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Resolution No. 89041 2 3 4 5 6 t RESOLUTION NO . 8904 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING AND AUTHORIZING THE EXECUTION OF AN AGREEMENT FOR ADMINIISTRATIVE SERVICES BY AND BETWEEN THE CITY OF VERNON AND UNITED OF CONCORDIA COMPANIES, INC. FOR ADMINISTRATION OF DENTAL BENEFITS 7 WHEREAS, the City of Vernon has agreements with United of 8 Omaha Life Insurance Company ( "Omaha ") for administering the City's 9 employee health care plan; and 10 WHEREAS, Omaha has formed a business relationship with 11 United Concordia Companies, Inc. ( "United Concordia ") for dental 12 insurance networks wherein Omaha acts as an agent for United Concordia 13 for receipt of all information relating to eligibility and enrollment; 14 and 15 WHEREAS, on January 5, 2005, the Finance Committee 16 recommended the 2005 renewal rates for group medical, dental and life 17 insurance; and 18 WHEREAS, Omaha has requested that the City sign an 19 Administrative Services Agreement with United Concordia for the period 20 January 1, 2005 through December 31, 2005, which is renewable for 21 successive one -year periods unless 30 -days written notice to terminate 22 is provided or 60 -days written notice to change financial terms is 23 provided; and 24 WHEREAS, the Acting Risk Manager has recommended that the 25 Agreement for Administrative Services be executed to implement the 26 renewal of the dental policy; and WHEREAS, United Concordia has requested that coincident with 28 the execution of the Agreement for Administrative Services that the 1 2 3 4 5 6 7 8 9 10 11 12 .13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 City execute a Business Associate Addendum whereby United Concordia will be a "Business Associate" of the City's employee health care plan; and WHEREAS, the City Council of the City of Vernon has determined that, pursuant to the provisions of subsection (a) of Section 2.27 of the Vernon City Code, it is in the public interest and necessity to enter into an Agreement for Administrative Services and Addendum with United Concordia, to enhance services provided to the Vernon community. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF VERNON AS FOLLOWS: SECTION 1: The City Council of the City of Vernon hereby finds and determines that the recitals contained hereinabove are true and correct. SECTION 2: The City Council of the City of Vernon hereby approves the Agreement for Administrative Services and Business Associate Addendum with United of Concordia Companies, Inc., in substantially the same form as Exhibit A which attached hereto and incorporated herein by reference. SECTION 3: The City Council of the City of Vernon hereby authorizes the Mayor to execute said Agreement and Addendum for, and on behalf of, the City of Vernon and the Acting City Clerk is hereby authorized to attest thereto. SECTION 4: The City Council of the City of Vernon hereby directs the Acting City Clerk, or his designee, to send one fully executed Agreement and Addendum to: Mutual of Omaha Attn: Bruce Attarian, Group Service Executive 15260 Ventura Blvd., Suite 600 Sherman Oaks, CA 91403 -5307 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 4 SECTION 5: The Acting City Clerk of the City of Vernon shall certify to the passage of this resolution, and thereupon and thereafter the same shall be in full force and effect. APPROVED AND ADOPTED this 7th day of December, 2005. ATTEST- BRUCE V. MALKENHORST, JR. Acting City Clerk LEONIS C. MAL :URG,`Mayor 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 STATE OF CALIFORNIA ss COUNTY OF LOS ANGELES I, BRUCE V. MALKENHORST, JR., Acting City Clerk of the City of Vernon, do hereby certify that the foregoing Resolution, being Resolution No. 8904, was duly adopted by the City Council of the City of Vernon at a regular meeting of the City Council duly held on Wednesday, December 7, 2005, and thereafter was duly signed by the Mayor of the City of Vernon. (SEAL) BRUCE V. MALKENHORST, JR. Acting City Clerk EXHIBIT A AGREEMENT FOR ADMINISTRATIVE SERVICES THIS AGREEMENT entered into as of the 1st day of January, 2005 by and between City of Vernon (hereinafter referred to as "Com pany") and United Concordia Companies, Inc. (hereinafter referred to as "Claims Administrator"). WITNESSETH: WHEREAS, the Company has established a self - insured employee welfare benefit plan ( "the Plan ") within the meaning of the Employee Retirement Income Security Act of 1974 as amended ( "ERISA "); WHEREAS, the Claims Administrator possesses the administrative capacity to assist the Plan in providing its Participants with dental benefits; WHEREAS, the Company has designated a P Ian Administrator to administer the Plan benefits in accordance with the requirem ents of ERISA; WHEREAS, the Company and the Plan Administrator have requested the Clai ms Administrator to furnish claims administration services for the Plan; and WHEREAS, the Claims Administrator is willing to administer the claims for certain dental benefits for the Plan's Participants. NOW, THEREFORE, in consideration of the mutual undertakings herein stated, t he Company and Claims Administrator, intending to be legally bound hereby, enter into this Agreement for the adm inistration of the claims for certain dental benefits of the P lan. ARTICLE 1 - DEFINITIONS Definitions of words and terms as used in this Agreement: A. Administrative Fee - the fee payable by Com pany to Claims Administrator specified in Exhibit A. B. Bank - Wachovia Corporation or such other institution as agreed to by Com pany and Claims Administrator. C. Covered Services - those services for which Plan Benefits are provided under and subject to the terms and conditions of the P lan. D. Participant - an employee, dependent, retiree or other beneficiary as defined i n the Plan, who is duly enrolled by the Claims Administrator in accordance with A rticle II of this Agreement. ASO-1 REV. 12/2004 E. Participating Provider - any provider with whom Claims Administrator has a contract or arrangement with respect to payment for services perform ed for persons enrolled in the Plan. F. Plan - the employee welfare benefit plan, as deft ned in ERISA, established by the Company for the purpose of providing certain dental care benefits, as desc ribed in the Plan/Summary Plan Description, for its Participants, which is marked as Exhibit B and is incorporated herein by refer ence. G. Plan Administrator - The entity or person designated by the Com pany as the Plan Administrator, as that term is defined in ERISA. The Claims Administrator is not the Plan Administrator. H. Plan Benefits - all benefits of whatever nature payable to a P articipant or a Participating Provider under and subject to the terms and conditions of the Plan. I. Provider - any duly licensed dental care provider for whose services the Company is obligated to pay under the term s of the Plan. J. Summary Plan Description ( "SPD ") - a document, as defined in ERISA, which describes the terms and benefits to be adm inistered by the Claims Administrator marked as Exhibit B and attached hereto and incorporated herein by refere nce. ARTICLE II = ENROLLMENT A. Eligibility Information. Mutual of Omaha ( "Agent ") will act as agent of Claims Administrator for the receipt of all information relating to eligibility and enrollment under this Agreement. On a mutually agreeable schedule, but not less than monthly, Company will provide to Agent, for transmittal to Claims Administrator, current information specifying individuals who are eligibl e to be Participants. Company will provide notice of changes to such information as it occurs, and Claims Administrator will post such changes no later than 10 business days after Claims Administrator receives such notice from Agent. Changes involving termination of a Participant for Plan benefits will be effective on a prospective basis only and will be effective at the end of the month in which proper notice is provided to Agent. All information under this Article shall be provided in a mutually acceptable data processing m edium and format. The Company is responsible for ensuring the acc uracy and timeliness of eligibility information. B. Identification Cards. Claims Administrator shall be responsible for providing standard identification cards to Participants based on information provided to it by Company, pursuant to paragraph A above. Customized identification cards are subject to added fees. C. Enrollment Procedures. Upon a determination by Company that an individual is eligible to participate in the Plan, Claims Administrator shall enroll the individual in a mutually agreed upon manner. Company will obtain from each Participant any necessary releases and consents as required by law for the disclosure of health information to Claims Administrator for the purposes set forth in this Agreement. ASO-1 REV. 12/2004 D. COBRA Compliance. The Company and the Plan Administrator shall retain full responsibility for notifying qualified beneficiaries of their term ination of coverage and of their rights to continuation coverage, and for adm inistering the exercise of continuation rights, as required by the Cons olidated Omnibus Budget Reconciliation Act of 1985, P.L. 99 -272; 29 U.S.C. 1161 -1168; 26 U.S.C. 4980B and 42 U.S.C. 300bb -1, (COBRA). Claims Administrator shall have no obligation to ensure that any instructions received by qualified beneficiaries or the Company and the Plan Administrator comply with the requirements of such laws and shall be indemnified by the Company and the Plan Administrator from any and all liability arising from such Company's and Plan Administrator's failure to provide s uch notices or continuati on coverage for qualified beneficiaries. ARTICLE 111 BENEFITS Payment Of Benefits. During the term of thi s Agreement, Claims Administrator will administer the claims for dental care benefits, s ubject to all of the terms and conditions set forth in Exhibit B. 1. Determination and Payment of Benefits - Cl aims Administrator witcompute and verify Plan Benefit amounts and prepare and provide to Participants and Participating Providers, when applicable, statements reflecting the amount of Plan Benefits payable and the reasons why a claim has been denied in whole or in part. Claims Administrator will draw drafts and checks or initiate electronic funds transfers in payment of Plan Benefits. 2. Services of Claims Administrator's Participating Providers - If covered services are performed by a Participating Provider, Claims Administrator will make payment directly to the Provider. Partici pating Providers have agreed to accept the Claims Administrator payment as payment in full for covered services performed for Participants, except where certain maximums, copayments, co- insurance or deductibi es are specified in Exhibit B and which are the responsibility of the participant. 3. Services of Non - Participating Providers - If covered services are perfor med by a Provider who is not a Participating Provider, Claims Administrator will make payment at the rate specified in Exhibit B. Any difference between the Provider's charge and the Claim s Administrator's payment shall be the personal responsibility of the Participant. Payment will be made to the Participant or, if permitted by the Plan and if a valid assignment of the claim is in place, to the Non - Participating Provider. 4. Overpayment of Plan Benefits - The parties wi II cooperate fully to make every reasonable effort under the circum stances, considering the chances of successful recovery and the costs thereof, to recover any payment made to a Participant or Provider whic h is in excess of the amount which the person was entitled to receive under the terms as listed in Exhibit B. ASO-1 REV. 12/2004 3 Company assigns to Claims Administrator the authority to pursue recovery of overpayments and Claims Administrator will pursue all reasonable means of recovery of overpayments under the circum stances but will not be obligated to commence litigation, unless otherwis e specifically agreed by the parties. CI aims Administrator will assume liability for an unrecovered overpayment only if and at such time as it is determined that: (a) the overpaym ent was caused by Cl aims Administrator's act or omission which was intentional, grossly negligent, fraudulent or crim inal; (b) all reasonable means of recovery under the circumstances have been exhausted; and (c) Claims Administrator's acts or omissions were not undertaken at the express di rection of Company. 5. Banking - Plan Benefits shall be made by check drawn by C laims Administrator payable through the. Bank. T he Company, by execution of this Agreement, expressly authorizes Claims Administrator to issue and accept such checks on behalf of the Com pany for the purpose of payment of Plan Benefits. Company agrees to provide funds in ac cordance with Exhibit A through its designated bank sufficient to satisfy all Plan Benefits upon notice from Claims Administrator or the Bank of the amount of checks approved and recorded by Claims Administrator. Company agrees to execute such docum ents as may be required by Claims Administrator or Bank from time to time to effectuate this provis ion. B. Amendments To Plan. The Company may amend the Plan to change the dental benefits provided to its Participants, or the eligibility of its beneficiaries to participate, at any time during the term or any extension of this Agreement. Upon written confirmation from the Company and the Plan Administrator that the Plan has been duly amended, the Claims Administrator shall administer claims to conform to the amendments to the Plan. The Company and the Plan Administrator assume all responsibility for communication of Plan amendments to the Participants or for other notices to P articipants as required by ERISA or any other applicable law. Claims Administrator reserves the right to term inate this Agreement upon thirty (30) days written notice if the amendments to the Plan constitute a material change in benefits available to Participants under the P Ian. If any amendment increases or decreases the Com pany's anticipated claims expense or the Claims Administrator's administrative costs, the parties shall, prior to the administration of the amendments to the Plan, agree to revise financial terms. If the parties fail to reach an agreem ent within thirty (30) days of commencement of negotiations, either party may terminate this Agreement by the giving of sixty (60) days prior written notice to the other par ty. To the extent changes in dental benefi ts necessitate modification or revision of Exhibit B or any booklet whi ch constitutes a part thereof, the Com pany shall provide reasonable advance written notice of such amendment to the Claims Administrator. C. Interpretation Of Plan. The Company and the Plan Administrator delegate to the Claims Administrator the authority, responsibil ity and discretion to interpret and construe the provisions of the Plan, as necessary to: 1. administer all services specified in this Agreement; 2. determine the extent of the benefi ts to which any Participant is entitled under the Plan; ASO-1 REV. 12/2004 4 3. make a full and fair review of each claim denial appealed by P articipants in accordance with the requirements of ERISA. Any function not specifically delegated to or assumed by the Claims Administrator pursuant to this Agreement shall remain the sole responsibility of the Company and the Plan Administrator. D. Nature of Services. Provided. Claims Administrator provides adm inistrative claims payment services only under this Agreem ent and does not ass ume any financial risk or obligation with respect to claims. This Agreement shall not be deem ed a contract of insurance or prepaid dental c are under the laws and regulations of any jurisdiction where Claims Administrator may be called upon to act in fulfilling its obligations under this Agreement. ARTICLE IV - SERVICES PROVIDED BY CLAIMS ADMINISTRATOR A. Advisory Services. Claims Administrator shall consult with Company and Plan Administrator when requested to do so regarding: 1. Plan design and revisions, including questions regarding eligibility for participation and effective dates and c essation of coverage. 2. Plan administration including questions regarding taxes and Covered Services. 3. The SPD and other material intended for distribution to Participants. Claims Administrator will make available on request a speci men form of SPD. However, Company and Plan Administrator acknowledge and agree that provision of a specimen form of SPD and consultation regarding the SPD is not intended to impose on Claims Administrator any obligation under ER ISA with respect to the SPD. Claims Administrator has no obligation to print or distribute the SPD. B. Estimates of Costs and Liabilities. 1. Estimates of Plan Benefit Costs and Fees - Claims Administrator will provide Company with an annual estimate, for budget purposes, of Plan Benefit costs and Claims Administrator's Service Fee and other charges for Subsequent Contract Periods. 2. Estimates of Costs of Proposed Plan Changes - Claims Administrator will provide Company with estimated Plan Benefit cost calculations for proposed changes in the Plan. 3. Estimates of Open and Unreported Claim Liability - Claims Administrator will provide Company with estimates of open and unreported Claim liability following the close of each Contract Period. ASO-1 REV. 12/2004 5 C. Standard Administrative Forms. Claims Administrator will provide Company and Plan Administrator with standard forms which may be used for administration of the Plan, including those necessary to process enrollments in the plan, designations of dependents, etc. Com pang will not use non - standard adm inistrative forms without receiving Claims Administrator's written approval. D. Standard Administrative Manuals. Claims Administrator will prepare, update and provide Company and /or Plan Administrator with Claims Administrator's standard administration manual to assist in Plan administration. E. Establishing Banking Arrangements. Claims Administrator will assist Company in establishing banking arrangem ents for the reimbursement of Plan Benefits and payment of Administrative Fees. F. Directories. Claims Administrator will provide Company and Plan Administrator with a sample of Participating Provider Directories. The Plan Administrator is responsible for supplying provider directories to plan partici pants. G. Report Services. Claims Administrator will furnish Company and /or Plan Administrator management reports in accordance with Exhibit C, provided that the content of such reports may be modified or restricted to maintain compliance with Claims Administrator's Privacy Practices and Procedures and applicable privacy law. It is understood and agreed that the Group shall request and utilize such data for the limited purpose of satisfying "Plan Administrative Function" (as that term is defined in 45 C.F.R. § 164.504) which the Company may have with regard to the Plan. H. Additional Services. No additional services are provided by the Claims Administrator other than those expressly agreed herein. ARTICLE V - CLAIM EXPENSE AND OTHER CHARGES The Company shall pay the Claims Administrator as specified in Exhibit A for all claims paid on behalf of the Plan's Participants plus the additional amounts set forth therein. The financial arrangement set forth in Exhi bit A may be modified from time to time during the initial term or any extension of this Agreement as mutually agreed upon in writing by the parties. Plan Benefits are entirely funded by the C ompany. Claims Administrator provides administrative and claims payment services only. Notwithstanding the term ination of this Agreement, and regardless of the reason for termi nation, Company shall be liable to Claims Administrator for the cost of any Plan Benefit paid by Claims Administrator pursuant to this Agreement: AS0-1 REV. 12/2004 ARTICLE VI - AUDIT Company may audit Claims Administrator's administration of Plan benefits hereunder, subject to the following conditions: A. Procedure. In case of any audit under this A udit provision, Company will give Claims Administrator notice in writing of its desire to conduct an audit. Company and Claims Administrator will agree on the scope of any audit request. The Company shall not request more than one audit per calendar year. Audits shall be conducted only for a period no greater than the two most recently completed contract years. Audits shall be conducted during norm al working business hours at t he offices of the Claims Administrator by an auditor mutually acceptable to the Claims Administrator and the Company which approval shal Knot be unreasonably withheld by either party. Claims Administrator shall provide appropriate records and docum ents for Company to evaluate the adm inistration of the benefits. Company will discuss with Claims Administrator the operational details of the audit. Audits shall not be conducted for the same scope and time frame or portion of time of a previously conducted audit unless the Company is required by a governm ental agency with which it has a contractual arrangement to audit a period or periods for whic h a final audit has been perform ed or in cases of fraud or suspected fraud or unless the audit identifies a systematic discrepancy in which event an audit or re -audit may be conducted of a period no greater than the four most recently completed contract years (incl uding the current audit period) solely for the purpose of examining such systematic discrepancies. B. Confidential Information. Prior to the commencement of any audit, Company and its outside auditor, if any, will execute a written agreement reasonably satisfactory to Claims Administrator to protect the confidenti ality of patient specific dental care information and Claims Administrator's proprietary or confidential information, provided that Claims Administrator will in no event be required to dis close any information in violation of applicable law. C. Types of Audits. 1. Financial Audits. Subject to the requirements of Paragraph A and B of this Audit provision and all applicable laws, regulations and Claims Administrator's policies, Financial Audits shall be limited to an examination of Claims ASO-1 REV. 12/2004 Administrator's records of provider charges and reimbursements for Plan benefits administered under this Agreement. Company shall reimburse Claims Administrator for the actual cost of any computer time expended as a result of any financial audit request. Further, if any financial audit request requires m ore than 40 hours of personnel of Clai ms Administrator, the Company shall reimburse the Claims Administrator for personnel time in excess of such hours at the rate of $100 per hour. 7 2. Claims Audit: (a) Subject to the requirem ents of Sections A and B of this Audit provision and all applicable laws, regulations and Claims Administrator's policies, the Company shall have the right under this Agreement to conduct an audit of the claims for the benefits paid under the P Ian. The audit shall be coordinated with the Claims Administrator and the scope of an audit shall be limited to reviews of claims documentation, membership data and benefit summaries. Audit sampling methodology shall be mutually agreed to by the parties and must be based on the universe of claims under review. A preliminary draft of the audit report shall be submitted to the Claims Administrator fifteen days prior to issuance of the final report. (b) On an annual basis , Company will be provided with 40 hours of audit support. Com pany shall reim burse Claims Administrator for any additional hours of audit support at a rate of $100 an hour . (c) The provisions of this Audit section shall survive termination of this Agreement. (d) Audit reports prepared by Com pany or its representatives shall be reviewed by the Claims Administrator prior to issuance. ARTICLE VII - LITIGATION If litigation or arbitration proceedings are commenced by a Participant or Provider against Claims Administrator or Company, or both parties, in connection with payment of claims for Plan benefits ( "Claims Litigation "), unless otherwise agreed by the parties: A. In actions asserted only against Claims Administrator: 1. Claims Administrator will provide written notice to C ompany as soon as practicable and will, at Company's written request, provide Company with information with respect to the ongoing status of the CI aims Litigation; and 2. Claims Administrator will select and retain counsel. B. In actions asserted against Claims Administrator and Com pany, unless a material conflict of interest arises between the parties, the parties will agree on a defense strategy for the action and Clai ms Administrator will select counsel reasonably satisfactory to Company to represent both parties. C. In actions asserted against Claims Administrator and Company where a material conflict of interest exists between the parties, each party will select and retain its own counsel. ASO-1 REV. 12/2004 D. In all litigation under this Article VII, Company shall reimburse Claims Administrator for all such legal fees, costs and disbursements, judgments or settlements unless such claims litigation was caused by acts or intentional misconduct or gross negligence by Claims Administrator in the performance or services under this Agreement. E. In all Claims Litigation the parties will. provide each other with reasonable cooperation necessary in the defense of Clai ms Litigation; F. Company shall be liable for the full amount of any Plan Benefits paid as a result of Claims Litigation. In no event wit I Claims Administrator be liable for any am ount of Plan benefits paid as a result of Claims Litigation. ARTICLE VIII — PRIVACY AND CONFIDENTIALITY A. Confidential Information. Claims Administrator, Company, and Plan Administrator acknowledge that in discharging their obligati ons under this Agreement they may disclose or make available to each other confidential i nformation. Claims Administrator, Company and Plan Administrator agree to protect and preserve the confidential, proprietary and trade secret nature of each other's confidential information and further agree not to disclose the other's confidential information to any other person, firm or entity without obtaining the other's prior written c onsent unless otherwis e provided by law. B. Use of Individually Identifiable Health Information. The use and disclosure of personally identifiable health information related to Participants ( "Protected Information ") is subject to various privacy laws, including state laws governing the privacy of personal financial and health information, the Health Insurance Portability and Accountability Act of 1996 ( "HIPAA "), and regulations adopted thereunder by the Departm ent of Health and Human Services (45 CFR Parts 160, 162, 164 and proposed Part 142). T he parties will treat all such information in accordance with those laws, and will use or disclose Protected Information received from the other only for the purposes stated in this Agreement, or to comply with judicial process or any applicable statute or regu lation. C. Business Associate Addendum. The parties acknowledge and agree that on and after the final compliance date for the "Privacy Rule" established pursuant to regulations implementing the Health Insurance Portabili ty and Accountability Act of 1996 ( "HIPAA ") (45 C.F.R. Parts 160 and 164), Claims Administrator shall be a "Business Associate" of the Plan (as that term is defined in 45 C.F.R. § 160.501). Accordingly, Company shall, for and on behalf of the Plan, agree to the attached "Business Associate Addendum" coincident with its execution of this Agreement. The parties further agree that this Agreement along with the Business Associate Addendum shall thereafter govern Claims Administrator's obligations regarding the use and disclosure of Protected Information when performing its functions under this Agreement. AS0-1 REV. 12/2004 9 ARTICLE IX - TERMINATION AND RENEWAL A. This Agreement shall continue until 12:00 m idnight on the termination date specified in Exhibit A, at which time, unless changed or termi nated as provided herein, it shall automatically renew for a further per iod of twelve (12) consecutive m onths and thereafter from year to year. Such initial period and each successive renewal period is hereinafter called a "Contract Period ". B. Upon at least sixty (60) days written notice to the other par ty prior to the end of any Contract Period, the Company or the Claims Administrator may request a change in the financial terms of this Agreement. If the parties are unable to agree upon such requested change within s ixty (60) days of the initial notice, this Agreement will automatically terminate at the end of the C ontract Period in which the request for change is made, unless the parties agree in writing to an extension thereof. C. The Company or the Claim s Administrator may terminate this Agreement at the end of any Contract Period by the giving of no les s than thirty (30) days written notice to the other party prior to the end of such Contract Period. D. If the amount due is not receiv ed by the end of five (5) business days from a payment due date, this Agreement may be terminated without written notification to the Com pany. In the event of automatic termination of this Agreement under this paragraph, the Claims Administrator, at its option, may reinstate this Agreement or enter into a new Agreement with the Company. Unless otherwise agreed, this reinstatement or new Agreement shall be on a month -to -month basis. ARTICLE X - MISCELLANEOUS A. Amendments to Comply with Law. Notwithstanding any provision contained herein to the contrary, the Company or the CI aims Administrator shall have the right, for the purpose of com plying with the provis ions of any law or lawful order of a court or regulatory authority, to amend this Agreement, including any Exhibits hereto, or to increase, reduce or elim inate any of the benef its provided for in this Agreement for any one or more Participants who shall be enrolled under this A greement, and each party w ill agree to any amendment of this Agreement which is necessary in order to accomplish such purposes. The Company also agrees to pay any change i n claims expense and administrative expense that results from such amendment. If the parties cannot agree to any such change or am endment, notwithstanding any provision of thi s Agreement to the contrary, the Company or the Claims Administrator may terminate this Agreement as of the end of the month by the gi ving of sixty (60) days written notice prior ther eto. B. Other Amendments. This Agreement shall be subject to amendment of modification by mutual written agreement between the CI aims Administrator and Com pany. This Agreement supersedes all prior written or oral agreements or understandings between the parties. AS0-1 REV. 12/2004 10 C. Notices. Unless otherwise provided herein, all notices required or permitted to be sent in accordance with this Agreement may be either personally delivered, or sent by reg ular U.S. mail or nationally recognized overnight courier service, to the foll owing addresses: To the Company at: City of Vernon Willard Yamaguchi Chief Deputy City Attorney 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Willard Yamaguchi To Claims Administrator at: United Concordia Companies, Inc. 4401 Deer Path Road Harrisburg, PA 17110 Attention: President The parties may change the address I isted herein by sendi ng notice of such change in writing to the other party in accordance with the method outlined in this Article. D. Choice of Law. Except as otherwise governed by ERISA, this Agreement is entered into pursuant to the laws of the state of California and shall be interpreted pursuant to such law. E. Severability. In the event of the unenforceability or invalidity of any section or provision of this Agreement, such section or provision s hall be enforceable to the fullest extent permitted by law, and such unenforceability or invalidity shall not otherwise affect any other section or provision of this Agreement and this Agreement shall otherwise remain in full force and effect. F. Assignment. Services to be provided by Claims Administrator under this Agreement may be performed in whole or in part by Clai ms Administrator, by any of its affiliates, or by any subcontractor selected by it or by such affiliates. Except as set forth in the preceding sentence, neither party m ay assign or delegate any of the rights and obligations hereunder to any third party without the prior written consent of an offs cer of the other party. G. Counterparts. This Agreement may be executed in any num ber of counterparts, each of which shall be deemed an original and constitute one and the same instrument. Independent Contractors. In fulfilling its obligations in connection with this Agreement and the Plan, Claims Administrator acts in the capacity of independent contractor as to Com pany and Plan Administrator. ASO-1 REV. 12/2004 11 1. Headings. Headings in this Agreement have been inserted for convenience and shall not be used to interpret or construe its provi sions. IN WITNESS WHEREOF, the parties intending to be legally bound have caused this Agreement to be executed the day and the year first above written. ASO-1 REV. 12/2004 CITY OF VERNON By: Title: UNITED CONCORDIA COMPANIES, INC. By:"Zgieted Title: President & CEO 12 EXHIBIT A EXHIBIT A Group: City of Vernon Group No: A00118000, A 00118001, A00118002 A00118003 A00118004, A 00118005, A00118006, A00118007, A00118008 A. Effective Date: January 1, 2005 B. Termination Date: December 31, 2005 C. Remittance Period: Semi- Monthly D. Payment Procedure: 1. Claims Administrator's Administrative Fee shall be an amount equal to $6.38 per employee per month. Claims Administrator (or the designated agent of Claim s Administrator) will bill Company for the Administrative Fee every month. 2 Claims Administrator (or the designated agent of Claim s Administrator) will notify the Company by the last busi ness day of each Rem ittance Period of the amount due under this Agreement to fund Plan Benefits. The Company will wire transfer the payment within two (2) business days of notice from the Claims Administrator. This Agreement will be terminated in accordance with Article IX of this Agreement if the Company fails to make timely payment. Claims Administrator shall have no obligation to pay any claims, regardless of the date of service, after termination. 3. A late fee of one and one half percent (1 1/2 %) per m onth will be charged on any unpaid balance. 4. Claims Administrator reserves the right to recalcul ate the Administrative Fee listed above if any of the fol lowing occurs during such period: (a). Change in Employee Count - 10% or greater agg regated change per contract period, positive or negative, in the number of employees from those assumed in Claims Administrator's quotation or renewal quotation. (b). Change in Plan. A material change in the Plan initiated by Company or in response to new I egislation. (c). Change in Claim Administration. A material change in claim payment requirements or procedures, account s tructure, or any other change materially affecting the manner or cost of paying benefits. ASO-1 REV. 12/2/1999 E. Taxes. In the event any state or any poli tical subdivision thereof presently or hereafter imposes any tax payable by the Claim s Administrator with respect to the servic es provided hereunder or with respect to the gross receipts derived hereunder, any amounts payable by the Company to the Claims Administrator shall be increased sufficiently to cover any such tax imposed with respect to the services or gross receipts involved. F. Settlement Upon Termination of Agreement. Upon termination of this Agreement for any reason other than non - payment by Company of any Plan Benefits or Administrative Fees, and provided that Company has paid an advance deposit to C laims Administrator, Claims Administrator will adm inister claims incurred by Participants prior to term ination for sixty (60) days (the "Run Out Period "). Claims Administrator shall bill Company, and Company shall pay Claims Administrator, for Plan Benefits and Administrative Fees in accordance with the Agreement and this Exhibit A as if the Agreement were still in effect. If Company fails to make timely payment to Claims Administrator, Claims Administrator may apply the advance deposit to amounts owed and may, in its sole discretion, terminate the Run Out Period immediately upon notice to Company. If the advance deposit is not sufficient to cover all amounts due, Company shall make payment within five (5) business days of notice from Claims Administrator. If Company has paid all amounts due Claims Administrator for Plan Benefits and Administrative Fees, Claims Administrator shall return the advance deposit to Company within ten (10) days after the end of the Run Out P eriod. G. Issued But Not Paid Checks. No later than thirty (30) days after ter mination of this Agreement or the end of the Run Out Period, whichever is later, Claims Administrator shall present an accounti ng to Company of checks issued by Claims Administrator but not yet paid by the B ank. Claims Administrator will apply any available claims funding or advance deposit against the amount indicated in the accounting. If there is a deficiency after application of claims funding or advance deposit, Com pany shall pay Claims Administrator such deficiency within ten (10) days. AS0-1 REV. 12/2/1999 EXHIBIT B SUMMARY PLAN DESCRIPTION CITY OF VERNON DENTAL PLAN Concordia FLEX ADMINISTRATIVE INFORMATION Plan Name: City of Vernon Informal Plan Name: Concordia Flex Employer/Plan Sponsor: City of Vernon Plan Sponsor Tax Identification No.: 95- 6000808 Plan Number: A00118000, A00118001, A00118002, A00118003, A00118004, A00118005, A00118006, A00118007, A00118008 Type of Plan: Group Dental Type of Administration: Third Party Administration Plan Administrator: Claims Administrator: Funding Medium: Willard Yamaguchi Chief Deputy City Attorney City of Vernon 4305 Santa Fe Avenue Vernon, CA 90058 United Concordia Companies, Inc.. 4401 Deer Path Road Harrisburg, PA 17110 Telephone number: (866) 454 -3190 The Plan is funded by employer contributions. The Claims Administrator is not liable for the payment of Plan Benefits. Plan Year: January 1 through December 31 STD -SPD (0702) • INTRODUCTION This Summary Plan Description is written in an easy -to- understand way to explain the Group Dental Plan ( "the Plan ") and provide information on the Plan which you may need in the future. If you have any questions after reading this Summary Plan Description, contact the Plan Administrator or the Claims Administrator at the address and telephone number under the Administrative Information section at the beginning of this document. The Plan is intended to provide dental benefits for eligible employees and their covered dependents. WHO IS ELIGIBLE FOR COVERAGE If you are a full -time employee regularly scheduled to work at least 30 hours per week, you are eligible for coverage under the Plan. Your coverage begins on the later of the first day of the month coincident with the date of hire or the date the Claims Administrator received your Plan enrollment from the Plan Administrator. Your existing dependents are eligible on the date you become eligible for employee coverage and their coverage begins when yours begins. Future dependents are eligible on the date you acquire them. Their coverage begins the later of the first day of the month following that date or the date the Claims Administrator receives the new dependent's enrollment. Your eligible dependents are: • spouse, unless legally separated or domestic partner • unmarried children, including stepchildren, adopted children, children placed for adoption if you are legally required to provide support until the adoption is finalized, and foster children, who: • qualify as your dependent under Internal Revenue Code Section 152, regardless of whether a divorced custodial parent has released the claim to the child's dependency exemptions under Internal Revenue Code Section 152(e). • are under age 19 or who are 19 but less than age 23 and are full -time students at an accredited school, college, or university. ENROLLMENT Before the beginning of each Plan Year, the Employer will hold an enrollment period during which you may elect benefits under the Plan for the upcoming Plan Year. The enrollment period will begin and end on dates determined by the Plan Administrator. These dates will be prior to the beginning of the next Plan Year. New employees will be enrolled in the Plan upon becoming eligible to participate. To enroll in the Plan, you must complete the election forms provided by the Plan Administrator. If you do not complete the proper election forms, you may not participate in the Plan. You must let the Plan Administrator know when new dependents become eligible. You must also inform the Plan Administrator when you no longer have eligible dependents. Your employer will notify the Claims Administrator. Individuals eligible for coverage as employees may not also be enrolled as dependents. If you and your spouse are both eligible for employee coverage under the Plan, only one of you can enroll your eligible dependents. 2 STD -SPD (0702) CHANGE IN BENEFIT ELECTIONS Generally, your Plan elections must stay in effect for the entire Plan Year. There are certain limited circumstances under which you are permitted to change your annual election. The following events are changes that if consistent with the requested change in your benefit election will permit you to change your benefit election during a Plan Year. • You get married or divorced • You have a child or adopt a child • Your spouse or a child dies • Your spouse commences or terminates employment • Your or your spouse's employment status changes from full -time to part-time or from part-time to full -time • You or your spouse take an unpaid leave of absence • There is a significant change in the dental coverage that is provided by your spouse's employer COST Your employer pays the monthly premium. HOW THE DENTAL PLAN WORKS Choice of Dentist You may choose any licensed dentist for services to be covered by the Plan. However, you will limit your out -of- pocket cost if you choose a United Concordia participating dentist. Participating dentists accept the Plan's allowance as payment in full for covered benefits. Your out -of- pocket cost will be limited to any applicable coinsurance, deductibles or amounts exceeding the program maximum. Participating dentists will also complete and send claims directly to the Claims Administrator. If you go to a dentist who is not a United Concordia's participating dentist, you may have to pay the dentist at the time of service. You will also have to pay the difference between the dentist's charge and the amount that the Plan allows, in addition to any coinsurance or deductible. You may have to submit the claim and wait for the Claims Administrator to reimburse you. To find a participating dentist, visit Find a Dentist on the Claims Administrator's website at www.dentabenefzts.com or telephone the Claims Administrator's Interactive Voice Response System at the toll -free number under the Administrative Information section of this document. When you visit the dental office, let your dentist know that you are covered under a United Concordia program. If your dentist has questions about your eligibility or benefits, instruct the office to call the Claims Administrator's Interactive Voice Response System at the number under the Administrative Information section of this document or visit Dental Inquiry on the Claims Administrator's website at www.dentabenefits.com. 3 STD -SPD (0702) Claims Submission and Payment Upon completion of treatment, a claim form needs to be filed with the Claims Administrator. If you visit a United Concordia participating dentist, the dental office will submit claims forms for you and your dependents. The Claims Administrator will pay covered benefits directly to the participating dentist. Both you and the dentist will receive an explanation of benefits. Most dental offices submit claim forms for patients. However, if you do not receive treatment from a participating dentist, you may have to complete and send a claim form to the Claims Administrator in the event the dental office will not do this for you. Send the claim form or predetermination to the address provided by the Claims Administrator. Be sure to include the patient's name, date of birth, the employee's contract ID number, patient's relationship to employee, the employee's name and address, and the name and policy number of a second insurer if the patient is covered by another dental plan. Your dentist should complete the treatment and provider information or supply an itemized receipt for you to attach to the claim form. The Claims Administrator will send payment to you if covered services are provided by a non- participating dentist and you do not indicate on the claim that you wish payment to be sent to the dentist. You will receive an explanation of benefits. Should you have any questions concerning your coverage, eligibility or a specific claim, contact the Claims Administrator at the address and telephone number on the Administrative Information page of this document or log onto My Dental Benefits at www.dentabenefits.com. Predetermination of Benefits A predetermination is a review in advance of treatment by the Claims Administrator to determine eligibility and coverage for planned services in accordance with the Schedule of Benefits and the Plan allowance. Predetermination is not required to receive a benefit for any service under the Plan. However, it is recommended for extensive, more costly treatment. A predetermination gives you and your dentist an estimate of what your coverage is and how much your share of the cost will be for the treatment being considered. To have services predetermined, you or your dentist should submit a claim form showing the planned procedures but leaving out the dates of services. Be sure to sign the predetermination request. Substantiating material such as radiographs and periodontal charting may be requested by the Claims Administrator to estimate benefits. The Claims Administrator will determine benefits payable, taking into account exclusions and limitations and alternate treatment options based upon accepted standards of dental practice. You and your provider, if participating in United Concordia's network, will receive an explanation of the estimated benefits. When the services are performed, simply have your dentist call the Claims Administrator's Interactive Voice Response System at the telephone number on the Administrative Information page of this document, or fill in the dates of service for the completed procedures on the predetermination notification and re- submit it to the Claims Administrator for processing. Any predetermination amount estimated by the Claims Administrator is subject to continued eligibility of the patient. The Claims Administrator may also make adjustments at the time of final payment to correct any mathematical errors, apply coordination of benefits, and comply with the member's Plan in effect and remaining program maximum dollars at date of service. 4 STD -SPD (0702) BENEFITS Schedule of Benefits Your benefits are shown on the attached Schedule of Benefits. The Schedule of Benefits lists: • the dental service groupings covered, shown with a "Plan Pays" percentage • the percentage of the Plan allowance that the Plan will pay • any waiting periods applicable to the services • any deductibles you must pay before any benefits will be paid by the Plan, and the services excluded from the deductibles • any maximums for services for a given period of time; for example, annual for most services and lifetime for orthodontics. If the service grouping is shown on the Schedule of Benefits as not covered or at "Plan Pays -- 0 %", no benefits will be paid for the dental procedures in that grouping. Service groupings shown with "Plan Pays" percentages of less than 100% require you to pay a portion of the cost. For example, if the Plan pays 80 %, your share is 20% of the Plan allowance. The general descriptions below explain the service groupings on the Schedule of Benefits. The descriptions are not all- inclusive — they include only the most common dental procedures in a service grouping. Specific dental procedures may be shifted among groupings or may not be covered depending on your Employer's choice of Plan. Check the Schedule of Benefits at the back of this document to see which groupings are covered and have your provider call the Claims Administrator to verify coverage of specific dental procedures. Services covered on the Schedule of Benefits are also subject to the Alternate Treatment Provision following this section and the Schedule of Limitations and Exclusions attached to this document. • Exams and X -rays for diagnosis — oral evaluations, bitewings, periapical and full -mouth x -rays • Cleanings, Fluoride Treatments, Sealants for prevention • Palliative Treatment for relief of pain in emergencies • Space Maintainers to prevent tooth movement • Basic Restorative to treat caries (cavities, tooth decay) — amalgam and anterior composite resin fillings, stainless steel crowns, crown build -ups and posts and cores • Endodontics to treat the dental pulp, pulp chamber and root canal — root canal treatment and retreatment, pulpotomy, pulpal therapy, apicoectomy, and apexification Non - surgical Periodontics for non - surgical treatment of diseases of the gums and bones supporting the teeth — periodontal scaling and root planing, periodontal maintenance (prophylaxis) Repairs of Crowns, Inlays, Onlays, Bridges, Dentures — repair, recementation, re- lining, re- basing and adjustment • Simple Extractions — non - surgical extraction of teeth and root removal • Surgical Periodontics for surgical treatment of the tissues supporting and surrounding the teeth (gums and bone) — gingivectomy, gingivoplasty, gingival curretage, osseous surgery, crown lengthening, bone and tissue replacement grafts • Complex Oral Surgery for surgical treatment of the hard and soft tissues of the mouth surgical extractions, impactions, excisions, exposure, and root removal; alveoplasty and vestibuloplasty. • Anesthesia for elimination of pain during treatment — general or nitrous oxide or IV sedation • Inlays, Onlays, Crowns when the teeth cannot be restored by fillings • Prosthetics — fixed bridges, partial and complete dentures • Orthodontics for treatment of poor alignment and occlusion — diagnostic x -rays, active treatment and retention for eligible dependent children STD -SPD (0702) 5 Alternate Treatment Provision There are often several ways to treat a dental condition. For example, a filling or a crown can restore a tooth, or a fixed bridge or a partial denture can replace missing teeth. An Alternate Benefit Provision (ABP) will be applied if a dental condition can be treated by means of a professionally acceptable procedure which is less costly than the treatment recommended by the dentist. The Plan will pay for the lesser benefit, professionally acceptable procedure. The ABP does not commit you to the less costly treatment. If you and your dentist choose the more expensive treatment, you are responsible for the additional charges beyond those allowed for the less expensive procedure under the ABP. Limitations and Exclusions Services covered by the Plan as indicated on the Schedule of Benefits are subject to frequency or age limitations detailed on the attached Schedules of Limitations and Exclusions. No benefits will be provided for services, supplies or charges detailed under the Exclusions on the attached Schedule of Limitations and Exclusions. COORDINATION OF BENEFITS If you or your dependents are covered by any other dental benefits plan and receive a service covered by this Plan and the other, benefits will be coordinated. This means that one plan will be primary and determine its benefits before those of the other plan and without considering the other plan's benefits. The other plan will be secondary and determine its benefits after the other plan. The secondary plan's benefits may be reduced because of the primary plan's payment. Each plan will provide only that portion of its benefit that is required to cover expenses. This prevents duplicate payments and overpayments. Upon determination of primary or secondary liability, this Plan will determine payment. 1. The following words and phrases regarding the Coordination of Benefits ( "COB ") provision are defined as set forth below: A) Allowable Amount is the Plan's allowance for items of expense, when the care is covered at least in part by one or more Plans covering the Member for whom the claim is made. B) Claim Determination Period means a benefit year. However, it does not include any part of a year during which a person has no coverage under this Plan. C) Other Dental Plan is any form of coverage which is separate from this Plan with which coordination is allowed. Other Dental Plan shall be any of the following which provides dental benefits, or services, for the following: Group insurance or group type coverage, whether insured or uninsured. This includes prepayment groups. It also includes coverage other than school accident type coverage (including granunar, high school and college student coverages) for accidents only, including athletic injury, either on a twenty-four (24) hour basis or on a "to and from school basis," or group or group type hospital indemnity benefits of $100 per day or less. Primary Plan is the plan which determines its benefits first and without considering the other plan's benefits. A plan that does not include a COB provision may not take the benefits of another plan into account when it determines its benefits. E) Secondary Plan is the plan which determines its benefits after those of the other plan (Primary Plan). Benefits may be reduced because of the other plan's (Primary Plan) benefits. F) Plan means this document including all schedules and all riders thereto, providing dental care benefits to which this COB provision applies and which may be reduced as a result of the benefits of other dental plans. 6 STD -SPD (0702) 2. The fair value of services provided by the Claims Administrator shall be considered to be the amount of benefits paid by the Claims Administrator. The Claims Administrator will be fully discharged from liability to the extent of such payment under this provision. 3. In order to determine which plan is primary, the Plan will use the following rules. A) The other plan does not have a provision similar to this one, then that plan shall be primary. B) If both plans have COB provisions, the plan covering the Member as a primary insured is determined before those of the plan which covers the person as a Dependent. C) Dependent Child/Parents Not Separated or Divorced -- The rules for the order of benefits for a Dependent child when the parents are not separated or divorced are: 1) The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year; 2) If both parents have the same birthday, the benefits of the plan which covered the parent longer are determined before those of the plan which covered the other parent for a shorter period of time; 3) The word "birthday" refers only to month and day in a calendar year, not the year in which the person was born; 4) If the other plan does not follow the birthday rule, but instead has a rule based upon the gender of the parent; and if, as a result, the plans do not agree on the order of benefits, the rule based upon the gender of the parent will determine the order of benefits. Dependent Child/Separated or Divorced Parents -- If two or more plans cover a person as dependent child of divorced or separated parents, benefits for the child are determined in this order: 1) First, the plan of the parent with custody of the child. 2) Then, the plan of the spouse of the parent with the custody of the child; and 3) Finally, the plan of the parent not having custody of the child. 4) If the specific terms of a court decree state that one of the parents is responsible for the dental care expenses of the child, and the entity obligated to pay or provide the benefits of the plan of that parent has actual knowledge of those terms, the benefits of that plan are determined first. The plan of the other parent shall be the Secondary Plan. 5) If the specific terms of the court decree state that the parents shall share joint custody, without stating that one of the parents is responsible for the dental care expenses of the child, the plans covering the child shall follow the order of benefit determination rules outlined in Section C.3. above, titled Dependent Child/Parents Not Separated or Divorced. E) Active/Inactive Member 1) For actively employed Members and their spouses over the age of 65 who are covered by Medicare, the plan shall be primary. 2) When one contract is a retirement plan and the other is an active plan, the active plan is primary. When two retirement plans are involved, the one in effect for the longest time is primary. If another contract does not have this rule, then this rule will be ignored. F) If none of these rules apply, then the contract which has continuously covered the Member for a longer period of time shall be primary. G) The plan covering an individual as a COBRA continuee will be secondary to a plan covering that individual as a Member or a Dependent. 4. Right to Receive and Release Needed Information -- Certain facts are needed to apply these COB rules. The Claims Administrator has the right to decide which facts it needs. It may get needed facts from or give them to any other organization or person. Any health information furnished to a third party will be released in accordance with federal law. Each person claiming benefits under This Plan must give any facts needed to pay the claim. STD -SPD (0702) Facility of Payment -- A payment made under another plan may include an amount which should have been paid under This Plan. If it does, the Claims Administrator may pay the amount to the organization which made that payment. That amount will then be treated as though it were a benefit paid under This Plan, and the Claims Administrator will not pay that amount again. The term "payment made" includes providing benefits in the form of services, in which case "payment made" means reasonable cash value of the services prepaid by the Claims Administrator. 6. Right of Recovery -- If the payment made by the Claims Administrator is more than it should have paid under this COB provision, the Claims Administrator may recover the excess from one or more of the following: (1) persons it has paid or for whom it has paid; or (2) insurance companies; or (3) other organization. Members are required to assist the Claims Administrator to implement this section. SUBROGATION OF BENEFITS In the event any payment is made under the Plan, the Plan shall be subrogated and shall succeed to the rights of any Participant against any other plan, person or entity for recovery of dental care expenses for which such other plan, person or entity is liable. All amounts so recovered, by settlement, judgment or otherwise, shall be paid to the Plan, for ultimate disposition thereunder, which may include payment to the Employer. Participants shall furnish such information, execute and deliver such assignment documents and other instruments, and take whatever steps are necessary to secure the rights of the Plan and the Employer. Participants shall take no action to prejudice the rights and interests of the Plan or the Employer hereunder. NON - ALIENATION OF BENEFITS No right or benefit provided for under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void. However, this Section shall not be construed to prevent a Participant from directing the Plan to pay expenses directly to a provider of services or products if those expenses are otherwise reimbursable to the Participant under Plan. In such event, the Plan shall be relieved of all further responsibility with respect to that particular expense. 8 STD -SPD (0702) TERMINATION OF COVERAGE Your coverage and/or your dependents' coverage will end on the date provided by the Platt Administrator or the date the Claims Administrator receives the termination notice when the following events occur: • Your termination of employment with the Plan Administrator. • Your failure to satisfy the Plan's eligibility requirements. • Your dependents cease to be dependents as defined by the Plan. • Your disenrollment from the Plan. • Your failure to immediately return to work after an approved leave of absence with the Plan Administrator during which you were entitled to receive coverage under the Plan. • Your fraudulent use of dental services or facilities. • Your failure to timely pay any required contributions under this Plan. If your coverage or your dependent's is terminated as described above, coverage for completion of a dental procedure, other than orthodontics, that requires two or more dental office visits on separate days will extend for ninety (90) days after termination. The procedure must be started prior to your termination date. This extension of benefits does not apply if the termination is due to nonpayment of premiums or fraud on your part. In the case of orthodontic treatment, if covered under the Plan, your coverage will extend through the end of the month of termination. If the Plan is terminated, your coverage will end on the date of the Plan's termination. COORDINATION WITH OTHER LAWS Family & Medical Leave Act. A Participant on an Employer approved leave of absence under the Family & Medical leave Act shall continue to participate in the Plan in accordance with the requirements of such act. Qualified Medical Child Support Order. To the extent required by ERISA Section 609(a), the Plan shall comply with the terms of any medical child support order determined by the Plan Administrator to constitute a Qualified Medical Child Support Order. A Plan participant or beneficiary can obtain, without charge, a copy of the Plan's procedures governing Qualified Medical Child Support Order determinations from the Plan Administrator named in the SPD. COBRA Continuation Coverage. Notwithstanding the termination provisions of the Plan described above, if the Employer normally employed 20 or more employees on a typical business day during the preceding calendar year, continuation coverage shall be provided under the Plan in accordance with ERISA Section 601 through 608, code Section 4980B, and Title XXII of the Public Health Services Act ( "COBRA continuation coverage "). The terms of such COBRA continuation coverage are described below: STD -SPD (0702) a) COBRA continuation coverage shall be offered under the following circumstances ( "qualifying events ") if participation under the Plan ordinarily would terminate as a result of such circumstances: (1) the Participant's termination of employment (other than by reason of such Participant's gross misconduct) or reduction of work hours to a level that would exclude him and his family from the Plan; (2) the Participant's divorce or legal separation; (3) death of the Participant; (4) the Participant's entitlement of Medicare benefits; (5) a dependent child ceasing to qualify as a "dependent" eligible for coverage under the terms of the Plan; or (6) the commencement by the Employer on or after July 1, 1986 of a Title 11 bankruptcy proceeding. (Item (6) affects only retired Participants, their Spouses and Dependents. . b) COBRA continuation coverage shall be offered only to the Participant and/or his Spouse and his Dependents who were covered under the Plan on the day before the qualifying event occurred and who lose coverage under the Plan on account of the qualifying event ( "qualified beneficiaries "). The qualified beneficiary shall be entitled to elect only the type of coverage he was receiving under the Plan at the time of the qualifying event. The right to elect core coverage, i.e., basic hospitalization and major medical coverage, shall be offered separately. Non -core coverage will not be offered separately from core coverage under the Contract. c) In the case of qualifying event described in (a)(2) or (5) above, the Participant or his family must notify the Employer of the qualifying event within 60 days of the date of the event. In all other cases, the Employer shall be deemed to be notified of the qualifying event. Within 14 days of such notification, the Employer shall provide the Participant and/or his family with a notice of the right to elect COBRA continuation coverage. d) The Participant, his Spouse, or his Dependent may elect COBRA continuation coverage within 60 days of the later of the date of the qualifying event, or the date to the notice form the Employer to qualified beneficiary. Each qualified beneficiary may make a separate election for COBRA continuation coverage. If an election is made within the 60 -day period, the Plan shall permit payment for COBRA continuation coverage during the period preceding such election to be made not less than 45 days after the date of the election. If the election to continue coverage is not made the above 60- day period, then no further opportunity to continue coverage will be extended to the Participant, his Spouse or his Dependents. COBRA continuation coverage is not conditioned upon evidence of insurability. e) In the case of (a) (1) above, COBRA continuation coverage may continue for up to 18 months. If, within the first sixty (60) days of continuation coverage, it is determined that the qualified beneficiary was disabled (under Title II or XV of the Social Security Act), continuation coverage may continue an additional 11 months, or a total of 29 months. To qualify for the additional 11 months, the Employer must be notified of the disability within 60 days after the date of determination. Such additional coverage will cease if the disability terminates. Therefore, the Employer must be notified within 30 days of the date of any final determination that the disability no longer exists. In the case of (a)(2) through (5), coverage may continue for up to 36 months. In this case of (a)(6), coverage may continue (1) until the death of the retired Participant or of any qualified beneficiary who, on the day before the qualifying event, was a surviving spouse or dependent child of the Participant, for up to 36 months after the death of the Participant. Notwithstanding the continuation periods specified above, COBRA continuation coverage shall terminate with respect to a qualified beneficiary upon the earlier of: 10 STD -SPD (0702) i The date on which the Employer ceases to provide any group dental plan to any employee; ii The date upon which coverage under the plan ceases as a result of failure to make timely premium payments as required by (f) below; premium payments shall be considered timely if made within 30 days of the due date; however, coverage shall be terminated retroactively as of the due date if payments are not received within 30 days; non- sufficient fund checks are not payment; iii The date upon which the qualified beneficiary becomes covered under any other group dental plan (as an employee or otherwise) if such plan does not contain an exclusion or limitation with respect to any preexisting condition of such qualified beneficiary; or iv The date upon which the qualified beneficiary (other than a qualified beneficiary described m (a) (6) above) becomes entitled to Medicare benefits. In the event of multiple qualifying events, the maximum required continuation period is 36 months. f) The Plan shall require payment of a premium for any period of COBRA continuation coverage in an amount that shall not exceed 102% of the cost to the Plan for such period of coverage for active Participants with respect to who a qualifying event has not occurred. The Cost to the Plan for coverage shall be determined for a period of 12 months selected by the Plan and shall be determined before the beginning of such period. The qualified beneficiary may elect to make any required premium payments in monthly installments. If the COBRA continuation period is extended from 18 months to 29 months due to disability as provided in (e) above, the premium for the additional 11 months of coverage shall be an amount not to exceed 150% of the cost to the Plan for such coverage, rather that 102% of such cost. PLAN AMENDMENT The Plan Sponsor reserves the right, at any time, to amend or terminate the Plan or amend or eliminate benefits under the Plan for any reason. All changes will be communicated in writing. If the Plan is discontinued, benefits, if any, will be paid for all charges incurred for covered services prior to the termination date. ERISA CLAIMS AND APPEAL PROCEDURES The Plan's ERISA Claims and Appeal Procedures are furnished automatically, without charge, as an attachment to this document and are incorporated by reference into this Summary Plan Description. ERISA STATEMENT OF RIGHTS As a participant in the Plan you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all plan participants shall be entitled to Receive Information About Your Plan and Benefits Examine, without charge, at the plan administrator's office and at other specified locations, such as worksites and union halls, all documents governing the plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Pension and Welfare Benefit Administration. 11 STD -SPD (0702) Obtain, upon written request to the plan administrator, copies of documents governing the operation of the plan, including insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The administrator may make a reasonable charge for the copies. Receive a summary of the Plan's annual financial report. The plan administrator is required by law to furnish each participant with a copy of this summary annual report. Continue Group Health Plan Coverage Continue health care coverage for yourself, spouse and dependents if there is a loss of coverage under the plan as a result of a qualifying event. You or your dependents may have to pay for such coverage. Review this summary plan description and the documents governing the plan on the rules governing your COBRA continuation coverage rights. Prudent Actions by Plan Fiduciaries In addition to creating rights for plan participants ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your plan, called "fiduciaries" of the plan, have a duty to do so prudently and in the interests of you and other plan participants and beneficiaries. No one, including your employer, your union, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a (pension, welfare) benefit or exercising your rights under ERISA. Enforce Your Rights If your claim for a (welfare) benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. 12 STD -SPD (0702) Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the plan administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the plan's decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in Federal court. If it should happen that plan fiduciaries misuse the plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. Assistance with Your Questions If you have any questions about your plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Pension and Welfare Benefits Administration. 13 STD -SPD (0702) ERISA AIM AND APPEAL PROCEDURES United Concordia Companies, Inc. (the "Claims Administrator ") will make benefit determinations and resolve claimant appeals in a thorough, appropriate, and timely manner to ensure that claimants are afforded a full and fair review of claims for benefits. Benefit determinations will be made in accordance with the Plan documents and consistently among claimants. The claimant or his/her authorized representative may submit written comments, documents, records and other information relating to claims or appeals. The Claims Administrator will provide a review that takes into account all information submitted whether or not it was considered with its first determination on the claim. Any notifications by the Claims Administrator required under these procedures will be supplied to the claimant or his /her authorized representative. DEFINITIONS The following terms when used in this document have the meanings shown below. "Adverse benefit determination" is a denial, reduction, or termination of or failure to make payment (in whole or in part) based on a determination of eligibility to participate in a plan or the application of any utilization review; or a determination that an item or service otherwise covered is experimental or investigational or not medically (dentally) necessary or appropriate. "Authorized representative" is a person granted authority by the claimant and the Claims Administrator to act on behalf of a claimant regarding a claim for benefit or an appeal of an adverse benefit determination. An assignment of benefit is not a grant of authority to act on the claimant's behalf in pursuing and appealing a benefit determination. "Claimant" is a participant and/or beneficiary of an employee welfare benefit plan to whom a benefit may be due. Claim for Benefits is a request for a plan benefit or benefits by a claimant in accordance with the Plan's reasonable procedure for filing benefit claims. "Claim involving urgent care" is any claim for dental treatment when the application of the time periods for making non - urgent care determinations could seriously jeopardize the life or health of the claimant or the ability of the claimant to regain maximum function; or in the opinion of a dentist with knowledge of the claimant's dental condition, would subject the claimant to severe pain that cannot be adequately managed without the care or treatment that is the subject of the claim. Since the Claims Administrator does not require advance approval of emergency care in order to obtain a benefit, there are no claims involving urgent care as defined under the dental plan. The ERISA procedures for claims involving urgent care do not apply. "Pre- service claim" is any Claim for Benefits under a group health plan when the terms of the plan condition receipt of the benefit, in whole or in part, on approval of the benefit in advance of obtaining dental care. The Plan does not require approval of planned dental treatment in advance of receiving care. Therefore, there are no pre- service claims as defined under the dental plan, and the ERISA procedures for pre- service claims do not apply. All claims under the dental plan are post - service claims. "Post- service claim" .( "claim ") is any Claim for Benefits under a group health plan that is not a pre service claim. 14 STD -SPD (0702) "Relevant" A document, record, or other information will be considered "relevant" to a given claim: a) if it was relied on in making the benefit determination; b) if it was submitted, considered, or generated in the course of making the benefit determination (even if the plan did not rely on it); c) if it demonstrated that, in making the determination, the plan followed its own administrative processes and safeguards for ensuring appropriate decision - making and consistency; d) or if it is a statement of the plan's policy or guidance concerning the denied benefit, without regard to whether it was relied upon in making the benefit determination. PROCEDURES FOR POST - SERVICE CLAIMS Benefit Determinations: The Claims Administrator will determine benefits and notify claimants of adverse benefit determinations no later than 30 days after receipt of the claim. The Claims Administrator may extend this 30 -day period by 15 days if additional information about the claim is required or the extension is necessary due to matters beyond the control of the Plan. The Claims Administrator will notify the claimant of the extension before the end of the initial 30 -day period. The Claims Administrator will explain the circumstances requiring the extension, the additional information required and the date by which the Plan expects to make the benefit determination. The claimant will have 45 days to provide the information requested. The time it takes the claimant to respond to the request for additional information will not be counted toward the time the Claims Administrator is required to make the benefit determination. When all information is received and the benefit determination is made, the Claims Administrator will send a notice of adverse benefit determination to the claimant. The notice will include: a) the specific reason for the adverse benefit determination; b) reference to the specific plan provisions on which the determination is based; c) description of any additional material or information necessary for the claimant to perfect the claim and why it is necessary; d) any relevant internal rule, guideline, protocol, criteria, or clinical judgment the plan relied on in making its decision and why it was necessary, or a statement that a copy is available free of charge upon request; e) a description of the Plan's review procedures and time limits applicable to those procedures; f) a statement of the claimant's right to bring a civil claim under ERISA. 15 STD -SPD (0702) Appeals: If the claimant is dissatisfied by the benefit determination, the claimant or his authorized representative may file an appeal with the Claims Administrator within 180 days of receipt of the adverse benefit determination. To file an appeal, telephone the toll -free number listed on your notice of adverse benefit determination. The Claims Administrator will review the claim and notify the claimant of its decision within 60 days of the request for appeal. Any dentist advisor involved in reviewing the appeal will be different from and not in a subordinate position to the dentist advisor involved in the initial benefit determination. Notice of the appeal decision will include the following in written or electronic form: a) the specific reason for the appeal decision; b) reference to specific plan provisions on which the decision was based; c) a statement that the claimant is entitled to receive upon request and free of charge, reasonable accessibility to and copies of all relevant documents, records, and criteria including an explanation of clinical judgment on which the decision was based and identification of the dental experts; d) a statement of the claimant's right to bring a civil action under ERISA; e) the following statement: "You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency." 16 STD -SPD (0702) United Concordia Dental Implant Rider to GROUP POLICY, CERTIFICATE OF INSURANCE, AND SCHEDULES OF BENEFITS: INCLUDING THE SCHEDULE OF EXCLUSIONS AND LIMITATIONS This Rider is effective on January 1, 2005 and is attached to and made a part of the Group Policy, Certificate of Insurance, and Schedules of Benefits including the Schedule of Exclusions and Limitations. Eligible Members will be provided coverage for dental services related to dental implants. The services performed for implants are considered Covered Services under this Plan as stated below. The Company will pay benefits equal to 60% of the Maximum Allowable Charge. Procedure Name D6090, D6095 Implant repairs All other crowns, inlays, onlays and prosthetic services rendered in conjunction with implants are covered as indicated on the Schedule of Benefits and subject to the exclusions and limitations listed on the Schedule of Exclusions and Limitations. Maximum(s) The lifetime Maximum amount per Member for the above listed implant services is included in the $1,500 per calendar year maximum per member. Waiting Period(s) No Waiting Period will be applied to dental implant services. Exclusions and Limitations The specific references to dental implants in the Schedule of Exclusions and Limitations do not apply to the above listed procedures. The following limitations are added to the Schedule of Exclusions and Limitations: Dental implants are limited to one per tooth per lifetime. Dental implants are limited to Members ages 18 and over. Any dental implant services not listed above are subject to the exclusions in the Schedule of Exclusions and Limitations. Deductible(s) No Deductible will be applied to the above listed dental implant services. R- Implant (10/04) Current Dental Terminology© 2004 American Dental Association. All rights reserved. SCHEDULE OF EXCLUSIONS AND LIMITATIONS EXCLUSIONS Except as specifically provided in the Certificate, Schedules of Benefits or Riders to the Certificate, no coverage will be provided for services, supplies or charges: 1. Not specifically listed as a Covered Service on the Schedule of Benefits and those listed as not covered on the Schedule of Benefits. 2. Which are necessary due to patient neglect, lack of cooperation with the treating dentist or failure to comply with a professionally prescribed Treatment Plan. This exclusion does not apply to Group Policies and Certificates issued and delivered in California. 3. Started prior to the Member's Effective Date or after the Termination Date of coverage with the Company, including, but not limited to multi -visit procedures such as endodontics, crowns, bridges, inlays, onlays, and dentures. 4. Services or supplies that are not deemed generally accepted standards of dental treatment. 5. For hospitalization costs. 6. That are the responsibility of Worker's Compensation or employer's liability insurance, or for treatment of any automobile related injury in which the Member is entitled to payment under an automobile insurance policy. The Company's benefits would be in excess to the third party benefits and therefore, the Company would have right of recovery for any benefits paid in excess. For Group Policies and Certificates issued and delivered in Georgia, Missouri, and Virginia, only services that are the responsibility of Workers Compensation or employer's liability insurance shall be excluded from this Plan. For Group Policies and Certificates issued and delivered in Texas, only services that are the responsibility the employer's liability insurance, or for treatment of any automobile related injury shall be excluded from this Plan. 7. For prescription or non- prescription drugs, vitamins, or dietary supplements. 8. Administration of nitrous oxide, general anesthesia and i.v. sedation, unless specifically indicated on the Schedule of Benefits. 9. Which are Cosmetic in nature as determined by the Company, including, but not limited to bleaching, veneer facings, personalization or characterization of crowns, bridges and/or dentures. 9809(07/01) This exclusion does not apply to Group Policies and Certificates issued and delivered in Pennsylvania for Cosmetic services required as the result of an accidental injury. This exclusion does not apply to Group Policies issued and delivered in New Jersey for Cosmetic services for newly -born children of Members as defined in the definition of Dependent. 10. Elective procedures including but not limited to the prophylactic extraction of third molars. 11. For the following which are not included as orthodontic benefits - retreatment of orthodontic cases, changes in orthodontic treatment necessitated by patient neglect, or repair of an orthodontic appliance. 12. For congenital mouth malformations or skeletal imbalances, including, but not limited to treatment related to cleft lip or cleft palate, disharmony of facial bone, or required as the result of orthognathic surgery including orthodontic treatment. For Group Policies and Certificates issued and delivered in Arizona, Kentucky, and Pennsylvania this exclusion shall not apply to newly born children of Members as defined under the definition of Dependent including newly adoptive children, regardless of age. For Group Policies issued and delivered in Colorado, Indiana, Missouri, New Jersey, and Virginia, this exclusion shall not apply to newly born children of Members as defined under the definition of Dependent. For Group Policies issued and delivered in Colorado, this exclusion shall not apply to orthodontic or dental services for a newly born Dependent with cleft lip or cleft palate and shall be covered as listed on the Schedule of Benefits. For Group Policies and Certificates issued and delivered in Florida, this exclusion shall not apply for diagnostic or surgical dental (not medical) procedures rendered to a Member of any age. 13. For dental implants including placement and restoration of implants unless specifically covered under a rider to the Certificate. 14. For oral or maxillofacial services including but not limited to associated hospital, facility, anesthesia, and radiographic imaging even if the condition requiring these services involves part of the body other than the mouth or teeth. This exclusion shall not apply to Group Policies issued and delivered in Georgia when such services are medically necessary. 15. Diagnostic services and treatment of jaw joint problems by any method unless specifically covered under a Rider to the Certificate. These jaw joint problems include but are not limited to such conditions as temporomandibular joint disorder (TMD) and craniomandibular disorders or other conditions of the joint linking the jaw bone and the complex of muscles, nerves and other tissues related to the joint. For Group Policies and Certificates issued in Florida, this exclusion does not apply to diagnostic or surgical dental (not medical) procedures for treatment of TMD rendered to a Member of any age as a result of congenital or developmental mouth malformation, disease, or injury and such procedures are covered under a Rider to the Certificate or the Schedule of Benefits. 16. For treatment of fractures and dislocations of the jaw. This exclusion does not apply to Group Policies and Certificates issued in Pennsylvania if the dental condition is as a result of an accidental injury. 17. For treatment of malignancies or neoplasms. 18. Services and /or appliances that alter the vertical dimension, including but not limited to, full mouth rehabilitation, splinting, fillings to restore tooth structure lost from attrition, erosion or abrasion, appliances or any other method. This exclusion does not apply to Group Policies and Certificates issued in Pennsylvania if the dental condition is as a result of an accidental injury. 19. Replacement of lost, stolen or damaged prosthetic or orthodontic appliances. 20. For broken appointments. 21. Arising from any intentionally self - inflicted injury or contusion when the injury is a consequence of the Member's commission of or attempt to commit a felony or engagement in an illegal occupation or of the Member's being intoxicated or under the influence of illicit narcotics. This exclusion does not apply to Group Policies and Certificates issued and delivered in Maryland. 9809 (07/01) 22. For house or hospital calls for dental services. 23. Replacement of existing crowns, onlays, bridges and dentures that are or can be made serviceable. 24. Preventive restorations in the absence of dental disease. 25. Periodontal splinting of teeth by any method. 26. For duplicate dentures, prosthetic devices or any other duplicative device. 27. For services determined to be furnished as a result of a referral to an entity in which the referring dentist, or the dentist's immediate family; (a) owns a beneficial interest; or (b) has a compensation arrangement. The dentist's immediate family includes the spouse, child, child's spouse, parent, spouse's parent, sibling, or sibling's spouse of the dentist, or that dentist in combination. 28. For which in the absence of insurance the Member would incur no charge. 29. For plaque control programs, oral hygiene, and dietary instructions. 30. For any condition caused by or resulting from declared or undeclared war or act thereof, or resulting from service in the national guard or in the armed forces of any country or international authority. This exclusion does not apply to Group Policies and Certificates issued and delivered in Oklahoma. 31. For training and /or appliance to correct or control harmful habits, including, but not limited to, muscle training therapy (myofunctional therapy). 32. For any claims submitted to the Company by the Member or on behalf of the Member in excess of twelve (12) months after the date of service. 33. Which are not Dentally Necessary as determined by the Company. This exclusion does not apply to Group Policies and Certificates issued a nd delivered in California and Maryland. 34. For prosthetic services including but not limited to full or partial dentures or fixed bridges, if such services replace one or more teeth missing prior to the Members eligibility under the Company. This exclusion does not apply to Group Policies issued and delivered in Georgia. For Group Policies issued and delivered in Maryland, this exclusion does not apply to prosthetic services placed five years after the Member's Effective Date for services. For Group Policies issued and delivered in West Virginia, this exclusion does not apply for prosthetic services, if such services replace one or more teeth missing less than twelve (12) months (or less than eighteen (18) months for a late enrollee) prior to the Member's eligibility under the Plan. 9809 (07/01) LIMITATIONS The following services will be subject to limitations as set forth below: 1. Full mouth x -rays — one every three years. 2. One set(s) of bitewing x -rays per calendar year. 3. Periodic oral evaluation — two per calendar year. 4. Limited oral evaluation (problem focused) limited to one per dentist per twelve months. 5. Prophylaxis — two per calendar year. 6. Fluoride treatment one per calendar year. 7. Space maintainers - are eligible on all teeth without any age restrictions. 8. Prefabricated stainless steel crowns - one per tooth per lifetime for age fourteen years and younger. 9. Crown lengthening - one per tooth per lifetime. 10. Periodontal maintenance following active periodontal therapy — two per twelve months in addition to routine prophylaxis. 11. Periodontal scaling and root planing - one per two year period per area of the mouth. 12. Placement or replacement of single crowns, inlays, onlays, single and abutment buildups and post and cores, bridges, labial veneers, full and partial dentures — one within five years of their placement. 13. Denture relining, rebasing or adjustments - are included in the denture charges if provided within six months of insertion by the same dentist. 14. Subsequent denture relining or rebasing — Iimited to one every three year(s) thereafter. 15. Surgical periodontal procedures - one per two year period per area of the mouth. 16. Sealants - one per tooth per four year(s) through age sixteen on permanent first and second molars. 17. Pulpal therapy - through age five on primary anterior teeth and through age eleven on primary posterior molars. 18. Root canal treatment and retreatment — one per tooth per lifetime. 9809 (07/01) 19. Recementations by the same dentist who initially inserted the crown or bridge during the first twelve months are included in the crown or bridge benefit, then one per twelve months thereafter; one per twelve months for other than the dentist who initially inserted the crown or bridge. 20. Replacement restorations — limited to one per twelve months. 21. Contiguous surface posterior restorations not involving the occlusal surface will be payable as one surface restoration. 22. Posts are only covered as part of a post buildup. 23. An Alternate Benefit Provision (ABP) will be applied if a dental condition can be treated by means of a professionally acceptable procedure which is less costly than the treatment recommended by the dentist. The ABP does not commit the member to the Tess costly treatment. However, if the member and the dentist choose the more expensive treatment, the member is responsible for the additional charges beyond those allowed for the ABP. 24. Payment for orthodontic services shall cease at the end of the month after termination by the Company. 25. If orthodontic treatment commences prior to age 19, benefits will be payable until the completion of treatment or until the orthodontic lifetime maximum has been reached. Schedule of Benefits Concordia Flex sr" Deductibles & Maximums • $50 per Calendar Year Deductible (excludes Class I Services, Skull X-rays, Sialography, Oral facial images, Collection of microorangisms, Caries susceptility test, Accession of tissue, Processing of cytologic smears, Unspecified diagnostic procedure & Orthodontics) per Member not to exceed $150 per family • $1, 500 per Calendar Year Maximum per Member • $500 Orthodontic Lifetime Maximum per Member All services listed on this Schedule of Benefits are subject to the Schedule of Exclusions and Limitations. Participating Dentists accept the Maximum Allowable Charge as payment in fu 9806 (07/01) Plan Pays Class 1 Services • Exams 100% • • All X -Rays 100% • Cleanings 100% • Fl ri ie Treatments 100% • Sealants 100% • Space Maintainers 100% Class 11 Services • Palliative Treatment 80% • Basic Restorative 80% • Endodontics 80% • Non - surgical Periodontics 80% • Repairs of Crowns, Inlays, Onlays, Bridges and Dentures 80% • Simple Extractions 80% • Surgical Periodontics 80% • Complex Oral Surgery 80% • Assistant Surgery 80% • General Anesthesia 80% Class 111 Services • Inlays, Onlays, Crowns 60% • Prosthetics 60% Orthodontics • Diagnostic, Active, Retention Treatment 50% • Limited to Dependent children under the age of 19 Deductibles & Maximums • $50 per Calendar Year Deductible (excludes Class I Services, Skull X-rays, Sialography, Oral facial images, Collection of microorangisms, Caries susceptility test, Accession of tissue, Processing of cytologic smears, Unspecified diagnostic procedure & Orthodontics) per Member not to exceed $150 per family • $1, 500 per Calendar Year Maximum per Member • $500 Orthodontic Lifetime Maximum per Member All services listed on this Schedule of Benefits are subject to the Schedule of Exclusions and Limitations. Participating Dentists accept the Maximum Allowable Charge as payment in fu 9806 (07/01) EXHIBIT C EXHIBIT C REPORT SERVICES A. Standard Reports: Claims Administrator will fumishto Company and /or Plan Administrator the following management reports at no additional charge: Report Frequency COMBINATION BANK STATEMENT MONTHLY FUNDING NOTIFICATION DAILY, WEEKLY OR MONTHLY DEPENDING ON REMITTANCE PERIOD SUMMARIES OF AMOUNT OF DRAFTS, CHECKS OR EFT'S DRAWN, VOIDED, REFUNDED AND PAID DAILY, WEEKLY OR MONTHLY DEPENDING ON REMITTANCE PERIOD ESCHEATMENT REPORT ANNUALLY, IF NECESSARY CLAIMS UTILIZATION REPORT ANNUALLY B. Other Reports: Reports other than those listed in this Exhibit C requested by Com pany or Plan Administrator will be produced upon ag reement with Claim Administrator and for additional fees billed and payabl e in addition to the Administrative Fee. ASO-1 REV. 12/2/1999 ADDENDUM 1 BUSINESS ASSOCIATE ADDENDUM This Business Associate Addendum ( "Addendum ") is by and between United Concordia Companies, Inc. ( "Claims Administrator ") and the group customer identified below ( "Plan Sponsor"), acting on its own behalf and on behalf of its group health plan(s) ( "GHP "). RECITALS: WHEREAS, GHP is a "Group Health Plan" as defined in Section 160.103 of the regulations implementing the Health Insurance Portability and Accountability Act of 1996 ( "HIPAA "), 45 C.F.R. Parts 160 and 164 (the "Privacy Rule "). WHEREAS, Claims Administrator provides services related to the administration of GHP under the terms of an administrative services agreement by and between Claims Administrator and Plan Sponsor ( "Administrative Services Agreement "). WHEREAS, Plan Sponsor and Claims Administrator desire to amend the Administrative Services Agreement in order to comply with the requirements of 45 C.F.R. §§ 164.502(e) and 164.504(e). NOW THEREFORE, in consideration of the mutual understandings set forth below, and intending to be legally bound, Plan Sponsor and Claims Administrator hereby agree to amend the Administrative Services Agreement by incorporating the following terms and conditions. PART I. - CLAIMS ADMINISTRATOR'S OBLIGATIONS A. Permitted Uses and Disclosures. Claims Administrator is permitted or required to Use or Disclose Protected Health Information it creates for, or receives from, Plan Sponsor or GHP only as follows: 1. Functions and Activities on Behalf of GHP. Claims Administrator is permitted to Use, Disclose, create or receive Protected Health Information in furtherance of its duties and responsibilities under the Administrative Services Agreement and this Addendum. 2. Data Aggregation Services. Claims Administrator may perform Data Aggregation services as defined in the Privacy Rule, subject to any limitations imposed by the Administrative Services Agreement and the Privacy Rule. 3. Uses for Claims Administrator's Operations. Claims Administrator is permitted to Use Protected Health Information: (a) as necessary for Claims Administrator's proper management and administration; and, (b) to carry out Claims Administrator's legal responsibilities. 4. Disclosures for Claims Administrator's Operations. Claims Administrator may Disclose Protected Health Information for Claims Administrator's proper management and administration or to carry out Claims Administrator's legal responsibilities, but only if the following conditions are met: (a) the Disclosure is Required by Law; or (b) Claims Administrator obtains reasonable assurances, from any person or organization to which Claims Administrator will disclose such Protected Health Information that the person or organization will: (i) hold such Protected Health Information in confidence and Use or further Disclose it only for the purpose for which Claims Administrator Disclosed it to the person or organization or as Required by Law; and, (ii) notify Claims Administrator (who will in turn notify GHP) of any instance of which the person or organization becomes aware in which the confidentiality of such Protected Health Information was breached. 1 5. Other Uses and Disclosures. Claims Administrator may make any Use and /or Disclosure of Protected Health Information permitted under 45 C.F.R. §§ 164.506(c), 164.508 and 164.510, as well as under Claims Administrator's Notice of Privacy Practices ( "NPP "). 6. De- Identification of Protected Health Information. Claims Administrator may de- identify any and all Protected Health Information provided that the de- identification conforms to the requirements of 45 C .F.R. §164.514(b). B. Minimum Necessary. Claims Administrator will apply policies and procedures intended to assure that it will Use, Disclose, or request only the minimum necessary amount of Protected Health Information to accomplish the intended purpose as required under 45 C.F.R. §§ 164.502(b) and 164.514(d) . C. Disclosure to Claims Administrator's Subcontractors and Agents. Claims Administrator shall require any of its agents or subcontractors to provide reasonable assurance, evidenced by written contract, that the agent or subcontractor will comply with the same privacy and security obligations as CI aims Administrator with res pect to Protected Health Information of GH P. D. Disclosure Pursuant to Audits. No provision of this Addendum is intended in any way to limit or expand the party's rights or obligations with respect to audits as set forth in the Administrative Services Agreement. E. Reporting of Improper Use or Disclosure. Claims Administrator will promptly report to GHP any Use or Disclosure of Protected Health Information not permitted by this Addendum or in violation of the Privacy Rule when Claims Administrator learns of such non - permitted Use or Disclosure. F. Compliance with Standard Transactions. If Claims Administrator conducts on behalf of GHP communications on and after October 16, 2003 that are required to meet the Standards for Electronic Transactions as set forth in 45 C.F.R. Part 162 ( "Standard Transactions "), Claims Administrator will comply, and will require any subcontractor or agent involved with the conduct of such Standard Transactions to comply with each applicable requirement of 45 C.F.R. Part 162. G. Information Safeguards. Claims Administrator will develop, implement, maintain and use reasonable and appropriate administrative, technical and physical safeguards to preserve the integrity, confidentiality and availability of Protected Health Information ( "PHI "), and to prevent non - permitted Use or Disclosure of PHI. When so required: 1. Such safeguards shall be consistent with applicable requirements of 45 C.F.R. Part 164, Subpart C, pertaining to the security of Electronic Protected Health Information ( "EPHI "); 2. Claims Administrator will ensure that any agent, including a subcontractor, to whom it provides EPHI agrees to implement reasonable and appropriate safeguar ds to protect it; and 2 3. Claims Administrator will report any security incident of which it becomes aware to GHP. For purposes of this amendment a reportable security incident shall be any security incident (as defined in 45 C.F.R. § 164.304) that Claims Administrator reasonably determines to be a threat or hazard to the security or integrity of GHP's EPHI. H. Administration of Individual Rights 1. Access. Upon GHP's written request, or the direct request of an individual, Claims Administrator will provide access to Protected Health Information about an Individual in Claims Administrator's custody or control contained in a Designated Record Set, so that GHP may meet its access obligations under 45 C.F.R. § 164.524. Such access shall be provided in a time and manner consistent with Business Associate's procedures for access, which Business Associate hereby represents comply with the requirements of 45 C.F.R. § 164.524. All fees related to this access shall be borne by the Individual, as determined by Claims Administrator in accordance with 45 C.F.R. § 164.524. 2. Amendment. Upon GHP's written request, or the direct request of an Individual, Claims Administrator will, on behalf of GHP, amend Protected Health Information as required by 45 C.F.R. § 164.526 on GHP's behalf. Claims Administrator will amend such Protected Health Information according to its own procedures for suc h amendment, which procedures Claims Administrator represents comply with applicable requirements of 45 C.F.R. § 164.526. 3. Disclosure Accounting. Claims Administrator agrees to record each disclosure, not excepted from Disclosure accounting under 45 C.F.R. § 164.528(a)(1) in accordance with the requirements of 45. C.F.R. § 164.528(b). Upon GHP's written request or the direct request of an Individual, Claims Administrator will, on behalf of GHP, provide a Disclosure accounting in accordance with its own procedures for Disclosure accounting, which Claims Administrator represents comply with 45 C.F.R. § 164.528. 4. Request for Restrictions and Confidential Communications. To the extent that communications are within the control of Claims Administrator, Claims Administrator will, on behalf of GHP, evaluate and determine whether to grant requests for restrictions and confidential communications in connection with the Use or Disclosure of Protected Health Information within the custody and control of Claims Administrator pursuant to 45 C.F.R. § 164.522. Claims Administrator will evaluate and determine whether to grant such requests according to its own procedures for such requests, and shall implement such appropriate operational steps as required by its own procedures. Claims Administrator represents that its procedures for evaluation and determination regarding such requests comply with the requirements of 45 C.F.R. § 164.522. I. Inspection of Books and Records. Claims Administrator will make its internal practices, books, and records relating to its Use and Disclosure of Protected Health Information available to the U.S. Department of Health and Human Services in a time and manner designated by that agency for the purpose of determining GHP's compliance with the Privacy Rule. • 4 r 1 e' 1 PART II — PRIVACY NOTICES A. Claims Administrator's Notice of Privacy Practice. Claims Administrator will not distribute its NPP to individuals enrolled in the GHP unless directed by the GHP. If directed by GHP, Claims Administrator will distribute its NPP to each individual enrolled in the GHP on the effective date of this agreement and, thereafter, to each new enrolled individual at time of enrollment, and to all enrolled individuals within 60 days of any material revision to the NPP to all individuals then enrolled. Distribution of the Claims Administrator's NPP will be limited to one NPP per household. Claims Administrator represents that its policies and procedures regarding the distribution of the NPP comply with 45 C.F.R. § 164.520(c). The practices and procedures set forth in Claims Administrator's NPP will apply to all Protected Health Information within the custody and control of Clai ms Administrator. B. GHP's Notice of Privacy Practices. GHP shall be responsible for the preparation and distribution of its NPP as required by the Privacy Rule. If requested, Claims Administrator shall provide GHP with its NPP that GHP may use as the basis for its own NPP. PART 111 — PLAN SPONSOR'S PLAN ADMINISTRATION FUNCTIONS A. Communication of Protected Health Information. Except as specifically agreed upon by Claims Administrator and Plan Sponsor in compliance with the Privacy Rule, all Disclosures of Protected Health Information by Claims Administrator pursuant to this Addendum shall be made to GHP, except for disclosures related to enrollment or disenrollment in G HP. B. Summary Health Information. Upon Plan Sponsor's written request for the purpose either (i) to obtain premium bids for providing health insurance coverage under GHP, or (ii) to modify, amend, or terminate GHP, Claims Administrator is authorized to provide Summary Health Information regarding Individuals enrolled in GHP to Plan Sponsor. C. Disclosure to Plan Sponsor. GHP will not disclose any Protected Health Information to the Plan Sponsor unless GHP has first ensured: (i) that its Plan Document has been amended as required by 45 C.F.R. § 164.504(0(2), and (ii) that the Plan Sponsor has delivered the certification required by 45 C.F.R. § 164.504(f)(2)(ii). If GHP should require Claims Administrator to disclose Protected Health Information directly to the Plan Sponsor, GHP shall authorize such disclosure by written instruction, accompanied by the Plan Sponsor's certification required by 45 C.F.R. § 164.504(f)(2)(ii). Claims Administrator may rely on Plan Sponsor's certification and GHP's written instruction, and will have no obligation to verify that the Plan Documents have been amended to comply with 45 C.F.R. § 164.504(0(2) or that Plan Sponsor is complying with such amendments. PART IV - TERM, TERMINATION AND AMENDMENT A. Term. The term of this Addendum shall be co- extensive with the term of the Administrative Services Agreement. B. Termination for Breach. GHP shall have the right to terminate the Administrative Services Agreement if Claims Administrator, by pattern or practice, materially breaches any provision of this Addendum. Before terminating under this section, GHP shall provide Claims Administrator with an opportunity to cure any identified breach. If efforts to cure are unsuccessful, as determined by GHP, in its reasonable discretion, Plan Sponsor shall terminate the Administrative Services Agreement and this Addendum, as soon as administratively feasible. 1 C. Effect of Termination: Return or Destruction of Protected Health Inform ation. Upon cancellation, termination, expiration or other conclusion of the Administrative Services Agreement ( "Termination "), Claims Administrator will, if feasible and lawful, return to GHP or destroy all Protected Health Information, in whatever form or medium, then held by Claims Administrator. Claims Administrator will complete such return or destruction as promptly as practical after the effective date of the Termi nation. D. Effect of Termination: Return or Destruction of Protected Health Information Not Feasible. GHP acknowledges that certain information may not feasibly be returned or destroyed, including, but not limited to, de- identified data, data used for Data Aggregation purposes, and data subject to regulatory data retention requirements. Accordingly, upon Termination, Claims Administrator will identify to GHP any Protected Health Information that cannot feasibly or lawfully be returned to GHP or destroyed. After Termination, Claims Administrator will continue to protect such information as required by this Addendum and limit its further Use or Disclosure of such information to those purposes that make its return or destruction infeasible. E. Continuing Privacy Obligation. Claims Administrator's obligation to protect the privacy of Protected Health Information that cannot feasibly or lawfully be returned or destroyed will survive Termination for as long as Claims Administrator retains any Protected Health Information governed by this Addendum. F. Agreement to Amend. The parties acknowledge that federal rules relating to HIPAA are evolving ( "New HIPAA Rules ") and, thus, may require amendment to this Addendum to ensure continuing compliance. The parties agree to amend this Addendum to add terms, conditions or assurances required by any New HIPAA Rule. Should the parties fail to adopt amendments by the effective date of any New HIPAA Rule, this Addendum will be deemed to be automatically be amended on such effective date to require both parties to comply with the requirements of such New HIPAA Rule. PART V — GENERAL PROVISIONS A. Conflict. The provisions of this Addendum will override and control any conflicting provision of the Administrative Services Agreement. All non - conflicting provisions of the Administrative Services Agreement will remain in full force and effect. B. Definitions and Interpretation. Capitalized terms used in this Addendum, unless otherwise defined herein, have the meanings ascribed to them under the Privacy Rule. For purposes of this Addendum, the term "Individual" shall include an Individual's personal representative. In the event of ambiguity, this Addendum shall be interpreted so as to make all activities conducted hereunder compliant with the Privacy Rule and any applicable state law or regulation governing the privacy of Individuals' health inform ation. C. Indemnification. Each party will indemnify and hold harmless the other party against any and all claims, liabilities, penalties or costs (including reasonable attorneys fees, expert witness fees and other costs of defense) ins tituted or imposed by an I ndividual or regulator, arising from any violation of this Addendum or wrongful Use or Disclosure of Protected Health Information govemed by this Addendum. A party seeking indemnification will promptly notify the other party of any claim or proceeding for which indemnification is claimed. Neither party will compromise or settle any claim for which indemnification is claimed without the concurrence of the Party from which indemnification is claimed, which concurrence will not be unreasonably withheld. The foregoing indemnification shall survive termination of this Addendum . C. Documentation. All documentation that is required by this Addendum or by the Privacy Rule will be retained by Claims Administrator for six (6) years from the date of creation or when it was last in effect, or for such longer period as may be required by any applicable law. • IN WITNESS WHEREOF, Plan Sponsor, execute this Addendum in multiple originals PLAN SPONSOR City of Vernon Corporate Name BY: NAME: TITLE: DATE: r • for and on behalf of GNP, and Claims Administrator to be effective on January 1, 2005. CLAIMS ADMINISTRATOR United Concordia Companies,Inc. BY _+0...t_' NAME: Thomas A. Dzuryachko TITLE: President & CEO DATE: April 26, 2005 ADDRESS: ADDRESS: 4401 Deer Path Road Harrisburg, Pa. 17110 FAX: FAX: SUPPORTING DOCUMENTS AGREEMENT FOR ADMINISTRATIVE SERVICES THIS AGREEMENT entered into as of the 1st day of January, 2005 by and between City of Vernon (hereinafter referred to as "Com pany ") and United Concordia Companies, Inc. (hereinafter referred to as "Claims Administrator"). WITNESSETH: WHEREAS, the Company has established a self- insured em ployee welfare benefit plan ("the Plan ") within the meaning of the Employee Retirement Income Security Act of 1974 as amended ( "ERISA "); WHEREAS, the Claims Administrator possesses the administrative capacity to assist the Plan in providing its Participants with dental benefits; WHEREAS, the Company has designated a P lan Administrator to administer the Plan benefits in accordance with the requirem ents of ERISA; WHEREAS, the Company and the Plan Administrator have requested the Clai ms Administrator to furnish claims administration services for the Plan; and WHEREAS, the Claims Administrator is willing to administer the claims for certain dental benefits for the Plan's Participants. NOW, THEREFORE, in consideration of the m utual undertakings herein stated, t he Company and Claims Administrator, intending to be legally bound hereby, enter into this Agreement for the adm inistration of the cl aims for certain dental benefits of the P Ian. ARTICLE I - DEFINITIONS Definitions of words and term s as used in this Agreement: A. Administrative Fee the fee payable by Com pany to Claims Administrator specified in Exhibit A. B. Bank - Wachovia Corporation or such other institution as agreed to by Com pany and Claims Administrator. C. Covered Services - those services for which Plan Benefits are provided under and subject to the terms and conditions of the Plan. D. Participant - an employee, dependent, retiree or other beneficiary as defined i n the Plan, who is duly enrolled by the Claims Administrator in accordance with A rticle II of this Agreement. AS0-1 REV. 12/2004 E. Participating Provider - any provider with whom Claims Administrator has a contract or arrangement with respect to payment for services perform ed for persons enrolled in the Plan. F. Plan - the employee welfare benefit plan, as defi ned in ERISA, established by the Company for the purpose of providing certain dental care benefits, as desc ribed in the Plan /Summary Plan Description, for its Participants, which is marked as Exhibit B and is incorporated herein by refer ence. G. Plan Administrator - The entity or person designated by the Com pany as the Plan Administrator, as that term is defined in ERISA. The Claims Administrator is not the Plan Administrator. H. Plan Benefits - all benefits of whatever nature payable to a P articipant or a Participating Provider under and subject to the terms and conditions of the Plan. 1. Provider - any duly licensed dental care provider for whose services the Company is obligated to pay under the term s of the Plan. J. Summary Plan Description ( "SPD ") - a document, as defined in ERISA, which describes the terms and benefits to be adm inistered by the Claims Administrator marked as Exhibit B and attached hereto and incorporated herein by refere nce. ARTICLE 11- ENROLLMENT A. Eligibility Information. Mutual of Omaha ( "Agent ") will act as agent of Claims Administrator for the receipt of all information relating to eligibility and enrollment under this Agreement. On a mutually agreeable schedule, but not less than monthly, Company will provide to Agent, for transm ittal to Claims Administrator, current information specifying individuals who are eligibl e to be Participants. Company will provide notice of changes to such information as it occurs, and Claims Administrator will post such changes no later than 10 business days after Cl aims Administrator receives such notice from Agent. Changes involving termination of a Participant for Plan benefits will be effective on a prospective basis only and will be effective at the end of the month in which proper notice is provided to Agent. All information under this Article shall be provided in a mutually acceptable data processing medium and format. The Company is responsible for ensuring the acc uracy and timeliness of eligibility information. B. Identification Cards. Claims Administrator shall be responsible for providing standard identification cards to Participants based on inform ation provided to it by Company, pursuant to paragraph A above. Customized identification cards are subject to added fees. C. Enrollment Procedures. Upon a determ ination by Company that an individual is eligible to participate in the Plan, Claims Administrator shall enroll the individual in a mutually agreed upon manner. Company will obtain from each Participant any necessary releases and consents as required by law for the disclosure of healt h information to Claims Administrator for the purposes set forth in this Agreement. ASO -1 REV. 12/2004 2 D. COBRA Compliance. The Company and the Plan Administrator shall retain full responsibility for notifying qualified beneficiaries of their term ination of coverage and of their rights to continuation coverage, and for adm inistering the exercise of continuation rights, as required by the Cons olidated Omnibus Budget Reconcil iation Act of 1985, P.L. 99 -272; 29 U.S.0 . 1161 -1168; 26 U.S.C. 4980B and 42 U.S.0 . 300bb -1, (COBRA). Claims Administrator shall have no obligation to ensure that any instructions received by qualified beneficiaries or the Com pany and the Plan Administrator comply with the requirements of such laws and shall be indemnified by the Company and the Plan Administrator from any and all liability arising from such Company's and Plan Administrator's failure to provide s uch notices or continuati on coverage for qualified beneficiaries. ARTICLE III - BENEFITS A. Payment Of Benefits. During the term of this Agreement, Claims Administrator will administer the claims for dental care benefits, s ubject to all of the terms and conditions set forth in Exhibit B. 1. Determination and Payment of Benefits - Claims Administrator will compute and verify Plan Benefit amounts and prepare and provide to Participants and Participating Providers, when applicable, statem ents reflecting the amount of Plan Benefits payable and the reasons why a claim has been denied i n whole or in part. Claims Administrator will draw drafts and checks or initiate electronic funds transfers in paym ent of Plan Benefits. 2. Services of Claims Administrator's Participating Providers - If covered services are performed by a Participating Provider, Claims Administrator will make payment directly to the Provider. Partici pating Providers have agreed to accept the Claims Administrator payment as payment in full for covered services performed for Participants, except where certain maximums, copayments, co- insurance or deductibles are specified in Exhibit B and which are the responsibility of the participant. 3. Services of Non - Participating Providers - If covered services are perfor med by a Provider who is not a Participating Provider, Claims Administrator will make payment at the rate specified in Exhibit B. Any difference between the Provider's charge and the Claims Administrator's payment shall be the personal responsibility of the Participant. Payment will be made to the Participant or, if permitted by the Plan and if a valid assignment of the claim is in place, to the Non- Participating Provider. 4. Overpayment of Plan Benefits - The parties will cooperate fully to make every reasonable effort under the circum stances, considering the c hances of successful recovery and the costs thereof, to recover any payment made to a Participant or Provider whic h is in excess of the amount which the person was entitled to receive under the terms as listed in Exhibit B. AS0-1 REV. 12/2004 Company assigns to Claims Administrator the authority to pursue recovery of overpayments and Claims Administrator will pursue all reasonable means of recovery of overpayments under the circum stances but will not be obligated to commence litigation, unless otherwis e specifically agreed by the parties. CI aims Administrator will assume liability for an unrecovered overpayment only if and at such time as it is determined that: (a) the overpaym ent was caused by Claims Administrator's act or omission which was intentional, grossly negligent, fraudulent or crim inal; (b) all reasonable means of recovery under the circumstances have been exhausted; and (c) Claims Administrator's acts or omissions were not undertaken at the express di rection of Company. 5. Banking • Plan Benefits shall be made by check drawn by C laims Administrator payable through the Bank. T he Company, by execution of this Agreement, expressly authorizes Claims Administrator to issue and accept such checks on behalf of the Com pany for the purpose of payment of Plan Benefits. Company agrees to provide funds in ac cordance with Exhibit A through its designated bank sufficient to satisfy all Plan Benefits upon notice from Claims Administrator or the Bank of the amount of checks approved and recorded by Claims Administrator. Company agrees to execute such docum ents as may be required by Claims Administrator or Bank from time to time to effectuate this provis ion. B. Amendments To Plan. The Company may amend the Plan to change the dental benefits provided to its Participants, or the eligi bility of its beneficiaries to participate, at any time during the term or any extension of this Agreement. Upon written confirmation from the Company and the Plan Administrator that the Plan has been duly amended, the Claims Administrator shall administer claims to conform to the amendments to the Plan. The Company and the Plan Administrator assume all responsibility for communication of Plan amendments to the Participants or for other notices to P articipants as required by ERISA or any other applicable law. Claims Administrator reserves the right to terminate this Agreement upon thirty (30) days written notice if the amendments to the Plan constitute a material change in benefits available to Participants under the P Ian. If any amendment increases or decreases the Com pany's anticipated claims expense or the Claims Administrator's administrative costs, the parties shall, prior to the administration of the amendments to the Plan, agree to revise financial terms. If the parties fail to reach an agreem ent within thirty (30) days of commencement of negotiations, either party may terminate this Agreement by the giving of sixty (60) days prior written notice to the other par ty. To the extent changes in dental benefi ts necessitate modification or revision of Exhibit B or any booklet which constitutes a part thereof, the Com pany shall provide reasonable advance written notice of such amendment to the Claims Administrator. C. Interpretation Of Plan. The Company and the Plan Administrator delegate to the Claims Administrator the authority, responsibil ity and discretion to interpret and construe the provisions of the Plan, as necessary to: 1. administer all services specified in this Agreement; 2. determine the extent of the benefi ts to which any Participant is entitled under the Plan; ASO-1 REV. 12/2004 4 3. make a full and fair review of each claim denial appealed by P articipants in accordance with the requirements of ERISA. Any function not specifically delegated to or assum ed by the Claims Administrator pursuant to this Agreement shall remain the sole responsibility of the Company and the Plan Administrator. D. Nature'of Services Provided. Claims Administrator provides adm inistrative claims payment services only under this Agreem ent and does not ass ume any financial risk or obligation with respect to claims. This Agreement shall not be deem ed a contract of insurance or prepaid dental c are under the laws and regulations of any jurisdiction where Claims Administrator may be called upon to act in fulfilling its obligations under this Agreement. ARTICLE IV - SERVICES PROVIDED BY CLAIMS ADMINISTRATOR A. Advisory Services. Claims Administrator shall consult with Company and Plan Administrator when requested to do so regarding: 1. Plan design and revisions, including questions regarding eligibility for participation and effective dates and c essation of coverage. Plan administration including questions regarding taxes and Covered Services. 3. The SPD and other material intended for distribution to Participants. Claims Administrator will make available on request a specimen form of SPD. However, Company and Plan Administrator acknowledge and agree that provision of a specimen form of SPD and consultation regarding the SPD is not intended to impose on Claims Administrator any obligation under ER ISA with respect to the S PD. Claims Administrator has no obligation to print or distribute the SPD. B. Estimates of Costs and Liabilities. 1. Estimates of Plan Benefit Costs and Fees - Claims Administrator will provide Company with an annual estimate, for budget purposes, of Plan Benefit costs and Claims Administrator's Service Fee and other charg es for Subsequent Contract Periods. 2. Estimates of Costs of Proposed Plan Changes - Claims Administrator will provide Company with estimated Plan Benefit cost calculations for proposed changes in the Plan. 3. Estimates of Open and Unreported Claim Liability - Claims Administrator will provide Company with estimates of open and unreported Claim liability following the close of each Contract P eriod. ASO-1 REV. 12/2004 5 C. Standard Administrative Forms. Claims Administrator will provide Company and Plan Administrator with standard forms which may be used for administration of the Plan, including those necessary to process enrollments in the plan, designations of dependents, etc. Com pany will not use non - standard adm inistrative forms without receiving Claims Administrator's written approval. D. Standard Administrative Manuals. Claims Administrator will prepare, update and provide Com pany and /or Plan Administrator with Clai ms Administrator's standard administration manual to assist in Plan administration. E. Establishing Banking Arrangements. Claims Administrator will assist Company in establishing banking arrangem ents for the reimbursement of Plan Benefits and payment of Administrative Fees. F. Directories. Claims Administrator will provide Company and Plan Administrator with a sample of Participating Provider Directories. The Plan Administrator is responsible for supplying provider directories to plan partici pants. G. Report Services. Claims Administrator will furnish Company and /or Plan Administrator management reports in accordance with Exhibit C, provided that the content of such reports may be modified or restricted to maintain compliance with Claims Administrator's Privacy Practices and Procedures and applicable privacy law. It is understood and agreed that the Group shall request and utilize such data for the limited purpose of satisfying "Plan Administrative Function" (as that term is defined in 45 C.F.R. § 164.504) which the Company may have with regard to the Plan. H. Additional Services. No additional services are provided by the Claims Administrator other than those expressly agreed herein. ARTICLE V - CLAIM EXPENSE AND OTHER CHARGES The Company shall pay the Claims Administrator as specified in Exhibit A for all claims paid on behalf of the Plan's Participants plus the additional amounts set forth therein. The financial arrangement set forth in Exhi bit A may be modified from time to time during the initial term or any extension of this Agreement as mutually agreed upon in writing by the parties. Plan Benefits are entirely funded by the C ompany. Claims Administrator provides administrative and claims payment services only. Notwithstanding the term ination of this Agreement, and regardless of the reason for termi nation, Company shall be liable to Claims Administrator for the cost of any Plan Benefit paid by Claims Administrator pursuant to this Agreement. ASO-1 REV. 12/2004 6 ARTICLE VI - AUDIT Company may audit Claims Administrator's administration of Plan benefits hereunder, subject to the following conditions: A. Procedure. In case of any audit under this A udit provision, Company will give Claims Administrator notice in writing of its desire to conduct an audit. Company and Claims Administrator will agree on the scope of any audit request. The Company shall not request more than one audit per calendar year. Audits shall be conducted only for a period no greater than the two most recently completed contract years. Audits shall be conducted during normal working business hours at the offices of the Claims Administrator by an auditor mutually acceptable to the Claims Administrator and the Company which approval shal I not be unreasonably withheld by either party. Claims Administrator shall provide appropriate records and docum ents for Company to evaluate the administration of the benefits. Company will discuss with Claims Administrator the operational details of the audit. Audits shall not be conducted for the same scope and time frame or portion of time of a previously conducted audit unless the Company is required by a govemm ental agency with which it has a contractual arrangement to audit a period or periods for whic h a final audit has been perform ed or in cases of fraud or suspected fraud or unless the audit identifies a systematic discrepancy in which event an audit or re -audit may be conducted of a period no greater than the four most recently completed contract years (incl uding the current audit period) solely for the purpose of exam ining such systematic discrepancies. B. Confidential Information. Prior to the commencement of any audit, Company and its outside auditor, if any, w ill execute a written agreement reasonably satisfactory to Claims Administrator to protect the confidenti ality of patient specific dental care information and Claims Administrator's proprietary or confidential information, provided that Claims Administrator will in no event be required to dis close any information in violation of applicable taw. Types of Audits. 1. Financial Audits. Subject to the requirements of Paragraph A and B of this Audit provision and all applicable laws, regulations and Claims Administrator's policies, Financial Audits shall be limited to an examination of Claims ASO-1 REV. 12/2004 Administrator's records of provider charges and reimbursements for Plan benefits administered under this Agreement. Company shall reimburse Claims Administrator for the actual cost of any computer time expended as a result of any financial audit request. Further, if any financial audit request requires m ore than 40 hours of personnel of Clai ms Administrator, the Company shall reimburse the Claims Administrator for personnel time in excess of such hours at the rate of $100 per hour. 7 2. Claims Audit: (a) Subject to the requirem ents of Sections A and B of this Audit provision and all applicable laws, regulations and Claims Administrator's policies, the Company shall have the right under this Agreement to conduct an audit of the claims for the benefits paid under the P Ian. The audit shall be coordinated with the Claims Administrator and the scope of an audit shall be limited to reviews of claims documentation, membership data and benefit summaries. Audit sampling methodology shall be mutually agreed to by the parties and must be based on the universe of claims under review. A preliminary draft of the audit report shall be submitted to the Claims Administrator fifteen days prior to issuance of the final report. (b) On an annual basis, Company will be provided with 40 hours of audit support. Company shall reim burse Claims Administrator for any additional hours of audit support at a rate of $100 an hour . (c) The provisions of this Audit section shall survive termination of this Agreement. (d) Audit reports prepared by Com pany or its representatives shall be reviewed by the Claims Administrator prior to issuance. ARTICLE VII LITIGATION If litigation or arbitration proceedings are commenced by a Participant or Provider against Claims Administrator or Company, or both parties, in connection with payment of claims for Plan benefits ( "Claims Litigation "), unless otherwise agreed by the parties: A. In actions asserted only against Claims Administrator: 1. Claims Administrator will provide written notice to C ompany as soon as practicable and will, at Company's written request, provide Company with information with respect to the ongoing status of the CI aims Litigation; and 2. Claims Administrator will select and retain counsel. B. In actions asserted against Claims Administrator and Company, unless a material conflict of interest arises between the parties, the parties will agree on a defense strategy for the action and Clai ms Administrator will select counsel reasonably satisfactory to Company to represent both parties. C. In actions asserted against Claims Administrator and Company where a material conflict of interest exists between the parties, each party will select and retain its own counsel. ASO-1 REV. 12/2004 8 D. In all litigation under this Article VII, Company shall reimburse Claims Administrator for all such legal fees, costs and disbursements, judgments or settlements unless such claims litigation was caused by acts or intentional misconduct or gross negligence by Claims Administrator in the performance or services under this Agreement. E. In all Claims Litigation the parties will provide each other with reasonable cooperation necessary in the defense of Claims Litigation; F. Company shall be liable for the full amount of any Plan Benefits paid as a result of Claims Litigation. In no event wil I Claims Administrator be liable for any am ount of Plan benefits paid as a result of Claims Litigation. ARTICLE VIII — PRIVACY AND CONFIDENTIALITY A. Confidential Information. Claims Administrator, Company, and Plan Administrator acknowledge that in discharging their obligati ons under this Agreement they may disclose or make available to each other confidential i nformation. Claims Administrator, Company and Plan Administrator agree to protect and preserve the confidential, proprietary and trade secret nature of each other's c onfidential information and further agree not to disclos e the other's confidential information to any other person, firm or entity without obtaining the other's prior written c onsent unless otherwis e provided by law. B. Use of Individually Identifiable Health Information. The use and disclosure of personally identifiable health information related to Partici pants ( "Protected Information ") is subject to various privacy laws, including state laws governing the privacy of personal financial and health information, the Health Insurance Portability and Accountability Act of 1996 ( "HIPAA "), and regulations adopted thereunder by the Departm ent of Health and Human Services (45 CFR Parts 160, 162, 164 and proposed Part 142). T he parties will treat all such information in accordance with those laws, and will use or disclose Protected Information received from the other only for the pur poses stated in this Agreement, or to comply with judicial process or any applicable statute or regulation. C. Business Associate Addendum. The parties acknowledge and agree that on and after the final compliance date for the "Privacy Rule" established pursuant to regulations implementing the Health Insurance Portabili ty and Accountability Act of 1996 ( "HIPAA ") (45 C.F.R. Parts 160 and 164), Claims Administrator shall be a "Business Associate" of the Plan (as that term is defined in 45 C.F.R. § 160.501). Accordingly, Company shall, for and on behalf of the PI an, agree to the attached "Business Associate Addendum" coincident with its execution of this Agreement. The parties further agree that this Agreement along with the Business Associate Addendum shall thereafter govern Claims Administrator's obligations regarding the use and disclosure of Protected Information when perform ing its functions under this Agreement. ASO-1 REV. 12/2004 9 ARTICLE IX - TERMINATION AND RENEWAL A. This Agreement shall continue until 12:00 m idnight on the termination date specified in Exhibit A, at which time, unless changed or termi nated as provided herein, it shall automatically renew for a further per iod of twelve (12) consecutive m onths and thereafter from year to year. Such initial period and each successive renewal period is hereinafter called a "Contract Period ". B. Upon at least sixty (60) days written notice to the other par ty prior to the end of any Contract Period, the Company or the Claim s Administrator may request a change in the financial terms of this Agreement. If the parties are unable to agree upon such requested change within s ixty (60) days of the initial notice, this Agreement will automatically terminate at the end of the C ontract Period in which the request for change is made, unless the parties agree in writing to an extension thereof. C. The Company or the Claims Administrator may terminate this Agreement at the end of any Contract Period by the giving of no les s than thirty (30) days written notice to the other party prior to the end of such Contract Period. D. If the amount due is not receiv ed by the end of five (5) business days from a payment due date, this Agreement may be terminated without written notification to the Com pany. In the event of automatic termination of this Agreement under this paragraph, the Claims Administrator, at its option, may reinstate this Agreement or enter into a new Agreement with the Company. Unless otherwise agreed, this reinstatement or new Agreement shall be on a month -to -month basis. ARTICLE X - MISCELLANEOUS A. Amendments to Comply with Law. Notwithstanding any provision contained herein to the contrary, the Company or the CI aims Administrator shall have the right, for the purpose of com plying with the provis ions of any law or lawful order of a court or regulatory authority, to amend this Agreement, including any Exhibits hereto, or to increase, reduce or elim inate any of the benef its provided for in this Agreement for any one or more Participants who shall be enrolled under this A greement, and each party w ill agree to any amendment of this Agreement which is necessary in order to accomplish such purposes. The Company also agrees to pay any change i n claims expense and administrative expense that results from such amendment. If the parties cannot agree to any such change or am endment, notwithstanding any provision of thi s Agreement to the contrary, the Company or the Clai ms Administrator may terminate this Agreement as of the end of the month by the gi ving of sixty (60) days written notice prior ther eto. B. Other Amendments. This Agreement shall be subject to amendment of modification by mutual written agreement between the CI aims Administrator and Com pany. This Agreement supersedes all prior written or oral agreements or understandings between the parties. AS0-1 REV. 12/2004 10 C. Notices. Unless otherwise provided herein, all notices required or permitted to be sent in accordance with this Agreement may be either personally delivered, or sent by reg ular U.S. mail or nationally recognized overnight courier service, to the foll owing addresses: To the Company at: City of Vernon Willard Yamaguchi Chief Deputy City Attorney 4305 Santa Fe Avenue Vernon, CA 90058 Attention: Willard Yamaguchi To Claims Administrator at: United Concordia Companies, Inc. 4401 Deer Path Road Harrisburg, PA 17110 Attention: President The parties may change the address I isted herein by sendi ng notice of such change in writing to the other party in accordance with the method outlined in thi s Article. D. Choice of Law. Except as otherwise governed by ERISA, this Agreement is entered into pursuant to the laws of the state of California and shall be interpreted pursuant to such law. E. Severability. In the event of the unenforceability or invalidity of any section or provision of this Agreement, such section or provision s hall be enforceable to the fullest extent permitted by law, and such unenforceability or invalidity shall not otherwise affect any other section or provision of this Agreement and this Agreement shall otherwise remain in full force and effect. F. Assignment. Services to be provided by Claims Administrator under this Agreement may be performed in whole or in part by Clai ms Administrator, by any of its affili ates, or by any subcontractor selected by it or by such affiliates. Except as set forth in the preceding sentence, neither party m ay assign or delegate any of the rights and obligations hereunder to any third party without the prior written consent of an offi cer of the other party. G. Counterparts. This Agreement may be executed in any num ber of counterparts, each of which shall be deemed an original and constitute one and the same instrument. H. Independent Contractors. In fulfilling its obligations in connection with this Agreement and the Plan, Claims Administrator acts in the capacity of independent contractor as to Com pany and Plan Administrator. AS0-1 REV. 12/2004 11 I. Headings. Headings in this Agreement have been inserted for convenience and shall not be used to interpret or construe its provi sions. IN WITNESS WHEREOF, the parties intending to be legally bound have caused this Agreement to be executed the day and the year first above written. ATTEST BRUCE V. MALKENHORST, JR. Acting City Clerk APPROVED AS TO FO ERIC T. FRESCH, City Attorney ASO-1 REV. 12/2004 CITY OF VERNON By: LEaNIS C. MALBURG, Mayor Title: UNITED CONCORDIA COMPANIES, INC. Title: President & CEO 12 EXHIBIT A Group: City of Vemon Group No: A00118000, A 00118001, A00118002, A00118003, A00118004, A 00118005, A00118006, A00118007, A00118008 A. Effective Date: January 1, 2005 B. Termination Date: December 31, 2005 C. Remittance Period: Semi - Monthly D. Payment Procedure: 1. Claims Administrator's Administrative Fee shall be an amount equal to $6.38 per employee per month. Claims Administrator (or the designated agent of Claim s Administrator) will bill Company for the Administrative Fee every month. 2. Claims Administrator (or the designated agent of Claim s Administrator) will notify the Company by the last business day of each Remittance Period of the amount due under this Agreement to fund Plan Benefits. The Company will wire transfer the payment within two (2) business days of notice from the Claims Administrator. This Agreement will be terminated in accordance with Article IX of this Agreement if the Company fails to make timely payment. Claims Administrator shall have no obligation to pay any claims, regardless of the date of service, after termination. 3. A late fee of one and one half percent (1 1/2 %) per m onth will be charged on any unpaid balance. 4. Claims Administrator reserves the right to recalcul ate the Administrative Fee listed above if any of the fol lowing occurs during such period: (a). Change in Employee Count - 10% or greater agg regated change per contract period, positive or negative, in the number of employees from those assumed in Claims Administrator's quotation or renewal quotation. (b). Change in Plan. A material change in the Plan initiated by Company or in response to new legislation. (c). Change in Claim Administration. A material change in claim payment requirements or procedures, account structure, or any other change materially affecting the manner or cost of paying benefits. ASO-1 REV. 12/2/1999 E. Taxes. In the event any state or any poti tical subdivision thereof presently or hereafter im poses any tax payable by the Claim s Administrator with respect to the servic es provided hereunder or with respect to the gross receipts derived hereunder, any amounts payable by the Company to the Claims Administrator shall be increased sufficiently to cover any such tax imposed with respect to the services or gross receipts involved. F. Settlement Upon Termination of Agreement. Upon termination of this Agreement for any reason other than non - payment by Company of any Plan Benefits or Administrative Fees, and provided that Company has paid an advance deposit to Claims Administrator, Claims Administrator will adm inister claims incurred by Participants prior to term ination for sixty (60) days (the "Run Out Period "). Claims Administrator shall bill Company, and Company shall pay Claims Administrator, for Plan Benefits and Administrative Fees in accordance with the Agreement and this Exhibit A as if the Agreement were still in effect. If Company fails to make timely payment to Claims Administrator, Claims Administrator may apply the advance deposit to amounts owed and may, in its sole discretion, terminate the Run Out Period immediately upon notice to Company. If the advance deposit is not sufficient to cover all amounts due, Company shall make payment within five (5) business days of notice from Claims Administrator. If Company has paid all amounts due Claims Administrator for Plan Benefits and Administrative Fees, Claims Administrator shall retum the advance deposit to Company within ten (10) days after the end of the Run Out P eriod. G. Issued But Not Paid Checks. No later than thirty (30) days after ter mination of this Agreement or the end of the Run Out Period, whichever is later, Claims Administrator shall present an accounti ng to Company of checks issued by Claims Administrator but not yet paid by the B ank. Claims Administrator will apply any available claims funding or advance deposit against the amount indicated i n the accounting. If there is a deficiency after application of claims funding or advance deposit, Com pany shall pay Claims Administrator such deficiency within ten (10) days. ASO-1 REV. 12/2/1999 EXHIBIT B [Plan/Summary Plan Description] ASO-1 REV. 12/2/1999 SUMMARY PLAN DESCRIPTION CITY OF VERNON DENTAL PLAN Concordia FLEX ADMINISTRATIVE INFORMATION Plan Name: City of Vernon Informal Plan Nam e• Concordia Flex Employer/Plan Sponsor: City of Vernon Plan Sponsor Tax Identification No.: 95- 6000808 Plan Number: A00118000, A00118001, A00118002, A00118003, A00118004, A00118005, A00118006, A00118007, A00118008 Type of Plan: Group Dental Type of Administration: Third Party Administration Plan Administrator: Willard Yamaguchi Chief Deputy City Attorney City of Vemon 4305 Santa Fe Avenue Vernon, CA 90058 Claims Administrator: United Concordia Companies, Inc. 4401 Deer Path Road Harrisburg, PA 17110 Telephone number: (866) 454 -3190 Funding Medium: The Plan is funded by employer contributions. The Claims Administrator is not liable for the payment of Plan Benefits. Plan Year: January 1 through December 31 1 STD -SPD (0702) INTRODUCTION This Summary Plan Description is written in an easy -to- understand way to explain the Group Dental Plan ( "the Plan") and provide information on the Plan which you may need in the future. If you have any questions after reading this Summary Plan Description, contact the Plan Administrator or the Claims Administrator at the address and telephone number under the Administrative Information section at the beginning of this document. The Plan is intended to provide dental benefits for eligible employees and their covered dependents. WHO IS ELIGIBLE FOR COVERAGE If you are a full -time employee regularly scheduled to work at least 30 hours per week, you are eligible for coverage under the Plan. Your coverage begins on the later of the first day of the month coincident with the date of hire or the date the Claims Administrator received your Plan enrollment from the Plan Administrator. Your existing dependents are eligible on the date you become eligible for employee coverage and their coverage begins when yours begins. Future dependents are eligible on the date you acquire them. Their coverage begins the later of the first day of the month following that date or the date the Claims Administrator receives the new dependent's enrollment. Your eligible dependents are: • spouse, unless legally separated or domestic partner • unmarried children, including stepchildren, adopted children, children placed for adoption if you are legally required to provide support until the adoption is fmalized, and foster children, who: • qualify as your dependent under Internal Revenue Code Section 152, regardless of whether a divorced custodial parent has released the claim to the child's dependency exemptions under Internal Revenue Code Section 152(e). • are under age 19 or who are 19 but less than age 23 and are full -time students at an accredited school, college, or university. ENROLLMENT Before the beginning of each Plan Year, the Employer will hold an enrollment period during which you may elect benefits under the Plan for the upcoming Plan Year. The enrollment period will begin and end on dates determined by the Plan Administrator. These dates will be prior to the beginning of the next Plan Year. New employees will be enrolled in the Plan upon becoming eligible to participate. To enroll in the Plan, you must complete the election forms provided by the Plan Administrator. If you do not complete the proper election forms, you may not participate in the Plan. You must let the Plan Administrator know when new dependents become eligible. You must also inform the Plan Administrator when you no longer have eligible dependents. Your employer will notify the Claims Administrator. Individuals eligible for coverage as employees may not also be enrolled as dependents. If you and your spouse are both eligible for employee coverage under the Plan, only one of you can enroll your eligible dependents. 2 STD -SPD (0702) CHANGE IN BENEFIT ELECTIONS Generally, your Plan elections must stay in effect for the entire Plan Year. There are certain limited circumstances under which you are permitted to change your annual election. The following events are changes that if consistent with the requested change in your benefit election will permit you to change your benefit election during a Plan Year. • You get married or divorced • You have a child or adopt a child • Your spouse or a child dies • Your spouse commences or terminates employment • Your or your spouse's employment status changes from full -time to part-time or from part-time to full -time • You or your spouse take an unpaid leave of absence • There is a significant change in the dental coverage that is provided by your spouse's employer COST Your employer pays the monthly premium. HOW THE DENTAL PLAN WORKS Choice of Dentist You may choose any licensed dentist for services to be covered by the Plan. However, you will limit your out -of- pocket cost if you choose a United Concordia participating dentist. Participating dentists accept the Plan's allowance as payment in full for covered benefits. Your out -of- pocket cost will be limited to any applicable coinsurance, deductibles or amounts exceeding the program maximum. Participating dentists will also complete and send claims directly to the Claims Administrator. If you go to a dentist who is not a United Concordia's participating dentist, you may have to pay the dentist at the time of service. You will also have to pay the difference between the dentist's charge and the amount that the Plan allows, in addition to any coinsurance or deductible. You may have to submit the claim and wait for the Claims Administrator to reimburse you. To fmd a participating dentist, visit Find a Dentist on the Claims Administrator's website at www.dentabenefits.com or telephone the Claims Administrator's Interactive Voice Response System at the toll -free number under the Administrative Information section of this document. When you visit the dental office, let your dentist know that you are covered under a United Concordia program. If your dentist has questions about your eligibility or benefits, instruct the office to call the Claims Administrator's Interactive Voice Response System at the number under the Administrative Information section of this document or visit Dental Inquiry on the Claims Administrator's website at www.dentabenefits.com. 3 STD -SPD (0702) Claims Submission and Payment Upon completion of treatment, a claim form needs to be filed with the Claims Administrator. If you visit a United Concordia participating dentist, the dental office will submit claims forms for you and your dependents. The Claims Administrator will pay covered benefits directly to the participating dentist. Both you and the dentist will receive an explanation of benefits. Most dental offices submit claim forms for patients. However, if you do not receive treatment from a participating dentist, you may have to complete and send a claim form to the Claims Administrator in the event the dental office will not do this for you. Send the claim form or predetermination to the address provided by the Claims Administrator. Be sure to include the patient's name, date of birth, the employee's contract ID number, patient's relationship to employee, the employee's name and address, and the name and policy number of a second insurer if the patient is covered by another dental plan. Your dentist should complete the treatment and provider information or supply an itemized receipt for you to attach to the claim form. The Claims Administrator will send payment to you if covered services are provided by a non - participating dentist and you do not indicate on the claim that you wish payment to be sent to the dentist. You will receive an explanation of benefits. Should you have any questions concerning your coverage, eligibility or a specific claim, contact the Claims Administrator at the address and telephone number on the Administrative Information page of this document or log onto My Dental Benefits at www.dentabenefits.com. Predetermination of Benefits A predetermination is a review in advance of treatment by the Claims Administrator to determine eligibility and coverage for planned services in accordance with the Schedule of Benefits and the Plan allowance. Predetermination is not required to receive a benefit for any service under the Plan. However, it is recommended for extensive, more costly treatment. A predetermination gives you and your dentist an estimate of what your coverage is and how much your share of the cost will be for the treatment being considered. To have services predetermined, you or your dentist should submit a claim form showing the planned procedures but leaving out the dates of services. Be sure to sign the predetermination request. Substantiating material such as radiographs and periodontal charting may be requested by the Claims Administrator to estimate benefits. The Claims Administrator will determine benefits payable, taking into account exclusions and limitations and alternate treatment options based upon accepted standards of dental practice. You and your provider, if participating in United Concordia's network, will receive an explanation of the estimated benefits. When the services are performed, simply have your dentist call the Claims Administrator's Interactive Voice Response System at the telephone number on the Administrative Information page of this document, or fill in the dates of service for the completed procedures on the predetermination notification and re- submit it to the Claims Administrator for processing. Any predetermination amount estimated by the Claims Administrator is subject to continued eligibility of the patient. The Claims Administrator may also make adjustments at the time of final payment to correct any mathematical errors, apply coordination of benefits, and comply with the member's Plan in effect and remaining program maximum dollars at date of service. 4 STD -SPD (0702) BENEFITS Schedule of Benefits Your benefits are shown on the attached Schedule of Benefits. The Schedule of Benefits lists: • the dental service groupings covered, shown with a "Plan Pays" percentage • the percentage of the Plan allowance that the Plan will pay • any waiting periods applicable to the services • any deductibles you must pay before any benefits will be paid by the Plan, and the services excluded from the deductibles • any maximums for services for a given period of time; for example, annual for most services and lifetime for orthodontics. If the service grouping is shown on the Schedule of Benefits as not covered or at "Plan Pays -- 0 % ", no benefits will be paid for the dental procedures in that grouping. Service groupings shown with "Plan Pays" percentages of less than 100% require you to pay a portion of the cost. For example, if the Plan pays 80 %, your share is 20% of the Plan allowance. The general descriptions below explain the service groupings on the Schedule of Benefits. The descriptions are not all- inclusive — they include only the most common dental procedures in a service grouping. Specific dental procedures may be shifted among groupings or may not be covered depending on your Employer's choice of Plan. Check the Schedule of Benefits at the back of this document to see which groupings are covered and have your provider call the Claims Administrator to verify coverage of specific dental procedures. Services covered on the Schedule of Benefits are also subject to. the Alternate Treatment Provision following this section and the Schedule of Limitations and Exclusions attached to this document. • Exams and X-rays for diagnosis — oral evaluations, bitewings, periapical and full -mouth x -rays • Cleanings, Fluoride Treatments, Sealants for prevention • Palliative Treatment for relief of pain in emergencies • Space Maintainers to prevent tooth movement • Basic Restorative to treat caries (cavities, tooth decay) — amalgam and anterior composite resin fillings, stainless steel crowns, crown build -ups and posts and cores • Endodontics to treat the dental pulp, pulp chamber and root canal — root canal treatment and retreatment, pulpotomy, pulpal therapy, apicoectomy, and apexification • Non - surgical Periodontics for non - surgical treatment of diseases of the gums and bones supporting the teeth — periodontal scaling and root planing, periodontal maintenance (prophylaxis) • Repairs of Crowns, Inlays, Onlays, Bridges, Dentures — repair, recementation, re- lining, re- basing and adjustment • Simple Extractions — non - surgical extraction of teeth and root removal • Surgical Periodontics for surgical treatment of the tissues supporting and surrounding the teeth (gums and bone) — gingivectomy, gingivoplasty, gingival curretage, osseous surgery, crown lengthening, bone and tissue replacement grafts • Complex Oral Surgery for surgical treatment of the hard and soft tissues of the mouth — surgical extractions, impactions, excisions, exposure, and root removal; alveoplasty and vestibuloplasty. • Anesthesia for elimination of pain during treatment - general or nitrous oxide or IV sedation • Inlays, Onlays, Crowns when the teeth cannot be restored by fillings • Prosthetics — fixed bridges, partial and complete dentures • Orthodontics for treatment of poor alignment and occlusion — diagnostic x -rays, active treatment and retention for eligible dependent children STD -SPD (0702) Alternate Treatment Provision There are often several ways to treat a dental condition. For example, a filling or a crown can restore a tooth, or a fixed bridge or a partial denture can replace missing teeth. An Alternate Benefit Provision (ABP) will be applied if a dental condition can be treated by means of a professionally acceptable procedure which is less costly than the treatment recommended by the dentist. The Plan will pay for the lesser benefit, professionally acceptable procedure. The ABP does not commit you to the less costly treatment. If you and your dentist choose the more expensive treatment, you are responsible for the additional charges beyond those allowed for the less expensive procedure under the ABP. Limitations and Exclusions Services covered by the Plan as indicated on the Schedule of Benefits are subject to frequency or age limitations detailed on the attached Schedules of Limitations and Exclusions. No benefits will be provided for services, supplies or charges detailed under the Exclusions on the attached Schedule of Limitations and Exclusions. COORDINATION OF BENEFITS If you or your dependents are covered by any other dental benefits plan and receive a service covered by this Plan and the other, benefits will be coordinated. This means that one plan will be primary and determine its benefits before those of the other plan and without considering the other plan's benefits. The other plan will be secondary and determine its benefits after the other plan. The secon4ary plan's benefits may be reduced because of the primary plan's payment. Each plan will provide only that portion of its benefit that is required to cover expenses. This prevents duplicate payments and overpayments. Upon determination of primary or secondary liability, this Plan will determine payment. 1. The following words and phrases regarding the Coordination of Benefits ( "COB ") provision are defined as set forth below: A) Allowable Amount is the Plan's allowance for items of expense, when the care is covered at least in part by one or more Plans covering the Member for whom the claim is made. B) Claim Determination Period means a benefit year. However, it does not include any part of a year during which a person has no coverage under this Plan. C) Other Dental Plan is any form of coverage which is separate from this Plan with which coordination is allowed. Other Dental Plan shall be any of the following which provides dental benefits, or services, for the following: Group insurance or group type coverage, whether insured or uninsured. This includes prepayment groups. It also includes coverage other than school accident type coverage (including grammar, high school and college student coverages) for accidents only, including athletic injury, either on a twenty-four (24) hour basis or on a "to and from school basis," or group or group type hospital indemnity benefits of $100 per day or less. D) Primary Plan is the plan which determines its benefits first and without considering the other plan's benefits. A plan that does not include a COB provision may not take the benefits of another plan into account when it determines its benefits. E) Secondary Plan is the plan which determines its benefits after those of the other plan (Primary Plan). Benefits may be reduced because of the other plan's (Primary Plan) benefits. F) Plan means this document including all schedules and all riders thereto, providing dental care benefits to which this COB provision applies and which may be reduced as a result of the benefits of other dental plans. 6 STD -SPD (0702) 2. The fair value of services provided by the Claims Administrator shall be considered to be the amount of benefits paid by the Claims Administrator. The Claims Administrator will be fully discharged from liability to the extent of such payment under this provision. 3. In order to determine which plan is primary, the Plan will use the following rules. A) The other plan does not have a provision similar to this one, then that plan shall be primary. B) If both plans have COB provisions, the plan covering the Member as a primary insured is determined before those of the plan which covers the person as a Dependent. C) Dependent Child/Parents Not Separated or Divorced -- The rules for the order of benefits for a Dependent child when the parents are not separated or divorced are: 1) The benefits of the plan of the parent whose birthday falls earlier in a year are determined before those of the plan of the parent whose birthday falls later in that year; 2) If both parents have the same birthday, the benefits of the plan which covered the parent longer are determined before those of the plan which covered the other parent for a shorter period of time; 3) The word "birthday" refers only to month and day in a calendar year, not the year in which the person was born; 4) If the other plan does not follow the birthday rule, but instead has a rule based upon the gender of the parent; and if, as a result, the plans do not agree on the order of benefits, the rule based upon the gender of the parent will determine the order of benefits. Dependent Child/Separated or Divorced Parents -- If two or more plans cover a person as dependent child of divorced or separated parents, benefits for the child are determined in this order: 1) First, the plan of the parent with custody of the child. 2) Then, the plan of the spouse of the parent with the custody of the child; and 3) Finally, the plan of the parent not having custody of the child. 4) If the specific terms of a court decree state that one of the parents is responsible for the dental care expenses of the child, and the entity obligated to pay or provide the benefits of the plan of that parent has actual knowledge of those terms, the benefits of that plan are determined first. The plan of the other parent shall be the Secondary Plan. 5) If the specific terms of the court decree state that the parents shall share joint custody, without stating that one of the parents is responsible for the dental care expenses of the child, the plans covering the child shall follow the order of benefit determination rules outlined in Section C.3. above, titled Dependent Child/Parents Not Separated or Divorced. Active/Inactive Member 1) For actively employed Members and their spouses over the age of 65 who are covered by Medicare, the plan shall be primary. 2) When one contract is a retirement plan and the other is an active plan, the active plan is primary. When two retirement plans are involved, the one in effect for the longest time is primary. If another contract does not have this rule, then this rule will be ignored. F) If none of these rules apply, then the contract which has continuously covered the Member for a longer period of time shall be primary. G) The plan covering an individual as a COBRA continuee will be secondary to a plan covering that individual as a Member or a Dependent. 4. Right to Receive and Release Needed Information -- Certain facts are needed to apply these COB rules. The Claims Administrator has the right to decide which facts it needs. It may get needed facts from or give them to any other organization or person. Any health information furnished to a third party will be released in accordance with federal law. Each person claiming benefits under This Plan must give any facts needed to pay the claim. STD -SPD (0702) 5. Facility of Payment -- A payment made under another plan may include an amount which should have been paid under This Plan. If it does, the Claims Administrator may pay the amount to the organization which made that payment. That amount will then be treated as though it were a benefit paid under This Plan, and the Claims Administrator will not pay that amount again. The term "payment made" includes providing benefits in the form of services, in which case "payment made" means reasonable cash value of the services prepaid by the Claims Administrator. 6. Right of Recovery -- If the payment made by the Claims Administrator is more than it should have paid under this COB provision, the Claims Administrator may recover the excess from one or more of the following: (1) persons it has paid or for whom it has paid; or (2) insurance companies; or (3) other organization. Members are required to assist the Claims Administrator to implement this section. SUBROGATION OF BENEFITS In the event any payment is made under the Plan, the Plan shall be subrogated and shall succeed to the rights of any Participant against any other-plan, person or entity for recovery of dental care expenses for which such other plan, person or entity is liable. All amounts so recovered, by settlement, judgment or otherwise, shall be paid to the Plan, for ultimate disposition thereunder, which may include payment to the Employer. Participants shall furnish such information, execute and deliver such assignment documents and other instruments, and take whatever steps are necessary to secure the rights of the Plan and the Employer. Participants shall take no action to prejudice the rights and interests of the Plan or the Employer hereunder. NON - ALIENATION OF BENEFITS No right or benefit provided for under the Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void. However, this Section shall not be construed to prevent a Participant from directing the Plan to pay expenses directly to a provider of services or products if those expenses are otherwise reimbursable to the Participant under Plan. In such event, the Plan shall be relieved of all further responsibility with respect to that particular expense. 8 STD -SPD (0702) TERMINATION OF COVERAGE Your coverage and/or your dependents' coverage will end on the date provided by the Plan Administrator or the date the Claims Administrator receives the termination notice when the following events occur: • Your termination of employment with the Plan Administrator. • Your failure to satisfy the Plan's eligibility requirements. • Your dependents cease to be dependents as defined by the Plan. • Your disenrollment from the Plan. • Your failure to immediately return to work after an approved leave of absence with the Plan Administrator during which you were entitled to receive coverage under the Plan. • Your fraudulent use of dental services or facilities. • Your failure to timely pay any required contributions under this Plan. If your coverage or your dependent's is terminated as described above, coverage for completion of a dental procedure, other than orthodontics, that requires two or more dental office visits on separate days will extend for ninety (90) days after termination. The procedure must be started prior to your termination date. This extension of benefits does not apply if the termination is due to nonpayment of premiums or fraud on your part. In the case of orthodontic treatment, if covered under the Plan, your coverage will extend through the end of the month of termination. If the Plan is terminated, your coverage will end on the date of the Plan's termination. COORDINATION WITH OTHER LAWS Family & Medical Leave Act. A Participant on an Employer approved leave of absence under the Family & Medical leave Act shall continue to participate in the Plan in accordance with the requirements of such act. Qualified Medical Child Support Order. To the extent required by ERISA Section 609(a), the Plan shall comply with the terms of any medical child support order determined by the Plan Administrator to constitute a Qualified Medical Child Support Order. A Plan participant or beneficiary can obtain, without charge, a copy of the Plan's procedures governing Qualified Medical Child Support Order determinations from the Plan Administrator named in the SPD. COBRA Continuation Coverage. Notwithstanding the termination provisions of the Plan described above, if the Employer normally employed 20 or more employees on a typical business day during the preceding calendar year, continuation coverage shall be provided under the Plan in accordance with ERISA Section 601 through 608, code Section 4980B, and Title XXII of the Public Health Services Act ( "COBRA continuation coverage "). The terms of such COBRA continuation coverage are described below: 9 STD -SPD (0702) a) COBRA continuation coverage shall be offered under the following circumstances ( "qualifying events ") if participation under the Plan ordinarily would terminate as a result of such circumstances: (1) the Participant's termination of employment (other than by reason of such Participant's gross misconduct) or reduction of work hours to a level that would exclude him and his family from the Plan; (2) the Participant' s divorce or legal separation; (3) death of the Participant; (4) the Participant's entitlement of Medicare benefits; (5) a dependent child ceasing to qualify as a "dependent" eligible for coverage under the terms of the Plan; or (6) the commencement by the Employer on or after July 1, 1986 of a Title 11 bankruptcy proceeding. (Item (6) affects only retired Participants, their Spouses and Dependents. b) COBRA continuation coverage shall be offered only to the Participant and/or his Spouse and his Dependents who were covered under the Plan on the day before the qualifying event occurred and who lose coverage under the Plan on account of the qualifying event ( "qualified beneficiaries "). The qualified beneficiary shall be entitled to elect only the type of coverage he was receiving under the Plan at the time of the qualifying event. The right to elect core coverage, i.e., basic hospitalization and major medical coverage, shall be offered separately. Non -core coverage will not be offered separately from core coverage under the Contract. c) In the case of qualifying event described in (a)(2) or (5) above, the Participant or his family must notify the Employer of the qualifying event within 60 days of the date of the event. In all other cases, the Employer shall be deemed to be notified of the qualifying event. Within 14 days of such notification, the Employer shall provide the Participant and/or his family with a notice of the right to elect COBRA continuation coverage. d) The Participant, his Spouse, or his Dependent may elect COBRA continuation coverage within 60 days of the later of the date of the qualifying event, or the date to the notice form the Employer to qualified beneficiary. Each qualified beneficiary may make a separate election for COBRA continuation coverage. If an election is made within the 60 -day period, the Plan shall permit payment for COBRA continuation coverage during the period preceding such election to be made not less than 45 days after the date of the election. If the election to continue coverage is not made the above 60- day period, then no further opportunity to continue coverage will be extended to the Participant, his Spouse or his Dependents. COBRA continuation coverage is not conditioned upon evidence of insurability. e) In the case of (a) (1) above, COBRA continuation coverage may continue for up to 18 months. If, within the first sixty (60) days of continuation coverage, it is determined that the qualified beneficiary was disabled (under Title II or XV of the Social Security Act), continuation coverage may continue an additional 11 months, or a total of 29 months. To qualify for the additional 11 months, the Employer must be notified of the disability within 60 days after the date of determination. Such additional coverage will cease if the disability terminates. Therefore, the Employer must be notified within 30 days of the date of any final determination that the disability no longer exists. In the case of (a)(2) through (5), coverage may continue for up to 36 months. In this case of (a)(6), coverage may continue (1) until the death of the retired Participant or of any qualified beneficiary who, on the day before the qualifying event, was a surviving spouse or dependent child of the Participant, for up to 36 months after the death of the Participant. Notwithstanding the continuation periods specified above, COBRA continuation coverage shall terminate with respect to a qualified beneficiary upon the earlier of: 10 STD -SPD (0702) i The date on which the Employer ceases to provide any group dental plan to any employee; ii The date upon which coverage under the plan ceases as a result of failure to make timely premium payments as required by (f) below; premium payments shall be considered timely if made within 30 days of the due date; however, coverage shall be terminated retroactively as of the due date if payments are not received within 30 days; non - sufficient fund checks are not payment; iii The date upon which the qualified beneficiary becomes covered under any other group dental plan (as an employee or otherwise) if such plan does not contain an exclusion or limitation with respect to any preexisting condition of such qualified beneficiary; or iv The date upon which the qualified beneficiary (other than a qualified beneficiary described in (a) (6) above) becomes entitled to Medicare benefits. In the event of multiple qualifying events, the maximum required continuation period is 36 months. f) The Plan shall require payment of a premium for any period of COBRA continuation coverage in an amount that shall not exceed 102% of the cost to the Plan for such period of coverage for active Participants with respect to who a qualifying event has not occurred. The Cost to the Plan for coverage shall be determined for a period of 12 months selected by the Plan and shall be determined before the beginning of such period. The qualified beneficiary may elect to make any required premium payments in monthly installments. If the COBRA continuation period is extended from 18 months to 29 months due to disability as provided in (e) above, the premium for the additional 11 months of coverage shall be an amount not to exceed 150% of the cost to the Plan for such coverage, rather that 102% of such cost. PLAN AMENDMENT The Plan Sponsor reserves the right, at any time, to amend or terminate the Plan or amend or eliminate benefits under the Plan for any reason. All changes will be communicated in writing. If the Plan is discontinued, benefits, if any, will be paid for all charges incurred for covered services prior to the termination date. ERISA CLAIMS AND APPEAL PROCEDURES The Plan's ERISA Claims and Appeal Procedures are furnished automatically, without charge, as an attachment to this document and are incorporated by reference into this Summary Plan Description. ERISA STATEMENT OF RIGHTS As a participant in the Plan you are entitled to certain rights and protections under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA provides that all plan participants shall be entitled to: Receive Information About Your Plan and Benefits Examine, without charge, at the plan administrator's office and at other specified locations, such as worksites and union halls, all documents governing the plan, including insurance contracts and collective bargaining agreements, and a copy of the latest annual report (Form 5500 Series) filed by the plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Pension and Welfare Benefit Administration. 11 STD -SPD (0702) . Obtain, upon written request to the plan administrator, copies of documents governing the operation of the plan, including insurance contracts and collective bargaining agreements, and copies of the latest annual report (Form 5500 Series) and updated summary plan description. The administrator may make a reasonable charge for the copies. Receive a summary of the Plan's annual financial report. The plan administrator is required by law to furnish each participant with a copy of this summary annual report. Continue Group Health Plan Coverage Continue health care coverage for yourself, spouse and dependents if there is a loss of coverage under the plan as a result of a qualifying event. You or your dependents may have to pay for such coverage. Review this summary plan description and the documents governing the plan on the rules governing your COBRA continuation coverage rights. Prudent Actions by Plan Fiduciaries In addition to creating rights for plan participants ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan. The people who operate your plan, called "fiduciaries" of the plan, have a duty to do so prudently and in the interests of you and other plan participants and beneficiaries. No one, including your employer, your union, or any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a (pension, welfare) benefit or exercising your rights under ERISA. Enforce Your Rights If your claim for a (welfare) benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules. 12 STD -SPD (0702) Under ERISA, there are steps you can take to enforce the above rights. For instance, if you request a copy of plan documents or the latest annual report from the plan and do not receive them within 30 days, you may file suit in a Federal court. In such a case, the court may require the plan administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the administrator. If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court. In addition, if you disagree with the plan's decision or lack thereof concerning the qualified status of a domestic relations order or a medical child support order, you may file suit in Federal court. If it should happen that plan fiduciaries misuse the plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court. The court will decide who should pay court costs and legal fees. If you are successful the court may order the person you have sued to pay these costs and fees. If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous. Assistance with Your Questions If you have any questions about your plan, you should contact the Plan Administrator. If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the plan administrator, you should contact the nearest office of the Pension and Welfare Benefits Administration, U.S. Department of Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Pension and Welfare Benefits Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Pension and Welfare Benefits Administration. 13 STD -SPD (0702) ERISA CLAIMS AND APPEAL O E L E United Concordia Companies, Inc. (the "Claims Administrator") will make benefit determinations and resolve claimant appeals in a thorough, appropriate, and timely manner to ensure that claimants are afforded a full and fair review of claims for benefits. Benefit determinations will be made in accordance with the Plan documents and consistently among claimants. The claimant or his /her authorized representative may submit written comments, documents, records and other information relating to claims or appeals. The Claims Administrator will provide a review that takes into account all information submitted whether or not it was considered with its first determination on the claim. Any notifications by the Claims Administrator required under these procedures will be supplied to the claimant or his/her authorized representative. DEFINITIONS The following terms when used in this document have the meanings shown below. "Adverse benefit determination" is a denial, reduction, or termination of or failure to make payment (in whole or in part) based on a determination of eligibility to participate in a plan or the application of any utilization review; or a determination that an item or service otherwise covered is experimental or investigational or not medically (dentally) necessary or appropriate. "Authorized representative" is a person granted authority by the claimant and the Claims Administrator to act on behalf of a claimant regarding a claim for benefit or an appeal of an adverse benefit determination. An assignment of benefit is not a grant of authority to act on the claimant's behalf in pursuing and appealing a benefit determination. "Claimant" is a participant and /or beneficiary of an employee welfare benefit plan to whom a benefit may be due. Claim for Benefits is a request for a plan benefit or benefits by a claimant in accordance with the Plan's reasonable procedure for filing benefit claims. "Claim involving urgent care" is any claim for dental treatment when the application of the time periods for making non - urgent care determinations could seriously jeopardize the life or health of the claimant or the ability of the claimant to regain maximum function; or m the opinion of a dentist with knowledge of the claimant's dental condition, would subject the claimant to severe pain that cannot be adequately managed without the care or treatment that is the subject of the claim. Since the Claims Administrator does not require advance approval of emergency care in order to obtain a benefit, there are no claims involving urgent care as defined under the dental plan. The ERISA procedures for claims involving urgent care do not apply. "Pre- service claim" is any Claim for Benefits under a group health plan when the terms of the plan condition receipt of the benefit, in whole or in part, on approval of the benefit in advance of obtaining dental care. The Plan does not require approval of planned dental treatment in advance of receiving care. Therefore, there are no pre- service claims as defined under the dental plan, and the ERISA procedures for pre - service claims do not apply. All claims under the dental plan are post - service claims. "Post- service claim" ( "claim ") is any Claim for Benefits under a group health plan that is not a pre - service claim. 14 STD -SPD (0702) "Relevant" A document, record, or other information will be considered "relevant" to a given claim: a) if it was relied on in making the benefit determination; b) if it was submitted, considered, or generated in the course of making the benefit determination (even if the plan did not rely on it); c) if it demonstrated that, in making the determination, the plan followed its own administrative processes and safeguards for ensuring appropriate decision - making and consistency; d) or if it is a statement of the plan's policy or guidance concerning the denied benefit, without regard to whether it was relied upon in making the benefit determination. PROCEDURES FOR POST - SERVICE CLAIMS Benefit Determinations: The Claims Administrator will determine benefits and notify claimants of adverse benefit determinations no later than 30 days after receipt of the claim. The Claims Administrator may extend this 30 -day period by 15 days if additional information about the claim is required or the extension is necessary due to matters beyond the control of the Plan. The Claims Administrator will notify the claimant of the extension before the end of the initial 30 -day period. The Claims Administrator will explain the circumstances requiring the extension, the additional information required and the date by which the Plan expects to make the benefit determination. The claimant will have 45 days to provide the information requested. The time it takes the claimant to respond to the request for additional information will not be counted toward the time the Claims Administrator is required to make the benefit determination. When all information is received and the benefit determination is made, the Claims Administrator will send a notice of adverse benefit determination to the claimant. The notice will include: a) the specific reason for the adverse benefit determination; b) reference to the specific plan provisions on which the determination is based; c) description of any additional material or information necessary for the claimant to perfect the claim and why it is necessary; d) any relevant internal rule, guideline, protocol, criteria, or clinical judgment the plan relied on in making its decision and why it was necessary, or a statement that a copy is available free of charge upon request; e) a description of the Plan's review procedures and time limits applicable to those procedures; I) a statement of the claimant's right to bring a civil claim under ERISA. 15 STD -SPD (0702) Appeals: If the claimant is dissatisfied by the benefit determination, the claimant or his authorized representative may file an appeal with the Claims Administrator within 180 days of receipt of the adverse benefit determination. To file an appeal, telephone the toll -free number listed on your notice of adverse benefit determination. The Claims Administrator will review the claim and notify the claimant of its decision within 60 days of the request for appeal. Any dentist advisor involved in reviewing the appeal will be different from and not in a subordinate position to the dentist advisor involved in the initial benefit determination. Notice of the appeal decision will include the following in written or electronic form: a) the specific reason for the appeal decision; b) reference to specific plan provisions on which the decision was based; c) a statement that the claimant is entitled to receive upon request and free of charge, reasonable accessibility to and copies of all relevant documents, records, and criteria including an explanation of clinical judgment on which the decision was based and identification of the dental experts; d) a statement of the claimant's right to bring a civil action under ERISA; e) the following statement: "You and your Plan may have other voluntary alternative dispute resolution options, such as mediation. One way to find out what may be available is to contact your local U.S. Department of Labor Office and your State insurance regulatory agency." 16 STD -SPD (0702) United Concordia Dental Implant Rider to GROUP POLICY, CERTIFICATE OF INSURANCE, AND SCHEDULES OF BENEFITS: INCLUDING THE SCHEDULE OF EXCLUSIONS AND LIMITATIONS This Rider is effective on January 1, 2005 and is attached to and made a part of the Group Policy, Certificate of Insurance, and Schedules of Benefits including the Schedule of Exclusions and Limitations. Eligible Members will be provided coverage for dental services related to dental implants. The services performed for implants are considered Covered Services under this Plan as stated below. The Company will pay benefits equal to 60% of the Maximum Allowable Charge. Procedure Name D6090, D6095 Implant repairs All other crowns, inlays, onlays and prosthetic services rendered in conjunction with implants are covered as indicated on the Schedule of Benefits and subject to the exclusions and limitations listed on the Schedule of Exclusions and Limitations. Maxiinum(s) The lifetime Maximum amount per Member for the above listed implant services is included in the $1,500 per calendar year maximum per member. Waiting Periods) No Waiting Period will be applied to dental implant services. Exclusions and Limitations The specific references to dental implants in the Schedule of Exclusions and Limitations do not apply to the above listed procedures. The following limitations are added to the Schedule of Exclusions and Limitations: Dental implants are limited to one per tooth per lifetime. Dental implants are limited to Members ages 18 and over. Any dental implant services not listed above are subject to the exclusions in the Schedule of Exclusions and Limitations. Deductibles) No Deductible will be applied to the above listed dental implant services. R- Implant (10/04) Current Dental Terminology© 2004 American Dental Association. All rights reserved. SCHEDULE OF EXCLUSIONS AND LIMITATIONS EXCLUSIONS Except as specifically provided in the Certificate, Schedules of Benefits or Riders to the Certificate, no coverage will be provided for services, supplies or charges: 1. Not specifically listed as a Covered Service on the Schedule of Benefits and those listed as not covered on the Schedule of Benefits. 2. Which are necessary due to patient neglect, lack of cooperation with the treating dentist or failure to comply with a professionally prescribed Treatment Plan. This exclusion does not apply to Group Policies and Certificates issued and delivered in California. 3. Started prior to the Member's Effective Date or after the Termination Date of coverage with the Company, including, but not limited to multi -visit procedures such as endodontics, crowns, bridges, inlays, onlays, and dentures. 4. Services or supplies that are not deemed generally accepted standards of dental treatment. 5. For hospitalization costs. 6. That are the responsibility of Worker's Compensation or employer's liability insurance, or for treatment of any automobile related injury in which the Member is entitled to payment under an automobile insurance policy. The Company's benefits would be in excess to the third party benefits and therefore, the Company would have right of recovery for any benefits paid in excess. For Group Policies and Certificates issued and delivered in Georgia, Missouri, and Virginia, only services that are the responsibility of Workers Compensation or employer's liability insurance shall be excluded from this Plan. For Group Policies and Certificates issued and delivered in Texas, only services that are the responsibility the employer's liability insurance, or for treatment of any automobile related injury shall be excluded from this Plan. 7. For prescription or non - prescription drugs, vitamins, or dietary supplements. 8. Administration of nitrous oxide, general anesthesia and i.v. sedation, unless specifically indicated on the Schedule of Benefits. 9. Which are Cosmetic in nature as determined by the Company, including, but not limited to bleaching, veneer facings, personalization or characterization of crowns, bridges and/or dentures. 9809 (07/01) This exclusion does not apply to Group Policies and Certificates issued and delivered in Pennsylvania for Cosmetic services required as the result of an accidental injury. This exclusion does not apply to Group Policies issued and delivered in New Jersey for Cosmetic services for newly -born children of Members as defined in the definition of Dependent. 10. Elective procedures including but not limited to the prophylactic extraction of third molars. 11. For the following which are not included as orthodontic benefits - retreatment of orthodontic cases, changes in orthodontic treatment necessitated by patient neglect, or repair of an orthodontic appliance. 12. For congenital mouth malformations or skeletal imbalances, including, but not limited to treatment related to cleft lip or cleft palate, disharmony of facial bone, or required as the result of orthognathic surgery including orthodontic treatment. For Group Policies and Certificates issued and delivered in Arizona, Kentucky, and Pennsylvania this exclusion shall not apply to newly bom children of Members as defined under the definition of Dependent including newly adoptive children, regardless of age. For Group Policies issued and delivered in Colorado, Indiana, Missouri, New Jersey, and Virginia, this exclusion shall not apply to newly born children of Members as defined under the definition of Dependent. For Group Policies issued and delivered in Colorado, this exclusion shall not apply to orthodontic or dental services for a newly bom Dependent with cleft lip or deft palate and shall be covered as listed on the Schedule of Benefits. For Group Policies and Certificates issued and delivered in Florida, this exdusion shall not apply for diagnostic or surgical dental (not medical) procedures rendered to a Member of any age. 13. For dental implants including placement and restoration of implants unless specifically covered under a rider to the Certificate. 14. For oral or maxillofacial services including but not limited to associated hospital, facility, anesthesia, and radiographic imaging even if the condition requiring these services involves part of the body other than the mouth or teeth. This exclusion shall not apply to Group Policies issued and delivered in Georgia when such services are medically necessary. 15. Diagnostic services and treatment of jaw joint problems by any method unless specifically covered under a Rider to the Certificate. These jaw joint problems include but are not limited to such conditions as temporomandibular joint disorder (TMD) and craniomandibular disorders or other conditions of the joint linking the jaw bone and the complex of muscles, nerves and other tissues related to the joint. For Group Policies and Certificates issued in Florida, this exclusion does not apply to diagnostic or surgical dental (not medical) procedures for treatment of TMD rendered to a Member of any age as a result of congenital or developmental mouth malformation, disease, or injury and such procedures are covered under a Rider to the Certificate or the Schedule of Benefits. 16. For treatment of fractures and dislocations of the jaw. This exclusion does not apply to Group Policies and Certificates issued in Pennsylvania if the dental condition is as a result of an accidental injury. 17. For treatment of malignancies or neoplasms. 18. Services and /or appliances that alter the vertical dimension, including but not limited to, full mouth rehabilitation, splinting, fillings to restore tooth structure lost from attrition, erosion or abrasion, appliances or any other method. This exclusion does not apply to Group Policies and Certificates issued in Pennsylvania if the dental condition is as a result of an accidental injury. 19. Replacement of lost, stolen or damaged prosthetic or orthodontic appliances. 20. For broken appointments. 21. Arising from any intentionally self - inflicted injury or contusion when the injury is a consequence of the Member's commission of or attempt to commit a felony or engagement in an illegal occupation or of the Member's being intoxicated or under the influence of illicit narcotics. This exclusion does not apply to Group Policies and Certificates issued and delivered in Maryland. 9809 (07/01) 22. For house or hospital calls for dental services. 23. Replacement of existing crowns, onlays, bridges and dentures that are or can be made serviceable. 24. Preventive restorations in the absence of dental disease. 25. Periodontal splinting of teeth by any method. 26. For duplicate dentures, prosthetic devices or any other duplicative device. 27. For services determined to be fumished as a result of a referral to an entity in which the referring dentist, or the dentist's immediate family; (a) owns a beneficial interest; or (b) has a compensation arrangement. The dentist's immediate family includes the spouse, child, child's spouse, parent, spouse's parent, sibling, or sibling's spouse of the dentist, or that dentist in combination. 28. For which in the absence of insurance the Member would incur no charge. 29. For plaque control programs, oral hygiene, and dietary instructions. 30. For any condition caused by or resulting from declared or undeclared war or act thereof, or resulting from service in the national guard or in the armed forces of any country or intemational authority. This exclusion does not apply to Group Policies and Certificates issued and delivered in Oklahoma. 31. For training and /or appliance to correct or control harmful habits, including, but not limited to, muscle training therapy (myofunctional therapy). 32. For any claims submitted to the Company by the Member or on behalf of the Member in excess of twelve (12) months after the date of service. 33. Which are not Dentally Necessary as determined by the Company. This exclusion does not apply to Group Policies and Certificates issued and delivered in Califomia and Maryland. 34. For prosthetic services including but not limited to full or partial dentures or fixed bridges, if such services replace one or more teeth missing prior to the Member's eligibility under the Company. This exclusion does not apply to Group Policies issued and delivered in Georgia. For Group Policies issued and delivered in Maryland, this exclusion does not apply to prosthetic services placed five years after the Member's Effective Date for services. For Group Policies issued and delivered in West Virginia, this exclusion does not apply for prosthetic services, if such services replace one or more teeth missing less than twelve (12) months (or less than eighteen (18) months for a late enrollee) prior to the Member's eligibility under the Plan. 9809 (07/01) LIMITATIONS The following services will be subject to limitations as set forth below: 1. Full mouth x -rays — one every three years. 2. One set(s) of bitewing x -rays per calendar year. 3. Periodic oral evaluation — two per calendar year. 4. Limited oral evaluation (problem focused) — limited to one per dentist per twelve months. 5. Prophylaxis — two per calendar year. 6. Fluoride treatment — one per calendar year. 7. Space maintainers - are eligible on all teeth without any age restrictions. 8. Prefabricated stainless steel crowns - one per tooth per lifetime for age fourteen years and younger. 9. Crown lengthening - one per tooth per lifetime. 10. Periodontal maintenance following active periodontal therapy — two per twelve months in addition to routine prophylaxis. 11. Periodontal scaling and root planing - one per two year period per area of the mouth. 12. Placement or replacement of single crowns, inlays, onlays, single and abutment buildups and post and cores, bridges, labial veneers, full and partial dentures — one within five years of their placement. 13. Denture relining, rebasing or adjustments - are included in the denture charges if provided within six months of insertion by the same dentist. 14. Subsequent denture relining or rebasing — limited to one every three year(s) thereafter. 15. Surgical periodontal procedures - one per two year period per area of the mouth. 16. Sealants - one per tooth per four year(s) through age sixteen on permanent first and second molars. 17. Pulpal therapy - through age five on primary anterior teeth and through age eleven on primary posterior molars. 18. Root canal treatment and retreatment — one per tooth per lifetime. 9809 (07/01) 19. Recementations by the same dentist who initially inserted the crown or bridge during the first twelve months are included in the crown or bridge benefit, then one per twelve months thereafter; one per twelve months for other than the dentist who initially inserted the crown or bridge. 20. Replacement restorations — limited to one per twelve months. 21. Contiguous surface posterior restorations not involving the occlusal surface will be payable as one surface restoration. 22. Posts are only covered as part of a post buildup. 23. An Alternate Benefit Provision (ABP) will be applied if a dental condition can be treated by means of a professionally acceptable procedure which is less costly than the treatment recommended by the dentist. The ABP does not commit the member to the less costly treatment. However, if the member and the dentist choose the more expensive treatment, the member is responsible for the additional charges beyond those allowed for the ABP. 24. Payment for orthodontic services shall cease at the end of the month after termination by the Company. 25. If orthodontic treatment commences prior to age 19, benefits will be payable until the completion of treatment or until the orthodontic lifetime maximum has been reached. Schedule of Benefits Concordia Flex sm Deductibles & Maximums • $50 per Calendar Year Deductible (excludes Class I Services, Skull X-rays, Sialography, Oral facial images, Collection of micioorangisms, Caries stisceptility test, Accession of tissue, Processing of cytologic smears, Unspecified diagnostic procedure & Orthodontics) per Member not to exceed $150 per family • $1, 500 per Calendar Year Maximum per Member • $500 Orthodontic Lifetime Maximum per Member All services listed on this Schedule of Benefits are subject to the Schedule of Exclusions and Limitations. Participating Dentists accept the Maximum Allowable Charge as payment in full. 9806 (07/01) Plan Pays Class 1 Services • Exams 100% • All X-Rays 100% • Cleanings 100% • Ruoride Treatments 100% • Sealants 100% • Space Maintainers 100% Class li Services • Palliative Treatment 80% • Basic Restorative 80% • Endodontics 80% • Non-surgical Periodontics 80% • Repairs of CTOW/IS, !nays, Onlays, Bridges and Dentures 80% • Simple Extractions 80% • Surgical Periodontics 80% • Complex Oral Surgery 80% • Assistant Surgery • General Anesthesia 80% Class Ill Services • Inlays, Onlays, Crowns 60% • Prosthetics 60% Orthodontics • Diagnostic, Active, Retention Treatment 50% • Limited to Dependent children under the age of 19 Deductibles & Maximums • $50 per Calendar Year Deductible (excludes Class I Services, Skull X-rays, Sialography, Oral facial images, Collection of micioorangisms, Caries stisceptility test, Accession of tissue, Processing of cytologic smears, Unspecified diagnostic procedure & Orthodontics) per Member not to exceed $150 per family • $1, 500 per Calendar Year Maximum per Member • $500 Orthodontic Lifetime Maximum per Member All services listed on this Schedule of Benefits are subject to the Schedule of Exclusions and Limitations. Participating Dentists accept the Maximum Allowable Charge as payment in full. 9806 (07/01) EXHIBIT C REPORT SERVICES A. Standard Reports: Claims Administrator will furnish to Company and /or Plan Administrator the following management reports at no additional charge: Report Frequency COMBINATION BANK STATEMENT MONTHLY FUNDING NOTIFICATION DAILY, WEEKLY OR MONTHLY DEPENDING ON REMITTANCE PERIOD SUMMARIES OF AMOUNT OF DAILY, WEEKLY OR MONTHLY DEPENDING ON DRAFTS, CHECKS OR EFT'S DRAWN, REMITTANCE PERIOD VOIDED, REFUNDED AND PAID ESCHEATMENT REPORT ANNUALLY, IF NECESSARY CLAIMS UTILIZATION REPORT ANNUALLY B. Other Reports: Reports other than those listed in this Exhibit C requested by Com pany or Plan Administrator will be produced upon ag reement with Claim Administrator and for additional fees billed and payabl e in addition to the Administrative Fee. ASO-1 REV. 12/2/1999 BUSINESS ASSOCIATE ADDENDUM This Business Associate Addendum ( "Addendum ") is by and between United Concordia Companies, Inc. ( "Claims Administrator ") and the group customer identified below ( "Plan Sponsor"), acting on its own behalf and on behalf of its group health plan(s) ( "GHP "). RECITALS: WHEREAS, GHP is a "Group Health Plan" as defined in Section 160.103 of the regulations implementing the Health Insurance Portability and Accountability Act of 1996 ( "HIPAA "), 45 C.F.R. Parts 160 and 164 (the "Privacy Rule "). WHEREAS, Claims Administrator provides services related to the administration of GHP under the terms of an administrative services agreement by and between Claims Administrator and Plan Sponsor ( "Administrative Services Agreement "). WHEREAS, Plan Sponsor and Claims Administrator desire to amend the Administrative Services Agreement in order to comply with the requirements of 45 C.F.R. §§ 164.502(e) and 164.504(e). NOW THEREFORE, in consideration of the mutual understandings set forth below, and intending to be legally bound, Plan Sponsor and Claims Administrator hereby agree to amend the Administrative Services Agreement by incorporating the following terms and conditions. PART I. - CLAIMS ADMINISTRATOR'S OBLIGATIONS A. Permitted Uses and Disclosures. Claims Administrator is permitted or required to Use or Disclose Protected Health Information it creates for, or receives from, Plan Sponsor or GHP only as follows: 1. Functions and Activities on Behalf of GHP. Claims Administrator is permitted to Use, Disclose, create or receive Protected Health Information in furtherance of its duties and responsibilities under the Administrative Services Agreement and this Addendum. 2. Data Aggregation Services. Claims Administrator may perform Data Aggregation services as defined in the Privacy Rule, subject to any limitations imposed by the Administrative Services Agreement and the Privacy Rule. 3. Uses for Claims Administrator's Operations. Claims Administrator is permitted to Use Protected Health Information: (a) as necessary for Claims Administrator's proper management and administration; and, (b) to carry out Claims Administrator's legal responsibilities. 4. Disclosures for Claims Administrator's Operations. Claims Administrator may Disclose Protected Health Information for Claims Administrator's proper management and administration or to carry out Claims Administrator's legal responsibilities, but only if the following conditions are met: (a) the Disclosure is Required by Law; or (b) Claims Administrator obtains reasonable assurances, from any person or organization to which Claims Administrator will disclose such Protected Health Information that the person or organization will: (i) hold such Protected Health Information in confidence and Use or further Disclose it only for the purpose for which Claims Administrator Disclosed it to the person or organization or as Required by Law; and, (ii) notify Claims Administrator (who will in turn notify GHP) of any instance of which the person or organization becomes aware in which the confidentiality of such Protected Health Information was breached. 1 5. Other Uses and Disclosures. Claims Administrator may make any Use and /or Disclosure of Protected Health Information permitted under 45 C.F.R. §§ 164.506(c), 164.508 and 164.510, as well as under Claims Administrator's Notice of Privacy Practices ( "NPP "). 6. De- Identification of Protected Health Information. Claims Administrator may de- identify any and all Protected Health Information provided that the de- identification conforms to the requirements of 45 C .F.R. §164.514(b). B. Minimum Necessary. Claims Administrator will apply policies and procedures intended to assure that it will Use, Disclose, or request only the minimum necessary amount of Protected Health Information to accomplish the intended purpose as required under 45 C.F.R. §§ 164.502(b) and 164.514(d) . C. Disclosure to Claims Administrator's Subcontractors and Agents. Claims Administrator shall . require any of its agents or subcontractors to provide reasonable assurance, evidenced by written contract, that the agent or subcontractor will comply with the same privacy and security obligations as Claims Administrator with respect to Protected Health Information of GHP. D. Disclosure Pursuant to Audits. No provision of this Addendum is intended in any way to limit or expand the party's rights or obligations with respect to audits as set forth in the Administrative Services Agreement. E. Reporting of Improper Use or Disclosure. Claims Administrator will promptly report to GHP any Use or Disclosure of Protected Health Information not permitted by this Addendum or in violation of the Privacy Rule when Claims Administrator learns of such non - permitted Use or Disclosure. F. Compliance with Standard Transactions. If Claims Administrator conducts on behalf of GHP communications on and after October 16, 2003 that are required to meet the Standards for Electronic Transactions as set forth in 45 C.F.R. Part 162 ( "Standard Transactions "), Claims Administrator will comply, and will require any subcontractor or agent involved with the conduct of such Standard Transactions to comply with each applicable requirement of 45 C.F.R. Part 162. G. Information Safeguards. Claims Administrator will develop, implement, maintain and use reasonable and appropriate administrative, technical and physical safeguards to preserve the integrity, confidentiality and availability of Protected Health Information ( "PHI "), and to prevent non - permitted Use or Disclosure of PHI. When so required: 1. Such safeguards shall be consistent with applicable requirements of 45 C.F.R. Part 164, Subpart C, pertaining to the security of Electronic Protected Health Information ( "EPHI "); 2. Claims Administrator will ensure that any agent, including a subcontractor, to whom it provides EPHI agrees to implement reasonable and appropriate safeguar ds to protect it; and 2 3. Claims Administrator will report any security incident of which it becomes aware to GHP. For purposes of this amendment a reportable security incident shall be any security incident (as defined in 45 C.F.R. § 164.304) that Claims Administrator reasonably determines to be a threat or hazard to the security or integrity of GHP's EPHI. H. Administration of Individual Rights 1. Access. Upon GHP's written request, or the direct request of an individual, Claims Administrator will provide access to Protected Health Information about an Individual in Claims Administrator's custody or control contained in a Designated Record Set, so that GHP may meet its access obligations under 45 C.F.R. § 164.524. Such access shall be provided in a time and manner consistent with Business Associate's procedures for access, which Business Associate hereby represents comply with the requirements of 45 C.F.R. § 164.524. All fees related to this access shall be bome by the Individual, as determined by Claims Administrator in accordance with 45 C.F.R. § 164.524. 2. Amendment. Upon GHP's written request, or the direct request of an Individual, Claims Administrator will, on behalf of GHP, amend Protected Health Information as required by 45 C.F.R. § 164.526 on GHP's behalf. Claims Administrator will amend such Protected Health Information according to its own procedures for suc h amendment, which procedures Claims Administrator represents comply with applicable requirements of 45 C.F.R. § 164.526. 3. Disclosure Accounting. Claims Administrator agrees to record each disclosure, not excepted from Disclosure accounting under 45 C.F.R. § 164.528(a)(1) in accordance with the requirements of 45. C.F.R. § 164.528(b). Upon GHP's written request or the direct request of an Individual, Claims Administrator will, on behalf of GHP, provide a Disclosure accounting in accordance with its own procedures for Disclosure accounting, which Claims Administrator represents comply with 45 C.F.R. § 164.528. 4. Request for Restrictions and Confidential Communications. To the extent that communications are within the control of Claims Administrator, Claims Administrator will, on behalf of GHP, evaluate and determine whether to grant requests for restrictions and confidential communications in connection with the Use or Disclosure of Protected Health Information within the custody and control of Claims Administrator pursuant to 45 C.F.R. § 164.522. Claims Administrator will evaluate and determine whether to grant such requests according to its own procedures for such requests, and shall implement such appropriate operational steps as required by its own procedures. Claims Administrator represents that its procedures for evaluation and determination regarding such requests comply with the requirements of 45 C.F.R. § 164.522. Inspection of Books and Records. Claims Administrator will make its internal practices, books, and records relating to its Use and Disclosure of Protected Health Information available to the U.S. Department of Health and Human Services in a time and manner designated by that agency for the purpose of determining GHP's compliance with the Privacy Rule. 3 PART II — PRIVACY NOTICES A. Claims Administrator's Notice of Privacy Practice. Claims Administrator will not distribute its NPP to individuals enrolled in the GHP unless directed by the GHP. If directed by GHP, Claims Administrator will distribute its NPP to each individual enrolled in the GHP on the effective date of this agreement and, thereafter, to each new enrolled individual at time of enrollment, and to all enrolled individuals within 60 days . of any material revision to the NPP to all individuals then enrolled. Distribution of the Claims Administrator's NPP will be limited to one NPP per household. Claims Administrator represents that its policies and procedures regarding the distribution of the NPP comply with 45 C.F.R. § 164.520(c). The practices and procedures set forth in Claims Administrator's NPP will apply to all Protected Health Information within the custody and control of Clai ms Administrator. B. GHP's Notice of Privacy Practices. GHP shall be responsible for the preparation and distribution of its NPP as required by the Privacy Rule. If requested, Claims Administrator shall provide GHP with its NPP that GHP may use as the basis for its own NPP. PART III — PLAN SPONSOR'S PLAN ADMINISTRATION FUNCTIONS A. Communication of Protected Health Information. Except as specifically agreed upon by Claims Administrator and Plan Sponsor in compliance with the Privacy Rule, all Disclosures of Protected Health Information by Claims Administrator pursuant to this Addendum shall be made to GHP, except for disclosures related to enrollment or disenrollment in G HP. B. Summary Health Information. Upon Plan Sponsor's written request for the purpose either (i) to obtain premium bids for providing health insurance coverage under GHP, or (ii) to modify, amend, or terminate GHP, Claims Administrator is authorized to provide Summary Health Information regarding Individuals enrolled in GHP to Plan Sponsor. C. Disclosure to Plan Sponsor. GHP will not disclose any Protected Health Information to the Plan Sponsor unless GHP has first ensured: (i) that its Plan Document has been amended as required by 45 C.F.R. § 164.504(f)(2), and (ii) that the Plan Sponsor has delivered the certification required by 45 C.F.R. § 164.504(f)(2)(ii). If GHP should require Claims Administrator to disclose Protected Health Information directly to the Plan Sponsor, GHP shall authorize such disclosure by written instruction, accompanied by the Plan Sponsor's certification required by 45 C.F.R. § 164.504(f)(2)(ii). Claims Administrator may rely on Plan Sponsor's certification and GHP's written instruction, and will have no obligation to verify that the Plan Documents have been amended to comply with 45 C.F.R. § 164.504(f)(2) or that Plan Sponsor is complying with such amendments. PART IV - TERM, TERMINATION AND AMENDMENT A. Term. The term of this Addendum shall be co- extensive with the term of the Administrative Services Agreement. B. Termination for Breach. GHP shall have the right to terminate the Administrative Services Agreement if Claims Administrator, by pattern or practice, materially breaches any provision of this Addendum. Before terminating under this section, GHP shall provide Claims Administrator with an opportunity to cure any identified breach. If efforts to cure are unsuccessful, as determined by GHP, in its reasonable discretion, Plan Sponsor shall terminate the Administrative Services Agreement and this Addendum, as soon as administratively feasible. 4 C. Effect of Termination: Return or Destruction of Protected Health Inform ation. Upon cancellation, termination, expiration or other conclusion of the Administrative Services Agreement ("Termination"), Claims Administrator will, if feasible and lawful, return to GHP or destroy all Protected Health Information, in whatever form or medium, then held by Claims Administrator. Claims Administrator will complete such return or destruction as promptly as practical after the effective date of the Termi nation. D. Effect of Termination: Return or Destruction of Protected Health Information Not Feasible. GHP acknowledges that certain information may not feasibly be retumed or destroyed, including, but not limited to, de- identified data, data used for Data Aggregation purposes, and data subject to regulatory data retention requirements. Accordingly, upon Termination, Claims Administrator will identify to GHP any Protected Health Information that cannot feasibly or lawfully be returned to GHP or destroyed. After Termination, Claims Administrator will continue to protect such information as required by this Addendum and limit its further Use or Disclosure of such information to those purposes that make its retum or destruction infeasibl e. E. Continuing Privacy Obligation. Claims Administrator's obligation to protect the privacy of Protected Health Information that cannot feasibly or lawfully be returned or destroyed will survive Termination for as long as Claims Administrator retains any Protected Health Information governed by this Addendum. F. Agreement to Amend. The parties acknowledge that federal rules relating to HIPAA are evolving ( "New HIPAA Rules ") and, thus, may require amendment to this Addendum to ensure continuing compliance. The parties agree to amend this Addendum to add terms, conditions or assurances required by any New HIPAA Rule. Should the parties fail to adopt amendments by the effective date of any New HIPAA Rule, this Addendum will be deemed to be automatically be amended on such effective date to require both parties to comply with the requirements of such New HIPAA Rule. PART V — GENERAL PROVISIONS A. Conflict. The provisions of this Addendum will override and control any conflicting provision of the Administrative Services Agreement. All non - conflicting provisions of the Administrative Services Agreement will remain in full force and effect. B. Definitions and Interpretation. Capitalized terms used in this Addendum, unless otherwise defined herein, have the meanings ascribed to them under the Privacy Rule. For purposes of this Addendum, the term "Individual" shall include an Individual's personal representative. In the event of ambiguity, this Addendum shall be interpreted so as to make all activities conducted hereunder compliant with the Privacy Rule and any applicable state law or regulation governing the privacy of Individuals' health inform ation. C. Indemnification. Each party will indemnify and hold harmless the other party against any and all claims, liabilities, penalties or costs (including reasonable attorneys fees, expert witness fees and other costs of defense) ins tituted or imposed by an Individual or regulator, arising from any violation of this Addendum or wrongful Use or Disclosure of Protected Health Information governed by this Addendum. A party seeking indemnification will promptly notify the other party of any claim or proceeding for which indemnification is claimed. Neither party will compromise or settle any claim for which indemnification is claimed without the concurrence of the Party from which indemnification is claimed, which concurrence will not be unreasonably withheld. The foregoing indemnification shall survive termination of this Addendum . C. Documentation. All documentation that is required by this Addendum or by the Privacy Rule will be retained by Claims Administrator for six (6) years from the date of creation or when it was last in effect, or for such longer period as may be required by any applicable law. 5 IN WITNESS WHEREOF, Plan Sponsor, for and on behalf of GHP, and Claims Administrator execute this Addendum in multiple originals to be effective on January 1, 2005. PLAN SPONSOR City of Vernon Corporate Name BY: NIS C. MALBURG NAME: NAME: Thomas A. Dzuryachko TITLE: President & CEO CLAIMS ADMINISTRATOR United Concordia Companies,Inc. TITLE: Mayor DATE: November 16, 2005 DATE: April 26, 2005 ADDRESS: 4305 Santa Fe Ave. ADDRESS: 4401 Deer Path Road Harrisburg, Pa. 17110 Vernon,CA 90058 FAX: 323- 826 -1438 BRUCE V. MALKENHORST, JR. Acting City Clerk APPROVED AS TO FORM: ERIC T. FRES C 'eli Ze rn ey 6 FAX: