Section 14

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.