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Resolution No. 91231 2 3 4 67 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 0M ON RESOLUTION NO. 9123 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VERNON APPROVING A GROUP HOSPITAL AND PROFESSIONAL SERVICE AGREEMENT WITH HEALTH NET OF CALIFORNIA, INC. REGARDING THE CITY'S HMO HEALTH BENEFIT PLAN WHEREAS, on December 21, 2005, the City Council of the City of Vernon adopted Resolution No. 8936 ratifying the approval of an Application for Group Service Agreement and/or Group Policy (the "Application") with Health Net of California, Inc. ("Health Net"), for medical insurance coverage from January 1, 2006 through December 31, 2006 and approving the payment of premiums in accordance with the terms of the insurance coverage; and WHEREAS, Health Net has provided a Group Hospital and Professional Service Agreement (the "Agreement") that incorporates the terms and conditions of the Application; and WHEREAS, Health Net does not require execution of the Agreement as the payment of the premiums constitute the City's acceptance of the terms and conditions of the Agreement; and WHEREAS, the City Council desires to approve the Agreement with Health Net to provide HMO health plan benefits. 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 Group Hospital and Professional Service Agreement with 1 Health Net, a copy of which is attached hereto as Exhibit A and made a 2 part hereof. 3 SECTION 3: The Acting City Clerk of the City of Vernon 4 shall certify to the passage of this resolution, and thereupon and 5 thereafter the same shall be in full force and effect. 6 APPROVED AND ADOPTED this 5th day of September, 2006. 7 8- 9 LEONIS C. MAL URG, Mayor 10 ATTEST: 11 12 13 BRUCE V. MALKENHORST, JR. Acting City Clerk 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 - 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. 9123, was duly adopted by the City Council of the City of Vernon at an adjourned regular meeting of the City Council duly held on Tuesday, September 5, 2006, and thereafter was duly signed by the Mayor of the City of Vernon. (SEAL) BRUCE V. MALKENHORST, JR. Acting City Clerk - 3 - EXHIBIT 0 Health Net' GROUP HOSPITAL AND PROFESSIONAL SERVICE AGREEMENT ISSUED BY HEALTH NET OF CALIFORNIA, INC. LOS ANGELES, CALIFORNIA To the extent herein limited and defined, this Agreement provides for comprehensive health services provided through Health Net of California, Inc. (Health Net), a federally qualified Health Maintenance Organization and a California Health Care Service Plan. Upon payment of subscription charges in the amount and manner provided for in this Agreement, Health Net HEREBY AGREES to furnish services and benefits as defined in this Agreement to eligible employees and their eligible Family Mem- bers of: Group Name: CITY OF VERNON Group ID: 67694A, C, D Coverage Code: OXVE Plan Code: 32K (herein called the "Group") according to the terms and conditions of this Agreement. Payment of subscription charges by the Group in the amount and manner provided for in the Agreement shall constitute the Group's acceptance of the terms and conditions of the Agreement. This Health Net Group Service Agreement, the "Application for Group Service Agreement," any Health Net Underwriting Assumptions provided to the Group and the enrollment forms of the Group's eligible employees, inclusively shall constitute the entire agreement between the parties. B. Curtis Westen Secretary HEALTH NET Stephen D. Lynch President Section-1 TERM OF AGREEMENT This Agreement becomes effective on January 1, 2006 at 12:00 a.m., Pacific Time and will remain in effect for a term of twelve consecutive months, subject to the payment of subscription charges as required in Section 2. This Agreement may be terminated by the Group with a 30-day written notice to Health Net. Health Net may terminate or not renew this Agreement for good cause as set forth below with a 30-day written notice (see Section 2 regarding termination for nonpayment of subscription charges). If the terms of this Agreement are altered by the consent of both parties, no resulting reduction in coverage will adversely affect a Member who is confined to a Hospital at the time of such change. Good cause for termination or not renewing this Agreement by Health Net shall include: • Failure of the Group to pay any subscription charges when due; • Failure of the Group to maintain minimum subscription charge contribution requirements as set forth in the Application for Group Service Agreement; • Failure of the Group to maintain at least 15 eligible employees enrolled with Health Net or with Health Net Life to be determined annually, 60 days prior to Group's renewal date, with termination effective at the renewal date; • Knowing failure by the Group to abide by and enforce the conditions of enrollment of Subscribers as set forth in the Eligibility, Enrollment and Termination Section of the Evidence of Coverage, the Application for Group Service Agreement and any Health Net Underwriting Assumptions provided to the Group; • Fraud or misrepresentation by submission to Health Net by the Group of materially incorrect or incomplete information which is reasonably relied upon by Health Net in issuing or renewing this Agreement; or • A material change in the nature of the Group's business. Termination of this Agreement for good cause, other than for not paying subscription charges (see Section 2, "Subscription Charges"), shall become effective with a 30-day written notice to the Group. If this Agreement terminates under its own terms or is otherwise terminated by either Health Net or the Group, the Group shall promptly mail or hand deliver to each covered Subscriber, a notice of cancellation of this Agreement. The Group shall, upon request by Health Net, provide Health Net with a copy of the notification, a written state- ment that the notice of cancellation was mailed or hand delivered to each Subscriber and the date of mailing or hand delivery. Members who are hospitalized on the date coverage under this Agreement ends, may be eligible for continuation of coverage. See the "Conversion Privilege" and "Extension of Benefits" sections in the Evidence of Coverage portion of this Agreement. Section-2 SUBSCRIPTION CHARGES The Group shall pay Health Net subscription charges as follows. Such charges shall be calculated by Health Net from current records as to number of Members enrolled. Retroactive payment adjustments will be made in subsequent billings for any additions or terminations of Mem- bers not currently reflected in Health Net's records at the time of calculation of subscription charges. The Effective Date of the addition or termination will be in accordance with rules established by Health Net for determining Effective Dates of retroactive adjustments, but in no event will the Effective Date be more than 90 days prior to the date of receipt of the written request by Health Net. In order for a credit of subscription charges to be applied for terminated Members, Health Net must receive notification as soon as possible following the date of the Member's ineligibility, but in no event later than 90 days following such date. Health Net will credit a maximum of 90 days of subscription charges to the Group for ineligi- ble Members. When a Member is being retroactively terminated, the effective date of retroactive termination cannot be prior to any date onwhich services or supplies were provided to the Member under this Agreement. In such instances, the date of termination will be the first day of the calendar month following the month in which services or supplies were last provided, and any applicable credit of subscription charges will be calculated from that date. Only Members for whom payment is received by Health Net shall be eligible for services and benefits unrf- r this Agreement and only for the period covered by such payment. If any covered Member is terminated by F., th Net, prepaid subscription charges received on the account of the terminated Member or Members applicable periods after the effective date of the termination will be credited back to the Group on the next following billing statement, and neither Health Net nor any contracting Physician Group will have any further liability or responsibil- ity under this Agreement to such terminated Member. Health Net will credit a maximum of 90 days,of subscription charges to the Group for terminated Members. If the Group seeks to retroactively add Members, enrollment forms must be received by Health Net as soon as possible following the Member's eligibility date, but in no event later than 90 days following such date. Health Net will charge the Group retroactive subscription charges according to the Member's Effective Date, which will be in accordance with rules established by Health Net for determining Effective Dates of retroactive adjustments, but in no event will the Effective Date be more than 90 days prior to when Health Net receives the enrollment or mem- bership change form. MONTHLY CHARGES Monthly Rates for 67694A Individual Employee: 254.21 Employee and Spouse: 546.56 Employee with Spouse and Child(ren): 749.94 Monthly Rates for ' 694C Individual COBRA Subscriber: 254.21 Subscriber and Spouse: 546.56 Subscriber with Spouse and Child(ren): 749.94 Monthly Rates for 67694M Individual Medicare Retiree: 254.21 Retiree and One Family Member: 546.56 The above monthly subscription charges are in effect and payable beginning on the second month after the Agreement's effective date. The monthly subscription charges must be paid to Health Net on the first of that month and on the first of each month thereafter while the Agreement is in force. For eligibility adjustments that are retroactive to the Agreement's effective date, the Group will neither be charged nor credited any subscription charge adjustment for the first month of the term of Agreement, unless this Agreement is terminated prior to the end of the twelve consecutive month term as further described in the last paragraph of this Section 2. If payment is not made by the due date, Health Net will send the Group a Prospective Notice r- Cancellation 15 days before any cancellation of coverage. This Prospective Notice of Cancellation will provide arse following information: (a) that Subscription Charges have not been paid and that the Group Service Agreement will be canceled for non-payment if the required subscription charges are not paid within 15 days from the date the Prospective Notice of Cancellation was mailed; (b) the specific date and time when coverage for all Members will end if subscription charges are not paid; and (c) how and when the Group can reinstate the Group Service Agreement. If Health Net does not receive payment of the delinquent subscription charges from the Group within 15 days of the date of mailing of the Prospective Notice of Cancellation, Health Net will cancel the Group Service Agreement retroactively back to 12:00 midnight on the last day of the month for which subscription charges were paid, not to exceed 60 days before the date Health Net mails the Group a Notice Confirming Termination of Coverage. The Notice Confirming Termination of Coverage, will provide the Subscriber and the Group with the following informa- tion: (1) that the Group Service Agreement has been canceled for non-payment of subscription charges; (2) the specific date and time when your Group coverage ended; (3) to the Group only, how and when coverage may be reinstated; (4) the Health Net telephone number Subscribers can call to obtain additional information, including whether the Group obtained reinstatement of the Group Service Agreement; and (5) an explanation of the Subscriber's options to purchase continuation coverage, (including coverage effective as of the retroactive termination date so the Subscriber can avoid a break in coverage) including (a) the deadline by which the Sub- scriber must elect to purchase such continuation coverage (which will be 63 days after the date Health Net mails the Subscriber and the Group the Notice Confirming Termination of Coverage); (b) how to obtain the forms necessary to purchase continuation coverage; and (c) referral to Health Net's website and the Department of Managed Health Care's website for additional information relating to rates and regarding the Subscriber's rights to continuation coverage. Health Net will allow one reinstatement during any twelve-month period, without a change in subscription charges because of such reinstatement, if the amounts owed are paid within 15 days of the date the Notice of Confirming Termination of Coverage is mailed, including payment of a $100 reinstatement fee. If the Group does not obtain reinstatement of the canceled Group Service Agreement within the required 15 days or if the Group Service Agreement has been previously canceled and reinstated for non-payment of subscription charges within the last twelve months, then Health Net is not required to reinstate the Group Service Agreement, and the Group will need to reapply for coverage. In this case, Health Net may consider the medical conditions of the Group's employees in determining whether to allow enrollment. Amounts received after the termination date will be refunded to the Group by Health Net within 20 business days. Except as described below, Health Net will not change the subscription charges, applicable Copayments, coin- surance or Deductibles for the length of this Agreement, after (1) the Group has delivered notice of acceptance of the Agreement, (2) the start of the Group's Open Enrollment Period or (3) subscription charges for the first month of coverage commencing on the effective date of this Agreement are paid by the Group in the amount and manner provided for in this Agreement. Health Net may change the subscription charges, applicable Copayments, coinsurance and Deductibles under the following circumstances: • When such changes are authorized or required under this Agreement; • When agreed to under a preliminary agreement which states that such agreement is subject to execution of a formal agreement between the Group and Health Net; or • When the terms of this Agreement are altered, in writing, by the consent of both parties. Any changes to the subscription charges shall be made with at least a 30-day written notice to the Group prior to the date of such change. Payment of any installment of subscription charges as altered shall constitute accep- tance of this change. If a governmental authority (1) imposes a tax or fee that is computed on subscription charges or (2) requires a change in coverage or administrative practice that increases Health Net's risk, Health Net may amend this Agreement and increase the subscription charges sufficiently to cover the tax, fee or risk. The effective date shall be the date set forth in a written notice from Health Net to the Group. The effective date shall not be earlier than the date the tax, fee or required change in coverage or administrative practice is imposed by the governmental authority. If this Agreement is terminated for any reason, the Group shall be liable for all subscription charges for any time this Agreement is in force during a grace period and any notice period. Additionally, if this Agreement is termi- nated prior to the end of the twelve consecutive month term, by either the Group (for any reason) or by Health Net (for good cause as specified in Section 1), the Group must pay the subscription charges for the first month the Agreement is in effect, adjusted for any retroactive eligibility adjustments that were applicable to that month. t Section-3 GENERAL PROVISIONS • FORM OR CONTENT OF AGREEMENT: No agent or employee of Health Net is authorized to change the form or content of this Agreement. Any changes can be made only through an endorsement authorized and signed by an officer of Health Net. • ENTIRE AGREEMENT: This Agreement, the application of the Group, any Health Net Underwriting Assump- tions provided to the Group, and the enrollment forms of the Group's eligible employees shall coonstitute the entire Agreement between the parties. • CONTINUATION OF SUBSCRIBER COVERAGE: Except as otherwise provided herein, Health Net shall not have the right to cancel or terminate any individual Evidence of Coverage issued to any Subscriber while this Agreement remains in force and effect, while said Subscriber remains in the eligible class of employees of the Group, and while his or her subscription charges are paid in accordance with the terms of this Agreement. • CHARTER NOT PART OF AGREEMENT: None of the terms or provisions of the charter, constitution or bylaws of Health Net shall form a part of this Agreement or be used in the defense of any related suit, unless the same is set forth in full in this Agreement. • INTERPRETATION OF AGREEMENT: The laws of the State of California shall be applied to interpretations of this Agreement. Where applicable, the interpretation of this Agreement shall be guided by the direct ser- vice, group practice nature of Health Net's operations as opposed to a fee for service indemnity basis. • RECORDKEEPING: The Group is responsible for keeping records relating to this Agreement. Health Net has the right to inspect and audit those records. • RELATIONSHIP OF PARTIES: Neither Health Net nor any of its employees are employees or agents of Hospitals or the contracting Physician Groups. • HOLD HARMLESS: Health Net agrees to indemnify and hold harmless Group and Members for any expense, liability or claims for eligible services under this Agreement with the exception of any Copayment amounts which may be required as indicated herein. • MODIFICATIONS TO P.AN AND NOTICE OBLIGATIONS: If the plan is terminated or modified in accor- dance with the terms and provisions of this Group Service Agreement, including a change or decrease in benefits. Health Net will send notice of such modification or termination to the Group with at least 30 days written notice. Except as required under Section 2 "Subscription Charges" above regarding termination for non-payment, Health Net will not provide notice of such changes to plan Subscribers unless it is required to do so by law. The Group may have obligations under state or federal law to provide notification of these changes to plan Subscribers. • NON-DISCRIMINATION: Health Net and the Group hereby agree that no person who is otherwise eligible for coverage under this Agreement shall be refused enrollment nor shall their coverage be canceled solely be- cause of race, color, national origin, ancestry, religion, sex, marital status, sexual orientation, age, health status or physical or mental handicap. • NOTICE OF CERTAIN EVENTS: Health Net will give the Group written notice, within a reasonable time, of any termination or breach of contract, or inability to perform services, by any contracting Physician Group or contracting provider, if the Group may be materially and adversely affected thereby. BINDING ARBITRATION Section-4 Sometimes disputes or disagreements may arise between Group or Members and Health Net regarding the construction, interpretation, performance or breach of this Group Service Agreement or regarding other matters relating to or arising out of this Agreement. Health Net uses binding arbitration as the final method for resolving all such disputes, whether stated in tort, contract or otherwise, and whether or not other parties such as health care providers, or their agents or employees, are also involved. In addition, disputes with Health Net involving alleged professional liability or medical malpractice (that is, whether any medical services rendered were unnecessary or unauthorized or were improperly, negligently or incompetently rendered) also must be submitted to binding arbitration. As a condition to contracting with Health Net, Group and Members agree to submit all disputes they may have with Health Net to final and binding arbitration. Health Net also agrees to arbitrate all such disputes. This mutual agreement to arbitrate disputes means that Group, Members and Health Net are bound to use binding arbitration as the final means of resolving disputes that may arise between them, and thereby the parties agree to forego any right they may have to a jury trial on such disputes. However, no remedies that otherwise would be available to the parties in a dourt of law will be forfeited by virtue of this agreement to use and be bound by Health Net's binding arbitration process. This agreement to arbitrate shall be enforced even if a party to the arbitration is also involved in another action or proceeding with a third party arising out of the same matter. Health Net's binding arbitration process is conducted by mutually acceptable arbitrator(s) selected by the parties The Federal Arbitration Act, 9 U.S.C. § 1, et seq., will govern arbitrations under this process. In the event that the total amount of damages claimed is $200,000 or less, the parties shall, within 30 days of submission of the demand for arbitration to Health Net, appoint a mutually acceptable single neutral arbitrator who shall hear and decide the case and have no jurisdiction to award more than $200,000. In the event that total amount of damages is over $200,000, the parties shall, within 30 days of submission of the demand for arbitration to Health Net, appoint a mutually acceptable panel of three neutral arbitrators (unless the parties mutually agree to one arbitra- tor), who shall hear and decide the case. If the parties fail to reach an agreement during this time frame, then any party may apply to a Court of Competent Jurisdiction for appointment of the arbitrator(s) to hear and decide the matter. Arbitration can be initiated by submitting a demand for arbitration to Health Net at the address provided below. The demand must have a clear statement of the facts, the relief sought and a dollar amount. Health Net of California Attention: Litigation Administrator PO Box 4504 Woodland Hills, CA 91365-4505 The arbitrator is required to follow applicable state or federal law. The arbitrator may interpret this Group Service Agreement, but will not have any power to change, modify or refuse to enforce any of its terms, nor will the arbitrator have the authority to make any award that would not be available in a court of law. At the conclusion of the arbitration, the arbitrator will issue a written opinion and award setting forth findings of fact and conclusions of law and that the award will be final and binding on all parties except to the extent that State or Federal law provide for judicial review of arbitration proceedings. The parties will share equally the arbitrator's fees and expenses of administration involved in the arbitration. Each party also will be responsible for their own attorneys' fees. In cases of extreme hardship to a Member, Health Net may assume all or portion of a Member's share of the fees and expenses of the arbitration. Upon written notice by the Member requesting a hardship application, Health Net will forward the request to an independent professional dispute resolution organization for a determination. Such request for hardship should be submitted to the Litiga- tion Administrator at the address provided above. Effective July 1, 2002, Members who are enrolled in an employer's plan that is subject to ERISA, 29 U.S.C. § 1001 et seq_, a federal law regulating benefit plans, are not required to submit disputes about certain "adverse benefit determinations" made by Health Net to mandatory binding arbitration. Under ERISA, an "adverse benefit determination" means a decision by Health Net to deny, reduce, terminate or not pay for all or a part of a benefit. However, you and Health Net may voluntarily agree to arbitrate disputes about these "adverse benefit determina- tions" at the time the dispute arises. Section-5 COBRA AND CALIFORNIA-COBRA PROGRAM (CAL -COBRA) CONTINUATION COVERAGE Health Net recognizes that many Groups must comply with the continuation of group coverage requirements under federal and California laws and regulations, which respectively are commonly referred to as "COBRA" and "Cal -COBRA." Health Net acknowledges that Groups who are so affected cannot discharge their legal responsi- bilities without Health Net's informed and willing participation in providing the required continuation coverage. Health Net is, therefore, committed to the following: n A. Maintaining an awareness of the continuation coverage requirements of federal and state laws. This includes federal requirements under the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act, regulations which are issued by the Secretaries of federal agencies and state law requirements under the California COBRA Program (Article 4.5 of the California Health and Safety Code and Article 1.7 of the California Insurance Code). B. Providing continuation coverage to Plan Members upon the request of a Group when such requests are consistent with the Group's obligations under the law. C. Sharing knowledge regarding COBRA and Cal -COBRA with Groups as they experience problems, but Health Net will not give legal advice on these matters. Section-6 CAL -COBRA OBLIGATIONS California law requires health plans and insurers to offer individuals who began receiving federal COBRA cover- age on or after January 1, 2003 and who have exhausted federal COBRA the opportunity to continue coverage for a total of 36 months through a combination of COBRA and Cal -COBRA. When such an individual has elected to continue coverage through Cal -COBRA, the Group must do the following: A. Notify current Cal -COBRA qualified beneficiaries of Group's intent to terminate this Group Service Agree- ment. If the Group intends to terminate this Group Service Agreement with Health Net and replace it with cov- erage through another California HMO or disability (health) insurer, the Group must, at least 30 days prior to the termination, inform all existing Cal -COBRA qualified beneficiaries of this action. The Group must also in- form qualified beneficiaries that they have the ability to choose to continue coverage through the new plan for the balance of the period that they could have continued coverage through the Health Net Plan. Health Net will provide the employer the names and last known addresses of enrolled Cal -COBRA qualified beneficiaries. B. Notify the successor plan of the qualified beneficiaries currently receiving Cal -COBRA coverage. The Group must notify the successor plan in writing of the qualified beneficiaries currently receiving continuation cover- age so that the successor plan, or contracting employer or administrator may provide those qualified benefici- aries with the necessary information to allow the qualified beneficiary to continue coverage through the new plan. Section-7 COVERAGE FOR DOMESTIC PARTNERS A Subscriber's Domestic Partner is eligible for coverage provided that the partnership meets the Group's domes- tic partnership eligibility requirements. The Group's eligibility requirements must be compliant with California law. The Domestic Partner and the dependent children of the Domestic Partner may enroll on the same basis as a Subscriber's spouse and his or her children in accordance with the terms and conditions of this Agreement that apply generally to the spouse of a Subscriber under the Plan. Domestic Partners and their enrolled dependent children are eligible for California COBRA coverage on the same basis as other enrollees. In addition, Health Net will provide federal COBRA -like coverage on the same basis to the Domestic Partner and his or her unmarried dependent children as other COBRA qualified enrollees based on the group's eligibility rules. Determination of COBRA qualification for Domestic Partners and their children will be based on agreements between Health Net and the Group. Section-8 PLAN BENEFITS AND EVIDENCE OF COVERAGE Health Net will issue and deliver to each Subscriber an Evidence of Coverage which will set forth a statement of services and benefits to which the Members are entitled and an Identification Card. The benefits of this plan are set forth commencing on the next page of this Agreement, the language of which will constitute the Evidence of Coverage.