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Home My WebLink About32-86` RESOLUTIONRESOLUTION NO. 32-86 A RESOLUTION AUTHORIZING THE MAYOR AND CITY,CT,FRK TO EXECUTE A HEALTH INSURANCE AGREEMENT AND RETENTION AGREEMENT WITH BLUE CROSS BLUE SHIELD OF ARKANSAS. BE IT RESOLVED BY nit BDARD OF DIRECTORS OF THE CITY OF FAYEITEVILLE, ARKANSAS: That the Mayor and City Clerk are hereby authorized and directed to execute a health insurance agreement and retention agreement with Blue Cross Blue Shield of Arkansas. A copy of the agreements authorized for execution hereby are attached .hereto marked Exhibits "A" and "B" and made a part hereof. PASSED AND APPROVED this 4th day of , 1986. APPROVED By: 6-l2age, Mayor AMENDMENT TO THE BLUE CROSS AND BLUE SHIELD WRAP AROUND MAJOR MEDICAL CONTRACT DEPENDENT STUDENT COVERAGE TO AGE 23 FOR CITY OF FAYETTEVILLE Group Number 090041 & 090042 Effective April 15, 1986, ARTICLE I., DEFINITIONS, E. 2. of the Blue Cross and Blue Shield Wrap Around Major Medical Contract is amended by adding subsection c. as follows: c. between age 19 and 23 if a full-time student in a school accredited by the State Board of Education. This Amendment becomes a part of the Blue Cross and Blue Shield Wrap Around Major Medical. Contract. George K. Mitchell President and Chief Executive Officer ARKANSAS BLUE CROSS AND BLUE SHIELD, INC. 601 Gaines Street Little Rock, Arkansas 72201 AMENDMENT TO THE BLUE CROSS AND BLUE SHIELD WRAP AROUND MAJOR MEDICAL CONTRACT FOR CITY OF FAYETTEVILLE Group Number 090041 & 090042 Schedule A of the Blue Cross and Blue Shield Wrap Around Major Medical Contract is amended to show the rates effective April 15, 1986. Charges for these Contracts shall be as follows: Blue Cross --Blue Shield Monthly Charge Per Covered Employee ONE PERSON COVERAGE FAMILY COVERAGE $56.97 $136.53 Initial charges shall be paid on the Effective Date and no coverage shall be in effect until such payment is received by the Plan. Subsequent charges shall be payable on or before the same day as the Effective Date of each month thereafter. The above charges are subject to change in accordance with Article XII., Paragraph E., of the Blue Cross and Blue Shield Wrap Around Major Medical Group Master Contract. This Amendment becomes a part of the Blue Cross and Blue Shield Wrap Around Major Medical Contract. o George K. Mitchell President and Chief Executive Officer ARKANSAS BLUE CROSS AND BLUE SHIELD, INC. 601 Gaines Street Little Rock, Arkansas 72201 AMENDMENT TO THE BLUE CROSS AND BLUE SHIELD WRAP AROUND MAJOR MEDICAL CONTRACT FOR CITY OF FAYETTEVILLE Group Number -090041 & 090042 Effective April 15,1986, ARTICLE XII., F. is hereby amended by deleting it in its entirety and the following provision is substituted for ARTICLE XII., I: - ARTICLE XII., I. 1. You, your dependents, or divorced spouse may be eligible for continuous coverage in the group for a period of 120 days, provided certain conditions are met. You must contact your employer for details of such eligibility. You must request continuation of coverage not later than ten (10) days after termination of employment or membership, or change in Marital status. 2. You and/or your covered dependents may also be eligible to convert immediately to a conversion policy upon proper application with your employer. The benefits in such policy do not necessarily equal or match those benefits provided in your existing group policy. You must apply to us within thirty-one (31) days after termination of coverage. This Amendment becomes a part of the Blue Cross and Blue Shield Wrap Around Major Medical Group Master Contract. George K. Mitchell President and Chief Executive Officer ARKANSAS BLUE CROSS AND BLUE SHIELD, INC. 601 Gaines Street Little Rock, Arkansas 72201 ARKANSAS BLUE CROSS AND BLUE SHIELD, INC. Retention Agreement for CITY OF FAYETTEVILLE and FAYETTEVILLE PUBLIC LIBRARY GROUPS 290041 and 290042 This Retention Agreement applies to the above Group. The Agreement is a retrospective refund calculation, and will be determined using earned premiums and incurred claims of Blue Cross, Blue Shield, and Extended Benefits coverage. The effective date of the Agreement is to be April 1, 1986. Each contractyear 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 Arkansas Blue Cross and Blue Shield for claims administration expense, general administration expenses, general contingency, insurance risk, and large claim pool charge. The retention used in• establishing the refund amount is I.7 ,6of earned premium. CLAIMS COST: Claims cost is the amount of earnedpremium required to pay contract benefits for claims incurred during the refund period. 9.07 1 LARGE CLAIM ADJUSTMENT: The Large Claim Pool base agreed to by the Carrier and the Group is 530,000.00 per member per contract year. At the time of settlement, only the 330,000.00 per member per contract year will be applied toward the determination of the Retrospective Refund and Stabilization Reserve Fund. RATE STABILIZATION RESERVE: The amount of earned premium maintained in reserve for the Group by Arkansas Blue Cross and Blue Shield to offset unusual fluctuations in claims. This will be 13.1% of earned premium for the contract year beginning April 1, 1986. Once the reserve is established, it will be credited with interest earned during subsequent periods. If an underwriting loss is incurred during the refund period, it will be charged against the rate stabilization funds. Negative balances in the rate stabilization fund will be carried forward to the next refund period. REFUND: The retrospective refund shall be earned premium, less retention, minus claims cost, less large claim adjustment, minus the adjustment to the stabilization fund. The formula is illustrated as follows: (EARNED PREMIUM - RETENTION) - (CLAIMS COST - LARGE CLAIM ADJUSTMENT) - ADJUSTMENT TO STABILIZATION FUND = REFUND. The refund shall be paid to City of Fayetteville and Fayetteville Public Library. TERMINATION: In the event the Group terminates Blue Cross and Blue Shield coverage during 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 the Group's termination. This Agreement may be terminated by either the Contract Holder or the Plan at the end of the contract year by thirty (30) days prior notice in writing. • 9.08 FAYETTEVILLE, ARKANSAS DEPARTMENT OF FINANCE P. 0. DRAWER F 72702 March 12, 1986. Mr. Randy DeLeat, CHC Regional Sales Manager Arkansas Blue Cross & Blue Shield P.O. Box 2181 Little Rock, AR 72203-2181 (501) 521-7700 RE: Your letter dated February 12, 1986 - City of Fayetteville/City Library Blue Cross & Blue Shield Group # 090041 and # 090042: Dear Mr. DeLeat: This is to advise that the City of Fayetteville, Board of Directors at their meeting of March 4, 1986 accepted the rates proposed by Blue Cross - Blue Shield for family and individual contracts beginning on April 15, 1986 as follows: Ind. $56.96., Family Rate $136.53. With the acceptance of these rates, we also acknowledge the additional' benifitof extending full coverage to dependent students to age 23 effective April 15, 1986. Please foward the retention fund agreement to me for execution by the Mayor and City Clerk. Sincerely, Sturman Mackey Purchasing Officer so cc .Jeanette Crumpler, Personnel Officer Scott Linebaugh, Administrative Services Director R uzanne Kennedy, City Clerk