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HomeMy WebLinkAboutContract 1817 PO Box 9310 Minneapolis, MN 55440-9310 952-992-2900 February 07,2005 Linda Magee 590 40th Ave NE Columbia Heights, MN 55421 S //0 Dear Ms. Magee: df 1 ~ Thank you for choosing Medica! The enclosed medical Mast r Group Co racts (MGCs) bind Medica and City of Columbia Heights, group nu bers 899 ~ to 89947, for the contract period commencing on January 1, 2 5, and xpiring on December 31,2005. The following steps should occ to e sure appropriate execution and continued performance under th M Cs. . Ensure the MGCs are signed n dated by an officer of the company or a Person authorized to execute t terms of the MGCs. . Include the contract signer's titl under the signature . Return one signed copy of each GC to me within 30 days . Retain the other documents for ur files The MGCs will be deemed to have b en accepted by City of Columbia Heights upon the earlier of Medica's receipt of your first premium payment for this contract period or City of Columbia Heights' execution of the MGCs. Please note that Medica will not accept unilateral changes to the MGCs when they are returned to Medica. Thank you for your prompt attention to this matter. If you have any questions, please contact me at (952) 992-2455. I appreciate your business and look forward to meeting the health care needs of City of Columbia Heights employees in the upcoming contract year. Sincerely, 9J~ Janet Litwin Account Service Representative Enclosures Cc: Gayle McCann COR 1709-50204 Medica' refers to the family of health plan businesses that includes Medica Holding Company, *Medica Health Plans, Medica Health Plans of Wisconsin, *Medica Insurance Company, *Medica Self-Insured, Medica Foundation, and Medica Affiliated Services. *Accredited by the National Committee for Quality Assurance. An Equal Opportunity Employer Medica Choice Select PLAN MASTER GROUP CONTRACT Employer Name: Employer Group#: Effective Date: Contract#: Amendments: CITY OF COLUMBIA HEIGHTS 89944 January 01, 2005 MCS7, BPL Number: 56741 Amendments attached as applicable for benefit package log (BPL) as listed above. ARTICLE 1 INTRODUCTION This Master Group Contract ("Contract") is entered into by and between Medica, together with its affiliate Medica Insurance Company ("MIC"), and the employer group named above ("Employer"), an employer under Minnesota law and other applicable law. This Contract includes the Eligibility Appendix, the Enrollment Appendix, the Certificate of Coverage ("Certificate") and any Amendments. This Contract is delivered in the State of Minnesota. If this Contract is purchased by Employer to provide benefits under an employee welfare benefit plan governed by the Employee Retirement Income Security Act, 29 U.S.C. 1001, et seq. ('ERISA"), this Contract is governed by ERISA and, to the extent state law applies, the laws of the State of Minnesota. If this Contract is not governed by ERISA, it is governed by the laws of the State of Minnesota. In consideration of payment of the Premiums by the Employer and payment of Copayments and Coinsurance by or for Members, Medica will provide coverage for the Benefits set forth in the Certificate and any amendments, subject to all terms and conditions, including limitations and exclusions, in this Contract. This Contract replaces and supersedes any previous agreements between Employer and Medica relating to Benefits. Medica shall not be deemed or construed to be an employer for any purpose with respect to the administration or provision of benefits under Employer's welfare benefit plan. Medica shall not be responsible for fulfilling any duties or obligations of Employer with respect to Employer's benefit plan. The terms used in this Contract have the same meanings given those terms defined in the Certificate, unless otherwise specifically defined in this Contract. Page 1 ARTICLE 2 TERM OF CONTRACT Section 2.1 Term and Renewal. This Contract is effective from January 01,2005 ("Effective Date") to December 31, 2005 ("Expiration Date"). All coverage under this Contract begins at 12:01 a.m. Central Time. At least 30 days before each Expiration Date, Medica shall notify Employer of any modifications to this Contract, including Premiums and Benefits for the next term of this Contract ("Renewal Terms"). If Employer accepts the Renewal Terms or if Employer and Medica agree on different Renewal Terms, this Contract is renewed for the additional term, unless Medica terminates this Contract pursuant to Section 2.2. Section 2.2 Termination of this Contract. Employer may terminate this Contract after at least 30 days written notice to Medica. This Contract is guaranteed renewable and will not be terminated by Medica except for the reasons and effective as stated below. Terminations for the reasons stated below require at least 30 days written notice from Medica: (a) Upon notice to an authorized representative of the Employer when Employer does not pay the required Premium when due, provided, however, that this Contract can be reinstated pursuant to Section 4.2; (b) On the date specified by Medica because Employer provided Medica with false information material to the execution of this Contract or to the provision of Benefits under this Contract. Medica has the right to rescind this Contract back to the effective date; (c) On the date specified by Medica due to Employer's violation of the participation or contribution rules as determined by Medica; (d) Automatically on the date Employer ceases to do business pursuant to 11 U.S.C. Chapter 7; (e) On the date specified by Medica, after at least 90 days prior written notice to Employer, that this Contract is terminated because Medica will no longer issue this particular type of group health benefit plan within the applicable employer market; (f) On the date specified by Medica, after at least 180 days prior written notice to the applicable state authority and Employer, that this Contract will be terminated because Medica will no longer renew or issue any employer health benefit plan within the applicable employer market; (g) On the date specified by Medica when there is no longer any Member who resides or works in Medica's approved service area; (h) If this Contract is made available to Employer only through one or more bona fide associations, on the date specified by Medica after Employer's membership in the association ceases. Page 2 (i) Any other reasons or grounds permitted by the licensing laws and regulations governing Medica. Notwithstanding the above, Medica may modify the Premium rate and/or the coverage at renewal. Nonrenewal of coverage as a result of failure of Medica and the Employer to reach agreement with respect to modifications in the Premium rate or coverage shall not be considered a failure of Medica to provide coverage on a guaranteed renewal basis. Section 2.3 Notice of Termination. Medica will notify: (a) Employer in writing if Medica terminates this Contract for any reason; (b) Subscribers in writing if Medica terminates this Contract pursuant to Section 2.2 (a), (d), (e) or (t). Employer will provide timely written notification to Subscribers in all circumstances for which Medica does not provide written notification to Subscribers. Section 2.4 Effect of Termination. In the event of termination of this Contract: (a) All Benefits under this Contract will end at 12:00 midnight Central Time on the effective date of termination. (b) Medica will not be responsible for any Claims for health services received by Members after the effective date of the termination; and (c) Employer shall be and shall remain liable to Medica for the payment of any and all Premiums that are unpaid at the time of termination. Page 3 ARTICLE 3 ENROLLMENT AND ELIGIBILITY Section 3.1 Eligibility. The Eligibility Appendix to this Contract governs who is eligible to enroll under this Contract. The eligibility conditions stated in the Eligibility Appendix are in addition to those specified in the Certificate. Section 3.2 Enrollment. The Enrollment Appendix to this Contract governs when eligible employees and eligible dependents may enroll for Benefits under this Contract, including the Initial Enrollment Period, Open Enrollment Period and any applicable Special Enrollment Periods. Employer shall conduct the Initial Enrollment Period and Open Enrollment Period. Employer shall cooperate with Medica in the event of a Special Enrollment Period. Section 3.3. Qualified Medical Child Support Orders. Employer will establish, maintain and enforce all written procedures for determining whether a child support order is a qualified medical child support order as defined by ERISA. Employer will provide Medica with notice of such determination and a copy of the order, along with an application for coverage, within the greater of 30 days after issuance of the order or the time in which Employer provides notice of its determination to the persons specified in the order. When and if Employer receives notice that the child has designated a representative, or of the existence of a legal guardian or custodial parent of the child, Employer shall promptly notify Medica of such person(s). Medica shall have no responsibility for: (i) establishing, maintaining or enforcing the procedures described above; (ii) determining whether a support order is qualified; or (iii) providing required notices to the child or the designated representative. Section 3.4. Eligibility and Enrollment Decisions. Subject to applicable law and the terms of this Contract, Employer has sole discretion to determine whether employees and their dependents are eligible to enroll for Benefits. Medica shall rely upon Employer's determination regarding an employee's and/or dependent's eligibility to enroll for Benefits. The Employer will be responsible for maintaining information verifying its continuing eligibility and the continuing eligibility of its eligible Subscribers and eligible Dependents. This information shall be provided to Medica as reasonably requested by Medica. The Employer shall also maintain written documentation of a waiver of coverage by an eligible Subscriber or eligible Dependent and provide this documentation to Medica upon reasonable request. Page 4 ARTICLE 4 PREMIUMS Section 4.1 Monthly Premiums. The monthly Premiums for this Contract are: Monthly Premium Rate Monthly Employer Contribution Monthly Enrollee Contribution Class 1 $440.65 (Employee Only) Class 4 $1,011.98 (Family) Employer shall contribute a minimum of 50% towards the single monthly premium rate. The Premiums are due on the first day of each calendar month. Employer shall pay the Premiums to Medica at the billing address stated in the Acceptance of Contract. Employer shall notify Medica in writing: (a) each month of any changes in the coverage classification of any Subscriber; and (b) within 30 days after the effective date of enrollments, terminations or other changes regarding Members. Section 4.2 Grace Period and Reinstatement. Employer has a grace period of 10 days after the due date stated in Section 4.1 to pay the monthly Premiums. If Employer fails to pay Premium, the Contract will be terminated in accordance with Section 2.2(a). This Contract will be reinstated if Employer pays all of the Premiums owed on or before the end of the grace period. In this event the Contract is not reinstated pursuant to this Section, Medica will not be responsible for any Claims for health services received by Members after the effective date of the termination. Section 4.3 Premium Calculation. The monthly Premiums owed by Employer shall be calculated by Medica using the number of Subscribers in each coverage classification according to Medica's records at the time of the calculation. Employer may make adjustments to its payment of Premiums for any additions or terminations of Members submitted by Employer but not yet reflected in Medica's calculations. A full calendar month's Premiums shall be charged for Members whose effective date falls on or before the 15th day of that calendar month. No Premium shall be charged for Members Page 5 whose effective date falls after the 15th of that calendar month. With the exception of termination of coverage due to a Member's death, a Member's Benefits may be terminated only at the end of a calendar month and a full Premium rate for that month will apply. In the case of a Member's death, that Member's Benefits will be terminated on the date of the death. Section 4.4 Retroactive Adjustments. In accordance with applicable law, retroactive adjustments may be made for any additions, or terminations of Members or changes in coverage classifications not reflected in Medica's records at the time the monthly Premiums were calculated by Medica. However, no retroactive credit will be granted for any month in which a Member received Benefits. No retroactive adjustments to enrollment or Premium refund shall be granted for any change occurring more than 60 days prior to the date Medica received notification of the change from Employer. Regardless of the preceding, Employer shall pay a Premium for any month during which a Member received Benefits. Section 4.5 Premium Changes. Medica may change the Premiums after 30 days prior written notice to Employer on: (a) the first anniversary of the effective date of this Contract; (b) any monthly due date after the first anniversary of this Contract; or (c) any date the provisions of this Contract are amended. Section 4.6 Employer Fees. Medica may charge Employer: (a) a late payment charge in the form of a finance charge of 12% per annum for any Premiums not received by the due date; and (b) a service charge for any non-suffIcient-fund check received in payment of the Premiums. ARTICLE 5 INDEMNIFICATION Medica will hold harmless and indemnify Employer against any and all claims, liabilities, damages or judgments asserted against, imposed upon or incurred by Employer, including reasonable attorney fees and costs, that arise out of Medica's grossly negligent acts or omissions in the discharge of its responsibilities to a Member. Employer will hold harmless and indemnify Medica against any and all claims, liabilities, damages or judgments asserted against, imposed upon or incurred by Medica, including reasonable attorney fees and costs, that arise out of Employer's or Employer's employees', agents', and representatives' grossly negligent acts or omissions in the discharge of its or their responsibilities under this Contract. Employer and Medica shall promptly notify the other of any potential or actual claim for which the other party may be responsible under this Article 5. Page 6 ARTICLE 6 ADMINISTRATIVE SERVICES The services necessary to administer this Contract and the Benefits provided under it will be provided in accordance with Medica's or its designee's standard administrative procedures. If Employer requests such administrative services be provided in a manner other than in accordance with these standard procedures, including requests for non-standard reports, and if Medica agrees to provide such non-standard administrative services, Employer shall pay for such services or reports at Medica's or its designee's then-current charges for such services or reports. ARTICLE 7 CLERICAL ERROR A Member will not be deprived of coverage under the Contract because of a clerical error. Furthermore, a Member will not be eligible for coverage beyond the scheduled termination date because of a failure to record the termination. ARTICLE 8 ERISA When this Contract is entered into by Employer to provide benefits under an employee welfare benefit plan governed by ERISA, Medica shall not be named as and shall not be the plan administrator or the named fiduciary of the employee welfare benefit plan, as those terms are used in ERISA. The parties agree that Medica has sole, final, and exclusive discretion to: (a) interpret and construe the Benefits under the Contract; (b) interpret and construe the other terms, conditions, limitations and exclusions set out in the Contract; (c) change, interpret, modify, withdraw or add Benefits without approval by Members; and (d) make factual determinations related to the Contract and the Benefits. For purposes of overall cost savings or efficiency, Medica may, in its sole discretion, provide services that would otherwise not be Benefits. The fact that Medica does so in any particular case shall not in any way be deemed to require it to do so in other similar cases. Medica may, from time to time, delegate discretionary authority to other persons or entities providing services under this Contract. ARTICLE 9 DATA OWNERSHIP AND USE Information and data acquired, developed, generated, or maintained by Medica in the course of performing under this Contract shall be Medica's sole property. Except as this Contract or applicable law requires otherwise, Medica shall have no obligation to release such information or data to Employer. Medica may, in its sole discretion, release such information or data to Employer, but only to the extent permitted by law and subject to any restrictions determined by Medica. Page 7 ARTICLE 10 CONTINUATION OF COVERAGE Medica shall provide Benefits under this Contract to those Members who are eligible to continue coverage under federal or state law. Medica will not provide any administrative duties with respect to Employer's compliance with federal or state continuation of coverage laws. All duties of the Employer, including, but not limited to, notifying Members regarding federal and state law continuation rights and Premium billing and collection, remain Employer's sole responsibility. ARTICLE 11 CERTIFICATION OF QUALIFYING COVERAGE FORMS As required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Medica will produce Certification of Qualifying Coverage forms for Members whose coverage under this Contract terminates. The Certification of Qualifying Coverage forms will be based on the eligibility and termination data Employer provides to Medica. Employer shall provide all necessary eligibility and termination data to Medica in accordance with Medica's data specifications. The Certification of Qualifying Coverage forms will only include periods of coverage Medica administers under this Contract. ARTICLE 12 AMENDMENTS AND ALTERATIONS Section 12.1 Standard Amendments: Except as provided in Section 12.2, amendments to this Contract are effective 30 days after Medica sends Employer a written amendment. Unless regulatory authorities direct otherwise, Employer's signature will not be required. No Medica agent or broker has authority to change this Contract or to waive any of its provisions. Section 12.2 Regulatory Amendment: Medica may amend this Contract to comply with requirements of state and federal law ("Regulatory Amendment") and shall issue to Employer such Regulatory Amendment and give Employer notice of its effective date. The Regulatory Amendment will not require Employer's consent and, unless regulatory authorities direct otherwise, Employer's signature will not be required. Any provision of this Contract that conflicts with the terms of applicable federal or state laws is deemed amended to conform to the minimum requirements of such laws. ARTICLE 13 ASSIGNMENT Neither party shall have the right to assign any of its rights and responsibilities under the Contract to any person, corporation or entity without the prior written consent of the other party; provided, however, that Medica may, without the prior written consent of the Employer, assign the Contract to any entity that controls Medica, is controlled by Medica, or is under common control with Medica. In the event of assignment, the Contract shall be binding upon the inure to the benefit of each party's successors and assigns. Page 8 ARTICLE 14 DISPUTE RESOLUTION Medica and Employer will work together in good faith to resolve any disputes under this Contract. If they are unable to resolve the disputes within 30 days following the date one party sent written notice of the dispute to the other party, and if either party wishes to pursue the dispute, it shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association ("AAA"). In no event may arbitration be initiated more than one year following the sending of written notice of the dispute. The arbitrators shall apply Minnesota substantive law to the proceeding, except to the extent federal substantive law, including ERISA, would apply to any claim. Any arbitration proceeding under this Agreement shall be conducted in Hennepin County, Minnesota. An award may be entered against a party who fails to appear at a duly noticed hearing. The arbitrators: (i) may construe or interpret, but shall not vary or ignore, the terms of this Agreement; (ii) shall have no authority to award any punitive or exemplary damages; and (iii) shall be bound by controlling law. A party may appeal an arbitration decision to a court of law only in accordance with applicable state arbitration laws or for de novo review of alleged errors of law or legal reasoning. The cost of arbitration shall be paid equally by the parties. In the event a third party initiates litigation involving Medica or Employer, and the party under this Contract who is involved in such third party litigation desires to bring a claim against the other party under this Agreement for indemnity or contribution, the indemnity or contribution claim may be brought in the same venue as the third party litigation, and shall not be subject to the terms of this Article 14. ARTICLE 15 TIME LIMIT ON CERTAIN DEFENSES No statement made by Employer, except a fraudulent statement, shall be used to void this Contract after it has been in force for a period of 2 years. Page 9 ARTICLE 16 RELATIONSHIP BETWEEN PARTIES The relationship between Employer and any Member is that of Employer and Subscriber, Dependent or other coverage classification as defined in this Contract. The relationship between Medica and Network Providers and the relationship between Medica and Employer are solely contractual relationships between independent contractors. Network Providers and Employer are not agents or employees of Medica. Medica and its employees are not agents or employees of Network Providers or Employer. The relationship between a Network Provider and any Member is that of provider and patient and Network Provider is solely responsible for the services provided to any Member. ARTICLE 17 EMPLOYER RECORDS Employer shall furnish Medica with all information and proofs that Medica may reasonably require with regard to any matters pertaining to this Contract. Employer will be responsible for obtaining any necessary consent from Members which allows Medica to receive a Member's protected health information (as defined in the federal privacy regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA)). Medica may at any reasonable time inspect all documents furnished to Employer by an individual in connection with the Benefits, Employer's payroll records, and any other records pertinent to the Benefits under this Contract. ARTICLE 18 MEMBER RECORDS By accepting Benefits under this Contract, each Member, including Dependents, whether or not such Dependents have signed the Subscriber's application, authorizes and directs any person or institution that has provided services to the Member to furnish Medica or any of Medica's designees at any reasonable time, upon its request, any and all information and records or copies of records relating to the Benefits provided to the Member. In accordance with applicable law, Medica and any of Medica's designees shall have the right to release any and all records concerning health care services: (i) as necessary to implement and administer the terms of this Contract; or (ii) for appropriate medical review or quality assessment. Such Member information and records shall be considered confidential medical records by Medica and it designees. ARTICLE 19 NOTICE Except as provided in Article 2, notice given by Medica to an authorized representative of Employer will be deemed notice to all Members. All notices to Medica shall be sent to the address stated in the Acceptance of Contract. All notices to Employer shall be sent to the persons and addresses stated in Employer's Application. All notices to Medica and Employer shall be deemed delivered: (a) if delivered in person, on the date delivered in person; (b) if delivered by a courier, on the date stated by the courier; (c) if delivered by an express mail service, on the date stated by the mail service vendor; or Page 10 (d) if delivered by United States mail, 3 business days after date of mailing. A party can change its address for receiving notices by providing the other party a written notice of the change. ARTICLE 20 COMMON LAW No language contained in the Contract constitutes a waiver of Medica's rights under common law. ACCEPTANCE OF CONTRACT This contract is deemed accepted by Employer upon the earlier of Medica's receipt of Employer's first payment of the Premium or upon Employer's execution of this Contract by its duly authorized representative. This Contract is deemed accepted by Medica upon Medica's deposit of Employer's first payment of the Premium. Such acceptance renders all terms and provisions herein binding on Medica and the Employer. IN WITNESS WHEREOF, MIC has caused this Contract to be executed on this February 7, 2005 to take effect on the Effective Date stated in the Contract. MEDICA EMPLOYER: 401 Carlson Parkway Minnetonka, Minnesota 55305 (952)992-2200 CITY OF COLUMBIA HEIGHTS Address: Billing Address: MN015-2838 P.O. Box 169063 Duluth, MN 55816 590 40th Ave. NE Columbia Height, MN 55421 Mailing Address: P.O. Box 9310 Minneapolis, MN 55440 Telephone: (763) 706-3609 ~~~t~~ ~~ --~.;<;"~~ Title: C <I+Y /11 a hVt1el'" 'd-I )Lflo5 Group Contact: Linda Magee Date: By: Tom L. Henke Title: Vice President, Commercial Sales and Account Services Page 11 ELIGIBILITY APPENDIX Employer Name: CITY OF COLUMBIA HEIGHTS Employer Group#: 89944 Section 1 Eligibility to Enroll. A Subscriber, and his or her Dependents, as defined below, who satisfies the eligibility conditions stated in this Contract are eligible to enroll for coverage under this Contract. Any person who does not satisfy the definition of Subscriber or Dependent is not eligible for coverage under this Contract. A Subscriber and his or her Dependents must meet the eligibility requirements described below and in the entire Contract. In no event may the number of Members residing outside the Service Area exceed 10 percent of the total number of Members. If there is a conflict between the Certificate and this Eligibility Appendix, this Eligibility Appendix governs. Section 2 Subscriber Definition. The term "Subscriber" as used in the Contract will include the types of employees and conditions identified below: Classifications Applicable Waiting Periods and Effective Dates 1 . See comments New Hires: Date of Hire Return: Date of Return Status Change: Date of Change A Subscriber who is a child entitled to receive coverage through a qualified medical child support order is not subject to any waiting periods, except to the extent that such waiting periods apply to the employee who is ordered by the qualified medical support order to provide coverage. Section 3 Dependent Definition. The term "Dependent" as used in this Contract includes the following: 1. The Subscriber's spouse 2. The following Dependent children: (a) Subscriber's unmarried natural or adopted child; (b) an unmarried child Placed For Adoption with the Subscriber; (c) a child for whom the Subscriber or the Subscriber's spouse has been appointed legal guardian, however, upon request by Medica, the Subscriber must provide satisfactory proof of dependency; Page 12 (d) Subscriber's or Subscriber's spouse's unmarried grandchild who, from the date of birth resides with and is dependent upon the Subscriber or Subscriber's spouse for support and (e) Subscriber's stepchild. A Dependent child must be under 19 years of age if s/he is not a student and must be under 25 years of age if s/he is a student. A Dependent child is eligible as a student if s/he is enrolled full- time in a recognized high school, college, university, trade or vocational school. If the student is unable to a carry a full-time course load due to illness, injury, or a physical or mental disability, as documented by a Physician, full-time student status will be granted if the student carries at least 60% of a full-time course load, as determined by the educational institution. 3. The Subscriber's handicapped Dependent. The handicapped Dependent must be: (a) incapable of self-sustaining employment by reason of mental retardation, mental illness, mental disorder or physical handicap; and (b) chiefly dependent upon the Subscriber for support and maintenance. The handicapped Dependent shall be eligible for coverage as long as he or she continues to be handicapped and satisfies the requirements of (a) and (b) above, unless coverage otherwise terminates under this Contract. Medica may require annual proof of handicap and dependency. An illness will not be considered a physical handicap. A child who is the subject of a qualified medical child support order is not a Dependent as defined above and may not enroll Dependents for coverage. See Section 2. Any person who does not satisfy the terms listed above will not be eligible for coverage under the Contract. Page 13 ENROLLMENT APPENDIX Employer Name: Employer Group#: CITY OF COLUMBIA HEIGHTS 89944 INITIAL ENROLLMENT "Initial Enrollment Period" is a 30 day time period starting with the date an eligible Subscriber and his or her eligible Dependents are first eligible to enroll for coverage under this Contract. An eligible Subscriber must apply within this period for coverage to begin the date he or she was first eligible to enroll. (The 30 day time period does not apply to newborn Dependents; see Special Enrollment, (item 4 ).) An eligible Subscriber who enrolls during the Initial Enrollment Period is accepted without application of health screening or affiliation periods. An eligible Subscriber and his/her Dependents who do not enroll during the Initial Enrollment Period may enroll for coverage during the next Open Enrollment, any applicable Special Enrollment Periods as described below. A Subscriber who is a child entitled to receive coverage through a qualified medical child support order is not subject to any Initial Enrollment Period restrictions, except as noted in the Eligibility Appendix. NOTIFICATION Subscribers must notify Employer within 30 days of the effective date of any change of address or name, addition or deletion of Dependents, or other facts identifying the Subscriber or the Subscriber's Dependents. The Employer must notify Medica within 30 days of the effective date of the Member's initial enrollment application, changes to the Member's name or address, or changes to enrollment, including if a Member is no longer eligible for coverage. OPEN ENROLLMENT "Open Enrollment" is a minimum 14 day period set by Employer and Medica each year during which eligible Subscribers and his or her Dependents may enroll for coverage without application of health screening or waiting periods. SPECIAL ENROLLMENT A. Special Enrollment Periods. The following "Special Enrollment Periods" are available in addition to the Initial Enrollment Period and Open Enrollment Period. A Special Enrollment period will apply to an eligible employee and Dependent if: (1) the eligible employee or Dependent: a. was covered under Qualifying Coverage at the time the eligible employee or Dependent was first eligible to enroll under the Contract, and b. declined coverage for that reason, and c. presents to Medica either (i) evidence of the loss of prior coverage due to loss of eligibility for that coverage, or (ii) evidence that employer contributions toward the prior coverage have terminated, and d. maintains Continuous Coverage, and Page 14 e. requests enrollment in writing within 30 days of the date of the loss of coverage or the date the employer's contribution toward that coverage terminates; For purposes of this item: a. prior coverage does not include continuation coverage required under federal law; b. loss of eligibility includes loss of eligibility as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment; c. loss of eligibility does not include a loss due to failure of the eligible employee or Dependent to pay Premiums on a timely basis or termination of coverage for cause; (2) the eligible employee or Dependent: a. was covered under benefits available under (i) the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), Public Law Number 99-272, as amended, or (ii) any state continuation laws applicable to the employer or Medica, and b. declined coverage for that reason, and c. the eligible employee or Dependent presents to Medica evidence that the eligible employee or Dependent has exhausted such COBRA or state continuation coverage and has not lost such coverage due to either failure of the eligible employee or Dependent to pay Premiums on a timely basis or for cause,and d. maintains Continuous Coverage, and e. requests enrollment in writing within 30 days of the loss of coverage; (3) the Dependent is a new spouse of the Subscriber or eligible employee, provided that the marriage is legal, enrollment is requested in writing within 30 days of the marriage, and the eligible employee also enrolls during this Special Enrollment Period; (4) the Dependent is a new Dependent child of the Subscriber or eligible employee, provided that enrollment is requested in writing within 30 days of the Subscriber or eligible employee acquiring the Dependent (the notification period is not limited to 30 days for newborn Dependents), and provided the eligible employee also enrolls during this Special Enrollment Period; (5) the Dependent is the spouse of the Subscriber or eligible employee through whom the Dependent child described in item #4 above claims Dependent status and; a. that spouse is eligible for coverage; and b. is not already enrolled under the Contract; and c. enrollment is requested in writing within 30 days of the Dependent child becoming a Dependent, provided the eligible employee also enrolls during this Special Enrollment Period. Page 15 (6) the Dependents are eligible Dependent children of the Subscriber or eligible employee and enrollment is requested in writing within 30 days of a Dependent, as described in items #3 or #4 above, becoming eligible to enroll under the coverage, provided the eligible employee also enrolls during this Special Enrollment Period. Additionally, when Employer provides Medica with notice of a qualified medical child support order and a copy of the order, Medica will provide such eligible dependent child with a Special Enrollment Period. Employer will provide Medica with such notice, along with an application for coverage, within the lesser of 30 days or the time in which Employer provides notice of its determination to the persons specified in the order. B. Effective Dates of Coverage. Coverage shall become effective: (1) in the case of paragraphs (A)( 1) or (2) above, the day after the date the other coverage ended; (2) in the case of paragraph (A)(3) above, the date of the marriage; (3) in the case of paragraph (A)(4) above, the date of birth, date of adoption, or date of placement for adoption. In all other cases, the date the Subscriber acquires the Dependent child. (4) in the case of paragraph (A)(5) above, the date the Subscriber acquires the Dependent Child; and (5) in the case of (A)(6) above, the first day of the first calendar month beginning after the date the completed request for enrollment is received by Medica. (6) in the case of the qualified medical child support order, the first day of the first calendar month beginning after the date the completed request for enrollment is received by Medica. Page 16 OFF-CYCLE ENROLLMENT - NO OFF-CYCLE ENROLLMENT FOR LATE ENTRANTS WITHOUT CONTINUOUS COVERAGE An eligible Subscriber or an eligible Subscriber and his or her Dependents who do not enroll for coverage offered through Employer during the Initial Enrollment Period, the Open Enrollment Period or any applicable Special Enrollment Period will be considered Late Entrants. (1) Late Entrants who have maintained Continuous Coverage may enroll and coverage will be effective the first day of the month following date of approval by Medica. Continuous Coverage will be determined to have been maintained if the Late Entrant requests enrollment within 63 days after prior Qualifying Coverage ends. (2) Late Entrants who have not maintained Continuous Coverage may not enroll off-cycle. An eligible Subscriber or Dependent who: (1) does not enroll during the Initial Enrollment Period, the Open Enrollment Period or any applicable Special Enrollment period; and (2) is an enrollee of the Minnesota Comprehensive Health Association ("MCHA") at the time Medica offers or renews coverage with Employer, provided the eligible Subscriber or Dependent maintains Continuous Coverage, will not be considered a Late Entrant and will be allowed to enroll. Coverage will be effective as determined by Medica. Page 17 Medica Elect PLAN MASTER GROUP CONTRACT Employer Name: Employer Group#: Effective Date: Contract#: Amendments: CITY OF COLUMBIA HEIGHTS 89945 January 01, 2005 ME7, BPL Number: 68547 Amendments attached as applicable for benefit package log (BPL) as listed above. ARTICLE 1 INTRODUCTION This Master Group Contract ("Contract") is entered into by and between Medica, together with its affiliate Medica Insurance Company ("MIC"), and the employer group named above ("Employer"), an employer under Minnesota law and other applicable law. This Contract includes the Eligibility Appendix, the Enrollment Appendix, the Certificate of Coverage ("Certificate") and any Amendments. This Contract is delivered in the State of Minnesota. If this Contract is purchased by Employer to provide benefits under an employee welfare benefit plan governed by the Employee Retirement Income Security Act, 29 U.S.C. 1001, et seq. ('ERISA"), this Contract is governed by ERISA and, to the extent state law applies, the laws of the State of Minnesota. If this Contract is not governed by ERISA, it is governed by the laws of the State of Minnesota. In consideration of payment of the Premiums by the Employer and payment of Co payments and Coinsurance by or for Members, Medica will provide coverage for the Benefits set forth in the Certificate and any amendments, subject to all terms and conditions, including limitations and exclusions, in this Contract. This Contract replaces and supersedes any previous agreements between Employer and Medica relating to Benefits. Medica shall not be deemed or construed to be an employer for any purpose with respect to the administration or provision of benefits under Employer's welfare benefit plan. Medica shall not be responsible for fulfilling any duties or obligations of Employer with respect to Employer's benefit plan. The terms used in this Contract have the same meanings given those terms defined in the Certificate, unless otherwise specifically defined in this Contract. Page 1 ARTICLE 2 TERM OF CONTRACT Section 2.1 Term and Renewal. This Contract is effective from January 01,2005 ("Effective Date") to December 31, 2005 ("Expiration Date"). All coverage under this Contract begins at 12:01 a.m. Central Time. At least 30 days before each Expiration Date, Medica shall notify Employer of any modifications to this Contract, including Premiums and Benefits for the next term of this Contract ("Renewal Terms"). If Employer accepts the Renewal Terms or if Employer and Medica agree on different Renewal Terms, this Contract is renewed for the additional term, unless Medica terminates this Contract pursuant to Section 2.2. Section 2.2 Termination of this Contract. Employer may terminate this Contract after at least 30 days written notice to Medica. This Contract is guaranteed renewable and will not be terminated by Medica except for the reasons and effective as stated below. Terminations for the reasons stated below require at least 30 days written notice from Medica: (a) Upon notice to an authorized representative of the Employer when Employer does not pay the required Premium when due, provided, however, that this Contract can be reinstated pursuant to Section 4.2; (b) On the date specified by Medica because Employer provided Medica with false information material to the execution of this Contract or to the provision of Benefits under this Contract. Medica has the right to rescind this Contract back to the effective date; (c) On the date specified by Medica due to Employer's violation of the participation or contribution rules as determined by Medica; (d) Automatically on the date Employer ceases to do business pursuant to 11 U.S.C. Chapter 7; (e) On the date specified by Medica, after at least 90 days prior written notice to Employer, that this Contract is terminated because Medica will no longer issue this particular type of group health benefit plan within the applicable employer market; (f) On the date specified by Medica, after at least 180 days prior written notice to the applicable state authority and Employer, that this Contract will be terminated because Medica will no longer renew or issue any employer health benefit plan within the applicable employer market; (g) On the date specified by Medica when there is no longer any Member who resides or works in Medica's approved service area; (h) If this Contract is made available to Employer only through one or more bona fide associations, on the date specified by Medica after Employer's membership in the association ceases. Page 2 (i) Any other reasons or grounds permitted by the licensing laws and regulations governing Medica. Notwithstanding the above, Medica may modify the Premium rate and/or the coverage at renewal. Nonrenewal of coverage as a result of failure of Medica and the Employer to reach agreement with respect to modifications in the Premium rate or coverage shall not be considered a failure of Medica to provide coverage on a guaranteed renewal basis. Section 2.3 Notice of Termination. Medica will notify: (a) Employer in writing if Medica terminates this Contract for any reason; (b) Subscribers in writing if Medica terminates this Contract pursuant to Section 2.2 (a), (d), (e) or (f). Employer will provide timely written notification to Subscribers in all circumstances for which Medica does not provide written notification to Subscribers. Section 2.4 Effect of Termination. In the event of termination of this Contract: (a) All Benefits under this Contract will end at 12:00 midnight Central Time on the effective date of termination. (b) Medica will not be responsible for any Claims for health services received by Members after the effective date of the termination; and (c) Employer shall be and shall remain liable to Medica for the payment of any and all Premiums that are unpaid at the time of termination. Page 3 ARTICLE 3 ENROLLMENT AND ELIGIBILITY Section 3.1 Eligibility. The Eligibility Appendix to this Contract governs who is eligible to enroll under this Contract. The eligibility conditions stated in the Eligibility Appendix are in addition to those specified in the Certificate. Section 3.2 Enrollment. The Enrollment Appendix to this Contract governs when eligible employees and eligible dependents may enroll for Benefits under this Contract, including the Initial Enrollment Period, Open Enrollment Period and any applicable Special Enrollment Periods. Employer shall conduct the Initial Enrollment Period and Open Enrollment Period. Employer shall cooperate with Medica in the event of a Special Enrollment Period. Section 3.3. Qualified Medical Child Support Orders. Employer will establish, maintain and enforce all written procedures for determining whether a child support order is a qualified medical child support order as defined by ERISA. Employer will provide Medica with notice of such determination and a copy of the order, along with an application for coverage, within the greater of 30 days after issuance of the order or the time in which Employer provides notice of its determination to the persons specified in the order. When and if Employer receives notice that the child has designated a representative, or of the existence of a legal guardian or custodial parent of the child, Employer shall promptly notify Medica of such person(s). Medica shall have no responsibility for: (i) establishing, maintaining or enforcing the procedures described above; (H) determining whether a support order is qualified; or (Hi) providing required notices to the child or the designated representative. Section 3.4. Eligibility and Enrollment Decisions. Subject to applicable law and the terms of this Contract, Employer has sole discretion to determine whether employees and their dependents are eligible to enroll for Benefits. Medica shall rely upon Employer's determination regarding an employee's and/or dependent's eligibility to enroll for Benefits. The Employer will be responsible for maintaining information verifying its continuing eligibility and the continuing eligibility of its eligible Subscribers and eligible Dependents. This information shall be provided to Medica as reasonably requested by Medica. The Employer shall also maintain written documentation of a waiver of coverage by an eligible Subscriber or eligible Dependent and provide this documentation to Medica upon reasonable request. Page 4 ARTICLE 4 PREMIUMS Section 4.1 Monthly Premiums. The monthly Premiums for this Contract are: Monthly Premium Rate Monthly Employer Contribution Monthly Enrollee Contribution Class 1 $396.60 (Employee Only) Class 4 $910.80 (Family) Employer shall contribute a minimum of 50% towards the single monthly premium rate. The Premiums are due on the first day of each calendar month. Employer shall pay the Premiums to Medica at the billing address stated in the Acceptance of Contract. Employer shall notify Medica in writing: (a) each month of any changes in the coverage classification of any Subscriber; and (b) within 30 days after the effective date of enrollments, terminations or other changes regarding Members. Section 4.2 Grace Period and Reinstatement. Employer has a grace period of 10 days after the due date stated in Section 4.1 to pay the monthly Premiums. If Employer fails to pay Premium, the Contract will be terminated in accordance with Section 2.2(a). This Contract will be reinstated if Employer pays all of the Premiums owed on or before the end of the grace period. In this event the Contract is not reinstated pursuant to this Section, Medica will not be responsible for any Claims for health services received by Members after the effective date of the termination. Section 4.3 Premium Calculation. The monthly Premiums owed by Employer shall be calculated by Medica using the number of Subscribers in each coverage classification according to Medica's records at the time of the calculation. Employer may make adjustments to its payment of Premiums for any additions or terminations of Members submitted by Employer but not yet reflected in Medica's calculations. A full calendar month's Premiums shall be charged for Members whose effective date falls on or before the 15th day of that calendar month. No Premium shall be charged for Members Page 5 whose effective date falls after the 15th of that calendar month. With the exception of termination of coverage due to a Member's death, a Member's Benefits may be terminated only at the end of a calendar month and a full Premium rate for that month will apply. In the case of a Member's death, that Member's Benefits will be terminated on the date of the death. Section 4.4 Retroactive Adjustments. In accordance with applicable law, retroactive adjustments may be made for any additions, or terminations of Members or changes in coverage classifications not reflected in Medica's records at the time the monthly Premiums were calculated by Medica. However, no retroactive credit will be granted for any month in which a Member received Benefits. No retroactive adjustments to enrollment or Premium refund shall be granted for any change occurring more than 60 days prior to the date Medica received notification of the change from Employer. Regardless of the preceding, Employer shall pay a Premium for any month during which a Member received Benefits. Section 4.5 Premium Changes. Medica may change the Premiums after 30 days prior written notice to Employer on: (a) the first anniversary of the effective date of this Contract; (b) any monthly due date after the first anniversary of this Contract; or (c) any date the provisions of this Contract are amended. Section 4.6 Employer Fees. Medica may charge Employer: (a) a late payment charge in the form of a finance charge of 12% per annum for any Premiums not received by the due date; and (b) a service charge for any non-sufFicient-fund check received in payment of the Premiums. ARTICLE 5 INDEMNIFICATION Medica will hold harmless and indemnify Employer against any and all claims, liabilities, damages or judgments asserted against, imposed upon or incurred by Employer, including reasonable attorney fees and costs, that arise out of Medica's grossly negligent acts or omissions in the discharge of its responsibilities to a Member. Employer will hold harmless and indemnify Medica against any and all claims, liabilities, damages or judgments asserted against, imposed upon or incurred by Medica, including reasonable attorney fees and costs, that arise out of Employer's or Employer's employees', agents', and representatives' grossly negligent acts or omissions in the discharge of its or their responsibilities under this Contract. Employer and Medica shall promptly notify the other of any potential or actual claim for which the other party may be responsible under this Article 5. Page 6 ARTICLE 6 ADMINISTRATIVE SERVICES The services necessary to administer this Contract and the Benefits provided under it will be provided in accordance with Medica's or its designee's standard administrative procedures. If Employer requests such administrative services be provided in a manner other than in accordance with these standard procedures, including requests for non-standard reports, and if Medica agrees to provide such non-standard administrative services, Employer shall pay for such services or reports at Medica's or its designee's then-current charges for such services or reports. ARTICLE 7 CLERICAL ERROR A Member will not be deprived of coverage under the Contract because of a clerical error. Furthermore, a Member will not be eligible for coverage beyond the scheduled termination date because of a failure to record the termination. ARTICLE 8 ERISA When this Contract is entered into by Employer to provide benefits under an employee welfare benefit plan governed by ERISA, Medica shall not be named as and shall not be the plan administrator or the named fiduciary of the employee welfare benefit plan, as those terms are used in ERISA. The parties agree that Medica has sole, final, and exclusive discretion to: (a) interpret and construe the Benefits under the Contract; (b) interpret and construe the other terms, conditions, limitations and exclusions set out in the Contract; (c) change, interpret, modify, withdraw or add Benefits without approval by Members; and (d) make factual determinations related to the Contract and the Benefits. For purposes of overall cost savings or efficiency, Medica may, in its sole discretion, provide services that would otherwise not be Benefits. The fact that Medica does so in any particular case shall not in any way be deemed to require it to do so in other similar cases. Medica may, from time to time, delegate discretionary authority to other persons or entities providing services under this Contract. ARTICLE 9 DATA OWNERSHIP AND USE Information and data acquired, developed, generated, or maintained by Medica in the course of performing under this Contract shall be Medica's sole property. Except as this Contract or applicable law requires otherwise, Medica shall have no obligation to release such information or data to Employer. Medica may, in its sole discretion, release such information or data to Employer, but only to the extent permitted by law and subject to any restrictions determined by Medica. Page 7 ARTICLE 10 CONTINUATION OF COVERAGE Medica shall provide Benefits under this Contract to those Members who are eligible to continue coverage under federal or state law. Medica will not provide any administrative duties with respect to Employer's compliance with federal or state continuation of coverage laws. All duties of the Employer, including, but not limited to, notifying Members regarding federal and state law continuation rights and Premium billing and collection, remain Employer's sole responsibility. ARTICLE 11 CERTIFICATION OF QUALIFYING COVERAGE FORMS As required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Medica will produce Certification of Qualifying Coverage forms for Members whose coverage under this Contract terminates. The Certification of Qualifying Coverage forms will be based on the eligibility and termination data Employer provides to Medica. Employer shall provide all necessary eligibility and termination data to Medica in accordance with Medica's data specifications. The Certification of Qualifying Coverage forms will only include periods of coverage Medica administers under this Contract. ARTICLE 12 AMENDMENTS AND ALTERATIONS Section 12.1 Standard Amendments: Except as provided in Section 12.2, amendments to this Contract are effective 30 days after Medica sends Employer a written amendment. Unless regulatory authorities direct otherwise, Employer's signature will not be required. No Medica agent or broker has authority to change this Contract or to waive any of its provisions. Section 12.2 Regulatory Amendment: Medica may amend this Contract to comply with requirements of state and federal law ("Regulatory Amendment") and shall issue to Employer such Regulatory Amendment and give Employer notice of its effective date. The Regulatory Amendment will not require Employer's consent and, unless regulatory authorities direct otherwise, Employer's signature will not be required. Any provision of this Contract that conflicts with the terms of applicable federal or state laws is deemed amended to conform to the minimum requirements of such laws. ARTICLE 13 ASSIGNMENT Neither party shall have the right to assign any of its rights and responsibilities under the Contract to any person, corporation or entity without the prior written consent of the other party; provided, however, that Medica may, without the prior written consent of the Employer, assign the Contract to any entity that controls Medica, is controlled by Medica, or is under common control with Medica. In the event of assignment, the Contract shall be binding upon the inure to the benefit of each party's successors and assigns. Page 8 ARTICLE 14 DISPUTE RESOLUTION Medica and Employer will work together in good faith to resolve any disputes under this Contract. If they are unable to resolve the disputes within 30 days following the date one party sent written notice of the dispute to the other party, and if either party wishes to pursue the dispute, it shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association ("AAA"). In no event may arbitration be initiated more than one year following the sending of written notice of the dispute. The arbitrators shall apply Minnesota substantive law to the proceeding, except to the extent federal substantive law, including ERISA, would apply to any claim. Any arbitration proceeding under this Agreement shall be conducted in Hennepin County, Minnesota. An award may be entered against a party who fails to appear at a duly noticed hearing. The arbitrators: (i) may construe or interpret, but shall not vary or ignore, the terms of this Agreement; (ii) shall have no authority to award any punitive or exemplary damages; and (iii) shall be bound by controlling law. A party may appeal an arbitration decision to a court of law only in accordance with applicable state arbitration laws or for de novo review of alleged errors of law or legal reasoning. The cost of arbitration shall be paid equally by the parties. In the event a third party initiates litigation involving Medica or Employer, and the party under this Contract who is involved in such third party litigation desires to bring a claim against the other party under this Agreement for indemnity or contribution, the indemnity or contribution claim may be brought in the same venue as the third party litigation, and shall not be subject to the terms of this Article 14. ARTICLE 15 TIME LIMIT ON CERTAIN DEFENSES No statement made by Employer, except a fraudulent statement, shall be used to void this Contract after it has been in force for a period of 2 years. Page 9 ARTICLE 16 RELATIONSHIP BETWEEN PARTIES The relationship between Employer and any Member is that of Employer and Subscriber, Dependent or other coverage classification as defined in this Contract. The relationship between Medica and Network Providers and the relationship between Medica and Employer are solely contractual relationships between independent contractors. Network Providers and Employer are not agents or employees of Medica. Medica and its employees are not agents or employees of Network Providers or Employer. The relationship between a Network Provider and any Member is that of provider and patient and Network Provider is solely responsible for the services provided to any Member. ARTICLE 17 EMPLOYER RECORDS Employer shall furnish Medica with all information and proofs that Medica may reasonably require with regard to any matters pertaining to this Contract. Employer will be responsible for obtaining any necessary consent from Members which allows Medica to receive a Member's protected health information (as defined in the federal privacy regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA)). Medica may at any reasonable time inspect all documents furnished to Employer by an individual in connection with the Benefits, Employer's payroll records, and any other records pertinent to the Benefits under this Contract. ARTICLE 18 MEMBER RECORDS By accepting Benefits under this Contract, each Member, including Dependents, whether or not such Dependents have signed the Subscriber's application, authorizes and directs any person or institution that has provided services to the Member to furnish Medica or any of Medica's designees at any reasonable time, upon its request, any and all information and records or copies of records relating to the Benefits provided to the Member. In accordance with applicable law, Medica and any of Medica's designees shall have the right to release any and all records concerning health care services: (i) as necessary to implement and administer the terms of this Contract; or (ii) for appropriate medical review or quality assessment. Such Member information and records shall be considered confidential medical records by Medica and it designees. ARTICLE 19 NOTICE Except as provided in Article 2, notice given by Medica to an authorized representative of Employer will be deemed notice to all Members. All notices to Medica shall be sent to the address stated in the Acceptance of Contract. All notices to Employer shall be sent to the persons and addresses stated in Employer's Application. All notices to Medica and Employer shall be deemed delivered: (a) if delivered in person, on the date delivered in person; (b) if delivered by a courier, on the date stated by the courier; (c) if delivered by an express mail service, on the date stated by the mail service vendor; or Page 10 (d) if delivered by United States mail, 3 business days after date of mailing. A party can change its address for receiving notices by providing the other party a written notice of the change. ARTICLE 20 COMMON LAW No language contained in the Contract constitutes a waiver of Medica's rights under common law. ACCEPTANCE OF CONTRACT This contract is deemed accepted by Employer upon the earlier of Medica's receipt of Employer's first payment of the Premium or upon Employer's execution of this Contract by its duly authorized representative. This Contract is deemed accepted by Medica upon Medica's deposit of Employer's first payment of the Premium. Such acceptance renders all terms and provisions herein binding on Medica and the Employer. IN WITNESS WHEREOF, MIC has caused this Contract to be executed on this February 7,2005 to take effect on the Effective Date stated in the Contract. MEDICA EMPLOYER: 401 Carlson Parkway Minnetonka, Minnesota 55305 (952)992-2200 CITY OF COLUMBIA HEIGHTS Address: Billing Address: MN015-2838 P.O. Box 169063 Duluth, MN 55816 590 40th Ave. NE Columbia Height, MN 55421 Telephone: (763) 706-3609 Mailing Address: P.O. Box 9310 Minneapolis, MN 55440 Contract Signer: d&/dI- --~~~~ Date: C ',+\..1 /l/i 0 h a 8e~ (!--!C-t ~ IJLflo~ Title: By: Tom L. Henke Group Contact: Linda Magee Title: Vice President, Commercial Sales and Account Services Page 11 ELIGIBILITY APPENDIX Employer Name: CITY OF COLUMBIA HEIGHTS Employer Group#: 89945 Section 1 Eligibility to Enroll. A Subscriber, and his or her Dependents, as defined below, who satisfies the eligibility conditions stated in this Contract are eligible to enroll for coverage under this Contract. Any person who does not satisfy the definition of Subscriber or Dependent is not eligible for coverage under this Contract. A Subscriber and his or her Dependents must meet the eligibility requirements described below and in the entire Contract. In no event may the number of Members residing outside the Service Area exceed 10 percent of the total number of Members. If there is a conflict between the Certificate and this Eligibility Appendix, this Eligibility Appendix governs. Section 2 Subscriber Definition. The term "Subscriber" as used in the Contract will include the types of employees and conditions identified below: Classifications Applicable Waiting Periods and Effective Dates 1. See Comments New Hires: Date of Hire Return: Date of Return Status Change: Date of Change A Subscriber who is a child entitled to receive coverage through a qualified medical child support order is not subject to any waiting periods, except to the extent that such waiting periods apply to the employee who is ordered by the qualified medical support order to provide coverage. Section 3 Dependent Definition. The term "Dependent" as used in this Contract includes the following: 1. The Subscriber's spouse 2. The following Dependent children: (a) Subscriber's unmarried natural or adopted child; (b) an unmarried child Placed For Adoption with the Subscriber; (c) a child for whom the Subscriber or the Subscriber's spouse has been appointed legal guardian, however, upon request by Medica, the Subscriber must provide satisfactory proof of dependency; Page 12 (d) Subscriber's or Subscriber's spouse's unmarried grandchild who, from the date of birth resides with and is dependent upon the Subscriber or Subscriber's spouse for support and (e) Subscriber's stepchild. A Dependent child must be under 19 years of age if s/he is not a student and must be under 25 years of age if s/he is a student. A Dependent child is eligible as a student if s/he is enrolled full- time in a recognized high school, college, university, trade or vocational school. If the student is unable to a carry a full-time course load due to illness, injury, or a physical or mental disability, as documented by a Physician, full-time student status will be granted if the student carries at least 60% of a full-time course load, as determined by the educational institution. 3. The Subscriber's handicapped Dependent. The handicapped Dependent must be: (a) incapable of self-sustaining employment by reason of mental retardation, mental illness, mental disorder or physical handicap; and (b) chiefly dependent upon the Subscriber for support and maintenance. The handicapped Dependent shall be eligible for coverage as long as he or she continues to be handicapped and satisfies the requirements of (a) and (b) above, unless coverage otherwise terminates under this Contract. Medica may require annual proof of handicap and dependency. An illness will not be considered a physical handicap. A child who is the subject of a qualified medical child support order is not a Dependent as defined above and may not enroll Dependents for coverage. See Section 2. Any person who does not satisfy the terms listed above will not be eligible for coverage under the Contract. Page 13 ENROLLMENT APPENDIX Employer Name: Employer Group#: CITY OF COLUMBIA HEIGHTS 89945 INITIAL ENROLLMENT "Initial Enrollment Period" is a 30 day time period starting with the date an eligible Subscriber and his or her eligible Dependents are first eligible to enroll for coverage under this Contract. An eligible Subscriber must apply within this period for coverage to begin the date he or she was first eligible to enroll. (The 30 day time period does not apply to newborn Dependents; see Special Enrollment, (item 4).) An eligible Subscriber who enrolls during the Initial Enrollment Period is accepted without application of health screening or affiliation periods. An eligible Subscriber and his/her Dependents who do not enroll during the Initial Enrollment Period may enroll for coverage during the next Open Enrollment, any applicable Special Enrollment Periods as described below. A Subscriber who is a child entitled to receive coverage through a qualified medical child support order is not subject to any Initial Enrollment Period restrictions, except as noted in the Eligibility Appendix. NOTIFICATION Subscribers must notify Employer within 30 days of the effective date of any change of address or name, addition or deletion of Dependents, or other facts identifying the Subscriber or the Subscriber's Dependents. The Employer must notify Medica within 30 days of the effective date of the Member's initial enrollment application, changes to the Member's name or address, or changes to enrollment, including if a Member is no longer eligible for coverage. OPEN ENROLLMENT "Open Enrollment" is a minimum 14 day period set by Employer and Medica each year during which eligible Subscribers and his or her Dependents may enroll for coverage without application of health screening or waiting periods. SPECIAL ENROLLMENT A. Special Enrollment Periods. The following "Special Enrollment Periods" are available in addition to the Initial Enrollment Period and Open Enrollment Period. A Special Enrollment period will apply to an eligible employee and Dependent if: (1) the eligible employee or Dependent: a. was covered under Qualifying Coverage at the time the eligible employee or Dependent was first eligible to enroll under the Contract, and b. declined coverage for that reason, and c. presents to Medica either (i) evidence of the loss of prior coverage due to loss of eligibility for that coverage, or (ii) evidence that employer contributions toward the prior coverage have terminated, and d. maintains Continuous Coverage, and Page 14 e. requests enrollment in writing within 30 days of the date of the loss of coverage or the date the employer's contribution toward that coverage terminates; For purposes of this item: a. prior coverage does not include continuation coverage required under federal law; b. loss of eligibility includes loss of eligibility as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment; c. loss of eligibility does not include a loss due to failure of the eligible employee or Dependent to pay Premiums on a timely basis or termination of coverage for cause; (2) the eligible employee or Dependent: a. was covered under benefits available under (i) the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), Public Law Number 99-272, as amended, or (ii) any state continuation laws applicable to the employer or Medica, and b. declined coverage for that reason, and c. the eligible employee or Dependent presents to Medica evidence that the eligible employee or Dependent has exhausted such COBRA or state continuation coverage and has not lost such coverage due to either failure of the eligible employee or Dependent to pay Premiums on a timely basis or for cause,and d. maintains Continuous Coverage, and e. requests enrollment in writing within 30 days of the loss of coverage; (3) the Dependent is a new spouse of the Subscriber or eligible employee, provided that the marriage is legal, enrollment is requested in writing within 30 days of the marriage, and the eligible employee also enrolls during this Special Enrollment Period; (4) the Dependent is a new Dependent child of the Subscriber or eligible employee, provided that enrollment is requested in writing within 30 days of the Subscriber or eligible employee acquiring the Dependent (the notification period is not limited to 30 days for newborn Dependents), and provided the eligible employee also enrolls during this Special Enrollment Period; . (5) the Dependent is the spouse of the Subscriber or eligible employee through whom the Dependent child described in item #4 above claims Dependent status and; a. that spouse is eligible for coverage; and b. is not already enrolled under the Contract; and c. enrollment is requested in writing within 30 days of the Dependent child becoming a Dependent, provided the eligible employee also enrolls during this Special Enrollment Period. Page 15 (6) the Dependents are eligible Dependent children of the Subscriber or eligible employee and enrollment is requested in writing within 30 days of a Dependent, as described in items #3 or #4 above, becoming eligible to enroll under the coverage, provided the eligible employee also enrolls during this Special Enrollment Period. Additionally, when Employer provides Medica with notice of a qualified medical child support order and a copy of the order, Medica will provide such eligible dependent child with a Special Enrollment Period. Employer will provide Medica with such notice, along with an application for coverage, within the lesser of 30 days or the time in which Employer provides notice of its determination to the persons specified in the order. B. Effective Dates of Coverage. Coverage shall become effective: (1) in the case of paragraphs (A)(1) or (2) above, the day after the date the other coverage ended; (2) in the case of paragraph (A)(3) above, the date of the marriage; (3) in the case of paragraph (A)(4) above, the date of birth, date of adoption, or date of placement for adoption. In all other cases, the date the Subscriber acquires the Dependent child. (4) in the case of paragraph (A)(5) above, the date the Subscriber acquires the Dependent Child; and (5) in the case of (A)(6) above, the first day of the first calendar month beginning after the date the completed request for enrollment is received by Medica. (6) in the case of the qualified medical child support order, the first day of the first calendar month beginning after the date the completed request for enrollment is received by Medica. Page 16 OFF-CYCLE ENROLLMENT - NO OFF-CYCLE ENROLLMENT FOR LATE ENTRANTS WITHOUT CONTINUOUS COVERAGE An eligible Subscriber or an eligible Subscriber and his or her Dependents who do not enroll for coverage offered through Employer during the Initial Enrollment Period, the Open Enrollment Period or any applicable Special Enrollment Period will be considered Late Entrants. (1) Late Entrants who have maintained Continuous Coverage may enroll and coverage will be effective the first day of the month following date of approval by Medica. Continuous Coverage will be determined to have been maintained if the Late Entrant requests enrollment within 63 days after prior Qualifying Coverage ends. (2) Late Entrants who have not maintained Continuous Coverage may not enroll off-cycle. An eligible Subscriber or Dependent who: (1) does not enroll during the Initial Enrollment Period, the Open Enrollment Period or any applicable Special Enrollment period; and (2) is an enrollee of the Minnesota Comprehensive Health Association ("MCHA") at the time Medica offers or renews coverage with Employer, provided the eligible Subscriber or Dependent maintains Continuous Coverage, will not be considered a Late Entrant and will be allowed to enroll. Coverage will be effective as determined by Medica. Page 17 Medica Elect $300 Oed. PLAN MASTER GROUP CONTRACT Employer Name: Employer Group#: Effective Date: Contract#: Amendments: City of Columbia Heights 89947 January 01, 2005 ME300-15, BPL Number: 68238 Amendments attached as applicable per benefit package log (BPL) as listed above. ARTICLE 1 INTRODUCTION This Master Group Contract ("Contract") is entered into by and between Medica, together with its affiliate Medica Insurance Company ("MIC"), and the employer group named above ("Employer"), an employer under Minnesota law and other applicable law. This Contract includes the Eligibility Appendix, the Enrollment Appendix, the Certificate of Coverage ("Certificate") and any Amendments. This Contract is delivered in the State of Minnesota. If this Contract is purchased by Employer to provide benefits under an employee welfare benefit plan governed by the Employee Retirement Income Security Act, 29 U.S.C. 1001, et seq. ('ERISA"), this Contract is governed by ERISA and, to the extent state law applies, the laws of the State of Minnesota. If this Contract is not governed by ERISA, it is governed by the laws of the State of Minnesota. In consideration of payment of the Premiums by the Employer and payment of Copayments and Coinsurance by or for Members, Medica will provide coverage for the Benefits set forth in the Certificate and any amendments, subject to all terms and conditions, including limitations and exclusions, in this Contract. This Contract replaces and supersedes any previous agreements between Employer and Medica relating to Benefits. Medica shall not be deemed or construed to be an employer for any purpose with respect to the administration or provision of benefits under Employer's welfare benefit plan. Medica shall not be responsible for fulfilling any duties or obligations of Employer with respect to Employer's benefit plan. The terms used in this Contract have the same meanings given those terms defined in the Certificate, unless otherwise specifically defined in this Contract. Page 1 ARTICLE 2 TERM OF CONTRACT Section 2.1 Term and Renewal. This Contract is effective from January 01, 2005 ("Effective Date") to December 31, 2005 ("Expiration Date"). All coverage under this Contract begins at 12:01 a.m. Central Time. At least 30 days before each Expiration Date, Medica shall notify Employer of any modifications to this Contract, including Premiums and Benefits for the next term of this Contract ("Renewal Terms"). If Employer accepts the Renewal Terms or if Employer and Medica agree on different Renewal Terms, this Contract is renewed for the additional term, unless Medica terminates this Contract pursuant to Section 2.2. Section 2.2 Termination of this Contract. Employer may terminate this Contract after at least 30 days written notice to Medica. This Contract is guaranteed renewable and will not be terminated by Medica except for the reasons and effective as stated below. Terminations for the reasons stated below require at least 30 days written notice from Medica: (a) Upon notice to an authorized representative of the Employer when Employer does not pay the required Premium when due, provided, however, that this Contract can be reinstated pursuant to Section 4.2; (b) On the date specified by Medica because Employer provided Medica with false information material to the execution of this Contract or to the provision of Benefits under this Contract. Medica has the right to rescind this Contract back to the effective date; (c) On the date specified by Medica due to Employer's violation of the participation or contribution rules as determined by Medica; (d) Automatically on the date Employer ceases to do business pursuant to 11 U.S.C. Chapter 7; (e) On the date specified by Medica, after at least 90 days prior written notice to Employer, that this Contract is terminated because Medica will no longer issue this particular type of group health benefit plan within the applicable employer market; (f) On the date specified by Medica, after at least 180 days prior written notice to the applicable state authority and Employer, that this Contract will be terminated because Medica will no longer renew or issue any employer health benefit plan within the applicable employer market; (g) On the date specified by Medica when there is no longer any Member who resides or works in Medica's approved service area; (h) If this Contract is made available to Employer only through one or more bona fide associations, on the date specified by Medica after Employer's membership in the association ceases. Page 2 (i) Any other reasons or grounds permitted by the licensing laws and regulations governing Medica. Notwithstanding the above, Medica may modify the Premium rate and/or the coverage at renewal. Nonrenewal of coverage as a result of failure of Medica and the Employer to reach agreement with respect to modifications in the Premium rate or coverage shall not be considered a failure of Medica to provide coverage on a guaranteed renewal basis. Section 2.3 Notice of Termination. Medica will notify: (a) Employer in writing if Medica terminates this Contract for any reason; (b) Subscribers in writing if Medica terminates this Contract pursuant to Section 2.2 (a), (d), (e) or (t). Employer will provide timely written notification to Subscribers in all circumstances for which Medica does not provide written notification to Subscribers. Section 2.4 Effect of Termination. In the event of termination of this Contract: (a) All Benefits under this Contract will end at 12:00 midnight Central Time on the effective date of termination. (b) Medica will not be responsible for any Claims for health services received by Members after the effective date of the termination; and (c) Employer shall be and shall remain liable to Medica for the payment of any and all Premiums that are unpaid at the time of termination. Page 3 ARTICLE 3 ENROLLMENT AND ELIGIBILITY Section 3.1 Eligibility. The Eligibility Appendix to this Contract governs who is eligible to enroll under this Contract. The eligibility conditions stated in the Eligibility Appendix are in addition to those specified in the Certificate. Section 3.2 Enrollment. The Enrollment Appendix to this Contract governs when eligible employees and eligible dependents may enroll for Benefits under this Contract, including the Initial Enrollment Period, Open Enrollment Period and any applicable Special Enrollment Periods. Employer shall conduct the Initial Enrollment Period and Open Enrollment Period. Employer shall cooperate with Medica in the event of a Special Enrollment Period. Section 3.3. Qualified Medical Child Support Orders. Employer will establish, maintain and enforce all written procedures for determining whether a child support order is a qualified medical child support order as defined by ERISA. Employer will provide Medica with notice of such determination and a copy of the order, along with an application for coverage, within the greater of 30 days after issuance of the order or the time in which Employer provides notice of its determination to the persons specified in the order. When and if Employer receives notice that the child has designated a representative, or of the existence of a legal guardian or custodial parent of the child, Employer shall promptly notify Medica of such person(s). Medica shall have no responsibility for: (i) establishing, maintaining or enforcing the procedures described above; (ii) determining whether a support order is qualified; or (iii) providing required notices to the child or the designated representative. Section 3.4. Eligibility and Enrollment Decisions. Subject to applicable law and the terms of this Contract, Employer has sole discretion to determine whether employees and their dependents are eligible to enroll for Benefits. Medica shall rely upon Employer's determination regarding an employee's and/or dependent's eligibility to enroll for Benefits. The Employer will be responsible for maintaining information verifying its continuing eligibility and the continuing eligibility of its eligible Subscribers and eligible Dependents. This information shall be provided to Medica as reasonably requested by Medica. The Employer shall also maintain written documentation of a waiver of coverage by an eligible Subscriber or eligible Dependent and provide this documentation to Medica upon reasonable request.o -Page 4 ARTICLE 4 PREMIUMS Section 4.1 Monthly Premiums. The monthly Premiums for this Contract are: Monthly Premium Rate Monthly Employer Contribution Monthly Enrollee Contribution Class 1 (Single) Class 4 (Family) $343.06 Employer shall contribute a minimum of 50% towards the single monthly premium rate. $787.84 The Premiums are due on the first day of each calendar month. Employer shall pay the Premiums to Medica at the billing address stated in the Acceptance of Contract. Employer shall notify Medica in writing: (a) each month of any changes in the coverage classification of any Subscriber; and (b) within 30 days after the effective date of enrollments, terminations or other changes regarding Members. Section 4.2 Grace Period and Reinstatement. Employer has a grace period of 10 days after the due date stated in Section 4.1 to pay the monthly Premiums. If Employer fails to pay Premium, the Contract will be terminated in accordance with Section 2.2(a). This Contract will be reinstated if Employer pays all of the Premiums owed on or before the end of the grace period. In this event the Contract is not reinstated pursuant to this Section, Medica will not be responsible for any Claims for health services received by Members after the effective date of the termination. Section 4.3 Premium Calculation. The monthly Premiums owed by Employer shall be calculated by Medica using the number of Subscribers in each coverage classification according to Medica's records at the time of the calculation. Employer may make adjustments to its payment of Premiums for any additions or terminations of Members submitted by Employer but not yet reflected in Medica's calculations. A full calendar month's Premiums shall be charged for Members whose effective date falls on or before the 15th day of that calendar month. No Premium shall be charged for Members Page 5 whose effective date falls after the 15th of that calendar month. With the exception of termination of coverage due to a Member's death, a Member's Benefits may be terminated only aUhe end of a calendar month and a full Premium rate for that month will apply. In the case of a Member's death, that Member's Benefits will be terminated on the date of the death. Section 4.4 Retroactive Adjustments. In accordance with applicable law, retroactive adjustments may be made for any additions, or terminations of Members or changes in coverage classifications not reflected in Medica's records at the time the monthly Premiums were calculated by Medica. However, no retroactive credit will be granted for any month in which a Member received Benefits. No retroactive adjustments to enrollment or Premium refund shall be granted for any change occurring more than 60 days prior to the date Medica received notification of the change from Employer. Regardless of the preceding, Employer shall pay a Premium for any month during which a Member received Benefits. Section 4.5 Premium Changes. Medica may change the Premiums after 30 days prior written notice to Employer on: (a) the first anniversary of the effective date of this Contract; (b) any monthly due date after the first anniversary of this Contract; or (c) any date the provisions of this Contract are amended. Section 4.6 Employer Fees. Medica may charge Employer: (a) a late payment charge in the form of a finance charge of 12% per annum for any Premiums not received by the due date; and (b) a service charge for any non-sufficient-fund check received in payment of the Premiums. ARTICLE 5 INDEMNIFICATION Medica will hold harmless and indemnify Employer against any and all claims, liabilities, damages or judgments asserted against, imposed upon or incurred by Employer, including reasonable attorney fees and costs, that arise out of Medica's grossly negligent acts or omissions in the discharge of its responsibilities to a Member. Employer will hold harmless and indemnify Medica against any and all claims, liabilities, damages or judgments asserted against, imposed upon or incurred by Medica, including reasonable attorney fees and costs, that arise out of Employer's or Employer's employees', agents', and representatives' grossly negligent acts or omissions in the discharge of its or their responsibilities under this Contract. Employer and Medica shall promptly notify the other of any potential or actual claim for which the other party may be responsible under this Article 5. Page 6 ARTICLE 6 ADMINISTRATIVE SERVICES The services necessary to administer this Contract and the Benefits provided under it will be provided in accordance with Medica's or its designee's standard administrative procedures. If Employer requests such administrative services be provided in a manner other than in accordance with these standard procedures, including requests for non-standard reports, and if Medica agrees to provide such non-standard administrative services, Employer shall pay for such services or reports at Medica's or its designee's then-current charges for such services or reports. ARTICLE 7 CLERICAL ERROR A Member will not be deprived of coverage under the Contract because of a clerical error. Furthermore, a Member will not be eligible for coverage beyond the scheduled termination date because of a failure to record the termination. ARTICLE 8 ERISA When this Contract is entered into by Employer to provide benefits under an employee welfare benefit plan governed by ERISA, Medica shall not be named as and shall not be the plan administrator or the named fiduciary of the employee welfare benefit plan, as those terms are used in ERISA. The parties agree that Medica has sole, final, and exclusive discretion to: (a) interpret and construe the Benefits under the Contract; (b) interpret and construe the other terms, conditions, limitations and exclusions set out in the Contract; (c) change, interpret, modify, withdraw or add Benefits without approval by Members; and (d) make factual determinations related to the Contract and the Benefits. For purposes of overall cost savings or efficiency, Medica may, in its sole discretion, provide services that would otherwise not be Benefits. The fact that Medica does so in any particular case shall not in any way be deemed to require it to do so in other similar cases. Medica may, from time to time, delegate discretionary authority to other persons or entities providing services under this Contract. ARTICLE 9 DATA OWNERSHIP AND USE Information and data acquired, developed, generated, or maintained by Medica in the course of performing under this Contract shall be Medica's sole property. Except as this Contract or applicable law requires otherwise, Medica shall have no obligation to release such information or data to Employer. Medica may, in its sole discretion, release such information or data to Employer, but only to the extent permitted by law and subject to any restrictions determined by Medica. Page 7 ARTICLE 10 CONTINUATION OF COVERAGE Medica shall provide Benefits under this Contract to those Members who are eligible to continue coverage under federal or state law. Medica will not provide any administrative duties with respect to Employer's compliance with federal or state continuation of coverage laws. All duties of the Employer, including, but not limited to, notifying Members regarding federal and state law continuation rights and Premium billing and collection, remain Employer's sole responsibility. ARTICLE 11 CERTIFICATION OF QUALIFYING COVERAGE FORMS As required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Medica will produce Certification of Qualifying Coverage forms for Members whose coverage under this Contract terminates. The Certification of Qualifying Coverage forms will be based on the eligibility and termination data Employer provides to Medica. Employer shall provide all necessary eligibility and termination data to Medica in accordance with Medica's data specifications. The Certification of Qualifying Coverage forms will only include periods of coverage Medica administers under this Contract. ARTICLE 12 AMENDMENTS AND ALTERATIONS Section 12.1 Standard Amendments: Except as provided in Section 12.2, amendments to this Contract are effective 30 days after Medica sends Employer a written amendment. Unless regulatory authorities direct otherwise, Employer's signature will not be required. No Medica agent or broker has authority to change this Contract or to waive any of its provisions. Section 12.2 Regulatory Amendment: Medica may amend this Contract to comply with requirements of state and federal law ("Regulatory Amendment") and shall issue to Employer such Regulatory Amendment and give Employer notice of its effective date. The Regulatory Amendment will not require Employer's consent and, unless regulatory authorities direct otherwise, Employer's signature will not be required. Any provision of this Contract that conflicts with the terms of applicable federal or state laws is deemed amended to conform to the minimum requirements of such laws. ARTICLE 13 ASSIGNMENT Neither party shall have the right to assign any of its rights and responsibilities under the Contract to any person, corporation or entity without the prior written consent of the other party; provided, however, that Medica may, without the prior written consent of the Employer, assign the Contract to any entity that controls Medica, is controlled by Medica, or is under common control with Medica. In the event of assignment, the Contract shall be binding upon the inure to the benefit of each party's successors and assigns. Page 8 ARTICLE 14 DISPUTE RESOLUTION Medica and Employer will work together in good faith to resolve any disputes under this Contract. If they are unable to resolve the disputes within 30 days following the date one party sent written notice of the dispute to the other party, and if either party wishes to pursue the dispute, it shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association ("AAA"). In no event may arbitration be initiated more than one year following the sending of written notice of the dispute. The arbitrators shall apply Minnesota substantive law to the proceeding, except to the extent federal substantive law, including ERISA, would apply to any claim. Any arbitration proceeding under this Agreement shall be conducted in Hennepin County, Minnesota. An award may be entered against a party who fails to appear at a duly noticed hearing. The arbitrators: (i) may construe or interpret, but shall not vary or ignore, the terms of this Agreement; (ii) shall have no authority to award any punitive or exemplary damages; and (iii) shall be bound by controlling law. A party may appeal an arbitration decision to a court of law only in accordance with applicable state arbitration laws or for de novo review of alleged errors of law or legal reasoning. The cost of arbitration shall be paid equally by the parties. In the event a third party initiates litigation involving Medica or Employer, and the party under this Contract who is involved in such third party litigation desires to bring a claim against the other party under this Agreement for indemnity or contribution, the indemnity or contribution claim may be brought in the same venue as the third party litigation, and shall not be subject to the terms of this Article 14. ARTICLE 15 TIME LIMIT ON CERTAIN DEFENSES No statement made by Employer, except a fraudulent statement, shall be used to void this Contract after it has been in force for a period of 2 years. Page 9 ARTICLE 16 RELATIONSHIP BETWEEN PARTIES The relationship between Employer and any Member is that of Employer and Subscriber, Dependent or other coverage classification as defined in this Contract. The relationship between Medica and Network Providers and the relationship between Medica and Employer are solely contractual relationships between independent contractors. Network Providers and Employer are not agents or employees of Medica. Medica and its employees are not agents or employees of Network Providers or Employer. The relationship between a Network Provider and any Member is that of provider and patient and Network Provider is solely responsible for the services provided to any Member. ARTICLE 17 EMPLOYER RECORDS Employer shall furnish Medica with all information and proofs that Medica may reasonably require with regard to any matters pertaining to this Contract. Employer will be responsible for obtaining any necessary consent from Members which allows Medica to receive a Member's protected health information (as defined in the federal privacy regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA)). Medica may at any reasonable time inspect all documents furnished to Employer by an individual in connection with the Benefits, Employer's payroll records, and any other records pertinent to the Benefits under this Contract. ARTICLE 18 MEMBER RECORDS By accepting Benefits under this Contract, each Member, including Dependents, whether or not such Dependents have signed the Subscriber's application, authorizes and directs any person or institution that has provided services to the Member to furnish Medica or any of Medica's designees at any reasonable time, upon its request, any and all information and records or copies of records relating to the Benefits provided to the Member. In accordance with applicable law, Medica and any of Medica's designees shall have the right to release any and all records concerning health care services: (i) as necessary to implement and administer the terms of this Contract; or (ii) for appropriate medical review or quality assessment. Such Member information and records shall be considered confidential medical records by Medica and it designees. ARTICLE 19 NOTICE Except as provided in Article 2, notice given by Medica to an authorized representative of Employer will be deemed notice to all Members. All notices to Medica shall be sent to the address stated in the Acceptance of Contract. All notices to Employer shall be sent to the persons and addresses stated in Employer's Application. All notices to Medica and Employer shall be deemed delivered: (a) if delivered in person, on the date delivered in person; (b) if delivered by a courier, on the date stated by the courier; (c) if delivered by an express mail service, on the date stated by the mail service vendor; or Page 10 (d) if delivered by United States mail, 3 business days after date of mailing. A party can change its address for receiving notices by providing the other party a written notice of the change. ARTICLE 20 COMMON LAW No language contained in the Contract constitutes a waiver of Medica's rights under common law. ACCEPTANCE OF CONTRACT This contract is deemed accepted by Employer upon the earlier of Medica's receipt of Employer's first payment of the Premium or upon Employer's execution of this Contract by its duly authorized representative. This Contract is deemed accepted by Medica upon Medica's deposit of Employer's first payment of the Premium. Such acceptance renders all terms and provisions herein binding on Medica and the Employer. IN WITNESS WHEREOF, MIC has caused this Contract to be executed on this February 7, 2005 to take effect on the Effective Date stated in the Contract. EMPLOYER: MEDICA 401 Carlson Parkway Minnetonka, Minnesota 55305 (952)992-2200 City of Columbia Heights Address: Billing Address: MN015-2838 P.O. Box 169063 Duluth, MN 55816 590 40th Ave NE Columbia Heights, MN 55421 Telephone: (763) 706-3609 Mailing Address: P.O. Box 9310 Minneapolis, MN 55440 Contract Signer: ~~ --~~~/~ Title: C '/ +y m,O h'" 1er- d-(ltfI05 Group Contact: Linda Magee Date: By: Tom L. Henke Title: Vice President, Commercial Sales and Account Services Page 11 ELIGIBILITY APPENDIX Employer Name: City of Columbia Heights Employer Group#: 89947 Section 1 Eligibility to Enroll. A Subscriber, and his or her Dependents, as defined below, who satisfies the eligibility conditions stated in this Contract are eligible to enroll for coverage under this Contract. Any person who does not satisfy the definition of Subscriber or Dependent is not eligible for coverage under this Contract. A Subscriber and his or her Dependents must meet the eligibility requirements described below and in the entire Contract. In no event may the number of Members residing outside the Service Area exceed 10 percent of the total number of Members. If there is a conflict between the Certificate and this Eligibility Appendix, this Eligibility Appendix governs. Section 2 Subscriber Definition. The term "Subscriber" as used in the Contract will include the types of employees and conditions identified below: Classifications Applicable Waiting Periods and Effective Dates 1. See comments New Hires: Date of hire Return: Date of return Status Change: Date of change A Subscriber who is a child entitled to receive coverage through a qualified medical child support order is not subject to any waiting periods, except to the extent that such waiting periods apply to the employee who is ordered by the qualified medical support order to provide coverage. Section 3 Dependent Definition. The term "Dependent" as used in this Contract includes the following: 1. The Subscriber's spouse 2. The following Dependent children: (a) Subscriber's unmarried natural or adopted child; (b) an unmarried child Placed For Adoption with the Subscriber; (c) a child for whom the Subscriber or the Subscriber's spouse has been appointed legal guardian, however, upon request by Medica, the Subscriber must provide satisfactory proof of dependency; Page 12 (d) Subscriber's or Subscriber's spouse's unmarried grandchild who, from the date of birth resides with and is dependent upon the Subscriber or Subscriber's spouse for support and (e) Subscriber's stepchild. A Dependent child must be under 19 years of age if s/he is not a student and must be under 25 years of age if s/he is a student. A Dependent child is eligible as a student if s/he is enrolled full- time in a recognized high school, college, university, trade or vocational school. If the student is unable to a carry a full-time course load due to illness, injury, or a physical or mental disability, as documented by a Physician, full-time student status will be granted if the student carries at least 60% of a full-time course load, as determined by the educational institution. 3. The Subscriber's handicapped Dependent. The handicapped Dependent must be: (a) incapable of self-sustaining employment by reason of mental retardation, mental illness, mental disorder or physical handicap; and (b) chiefly dependent upon the Subscriber for support and maintenance. The handicapped Dependent shall be eligible for coverage as long as he or she continues to be handicapped and satisfies the requirements of (a) and (b) above, unless coverage otherwise terminates under this Contract. Medica may require annual proof of handicap and dependency. An illness will not be considered a physical handicap. A child who is the subject of a qualified medical child support order is not a Dependent as defined above and may not enroll Dependents for coverage. See Section 2. Any person who does not satisfy the terms listed above will not be eligible for coverage under the Contract. Page 13 ENROLLMENT APPENDIX Employer Name: Employer Group#: City of Columbia Heights 89947 INITIAL ENROLLMENT "Initial Enrollment Period" is a 30 day time period starting with the date an eligible Subscriber and his or her eligible Dependents are first eligible to enroll for coverage under this Contract. An eligible Subscriber must apply within this period for coverage to begin the date he or she was first eligible to enroll. (The 30 day time period does not apply to newborn Dependents; see Special Enrollment, (item 4).) An eligible Subscriber who enrolls during the Initial Enrollment Period is accepted without application of health screening or affiliation periods. An eligible Subscriber and his/her Dependents who do not enroll during the Initial Enrollment Period may enroll for coverage during the next Open Enrollment, any applicable Special Enrollment Periods as described below. A Subscriber who is a child entitled to receive coverage through a qualified medical child support order is not subject to any Initial Enrollment Period restrictions, except as noted in the Eligibility Appendix. NOTIFICATION Subscribers must notify Employer within 30 days of the effective date of any change of address or name, addition or deletion of Dependents, or other facts identifying the Subscriber or the Subscriber's Dependents. The Employer must notify Medica within 30 days of the effective date of the Member's initial enrollment application, changes to the Member's name or address, or changes to enrollment, including if a Member is no longer eligible for coverage. OPEN ENROLLMENT "Open Enrollment" is a minimum 14 day period set by Employer and Medica each year during which eligible Subscribers and his or her Dependents may enroll for coverage without application of health screening or waiting periods. SPECIAL ENROLLMENT A. Special Enrollment Periods. The following "Special Enrollment Periods" are available in addition to the Initial Enrollment Period and Open Enrollment Period. A Special Enrollment period will apply to an eligible employee and Dependent if: (1) the eligible employee or Dependent: a. was covered under Qualifying Coverage at the time the eligible employee or Dependent was first eligible to enroll under the Contract, and b. declined coverage for that reason, and c. presents to Medica either (i) evidence of the loss of prior coverage due to loss of eligibility for that coverage, or (ii) evidence that employer contributions toward the prior coverage have terminated, and d. maintains Continuous Coverage, and Page 14 e. requests enrollment in writing within 30 days of the date of the loss of coverage or the date the employer's contribution toward that coverage terminates; For purposes of this item: a. prior coverage does not include continuation coverage required under federal law; b. loss of eligibility includes loss of eligibility as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment; c. loss of eligibility does not include a loss due to failure of the eligible employee or Dependent to pay Premiums on a timely basis or termination of coverage for cause; (2) the eligible employee or Dependent: a. 'was covered under benefits available under (i) the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), Public Law Number 99-272, as amended, or (ii) any state continuation laws applicable to the employer or Medica, and b. declined coverage for that reason, and c. the eligible employee or Dependent presents to Medica evidence that the eligible employee or Dependent has exhausted such COBRA or state continuation coverage and has not lost such coverage due to either failure of the eligible employee or Dependent to pay Premiums on a timely basis or for cause,and d. maintains Continuous Coverage, and e. requests enrollment in writing within 30 days of the loss of coverage; (4 ) the Dependent is a new spouse of the Subscriber or eligible employee, provided that the marriage is legal, enrollment is requested in writing within 30 days of the marriage, and the eligible employee also enrolls during this Special Enrollment Period; the Dependent is a new Dependent child of the Subscriber or eligible employee, provided that enrollment is requested in writing within 30 days of the Subscriber or eligible employee acquiring the Dependent (the notification period is not limited to 30 days for newborn Dependents), and provided the eligible employee also enrolls during this Special Enrollment Period; (3) (5) the Dependent is the spouse of the Subscriber or eligible employee through whom the Dependent child described in item #4 above claims Dependent status and; a. that spouse is eligible for coverage; and b. is not already enrolled under the Contract; and c. enrollment is requested in writing within 30 days of the Dependent child becoming a Dependent, provided the eligible employee also enrolls during this Special Enrollment Period. Page 15 (6) the Dependents are eligible Dependent children of the Subscriber or eligible employee and enrollment is requested in writing within 30 days of a Dependent, as described in items #3 or #4 above, becoming eligible to enroll under the coverage, provided the eligible employee also enrolls during this Special Enrollment Period. Additionally, when Employer provides Medica with notice of a qualified medical child support order and a copy of the order, Medica will provide such eligible dependent child with a Special Enrollment Period. Employer will provide Medica with such notice, along with an application for coverage, within the lesser of 30 days or the time in which Employer provides notice of its determination to the persons specified in the order. B. Effective Dates of Coverage. Coverage shall become effective: (1) in the case of paragraphs (A)(1) or (2) above, the day after the date the other coverage ended; (2) in the case of paragraph (A)(3) above, the date of the marriage; (3) in the case of paragraph (A)(4) above, the date of birth, date of adoption, or date of placement for adoption. In all other cases, the date the Subscriber acquires the Dependent child. (4) in the case of paragraph (A)(5) above, the date the Subscriber acquires the Dependent Child; and (5) in the case of (A)(6) above, the first day of the first calendar month beginning after the date the completed request for enrollment is received by Medica. (6) in the case of the qualified medical child support order, the first day of the first calendar month beginning after the date the completed request for enrollment is received by Medica. Page 16 OFF-CYCLE ENROLLMENT- NO OFF-CYCLE ENROLLMENT FOR LATE ENTRANTS WITHOUT CONTINUOUS COVERAGE An eligible Subscriber or an eligible Subscriber and his or her Dependents who do not enroll for coverage offered through Employer during the Initial Enrollment Period, the Open Enrollment Period or any applicable Special Enrollment Period will be considered Late Entrants. (1) Late Entrants who have maintained Continuous Coverage may enroll and coverage will be effective the first day of the month following date of approval by Medica. Continuous Coverage will be determined to have been maintained if the Late Entrant requests enrollment within 63 days after prior Qualifying Coverage ends. (2) Late Entrants who have not maintained Continuous Coverage may not enroll off-cycle. An eligible Subscriber or Dependent who: (1) does not enroll during the Initial Enrollment Period, the Open Enrollment Period or any applicable Special Enrollment period; and (2) is an enrollee of the Minnesota Comprehensive Health Association ("MCHA") at the time Medica offers or renews coverage with Employer, provided the eligible Subscriber or Dependent maintains Continuous Coverage, will not be considered a Late Entrant and will be allowed to enroll. Coverage will be effective as determined by Medica. Page 17 Medica Choice Select $300 Ded PLAN MASTER GROUP CONTRACT Employer Name: Employer Group#: Effective Date: Contract#: Amendments: City of Columbia Heights 89946 January 01, 2005 MCS300-15, BPL Number: 68235 Amendments attached as applicable per benefit package log (BPL) as listed above. ARTICLE 1 INTRODUCTION This Master Group Contract ("Contract") is entered into by and between Medica, together with its affiliate Medica Insurance Company ("MIC"), and the employer group named above ("Employer"), an employer under Minnesota law and other applicable law. This Contract includes the Eligibility Appendix, the Enrollment Appendix, the Certificate of Coverage ("Certificate") and any Amendments. This Contract is delivered in the State of Minnesota. If this Contract is purchased by Employer to provide benefits under an employee welfare benefit plan governed by the Employee Retirement Income Security Act, 29 U.S.C. 1001, et seq. ('ERISA"), this Contract is governed by ERISA and, to the extent state law applies, the laws of the State of Minnesota. If this Contract is not governed by ERISA, it is governed by the laws of the State of Minnesota. In consideration of payment of the Premiums by the Employer and payment of Copayments and Coinsurance by or for Members, Medica will provide coverage for the Benefits set forth in the Certificate and any amendments, subject to all terms and conditions, including limitations and exclusions, in this Contract. This Contract replaces and supersedes any previous agreements between Employer and Medica relating to Benefits. Medica shall not be deemed or construed to be an employer for any purpose with respect to the administration or provision of benefits under Employer's welfare benefit plan. Medica shall not be responsible for fulfilling any duties or obligations of Employer with respect to Employer's benefit plan. The terms used in this Contract have the same meanings given those terms defined in the Certificate, unless otherwise specifically defined in this Contract. Page 1 ARTICLE 2 TERM OF CONTRACT Section 2.1 Term and Renewal. This Contract is effective from January 01, 2005 ("Effective Date") to December 31 , 2005 ("Expiration Date"). All coverage under this Contract begins at 12:01 a.m. Central Time. At least 30 days before each Expiration Date, Medica shall notify Employer of any modifications to this Contract, including Premiums and Benefits for the next term of this Contract ("Renewal Terms"). If Employer accepts the Renewal Terms or if Employer and Medica agree on different Renewal Terms, this Contract is renewed for the additional term, unless Medica terminates this Contract pursuant to Section 2.2. Section 2.2 Termination of this Contract. Employer may terminate this Contract after at least 30 days written notice to Medica. This Contract is guaranteed renewable and will not be terminated by Medica except for the reasons and effective as stated below. Terminations for the reasons stated below require at least 30 days written notice from Medica: (a) Upon notice to an authorized representative of the Employer when Employer does not pay the required Premium when due, provided, however, that this Contract can be reinstated pursuant to Section 4.2; (b) On the date specified by Medica because Employer provided Medica with false information material to the execution of this Contract or to the provision of Benefits under this Contract. Medica has the right to rescind this Contract back to the effective date; (c) On the date specified by Medica due to Employer's violation of the participation or contribution rules as determined by Medica; (d) Automatically on the date Employer ceases to do business pursuant to 11 U.S.C. Chapter 7; (e) On the date specified by Medica, after at least 90 days prior written notice to Employer, that this Contract is terminated because Medica will no longer issue this particular type of group health benefit plan within the applicable employer market; (f) On the date specified by Medica, after at least 180 days prior written notice to the applicable state authority and Employer, that this Contract will be terminated because Medica will no longer renew or issue any employer health benefit plan within the applicable employer market; (g) On the date specified by Medica when there is no longer any Member who resides or works in Medica's approved service area; (h) If this Contract is made available to Employer only through one or more bona fide associations, on the date specified by Medica after Employer's membership in the association ceases. Page 2 (i) Any other reasons or grounds permitted by the licensing laws and regulations governing Medica. Notwithstanding the above, Medica may modify the Premium rate and/or the coverage at renewal. Nonrenewal of coverage as a result of failure of Medica and the Employer to reach agreement with respect to modifications in the Premium rate or coverage shall not be considered a failure of Medica to provide coverage on a guaranteed renewal basis. Section 2.3 Notice of Termination. Medica will notify: (a) Employer in writing if Medica terminates this Contract for any reason; (b) Subscribers in writing if Medica terminates this Contract pursuant to Section 2.2 (a), (d), (e) or (t). Employer will provide timely written notification to Subscribers in all circumstances for which Medica does not provide written notification to Subscribers. Section 2.4 Effect of Termination. In the event of termination of this Contract: (a) All Benefits under this Contract will end at 12:00 midnight Central Time on the effective date of termination. (b) Medica will not be responsible for any Claims for health services received by Members after the effective date of the termination; and (c) Employer shall be and shall remain liable to Medica for the payment of any and all Premiums that are unpaid at the time of termination. Page 3 ARTICLE 3 ENROLLMENT AND ELIGIBILITY Section 3.1 Eligibility. The Eligibility Appendix to this Contract governs who is eligible to enroll under this Contract. The eligibility conditions stated in the Eligibility Appendix are in addition to those specified in the Certificate. Section 3.2 Enrollment. The Enrollment Appendix to this Contract governs when eligible employees and eligible dependents may enroll for Benefits under this Contract, including the Initial Enrollment Period, Open Enrollment Period and any applicable Special Enrollment Periods. Employer shall conduct the Initial Enrollment Period and Open Enrollment Period. Employer shall cooperate with Medica in the event of a Special Enrollment Period. Section 3.3. Qualified Medical Child Support Orders. Employer will establish, maintain and enforce all written procedures for determining whether a child support order is a qualified medical child support order as defined by ERISA. Employer will provide Medica with notice of such determination and a copy of the order, along with an application for coverage, within the greater of 30 days after issuance of the order or the time in which Employer provides notice of its determination to the persons specified in the order. When and if Employer receives notice that the child has designated a representative, or of the existence of a legal guardian or custodial parent of the child, Employer shall promptly notify Medica of such person(s). Medica shall have no responsibility for: (i) establishing, maintaining or enforcing the procedures described above; (ii) determining whether a support order is qualified; or (iii) providing required notices to the child or the designated representative. Section 3.4. Eligibility and Enrollment Decisions. Subject to applicable law and the terms of this Contract, Employer has sole discretion to determine whether employees and their dependents are eligible to enroll for Benefits. Medica shall rely upon Employer's determination regarding an employee's and/or dependent's eligibility to enroll for Benefits. The Employer will be responsible for maintaining information verifying its continuing eligibility and the continuing eligibility of its eligible Subscribers and eligible Dependents. This information shall be provided to Medica as reasonably requested by Medica. The Employer shall also maintain written documentation of a waiver of coverage by an eligible Subscriber or eligible Dependent and provide this documentation to Medica upon reasonable request. Page 4 ARTICLE 4 PREMIUMS Section 4.1 Monthly Premiums. The monthly Premiums for this Contract are: Monthly Premium Rate Monthly Employer Contribution Monthly Enrollee Contribution Class 1 (Single) Class 4 (Family) $381.16 Employer shall contribute a minimum of 50% towards the single monthly premium rate. $875.36 The Premiums are due on the first day of each calendar month. Employer shall pay the Premiums to Medica at the billing address stated in the Acceptance of Contract. Employer shall notify Medica in writing: (a) each month of any changes in the coverage classification of any Subscriber; and (b) within 30 days after the effective date of enrollments, terminations or other changes regarding Members. Section 4.2 Grace Period and Reinstatement. Employer has a grace period of 10 days after the due date stated in Section 4.1 to pay the monthly Premiums. If Employer fails to pay Premium, the Contract will be terminated in accordance with Section 2.2(a). This Contract will be reinstated if Employer pays all of the Premiums owed on or before the end of the grace period. In this event the Contract is not reinstated pursuant to this Section, Medica will not be responsible for any Claims for health services received by Members after the effective date of the termination. Section 4.3 Premium Calculation. The monthly Premiums owed by Employer shall be calculated by Medica using the number of Subscribers in each coverage classification according to Medica's records at the time of the calculation. Employer may make adjustments to its payment of Premiums for any additions or terminations of Members submitted by Employer but not yet reflected in Medica's calculations. A full calendar month's Premiums shall be charged for Members whose effective date falls on or before the 15th day of that calendar month. No Premium shall be charged for Members Page 5 whose effective date falls after the 15th of that calendar month. With the exception of termination of coverage due to a Member's death, a Member's Benefits may be terminated only at the end of a calendar month and a full Premium rate for that month will apply. In the case of a Member's death, that Member's Benefits will be terminated on the date of the death. Section 4.4 Retroactive Adjustments. In accordance with applicable law, retroactive adjustments may be made for any additions, or terminations of Members or changes in coverage classifications not reflected in Medica's records at the time the monthly Premiums were calculated by Medica. However, no retroactive credit will be granted for any month in which a Member received Benefits. No retroactive adjustments to enrollment or Premium refund shall be granted for any change occurring more than 60 days prior to the date Medica received notification of the change from Employer. Regardless of the preceding, Employer shall pay a Premium for any month during which a Member received Benefits. Section 4.5 Premium Changes. Medica may change the Premiums after 30 days prior written notice to Employer on: (a) the first anniversary of the effective date of this Contract; (b) any monthly due date after the first anniversary of this Contract; or (c) any date the provisions of this Contract are amended. Section 4.6 Employer Fees. Medica may charge Employer: (a) a late payment charge in the form of a finance charge of 12% per annum for any Premiums not received by the due date; and (b) a service charge for any non-sufficient-fund check received in payment of the Premiums. ARTICLE 5 INDEMNIFICATION Medica will hold harmless and indemnify Employer against any and all claims, liabilities, damages or judgments asserted against, imposed upon or incurred by Employer, including reasonable attorney fees and costs, that arise out of Medica's grossly negligent acts or omissions in the discharge of its responsibilities to a Member. Employer will hold harmless and indemnify Medica against any and all claims, liabilities, damages or judgments asserted against, imposed upon or incurred by Medica, including reasonable attorney fees and costs, that arise out of Employer's or Employer's employees', agents', and representatives' grossly negligent acts or omissions in the discharge of its or their responsibilities under this Contract. Employer and Medica shall promptly notify the other of any potential or actual claim for which the other party may be responsible under this Article 5. Page 6 ARTICLE 6 ADMINISTRATIVE SERVICES The services necessary to administer this Contract and the Benefits provided under it will be provided in accordance with Medica's or its designee's standard administrative procedures. If Employer requests such administrative services be provided in a manner other than in accordance with these standard procedures, including requests for non-standard reports, and if Medica agrees to provide such non-standard administrative services, Employer shall pay for such services or reports at Medica's or its designee's then-current charges for such services or reports. ARTICLE 7 CLERICAL ERROR A Member will not be deprived of coverage under the Contract because of a clerical error. Furthermore, a Member will not be eligible for coverage beyond the scheduled termination date because of a failure to record the termination. ARTICLE 8 ERISA When this Contract is entered into by Employer to provide benefits under an employee welfare benefit plan governed by ERISA, Medica shall not be named as and shall not be the plan administrator or the named fiduciary of the employee welfare benefit plan, as those terms are used in ERISA. The parties agree that Medica has sole, final, and exclusive discretion to: (a) interpret and construe the Benefits under the Contract; (b) interpret and construe the other terms, conditions, limitations and exclusions set out in the Contract; (c) change, interpret, modify, withdraw or add Benefits without approval by Members; and (d) make factual determinations related to the Contract and the Benefits. For purposes of overall cost savings or efficiency, Medica may, in its sole discretion, provide services that would otherwise not be Benefits. The fact that Medica does so in any particular case shall not in any way be deemed to require it to do so in other similar cases. Medica may, from time to time, delegate discretionary authority to other persons or entities providing services under this Contract. ARTICLE 9 DATA OWNERSHIP AND USE Information and data acquired, developed, generated, or maintained by Medica in the course of performing under this Contract shall be Medica's sole property. Except as this Contract or applicable law requires otherwise, Medica shall have no obligation to release such information or data to Employer. Medica may, in its sole discretion, release such information or data to Employer, but only to the extent permitted by law and subject to any restrictions determined by Medica. Page 7 ARTICLE 10 CONTINUATION OF COVERAGE Medica shall provide Benefits under this Contract to those Members who are eligible to continue coverage under federal or state law. Medica will not provide any administrative duties with respect to Employer's compliance with federal or state continuation of coverage laws. All duties of the Employer, including, but not limited to, notifying Members regarding federal and state law continuation rights and Premium billing and collection, remain Employer's sole responsibility. ARTICLE 11 CERTIFICATION OF QUALIFYING COVERAGE FORMS As required by the Health Insurance Portability and Accountability Act of 1996 (HIPAA), Medica will produce Certification of Qualifying Coverage forms for Members whose coverage under this Contract terminates. The Certification of Qualifying Coverage forms will be based on the eligibility and termination data Employer provides to Medica. Employer shall provide all necessary eligibility and termination data to Medica in accordance with Medica's data specifications. The Certification of Qualifying Coverage forms will only include periods of coverage Medica administers under this Contract. ARTICLE 12 AMENDMENTS AND ALTERATIONS Section 12.1 Standard Amendments: Except as provided in Section 12.2, amendments to this Contract are effective 30.days after Medica sends Employer a written amendment. Unless regulatory authorities direct otherwise, Employer's signature will not be required. No Medica agent or broker has authority to change this Contract or to waive any of its provisions. Section 12.2 Regulatory Amendment: Medica may amend this Contract to comply with requirements of state and federal law ("Regulatory Amendment") and shall issue to Employer such Regulatory Amendment and give Employer notice of its effective date. The Regulatory Amendment will not require Employer's consent and, unless regulatory authorities direct otherwise, Employer's signature will not be required. Any provision of this Contract that conflicts with the terms of applicable federal or state laws is deemed amended to conform to the minimum requirements of such laws. ARTICLE 13 ASSIGNMENT Neither party shall have the right to assign any of its rights and responsibilities under the Contract to any person, corporation or entity without the prior written consent of the other party; provided, however, that Medica may, without the prior written consent of the Employer, assign the Contract to any entity that controls Medica, is controlled by Medica, or is under common control with Medica. In the event of assignment, the Contract shall be binding upon the inure to the benefit of each party's successors and assigns. Page 8 ARTICLE 14 DISPUTE RESOLUTION Medica and Employer will work together in good faith to resolve any disputes under this Contract. If they are unable to resolve the disputes within 30 days following the date one party sent written notice of the dispute to the other party I and if either party wishes to pursue the dispute, it shall be submitted to binding arbitration in accordance with the rules of the American Arbitration Association ("MA"). In no event may arbitration be initiated more than one year following the sending of written notice of the dispute. The arbitrators shall apply Minnesota substantive law to the proceeding, except to the extent federal substantive law, including ERISA, would apply to any claim. Any arbitration proceeding under this Agreement shall be conducted in Hennepin County, Minnesota. An award may be entered against a party who fails to appear at a duly noticed hearing. The arbitrators: (i) may construe or interpret, but shall not vary or ignore, the terms of this Agreement; (ii) shall have no authority to award any punitive or exemplary damages; and (iii) shall be bound by controlling law. A party may appeal an arbitration decision to a court of law only in accordance with applicable state arbitration laws or for de novo review of alleged errors of law or legal reasoning. The cost of arbitration shall be paid equally by the parties. In the event a third party initiates litigation involving Medica or Employer, and the party under this Contract who is involved in such third party litigation desires to bring a claim against the other party under this Agreement for indemnity or contribution, the indemnity or contribution claim may be brought in the same venue as the third party litigation, and shall not be subject to the terms of this Article 14. ARTICLE 15 TIME LIMIT ON CERTAIN DEFENSES No statement made by Employer, except a fraudulent statement, shall be used to void this Contract after it has been in force for a period of 2 years. Page 9 ARTICLE 16 RELATIONSHIP BETWEEN PARTIES The relationship between Employer and any Member is that of Employer and Subscriber, Dependent or other coverage classification as defined in this Contract. The relationship between Medica and Network Providers and the relationship between Medica and Employer are solely contractual relationships between independent contractors. Network Providers and Employer are not agents or employees of Medica. Medica and its employees are not agents or employees of Network Providers or Employer. The relationship between a Network Provider and any Member is that of provider and patient and Network Provider is solely responsible for the services provided to any Member. ARTICLE 17 EMPLOYER RECORDS Employer shall furnish Medica with all information and proofs that Medica may reasonably require with regard to any matters pertaining to this Contract. Employer will be responsible for obtaining any necessary consent from Members which allows Medica to receive a Member's protected health information (as defined in the federal privacy regulations promulgated pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA)). Medica may at any reasonable time inspect all documents furnished to Employer by an individual in connection with the Benefits, Employer's payroll records, and any other records pertinent to the Benefits under this Contract. ARTICLE 18 MEMBER RECORDS By accepting Benefits under this Contract, each Member, including Dependents, whether or not such Dependents have signed the Subscriber's application, authorizes and directs any person or institution that has provided services to the Member to furnish Medica or any of Medica's designees at any reasonable time, upon its request, any and all information and records or copies of records relating to the Benefits provided to the Member. In accordance with applicable law, Medica and any of Medica's designees shall have the right to release any and all records concerning health care services: (i) as necessary to implement and administer the terms of this Contract; or (ii) for appropriate medical review or quality assessment. Such Member information and records shall be considered confidential medical records by Medica and it designees. ARTICLE 19 NOTICE Except as provided in Article 2, notice given by Medica to an authorized representative of Employer will be deemed notice to all Members. All notices to Medica shall be sent to the address stated in the Acceptance of Contract. All notices to Employer shall be sent to the persons and addresses stated in Employer's Application. All notices to Medica and Employer shall be deemed delivered: (a) if delivered in person, on the date delivered in person; (b) if delivered by a courier, on the date stated by the courier; (c) if delivered by an express mail service, on the date stated by the mail service vendor; or Page 10 (d) if delivered by United States mail, 3 business days after date of mailing. A party can change its address for receiving notices by providing the other party a written notice of the change. ARTICLE 20 COMMON LAW No language contained in the Contract constitutes a waiver of Medica's rights under common law. ACCEPTANCE OF CONTRACT This contract is deemed accepted by Employer upon the earlier of Medica's receipt of Employer's first payment of the Premium or upon Employer's execution of this Contract by its duly authorized representative. This Contract is deemed accepted by Medica upon Medica's deposit of Employer's first payment of the Premium. Such acceptance renders all terms and provisions herein binding on Medica and the Employer. IN WITNESS WHEREOF, MIC has caused this Contract to be executed on this February 7, 2005 to take effect on the Effective Date stated in the Contract. MEDICA EMPLOYER: 401 Carlson Parkway Minnetonka, Minnesota 55305 (952)992-2200 City of Columbia Heights Address: Billing Address: MN015-2838 P.O. Box 169063 Duluth, MN 55.816 590 40th Avenue NE Columbia Heights, MN 55421 Telephone: (763) 706-3609 Mailing Address: P.O. Box 9310 Minneapolis, MN 55440 ~~~t:~~t ;;$/4:; --~~~~ Date: CI+'I ~a "'-/1 3'e.- d-/J~ Or::;? , Linda Magee Title: By: Tom L. Henke Group Contact: Title: Vice President, Commercial Sales and Account Services Page 11 ELIGIBILITY APPENDIX Employer Name: City of Columbia Heights Employer Group#: 89946 Section 1 Eligibility to Enroll. A Subscriber, and his or her Dependents, as defined below, who satisfies the eligibility conditions stated in this Contract are eligible to enroll for coverage under this Contract. Any person who does not satisfy the definition of Subscriber or Dependent is not eligible for coverage under this Contract. A Subscriber and his or her Dependents must meet the eligibility requirements described below and in the entire Contract. In no event may the number of Members residing outside the Service Area exceed 10 percent of the total number of Members. If there is a conflict between the Certificate and this Eligibility Appendix, this Eligibility Appendix governs. Section 2 Subscriber Definition. The term "Subscriber" as used in the Contract will include the types of employees and conditions identified below: Classifications Applicable Waiting Periods and Effective Dates 1. See comments New Hires: Date of Hire Return: Date of return Status Change: Date of change A Subscriber who is a child entitled to receive coverage through a qualified medical child support order is not subject to any waiting periods, except to the extent that such waiting periods apply to the employee who is ordered by the qualified medical support order to provide coverage. Section 3 Dependent Definition. The term "Dependent" as used in this Contract includes the following: 1. The Subscriber's spouse 2. The following Dependent children: (a) Subscriber's unmarried natural or adopted child; (b) an unmarried child Placed For Adoption with the Subscriber; (c) a child for whom the Subscriber or the Subscriber's spouse has been appointed legal guardian, however, upon request by Medica, the Subscriber must provide satisfactory proof of dependency; Page 12 (d) Subscriber's or Subscriber's spouse's unmarried grandchild who, from the date of birth resides with and is dependent upon the Subscriber or Subscriber's spouse for support and (e) Subscriber's stepchild. A Dependent child must be under 19 years of age if s/he is not a student and must be under 25 years of age if s/he is a student. A Dependent child is eligible as a student if s/he is enrolled full- time in a recognized high school, college, university, trade or vocational school. If the student is unable to a carry a full-time course load due to illness, injury, or a physical or mental disability, as documented by a Physician, full-time student status will be granted if the student carries at least 60% of a full-time course load, as determined by the educational institution. 3. The Subscriber's handicapped Dependent. The handicapped Dependent must be: (a) incapable of self-sustaining employment by reason of mental retardation, mental illness, mental disorder or physical handicap; and (b) chiefly dependent upon the Subscriber for support and maintenance. The handicapped Dependent shall be eligible for coverage as long as he or she continues to be handicapped and satisfies the requirements of (a) and (b) above, unless coverage otherwise terminates under this Contract. Medica may require annual proof of handicap and dependency. An illness will not be considered a physical handicap. A child who is the subject of a qualified medical child support order is not a Dependent as defined above and may not enroll Dependents for coverage. See Section 2. Any person who does not satisfy the terms listed above will not be eligible for coverage under the Contract. Page 13 ENROLLMENT APPENDIX Employer Name: Employer Group#: City of Columbia Heights 89946 INITIAL ENROLLMENT "Initial Enrollment Period" is a 30 day time period starting with the date an eligible Subscriber and his or her eligible Dependents are first eligible to enroll for coverage under this Contract. An eligible Subscriber must apply within this period for coverage to begin the date he or she was first eligible to enroll. (The 30 day time period does not apply to newborn Dependents; see Special Enrollment, (item 4).) An eligible Subscriber who enrolls during the Initial Enrollment Period is accepted without application of health screening or affiliation periods. An eligible Subscriber and his/her Dependents who do not enroll during the Initial Enrollment Period may enroll for coverage during the next Open Enrollment, any applicable Special Enrollment Periods as described below. A Subscriber who is a child entitled to receive coverage through a qualified medical child. support order is not subject to any Initial Enrollment Period restrictions, except as noted in the Eligibility Appendix. NOTIFICATION Subscribers must notify Employer within 30 days of the effective date of any change of address or name, addition or deletion of Dependents, or other facts identifying the Subscriber or the Subscriber's Dependents. The Employer must notify Medica within 30 days of the effective date of the Member's initial enrollment application, changes to the Member's name or address, or changes to enrollment, including if a Member is no longer eligible for coverage. OPEN ENROLLMENT "Open Enrollment" is a minimum 14 day period set by Employer and Medica each year during which eligible Subscribers and his or her Dependents may enroll for coverage without application of health screening or waiting periods. SPECIAL ENROLLMENT A. Special Enrollment Periods. The following "Special Enrollment Periods" are available in addition to the Initial Enrollment Period and Open Enrollment Period. A Special Enrollment period will apply to an eligible employee and Dependent if: (1) the eligible employee or Dependent: a. was covered under Qualifying Coverage at the time the eligible employee or Dependent was first eligible to enroll under the Contract, and b. declined coverage for that reason, and c. presents to Medica either (i) evidence of the loss of prior coverage due to loss of eligibility for that coverage, or (ii) evidence that employer contributions toward the prior coverage have terminated, and d. maintains Continuous Coverage, and Page 14 e. requests enrollment in writing within 30 days of the date of the loss of coverage or the date the employer's contribution toward that coverage terminates; For purposes of this item: a. prior coverage does not include continuation coverage required under federal law; b. loss of eligibility includes loss of eligibility as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment; c. loss of eligibility does not include a loss due to failure of the eligible employee or Dependent to pay Premiums on a timely basis or termination of coverage for cause; (2) the eligible employee or Dependent: a. was covered under benefits available under (i) the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), Public Law Number 99-272, as amended, or (ii) any state continuation laws applicable to the employer or Medica, and b. declined coverage for that reason, and c. the eligible employee or Dependent presents to Medica evidence that the eligible employee or Dependent has exhausted such COBRA or state continuation coverage and has not lost such coverage due to either failure of the eligible employee or Dependent to pay Premiums on a timely basis or for cause,and d. maintains Continuous Coverage, and e. requests enrollment in writing within 30 days of the loss of coverage; (3) the Dependent is a new spouse of the Subscriber or eligible employee, provided that the marriage is legal, enrollment is requested in writing within 30 days of the marriage, and the eligible employee also enrolls during this Special Enrollment Period; (4) the Dependent is a new Dependent child of the Subscriber or eligible employee, provided that enrollment is requested in writing within 30 days of the Subscriber or eligible employee acquiring the Dependent (the notification period is not limited to 30 days for newborn Dependents), and provided the eligible employee also enrolls during this Special Enrollment Period; (5) the Dependent is the spouse of the Subscriber or eligible employee through whom the Dependent child described in item #4 above claims Dependent status and; a. that spouse is eligible for coverage; and b. is not already enrolled under the Contract; and c. enrollment is requested in writing within 30 days of the Dependent child becoming a Dependent, provided the eligible employee also enrolls during this Special Enrollment Period. Page 15 (6) the Dependents are eligible Dependent children of the Subscriber or eligible employee and enrollment is requested in writing within 30 days of a Dependent, as described in items #3 or #4 above, becoming eligible to enroll under the coverage, provided the eligible employee also enrolls during this Special Enrollment Period. Additionally, when Employer provides Medica with notice of a qualified medical child support order and a copy of the order, Medica will provide such eligible dependent child with a Special Enrollment Period. Employer will provide Medica with such notice, along with an application for coverage, within the lesser of 30 days or the time in which Employer provides notice of its determination to the persons specified in the order. B. Effective Dates of Coverage. Coverage shall become effective: (1) in the case of paragraphs (A)( 1) or (2) above, the day after the date the other coverage ended; (2) in the case of paragraph (A)(3) above, the date of the marriage; (3) in the case of paragraph (A)(4) above, the date of birth, date of adoption, or date of placement for adoption. In all other cases, the date the Subscriber acquires the Dependent child. (4) in the case of paragraph (A)(5) above, the date the Subscriber acquires the Dependent Child; and (5) in the case of (A)(6) above, the first day of the first calendar month beginning after the date the completed request for enrollment is received by Medica. (6) in the case of the qualified medical child support order, the first day of the first calendar month beginning after the date the completed request for enrollment is reeeived by Medica. Page 16 OFF-CYCLE ENROLLMENT - NO OFF-CYCLE ENROLLMENT FOR LATE ENTRANTS WITHOUT CONTINUOUS COVERAGE An eligible Subscriber or an eligible Subscriber and his or her Dependents who do not enroll for coverage offered through Employer during the Initial Enrollment Period, the Open Enrollment Period or any applicable Special Enrollment Period will be considered Late Entrants. (1) Late Entrants who have maintained Continuous Coverage may enroll and coverage will be effective the first day of the month following date of approval by Medica. Continuous Coverage will be determined to have been maintained if the Late Entrant requests enrollment within 63 days after prior Qualifying Coverage ends. (2) Late Entrants who have not maintained Continuous Coverage may not enroll off-cycle. An eligible Subscriber or Dependent who: (1) does not enroll during the Initial Enrollment Period, the Open Enrollment Period or any applicable Special Enrollment period; and (2) is an enrollee of the Minnesota Comprehensive Health Association ("MCHA") at the time Medica offers or renews coverage with Employer, provided the eligible Subscriber or Dependent maintains Continuous Coverage, will not be considered a Late Entrant and will be allowed to enroll. Coverage will be effective as determined by Medica. Page 17 PO Box 9310 Minneapolis, MN 55440-9310 952-992-2900 -1 MEDICA@ Dear Client: Enclosed are amendments which modify your current Medica Certificate of Coverage, which is part of your Master Group Contract. The first is an amendment providing clarification of language in the Continuation section of the Certificate of Coverage. e General disclosure information on COBRA. e Updated language for Uniformed Services Employment and Reemployment Right Act (USERRA). The second amendment updates language in the Conversion section of the Certificate of Coverage, providing further clarification regarding conversion rights. If you have any questions or would like more information, please contact the Medica Service Center at 800-936-6880 or 952-992-2200. Medica COM 1709-50405 MedicaiID is a registered service mark of Medica Health Plans. "Medica" refers to the family of health plan businesses that includes Medica Health Plans*, Medica Health Plans of Wisconsin, Medica Insurance Company*, and Medica Self-Insured*. *Accredited by the National Committee for Quality Assurance in the states of MN, ND, 5D and WI. An Equal Opportunity Employer Medica Commercial HMO/POS and Medicaid Plans AMENDMENT TO THE CERTIFICATE OF COVERAGE This amendment modifies your Medica Health Plans ("Medica") Certificate of Coverage ("Certificate") effective December 1, 2005. Subsection 2 of the section titled Continuation has been deleted and replaced with the following: 2. Your right to continue coverage under federal law Notwithstanding the provisions regarding termination of coverage described in Ending Coverage, you may be entitled to extended or continued coverage as follows: This plan is a group health plantor purposes ofQOI3RA. COBRA continuation coverage. Continued coverage shall be provided as required under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), as amended (as well as the Public Health Service Act (PHSA), as amended). The employer shall, within the parameters of federal law, establish uniform policies pursuant to which such continuation coverage will be provided. See General COBRA Information in this section. USERRA continuation coverage. Continued coverage shall be provided as required under the Uniformed Services Employment and Reemployment Rights Act of 1994 ("USERRA"), as amended. The employer shall, within the parameters of federal law, establish uniform policies pursuant to which such continuation coverage will be provided. See General USERRA Information in this section. General COBRA Information. COBRA requires employers with 20 or more employees to offer subscribers and their families (spouse and/or dependent children) the opportunity to pay for a temporary extension of health coverage (called continuation coverage) at group rates in certain instances where health coverage under employer sponsored group health plan(s) would otherwise end. This section is intended to inform you, in summary fashion, of your rights and obligations under the continuation coverage provision of federal law. It is intended that no greater rights be provided than those required by federal law. Take time to read this section carefully. 1 05 MHP COBRA (6/05) 05 MCS, ME-MES, MCC COBRA 12/1/05 COM2562-11005 AMENDMENT TO THE CERTIFICATE OF COVERAGE Qualified beneficiary For purposes of this section, a qualified beneficiary is defined as: a. A covered employee (a current or former employee who is actually covered under a group health plan and not just eligible for coverage); b. A covered spouse of a covered employee; or c. A dependent child of a covered employee. (A child placed for adoption with or born to an employee or former employee receiving COBRA continuation coverage is also a qualified beneficiary.) Subscriber's loss The subscriber has the right to elect continuation of coverage if there is a loss of coverage under the Contract because of termination of the subscriber's employment (for any reason other than gross misconduct), or the subscriber becomes ineligible to participate under the terms of the Contract due to a reduction in his or her hours of employment. Subscriber's spouse's loss The subscriber's covered spouse has the right to choose continuation coverage if he or she loses coverage under the Contract for any of the following reasons: a. Death of the subscriber; b. A termination of the subscriber's employment (for any reason other than gross misconduct) or reduction in the subscriber's hours of employment with the employer; c. Divorce or legal separation from the subscriber; or d. The subscriber's entitlement to (actual coverage under) Medicare. Subscriber's child's loss The subscriber's dependent child has the right to continuation coverage if coverage under the Contract is lost for any of the following reasons: a. Death of the subscriber if the subscriber is the parent through whom the child receives coverage; b. The subscriber's termination of employment (for any reason other than gross misconduct) or reduction in 2 05 MHP COBRA (6/05) 05 MCS, ME-MES, MCC COBRA 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE the subscriber's hours of employment with the employer; c. The subscriber's divorce or legal separation from the child's other parent; d. The subscriber's entitlement to (actual coverage under) Medicare if the subscriber is the parent through whom the child receives coverage; or e. The subscriber's child ceases to be a dependent child under the terms of the Contract. Responsibility to inform Under federal law, the subscriber and dependent have the responsibility to inform the employer of a divorce, legal separation, or a child losing dependent status under the Contract within 60 days of the date of the event, or the date on which coverage would be lost because of the event. Also, a subscriber and dependent who have been determined to be disabled under the Social Security Act as of the time of the subscriber's termination of employment or reduction of hours or within 60 days of the start of the continuation period must notify the employer of that determination within 60 days of the determination. If determined under the Social Security Act to no longer be disabled, he or she must notify the employer within 30 days of the determination. Bankruptcy Rights similar to those described above may apply to retirees (and the spouses and dependents of those retirees), if the subscriber's employer commences a bankruptcy proceeding and these individuals lose coverage. Election rights When notified that one of these events has happened, the employer will notify the subscriber and dependents of the right to choose continuation coverage. Under federal law, the subscriber and dependents have at least 60 days to elect continuation coverage, measured from the later of: a. The date coverage would be lost because of one of the events described above, or b. The date notice of election rights is received. 3 05 MHP COBRA (6/05) Ifcontinuationcoverage is not elected, your coverage under the Contract will end. 05 MCS, ME-MES, MCC COBRA 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE If continuation coverage is elected within this period, the coverage will be retroactive to the date coverage would otherwise have been lost. The subscriber and the subscriber's covered spouse may elect continuation coverage on behalf of other dependents entitled to continuation coverage. However, each person entitled to continuation coverage has an independent right to elect continuation coverage. The subscriber's covered spouse or dependent child may elect continuation coverage even if the subscriber does not elect continuation coverage. Type of coverage and cost If the subscriber and the subscriber's dependents elect continuation coverage, the employer is required to provide coverage that, as of the time coverage is being provided, is identical to the coverage provided under the Contract to similarly situated employees or employees' dependents. Under federal law, a person electing continuation coverage may have to pay all or part of the premium for continuation coverage. The amount charged cannot exceed 102 percent of the cost of the coverage. The amount may be increased to 150 percent of the applicable premium for months after the 18th month of continuation coverage when the additional months are due to a disability under the Social Security Act. There is a grace period of at least 30 days for the regularly scheduled premium. Duration of COBRA coverage Federal law requires that you be allowed to maintain continuation coverage for 36 months unless you lost coverage under the Contract because of termination of employment or reduction in hours. In that case, the required continuation coverage period is 18 months. The 18 months may be extended if a second event (e.g., divorce, legal separation or death) occurs during the initial 18-month period. It also may be extended to 29 months in the case of an employee or employee's dependent who is determined to be disabled under the Social Security Act at the time of the employee's termination of employment or reduction of hours, or within 60 days of the start of the 18-month continuation period. 4 05 MHP COBRA (6/05) Underno circumstances is the total continuation periodgreaterthan36 months from the datebfthe original event that triggered the continuation coverage, 05 MCS, ME-MES, MCC COBRA 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE If an employee or the employee's dependent is entitled to 29 months of continuation coverage due to his or her disability, the other family members' continuation period is also extended to 29 months. If the subscriber becomes entitled to (actually covered under) Medicare, the continuation period for the subscriber's dependents is 36 months measured from the date of the subscriber's Medicare entitlement even if that entitlement does not cause the subscriber to lose coverage. Federal law provides that continuation coverage may end earlier for any of the following reasons: a. The subscriber's employer no longer provides group health coverage to any of its employees; b. The premium for continuation coverage is not paid on time; c. Coverage is obtained under another group health plan (as an employee or otherwise) that does not contain any exclusion or limitation with respect to any applicable pre-existing condition; or d. The subscriber becomes entitled to (actually covered under) Medicare. Continuation coverage may also end earlier for reasons which would allow regular coverage to be terminated, such as fraud. General USERRA Information. USERRA requires employers to offer employees and their families (spouse and/or dependent children) the opportunity to pay for a temporary extension of health coverage (called continuation coverage) at group rates in certain instances where health coverage under employer sponsored group health plan(s) would otherwise end. This section is intended to inform you, in summary fashion, of your rights and obligations under the continuation coverage provision of federal law. It is intended that no greater rights be provided than those required by federal law. Take time to read this section carefully. Employee's loss The employee has the right to elect continuation of coverage if there is a loss of coverage under the Contract because of absence from employment due to service in the uniformed services, and the employee was covered under the Contract at the time the absence 5 05 MHP COBRA (6/05) This plan is a group health plan for purposes of USERRA. 05 MCS, ME-MES, MCC COBRA 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE began, and the employee, or an appropriate officer of the uniformed services, provided the employer with advance notice of the employee's absence from employment (if it was possible to do so). Service in the uniformed services means the performance of duty on a voluntary or involuntary basis in the uniformed services under competent authority, including active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard duty, and the time necessary for a person to be absent from employment for an examination to determine the fitness of the person to perform any of these duties. Uniformed services means the U.S. Armed Services, including the Coast Guard, the Army National Guard and the Air National Guard, when engaged in active duty for training, inactive duty training, or full-time National Guard duty, and the commissioned corps of the Public Health Service. Election rights The employee or the employee's authorized representative may elect to continue the employee's coverage under the Contract by making an election on a form provided by the employer. The employee has 60 days to elect continuation coverage measured from the later of (1) the date coverage would be lost because of the event described above, or (2) the date notice of election rights is received. If continuation coverage is elected within this period, the coverage will be retroactive to the date coverage would otherwise have been lost. The employee may elect continuation coverage on behalf of other covered dependents, however, there is no independent right of each covered dependent to elect. If the employee does not elect, there is no USERRA continuation available for the spouse or dependent children. In addition, even if the employee does not elect USERRA continuation, the employee has the right to be reinstated under the Contract upon reemployment, subject to the terms and conditions of the Contract. Type of coverage and cost If the employee elects continuation coverage, the employer is required to provide coverage that, as of the time coverage is being provided, is identical to the coverage provided under the Contract to similarly situated employees. The amount charged cannot 6 05 MHP COBRA (6/05) 05 MCS, ME-MES, MCC COBRA 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE exceed 102 percent of the cost of the coverage unless the employee's leave of absence is less than 31 days, in which case the employee is not required to pay more than the amount that they would have to pay as an active employee for that coverage. There is a grace period of at least 30 days for the regularly scheduled premium. Duration of USERRA coverage When an employee takes a leave for service in the uniformed services, coverage for the employee and dependents for whom coverage is elected begins the day after the employee would lose coverage under the Contract. Coverage continues for up to 24 months, unless the leave for service began prior to December, 10, 2004, in which case coverage continues for up to 18 months. Federal law provides that continuation coverage may end earlier for any of the following reasons: a. The employer no longer provides group health coverage to any of its employees; b. The premium for continuation coverage is not paid on time; c. The employee loses their rights under USERRA as a result of a dishonorable discharge or other undesirable conduct; d. The employee fails to return to work following the completion of his or her service in the uniformed services; or e. The employee returns to work and is reinstated under the Contract as an active employee. Continuation coverage may also end earlier for reasons which would allow regular coverage to be terminated, such as fraud. COBRA and USERRA coverage are concurrent If the employer is subject to COBRA and USERRA, and you elect COBRA continuation coverage in addition to USERRA continuation coverage, these coverages run concurrently. 7 05 MHP COBRA (6/05) 05 MCS, ME-MES, MCC COBRA 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE All other terms and conditions of the Certificate remain in full force and effect. Medica Health Plans By: ~/~/-<.-. Tom Henke Senior Vice President By: 1~tJ~ James P. Jacobson Senior Vice President and Assistant Secretary 8 05 MHP COBRA (6/05) 05 MCS, ME-MES, MCC COBRA 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE This amendment modifies your Medica Certificate of Coverage ("Certificate") effective December 1,2005. The Conversion provision appearing in the Certificate of Coverage is deleted and replaced with the following: Conversion Minnesota Residents: This section describes your right to convert to an individual conversion plan if you are a resident of Minnesota on the day that you submit an enrollment form to Medica or Medica's designated conversion vendor. Overview 1. You may convert to an HMO individual conversion plan through Medica or Medica's designated conversion vendor without proof of good health or waiting periods at the following times: a. Your continuation coverage with Medica, as described in Continuation, is exhausted. See Definitions. These words have specific meanings: . Continuous coverage . Dependent . Premium . Waiting period b. Your coverage or continuation coverage ends because the Contract is terminated and the Contract is not replaced with other continuous group coverage. Your conversion plan coverage may not provide the same coverage as your previous group health plan. Benefits and provider networks may be different. c. Your coverage ends under the Contract and you do not have the right to continue coverage as described in Continuation. 2. If you move from the service area you may convert to an insurance conversion plan without proof of good health or waiting periods. a. When continuous coverage is not maintained; or If you are a Minnesota resident, you may be eligipleto.obtain coverage from 1) other private sources of health coverage, or 2) the Minnesota Comprehensive Health Association, without a preexisting condition limitation. Contact the Minnesota Comprehensive Health Association for further information: 3. Your conversion plan goes into effect the day following the date your other coverage ends. You may select a qualified 1, 2 or 3 conversion plan. You must maintain continuous coverage when applying for conversion coverage. 4. Conversion coverage is not available: b. If your coverage terminates due to nonpayment of premium; or . For deductible plan options call 1- 866-894-8053 or TTY 1-800-841- 6753 c. If you have not exhausted your right to continue coverage as described in Continuation; or · For Medicare Supplement plan options call 1-800-325-3540 or TTY 1-800-234-8819 05 MHP MN CONVERSION (5/05) 1 MN MCC, MCS, ME/MES CONV 12/1/05 COM2561-11005 AMENDMENT TO THE CERTIFICATE OF COVERAGE d. If your coverage or continuation coverage ends because the Contract is terminated and the Contract is not replaced with other continuous group coverage; or e. If you commit fraud or material misrepresentation in applying for continuation or conversion of coverage. For purposes of numbers 3 and 4a. above, continuous coverage will be determined to have been maintained if you request enrollment for conversion within 63 days after your coverage ends or within 31 days of the date you were notified of the right to convert coverage, whichever is later. What you must do 1. For conversion coverage information, call Customer Service at one of the telephone numbers listed inside the front cover. 2. Pay premiums to Medica or Medica's designated conversion vendor within 63 days after your coverage ends or within 31 days of the date you were notified of your right to convert coverage, whichever is later. You will be required to include your first month premium payment with your enrollment form for conversion coverage. 3. Submit an enrollment form to Medica or Medica's designated conversion vendor within 63 days after your coverage ends or within 31 days of the date you were notified of your right to convert, whichever is later. You may include only those dependents who were enrolled under the Contract at the time of conversion. What the employer must do The employer is required to notify you of your right to convert coverage. Residents of a state other than Minnesota: This section describes your right to convert to an individual conversion plan if other group coverage is unavailable and if you are a resident of a state other than Minnesota on the day that you submit an enrollment form to Medica or Medica's designated conversion vendor. 05 MHP MN CONVERSION (5/05) 2 MN MCC, MCS, ME/MES CONV 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE Overview You may convert to an individual conversion plan through Medica or Medica's designated conversion vendor without proof of good health or waiting periods, in accordance with the laws of the state in which you reside on the day that you submit an enrollment form to Medica or Medica's designated conversion vendor. What you must do 1. For conversion coverage information, call Customer Service at one of the telephone numbers listed inside the front cover. 2. Pay premiums to Medica or Medica's designated conversion vendor within 31 days after your coverage ends or such other period of time as provided under applicable state law. You will be required to include your first month premium payment with your enrollment form for conversion coverage. 3. Submit an enrollment form to Medica or Medica's designated conversion vendor within 31 days after your coverage ends or such other period of time as provided under applicable state law. You may include only those dependents who were enrolled under the Contract at the time of conversion. 05 MHP MN CONVERSION (5/05) 3 MN MCC, MCS, ME/MES CONV 12/1/05 AMENDMENT TO THE CERTIFICATE OF COVERAGE All other terms and conditions of the Certificate remain in full force and effect. Medica Health Plans By: ~x:~.c, GG. Tom Henke Senior Vice President By: '7~C;~ James P. Jacobson Senior Vice President and Assistant Secretary 05 MHP MN CONVERSION (5/05) 4 MN MCC, MCS, ME/MES CONV 12/1/05