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HomeMy WebLinkAboutReso 172-2021 (21-684)City of South San Francisco P.O. Box 711 (City Hall, 400 Grand Avenue) South San Francisco, CA City Council Resolution: RES 172-2021 File Number: 21-684 Enactment Number: RES 172-2021 A RESOLUTION APPROVING THE CHANGE OF ADMINISTRATOR FOR THE MEDICAL AFTER RETIREMENT ACCOUNT ("MARA") PLAN TO EDUCATORS BENEFIT CONSULTANTS, LLC D/B/A AVIBEN ("AVIBEN" OR `BBC") AND AUTHORIZING THE CITY MANAGER TO EXECUTE THE NECESSARY PLAN DOCUMENTS TO EFFECT THIS CHANGE. WHEREAS, as described in the accompanying staff report, staff recommends approval of the change in Medical After Retirement Account ("MARA") plan administrator to Educators Benefit Consultants, LLC d/b/a Aviben ("Aviben" or `BBC"); and WHEREAS, the Deferred Compensation Committee has approved the recommendation to change the MARA plan administrator to Aviben; and WHEREAS, certain plan documents must be executed by the City and plan administrator in order to effectuate this transition. NOW THEREFORE, BE IT RESOLVED that the City Council of the City of South San Francisco hereby approves Educators Benefits Consultants, LLC d/b/a Aviben as the MARA plan administrator and the necessary plan documents to effectuate the change attached hereto as Exhibits A -C. BE IT FURTHER RESOLVED that the City Manager is authorized to execute the necessary plan documents in substantially the same form as Exhibits A -C on behalf of the City, and to take any other actions consistent with the intent of this Resolution that does not materially increase the City's obligations. At a meeting of the City Council on 10/13/2021, a motion was made by Vice Mayor Nagales, seconded by Councilmember Coleman, that this Resolution be approved. The motion passed. Yes: 5 Mayor Addiego, Vice Mayor Nagales, Councilmember Nicolas, Councilmember Coleman, and Councilmember Flores Attest by M 4 6� osa Govea Acosta, City Clerk City of South San Francisco Page 1 1 HRA Adoption Agreement v.01.01.18 Health Reimbursement Arrangement Employer Adoption Agreement This is the Adoption Agreement referred to in the City of South San Francisco Health Reimbursement Arrangement Plan Document (“Plan document”). The Adoption Agreement the Plan Document (v.01.01.18) and applicable Addenda (v.01.01.18) constitute the Plan with respect to that Adopting Employer. The Adopting Employer hereby makes the following representations and selections: ADOPTING EMPLOYER INFORMATION Employer Name: City of South San Francisco Address: 400 Grand Avenue City, State, Zip: South San Francisco, CA 94080 Phone/Fax Number: (650) 877-8522 Contact Person Name: Mich Mercado Title: Human Resources Manager Address: 400 Grand Avenue City, State, Zip: South San Francisco, CA 94080 Phone/Fax No: (650) 877-8522 Email Address: [email protected] Type of Business Entity: Governmental State of Organization: California Adopting Employer EIN: 94-6000435 Fiscal Year: 2021-2022 Adopting Employer’s Committee (complete only if applicable to the Adopting Employer): The Adopting Employer has established a “Committee” to act on behalf of the Adopting Employer hereunder and to adopt the variable plan features of the HRA. The Committee is a group of individuals appointed and designated as such by the Adopting Employer’s board of directs or equivalent governing body at any time and from time to time. IMPORTANT: Once completed and signed, this document becomes part of the official documentation. Please review and complete this Adoption Agreement carefully. For the class of employees/group (specify): Deferred Compensation Committee 2 HRA Adoption Agreement v.01.01.18 The current Committee members are (include name/title) – Committee membership shall be revised from time-to-time at the Employer’s discretion): Name Title Mich Mercado Human Resources Manager Janet Salisbury Finance Director Steven Lew Senior Accountant Alan Patrick Lead Park Maintenance Worker Scott Peradotto Police Officer Javier Vasquez Administrative Assistant I Susie Choi Retiree EMPLOYEES AND/OR PARTICIPANTS: There were fifty (50) or more Employees in the last twelve months: ☒ Yes ☐ No There were twenty (20) or more employees in the last calendar year: ☒ Yes ☐ No Check the statement that applies (check only one box) ☐ The Plan benefits active Employees only. ☒ The Plan benefits terminated Employees only. ☐ The Plan benefits both active Employees and terminated Employees. PLAN TYPE: (check only one box, except under vision & dental): ☐ Integrated HRA ☒ Retiree-Only HRA ☐ Limited-Scope HRA Specify - ☐ Vision ☐ Dental ☐ Frozen HRA as of 1/1/2014. This Plan was frozen on January 1, 2014. No new contributions shall be accepted into this Plan. The Plan shall continue to be available to current participants until Plan funds are exhausted. MISCELLANEOUS Name of Plan (and Trust if applicable): City of South San Francisco Retiree HRA Addendum(s) Attached: ☒ Yes ☐ No If Yes, specify which: VEBA Trust Addendum Joint Powers Agreement (as applicable to governmental entities): ☐ Yes ☒ No ARTICLE I: INTRODUCTION Effective Date Means: 01/01/2022 Original Effective Date: 01/08/2003 Restatement Date (date Adoption Agreement is effective): 01/01/2022 3 HRA Adoption Agreement v.01.01.18 ACA Grandfathered Plan (If yes: must comply with ACA rules for grandfathered plans): ☐ Yes ☒ No The Plan is Subject to ERISA (generally, this means the adopting employer is a private sector entity): ☐ Yes ☒ No ARTICLE II: DEFINITIONS 2.1 Adopting Employer means: City of South San Francisco 2.7 Covered Individual within Integrated HRA means (check all that apply) ☐ Participant enrolled in Sponsoring Employer’s compatible group health plan ☐ Participant enrolled in another family member’s compatible group health plan ☐ Dependent enrolled in Sponsoring Employer’s compatible group health plan ☐ Dependent enrolled in another employer sponsored compatible group health plan 2.8 Dependent means: ☒ As provided in the Plan Document. ☐ Other (Describe): If the definition is different for Participants once they terminate employment, complete again: ☒ N/A – definition does not change ☐ As provided in Plan Document ☐ Other (Describe): 2.13 Entry Date means: ☒ Date Employee becomes eligible to participate. ☐ Other (Describe): 2.15 Health Care Expense means: ☒ As provided in the Plan Document. ☐ An expense which but for the deductible under a specified group medical coverage sponsored by the adopting employer, would have been paid by that group medical coverage. Name of group medical coverage: ☐ Other (Describe): Note: Dependent cannot be defined more broadly than “dependent” For purposes of Code §§ 105 and 152. 4 HRA Adoption Agreement v.01.01.18 If the definition is different for Participants once they terminate employment, complete again: ☒ N/A definition does not change. ☐ As provided in the Plan Document. ☐ An expense which but for the deductible under a specified group medical coverage sponsored by the adopting employer, would have been paid by that group medical coverage. Name of group medical coverage: ☐ Other (Describe): 2.15(e) Clarify the distinction of Covered Individuals as described in Article II, 2.7 to allow single coverage HRAs to reimburse the qualified expenses of spouse and/or dependent(s) that are enrolled in another employer-sponsored group health plan that meets the MV and MEC standards of ACA. ☐ HRAs integrated with single coverage shall not be allowed to reimburse spouse and/or dependent(s) health care expenses. ☐ HRAs integrated with single coverage shall be allowed to reimburse eligible expenses of spouse and/or dependent(s). (Note: In order to provide for this feature employee shall complete and submit an Attestation of Coverage Form to the Sponsoring Employer or the Third Party Administrator) 2.22 The Plan Administrator is the Adopting Employer unless otherwise specified. (Note EBC may be the Third Party Administrator, an administrative service provider, under a separate written service agreement between the Adopting Employer and EBC.) 2.24 Plan Year: January 1 - December 31 The initial “short” Pan Year: N/A 2.25 Spouse means: ☒ A provided in the Plan Document ☐ Other (Describe): Note: Health Care Expense cannot be defined more broadly than the description in IRS Revenue Ruling 2002-41, IRS Notice 2002-45, IRS Notice 2013-54, IRS Notice 2015-87 and the final HRA regulations issued on November 18, 2015. Note: If “Other”, confirm applicable law and tax treatment. 5 HRA Adoption Agreement v.01.01.18 ARTICLE IV: ELIGIBILITY AND PARTICIPATION 4.1 Eligibility requirements are as follows (check and complete only those that apply): ☐ Age (Minimum age must not exceed age 21) (Describe): ☐ Length of Service (Describe): Employment Classification (e.g., union, part-time, full-time): ☒ Union List which union groups are covered by the Plan: • AFSCME • IAFF • Police Association • IUOE Local 39 • Teamsters Confidential • Teamsters Mid-Management ☒ Current Collective Bargaining agreement (CBA) is attached and the CBA always dictates Plan eligibility. ☒ Non-Union List which non-union groups are covered by the Plan: • Public Safety Managers • Executive Management • City Manager ☐ Coverage under a specified group medical (Describe): ☐ Coverage sponsored by the Adopting Employer (Describe): ☐ Other Describe: ☐ Specified Exclusions (Note: Requirements for inclusions are noted above. Unless otherwise specified, non-resident aliens and leased employees are excluded. Specify any other exclusions here: 4.4 A Participant shall cease to be eligible to receive contributions under this Plan: ☒ As provided in the Plan Document ☐ Other (Describe): 4.5 A Participant shall cease to be a Participant in this Plan: ☒ As provided in the Plan Document 6 HRA Adoption Agreement v.01.01.18 ☐ Other (Describe): 4.5(e) Effective January 1, 2017 a Sponsoring Employer may provide that the Plan provide for a waiver rather than an opt-out and forfeit opportunity once each Plan Year and at termination of employment. The Participant’s election to must be irrevocable and must be either: ☐ Permanent - funds are forfeited ☒ Reinstated upon one of the following events: ☐ (i) A fixed date or event ☐ (ii) The participant’s death, or ☒ (iii) The earlier of (i) or (ii) above. Example: Participants or former Participants who have opted out of the Plan can reinstate their HRA Account balance when they become eligible for Medicare. The HRA Account balance can also be used by eligible family members if the HRA Account balance is reinstated upon the Participant’s death. After the opt-out election becomes effective, the Participant, former Participant, or eligible family member, cannot have access to the balance in the HRA Account prior to reinstatement. In that regard, any claims incurred after the waiver and prior to the reinstatement are not eligible for reimbursement The Adopting employer shall administer this opt-out rule in accordance with applicable regulatory guidance, including the final HRA regulations issued on November 18, 2015. Note: You will be making an election to this effect in Section 4.5 of this Adoption Agreement Note: Applicable with respect to an Integrated HRA or Retiree-Only HRA (see designation above: If this HRA is an Integrated HRA or Retiree-Only HRA, the Adopting Employer acknowledges that, as of Plan Years beginning on or after January 1, 2017, participants in the Plan must have the opportunity at least once each year and upon termination of employment to permanently or temporarily opt out of participation in the Plan and to temporarily or permanently waive reimbursements from the HRA. The Participant’s election to opt out of the Plan participation and to waive HRA reimbursements must be irrevocable and must be either: (i) Permanent; (ii) reinstated upon the Participant’s death or other fixed date or event or; (iii) the earlier of the Participant’s death or a fixed date or event. For 7 HRA Adoption Agreement v.01.01.18 ARTICLE V: PLAN BENEFITS 5.2 Timeframe for submitting claims (Describe): Two (2) years from date expense was incurred. 5.4 Time of Reimbursement: ☒ As provided in the Plan Document ☐ Other (Describe): 5.5 Maximum Reimbursement: ☒ As provided in the Plan Document ☐ Other (Describe): 5.6 Participant’s Death: ☒ As provided in the Plan Document for up to twelve (12) months ☐ Other (describe a longer time period to submit claims): 5.8 Use of forfeitures: Note: While access to funds are waived Participant and family members may not have access to the balance and any claims incurred during that time period may not later be submitted for reimbursement. Note: ACA minimum-Value Standards – Applicable with respect to an Integrated HRA (see designation in Section 2.15(e), (above): If this HRA is an Integrated HRA, the Adopting Employer acknowledges that reimbursement requirements under applicable regulatory guidance (including the final HRA regulations issued on November 18, 2015) differ depending on whether the applicable group health plan that is integrated with the HRA meets the ACA’s minimum value standards. For this purpose, an “applicable group health plan” is a group health plan sponsored by the Adopting Employer that satisfied the ACA’s minimum-value standards, In addition, provided that the Adopting Employer mains a health plan that meets the ACA’s minimum value standards, the employee’s Dependents are eligible for HRA reimbursements under the Plan even if they are covered under a different employer’s health plan that also meets the ACA’s minimum value standards. See the summary of this special rule in the Plan Document. The Adopting Employer shall administer the Integrated HRA reimbursement requirements consistent with applicable regulatory guidance, including the final HRA regulations issued on November 18, 2015. 8 HRA Adoption Agreement v.01.01.18 ☐ As provided in the Plan Document ☒ Pay administrative costs which would otherwise be paid from the Trust but only for those Participants in the same classification at the time of the forfeiture ☐ Other (Describe): 5.10 Which plan pays first: ☒ As provided in the Plan Document ☐ This Plan ☐ Other (Describe): 5.10(d) Other Limitations, if any: ARTICLE VI: EMPLOYER CONTRIBUTIONS 6.1 Employer Contribution amount, timing, restrictions (check all that apply): ☐ Fixed dollar amount ☐ Per pay period ☐ Per month ☐ Per quarter ☐ Per year ☐ Paid monthly only and only accessible to the extent the Participant has an account balance; or ☐ Paid monthly (or if needed sooner to pay an eligible expense, paid at the time the claim is made) ☐ Other (Describe): ☐ Restrictions, if any (Describe) ☒ Fixed Formula (Describe): ☒ Per pay period ☐ Per month Note: The choice of which plan pays first cannot be left to the Participant. Note: If you choose the second option above, the Adopting Employer will be required to “advance” payment to Participants, without discrimination, and will not be able to seek reimbursement for amounts advanced if a Participant terminates employment prior to the end of the Plan Year in which the sums are earned. 9 HRA Adoption Agreement v.01.01.18 ☐ Per quarter ☒ Per year ☐ Paid monthly only and only accessible to the extent the Participant has an account balance; or ☐ Paid monthly (or if needed sooner to pay an eligible expense, paid at the time the claim is made) ☒ Other (Describe): Refer to most recent collective bargaining agreement or employment contract. ☐ Restrictions, if any (Describe) ☒ Contribution of Accumulated paid time Off, Vacation, or Sick Leave Upon Termination of Employment (Describe): Refer to most recent collective bargaining agreement or employment contract. 6.2 Availability for reimbursement of HC Account balance: ☒ As provided in the Plan Document (available as contributions are made to the Trust): ☒ The balance of the Account at the time the claim is submitted; or ☐ The amount of the Employer Contribution available for the Plan Year. ☒ Upon termination of employment.* ☐ In the event a participant terminates employment after the age of 62 or age 55 with 10 years of service, the Account Balance shall not be subject to forfeiture, but shall be eligible for spend down until the Account is spent down to zero ($0.00).* ☐ Other (Describe): Note: If you choose the second option above, the Adopting Employer will be required to “advance” payment to Participants, without discrimination, and will not be able to seek reimbursement for amounts advanced if a Participant terminates employment prior to the end of the Plan Year in which the sums are earned. Note: If you choose the second option above, the Employer will be required to “advance” payment to Participants without discrimination, and will not be able to seek reimbursement for amounts advanced if a Participant terminates employment prior to the end of the Plan Year in which the sums are earned. 10 HRA Adoption Agreement v.01.01.18 ARTICLE VII: PREPAID BENEFITS CARD 7.1 Use of Prepaid Benefits Care to reimburse Health Care Expenses: ☐ Yes. (See Prepaid Benefits Card Addendum) ☐ No ARTICLE VIII: CLAIMS PROCEDURES 8.1 Alternative Claims and Review Procedures: ☒ As provided in the Plan Document ☐ Other (Describe): ARTICLE IX: PLAN ADMINISTRATION 9.1(c) Claims Administrator: ☒ EBC, as provided in the Plan Document ☐ Other (Specify): 9.7 Reasonable fees of Claims Administrator shall be paid as follows: ☒ Charged to the Participants HC Accounts ☐ Charged to the Trust ☐ Charged to the Plan and paid from the general assets of the Adopting Employer ☐ Other (Describe) ARTICLE XI: GENERAL PROVISIONS 11.8 Governing law: ☒ As provided in the Plan Document – California ☐ Other. List only one state: ARTICLE XIII: COBRA CONTINUATION COVERAGE 13.3 Alternative in Lieu of COBRA Continuation or Spend Down Feature (a) Applies to Integrated and/or limited-Purpose plans only. ☒ As provided in the Plan Document *Note: When termination of employment is a condition of reimbursement, such reimbursement availability shall cease immediately upon a previously terminated Participant’s return to active employment (rehire) with the Adopting Employer, pending such Participant’s subsequent termination of employment. In addition, no reimbursement may be made for expenses incurred during any period in which a participant “opt out” election is in effect. 11 HRA Adoption Agreement v.01.01.18 ☐ Other (e.g., remove five year requirement or adjust five year requirement) (b) Death of a Participant ☒ As provided in the Plan Document ☐ Other ☐ Legal spouse only ☐ Legal dependent(s) only FUNDING ADDENDUM: (Complete the following to specify the funding mechanism for the HRA) ☒ VEBA (Voluntary Employee Beneficiary Association IRC 501(c)(9) ☐ Integral Part Trust (IRC 115) ☐ General Asset Account (if selected, skip to the next section, (“Acknowledgements”) 1.1 Trustee means: City of South San Francisco 1.1 Indicate whether the Trustee is a directed Trustee under the Plan: ☒ Yes ☐ No 1.1 Indicate whether a custodian will be designated by the Trustee: ☒ Yes ☐ No Name, Address and Contact Information of the Custodian: MG Trust, 717 17th St., Ste 1300, Denver, CO 80202 Phone: 1-877-610-3822 2.5 Reasonable fees of Trustee shall be paid as follows: ☒ As provided in the Plan Document: ☐ Charged to the Plan and paid from the general assets of the Adopting Employer. ☐ Other (Describe): 2.6 Investment direction: ☒ To be directed by each Participant with respect to his or her HC Account. ☐ To be directed by an Adopting Employer-designated committee (Note: Such committee shall be designated by written action of the Adopting Employer). ☐ To be directed by the Adopting Employer ☒ Other (Describe): If no participant direction, funds will be placed in an age-based target date fund based on the participant’s age. ACKNOWLEDGEMENTS: A. Pursuant to Section 2.9(a), any collectively bargained Employees participating in this Plan participate because the collective bargaining agreement provides for coverage under this Plan. 12 HRA Adoption Agreement v.01.01.18 B. This Plan has been duly adopted or authorized to be adopted by the Adopting Employer’s Managing Body. C. This Plan is a “covered entity” for purposes of the Privacy Rules under the Health Insurance Portability and Accountability Act (HIPAA). D. The Adopting Employer acknowledges that it has received disclosure of fees with respect to EBC’s services and understands that disclosure of fees applicable to investment options under the Plan will be provided to the Adopting Employer by EBC and/or the Trustee (as applicable). The Adopting Employer acknowledges its responsibility to review fee arrangements for Plan services. Disclosed fee arrangements are deemed to be approved by the Adopting Employer when related Plan services are utilized. E. The Adopting Employer acknowledges that it has reviewed the Adoption Agreement, Plan Document and applicable Addendum/Addenda with its legal, tax and compliance advisers prior to signing below. F. This Adoption Agreement may be executed in any number of counterparts, any of which may be executed and transmitted by facsimile or other electronic means, and each of which will be deemed to be an original of this Adoption Agreement and all of which, when taken together, will be deemed to constitute one and the same instrument. ADOPTION OF THE PLAN BY ADOPTING EMPLOYER: (Required) ACKNOWLEDGMENT BY EDUCATORS BENEFIT CONSULTANTS, LLC: (Optional) Signature Signature Mike Futrell Loni Morrow Printed Name Printed Name: City Manager Legal Counsel Title Title Date Date Page 1 BUSINESS ASSOCIATE AGREEMENT WHEREAS, This Business Associate Agreement (“Agreement”) between The City of South San Francisco (“Plan Sponsor”) on behalf of the City of South San Francisco Retiree HRA Plan (the “Covered Entity”) and Educators Benefit Consultants, LLC (“EBC”) (the “Business Associate”) is effective upon execution. WHEREAS, Business Associate and Covered Entity have an existing business relationship as a Health Reimbursement Arrangement (“HRA”) administrator and an employer sponsoring such benefit plan. WHEREAS, the Business Associate regularly uses and comes into contact with Protected Health Information (as defined below) in its performance of contracted services for the Covered Entity. WHEREAS, both parties are committed to complying with the requirements under the Privacy Rule and the Security Rule of the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104 -191 (“HIPAA”) and Health Information Technology for Economic and Clinical Health Act (“HITECH”), as enacted as part of the American Recovery and Rehabilitation Act of 2009, Pub. L. No. 111-5 (“ARRA”). NOW THEREFORE, the parties hereby agree as follows: I. Definitions Terms used but not otherwise defined herein shall have the same meaning as those terms in the Privacy Rule and Security Rule. A. Business Associate – “Business Associate” shall mean EBC, as the HRA administrator and consultant for the Covered Entity, to the extent that health information received, maintained or created by EBC is PHI under the Privacy Rule. B. Breach – “Breach” shall mean the unauthorized acquisition, access, use or disclosure of PHI which compromises the security or privacy of such information, as defined in 45 CFR §164.402. C. Covered Entity – “Covered Entity” shall mean the Plan named above. D. Data Aggregation – “Data Aggregation” shall mean the combining of PHI created or received by Business Associate in its capacity as a business associate of the Covered Entity with the PHI received by Business Associate in its capacity as a business associate of another covered entity (as those terms are defined in 45 CFR §160.103), to permit data analyses that relate to the health care operations of the respective covered entities. E. Designated Record Set – “Designated Record Set” shall mean a group of records maintained by or for Covered Entity that is: (1) the medical records and billing records about Individuals maintained by or for Covered Entity; (2) the enrollment, payment, claims adjudication, and case or medical management record systems maintained by or for Covered Entity; or (3) used, in whole or in part, by or for Covered Entity to make decisions about Individuals. As used herein, the term “Record” means any item, collection or grouping of information that includes PHI and is maintained, collected, used or disseminated by or for Covered Entity. F. Disclose – “Disclose” shall have the same meaning as the term “disclose” in 45 CFR §160.103 and shall mean the release, transfer, provision of access to, or divulging in any manner of information outside the entity holding the information. Page 2 G. Discover – “Discover” (or Discovery or Discovered) shall mean that Business Associate has discovered a breach or Security Incident as of the first day on which the breach or Security Incident is known to Business Associate or, by exercising reasonable diligence would have been known to Business Associate. Business Associate shall be deemed to have knowledge of a breach if such breach is known, or by exercising reasonable diligence would have been known, to any person, other than the person committing the breach, who is a workforce member , Subcontractor or agent of Business Associate. H. Individual – “Individual” shall have the same meaning as the term “individual” in 45 CFR §164.501 and shall include a person who qualifies as a personal representative in accordance with 45 CFR §164.502(g). I. Plan – “Plan” shall mean the HRA named above for which Business Associate provides services involving the use or disclosure of PHI. J. Plan Sponsor – “Plan Sponsor” shall mean the sponsor of the Covered Entity named above. K. Privacy Rule – “Privacy Rule” shall mean the Standards for Privacy of Individually Identifiable Health Information at 45 CFR Part 160 and Part 164, subparts A and E as in effect or as amended. L. Protected Health Information – “Protected Health Information” or “PHI” shall mean the “protected health information” (as defined in 45 CFR §164.501) created or received by Business Associate from or on behalf of Covered Entity. M. Required by Law – “Required by Law” shall have the same meaning as the term “required by law” in 45 CFR §164.501. N. Secretary – “Secretary” shall mean the Secretary of the Department of Health and Human Services or his/her designee. O. Security Incident – “Security Incident” shall have the same meaning as the term “security incident” in 45 CFR §164.304. P. Security Rule – “Security Rule” shall mean the Security Standards and Implementation Specifications at 45 CFR Part 160 and Part 164, subpart C as in effect or as amended. Q. Subcontractor – “Subcontractor” shall have the same meaning as the term “subcontractor” in 45 CFR §160.103 and shall mean a person or entity to whom a Business Associate delegates a function, activity, or service, other than in the capacity of a member of the Business Associate’s workforce. R. Unsecured Protected Health Information or Unsecured PHI – “Unsecured Protected Health Information” or “Unsecured PHI” means PHI that is not rendered unusable, unreadable, or indecipherable to unauthorized individuals through the use of a technology or methodology specified by the Secretary in guidance. S. Use – “Use” shall have the same meaning as the term “use” in 45 CFR §160.103 and shall mean, with respect to individually identifiable health information, the sharing, employment, application, utilization, examination or analysis of such information within an entity that maint ains such information. Page 3 II. Obligations and Activities of Business Associate A. Generally. Pursuant to the Service Agreement, Business Associate provides services (“Services”) for Covered Entity that involve the use and disclosure of PHI. In the provision of these Services, Business Associate agrees not to acquire, access, use or disclose PHI other than as permitted or required by this Agreement or as Required by Law. To the extent possible, all uses and disclosures of PHI under this Agreement on or after September 23, 2009, will be limited to the Limited Data Set (as defined in 45 CFR §164.514(e)(2)). In all cases, Business Associate agrees that its uses and disclosures of PHI under this Agreement will be limited to the minimum necessary PHI needed to perform the functions, activities or services provided for by the Agreement. B. Permitted Uses and Disclosures by Business Associate. Except as otherwise limited in this Agreement, Business Associate may use or disclose PHI to perform functions, activities, or services for or on behalf of Covered Entity as described in the Service Agreement in effect between Business Associate and Plan Sponsor, provided that such use or disclosure would not violate the Privacy Rule or Security Rule, or any applicable state laws or regulations governing health information, if done by Covered Entity. 1. Except as otherwise limited in this Agreement, Business Associate may use PHI for the proper management and administration of Business Associate or to carry out the legal responsibilities of Business Associate. 2. Except as otherwise limited in this Agreement, Business Associate may disclose PHI for the proper management and administration of Business Associate, provided that (a) disclosures are Required by Law, or (b) Business Associate obtains reasonable assurances from the person to whom the information is disclosed that the PHI will remain confidential, that it will be used or further disclosed only as Required by Law or for the purpose for which it was disclosed to the person, that effective February 17, 2010, the person will comply with all HIPAA Privacy and Security Rule requirements that are applicable to the person, that the person will notify Business Associate within seven (7) calendar days of any instances of which it is aware in which the confidentiality of the information has been or may have been improperly acquired, accessed, used or disclosed (“breached”) and that for any breach occurring on or after September 23, 2009, the person will cooperate with Business Associate and/or Covered Entity to investigate said breach and to provide all information in its possession to Covered Entity that Covered Entity requires to determine whether such breach is a Breach and to comply with the HITECH notification and documentation requirements. 3. Except as otherwise limited in this Agreement, Business Associate may use PHI to provide Data Aggregation services to Covered Entity as permitted by 45 CFR §164.504(e)(2)(i)(B). 4. Business Associate may use PHI to report violations of law to appropriate Federal and State authorities, consistent with 45 CFR §164.502(j)(1). C. Mitigation. Business Associate agrees to mitigate, to the extent practicable and in a manner acceptable to Covered Entity, any harmful effect that is known to Business Associate of the use or disclosure of PHI by Business Associate in violation of the requirements of this Agreement. For any such use or disclosure of PHI occurring on or after September 23, 2009, Business Associate will provide Covered Entity with written information regarding its mitigation efforts sufficient to meet Covered Entity’s obligations to document and report such efforts to the Secretary under HITECH. Page 4 D. Safeguards Against Misuse of Information. Business Associate will implement appropriate administrative, physical and technical safeguards (including written policies and procedures) that reasonably and appropriately protect the confidentiality, integrity and availability of all PHI, including electronic PHI, that it creates, receives, maintains or transmits on behalf of Covered Entity as required by the Privacy and Security Rules. Business Associate will include in such safeguards procedures designed to identify Breaches or potential Breaches of PHI. E. Reporting of Disclosures of PHI. Business Associate agrees to report to Covered Entity any actual or probable use or disclosure of the PHI not provided for by this Agreement (“breach”) and/or any actual or probable Security Incident to Covered Entity. For any such breach or Security Incident that occurs on or after September 23, 2009, Business Associate will fully comply with 45 CFR §164.410. Business Associate agrees to report any breach or Security Incident to Covered Entity within ten (10) calendar days of Business Associate’s Discovery of such breach or Security Incident. In addition, Business Associate agrees to promptly supplement any report of a breach or Security Incident to Covered Entity after the above period if Business Associate discovers additional relevant information regarding such breach or Security Incident. F. Determination of Breach. Business Associate agrees to fully cooperate with Covered Entity in the investigation of any breach or Security Incident. Business Associate agrees that Covered Entity’s determination as to whether a Breach under 45 CFR §164.402 has occurred, and whether notification of such Breach is required under 45 CFR §§164.404, 164.406 or 164.408 will be final and binding on both parties. Business Associate agrees to conduct reasonable additional investigation at Covered Entity’s request and to provide relevant information in its possession regarding any applicable breach or Security Incident to Covered Entity to enable Covered Entity to provide notifications under 45 CFR §§164.404, 164.406 or 164.408. Notwithstanding the foregoing, nothing in this Agreement shall require Business Associate to provide information to Covered Entity that could not reasonably be used by Covered Entity to determine whether a Breach has occurred under 45 CFR §164.402, to provide notifications under 45 CFR §§164.404, 164.406 and 164.408, to maintain adequate documentation of all breaches, Breaches and Security Incidents or that is otherwise required or provided for in this Agreement. G. Subcontractors. Business Associate agrees to ensure that any agent, including a Subcontractor, to whom it provides PHI received from, or created or received by Business Associate on behalf of Covered Entity agrees in writing to the same restrictions and conditions that apply through this Agreement to Business Associate with respect to such information, including but not limited to reporting any breaches of PHI or Security Incidents and cooperating with Business Associate and Covered Entity to investigate such breach or Security Incident. Moreover, Business Associate shall ensure that any such agent or Subcontractor agrees to implement reasonable and appropriate safeguards, including written policies and procedures, to protect Covered Entity’s PHI as required by HIPAA and HITECH. H. Access to Information. Business Associate agrees to provide access, within fifteen (15) days of a request by Covered Entity, to PHI in a Designated Record Set held or maintained by Business Associate, including in electronic form and format, to Covered Entity or, as directed by Covered Entity, to an Individual in order to meet the requirements under 45 CFR §164.524. Page 5 I. Availability of PHI for Amendment. Within fifteen (15) days of receipt of a request from Covered Entity for the amendment of an Individual’s PHI or a record regarding an Individual contained in a Designated Record Set for so long as the PHI is maintained in the Designated Record Set, Business Associate shall provide such information to Covered Entity for amendment and incorporate any such amendments in the PHI as required by 45 CFR §164.526. It shall be Covered Entity’s responsibility to promptly notify Business Associate of the request for an amendment. Any denials, in whole or in part, of requested amendments shall be done in accordance with 45 CFR §164.526 and shall be the responsibility of Covered Entity. J. Accounting of Disclosures. Business Associate agrees to document such disclosures of PHI and information related to such disclosures as would be required for Covered Entity to respond to a request by an Individual for an accounting of disclosures of PHI in accordance with 45 CFR §164.528. Within fifteen (15) days of receipt of notice from Covered Entity that it has received a request for an accounting of disclosures of PHI regarding an Individual during the six (6) years prior to the date on which the accounting was requested, Business Associ ate shall make available to Covered Entity such information as is in Business Associate’s possession and is required for Covered Entity to make the accounting required by 45 CFR §164.528. At a minimum, Business Associate shall provide Covered Entity with the following information: (1) The date of the disclosure; (2) the name of the entity or person who received the PHI and, if known, the address of such entity or person; (3) a brief description of the PHI disclosed; and (4) a brief statement of the purpose of such disclosure which includes an explanation of the basis for such disclosure. It shall be Covered Entity’s responsibility to promptly notify Business Associate of the request for an accounting, and to prepare and deliver any such accounting requested. Business Associate hereby agrees to implement an appropriate record keeping process to enable it to comply with the requirements of this section. Business Associate’s obligations under this paragraph J include implementing a recordkeeping process to comply with HITECH §13405(c) to account for disclosures of electronic health records on or after January 1, 2011 (for all electronic health records acquired after January 1, 2009) or January 1, 2014 (for all electronic health records acquired as of January 1, 2009) unless the Secretary sets a later effective date. K. Access Provided to Secretary. Business Associate shall make its internal practices, books and records relating to the use and disclosure of PHI received from, or created or received by Business Associate on behalf of, Covered Entity available to the Secretary, if necessary, for purposes of determining the Covered Entity’s compliance with the Privacy Rule. L. Access Provided to Covered Entity. Upon fifteen (15) days advance written request, Business Associate will make available during normal business hours at Business Associate’s offices all books, records, agreements, policies and procedures relating to the use and/or disclosure of PHI to Covered Entity for purposes of enabling Covered Entity to determine Business Associate’s compliance with the terms of this Agreement. M. Return of PHI. Business Associate shall at the termination of this Agreement with Covered Entity, if feasible, return or destroy all PHI received from, or created or received by Business Associate on behalf of, Covered Entity that Business Associate still maintains in any form within fifteen (15) days of the end of the termination of this Agreement and retain no copies of such information. If such return or destruction is not feasible, Business Associate agrees to extend the protection of this Agreement to the information and limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible. Page 6 III. Obligations of Covered Entity A. Notice of Privacy Practices. Covered Entity shall notify Business Associate of any limitation(s) in its notice of privacy practices of Covered Entity in accordance with 45 CFR §164.520, to the extent that such limitation may affect Business Associate’s use or disclosure of PHI. Covered Entity may satisfy this requirement by providing Business Associate with the notice of privacy practices that Covered Entity produces in accordance with 45 CFR §164.520, as well as any changes to such notice. B. Requests by Covered Entity. Except as otherwise allowed in this Agreement, Covered Entity shall not request Business Associate to use or disclose PHI in any manner that would not be permissible under the Privacy Rules if done by Covered Entity. This includes, but is not limited to, requests for disclosure of PHI to Plan Sponsor as other than the entity acting on behalf of the Plan as the Covered Entity. To the extent a dispute or difference of opinion exists between Business Associate and Plan Sponsor acting on behalf of the Plan(s), Business Associate may disclose under objection pursuant to the specific, written direction of Covered Entity. Any disclosures made pursuant to such specific, written direction shall be subject to the indemnification provisions of the Agreement. C. Changes in Permission. Covered Entity shall notify Business Associate of any changes in, or revocation of, permission by Individual to use or disclose PHI, to the extent that such changes may affect Business Associate’s use or disclosure of PHI. D. Restrictions. Covered Entity shall notify Business Associate of any restriction to the use or disclosure of PHI that Covered Entity has agreed to in accordance with 45 CFR §164.522, to the extent that such restriction may affect Business Associate’s use or disclosure of PHI. IV. Term and Termination A. Term. This Agreement shall become effective on the date set forth above and shall continue in effect until all obligations of the parties have been met, unless terminated as provided in this Section IV. In addition, certain provisions and requirements of this Agreement shall survive its expiration or other termination as set forth in Section V.C. B. Termination for Cause. 1. Termination by Covered Entity. As provided under HIPAA, Covered Entity may immediately terminate this Agreement and any related agreements if Covered Entity makes the determination that Business Associate has breached a material term of this Agreement. Alternatively, Covered Entity may choose to: (i) provide Business Associate with ten (10) days written notice of the existence of an alleged material breach; and (ii) afford Business Associate an opportunity to cure said alleged material breach upon mutually agreeable terms. Nonetheless, in the event that mutually agreeable terms cannot be achieved within fifteen (15) days, Business Associate must cure said breach to the satisfaction of Covered Entity within fifteen (15) days. Failure to cure in the manner set forth in this paragraph is grounds for the immediate termination of this Agreement. Page 7 2. Termination by Business Associate. If Business Associate makes the determination that a material condition of performance has changed under the Service Agreement or this Agreement, of that Covered Entity has breached a material term of this Agreement, Business Associate may provide thirty (30) days notice of its intention to terminate this Agreement. Business Associate agrees, however, to cooperate with Covered Entity to find a mutually agreeable resolution to the matter prior to terminating the Agreement. Business Associate further agrees that, notwithstanding this provision, it shall not terminate this Agreement so long as the Service Agreement is in effect; provided that, however, failure to cure a breach of a material term of this Agreement is grounds for the immediate termination of this Agreement. C. Automatic Termination. This Agreement will automatically terminate without any further action of the parties upon the termination or expiration of the Service Agreement between the parties. D. Effect of Termination 1. Except as provided in paragraph 2, below, upon termination of this Agreement for any reason, Business Associate shall return or destroy all PHI received from Covered Entity, or created, maintained or received by Business Associate on behalf of Covered Entity. This provision shall apply to PHI that is in the possession of Subcontractors or agents of Business Associate. Business Associate shall retain no copies of the PHI. 2. In the event that Business Associate determines that returning or destroying the PHI is infeasible, Business Associate shall provide to Covered Entity notification of the conditions that make return or destruction infeasible. Upon Business Associate’s determination that return or destruction of PHI is infeasible, Business Associate shall extend the protections of this Agreement to such PHI and limit further uses and disclosures of such PHI to those purposes that make the return or destruction infeasible, for so long as Business Associate maintains such PHI. 3. If it is not feasible for Business Associate to obtain from a Subcontractor or agent any PHI in the possession of such Subcontractor or agent, Business Associate must provide a written explanation to Covered Entity and require the Subcontractors and agents to agree to extend any and all protections, limitations and restrictions contained in this Agreement to the Subcontractors’ and/or agents’ use and/or disclosure of any PHI retained after the termination of this Agreement, and to limit any further uses and/or disclosures to the purposes that make the return or destruction of the PHI infeasible. V. Miscellaneous A. Indemnification. Each Party (“Indemnitor”) shall indemnify, defend and hold harmless the other Party (“Indemnitee”) from and against any and all of the following incurred by the Indemnitee: losses, damages, suits, causes of action, claims, liabilities, federal or state penalties, fines, costs including without limitation reasonable attorneys’ fees, court costs, costs of notification to, or credit reporting protection for, individuals whose PHI was disclosed or alleged to have been disclosed in violation of the terms of this Agreement, HIPAA or any applicable state law (the “Losses”) to the extent that such Losses arise out of or relate to Indemnitor’s grossly negligent, intentional, willful, reckless or criminal acts or omissions or its breach of the terms of this Agreement. This Section V.A. shall survive termination of this Business Associate Agreement. Page 8 B. Amendment and Waiver. The Parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for Covered Entity and Business Associate to comply with the Privacy Rule, the Security Rule and other HIPAA requirements. Notwithstanding the foregoing, this Agreement may not be modified, nor shall any provision hereof be waived or amended, except in writing, duly signed by authorized representatives of the parties. A waiver with respect to one event shall not be construed as continuing, or as a bar to or waiver of any right or remedy as to subsequent events. C. Survival. The respective rights and obligations of Business Associate under Sections IV.D. and V.A. of this Agreement shall survive the termination of this Agreement. D. Interpretation. Any ambiguity in this Agreement shall be resolved to permit Covered Entity and/or Business Associate to comply with the Privacy Rule and the Security Rule. E. No Third Party Beneficiaries. Nothing express or implied in this Agreement is intended to confer, nor shall anything in this Agreement confer, upon any person or entity other than the parties and their respective successors or assigns any rights, remedies, obligations or liabilities whatsoever. F. Notices. All notices shall be in writing and sent by registered mail, overnight mail, courier or transmitted by facsimile (if confirmed by such mailing) to the addresses indicated in the signature page of this Agreement or such other addresses as either party may indicate by at least ten (10) days prior written notice. G. Limitation of Liability. Neither party shall be liable to the other party for any incidental, consequential, special, or punitive damages of any kind or nature, whether such liability is asserted on the basis of contract, tort (including negligence or strict liability), or otherwise, even if the other party has been advised of the possibility of such loss or damages. [Signatures on the following page] Page 9 VI. Signatures. In witness whereof, each of the undersigned has caused this Agreement to be duly executed in its name and on its behalf effective upon complete execution of this document. BUSINESS ASSOCIATE – EDUCATORS BENEFIT CONSULTANTS, LLC (“EBC”) Loni Morrow Legal Counsel Aviben Dated: ________________________ COVERED ENTITY – City of South San Francisco Signature Mike Futrell, City Manager 400 Grand Avenue Address 1 South San Francisco, CA 94080 City, State, Zip Code Dated: *All revenue sharing dollars shall be credited back to participants’ accounts (e.g., 12b1s, Sub TAs, and inter est earned via “The Standard II” fixed account). © Educators Benefit Consultants, LLC. All Rights Reserved. 1995 E. Rum River Dr. S, Cambridge, MN 55008. City of South San Francisco HEALTH REIMBURSEMENT ARRANGEMENT ADMINISTRATIVE SERVICES AGREEMENT (Confidential) Thank you for retaining Educators Benefit Consultants, LLC d/b/a Aviben (“Aviben” or “EBC”) to perform services for your HRA Plan. We look forward to working with you and will do our best to provide service for your HRA Plan in a prompt and efficient manner. This summarizes the work we are to perform, outlines our fees and billing procedures, and notifies you of your responsibilities. Please read it carefully and call us with any questions you may have. If you do not have any questions, please sign and return the enclosed copy to our office. The engagement will renew on the first day of each succeeding plan year, unless either of us gives the other notice of termination of this engagement 90 days prior to the end of any plan year. You will receive notice of any increases in the cost of administration services at least 100 days prior to the end of the plan year. In the event the notice of increase is not received by you at least 90 days prior to the end of the plan year, you will have 30 days after the receipt of the increase to give us notice of the cancellation of our services. 1. WHAT AVIBEN WILL DO: A. Plan Documentation – Aviben will prepare the following documentation for the Plan in accordance with current with Internal Revenue Codes (IRC) 105, 106, 213(d), 115, 501(a), and the Affordable Care Act (ACA) as applicable. Aviben will make recommendations to employer as needed on ways to comp ly with these Code sections in the future. Employer will be notified of the cost, and the content of the changes required to the following, if relevant: ▪ Plan Document ▪ Adoption Agreement ▪ Funding Addendum (Naming the Trust Vehicle) ▪ Summary Plan Description ▪ Enrollment Forms ▪ Claim Forms ▪ Notice of Privacy Practices (HIPAA requirement) ▪ Business Associate Agreement (HIPAA requirement) B. Trust Documentation – Public Employers have the option between two different trust types an IRC 115 (Integral Part Trust) or a IRC 501(c)(9) (Voluntary Employee Beneficiary Association or VEBA Trust). Private Sector Employers that desire to implement a Trust only have the VEBA Trust as an option. ▪ Trust Addendum: Specific to VEBA or 115 Requirements ▪ Custodial Agreement: Specific to VEBA or 115 Requirements ▪ Benny Card Addendum C. Aviben will prepare the following documentation for the establishment of the VEBA Trust. ▪ Form SS-4 to request trust tax ID number ▪ Form 8718: User Fee for Exempt Organization Determination Letter Request o User fee to be paid by employer ▪ Form 1024: Application for Recognition of Exemption Under Section 501(a) and all supporting materials D. Administrative Duties: To follow are some of the daily administrative functions performed by Aviben ▪ Process claims ▪ Provide employee enrollment materials ▪ Reimburse participants via ACH, check, or debit card process ▪ Customer service call center ▪ Reporting as required under Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007 ▪ Provide a secure participant web portal ▪ Provide a secure employer web portal ▪ Monitor HRA investment offerings ▪ Mail or e-mail statements to participants at least annually ▪ Consulting services to employer ▪ Provide PCOR participant count report and payment instructions ▪ Provide Transitional Reinsurance Fee participant count report and payment instructions E. Plan Amendments – From time to time a plan will need to be amended either to reflect voluntary changes made by the plan sponsor or to reflect mandatory changes required by law. Aviben shall prepare the following in response to voluntary or mandatory amendments. • Resolution to Amend • The Amendment or an Adoption Agreement • Summary of Material Modifications (describes changes and impact on plan) The fee for a voluntary amendment shall be $200.00 The fee for a mandatory amendment shall be $0 2. Other Services A. Discrimination Test (D-Test) Performed Annually. If elected as an option, Aviben shall perform a discrimination test based on employee information that you submit in accordance with IRC 105(h). If elected, Employer shall receive D-Test notice early in the Plan year from Aviben. Employer shall complete and submit via an on-line process. Aviben shall provide written outcome and analysis of the D-Test for Employer. I understand that if I elect to have Aviben run the annual test we will be invoiced the cost quoted in the Service Agreement Addendum – Fee Schedule. Aviben shall invoice us upon completion of the test. B. Summary of Benefit Coverage (SBC) and Uniform Glossary. The ACA provides that participants must receive a SBC upon a) initial enrollment in a plan; b) at the beginning of each new plan year; and c) within seven business days of requesting a copy. SBC are not required for all HRAs. Upon consulting with an Aviben representative it will be determined whether or not your HRA Plan requires an SBC. In general the following plans are exempt from the SBC requirement: • Retiree Only HRAs • Limited-Use HRAs • Integrated HRAs only if the insurance SBC addresses the HRA Plan The IRS provides that an SBC may be delivered in an electronic format. If elected, your HRA Plan’s SBC and Uniform Glossary will be loaded on the employee web portal and updated 3 months before your plan year renews. If you want the SBC mailed to participants Aviben shall be reimbursed for the postage expense. I understand that if I elect for Aviben to provide an updated SBC and Uniform Glossary for our employer-sponsored HRA Plan on an ongoing annual basis, this SBC and Glossary will be posted on the employee web portal every year and we will be invoiced the cost quoted in the Service Agreement Addendum – Fee Schedule. I further understand that if I elect to have Aviben mail the SBC to employees 3 months before our plan year begins, we will be billed the cost of the mailings in addition to the cost quoted in the Service Agreement Addendum – Fee Schedule. C. Annual Form 990 Filing (annual requirement for VEBA trusts). If desired, Aviben shall prepare signature ready Form 990 on an annual basis for filing with the IRS; employer will be responsible for following our instructions to sign and timely file these forms with the appropriate government agency. The 990 is due on the 15th day of the fifth month after the plan year ends. I understand that if I elect to have Aviben prepare the filing we will be invoiced the fee quoted in the Service Agreement Addendum. The fee will be charged when the f iling package is sent to employer for signature and mailing. D. Annual Form 5500 Filing (annual requirement for private sector plans). If desired, Aviben shall prepare and submit to electronic filing service for filing with the Department of Labor (DOL). This filing is required for private sector VEBA plans. Employer will be responsible for following our instruction to electronically sign and timely file the form with the appropriate government agency. This filing is due by the last day of the seventh month after the plan year ends. I understand that if I elect to have Aviben prepare the filing we will be charged the fee quoted in the Service Agreement Addendum – Fee Schedule once the Form is submitted for electronic signature. E. COBRA Administration for HRA Plan. If desired, Aviben will provide certain COBRA Administration services for the HRA Plan including sending the HRA COBRA Election packet and providing the option to elect the alternative to COBRA (spend down feature). I understand that if I elect to have Aviben perform the COBRA Administration services, we will be charged the fee quoted in the Service Agreement Addendum – Fee Schedule. 3. WHAT YOU AGREE TO DO It is impossible for us to provide services to you without your cooperation. Therefore, you are responsible for the following: • Timeliness and Accuracy of Data – We must receive complete, accurate, and timely information. We will rely exclusively on information provided by you , your agents, employees, or advisors, whether oral or in writing, and will have no responsibility to verify independently the accuracy of that information. We assume no responsibility to acquire information other than to request it from you and will not be liable for any errors or omissions made because of incomplete or incorrect information that you furnish to us. In the event inaccurate or incomplete materials require that we repeat any compliance work already completed, you will be charged an additional fee. • Annual Compliance – Upon request we may require employee census data, updated information about your company. Following the receipt of complete information from you, Aviben will do the following: • Filing Government Reports – We will prepare certain government reports on your behalf. You will be responsible for the timely filing of these reports with the appropriate agency. • Notification of Contacts by Government Agenci es – You will notify Aviben of any plan audits, investigations, or examinations by any governmental agency including, without limitation, the Internal Revenue Service or U.S. Department of Labor. If additional services are needed in connection with any such audit, investigation, or examination, Aviben will provide those services and bill separately for those services under our Fee Schedule. • Qualified Medical Child Support Order (“QMCSO”) Determination – Unless you otherwise request us to assist in the determination, you will be responsible for the determination of whether court orders comply with the QMCSO requirements of the Code. In the event you have possession of any QMCSO requiring the separation of any assets of the Plan, you must inform Aviben of the required separation. • Other Plans - The Plan's operation and tax qualification is affected by other plans sponsored by the Company (whether currently active or terminated, and whether or not we administer them). You are responsible for informing us of other plans. • Mutual Indemnification – Employer shall indemnify and hold harmless Aviben and each of its officers, and employees from and against any and all claims, damages or expenses of any kind incurred by Aviben as a result of a third party claim that the employer acted in negligence, willfully, or in violation of applicable standard of care in breach of its obligations under this Plan. Aviben shall indemnify and hold harmless Employer and each of its officers, directors, and employees from and against any and all claims, damages or expense of any kind incurred by employer as a result of a third party claim that Aviben acted in negligence, willfully, or in violation of applicable standard of care in breach of its obligations under this Plan. • Confidentiality – The Aviben design shall not be divulged by the Employer to any third parties, unless written permission is received from Aviben, providing that the Employer may divulge aspects of the Aviben design when acting as a reference to third parties who are considering adoption of the Aviben system. 4. BILLING PROCEDURES AND COLLECTIONS • Statements, Late Charges, Stopping of Work - You will be billed on an ongoing basis for work performed by Aviben that is not taken directly from the participants’ accounts. Invoices are due upon receipt, and become delinquent and subject to late charges if payment is not received by our office within 30 days. If payment is past due in excess of 30 days, we reserve the right to stop all work until your account is brought current. In addition, balances not paid within 30 days of the invoice date will bear a late charge equal to 1.5% of the outstanding balance for each month or partial month until paid in full. Aviben is not responsible for any late tax filings or penalt ies, fines, taxes, or other charges that may be assessed. • Governing Law - This agreement shall be interpreted, construed, and enforced in accordance with the laws of the State of Minnesota and shall and the obligations, rights, and remedies of the partie s hereunder shall be determined in accordance with such laws. Any action brought by any party hereto shall be brought within the State of Minnesota. If jurisdiction exists in Federal Courts, the parties agree to bring any action in the District Court of Minnesota in the City of St. Paul. If Federal jurisdiction does not exist, the parties agree to bring any action in the Tenth Judicial District, or the County of Isanti. • Costs and Expenses - In addition to the fees quoted in the attached Fee Schedule, you are responsible for payment of any out-of-pocket expenses we may incur on your behalf, such as IRS user fees, and extensive travel expenses.1 5. ENTIRE AGREEMENT This Service Agreement and the Service Agreement Fee Schedule contains the entire agreement between you and Aviben with respect to your HRA Plan. This Agreement supersedes any prior conflicting agreements. This agreement may be modified only by mutual written consent between you and Aviben. We will commence work under this agreement upon receipt of a signed copy of this Service Agreement and Service Agreement Fee Schedule. If you have questions regarding this letter, please call 1-888-507-6053. 6. ACCEPTANCE The items and conditions of this Service Agreement are agreed to and accepted by an Aut horized Plan Representative on behalf of the Plan and by the Employer: Dated: _______________________________ Dated: _____________________________ Name of Employer: City of South San Francisco Educators Benefit Consultants, LLC By: ___________________________________ By: _______________________________ Mike Futrell, City Manager Loni Morrow, General Counsel City of South San Francisco Educators Benefit Consultants, LLC 400 Grand Avenue 1995 E. Rum River Dr. South South San Francisco, CA 94080 Cambridge, MN 55008 1 Aviben will absorb the cost of one business trip per year to an employer’s location. Trips in excess of one made at the request of the employer shall be paid for by the employer (mileage and lodging) unless otherwise negotiated. *All revenue sharing dollars shall be credited back to participants’ accounts (e.g., 12b1s, Sub TAs, and inter est earned via “The Standard II” fixed account). © Educators Benefit Consultants, LLC. All Rights Reserved. 1995 E. Rum River Dr. S, Cambridge, MN 55008. SERVICE AGREEMENT ADDENDUM – FEE SCHEDULE FOR SERVICES PROVIDED Plan: City of South San Francisco Retiree HRA ______________________________________________________________ Employer: City of South San Francisco ______________________________________________________________ Pursuant to the attached “Administration Services Agreement”, Aviben has been engaged by the “Plan” to provide administration and compliance services. The specific services are outlined in the “Administration Services Agreement”. The purpose of this agreement is for the Plan and Employer to acknowledge the fees associated with the administrative services provided by Aviben and to authorize Aviben to deduct fees for these services directly from participant accounts or via invoiced directly to Employer (either by design, or in the event of non-payment by the Employer). 1. Fees - For the performance of these services, Aviben will charge the following: A. Plan Documentation Fee (Document and Set-up) – One time only……………………………….$1,000 B. Trust Documentation – One time only……………………………………………………………………$250 C. Administrative Fees (charged quarterly in advance): Employer Pays  Retiree-Only HRA……………………………………………………$0.00 per participant per month Participant Pays All HRAs in a VEBA or 115 Trust are subject to asset based fee of 14 bps per quarter. If funds are invested in anything other than the fixed interest account or the money market other investment fees shall also apply.* . D. System Fee………………………………………$1.00 per participant per month once claims-eligible PLEASE CHECK ONE: X Charge by deducting from Participant account annually in advance  Charge Employer quarterly E. Plan Amendments Paid By Employer a. Voluntary amendments………………………………………………………………………..$200.00 b. Federally mandated amendments………………………………………………………………$0.00 2. Other Services Aviben Can Provide if Desired [PLEASE CHECK DESIRED OPTIONS]:  Discrimination Test…………………………………………………………..$500.00 (if elected by Employer) X 990 Filing (VEBA’s Requirement)……………………………………………………………………..$500.00  5500 Filing (only private sector plans) ……………………………………………………………….$500.00  COBRA Administration…………………………….$20.00 per packet & $7.00 per participant per month 3. EFT/ACH Authorization for Contributions and Reimbursements Unless otherwise negotiated, I will authorize Aviben to receive information via an electronic transaction from the Plan. BY:________________________________ Print Name & Title_Janet Salisbury, Finance Director__________ Phone:__(650)_________________________ ACKNOWLEDGMENTS A. Any collectively bargained Employees participating in this Plan participate because the collective bargaining agreement provides for coverage under this Plan. B. This Plan has been duly adopted or authorized to be adopted by the Employer’s Committee. C. The Employer acknowledges that it has reviewed the Adoption Agreement, Plan Document , Service Agreement, and applicable Addendum/Addenda with its legal, tax and compliance advisers prior to signing below. D. This Service Agreement, and applicable Addendum/Addenda may be executed in any number of counterparts, any of which may be executed and transmitted by facsimile or other electronic means, and each of which will be deemed to be an original of this Service Agreement, and applicable Addendum/Addenda and all of which, when taken together, will be deemed to constitute one and the same instrument for purposes of execution. Executed by: EMPLOYER: City of South San Francisco By: Mike Futrell Title: City Manager Date: EDUCATORS BENEFIT CONSULTANTS, LLC d/b/a Aviben By: Loni Morrow Title: General Counsel Date: