HomeMy WebLinkAbout25A - AGMT FOR FLEX SPENDINGREQUEST FOR
COUNCIL ACTION
CITY COUNCIL MEETING DATE:
OCTOBER 20, 2020
TITLE:
APPROVE AGREEMENT WITH IGOE
ADMINISTRATIVE SERVICES FOR
SECTION 125 PLAN ADMINISTRATION
AND FLEXIBLE SPENDING ACCOUNT
SERVICES
(NON -GENERAL FUND)
/s/ Kristine Ridge
CITY MANAGER
CLERK OF COUNCIL USE ONLY:
APPROVED
❑ As Recommended
❑ As Amended
❑ Ordinance on 1� Reading
❑ Ordinance on 2nd Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
RECOMMENDED ACTION
Authorize the City Manager to execute an agreement with IGOE Administrative Services to provide
Section 125 Plan Administration and Flexible Spending Account Services to employees effective
January 1, 2021 with a yearly automatic renewal and a three-year rate guarantee, subject to non -
substantive changes approved by the City Manager and City Attorney.
DISCUSSION
On September 5, 2017, the City Council authorized the City Manager and Clerk of the Council to
execute an agreement with Total Administrative Services Corporation (TASC), to provide Section
125 Plan Administration, Flexible Spending Account services, and Retiree Dental Billing, effective
April 1, 2017 and until terminated.
Keenan, the City's Benefits Broker, assisted in a market study to compare services and rates for
Section 125 Plan Administrators and Flexible Spending Account providers. Two proposals were
received from IGOE Administrative Services and Sterling Administrative Services. IGOE
Administrative Services was selected to take over as the City's Section 125 Plan Administration
and Flexible Spending Account Services. In the plan -takeover, IGOE Administrative Services will
take over the administration of Section 125 Plan Administration and Flexible Spending Account
Services from TASC effective January 1, 2021, with a yearly automatic renewal January 1, each
year unless terminated effective upon thirty (30) days' notice to the other party. TASC will continue
to provide administration of Retiree Dental Billing.
The Section 125 Plan is part of the IRS code that enables and allows employees to take taxable
benefits, such as healthcare benefits and convert them into nontaxable benefits. The City's Flexible
Benefits Plan offers eligible employees to have pre-tax payroll deductions for certain healthcare
and dependent care qualified expenses, and commuter expense reimbursement accounts. The
City of Santa Ana currently has approximately 170 eligible employees participating in Section 125
Flexible Spending Accounts (FSA) per year. Employees enrolled in the FSAs can take advantage
of dependent care FSA for an annual maximum of $5,000 for married couples filing taxes jointly
and $2,500 for singles, and commuter expenses, such as public transportation fare and qualified
25A-1
Authorize Agreement with IGOE Administrative Services
October 20, 2020
Page 2
parking expenses. Healthcare account funds not used in the calendar year are eligible to roll over
into the next plan year for a maximum of $500.
The City does not contribute to the employee's accounts; the employee pays for their contributions
out of their paycheck. The City does pay a nominal administration fee on behalf of the employees
to administer the plan.
FISCAL IMPACT
The IGOE Administrative Services agreement has a bundled rate which includes implementation
and plans administration. There is a monthly flat rate of $4.00 per participant. This rate is
guaranteed until December 31, 2023 (Exhibit 1 and Exhibit 2). Each year, approximately 170
eligible City of Santa Ana employees participate in the Section 125 Flexible Spending Accounts.
The number of participants varies, as well as certain fees (e.g., $5 per manual enrollment, ACH
Rejections, Reimbursement Reissuance) therefore a 10 percent contingency has been factored
into the total cost. Funds are budgeted and available for Fiscal Year 2020-2021 in the Employee
Group Insurance Fund, Insurance Payment Account (No. 08109053-64010) and will be budgeted
every subsequent year thereafter.
Account Unit -
Accounting Unit-
Fund
Account
Fiscal Year
Account#
Description
Descri tion
Amount
Employee Group
2020-21 (Jan.
Internal Service
Insurance, Insurance
2021 to Jun. 2021)
08109053-64010
Fund
Payment
4,500.00
Employee Group
Internal Service
Insurance, Insurance
2021-22
08109053-64010
Fund
Payment
9,000.00
Employee Group
Internal Service
Insurance, Insurance
2022-23
08109053-64010
Fund
Payment
9,000.00
Employee Group
2023-24 (Jul. 2023
Internal Service
Insurance, Insurance
to Dec. 2023)
08109053-64010
Fund
Payment
4,500.00
Total
27,000.00
Fiscal Impact Verified By: Kathryn Down, CPA, Executive Director — Finance and Management
Services Agency
Submitted by: Steven V. Pham, Executive Director — Human Resources Department
Exhibits: 1. IGOE Spending Account Services Agreement
2. IGOE Business Associate Agreement
25A-2
'DocuSign Envelope ID: CFCE3443-EF37-4FD4-8DCD-D85D559F77AE
IGOE ADMINISTRATIVE SERVICES EXHIBIT 1
Spending Account Administrative Services Agreement
Prepared for City of Santa Ana
The terms of this contract reflect the business practices of Igoe Administrative Services and are not
negotiable. Igoe Administrative Services promotes a fair and equal business practice and as a result
extends the same services, allocation of responsibilities, and liability statements to all clients.
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City of Santa Ana Spending Account Administrative Services Agreement
Client Initials:
PEPM17
Page 1
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DocuSign Envelope ID: CFCE3443-EF37-4FD4-BDCD-D85D559F77AE
Recitals
The Spending Account Administrative Services Agreement (Agreement) is entered into as of the
Effective Date defined in Section 2.a herein, by and between Igoe & Company Incorporated, dba Igoe
Administrative Services (Contract Administrative Firm) with principal offices at 10905 Technology Place,
Suite A, San Diego, CA 92127 and City of Santa Ana (Client) with principal offices at 20 Civic Center
Plaza, Santa Ana CA 92701. The Contract Administrative Firm and the Client, however otherwise
designated, collectively are referred to herein as the "Parties".
The Parties mutually agree and acknowledge that:
• Igoe provides a variety of administrative services to employers, including services related to the
following types of spending accounts offered independently or as part of a cafeteria/flexible
benefit plan under Internal Revenue Code (Code) § 125;
• Medical Care Reimbursement Account (MCRA) — also referred to as medical or health
flexible spending account (FSA) under Code § 105;
• Dependent Care Reimbursement Account (DCRA) under Code § 129;
• Limited Purpose Reimbursement Account (LPRA) —also referred to as a limited purpose
medical or health FSA (LPFSA) under Code § 125
• Premium Reimbursement Account (PRA) based on Revenue Ruling 61-146;
• Health Reimbursement Account (HRA) based on Revenue Ruling 2002-41;
• Transit Reimbursement Account (TRA) under Code § 132;
• Parking Reimbursement Account (PRA) under Code § 132
• As of the Effective Date set forth in 2.a or, if later, the specific service effective date(s) as set
forth in Exhibit B, Client wishes to engage Contract Administrative Firm to provide services
related to spending accounts as identified in Exhibit B to this Agreement, which for the purposes
of this Agreement collectively shall comprise and be referred to as the "Client's Spending
Account Program".
• With regard to the Client's Spending Program as defined above, in consideration for the fees
and charges detailed in Exhibit A to this Agreement, the Contract Administrative Firm hereby
agrees to provide said administrative services to the following terms and conditions.
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City of Santa Ana Spending Account Administrative Services Agreement
Client Initials:
PEPM17
Page 2
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DocuSign Envelope ID: CFCE3443-EF37-4FD4-80CD-D85D559F77AE
1. Terms and Conditions
a. Spending Account Services — Contract Administrative Firm Duties
i. In accordance with the terms of this Agreement, including language specific to
each component of Client's Spending Account Program as identified in Exhibit B
to this Agreement, but excluding language pertaining to components not
selected as part of the Client's Spending Account Program or components
selected by Client but administered by a third party firm other than Igoe, or by
Client itself, the Contract Administrative Firm shall provide the following
administrative and clerical functions:
1. The Contract Administrative Firm shall consult with the Client on the
design of the Client's Spending Account Program. The Contract
Administrative Firm shall provide the Client with the following sample
documentation in order to initiate the administrative function;
a. Data collection forms and/or annual client verification forms
that outline the specific details of the Client's Spending Account
Program;
b. Sample Spending Account documentation corresponding to the
component reimbursement accounts comprising Client's
Spending Account Program for review and potential adoption by
the Client in its capacity as the Plan Administrator/Plan Sponsor
as defined by the Employee Retirement and Securities Act of
1971 (ERISA) § 3(16) if applicable;
c. Sample written summaries of the reimbursement accounts
comprising Client's Spending Account Program explaining the
rights and responsibilities of participants thereunder for review
and potential adoption by Client in its capacity as the Plan
Administrator/Plan Sponsor as defined by ERISA § 3(16) if
applicable;
d. A master set of spending account participant (Participant)
communication and enrollment materials, if applicable,
including:
i. Election forms to be used during the enrollment
process; and
ii. Electronic file transfer specifications; and
iii. Reimbursement request forms, which include
instructions for filing requests.
The Client is not required to use the sample election forms or
enrollment materials provided, subject to review by the
Contract Administrative Firm. The Contract Administrative Firm
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City of Santa Ana Spending Account Administrative Services Agreement
Client Initials:
PEPM17
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DocuSign Envelope ID: CFCE3443-EF37-4FD4-BDCD-D85D559F77AE
makes no warranties or representations regarding adequacy of
alternate materials. Additional fees may apply if the Client uses
alternate materials that have not been reviewed and approved
by the Contract Administrative Firm and result in custom data
entry. Such fees must be provided in writing by the Contract
Administrative Firm and agreed to in writing by the Client
before such materials will be submitted for data entry by the
Contract Administrative Firm. Electronic file transmissions
must meet the Contract Administrative Firm's file specifications.
2. The Contract Administrative Firm will process reimbursement requests,
including the provision of written instructions to Participants for re-
submitting reimbursement requests in instances where required
information may be missing. In the event of an appeal by a Participant,
the Contract Administrative Firm agrees to reimburse expenses based
on a final, written approval by the Client.
3. The Contract Administrative Firm will use a designated checking account
owned and managed by the Client ("Funding Account") for the purpose
of funding the following Spending Account activity as applicable:
a. All daily cumulative Benefits Card (Card) transactions via
Automated Clearing House (ACH) transfer from the Funding
Account directly to the Card provider
b. All daily cumulative Participant direct deposit transactions via
ACH from the Funding Account directly to the Card provider.
c. All weekly manual (check) Participant reimbursements
accumulated during the previous week and disbursed from a
designated account owned and operated by the Contract
Administrative Firm. Such reimbursements are produced daily
as applicable. The Contract Administrative Firm will process an
ACH on a designated day of the week equal to the amount of
funds disbursed by the Contract Administrative Firm during the
previous week, unless other arrangements have been made
allowing the Client to push such funds to the Contract
Administrative Firm. If a fund push is approved, funds must be
received by the Contract Administrative Firm on a designated
day of the week. Should funds not be received by the
designated day of the week, the Contract Administrative Firm
will automatically pull funds from the Funding Account via ACH
and additional processing fees will apply as listed in Exhibit A.
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City of Santa Ana Spending Account Administrative services Agreement
Client Initials:
PEPM17
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CocuSign Envelope ID: CFCE3443-EF37-4FD48DCD-D85D559F77AE
4. The Contract Administrative Firm will provide a check register or similar
written report to the Client for all transactions posted during each
reimbursement processing.
5. The Contract Administrative Firm will provide an electronic notification
if the Client contracts Card services and a Participant uses his/her Card
for a transaction that falls outside of the Card parameters set forth by
the Internal Revenue Service (IRS). If no response is received within 14
days, a second request for substantiation will be sent. If no response is
received within 7 days of this second request, the Card may be
deactivated and the expense will be deemed ineligible.
Once a transaction is deemed ineligible, resolution is required and can
be made through one of the following methods:
a. Submission of adequate receipts as substantiation to the
Contract Administrative Firm within the corresponding plan
year. Upon receipt, the transaction will be approved therefore
reactivating the Card (if applicable);
b. Refunding the applicable reimbursement account on an after-
tax basis equal to the amount of the transaction. This refund
must be made in accordance with the Client's internal policies.
The Contract Administrative Firm will reverse the ineligible
transaction and release the associated funds for future use
upon written notification from the Client.
c. A written report outlining unresolved and therefore ineligible
transactions will be provided to the Client on a monthly basis.
At the end of the plan year, all remaining ineligible transactions
must be added to the Participant's W-2 as taxable income.
6. The Contract Administrative Firm will conduct at least one set of non-
discrimination testing per component reimbursement account per year,
if applicable, based on information provided in writing by the Client and
will provide the Client with written interpretation of such testing
following each enrollment period. Additional non-discrimination
testing can be provided upon written direction. Additional fees may
apply if additional testing is required based on the Client's failure to
provide adequate and accurate information as requested in writing by
the Contract Administrative Firm.
7. The Contract Administrative Firm will provide a written year-to-date
report of reimbursement account balances, reimbursements paid, and
scheduled payroll contributions (if applicable) for all Participants on a
monthly basis.
8. The Contract Administrative Firm will attend any audit of hearing by a
government agency or bureau regarding compliance issues directly
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pertaining toad min istrative services performed by the Contract
Administrative Firm during the Term of this Agreement and will provide
any and all requested documents in their possession.
9. The Contract Administrative Firm will respond to inquiries from the
Client and their Participants including, but not limited to, available
account balances, reimbursement request submission and appeals
procedures. The Contract Administrative Firm will not provide legal
advice. The Contract Administrative Firm will defer inquiries to the
Client if the Participant has indicated intent to involve legal
representation.
b. Client Responsibilities
i. In accordance with the terms and conditions of this Agreement, the Client
agrees to the following:
1. The Client Agrees that the Contract Administrative Firm is willing to
perform the services described in this Agreement, provided that the
Contract Administrative Firm shall not constitute or be deemed or
construed to constitute the Plan Administrator or Plan Sponsor with
respect to the Client's Spending Account Program or any component
thereof, within the meaning of ERISA § 3(16), to the extent applicable.
The Client agrees that this responsibility is, and remains, that of the
Client or its designee.
2. The Client shall administer the Reimbursement Program or appoint a
person or committee to administer the Program.
3. The Client agrees that, except as expressly set forth herein, the Contract
Administrative Firm shall not be a Fiduciary, as such term is defined in
ERISA § 3(21), of the Client's Spending Account Program or any
component thereof. The Client agrees that this responsibility is, and
remains, that of the Client. Further, the Client agrees that the Contract
Administrative Firm, at no time, holds plan funds or assets and acts
solely at the discretion of the employer.
4. The Client understands and acknowledges that the Contract
Administrative Firm is responsible only for providing services specifically
allocated to the Contract Administrative Firm in this Agreement, and
only with regard to the component reimbursement accounts that
together comprise the Client's Spending Account Program, as further
specified by the attached Exhibit B and in accordance with the RECITALS
to this Agreement. If the Client wishes to engage the Contract
Administrative Firm for additional services such request must be
presented in writing for the Contract Administrative Firm's review. If
such services are available, the Contract Administrative Firm will
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present its fees and terms in writing and will require written agreement
of such fees and terms by the Client before said services are performed.
5. The Client agrees to notify the Contract Administrative Firm if the Client
has contracted a third party vendor for electronic enrollment and
intends to have said third party vendor electronically transmit
enrollment data.
a. The Client agrees that electronic data must conform to the
Contract Administrative Firm's file specifications and that data
fee establishment and testing fees may be incurred. Such fees
must be presented in writing by the Contract Administrative
Firm and agreed to by the Client before testing begins.
b. The Client agrees that the Contract Administrative Firm will
process electronically transmitted files as received without
question. If corrections are needed, such corrections must be
provided by the Client in writing and will serve as authorization
to perform system corrections and charge applicable
administrative fees as set forth in Exhibit A.
6. The Client agrees that it is responsible for the timely review and final
approval, execution and implementation of sample Reimbursement
Account documentation, if applicable, provided by the Contract
Administrative Firm. If the sample Reimbursement Account
documentation is not executed and implemented, the Client agrees that
it is responsible upon adoption of alternative documentation to provide
a copy of the same to the Contract Administrative Firm upon request.
The Client agrees that the Contract Administrative Firm makes no
warranties or representations regarding the adequacy of sample
Reimbursement Account documentation under the Code of other
applicable laws.
7. The Client agrees to provide sample written summaries of the component
reimbursement accounts to each Participant upon enrollment
thereunder and to communicate any changes which may be made to the
Client's Spending Account Program and/or the written summaries of
same if required.
B. The Client will establish and authorize the Contract Administrative Firm
access via ACH to a Funding Account for the purpose of funding the
following Spending Account activity as applicable:
a. All daily cumulative daily Benefits Card (Card) transactions via
Automated Clearing House (ACH) transfer from the Funding
Account directly to the Card provider
b. All daily cumulative Participant direct deposit transactions via
ACH from the Funding Account directly to the Card provider.
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PEPM17
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c. All weekly manual (check) Participant reimbursements
accumulated during the previous week and disbursed from an
account owned and operated by the Contract Administrative
Firm. The Contract Administrative Firm will process an ACH on
a designated day of the week equal to the amount of funds
disbursed by the Contract Administrative Firm via check during
the previous week, unless other arrangements have been made
allowing the Client to push such funds to the Contract
Administrative Firm. If a fund push is approved, funds must be
received by the Contract Administrative Firm on a designated
day of the week. Should funds not be received by the
designated day of the week, the Contract Administrative Firm
will automatically pull funds from the Funding Account via ACH
and additional processing fees will apply as listed in Exhibit A.
9. The Client will ensure that the Funding Account has adequate funds to
support transactions described in Section 1.b.8.c. Should the Funding
Account not be adequately funded, additional fees will be charged
pursuant to Exhibit A. Further, the Contract Administrative Firm
reserves the right to cease all reimbursement activity immediately until
all funds, including administrative fees owed, are available and paid to
the Contract Administrative Firm. Further, the Contract Administrative
Firm reserves the right to require that all check reimbursements be
made directly from a Client owned bank account using MICR
specifications and an authorized Client signature.
10. The Client shall report all Participant terminations and all qualifying
change in status events in a written format, including all requested
information, to the Contract Administrative Firm prior to the first
affected payroll date. Such notice must contain the effective date of the
change, the first pay date affected, the new payroll contribution amount,
and the new annual election amount (if applicable). Should this
information not be provided in a complete or timely manner, the Client
agrees to pay any resulting administrative fees which may be incurred in
order to process retroactive adjustments to payroll contributions or
reimbursement claims processed in error as set forth in Exhibit A.
11. The Client is responsible to review all reporting provided by the Contract
Administrative Firm in a timely manner and must provide any corrections
in writing. Should such corrections not be identified in a timely and
complete manner, the Client agrees to pay any resulting administrative
fees required to process such corrections as set forth in Exhibit A.
12. The Client agrees to provide to the Contract Administrative Firm, upon
each open enrollment period, all required data necessary to perform
non-discrimination testing if required. The Client agrees to report any
changes to the Contract Administrative Firm which may affect the
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City of Santa Ana Spending Account Administrative Services Agreement
Client Initials:
PEPM17
Page 8
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DocuSigp Envelope ID: CFCE3443-EF37-4FD4-8DCD-D85D559F77AE
qualification of the Plan for meeting non-discrimination requirements. In
addition, the Client agrees to initiate any action required in the event that
one or more component benefit programs are reported as
discriminatory. If the Client requests additional non-discrimination
testing services, the Client will be responsible for updating all data
necessary to conduct said testing and agrees to pay resulting
administrative fees as set forth in Exhibit A, if applicable.
13. The Client shall retain documentation relating to its Reimbursement
Program operations that may be requested in an IRS or Department of
Labor audit - including, but not limited to: non-discrimination testing
information, executed copies of reimbursement account documentation,
Salary Redirection Agreements (e.g. Enrollment Forms), Amendments,
Resolutions adopting the Reimbursement Program, and Form 5500s (if
applicable), for seven years after the close of each "Plan Year" with
respect to the Program, as such term is defined under ERISA §3(39), if
applicable.
14. The Client shall ensure that only common law employees participate in
the Reimbursement Program [employees of companies described in
Code §414 (b), (c) or (m) and listed in the Plan as participating affiliates
may also participate] and to ensure that the terms of its documentation
are properly enforced. Client solely is responsible for determining
whetheror not it is a component memberof a controlled group, common
control group, or affiliated service group, under Code § 414(b), (c), or (m)
and for the consequences, under ERISA and the Code, of such status.
15. The Client agrees that, unless alternate arrangements have been made
with the Contract Administrative Firm's approval, payment for services
performed will be taken directly from the Funding Account as defined in
Section 1.a.i.3 and 1.b.i.8 herein, in accordance with Exhibit A. Fees will
be assessed on or about the first day of the month in which services are
being provided. If the Client is still completing open enrollment during a
billing month, fees associated with participation counts will be estimated.
In these cases, adjustments will be made as necessary during the next
month's billing cycle. Unless alternate arrangements have been made
with the Contract Administrative Firm's approval, payment for fees will
be drawn from said account via an ACH transaction no later than the 20t1,
of the applicable billing month. A written statement of such fee
assessments and ACH activity will be provided by the Contract
Administrative Firm at least 2 business days prior to when the ACH is
initiated. Administrative fees set forth in Exhibit A are subject to review
by the Contract Administrative Firm upon expiration of the Rate
Guarantee Period defined in Exhibit A. The Contract Administrative Firm
must give written notice to the Client regarding any change in fees at
least sixty (60) days prior to the expiration of the Rate Guarantee Period.
16. The Client Agrees that if the Card is contracted and Participant uses
his/her Card for a transaction that falls outside of the Card parameters
set forth by the IRS, the Contract Administrative Firm will send a written
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notice to the Participant. If no response is received within 14 days, a
second request for substantiation will be sent. If no response is
received within 7 days of this second request, the Card may be
deactivated and the expense will be deemed ineligible.
Once a transaction is deemed ineligible, resolution is required and can
be made through one of the following methods:
a. Submission of adequate receipts as substantiation to the
Contract Administrative Firm within the corresponding plan
year. Upon receipt, the transaction will be approved therefore
reactivating the Card (if applicable);
b. Refunding the applicable reimbursement account on an after-
tax basis equal to the amount of the transaction. This refund
must be made in accordance with the Client's internal policies.
The Contract Administrative Firm will reverse the ineligible
transaction and release the associated funds for future use
upon written notification from the Client.
c. A written report outlining unresolved and therefore ineligible
transactions will be provided to the Client on a monthly basis.
At the end of the plan year, all remaining ineligible transactions
must be added to the Participant's W-2 as taxable income.
17. The Client agrees that, at any time during the Term of the Agreement as
defined herein, if it should file in the United States for debt relief or
reorganization of any type, all services from the date of the filing
forward may terminate immediately. The Client further agrees that it
is its responsibility to ensure that written notification of filing for debt
relief or reorganization of any type is provided to the Contract
Administrative Firm in a reasonable timeframe.
18. The Client agrees that in the event of an acquisition or merger that it is
its responsibility to ensure that written notification is provided to the
Contract Administrative Firm in a reasonable timeframe. The Client
further agrees to provide all information as requested and in a timely
mannerto assist the Contract Administrative Firm in identifying aspects
of current administration that may be impacted or require alteration as
a result of an acquisition or merger, including but not limited to an
amended Agreement, amended specimen reimbursement account
documentation, and system adjustments. Client solely is responsible
for determining whether or not, as a result of an acquisition, merger, or
other business transaction it is a component member of a controlled
group, common control group, or affiliated service group, under Code 4
414(b), (c), or (m) and for the consequences, under ERISA and the Code,
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City of Santa Ana Spending Account Administrative services Agreement
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PEPM17
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DowSign.Envelope ID: CFCE3443-EF37-4FD48DCD-D85D559F77AE
of such status. Additional fees to support required changes may apply
as set forth in Exhibit A.
19. The Client agrees to accurately complete a data collection/client
verification form in a reasonable timeframe, as supplied by the Contract
Administrative Firm, upon implementation or renewal of one or more
component reimbursement accounts. The Client agrees that these
forms will delineate the Contract Administrative Firm's services under
this Agreement and will be specifically identified in Exhibit B. Further,
the Client agrees that any changes to the information supplied on these
forms may only be made in writing and are only effective when
acknowledged by the Contract Administrative Firm in writing.
Additional fees may be incurred for any retroactive changes made after
the Client has submitted completed forms or for any changes which
may be requested mid -year (after the open enrollment period).
2. Term and Termination
a. Effective Date. This Agreement shall be effective as of the date of the last signature on
this Agreement (the "Effective Date"), however component reimbursement accounts may
be subject to a later effective date as set forth in the RECITALS to this Agreement.
b. Term. The term of this Agreement begins on the Effective Date and shall last until
terminated pursuant to the terms hereof (the "Term").
c. Termination Without Cause. Either Party may terminate this Agreement without
cause effective upon thirty (30) days written notice to the other Party.
d. Mutual Termination. The Parties may terminate this Agreement by mutual written
agreement.
e. Termination Upon Insolvency or Bankruptcy. Either Party may terminate this
Agreement effective immediately upon written noticeto the other Party in the event that
such other Party becomes insolvent, makes a general assignment for the benefit of
creditors, suffers or permits the appointment of a receiver for its business or assets, or
becomes subject to any proceeding under bankruptcy or insolvency law which does not
result in a reorganization. In the event that a Party experiences an event described in this
Section 2(e), such Party will make a good faith effort promptly to notify the other Party of
the event so as to allow that other Party to terminate this Agreement pursuant to this
Section.
f. Termination Due to Bad Acts. Either Party may terminate this Agreement effective
immediately upon written notice to the other Party in the event that such other Party, or
any of its officers, owners, agents or employees, engages in conduct giving rise to a good
faith belief that such Party, or any of its officers, owners, agents or employees, has
engaged in misrepresentation, gross negligence, fraud or embezzlement. If a Party
becomes aware of such conduct by any of its officers, owners, agents or employees, it will
make a good faith effort promptly to notify the other Party of such conduct so as to allow
that other Party to terminate this Agreement pursuant to this Section.
g. Termination Due to Non -Payment. In the event of Client non-payment, this
Agreement shall terminate on the date that is thirty (30) days after the Contract
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City of Santa Ana Spending Account Administrative Services Agreement
Client Initials:
PEPM17
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Administrative Firm suspends services for nonpayment by the Client, provided that the
Contract Administrative Firm provides written notice of such suspension to the Client and
the Client fails to pay fees in arrears as set forth is Exhibit A, by the required due date.
The Client is considered to have reached "nonpayment" status 30 days after written
notice is provided outlining applicable administrative fees and payment for such fees has
not been made. The Contract Administrative Firm will provide written notice if the Client
is in "non-payment" status outlining a minimum fifteen (15) day cure period before
suspending future services as outlined herein.
h. The Parties' Respective Rights and Obligations Upon Termination.
i. In the event of termination of this Agreement, the Contract Administrative Firm
will place a stop payment on all participant reimbursements that have not cleared
within thirty (30) days of the termination date. All funds associated with the stop
payment (minus processing fees as outlined in Exhibit A) will be returned to the
Client within sixty (60) days of the termination date. Further, the Contract
Administrative Firm will forward a written report outlining all reimbursements
still owed to the Participant as a result of this activity so that payment can be
processed by the Client or the Client's designee.
ii. In the event of termination of this Agreement, and upon request by the Client,
the Contract Administrative Firm will assist in a smooth transition of services and
records to the Client or its designated service provider, provided that such
documentation complies with the Contract Administrative Firm's current written
report format or electronic file specifications and, solely with regard to Client's
reimbursement accounts listed on Exhibit B that comprise "group health plans"
for purposes of compliance with the Health Insurance Portability and
Accountability Act of 1996 ("HIPAA") as amended by the Health Information
Technology for Economic and Clinical Health Act provisions of the American
Recovery and Reinvestment Act of 2009 ("HITECH), subject to the provisions
regarding retained "Protected Health Information" or "PHI" (as defined in the
Parties' Business Associate Agreement), and including, as used herein, electronic
PHI or "ePHI") in the Parties' Business Associate Agreement.
iii. If the Contract Administrative Firm performs any post -termination services
pursuant to this Agreement, the Client agrees to pay the Contract Administrative
Firm fees or other charges on the same basis as if the Agreement had continued
in effect for the period during which such services are performed.
3. Miscellaneous -Definitions
a. Applicable Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California.
b. Assignability. This Agreement and the rights, benefits, privileges, duties and
responsibilities of the Parties hereto may not be assigned by any Party hereto without the
prior written consent of the other Party hereto.
c. Audits. The Contract Administrative Firm agrees that the Client and its representatives
shall have the right, upon reasonable written notice, to conduct audits of the Contract
Administrative Firm relating to the provision of services set forth in this Agreement at the
Client's expense. Audits shall be performed during normal working hours. Fees
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associated with an audit must be provided in writing by the Contract Administrative Firm
to the Client and agreed to by both Parties in writing before said audit is conducted.
d. Availability of Counsel. All Parties hereby acknowledge that they have read this
Agreement in its entirety and have, to the extent to which they deem necessary,
consulted with counsel before executing this Agreement.
e. Binding Nature of Agreement. This Agreement is binding upon signature by both
Parties and shall inure to the benefit of the heirs, executors, successors and assignors of
the Parties hereto.
f. Complete Agreement. With the exception of the Business Associate Agreement
between the parties, this Agreement and all accompanying Exhibits constitute the
complete Agreement of the Parties regarding its subject matter and replace and
supersede any prior written or oral agreement between the Parties regarding its subject
matter.
g. Confidentiality.
i. The Parties mutually acknowledge and agree that in performance of this
Agreement, each Party and its employees has and will continue to disclose to the
other Party Confidential Information (as defined below) including but not limited
to information relating to the Client's personnel and their employment status,
and the Contract Administrative Firm's proprietary service model and materials,
and that each is bound to maintain the confidentiality of such Confidential
Information during the Term of this Agreement and at all times afterward, absent
a legal duty to disclose or the express written authorization to do so obtained
from the Party to whom the information pertains or belongs; provided however,
that each Party may disclose Confidential Information of the other Party or its
employees to its own representatives who need to know such information and
are bound by obligations of confidentiality and non-use consistent with those set
forth herein. Confidential Information shall not be used for any purpose other
than performance of this Agreement or otherwise in furtherance of the purposes
of this Agreement.
ii. For purposes of this Section 3(g), Confidential Information is any information
identified by either Party to the other as confidential and/or proprietary (or
words of similar import) or which reasonably should be considered confidential,
including but not limited to information regarding the Parties' respective
businesses or finances. Confidential Information does not include information
which: (a) becomes generally available to the public other than as a result of a
disclosure by the receiving party, its representatives, or its agents; (b) was
available to the receiving party on a non -confidential basis prior to its disclosure
hereunder by the other party or its employees or agents; (c) becomes available
on a non -confidential basis from a third -party source provided that such third
party source is not bound by a confidentiality agreement with the disclosing
party; or (d) is independently developed by the receiving party without the use
of, or reference to, the disclosing party's Confidential Information.
iii. With regard to "protected health information," as that term is defined in the
Parties' Business Associate Agreement and under HIPAA, the Parties mutually
agree to the additional privacy and security limitations set forth in the Business
Associate Agreement. If there is a conflict between this Agreement and the
Business Associate Agreement regarding information that can be classified as
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Protected Health Information, the terms of the Business Associate Agreement will
control to the extent necessary for full compliance under HIPAA.
h. Construction and Severability. The captions of this Agreement and its paragraphs and
subparagraphs are for the convenience of the Parties only and shall not be taken in
account in the construction and interpretation of this Agreement. All personal pronouns
used in this Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other gender, the singular may include the plural, and vice versa as the context
may require. The terms of this Agreement are severable; should any portion of this
Agreement be invalid or unenforceable, such invalidity or unenforceability shall not affect
the validity or enforceability of the remainder of this Agreement and this Agreement shall
be construed and interpreted as though such invalid or unenforceable provision was not
contained herein.
i. Force Majeure: Neitherthe Contract Administrative Firm nor the Client will be deemed
to be in default of this Agreement, nor held responsible for, any cessation, interruption
or delay in the performance of its obligations to provide such services hereunder due to
causes beyond its reasonable control, including, but not limited to, natural disaster, act
of God, labor controversy, civil disturbance, disruption of the public markets, terrorism,
war or armed conflict, or the inability to obtain sufficient materials or services required
in the conduct of its business from the Contract Administrative Firm's vendors or other
parties, including Intranet or Internet access, or any change in or the adoption of any law,
judgment or decree (each, a "Force Majeure Event"). In the event that a Force Majeure
Event prevents the Client or its designee from making a payment when due, the Contract
Administrative Firm shall be excused from performance under this Agreement from the
date on which such payment becomes delinquent until the date on which such payment
is made.
j. Independent Contractor. The Contract Administrative Firm's relationship with the
Client is that of independent contractor and nothing in this Agreement shall be construed
as creating the relationship of employer or employee between the Client and officers,
employees, or agents of the Contract Administrative Firm or the relationship of a
partnership orjointventure between the Parties.
k. Modifications. This Agreement may not be modified or amended except by the Parties
to this agreement by means of written modification or amendment of this Agreement or
their legal successors in interest.
1. Notices. All notices required hereunder shall be in writing and provided by electronic
mail and will be considered received as of the date of the electronic transmission.
Notices to the Client shall be sent to the daily contact on file with the Contract
Administrative Firm. Notices to the Contract Administrative Firm shall be sent to the
daily contact on file with the Client. Both Parties agree that they are responsible for
ensuring that such Notices are forwarded to the appropriate internal personnel for
handling. If additional information is needed to take action related to a Notice, a request
must be made in writing outlining all specific requirements and instructions and provided
by electronic mail.
m. Recordkeeping.
i. The Contract Administrative Firm shall maintain records it creates or receives
pursuant to this Agreement, including but not limited to notifications,
correspondence and other records, for the lesser of (a) the Term of this
Agreement or (b) seven (7) years following the date that the Contract
a
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Administrative Firm created or received the record. The Contract Administrative
Firm will deliver copies of such records to the Client or its designee within thirty
(30) days of (a) termination of this Agreement, or (b) the Contract Administrative
Firm's receipt of the Client's written request for the records.
ii. The Contract Administrative Firm reserves the right to retain at its own expense,
beyond the period defined in Section 4(m)(i), digital files containing records it
created or received pursuant to this Agreement, subject however to the express
provisions of Section 4(g), Confidentiality, and, to the extent such digital files
contain PHI, the provisions of the Business Associate Agreement regarding
maintenance of PHI when return or destruction of such PHI is infeasible.
Ill. The requirements of this subsection shall survive termination of this Agreement
and shall remain in effect for so long as the required period of record
maintenance lasts.
Standard of Care. The Contract Administrative Firm will use reasonable care and due
diligence in the performance of the duties contained in this Agreement, including the
selection and retention of subcontractors and agents engaged by Contract Administrative
Firm to assist in performance of its duties under this Agreement. It shall not be considered
a breach of this Agreement if the Contract Administrative Firm refuses to perform services
generally required under this Agreement if the manner in which the Client requires such
services to be performed is inconsistent with the Contract Administrative Firm's standard
of care, or requires material changes to the Contract Administrative Firm's existing
operating procedures.
o. Subcontractors and Agents. The Contract Administrative Firm will ensure that the
Standard of Care as outlined in Section 3(n), and the privacy and security duties under
HIPAA (as amended by HITECH) that are outlined in Section 3(g)(iii) are upheld by any
subcontractor or agent engaged for the purpose of providing services as outlined in
Section 1 and will further ensure that any such subcontractor or agent will comply with
applicable terms of this Agreement, including without limitation, Section 3(g). Disclosure
of subcontractor or agent relationships in existence as of the Effective Date or later will
be made by the Contract Administrative Firm upon the written request of the Client.
p. Survival. Notwithstanding any provision herein to the contrary, the Parties' obligations
under Sections 3(g) and 5 shall survive termination of this Agreement.
q. Warranties. No representations or warranties have been provided by any Party to this
Agreement except as specifically set forth in this Agreement.
r. Venue in the Event of Legal Dispute. Should either Party institute legal action to
enforce its rights under this Agreement, the venue shall be in San Diego County, State of
California, and the prevailing party in such action shall be entitled to recover reasonable
attorney's fees and costs.
4. No Trust Created.
Notwithstanding any provision herein to the contrary, the Contract Administrative Firm and the
Client agree and acknowledge that any funds submitted by the Client or any other individual or
entity to the Contract Administrative Firm in accordance with this Agreement: (1) are and shall
remain the general assets of the Client; (2) are not "plan assets" within the meaning of ERISA,
without regard to whether ERISA applies to the reimbursement accounts at issue; (3) were never
held in an account, fund or trust bearing the name of a Client component reimbursement
a
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account, Reimbursement Program or any participants or beneficiaries thereof; and (4) shall
always remain subject to the claims of the Client's creditors. The Client further understands that
the Contract Administrative Firm is not responsible for satisfying any applicable trust
requirements solely because funds are transmitted to the Client in accordance with this
Agreement by either the Client, or individuals who currently are or formerly were employed by
the Client.
5. Indemnification.
a. The Client shall indemnify, defend and hold harmless the Contract Administrative Firm, its
affiliates, directors, officers, owners, employees and subcontractors from any claim,
expense, loss, damage, settlement, judgment, penalty or liability including reasonable
attorney's fees and court costs (individually and collectively, "Claims') resulting in any way
from or arising out of the Client's performance of or failure to perform its duties under this
Agreement, including, without limitation, Claims resulting from or arising out of acts or
omissions by the Client, its employees, owners, officers, directors, or subcontractors.
b. The Contract Administrative Firm shall indemnify, defend and hold harmless the Client, its
affiliates, directors, officers, owners, employees, and subcontractors or any of them from
any claim, expense, loss, damage, settlement, judgment, penalty or liability, including
reasonable attorneys' fees and court costs (individually and collectively, "Claims') resulting
in any way from or arising out of the Contract Administrative Firm's performance of or failure
to perform its duties under this Agreement, including, without limitation, Claims resulting
from or arising out of acts or omissions by the Contract Administrative Firm, its employees,
owners, officers, directors, or subcontractors.
6. Signature
The Parties to this Agreement consent and agree to all of its provisions and by their signatures
cause this Agreement to become effective on the Effective Date.
Client:
Sign:
Print: Kristine Ridge
Contract Administrative Firm:
o uskn" by:
Sign: i+7olCT:".G"'
A21979ASBF118409_.
Print: Laura K. McKinlav
Title: City Manager
Title: President/CEO
9/14/2020
Date:
Date:
Attest:
Approved as to form:
Sonia R. Carvalho, City Attorney
Xco�A.R
Daisy Game
Clerk of Council
Laura A. Rossini
Acting Chief Assistant City
R mmen
ed for approval
Attorney 4-
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City of Santa Ana Spending Account Administrative Services Agreement
Executive Di
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Exhibit A: Spending Account Services
Fee Guarantee Period Begins on the Effective Date and ends
December 31, 2023
Annual Anniversary Date: January 15t 1
Minimum Monthly Fee: $100
FSA (Section 125 Services) 2 & Commuter Benefit Administration3
FSA administration includes Limited and Full Purpose Health FSA and Dependent Care
Assistance Plans. Commuter administration includes Qualified Transportation and Parking
Plans. Commuter program design requirements apply!. Bundled rate.
Monthly Participation Rate: $4.00 per participant per month
Included Services List:
These services are part of all Spending Accounts unless expressly indicated below.
✓ Implementation
• Plan Configuration Support
• Initial EDI Testing
✓ Client Relations Manager (CRM)
✓ Benefit Card Administrations (card stacked for multiple plans)
✓ Claim Review
✓ Client & Participant Portals
✓ Daily Reimbursement Remittance
✓ Direct Deposit Reimbursement
✓ Electronic Eligibility Updates
✓ Employer Reporting - scheduled and on demand
✓ Enrollment Processing and Eligibility Updates'
✓ FDIC Insured
'Once the Fee Guarantee Period expires, fees will renew as is on an annual basis unless new fee offerings are presented in writing 60 days prior
to the Annual Anniversary Date.
'Participation fees are assessed by Plan Year and will remain billable until the Plan year has closed administration. Section 125 Services include
standard and limited Health Flexible Spending Accounts as well as Dependent Care Reimbursement Account administration. A participant is
billable as long as they are enrolled in at least one of the aforementioned account types. Igoe reserves the right to increase the monthly
participation rate at any time due to increases in Federal Postage rates, changes to Federal legislation governing the provision of these services,
or as a result of CPI adjustments (not to exceed 3%annually).
'The per participant fee is bundled across all commuter elections offered. Igoe reserves the right to Increase the monthly participation rate at
anytime due to increases in Federal Postage rates, changes to Federal legislation governing the provision of these services, or as a result of CPI
adjustments (not to exceed 3 % annually).
4Fot files received prior to the administrative effective date
'Includes 2 benefit cards per account (both initial cards and cards renewed due to standard card expiration)
aEnrollment and Account Updates that require manual entry by an Igoe Associate are subject to a processing fee — please refer to the Billable
Services List.
7
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✓ Fund Rollover (FSA Carryover, HRA and Commuter)
✓ Investment Options (HSA only)
✓ Participant Call Center Support - Domestically Based
✓ Participant Communications & Alerts (Real Time)
• Communications are in electronic format
• Account Statements are emailed monthly
• Year-end tax statements (HSA only)
✓ Participant Mobile App
✓ Plan Document and Summary Plan Descriptions (fees apply if such
documentation is not required for Plan compliance)
Included Annual Services List:
✓ Non-discrimination Testing (NDT) (provided such testing is required for compliance
of spending accounts administered by Igoe)
✓ Open Enrollment Processing'
Billable Services List — Not Included
This list outlines services that are not included in the Monthly Participation Rate. Fees based
on time and ability will be presented to the Client by means of a written proposal (statement of
work) and must be agreed to before such services are provided. Postage expenses are
calculated using the official Federal USPS postal rate as of the time of the mailing.
✓ Benefit Cards
• Cards in excess of the 2 card per participant limit: $5.00 per
• Lost/Stolen/Damaged Replacement Cards: $5.00 per
✓ Benefit Fair and/or Open Enrollment Meeting Attendance
• $300 per day+travel
This fee is waived for clients within 100 miles of Igoe's San Diego based corporate
facility. Igoe's attendance is subject to associate availability.
✓ Banking Fees
• ACH Rejection -Client: $50.00 per each rejected client ACH
• Direct Deposit Rejection -Participant: $15.00 per each returned participant
ACH
• Reimbursement Reissuance: $10.00 per each reissued reimbursement (ACH
or manual check)
• Stop Payment: $15.00 per stop payment (fee only applies to manually issued
Manual Enrollment Processing fees will apply if election data is provided in a manual format and/or after the data submission detail outlined in
the Annual Open Enrollment Guide. Changes made to system configuration to accommodate amended benefit offerings are subject to System
Re -configuration fees.
IGOE
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checks)
✓ EDI Development
• $300 per vendor connection
This fee includes consultation and file testing for files that are initiated and/or altered
after initial plan administration has begun.
✓ Manual Enrollment Processing
• $5.00 per manually entered enrollment
✓ System Corrections/Re-Configuration
• $30 per 1/4 hour ($120 minimum)
Amended Section 12S Plan Documents and SPDs are included as applicable.
✓ Take-over Account Set-up and/or Balance Transfer
• $10.00 per participant account created ($200 minimum)
This fee is waived for each take-over account that is submitted in Igoe's preferred
format and successfully loaded into the Client's custom database.
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Exhibit B: Client Spending Account Program Design
Medical Care Reimbursements Account:
Dependent Care Assistance Account:
Limited Purpose Reimbursement Account:
Health Reimbursement Account:
Health Savings Account:
Transit Reimbursement Account:
Parking Reimbursement Account:
® Yes
❑ No
® Yes
❑ No
❑ Yes
❑ No
❑ Yes
❑ No
❑ Yes ❑ No
® Yes ❑ No
® Yes ❑ No
i Commuter Program Design Requirements:
Below is a list of administrative requirements that must be in place in order to maintain the Fee
Guarantee outlined herein. Custom Plan Designs are available and upon written request. Fees
for custom services will be made available at the time of the request.
• Connection to approved WireclCommute vendors
• Automatic update to current federal monthly limits
• Fund rollover with annual re -enrollment
® Manual claim remittance (participant will receive a check mailed home or can opt in to
direct deposit)
® 180-day claim submission period (the termination run out will be invoked for employment
termination)
• First of the month funding
• Eligibility changes must be submitted prior to the 20th of the month and will be effective
the 1st of the following month
City of Santa Ana Spending Account Administrative Services Agreement
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IGOE ADMINISTRATIVE SERVICES EXHIBIT 2
Business Associate Agreement
Prepared for City of Santa Ana
The terms of this contract reflect the business practices of Igoe Administrative Services and are not
negotiable. Igoe Administrative Services promotes a fair and equal business practice and as a result
extends the same services, allocation of responsibilities, and liability statements to all clients.
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Contents
Recitals..........................................................................................................................................................4
1.
Definitions.............................................................................................................................................4
a. Breach....................................................... ................................ ................... ................................ 4
b. Breach Notification Rule...............................................................................................................4
c. Designated Record Set..................................................................................................................5
d. Electronic Protected Health Information......................................................................................5
e. Electronic Transactions Rule ................... --.....................................................
............................. 5
f. Enforcement Rule.........................................................................................................................5
g. Genetic Information......................................................................................................................5
h. HIPAA Rules... ................................................................................................................................
5
i. HHS................................................................................................................................................5
j. Individual.......................................................................................................................................
5
k. Privacy Rule...........................................................................................................................-......5
I. Protected Health Information.......................................................................................................5
m. Required by Law ....................... -..........................................................................................
......... 5
In. Secretary .......................................................................................................................................5
o. Security Incident...........................................................................................................................5
p. Security Rule . ........................ ......................... .......................
........................................................ 5
q. Subcontractor...............................................................................................................................6
r. Transaction....................................................................................................................................6
s. Unsecured Protected Health Information....................................................................................6
2.
Permitted Uses and Disclosures of PHI by Business Associate.............................................................6
3.
Duties of Business Associate Relative to PHI........................................................................................7
4.
Term and Termination........................................................................................................................10
i) Term............................................................................................................................................10
ii) Termination for Cause................................................................................................................11
iii) Effect of Termination..................................................................................................................11
S.
Consideration......................................................................................................................................11
6.
Remedies in Event of Breach..............................................................................................................12
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7. Modification........................................................................................................................................12
8. Interpretation of this Contract to Other Contracts Between the Parties...........................................12
9. Compliance with State Law.................................................................................................................13
10. Miscellaneous.....................................................................................................................................13
i) Ambiguity....................................................................................................................................13
ii) Regulatory References................................................................................................................13
...
III Notice to Covered Entity Business Associate.............................................................................13
11. Signature.............................................................................................................................................14
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Recitals
This Business Associate Agreement (the "Agreement') is made by City of Santa Ana in its capacity as
Plan Administrator of City of Santa Ana Group Health Plan/Plans (herein referred to as "Covered Entity")
and Igoe & Company Incorporated, dba Igoe Administrative Services (hereinafter known as "Business
Associate" or "Igoe"). Covered Entity and Business Associate shall collectively be known herein as the
"Parties".
WHEREAS, Covered Entity wishes to commence a business relationship with Business Associate that
shall be memorialized in a separate administrative services agreement (the "Underlying Agreement')
pursuant to which Business Associate may be considered a "business associate" of Covered Entity as
defined in the Health Insurance Portability and Accountability Act of 1996 ("HIPAA") as amended by the
Health Information Technology for Economic and Clinical Health Act provisions of the American
Recovery and Reinvestment Act of 2009 (Pub. L. 111-5) (the "HITECH Act'); and
WHEREAS, the nature of the prospective contractual relationship between Covered Entity and Business
Associate may involve the exchange of Protected Health Information ("PHI") as that term is defined
under HIPAA; and
WHEREAS, Covered Entity and Business Associate wish to enter into this Agreement for the purpose of
ensuring compliance with the requirements of HIPAA as amended by HITECH, and its implementing
regulations through and including the "omnibus" final HIPAA/HITECH regulations published in January
2013; and with applicable privacy provisions of California law;
NOW THEREFORE, in consideration of the mutual promises set forth herein and in the Underlying
Agreement, the Parties, intending to be legally bound, hereby agree as follows:
1. Definitions
The following terms used in this Agreement shall have the same meaning as those terms in the
HIPAA Rules: Data Aggregation, Disclosure, Health Care Operations, Minimum Necessary, Notice
of Privacy Practices, and Use. Other terms are as defined below:
a. Breach. 'Breach" shall have the same meaning as the term "breach' in 45 CFR § 164.402,
taking into account the exclusions set forth at 45 CFR § 164.402(1).
b. Breach Notification Rule. 'Breach Notification Rule" shall mean the Standards and
Implementation Specifications for Notification of Breaches of Unsecured Protected Health
Information under 45 CFR Parts 160 and 164, subparts A and D.
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c. Designated Record Set. "Designated Record Set' shall have the same meaning as the term
"designated record set" in 45 CFR §164.501.
d. Electronic Protected Health Information. "Electronic Protected Health Information" or
"Electronic PHI" shall have the same meaning as the term "electronic protected health
information" in 45 CFR §160.103.
e. Electronic Transactions Rule. "Electronic Transactions Rule" shall mean the final regulations
issued by HHS concerning standard transactions and code sets under 45 CFR Parts 160 and
162.
f. Enforcement Rule. "Enforcement Rule" shall mean the Enforcement Provisions set forth in
45 CFR Part 160
g. Genetic Information. "Genetic Information" shall have the same meaning as the term
"genetic information" in 45 CFR §160.103.
h. HIPAA Rules. "HIPAA Rules" shall mean the Privacy, Security, Breach Notification and
Enforcement Rules at 45 CFR Parts 160 and 164.
i. HHS. "HHS' shall mean the U.S. Department of Health and Human Services.
j. Individual. "Individual' shall have the same meaning as the term "individual' in 45 CFR
§160.103 and shall include a person who qualifies as a personal representative in
accordance with 45 CFR §164.502(g).
It. Privacy Rule. "Privacy Rule" shall mean the Standards for Privacy of Individually Identifiable
Health Information at 45 CFR Part 160 and Part 164, Subparts A and E.
I. Protected Health Information. "Protected Health Information" or "PHI' shall have the same
meaning as the term "protected health information" in 45 CFR §160.103, limited to the
information created, received, maintained or transmitted by Business Associate from or on
behalf of Covered Entity pursuant to this Agreement.
m. Required by Law. "Required by Law" shall have the same meaning as the term "required by
law" in 45 CFR §164.103.
n. Secretary. "Secretary" shall mean the Secretary of the U.S. Department of Health and
Human Services or his or her designee.
o. Security Incident. "Security Incident' shall have the same meaning as the term "security
incident' in 45 CFR § 164.304, limited however by the provisions set forth in Section 3(c)
below.
p. Security Rule. "Security Rule" shall mean the Security Standards and Implementation
Specifications at 45 CFR Parts 160 and 164, subparts A and C.
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q. Subcontractor. "Subcontractor" shall have the same meaning as the term "subcontractor"
in 45 CFR § 160.103.
r. Transaction. "Transaction" shall have the meaning given the term "transaction" in 45 CFR§
160.103.
s. Unsecured Protected Health Information. "Unsecured Protected Health Information" or
"Unsecured PHI" shall have the meaning given the term "unsecured protected health
information" in 45 CFR § 164.402.
2. Permitted Uses and Disclosures of PHI by Business Associate.
a. General Use and Disclosure. Except as otherwise limited in this Agreement, Business
Associate may use or disclose Protected Health Information in order to perform functions,
activities, or services for, or on behalf of, Covered Entity, as specified in the Underlying
Agreement, provided that such use or disclosure of Protected Health Information would not
violate the Privacy Rule, including the Minimum Necessary requirement, if done by Covered
Entity.
b. Specific Uses and Disclosures by Business Associate.
L Except as otherwise limited in this Agreement, Business Associate may use or disclose
PHI for the proper management and administration of Business Associate, or to carry out
the legal responsibilities of Business Associate, provided that any disclosures of PHI are
Required by Law, or Business Associate obtains reasonable assurances from the person
to whom the information is disclosed that it will remain confidential and be used or
further disclosed only as Required by Law or for the purpose for which it was disclosed to
the person, and the person notifies Business Associate of any instances of which it is
aware in which the confidentiality of the information has been breached.
ii. Business Associate may use Protected Health Information to perform Data Aggregation
services on behalf of the Plan as permitted by 45 CFR § 164.504(e)(2)(i)(B).
iii. Business Associate may use Protected Health Information to create de -identified
information consistent with the standards set forth at 45 CFR § 164.514.
c. Covered Entity's Other Business Associates. In the course of fulfilling its duties hereunder,
Business Associate may disclose PHI to, and receive PHI from, other business associates of
Covered Entity to the same extent and degree as Covered Entity could disclose PHI to, or
receive PHI from, such other of its business associates. Covered Entity is solely responsible
for ensuring that it properly has entered into business associate agreements with its other
business associates and Business Associate shall have no responsibility for confirming the
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existence of a business associate agreement between Covered Entity, on the one hand, and,
on the other hand, another business associate of Covered Entity. Where required by service
agreements and/or business associate agreements prepared by other business associates,
Covered Entity shall expressly authorize transmission of PHI to Business Associate. Covered
Entity promptly shall notify Business Associate of any changes to its relationships with other
business associates with which Business Associate may have dealings in fulfilling its duties
hereunder.
3. Duties of Business Associate Relative to PHI.
a. Business Associate shall not use or disclose PHI other than as permitted or required by this
Agreement or as Required by Law, and otherwise comply with all applicable provisions of
the Privacy Rule.
b. Business Associate shall use appropriate safeguards, and comply with Subpart C of 45 CFR
Part 164 with respect to electronic protected health information, to prevent use or
disclosure of protected health information other than as provided for by this Agreement,
and otherwise comply with all applicable provisions of the Security Rule.
c. Business Associate will report to Covered Entity any use or disclosure of Protected Health
Information not provided for by this Agreement of which it becomes aware, including
Security Incidents of which Business Associate becomes aware. Business Associate shall
not, however be required to report to Covered Entity the ongoing existence and
occurrence of "Attempted but Unsuccessful Security Incidents," defined as activity such as
pings and other broadcast attacks on Business Associate's firewall, port scans, unsuccessful
log -on attempts, denial of service and any combination of the above, so long as no such
incident results in unauthorized access, use or disclosure of Electronic PHI as defined under
the HIPAA Rules.
d. Business Associate promptly shall notify Covered Entity of a Breach of Unsecured PHI upon
Business Associate's discovery of same. Business Associate will treat any Breach as being
discovered in accordance with 45 CFR § 164.410. Business Associate's notification to
Covered Entity hereunder shall:
(1) Be made to Covered Entity without unreasonable delay and in no event later than 60
calendar days after discovery of the Breach, except where a law enforcement official
determines that a notification would impede a criminal investigation or cause damage
to national security;
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(2) Identify the individuals whose Unsecured PHI has been, or is reasonably believed to
have been, the subject of a Breach; and
(3) Include any other available information that the Covered Entity requires in order to
complete a risk assessment under 45 CFR § 164.402 with respect to the Individuals
affected by the Breach, or in order to notify such Individuals of the Breach, as well as
the Secretary and the media, to the extent required under §13402(f) of the HITECH
Act, 42 U.S.C. § 17932 and 45 CFR §§ 164.404, 164.406 and 164.408. Business
Associate shall provide such information to Covered Entity promptly upon such
information becoming available to Business Associate. Covered Entity solely shall be
responsible for providing notification to any Individual, the Secretary, or the media
with regard to a Breach.
(4) Each party shall bear its own costs and expenses required to comply with notification
duties resulting from a breach of Unsecured PHI as set forth in 45 CFR §§ 164.404,
164.406, and 164.408, with regard to Covered Entity, and as set forth in 45 CFR §
164.410, with regard to Business Associate.
(5) Each party shall mitigate, to the extent practicable, any harmful effect known to them
resulting from a use or disclosure of PHI in violation of this Agreement.
i. In accordance with 45 CFR §§ 164.502(e)(1)(ii) and 164.308(b)(2), if applicable,
Business Associate agrees to require that any of its Subcontractors that create,
receive, maintain or transmit Protected Health Information from or on behalf of
Business Associate agree in writing to the same restrictions, conditions, and
requirements that apply to Business Associate with respect to such information,
including the obligation promptly to notify Business Associate of any use or
disclosure of PHI not provided for by the agreement between the Business
Associate and the Subcontractor, and to report to Business Associate any Security
Incident of which Subcontractor becomes aware, or Breach that Subcontractor
discovers.
ii. In the event Business Associate becomes aware of a pattern or practice of a
Subcontractor that violates the privacy and security safeguard obligations made to
Business Associate, Business Associate will take reasonable steps to cure such
violation and otherwise will respond to non-compliance by a Subcontractor in the
same way that Covered Entity is required to respond to non-compliance by
Business Associate.
III. Effective as of September 23, 2013, or the Effective Date of this Agreement, if
later, Business Associate will refrain from engaging in the sale of any Protected
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Health Information other than with the written authorization of the Individual to
whom the Protected Health Information pertains.
iv. If Business Associate conducts in whole or part Electronic Transactions on behalf
of Covered Entity for which HHS has established standards, Business Associate will
comply, and will require any Subcontractor it involves with the conduct of such
Transactions to comply, with each applicable requirement of the Electronic
Transactions Rule. Business Associate shall also comply with the National Provider
Identifier requirements, if and to the extent applicable.
v. Business Associate will comply with requests for restrictions on use or disclosure
to health plans for payment or health care operations purposes when the
provider has been paid out of pocket in full consistent with 45 CFR § 164.522(a),
provided that Covered Entity has first notified Business Associate of the
application of such restrictions.
vi. To the extent applicable, Business Associate shall provide access to Protected
Health Information in a Designated Record Set at reasonable times, at the request
of Covered Entity or, as directed by Covered Entity, to an Individual in order to
meet the requirements under 45 CFR §164.524.
vii. To the extent applicable, Business Associate shall make any amendment(s) to
Protected Health Information in a Designated Record Set that Covered Entity
directs or agrees to pursuant to 45 CFR §164.526 at the request of Covered Entity
or an Individual.
viii. Business Associate shall, upon request with reasonable notice, provide Covered
Entity access to its premises for a review and demonstration of its internal
practices and procedures for safeguarding PHI. Such access shall be granted no
less frequently than annually, and also upon request and reasonable notice, in the
event of a Breach or Security Incident as herein defined.
ix. Business Associate agrees to document such disclosures of PHI and information
related to such disclosures as would be required for a Covered Entity to respond
to a request by an individual for an accounting of disclosures of PHI in accordance
with 45 C.F.R. §164.528. Should an individual make a request to Covered Entity
for an accounting of disclosures of his or her PHI pursuant to 45 C.F.R. §164.528,
upon prompt notice of same, Business Associate agrees to promptly provide
Covered Entity with information in a format and manner sufficient to respond to
the individual's request.
x. Business Associate shall make its internal practices, books, records, and any other
material requested by the Secretary relating to the use, disclosure, and
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safeguarding of PHI received from Covered Entity available to the Secretary for
the purpose of determining compliance with the HIPAA Rules. The
aforementioned information shall be made available to the Secretary in the
manner and place as designated by the Secretary or the Secretary's duly
appointed delegate. Under this Agreement, Business Associate shall comply and
cooperate with any request for documents or other information from the
Secretary directed to Covered Entity that seeks documents or other information
held by Business Associate.
xi. Business Associate may use Protected Health Information to report violations of
law to appropriate Federal and State authorities, consistent with 42 C.F.R.
§164.502(j)(1).
xii. Effective as of September 23, 2013, or the Effective Date of this Agreement, if
later, if Covered Entity requests an electronic copy of Protected Health
Information that is maintained electronically in a Designated Record Set in the
Business Associate's custody or control, Business Associate will provide an
electronic copy in the form and format specified by the Covered Entity if it is
readily producible in such format; if it is not readily producible in such format,
Business Associate will work with Covered Entity to determine an alternative form
and format that enable Covered Entity to meet its electronic access obligations
under 45 CFR § 164.524.
xiii. Business Associate will not use or disclose PHI for purposes of Marketing, as
defined in 45 CFR § 164.501, other than in accordance with the HIPAA Rules,
including the requirement, where applicable, to obtain prior written authorization
for such use or disclosure for Marketing purposes.
xiv. Effective as of September 23, 2013, or the Effective Date of this Agreement, if
later, Business Associate will refrain from using or disclosing Genetic Information
for underwriting purposes in violation of the HIPAA Rules.
4. Term and Termination.
i) Term. The Term of this Agreement shall be effective as of the date the Underlying
Agreement is effective, and shall terminate when all of the Protected Health Information
provided by Covered Entity to Business Associate, or created, maintained or received by
Business Associate on behalf of Covered Entity, is destroyed or returned to Covered Entity,
or, if it is infeasible to return or destroy Protected Health Information, protections are
extended to such information, in accordance with the termination provisions in this Section
IV.
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ii) Termination for Cause. Upon Covered Entity's knowledge of a material breach of this
Agreement by Business Associate, Covered Entity shall:
(1) Provide an opportunity for Business Associate to cure the breach or end the violation
and, if Business Associate does not cure the breach or end the violation within the
time specified by Covered Entity, which shall be no less than thirty (30 days),
terminate this Agreement;
(2) Immediately terminate this Agreement if Business Associate has breached a material
term of this Agreement and cure is not possible.
iii) Effect of Termination.
(1) Except as provided in paragraph 4(iii)(2) of this section, upon termination of this
Agreement for any reason, Business Associate shall return or destroy all Protected
Health Information received from Covered Entity, or created, maintained or received
by Business Associate on behalf of Covered Entity. This provision shall apply to
Protected Health Information that is in the possession of Subcontractors of Business
Associate. Business Associate shall not retain any copies of the Protected Health
Information.
(2) In the event that Business Associate determines that returning or destroying the
Protected Health Information is infeasible, Business Associate shall provide to Covered
Entity written notification of the conditions that make return or destruction infeasible.
After written notification that return or destruction of Protected Health Information is
infeasible, Business Associate shall extend the protections of this Agreement to such
Protected Health Information and limit further uses and disclosures of such Protected
Health Information to those purposes that make the return or destruction infeasible,
for so long as Business Associate maintains such Protected Health Information.
(3) Should Business Associate make a disclosure of PHI in violation of this Agreement,
Covered Entity shall have the right to immediately terminate any contract, other than
this Agreement, then in force between the Parties, including the Underlying
Agreement.
Consideration.
The parties mutually recognize that the promises each has made to the other in this Agreement
shall, henceforth, be detrimentally relied upon by each party in choosing to continue or
commence a business relationship with the other party.
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6. Remedies in Event of Breach.
Business Associate hereby recognizes that irreparable harm will result to Covered Entity, and to
the business of Covered Entity, in the event of breach by Business Associate of any of the
covenants and assurances contained in this Agreement. As such, in the event of breach of any of
the covenants and assurances contained in Sections 2 or 3 above, Covered Entity shall be
entitled to enjoin and restrain Business Associate from any continued violation of Sections 2 or
3. Furthermore, in the event of breach of Sections 2 or 3 by Business Associate, Covered Entity is
entitled to reimbursement and indemnification from Business Associate for Covered Entity's
reasonable attorneys' fees and expenses and costs that were reasonably incurred as a
proximate result of Business Associate's breach however not including attorneys' fees, expenses
or costs incurred in claims or actions brought by third parties affected by the breach. The
remedies contained in this Section 6 shall be in addition to (and not supersede) any action for
damages and/or any other remedy Covered Entity may have for breach of any part of this
Agreement.
Covered Entity shall indemnify and limit the Business Associate's liability against any losses
incurred as a result of communicating with the Covered Entity's designated contact, or from a
use or disclosure of PHI by the City of Santa Ana's employees, agents, owners, directors, or by
other business associates of Covered Entity.
7. Modification.
This Agreement may only be modified through a writing signed by the Parties and, thus, no oral
modification hereof shall be permitted. The Parties agree to take such action as is necessary to
amend this Agreement from time to time as is necessary for Covered Entity to comply with the
requirements of the HIPAA Rules.
8. Interpretation of this Contract to Other Contracts Between the
Parties.
Should there be any conflict between the language of this contract and any other contract
entered into between the Parties (either previous or subsequent to the date of this Agreement),
that pertains to duties and obligations under the HIPAA Rules, the language and provisions of
this Agreement shall control and prevail.
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9. Compliance with State Law.
Except to the extent its obligation to do so is preempted by the provisions of HIPAA, including
provisions of the HITECH Act, Business Associate shall notify Covered Entity of any breach of
unencrypted data owned or licensed by Covered Entity, and maintained by Business Associate,
in accordance with applicable California law. 'Breach" for these specific purposes means
acquisition of unencrypted data by an unauthorized person, or the reasonable belief of such
acquisition, that compromises the security, confidentiality, or integrity of "personal
information" pertaining to California residents, as those terms are defined in California Civil
Code §§ 1798.82(g) and (h), respectively, subject however to the good faith exception to
"Breach" set forth in Civil Code § 1798.82(g). If the HIPAA Rules and the California Civil Code
provisions cited herein conflict regarding the degree of protection provided for Protected Health
Information, Business Associate shall comply with the more restrictive protection requirement.
10. Miscellaneous.
i) Ambiguity. Any ambiguity in this Agreement shall be resolved to permit the Parties to
comply with the HIPAA Rules.
ii) Regulatory References. A reference in this Agreement to a section in the HIPAA Rules
means the section as in effect or as amended.
iii) Notice to Covered Entity/Business Associate. All Notices required hereunder shall be in
writing and provided by electronic mail, and will be considered received as of the date of
the electronic transmission. Notices to the Covered Entity shall be sent to the daily contact
on file with the Business Associate. Notices to the Business Associate shall be sent to the
daily contact on file with the Covered Entity. Both Parties agree that they are responsible
for ensuring that such Notices are forwarded to the appropriate internal personnel for
handling. If additional information is needed to take action related to a Notice, a request
must be made in writing outlining all specific requirements and instructions and provided by
electronic mail.
iv) Governing Law. Interpretation and enforcement of this Agreement shall be governed by and
construed in accordance with the laws of the state of California to the extent they are not
preempted by the HIPAA Rules or other applicable federal law.
v) Severability. The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
vi) No Third Party Beneficiary. Nothing expressed or implied in this Agreement is intended to
confer, nor shall anything herein confer, upon any person other than the parties and the
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respective successors or assignees of the parties, any rights, remedies, obligations, or
liabilities whatsoever.
vii) Construction and Interpretation. The section headings contained in this Agreement are for
reference purposes only and shall not in any way affect the meaning or interpretation of this
Agreement. This Agreement has been negotiated by the parties at arm's-length and each of
them has had an opportunity to modify the language of the Agreement. Accordingly, the
Agreement shall be treated as having been drafted equally by the parties, and the language
shall be construed as a whole and according to its fair meaning. Any presumption or
principle that the language is to be construed against any party shall not apply. This
Agreement may be executed in counterparts, each of which shall be deemed to be an
original, but all of which, taken together, shall constitute one and the same agreement.
viii) Survival. The respective rights and obligations of Business Associate under Sections 2(a) and
(b) and 4(iii)(2) and (3) shall survive the termination of this Agreement.
11. Signature.
IN WITNESS WHEREOF and acknowledging acceptance and agreement of the foregoing, the
Parties affix their signatures hereto.
Covered Entity:
Sign:
Print: Kristine Ridge
Title: City Manger
Date:
Business Associate:
Docualgned by:
Sign: C .4 7V&IC
AZ079AMF118409_.
Print: Laura K. McKinlav
Title: President/CEO
Date: 9/14/2020
G:\18790\0001\DOCS\GU9280.DOCx
Attest:
Daisy Gomez, Clerk of Council
Approved as to form:
Sonia R. Carvalho
City Attorney
By UQWWL A. 9,01nli�
Laura A. Rossini
Acting Chief Assistant City Attorney
for
Pham
Director of Human Resources
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