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HomeMy WebLinkAbout58-82 RESOLUTION• s • RESOLUTION NO. 45-2 402s- A RESOLUTION AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A RETENTION FUND AGREEMENT WITH ARKANSAS BLUE CROSS AND BLUE SHIELD, INC. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: That the Mayor and City Clerk are hereby authorized and directed to execute a retention fund agreement with Arkansas Blue Cross and Blue Shield, Inc. A copy of the agreement authorized for execution hereby is attached hereto and made a part hereof. PASSED AND APPROVED thisa2"day of APPROVED: r'c �7 gar reit-4S 4.4. r. ,.. ATTEST t.� t *IN l. TYCE 1982. MAYOR • •If Pr • • ARKANSAS BLUE dhoss AND BLUE-SHiELD, INC. Retention Agreement for City of Fayetteville Group Numbers: 290041 & 290042 This Retention Agreement applies to the above group. The Agreement is a retrospective refund calculation, and will:be determined using earned premium and incurred claims o Blue,Cross, Blue Shield and Extended Benefits coverage. The ,effective date of the Agreement is to be'April 15, 1982. --Each 'Contract year constitutes a period for accountability of premiums and incurred claims, and hereafter Will be referred to as a refund . , period. The refund will be calculated one hundred and eighty .(180) dayS'after the end Of each contract year. ..'The composition of the formula used to determine the refund &haunt and the definition of each item Contained in the fotMula - • •d • are'at follows Earned Premium - Blue Cross, Blue Shield andExtended Benefits 4.ncoMe-Efor the refund period. Retention - :The amount retained by Arkansas Flue Cross and , ;Blue Shield, Int. for general administrative expenses, general contingency, And inSurance tisk. The retention used an establishing theHetUnd amOunt is 11..5% of earned premium. ••• -' Claims cost is the aroUnt eriiea premium redUired to:pay con'tradt benefits for ClaiMs incurred dUting .the reund period, -plus claims administration. expense. ' Az ;;F • • Rate Stabilization Reserve - The amount of income maintained • in reserve for the group by Arkansas Blue Cross and Blue Shield, Ind`, to offset unusual fluctuations in claims. This will be 15.5% of income for the contract year beginning April 15, 1982. Once the reserve is established, it will be credited with interest earned during subsequent periods. Refund - ,"The retrospective refund shall be earned premium, minus the sum of claims cost, plus retention, minus the adjustment. to•the•wstabilizati.on fund. The formula is illustrated as:follows: EARNED PREMIUM -. (CLAIMS .COST + RETENTION) = ADJUSTMENT TO STABILIZATION FUND = REFUND ,The refund shall be paid t� the City of Fayetteville. in the'event the group terminates their Blue Cress arid Blue Shield coverage during the middle of the contract year, any refund ,or rate stabilization reserve due the group Will be considered liquidated damages If the termination occurs at the end of.a contract year, any refund or rate stabilization reserve due the • •group will not'be settled until twelve (12) months following group's termination. This Agreeinent may be terminated by either the Contract Holder • ,or thePlan.at the end of the contract year by thirty (30)' days • prior Notice in wrifing. . Signed ARKANSAS [SLUE CROSS ANU BLUE SHEILD, INC. • • RESOLUTION NO. 5-2-202... 4 A RESOLUTION AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE A RETENTION FUND. AGREEMENT WITH ARKANSAS BLUE CROSS AND BLUE SHIELD, INC. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF FAYETTEVILLE, ARKANSAS: That the Mayor and City Clerk are hereby authorized and directed to executea retention fund agreement with Arkansas Blue Cross and Blue Shield, Inc. A copy of the agreement authorized for execution hereby is attached hereto and made a part hereof. PASSED AND APPROVED thisaW. Q day of ATTEST: Amy_ EraAe- APPROVED: 1982. • ARKANSAS BLUE CROSS AND BLUE SHIELD, INC. Retention Agreement for City of Fayetteville ,Group Numbers: 290041 & 290042 • This Retention Agreement applies to the above group. The Agreement is a retrospective refund calculation, and will be determined using earned premium and incurred claims of .Blue Cross, Blue Shield and Extended Benefits coverage. The effective date of the Agreement is to be' April 15, 1982> Each contract year constitutes a period for accountability of premiums and incurred claims, and hereafter will be referred to as a refund period. :The refund will be calculated one hundred and eighty (180) days after the end of. each contract year. 'The composition'of the formula used to determine the refund amount and the definition of each item contained in the formula are as follows: Earned Premium Blue Cross, Blue Shield and Extended Benefits income for the refund period. Retention - The amount retained by r rkansas Blue Cross and • Blue 5hield,'Inc. for general administrative expenses, general contingency, and insurance risk. The retention used in establishing the refund amount is 11.5% of earned premium. �laims Cast - C' aim= Cost is the aroiirt required to. pay contract benefits for claim- incurred during the refuna period., plus claims administration expense. • Rate Stabilization Reserve - The amount of income maintained in reserve for the group by Arkansas Blue Cross and Blue Shield, Inc.., to offset unusual fluctuations in claims. This will be 15.5% of income for the contract year beginning April 15, 1982. Once the reserve is established, it will be credited with interest earned during subsequent periods. Refund - "The retrospective refund shall be earned premium, minus the sum of claims cost, plus retention, minus the adjustment to the stabilization fund. The formula is illustrated as follows: EARNED PREMIUM - (CLAIMS COST + RETENTION) - ACJUSTMF.NT TO STABILIZATION FUND = REFUND The refund shall be paid to the City of Fayetteville." in the event the group terminates their Blue Cross and Blue Shield coverage during the middle of the contract year, any refund or rate stabilization reserve due the group will be considered liquidated damages. If the termination occurs at the end of a contract year, any refund or rate stabilization reserve due the .group will not be settled until twelve (12) months following group's • 90 termination. . This Agreement may be terminated by either the Contract Holder cr the Plan .at. the end of the contract year by thirty (30) days prior notice in writing. .'1 t. Signed ARKANSAS BLUE CROSS AND BLUE SHEILD, INC. -r-.