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HomeMy WebLinkAboutresolution.council.016-07 RESOLUTION NO.! r;, Series of 2007 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ASPEN, COLORADO, APPROVING A FEE FOR SERVICES AGREEMENT FOR A HEALTH AND WELFARE CONSULTANT, BETWEEN THE CITY OF ASPEN AND DENVER SERIES OF LOCKTON COMPANIES, LLC, AND AUTHORIZING THE MAYOR OR CITY MANAGER TO EXECUTE SAID CONTRACT ON BEHALF OF THE CITY OF ASPEN, COLORADO. WHEREAS, there has been submitted to the City Council a fee for Services Agreement for a Health and Welfare Consultant, between the City of Aspen and Denver Series of Lockton Companies, LLC, a true and accurate copy of which is attached hereto as Exhibit "A"; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ASPEN, COLORADO: That the City Council of the City of Aspen hereby approves that Service Agreement for a Health and Welfare Consultant, between the City of Aspen and Series of Lockton Companies, LLC, a copy of which is annexed hereto and incorporated herein, and does hereby authorize the Mayor or City Manager to execute said agreement on behalf of the City of Aspen. INTRODUCED, READ AND ADOPTED by the City Council of the City of Aspen on the~day of~007. I, Kathryn S. Koch, duly appointed and acting City Clerk do certify that the foregoing is a true and accurate copy of that resolution adopted by the City Council of the City of Aspen, Colorado, at a meeting held on the day hereinabove stated. G :\tara\RESOS\hr.consultant.doc .,?;~'.. .. r~\;ii ":"'~V ",."'~ f~~"'~" fi" \. ~ .....{t~.,$,': .iil~ V;~,; ..... ~? 'l~~' ,,\\>-~. \PS - <1'\,~,~i"''''' CClf,'" - \~c~'. C". \..0 .- Attachment A Fee for Services Agreement City of Aspen and Denver Series of Lockton Companies, LLC This Agreement made and entered into effective as of this 1 st day of January, 2007, by and between City of Aspen having offices at 130 South Galena Street, Aspen, Colorado 81611' (hereinafter referred to as Client) and Denver Series of Lockton Companies, LLC, having offices at 8110 East Union Avenue, Suite 700, Denver, Colorado 80237 (hereinafter referred to as Lockton). Client wishes to procure certain services that can be performed by Lockton; and Lockton can provide and desires to render to Client such services; and The parties agree that it would be to their mutual advantage to execute this Agreement and thereby define the terms and conditions that shall control the rendering of services provided to Client by Lockton. Now, therefore, in consideration of the foregoing recitals, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows: I. Service Period A. This Agreement will be in effect for a period of one (I) year from the date hereof unless earlier terminated in accordance with the provision of the Agreement. This Agreement will automatically renew annually unless terminated with thirty (30) days written notice by either party. B. If this Agreement is terminated, either prior to or at the expiration of the term, and the parties fail to execute a new Agreement, all services will be discontinued as of the date of such termination, provided, however, Lockton shall use its best efforts to complete all services co=enced prior to such termination and shall 184'8; S:\Activc Accts\City of Aspen\Bcndits\2007\Contnlcts\Fce Agree\Fc:e Agrcc1206.doc December 28, 2006 - I bill Client for the completion of such services, on a pro rata basis, in accordance with the fees set forth in this Agreement. 18458: S:\Activc Auts\City of Aspen\Bcncfit:s\2007\Contracts\Fce Agrec\Fee Agree1206.doc December 28, 2006 . 2 II. Service Fee A. All consulting and/or risk management/insurance services provided by Lockton as set forth in Addendum A will be perfonned for an annual fee of $42,000. Client acknowledges that this fee may be in addition to certain incentive compensation including contingency payments and bonuses which Lockton may receive as a result of being Client's insurance broker as well as commissions from insurance companies, other intennediaries or other third parties (collectively, "Additional Compensation"). Client consents and agrees to Lockton's ability to receive such Additional Compensation under all circumstances. Notwithstanding any provision of this Agreement to the contrary, Lockton agrees that it will seek to have all placements made on a net basis. In the event a carrier will not comply with this request or it is not in Client's best interest, any such commissions will be disclosed to Client and either deducted from the premium billed to the Client, in the case. of agency billed placements, or, in the case of direct billed placements, returned to the carrier with the request that the carrier either credit the commission amount towards Client's premium obligation or return it directly to Client. If any carrier refuses to credit or return commission on a direct billed placement to Client, Lockton will return the commission directly to the Client. In addition, although Lockton does not receive any Additional Compensation from any carriers on Client's program as of the effective date of this Agreement, in the event Lockton may receive any other Additional Compensation from a carrier on Client's future program, Lockton agrees that it will request that the carrier remove Client's placements from the calculation of any such Additional Compensation. In the event any carrier will not comply with this request, Lockton agrees to disclose to Client the terms of any agreement by which Lockton may receive Additional Compensation. In addition, in the event Lockton indeed receives any Additional Compensation attributable to Client's placements, Lockton will attempt to return any such compensation to the carrier with the request that the carrier either credit the commission amount towards Client's premium obligation or return it directly 18458: S:\Active Accts\City of Aspen\Bcnefits\2007\C0ntracts\Fee Agree\Fee AgrccI206.doc December 28, 2006 - 3 to Client. If any carrier refuses to credit or return the Additional Compensation to Client, Lockton will return the Additional Compensation directly to the Client. Client acknowledges and agrees that any contemplated commission deduction, premium credit request or return of commission or Additional Compensation to a carrier or to Client will be done to accomplish and maintain the total agreed-upon compensation to Lockton and is not an inducement to purchase or renew coverage through Lockton. B. The fee will be paid based on the following payment terms: $3,500 to be billed and paid monthly with payment due within thirty (30) days of receipt of Lockton's billing. C. Payment of all invoices submitted under this Agreement will be made within thirty (30) days. D. If the term of this Agreement or the extension of services is for more than one (1) year, the annual service fee will be adjusted for each subsequent annual service period based upon corresponding increases in the Consumer Price Index. 18458: S:\ActiVt Accts\City of Aspcn\BencfitsUOO7\CODtracts\Fce Agrce\Fee Agree1206.doc December 28, 2006 - 4 III. Services A. It is hereby understood and agreed.that in consideration of a fee in an amount set forth above that Lockton will provide consulting and/or risk management/insurance services which are outlined in Addendum A, which is attached to and made part of this Agreement. B. It is further agreed that other risk management services may be undertaken that are outside the foregoing scope of services by mutual consent, which consent may be verbal provided that it is subsequently acknowledged in writing by either or both of the parties. Amendments may be made to this Agreement as deemed appropriate by both parties. C. When, in Lockton's professional judgment, it is necessary or appropriate, Lockton may utilize the services of other intermediaries or other appropriate outside vendors to assist in the servicing and marketing of Client's insurance/risk management programs. However, this may only be done after consultation with and prior approval by Client. IV. Termination of Services A. Should Client designate a broker other than Lockton as its broker of record at any time subsequent to the date of this Agreement, all efforts by Lockton shall cease and no further payments shall be due to Lockton by Client. Furthermore, should the Client determine that Lockton has not fulfilled its obligations under the terms of this Agreement, Lockton's most immediate prior monthly payment shall be forfeitable. V. . Additional Obligations of Client/Confidentiality A. Client shall provide Lockton with reasonable cooperation and assistance necessary for Lockton to fulfill its responsibilities to Client pursuant to the teITIlS of this Agreement, including, without limitations, copies of all documents reasonably requested by Lockton and the cooperation of and access to certain of Client's personnel. 18458: S:\Activc Accu\City of Aspeo\BencfilS\2007\ContraCts\Fcc Agree\Fec AgreeI206.doc. December 28, 2006 . S B. Lockton acknowledges that the nature of its relationship with Client is one in which Client shall entrust Lockton as the custodian of certain of Client's infoITIlation, some of which may be of a confidential or proprietary nature. Lockton shall undertake all reasonable efforts to maintain the integrity of all of Client's information, whether or not such information is confidential or proprietary. VI. General Conditions A. Neither party shall assign the rights nor duties herein set forth without the prior written consent of the other party. B. The teITIlS and conditions of this Agreement, and the previously executed Business Associate Agreement, shall constitute the entire Agreement between the parties with respect to the subject matter hereof. Subject to the provisions of Section III. B, this Agreement shall not be amended except by a written amendment signed by both parties, and no promises, agreement, or representations not herein set forth shall be of any force or effect between them. This Agreement shall serve to terminate and supersede all agreements and undertakings heretofore entered into between the parties on subjects covered by this Agreement. C. Lockton and Client shall indemnify, defend, and hold one another, their directors, officers, employees, agents, and representatives harmless from and against any and all claims, damages, losses, or expenses (including such parties' reasonable attorney, accountant, and expert witness fees and costs) incurred by one party as the result of (i) a material breach by the other party of any of its . obligations under this Agreement or (ii) any willful or negligent conduct of the other party. D. Any communication or notice required or which may be given hereunder shall be addressed to Client and to Lockton at their addresses set forth in the preamble hereof. E. This Agreement shall be governed for all purposes by the laws of the state of Colorado. 18458: S:\Active Accts\City of Aspcn\8encfits\2007\COOlracts\Fee Agrec\Fcc AgrecI206.doc December 28, 2006 - 6 In witness whereof, the parties hereto have executed the Agreement in duplicate intending each copy to serve as an original as of the day and year first written above. DENVER SERIES OF LOCKTON COMPANIES, LLC BY: DATE: ~A7 ing Officer BY: DATE: 711-07 18458: S:\Active Accts\City of Aspen\Bcuefits\2007\Contracts\F'ec Agrcc\Fee Agrec1206.doc December 28, 2006. 7 Addendum A - Services Employee Benefit Consulting and Brokerage I. Managing the Third party Administrator . Ensuring tIiat run-out claims that are to be paid by Mountain States Administrators (MSA) are handled in a cost efficient, accurate and timely manner; . Coordinating the set-up with Regional Care Inc. (RCI) so that new benefit claims will be adjudicated accurately and all clean claims paid within fifteen days of receipt; . Assisting the HR department and city of Aspen employees in the resolution of claim questions or problems; . Ensuring that monthly claim reports are accurate from MSA and RCI and during the run out period and that these reports are received within thirty days of the close of the prior month. . Providing claims process reviews as deemed appropriate by the city of Aspen. II. Plan Maintenance. Design. and Compliance . Oversight of the revisions to the City's Health Plan document to ensure that all required changes are made, and that the resulting document is up to date with regard to federal requirements (HIP AA, COBRA, Medicare Part D, etc.); . Providing compliance reviews as necessary; . Communicating information regarding relevant legislation and regulations, and trends that may affect cost and coverage and provide immediate plan recommendations. . Assisting the Human Resources Department to ensure that all necessary HIP AA safeguards are in-place, as required by federal law; . Reviewing the revised plan documents and providing Human Resources with suggestions for changes, and improvement, which will ensure that the benefits being provided are both competitive and cost effective; . Suggesting additional plan revisions that may be appropriate to enable the City's benefit plans to be in-line with advances in medical science. . Assisting with open enrollment presentations at the same level of quality and productivity the city of Aspen received in 2006. .. Offering at least one member ofLockton's consulting team to respond to any call ~r inquiry, from the HR team or from any member of the City's senior management within 24 hours. 18458: S:\Active Accts\City of Aspen\Benefits\2007\Contracts\Fee Agrcc\Fce Agrccl106.doc Det.ember 28, 2006 . 8 III. Local Contracting . Assist the City in evaluating the opportunities for local contracting with physicians, optometrists, dentists, etc. so that the plan's panel of participating providers will be adequate and appropriate to serve the needs of those covered; . Provide the City with input on the various local contracting options and their financial value to the plan. IV. Plan Operations . Assist the City in setting fully insured equivalent rates for the purposes of developing employee contribution levels, cost differentials between plans, and COBRA continuation rates; . Provide actuarial assistance and guidance where necessary in setting and negotiating rates; . Provide benefit and cost benchmarking reports so that Human Resources can evaluate the level and type of benefits being provided vs. other, similar public entities in Colorado; . Assist the City in renewal negotiations with stop-loss vendors, obtaining alternative competitive bids, and recommending appropriate renewal strategies; . Assist the City in the renewal negotiations with all plan vendors to ensure that such rates or fees are appropriate and competitive (e.g., provider network; Third Party Administrator; Flex-Benefit Plan Administrator, etc.). V. Reporting . Work with the City's Director of Finance to develop a reporting format and schedule so that appropriate financial reports are available to assist in the management of the plan; . Assist the City's Director of Finance to develop a monthly budget for the health and welfare plans so that monthly expenditures can be monitored against this standard; . Prepare monthly Aggregate Accounting Reports to track claims, identify large claims, and to monitor plan expenditures to budget; . Research and review reported large claims and report these emerging costs to the Director of Finance, and Human Resources; . Prepare a full plan review once prior to the plan's renewal, mid-year and again at year-end so that claims costs can be monitored, large claims tracked, and plan costs can be compared to those in prior years. . Identify trends through claims analysis and provide cost containment recommendations. VI. Special Proiects . Investigate creative opportunities for enriching plan benefits through unique and innovative cost management and plan design strategies. 184S8: S:\Active Accts\City of Aspen\Bcncfits\2OO11Contracts\Fce Agrce\Fee AgrccI206.doc December 28, 2006 - 9