof derived from discounts, refunds, dividends, or similar revenues. Services fees payable with respect to Other Financial and Risk Management Services shall be established and 990902:1424 -6- disclosed from time to time as detennined by the Board. Participants shall be given advance notice of any change in Addendum A. 4.6 Service Providers. 4.6.1 Selection. The Participants hereby delegate to the Board the right to select the Providers for Group Employee Benefits and Other Financial and Risk Management Services. 4.6.2 Governmental Unit Bidding and Contracting Laws. As applicable, the Board shall comply with all state and federal laws relating to requests for proposals, review of proposals, length of Group Contract rules, and other laws and regulations relating to contracting for Group Employee Benefits and Other Financial and Risk Management Services. 4.6.3 Service Provider Rate Increases. The Board will annually review renewal information as presented by Providers, make recommendations and determine if requests for proposals are necessary. Rate renewals for group insurance will be determined on the basis of the aggregate change of premiums. 4.7 Premiums and/or Contract Charges. To the extent not established by the applicable Operating Agreement or in any other manner prescribed by this Agreement, premiums and/or contract charges shall be determined by the Board in its discretion; provided, however, that in accordance with Section 6.5, no retroactive assessment may be made without the consent of the affected Participants. 4.8 Advisory Committee(s). The Board may, but is not required to, appoint one or more advisory committees. The purpose of any such cOIIllIlJ.ttee may include, without limitation, the receipt and processing of information relating to group employee benefits, and the future .direction of such benefits as well as other programs and services. The Board shall consider, but is not required to adopt, advisory committee recommendations and proposals. Labor representation, when appropriate, on any advisory committee formed by the Board shall be, in so far as is reasonably possible, representative of the bargaining representatives of individuals covered in the relevant Pool. Notwithstanding. anything to the contrary in this Section 4.8, the SC shall create a labor-D;1anagement committee to advise it on certain matters as required by Minn. Stat. 123A.25. 4.9 Authority of Board. The Board, with due consideration given to recommendations submitted by any advisory committee which may be established, shall, unless otherwise expressly agreed, retain final authority in all matters relative to this Agreement and to the Group Employee Benefits and Otner Financial and Risk Management Services subject to this Agreement; provided, however, that nothing in this Agreement shall permit the Board to enter into a Group Contract on behalf of a Participant, and that, subject to any applicable notice rules, nothing in this Agreement shall prevent a Participant from withdrawing from this Agreement, any Group Employee Benefit, or any Other Financial and Risk Management Service. 990902:1424 -7- 4.10 Liability Limited. The Board, its authorized representatives, employees and designees shall have no duty or liability to any of the Participants or Providers with respect to the fees, premiums and/or contract charges, offers, acceptances or binders of coverage, cancellation notices, or other matters relating to a Participant's subscribers, all of which shall be the responsibility of the Participant. The Board, its authorized representatives, employees and designees, and each Participant shall have no duty or liability due to negligence of other Participants and Providers. When it is not exercising the joint powers authorized by this Agreement (and therefore not acting as the Board), the SC Board of Directors shall have no duty or obligation whatsoever to act for the benefit of Participants (as Participants). 4.11 Withdrawal by Board. The undertakings for the provision of Group Employee Benefits in this Agreement may be terminated by the Board or the SC (as applicable) at any time. SECTION 5 RIGHTS AND RESPONSIBILITIES OF PARTICIPANTS 5.1 Enrollment and RenewaL Participants may elect whether to participate in any Group Employee Benefit and any Other Financial and Risk Management Service made available by the Board. If a Participant elects to participate in a Group Employee Benefit or Other Financial or Risk Management Service, the Participant must execute any applicable Group Contract, Group Contract amendment, enrollment and renewal documents directly with the Provider. 5.2 Participants to Furnish Data. Each Participant agrees to furnish all reasonably necessary employee data directly to the SC or its designee. 5.3 Remittance of Premiums and Contract Charges. The Participant shall remit premiums and/or contract charges in the time and manner as from time to time determined by the Board. 5.4 CBA Employee Benefits. Each Participant that participates in CBA Employee Benefits shall be solely responsible for the collective bargaining of such benefits, and for providing any notices regarding CBAEmployee Benefits, including, without limitation, the obligation to notify certain representatives regarding the adoption of a self-insured health benefit plan set forth in Minn. Stat. 471.617, Subd. 4. 5.5 Participant WithdrawaL 5.5.1 Voluntary WithdrawaL At any time during a year, (but at least three (3) months prior to renewal), a Participant may terminate its participation in this Agreement or in a Pool upon ninety (90) days written notice to the Board and to all Providers of programs in which it participates. 5.5.2 Withdrawal Relating to Participant Rate Solicitation. If a Participant solicits proposals independently of this Agreement when there has not been a fifty percent (50%) increase 990902: 1424 -8- in the aggregate rates for that Participant group in a given year, the Board retains the right to deem that the Participant has withdrawn from the appropriate Pool. "Soliciting proposals" shall be defined as requesting and/or accepting written or verbal proposals of any kind, regardless of how formal or informal. Notwithstanding the foregoing, a Participant receiving a 50% or greater increase in the aggregate rate for that Participant group in a given year shall be allowed to solicit proposals without jeopardizing their participation in the Pool. If the Participant elects to reject all proposals and remain a Participant in the Pool, the Participanfwill receive a rate to be established by the Board. 5.5.3 Withdrawal Relating to Dual Offering. If a Participant offers Group Employee .Benefits through an additional or different plan which, in the discretion of the Board, are considered to be substantially similar to those provided by a Pool in which the Participant participates, then the Board retains the right to deem. that such Participant has withdrawn from the Pool. 5,5.4 Withdrawal at Annual Renewal. If a material change in any term or condition of a Group Employee Benefit or Other Financial or Risk Management Service in which a Participant participates is proposed to commence as of the Participant's annual rene~al date, the Participant may withdraw from the applicable Pool as of the renewal date, provided the Participant gives advance written notice of its intent to withdraw promptly (within 30 days) after receiving notice of the material change, even if such notice is given less than 120 days in advance of the renewal date. 5.6 Effect of Participant Withdrawal. Upon a Participant's withdrawal or deemed withdrawal from this Agreement or from a Pool, the following rules shall apply: 5.6.1 Withdrawal from this Agreement. Upon its withdrawal from this Agreement, a Participant shall be deemed to have withdrawn from all Pools maintained under this Agreement in which the Participant is participating'at the time of such withdrawal. If a Participant no longer participates in any Pool, the Participant shall be deemed to have withdrawn from this Agreement, as well as from the applicable Pool(s). 5.6.2 Withdrawal from a Pool. Withdrawal by a Participant from any Pool shall not affect the Participant's participation in any other Pool. . 5.6.3 Program Funds. No Program Funds or any other amounts that may, in any way, be attributable to a Participant's participation in a Pool shall be returned to the Participant in the event such Participant's participation in the Pool ends prior to the poor s termination. 5.6.4 Future Participation Limited. If a Participant withdraws or is deemed by the Board to have withdrawn from a Pool, such Participant's participation in such Pool shall be prohibited for a period of twenty-four (24) months from the date of such withdrawal or deemed withdrawal. If a Participant withdraws or is deemed by the Board to have withdrawn from this Agreemerit, such Participant's participation in this Agreement (and any Pool offered hereunder) shall be prohibited for a period of twenty-four (24) months from the date of such withdrawal or deemed withdrawal. 990902:1424 -9- SECTION 6 PROGRAM FUNDS ADMINISTRATION 6.1 Program Funds. It is understood and agreed that, in connection with the Group Employee Benefits and Other Financial and Risk Management Services made available pursuant to this Agreement, the Board may acquire Program Funds. The Board may, in its discretion, establish and maintain separate accounts for specified portions of the Program Funds, and may designate specific purposes, such as the payment and financing of Group Employee Benefits or the stabilization of the cost of such benefits, for which the amounts credited to such account ~hall be used, but it shall not be required to do so. 6.2 General Rules Regarding Management and Disposition of Program Funds. Program Funds shall be used solely for the purposes of providing Group Employee Benefits and Other Financial and Risk Management Services, providing related services, defraying the reasonable expenses of administering such benefits and services, and, if the Board determines that such use would either directly or indirectly benefit Participants (e.g., by spreading-risk, achieving economies of scale, generating revenues or enhancing the Board's ability to negotiate with Providers as a result of the Board's visibility, presence in the marketplace or enhanced expertise), establishing, providing and administering similar benefits and services offered by the joint action of other governmental units. Program Funds shall not inure to the benefit of the Board; this prohibition shall not, however, prohibit the payment of service fees to an SC as provided below. Subject to the foregoing, the Board, in it sole discretion, shall determine the management and disposition of the Program Funds. The Board may consider Advisory Committee recommendations regarding the use of Program Funds before any determinations are made. The following are examples of purposes for which the Board may use and apply Program Funds. (a) to negotiate the purchase of, administer, provide and maintain (either directly or through the purchase of insurance, or both) Group Employee Benefits (including, but not limited to programs related to the purpose for which the Fund was created, such as, for example, in the case of a Health Pool, an Employee Assistance Program (EAP) and Wellness Program) and Other Financial and Risk Management Services; (b) to payor provide for the payment of reasonable and necessary expenses of administering Group Employee Benefits and Other Financial and Risk Management Services including, without limitation, all expenses which may be incurred in connection with the establishment and administration of Pools, the employment of administrative, legal, accounting, other expert and clerical assistance, the leasing of such premises and the purchase of lease materials, supplies, equipment, and liability and property insurance; (c) to establish and accumulate funds deemed adequate by the Board to carry out the purposes of the Pools, for example, for purposes of rate stability and risk reserve; 990902:1424 -10- (d) to pay any federal, state or local income, employment, death or other tax which may be properly imposed on or levied against Group Employee Benefit, Other Financial and Risk Management Service, a Pool, or on benefits paid therefrom; (e) to pay for any bond and to pay the premiums on any insurance purchased by a Pool, including, but not limited to liability insurance, "stop loss" insurance and other insurance intended to pay directly or indirectly the benefits established with respect to a Pool; and (f) to pay the SC any service fee payable to it pursuant to, or authorized pur~uant to, this Agreement. 6.3 Investment of Program Funds. Program Funds shall be held and invested in a manner that is consistent with any applicable legal requirements regarding the holding and investment of funds by the Participant Members who are governmental units within the meaning of Minn. Stat. 471.59. 6.4 Withdrawal of Participant. In the event of the withdrawal Q..f a Participant prior to the termination of this Agreement or of a Pool, Program Funds attributable to contributions of such Participant shall not be returned to such Participant. 6.5 Termination of Pool. In the event of termination of a Pool, any portion of the Program Funds that has been designated for use solely in connection with the terminating Pool, and any other portion allocated to the terminating Pool by the Board in its sole discretion, shall be distributed to the Pool Participants in a manner to be determined by the Board, which may include the following: (a) payment of benefits to or on behalf of enrolled employees with respect to claims arising prior to such termination; (b) provision of similar benefits for such employees; (c) payment of reasonable and necessary expenses incurred in such termination; (d) payment of taxes; and (e) cash payments to Participant Members according to a formula established by the Board. Upon such termination, the Board shall continue to serve for such period of time and to the extent necessary to carry out the directions of the preceding sentence. The Participants who receive such distributions shall be solely responsible for determining whether, and to what extent, any amounts they receive will be distributed to individuals who were covered by benefit programs provided by the terminating Pool. 990902:1452 -11- ," 6.6 Funding of Risk. Premiums may be adjusted, but no retroactive assessment shall be made without consent and agreement by the affected Participants. Subject to their obligation to provide accurate information regarding the individuals who will receive benefits from a Pool, no Participant or its employees shall bear any financial risk other than the agreed upon premium. SECTION 7 LENGTH OF AGREE:MENT AND TERMINATION Pursuant to Minn. Stat. 471.59, Subd. 4, but subject to the provisions herein relating to Participant withdrawal, this Agreement shall be ongoing. SECTION 8 LIABILITY OF PARTIES Any Participant to this Agreement holds the Board and its employees and it designees, and the SC and its board, employees and designees, harmless from any and all causes of action arising at law or in equity unless such action shall arise from its or their gross negligence and is permitted, after application of all doctrines and statutes respecting immunity, by applicable law. The parties agree to waive any rights to litigation from any dispute arising out of this Agreement unless such action is the result of intentional wrongdoing. All benefits hereunder are the sole responsibility of the Provider(s) and the Participants, and shall not be the responsibility of the Board or the SC. SECTION 9 AGREE:MENT BY PARTICIPATION Any governmental unit, and any nonprofit or non-governmental entity, which participates in any of the Group Employee Benefits or Other Financial and Risk Management Services and remits premium and/or contract charges in accordance with this Agreement, Shall be deemed to have approved this Agreement and, in the case of an eligible governmental unit, to have executed this Agreement by its duly authorized officers, and shall be bound by the terms and conditions of this Agreement to the same extent as if such formal approval had been obtained and such execution had occurred. 990902:1424 -12- Pursuant to all applicable state and federal laws, this Agreement has been approved by the governing boards of the parties and is signed by the duly authorized officers of the partie~. PARTICIPANT MEMBER Name of Organization By Title Date SERVICE COOPERATIVE Name of Organization By Title Date '..,:; 990902:1424 -13- ADDENDUM A TO THE JOINT POWERS AGREEMENT Service Cooperative Fees The Service Cooperative shall be paid a monthly administration fee beginningJanuaty 1, 200} by the provider equal to $9.85 per contract per month. This fee may be subject to an annual adjustment equal to the Consumer Price Index (CPl) increase as published by the u.S. Department of Labor.