HomeMy WebLinkAboutContract 47463 GPID 25345
CITY SECRUAW
Health Savings Account Services Agreement CoMUCTW. N
This Health Savings Account Administrative Services Agreement("Agreement") is entered into by City of Fort Worth ("Employer")and
Discovery Benefits, Inc. ("DBI") as of 01/01/16 ("Effective Date").
WHEREAS, Health Savings Accounts ("HSAs")will be established by or on behalf of Employer's employees ("Employees"). DBI will
perform certain recordkeeping and nondiscretionary administrative services, and will facilitate contributions made by or on behalf of
Employees to HSAs. Healthcare Bank will serve as custodian of these accounts.
NOW THEREFORE,the parties agree as follows:
1. Scope and Purpose
This Agreement is limited in scope and purpose to establishing the terms and conditions for the transfer of payroll deductions and
Employer contributions (if applicable)to HSAs of Employees. If provided for in Exhibit A, this Agreement also permits the payment
of HSA fees by Employer on behalf of Employees. Nothing in this Agreement shall modify or amend the terms of any HSA trust
agreement entered into between Healthcare Bank and Employees. Employer acknowledges and agrees that each Employee, and
not DBI,will be responsible for, and DBI shall have no liability in connection with: (i) determining that the employee is eligible to
maintain an HSA and make contributions under applicable tax laws; (ii) ensuring that all distributions the employee makes are
permitted under said laws; (iii)the tax consequences of any contributions (including rollover contributions) and distributions; (iv)
paying any fees applicable to the HSA; and (v) complying with all requirements and terms and conditions in connection with the
HSA imposed or established by DBI or Healthcare Bank.
2. Opening of Accounts
In accordance with procedures to be agreed upon by the parties, Employer will: (i) advise Employees who wish to participate in
Employer's HSA program that they will be required to enroll in an HSA account through electronic procedures established by DBI;
(ii) provide each such Employee with any applicable notices,forms and disclosures provided by DBI; and (iii) send to DBI at such
time and in such format as DBI requires information with respect to the Employees who are participating in the Employer's HSA
program. Employer represents to DBI that information it provides to DBI under this Agreement will be true and complete, and that
it will not request DBI to open an HSA account for any Employee who has not indicated intent to open such account. DBI shall not
be responsible for the accuracy of such information or for its HSA account opening or maintenance activities based on information
received from the Employer. DBI reserves all rights to decline to open or activate any HSA account or to close any HSA account
insofar as its practices and procedures have not been properly observed by the Employer or the Employee.
3. Funding of Accounts
On a schedule and in the form to be agreed upon by the parties, Employer shall remit to DBI the funds to be deposited into the
HSA account of each Employee, and shall provide accompanying data which accurately indicates each HSA account and the dollar
amount to be credited to each such HSA account. DBI shall have no liability for any funds not received by DBI, or for any errors in
crediting HSA accounts based on the data provided by Employer, including where such contributions are set up as automated
recurring contributions pulled from the Employer's bank account. As soon as administratively practicable, Healthcare Bank will
sweep the Employer's contributions into the HSA accounts of the Employees. As applicable, Employer contributions shall be
allocated first,to pay applicable administrative and account maintenance fees attributable to HSA accounts of the Employees, and
next, directly to the HSA accounts of the Employees. Once deposited,funds may be withdrawn or transferred from an HSA
account solely upon the instructions of the respective Employee. In no event shall DBI be obligated to return any HSA account
funds to Employer.
4. Mistaken Employer Contributions
Neither DBI nor Healthcare Bank assumes any responsibility for mistaken Employer contributions. Employer understands that
Internal Revenue Service (IRS) regulation requires that HSA contributions be nonforfeitable, meaning the IRS will allow the
reversal of mistaken employer contributions only in two instances: i)when there is a mistake in the eligibility to establish an HSA
and the employee was never eligible for HSA contributions; and ii)when the contribution exceeds the annual HSA maximum
contribution.
5. Account Maintenance
In order to administer and maintain the HSA accounts, from time to time in accordance with procedures to be agreed upon,
Employer will submit to DBI certain information concerning the status of Employees and HSA contributions and DBI may provide
certain information about the HSA accounts to Employer. Employer acknowledges that DBI may rely upon all information provided
by Employer in maintaining and administering the HSA accounts. Employer shall be responsible for all reasonable costs and
expenses incurred by DBI for error correction or other activities undertaken by DBI at Employer's request or as a result of
erroneous information provided by Employer to DBI. If requested, Employer will certify to DBI the personnel authorized by
Employer to receive and furnish information under this Agreement.
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Discovery Benefits, Inc. C9 u 1r 3 C r; nnn
432120"'Avenue S, Fargo, ND 58103 � (�ii�, �i�9�R���
866-451-3399 www.discoverybenefits.com a
Health Savings Account Services Agreement
6. Account Closures
DBI will close an HSA account only upon the instructions of the respective Employee. Notwithstanding anything to the contrary
herein, at its discretion, DBI may refuse to open, or may close any previously established HSA account, as to which the Employee
is unable or unwilling to sign DBI forms or otherwise agree to the terms and conditions related to such HSA account,or otherwise
violates any terms thereof. Employer acknowledges that upon any such closure,funds in the HSA account will be returned to the
Employee, or forwarded to another financial institution upon written instructions of the Employee. Employer further acknowledges
that such closure may result in tax consequences for which the Employee shall solely be responsible.
7. Fees Paid by Employer
Employer shall pay fees directly to DBI (outside of the HSA accounts)within thirty(30)days following the Employer's receipt of the
statement of Service Fees. Interest may be charged on the amount of all past due fees in accordance with the Prompt Payment
Act, Section 2252.025 of the Texas Government Code. If Employer fails to pay fees within sixty(60)days following the Employer's
receipt of the statement of Service Fees, and upon written notice to Employer and by written request of DBI to Healthcare Bank,
fees(including interest on past due fees) may be deducted directly from the HSA accounts to which they relate; provided, no
amount may be deducted from an HSA account to cover unpaid fees from other HSA accounts.
8. Employee Data
Employer represents that all Employees for whom data is provided by the Employer have been positively identified through either:
(i) Internal Revenue Service 1-9 forms completed by Employees if hired after November 6, 1986, or(ii)for employees hired before
that date, review by Employer of the Employees'driver's licenses or other government-issued identifying documentation evidencing
nationality or residence and bearing a photograph or similar safeguard. The Employer also represents that the Employees have
certified their authorization to work in the United States and have furnished their social security or other taxpayer identification
numbers which the Employer will provide to DBI for the purposes of establishing HSAs.
9. Employer requirements
Employer represents that it does not: (i)limit the ability of eligible individuals to move their funds to another HSA account beyond
restrictions imposed by the Internal Revenue Code of 1986, as amended (the"Code"); (ii) impose conditions on uses of HSA funds
beyond those permitted under the Code; (iii) make or influence the investment decisions with respect to funds contributed to an
HSA account; (iv) represent that HSAs are an employee welfare benefit plan established or maintained by Employer; or(v) receive
any payment or compensation from DBI in connection with an HSA.
10. Activities Outside the Scope of DBI and Healthcare Bank Responsibility
Neither DBI nor Healthcare Bank assumes any responsibility or authority under this Agreement for: (i)the design,funding or
operation of any Employer-sponsored health and welfare benefit plan or for compliance of any such plan with ERISA, as
applicable, including any aspect of the Consolidated Omnibus Budget Reconciliation Act of 1985("COBRA"); (ii)duties incumbent
upon a"plan sponsor"or"covered entity"under the HIPAA privacy and security rules; (iii)funding of claims for benefits under any
HSA or employee benefit plan or the payment of fees to third parties providing services or products to Employer or it Employees;
(iv)funding of any contributions; or(v) insuring or underwriting any liability to provide benefits under any employee benefit plan.
11. Term of Agreement.
a. Duration.
The term of this Agreement shall commence as of January 1,2016,the"Effective Date"and shall continue for a period of three
years (the"Initial Term") and shall expire on December 31, 2018, unless terminated earlier in accordance with the provisions
of this Agreement. Employer shall have the sole right to renew this Agreement for two (2) additional one-year terms, unless
terminated in writing by either party within sixty (60) days prior to the end of the Initial Term or prior to the end of any
subsequent one (1) year term. If Employer desires to exercise an option to renew, Employer shall notify DBI in writing of its
intention to renew at least sixty(60) days prior to the end of the then-current term. Compensation to be paid during any option
term shall be the same as that provided for in the Initial Term, unless otherwise agreed to in writing as an amendment to this
Agreement.
b. Termination Without Cause
This Agreement may be terminated by either the Employer or DBI without cause and without liability, by written notice of
intention to terminate given to the other party,to be effective as of a date certain set forth in the written notice,which shall not
be less than sixty(60) days from the date of such notice.
c. Automatic Termination and Termination With Cause
The Agreement shall automatically terminate:
a. If any law is enacted or interpreted to prohibit the continuance of this Agreement, upon the effective date of such law
or interpretation;
b. If any monthly administrative fee remains unpaid to DBI beyond thirty(30)days past the due date, upon notification
by DBI to the Employer in writing that DBI intends to exercise its option to enforce this
provision; or
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Health Savings Account Services Agreement
c. If at any time the Employer fails to provide funds for the payment of Plan benefits.
If either party is in default under any provision of this Agreement,the other party may give written notice to the other party of
such default. If the defaulting party has not used good faith efforts to cure such breach or default within thirty(30)days after it
receives such notice, or if good faith efforts to cure have begun within thirty(30)days but such cure is not completed within
sixty(60)days after receipt of the notice, the other party shall have the right by further written notice (the"Termination Notice")
to terminate the Agreement as of any future date designated in the Termination Notice. In addition, if termination is due to
default under any provision of this Agreement by DBI,the termination fees applicable to the initial term will not apply.
d. Non-appropriation of Funds.
In the event no funds or insufficient funds are appropriated by the Employer in any fiscal period for any payments due
hereunder, Employer will notify DBI of such occurrence and this Agreement shall terminate on the last day of the fiscal period
for which appropriations were received without penalty or expense to the Employer of any kind whatsoever, except as to the
portions of the payments herein agreed upon for which funds shall have been appropriated.
e. Charges.
Employer shall pay all charges or Service Fees that have accrued up to the date of the termination within thirty(30) days after
the date of the termination.
12. Confidentiality
Neither party shall disclose Confidential Information of the other party. The receiving party shall use the same degree of care as it
uses to protect its own confidential information of like nature, but no less than a reasonable degree of care, to maintain in
confidence the confidential information of the disclosing party. The foregoing obligations shall not apply to any information that: (i)
is at the time of disclosure, or thereafter becomes, part of the public domain through a source other than the receiving party; (ii) is
subsequently learned from a third party that does not impose an obligation of confidentiality on the receiving party; (iii)was known
to the receiving party at the time of disclosure; (iv) was generated independently by the receiving party; or (v) is required to be
disclosed by law, subpoena or other process. DBI may transfer Employer's Confidential Information to a governmental agency,
Healthcare Bank or other third party, with the same obligations owed to Employer as DBI, to the extent necessary for DBI to
perform its obligations under this Agreement or if Employer has given DBI written authorization to do so. For purposes of this
paragraph, Confidential Information shall mean any information identified by either party as "Confidential" and/or "Proprietary", or
which, under the circumstances, ought to be treated as confidential or proprietary, including non-public information related to the
disclosing party's business, employees, service methods, software, documentation, financial information, prices and product plans.
DBI reserves the right to independently use its experience and know-how, including processes, ideas, concepts and techniques
developed in the course of performing services under this Agreement. In no event shall either party be held liable for disclosing
Confidential Information of DBI that is required by law or court order. The party will notify the other party within ten (10) business
days of such request.
13. Reliance by DBI
Employer has authorized and instructed DBI in this Agreement to implement its standard administrative procedures to provide
services in accordance with this Agreement. Employer acknowledges that DBI will rely upon representations made by Employer as
set forth in this Agreement and communications made by or on behalf of Employer in effecting its obligations under this Agreement.
Employer and DBI agree that if Employer provides DBI with specific written instructions (in a form acceptable to DBI) to provide
services in a manner other than in accordance with DBI standard procedures, DBI may (but need not) comply with Employer's
written instructions.
14. Indemnification
DBI will indemnify Employer and hold Employer harmless against any and all losses, liabilities, penalties, fines, costs, damages,
and expenses, that Employer incurs, including reasonable attorneys' fees, which arise out of (i) DBI's or its vendors' gross
negligence or willful misconduct in the performance of DBI's or its vendors', subcontractors'or authorized agents'obligations under
this Agreement or (ii) DBI's material breach of this Agreement, all as determined by a court or other tribunal having jurisdiction of
the matter. This provision shall survive the termination of this Agreement. Notwithstanding the foregoing, Employer will remain
responsible for payment of plan benefits and DBI's indemnification will not extend to indemnification of Employer against any
claims, liabilities,damages,judgments or expenses that constitute payment of plan benefits.
15. Red Flags Rule Compliance.
To the extent applicable, DBI shall comply with the Red Flags Rule with respect to the Covered Services. For purposes of this
provision"Red Flags Rule"mean the regulations adopted by various federal agencies, including the Federal Trade Commission, in
connection with the detection, prevention and mitigation of identity theft, and located at 72 Fed. Reg.63718 (November 9, 2007),
as amended;and (ii) "Covered Services"means the services provided by DBI (if any)with respect to the Plan that allow Plan
participants to pay for eligible expenses under the Plan with a debit or other stored-value card, and any other services provided by
DBI under this Agreement that are covered by the Red Flags Rule as determined by DBI in its sole discretion, provided that any
services to HSAs shall not be Covered Services.
As a part of the Red Flags Rule compliance, DBI adopts, maintains, and uses appropriate and
commercially reasonable rules, procedures and safeguards to detect and identify red flags and to
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Health Savings Account Services Agreement
prevent and mitigate identity theft, as required by the Red Flags Rule. Such rules, procedures and safeguards shall be set forth in
a written program that complies with the Red Flag Rule (the"Red Flags Program"). DBI shall, upon request, make available to
Employer a copy of its Red Flags Program. This section shall be effective January 1,2011 or such later date on which the FTC
shall begin enforcement of the provisions of the Red Flags Rule applicable to the Covered Services; provided, however,this
section shall be null and void to the extent action is taken by Congress or a federal agency to exempt the Covered Services (or
third party administrators that provide Covered Services)from the Red Flags Rule.
16. Limitation of Remedies
Notwithstanding any other provision in this Agreement to the contrary, including, without limitation, Section 14, the maximum total
liability of DBI to Employer shall be limited to direct money damages in an amount not to exceed the total amount paid by Employer
for the defective service causing the damage during the twelve (12) months immediately preceding the loss. This remedy is
Employer's sole and exclusive remedy. Neither DBI nor Employer shall be responsible for any special, incidental, consequential,
exemplary, or punitive damages even if either party has knowledge of the possibility of such potential loss or damage. No action
under this Agreement may be brought by Employer more than two years after the cause of action has accrued.
17. Right to Audit
DBI agrees that the Employer shall, until the expiration of one (1) year after final payment under this Agreement, have access to
and the right to examine, to the extent permissible by applicable law, at reasonable times any directly pertinent books, documents,
papers and records of DBI involving transactions relating to this Agreement at no additional cost to the Employer. DBI agrees that
the Employer shall have access during normal working hours to all necessary DBI facilities and shall be provided adequate and
appropriate work space in order to conduct audits in compliance with the provisions of this section. Employer shall give DBI
reasonable advance notice of intended audits. DBI agrees to photocopy such documents as may be requested by Employer.
Employer agrees to reimburse DBI for the cost of copies at the rate published in the Texas Administrative Code in effect as of the
time copying is performed.
This section shall survive the expiration or termination of this Agreement.
18. General
(a) This Agreement, including any Exhibits attached including DBI's response to RFP 15-0222 Health Benefits Management,
constitutes the entire contract between DBI and Employer and no modification or amendment shall be valid unless agreed to in
writing by both parties. If there is an inconsistency between the terms of this Agreement and the terms of any prior agreement
between the parties, the terms of this Agreement will control, unless otherwise provided in such other agreement. This
Agreement shall not be modified in any way except by a writing signed by both parties. If any provision of this Agreement (or
any portion thereof) shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remainder
of this Agreement shall not in any way be affected or impaired thereby. Neither party shall be deemed to have waived any of
its rights, powers or remedies hereunder unless such waiver is approved in writing by the other party. Further, it is understood
and agreed that by execution of this Agreement, Employer does not waive or surrender any of its governmental powers.
(b) The parties shall cooperate in good faith to resolve any and all disputes (each, a"Dispute")that may arise under or in
connection with this Agreement.The existence or resolution of any Dispute as to a matter shall not reduce or otherwise affect
the payment or performance by Employer its obligations under this Agreement as to any other matter, unless pursuant to the
terms of any such resolution. Employer and DBI shall attempt in good faith to resolve any Dispute arising out of or relating to
this Agreement promptly by negotiation between executives who have authority to settle the controversy and who are at a
higher level of management than the persons with direct responsibility for administration of this Agreement. Either party may
give the other party written notice of any Dispute not resolved in the normal course of business.Within fifteen(15)days after
delivery of the notice,the receiving party shall submit to the other party a written response. The notice(s)and the response(s)
shall each include: (i)a statement of each party's position and a summary of arguments supporting that position; and (ii)the
name and title of the executive who will represent that party and of any other person who will accompany the executive.
Within thirty(30) days after delivery of the disputing party's notice(s),the executives of the parties subject to the dispute shall
meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary to attempt to
resolve the Dispute. All reasonable requests for information made by one party to the other will be honored.
(c) From time-to-time and in compliance with applicable federal and state laws, DBI may monitor and/or record calls which are
made to and from the customer service line for quality assurance and training purposes, and/or to ensure that DBI's services
fully comply with the terms of this Agreement.
(d) This Agreement may not be assigned by either party, in whole or in part, without the prior written consent of the other which
consent shall not be unreasonably withheld; provided, however, that any legal successor in interest to either party shall
continue to be bound by this Agreement until modified or terminated in accordance herewith.
(e) Neither DBI nor Employer, as applicable under the circumstances, shall be liable or deemed to be in default for failure to
perform or delay in performance of any of their respective obligations under this Agreement to the extent that such failure or
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Health Savings Account Services Agreement
delay results from any act of God; military operation; terrorist attack; widespread and prolonged loss of use of the Internet;
national emergency or government restrictions.
(f) The individuals executing this Agreement on behalf of DBI and Employer do each hereby represent and warrant that they are
duly authorized by all necessary action to execute this Agreement on behalf of their respective principals.
(g) Neither Employer nor DBI will restrict the ability of HSA owners to move funds to another NSA beyond those restrictions
imposed by the Code.
(h) This Agreement shall be governed and interpreted by the laws of the State of Texas. In the event of any conflict of laws,the
laws of the State of Texas shall prevail.
(i) By executing this Agreement,the parties agree to extend the term of any ACH Agreement associated herewith to be
coterminous with the term of this Agreement and to have such agreement be covered by the terms and provisions hereof.
(j) The parties agree that in performing their responsibilities under this Agreement, they are in the position of independent
contractors. This Agreement is not intended to create, nor does it create and shall not be construed to create, a relationship of
partner or joint venturer or any association for profit between Employer and DBI.
(k) DBI shall not be bound by any communication until it has been received at its office at 4321 20`h Avenue S, Fargo, ND 58103
or at such other address as it has specified to the Employer. The Employer shall not be bound by any communication until it
has been received at the address shown below or such other address as it has specified by Employer to DBI with copy to the
City Attorney's Office at same address.
(1) If any provision of this Agreement is held to be invalid, illegal or unenforceable,the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired.
(m) Sections 8, 12, 13, 14 and 15 and this subsection shall survive the expiration or termination of this Agreement.
Authorization
This Agreement, including any attachments or other exhibits, is accepted and agreed to by the parties as of the effective date of this
Agreement.
Sig ®r�ploy�erb Signe covqo Benefits by:
Sus n AI nis,Assistant City Manager S17 =,zar, Chief Compliance Officer/EVP
1000 Throckmorton Street, Fort Worth,TX 76102 4nue S, Fargo, ND 58103
M&C: C-27335
Date:June 16, 2015
Form 1295 Certification No.
APPROVED AS TO FOMW AND LEGALITY:
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Health Savings Account Services Agreement
Exhibit A
HSA Service Fees
("Service Fees")
Payment shall be due thirty(30)days following the Employer's receipt of the statement of Service Fees. Interest may be charged on
the amount of all past due fees in accordance with the Prompt Payment Act, Section 2252.025 of the Texas Government Code. DBI
will have the right to adjust its Service Fees upon thirty(30)days advance written notice to Employer.
DBI may charge Employer reasonable fees for the reproduction or return of records or reports requested by Employer or governmental
agencies if the governmental agency has made the request on behalf of the Employer or for reasonable fees charged by other parties
for information reasonably required by DBI to perform its duties under this Agreement.
Notwithstanding the foregoing, and with thirty(30)days advance written notice to.Employer, DBI reserves the right to increase fees at
any time that are caused by Federal postal rate increases, increases in bank fees, or that are due to Federal legislative changes. DBI
reserves the right to increase fees due to the provision of additional services to the Employer by DBI that were not included in or
contemplated by this Agreement on the Effective Date.
HSA Administrative Fees
Monthly Administrative Fee $1.95 per HSA Participant
• Includes Benefits Debit Card
• Spouse, dependent and replacement cards
available at no fee
Enrollment Meetings (optional) $350 per day plus travel expense. WebEx
meetings included at no additional fee.
Postage and Printing Included for standard mailings and materials
(Additional charges will apply for non-standard mailings
and/or expedited requests)
Direct Deposit Included
Custodial Management Fee (applies to mutual fund 25 basis points
investments only)
(The Custodial Management Fee is calculated quarterly
and offset by the 12b1 and STA fund credits annually. If at
the end of the year the 12b1 and STA fund credits exceed
the participant fee the remaining credits will be allocated
to the participant.)
Minimum Monthly Fee $20.00
(Applies only if the monthly administrative fee times the
number of participants is less than this amount.)
DBI does not charge implementation, set-up or renewal fees. Fees are quoted net of commissions.
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Health Savings Account Services Agreement
Exhibit B
Summary of Features
Interest Bearing
Feature Cash Account Investment Account
Account
Minimum deposit to open HSA No Minimum No Minimum No Minimum
account
Minimum is$1,000.00.
Minimum Threshold Accountholder may set a No minimum threshold. No minimum threshold.
higher threshold if desired.
Funds will automatically
Amounts over threshold will Amounts over threshold will sweep back to the cash
automatically sweep into the automatically sweep into the account if the balance is
Automated Sweep interest bearing account interest bearing account insufficient in the interest
starting at$100 above the starting at$100 above the bearing account to cover the
threshold. threshold. minimum threshold or to cover
requested withdrawals.
Interest Rate Variable Rate Variable Money Market Rate Based on Mutual Fund
Selected
Interest Payable Accrued Daily, Paid Monthly Accrued Daily, Paid Monthly Based on Mutual Fund
Selected
Brokerage Fees None None Yes
Transaction Fees None None None
On-Line Enrollment Yes Yes Yes
On-line Account Access Yes Yes Yes
On-line Mutual Fund Purchases Yes Yes Yes
and Redemptions
Daily Mutual Fund Trade Not Applicable Not Applicable Yes
Processing
On-line Distribution Requests Yes Yes Yes
Quarterly Emailed Account Yes Yes Yes
Summary
Daily Processing of Distribution Yes Yes Yes
Requests
Debit Card Yes No No
HSA to HSA Transfer Yes Yes Yes
HSA Fund Rollover Yes Yes Yes
One Time IRA to HSA Transfer Yes Yes Yes
Mistaken/Excess Contribution or Yes Yes Yes
Distribution
Ad Hoc Contributions-outside Yes Yes Yes
employee payroll deductions
Employer Contributions(lump sum Yes Yes Yes
or per pay period)
Account Closure Fee No No I No
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CERTIFICATE OF INTERESTED PARTIES
FORM 1295
1 of 1
Complete Nos.1-4 and 6 if there are interested parties. OFFICE USE ONLY
Complete Nos.1,2,3,5,and 6 if there are no interested parties. CERTIFICATION OF FILING
1 Name of business entity filing form,and the city,state and country of the business entity's place Certificate Number:
of business. 12016-4506
Discovery Benefits, Inc.
Farg, ND United States Date Filed:
2 Name of governmental entity or state agency that is a party to the contract for which the form is 01/21/2016
being filed.
City of Fort Worth Date Acknowledged:
3 Provide the identification number used by the governmental entity or state agency to track or identify the contract,and provide a
description of the goods or services to be provided under the contract.
47050
Flexible Spending Account, Health Savings Account and COBRA Administrative Services
4 Nature of interest(check applicable)
Name of Interested Party City,State,Country(place of business)
Controlling Intermediary
Noridian Mutual Insurance Company Fargo, ND United States X
5 Check only if there is NO Interested Party. ❑
6 AFFIDAVIT I swear,or affirm,under penalty of perjury,that the above disclosure is true and correct.
KIRSTEN STIENING
Notary Public
State of North Dakota
My Commission Expires.April 25,2020 S' e of authorized agent of contracting business entity
AFFIX NOTARY STAMP/SEAL ABOVE
Sworn to and subscribed before me, by the said 2 ,,17e /" this the a/JIL day of G--1L(�
20J (o ,to certify which,witness my hand and seal of office.
Signature of officer administ ring oath Printed name of officer administeringJath T' e of officer administering c&h
Forms provided by Texas Ethics Commission www.ethics.state.tx.us Version V1.0.34416
M&C Review Page 1 of 2
official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FoR� H
COUNCIL ACTION: Approved on 6/16/2015
DATE: 6/16/2015 REFERENCE **C-27335 LOG NAME: 14FSAHSACOBRA16
NO..
CODE: C TYPE: CONSENT PUBLIC NO
HEARING:
SUBJECT: Authorize Execution of a Three-Year Contract with Discovery Benefits, Inc., for
Administration of the City's Flexible Benefit Plan, Health Savings Account and COBRA in
the Amount of Up to $294,714.00 (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
It is recommended that the City Council authorize the execution of a three-year contract with Discovery
Benefits, Inc., for administration of the City's Flexible Benefit Plan, Health Savings Account and COBRA in
the amount of up to $294,714.00.
DISCUSSION:
The purpose of this Mayor and Council Communication is to seek authorization from the City Council to
enter into a contract with Discovery Benefits, Inc. (Discovery Benefits), for administration of the City's
Flexible Benefit Plan, Health Savings Account and COBRA. The total cost of the three-year contract will
not exceed the amount of$294,714.00. The rates for the two one-year renewal options are guaranteed and
the annual cost will be dependent upon employee enrollment.
Staff determined it would be in the City's best interest to ensure that it was getting the best overall product
and price by going out to the market and giving all providers the opportunity to compete for the City's
business. On February 17, 2015, a Request for Proposal (RFP) was issued requiring interested vendors to
submit proposals by April 2, 2015. The RFP was designed to solicit proposals for the following services
individually or in combination with each other: (1) Third Party Administrator (TPA) for the City's self-funded
Medical and Disease Management Program; (2) Pharmacy Benefit Management (PBM); (3) Flexible
Spending Account (FSA), Health Saving Accounts (HSA) and COBRA administration; (4) Employee
Assistance Program, and (5) Medicare Advantage.
In April 2015, an Ad Hoc Selection Committee (Committee) was formed that included one retiree, five active
employees- one from the Water Department, two from the Health Benefits Advisory Committee (HBAC)
and two from the Human Resources Department. The Committee was active in the analysis of the
proposals. Human Resources staff and the City's benefits consultant, A.J. Gallagher Benefits Services,
facilitated the RFP review and Committee meetings. Thirty-four vendors were solicited from the Purchasing
Division database system; five vendors responded representing five proposals.
After a lengthy review process, the Committee by consensus agreed that Discovery Benefits provided the
best overall quality of service and pricing. Discovery Benefits also introduced a new service provided in
their COBRA product that can aid in reducing the City's future COBRA enrollment and future claims cost
attributed to COBRA participants. Discovery Benefits affords the stability of the administration of the
flexible benefit plans, savings accounts and COBRA. The associated cost and fees are as follows:
A. Flexible Benefit Plan
$3.85 per participant per month - administration for the three Flexible Benefit Plans that will provide
reimbursements to active employees for allowable medical, dental and vision benefits, dependent care, and
adoption assistance. Average number of participants is 1,473.
Total Estimated Contract Cost- $204,159.00; average annual cost- $68,053.00
B. Health Saving Account
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=21204&councildate=6/16/2015 2/1/2016
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$1.95 per participant per month -administration for the health (medical, dental, vision) benefits payments
for the active employees and non-Medicare retirees enrolled in the City's Consumer Health Choice
Plan. Average number of participants is 765.
Total Estimated Contract Cost-$53,703.00; average annual cost- $17,901.00
C. COBRA Administration
$31.02 per qualifying event plus new hire notification and managing COBRA continuants billing and
payments. Average number of qualifying events is 396.
Total Estimated Contract Cost is-$36,852.00; average annual cost- $12,284.00
Open enrollment for the 2016 Benefit Plans is scheduled to begin October 8, 2015. The Calendar Year
average cost for the contract is$98,238.00. The proposed Fiscal Year 2016 budget includes funds for this
contract through September 2016. An appropriation request for the remainder of Calendar Year 2016 will
be included as part of the Fiscal Year 2017 budget process. Authority for the remaining fiscal years that are
encompassed by the Agreement will be requested annually as part of the overall budget process and the
contract will include a standard fiscal funding out clause that would comply with state law requirements by
allowing the City to terminate the Agreement without penalty, if in the future, the Council elects not to
appropriate funds for the Flexible Benefit Plans, Health Savings Accounts and COBRA Administration to
continue.
AGREEMENT TERMS - Upon City Council approval, the initial three-year term of this contract shall begin
on January 1, 2016 and expire on December 31, 2018. The contract may be renewed for up to two
successive one-year terms at the City's option. This action does not require specific City Council approval,
provided that the City has appropriated sufficient funds to satisfy the City's obligations during the renewal
term.
M/WBE OFFICE -A waiver of the goal for MBE/SBE subcontracting requirements was requested by the
Department and approved by the M/WBE Office, in accordance with the BDE Ordinance, because the
purchase of goods or services from source(s) where subcontracting or supplier opportunities are negligible.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that funds will be included in the City Manager's
proposed budget for Fiscal Years 2015 -2016 for the Group Health and Life Insurance Fund. Upon
approval of the above recommendations and upon the adoption of the Fiscal Year 2015 -2016 Budget by
the City Council to include the above recommendations, funds will be available in the Fiscal Year 2016
operating budget, as appropriated. Prior to expenditure being made, the Human Resources Department
has the responsibility to validate the availability of funds.
TO Fund/Account/Centers FROM Fund/Account/Centers
60109 5310101 0148540 $468.00
60109 5310101 0148520 $97,770.00
Submitted for City Manager's Office by: Susan Alanis (8180)
Originating Department Head: Brian Dickerson (7783)
Additional Information Contact: Margaret Wise (8058)
ATTACHMENTS
http://apps.cfwnet.org/council_packet/mc review.asp?ID=21204&councildate=6/16/2015 2/1/2016