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HomeMy WebLinkAbout127-16 RESOLUTION113 West Mountain
Street Fayetteville,
AR 72701
(479)575-8323
Resolution: 127-16
File Number: 2016-0283
GALLAGHER BENEFITS SERVICES:
A RESOLUTION TO APPROVE THE ANNUAL RENEWAL CONTRACT WITH GALLAGHER
BENEFITS SERVICES IN THE AMOUNT OF $57,600.00 FOR THE PROVISION OF CITY EMPLOYEE
BENEFITS BROKER SERVICES.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves the annual renewal
contract with Gallagher Benefits Services in the amount of $57,600.00 for the provision of employee
benefits broker services. tJ1111110
PASSED and APPROVED on 6/21/2016
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Sondra E. Smith, City Clerk
Treasurer
Page I Printed on
6/22/16
r F City of Fayetteville, Arkansas 113 West Mountain Street
Fayetteville, AR 72701
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- (479) 575-8323
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Text File
File Number: 2016-0283
Agenda Date: 6/21/2016 Version: 1 Status: Passed
In Control: City Council Meeting File Type: Resolution
Agenda Number: A. 6
GALLAGHER BENEFITS SERVICES:
A RESOLUTION TO APPROVE THE ANNUAL RENEWAL CONTRACT WITH GALLAGHER
BENEFITS SERVICES IN THE AMOUNT OF $57,600.00 FOR THE PROVISION OF CITY
EMPLOYEE BENEFITS BROKER SERVICES
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas hereby approves the annual
renewal contract with Gallagher Benefits Services in the amount of $57,600.00 for the provision of
employee benefits broker services.
City of Fayetteville, Arkansas Page 1 Printed on 612212016
City of Fayetteville Staff Review Form
lc,g=,star -ii>�; ii~
6/21/2016
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
Brenda Reed 5/31/2016
Submitted By Submitted Date
Action Recommendation:
Human Resources/
Chief of Staff
Division / Department
Approve the 2016 annual renewal of the City's contract with Gallagher Benefit Services, Inc. for benefit broker
services effective July 1, 2016. Gallagher Benefit Services provides brokerage services, legislative compliance
support and brings benefit administration technology solutions to the City. Gallagher advises City staff in regard to
federal regulations pertaining to benefit administration, including health care reform requirements under the
Affordable Care Act.
Budget Impact:
1010.1220.5314.00 General
Account Number Fund
N/A Employee Benefits/Services
Project Number Project Title
Budgeted Item? Yes Current Budget $ 203,566.00
Funds Obligated $ 21,132.29
Current Balance
Does item have a cost? Yes Item Cost $ 57,600.00
Budget Adjustment Attached? No Budget Adjustment
Remaining Budget
V20140710
Previous Ordinance or Resolution #
Original Contract Number:
Comments:
Approval Date:
CITY OF
Tr
aye
ARKANSAS
MEETING OF JUNE 21, 2016
TO: Mayor and City Council
THRU: Don Marr, Chief of Staff
FROM: Brenda Reed, HR Director
DATE: May 31, 2016
CITY COUNCIL AGENDA MEMO
SUBJECT: Approval of the 2016 Annual Renewal with Gallagher Benefits Services, Inc. for
Benefit Brokerage Services
RECOMMENDATION:
Staff recommends Council approve the City's annual renewal of its contract with Gallagher
Benefit Services effective July 1, 2016.
BACKGROUND:
The City's original contract was approved in 2012.
DISCUSSION:
Gallagher Benefit Services provides brokerage services, legislative compliance support and
benefit management technology solutions to the City. Gallagher advises City staff in regard to
federal regulations pertaining to benefit administration, including health care reform
requirements under the Affordable Care Act.
The Gallagher Benefit Services renewal contract price and terms of service remain unchanged
from last year.
Through the Gallagher contract, the City has utilized the PlanSource benefits administration
system since 2012. The approximate annual cost for utilizing the benefits administration system
is $21,525. The City has utilized the PlanSource Affordable Care Act (ACA) measuring and
reporting software tool since 2015. The approximate annual cost for the ACA tool is $2,634.
Through the 2016 Gallagher Benefit Services contract, the City will utilize the American Fidelity
AFEnroll benefits administration system and the American Fidelity WorxTime ACA measuring
and reporting software tool at no cost to the City.
The American Fidelity benefits administration system and ACA tool will replace PlanSource's
benefits administration and ACA services.
BUDGET/STAFF IMPACT:
Funds are budgeted each year in the Human Resources program to cover the cost of this
contract.
Mailing Address:
113 W. Mountain Street www.fayetteviile-ar.gov
Fayetteville, AR 72701
CONSULTING AGREEMENT
Annual Renewal
June, 2016
This Consulting Agreement (this "Agreement") is made by and between Gallagher Benefit
Services, Inc., a Delaware corporation ("GBS"), and City of Fayettevillc, Arkansas (the "Client").
The Client wishes to enter into a consulting relationship with GBS with the terms and conditions set forth
in this Agreement, and GBS is willing to accept such a consulting relationship.
In consideration of and in reliance upon the previous paragraph and the terms and conditions contained in
this Agreement, the Client and GBS agree as follows:
1. Engagement
The Client engages GBS as an employee benefits consultant as stated in this Agreement and GBS
accepts this engagement. During the time that GBS is performing services for the Client under this
Agreement, and for all purposes outlined in this document, GBS' status will be that of an independent
contractor ofthe Client.
2. Terrn and Termination
The Effective Date of this Agreement is July 1, 2016. The term of GBS' engagement under this
Agreement (the "Consulting Period") will begin as of the Effective Date and will remain in effect for two
(2) years from the Effective Date, subject to mutually agreed upon annual renewal by both parties. Either
party may terminate this Agreement by giving the other party at least thirty (3 0) days written notice of its
intent to terminate. In the event such termination is effective during the Consulting Period, Client shall be
responsible to GBS for any services performed prior to the date of termination and GBS shall be
responsible to Company to continue to provide services until the date of termination of this Agreement.
3. Services
GBS will provide employee benefits management consulting services to the Client and consult
with its employees, representatives, agents and contractors as to such matters as more fully described in
Exhibit A attached to this Agreement and incorporated herein. GBS will perform other services as the
Client and GBS mutually agree in writing.
4. Compensation
Subject to any changes as may be mutually agreed by the parties in writing and signed by their
authorized representatives, GBS will receive, as compensation for its services under this Agreement, fees
in the amount of $ 57,600 per year, which amount will be billed in equal
installments of $1,800 and paid on a monthly basis.
GBS further agrees to firIly disclose to Client, in writing, any business relations with or
corrunissions it receives or plans on receiving from any of Client's current or prospective insurance
carriers or other vendors. GBS will do so prior to making any recommendations to Client concerning
Client doing or continuing doing business with such a carrier or vendor, so that Client will be apprised of
any potential conflict of interest
For additional information regarding GBS compensation, please see our revenue disclosure policy
and schedule set forth in Exhibit B.
GBS Consulting Agreement 4-2006
Page I of 14
In the event an insurance company cancels or refuses to renew an insurance coverage that had
been placed by GBS, on behalf of Client, GBS will use its best efforts to obtain appropriate replacement
coverage from another insurance company.
Performance and Scope
(a) GBS Not a Fiduciary Under ERISA. To the extent that one or more of the Client's
employee benefit plans are subject to the Employee Retirement Income Security Act, as amended
(ERISA) and in spite of any other provision of this Agreement to the contrary, the parties agree and
acknowledge that:
(i) GBS' services under this Agreement are not untended in any way to impose on GBS or any of
its affiliates a fiduciary status under the Employee Retirement Income Security Act of 1974, as amended
("ERISA") ; and
(ii) this Agreement does not provide GBS, and the Client will not cause or permit GBS to assume,
without prior written consent of GBS, any:
(A) discretionary authority or discretionary control respecting management of any
"employee benefit plan' within the meaning of Section 3(3) of ERISA (an "ERISA Plan"),
(B) authority or control respecting management or disposition of the assets of any ERISA
Plan, or
(C) discretionary authority or discretionary responsibility in the administration of any
ERISA Plan.
(b) Reliance. In the performance of its duties, GBS may rely upon, and will have no
obligation to independently verify the accuracy, completeness, or authenticity of, any written instructions
or information provided to GBS by the Client or its designated representatives and reasonably believed by
GBS to be genuine and authorized by the Client.
(c) No Practice of Law. GBS will not be obligated to perform, and the Client will not
request performance of, any services which may constitute unauthorized practice of law. The Client will
be solely responsible for obtaining any legal advice, review or opinion as may be necessary to ensure that
its own conduct and operations, including the engagement of GBS under the scope and terms as provided
herein, conform in all respects with applicable State and Federal laws and regulations (including ERISA,
the Internal Revenue Code, State and securities laws and implementing regulations) and, to the extent that
the Client has foreign operations, any applicable foreign laws and regulations.
(d) Subcontractors. GBS may cause another person or entity, as a subcontractor of GBS, to
provide some or all of the services required to be perforned by GBS hereunder: provided, that GBS shall
remain responsible for all acts and omissions of any such subcontractors (each of which shall be bound by
GBS' obligations under this Agreement). GBS shall seek prior written approval from Client for any
subcontractors providing substantive consulting, professional or managerial services. Prior written
approval shall not be required for clerical, office, secretarial, IT back --up, administrative or similar support
services.
(e) Conflict of Interest. GBS' engagement under this Agreement will not prevent it from
taking similar engagements with other clients who may be competitors of the Client. GBS will,
nevertheless, exercise care and diligence to prevent any actions or conditions which could result in a
conflict with Client's best interest.
GBS Consulting Agreement
Page 2 of 14
4-2006
Exhibit A revised 11-2007
(f) Acknowledgements. In connection with GBS' services under this Agreement, Client
agrees that:
(i) Although GBS will apply its professional judgment to access those
insurance companies it believes are best suited to insure the Client's risks, there can be no
assurance that the insurance companies GBS has accessed are the only or are the best suited ones
to insure the Client's risks.
(li) Any compensation of the types described above and disclosed to it does
not constitute a conflict of interest and the Client expressly waives any claims alleging any such
conflict of interest.
(iii) The final decision to choose any insurance company has been made by
the Client in its sole and absolute discretion. The Client understands and agrees that GBS does
not take risk, and that GBS does not guarantee the financial solvency or security of any insurance
company.
(iv) The compensation payable to GBS is solely for the services set forth
under this Agreement, including Exhibit A. Any additional administrative, claims representative
or other services (collectively, "Additional Services") will be governed by the terms of a separate
agreement covering the Additional Services.
(v) The Client is responsible for irmnediate payment of GBS' fees (if
applicable) and payment of premiums for all insurance placed by GBS on Client's behalf. If any
amount is not paid in full when due, including premium payments to insurance companies, that
nonpayment will constitute a material breach of this Agreement that will allow GBS to
immediately terminate this Agreement, at its option, with notice to the Client
6. Confi'dentialio)
(a) Client Information. GBS recognizes that certain confidential information may be
furnished by the Client to GBS in connection with its services pursuant to this Agreement ("Confidential
Information"). GBS agrees that it will disclose Confidential Information only to those who, in GBS'
reasonable determination, have a need to know such information. Confidential Information will not
include information that (i) is in the possession of GBS prior to its receipt of such information from the
Client, (ii) is or becomes publicly available other than as a result of a breach of this Agreement by GBS,
or (iii) is or can be independently acquired or developed by GBS without violating any of its obligations
under this Agreement. However, disclosure by GBS of any Confidential Information pursuant to the
terms of a valid and effective subpoena or order issued by a court of competent jurisdiction, judicial or
administrative agency or by a legislative body or committee will not constitute a violation of this
Agreement, (provided that GBS irnmediately notifies Client in writing upon GBS' receipt of any such
subpoena or order).
(b) HIPAA Privacy. In spite of Sections 6(a) above, GBS and the Client will each comply
with any prohibitions, restrictions, limitations, conditions, or other requirements to the extent they apply
to them directly or indirectly pursuant to the Health Insurance Portability and Accountability Act of 1996
("HIPAA") and its implementing regulation concerning privacy of individually identifiable health
information as set forth in 45 CFR Paas 160-164, as amended from time to time. Where required, the
Client, as a representative of the health plans and GBS will enter into a separate Business Associate
Agreement.
(c) Use of Naples; Public Announcements. No party will use, in any commercial manner,
the names, logos, trademarks or other intellectual property of the other party without its prior written
consent. Except as may be required by law, no party will issue any press releases or make any public
GBS Consulting Agreement
Page 3 of 14
4-2006
Exhibit A revised 11-2007
announcements of any kind regarding the relationship between the parties without the other party's prior
consent.
7. Indemnification Rights and Limitation of Liability
Limitation of Liability. Notwithstanding any other term or provision of this Agreement, neither
party shall be liable to the other for any exemplary, special indirect, incidental, consequential or
punitive damages (including but not limited to lost profits) which may result from the other
party's action or its failure to perform any term or condition of this Agreement or whether such
liability is based upon tort, strict liability, breach of warranties, failure of essential purpose or
otherwise and if advised of the possibility of such damages. This provision applies to the fullest
extent permitted by applicable law.
8. Notices
Any notices, requests and other cornmunications pursuant to this Agreement will be in writing
and will be deemed to have been duly given, if delivered in person or by courier, telegraphed, or by
facsimile transmission (provided that the sender received electronic confirmation of receipt by recipient)
or sent by express, registered or certified mail, postage prepaid, addressed as follows:
If to the Client: City of Fayetteville, Arkansas
ATTN: Brenda Reed
113 W. Mountain
Fayetteville, AR, 72701
(Fax:) (479) 718-7698
If to GBS: Gallagher Benefit Services, Inc.
300 S. Jefferson Suite 600-N
Springfield MO 65806
Attention: Jacob Salinas
(Fax: 417-881-8719)
Either party may, by written notice to the other, change the address to which notices to such party are to
be delivered or mailed.
9, Miscellaneous
(a) SeverabiliiY. The various provisions and subprovisions of this Agreement are severable
and if any provision or subprovision or part thereof is held to be unenforceable by any court of competent
jurisdiction, then such enforceability will not affect the validity or enforceability of the remaining
provisions or subprovisions or parts thereof in this Agreement.
(b) Entire Agreement; Amendment. This Agreement, including all exhibits hereto,
constitutes the entire agreement between the parties and supersedes all prior agreements and
understandings, whether oral or written, between the parties regarding the subject matter hereof. This
Agreement may be modified or amended only by a written instrument executed by both parties.
(c) Governing Law Rule of Construction. This Agreement will be construed, interpreted
and enforced in accordance with the laws of the State of Arkansas without giving effect to the choice of
law principles thereof or any canon, custom or rule of law requiring construction against the drafter.
GBS Consulting Agreement
Page 4of14
4-2006
Exhibit A revised 11-2007
(d) Jurisdiction and Venue. The parties agree that in the event of any legal dispute the
governing jurisdiction and venue will be Washington Comity GirCUit (COIR in Fayetteville, Arkansas for
state cornu actions or the United States District Court, Western Distrio, Arkansas, ill Fayetteville,
Arkansas for federal court actions.
(e) Successors. This Agreement shall be binding, upon and shall inure to the benefit of all
assigns, transferees and successors in the interest of €lie parties hereto.
(f) Gaunter kt ts. This Agreemeat may be executed by the parties in several counterparts,
each of which shall be deemed] to be an original copy -
(g) Survival of Provisions. Sections 2, 4, b an(] 7 will survive the termination of this
Agreement.
[The remainder of this page intentionally left blank. The parties' signatures appear on the
following page.]
GBS Cousulting Agreement 11-2006
Exhibit A revised 11-2007
Page 5 of 14
IN WITNESS WHEREOF, the parties hereto have caused this Consulting Agreement to be duly executed
on the date first written above.
GBS Consulting Agreement
City of Fayef/tI]j/J ville, Arkansas
Title: - Mayor
GALLAGHER BENEFIT SERVICES, INC.
• Branch Managers (Area Presidents) are the
preferred signers on consulting or fee
agreements, however, our current policy allows
for producers who are Area AVPs to sign for
GBS as well.
s Any modifications must be approved AJG
c r oorate legal prio to GBS siTatiure.
By: c
691,
e: Jacob Salinas
Title: Area Vice President
Page 6 of 14
4-2006
Exhibit A revised 11-2007
EXHIBIT A
SCOPE OF SERVICES
Subject to any changes and additions as may be mutually agreed by the parties in writing, availability and
delivery of data from the insurance carrier and other third party vendors, GBS will provide the following
services:
CONSULTING SERVICES PROVIDED ON AN "AS NEEDED" BASIS
❑ RENEWAL ANALYSIS
o Review and evaluate carrier projections
o Prepare "shadow" renewal projection
o Create financial modeling reports using proprietary Apex software
o Coordinate carrier negotiations
o Create employee contribution modeling reports
o Review identified benchmarks of projected plan costs
o Develop "working" rates for Company analysis and approval
o Assist with budget projections
o Provide renewal alternatives with cost impact of benefit plan changes
❑ PERIODIC PLAN FINANCIAL REPOR'T'S (frequency to be mutually agreed upon):
o Summary of plan costs
o Analysis of actual vs. budget
o Employee contributions
o Large claims tracking
o Identification of costs for specific line of coverage
o Comparison of plan costs to aggregate stop -loss projections, if applicable
o Utilization review
o Comparison to prior claim period
o Plan trends
❑ ANNUAL FINANCIAL REPORTS (End of Year Accounting)-
* Comparison of current costs to renewal costs
o Future plan costs projections
o Executive summary of program expenses
o Comparison of current costs to renewal costs
o Future plan costs projections
o Dollars saved by contract negotiation
o Percent of benefit dollars paid by employee
o Claims by size
o Physician visit details
o Benefits paid by type of service
o Plan fturding/budget comparison
o Fixed expense comparison
GBS Consulting Agreement
Page 7of14
4-2006
Exhibit A revised 11-2007
❑ LEGISLATIVE AND CORPORATE COMPLIANCE SUPPORT
o Provide legislative updates, including Technical Bulletins and Directions newsletters
o Evaluate plan design to assist with compliance with state and federal regulations
o Review benefit plan documents, including summary plan descriptions; contracts, employee
summaries, and policies/procedures
o Conduct periodic seminars on regulatory issues
o Assist with the review and evaluation of COBRA. and 1-11PAA compliance procedures
o Provide general information and guidance to assist with compliance with ERISA, FMLA,
USERRA, Medicare Part D and other Federal legislation that directly affects the administration of
plan benefits
o Provide template or sample compliance notices, certificates of creditable coverage and enrollment
forms as reasonably requested by Company
❑ CARRIER MARKETING AND NEGOTIATIONS, AS DIRECTED BY CLIENT
o Work with Company to develop a strategy to identify goals, analyze program costs and review both
current and alternative funding arrangements
o Manage the renewal process with the current carrier to control costs
o Implement carrier renewal strategies with Company
o Develop timeline covering every aspect from RFP preparation to the delivery of employee
communications
o Provide analysis of employee disruption report and preparation of goo -access report
o Provide analysis of discounts offered by various carriers by using CPT codes and carrier pricing
data
o Manage RFP development that tailors the RFP to the desires, needs and financial directions
provided by Company
o Explore alternative ftmding solutions
o Evaluate vendor responses to track variations in coverage and costs as they are identified
o Conduct finalist interviews to investigate and document intangibles such as personalities, service
orientation and responsiveness
o Draft renewal analysis report, based on renewal negotiation, covers program and claims cost
projections as well as complete information on benefit designs
o Facilitate decision process by coordinating close collaboration and discussions among file GBS
team and Company
❑ DAY TO DAY ADMINISTRATIVE SERVICES
❑ EIVIPLOYEEEDUCATION PROGRAMS
o Facilitate focus groups
o Monthly benefit communication directed to employees
o Educational meetings on coverage and trends
❑ COMMUNICATION MATERIALS
o Assist with the drafting and distribution of Open Enrolhnent-New Member Orientation summary
information and any other communications pertaining to the health and welfare program
o Provide annual open enrolhxrent guidance and employee meeting materials
o Assist with marketing and oversight of Customized Enrollment Materials (if elected)
GBS Consulting Agreement
Page 8 of 14
4-2006
Exhibit A revised 11-2007
o Assist with participant wellness initiatives, as directed by Company
BENEFIT ADMINISTRATION ASSESSMENT
o Periodic evaluation of internal plan enrollment and benefit termination processes
o Review, coordinate and implement Company agreed upon plan "best practices" to help limit plan
liability and increase participant satisfaction
o Help identify opportunities for streamlining and improving administration procedures
❑ BE, ADMINISTRATION SOFTWARE:
o Gallagher agrees to enter into an Agreement with PlanSource/Coffnect2MyBenefits software
vendor to provide Client with benefits software services.
o Gallagber agrees to continue using PlanSource/Conlect2MyBenefits through the end of the plan
year, December 31, 2016. The Client will continue to reimburse Gallagher $2.45 Per Employee
per Month through December 31, 2016.
o At a date to be determined later, the Client will begin to utilize American Fidelity and the
AFEnroll System at no additional cost
Additional terms and details concerning the AFEnroll software as agreed upon are referenced in
attached Appendix "C".
❑ MARKETBENCHMARKING STUDIES:
o Local Area Surveys
o Industry Surveys
❑ Benefit Plan Design (or Redesign)
o Help Company identify business and HR objectives that impact benefits
o Review with Company possible benefit strategies to meet tbeir objectives
o Help Company evaluate/review current scope of benefits package e.g., types & levels of coverage
o Work with Company to develop funding and contribution strategies
o Assist with budget projections for design alternatives
GBS Consulting Agreement
Page 9 of 14
4-2006
Exhibit A revised 11-2007
EXHIBIT B
COMPENSATION DISCLOSURE STATEMENT
What follows is the disclosure of actual fees and/or commissions related to the Company's
Group Health Plan(s) and any relationships, or agreements GBS has with the insurance Company
involved in this transaction, GBS as agent of record will receive the following initial and renewal
sale commissions expressed as percentage of gross premium payments, or fees as agreed up by
Line of Coverage I Insurance Company
Consulting Agreement 1 Gallagher Benefit Services
Owned by
AJG/GBS
N/A
Commissions include all commissions/fees paid to GBS that are attributable to a contract or policy between a plan and an insurance Company,
or insurance service. This includes indirect fees that are paid to GBS paid by a third party, and includes, among other things, the payment of
"finders' Ices" or other fees to GBS for a transaction or service involving the plan.
2 Gallagher companies may receive supplemental compensation referred to in a variety of terms and definitions, such as contingent commissions,
additional commissions and supplemental commission_
' Direct Fees include compensation to GBS paid for directly by the plan sponsor.
Which allows an exemption from a prohibited transaction under Section 408(a) of the Employee Retirement Income Security Act of 1974
(ERISA).
s In making these disclosures, no position is taken, nor is one to be inferred, regarding the use of assets of a plan subject to ERISA to purcbase
such insurance.
GBS Consulting Agreement 4-2006
Exhibit A revised 11-2007
Page 10 of 14
Commission'/
Wholesale r,
Effective
Supplemental
Direct Fees a
MGU, or
Date_
CompensationZ
Intermediar;
7/1/2016
N/A
$57;600
NIA
Owned by
AJG/GBS
N/A
Commissions include all commissions/fees paid to GBS that are attributable to a contract or policy between a plan and an insurance Company,
or insurance service. This includes indirect fees that are paid to GBS paid by a third party, and includes, among other things, the payment of
"finders' Ices" or other fees to GBS for a transaction or service involving the plan.
2 Gallagher companies may receive supplemental compensation referred to in a variety of terms and definitions, such as contingent commissions,
additional commissions and supplemental commission_
' Direct Fees include compensation to GBS paid for directly by the plan sponsor.
Which allows an exemption from a prohibited transaction under Section 408(a) of the Employee Retirement Income Security Act of 1974
(ERISA).
s In making these disclosures, no position is taken, nor is one to be inferred, regarding the use of assets of a plan subject to ERISA to purcbase
such insurance.
GBS Consulting Agreement 4-2006
Exhibit A revised 11-2007
Page 10 of 14
It should also be noted that:
• GBS is not an affiliate of the insurer whose Contract is recommended. This means the
insurer whose contract is recommended does not directly or indirectly have the power to
exercise a controlling influence over the management of policies of GBS.
• GBS' ability to reconuriend other insurance contracts is not limited by an agreement with
the Insurance Carrier.
• GBS is effecting the transaction for the Plan(s) in the ordinary course of GBS business.
• The transaction set forth is at least as favorable to the Plan(s) as an arm's length
transaction with an unrelated party.
• GBS is not a trustee of the Plan(s) and is neither the Plan Administrator of the Plan(s), a
fiduciary of the Plan(s), nor an employer which has employees in the Plan(s).
For Employers and Plan Sponsors Subject to ERISA: This Disclosure Statement is being given to the Client (t)
to make sure Client knows about GBS' and GBS' affiliates income before purchasing the insurance product and
(2) for plans subject to ERISA, to comply with the disclosure, acknowledgement and approval requirement of
Prohibited Transaction Class Exemption No. 84--24, which protects both Client and GBS. Disclosure must be
made to an independent plan fiduciary for the ERISA Plan(s) and Client acknowledges and confirms that this is a
reasonable transaction in the best interest of the participants in the ERISA Plan(s).
GBS Consulting Agreement
Page 11 of 14
4-2006
Exhibit A revised 11-2007
For more in%rinatioii on Gallagher's compensation arrangements, please visit
°damc��llrcon ci�7tion. In the event a client wishes to register a formal complaint
regarding compensation Gallagher receives, please send an a-mail to
C~ouipensation_CotiipJaintsfte,rdg.com or send a letter to: AVC Compliance Officer, c/o Internal
Audit Department, Arthur J. Gallagher & Co., Two fierce Place, Itasca, IL 60143.
GBS Consulting Agreemcnt
Page 12 of 14
4-2006
BAffiit A revised 11-2007
APPENDIX C
American Fidelity AFEnroll Benefits Platform
GBS agrees to enter into an agreement with American Fidelity for AFEnroll benefits software
platfoi7n to be built and serviced on air ongoing basis for Client, as follows:
Client will be billed at a rate of $0.00 per Employee per Month for its employees
classified as Active, Statutory Insured, and COBRA. The current number are
approximately 685 Active employees, 20 Statutory Insured, and 8 COBRA. This shall
constitute the entire amount(s) billed to Client and includes, but is not limited to,
American Fidelity providing implementation, building the platform for Client, training,
ongoing customer service (provided directly to Client's authorized representatives,
without the necessity of default communications occurring only with or through GBS),
four electronic Standard Format (Excel) feeds to Client's carriers/vendors,
troubleshooting, use of the software, annual programming, administrative logins,
employee logins, and the services referenced in this Appendix.
■ Client shall receive at least 60 days' written notice from GBS prior to any proposed price
changes for American Fidelity services or changes in American Fidelity scope of
services, including American Fidelity terminating its services to Client.
■ Client shall provide GBS with at least 60 days' written notice prior to any proposed
changes in Client's utilization of American Fidelity services, including Client terminating
its use of American Fidelity benefits software.
■ American Fidelity shall:
o Provide Employee Education and Communication prior to annual Open Enrollment
o Conduct Group Meetings prior to Open Enrollment
o Facilitate One -on -One Benefit Reviews with each employee during Open Enrollment
o Perpetual Onboarding with New Employees for enrollment of benefit plan options
o Provide Health Flexible Spending Account & Dependent Day Care support and
enrollment and no additional cost to the Client
o Provide the Client ACA 6055/6056 Tracking and Reporting services at no additional
cost through WorxTime, a preferred vendor partner
■ Mance AFEnroll site available to HR throughout the plan year that includes:
o Provide HR access to real-time online administrative service features
o Provide HR access to online reporting functions.
o Provide links to electronic EOI questionnaires where required by carriers for life or
disability coverage requests.
o Send recurring eligibility data feed to V party carrier systems
o Send recurring deduction codes to Client's payroll system (if requested).
o Create 834 data interfaces Configuration of carrier export file based on carrier
requirements and ability to accept data
GBS Consulting Agreement
Page 13 of 14
4-2006
Exhibit A revised 11-2007
o Create data feeds in Arnerican Fidelity Standard Format
c Custom create non -$34 data interfaces
a Conduct Annual Renewal Cozrfgnira ions (tor each new carrier or change in data Feed
rcquimments at renewal),
a Provide Standard Feed formats (Excel).
GBS Consulting Agreement
Page t4 of 14
4-2006
Exhibit A revised t 1-2007