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2014-318 HR - UnitedHealthCare for United HealthCare Application for Excess Loss Insurance Policy $1,625,322
■ Clerk to the Board's — wwv�! to the _please return this c epmanent agenda file o office for p UNITEDHEALTHCARE INSURANCE COMPANY A Stock Company 185 Asylum Street,Hartford,Minnesota Phone: 1-860-702-5000 APPLICATION FOR EXCESS LOSS INSURANCE The undersigned Applicant requests the Excess Loss Insurance Benefits shown herein and provided by UnitedHealthcare Insurance Company,and agrees to be bound by the terms and provisions of the Excess Loss Insurance Policy. Full Legal Name of Applicant: Orange County Address: 200 South Cameron Street,Hillsborough,NC 27278 Key Contact: Diane Shepherd Telephone: 919-245-2558 Tax ID: Applicant is a: Local Government Nature of Business of the Group to be Insured: Local Government Requested Effective Date: January 1,2014 Total number of eligible persons: Employees: 869 Retirees: 153 Are retirees covered: Y Agent or Broker: Mark III Brokerage Inc. SS No.or Tax ID: Address: 211 Greenwich Road,Charlotte,North Carolina 28211 SPECIFIC EXCESS LOSS INSURANCE: Benefit Period:Covered Expenses Incurred from January 1,2014 through December 31,2014,and Paid from January 1,2014 through December 31,2014. Specific Deductible per Covered Person: $100,000 Specific Percentage Reimbursable: 100% Maximum Specific Benefit per Covered Person:Unlimited Covered Expenses Under Specific Excess Loss: • Medical • Stand Alone Prescription Drug Program Specific Excess Loss Premium: $88.80 per subscriber per month AGGREGATE EXCESS LOSS INSURANCE Benefit Period:Covered Expenses Incurred from January 1,2014 through December 31,2014,and Paid from January 1,2014 through December 31,2014. Covered Expenses under Aggregate Excess Loss Coverage: • Medical • Stand Alone Prescription Drug Program Aggregate Percentage Reimbursable: 100% Maximum Aggregate Benefit: $2,000,000 per Policy Year UHIAPP(12/01) Minimum Annual Aggregate Deductible:$8,291,417 or 95%of the first Monthly Aggregate Deductible amount times 12, whichever is greater. Maximum Covered Expenses per Covered Person accumulating toward the Maximum Aggregate Benefit: $100,000 Monthly Aggregate Factors:$730.97 per subscriber Aggregate Excess Loss Premium:$4.99 per subscriber per month It is understood and agreed by the undersigned that: a. The statements,declarations and representations made in this Application,any request for proposal,the underwriting information provided by or on behalf of the undersigned and the Plan Document are the undersigned's representations; that any Policy is issued in reliance upon the truth of such statements,declarations,and representations;and that such statements,declarations,and representations will form a part of the Excess Loss Insurance Policy. Any inaccuracy in such information or failure to disclose any such information, including all claims or possible claims, paid or pending, or which the Employer should otherwise know about,if discovered later,can result in rejection of this Application,or can change the terms,conditions or premiums,or can void coverage. b. As a condition precedent to the approval of this Application, the undersigned shall furnish to the Company a copy of the executed Plan Document within 90 days after the date of this application describing the benefits provided by the Plan, which shall be kept on file in the office of the Company. If the Company does not receive the Plan Document within 90 days, the Company may refund all premium and the Application shall have been null and void when signed. No Excess Loss Insurance will be effective nor reimbursement made unless a Plan Document is received and accepted by the Company. C. The Company will evaluate the undersigned's risk, as requested by this application, the underwriting data received and represented by the Plan and may require adjustments of rates,factors,and/or special limitations. d. Any coverage resulting from this Application shall be subject to the terms and provisions of the Policy herein applied for. Coverage shall become effective on the date specified in this Application if all requirements of the Company, including the Plan Document and the underwriting requirements have been met and the required premiums paid. e. The receipt by the Company of the first month's premium and deposit of any check drawn in connection with this Application shall not constitute an acceptance of liability. In the event the Company does not approve this application, its sole obligation shall be to refund such sum to the undersigned. The undersigned has read the entire Application for Excess Loss Insurance and understands that the insurance requested herein is not in effect until this Application is approved and accepted by the Company. Full Legal Name of Applicant: V y` -,,-t Signature of A Sze er o / Print Na e: Title: Date: r YJ Signature of Agent or Broke Print Name of Agent or Broker: UHIAPP(12/01) FRAUD WARNING NOTICES: (Please review notice that applies in your state) For applicants in Arkansas and Louisiana: Any person who knowingly presents a false or fraudulent claim for payment of a loss or benefit or knowingly presents false information in an application for insurance,is guilty of a crime and may be subject to fines and confinement in prison. For applicants in Colorado: It is unlawful to knowingly provide false, incomplete or misleading facts or information to an insurance company for the purpose of defrauding or attempting to defraud the company. Penalties may include imprisonment,fines,denial of insurance, and civil damages. Any insurance company or agent of an insurance company who knowingly provides false,incomplete,or misleading facts or information to a policyholder or claimant for the purpose of defrauding or attempting to defraud the policyholder or claimant with regard to a settlement or award payable from insurance proceeds, shall be reported to the Colorado division of insurance within the Department of Regulatory Agencies. For applicants in District of Columbia: WARNING: It is a crime to provide false or misleading information to an insurer for purpose of defrauding the insurer or any other person. Penalties include imprisonment and/or fines. In addition, an insurer may deny insurance benefits if false information materially related to a claim was provided by the application. For applicants in Florida: Any person who knowingly and with intent to injure, defraud, or deceive any insurer files a statement of claim or an application containingany false,incomplete,or misleading information is guilty of a felony of the third degree. For applicants in Kentucky,New Mexico,Ohio,and Pennsylvania: Any person who knowingly and with intent to defraud any insurance company or other person files an application for insurance or statement of claim containing any materially false information or conceals for the purpose of misleading, information concerning any fact material thereto commits a fraudulent insurance act, which is a crime and subjects such person to criminal and civil penalties. For applicants in Maine,Tennessee and Virginia: It is a crime to knowingly provide false,incomplete, or misleading information to an insurance company for the purpose of defrauding the company.Penalties may include imprisonment,fines,or a denial of insurance benefits. For applicants in New Jersey: Any person who includes any false or misleading information on an application for an insurance policy is subject to criminal and civil penalties. For applicants in all other states: If is a crime to knowingly provided false,incomplete,or misleading information to an insurance company for the purpose of defrauding the company.Penalties may include imprisonment,fines,or a denial of insurance benefits. UHIAPP(12/01) UnitedHealthcare Insurance Company STOP LOSS POLICY FOR Orange County Policy Number: GA-743058GL Effective Date: January 1,2014 State or other Jurisdiction of Issue: North Carolina UNITEDHEALTHCARE INSURANCE COMPANY A Stock Company 185 Asylum Street,Hartford,Connecticut Phone: 1-860-702-5000 UnitedHealthcare Insurance Company("Company")agrees to reimburse the Policyholder as outlined under the provisions of this Excess Loss Insurance Policy("Policy"). This Policy is legally binding between the Policyholder and UnitedHealthcare Insurance Company. The consideration for this Policy includes,but is not limited to,the Application and the Payment of premiums as provided hereinafter. The Policyholder is entitled to the reimbursement described in this Policy if the Policyholder is eligible for insurance under the provisions of this Policy.Reimbursement is subject to the terms and conditions of this Policy. The first premium is due on the first(1st) day of the Policy Period. Subsequent monthly premiums are due on the first (1st) day of each month thereafter. The premium is not considered Paid until the Company receives the premium payment. All periods of coverage will begin and end 12:01 a.m.local time at the principal office of the Policyholder. This Policy is delivered in and is governed by the laws of the state of issue. IN WITNESS WHEREOF UnitedHealthcare Insurance Company has caused this Policy to be executed by its President and Secretary. IMPORTANT NOTICE-READ YOUR POLICY CAREFULLY This Policy is a legal contract between you and us. We issued it on the basis that the information in your application is correct and complete.Check this information carefully.If it is not correct and complete,write to our Administrative Office and provide the correct and complete information. Jeffrey Alter,President Michael J.McDonnell,Secretary STOP LOSS INSURANCE POLICY IMPORTANT CANCELLATION INFORMATION- Please Read The Provision Entitled"Termination Provisions" Found on Page TERM UHIELIP-NC(07/06) 1 UnitedHealthcare Insurance Company A Stock Company 185 Asylum Street,Hartford,Connecticut Phone: 1-860-702-5000 SCHEDULE OF BENEFITS This Schedule of Benefits is only applicable to Excess Loss Insurance provided by the Company during the Policy Period shown below. Policyholder: Orange County Policy Number: GA-743058GL Effective Date: January 1,2014 Administrator: United HealthCare Services,Inc. Coverage specified herein is applicable only during the Policy Period from January 1, 2014 through December 31,2014,and is further subject to all terms and conditions of this Policy. SPECIFIC EXCESS LOSS INSURANCE Benefit Period: Covered Expenses Incurred from January 1, 2014 through December 31, 2014 and Paid from January 1,2014 through December 31,2014. Specific Deductible per Covered Person:$100,000 Specific Percentage Reimbursable: 100% Maximum Specific Benefit per Covered Person:Unlimited Specific Excess Loss Insurance includes: • Medical • Stand Alone Prescription Drug Program Specific Excess Loss Premium:$88.80 per subscriber per month AGGREGATE EXCESS LOSS INSURANCE Benefit Period: Covered Expenses Incurred from January 1, 2014 through December 31, 2014 and Paid from January 1,2014 through December 31,2014. Aggregate Excess Loss Insurance includes: • Medical • Stand Alone Prescription Drug Program Aggregate Percentage Reimbursable: 100% Maximum Aggregate Benefit: $2,000,000 per Policy Year Minimum Annual Aggregate Deductible: $8,291,417 or 95% of the first Monthly Aggregate Deductible amount times 12,whichever is greater UHIELIP-NC(07/06) 2 SCHED Maximum Covered Expenses per Covered Person accumulating toward the Maximum Aggregate Benefit: $100,000 Monthly Aggregate Factors:$730.97 per subscriber Aggregate Excess Loss Premium:$4.99 per subscriber per month UHIELIP-NC(07/06) 3 $,CHED DEFINITIONS ADMINISTRATOR means a firm or person who has been retained by the Policyholder to provide administrative services on behalf of the Policyholder/Plan. ANNUAL AGGREGATE DEDUCTIBLE for any one Policy Period means the greater of (a)sum of the Monthly Aggregate Deductibles;or(b)the Minimum Annual Aggregate Deductible. BENEFIT PERIOD means the period of time specified in the Schedule of Benefits in which a Covered Expense must be Incurred by the Covered Person and Paid by the Plan to be eligible for reimbursement under this Policy. This period does not alter the Effective Date, Policy Period, or waive this Policy's eligibility requirements. COVERED EXPENSE means medical or other expenses under the Plan to which this Policy applies, as shown in the Schedule of Benefits, and which are not specifically excluded by the terms of this Policy. Covered Expense does not include any payment for the cost of administrating the Plan or other Policyholder contracted services. COVERED PERSON(S)means each person covered under the Plan. COVERED UNITS(S)means the types of Covered Units and the factors and premium rates for each type as shown in the Schedule of Benefits. EFFECTIVE DATE is the date set forth in the applicable Schedule of Benefits. INCURRED means with respect to medical services or supplies, the date on which the services are rendered or supplies are purchased by the Covered Person. MONTHLY AGGREGATE DEDUCTIBLE means, with respect to a particular month,the total number of Covered Units for that given Policy month multiplied by the corresponding Monthly Aggregate Factors as specified in the Schedule of Benefits. PAY,PAID,PAYMENT means under the Specific Excess Loss, on the date the Policyholder's check of Payment of a Plan benefit is issued by the Administrator or when a credit of funds for Payment of a Plan benefit has been debited by the Policyholder's bank account.Under the Aggregate Excess Loss,on the date the Policyholder's check for Payment of a Plan benefit has been presented through the collecting bank and reported to the Administrator or when a credit of funds for Payment of a Plan benefit has been debited by the Policyholder's bank account. PLAN means the self-funded health care plan established by the plan sponsor to provide certain benefits to Covered Persons. PLAN DOCUMENT means the written document approved by the Policyholder. A copy of the Plan Document in effect on the Effective Date is attached to the application for Excess Loss Insurance. POLICY PERIOD means the specified period in the Schedule of Benefits, however beginning no earlier than the Effective Date of this Policy and continuing until coverage terminates in accordance with the Termination Provisions. SPECIFIC DEDUCTIBLE is set forth in the Schedule of Benefits. The Specific Deductible will apply separately to each Benefit Period. UHIELIP-NC(07/06) 4 DEF REIMBURSEMENT PROVISIONS NOTICE OF COVERED EXPENSE The Policyholder authorizes the Administrator to file claims on its behalf under this Policy. The Policyholder authorizes the Company to reimburse Covered Expenses to the Administrator for deposit into the bank account maintained by the Policyholder for the funding of benefits under the Plan. PAYMENT BY PLAN While the determination of benefits under the Plan is the sole responsibility of the Policyholder,the Company reserves the right to interpret the terms and conditions of the Plan Document as it applies to this Policy. The Company will have the sole authority to reimburse or deny reimbursement under this Policy. SPECIFIC EXCESS LOSS INSURANCE The Schedule of Benefits indicates whether Specific Excess Loss Insurance is provided under this Policy. If, while this Policy is in effect, the Covered Expenses for a Covered Person for the applicable Benefit Period exceed the Specific Deductible,the Company will reimburse the Policyholder, subject to the terms and conditions of this Policy including the limits set forth in the Schedule of Benefits. The amount of the reimbursement will be equal to the Specific Percentage Reimbursable times the amount by which Covered Expenses exceed the Specific Deductible amount, but will not exceed the Maximum Specific Benefit.For purposes of determining whether such Maximum Specific Benefit has been exceeded, Covered Expenses Incurred or Paid in any other Policy Period under this policy are included. Covered Expenses for any Covered Person during the Policy Period will be determined according to the Benefit Period described in the Schedule of Benefits. If Specific Excess Loss Insurance terminates before the end of the Policy Period,the Specific Deductible will not be reduced. AGGREGATE EXCESS LOSS INSURANCE The Schedule of Benefits indicates whether Aggregate Excess Loss Insurance is provided under this Policy. If the Covered Expenses for the applicable Benefit Period exceed the Annual Aggregate Deductible for the Policy Period, the Company will reimburse the Policyholder, subject to the terms and conditions of this Policy including the limits set forth in the Schedule of Benefits. The amount of the reimbursement will be equal to the Aggregate Percentage Reimbursable times the amount by which Covered Expenses exceed the Annual Aggregate Deductible amount,but will not exceed the Maximum Aggregate Benefit. Covered Expenses will not include any amounts reimbursed by the Company under any other provision of this Policy.If the Policyholder's coverage terminates before the end of the Policy Period,the greater of the Accumulated Annual Aggregate Deductible or the Minimum Annual Aggregate Deductible will apply.The Minimum Aggregate Deductible will not be reduced. UHIELIP-NC(07/06) 5 REIM PREMIUMS AND FACTORS PROVISIONS PAYMENT OF PREMIUMS For coverage to remain in effect,any subsequent monthly premium must be received by the Company by the first(1st)day of each month.Premiums are not considered Paid until the Company receives the premium payment. Premiums or other payments made by the Policyholder to their Administrator or Agent or Broker shall not be deemed or considered payments to the Company until actually received by the Company. The entire amount of the applicable premium shall be paid when due. The Company is not obligated to accept or apply any premium paid which is less than the entire amount due for any period. Premium payments shall be credited first to any past due and unpaid premium, in the order in which due. A late payment charge may be assessed for any premiums not received within fifteen (15) calendar days following the due date. A service charge will be assessed for any non-sufficient-fund check received in payment of premiums.The Policyholder will reimburse the Company for any attorney's fees and any other costs related to collecting delinquent premiums. GRACE PERIOD A Grace Period of thirty-one (31) days from the due date will be allowed for the payment of each premium after the first. During the Grace Period, the coverage will remain in effect provided the full premium is Paid before the end of the Grace Period. Should a premium otherwise due,not be Paid during the Grace Period,this Policy will terminate without further notice as of midnight on the last day for which premiums were Paid. PREMIUM AMOUNT The premiums will be calculated using rates determined by the Company as set forth in the Schedule of Benefits. The amount of total premium due each month is the sum obtained by multiplying the applicable premium rates shown in the Schedule of Benefits by the actual number of appropriate Covered Units. The Policyholder will be liable for any premium taxes assessed at any time against the Company beyond any taxes which may be payable on the premium received by the Company. All requests for adjustments, credits or refunds because of overpayment of premiums shall be reported, in, writing,with accompanying detail within sixty(60)days after termination of the applicable Policy Period. The Company will not refund any portion of the premiums Paid if this Policy terminates during this Policy Period.The Company shall be entitled to reduce the reimbursements due the Policyholder under this Policy against any premiums due and unpaid, any overpayments or other reimbursements made in error or upon incorrect information,and any other amounts due the Company. PREMIUM RATE AND MONTHLY AGGREGATE FACTOR CHANGE The Company may change the Policyholder's premium rates or factors for any of the following: a) the date when the terms of this Policy are changed; b) the date the Plan Document changes are accepted by the Company; c) the date the Policyholder adds or deletes subsidiary or affiliated companies or divisions; d) the date the number of Covered Units on any premium due date varies more than ten percent(10%) from the number of Covered Units as of the first month of the Policy Period. UH MLIP-NC(07/06) 6 PREFAC TERMINATION PROVISIONS This Policy and coverage provided hereunder will terminate upon the earliest of- a) the premium due date of any premium which remains unpaid at the end of the Grace Period; b) the premium due date next following receipt by the Company of written notice from the Policyholder that this Policy is to be terminated; c) the date of termination of the Plan; d) the date the Policyholder suspends active business operations or dissolves; e) the end of the Policy Period;or f) the date the administrative services agreement with the Administrator is terminated. This Policy may also be terminated,at the Company's option on the earliest of: a) the last day of the second (2nd) consecutive month during which there are less than fifty-one (51) employees enrolled in the Plan,unless the Company agrees,in writing,to continue coverage;or b) the date the Policyholder fails to comply with the terms of this Policy;or c) on the Policy anniversary date by the Company giving sixty(60)days advance written notice that this Policy will end,or such other notice as required by law. The Company will not refund any portion of the premiums paid if this Policy is terminated during the Policy Period. SUBSEQUENT POLICY PERIOD PROVISIONS At the end of a Policy Period,this Policy may have a Subsequent Policy Period only by mutual agreement of the Policyholder and the Company.The Subsequent Policy Period may be subject to new premium rates, factors,new underwriting terms,new Benefit Period and other new Policy terms. The terms and conditions for a subsequent Policy Period will be evidenced by the issuance of a new Schedule of Benefits by the Company,which shows the new premium rates,Benefit Period and other new terms. UHIELIP-NC(07/06) 7 TERM GENERAL PROVISIONS ADMINISTRATOR The Policyholder may retain an Administrator to act as an agent for the Policyholder in performing any or all of the duties as designated by the Policyholder.Without waiving any of its rights under this Policy, and without making the designated Administrator a party to this Policy, the Company agrees to recognize the Administrator as an agent of the Policyholder. The Policyholder will immediately notify the Company in writing if the agreement between the Policyholder and the Administrator terminates. ASSIGNMENT The Policyholder may not assign the Policyholder's interest in or reimbursement under this Policy,and the Company will not recognize any such assignment. AUDITS The Company will have the right: (a) to inspect and audit all records and procedures of the Policyholder and Administrator, developed and maintained for the Plan, that are applicable to the administration of this Policy; and (b) to require, upon request, proof satisfactory to the Company that Payment has been made to the Covered Person or the provider of such services or benefits which are the basis for any Loss by the Policyholder hereunder. CHANGES TO THE PLAN DOCUMENT If the Plan Document in effect on the Effective Date is subsequently amended,notice of the amendment will be given to the Company prior to the effective date of the change. If the Company does not give written acceptance of the amendment, the Company will only provide coverage under this Policy consistent with the Plan Document prior to amendment.The Company's reimbursement will be made according to the amended Plan,once the notice is received and accepted. CHANGES TO THE POLICY Only the President, a Vice President, or the Secretary of the Company have the authority to alter this Policy, or to waive any of the Company's rights and then only in writing.No such alteration of this Policy shall be valid unless endorsed and attached to this Policy.No agent,broker,or Administrator has the authority to alter this Policy or to waive any of its provisions. CLERICAL ERROR Clerical errors, whether by the Policyholder or by the Company, in keeping or transmitting any records pertaining to the coverage,.will not invalidate or limit coverage otherwise validly in force nor continue coverage otherwise validly terminated. Clerical error does not include any failure of the Policyholder,the Administrator or any agent of the Policyholder: (a)to comply with the requirements relating to notice of claims or payment of claims; or(b)to disclose underwriting information requested by the Company,whether or not intentional and regardless of the actual knowledge of the person providing the information. CONFORMITY WITH LAW If any provision of this Policy is contrary to any law to which it is subject, such provision is hereby amended to conform to the minimum requirements of such law. ENTIRE CONTRACT The Entire Contract between the Company and the Policyholder will consist of this Policy, Schedule of Benefits, application, approved amendments or endorsements, and a copy of the Plan Document,which is on file with the Company. INSOLVENCY Nothing in this Policy shall either relieve an insolvent or bankrupt Policyholder from the obligation to pay premiums when due or delay or abate cancellation of this Policy for failure to do so.The insolvency, bankruptcy, financial impairment, receivership, voluntary plan of arrangement with creditors, or dissolution of the Policyholder or the Policyholder's Administrator will not impose upon the Company any liability other than the liability defined in this Policy.In particular,the insolvency of the Policyholder will not make the Company liable to the creditors of the Policyholder,including Covered Persons under the Plan. LEGAL ACTION The Policyholder cannot file suit until ninety(90)days after the date on which proof of loss is given to the Company. The Policyholder cannot file suit more than three(3)years after the date on which the Policyholder must give the Company proof of Loss. LIABILITY The Company will have neither the right nor the obligation under this Policy to directly pay any Covered Person or provider of professional or medical services. The Company's sole liability is to the Policyholder,subject to the terms and conditions of this Policy.Nothing in this Policy shall be construed to UHIELIP-NC(07/06) 8 GEN permit a Covered Person to have a direct right of action against the Company. The Company will not be considered a party to the Plan of the Policyholder,or to any supplement or amendment to it. MISSTATED DATA,CONCEALMENT,FRAUD The Company has relied on the information provided by the Policyholder, the Administrator or any agent of the Policyholder, in the issuance of this Policy, or for any Subsequent Policy Period.In the event of a misrepresentation,concealment or omission of a fact,or a mistake of fact (whether or not a mutual mistake), any of which materially affect the underwriting, premium,rating or terms and conditions of this Policy,the Company may,at its option: (a) increase premium rates, attachment points and/or otherwise change the terms and conditions of this Policy. Such increase or change to be effective retroactively to the Effective Date or as of any premium due date thereafter,or (b) terminate this Policy as of the next premium due date. The Company may declare this Policy null and void in its inception if,whether before or after a claim,the Policyholder,Administrator or any agent of the Policyholder has willfully or intentionally misrepresented, concealed, omitted any material fact affecting terms, conditions, or underwriting of this Policy. In such event, the Company's liability under this Policy shall be limited to refunding premiums paid by the Policyholder after deducting therefrom the amount of any Covered Expenses reimbursed by the Company to the Policyholder prior to the date of termination. If the amount of the Covered Expenses reimbursed by the Company to the Policyholder exceeds the premiums paid by the Policyholder, the Policyholder shall pay the Company the difference within thirty(30) days of the date the Company notifies the Policyholder of such difference. NOTICE OF COMPLAINT, APPEAL, LEGAL ACTION As a condition precedent to the Company reimbursing the Policyholder in any settlement or judgment for a disputed Covered Expense, the Policyholder shall immediately inform the Company of any notice of appeal, notice of legal action, or objection,demand or complaint which the Policyholder received regarding any Covered Expense that may be reimburse under this Policy. OTHER COVERAGE The reimbursement provided by this Policy is in excess of other coverage such as group insurance,excess insurance,insurance,plan benefits,including insurance or plan benefits established by any federal,state,or local law. PARTIES TO THE POLICY The parties to this Policy are the Policyholder and the Company. The Company's sole liability under this Policy is to the Policyholder. This Policy does not create any right or legal relation between the Company and a Covered Person under the Plan.This Policy will not be deemed to make the Company a party to any agreement between the Policyholder and the Administrator. POLICYHOLDER REQUIREMENTS The Policyholder agrees to provide funds for Payment of all eligible expenses under the Plan.If the Policyholder fails to provide funds for timely Payment:(a)coverage under this Policy will immediately terminate; and (b) any Aggregate and/or Specific Deductible will be deemed not satisfied. RECORDS The Policyholder will maintain records of all Covered Persons under the Plan during the Policy Period and for a period of seven(7)years after the end of the Policy Period. The Policyholder will make all such records available to the Company as needed to evaluate its liability under this Policy. The Policyholder will maintain a separate record of any and all amounts Paid in excess of benefits eligible under the Plan. SEVERABILITY CLAUSE Any clause deemed void,invalid,or otherwise unenforceable,whether or not such a provision is contrary to public policy,will not render any of the remaining provisions of this Policy invalid. TERMINATION OF THE POLICYHOLDER'S PLAN The Policyholder will immediately notify the Company,if the Plan is terminated. UHIELIP-NC(07/06) 9 GEN WAIVER Failure of the Company to strictly enforce its rights under this Policy shall not waive any such right,regardless of the frequency or similarity of the circumstances. UHIELIP-NC(07/06) 10 GEN I v GENERAL EXCLUSIONS PROVISIONS The Company will not reimburse the Policyholder for any of the following: (a) Any payment which does not strictly comply with the terms and conditions of the Plan Document; (b) Any payment or expense caused by or resulting from war,whether or not declared,any act or hazard of war,while a Covered Person is a member of any kind of military force or auxiliary unit engaged in that war; (c) Any payment for litigation costs and expenses, extra-contractual damages, compensatory damages, interest, exemplary and punitive damages or liabilities, including but not limited to those resulting from negligence,intentional wrongs,fraud,bad faith or strict liability on the part of the Policyholder, Plan,Administrator or any agent or representative of the Policyholder,Plan or Administrator; (d) Services or supplies for the treatment of an Occupational Injury or Sickness which are paid under the North Carolina Worker's Compensation Act only to the extent such services or supplies are the liability of the employee, employer or workers' compensation insurance carrier according to a final adjudication under the North Carolina Worker's Compensation Act or an order of the North Carolina Industrial Commission approving a settlement agreement under the North Carolina Workers' Compensation Act. UHIELIP-NC(07/06) 11 EXCL ADMINISTRATIVE SERVICES AGREEMENT This Administrative Services Agreement("Agreement")between United HealthCare Services,Inc. ("United"in this Agreement) and Orange County ("Customer" in this Agreement) is effective January 1, 2014 ("Effective Date"). This Agreement covers the services United is providing to Customer, either directly or in conjunction with one of United's affiliates,for use with Customer's Self-Funded employee benefit plan. United HealthCare Services,Inc. identifies this arrangement as Contract No.: 743058 By signing below,each party agrees to the terms of this Agreement. United HealthCare Services,Inc. Orange County 185 Asylum Street 200 South Cameron Street Hartford,CT 06103-3408 Hillsborough,)?r27278..7 By: By: r Authorized Signature Authorized Signatur "J ✓ y Print Name: � JT�n Print Name: C'I k?i' �'5 �J �`�� C's 61 r �y Print Title: } (n�Q,1 LeC C1r1Qr( . Print Title: (�p�K!:!J Aa-* ,A-A-c.Y' Date: aa I"1 Date: 1, I This instrument has been pre-audited in the manner required by the Local Government /7 Budget and FiVA, l C roI Act Clarence G.Grier,Assistant Co. Manager& ASA 4Q 2013 Rev CFO Table of Contents Section1—Definitions....................................................................................................................................1 Section 2—Employee Benefit Plan: Customer Responsibilities.....................................................................2 Section 3—Customer Other Responsibilities..................................................................................................3 Section4—Services Provisions.......................................................................................................................3 Section 5—Benefit Determinations and Appeals............................................................................................7 Section6—Service Fees..................................................................................................................................8 Section 7—Providing Funds For Benefits.......................................................................................................9 Section8—Term Of The Agreement............................................................................................................10 Section9—Termination................................................................................................................................10 Section 10—Records,Information,Audits...................................................................................................10 Section11 —System Access..........................................................................................................................12 Section 12—Taxes And Assessments...........................................................................................................13 Section13—Indemnification.........................................................................................................................13 Section 14—Plan Benefits Litigation.............................................................................. .............................13 Section15—Mediation..................................................................................................................................14 Section16—Miscellaneous...........................................................................................................................14 EXHIBITA—SERVICES............................................................................................................................16 EXHIBITB—SERVICE FEES ....................................................................................................................22 EXHIBIT C—PERFORMANCE STANDARDS FOR HEALTH BENEFITS............................................23 EXHIBIT D—BUSINESS ASSOCIATE AGREEMENT ADDENDUM....................................................29 Section I—Definitions When these terms are capitalized in the Agreement they have the meanings set forth below. The words may be singular or plural. Agreement Period: The period of twelve (12) months commencing on the Effective Date and automatically continuing for additional 12-month periods until the Agreement is terminated. Bank: JPMorgan Chase Bank,New York,New York- Bank Account: Benefits Demand Deposit Bank Account maintained for the payment of Plan benefits, expenses, and fees. Employee: A current or former employee of Customer or its affiliated employer as described in Section 2.4. IRC: The United States Internal Revenue Code of 1986,as amended from time to time. . Network: The group of Network Providers United makes available to the Plan who have entered into or are governed by contractual arrangements under which they agree to provide health care services to Participants and accept negotiated fees for these services. Network Pharmacy: A pharmacy,including a specialty pharmacy and mail order pharmacy which has entered into or is governed by a contractual arrangement with United under which the pharmacy agrees to provide prescription drug services to Participants. Network Provider: The physician, or medical professional or facility which participates in a Network. A provider is only a Network Provider if they are participating in a Network at the time services are rendered to the Plan Participant. Overpayments: Payments that exceed the amount payable under the Plan. This term does not include overpayments caused by untimely or inaccurate eligibility information. Participant: Employee or dependent who is covered by the Plan. PHI: Any information United receives or provides on behalf of the Plan which is considered Protected Health Information as the term is defined in the privacy regulations of the Health Insurance Portability and Accountability Act of 1996. Plan: The plan to which this Agreement applies,but only with respect to those provisions of the plan relating to the Self-Funded health benefits United is administering,as described in the Summary Plan Description. Plan Administrator: The current or succeeding person, committee,partnership, or other entity designated the Plan Administrator who is generally responsible for the Plan's operation. Proprietary Business Information:Nonpublic information,trade secrets,and other data including,but not limited to,sales and marketing information,management systems,strategic plans and other information about the disclosing party's business,industry,products and services,plans, specifications,operation methods,pricing,costs,techniques, manuals,know-how and other intellectual property, in written,oral or other tangible form,provided by one party to another or its representative; and all information, documents, technology, products, and services containing or derived from Proprietary Business Information which was or may have been transmitted,given or made available to or viewed by one party or another in the course of the receiving party's relationship. United's Proprietary Business Information shall include,but not be limited to,discounts and other financial provisions related to United's Network of healthcare providers and claims data from which those financial provisions can be derived and financial provisions related to prescription drug products covered under the medical benefit, the Prescription Drug List, reimbursement rates,compensation arrangements,and all other financial provisions related to the pharmacy benefits contained in this Agreement. While the Prescription Drug List is considered United's Proprietary Business Information, it may be disclosed in the limited circumstances outlined in this Agreement. This information is collectively known as"United's Financial PBI". 1 Rebates: All rebates, discounts or other financial incentives (whether access, base, Prescription Drug List (PDL), incentive,market share,volume,or other),and administrative fees which United receives directly or indirectly from a pharmaceutical manufacturer and which are obtained in connection with prescription drug products dispensed to Participants under the Plan's pharmacy benefit or the medical benefit. Rebates do not include any purchasing discounts,provided that United obtains the same Rebates for prescription drugs regardless of where the prescription is dispensed. Rebates to customers are administered and paid under the medical benefit plan or pharmacy benefit plan as outlined in this Agreement. Self-Fund or Self-Funded: Means that Customer, on behalf of the Plan, has the sole responsibility to pay, and provide funds, to pay for all Plan benefits. United has no liability or responsibility to provide these funds. This is true even if United or its affiliates provides stop loss insurance to Customer. Summary Plan Description or SPD: The document(s) Customer provides to Plan Participants describing the terms and conditions of coverage offered under the Plan. Systems: Means the systems United owns or makes available to Customer to facilitate the transfer of information in connection with this Agreement. Tax or Taxes: A charge imposed,assessed or levied by any federal,state,local or other governmental entity. Urgent Care Claims: A claim for medical services and supplies which meets ERISA's definition of Urgent Care Claim. Section 2—Employee Benefit Plan: Customer Responsibilities Section 2.1 Responsibility for the Plan. United is not the Plan Administrator of the Plan. Any references in this Agreement to United"administering the Plan"are descriptive only and do not confer upon United anything beyond certain agreed upon claim administration duties. Except to the extent this Agreement specifically requires United to have the fiduciary responsibility for a Plan administrative function, Customer accepts total responsibility for the Plan for purposes of this Agreement including its benefit design,the legal sufficiency and distribution of SPDs, and compliance with any laws that apply to Customer or the Plan, whether or not Customer or someone Customer designates is the Plan Administrator. Section 2.2 Plan Consistent with the Agreement. Customer represents that Plan documents, including the Summary Plan Description as described in Exhibit A- Services, are consistent with this Agreement. Nevertheless, before distributing any communications describing Plan benefits or provisions to Participants or third parties, Customer will provide United with copies of the Summary Plan Description and Employee communications which refer to United or United's services prior to distributing these materials to Employees or third parties. Customer will amend them if United reasonably determines that references to United are not accurate, or any Plan provision is not consistent with this Agreement or the services that United is providing. Section 2.3 Plan Changes. Customer must provide United with notice of any changes to the Plan and/or Summary Plan Description within a reasonable period of time prior to the effective date of the change to allow United to determine if such change will alter the services United provides under this Agreement.Any change in the services to be provided by United under this Agreement which would be caused by any aforementioned changes must be mutually agreed to in writing prior to implementation of such change. United will notify Customer if(i)the change increases United's cost of providing services under this Agreement or(ii)United is reasonably unable to implement or administer the change.If the parties cannot agree to a new fee within(30)thirty days of the notice of the new fee or if United notifies Customer that United is unable to reasonably implement or administer the change,United shall have no obligation to implement or administer the change, and Customer may terminate this Agreement upon (60) sixty days written notice. 2 Section 2.4 Affiliated Employers. Customer represents that together Customer and any of its affiliates covered under the Plan make up a single"controlled group"as defined by the IRC.Customer agrees to provide United with a list of Customer's affiliates covered under the Plan upon request. Section 3—Customer Other Responsibilities Section 31 Information Customer Provides to United. Customer will tell United which of Customer's Employees,their dependents and/or other persons are Participants. This information must be accurate and provided to United in a timely manner. United will accept eligibility data from Customer in the format described in Exhibit A -Services.Customer will notify United of any change to this information as soon as reasonably possible. United will be entitled to rely on the most current information in United's possession regarding eligibility of Participants in paying Plan benefits and providing other services under this Agreement. United will not be required to make retroactive eligibility changes, process or reprocess claims, but if United agrees to do so, additional fees may apply. Customer agrees to provide United (or cause Customer's vendor to provide United), in a timely manner with all information that United reasonably requires to provide Customer's Participants with disease management services as described in accordance with Exhibit A- Services and United's program guidelines. United shall be entitled to rely on the information that is provided to United in connection with United's provision of disease management services to Customer's Participants. Section 3.2 Notices to Participants. Customer will give Participants the information and documents they need to obtain benefits under the Plan within a reasonable period of time before coverage begins. In the event this Agreement is discontinued, Customer will notify all Participants that the services United is providing under this Agreement are discontinued. Section 3.3 Escheat. Customer is solely responsible for complying with all applicable abandoned property or escheat laws,making any required payments,and filing any required reports. Section 4—Services Provisions Section 4.1 Administrative Services. United will provide the administrative services described in Exhibit A — Services. Section 4.2 Network Access, Management and Administration. United will provide access to Networks and Network Providers, as well as related administrative services including physician (and other health care professional) relations, clinical profiling, contracting and credentialing, and network analysis and system development. The make-up of the Network can change at any time.Notice will be given in advance or as soon as reasonably possible. United generally does not employ Network Providers and they are not United's agents or partners,although certain Network Providers are affiliated with United. Otherwise, Network Providers participate in Networks only as independent contractors. Network Providers and the Participants are solely responsible for any health care services rendered to Participants. United is not responsible for the medical outcomes or the quality or competence of any provider or facility rendering services, including Network Pharmacies and services provided through United's affiliates'networks,or the payment for services rendered by the provider or facility. Value Based Contracting Program. United's contracts with some Network Providers may include withholds, incentives, and/or additional payments that may be earned, conditioned on meeting standards relating to utilization, quality of care, efficiency measures, compliance with United's other policies or initiatives, or other clinical integration or practice transformation standards. Customer shall fund these payments due the Network Providers as soon as United makes the determination the Network Provider is entitled to receive the payment under the Network Provider's contract,either upfront or after the standard has been met. For upfront funding,if United makes the determination that the Network Provider failed to meet a standard, United will return to Customer the applicable amount- United shall provide Customer reports describing the amount of payments made on behalf of Customer's Plan. 3 Only the initial claims based reimbursement to Network Providers will be subject to the Participant's copayment, coinsurance or deductible requirements. Customer will pay the Network Provider the full amount earned or attributable to its Participants, without a reduction for copayments or deductibles and agree that there will be no impact from these payments on the calculation of the Participant's satisfaction of their annual deductible amount. Section 4.3 Claim Recovery Services.United will provide recovery services for Overpayments,but United will not be responsible for recovery costs except as otherwise stated in this section. United will be responsible for recovery costs and reimbursement of any unrecovered Overpayment only to the extent the Overpayment was due to United's gross negligence. In some instances, United may be able to obtain Overpayment recoveries by applying (or offsetting) the Overpayment against future payments to the provider made by United. In effectuating Overpayment recoveries through offset, United will follow its established Overpayment recovery rules which include, among other things, the prioritization of Overpayment credits based on the age of the Overpayment in United's system and funding type. In United's application of Overpayment recovery through offset, timing differences may arise in the processing of claims payments, disbursement of provider checks,and the recovery of Overpayments. As a result,the Plan may in some instances receive the benefit of an Overpayment recovery before United actually receives the funds from the provider. Conversely,United may receive the funds before the Plan receives the credit for the Overpayment. It is hereby understood that the parties may retain any interest that accrues as a result of these timing differences. Details_ associated with Overpayment recoveries made through offset will be identified in the monthly reconciliation report provided to the designated representative for Customer's Plan. United will also provide services to recover Plan benefits that were paid and are recoverable by the Plan because payment was or should have been made by a third party for the same medical expense(other than in connection with coordination of benefits,Medicare, or other Overpayments). This is referred to as"Third Party Liability Recovery" (or "subrogation").Customer will not engage any entity except United to provide the services described herein without United's prior approval. Customer will be charged fees, as listed in Exhibit B, Fees, when any of the services described herein are provided by United through a subcontractor or affiliate. The fees are deducted from the actual recoveries. Customer will be credited with the net amount of the recovery. Customer delegates to United the discretion and authority to develop and use standards and procedures for any recovery, including but not limited to, whether or not to seek recovery, what steps to take if United decides to seek recovery,and the circumstances under which a claim may be compromised or settled for less than the full amount of the claim. Customer acknowledges that use of United's standards and procedures may not result in full or partial recovery for any particular case. United will not pursue any recovery if it is not permitted by any applicable law, or if recovery would be impractical. United may initiate litigation to recover payments,but United has no obligation to do so.If United initiates litigation,Customer will cooperate with United in the litigation. If this Agreement terminates, or, if United's recovery services terminate, United can continue to recover any payments United is in the process of recovering. The appropriate fees will continue to be deducted from the actual recovery,when and if a recovery is obtained. Section 4.4 Abuse and Fraud Management. United or its affiliate will provide services related to the detection, prevention,and recovery of abusive and fraudulent claims. United's Abuse and Fraud Management processes will be based upon United's proprietary and confidential procedures,modes of analysis and investigations. United will use these procedures and standards in delivering Abuse and Fraud Management services to Customer and United's other customers. These procedures and standards include,but are not limited to: whether or not to seek recovery, what steps to take if United decides to seek recovery, and under what circumstances to compromise a claim or settle for less than the full amount. Customer delegates to United the discretion and authority to use such procedures and standards, including the authority to undertake actions, including legal actions, which have the largest impact for the largest number of customers. 4 Customer acknowledges that the use of these procedures and standards may not result in full or partial recovery or in full recovery for any particular case. United does not guarantee or warranty any particular level of prevention, detection, or recovery. United agrees to perform Abuse and Fraud Management services pursuant to the industry standards for such services. If this Agreement terminates, or if United's claim recovery services terminate, United can elect to continue fraud and abuse recoveries that are in progress,and the fees will continue to apply. Section 4.5 Medical Benefit Drug Rebate Payments.From time to time, United or a subcontractor may negotiate with drug manufacturers regarding the payment of medical benefit Rebates on applicable prescription drug products dispensed to Participants under the Plan's medical benefit. Customer will receive 80% of the medical benefit Rebates United receives. United will retain the balance of such medical benefit Rebates as part of United's compensation. When United negotiates directly with drug manufacturers for the payment of medical benefit Rebates to United, United will pay Customer the agreed upon Rebates within thirty (30) calendar days of United's receipt of such Rebates from the drug manufacturer. If United is not able to make payment to Customer within thirty(30) calendar days, United will pay interest on such Rebates from the date of receipt until United makes payment to Customer, less approximately thirty (30) days for processing. United will retain interest earned during this processing timeframe. United will pay medical benefit Rebates to Customer in the agreed upon amount no less than annually. Interest will be paid at the one month London Interbank Offered Rate(LIBOR)in effect on the first business day of each applicable month. Customer will only receive Customer's medical benefit Rebates to the extent that medical benefit Rebates are actually received by United.Thus,for example,if a government action or a major change in pharmaceutical industry practices prevents United from receiving medical benefit Rebates,the amount Customer receives may be reduced or eliminated. Customer agrees that during the term of this Agreement, neither Customer nor the Plan will negotiate or arrange or contract in any way for medical benefit Rebates on or the purchase of prescription drug products from any manufacturer under the Plan's medical benefit. If Customer or the Plan does, United may, without limiting United's right to other remedies, immediately terminate Customer's and Plan's entitlement to medical benefit Rebates (including forfeiture of any medical benefit Rebates earned but not paid).In addition, Customer agrees to reasonably cooperate with United in order to obtain medical benefit Rebates. Subcontractor Compensation: If a subcontractor is involved in negotiating with drug manufacturers regarding the payment of medical benefit Rebates, it may retain a portion of the gross amounts received from drug manufacturers in connection with such products. United will provide information on the amount, if any, retained by the subcontractor as compensation for its services,in advance of Customer's execution of this Agreement. In addition, United will provide Customer with thirty (30) days advance notice of any material increase in or method for subcontractor compensation. If at any time Customer does not find the subcontractor compensation acceptable, Customer may terminate the medical benefit Rebates services after thirty(30)days advance written notice to United. Section 4.6 Pharmacy Benefit Services. United or its Affiliate will provide the Pharmacy Benefit Services described in this Section 4.6. United will make Network Pharmacies available to Customer's Participants, through United's affiliate. United will determine which pharmacies are Network Pharmacies. Network Pharmacies can change at any time. United will make a reasonable effort to provide Customer with advance notice if any material changes occur to the network.Upon request,United will provide Customer information on the reimbursement rate to United's affiliated Network Pharmacies. Mail Order Pharmacy Services. United will provide, through its affiliate mail order pharmacy, services for Customer's Participants. Customer's pricing terms for mail order pharmacy services are based on package sizes of 100 units, 16 ounce quantities or the next closest quantity available and at least a 46 day supply.Prescriptions filled through the mail order pharmacy that are less than a 46 day supply will be processed at retail pricing and will be counted with retail utilization. United will retain the difference between the package size of 100 units or 16 ounces and the actual manufacturer's package size which the mail order pharmacy's price is based on. 5 Prescription Drug List (PDL) Customer has adopted one or more of United's PDLs for use with Customer's benefit plans. Customer agrees not to copy, distribute, sell, or otherwise provide the PDL to another party without United's prior written approval, except to Participants as described below. On termination of this Agreement or if Customer terminates the Pharmacy Benefit Services portion of this Agreement„ Customer will stop all use of the PDL. While Customer is the ultimate decision-maker on selecting the design of Customer's PDL(s), Customer has requested that United supply, and United has assisted Customer with, certain PDL development and management functions including but not limited to drug tiering decisions. United's intent is to provide Customer with the same PDL and management strategies that United develops and employ in the management of United's fully insured business. United makes the final classification of an FDA-approved prescription drug product to a certain tier of the PDL by considering a number of factors including,but not limited to, clinical and economic factors. Clinical factors may include, but are not limited to, evaluations of the place in therapy, relative safety or relative efficacy of the prescription drug product, as well as whether supply limits or notification requirements should apply. Economic factors may include,but are not limited to,the prescription drug product's acquisition cost including,but not limited to,available Rebates and assessments on the cost effectiveness of the prescription drug product. United may periodically down-tier the placement of a prescription drug product among the tiers. These changes may occur without prior notice. Once a year, United may also up-tier the placement of a prescription drug product among the tiers and/or recommend specific prescription drug product exclusions from coverage. United will provide notice to Customer of material changes to the PDL, United's drug tier classification procedures, coverage exclusions, and clinical programs. If Customer chooses not to implement a particular coverage exclusion or clinical program change, Customer needs to inform United in writing sixty (60) days prior to the effective date of the exclusion or change. Current drug placement and related information may be obtained from the member website,or by calling customer service. Claims Processing. United will process the claims received from a Network Pharmacy in accordance with the Summary Plan Description, as well as the pricing and other terms of the Network Pharmacy's participation agreement. On mail order and retail pharmacy services, United will retain the difference between what United reimburses the Network Pharmacy and Customer's payment for a prescription drug product or service. United maintains systems for processing pharmacy claims and may receive access fees as compensation for services United provides to Network Pharmacies. Section 4.7 Pharmacy Benefit Rebates. Allocation and Payment of Rebates.United will negotiate with drug manufacturers for the payment of Rebates to United. The amount of Rebates that is available depends on many factors including whether Customer has an incentive benefit design, arrangements with drug manufacturers, the volume of prescription drug claims and the structure of the PDL. United will pay Customer an amount equal to 80%of the Rebates United receives(and United may pay interest on this amount as described in this Section). United will retain the balance of such Rebates (and any related interest) as part of United's compensation. Customer agrees that all payments associated with Rebates and any related interest are not due and owing to Customer until United actually pays them to Customer pursuant to this Agreement. Customer will only receive Rebates to the extent that Rebates are actually received by United. For example, if a government action or a major change in pharmaceutical industry practices eliminates or materially reduces manufacturer Rebate programs, Customer's payment amount may be reduced or eliminated. In such event, United shall promptly notify Customer and revise or eliminate such payment effective with the date of the reduction or elimination in Rebate payments. In addition, reduction or elimination of Rebates in this event shall constitute a change in the Agreement as described in the Service Fees Section such that United has the right to increase the service fees for the Pharmacy Benefits Management services or increase the percentage of Rebate dollars retained by United. United will pay Customer the agreed upon Rebates within thirty (30) calendar days of United's receipt of such Rebates, generally four times per year. For any Rebates not paid to Customer within thirty (30) calendar days of United's receipt, United will pay Customer interest on such Rebates from the date of receipt until United makes payment to Customer, less approximately thirty (30) days for processing. United will retain interest earned during this processing timeframe. United will pay Rebates to Customer in the agreed upon amount no less than annually. 6 Interest will be paid at the one month London Interbank Offered Rate(LIBOR)in effect on the first business day of each applicable month. Payments to Pharmacies. In connection with prescription drug claims, there may be a timing difference between when United withdraws funds from Customer's claims account and when United issues payments to pharmacies and other payees. United may retain interest earned on these amounts during this time. Interest is expected to be paid at overnight deposit rates by United's banking institution. Customer Compliance.Customer agrees that during the term of this Agreement,neither Customer nor the Plan will negotiate or arrange or contract in any way for Rebates on or the purchase of prescription drug products from any manufacturer with respect to the pharmacy benefits. If Customer or the Plan does, United may, without limiting United's right to other remedies, immediately terminate Customer's and Plan's entitlement to Rebates (including forfeiture of any Rebates. earned but not paid) and/or terminate the pharmacy benefit services. Termination of pharmacy benefit services shall constitute a change in the Agreement as described in the Service Fees Section such that United has the right to increase the services fees for medical management services under this Agreement. In addition, Customer agrees to reasonably cooperate with United in order to obtain Rebates. Customer will encourage Customer's Participants to use a Network Pharmacy. Customer will also encourage Customer's Participants to electronically access the PDL on United's website,and encourage Participants to share the PDL with their physicians or refer their physicians to the PDL on United's website Section 5—Benefit Determinations and Appeals Section 5.1 Claim Procedures. Customer appoints United a named, fiduciary under the Plan with respect to (i) performing initial benefit determinations and payment,and(ii)performing the fair and impartial review of first level internal appeals, and (iii) performing the fair and impartial review of second level internal appeals. As such, Customer delegates to United the discretionary authority to (i) construe and interpret the terms of the Plan, (ii) to determine the validity of charges submitted to United under the Plan, and (iii) make final, binding determinations concerning the availability of Plan benefits under the Plan's internal appeal process. If it is determined that a benefit is payable,United will issue a check for, or otherwise credit the benefit payment to the appropriate payee. If United denies a Plan benefit claim, the claimant shall have the appeal rights set forth in the Summary Plan Description, and/or which are required under applicable law. If United determines that all or a part of the benefit is not payable under the Plan,United will notify the claimant of the adverse benefit determination and of the claimant's right to appeal the adverse benefit determination. This notification will be designed to comply with applicable requirements for adverse benefit determination notices. If, after the exhaustion of the two levels of internal appeal with United, United determines that the Plan benefit is still not available,United will notify the claimant that the adverse benefit determination has been upheld.This notice will be designed to comply with the applicable requirements for adverse benefit determination notices. This determination will be final and binding on the claimant,and all other interested parties,except as otherwise provided under the external review program described in Section 5.2. Appeals of Urgent Care Claims Notwithstanding the foregoing, with respect to Urgent.Care Claims, United will conduct one review of a denied Urgent Care Claim and issue a final determination as soon as possible,in accordance with applicable law. Section 5.2 External Review Program. United will notify claimants of the option to request an external review of adverse benefit determinations following the required internal appeal process. United will, in accordance with applicable law: (i)provide claimant with the necessary procedures to obtain the review(ii)coordinate submission of the claimant's case to an independent review organization, and(iii) notify the claimant of the final external review decision. A fee will apply beyond the maximum number of free reviews,as listed in Exhibit B, Service Fees. 7 Section 6—Service Fees Section 6.1 Service Fees. Customer will pay fees for United's services. The service fees listed in Exhibit B of this Agreement are effective for the Agreement Period shown in the Exhibit. In addition to the service fees specified in Exhibit B, Customer must also pay United any additional fee that is authorized by a provision elsewhere in this Agreement or is otherwise agreed to in writing by the parties. Section 6.2 Changes in Service Fees. United can change the service fees on each Agreement Period anniversary, subject to the provisions of Exhibit B.United will provide Customer with thirty(30)days prior written notice of the revised service fees for subsequent Agreement Periods. Any such service fee change will become effective on the later of the first day of the new Agreement Period or thirty(30) days after United provides Customer with written notice of the new fees. United will provide Customer with a new Exhibit B that will replace the existing Exhibit B for the new Agreement Period. United also can change the services fees (i) any time there are changes made to this Agreement or the Plan, which affect the fees, (ii)when there are changes in laws or regulations which affect or are related to the services United is providing, or will be required to provide,under this Agreement, including the Taxes and fees noted in Section 12.3 (iii) if the number of Employees covered by the Plan or any Plan option changes by ten percent (10%) or more or (iv) if the average contract size, defined as the total number of enrolled Participants divided by the total number of enrolled Employees,varies by 10%or more from the assumed average contract size set forth in Exhibit B. Any new service fee required by such change will be effective as of the date the changes occur,even if that date is retroactive. If Customer does not agree to any change in service fees, Customer may terminate this Agreement upon thirty(30) days written notice after Customer receives written notice of the new fees. Customer must still pay any amounts due for the periods during which the Agreement is in effect. Section 6.3 Due Dates, Payments, and Penalties. For the Standard Medical Service Fees described in Exhibit B, United will provide Customer with an on-line invoice in advance of the first of each month, typically no later than the 18`h of each month. The Due Date for payment of the invoiced amounts is on the first day of the next full calendar month. Such invoices are provided on an eligibility-based format, and therefore payment must be made as billed(no adjustments are allowed to the invoice). For Shared Savings Program as described in Exhibit B,United will provide Customer with an on-line invoice for the amounts that Customer owes United. In these cases, the Due Date is fifteen (15) days from the date an invoice is made available to Customer(generally around the 18''of each month). Late Payment: If amounts owed are not paid within fifteen (15) days after their Due Date ("Grace Period"), Customer will pay United interest on these amounts at the interest rate that United charges to its self-funded customers. Customer agrees to reimburse United for any costs that United incurs to collect these amounts. United's decision to provide Customer with a Grace Period will be based on United's assessment of Customer's financial condition, as of the Effective Date, and Customer's compliance with material financial obligations. If United determines, based on reasonable information and belief, that Customer's financial condition has deteriorated, or Customer continues to fail to comply with the material financial obligations specified in this Agreement,United may remove the Grace Period upon notice to Customer and reserves the right to either charge interest on payments not received after the Due Date or terminate the Agreement if payments are not received by the Due Date. Section 6.4 Reconciliation.For each Agreement Period,United will reconcile the total amounts Customer paid with the total amounts Customer owed. If the reconciliation indicates that United owes Customer money, Customer's next payment will be credited. If the reconciliation indicates that Customer owes United money,United will invoice Customer for the amount due. The Due Date for these amounts is the first day of the next calendar month. Customer will pay United within thirty (30) days after receiving notice of the amounts that Customer owes United. For payments made after this thirty(30) day period, Customer will pay United interest on these amounts at the interest rate that United charges to its other self-funded customers. If the Agreement is terminated,United will pay Customer the amount owed within thirty(30)days after United performs a final reconciliation.If the final reconciliation indicates that Customer owes United money,Customer will pay United within thirty(30)days after receiving notice of the amount owed. 8 For payments Customer makes after thirty(30)days of receiving notice of the amounts that Customer owes United, United will charge interest at the interest rate that United charge its other self-funded customers. Section 7—Providing Funds For Benefits Section 7.1 Providing Funds for Benefits. The Plan is Self-Funded. Customer is solely responsible for providing funds for payment for all Plan benefits payable to Participants,Network Providers,or non-Network Providers. Section 7.2 Bank Account. United, on Customer's behalf, will open and maintain a Bank Account at the Bank to provide United the means to access Customer's funds for the sole purpose of payment of Plan benefits, Plan expenses (such as state surcharges or assessments) and, when authorized by Customer, service fees. The Bank Account will be a part of the network of accounts that have been established at the Bank for United's self-funded customers.The funds in the Bank Account are Customer's and will not be comingled with any other customer funds. Section 7.3 Balance In Account. Customer will maintain a minimum balance in the Bank Account in an amount equal to not less than 6 days of expected Bank Account activity.United will establish this amount based on expected Plan benefit payments, with appropriate adjustments for anticipated non-daily activity (e.g., prescription drug benefits and service fee payments) as determined by United. United will determine if circumstances warrant increasing this minimum balance, and will notify Customer if and when the required balance or the amount identified above changes. The required minimum balance is based on Customer's financial condition as assessed by United. In the event United determines,based on reasonable information and belief,that Customer's financial condition has deteriorated or Customer continues to fail to comply with the material financial obligations specified in this Agreement, United may revise the required balance effective five(5)days from the date of notice. Section 7.4 Issuing and Providing Funds for Checks and Non-Draft Payments. The checks and/or non-draft payments United writes and issues to pay Plan benefits under this Agreement will be written and/or issued from one or more common accounts that are a part of the network of accounts maintained at the Bank for United's self-funded customers.When the checks for Plan benefits are presented to the Bank,the Bank will notify United and United will direct the Bank to either reject the checks or to withdraw funds from the Bank Account to fund the checks that are cashed. Section 7.5 Transfers of Funds. Funds will also be withdrawn from the Bank Account when a transfer of funds United made to pay Plan benefits is completed, such as when an electronic funds transfer has been made to a health care provider to pay benefits under the Plan. United will direct the Bank to withdraw funds from the Bank Account to fund the non-draft payments as they are issued. Section 7.6 Calls for Funds. The withdrawals for Plan benefits and service fees are paid for by the balance Customer maintains in the Bank Account. This balance will be drawn down each banking day to satisfy the previous day's liability. Customer will authorize United to initiate Automated Clearing House(ACH) transfers from Customer's designated benefit funding bank account to the Bank Account for the amount needed to pay claims processed and fees that are due. Every 5 business day(s), United will notify Customer of the amount due and United will within one business day, ACH, initiate transfers from Customer's designated funding bank account to the Bank Account in an amount necessary to pay Plan benefits. The number of days between transfers and the method of transfer are based on Customer's financial condition as of the Effective Date as assessed by United, as well as Customer's compliance with material financial obligations.United reserves the right to increase the frequency of such fund transfers and/or change the method of transfer if United determines, based on reasonable information and belief, that Customer's financial condition has deteriorated, or Customer continues to fail to comply with the material financial obligations specified in this Agreement. Section 7.7 Underfunding. If Customer does not provide the amounts sufficient to maintain the required minimum balance in the Bank Account, or to cover Bank Account withdrawals: (1) Customer must immediately correct the deficiency and provide prompt notice to United. (2) If United learns of the funding deficiency, United will notify Customer within one business day so Customer can correct the deficiency. (3)United may stop issuing checks and non-draft payments and suspend any of its other services under this Agreement for the period of time Customer does not provide the required funding. (4)If Customer does not correct the funding deficiency within three business days of United's notice to Customer,United may terminate this Agreement as otherwise set forth in this Agreement,such 9 termination to be effective the first day such funding deficiency began. Customer will pay interest on the amount of underf inding at the standard rate that United charges to its self-funded customers for underfunding of bank accounts. Section 7.8 Stop Payments on Outstanding Checks. At Customer's expense, United may place stop payments on checks if United determines that Customer has insufficient funds in its designated benefits funding bank account to honor such checks. United will send a search letter to the payee on all checks that have not been cashed within six (6) months. United will automatically stop payment on all checks that have not been cashed within twelve (12) months and provide Customer with reports Customer needs for the purposes of performing escheat. Customer is solely responsible for determining to file and/or filing unclaimed property once notified, or for making unclaimed payee payments directly. Section 8—Term Of The Agreement Section 8.1 Services Begin. United will begin providing Customer services under this Agreement on the Effective Date. These services apply only to claims for Plan benefits that are incurred on or after the Effective Date. This Agreement will apply for an initial Agreement Period commencing on the Effective Date and will automatically continue for additional Agreement Periods,unless and until this Agreement is terminated. Following the Effective Date and after Customer has provided three (3) months' worth of funds for the processing of claims and/or the payment of administrative fees,this Agreement is deemed executed by the parties. Section 8.2 Services End. United's services under this Agreement stops on the date this Agreement terminates, regardless of the date that claims are incurred. However, United may agree to continue providing certain services beyond the termination date,as provided in Exhibit A-Services. Section 9—Termination Section 9.1 Termination Events. This Agreement will terminate under the following circumstances: (i) The Plan terminates, (ii) Both parties agree in writing to terminate the Agreement, (iii) After the initial Agreement Period, either party gives the other party at least sixty (60) days prior written notice, (iv) United gives Customer notice of termination because Customer did not pay the fees or other amounts Customer owed United when due under the terms of this Agreement, (v) United gives Customer notice of termination if Customer fails to provide the required funds for payment of benefits under the terms of this Agreement, (vi) Either party is in material breach of this Agreement, other than by non-payment or late payment of fees owed by Customer or the funding of Plan benefits, and does not correct the breach within thirty (30) days after being notified in writing by the other party, (vii) Any state or other jurisdiction prohibits a party from administering the Plan under the terms of this Agreement, or imposes a penalty on the Plan or United and such penalty is based on the administrative services specified in this Agreement. In this situation, the party may immediately discontinue the Agreement's application in such state or jurisdiction. Notice must be given to the other party when reasonably practical. The Agreement will continue to apply in all other states or jurisdictions,or(viii)As otherwise specified in this Agreement. Section 9.2 Funding After Termination. When this Agreement terminates, the funding method for Plan benefits will remain in place for the length of the run-out period. After the run-out period has ended, that funding method will cease and Customer will deposit and maintain in the Bank Account enough funds to cover all checks for Plan benefits that have been issued but not cashed. This balance will remain in the Bank Account for a limited period of time to fund the outstanding checks. This period will be reasonable, as determined by United. United will stop payment on all checks that remain uncashed at the end of this period and Customer will request in writing to close the Bank Account and recover any funds remaining in it. United will provide bank statements and Bank Account reconciliation reports,including reports Customer needs for the purposes of performing escheat. Section 10—Records, Information, Audits Section 10.1 Records.United will keep records relating to the services it provides under this Agreement for as long as United is required to do so by law. 10 Section 10.2 Access to Information.If Customer needs information in United's possession for purposes other than an audit,but in order to administer the Plan,United will provide Customer access to that information,if it is legally permissible, the information relates to United's services under this Agreement, and Customer gives United reasonable advance notice and an explanation of the need for such information. Customer represents that it has reasonable procedures in place for handling PHI, as required by law. Customer will only use or disclose PHI to administer the Plan, to perform under this Agreement, or as otherwise permitted under this Agreement. United will provide information only while this Agreement is in effect and for a period of six (6) months after the Agreement terminates, unless Customer demonstrates that the information is required by law or for Plan administration purposes. United also will provide reasonable access to information to an entity providing Plan administrative services to Customer, such as a consultant or vendor, if Customer requests it. Before United provides PHI to that entity, the parties must sign a mutually agreed-upon confidentiality agreement, and the parties must agree as to what information is minimally necessary to accomplish the Plan administrative service. Section 10.3 Audits. During the term of the Agreement, and at any time within six (6) months following its termination, Customer or a mutually agreeable entity may audit United once each calendar year to determine whether United is fulfilling the terms of this Agreement. Prior to the commencement of this audit, United must receive a signed,mutually agreeable confidentiality agreement. Without limiting the foregoing, with respect to audits regarding the payment of Rebates by pharmaceutical manufacturers, the audit must be conducted solely by a"big four"public accounting firm that maintains a separate and stand-alone audit department and is not providing support in conjunction with any litigation pending against United or its affiliates. However,if no"big four"public accounting firm is qualified to perform the audit due to the above requirements,another mutually agreeable firm meeting such requirements may be used. Customer must advise United in writing of its intent to audit. The place, time, type, duration, and frequency of all audits must be reasonable and agreed to by United. All audits will be limited to information relating to the calendar year in which.the audit is conducted, and/or the immediately preceding calendar year. With respect to United's transaction processing services, the audit scope and methodology will be consistent with generally acceptable auditing standards,including a statistically valid random sample or other acceptable audit technique as approved by United("Scope"). Customer will pay any expenses that it incurs in connection with the audit. In addition, Customer will be charged a reasonable per claim charge and a$1,000 charge per day for audits outside of the following parameters: (1) more than one audit per calendar year; (2) any on-site audit visit that is not completed within five (5) business days; (3) sample sizes exceeding the Scope specified above; or (4) any audit initiated after this Agreement has terminated. The additional fees cover the additional resources,facility fees, and other incremental costs associated with an audit that exceeds the Scope. In addition to Customer's expenses and any applicable fees, Customer will also pay any extraordinary expenses United incurs in connection with the audit. For any audit initiated after this Agreement is terminated,Customer will pay all expenses incurred by United. Customer will provide United with a copy of any audit reports within thirty(30) days after Customer receives the audit report(s)from the auditor. Section 10.4 Proprietary Business Information. Each party will limit the use of the other's Proprietary Business Information to only the information required to administer the Plan, to perform under this Agreement, or as otherwise permitted under this Agreement. Neither party will disclose the other's Proprietary Business Information to any person or entity other than to the disclosing party's employees, subcontractors, or authorized agents needing access to such information to administer the Plan,to perform under this Agreement,or as otherwise permitted under this Agreement, except that United's Financial PBI cannot be disclosed by Customer to any third party without United's express written consent. This provision shall survive the termination of this Agreement. 11 Section 10.5 Service Auditor Reports. United may make its Type II service auditor report("Report") available to United's self-funded customers each year for Customer's review in connection with Plan administrative purposes only. The Report will be issued under the guidance of Statement on Standards for Attestation Engagements #16 (SSAE16). Should new guidelines covering service auditor reports be issued,United may make the equivalent of,or any successor to, the SSAE16 Type II Report available to United's self-funded customers. The Report is United's Proprietary Business Information and shall not be shared with any third parties without United's prior written approval; provided, however, that Customer can share the Report with: (i) Customer's independent public accounting firm; and/or(ii) Customer's consultants,provided that such consultants are not in any way a competitor of United's and that Customer informs its consultants that the report was not prepared for their use. To the extent that Customer does provide the Report to its independent public accounting firm or a consultant as permitted herein, Customer shall require that they retain the Report as confidential and that they not disclose such Report to any other persons or entities. Section 10.6 PHI.The parties'obligations with respect to the use and disclosure of PHI are outlined in the Business Associate Addendum attached to this Agreement as Exhibit D. Section 11—System Access Section 11.1 System Access. United grants Customer the nonexclusive, nontransferable right to access and use the functionalities contained within the Systems,under the terms specified in this Agreement. Customer agrees that all rights, title, and interest in the Systems and all rights in patents, copyrights, trademarks, and trade secrets encompassed in the Systems will remain United's. To obtain access to the Systems, Customer will obtain, and be responsible for maintaining, at no expense to United, the hardware, software, and Internet browser requirements United provides to Customer, including any amendments thereto. Customer will be responsible for obtaining an Internet Service Provider or other access to the Internet. Customer will not (i) access Systems or use, copy, reproduce,modify,or excerpt any Systems documentation provided by United in order to access or utilize Systems, for purposes other than as expressly penmitted under this Agreement or(ii) share,trwisfer, or lease Customer's right to access and use Systems, to any other person or entity which is not a party to this Agreement. Customer may designate any third parry, with prior approval from United, to access Systems on Customer's behalf, provided the third party agrees to these terms and conditions of Systems access and Customer assumes joint responsibility for such access. Section 11.2 Security Procedures. Customer will use commercially reasonable physical and software-based measures to protect the passwords and user IDs provided by United for access to and use of any web site provided in connection with the services. Customer shall use commercially reasonable anti-virus software, intrusion detection and prevention system, secure file transfer and connectivity protocols to protect any email and confidential communications provided to United, and maintain appropriate logs and monitoring of system activity, Customer shall notify United within a reasonable timeframe of any (a) unauthorized access or damage, including damage caused by computer viruses resulting from direct access connection, and(b) misuse and/or unauthorized disclosure of passwords and user IDs provided by United which impact the System. Section 11.3 System Access Termination. United reserves the right to terminate Customer's System access (i) on the date Customer fails to accept the hardware, software and browser requirements provided by United, including any amendments thereto or (ii) immediately on the date United reasonably determines that Customer has (i) breached,or allowed a breach of,any applicable provision of this Section 11 or(ii)materially breached or allowed a material breach of,any other applicable provision of this Agreement. Customer's System Access will also terminate upon termination of this Agreement, provided however that if run-out is provided in accordance with Exhibit A- Services, Customer may continue to access applicable functionalities within the Systems during the run-out period. Upon any of the termination events described in this Agreement, Customer agrees to cease all use of Systems, and United will deactivate Customer's identification numbers,passwords,and access to the System. 12 Section 12—Taxes And Assessments Section 12.1 Payment of Taxes and Expenses. In the event that any Taxes are assessed against United as a claim administrator in connection with United's services under this Agreement, including all topics identified in Section 12.3 Customer will reimburse United through the Bank Account for Customer's proportionate share of such Taxes (but not Taxes on United's net income).United has the authority and discretion to reasonably determine whether any such Tax should be paid or disputed. Customer will also reimburse United for a proportionate share of any cost or expense reasonably incurred by United in disputing such Tax,including costs and reasonable attorneys'fees and any interest, fines, or penalties relating to such Tax, unless caused by United's unreasonable delay or unreasonable determination to dispute such Tax. Section 12.2 Tax Reporting.In the event that the reimbursement of any benefits to Participants in connection with this Agreement is subject to Plan or employer based tax reporting requirements, Customer agrees to comply with these requirements. Section 12.3 State and Federal Surcharges, Fees and Assessments. The Plan is responsible for state or Federal surcharges, assessments, or similar Taxes imposed by governmental entities or agencies on the Plan or United, including, but not limited to, those imposed pursuant to The Patient Protection and Affordable Care Act of 2010 ("PPACA"), as amended from time to time. This includes the funding,remittance and determination of the amount due for PPACA required taxes and fees. Section 13—Indemnification Section 13.1 Customer Indemnifies United. Customer will indemnify and hold United harmless to the extent provided by North Carolina law against any and all losses, liabilities,penalties,fines,costs,damages, and expenses, United incurs, including reasonable attorneys' fees, which arise out of(i) Customer or its vendors', subcontractors' or authorized agents' gross negligence or willful misconduct in the performance of Customer or its vendors', subcontractors' or authorized agents' obligations under this Agreement or any other agreements entered into with such third parties on Customer's behalf(ii) Customer's material breach of this Agreement(iii)a breach of any other agreements United enters into with such third parties on Customer's behalf, all as determined by a court or other tribunal having jurisdiction of the matter(iv) third party claims brought against United as the claims administrator (e.g. a claim raised by the federal government based on the federal Medicare Secondary Payor laws). This provision shall survive the termination of this Agreement. Section 13.2 United Indemnifies Customer.United will indemnify Customer and hold Customer harmless against any and all losses,. liabilities, penalties, fines, costs, damages, and expenses, that Customer incurs, including reasonable attorneys'fees,which arise out of(i)United or its vendors' gross negligence or willful misconduct in the performance of United or its vendors',subcontractors' or authorized agents' obligations under this Agreement or(ii) United's material breach of this Agreement, all as determined by a court or other tribunal having jurisdiction of the matter. Notwithstanding the foregoing, Customer will remain responsible for payment of benefits and United's indemnification will not extend to indemnification of Customer or the Plan against any claims, liabilities,damages, judgments or expenses that constitute payment of Plan benefits. This provision shall survive the termination of this Agreement. Section 14—Plan Benefits Litigation Section 14.1 Litigation Against United. If a demand is asserted, or litigation or administrative proceedings are begun by a Participant or healthcare provider against United to recover Plan benefits related to its duties under this Agreement("Plan Benefits Litigation"),United will select and retain defense counsel to represent its interest. Section 14.2 Litigation Against Customer. If Plan Benefits Litigation is begun against Customer and/or the Plan, Customer will select and retain counsel to represent its interest. Section 14.3 Litigation Against United and Customer. If Plan Benefits Litigation is begun against the Plan and United jointly,and provided no conflict of interest arises between the parties, the parties may agree to joint defense counsel. If the parties do not agree to joint defense counsel, then each party will select and retain separate defense counsel to represent their own interests. 13 Section 14.4 Litigation Fees and Costs.All reasonable legal fees and costs United incurs as provided in Section 14, will be paid by Customer(except as provided in Section 13.2) if United gives Customer reasonable advance notice of United's intent to charge Customer for such fees and costs, and United and Customer agrees that United is proceeding in a manner consistent with United's fiduciary obligations in United's litigation strategy. Section 14.5 Litigation Cooperation. Both parties will cooperate fully with each other in the defense of Plan Benefits Litigation. Section 14.6 Payment of Plan Benefits. In all events, Customer is responsible for the full amount of any Plan benefits paid as a result of Plan Benefits Litigation. Section 14.7 Survival.This provision shall survive the termination of this Agreement. Section 15—Mediation In the event that any dispute, claim,or controversy of any kind or nature relating to this Agreement arises between the parties,the parties agree to meet and make a good faith effort to resolve the dispute.If the dispute is not resolved within thirty (30) days after the parties first met to discuss it, and either parry wishes to pursue the dispute further, that party will refer the dispute to non-binding mediation under the Commercial Mediation Rules of the American Arbitration Association("AAA"). In no event may the mediation be initiated more than one year after the date one party first gave written notification of the dispute to the other party. A single mediator engaged in the practice of law, who is knowledgeable about employee benefit plan administration, will conduct the mediation under the then current rules of the AAA.The mediation will be held in Orange County,North Carolina or a mutually agreeable site. Nothing herein is intended to prevent either party from seeking any other remedy available at law including seeking redress in a court of competent jurisdiction. This provision shall survive the termination of this Agreement. Section 16—Miscellaneous Section 16.1 Subcontractors.United can use its affiliates or subcontractors to perform United's services under this Agreement. United will be responsible for those services to the same extent that United would have been had it performed those services without the use of an affiliate or subcontractor. Section 16.2 Assignment. Except as provided in this paragraph, neither party can assign this Agreement or any rights or obligations under this Agreement to anyone without the other party's written consent.That consent will not be unreasonably withheld. Nevertheless, United can assign this Agreement, including all of its rights and obligations to United's affiliates,to an entity controlling,controlled by,or under common control with United, or a purchaser of all or substantially all of United's assets,subject to notice to Customer of the assignment. Section 16.3 Governing Law. This Agreement is governed by the applicable laws of the State of North Carolina. This provision shall survive the termination of this Agreement. Section 16.4 Entire Agreement. This Agreement, with its exhibits, constitutes the entire agreement between the parties governing the subject matter of this Agreement. This Agreement replaces any prior written or oral communications or agreements between the parties relating to the subject matter of this Agreement. The headings and titles within this Agreement are for convenience only and are not part of the Agreement. Section 16.5 Amendment. Except as may otherwise be specified in this Agreement, the Agreement may be amended only by both parties agreeing to the amendment in writing, executed by a duly authorized person of each party. Section 16.6 Waiver/Estoppel.Nothing in this Agreement is considered to be waived by any party,unless the party claiming the waiver receives the waiver in writing. No breach of the Agreement is considered to be waived unless the non-breaching party waives it in writing.A waiver of one provision does not constitute a waiver of any other.A failure of either party to enforce at any time any of the provisions of this Agreement,or to exercise any option which is herein provided in this Agreement, will in no way be construed to be a waiver of such provision of this Agreement. Section 16.7 Notices. Any notices, demands, or other communications required under this Agreement will be in writing and may be provided via electronic means or by United States Postal Service by certified or registered mail, return receipt requested,postage prepaid,or delivered by a service that provides written receipt of delivery. 14 Section 16.8 Use of Name.The parties agree not to use each other's name,logo, service marks,trademarks or other identifying information without the written permission of the other; provided, however, Customer grants United permission to use Customer's name, logo, service marks, trademarks or other identifying information to the extent necessary for United to carry out its obligations under this Agreement(e.g.on SPDs and ID cards). Section 16.9 Producer Compensation.United pays brokers and agents(referred to collectively as"producers") compensation for their services in connection with the sale of United's third party administrative services,in compliance with applicable law.United pays"base commissions"based on factors such as the type of services sold, total amount of administrative fees,group size,and number of employees.These commissions are reflected in the administrative service rate.In addition,United may pay bonuses pursuant to bonus programs established from time to time which are designed to encourage the provision of information regarding new products and provide incentives to achieve production targets,persistency levels,growth goals and other objectives.Bonuses are not reflected in the administrative service fees but are paid from United's general administrative expenses.In general,United's total bonuses are less than 10%of total producer compensation paid but the percentage may be higher in certain situations.It is United's policy not to pay commissions to producers with respect to a product for which the customer is also paying the producer a commission or other fee.Please note United also makes payments from time to time to producers for services other than those relating to the sale of services(for example,compensation for services as a general agent or as a consultant).United has taken steps to ensure that producers.properly disclose their compensation arrangements to their customers,but United cannot guarantee the producer's compliance.For general information on United's producer payment arrangements,including the approximate percentage of total compensation that total bonus payments comprise,please go to http://www.uhc.com and search for"Producer Compensation"or click"legal"at the bottom of the screen and select the tab for"Overview of Producer Compensation''For specific information about the compensation payable with respect to Customer's particular situation,Customer should contact its producer. Section 16.10 Compliance with Laws. United shall at all times remain in compliance with all applicable local, state,and federal laws,rules,and regulations including but not limited to all anti-discrimination laws. Pursuant to the terms of North Carolina General Statute 153A449(b)no county may enter into a contract with a contractor unless the contractor and the contractor's subcontractors comply with the requirements of Article 2 of Chapter 64 of the North Carolina General Statutes. Where applicable,failure to maintain compliance with the requirements of Article 2 of Chapter 64 of the General Statutes constitutes United's breach of this Agreement. By executing this Agreement Provider affirms United is in compliance with Article 2 of Chapter 64 of the North Carolina General Statutes. Section 16.11 Non-Appropriation. United acknowledges that Costumer is a governmental entity,and the validity of this Agreement is based upon the availability of public funding under the authority of its statutory mandate. In the event that public funds are unavailable and not appropriated for the performance of Customer's obligations under this Agreement,then this Agreement shall automatically expire without penalty to Customer immediately upon written notice to United of the unavailability and non-appropriation of public funds.It is expressly agreed that Customer shall not activate this non-appropriation provision for its convenience or to circumvent the requirements of this Agreement,but only as an emergency fiscal measure during a substantial fiscal crisis. In the event of a change in the Customer's statutory authority,mandate and/or mandated functions,by state and/or federal legislative or regulatory action,which adversely affects Customer's authority to continue its obligations under this Agreement,then this Agreement shall automatically terminate without penalty to Customer upon written notice to United of such limitation or change in Customer's legal authority. 15 EXHIBIT A-SERVICES The following are the administrative services United has agreed to provide to Customer. Customer may request that United provide services in addition to those set forth in this Agreement. If United agrees to provide them, those services will be governed by the terms of this Agreement and any amendments to this Agreement. Customer will pay an additional fee,determined by United,for these additional services. The Services described in this Exhibit will be made available to Customer's eligible Participants consistent with the Summary Plan Description under which the Participant is covered. A. ACCOUNT MANAGEMENT SERVICES Service Comments Implementation and maintenance of account. Enrollment meetings and support for locations that meet Minimum six weeks nonce of meeting. United's criteria. Standard initial enrollment kit. Bulk mailing of initial enrollment kits to Customer based on United's criteria. Ongoing account management including: • Designated account resources. • Ongoing management and review of benefits and data. Standard accounting structure based on United's criteria: • Suffixes to accommodate separate claims reporting for different benefit plans. • Claim accounts to accommodate separate claims data for different locations and _Maintenance of up to 2 separate benefit plans. Electronic Bill Presentment and Payment(EBPP),which provides capabilities to: • View invoices online. • Sort and search enrollee information. • Download billing information. • Remit payment online. Online administration services accessed through United's Customer reporting is included to the extent indicated in Employer eServices Web site including online eligibility Section D.eServices Customer Reporting Services. _maintenance and claim status inquiry_ Issuance of HIPAA Certificates of Creditable Coverag�__ Summary Plan Description(SPD)Assistance. United will If the SPD is not finalized sufficiently in advance of the prepare a customized draft of an SPD,either for each plan or Effective Date of United's services,United will either(i) multiple plans, as mutually agreed upon with one additional utilize the summary of Plan benefits and exclusions that United draft, in response to Customer's comments, and a final draft has created based on its understanding of Customer's Plan SPD. "Plan", for purposes of this paragraph, means each ' design and which Customer has reviewed and approved or(ii) individual plan design administered by United. The SPD will create,at United's discretion,an operational SPD which will be be in English. based upon the summary of Plan benefits that Customer has reviewed and approved. United will administer claims and United will print each SPD in its standard size and with otherwise provide its services in accordance with this summary United's standard cover in a quantity equal to 110% of the ' of Plan benefits and exclusions or operational SPD,as the case number of Employees participating in the plan,and ship to a may be,and it will govern and remain in full force and effect single location and/or post online. until a final SPD is provided to United If United is providing Drafts only or if Customer is producing the Final SPDs,Printing of SPDs will be at an additional cost. Summary of Benefits and Coverage: • Electronic version in United's standard format. • For medical Plans administered by United. • Initial request and up to 1 amendment�erear. 16 B. ELIGIBILITY MANAGEMENT SERVICES Service Comments Standard ID Card production and issuance. United has assumed the addition of Customer's logo in an acceptable format to the ID card. Alternative member ID numbers generated by United (not based on SSN). Electronic Eli ibili Processing Electronic Enrollment processing: • Each submission to be a single consolidated file. Separate eligibility submissions for COBRA. • Initial load of primary physician data(when applicable) to be supplied electronically with ongoing changes submitted via Employer eServicessM Web site. Submission format: • UnitedHealth Group Standard 3005 Format;HIPAA 834 Compliant Format;or HR-XML format. • Single data source required Submission frequency: • Changes file daily in combination with a full population file on a monthly schedule. Or • Changes file weekly or bi-weekly in combination with a full population file on a monthly or quarterly schedule. Or • Full file weekly or bi-weekly. Transmission method: • FTP with United's approved encryption or direct connect. C. UNDERWRITING AND FINANCIAL SERVICES Service Comments Overall program accounting(year-end reconciliation). Claim projections. Annual Projection of cost impact for benefit design changes. Annual Projection of conventional premium equivalent rates._ Annual Reserve estimates. Annual government filings of 1099 reports to the IRS regarding payments made to physicians and other health care professionals. Provide required data necessary to enable Customer to file Form 5500. D. ESERVICES® CUSTOMER REPORTING SERVICES Service Comments An online customer reporting system including up to five customer IDs. _ Reporting Access Levels: Customer's access level is based upon its election. • Standard—Basic report package of"subscription" financial and utilization information produced on a pre- Expanded Level reports are available to customers with Select scheduled basis. Level reporting on an ad hoc basis for an additional charge per • Select—In addition to the Standard features,interactive report. access to eCR tools allowing the user to customize report parameters to facilitate detailed views of the data. Includes a broad array of membership and utilization reports. • Expanded—In addition to the Select features,allows the user greater ad-hoc and customizable capabilities to obtain detailed performance information_. _ Non-standard or ad hoc reports Fees are determined on a report-specific basis 17 Service Comments United reserves the right,from time to time,to change the content,format and/or type of its reports. E. CLAIMS ADMINISTRATION SERVICES Service Comments Claims for Plan benefits must be submitted in a form that is satisfactory to United in order for it to determine whether a benefit is payable under the Plan's provisions. Customer delegates to United the discretion and authority to use United's claim procedures and standards for Plan benefit claim determination. Implementation of Customer's benefians. Claim history load from one prior carrier using United's standard process_ Standard claims processing including: • Re-pricing and payment of claims. • Auto and manual adjudication using proprietary software. • Claim edit/review and cost containment program _•_ Pending and subsequent claim review. Standard claim forms when a Medical claim review of specific health care claims to promote coding accuracy,benefit interpretation,and apply reimbursement policy. Standard coordination of benefits for all claims with automated investigation once every 12 months. Production and distribution of monthly Health _Statements. Processing of run-out claims(meaning claims incurred prior If the Agreement terminates because Customer fails to pay to the termination date)for six(6)months following United fees due,fails to provide the funding for the payment of termination. benefits,or United terminates for any other material breach, run-out will not apply. The fee for run-out claims processing is equal to the last two months'Standard Service Fees in effect at the time of termination.If Customer terminates this Agreement at the end of the initial Agreement Period,a matured Standard Service Fee will be used as the basis for the run-out fee. United will bill Customer for the full amount of run-out fee that Customer owes, generally one month prior to the Agreement's termination date.The full payment of run-out fees is due and payable before run-out claims processing will begin. United will only process run-out claims if Customer is current with all Service Fee obligations at time of termination. Suspension of Run-out Processing If Customer does not pay the run-out fees it owes United when due as set forth above, United will notify Customer. If Customer does not make the required payment within five(5) business days of United's notice to Customer,United may stop issuing checks and non-draft payments and suspend its ran-out claims processing under this Agreement, such suspension to apply to all claims regardless of dates of service and shall remain in effect until such date when Customer makes the required payment. Termination of Run-out Processing Run-out claims processing will terminate:(1)the date United gives Customer notice of termination because Customer did not pay the run-out fees Customer owed United when due as set forth above,or(2)if Customer fails to provide the required funds for payment of benefits under the terms of this Agreement.Such termination shall apply to all claims 18 Service Comments regardless of dates of service. _ Application of subrogation services. Abuse and Fraud Management Recovery Program. The fee includes all work to identify recovery opportunities, research,conduct data analysis,investigate,negotiate settlements without the use of outside counsel,and draft legal documents. If outside counsel is retained for a group of payers seeking the recovery,a proportionate amount of the outside legal fees, equal to the payer's exposure in the case to the total exposure in the case,will be deducted from the gross recovery amount, after the fee has been deducted Customer will be given the _ option to participate or decline participation in the settlement. Hospital Bill Audit Program. Credit Balance Recovery Program. Advanced Analytics and Recovery Services United or its affiliate will use a combination of large scale analytics,information and analysis to identify post- adjudication claims for additional overpayment o ortunities. F. MEMBER SERVICES Service Comments Toll-free access to a customer care unit using a dedicated number Employee access to a member website enabling Participants to: • Check claim status. • Check eligibility information. • Search for providers and online health information. G. MEDICARE SERVICES Service Comments Medicare Secondary Payer Reporting. United shall Customer agrees to provide to United in a timely manner and provide to applicable parties the applicable reports in a time in an agreed upon format any and all data that United requires and manner as required according to the Medicare Secondary to comply with the Reporting Requirements. Payer Mandatory Reporting Provisions ("Reporting Requirements") in Section 111 of the Medicare, Medicaid, and SCHIP Extension Act of 2007. United shall not be responsible for any noncompliance penalties in connection with the Reporting Requirements that are related to Customer's failure to provide the required data. H. NETWORK SERVICES Service Comments Network access, management and administrative Standard on all network plans. activities _ UnitedHealth PremiumsM Designation Program Available_ in designated markets. _ Network access to chiropractic and complementary alternative medicine providers Physical Health Clinical Support Program for Chiropractic and Complementary Alternative providers. Transplant Solutions(TS)Services • Transplant Network via Centers of Excellence(COE) • Transplant Access Program(TAP)Network • Extra-Contractual Services-contracting on a case-by case basis for transplant care outside of the COE or TAP Networks for a standard negotiating Reasonable and customary charge guidelines for out of network surgical,medical,lab and x-ray claims. Maximum Non-Network Reimbursement Program 19 Service Comments (MNRP for non-emergency non-network claims. Shared Savings Program The services under this program provide access to provider Application of the Shared Savings Program provides discounts only and do not include credentialing of providers or additional savings on select non-Network facility and other Network services.United is not responsible for the physician claims not eligible for standard network discounts. medical outcomes or the quality or competence of any provider Program provides access to discounted charges made or facility rendering services under the Shared Savings available to United from health care providers who contract Program. or will negotiate with,a third party to provide such discounted charges. Either party can terminate the Shared Savings Program at any time for any reason with written notice. Access to Extended Networks(leased networks) Available at an additional charge. I. CARE MANAGEMENT AND OUTREACH SERVICES Service Comments Personal Health Support,an integrated personal health Coordination with external vendors is subject to an additional management program using a designated team of nurses and fee. incorporating elements of care management core activities such as case management and support around specific treatment decisions. A pregnancy program,consumer engagement notification program including gaps in care messaging,and a predictive model specific to Customer are also included. Medica olicy functions,as guided by a medical director. Standard on all managed plans. _ Disease Management Programs Coordination with external vendors is subject to an additional fee. Complex Medical Conditions: • Cancer Resource Services 9 Congenital Heart Disease Resource Services • Healthy Pregnancy • Kidney Resource Services • Maternity Support Program • Neonatal Resource Services Alternate Care Proposals(ACP)which provide appropriate ? Customer consents to United's use and administration of the and cost effective health care services and supplies I ACP program and delegate to United the discretion and alternatives that would otherwise not be covered by the Plan. i authority to develop and revise ACPs. __ ^ Activation programs to engage Participants including, monthly health statements member call services,and access to member ortal with consumer messaging Predictive modeling,using data from a proprietary system, Standard on all managed plans. Additional charges apply for to identify individuals at risk and offer proactive programs to integrating an outside vendor's pharmacy data improve their health status. 20 J. UNITED BEHAVIORAL HEALTH — MENTAL HEALTH AND SUBSTANCE USE DISORDER SERVICES Service Comments Behavioral Health Solutions,Full Care Management • Network access,development and maintenance. • Ongoing case management. • Outpatient care management. • Inpatient care management. • Outcomes measurement. • Claims processing,adjudication and member services. • Account management,reporting and communication materials. • Interface with employee assistance program(EAP) vendors. K. EMPLOYEE HEALTH EDUCATION AND MEDICAL SELF-CARE PROGRAM SERVICES Service Comments N_urseLinesM-provides 24-hour access to registered nurses. Care2 —works in conjunction with NurseLine and Employee Assistance Program(EAP)to provide 24-hour registered access to clinical,wellness,financial,legal or counseling resources. _ HealthAtoZ-providing members with access to online Health and Wellness content/health assessments/health coaching,personal health records,and automated messaging. L. UNITEDHEALTH ALLIES® DISCOUNT PROGRAM Service Comments Core UnitedHealth Allies Discount Program enabling i The Core UnitedHealth Allies Discount Program can be made plan participants to access pre-negotiated savings on certain available to non-covered employees or employees participating out-of-pocket health care purchases. The discount value in plans not administered by United for an additional fee. program is not a health insurance plan. M. MANAGED PHARMACY SERVICES Service Comments Integrated Pharmacy Services including: Postage paid return envelopes are not included and are not • Claims processing available. • Eligibility management • Benefits management • Reporting(available through eServices) • Retail Pharmacy Network Management. • Mail Order Services. • Customer Care Center Services-Toll-free access to customer care voice response unit(for location of network pharmacies),and a pharmacist • Specialty Pharmacy • Support staff and account management Standard Clinical programs such as standard notification, quantity level limits,and quantity per duration. Additional programs such as dispense as written(DAW) interventions,retail flags and edits,maximum allowable cost pricing(retail),and generic and mail order programs. 21 EXHIBIT B-SERVICE FEES This exhibit lists the service fees Customer must pay United for its services during the term of the Agreement. These fees apply for the period from January 1,2014 through December 31,2014.Customer acknowledges that the amounts paid for administrative services are reasonable. Administrative Service Fees—Standard Medical Service Fees The Standard Medical Service Fees described below, excluding optional and non-standard fees, are adjusted as set forth in the applicable performance standard(s). The Standard Medical Fees listed below are based upon an estimated minimum of 995 enrolled Employees. The Standard Medical Service Fees are the sum of the following: January 1,2014 through December 31,2014 • $38.35 per Employee per month covered under the Choice Plus portion of the Plan. Average Contract Size: 1.66. Pharmacy AWP Contract Rate Customer's contract rate for prescription drugs is as provided in Exhibit C. United uses Medi-Span's national drag data file as the source for average wholesale price (AWP) information. United reserves the right to revise the pricing and adopt a new source or benchmark if there are material industry changes in pricing methodologies. Administrative Service Fees-Non-Standard Fees Service Description Fee Fraud and Abuse Management Fee equal to thirty-two and five-tenths percent(32.5%)of the gross recovery amount Hospital Audit Program Services Fee not to exceed thirty-one percent(31%)of the gross recovery amount Credit Balance Recovery Services Fee not to exceed ten percent(10%)of the gross recovery amount. Standardized Summary of Benefits and Coverage(SBC)as United will provide,at no additional charge,standard established under The Patient Protection and Affordable Care format,electronic copies of the SBC documents(twice per Act of 2010 year)for medical benefit plans administered by United. Customer logos can be included on the SBC at no additional charge. Additional fees will apply for other services. United will not create SBCs for medical plans it does not administer. Third Party Liability Recovery(Subrogation)Services Fee equal to thirty-three and one-third percent(33.3%)of the gross recovery amount Advanced Analytics and Recovery Services Fee equal to twenty four percent(24%)of the gross -recovery amount Shared Savings Program Customer will pay a fee equal to thirty-five percent(35%) of the"Savings Obtained"as a result of the Shared Savings Program. "Savings Obtained"means the amount that would have been payable to a health care provider,including amounts payable by both the Participant and the Plan,if no discount were available,minus the amount that is payable to the health care provider,again,including amounts payable by both the Participant and the Plan,after the discount is taken. External Reviews For each subsequent external review beyond 5 total reviews per year,a fee of$500 will apply er review. 22 EXHIBIT C-PERFORMANCE STANDARDS FOR HEALTH BENEFITS The Standard Medical Service Fees (excluding Optional and Non-Standard Fees and that portion of the Standard Medical Service Fees attributable to Commission Funds, if applicable, as described in Exhibit B), (hereinafter referred to as "Fees") payable by Customer under this Agreement will be adjusted through a credit to its Service Fees in accordance with the performance guarantees set forth below unless otherwise defined in the guarantee. Unless otherwise specified, these guarantees apply to medical benefits and are effective for the period beginning January 1, 2014 and ending on December 31, 2014 (each twelve month period is a "Guarantee Period"). With respect to the aspects of United's performance addressed in this exhibit, these fee adjustments are Customer's exclusive financial remedies. These guarantees will become effective upon the later of(1) the effective date of the Guarantee Period; or(2) the date this Agreement is signed by both parties. In the event these guarantees become effective later than the effective date of the Guarantee Period: (1) quarterly guarantees will become effective beginning with the next calendar quarter following signature of this Agreement by both parties and (2) annual guarantees will become effective commencing with the Agreement Period during which this Agreement is signed by both parties. United reserves the right from time to time to replace any report or change the format of any report referenced in these guarantees. In such event,the guarantees will be modified to the degree necessary to carry out the intent of the parties. United shall not be required to meet any of the guarantees provided for in this Agreement or amendments thereto to the extent its failure is due to Customer's actions or inactions or if United fails to meet these standards due to fire, embargo, strike, war, accident, act of God, acts of terrorism or United's required compliance with any law, regulation,or governmental agency mandate or anything beyond United's reasonable control. Prior to the end of the Guarantee Period, and provided that this Agreement remains in force, United may specify to Customer in writing new performance guarantees for the subsequent Guarantee Period. If United specifies new performance guarantees,United will also provide Customer with a new Exhibit that will replace this Exhibit for that subsequent Guarantee Period. Claim is defined as an initial and complete written request for payment of a Plan benefit made by an enrollee, physician, or other healthcare provider on an accepted format. Unless stated otherwise, the claims are limited to medical claims processed through the UNET claims systems. Claims processed and products administered through any other system, including claims for other products such as vision, dental, flexible spending accounts, health reimbursement accounts, health savings accounts, or pharmacy coverage, are not included in the calculation of the performance measurements. Also, services provided under capitated arrangements are not processed as a typical claim;therefore capitated payments are not included in the performance measurements. A formal implementation plan,which defines key tasks,dependencies and completion dates will be developed and agreed to by both parties. The lack of a mutually agreeable formal implementation plan will nullify these implementation guarantees in total. Failure on the customer's part to complete,by the agreed upon dates,the key dependent tasks associated with the implementation guarantees outlined below will also nullify that guarantee. Initial ID Card Issuance ID cards will be postmarked within the parameters set forth after the final eligibility data has been system Definition loaded,passed a quality assurance check,passed a system load test and has been released to the ID card production area. Measurement Percents e of cards issued 1 99°!0 Issuance time frame,business days or less business days 1 10 Calculated on a pro-rated basis,based on the actual number of late cards as a percent of the total number of Criteria cards. ID card turnaround time guarantees are based on United's performance during the implementation process. I eveI" Customerspecific Period" Initial im lementation timeframe PaymentTeriod Annually Fees at Risk Total Dollars at Risk for this metric $3,900 Payment Amount Of the Fees at Risk for this metric,percentage at risk for each gradient N/A Gradients Not applicable 23 Claim Wady Date Ready to pay electronic claims by the later of the effective date or within the designated number of days following the completion of key implementation tasks: (i)Account structure and benefit plan details are Definition defined and written approval has been provided by the customer,(ii)final eligibility has been received and successfully tested by United;and(iii)if so negotiated,deductibles and lifetime maximums from the revious carrier received in a mutually agreed upon format,accurate,and loaded electronically. Measurement Electronic claim ready by effective date or the later of business days or less business days IS If any additional changes are received or requested after written approval is received, 10 additional business Criteria days will be required for changes affecting up to ten benefit plans(sets);20 additional days will be required for than es affecting ten or more benefit plans(sets). Level Customerspecific Period Initial implementation timefi-ame Payment Period Annually Fees at Risk Total Dollars at Risk for this metric $3,900 Payment Amount Of the Fees at Risk for this metric,percentage at risk for each gradient N/A Gradients Not applicable Eli ibli Loading Definition Initial implementation electronic eligibility files will be loaded within the timeframe set forth following receipt of clean eligibility file. Measurement Files loaded,in business days or less business da s 3 Clean eligibility file once approved by Customer and/or its designee and United,which must be:a)error Criteria free;b)formatted per United's standards;and c)received by 12:00 p.m.,EST on the scheduled date,or the arantee period starts the following business day. Level Customerspecific Period Initial implementation timeframe Payment Period Annually Fees at Risk Total Dollars at Risk for this metric $3,900 Pavinent Amount Of the Fees at Risk for this metric,percentage at risk for each gradient N/A Gradients Not a plicable Time to Process in'10 Days Definiti on The percentage of all claims United receives will be processed within the designated number of business days of receipt. Measurement Percentage of claims processed 94°l0 Time to rocess,in business days or less after receipt of claim business days 10 Criteri a Standard claim operations reports Level Site Level Period Annually Payment Period Annually Fees at Risk Total Dollars at Risk for this metric $3,900 . .............. ....... . ...._ ._.. Payment Amount Of the Fees at Risk for this metric,percentage at risk for each gradient 20% Gradients 11 business days 12 business days 13 business days 14 business days 15 business days or more 24 Dollar Aceura AR Definition ': Dollar accuracy rate of not less than the designated percent in any quarter. Measurement Percentage of claims dollars processed accurately 99% Criteria "" Statistically significant random sample of claims processed is reviewed to determine the percentage of claim dollars processed correctly out of the total claim dollars paid. Level Office Level Period " Annually Payment Period ° Annually Fees"at Risk : Total Dollars at Risk for this metric $3,900 Payment.Amount Of the Fees at Risk for this metric,percentage at risk for each gradient 20% Gradients !! 98.99%-98.50% 98.49%-98.00% 97.99%-97.50% 97.49%-97.00 Below 97.00% Procedural Accurac Definition`' Procedural accuracy rate of not less than the designated percent. Measurement Percentage of claims processed without procedural(i.e.non-financial)errors 97% Criteria . Statistically significant random sample of claims processed is reviewed to determine the percentage of claim dollars processed without procedural(i.e.non-financial)errors. Level " Office Level Period Annually Payment Period Annually Fees at Risk Total Dollars at Risk for this metric $3,900 Payment.Amount Of the Fees at Risk for this metric,percentage at risk for each gradient 20% Gradients 96.99%-96.50% 96.49%-96.00% 95.99%-95.50% 95.49%-95.00% Below 95.00% Phone service guarantees and standards apply to Participant calls made to the customer care center that primarily services Customer's Participants.If Customer elects a specialized phone service model the results may be blended with more than one call center and/or level.They do not include calls made to care management personnel and/or calls to the senior center for Medicare Participants,nor do they include calls for services/products other than medical,such as mental health/substance abuse,pharmacy (except when United is Customer's pharmacy benefit services administrator),dental,vision,Health Savings Account,etc. Average Speed eed to"Answer Definition Calls will sequence through United's phone system and be answered by customer service within the parameters set forth. Measurement Percentage of calls answered 100% Time answered in seconds,on average seconds 30 Criteria Standard tracking reports produced by the phone s stem for all calls Level Team that services Customer's account Period " Annually Pa' ent Period Annually Fees at Risk Total Dollars at Risk for this metric $3,900 Payriient Amount = Of the Fees at Risk for this metric,percentage at risk for each gradient 20% Gradients,= 32 seconds or less 34 seconds or less 36 seconds or less 38 seconds or less Greater than 38 seconds 25 Abandonment Rate Definition The average call abandonment rate will be no greater than the percentage set forth Measurement Percentage of total incoming calls to customer service abandoned,on average 2% Criteria Standard tracking reports produced by the phone s stem for all calls Level Team that services Customer's account Period Annually Payment Period Annually Foes at Risk f Total Dollars at Risk for this metric $3,900 Payment Amount Of the Fees at Risk for this metric,percentage at risk for each gradient 20% Gradients 2.01%-2.50% 2.51%-3.00% 3.01%-3.50% -4.00% 3.51% Greater than 4.00% Call Quality:Score Definition Maintain a call quality score of not less than the percent set forth Measurement Call quality score to meet or exceed 93% Criteria "" Random sampling of calls are each assigned a customer service quality score,using United's standard internal call quality assurance program. Level Office that services Customer's account Period Annually Payment Period Annually Fees at Risk Total Dollars at Risk for this metric $3,900 Pa y ment Amount Of the Fees at Risk for this metric,percentage at risk for each gradient 20% Gradients., 92.99%-91.00% 90.99%-89.00% 88.99%-87.00% -85.00% 86.99% Below 85.00% Employee(Member)Satisfaction Definition The overall satisfaction will be determined by the question that reads"Overall,how satisfied are you with the way we administers your medical health insurance plan?" Measurement" Percentage of respondents,on average,indicating a grade of satisfied or higher 80% Criteria " Operations standard survey,conducted over the course of the year;may be customer specific for an additional charge. Level Office that services Customer's account Period Annually Payment Period Annually Fees'at Risk Total Dollars at Risk for this metric $1,950 Payment Amount Of the Fees at Risk for this metric,percentage at risk for each gradient N/A Gradients Not applicable Customer Satisfaction Definition The overall satisfaction will be determined by the question that reads"How satisfied are you overall with UnitedHealthcare?" Measurement Minimum score on a 10 point scale score 5 Criteria" " ! Standard Customer Scorecard Surve Level Customerspecific Period Annually Payment"Perod Annually Fees at Risk Total Dollars at Risk for this metric $1,950 Payment Amount Of the Fees at Risk for this metric,percentage at risk for each gradient N/A Gradients Not applicable 26 Pharmaev Financials Definition Contracted hannac rates that will be delivered to Customer. Measurement and Criteria a ComWned Discounts - Retail Brand,Average Wholesale Price(AWP)less 16.4% Retail Generic,AWP less 79.5% Mail Order Brand,AWP less 22.1% Mail Order Generic,AWP less 68.0% The Guaranteed Discount amount will be determined by multiplying the AWP by the guaranteed discount off AWP by each com anent and adding the amounts together. Dispensing Fee Guarantee Retail Brand $1.38 Retail Generic $1.38 Dispensing fee totals are calculated by multiplying the actual scripts for each type by the contracted rate for that scri t ,Minimum Rebate!Gus rantee" Rebate Sharing Percentage 80.0% Basis,per script Brand Retail $20.91 Mail Order $41.88 Level Customer Specific Period Annually Pa "ent Period Annually Payment Amount ! The amount the actual discounts are less than the combined guaranteed discount amount. Discounts Payment A-mount The amount the combined actual dispensing fee exceeds the combined guarantee dispensing fee. -TDis -' Fees Payment A,mount The amount the combined actual Rebate amounts are less than the combined guaranteed Rebate amount -Rebates Conditions. Discount Specific Conditions •Discounts are based on actual Network Pharmacy brand and generic usage of retail and mail order drugs. The contracted discount amount will be determined by multiplying the AWP by the contracted discount rate off AWP by component •Does not apply to items covered under the Plan for which no AWP measure exists. •Discounts calculated based on AWP less the ingredient cost;discount percentages are the discounts divided by the AWP. Discounts for retail generic prescriptions represent the average savings off AWP based on Maximum Allowable Cost(MAC)pricing for MAC generics and percentage discount savings off AWP for non-MAC generics. All other discounts represent the percentage discount savings off of AWP. •The arrangement excludes all specialty drugs, generic medications launched as an"at-risk"product, generic medications with pending litigation,compound drugs,retail out of network claims,mail order drugs (for dispensing fee arrangement)and non-drug items. •The retail and mail order generic discounts exclude any generic drug that has two or fewer generic manufacturers; the retail and mail order brand discounts include any generic drug that has two or fewer generic manufacturers. Rebate Specific Conditions United reserves the right to modify or eliminate this arrangement as follows based upon changes in Rebates: •if changes made to United's PDL,for the purpose of achieving a lower net drug cost for Customer and United's other ASO customers,result in significant reductions to the Rebate level •in the event that there are material deviations to the anticipated timing of drugs that will come off patent and no longer generate Rebates General Conditions •On mail order drugs and retail pharmacy drugs and services including dispensing fees,United will retain the difference between what we reimburse the Network Pharmacy and Customer's payment for a prescription drug product or service. •A minimum of 896 Employees and 1,481 Participants enrolled in the pharmacy plan is required, •United reserves the right to revise or revoke this arrangement if: a)changes in federal,state or other IR RIB(©5/3.U13) !; applicable law or regulation require modifications;b there are material changes to the AWP as published 27 by the pricing agency that establishes the AWP as used in these arrangements;c)Customer makes benefit changes that impact the arrangements;d)there is a material industry change in pricing methodologies resulting in a new source or benchmark;e)it is not accepted within ninety(94)days of the issuance of our initial quote. 18 i EXHIBIT D-BUSINESS ASSOCIATE AGREEMENT ADDENDUM This Business Associate Agreement (`BAN") is incorporated into and made part of the Administrative Services Agreement ("Agreement") between United Healthcare Services, Inc. on behalf of itself and its Affiliates (`Business Associate") and Orange County("Covered Entity") (each a"Party" and collectively the"Parties") and is effective on January 1,2014(Effective Date). The Parties hereby agree as follows: 1. DEFINITIONS 1.1 Unless otherwise specified in this BAA,all capitalized terms used in this BAA not otherwise defined have the meanings established for purposes of the Health Insurance Portability and Accountability Act of 1996 and its implementing regulations as amended and supplemented by HITECH, as each is amended from time to time(collectively,"HIPAX). 1.2 "Affiliate",for purposes of this BAA,means any entity that is a subsidiary of UnitedHealth Group. 1.3 "Breach" means the acquisition, access, use or disclosure of PHI in a manner not permitted by the Privacy Rule that compromises the security or privacy of the PHI as defined, and subject to the exclusions set forth,in 45 C.F.R. 164.402. 1.4 `Breach Rule" means the federal breach regulations, as amended from time to time, issued pursuant to HIPAA and codified at 45 C.F.R.Part 164(Subpart D). 1.5 "Compliance Date"means the later of the September 23,2013 or the effective date of the Agreement. 1.6 "Electronic Protected Health Information" (or"ePHI") means PHI that is transmitted or maintained in Electronic Media. 1.7 "HITECH"means Subtitle D of the Health Information Technology for Economic and Clinical Health Act provisions of the American Recovery and Reinvestment Act of 2009, 42 U.S.C. 17921-17954, and all associated existing and future implementing regulations,when and as each is effective. 1.8 "PHI' means Protected Health Information, as defined in 45 C.F.R. 160.103, and is limited to the Protected Health Information received from, or received, maintained created or transmitted on behalf of, Covered Entity by Business Associate in performance of the Services. 1.9 "Privacy Rule" means the federal privacy regulations, as amended from time to time, issued pursuant to HIPAA and codified at 45 C.F.R.Parts 160 and 164(Subparts A&E). 1.10 "Security Rule"means the federal security regulations, as amended from time to time, issued pursuant to HIPAA and codified at 45 C.F.R.Parts 160 and 164(Subparts A&C). 1.11 "Services" means, to the extent and only to the extent they involve the receipt, creation, maintenance, transmission,use or disclosure of PHI,the services provided by Business Associate to Covered Entity as set forth in the Agreement,including those set forth in this BAA in Sections 4.3 through 4.7,as amended . by written agreement of the Parties from time to time. 2. RESPONSIBILITIES OF BUSINESS ASSOCIATE With regard to its use and/or disclosure of PHI,Business Associate agrees to: 2.1 not use and/or further disclose PHI except as necessary to provide the Services, as permitted or required by this BAA and/or the Agreement,and in compliance with each applicable requirement of 45 C.F.R. 164.504(e),or as otherwise Required by Law,provided that,to the extent Business Associate is to carry out Covered Entity's obligations under the Privacy Rule,Business Associate will comply with the requirements of the Privacy Rule that apply to Covered Entity in the performance of those obligations. 2.2 implement and use appropriate administrative, physical and technical safeguards and as of the Compliance Date comply with applicable Security Rule requirements with respect to ePHI, to prevent use or disclosure of PHI other than as provided for by this BAA and/or Agreement. 29 2.3 without unreasonable delay,report to Covered Entity: (i)any use or disclosure of PHI not provided for by this BAA and/or Agreement, of which it becomes aware in accordance with 45 C.F.R. 164.504(e)(2)(ii)(C); and/or(ii) any Security Incident of which Business Associate becomes aware in accordance with 45 C.F.R. 164.314(a)(2)(i)(C). 2.4 with respect to any use or disclosure of Unsecured PHI not permitted by the Privacy Rule that is caused solely by Business Associate's failure to comply with one or more of its obligations under this BAA, Covered Entity hereby delegates to Business Associate the responsibility for determining when any such incident is a Breach and for providing all legally required notifications to Individuals, HHS and/or the media,on behalf of Covered Entity. Business Associate shall provide these notifications in accordance with the notification requirements set forth in the Breach Rule, and shall pay for the reasonable and actual costs associated with those notifications. In the event of a Breach, without unreasonable delay, and in any event no later than sixty(60) calendar days after Discovery, Business Associate shall provide Covered Entity with written notification in accordance with 45 C.F.R. 164.410 that includes a description of the Breach,a list of Individuals(unless Covered Entity is a plan sponsor ineligible to receive PHI)and,in the event the delegation set forth above has been triggered,a copy of the template notification letter to be sent to Individuals. 2.5 in accordance with 45 C.F.R. 164.502(e)(1)(ii) and 45 C.F.R. 164.308(b)(2), ensure that any subcontractors of Business Associate that create, receive, maintain or transmit PHI on behalf of Business Associate agree, in writing, to the same restrictions and conditions on the use and/or disclosure of PHI that apply to Business Associate with respect to that PHI,including complying with the applicable Security Rule requirements with respect to ePHI. 2.6 make available its internal practices,books and records relating to the use and disclosure of PHI to the Secretary for purposes of determining Covered Entity's compliance with the Privacy Rule. 2.7 document, and within thirty (30) days after receiving a written request from Covered Entity or an Individual, make available an accounting of disclosures of PHI about the Individual, m accordance with 45 C.F.R. 164.528. 2.8 provide access, within twenty (20) days after receiving a written request from Covered Entity or an Individual, to PHI in a Designated Record Set about an Individual, in accordance with the requirements of 45 C.F.R. 164.524 including as of the Compliance Date,providing or sending a copy to a designated third party and providing or sending a copy in electronic format. 2.9 to the extent that the PHI in Business Associate's possession constitutes a Designated Record Set, make available, within thirty (30) days after a written request by Covered Entity, PHI for amendment and incorporate any amendments to the PHI,as requested by Covered Entity,all in accordance with 45 C.F.R. 164.526. 3. RESPONSIBILITIES OF COVERED ENTITY In addition to any other obligations set forth in the Agreement,including in this BAA,Covered Entity: 3.1 shall identify the records it furnishes to Business Associate it considers to be PHI for purposes of this BAA. 3.2 shall provide to Business Associate only the minimum PHI necessary to accomplish the Services. 3.3 in the event that the Covered Entity honors a request to restrict the use or disclosure of PHI pursuant to 45 C.F.R. 164.522(x) or makes revisions to its notice of privacy practices of Covered Entity in accordance with 45 C.F.R. 164.520 that increase the limitations on uses or disclosures of PHI or agrees to a request by an Individual for confidential communications under 45 C.F.R. § 164.522(b),Covered Entity agrees not to provide Business Associate any PHI that is subject to any of those restrictions or limitations to the extent any may limit Business Associate's ability to use and/or disclose PHI as permitted or required under this BAA unless Covered Entity notifies Business Associate of the restriction or limitation and Business Associate agrees in writing to honor the restriction or limitation. In addition, if those limitations or revisions materially increase Business Associate's cost of providing services under the Agreement, including this BAA,Covered Entity shall reimburse Business Associate for such increase in cost. 30 3.4 shall be responsible for using administrative,physical and technical safeguards at all times to maintain and ensure the confidentiality,privacy and security of PHI transmitted to Business Associate pursuant to the Agreement, including this BAA, in accordance with the standards and requirements of HIPAA, before and during the transmission of such PHI to Business Associate. 3.5 shall obtain any consent or authorization that may be required by applicable federal or state laws and regulations prior furnishing to Business Associate the PHI for use and disclosure in accordance with this BAA. 4. PERMITTED USES AND DISCLOSURES OF PM Unless otherwise limited in this BAA, in addition to any other uses and/or disclosures permitted or required by this BAA or the Agreement,Business Associate may: . 4.1 make any and all uses and disclosures of PHI necessary to provide the Services to Covered Entity. 4.2 use and disclose PHI,if necessary,for proper management and administration of Business Associate or to carry out the legal responsibilities of Business Associate,provided that the disclosures are Required by Law or any third party to which Business Associate discloses PHI for those purposes provides written assurances in advance that: (i) the information will be held confidentially and used or further disclosed only for the purpose for which it was disclosed to the third party or as Required by Law;and (ii)the third party promptly will notify Business Associate of any instances of which it becomes aware in which the confidentiality of the information has been breached. 4.3 De-identify any and all PHI received or created by Business Associate under this BAA, which De- identified information shall not be subject to this BAA and may be used and disclosed on Business Associate's own behalf,all in accordance with the De-identification requirements of the Privacy Rule. 4.4 provide Data Aggregation services relating to the Health Care Operations of the Covered Entity in accordance with the Privacy Rule. 4.5 identify Research projects conducted by Business Associate, its Affiliates or third parties for which PHI may be relevant;obtain on behalf of Covered Entity documentation of individual authorizations or an Institutional Review Board or privacy board waiver that meets the requirements of 45 C.F.R. 164.512(i)(1) (each an"Authorization" or"Waiver") related to such projects; provide Covered Entity with copies of such Authorizations or Waivers, subject to confidentiality obligations ("Required Documentation"); and disclose PHI for such Research provided that Business Associate does not receive Covered Entity's disapproval in writing within ten (10) days of Covered Entity's receipt of Required Documentation. 4.6 make PHI available for reviews preparatory to Research and obtain and maintain written representations in accord with 45 C.F.R. 164.512(i)(1)(ii) that the requested PHI is sought solely as necessary to prepare a Research protocol or for similar purposes preparatory to Research,that the PHI is necessary for the Research,and that no PHI will be removed in the course of the review. 4.7 use the PHI to create a Limited Data Set("LDS")in compliance with 45 C.F.R. 164.514(e). 4.8 use and disclose the LDS referenced in Section 4.7 solely for Research or Public Health purposes or for the Health Care Operations of the Covered Entity, provided that Business Associate shall: (i) not use or further disclose the information other than as permitted by this Section 4.8 or as otherwise Required by Law; (ii)use appropriate safeguards to prevent use or disclosure of the information other than as provided for by this Section 4.8; (iii) report to Covered Entity any use or disclosure of the information not provided for by this Section 4.8 of which Business Associate becomes aware; (iv) ensure that any agents to whom Business Associate provides the LDS agree to the same restrictions and conditions that apply to Business Associate with respect to such information; and (v) not identify the information or contact the Individuals. 5. TERMINATION 5.1 Termination. If either Party knows of a pattern of activity or practice of the other Party that constitutes a material breach or violation of this BAA then the non-breaching Party shall provide written notice of the breach or violation to the other Party that specifies the nature of the breach or violation. The 31 breaching Party must cure the breach or end the violation on or before thirty(30) days after receipt of the written notice. In the absence of a cure reasonably satisfactory to the non-breaching Party within the specified timeframe, or in the event the breach is reasonably incapable of cure, then the non- breaching Party may terminate the Agreement and/or this BAA. 5.2 Effect of Termination or Expiration. After the expiration or termination for any reason of the Agreement and/or this BAA, Business Associate shall return or destroy all PHI, if feasible to do so, including all PHI in possession of Business Associate's subcontractors. In the event that Business Associate determines that return or destruction of the PHI is not feasible, Business Associate may retain the PHI subject to this Section 5.2. Under any circumstances, Business Associate shall extend any and all protections, limitations and restrictions contained in this BAA to Business Associate's use and/or disclosure of any PHI retained after the expiration or termination of the Agreement and/or this BAA, and shall limit any further uses and/or disclosures solely to the purposes that make return or destruction of the PHI infeasible. 5.3 Cooperation. Each Party shall cooperate in good faith in all respects with the other Party in connection with any request by a federal or state governmental authority for additional information and documents or any governmental investigation,complaint,action or other inquiry. 6. MISCELLANEOUS 6.1 Construction of Terms. The terms of this BAA to the extent they are unclear shall be construed to allow for compliance by Covered Entity and Business Associate with HIPAA. 6.2 Survival. Sections 5.2, 5.3,6.1, 6.2,and 6.3 shall survive the expiration or termination for any reason of the Agreement and/or of this BAA. 6.3 No Third Party Beneficiaries. Nothing in this BAA shall confer upon any person other than the Parties and their respective successors or assigns,any rights,remedies,obligations,or liabilities whatsoever. 32