Loading...
HomeMy WebLinkAbout2011-273 Co. Mgr. - RDS Services, LLC - Agreement for Early Retiree Reinsurance Program Services 1*, �3 'yam' RDS SERVICES,LLC AGREEMENT FOR EARLY RETIREE REINSURANCE PROGRAM SERVICES THIS AGREEMENT FOR EARLY RETIREE REINSURANCE PROGRAM SERVICES ("Agreement")is entered into by and between RDS Services,LLC, a Michigan limited liability company ("RDS")and Orange County North Carolina("Plan Sponsor")and shall be effective as of July 21,2011 ("Effective Date"). Plan Sponsor maintains a group health program(hereinafter referred to as the"Plan")under which eligible individuals are able to obtain certain retiree health care benefits.Plan Sponsor desires to engage RDS to assist Plan Sponsor with certain requirements and opportunities with respect to the Early Retiree Reinsurance Program("Reinsurance Program")under the Patient Protection and Affordable Care Act of 2010 ("PPACA of 2010"),and RDS desires to provide such assistance,all on the terms and subject to the conditions set forth in this Agreement. NOW THEREFORE,the parties agree as follows: SECTION 1 SERVICES AND RESPONSIBILITIES 1.01 RDS Services.During the term of this Agreement,RDS shall provide to Plan Sponsor the services described on Exhibit A to this Agreement(collectively, "RDS Services"). In performance of the RDS Services,RDS shall rely on any communication and/or data reasonably believed by it to be genuine, including necessary information received from Plan Sponsor in a timely manner and in good order.For purposes hereof, "timely manner"means a reasonable period of time as may be necessary for sorting,processing, analyzing,entering and/or posting of information received. 1.02 Responsibilities of Plan Sponsor.Plan Sponsor(or its designee(s)other than RDS) shall serve as the administrator, fiduciary and primary decision maker for the Plan,with all of the rights and responsibilities for administering the Plan in connection with the Reinsurance Program, and RDS shall have no such authority or responsibility except as may be specifically provided in this Agreement. During the term of this Agreement, and as a condition to RDS' obligation to provide the RDS Services,Plan Sponsor's responsibilities shall include the responsibilities set forth on Exhibit B to this Agreement. 1.03 Compensation.The fees for the RDS Services are set forth on Exhibit C to this Agreement.RDS shall send an invoice to Plan Sponsor for fees.Payment shall be due 30 days after receipt of invoice. Accounts and invoices not paid by the later of the end of the month,or within 30 days of billing,are considered delinquent and are subject to a monthly service charge of 1.5 percent(1.5%)of the delinquent amount. Late fees and charges shall not apply where there is a bona fide dispute as to the amount owed. 1.04 Caveats.By its execution of this Agreement,Plan Sponsor is acknowledging its knowledge, understanding and agreement to the specific items set forth on Exhibit D to this Agreement regarding the RDS Services. 1.05 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY STATED HEREIN,RDS DISCLAIMS TO THE FULLEST EXTENT PERMISSIBLE BY LAW ALL WARRANTIES, EXPRESS OR IMPLIED, AS TO THE NATURE OR STANDARD OF THE RDS SERVICES HEREUNDER, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT, IN Troy_5724401+12 NO EVENT WILL RDS BE LIABLE FOR SPECIAL,CONSEQUENTIAL OR INDIRECT DAMAGES, INCLUDING BUT NOT LIMITED TO LOSS OF PROFITS OR LOSS OF USE. SECTION 2 RELATIONSHIP OF THE PARTIES 2.01 Independent Contractor. In performing services under this Agreement,RDS performs all acts as an independent contractor and not as an officer,employee or agent of the Plan.Nothing in this Agreement shall be construed to mean that Plan Sponsor(or any of its agents)retains any control over the manner and means of how RDS performs the services provided for herein,but only a right to review the results of the work performed. 2.02 Not a Fiduciary or Insurer.Plan Sponsor is the named fiduciary and/or primary decision maker of the Plan.As fiduciary and/or decision maker,Plan Sponsor maintains discretionary authority and responsibility in the administration and operation of the Plan,including,but not limited to,the determination of covered services,interpretation of the terms of the Plan, and the determination of eligibility for and entitlement to benefits under the Plan in accordance with the terms of the Plan. RDS does not assume any responsibility for any act,omission or breach by any fiduciary. SECTION 3 TERM AND TERMINATION 3.01 Term. This Agreement shall be in effect for a period of one (1) year starting on the Effective Date and will automatically renew for subsequent years unless otherwise terminated in accordance with Section 3.02. 3.02 Termination. Subject to continuing obligations under Section 3.03, this Agreement may be terminated as specified below: (a)By either party as of the date the other voluntarily or involuntarily files for bankruptcy protection or any or all portion of its business operations; (b)By mutual written agreement of the parties; (c)Upon termination of the Reinsurance Program by the Department of Health&Human Services ("HHS"); or (d)By Plan Sponsor if RDS breaches this Agreement in any material respect and fails to cure such breach within thirty(30)days following written notice of such breach from Plan Sponsor. 3.03 Obligations After Contract Termination; Survival. All responsibilities of either party under this Agreement shall terminate upon the termination of this Agreement, except that the following rights and liabilities of the parties shall survive the termination of this Agreement for the specified time period as provided below or as otherwise agreed by the parties hereto: (a) Plan Sponsor's duty to pay RDS for amounts due to RDS hereunder,until such amounts are paid in full, specifically including all payments with respect to all Reinsurance Subsidies paid to Plan Sponsor as a result of the a "claim reimbursements" made by RDS to HHS provided such amounts are undisputed by Plan Sponsor.. (b) Plan Sponsor's and RDS' respective duties hereunder that are predicated on,or reasonably contemplate continuation beyond,the termination of this Agreement, including,but not limited to, this Section 3.03 and Sections 3.04, 3.05, 3.06, and 5.02. Notwithstanding the foregoing, such duties shall not survive beyond the duration of any applicable statute of limitations. 2 Troy_572440_14-J2 (c)Plan Sponsor's and RDS' indemnification duties and liabilities under Section 4 hereof with respect to events and claims arising before the termination of the Agreement,until the appropriate statute of limitations has run. 3.04 Outstanding Fees; Records.Upon termination of this Agreement,Plan Sponsor agrees to remit to RDS any outstanding balances due(or which,under Section 3.03(a),becomes due)under this Agreement. Without limiting other available remedies,RDS shall have the right to retain all records in its possession with regard to its services pursuant to this Agreement until receipt of all undisputed outstanding monies due. 3.05 Cooperation with Successor. In the event Plan Sponsor appoints a successor to RDS for any or all of RDS' services described herein,RDS shall cooperate as reasonably necessary in transferring files,records, reports and the like,and RDS shall be entitled to reasonable compensation for its services in connection therewith.Notwithstanding any provision of this Agreement(including any exhibit or addendum hereto),to the contrary,RDS shall not,without prior written agreement with Plan Sponsor,be obligated to assist a successor to RDS or otherwise take or continue any action following termination of the Agreement if and to the extent such assistance or action may reasonably be viewed as causing RDS to become a fiduciary with respect to the Plan in any manner. 3.06 Access to Information.Plan Sponsor shall have the right,upon providing reasonable notice,to periodically review, at its own expense,any records of RDS relating to the services provided herein; any examination of such records shall be carried out in a manner mutually agreeable to RDS and Plan Sponsor and to the extent permitted by applicable law. SECTION 4 INDEMNIFICATION 4.01 Indemnification by Plan Sponsor. Plan Sponsor agrees to indemnify RDS,its officers,directors, employees and agents for and hold them harmless from any claim,liability,cost,loss,expense or damage (including reasonable attorney fees)which may be paid or incurred by RDS resulting from or in connection with a material breach by Plan Sponsor of its responsibilities and duties outlined under this Agreement, provided, however, no section of the Agreement is intended to create a waiver of Plan sponsor's rights or privileges as a sovereign entity. 4.02 Indemnification by RDS. RDS agrees to indemnify Plan Sponsor,its officers, directors, employees and agents for and hold them harmless from any claim,liability, cost,loss, expense or damage(including reasonable attorney fees)which may be paid or incurred by Plan Sponsor resulting from or in connection with a material breach by RDS of its responsibilities and duties outlined under this Agreement. SECTION 5 GENERAL PROVISIONS 5.01 Amendment;Assignment.This Agreement may not be amended without the express written consent of both parties.No assignment by either party pertaining to this Agreement shall be valid without the express written consent of the other party,which consent will not be unreasonably withheld. 5.02 Confidentiality.RDS recognizes that it shall be provided with personal information regarding Members of Plan in the course of providing services under this Agreement.RDS shall safeguard such information to ensure that no person who does not need to know such information has access to such information.To the extent required by law,RDS will enter into a"Business Associate Agreement"with the Plan and/or Plan Sponsor. 5.03 Entire Agreement.This Agreement(including any exhibits or addenda hereto)constitutes the 3 Troy_57244014-]2 complete and exclusive statement of the terms of the agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings, promises, and arrangements, oral or written,between the parties with respect to the subject matter hereof. 5.04 Governing Law and Jurisdiction. To the extent not preempted by federal law, including ERISA, this Agreement shall be governed by and construed in accordance with the laws of the State of North Carolina without regard to conflicts-of-law principles that would require the application of any other law. The Parties agree that jurisdiction and venue for any matter arising out of or pertaining to this Agreement shall be proper only in the state and federal courts located in Orange County and the Middle District of the State of North Carolina,United States of America,and the Parties hereby consent to such jurisdiction and venue. 5.05 Headings.The headings of this Agreement are solely for the convenience of the parties and do not affect the meaning or interpretation of any provision of this Agreement. 5.06 Notice. Any notice required to be given hereunder between the parties shall be written,effective upon receipt and shall be served by facsimile or by personal delivery or certified mail,return receipt requested to the address cited in the signature block of this Agreement or to such other address as shall be specified by like notice by either party. 5.07 Other Service Providers,No Legal or Tax Advice. RDS may seek the services of others in performing its duties and obligations under this Agreement. Such service providers shall not have access to personal health information of Plan Sponsor's Members unless such service providers sign a business associate agreement with RDS which is substantially the same as the business associate agreement executed between RDS and the Plan and/or Plan Sponsor. Plan Sponsor acknowledges and agrees that RDS' services pursuant to this Agreement are in the nature of consulting, logistical and non-discretionary ministerial services and are not intended, and shall not be construed or characterized as, the provision of legal or tax advice or professional fiduciary services. 5.08 Successor and Assigns, Waiver. Subject to the provisions of Section 5.01 above,this Agreement shall be binding upon and inure to the benefit of and be enforceable against the parties hereto and their respective successors and assigns. Failure to enforce any provision of this Agreement shall not affect the rights of the parties to enforce such provision in another circumstance or their right to enforce any other provision of this Agreement at any time. If any provision of this Agreement is determined to be unenforceable or invalid, such determination shall not affect the validity of the other provisions contained in this Agreement. 5.09 Counterparts.This Agreement may be executed in multiple counterparts,each of which shall be deemed to be an original and all of which together shall constitute a single agreement. [SIGNATURE PAGE FOLLOWS] 4 Troy_5724401112 IN WITNESS WHEREOF,the parties hereto have caused this Agreement to be executed, effective as of the Effective Date,by their duly authorized officers. RDS Services,LLC Orange County North Carolina(Plan Sponsor) By: By:_ Name: A-1171-/4- H L4 e-r� Name: pth+ U). C IF114 Title: Title: &MHZIZ Address: /You w Lan 1"-kt-/l're Address: Date: /� // Date: e, 5 Troy_572440_[+]2 EXHIBIT A RDS SERVICES 1. RDS Services—Generally. During the term of this Agreement, RDS shall provide the following services,as more specifically detailed in Sections 2 through 4 below: (a) Determine and assist in completion of Plan Sponsor's "requirements to participate", as defined under Section 1102(b)of the PPACA of 2010 (45 CFR 149.35), and summarized below. Plan Sponsor's employment-based plan must: (i) Be certified by the Secretary of HHS (ii) Include programs and procedures that have generated or have the potential to generate cost-savings for plan participants with chronic and high-cost conditions A sponsor must: (A) Make available information, data, documents, and records as specified in 45 CFR 149.350 (B) Have a written agreement with its health insurance issuer or employment-based plan regarding disclosure of pertinent plan information to comply with the program (C) Ensure that policies and procedures to protect against fraud, waste and abuse under the program are in place (D) Submit an application to the Secretary in the manner,and at the time,required by the Secretary. (b) Assist Plan Sponsor in applying for the Reinsurance Program subsidy in connection with the Plan(as described in Section 1102 of the PPACA of 2010 and 45 CFR Part 149). 2. Specific RDS Services — Reinsurance Subsidy. During the term of this Agreement, RDS shall provide any or all of the following services as may be necessary to assist Plan Sponsor with respect to the Reinsurance Subsidies: (a) General consultation regarding the Reinsurance Program and assist in determining the magnitude of potential Reinsurance Subsidies that may be available to Plan Sponsor; (b) Assist in the identification of"qualifying claim" data which may include payments for medical, surgical, hospital and prescription drug costs, or other benefits as the HHS Secretary determines under Section 1102(a)(2)(A)of the PPACA of 2010; (c) Assist in obtaining, compiling and documenting detailed expenditure information from third-party administrators,insurance companies and other sources; (d) Appoint a Reinsurance Subsidy Account Manager for Plan Sponsor and assist in the preparation of an application to Department of Health and Human Services ("HHS") for the Reinsurance Subsidies, and assist with follow-up tasks as may be required by HHS, including the timely submission of plan information and claims detail to HHS; and (e) Assist in the design and establishment of a system for the proper retention of relevant data as may be proper and necessary for compliance with the Reinsurance Program and any audits by HHS in connection with the Reinsurance Subsidies. 3. Specific RDS Services — Ongoing Services. During the term of this Agreement, RDS shall provide the following ongoing services: (a) Maintain and update a database containing the eligibility of each Individual with coverage under the Plan and/or under the Reinsurance Program; (b) Maintain other appropriate records regarding the Plan in respect of the Reinsurance Program as may be required by federal law; and (c) Assist Plan Sponsor with submission of, or access to, the records in RDS' database as may be required for HHS regulatory, audit,and/or other business purposes. 4. Additional Services. Additional general consulting services by RDS, if any, shall be provided upon request by Plan Sponsor and approval by RDS for the additional service fees as specified on Exhibit C to this Agreement. EXHIBIT B RESPONSIBILITIES OF PLAN SPONSOR Preparation and Provision of Eli ig'bility List and Plan Information.Plan Sponsor shall: (a) Prepare a complete and accurate set of current enrollment records for all Early Retiree Members under the Plan. Such records shall be delivered to RDS in an electronic format acceptable to RDS as soon as practicable following the Effective Date. Thereafter, Plan Sponsor shall promptly update such enrollment records in an electronic format acceptable to RDS,notifying RDS of any and all changes in Early Retiree Member's status, including the addition of new Early Retiree Member,termination from plan, changes in dependent status or any other changes that may affect the eligibility of a Early Retiree Member; (b) Make available, or cause to be made available to RDS, certain reports and information to which Plan Sponsor has access, as mutually agreed to by the parties. Such reports and information may include, but shall not be limited to: (i) certification that a Early Retiree Member is eligible for benefits under the Plan; (ii) a description and identification of the types of benefits to which a Early Retiree Member is entitled; (iii)date of a Early Retiree Member's eligibility; and(iv) Early Retiree Member contribution rates (i.e., amounts) for single coverage, two-person coverage, and family coverage (or such other coverage units as may be applicable under the Plan) for all coverage's available under the Plan. Upon request, Plan Sponsor shall provide RDS with any other reasonable and necessary information regarding Early Retiree Members; (c) Provide RDS with a complete copy of the Plan Document (and summary plan description, if separate),including any amendments and summary of material modifications; and (d) Be solely responsible to inform RDS of any changes in the information it previously supplied RDS. Reinsurance Subsidy Application and Related Tasks (a) To enable RDS to fulfill all of its duties regarding the Reinsurance Subsidy Plan Sponsor consents to and authorizes RDS' designation of an employee or a representative of RDS to be the "Account Manager" for purposes of the Reinsurance Subsidy application to HHS, with the necessary authority to (i) begin the Reinsurance Subsidy application process on behalf of Plan Sponsor, (ii) have and maintain full access to Plan Sponsor's Reinsurance Subsidy Application, and (iii) assign "Application Designees" and such other designees as may be necessary in the Reinsurance Subsidy application and any follow-up processes. (b) To enable RDS to fulfill all of its duties regarding the Reinsurance Program Plan Sponsors consents to and authorizes RDS' designation of employees or representatives of RDS to act as designees in connection with the Reinsurance Subsidy application to HHS, with the necessary authority to (i) gather, organize and submit appropriate information to HHS and (ii) request Reinsurance Subsidy payments from HHS. (c) Plan Sponsor shall provide its full and good faith cooperation in the procurement; access and/or review of such other reasonable information as may be determined by RDS to be reasonably necessary in order to perform its services hereunder. Except as may be otherwise agreed to by RDS,Plan Sponsor specifically agrees that: (i) All electronic communications between HHS and Plan Sponsor or any of its employees or agents shall exclusively be conducted through the Server, URL address, email address and/or website established or approved by RDS for Plan Sponsor, and (ii) Any electronic communication related to this Agreement to HHS from Plan Sponsor or any of its employees or agents shall only be initiated with the knowledge and consent of the Reinsurance Subsidy Account Manager. HIPAA Compliance. Notwithstanding any provision in this Agreement to the contrary, Plan Sponsor shall, during the term of this Agreement,be solely responsible for ensuring that the Plan is and remains in full compliance with the privacy and security requirements under the Health Insurance Portability and Accountability Act (HIPAA) and implementing regulations. In particular, Plan Sponsor shall have in place all necessary business associate agreements, Plan amendments, and related documentation to the extent required under HIPAA in order to (i) permit the disclosure of protected health information (within the meaning of HIPAA) to Plan Sponsor and (ii) establish the permitted and required uses and disclosures of protected health information by Plan Sponsor. EXHIBIT C COMPENSATION RDS' compensation for the services provided pursuant to the Agreement shall be: I. Reinsurance Subsidy Services. For the RDS Services as described in Sections 1, 2 and 3 of Exhibit A to this Agreement, the fee for such RDS Services shall be equal to a percent (based on the sliding percent scale below)of the amount of each Reinsurance Subsidy payment received by Plan Sponsor from HHS as a result of any Reinsurance Subsidy Application prepared by RDS or reimbursement requests made by RDS pursuant to this Agreement. SUMOYRECOVERED FEE% $0 to$100,000 20% 100,001 to 500,000 10% $500,001 to$2,000,000 5% Over$2,000,000 2% * Annual Fee maximum shall not exceed$200,000 For purposes of clarifying the foregoing language and table, it is understood that: 1. Fees shall be paid to RDS based on this Agreement after the Plan Sponsor receives a subsidy payment as stated in paragraph 1.03. 2. The percentage(s) to be used to calculate RDS' Fees based on particular subsidy payment shall be based on the aggregate amount of subsidy payments the Plan Sponsor has already received from HHS as a result of any reimbursement requests made by RDS during the applicable ERRP plan year. It shall also be based on the amount of that particular payment if the payment causes the aggregate amount of subsidy payments to rise into another "SUBSIDY RECOVERED" range. 3. The annual maximum amount of fees to be paid to RDS based on subsidy payments the Plan Sponsor receives from HHS shall be $200,000 for each ERRP plan year.4.The fees to be paid to RDS are not to be calculated by simply multiplying the total "SUBSIDY RECOVERED"by the "FEE%"applicable to the range of the "SUBSIDY RECOVERED" as shown in the above table. Instead, the fee structure is graduated with the fee percentage to be applied to particular payments gradually decreasing as the aggregate amount of payments to the Plan Sponsor increases. Fees paid to RDS shall be reduced by or refunded as a result of claim reversals and adjustments that reduce future recoveries by Plan Sponsor or require re-payment by Plan Sponsor to HHS. However,RDS shall not have its fees reduced and shall not have to refund any fees in the case of claim reversals and adjustments if any of the following apply or applies: 1. RDS does not receive actual or constructive notice from any source that Plan Sponsor will have its future recovery reduced or will have to re-pay an amount recovered. 2. The claim reversal or adjustment stems from the Plan Sponsor's material breach of this Agreement. 3. The claim reversal or adjustment does not stem from: i. any service performed by RDS under this Agreement or any other agreement Plan Sponsor may have in the future with RDS, ii. any reinsurance subsidy application prepared by RDS,or iii. any reimbursement request made by RDS. 2. General Consulting Services. In the event Plan Sponsor requests RDS to provide consulting services that are in addition to the Reinsurance Subsidy Services identified in paragraph 1 above, such services shall be provided based on the time spent at the following hourly rates: a. $250/hour for professional staff of RDS b. $100/hour for paraprofessional staff of RDS C. $50/hour for all other staff of RDS 3. Retainer. Upon execution of this Agreement, Plan Sponsor shall pay a one-time payment, as set forth below, as a retainer, to be applied against compensation due RDS under the terms of this Agreement. In the event Plan Sponsor terminates this Agreement before RDS has earned the entire amount of the retainer, RDS shall be entitled to retain any remaining balance. If Plan Sponsor receives limited or no subsidy because funds under the Program have been exhausted, Plan sponsor shall be entitled back retainer minus fees paid. In the event that RDS' Reinsurance Subsidy engagement ends because the application is not approved and the Plan does not qualify for the Reinsurance Subsidy, RDS shall return all retainer amounts paid by Plan Sponsor to the Plan Sponsor within 15 days. The one-time retainer will be established by the number of estimated"early retirees" at the commencement of this Agreement. The retainer amount will be as follows: Number of"early retirees" Retainer Up to 100 $5,000 101 to 500 $10,000 Over 500 $15,000 EXHIBIT D CAVEATS Plan Sponsor acknowledges, understands and agrees to the following with respect to Reinsurance Subsidy services: 1. RDS may conclude that the Plan does not qualify for the Reinsurance Subsidy because it fails a Reinsurance Program test or for some other reason.Unless there is a straightforward fix(which RDS will inform Plan Sponsor of),RDS' Reinsurance Subsidy engagement will end, with no residual duty or obligation for RDS (RDS will try and make this determination as soon as possible following the signing of this Agreement); 2. Plan Sponsor has been given a written copy of the HHS Reinsurance Subsidy Application, has reviewed the Plan Sponsor Agreement and has determined that it is willing to sign the Plan Sponsor Agreement; 3. Plan Sponsor understands that the Reinsurance Program is a temporary program administered by HHS and that only limited funds have been made available for Plan Sponsors applying. Applicants are not guaranteed reinsurance subsidy upon submission of Application. Moreover, the amounts will vary substantially and it is not possible to accurately predict either the amount or even the frequency of such payments. Plan Sponsor's actual Reinsurance Subsidy payments are calculated one eligible retiree("ER")at a time,based on that retiree's qualifying claim utilization; 4. In generating benefit cost information for purposes of requesting Reinsurance Subsidy payments, RDS may need to filter out certain claims that may not qualify under the Reinsurance Program and are therefore ineligible for Reinsurance Subsidy payments. Due to impracticalities that are inherent in any filtering process(e.g.,whether a claim should or should not be filtered out in this process may depend on factual circumstances that could not be known by RDS or any other vendor), RDS will adopt, unless instructed otherwise by Plan Sponsor, a conservative approach that errs in favor of excluding claims that potentially may NOT be covered under Section 1102 of the PPACA of 2010 and any regulations forthcoming. This conservative approach is intended to minimize the possibility of Plan Sponsor improperly receiving more payments than is legally permitted under the Reinsurance Subsidies program; 5. In generating benefit cost information for purposes of requesting Reinsurance Subsidy payments, RDS will need to report to HHS any rebates or other provider discounts, credits or like amounts received by the Plan Sponsor or the Plan; 6. The Subsidy Application must be filed in a timely manner to ensure a greater likelihood of success receiving subsidy. For this reason, it is critical that Plan Sponsor and vendors provide RDS with necessary information in a timely manner; and 7. RDS will provide a report to Plan Sponsor matching any subsidy funds received with any Early Retirees of Plan Sponsor for whose claims the subsidy was paid. RDS will also keep Plan Sponsor up to date on the progress of receipt of any subsidy amounts. 3 Business Associate Contract This Business Associate Contract (Agreement) is entered 'alto by and between Orange County North Carolina(Covered Entity)and RDS Services,LLC(Business Associate),effective immediately. WHEREAS, Covered Entity is a group health plan as defined in the administrative simplification provisions within the Health Insurance Portability and Accountability Act of 1996(HIPAA Privacy and Security Rules). WHEREAS,Business Associate provides consulting services to Covered Entity on matters related to the Early Retiree Reinsurance program: WHEREAS, Business Associate has been retained by the Covered Entity to perform a function or activity on behalf of the Covered Entity that requires that the Business Associate have access to Protected Health Information (PHI). WHEREAS, Covered Entity desires to receive satisfactory assurances from the Business Associate that it will comply with the obligations required of business associates by the HIPAA Privacy and Security Rules. . WHEREAS, the parties wish to set forth their understandings with regard to the use and disclosure of PHI by the.Business Associate in performance of its obligations. NOW, THEREFORE, in consideration of the mutual promises set forth below, the parties hereby agree as follows: A.USE AND DISCLOSURE OF PHI Covered Entity hereby grants Business Associate permission to use, disclose, and request from third parties PHI on behalf of Covered Entity or an organized health care arrangement in which the Covered Entity is a member in order to: 1. Perform or assist in performing a function or activity regulated by the HIPAA Privacy or Security Rules, including, but not liinited to, administration, quality assurance, analysis related to managing the Early Retiree Reinsurance program, and customer service. 2. Assist the Covered Entity's other business associates retained to provide legal advice, accounting, actuarial, consulting, data aggregation, management, administration, accreditation, or financial services to the Covered Entity or to an organized health care arrangement in which the Covered Entity participates. 3. Allow Business Associate to properly manage and administer the Business Associate's organization or to carry out the legal responsibilities of the Business Associate. 4. Perform functions, activities, or services for, or on behalf of, Covered Entity as specified above, except as otherwise limited by this Agreement, or if such use or disclosure would violate the HIPAA Privacy or Security Rules if done bythe Covered Entity. The parties hereby acknowledge and agree to the terms of this Agreement consisting of a total of five(5) pages, including this signature page, which together represent an Agreement between the parties concerning use and disclosure of Protected Health Information. IN WITNESS WHEREOF,the undersigned have executed this Agreement. RDS Services,,LL Orange County North Carol'na Signed: Signed: Date: / ���1� Date: Name: Mark Manquen Name: Title: President Title: , Address: 1450 W.Long Lake Rd., Suite 250 Address: Troy,MI 48098 B. OBLIGATIONS AND ACTIVITIES OF BUSINESS ASSOCIATE 1.Use and Disclosure of PHI.Business Associate shall not use or further disclose PHI other than as permitted by this Agreement or as required by law. To the extent practicable,Business Associate shall limit its use or disclosure of PHI or requests for PHI to a limited data set, or if necessary,to the minimum necessary to accomplish the intended purpose of such use, disclosure or request. .2. Safeguards. Business Associate shall use appropriate safeguards to prevent the use or disclosure of PHI other than pursuant to the terms and conditions of this Agreement, including establishing procedures that limit access to PHI within its organization to those employees with a need to know the information. Business Associate agrees that it will implement reasonable administrative,physical,and technical safeguards to protect the confidentiality,integrity and availability of electronic PHI that it creates,receives, maintains or transmits on behalf of the Covered Entity, as required by the HIPAA Privacy Rule. Effective February 17,2010,the requirements of 45 C.F.R. Sections 164.308, 164.310 and 164.312 applicable to such administrative,physical and technical safeguards shall apply to Business Associate in the same manner that such sections apply to Covered Entity.Further, effective February 17,2010,Business Associate shall implement, and maintain in written form,reasonable and appropriate policies and procedures to comply with the standards, implementation specifications or other requirements of the HIPAA Security Rule,in accordance with 45 C.F.R. Section 164.316,which shall apply to Business Associate in the same manner that such sections apply to Covered Entity. 3. Unauthorized Disclosures of PHI. Business Associate shall, within ten(10)business days of becoming aware of a disclosure of PHI in violation of this Agreement by Business Associate, its officers, directors, employees, contractors, or agents or by a third parry to which Business Associate disclosed PHI,report to Covered Entity any such disclosure.Business Associate agrees to mitigate,to the extent practicable, any harmful effect of the unauthorized disclosure. This section shall also apply to any breach of unsecured PHI where the breach is applicable to new regulations and is discovered on or after 30 days from the issuance of those new regulations. Notice of any such breach shall include the identification of any individual whose unsecured PHI has been, or is reasonably believed by Business Associate, to have been accessed, acquired or disclosed during such breach and any other information required by the applicable regulations. 4. Security Incidents.Business Associate shall promptly report to Covered Entity any Security Incident of which it becomes aware,in accordance with the HIPAA Security Rule. 5.Agreements With Third Parties.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 the Covered Entity, agrees to the same restrictions and conditions that apply through this Agreement to Business Associate with respect to such information. 6.Access to Information. Within ten(10)business days of a request by the Covered Entity for access to PHI about an individual contained in a Designated Record Set,Business Associate shall make available to the Covered Entity such PHI for so long as such information is maintained in a Designated Record Set.In the event any individual requests access to PHI directly from the Business Associate,Business Associate shall respond to the request for PHI within ten(10)business days.Any denials of access to the PHI requested shall be the responsibility of the Business Associate. 7. Availability of PHI for Amendment.Business Associate agrees to make any amendments to PHI in a Designated Record Set that the Covered Entity directs or agrees to pursuant to 45 CFR 164.526 at the request of the Covered Entity or an individual, and in the time and manner designated by Covered Entity. 8. Inspection of Books and Records.Business Associate agrees to 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 Covered Entity, or at the request of the Covered Entity,to the Secretary of the U.S. Department of Health and Human Services or its designee(the "Secretary"), in a time and manner designated by the Covered Entity or the Secretary, for purposes of the Secretary determining Covered Entity's compliance with HIPAA. 9.Accounting of Disclosures. Business Associate agrees to maintain and make available to the Covered Entity an accounting of disclosures of PHI as would be required for Covered Entity to respond to a request by an individual made in accordance with 45 CFR 164.528. Business Associate shall provide an accounting of disclosures made during the six (6) years.prior to the date on which the accounting is requested (or during the three (3) years prior to the date the accounting is requested for PHI maintained in an electronic_health record, beginning on the applicable effective date pursuant to the American Recovery and Reinvestment Act of 2009). At a minimum, the accounting of disclosures shall include the following information: 1 a.Date of disclosure, b. The name of the person or entity who received the PHI, and if known,the address of such entity or person, c. A brief description of the PHI disclosed, and d. A brief statement of the purpose of such disclosure which includes an explanation of the basis of such disclosure. . In the event the request for an accounting is delivered directly to the Business Associate, the Business Associate . shall respond to the request within ten(10)business days. Any denials of a request for an accounting shall be the responsibility of the Business Associate. Business Associate agrees to implement an appropriate recordkeeping process to enable it to comply with the requirements of this Section. 10.Remuneration in Exchange for PHI. Effective six(6)months after the issuance of applicable final regulations pursuant to the American Recovery and Reinvestment Act of 2009, Business Associate shall not directly or indirectly receive remuneration in exchange for any PHI without a valid authorization permitting such remuneration, except as permitted by law. C. OBLIGATIONS OF COVERED ENTITY 1. Covered Entity shall comply with each applicable requirement of the HIPAA Privacy and Security Rules. 2. Covered Entity shall provide 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. 3. Covered Entity shall provide Business Associate with any changes.in, or revocation of,permission by individual to use or disclose PHI, if such changes affect Business Associate's permitted or required uses and disclosures. 4. 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. D. PERMISSIBLE REQUESTS BY COVERED ENTITY Covered Entity shall not request Business Associate to use or disclose PHI in any manner that would not be permissible under HIPAA if done by the Covered Entity, except that Business Associate shall be per_miffed to use PHI as set forth in this Agreement. E. TERIVIINATION 1. Term. The provisions of this Agreement shall take place on the Agreement's Effective Date and shall terminate when all of the Protected Health Information provided by Covered Entity to Business Associate, or created,maintained,transmitted or received by Business Associate on behalf of Covered Entity,is destroyed or returned to Covered Entity, or,in accordance with Section E(3)(b) of this Agreement. 2. Termination for Cause. Without limiting the termination rights of the parties pursuant to the Agreement and upon either party's knowledge of material breach of this Agreement or non compliance with an applicable law by the other party, the non-breaching party shall provide an opportunity for the breaching party to cure the breach or end the violation, or terminate the Agreement, if the breaching party does not cure the breach or end the violation within the time specified by the non-breaching party, or immediately terminate this Agreement, if, in the non-breaching party's reasonable judgment, cure is not possible. 3. Effect of Termination. a. Except as provided in Section E3(a),upon termination of this Agreement, for any reason,Business Associate shall return or destroy all Protected Health Information received from the Covered Entity,or created,maintained,transmitted or received by Business Associate on behalf of Covered Entity. This provision shall apply to Protected Health Information that is in the possession of subcontractors or agents of Business Associate. Business Associate shall retain no copies of the Protected Health Information. b. In the event the Business Associate determines that returning or destroying the Protected Health Information is infeasible,Business Associate shall provide to Covered Entity notification of the conditions that make return or destruction infeasible. Upon mutual agreement of the parties that return or destruction of Protected Health Information is infeasible,per Section 3(a)above, Business Associate shall continue to extend the protection of this Agreement to such Protected Health Information and limit further uses and disclosures of such Protected Health Information for so long as Business Associate maintains such Protect Health Information. 4. Judicial or Administrative Proceedings. Either party may terminate the Agreement, effective immediately if:(a)the other party is named as a defendant in a criminal proceeding for a violation of HIPAA or(b)a finding or stipulation that the other party has violated any standard or requirement of HIPAA or other security or privacy laws is made in any administrative or civil proceeding in which the party has been joined. . 5. Return or Destruction of PHI Upon termination of this Agreement,Business Associate shall return or destroy all PHI received from Covered Entity, or created 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. Notwithstanding the above,to the extent that the Business Associate determines that it is not feasible to return or destroy such PHI,the terms and provisions of Paragraphs A,B and C shall survive termination of this Agreement and such PHI shall be used or disclosed solely for such purpose or purposes which prevented the return or destruction of such PHI. F. DEFINITIONS Terms used, but not otherwise defined, in this Agreement shall have the same meaning as those terms in 45 CFR 160.103 and 164.501. Capitalized terms within this Agreement are defined in the text or as follows: 1. Designated Record Set means a group of records maintained by or for the Covered Entity that is (a) medical records and billing records about individuals maintained by or for the Covered Entity, (b)the enrollment,payment,claims adjudication, and case or medical management record systems maintained by or for a health plan, or(c)used, in whole or in part,by or for the 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 the Covered Entity. 2. Protected Health Information (PHI) as defined at 45 CFR 164.501 means information that is received from Covered Entity, or created or received by Business Associate on behalf of Covered Entity,whether oral, written, or electronic,that a)is created or received by a health care/prescription drug provider,health plan, employer, or health care clearinghouse, and b)relates to the past,present, or future physical or mental health or condition of an individual;the provision of healthcare to an individual; or the past,present, or future payment for the provision of healthcare to an individual; and(1)identifies the individual or(2)with respect to which there is a reasonable basis to believe the information can be used to identify the individual. G. GENERAL PROVISIONS 1. Amendment. This Agreement may be amended only by the mutual written agreement of the parties. The parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for the Covered Entity or Business Associate to comply with the requirements of HIPAA. 2. Indemnification.Business Associate shall release, indemnify and hold Covered Entity harmless from and against any claims, fees, and costs,including,without limitation,reasonable attorneys' fees and costs, which are related to Business Associate's failure to perform its obligations under this Agreement. Covered Entity shall release,indemnify and hold Business Associate harmless from and against any claims,fees, and costs, including without limitation,reasonable attorneys'fees and costs, which are related to Covered Entity's alleged improper use or disclosure of Protected Health Information or other breach of this Agreement.It is the intent of this Section to require Business Associate to indemnify the Covered Entity to the extent permitted under North Carolina law. 3. Remedies. The parties acknowledge that breach of Paragraphs A and B of this Agreement may cause irreparable harm for which there is no adequate remedy at law. In the event of a breach, or if either party has actual notice of an intended breach, such party shall be entitled to a remedy of specific performance and/or injunction enjoining the other party from violating or further violating this Agreement. The parties agree the election of the party to seek injunctive relief and or specific performance of this Agreement does not foreclose'or have any effect on any right such party may have to recover damages. 4. Survival. Business Associate's obligation to limit its use and disclosure of PHI as set out in Paragraphs A and B survive the termination of this Agreement so long as Business Associate has PHI received during the performance of its services as described in this Agreement. 5. Assigns.Neither this Agreement nor any of the rights,benefits, duties, or obligations provided herein may be assigned by any party to this Agreement without the prior written consent of the other party. 6. Third Party Beneficiaries.Nothing in this Agreement shall be deemed to create any rights or remedies in any third parry. 7. Interpretation.Any ambiguity in this Agreement shall be resolved in favor of a meaning that permits the Covered Entity and/or Business Associate, as applicable,to comply with HIPAA. 8. Notices. Any notice given under this Agreement must be in writing and delivered via first class mail,via reputable overnight courier service, or in person to the parties'respective addresses as first written above or to such other address as the parties may from time to time designate in writing. 9. Waiver. The failure of the Covered Entity to require compliance by the Business Associate with any provisions of this Agreement or the waiver by the Covered Entity of any breach of this Agreement shall not constitute a waiver of any claim for damages by the Covered Entity for any breach of this Agreement or a waiver of any other required compliance with this Agreement. 10. Governing Law and Jurisdiction. This Agreement and duties, responsibilities, obligations, and rights of respective parties hereunder shall be governed by applicable federal laws and to the extent not pre-empted by federal laws,the State of North Carolina. Any and all suits or actions to enforce, interpret or seek damages with respect to any provision of, or the performance or non-performance of, this Agreement shall be brought in the state and federal courts located in Orange County and the Middle District of the State of North Carolina, United States of America. It is agreed by the parties that no other court shall have jurisdiction or venue with respect to such suits or actions. The Parties may agree to nonbinding mediation of any dispute prior to the bringing of such suit or action. If any provision of this Agreement is determined to be unenforceable or invalid, such determination shall not affect the validity of the other provisions contained in this Agreement.