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Section 14

HEALTH & WELFARE COVERAGE

 

FOR THE

 

PURMS JOINT SELF-INSURANCE AGREEMENT

Amended and Restated as of December 7, 2001

TABLE OF CONTENTS

                                                                                                                                                    

1.         Definitions for Health & Welfare Coverage  2

2.         Insuring Agreement and Conditions for H&W Coverage  16

2.1    H&W Coverage is Provided by the H&W Pool in Accordance with the Terms and Conditions of Members’ Respective Coverage Booklets. 16

2.1.1    Scope of Health and Welfare Benefits Available to Members through the H&W Pool 16

2.1.2    H&W Coverage is Provided for Incurred H&W Claims. 16

2.1.3    Requirement for and Content of Members’ Coverage Booklets. 16

2.1.4    Preparation of Coverage Booklets. 17

2.1.5    Administrative Committee Review of Coverage Booklets. 17

2.1.6    When Coverage Booklets Must Be Submitted for Pre-Review by Administrative Committee. 17

2.2    Members’ Obligations to Provide Information re: H&W Coverage. 18

2.2.1    Information Required re: Eligible Employees and Dependents. 18

2.2.2    Notice of Changes re: Eligible Employees. 18

2.2.3    Notice of Changes in H&W Coverage. 18

2.2.4    Changes in H&W Coverage that Affect Stop Loss Coverage. 18

2.2.5    Members’ Inadvertent Failure to Notify re: Additional Eligible Employees or Dependents. 19

2.3    Member’s Use of Preferred Provider or Similar Organizations and Doctors Offered through the H&W Pool 19

2.4    H&W Coverage Limit 19

2.5    H&W Coverage Deductibles and Copays. 19

2.6    Eligibility Requirements. 19

2.7    Coordination of H&W Benefits with Other Insurance. 19

2.8    Stop-Loss Coverage. 20

3.         Exclusions  20

4.         Confidentiality of Medical Information and Permitted Users of Same  20

5.         H&W Pool Coverage Year 20

6.         Reports to Members  20

7.         Members’ Responsibility for Compliance with State and Federal Laws Applicable to Their Respective H&W Benefit Plans  20

7.1    Each Member’s H&W Benefits Plan Constitutes a Separate Plan for Purposes of State and Federal Regulation. 20

7.2    Indemnification for Non-Compliance. 21

 


HEALTH & WELFARE COVERAGE

FOR THE

PURMS JOINT SELF-INSURANCE AGREEMENT

Amended and Restated as of December 7, 2001

Overview of Coverages for PURMS Risk Pools

The Coverages Sections of the SIA set forth the Insuring Agreements, Exclusions, and other terms and conditions which comprise the Coverages provided by the Fund for the Members of its Risk Pools and, as applicable, their Employees under the SIA. 

The current Liability Coverage provided by the Fund for Members of the Liability Pool includes:  Commercial General Liability (SIA § III, “CGL”); Public Officials & Entity Liability (SIA § IV, “PO&E”); Automobile Liability (SIA § V); and Pollution Liability (§ VI). The CGL Coverage was originally adopted on December 20, 1976, has been amended from time to time, and was unanimously re-adopted by the Members on December 7, 2001. The PO&E, Automobile and Pollution Liability Coverages were first adopted effective March 30, 1995. The PO&E Coverage was unanimously re-adopted by the Members on December 7, 2001.

The current Property Coverage provided by the Fund for Members of the Property Pool includes:  General Property Coverage (SIA § X) and Auto Physical Damage Coverage (SIA § XI). Both of these Property Coverages were originally adopted effective February 27, 1997.

Members of the Property Pool may participate in either or both Property Coverages (SIA § X and/or § XI).  Members of the Liability Pool must participate in all Liability Coverages provided by the Fund (SIA § III - VI).

The current Health & Welfare Coverage provided by the Fund for the Members of the H&W Pool is set forth in § XIV. The H&W Coverage was originally adopted on March 16, 2000, effective April 1, 2000, and was amended and restated and unanimously re-adopted be the Members as of December 7, 2001.

These Coverages, as amended from time to time pursuant to § I, ¶ 5.2, are specifically incorporated into the Interlocal Agreement and shall be deemed a part of that Agreement as if fully set forth therein.


 

HEALTH & WELFARE COVERAGE

1.               Definitions for Health & Welfare Coverage.  The Definitions set forth in the “Definitions” Section of the SIA (see, § II) apply to the interpretation of the Coverage provided by this H&W Coverage Section, except as may be modified specifically or by necessary implication by the Definitions set forth below which are specific to the H&W Coverage contained in this § XIV).

1.1   Adjusted Initial Deposit

--

shall mean an H&W Pool Member’s Initial Deposit after any adjustments to increase or decrease the amount of the Member’s Initial Deposit are made by the Administrative Committee to reflect  changes in such Member’s H&W Claims Experience, as provided in § I, ¶ 13.2.2.

 

1.2   Allowed H&W Claim

--

shall mean an H&W Claim which is not within the terms of an H&W Pool Member’s Coverage Booklet, but which is paid by the H&W Pool according to § XV, ¶¶ 5.2.2.2 and 5.2.3.

 

1.3   Assessment Formula

--

with respect to the H&W Pool, shall mean the Formula for calculating a Member’s Monthly H&W Assessment, which consists of a Member’s Direct H&W Claims Costs paid by the H&W Pool in the preceding month and such Member’s H&W Assessment Share of Shared H&W Costs determined under the H&W General Assessment Formula (§ XV).

 

(i)                                                      1.4   Average Claims Frequency Ratio

 

--

shall mean the average of all H&W Members’ Claims Frequency Ratios, as provided in § XV, ¶ 2.1(a).

 

1.5   Benefits Check

--

shall mean a check issued by the Administrator for the H&W Pool to a Medical Provider to pay for Medical Services provided to an Eligible Employee or Dependent.

 

1.6    Borrowing Risk Pool

--

shall mean the Risk Pool receiving the InterPool Loan.

 

1.7    Claims Experience

--

shall mean a Member’s or potential New Member’s experience regarding the amounts and frequency of Health & Welfare Benefits claims for its Employees and Dependents.

 

1.8    Claims Frequency Factor

--

shall mean the percentage that a Member’s Claims Frequency Ratio is to the total of all Claims Frequency Ratios of all H&W Pool Members.  A Member’s Claims Frequency Factor is used to weight a Member’s 30% Formula Component relating to its H&W Claims Experience based on the frequency of such Member’s H&W Claims in relation to the frequency of the H&W Claims of all H&W Pool Members.  (see § XV, ¶ 2.1).

 

1.9    Claims Frequency Ratio

--

shall mean the Ratio resulting from dividing the total of all Benefits Checks issued by the H&W Pool to Medical Providers for each Member’s Eligible Employees and Dependents in the preceding month by the total number of each Member’s Eligible Employees in the preceding month, as provided in § XV, ¶ 2.1(b).

 

1.10   Cobra Coverage

--

shall mean the requirements of 26 CFR, Parts 54 and 602, applicable to non-federal governmental group health plans under the Public Health Service Act, and any applicable similar federal or State law, requiring the Members of the H&W Pool to which it applies to provide continuing H&W Coverage to any Employee of a Former Member or to an Eligible Employee that has ceased his/her employment relationship with a Member, or similar circumstance.

 

1.11   Continuing

 Treatment

--

shall mean the right, if provided for under the terms of such Employee’s applicable Coverage Booklet and otherwise consistent with the H&W Coverage provided under the SIA, of an Eligible Employee of a Former Member to receive continuing Medical Services after the Withdrawal Date for a Medical Condition for which Medical Services were first provided to such Employee during the H&W Coverage Period.

 

1.12   Coverage Booklet

--

shall mean the written materials a Member provides to its Employees describing the scope and terms governing the Health & Welfare Benefits the Member is providing its Eligible Employees and their Dependents though the H&W Coverage provided by the H&W Pool.

 

1.13  Covered H&W Claim

--

shall mean an H&W Claim for which H&W Coverage is provided to an Eligible Employee (or Dependent) under the terms of the applicable Coverage Booklet and the SIA.

 

1.14  Date of Membership

--

shall mean the date a Member of the Fund becomes a Member of a particular Risk Pool.

 

1.15  Debatable H&W Claims

--

shall mean an H&W Claim for which H&W Coverage is neither clearly provided for, nor clearly precluded, by the terms of a Member’s Coverage Booklet and the SIA (see § XV, ¶ 5).

 

1.16  Dependent Coverage

--

shall mean H&W Coverage provided for Medical Services rendered to an Eligible Employee’s Dependents, as that term is defined in the applicable Coverage Booklet. 

 

1.17  Dependents

--

shall mean, without limitation, an Employee’s spouse or children or other dependents eligible for H&W Coverage, as determined by the terms in the applicable Coverage Booklet.

 

1.18  Direct H&W Claims Costs

--

shall mean the dollar amount of a Member’s H&W Claims Costs which does not qualify for treatment as “Shared H&W Claims”, and which is passed through directly to a Member on a monthly basis as part of the Member’s Monthly H&W Assessment.

 

1.19  Eligibility

--

shall mean the terms and conditions established by each Member for its Employees, as reflected in such Member’s Coverage Booklet, determining when such Employees and their Dependents are entitled to H&W Coverage.

 

1.20  Eligible Employee

--

shall mean an Employee who is enrolled by the Member with the Administrator for the H&W Pool as entitled to receive H&W Coverage for Medical Services, as determined by the terms of the applicable Coverage Booklet and the SIA.

 

1.21  Eligible Employee Assessment  Allocation

--

shall mean the dollar amount of the Formula Component of a Member’s H&W Assessment Share of 70% of the Shared H&W Cost based on the number of the Member’s Eligible Employees in relation to the number of Eligible Employees of all H&W Pool Members, as determined under the H&W General Assessment Formula, (see § XV, ¶ 2.2).

 

1.22  Eligible Employee Factor

--

shall mean the percentage of an H&W Pool Member’s Eligible Employees in relation the number of Eligible Employees of all Members, (see § XV, ¶ 2.2(a)).

 

1.23  Eligible Insured

--

Shall mean either an Eligible Employee of a Member or a Dependent of an Eligible Employee entitled to H&W Coverage through a Member according to the terms of such Member’s Coverage Booklet.  The “Eligible Insureds” of a Member shall be all Eligible Employees and Dependents of such Member.

 

1.24  Employee

--

with respect to the H&W Pool, shall mean the Employee of a Member of the H&W Pool, and unless otherwise inconsistent in the context, shall include such Employee’s Dependents, as determined by the terms of the applicable Coverage Booklet.

 

1.25  Employee Demographic Categories

--

shall mean the three weighted risk categories that are used in connection with the H&W General Assessment Formula to establish the amount of a Member’s Aggregate Stop Loss and a Member’s Individual Stop Loss.  The three categories consist of (a) an Eligible Employee, (b) an Eligible Employee and one Dependent, and (c) an Eligible Employee and 2 or more Dependents, as provided more specifically in § XV, ¶ 3.2.3.

 

1.26  Employee Demographics

--

shall mean the number or percentage of Eligible Employees and/or Dependents for each Member, verses the H&W Pool as a whole, with respect to each of the Employee Demographic Categories.

 

1.27  Extended Coverage H&W Claim

--

shall mean any H&W Claim for which H&W Coverage is provided by the H&W Pool for the Employee of a Former Member, after the effective date of such Member’s withdrawal from the H&W Pool, for a Medical Condition that gives rise to a right to Continuing Treatment for such Former Member’s Employee in accordance with such Member’s Coverage Booklet, or that involves mandated Continuing Treatment under the H&W Coverage for such Employee beyond the Former Member’s Withdrawal Date under the terms of COBRA, or similar law.

 

1.28  Fund’s Fiscal Year

--

shall mean the annual accounting year for the Fund, which shall be the calendar year, unless otherwise determined by Majority Vote of the Board.

 

1.29  H&W Assessments

--

shall mean any and all Assessments issued by the H&W Pool to its Members.

 

1.30  H&W Assessment Share

--

shall mean the amount of money a Member of the H&W Pool becomes obligated to pay the H&W Pool on a monthly basis for Shared H&W Costs paid in the preceding month, as determined by the H&W General Assessment Formula.  A Member’s H&W Assessment Share, together with its Direct H&W Claims Costs from the preceding month, shall comprise a Member’s Monthly H&W Assessment.

 

1.31  H&W Claim

--

shall mean a claim submitted by or on behalf of an Eligible Employee (or Dependent) arising from the rendering of Medical Services to an Eligible Employee (or Dependent) by a Medical Provider.

 

1.32  H&W Claims Costs

--

shall mean the total dollar amount the H&W Pool paid to Medical Providers in the preceding month for Covered H&W Claims made by a Member’s Eligible Employees and their Dependents.

 

1.33  H&W Claims Cut Off Date

--

shall mean the date upon which a Former Member assumes total financial responsibility for any unpaid Incurred H&W Claims and any Extended Coverage H&W Claims, and thereafter the H&W Pool ceases to have any financial responsibility with respect thereto, as determined in accordance with § I, ¶ 20.4.2.1(a) or (b).  When applied to the H&W Pool in the context of the H&W Pool’s Dissolution, the “H&W Claims Cut Off Date” shall mean the date when any remaining financial responsibility for unpaid H&W Claims ceases for the H&W Pool.

 

1.34  H&W Claims Experience

--

shall mean the total dollar amount of H&W Claims paid by the H&W Pool on behalf of a Member.

 

1.35  H&W Claims Experience Assessment Allocation

--

shall mean the dollar amount of the Formula Component of a Member’s H&W Assessment Share of 30% of the Shared H&W Costs based on the Member’s H&W Claims Experience in relation to the H&W Claims Experience of all H&W Pool Members, weighted by the Member’s Claims Utilization Frequency Factor as determined under the H&W General Assessment Formula (see § XV, ¶ 2.1).

 

1.35  H&W Claims

Handling Fee

--

shall mean the dollar amount of the administrative fee per H&W Claim established annually by the H&W Pool and the Administrator, as reflected in the Administrator’s Contract, to cover the Administrator’s cost of processing and paying H&W Claims on behalf of a Former Member after expiration of the Mandatory H&W Claims Run-out Period, but before the H&W Claims Cut‑off Date.

 

1.37  H&W Coverage

--

shall mean the insurance coverage provided by the H&W Pool for Health & Welfare Benefits and  Medical Services provided to each Member’s Eligible Employees and Dependents, in accordance with each Member’s Coverage Booklet and the terms of the SIA.

 

1.38    H&W Coverage

Period

--

shall mean the time period during which a Member is a Member of the H&W Pool, starting upon the effective date of such Member’s participation therein, and ceasing upon the effective date of a Member’s withdrawal from the H&W Pool or on the H&W Pool’s Dissolution Date.

 

1.39  H&W Coverage Year

--

shall mean the annual or other period of time over which H&W Pool Members’ H&W Claims are accrued against their respective Stop Loss Points, which shall be the same period of time as encompassed by the Stop Loss Policy Year.

 

1.40  H&W General Assessment Formula

--

shall mean the General Assessment Formula for the H&W Risk Pool, set forth in § XV.

 

1.41  H&W Pool

--

shall mean the Risk Pool operated by the Fund that provides protection to its Members’ Eligible Employees and Dependents for Heath & Welfare Benefits, as specified in Members’ respective Coverage Booklets.

 

(1)            1.42  H&W Pool Aggregate

Stop Loss

--

shall mean the total dollar amount of established by contact with the Stop Loss Carrier at which any further payments by the H&W Pool for the H&W Claims of any and all Members are thereafter covered by Stop Loss Insurance.

 

1.43  H&W Pool Individual Stop Loss

--

shall mean the dollar amount that is established by contact with the Stop Loss Carrier at which any further payments the H&W Pool would otherwise make in connection with a particular H&W Claim and/or an Eligible Employee or Dependent, or on some other basis established by the Stop Loss Carrier, are instead covered by Stop Loss Insurance, even though the H&W Pool’s Aggregate Stop Loss has not been reached.

 

1.44  H&W Pool Operational Costs

--

shall mean all of the expenses the Fund incurs with respect to operation of the H&W Pool, including without limitation, Direct and Shared Administrative Expenses, Broker, Legal and Accounting fees, PPO Charges, Stop Loss Insurance Premiums, Shared H&W Claims and Direct H&W Claims Costs.

 

1.45  H&W Pool Reserves

--

shall mean the total of all H&W Pool Members’ Initial Deposits and Adjusted Initial Deposits, which yields a number designed to approximate three (3) months of reasonably anticipated H&W Claims Experience for all Members of the H&W Pool (see § I, ¶ 13.2.1), and which is replenished on a monthly basis through Monthly H&W Assessments (see § I, ¶ 13.2.3.1).

 

1.46  H&W Pool Fiscal Year

--

shall mean the annual accounting year for the H&W Pool, which shall be the calendar year, or the period of time encompassed by the Stop Loss Policy Year, if different from the calendar year.

 

1.47  Health & Welfare Benefits
(or “Benefits”)

--

shall mean any and all Health and Welfare Benefits authorized by RCW 48.62, et. seq. for the H&W Pool to provide for Members’ Eligible Employees and Dependents, but only as and to the extent such Benefits are defined in the Members’ respective Coverage Booklets, and only to the extent such Benefits are consistent with the SIA.

 

1.48  Incurred

--

shall mean, with respect to an H&W Claim, shall mean the date that Medical Services were provided to an Eligible Employee or Dependent.

 

1.49    Incurred H&W

Claims

--

--

with respect to current H&W Pool Members, shall mean the Claims of Eligible Employees or Dependents for H&W Coverage which are allocable to a particular Coverage Year, or other time period, based on the date Medical Services are rendered to such Employee or Dependent. 

with respect to a Former Member, shall mean all H&W Claims arising from Medical Services provided to Eligible Employees of a Former Member, or such Employee’s Dependents, during the H&W Coverage Period applicable to the Former Member, and shall include all Extended Coverage H&W Claims with respect to such Former Member.

 

1.50  Incurred Shared H&W Claims

--

shall mean the Incurred H&W Claims of the Former Member and the H&W Claims of the remaining Members of the H&W Pool that constitute Shared H&W Claims on the Former Member’s Withdrawal Date.

 

1.51  Initial Deposit

--

shall mean the amount of money an Initial H&W Pool Member or a New H&W Pool Member deposits with the H&W Pool in order to become a Member thereof, measured by three (3) times such Member’s Prior Monthly H&W Claims Experience, if available, or three (3) times such Member’s Prior Monthly H&W Premium, or as may be otherwise determined for a New H&W Member pursuant to § I, ¶ 18.2.2.2.  The amount of the Initial Deposit may be reevaluated and adjusted every three (3) years, or sooner, as determined by the Administrative Committee, pursuant to § I, ¶ 13.2.2.  Unless otherwise specified, the term Initial Deposit shall include and mean any Adjusted Initial Deposit.

 

1.52  Initial H&W Member

--

shall mean each of those local government entities that became a Member of the H&W Pool upon its formation on April 1, 2000.

 

1.53  Inter-Pool Loan

--

shall mean a short-term Loan by one Risk Pool to another under the terms and restrictions identified in § I, ¶ 13.2.3.2.

 

1.54  Loaning Risk Pool

--

shall mean the Risk Pool making the Inter-Pool Loan.

 

1.55  Mandatory H&W Claims Run-out Period

--

shall mean the three (3) month period of time from the effective date of a Former Member’s withdrawal from the H&W Pool to the end of the third (3rd) month following the Withdrawal Date during which the Former Member shall be assessed in accordance with § I, ¶ 20.2.2.2.

 

1.56  Medical Condition

--

shall mean an Eligible Employee’s or Dependent’s physical health or other condition for which Medical Services are provided to such Employee or Dependent during the H&W Coverage Period.

 

1.57  Medical Incident

--

shall mean the occasion(s) upon which Medical Services are provided during the H&W Coverage Period to an Eligible Employee or Dependent for a Medical Condition.

 

1.58  Medical Information

--

shall mean any and all data relating to the Medical Services provided to Eligible Employees and their Dependents to the extent confidentiality and disclosure of such Information is governed by applicable State or Federal law.

 

1.59  Medical Provider

--

shall mean a person or entity that provides Medical Services to an Eligible Employee or Dependent for whom H&W Coverage is provided under the terms of the applicable Coverage Booklet and the SIA.

 

1.60  Medical Services

--

shall mean medical, drug prescription, dental, vision or other types of Health and Welfare Benefits provided to an Eligible Employee or Dependent by a Medical Provider.

 

1.61  Member Aggregate Stop Loss

--

shall mean the total dollar amount at which any further payments by the H&W Pool on H&W Claims by a Member’s Eligible Employees or Dependents shall constitute Shared H&W Claims and shall be reimbursed to the H&W Pool by Assessment of all Members (except for the Member that has reached its Aggregate Stop Loss) under the H&W General Assessment Formula, rather than being passed through to the Member as Direct H&W Claims Costs.  The amount of each Member’s Aggregate Stop Loss shall be determined in accordance with § XV, ¶ 3.2.3.

 

1.62  Member Individual Stop Loss

--

shall mean the dollar amount at which any further payments by the H&W Pool on a particular H&W Claim or for an Eligible Employee or Dependent, or on some of other basis established by the Stop Loss Carrier, shall constitute a “Shared H&W Claim” and shall be reimbursed to the H&W Pool by Assessment of all Members (except for the Member that has reached its Individual Stop Loss) under the H&W General Assessment Formula, rather than being passed through to the Member as Direct H&W Claims Costs.  The amount of each Member’s Individual Stop Loss shall be determined in accordance with § XV, ¶ 3.2.4.

 

1.63  Monthly H&W Assessment

--

shall mean the Assessment issued by the Administrator on a monthly basis to each Member (and as applicable, Former Member) of the H&W Pool to replenish such Members’ Initial Deposit which, as to each Member, shall consist of the Member’s Assessment Share of the total amount of all Members’ Shared H&W Costs paid in the preceding month, in an amount determined by the H&W General Assessment Formula, and the total amount of that Member’s Direct H&W Claims Costs paid in the preceding month.

 

1.64  New H&W Member

--

shall mean any local government entity that becomes a Member of the H&W Pool after its formation, in accordance with § I, ¶ 18.

 

1.65  Per Capita Administrative Fee

--

shall mean the amount charged by the Administrator to the H&W Pool on a per Eligible Employee and/or Dependent basis for administration of the H&W Pool, as agreed between the Administrator and Administrative Committee, and approved by the Board.

 

1.66  Per Capita Costs

--

shall mean the charges for H&W Pool Operational Costs that are part of a Member’s Monthly H&W Assessment and are based on the number of Eligible Employees and/or Dependents of a Member, including but not limited to, the Stop-Loss Per Capita Rate, PPO Charges (if applicable to the Member) and the Per Capita Administrative Fee.

 

1.67  Pool Recognized Aggregate Stop Loss Point

--

shall mean the point at which the total of all Covered H&W Claims and all Pool Recognized H&W Claims equal the H&W Pool’s Aggregate Stop Loss.

 

1.68  Pool Recognized H&W Claims

--

shall mean all H&W Claims where the H&W Coverage for such claim is reasonably debatable, as determined by the Administrative Committee, and which the Administrative Committee determines should be recognized by the H&W Pool for payment and for accrual toward the Member’s Stop Loss Points and the Pool Recognized Stop Loss Point.

 

1.69  Post-Stop-Loss H&W Assessments

--

shall mean those portions of Member’s Monthly H&W Assessments relating to the H&W Pool paying Post-Stop-Loss H&W Claims, which shall be refunded to Members when and to the extent the H&W Pool has been reimbursed by the Stop Loss Carrier, as provided in § I, ¶¶ 4.2.2 and 4.2.3.

 

1.70  Post-Stop-Loss H&W Claims

--

shall mean the total dollar amount paid by the H&W Pool on H&W Claims after the H&W Pool reached the Pool Recognized Aggregate Stop Loss Point.

 

1.71  PPO Charges

--

shall mean the additional expenses incurred by the H&W Pool for the services provided by a preferred provider organization which shall be treated as a Shared H&W Cost under the H&W General Assessment Formula.

 

1.72  PPO Plan

--

shall mean the terms and conditions and services offered by a Preferred Provider Organization.

 

1.73  Preferred Provider Organization (or “PPO”)

--

shall mean an organization that has contracts with certain Medical Providers to accept reduced fees and charges for Medical Services.

 

1.74  Prior Monthly H&W Claims Experience

--

shall mean the monthly average of the total cost of the Claims an Initial H&W Member or a New H&W Member experienced for a Health & Welfare Benefits package for its Employees, similar to the Benefits package proposed for H&W Coverage by the H&W Pool, in the most recent consecutive twelve (12) months preceding the date of the application, provided that the last month of said 12 consecutive months does not end more than 3 months prior to the Date of Membership.

 

1.75  Prior Monthly H&W Premium

--

shall mean the most recent monthly premium the Initial H&W Member or a New H&W Member paid prior to the Date of Membership in the H&W Pool for a Health & Welfare Benefits package for its Employees similar to the package proposed for H&W Coverage by the H&W Pool.

 

1.76  Shared H&W Claims

--

shall mean the amount of a Member’s H&W Claims Costs paid by the H&W Pool in the preceding month that exceeded either the Member’s Aggregate Stop Loss or the Member’s Individual Stop Loss, and which are not covered by Stop Loss Insurance.  Shared H&W Claims are paid as Shared H&W Costs to be reimbursed by the Members of the H&W Pool under the H&W General Assessment Formula.

 

1.77  Shared H&W Costs

--

shall mean all of the H&W Pool Operational Costs except for a Member’s Direct H&W Claims Costs.  Shared H&W Costs shall include, without limitation, Administrative Expenses allocable to the H&W Pool, premiums for Stop Loss Insurance, PPO Charges and Shared H&W Claims, paid by the H&W Pool in or otherwise allocable to the preceding month.  All Shared H&W Costs shall be assessed to Members of the H&W Pool under the H&W General Assessment Formula.

 

1.78  Stop Loss Carrier

--

shall mean the insurance company that provides Stop Loss Insurance for the H&W Pool and its Members.

 

1.79  Stop Loss Coverage

--

shall mean the coverage provided by the Stop Loss Insurance.

 

1.80  Stop Loss Insurance

--

shall mean the coverage provided by a Stop Loss Carrier to the H&W Pool and its Members that begins paying H&W Claims Costs at either the H&W Pool Aggregate Stop Loss or the H&W Pool Individual Stop Loss.

 

1.81  Stop Loss Per Capita Rate

--

shall mean the rate per Eligible Employee (and if applicable, Dependents) that the Stop Loss Carrier uses to calculate the amount of the Stop Loss Insurance Premium.

 

1.82  Stop Loss Point

--

--

with respect to a Member, shall mean the dollar amount at which a Member ceases being directly responsible under its Monthly H&W Assessment for payments on a particular H&W Claim  or for a particular Eligible Employee or Dependent (i.e. the Member Individual Stop Loss Point), or on all H&W Claims submitted by or made on behalf of all of the Member’s Eligible Employees and Dependents (i.e. the Member Aggregate Stop Loss Points), and further payments thereon are assessed as Shared H&W Claims under the H&W General Assessment Formula;

with respect to the H&W Pool, shall mean the dollar amount at which the H&W Pool ceases being responsible for payments made on a particular H&W Claim or for a particular Eligible Employee or Dependent (i.e. the H&W Pool Individual Stop Loss Point),  or for any further payments made on any further H&W Claims by the Eligible Employees and Dependents of any Member (i.e. the H&W Pool Aggregate Stop Loss Point), and further payments thereon are covered by Stop Loss Insurance.

 

1.83  Stop Loss Policy Year

--

shall mean the annual or other period of time covering the effective dates of the Stop Loss Insurance.

 

1.84  Stop Loss Insurance Premium

--

shall mean the dollar amount paid by the H&W Pool for Stop Loss Insurance, monthly or annually, or otherwise.

 

1.85  Stop Loss Recognized H&W Claims

--

shall mean those H&W Claims that the Stop Loss Carrier counts towards satisfaction of the H&W Pool Aggregate or Individual Stop Loss Points.

 

 


2.               Insuring Agreement and Conditions for H&W Coverage. Except as otherwise provided in this ¶ 2 and in ¶ 3 below, or in other sections of the SIA (see, e.g., § I, ¶ 13.6), and subject to § VII regarding Claims Resolution, the Fund shall provide H&W Coverage for the Eligible Employees and Dependents of Members of the H&W Pool as follows:

2.1            H&W Coverage is Provided by the H&W Pool in Accordance with the Terms and Conditions of Members’ Respective Coverage Booklets.

2.1.1       Scope of Health and Welfare Benefits Available to Members through the H&W Pool.  It is the intent of the Fund to make available to the Members of the H&W Pool any and all Health & Welfare Benefits authorized by RCW 48.62, et. seq., as amended, and not prohibited by any other applicable law.  Within the scope of this authority, and subject to any other limitations as may be contained in the SIA, each Member of the H&W Pool shall be free to select the types and levels of Health & Welfare Benefits to be provided to its Eligible Employees and Dependents through the H&W Pool, and the terms and conditions governing application of the same, as described and defined in each Member’s Coverage Booklet.  If and to the extent provided for in a Member’s Coverage Booklet, Eligible Employees of the same Member may select different types and levels of Health & Welfare Benefits for themselves and their Dependents; provided, reasonable notice thereof is given to the Administrator.  (see ¶ 2.2.3 below.)  Subject to the same limitations identified above, all decisions regarding whether H&W Coverage is provided for a particular H&W Claim shall be determined by the terms of the Coverage Booklet applicable to the Eligible Employee or Dependent making the Claim; provided, however, that under certain circumstances, H&W Coverage may be extended to an H&W Claim that is not within the terms of a Member’s Coverage Booklet as an “Allowed H&W Claim.”  (See § XV, ¶¶ 5.2.2.2 and 5.2.3).

2.1.2       H&W Coverage is Provided for Incurred H&W Claims.  In the first instance, H&W Coverage shall be provided only for Incurred H&W Claims.  An H&W Claim is “Incurred” on the date that Medical Services are provided to an Eligible Employee or Dependent.

2.1.3       Requirement for and Content of Members’ Coverage Booklets.  Each Member of the H&W Pool shall be responsible for providing its Eligible Employees with Coverage Booklets that describe the types and levels of Health & Welfare Benefits provided by the Member for such Employees and their Dependents through the H&W Pool, and that state the terms and conditions governing such H&W Coverage.  Without limiting the generality of the preceding sentence, such Coverage Booklets shall specifically address the following subjects:

(a)             The types and levels of Health & Welfare Benefits provided;

(b)            All Exclusions from H&W Coverage;

(c)             The applicable Coverage Limit for each type of Benefit;

(d)            The applicable Deductible and/or Copay for each type of Benefit;

(e)             All Eligibility requirements for H&W Coverage for the Member’s Employees and Dependents;

(f)              The terms of any applicable PPO requirements and any H&W Coverage limitations relating thereto;

(g)             A description of procedures for Employees submitting H&W Claims for payment if not submitted by the Medical Provider; and

(h)             Notice of where on the Member’s business premises Employees can find a description of the H&W Pool’s Appeal Procedures that would apply if Coverage for an H&W Claim is denied.

2.1.4       Preparation of Coverage Booklets.  For Initial H&W Members, and for any New H&W Members, the Administrator in the first instance shall arrange for preparation of prototype Coverage Booklets for each Member, based on the H&W Coverage information provided by each Member.  Each Member, however, shall be responsible for customizing, formatting and finalizing the prototype and having copies of the final Coverage Booklet made for dissemination to its Employees.

2.1.5       Administrative Committee Review of Coverage Booklets.  The Administrative Committee shall have the right to pre-review Initial H&W Members’ and all New H&W Members’ Coverage Booklets and suggest any changes it deems appropriate to the Member.  Among other things, such pre-review will help ensure that both the H&W Pool and the Members stay abreast of changes in the law that would affect Members’ H&W Coverage and/or which should be reflected in Members’ Coverage Booklets.  By undertaking such pre-review, neither the Administrative Committee, nor the Fund, nor the H&W Pool shall be deemed to have taken on responsibility for advising Members regarding compliance with applicable laws or any other legal aspect of the Members’ respective H&W Coverages, or the terms of their Coverage Booklets, and the ultimate responsibility with respect to all such matters shall always reside with the respective Members.  Furthermore, the Administrative Committee’s pre-review of Members’ Coverage Booklets shall not be relevant to the determination of whether H&W Coverage in accordance with such Booklets is authorized by law or is within the terms of the SIA, which determination shall instead occur at the time an H&W Claim raising such an issue is in fact submitted for payment. 

2.1.6       When Coverage Booklets Must Be Submitted for Pre-Review by Administrative Committee.  Members of the H&W Pool shall submit their proposed Coverage Booklets for pre-review by the Administrative Committee as follows:

(a)             Initial H&W Members, at the inception of the H&W Pool, and all new H&W Members, prior to their Date of Membership;

(b)            Within a reasonable time after any H&W Pool Member makes any material changes in the existing benefits provided to its Eligible Employees and Dependents;

(c)             Whenever there are changes in applicable laws that require changes to the content of Members’ existing Coverage Booklets; and

(d)            At anytime, upon request of the Administrative Committee.

2.2            Members’ Obligations to Provide Information re: H&W Coverage

2.2.1       Information Required re: Eligible Employees and Dependents.  Prior to the beginning of each successive Coverage Year, each Member will provide the Administrator with a list of all Eligible Employees and Dependents anticipated at the time to receive H&W Coverage in the ensuing Coverage Year, and any other information requested by the Administrator or Administrative Committee.  In addition, the Administrator shall periodically or annually provide each H&W Pool Member with a list of the Eligible Employees and Dependents for such Member contained in the Administrator’s records for purposes of updating those records, and further, shall provide such information to a Member at any time requested by a Member.

2.2.2       Notice of Changes re: Eligible Employees.  It is each Member’s obligation to timely notify the Administrator of any and all new Eligible Employees and Dependents, as well as all Employee terminations or other removals from eligibility status of Employees and Dependents.  Thus, at any time during the Coverage Year, a Member may notify the Administrator in writing of any Eligible Employee and/or Dependent to be added to or deleted from its H&W Coverage, and H&W Coverage through the H&W Pool shall be provided therefore, or deleted, upon receipt of the notice by the Administrator; provided, however, for purposes of applying the H&W General Assessment Formula, including calculation of Members’ Stop Loss Points, any changes in the number of Eligible Employees and Dependents of a Member shall not be considered until the beginning of the month following the month in which the notice was given. 

2.2.3       Notice of Changes in H&W Coverage.  At anytime during the Coverage Year, a Member may also change the types or levels of Benefits provided in its Coverage Booklet, or the terms and conditions governing the same, and such changes shall become effective upon receipt of written notice thereof by the Administrator, unless some other effective date is specified in the notice; provided, however, failure to provide such notice to the Administrator within a reasonable time prior to the effective date of such Benefits changes may delay H&W Claims processing beyond the normal turnaround time.  Any issue as to whether the Benefits initially provided in Members’ Coverage Booklets or subsequently added to Members’ H&W Coverages are within applicable statutory authority and/or the terms of the SIA shall be addressed at the time an H&W Claim raising such an issue is presented for payment.

2.2.4       Changes in H&W Coverage that Affect Stop Loss Coverage.  If any Member’s changes or additions to its H&W Coverage result in an increase in the Stop Loss Per Capita Rate, or otherwise increase the Stop Loss Issurance Premium or the H&W Pool’s Aggregate or Individual Stop Loss Points, the impact of such increases shall be borne among all Members of the H&W Pool.

2.2.5       Members’ Inadvertent Failure to Notify re: Additional Eligible Employees or Dependents.  H&W Coverage will be provided for an Employee or Dependent who would otherwise be entitled to H&W Coverage through the Member but for the Member’s failure to notify the Administrator in writing of such Eligible Employee or Dependent prior to such Employee or Dependent being involved in a Medical Incident giving rise to an H&W Claim; provided that the effective date of such Coverage shall be retroactive to the date such Employee would first have become an Eligible Employee after the date of hiring, according to the Eligibility requirements in the applicable Coverage Booklet; and provided further, that such Member shall within thirty (30) days of receiving an invoice therefore, pay the H&W Pool the total of the Per Capita Costs that would otherwise have been attributed to such Employee had notice thereof been timely given, retroactive to the date such Employee could first have been an Eligible Employee.  If a Member fails to timely notify the Administrator of the termination of an Eligible Employee, or other removal of an Eligible Employee or Dependent from Eligibility, the Member shall not be entitled to any refund for H&W Assessments or Per Capita Costs paid for such Employee or Dependent after the termination or removal from Eligibility.

2.3            Member’s Use of Preferred Provider or Similar Organizations and Doctors Offered through the H&W Pool.  If the H&W Pool through the Fund contracts with one or more Preferred Provider Organizations, as deemed appropriate by the Administrative Committee, Members do not have to participate in such PPO Plan(s); provided that if a Member does elect to participate in such Plan(s) by providing written notice of such election to the Administrator, such Member agrees thereby to be bound by and to comply with the terms of the Contract(s) between the Fund and such PPO(s) as if they were a signatory thereto, including any PPO exclusivity provisions.  In addition, each such Member agrees to provide the pertinent information regarding such PPO(s) in its Coverage Booklets.

2.4            H&W Coverage Limit.  The Coverage Limit applicable to an H&W Claim shall be as set forth in the Coverage Booklet applicable to that Claim.

2.5            H&W Coverage Deductibles and Copays.  The Deductibles and Copays, if any, applicable to an H&W Claim shall be those set forth in the Coverage Booklet applicable to such Claim.

2.6            Eligibility Requirements.  The requirements for a Member’s Employee or Dependent to be Eligible for H&W Coverage through the H&W Pool shall be as set forth in such Member’s Coverage Booklet.

2.7            Coordination of H&W Benefits with Other Insurance.

[Reserved pending Administrative Committee review of issues.]

2.8            Stop-Loss Coverage.  All Members of the H&W Pool shall participate in the Stop Loss Coverage acquired by the Fund on behalf of the H&W Pool, its Members and Eligible Employees and Dependents, and each Member shall pay its H&W Assessment Share of the cost of such Stop Loss Insurance as a Shared H&W Cost assessed to all Members under the H&W General Assessment Formula (see § XV).

3.               Exclusions.  The Exclusions applicable to the H&W Coverage provided through each Member shall be those set forth in each Member’s Coverage Booklet; provided that under no circumstances shall the H&W Pool be required to pay an H&W Claim for which it does not have legal authority to do so, or is otherwise contrary to the terms of the SIA.

4.               Confidentiality of Medical Information and Permitted Users of Same.  Members and their Eligible Employees should be aware that the Fund, the H&W Pool, and the Administrative Committee are cognizant of applicable State and Federal laws regarding confidentiality and disclosure of certain Medical Information of Employees and their Dependants, and similar requirements, and it is the intent of the Fund to comply with such laws.

5.               H&W Pool Coverage Year.  The H&W Pool’s Coverage Year and Fiscal Year shall be the calendar year, and the Broker shall attempt to obtain Stop Loss Insurance with a Policy Year the same as the calendar year; provided that if the Stop Loss Carrier ultimately establishes its Stop Loss Policy Year on a basis other than the calendar year, the H&W Pool shall conform its Coverage Year and Fiscal Year, and the rights and obligations of Members triggered thereby, to the Stop Loss Policy Year.  If because of a change in Stop Loss Carriers or otherwise, the Stop Loss Policy Year changes at any time during an H&W Coverage Year, the H&W Pool shall adjust its Coverage Year and Fiscal Year accordingly, and among other things, Members’ Stop Loss Points shall be recalculated and Members will start the adjusted H&W Coverage Year with zero H&W Claims accrued toward their respective Stop Loss Points, unless provisions obviating the need for this are obtained from the Stop Loss Carrier.

6.               Reports to Members.  Subject to applicable laws regarding confidentiality and disclosure of Medical Information, the Administrator, subject to Administrative Committee approval, shall periodically provide a Member with information and reports reasonably requested by the Member relating to the H&W Pool’s Operational Costs and such Member’s H&W Claims, but not the Medical Information or related details of the other Members’ H&W Claims.

7.               Members’ Responsibility for Compliance with State and Federal Laws Applicable to Their Respective H&W Benefit Plans.

7.1            Each Member’s H&W Benefits Plan Constitutes a Separate Plan for Purposes of State and Federal Regulation. Because each Member has sole authority for determining and establishing the nature, scope and level of H&W Benefits provided through the H&W Pool for its Employees and their Dependents pursuant to ¶ 2.1.1, each Member acknowledges and agrees:

(a)    That for purposes of State and/or Federal laws governing the content and/or administration of group health plans: (1) each Member’s H&W Benefits Plan is separate and distinct from and independent of the H&W Benefits Plans of any and all other Members of the H&W Pool, and from the H&W Pool itself; and (2) each Member is primarily and solely responsible for ensuring compliance of its H&W Benefits Plan with State and Federal laws applicable to such Plans. Thus, for example, without limiting the generality of the foregoing, (and notwithstanding the Administrative Committee’s review of each Member’s Coverage Booklet pursuant to ¶¶ 2.1.5 and 2.1.6 herein, or any information or advice provided by the Fund or its agents with respect to the requirements of or compliance applicable State or Federal laws possibly applicable to such Member’s H&W Benefits Plan), each Member is primarily and solely responsible for ascertaining and implementing any Federal or State requirements respecting confidentiality of the Medical Information of its Employees and Dependents, to the extent it is within its power to do so, and for determining and implementing the requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), and the Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”), and similar laws,  to the extent applicable to such Member;

(b)    That applicability of such laws referenced in sub-¶ (a) above to the Member shall be determined solely on the nature and/or number of such Member’s Employees and Dependants and/or the nature, scope or level of H&W Benefits provided by such Member’s H&W Benefits Plan, irrespective of the number of other H&W Pool Members’ Employees or the types of Benefits provided for their Employees and Dependants under their respective H&W Benefit Plans; and

(c)    That under no circumstances shall the H&W Pool or the Fund be deemed to constitute a single H&W Benefits Plan, or a “group health plan” as that phrase is defined under the Employee Retirement Income Security Act, as amended (“ERISA”), or under the Public Health Service Act, as amended (“PHSA”), consisting of multiple employers.

7.2            Indemnification for Non-Compliance. Each H&W Pool Member hereby indemnifies and holds harmless the H&W Pool, every other Member of the H&W Pool, the Fund, its Board, Committees, Administrator and agents and from and against any and all consequences (including any civil or criminal penalties, and any costs and legal fees relating thereto) of any Non-Compliance of its H&W Benefits Plan, or the administration or implementation thereof, with State or Federal laws governing the content or administration of such H&W Benefit Plans, in general, or “group health plans”, in particular.