Agenda Cover Memorandum Meeting Date:

May 7, 2012

Item Title:

Approve payment for Employee Medical, Dental and Life insurance

Action Requested: Approval For discussion Feedback requested For your information

Staff Contact: Phone Number: Email Address:

Cathy Doczekalski/Mike Suppan 847-318-5296/847-318-5202 [email protected], [email protected]

Background: The City offers employees the choice between three medical plans provided by Blue Cross Blue Shield of Illinois. There are two PPO choices and one HMO choice. Additional tiers of coverage were added to the health plans this year to help offset the increase in the expenses. There is now the choice between single, single+spouse, single+child(ren) and family coverage. The renewal rates for the two PPO plans will increase 11.8% and the HMO will increase 1.2%. The PPO budgeted amount is $2,753,957 and the HMO budgeted amount is $1,030,793 for fiscal year 2012/13. The contracts were signed earlier this month by the City Manager to secure the quoted rates. The City also offers dental insurance to employees in the form of single or family coverage. The City’s current dental provider is Delta Dental. A two-year rate was locked in last year so there is no increase for 2012/13. The existing monthly rates are $43.88 for single coverage and $107.06 for family coverage. The budgeted amount is $221,564 for fiscal year 2012/13. The City has a contract with Aetna for life insurance for employees. The life insurance rates are not increasing for fiscal year 2012/13. The current rate is $0.23 per thousand of coverage. The budgeted amount is $37,200 for the fiscal year. The City is currently in the open enrollment period for employees. Informational packets were sent out to each employee explaining the group health plan option, premium amounts and employee contributions. During open enrollment, employees have the ability to change plans and coverage type. The figures listed above were included in the 2012/13 Budget approved by the City Council on April 2, 2012. At the April 23, 2012 Committee of the Whole meeting, the Committee approved the payments. Ald. Knight asked for a breakdown of the life insurance coverage for employees, which is attached. The individual figures for each employee were included in the budget as well. Recommendation: Move approval of a purchase order not to exceed $1,030,793 for employee HMO health insurance with Blue Cross Blue Shield of Illinois, 233 N. Michigan Ave, Chicago, IL 60601 for the period beginning May 1, 2012 and ending April 30, 2013. Move approval of a purchase order not to exceed $2,753,957 for employee PPO health insurance with Blue Cross Blue Shield of Illinois, 233 N. Michigan Ave, Chicago, IL 60601 for the period beginning May 1, 2012 and ending April 30, 2013.

Rev 04/09/12

Agenda Cover Memorandum Move approval of a purchase order not to exceed $221,564 for employee dental insurance with Delta Dental, 801 Ogden Avenue, Lisle, IL 60532 for the period beginning May 1, 2012 and ending April 30, 2013. Move approval of a purchase order not to exceed $37,200 for employee life insurance with Aetna Insurance, PO Box 88860, Chicago, IL 60695 for the period beginning May 1, 2012 and ending April 30, 2013. Budget Implications: Does Action Require an Expenditure of Funds: If Yes, Total Cost: If Yes, is this a Budgeted Item:

Yes

No

$4,043,514 Yes

No

If Budgeted, Budget Code (Fund, Dept, Object) Various funds, all 921XXX

Attachments: o Information on life insurance coverage

Rev 04/09/12

Life Insurance Coverage for full-time Employees

Employee Group Department heads City Manager Non-union and ICOPS FOP Union (Police) Local 150 Union (PW) IAFF Union (Fire)

*Rolled up to the nearest thousand.

Coverage Two times salary* $300,000 One times salary* $40,000 $40,000 $40,000

Number of Employees 7 1 105 40 28 37

BlueCross BlueShield of Illinois BENEFIT PROGRAM APPLICATION ("BPA") (Applicable to 151-Pius Insured Group Accounts) Employer Account Number: 055977

Employer Group Number(s): _ _

Section Number(s): P55977- 1501. 1502. 1503. 2501. 2502. 2503. 3501. 3502. & 3503: P66988 - 4501. 4502 & 4503 Employer Name: City of Park Ridge (Specify the employer, the employee trust or the association applying for coverage. List subsidiary or affiliated companies to be covered below. An employee benefit plan may not be named.) Zip Code: 60068 Address: 505 Butler Place City: Park Ridge State: lb Billing Address (if different from above): _ _

City: _ _

State:

Zip Code: _ _

Employer Identification Number ("EIN"): 366006041 Subsidiaries: Affiliated Companies: _ _ (If Affiliated Companies to be covered are listed above, a separate "Addendum to the Benefit Program Application Regarding Affiliated Companies" must be completed, signed by the Employer's authorized representative, and attached to this BPA.) Fax: 847-318-5329 Email: Administrative Contact: Cathy Phone: 847-318-5202 Doczekalski [email protected] Blue Access for Employers (BAE) Contact: Cathy Doczekalski (The BAE Contact is the employee of the account authorized by the Employer to access and maintain its account via BAE.) Title: HR Administrator

Phone: 847-318-5202

Policy Effective Date: May 1. 2012 ERISA Plan:

0

Yes

Fax: 847-318-5329

Email: [email protected]

Policy Anniversary Date: May 1, 2013

~ No

If Yes, specify ERISA Plan Year: _ _

ERISA Plan Administrator: ERISA Plan Administrator's Address: City: _ _

ZipCode: _ _

State:

ERISA Plan Administrator's Email: ELIGIBILITY

1.

Eligible Person means: ~ A full-time employee of the Employer. D A full-time employee who is a member of: _ _ (name of union or association) D Other (please specify): _ _ Full-Time Employee means: ~

A person who is regularly scheduled to work a minimum of 30 hours per week and who is on the permanent payroll of the Employer. D Other (please specify): _ _ ~ An Eligible Person may also include a retiree of the Employer. Please specify: A retiree is anyone who works for the City of Park Ridge and retire at age 50 or older. 2.

Domestic Partner Coverage:

DYes

~No

If Yes, a Domestic Partner, as defined in the Policy, shall be considered eligible for coverage. The Policyholder is responsible for providing notice of possible tax implications to those Insureds with Domestic Partner--coverage. Domestic Partner Coverage Continuation (only available if Domestic Partners are covered) 3.

DYes

Limiting Age for covered unmarried children is: A Division of Health Care Service Corporation, a Mutual Legal Reserve Company an Independent Licensee of the Blue Cross and Blue Shield Association

MGA-10-1 HCSC Rev. 10/08

DNo

[8] twenty-six (26) years; thirty (30) years if eligible military personnel as described in the Certificate Booklet.

D

years; year s if eligible military personnel as described in the Certificate Booklet. (The minimum allowable ages for this option are 26; 30 if eligible military personnel)

D years if a full-time student. (The minimum allowable ages for this option are 26; 30 if eligible military personnel) Coverage will terminate at the end of the period for which premium has been accepted. However, coverage shall be extended due to a leave of absence in accordance with any applicable federal or state law. 4.

Eligibility Date for a person who becomes an Eligible Person after the Effective Date of the Employer's health care plan: The date of employment. D The _ _ day of employment. D The _ _ day of the month following _ _ month(s) or _ _days of employment. D The _ _ day of the month following the date of employment. D Other (please specify): _ _.

[8]

5.

Special Enrollment: An Eligible Person may apply for coverage, Family coverage or add dependents within thirty-one (31) days of a Special Enrollment event if he/she did not apply prior to his/her Eligibility Date or when eligible to do so. Such person's Coverage Date, Family Coverage Date, and lor dependent's Coverage Date will be effective on the date of the Special Enrollment event or, in the event of Special Enrollment due to termination of previous coverage, the date of application for coverage. Annual Open Enrollment:

[8] Yes

DNo

If Yes, specify Annual Open Enrollment Period:The month of April for a May 1 effective date. An Eligible Person may apply for coverage, Family coverage or add dependents if he/she did not apply prior to his/her Eligibility Date or did not apply when eligible to do so, during the Employer's Annual Open Enrollment Period. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be a date mutually agreed to by Blue Cross and Blue Shield of Illinois, a Division of Health Care Service Corporation, a Mutual Legal Reserve Company ("HCSC") and the Employer. Such date shall be subsequent to the annual open enrollment period. 6.

Extension of benefits due to Temporary Layoff, Disability or Leave of Absence: Temporary Layoff: 365 days Disability: 365 days Leave of Absence: 365 days (However, benefits shall be extended for the duration of an Eligible Person's leave in accordance with any applicable federal or state law.)

FUNDING ARRANGEMENT

D Standard Premium D Standard Premium -

Prospective Retrospective [8] Minimum Premium Program (MPP)

D Cost Plus Program D Contingent Premium - Separate Agreement

STANDARD PREMIUM INFORMATION (a)

Premium Period: D The first day of each calendar month through the last day of each calendar month. (This option applies to all coverages if the Employer has BlueCare® Dental HMO coverage) D The _ _ day of each calendar month through the _ _day of the next calendar month. (This option is not available for any coverage if the Employer has BlueCare Dental HMO coverage.)

(b)

Employer contribution: D 100% of the Individual Coverage Premium and an amount equal to 100% of the Individual Coverage Premium will be contributed toward the Family Coverage Premium. D __% of the Individual Coverage Premium and _ _% of the Family Coverage Premium. D Other (please specify): _ _.

(c)

It is understood that no Policy will be issued or renewed on a contributory basis unless at least _ _% of the Eligible Persons, and for Family Coverage _ _% of the Eligible Persons with eligible dependents, have enrolled for coverage.

MGA-10-1 HCSC Rev. 10/08

page2

STANDARD PREMIUM RATES 1:8] No

1. Employee

$

$

$

$

$

$

2. Employee plus one dependent:

$

$

$

$

$

$

3. Employee plus two or more

$

$

$

$

$

$

4. Spouse:

$

$

$

$

$

$

5. Child(ren):

$

$

$

$

$

$

6. Family:

$

$

$

$

$

$

7. Other:

$

$

$

$

$

$

item 1. Two Tier Rate structure Three Tier Rate structure - Complete items 1., 2., and 3. Four Tier Rate Structure- Complete items 1., 4., 5., and 6. Indicate "N/A" in any rate field that does not apply. Medicare Eligible Rates (When HCSC is Secondary Payer) Single Coverage:

$

$

$

$

$

$

Family Coverage:

$

$

$

$

$

$

MINIMUM PREMIUM PROGRAM 1:8] Yes DNo

Monthly Minimum Premium:

1:8] Rate per Employee or D Single and Family Rates

Health Coverage: $222.35 Dental Coverage: $ Monthly CAP (Claims as Paid) Maximum: D Rate per Employee or D Single and Family Rates Health Coverage:

$948.55

Dental Coverage: Individual Pooling Limit per Covered Person: $80,000.00 Terminal Liability Payment: $1 ,234.04; Terminal Administrative Fee: $_;__

$

D Rate per Employee or D Single and Family Rates D Rate per Employee or D Single and Family Rates or D N/A

Rates are based on an enrollment of: 66Single Coverage Units and 130 Family Coverage Units

MGA-10-1 HCSC Rev. 10/08

page 3

COST - PLUS PROGRAM DYes 1:8] No Service Charges: D _ _% of Net Claim Payments or$_ _ per employee per month D Applies to all coverage(s) D Different percentage(s) or amount(s) for the following types of coverage(s). Please specify below: For _ _ Covera ge: For _ _ Covera ge: Other (please specify):

_ _% of _ _CI aim Payments _ _% of _ _CI aim Payments

or $_ _ per employee per month or $_ _ per employee per month

Blue Care Connection® ("BCC"): BCC Program (may select one): D Blue Care Advisor D Please refer to Additional Provisions

D Fee: $__ per covered employee per month for administration of the program. D Fee is included in the Service Charges.

Blue Care Custom: D Health Dialog (may select one) Health Dialog Fee: $_ _ per covered employee per month D Health Coach Line (In bound) D Health Coach Line (In and out bound) D Health Coach Line (With Disease Management) D Not applicable D American Healthways (may select one) D Package A D Package B D Package C D Not applicable

I

I

American Healthways Program Fees, per participating Covered Person per month:

Payment Method:

Conditions:

Package A - Fees

Package B - Fees

Package C- Fees

Diabetes: Chronic Heart Disease: Chronic Obstructive Pulmonary Disease Asthma: Impact Conditions:

$_ _ $_ _

$_ _ $_ _

$_ _ $_ _

$_ _ $_ _ $_ _

$_ _ $_ _ Not Applicable

Not Applicable Not Applicable Not Applicable

D Transfer Payment

D

Post Payment

If Transfer Payment, Method of Transfer Payment: D Wire Transfer D Draft D Electronic Fund Transfer D Other (Qiease specify): Payment Period: D Daily D Weekly D Bi-Weekly D Monthly D Other (please specify): _ _ Claim Settlement: D Monthly D Quarterly D Other (please specify): _ _ If Transfer Payment, Tentative Final Settlement Period: Transfer Payments to be made for the following time period after termination: D 6 months D 9 months D 12 months D Other (please specify): _ _ D 3 months The Effective Date of Termination for a person who ceases to meet the definition of Eligible Person: D The date such person ceases to meet the definition of Eligible Person. D The last day of the calendar month in which such person ceases to meet the definition of an Eligible Person. D Other: _ _. Prescription Drug Rebate: $_ _ per covered employee per month is the guaranteed Prescription Drug Rebate savings reflected as a Prescription Drug Rebate credit.

MGA-10-1 HCSC Rev. 10/08

page4

APPLICABLE TO MINIMUM PREMIUM ("MPP") AND COST-PLUS PROGRAMS ONLY: PLAN PROVIDER ACCESS FEE(S): ~Yes

DNo

Group Number(s): P55977 & P66988 ~ % of ADP Savings: 2.8%

D $ Per Employee per month (For MPP, this amount also included in Monthly Minimum Premium): $ Please complete for groups with multiple products {for example, Comprehensive Major Medical and PPO) with separate access fees: Group Number{s): _ _ 0% of ADP Savings: ~o D $ Per Employee per month (For MPP, this amount also included in Monthly Minimum Premium): $ The undersigned representative is authorized and responsible for purchasing insurance on behalf of the Employer, has provided the information requested in this Benefit Program Application ("BPA") and, on behalf of the Employer, offers to purchase the benefit program as outlined in the Request For Proposal ("RFP") submitted to the Employer by the Sales Representative. Any changes to the RFP are specified below. It is understood and agreed that the actual terms and conditions of the benefit program are those contained in the Policy. This BPA is subject to acceptance by HCSC. Upon acceptance, HCSC shall issue a Policy to the Employer and this BPA shall be incorporated and made a part of the Policy. Upon acceptance of this BPA and issuance of the Policy, the Employer shall be referred to as the Policyholder. In the event of any conflict between the RFP and the Policy, the provisions of the Policy shall prevail. The undersigned representative acknowledges that any broker/producer is acting on behalf of the Employer for purposes of purchasing the Employer's insurance, and that if HCSC accepts this BPA and issues a Policy to the Employer, HCSC may pay the Employer's broker/producer a commission and/or other compensation in connection with the issuance of such Policy. The undersigned representative further acknowledges that if the Employer desires additional information regarding any commissions or other compensation paid the broker/producer by HCSC in connection with the issuance of a Policy, the Employer should contact its broker/producer. The undersigned representative acknowledges that the Employee Retirement Income Security Act of 1974, as amended, ("ERISA") establishes certain requirements for employee welfare benefit plans. As defined in Section 3 of ERISA, the term "employee welfare benefit plan" includes any plan, fund or program which is established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, medical, surgical or hospital benefits, or benefits in the event of sickness, accident or disability. The undersigned representative further acknowledges that: (i) an employee welfare benefit plan must be established and maintained through a separate plan document which may include the terms hereof or incorporate the terms hereof by reference, and that (ii) an employee welfare benefit plan document may provide for the allocation or delegation of responsibilities thereunder. However, notwithstanding anything contained in the employee welfare benefit plan document of the Employer (or any group member if the group is an association), the Employer agrees that no allocation or delegation of any fiduciary or nonfiduciary responsibilities under the employee welfare benefit plan of the Employer (or any group member if the group is an association) is effective with respect to or accepted by HCSC except to the extent specifically provided and accepted in this BPA or the Policy or otherwise accepted in writing by HCSC. OTHER PROVISIONS: (a) Reimbursement Provision:~ Yes If yes:

(b)

DNo

It is understood and agreed that in the event HCSC makes a recovery on a third-party liability claim, HCSC will retain 25% of the net recovery (under cost-plus funding) or deduct 25% of the net recovery from the amount credited to the group's experience (under premium funding), after attorneys' fees, if any, have been paid.

Certificate of Creditable Coverage: ~Yes D No If yes:

It is understood and agreed that HCSC will issue a Certificate of Creditable Coverage consistent with the requirements under the Health Insurance Portability and Accountability Act of 1996. The Certificate of Creditable Coverage shall be based upon coverage under the Plan during the term of the Policy and information provided to HCSC by the Employer.

If no:

The Certificate of Creditable Coverage Release and Indemnification letter is attached to this BPA and made part of the Policy.

(c)

BlueCare® Dental HMO Coverage purchased: DYes

(d)

Fort Dearborn Life Insurance purchased: DYes

(e)

Excess Loss Coverage purchased: D Yes

(f)

Case Management: If Yes:

~No (If yes, complete separate application.)

~ No (If yes, complete separate application.)

~ No (If yes, complete separate application.)

~Yes D No

The undersigned representative authorizes provision of alternative benefits for services rendered to Covered Persons in accordance with the provisions of the Policy.

MGA-10-1 HCSC Rev. 10/08

page5

(g)

Electronic Issuance: The Policyholder consents to receive, via an electronic file or access to an electronic file, a Certificate Booklet provided by HCSC to the Policyholder for delivery to each Insured. The Policyholder further agrees that it is solely responsible for providing each Insured access~ via the internet, intranet, or otherwise, to the most current version of any, electronic file provided by HCSC to the Policyholder and, upon the Insured's request, a paper copy of the Certificate Booklet.

(h)

Massachusetts Health Care Reform Act: Notwithstanding anything to the contrary in this BPA, with respect to the Employer's employees who live in Massachusetts (if any) the Employer represents that it offers the health insurance benefits provided for herein to all full-time employees, and the Employer will not make a smaller premium contribution percentage to a full-time employee living in Massachusetts than to any other full-time employee living in Massachusetts who receives an equal or greater total hourly or annual salary. For purposes of this representation, a "full-time employee" is defined by Massachusetts law, generally an employee who is scheduled or expected to work at least the equivalent of an average of thirty-five (35) hours per week.

ADDITIONAL PROVISIONS: A.

Grandfathered Health Plans: Policyholder shall provide HCSC with written notice prior to renewal (and during the plan year, at least 60 days advance written notice) of any changes in its Contribution Rate Based on Cost of Coverage or Contribution Rate Based on a Formula towards the cost of any tier of coverage for any class of Similarly Situated Individuals as such terms are described in applicable regulations. Any such changes (or failure to provide timely notice thereof) can result in retroactive and/or prospective changes by HCSC to the terms and conditions of coverage. In no event shall HCSC be responsible for any legal, tax or other ramifications related to any benefit package of any group health insurance coverage (each hereafter a "plan") qualifying as a "grandfathered health plan" under the Affordable Care Act and applicable regulations or any representation regarding any plan's past, present and future grandfathered status. The grandfathered health plan form ("Form"), if any, shall be incorporated by reference and part of the BPA and Group Policy, and Policyholder represents and warrants that such Form is true, complete and accurate. If Policyholder fails to timely provide HCSC with any requested grandfathered health plan information, HCSC may make retroactive and/or prospective changes to the terms and conditions of coverage, including changes for compliance with state or federal laws or regulations or interpretations thereof.

B.

Retiree Only Plans and/or Excepted Benefits: If the BPA includes any retiree only plans and/or excepted benefits, then Policyholder represents and warrants that one or more such plans is not subject to some or all of the provisions of Part A (Individual and Group Market Reforms) of Title XXVII of the Public Health Service Act (and/or related provisions in the Internal Revenue Code and Employee Retirement Income Security Act) (an "exempt plan status"). Any determination that a plan does not have exempt plan status can result in retroactive and/or prospective changes by HCSC to the terms and conditions of coverage. In no event shall HCSC be responsible for any legal, tax or other ramifications related to any plan's exempt plan status or any representation regarding any plan's past, present and future exempt plan status.

C.

Policyholder shall indemnify and hold harmless HCSC and its directors, officers and employees against any and all loss, liability, damages, fines, penalties, taxes, expenses (including attorneys' fees and costs) or other costs or obligations resulting from or arising out of any claims, lawsuits, demands, governmental inquiries or actions, settlements or judgments brought or asserted against HCSC in connection with (a) any plan's grandfathered health plan status, (b) any plan's exempt plan status, (c) any directions, actions and interpretations of the Policyholder, and/or (d) any provision of inaccurate information. Changes in state or federal law or regulations or interpretations thereof may change the terms and conditions of coverage.

The provisions of paragraphs A-C (directly above) shall be in addition to (and do not take the place of) the other terms and conditions of coverage and/or administrative services between the parties.

Renewals Only: If this BPA is blank, it is intentional and this BPA is an addendum to the existing BPA. In such case, all terms of the existing BPA as amended from time to time shall remain in force and effect. However, beginning with the Policyholder's first renewal date on or after September 23, 2010, the provisions of paragraphs A-C (above) shall be part of (and be in addition to) the terms of the existing BPA as amended from time to time. Any reference in this Benefit Program Application to eligible dependents may include Domestic Partners, but will include dependent covered children under the Limiting Age of twenty-six (26). Any reference in this Benefit Program Application to the Limiting Age for covered children means twenty-six (26) years, regardless of presence or absence of a child's financial dependency, residency, student status, employment, marital status or any combination of those factors. If the covered child is eligible military personnel, the Limiting Age is thirty (30) years. Any reference in this Benefit Program Application to the "Employee plus one dependent" rate structure means "Employee plus one spouse or one child." Any reference in this Benefit Program Application to the "Child(ren)" rate structure means "Employee plus one or more children."

Grandfathered Plan

D Additional Provisions are specified in the Exhibit attached hereto and made a part of this BPA. MGA-10-1 HCSC Rev. 10/08

page6

Myriam Cardenas Sales Representative 832/811 District Kathleen D. Rowe Producer Representative Doyle Rowe, Ltd. Producer Firm 1301 W. 22ND Street, Suite 101 Oak Brook, IL 60523 Producer Address on file

1gnature of Authori ed Purchaser

l'rrr dA&~Ac«_

Title

:~ $

A mount Submitted

Producer Tax I. D. No.

MGA-10-1 HCSC Rev. 10/08

page 7

PROXY The undersigned hereby appoints the Board of Directors of Health Care Service Corporation, a Mutual Legal Reserve Company, or any successor thereof ("HCSC"), with full power of substitution, and such persons as the Board of Directors may designate by resolution, as the undersigned's proxy to act on behalf of the undersigned at all meetings of members of HCSC (and at all meetings of members of any successor of HCSC) and any adjournments thereof, with full power to vote on behalf of the undersigned on all matters that may come before any such meeting and any adjournment thereof. The annual meeting of members shall be held each year in the corporate headquarters on the last Tuesday of October at 12:30 p.m. Special meetings of members may be called pursuant to notice mailed to the member not less than 30 nor more than 60 days prior to such meetings. This proxy shall remain in effect until revoked in writing by the undersigned at least 20 days prior to any meeting of members or by attending and voting in person at any annual or special meeting of members. Group No(s).:

P55977 & P66988

Group Name:

City of Park Ridge

Address:

505 Butler Place

City: Dated this

_.:_P.::::ar:.:..:kc..:.R..::id=:;goz.::e"---------- State:

--=J./L=--...

MGA-10-1 HCSC Rev. 10/08

day of

{;r, /.

,..~onth

--=..:IL=------ Zip Code:

60068

2D /2.: Year

page 8

., ®

The HMOs of Blue Cross and Blue Shield of IHinois

BlueCross BlueShield of Illinois

®

Benefit Program Application ("BPA") Employer Account Number:

005977 H55977 0001, 0002, 0003, 1001, 1002 & 1003

HMO Illinois Employer Group Number(s): HMO Illinois Section Number(s): BlueAdvantage® HMO Employer Group Number(s): BlueAdvantage HMO Section Number(s):

Employer Name: City of Park Ridge (Specify the Employer, the employee trust or the association applying for coverage. Names of subsidiary or affiliated companies to be covered must also be included below. An employee benefit plan may not be named.) Address: 505 Butler Place City: Park Ridge

State: IL

Zip Code: 60068-4173

State:

Zip Code:

Billing Address (if different from above): _ _ Employer Identification Number ("EIN"): 366006041 City: _ _ Subsidiaries: _ _ Affiliated Companies: _ _ (If Affiliated Companies to be covered are listed above, a separate "Addendum to the Benefit Program Application Regarding Affiliated Companies" must be completed, signed by the Employer's authorized representative, and attached to this BPA.) Phone: 84 7-318-5202 Fax: 847-318-5329 Email: Administrative Contact: Cathy CDoczeka@parkridge. us Doczekalski Blue Access for Employers (BAE) Contact: Cathy Doczekalski (The BAE Contact is the employee of the account authorized by the Employer to access and maintain its account via BAE.)

Title: HR Administrator

Phone: 847-318-5202

Policy Effective Date: May 1, 2012 ERISA Plan:

0

Yes

[8J

Fax: 847-318-5329

Email: CDoczeka@parkridge. us

Policy Anniversary Date: May 1, 2013

No

If Yes, specify ERISA Plan Year: _ _

ERISA Plan Administrator: ERISA Plan Administrator's Address: City: _ _

State:

Zip Code: _ _

ERISA Plan Administrator's Email: 1.

Eligible Person means a person who resides in the Service Area of a Participating IPA and is:

1:8:]

D D 2.

A full-time employee of the Employer. A member of (name of union or association): _ _ Other (please specify): _ _

Full-Time Employee means:

1:8:]

A person who is regularly scheduled to work a minimum of 30 hours per week and is on the payroll of the Employer. A Division of Health Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association

GA-16-1.2 HCSC Rev. 10/08

Page 1

D 3.

Other (please specify): _ _

Limiting Age for covered unmarried children is:

I:8J twenty-six (26) years; thirty (30) years if eligible military personnel as described in the Certificate Booklet.

D

years;

years if eligible military personnel as described in the Certificate Booklet.

(The minimum allowable ages for this option are 26; 30 if eligible military personnel)

D

years if a full-time student.

(The minimum allowable ages for this option are 26; 30 if eligible military personnel)

.Qoverage will terminate at the end of the following period for which premium has been accepted:

I:8J The month in which the Limiting Age is reached.

D The year in which the Limiting Age is reached.

However, coverage shall be extended due to a leave of absence in accordance with any applicable federal or state law. 4.

Total number of employees: (indicate the total number of actual employees, not enrollees) National employees Q Illinois employees 291 Of the Employer 291

5.

Eligibility Date for a person who becomes an Eligible Person after the Effective Date of the Employer's health care plan:

I:8J

D D D D

I:8J

6.

The date of employment. The _ _ day of employment. The _ _ day of the month following _ _ month(s) or

days of employment.

The _ _ day of the month following the date of employment. Other (please specify): _ _ A full month's premium will be charged for the first month of coverage for those employees whose Coverage Dates fall between the first and fifteenth day of the Premium Period. No premium will be charged for the first month of coverage for those employees whose Coverage Dates fall between the sixteenth day and the end of the Premium Period.

Special Enrollment: An Eligible Person may apply for coverage, Family coverage or add dependents within thirty-one (31) days of a Special Enrollment event if he/she did not apply prior to his/her Eligibility Date or when eligible to do so. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be the effective date of the Special Enrollment event or, in the event of Special Enrollment due to termination of previous coverage, the date of application for coverage. Open Enrollment: Specify Open Enrollment Period:The month of April for a May 1 effective date.. An Eligible Person may apply for coverage, Family coverage or add dependents if he/she did not apply prior to his/her Eligibility Date or did not apply when eligible to do so, during the Employer's Open Enrollment Period. Such person's Coverage Date, Family Coverage Date, and/or dependent's Coverage Date will be a date mutually agreed to by Blue Cross and Blue Shield of Illinois, A Division of Health Care Service Corporation, A Mutual Legal Reserve Company ("HCSC") and the Employer. Such date shall be subsequent to the open enrollment period.

7.

Effective Date of Termination for a person who ceases to meet the definition of an Eligible Person:

D

I:8J

The date such person ceases to meet the definition of Eligible Person. The last day of the calendar month in which such person ceases to meet the definition of an Eligible Person.

D Other (please specify): - - - GA-16-1.2 HCSC Rev. 10/08

Page2

8.

Extension of Benefits due to Temporary Layoff, Disability or Leave of Absence: Temporary Layoff: 365 days; D

Disability: 365 days;

Leave of Absence: 365 days

Other (please specify): _ _

However, benefits shall be extended for the duration of an Eligible Person's leave in accordance with any applicable federal or state law. 9.

Funding

Arrangement:~

Premium Prospective (complete section 10.)

D

Cost Plus (complete section 12.)

10. Employer Contribution:

~

HMO Illinois: BlueAdvantage HMO: Premium. D

90% of the Individual Coverage Premium, and 90% of the Family Coverage Premium.D _ _% of the Individual Coverage Premium, and _ _% of the Family Coverage

Other (please specify):

11. Premium Period:

~ The first day of each calendar month through the last day of each calendar month. (This option applies to all coverages if the Employer has BlueCare® Dental HMO Coverage.) D The day of each calendar month through the day of the next calendar month. (This option is not available for any coverage if the Employer has BlueCare Dental HMO Coverage.)

2. Employee plus one dependent 3. Employee plus two or more dependents 4. Employee plus Spouse 5. Employee plus Child(ren) 6. Family

HMO Illinois $531.19

BlueAdvantage HMO $

HMO Illinois $

BlueAdvantage HMO $

HMO Illinois$

BlueAdvantage HMO$

HMO Illinois $1,021.08

BlueAdvantage HMO $

HMO Illinois $979.87

BlueAdvantage HMO $

HMO Illinois $1,516.03

BlueAdvantage HMO$

Single Tier rate structure - complete item 1. Two Tier rate structure - complete items 1. and 6. Three Tier rate structure- complete items 1., 2., and 3. Four Tier rate structure - complete items 1., 4., 5., and 6.

GA-16-1.2 HCSC Rev. 10/08

Page3

Family Coverage

HMO Illinois $758.88

BlueAdvantage HMO$

12. Cost Plus Program: a) Service Charges for Claim Payments:

D HMO Illinois: _ _% of Claim Payments; $_ _ per Enrollee per month for health Claim Payments. D BlueAdvantage HMO: _ _% of Claim Payments; $_ _ per Enrollee per month for health Claim

Payments. b) Physician's Services Fees:

D HMO Illinois:

$_ _ per month per single Enrollee; $_ _ per month per Enrollee with one or

more Dependents.

D

BlueAdvantage HMO: $_ _ per month per single Enrollee; more Dependents.

c)

$___per month p er Enrollee with one or

D Transfer Payment Method: D

D Wire Transfer D Draft D Electronic Fund Transfer D Other (please specify): _ _ Tentative Final Settlement Period -Transfer payments required after termination for: D 3 months D 6 months D 9 months D 12 months D Other (please specify): _ _

d) Post Payment Method e) Payment Period: D Daily D Weekly D Bi-Weekly D Monthly D Other (please specify): _ _ f) Claim Settlement Period: D Monthly D Quarterly D Other (please specify) _ _ g) Prescription Drug Rebate: $_ _ per Enrollee per month is the guaranteed Prescription Drug Rebate savings reflected as a Prescription Drug Rebate credit. The undersigned representative is authorized and responsible for purchasing insurance on behalf of the Employer, has provided the information requested in this Benefit Program Application ("BPA") and on behalf of the Employer offers to purchase the benefit program as outlined in the proposal document submitted to the Employer by the Sales Representative. The benefit program and funding arrangements are as outlined in this BPA. It is understood and agreed that the actual terms and conditions of the benefit program are those contained in the Policy. This BPA is subject to acceptance by Blue Cross and Blue Shield of Illinois, a Division of Health Care Service Corporation, A Mutual Legal Reserve Company ("HCSC"). Upon acceptance, HCSC shall issue a Policy to the Employer and this BPA shall be incorporated and made a part of the Policy. Upon acceptance of this BPA and issuance of the Policy, the Employer shall be referred to as the Policyholder. In the event of any conflict between the proposal document and the Policy, the provisions of the Policy shall prevail. The undersigned representative acknowledges that any broker/producer is acting on behalf of the Employer for purposes of purchasing the Employer's insurance, and that if HCSC accepts this BPA and issues a Policy to the Employer, HCSC may pay the Employer's broker/producer a commission and/or other compensation in connection with the issuance of such Policy. The undersigned representative further acknowledges that if the Employer desires additional information regarding any commissions or other compensation paid to the broker/producer by HCSC in connection with the issuance of a Policy, the Employer should contact its broker/producer. The undersigned representative hereby acknowledges that the Employee Retirement Income Security Act of 1974, as amended, ("ERISA"), establishes certain requirements for employee welfare benefit plans. As defined in Section 3 of ERISA, the term "employee welfare benefit plan" includes any plan, fund or program which is established or maintained by an employer or by an employee organization, or by both, to the extent that such plan, fund or program was established or is maintained for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, medical, surgical or hospital benefits, or benefits in the event of sickness, accident or disability. The undersigned representative further acknowledges that: (i) an employee welfare benefit plan must be established and maintained through a separate plan document which may include the terms hereof or incorporate the terms hereof by reference, and that (ii) an employee welfare benefit plan document may provide for the allocation and delegation of responsibilities thereunder. However, notwithstanding anything contained in the employee welfare benefit plan document of the Employer (or any group member if the group is an association), the Employer agrees that no allocation or

GA-16-1.2 HCSC Rev.10/08

Page4

delegation of any fiduciary or non-fiduciary responsibilities under the employee welfare benefit plan of the Employer (or any group member if the group is an_association) is effective with respect to or accepted by HCSC except to the extent specifically provided and accepted in this BPA or the Policy or otherwise accepted in writing by HCSC.

OTHER PROVISIONS: 1.

Certificate of Creditable Coverage: ~ Yes D No (The "yes/no" option is applicable to 100 plus only; A Certificate of Creditable Coverage is issued automatically under 100 lives.) If yes: It is understood and agreed that HCSC will issue a Certificate of Creditable Coverage consistent with the requirements under the Health Insurance Portability and Accountability Act of 1996. The Certificate of Creditable Coverage shall be based upon coverage under the Plan during the term of the Policy and information provided to HCSC by the Employer. If no: The Certificate of Creditable Coverage Release and Indemnification letter is attached to this BPA and made part of the Policy.

2.

Reimbursement Provision: It is understood and agreed that in the event HCSC makes a recovery on a third-party liability claim, HCSC will deduct 25% of the net recovery from the amount credited to the Employer's experience, after attorneys' fees, if any, have been paid.

3.

Domestic Partner Coverage:

D

Yes

~

No

If yes, a Domestic Partner, as defined in the Policy, shall be considered eligible for coverage. The Policyholder is responsible for providing notice of possible tax implications to those Enrollees with Domestic Partners. Domestic Partner Coverage Continuation: (only available if Domestic Partners are covered) 4.

Excess Loss Coverage purchased:

DYes

DYes

D

No

~No

If yes: Complete separate Application for Excess Loss Coverage.

ADDITIONAL PROVISIONS:

A

Grandfathered Health Plans: Policyholder shall provide HCSC with written notice prior to renewal (and during the plan year, at least 60 days advance written notice) of any changes in its Contribution Rate Based on Cost of Coverage or Contribution Rate Based on a Formula towards the cost of any tier of coverage for any class of Similarly Situated Individuals as such terms are described in applicable regulations. Any such changes (or failure to provide timely notice thereof) can result in retroactive and/or prospective changes by HCSC to the terms and conditions of coverage. In no event shall HCSC be responsible for any legal, tax or other ramifications related to any benefit package of any group health insurance coverage (each hereafter a "plan") qualifying as a "grandfathered health plan" under the Affordable Care Act and applicable regulations or any representation regarding any plan's past, present and future grandfathered status. The grandfathered health plan form ("Form"), if any, shall be incorporated by reference and part of the BPA and Group Policy, and Policyholder represents and warrants that such Form is true, complete and accurate. If Policyholder fails to timely provide HCSC with any requested grandfathered health plan information, HCSC may make retroactive and/or prospective changes to the terms and conditions of coverage, including changes for compliance with state or federal laws or regulations or interpretations thereof. B. Retiree Only Plans and/or Excepted Benefits: If the BPA includes any retiree only plans and/or excepted benefits, then Policyholder represents and warrants that one or more such plans is not subject to some or all of the provisions of Part A (Individual and Group Market Reforms) of Title XXVII of the Public Health Service Act (and/or related provisions in the Internal Revenue Code and Employee Retirement Income Security Act) (an "exempt plan status"). Any determination that a plan does not have exempt plan status can result in retroactive and/or prospective changes by HCSC to the terms and conditions of coverage. In no event shall HCSC be responsible for any legal, tax or other ramifications related to any plan's exempt plan status or any representation regarding any plan's past, present and future exempt plan status. C. Policyholder shall indemnify and hold harmless HCSC and its directors, officers and employees against any and all loss, liability, damages, fines, penalties, taxes, expenses (including attorneys' fees and costs) or other costs or obligations resulting from or arising out of any claims, lawsuits, demands, governmental inquiries or actions, settlements or judgments brought or asserted against HCSC in connection with (a) any plan's grandfathered health plan status, (b) any plan's exempt plan status, (c) any directions, actions and interpretations of the Policyholder,

GA-16-1.2 HCSC Rev. 10/08

Page 5

and/or (d) any provision of inaccurate information. Changes in state or federal law or regulations or interpretations thereof may change the terms and conditions of coverage. The provisions of paragraphs A-C (directly above) shall be in addition to (and do not take the place of) the other terms and conditions of coverage and/or administrative services between the parties. Renewals Only: If this BPA is blank, it is intentional and this SPA is an addendum to the existing BPA. In such case, all terms of the existing SPA as amended from time to time shall remain in force and effect. However, beginning with the Policyholder's first renewal date on or after September 23, 2010, the provisions of paragraphs A-C (above) shall be part of (and be in addition to) the terms of the existing SPA as amended from time to time.

Any reference in this Benefit Program Application to eligible dependents may include Domestic Partners, but will include dependent covered children under the Limiting Age of twenty-six (26). Any reference in this Benefit Program Application to the Limiting Age for covered children means twenty-six (26) years, regardless of presence or absence of a child's financial dependency, residency, student status, employment, marital status or any combination of those factors. If the covered child is eligible military personnel, the Limiting Age is thirty (30) years. Any reference in this Benefit Program Application to the "Employee plus one dependent" rate structure means "Employee plus one spouse or one child." Any reference in this Benefit Program Application to the "Employee plus Child(ren)" rate structure means "Employee plus one or more children."

Grandfathered Plan

Myriam Cardenas ignature of Authori ed Purchaser

Sales Representative

832/811

630-824-5154

District

Phone No.

Ca:r~6££

Kathleen Rowe Producer Representative

Doyle Rowe, Ltd. Producer Firm

1301 W. 22ND Street, Suite 101 Oak Brook, IL 60523 Producer Address

$_ _ Amount Submitted (not required for renewals )

on file Producer Tax ID No.

UNDERWRITING AUTHORIZATION Date BPA approved by Underwriting: _ _

INTERNAL USE ONLY

Printed Name and Signature of Underwriter

GA-16-1.2 HCSC Rev. 10/08

Page6

PROXY The undersigned hereby appoints the Board of Directors of Health Care Service Corporation, a Mutual Legal Reserve Company, or any successor thereof ("HCSC"), with full power of substitution, and such persons as the Board of Directors may designate by resolution as the undersigned's proxy to act on behalf of the undersigned at all meetings of members of HCSC (and at all meetings of members of any successor of HCSC) and any adjournments thereof, with full power to vote on behalf of the undersigned on all matters that may come before any such meeting and any adjournment thereof. The annual meeting of members shall be held each year in the corporate headquarters on the last Tuesday of October at 12:30 p.m. Special meetings of members may be called pursuant to notice mailed to the member not less than 30 nor more than 60 days prior to such meetings. This proxy shall remain in effect until revoked in writing by the undersigned at least 20 days prior to any meeting of members or by attending and voting in person at any annual or special meeting of members. By:

Group No(s).: H55977

Group Name: City of Park Ridge Address: 505 Butler Ridge Place City: Park Ridge Dated this:

day of Month

Year

Cut along dotted lines

GA-16-1.2 HCSC Rev.10/08

Page 7

' .. !I!>

BlueCrossBlueShield of Illinois

'; ®

Account Name:

City of Park Ridge

Account Number:

055977

Renewal Date:

5/1/2012

Grandfathered Health Plan Form The Affordable Care Act (ACA) provides that certain group health insurance coverage in which an individual was enrolled on March 23, 2010, (ACA's date of enactment) may be a "grandfathered health plan." Grandfathered health plans are not subject to certain ACA provisions. Among other requirements, in order to maintain grandfathered health plan status, an employer's or employee organization's contribution rate toward the cost of any tier of coverage cannot decrease by more than five (5) percentage points since March 23, 2010. By default, our group renewal offer(s) reflect a non-grandfathered health plan design. This Grandfathered Health Plan Form must be signed by the group representative and returned to our offices at least 10 days prior to your renewal(s) effective date in order to change your renewal(s) to a grandfathered health plan design. If a plan is modified to a non-grandfathered health plan design on its effective date, it cannot later revert back to a grandfathered health plan design. For more information on grandfathered health plans and what changes or events may cause a plan to Jose grandfathered health plan status, go online to: bcbsil.com/affordable_care_act. The rules related to grandfathered health plans are complex. We recommend that you seek the advice and guidance of your legal counsel regarding ACA and grandfathered health plans. If you believe a plan or policy has lost or will lose grandfathered status, contact your insurance broker (if applicable) or BCBSJL representative immediately for available benefit plan options. Check all that apply for only the benefit plan(s) in effect that qualify for and that you wish to renew with a grandfathered health plan design. Group Number

Plan/Benefit Agreement Name/Number

Grandfathered?

H55977

KJG20 I HMO II 0010

181 Yes 0

P55977

$500 Deductibe I PPO+ PPO I 0002

181 Yes D No

P66988

PPO+ PPO I 0009

181 Yes 0

No

No

TO BE SIGNED BY THE GROUP REPRESENTATIVE: I, the undersigned, a duly authorized representative of the policyholder named above ("Policyholder''), hereby: (i) represent that I am knowledgeable as to standards associated with a "grandfathered health plan" as set forth in the Affordable Care Act and applicable regulations, and that the information contained in this Grandfathered Health Plan Form, and any subsequent updates to such Form, are true, complete and accurate; (ii) agree that the Policyholder will immediately provide BCBSIL with written notice prior to renewal (and during the plan year, with at least 60 days advance written notice) of any changes to the employer's or employee organization's contribution rate toward the cost of any tier of coverage; and (iii) agree that BCBSI L retains the authority to determine, at its sole discretion, whether any health insurance coverage constitutes a grandfathered health plan under the Affordable Care Act, applicable regulations and interpretations thereof.

Print Title

1/ S:/t;;l._ /

Signature

Date

A Division ofHealth Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association. Granclfathered Health Plan Farm - LGFI- 20 I 2

Page 1 of 2

.. ®

, . . Blue~r?ssBlueShield : of lllinms ®

Account Name:

City of Park Ridge

Account Number:

Renewal Date:

055977

05/01/2012

Grandfathered Health Plan Form Contribution Information Among other requirements, in order to maintain grandfathered health plan status, an employer's or employee organization's contribution rate toward the cost of any tier of coverage cannot decrease by more than five (5) percentage points since March 23, 201 0. Complete the following information to report on employer or employee organization contribution rates only for benefit plan(s) where YES was checked in the "Grandfathered?" column on page 1 of this form. Should the contributions differ by any employee class or tier within the employer group or employee organization, each of them must be stated.

Benefit Plan Name (e.g., PPO, HMO)

Employee Class (e.g., All, Hourly Only, Salaried Only or Other (as defined by Employer or Employee Organization))

Tier (e.g., Employee, Employee+Spouse, Employee+Child(ren), Family)

Renewal Date Employer's or Employee Organization's Contribution Rate

50"/o

75%

100% Other"/o

(Indicate % amount if Other)

D D D D D D D D D D D D D D

D D D D D D D D D D D D D D

D D D D D D D D D D D D D D

D D D

----------

---

-----

Add additional details as needed by copying this page. Make sure you return the signature and table page(s) together.

A Division ofHealth Care Service Corporation, a Mutual Legal Reserve Company, an Independent Licensee of the Blue Cross and Blue Shield Association. Grandfathered Health Plan Form- LGFI- 2012

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