EXHIBIT 10-26
HEALTH BENEFITS SERVICES AGREEMENT
THIS HEALTH BENEFITS SERVICES AGREEMENT, including all attachments and
exhibits hereto (the "Agreement"), is entered into as of January 1, 2003,
by and between the National Postal Mail Handlers Union, a Division of the
Laborers International Union of North America, AFL-CIO (the "Mail Handlers
Union") and First Health Group Corp. ("First Health"). The Mail Handlers
Union and First Health may be individually referred to herein as a "party"
or collectively referred to herein as the "parties."
RECITALS
WHEREAS, certain federal government employees and annuitants and former
spouses of such employees and annuitants are enrolled in a Federal Employees
Health Benefits plan known as the Mail Handlers Benefit Plan ("MHBP" or
"Plan"), which is established by federal government procurement Contract No.
CS 1146 between the National Postal Mail Handlers Union, a Division of the
Laborers International Union of North America, AFL-CIO, an unincorporated
association, and the United States Office of Personnel Management; and
WHEREAS, First Health Life and Health Insurance Company and Cambridge
Life Insurance Company (collectively, the "Underwriter") underwrite and
Federal Employee Plans, Inc. ("FEPI") administers the MHBP pursuant to Prime
Subcontract No. L-35489 between the Underwriter, FEPI and the Mail Handlers
Union (the "Prime Subcontract"); and
WHEREAS, it is in the MHBP's best interest for the Mail Handlers Union
to procure cost containment services to manage medical costs; and
WHEREAS, so long as the Underwriter is performing underwriting services
and FEPI is performing administrative services to the Mail Handlers Union,
the Mail Handlers Union desires First Health to provide cost containment
programs; and
WHEREAS, First Health is a recognized leader in the business of
establishing, administering, and maintaining cost containment services.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, and for other good and valuable consideration, receipt of which
is hereby acknowledged, First Health and the Mail Handlers Union agree as
follows:
ARTICLE 1 DEFINITIONS
1.1 Agreement Year means each calendar year, beginning January 1st and
ending December 31st.
1.2 Area Network Rate means the average of the Contract Rates for a Covered
Service based upon all of the Contract Providers' Contract Rates for that
Covered Service in the Market Area in which the claim was incurred. This
rate is also known as the "blended" rate as defined on page 70 of the Plan
in effect for 2002.
1.3 Authorized Designee means the entity or person, including but not
limited to, the Mail Handlers Union, its health benefits service providers,
brokers and consultants which are authorized by the Mail Handlers Union to
have access to Confidential Medical Information as defined in Section 10.2.
1.4 Claims Administrator means FEPI, or its designee (as approved by the
Mail Handlers Union).
1.5 Contract Provider means a provider of medical services that has entered
into an agreement with First Health to provide medical services to Members
at negotiated rates.
1.6 Contract Rates means the negotiated rates for medical services
specified in the respective agreements between First Health and the Contract
Providers.
1.7 Covered Service means a medical service provided to a Member which is
eligible for payment under the provisions of the Plan.
1.8 Enrollee means each covered active member and any other person covered
under a Plan in his or her own right (such as former members or others
electing temporary continuation of coverage) and not by reason of status as
a dependent or spouse.
1.9 The First Health[R] Network (the "Network") is a provider network of
Contract Providers, including hospitals, physicians and ancillary service
providers and a specially credentialed network of transplant providers.
1.10 Geographic Areas means the states listed in Exhibit II of this
Agreement.
1.11 Market Area means an area identified by First Health as a market area
with a sufficient number of Contract Providers located in such area so that
First Health can develop the Area Network Rates.
1.12 Member means a person entitled to benefits for medical services under
the Plan.
1.13 Non-Network Claim means a non-hospital medical claim for Covered
Services from a medical provider which is not a member of The First HealthO
Network.
1.14 OPM means the United States Office of Personnel Management.
1.15 Plan means the benefits brochure for the current year authorized for
distribution by OPM entitled "Mail Handlers Benefit Plan, RI 71-07".
1.16 PPO means a network of medical providers.
1.17 Prime Contract means the Contract for Federal Employees Health Benefits
No. CS 1146, as amended, between the Mail Handlers Union, as Carrier of the
Plan, and OPM.
1.18 Savings means the difference between billed charges (net of: (1)
charges that are excluded from coverage under the terms of the Plan; (2)
payments made to over 65 annuitants that are limited to Medicare allowable
or approved amounts; and (3) payments due from other third party payors
(including Medicare)) and the negotiated rates. Negotiated rates on bills
incurred in the Network equal the Contract Rates and on non-network bills
equal the negotiated discounts as specified in Section 2.2. Savings does
not include claim reductions taken in accordance with Section 2.3.
ARTICLE 2 NETWORK AND CLINICAL SERVICES
2.1 The First Health[R] Network. First Health will provide the Mail
Handlers Union with access to the Network for Members in the Geographic
Areas. First Health will provide notice to Contract Providers regarding
the Mail Handlers Union's selection of the Network in conjunction with its
quarterly Contract Provider bulletin, or earlier as determined practical
by First Health. Subject to Section 2.6 below regarding certain Network
changes, First Health may at any time, and in its sole discretion, add or
delete any Contract Provider from the Network.
2.2 Non-Network Negotiation Services. First Health will review large dollar
claims, at the then-current threshold as established by First Health, that
have not been repriced pursuant to Section 2.3 below, from non-network
medical providers prior to claims payment and attempt to negotiate a
discount from billed charges for prompt payment where feasible. In
addition, First Health will evaluate claims for audit potential, make
recommendations to the Claims Administrator and coordinate on-site audits as
necessary. Such on-site audits will be conducted under terms and conditions
mutually acceptable to First Health and the Claims Administrator.
2.3 Market Area Network Services. First Health will provide the Mail
Handlers Union with access to the Market Area Network Services in the
Geographic Areas.
2.3.1 Non-Network Claims. First Health will review Non-Network
Claims incurred by Members that are submitted to First Health.
First Health will reprice the claim to the Area Network Rate,
in accordance with Section 2.3.2 below.
2.3.2 Area Network Rate Repricing. For each Non-Network Claim
received by First Health, First Health will identify whether the
Non-Network Claim was incurred in a Market Area. If the Non-
Network Claim was incurred in a Market Area, First Health will
reprice the claim to the Area Network Rate. The Mail Handlers
Union acknowledges that the Market Areas are subject to change
by First Health from time to time.
2.4 Clinical Software and Medical Consulting. First Health will provide
access to software designed to identify opportunities for utilization review
and medical case management intervention. In addition, First Health will
provide access to physicians for the purpose of providing medical consulting
services. First Health will provide the clinical software and physician
access consistent with the provision of such services by the previous vendor
and/or administrator of the Mail Handlers Union, and the fee for such access
is included in the Network access fee.
2.5 Information Provided by First Health. First Health will provide
Members with information regarding Contract Providers and will provide the
Claims Administrator with a camera-ready hard copy listing of Contract
Providers, including annual updates, for each Geographic Area for the Mail
Handlers Union or its designee to reproduce and distribute at the Claims
Administrator's expense. Printed Contract Provider directories may be
purchased by the Claims Administrator from First Health at the then-current
rates.
2.6 Network Improvement. First Health agrees to improve and expand the
Network during the Term, and will establish a joint task force made up of
representatives from both First Health and the Mail Handlers Union. When
requested by the Mail Handlers Union, the task force will meet promptly
to identify areas of the Network which need improvement and expansion,
and to monitor progress of existing improvement and expansion efforts. In
addition, First Health will maintain a toll free number for the nomination
and recruitment of providers, and, if First Health intends to make major
changes (either additions or deletions) in the composition of Contract
Providers in any Geographic Area, First Health will notify and consult with
the Mail Handlers Union regarding the substance and timing of such changes
prior to taking any such action.
ARTICLE 3 OBLIGATIONS OF THE MAIL HANDLERS UNION OR ITS DESIGNEES
3.1 Eligibility Verification. The Claims Administrator will maintain a
procedure for prompt verification during normal business hours of a Member's
enrollment in the Plan.
3.2 Communication to Members.
3.2.1 The Claims Administrator will identify all Contract Providers as
the exclusive PPO providers of Covered Services and will advise Members
as to the identity of all such Contract Providers.
3.2.2 The Claims Administrator will advise Members that the list
of Contract Providers may change from time to time, with or without
notice, and the Member is obligated to confirm with the Contract
Provider the Contract Provider's status.
3.2.3 The Claims Administrator will provide Members with a First
Health-approved Plan identification card which prominently displays
The First Health[R] Network logo and the toll-free number. The Mail
Handlers Union and its designees agree not to alter or attach any
information to the identification cards which materially changes any
of the information contained on the identification cards, including,
but not limited to, stickers and card sleeves.
3.2.4 Upon implementation, and at least twice annually, the Claims
Administrator will provide Members with information regarding the
services provided pursuant to this Agreement, including the following:
(a) instructions about how to use the services; (b) information on the
toll-free number; (c) information on the obligations of the Member and
of any benefits and penalties, including benefit differentials, under
the Plan for use of or failure to use the services made available
pursuant to this Agreement; and (d) information about incentives to
encourage Members to use the services of Contract Providers through the
distribution of communication materials on the Network, provision of
directories or other means agreed to by the Claims Administrator and
First Health.
3.2.5 The Claims Administrator will indicate on the explanation of
payment to a Contract Provider and the explanation of benefits to
the Member that reimbursement is subject to the Contract Provider's
agreement with First Health and the balance owed by the Member. The
Claims Administrator will provide First Health with model samples of
the proposed explanations of payment and benefits for approval prior
to use.
3.2.6 The Mail Handlers Union agrees that all descriptive information
including, but not limited to, communication materials for distribution
to Members and the information contained in the Plan, regarding First
Health or the services provided by First Health may not be disseminated
by the Mail Handlers Union, the Claims Administrator or other related
parties without the express written approval of First Health.
3.3 Contract Provider Payments. The Claims Administrator will submit all
Members' medical services claims which it may receive to First Health in a
timely manner. The Claims Administrator will pay all repriced claims within
30 days, and the Mail Handlers Union acknowledges that under the respective
agreements between First Health and the Contract Providers, a Contract
Provider may refuse to accept payment at the Contract Rates if the Contract
Provider is not paid within 30 days of the Claims Administrator's receipt
of accurate and complete bills.
3.4 Non-Network Negotiation Services Requirements. The Mail Handlers Union
agrees that as part of First Health's non-network negotiation services as
described in Section 2.2: (a) the Claims Administrator is permitted to pay
claims within 10 working days from the date of the negotiated agreement.
The Mail Handlers Union acknowledges that no discount will be available
on claims paid after the negotiated payment date; (b) the explanation of
payment will clearly state that payment is being made on the basis of
the First Health negotiated discount; and (c) First Health may waive
retrospective xxxx audit review of non-network negotiated claims, except
in cases of fraud or illegal activity.
3.5 Contract Provider Information Requirements. The Mail Handlers Union
acknowledges that all Contract Provider information is provided for the
sole purpose of assisting the Mail Handlers Union in identifying Contract
Providers to Members, and the Mail Handlers Union agrees not to modify or
commingle this information with any other information.
ARTICLE 4 PLAN REQUIREMENTS
4.1 Vendor for Health Benefits Services. The Mail Handlers Union
represents and warrants that the Plan includes a provision which allows an
outside entity, such as First Health, to provide health benefits services
as set forth under this Agreement.
4.2 Financial Incentives. The Plan currently includes financial incentives
to encourage Members to access the Network for Covered Services, and the
parties intend to maintain appropriate financial incentives during each
Term.
ARTICLE 5 EXCLUSIVITY AND NON-COMPETITION
5.1 Exclusivity. The Mail Handlers Union agrees that it will use First
Health exclusively to provide all of the Members with all cost containment
services specified in this Agreement. First Health intends to contract with
other service providers, such as non-directed PPOs, to provide additional
services to the Mail Handlers Union. If necessary, this Agreement will be
amended to incorporate such additional services. In addition, the Mail
Handlers Union will consider using new or additional cost containment
services that may be made available by First Health on or after January 1,
2003.
5.2 Non-Competition. The Mail Handlers Union agrees that it will not
directly enter into any contract with any Contract Provider for the delivery
of PPO services to its Members for at least twelve months after the
termination of this Agreement. This provision shall not apply to any
contracts in existence between the Mail Handlers Union and Contract
Providers as of the date on which this Agreement was entered, nor shall it
prohibit the Mail Handlers Union from directly contracting with any other
entity that provides a PPO after termination of this Agreement.
ARTICLE 6 DATA AND INFORMATION REQUIREMENTS
6.1 Reliance on Data. The Mail Handlers Union acknowledges that
performance of the services provided under this Agreement is dependent upon
the submission of timely, accurate and complete information as required by
First Health, and the Mail Handlers Union or its designee agrees to furnish
such information. The Mail Handlers Union understands that failure to
submit such information accurately and completely to First Health within any
requested time frames may delay or prevent access to the services provided
under this Agreement. The Mail Handlers Union agrees that First Health may
rely on such information in performing its services under this Agreement.
Further, services will be performed using the then-current data as provided
by the Mail Handlers Union or its designee. First Health is not responsible
for, nor does First Health have any liability under this Agreement or any
applicable law for, any errors or performance failures which result from the
Mail Handlers Union's or its designee's failure to provide the information,
its provision of erroneous information, or use of the then-current data
during the standard time period required to update information received from
the Mail Handlers Union or its designee. First Health may use data provided
by the Mail Handlers Union or its designee for statistical, reporting or
other related commercial purposes in a manner that will not disclose any
Confidential Medical Information as defined in Section 10.2.1.
6.2 Reports. First Health will provide the Mail Handlers Union or its
designee with its standard periodic reports of the on-going results of the
services provided under this Agreement. For matters of special interest to
the Mail Handlers Union, First Health may provide special reports which are
requested in writing by the Mail Handlers Union. If First Health agrees to
prepare a special report, and an additional expense will be incurred by
First Health in preparing such report, First Health will promptly provide
a written cost estimate and production schedule and obtain the Mail
Handlers Union's approval of such costs prior to preparing the report.
Notwithstanding the foregoing, First Health will not charge the Mail
Handlers Union for any special report or data requests that are reasonable
as to scope and cost. Further, First Health will also cooperate with the
Mail Handlers Union in regard to any OPM requests for data collection and
reporting requirements.
ARTICLE 7 FEES
7.1 Payment of Fees.
7.1.1 The Mail Handlers Union will require the Underwriter to pay
First Health for all services provided pursuant to this Agreement as
set forth in Exhibit I, the Schedule of Fees.
7.1.2 Payment must be made by the Underwriter within 30 days after
receipt by it of monthly billing statements from First Health.
7.1.3 First Health's fees do not include taxes or governmental
charges. The Underwriter will pay, or reimburse First Health for,
any applicable sales, use, value added or other tax or government
or regulatory agency charge imposed based on transactions hereunder,
exclusive of First Health's net income or corporate franchise taxes.
7.1.4 Effective on each anniversary date of this Agreement, First
Health will annually adjust all fees that are charged on an hourly, per
capita, per case, per xxxx, per claim or per unit basis, by giving 60
days notice to the Mail Handlers Union prior to the anniversary date
of each year of this Agreement. Such fees for the next year of the
Agreement will be increased by an amount equal to the percentage
difference between the annual average of the CPI available for the most
recently published year, and the annual average of the CPI available
for the year prior to the most recently published year. For purposes
of this Agreement, the term "CPI" means the Consumer Price Index - All
Urban Consumers, Medical Care Services, Base Period: 1982-1984=100,
Not Seasonally Adjusted. If the methodology for calculating the CPI
is substantially revised, First Health will make an adjustment to such
fees to produce results equivalent, as nearly as reasonably possible,
to those which would have been obtained if the methodology for
calculating CPI had not been so revised. First Health acknowledges
that Section 7.1.4 does not apply to any percentage of Savings fees
charged hereunder.
ARTICLE 8 TERM AND TERMINATION
8.1 Term. The term of this Agreement is five years beginning January 1,
2003 and ending December 31, 2007, and will automatically renew for
consecutive four-year terms (each, a "Term") thereafter, unless terminated
as hereinafter set forth in Sections 8.2, 8.3 or 14.12.
8.2 Termination By The Mail Handlers Union. This Agreement may be
terminated by written notice thereof given by the Mail Handlers Union to
First Health if any one of the following occurs:
8.2.1 Failure of First Health to meet any material covenant,
agreement, or obligation provided for in this Agreement if it has not
commenced to cure any such default within 20 days and has not cured
such default within 90 days after written notice thereof to First
Health by the Mail Handlers Union.
8.2.2 First Health becomes insolvent or is adjudicated as a bankrupt
entity, or its business comes into possession or control of any trustee
in bankruptcy, or a receiver is appointed for it, or it makes a general
assignment for the benefit of creditors. If any of these events
occurs: (a) no interest in this Agreement may be deemed an asset of
creditors; (b) no interest in this Agreement may be deemed an asset or
liability of First Health; and (c) no interest in this Agreement may
pass by the operation of law without the consent of the Mail Handlers
Union.
8.2.3 The Mail Handlers Union gives not less than forty days written
notice before the first submission of benefits or rates is due to OPM
for the Plan year following the last Plan year of the then-current
Term. Such termination will be effective at the expiration of the
then-current Term.
8.2.4 The Prime Subcontract is terminated or expires. Such
termination will be effective at the end of the then-current Agreement
Year.
8.3 Termination By First Health. This Agreement may be terminated by
written notice thereof given by First Health to the Mail Handlers Union if
any one of the following occurs:
8.3.1 Failure of the Mail Handlers Union to meet any material
covenant, agreement, or obligation provided for in this Agreement if it
has not commenced to cure any such default within 20 days and has not
cured such default within 90 days after written notice thereof to the
Mail Handlers Union by First Health.
8.3.2 Failure of the Underwriter to make payment under this Agreement
when due, and if payment is not made within 20 days following written
notice of non-payment sent by First Health to the Mail Handlers Union,
provided that such failure was not due to any action or inaction of
First Health or its affiliates.
8.3.3 The Mail Handlers Union becomes insolvent, or is adjudicated as
a bankrupt entity, or its business comes into possession or control,
even temporarily, of any trustee in bankruptcy, or a receiver is
appointed for it, or it makes a general assignment for the benefit of
creditors. If any of these events occurs: (a) no interest in this
Agreement may be deemed an asset of creditors; (b) no interest in this
Agreement may be deemed an asset or liability of the Mail Handlers
Union; and (c) no interest in this Agreement may pass by operation
of law without the consent of First Health.
8.3.4 First Health gives not less than forty days written notice
before the first submission of benefits or rates is due to OPM for the
Plan year following the last Plan year of the then-current Term. Such
termination will be effective at the expiration of the then-current
Term.
8.3.5 The Prime Subcontract is terminated or expires. Such
termination will be effective at the end of the then-current Agreement
Year.
8.4 Obligations Upon Termination. Upon the effective date of the
termination of this Agreement, in whole or in part, as applicable:
8.4.1 The Underwriter or First Health will promptly pay to the other
party all moneys due hereunder.
8.4.2 Each party will immediately cease to use the other party's
documents, systems, logos, service marks, trademarks, trade names,
methods and techniques in any form.
8.4.3 The Underwriter will immediately cease reimbursing Contract
Providers at the Contract Rates except for those Members admitted to or
receiving services from a Contract Provider prior to the effective date
of termination. For such Members, the Underwriter may reimburse
Contract Providers at the Contract Rates for the duration of the
inpatient stay or for a period of 60 days after the effective date of
termination for outpatient care services.
ARTICLE 9 LIMITED ROLE OF FIRST HEALTH
9.1 First Health's Role in Relation to Medical Services. The parties
acknowledge and agree that: (a) First Health does not provide, direct or
control the provision of medical services to Members; (b) the provision of
Contract Provider information in any medium by First Health is not the
provision of medical diagnostic or treatment services, medical advice or
health advice; (c) all decisions regarding medical services are made solely
by the Member and the attending practitioner and the rendering of medical
services to a Member and the results thereof are solely within the control
of the provider of medical services providing the services, and the Members;
and (d) execution of this Agreement and the performance of its obligations
does not constitute an undertaking by the parties to render any medical
services, or to assume or guarantee the results thereof to Members, or
to guarantee that medical services will be rendered in accordance with
generally accepted standards or procedures.
9.2 Cooperation. The parties will cooperate as necessary in order to
comply with the requirements imposed by OPM related to the services provided
hereunder.
ARTICLE 10 CONFIDENTIALITY OF INFORMATION
10.1 Confidential Proprietary Information.
10.1.1 "Confidential Proprietary Information" means any non-public
proprietary information, including, but not limited to, the terms of
this Agreement, information about fees, computer software, business
procedures and manuals, data review criteria, Contract Provider
databases and directories and Contract Rates. For purposes of this
Agreement, Confidential Proprietary Information does not include: (a)
information publicly available by means other than wrongful disclosure
or lawfully obtained from third parties without any confidentiality
obligations; (b) information which is required by law or by a
government agency to be disclosed by a party, provided that such party
immediately notifies the other party of the requirements for such
disclosure and reasonably cooperates in obtaining any protective order
desired by the other party with regard to such information; (c)
information independently developed by the other party; or (d)
information provided to the other party with the intention that it be
published, disseminated, released or distributed by such other party to
Members, Contract Providers, or to the general public.
10.1.2 The parties agree that all Confidential Proprietary Information
of either party may not be disclosed, except as provided below, without
the express written approval of the other party. Further, Confidential
Proprietary Information may be disclosed only to those persons who need
to know, and only to the extent necessary, in order to carry out the
terms of this Agreement. The Mail Handlers Union will require any of
its health benefits vendors with access to any Confidential Proprietary
Information of First Health to keep such Confidential Proprietary
Information confidential. Confidential Proprietary Information may
not be used in any way not specifically allowed under this Agreement,
including in each party's own business, whether or not competitive with
the other party. Each party will notify the other party of any loss or
accidental or unauthorized disclosure of Confidential Proprietary
Information.
10.1.3 The parties recognize that no remedy of law may be adequate to
compensate either party for a breach of the provisions of this Article;
therefore, both parties agree that either party may seek temporary and
permanent injunctive relief against the breaching party, in addition to
all other remedies which either is otherwise entitled, and this Section
in no way limits such other remedies of the parties. Such temporary or
permanent injunctive relief may be granted without bond which each
party does hereby waive.
10.2 Confidential Medical Information.
10.2.1 The parties agree that legal and professional considerations
require that all Confidential Medical Information be kept confidential,
and each party agrees to comply with all applicable laws governing the
confidentiality of Confidential Medical Information. "Confidential
Medical Information" means Members' non-public medical or personal
information containing information which allows the identification of
the Members, the Mail Handlers Union or the Plan. In connection with
the disclosure or other transfer of Confidential Medical Information
among Members' medical services providers, the Mail Handlers Union
and/or Authorized Designees as necessary in the performance of duties
under this Agreement or upon the Mail Handlers Union's request (each,
a "Confidential Medical Information Transfer"), the Mail Handlers Union
will obtain from the appropriate Member(s) a valid authorization form
permitting the Confidential Medical Information Transfer ("Release
Authorization"). If the Mail Handlers Union requests First Health
to perform a Confidential Medical Information Transfer, under
the provisions of this Agreement or by other means, such request
constitutes the Mail Handlers Union's representation and warranty
that the requested Confidential Medical Information Transfer is to an
authorized representative of the Plan for a lawful purpose and the Mail
Handlers Union has obtained the appropriate Release Authorization(s).
Notwithstanding the above, the Mail Handlers Union may be required to
provide a copy of the applicable Release Authorization(s) prior to a
Confidential Medical Information Transfer.
10.2.2 The Mail Handlers Union agrees that First Health may
release Confidential Medical Information: (a) to the Member to
whom such information pertains, or his/her legal guardian or other
representative, upon receipt of written authorization from such Member;
and (b) as required by order of a court or administrative agency with
jurisdiction in the matter.
ARTICLE 11 AUDIT
Subject to Article 10, the Mail Handlers Union agrees that at its office,
during normal business hours, and upon not less than 30 days advance notice,
First Health will have the right to examine records which the Mail Handlers
Union has kept which relate directly to services received pursuant to this
Agreement. Subject to Article 10, First Health agrees that at its office,
during normal business hours, and subject to First Health's standard audit
procedures, the Mail Handlers Union will have the right to examine records
which First Health has kept which relate directly to services provided
pursuant to this Agreement. The auditing party will provide a summary of
the final results of such audit or examination to the other party. Such
right of examination will continue for a period of not less than five years
after the date of discharge, end of the treatment, or the end of First
Health's services in relation to the specific episode of care. The auditing
party agrees to pay the other party for its costs incurred in supporting
such audits at the audited party's then-current audit fees. Each party
may require the other party's representatives to execute a confidentiality
agreement prior to commencing any such audit.
ARTICLE 12 ADDITIONAL OPM REQUIREMENTS
12.1 All provisions or clauses of the Prime Contract, including without
limitation, the provisions listed below, that are required to be
incorporated herein are so incorporated by reference thereto. For purposes
of this Agreement, all applicable references in the following provisions
of the Prime Contract to the "Contractor" or "Carrier" shall be treated as
references to First Health, and all references to the "Contract" or "Prime
Contract" therein shall be treated as references to this Agreement. The
following provisions of the Prime Contract are specifically incorporated
herein by reference and shall be binding on First Health:
Section 1.6 Confidentiality of Records
Section 3.8 Contractor Records Retention
Section 5.19 Equal Opportunity
Section 5.22 Affirmative Action for Disabled Veterans and Veterans
of the Vietnam Era
Section 5.23 Affirmative Action for Workers with Disabilities
Section 5.60 Subcontracts for Commercial Items and Commercial
Components
ARTICLE 13 INDEMNIFICATION
Should the Mail Handlers Union incur any costs, expenses, judgments,
damages, liabilities, legal fees, or other reasonable costs of litigation
or defense of any claim, including reasonable attorneys' fees and costs
(collectively, "Costs or Liabilities"), whether in settlement of any cause
of action or threatened cause of action, which settlement First Health
approves, or as a result of an order or judgment of a court of competent
jurisdiction, which Costs or Liabilities result or arise from any third-
party claims related to the performance of services hereunder by First
Health, First Health agrees to indemnify, hold harmless and reimburse
the Mail Handlers Union to the extent of any such Costs or Liabilities.
ARTICLE 14 GENERAL PROVISIONS
14.1 Independent Contractors. The relationship between the parties is that
of independent contractors. Nothing herein is intended or will be construed
to establish any agency, employment, partnership, or joint venture
relationship between the parties. Each party is solely responsible for
the direction, control, and management of its subcontractors, agents and
employees.
14.2 Non-Exclusivity. The Mail Handlers Union acknowledges that First
Health offers its services on a national basis, including to businesses or
organizations which may be competitive with the Mail Handlers Union. The
Mail Handlers Union agrees that nothing, whether contained in this Agreement
or otherwise, limits, restricts or prevents First Health from providing its
services to any other entity.
14.3 No Third-Party Beneficiaries. This Agreement is entered into by and
between the parties hereto solely for their benefit. The parties have not
created or established any third-party beneficiary status or rights in any
person or entity not a party hereto including, but not limited to, any
Member, provider, subcontractor, or other third-party, and no such third-
party will have any right to enforce any right or enjoy any benefit created
or established under this Agreement.
14.4 Insurance. Each party will, so long as such coverage is available in
the market and at a reasonable cost within each party's judgment, at all
times for the Term maintain in effect insurance that is commonly maintained
by similar entities in the same types of organization or industry.
14.5 Compliance. Each party will comply with all applicable licensing and
regulatory requirements for each Geographic Area in which First Health
provides services to the Mail Handlers Union under this Agreement. Upon
request by the other party, each party will promptly provide to the
requesting party such information and documentation as the requesting party
deems necessary for its compliance with applicable licensing and regulatory
requirements.
14.6 Force Majeure. The obligations of a party under this Agreement will be
suspended for the duration of any force majeure applicable to that party.
The term "force majeure" means any cause not reasonably within the control
of the party claiming suspension, including, without limitation, an act of
God, industrial disturbance, war, riot, weather-related disaster, earthquake
and governmental action. The party claiming suspension under this Section
will take reasonable steps to resume performance as soon as possible without
incurring unreasonably excessive costs.
14.7 Entire Agreement; Amendments; Facsimile. This Agreement including any
riders, attachments or amendments hereto, constitutes the entire agreement
between the parties. This Agreement supersedes any prior agreement or
understandings pertaining to the services provided hereunder, whether oral
or written, and may be amended only by a writing executed by authorized
representatives of First Health and the Mail Handlers Union. A facsimile or
other reproductive type copy of this Agreement, so long as signed by both
parties, will be considered an original and will be fully enforceable
against both parties.
14.8 Choice of Law. All terms of this Agreement are intended by the parties
to be subject to interpretation in accordance with the laws of the United
States. However, to the extent that federal law is deemed not to govern
this Agreement and the interpretation thereof, the laws of the State of
Illinois will so govern without regard to principles of conflict or choice
of law.
14.9 Assignment and Delegation. Neither party may assign its rights or
duties under this Agreement without the prior written consent of the other,
except that First Health may assign this Agreement or its rights and duties
under this Agreement to a different subsidiary or affiliate of First Health
(with the prior approval of OPM), provided that such assignment will not
relieve First Health of its liabilities under this Agreement. The Mail
Handlers Union acknowledges that certain services may be performed by
affiliates of First Health, and First Health expressly delegates its
obligations herein to perform such services to certain designated
affiliates, provided that such delegation will not relieve First Health of
any liability under this Agreement. This Agreement is binding upon and will
inure to the benefit of the respective parties hereto and their successors
and permitted assigns.
14.10 Headings. All headings are for convenience only and may not be
deemed to limit, define or restrict the meaning or contents of the Articles
and Sections.
14.11 Use of Marks. Neither party may in any way infringe upon or harm
the rights of the other party in its service marks, trademarks, copyrights,
and other proprietary marks. Neither party may, without the prior written
approval of the other party, use any xxxx or name of the other party.
Notwithstanding the foregoing, this provision does not prohibit the Mail
Handlers Union from identifying First Health as its vendor of health
benefits services nor does it prohibit First Health from identifying the
Mail Handlers Union as a party to whom First Health is providing such
services.
14.12 Unenforceable Provisions. If any provision of this Agreement
conflicts with the Prime Contract or is held to be illegal or unenforceable
by a court of competent jurisdiction, the remaining provisions will remain
in effect and the illegal or unenforceable provision will be modified so
as to conform to the original intent of this Agreement to the greatest
extent legally permissible. Notwithstanding the foregoing, if any such
modification causes a material change in the obligations or rights of either
party, upon written notice from one party to the other of the adverse effect
thereof upon such notifying party, and then if the parties are not able to
mutually agree as to an amendment hereto, the notifying party may terminate
this Agreement upon 30 days written notice to the other party.
14.13 Notices. Any notice required pursuant to this Agreement must
be in writing and sent by registered or certified mail, return receipt
requested, by fax with proof of delivery, or by a nationally recognized
private overnight carrier with proof of delivery, to the addresses of the
parties set forth below in this Agreement. The date of notice will be the
date on which the recipient receives notice or refuses delivery. All
notices must be addressed as follows or to such other address as a party
may identify in a notice to the other party:
For First Health: First Health Group Corp.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxxx, CEO
Fax Number: (000) 000-0000
CC: General Counsel
Fax Number: (000) 000-0000
For the Mail Handlers Union:
Xx. Xxxxxxx X. Xxxxx, National President
Xx. Xxxx X. Xxxxxxx, National Secretary-Treasurer
National Postal Mail Handlers Union
0000 Xxxxxxxxxxx Xxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Fax Number: (000) 000-0000
14.14 Waiver. A waiver of a breach or default under this Agreement is
not a waiver of any other or subsequent breach or default. A failure or
delay in enforcing compliance with any term or condition of this Agreement
does not constitute a waiver of such term or condition unless it is
expressly waived in writing.
14.15 Negotiated Agreement. Each party acknowledges that this Agreement
resulted from negotiations by and between the parties, and therefore any
rule of construction requiring ambiguities to be construed against the
drafter of an agreement will not apply to any provision of this Agreement.
14.16 OPM Approval. The parties recognize that this Agreement is
subject to approval by OPM, and that amendments hereto when so required by
law are also subject to OPM approval.
14.17 Survivability. The provisions of Sections 5.2, 7.1 and 8.4 and
Articles 9, 10, 11, 12, 13 and 14 will survive the termination of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
date first above written by their duly authorized officers for and on behalf
of said entity.
NATIONAL POSTAL MAIL HANDLERS UNION, A DIVISION OF THE LABORERS
INTERNATIONAL UNION OF NORTH AMERICA, AFL-CIO d/b/a MAIL HANDLERS BENEFIT
PLAN
By:
---------------------------------------
Title:
---------------------------------------
Date:
---------------------------------------
FIRST HEALTH GROUP CORP.
By:
---------------------------------------
Xxxxxx X. Xxxxxxx
Title: CEO President & Chief Operating Officer
---------------------------------------
Date:
---------------------------------------
First Health[R] is a registered service xxxx of First Health Group Corp.
GEOGRAPHIC AREAS AND EFFECTIVE DATES
Geographic The First Health[R] Geographic The First Health[R]
Area Network Area Network
---- ------- ---- -------
AL 1/1/2003 MT 1/1/2003
AK* 1/1/2003 NE 1/1/2003
AZ 1/1/2003 NV 1/1/2003
AR 1/1/2003 NH 1/1/2003
CA 1/1/2003 NJ 1/1/2003
CO 1/1/2003 NM 1/1/2003
CT 1/1/2003 NY* 1/1/2003
DE 1/1/2003 NC 1/1/2003
DC 1/1/2003 ND 1/1/2003
FL 1/1/2003 OH 1/1/2003
GA 1/1/2003 OK 1/1/2003
HI 1/1/2003 OR 1/1/2003
ID 1/1/2003 PA 1/1/2003
IL 1/1/2003 PR* 1/1/2003
IN 1/1/2003 RI 1/1/2003
IA 1/1/2003 SC 1/1/2003
KS 1/1/2003 SD 1/1/2003
KY 1/1/2003 TN 1/1/2003
LA 1/1/2003 TX 1/1/2003
ME* 1/1/2003 UT 1/1/2003
MD 1/1/2003 VT 1/1/2003
MA 1/1/2003 VA 1/1/2003
MI 1/1/2003 WA 1/1/2003
MN 1/1/2003 WV 1/1/2003
MS 1/1/2003 WI 1/1/2003
MO 1/1/2003 WY* 1/1/2003
* The Mail Handlers Union acknowledges that The First Health[R] Network
is not fully developed.
