HomeMy WebLinkAboutLetter- RE TCCOG Health Care Status 2-12-2010.PDF Att: Trustees
RE: TCCOG Health Care Status
From: Mayor Gilmore
Fellow Boardmembers, Date 2/12/10
At our 2/8 Monday Noon board Meeting it was m, Norma and Jeff Silber's intent to further
explain the key points of the TCCOG Health Care Consortium situation. Since we didn't get
to it, I'll now share the basics referring to the material distributed. Please bring any
questions for clarification on Tuesday 2/16's evening meeting.
#1) The Municipal Cooperation Agre ment dated 2/8/10 is in our packets; a work in
progress for about a year. 17 municipalities have been involved in contract negotiation and
23 bargaining union units through the Health Consortium Board. The contract is under
review by Laurie Johnston, our Healthcare and Labor Relation's Attorney. This agreement
is now with the NYSID New York Stat Insurance Department and likely to be approved any
day now. The final version will go to Laurie Johnston for her approval, and I would expect
to sign it on or by February 25 which will officially create the legal insurance entity with all
its municipalities signing on by this date.
The Agreement gives the Village of Cayuga Heights, a Labor Union Representative and all
Member Municipalities one vote on th e Health Consortium Board issues going forward. In
the,case where there's a tie vote, a weighted voting model will be implemented to avoid any
possible stall in the managing the entity. Municipalities with the greatest number of
employees will receive weighted votes, but in a manner that's intended to protect balance
with smaller municipalities. These types of conflicts are not expected, nor have they
occurred to date, as what's good fora y health consortium member is likely good for all.
The VOCH Mayor by earlier Board Me nber resolution has been authorized to execute this
document on 2/25/2010 at the regular TCCOG Meeting. However,if anew Resolution is
required, Randy or Norma should advise us of action required on 2/16 before the 2/25
TCCOG signing is anticipated.
#2) Financial Summary...Jeff Silber wi 1 explain this in a more detail. The dollar amounts
circled in the sheet you have dated 9/ 4/09 is the Draft Health Consortium Budget
anticipated for this new organization. Tompkins County's Director of Finance Dave Squires
and the City of Ithaca's Controller Steve Thayer act as the fiscal administrative officers for
the Health Consortium since each of tf ese entities have the lion's share of participants and
the resources and staffing to oversee t is $25 million dollar annual operation. Dave and
Steve will report to the Health Care Consortium Board monthly as it relates to this financial
oversight. Extra consortium staffing will be hired administratively and housed within the
County under Dave Squire's direction.
The area under"Net Income". "Liabilit es", and "Unencumbered Fund Balance" represents a
building of resources for catastrophic participant losses and long-term equity stabilization
(page two/Health consortium financial summary continued)
of the consortium, allowing it to keep insurance premiums as low as possible.
#3) VOCH Retiree Side by Side Comparison dated 2/8 ...This compares what coverage we
currently have verses what we anticipate for our Retiree Participants. It is designed to be
as good as or better than our present health care cove age. Insurance premiums to the
Participants and the Village for this coverage will be a least 15% lower than currently
charged. It's expected this coverage will be ready to tz ke affect soon, and that letters of
explanation will go out to retirees as soon as the Village Administration with Board
Support feels we are ready to move forward.
Consortium Retiree Coverage was approved at the Board Level several month's ago, as
being appropriate,subject to Treasurer-Clerk and Mayor's final review, approval and
execution as required.
#4) VOCH Non-Bargaining Side-by-Side Comparison dated 2/8.... This compares what we
currently have verses what we anticipate for our Non-Bargaining Participants. It is
designed to be as good as or better than our present h, alth care coverage. Insurance
premiums to the Participants and the Village for this coverage will be at least 15% lower
than currently charged. It's expected this coverage will be ready to take affect soon. Our
Treasurer, Clerk and Mayor will notify us, when in our opinion we are ready to begin this
coverage, assuming side-by-side comparisons continu 2 favorably. If so, letters of
explanation will go out to Non-Bargaining Staff a mon h before coverage would change.
This coverage also represents a savings to VOCH, alth ugh exact% savings is being
finalized.
Non-Bargaining Consortium Insurance (#4) adoption believe still needs Board Approval
for administration to then take follow-tip action. It is still under review.
#3  above) In both cases of coverage above, the T easurer, Clerk and Mayor will be
intimately involved in the detail of affirming the coverage and cost of both policies before it
is brought forth to the employees.
This further explains the status of Consortium Health nsurance, and our request for the
Board's further support to keep this progressing. The w ole process has been slow but
inching forward thanks to municipal-wide cooperation that's a bit unique in local
government, perhaps unheard of at the national level. If enacted, this organization will be
the 1st such Municipal Health Consortium created in New York State under Article 47 of
New York State Insurance Law.
I hope this helps and we can address any further questions you all may have on 2/16 as
needed. Currently Mayor Gilmore sits on the Consortium Board and Trustee Kate Supron is
the official "Alternate" when the Mayor is unavailable.
Sincerely, Mayor Jim Gilmore
D FT -2/08/10
MUNICIPAL COOPERATION AGREEMENT
THIS AGREEMENT (the "Agr ement") made effective as of 1"day of January 2010
(the "Effective Date"), by and among each of the signatory municipal corporations hereto
(collectively, the "Participants").
HEREAS:
1. Article 5-G of the New York General Municipal Law(the "General Municipal
Law") authorizes municipal corporations to enter into cooperative agreements for the
performance of those functions or activities in which they could engage individually;
2. Sections 92-a and 119-o c f the General Municipal Law authorize municipalities to
purchase a single health insurance policy, enter into group health plans, and establish a joint
body to administer a health plan;
3. Article 47 of the New Yolk Insurance Law(the "Insurance Law"), and the rules
and regulations of the New York State Superintendent of Insurance (the "Superintendent") set
forth certain requirements for governing §elf insured municipal cooperative health insurance
plans;
4. Section 4702(f) of the Ins ance Law defines the term "municipal corporation" to
include a county, city, town,village, school district, board of cooperative educational services,
public library (as defined in Section 253 of the New York State Education Law) and district(as
defined in Section 119-n of the General Municipal Law); and
5. The Participants have determined to their individual satisfaction that furnishing
the health benefits (including, but not limited to, medical, surgical,hospital,prescription drug,
dental, and/or vision) for their eligible officers, eligible employees_(as defined by the Internal
Revenue Code of 1986, as amended, and the Internal Revenue Service rules and regulations),
eligible retirees, and the eligible dependents of eligible officers, employees and retirees
(collectively,the Enrollees ) (such def,II tion does not include independent contractors and/or
consultants) through a municipal cooperative is in their best interests as it is more cost- effective
and efficient. Eligibility requirements shall be determined by each Participant's collective
bargaining agreements and/or their personnel policies and procedures.
NOW, THEREFORE,the partie agree as follows:
A. PARTICIPANTS.
l. The Participants hereby designate themselves under this Agreement as the Greater
Tompkins County Municipal Health Insurance Consortium(the "Consortium") for the purpose of
providing health benefits (medical, surgic' 1, hospital, prescription drug, dental, and/or vision)to
those Enrollees that each Participant individually elects to include in the Greater Tompkins
County Municipal Health Insurance Cons rtium Medical Plan(s) (the "Plan(s)").
2. The following Participants shall comprise the initial membership of the
Consortium (a) County of Tompkins; (b) ity of Ithaca; (c) Town of Enfield; (d) Town of
Caroline; (e) Town of Ithaca; (f) Town of Danby; (g) Town of Dryden; (h) Town of Ulysses; (i)
Village of Cayuga Heights; 0)Village ofGroton; (k)Village of Dryden; (1)Village of
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Trumansburg; (in) Town of Groton. Membership in the C nsortium may be offered to any
municipal corporation within the geographical boundaries f the County of Tompkins; provided
however, in the sole discretion of the Board(as defined below),the applicant provides
satisfactory proof of its financial responsibility and is of the same type of municipal corporation
as the initial Participants. Notwithstanding anything to contrary set forth in this Agreement,
admission of new Participants shall not require amendment of this Section A(2). Membership
shall.be subject to the terms and conditions set forth in this Agreement, any amendments hereto
and applicable law.
3. Participation in the Plan(s)by some, but not all, collective bargaining units or
employee groups of a Participant is not encouraged and shall not be permitted absent prior Board
approval. Further, after obtaining approval, any Particip which negotiates an alternative
health insurance plan offering other than the plan offerings of the Consortium with a collective
bargaining unit or employee group may be subject to a ris charge as determined by the Board.
4. Initial membership of additional participants shall become effective on the first
day of the Plan Year following the adoption by the Board of the resolution to accept a municipal
corporation as a Participant. Such municipal corporation must agree to continue as a Participant
for a minimum of three (3)years upon entry.
5. The Board,by a two-thirds (2/3)vote of the entire Board, may elect to permit a
municipal corporation which is not located in the geographical or political boundaries of the
County of Tompkins to become a Participant subject to satisfactory proof, as determined by the
Board, of such municipal corporation's financial responsibility. Such municipal corporation
must agree to continue as a Participant for a minimum of three (3) years upon entry.
6. A municipal corporation that was previously a Participant, but is no longer a
Participant, and which is otherwise eligible for members hi in the Consortium,may apply for re-
entry after a minimum of three (3)years has passed since it was last a Participant. Such re-entry
shall be subject to the approval of two-thirds(2/3) of the eritire Board. This re-entry waiting
period may be waived by the approval of two-thirds (2/3) of the entire Board. In order to re-
enter the Consortium, a municipal corporation employer ust have satisfied in full all of its
outstanding financial obligations to the Consortium. A municipal corporation must agree to
continue as a Participant for a minimum of three (3)years upon re-entry.
B. PARTICIPANT LIABIIdTY.
1. The Participants shall share in the costs of, d assume the liabilities for benefits
(including medical, surgical, and hospital)provided under the Plan(s)to covered officers,
employees, retirees, and their dependents. Each Participant shall pay on demand such
Participant's share of any assessment or additional contribution ordered by the Board, as set forth
in Section L(4) of this Agreement. The pro rata share shall be based on the Participant's relative
"premium" contribution to the Plan(s) as a percentage of t ie aggregate "premium" contribution
to the Plan(s), as is appropriate based on the nature of the issessment or contribution.
2. New Participants (each a"New Participant')who enter the Consortium may be
assessed a fee for additional financial costs above and beyond the premium contributions to the
Plan(s). Any such additional financial obligations and any related terms and conditions
associated with membership in the Consortium shall be determined by the Board, and shall be
disclosed to the New Participant prior to its admission.
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3. Each Participant shall be liable, on a pro rata basis, for any additional assessment
required in the event the Consortium funding falls below those levels required by the Insurance
law as follows:
a. In the event the Consortium does not have admitted assets (as defined in
Insurance Law § 107) at least equal to the aggregate of its liabilities, reserves and
minimum surplus required by the Insurance Law, the Board shall,within thirty (30) days,
order an assessment(an "Assessment ent Order")for the amount that will provide sufficient
funds to remove such impairment and collect from each Participant a pro-rata share of
such assessed amount.
b. Each Participant that participated in the Consortium at any time during the
two (2) year period prior to the issuing of an Assessment Order by the Board shall, if
notified of such Assessment Order,pay its pro rata share of such assessment within ninety
(90) days after the issuance of su h Assessment Order, This provision shall survive
termination of the Agreement of ithdrawal of a Participant.
C. For purposes of this Section B(3), a Participant's pro-rata share of any
assessment shall be determined b applying the ratio of the total assessment to the total
contributions or premium equivalents earned during the period covered by the assessment
on all Participants subject to the assessment to the contribution or premium equivalent
earned during such period attributable to such)Participant.
C. BOARD OF DIRECTORS.
l. The governing board of th Consortium,responsible for management, control and
administration of the Consortium and the Plan(s), shall be referred to as the "Board of Directors"
(the "Board"). The voting members of the Board shall be composed of one representative of
each Participant and one representative of the Labor-Management Advisory Committee (as set
:for in Section:C(11)), who shall have t e authority to vote on any official action taken by the
Board (each a "Director"), Each Director, except the representative of the Labor-Management
Advisory Committee, shall be designate in writing by the governing body of the Participant.
2. If a Director designated b a Participant cannot fulfill his/her obligations, for any
reason, as set forth herein, and the Participant desires to designate a new Director, it must notify
the Consortium's Chairperson in writing of its selection of a new designee to represent the
Participant:as a Director.
3. Directors shall receive no remuneration from the Consortium for their service and
shall serve a term from January 1 through December 31 (the "Plan Year").
4. No Director may represent more than one Participant.
5. No Director, or any memb r of a Director's immediate family shall be an owner,
officer, director,partner, or employee of any contractor or agency retained by the Consortium,
including any third party contract administrator.
6. Except as otherwise provi ed in Section D of the Agreement, each Director shall
be entitled to one vote. A majority of the entire Board, not simply those present, is required for
the Board to take any official action, unle 3s otherwise specified in this Agreement. The "entire
Board", as used herein and elsewhere in this Agreement, shall mean the total number of
Directors when there are no vacancies.
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7. Each Participant may designate in writing a alternate Director to attend the
Board's meeting when its Director cannot attend. The alternate Director may participate in the
discussions at the Board meeting and will, if so designated in writing by the Participant,be
authorized to exercise the Participant's voting authority. Only alternate Directors with voting
authority shall be counted toward a quorum. The Labor-management Committee may designate
an alternate Director as set forth in Section C(11).
8. A majority of the Directors of the Board shall constitute a quorum. A quorum is a
simple majority (more than half) of the entire Board. A quorum is required for the Board to
conduct any business. This quorum requirement is indepe dent of the voting requirements set
forth in Section C(6). The Board shall meet on a regular basis, but not less than on a quarterly
basis at a time and place within the State of New York determined by a vote of the Board. The
Board shall hold an annual meeting (the"Annual Meeting')between October P and October
15tb of each Plan Year.
9. Special meetings of the Board may be called at any time by the Chairperson or by
any two (2)Directors. Whenever practicable,the person or persons calling such special meeting
shall give at least three(3) day notice to all of the other Directors. Such notice shall set forth the
time and place of the special meeting as well as a detailed agenda of the matters proposed to be
acted upon. In the event three (3)days notice cannot be given, each Director shall be given such
notice as is practicable under the circumstances.
10. In the event that a special meeting is impra tical due to the nature and/or urgency
of any action which, in the opinion of the Chairperson, is necessary or advisable to be taken on
behalf of the Consortium,the Chairperson may send prop sals regarding said actions via
facsimile to each and all of the Directors. The Directors n Lay then fax their approval or
disapproval of said actions to the Chairperson': Upon rece pt by the Chairperson of the requisite
number of written approvals,the Chairperson may act on ehalf of the Board in reliance upon
such approvals. Any actions taken.by the Chairperson p suant to this paragraph shall be ratified-
at the next scheduled meeting of the Board.
11. The Chair of the Labor-Management Advisory Committee (as defined in Section
K) shall serve as a Director(the "Labor Representative") nd shall have the same rights and
obligations as all other Directors. The Labor-Management Advisory Committee may designate
in writing an alternate Director to attend the Board's meetings when the Chair cannot attend.
The alternate Director may, if designated in writing,be authorized to exercise the Chair's voting
authority.
D. WEIGHTED VOTING.
l. Except as otherwise provided in this Agreement, any two or more Directors,
acting jointly,may require a weighted vote on any matter that may come before the Board. In
such event,the voting procedure set forth in this Section shall apply in lieu of any other voting
procedures set forth in this Agreement. Such weighted voting procedures shall apply solely with
respect to the matter then before the Board.
2. For purposes of this Section D, each Direc or shall receive votes as follows:
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a. each Director representing a Participant with five hundred (500) or fewer
Enrollees shall be entitled to one (1)vote.
b. each Director representing a Participant with more than five hundred(500)
Enrollees shall be entitled to a number of votes equaling the total number of votes
available under subsection(a) minus one (1), divided evenly by the number of
Participants eligible under this subsection (b) and rounded down to the nearest whole
number.
C. the Labor Represe tative shall be entitled to one (1) vote.
3. Attached as Addendum "A"to this Agreement is an example of the application of
the voting formula contained in subparagraph"2" of this Section.
4. Notwithstanding anything to the contrary contained in this Agreement, any action
taken pursuant to this Section D shall require the approval of two-thirds (2/3) of the total number
of votes, if all votes had been cast.
E. ACTIONS BY THE BOARD.
Subject to the voting and quorum require ents set forth in this Agreement, the Board is
authorized and/or required to take action on the following matters:
1. To fill any vacancy in any of the officers of the Consortium.
2. To fix the frequency, time and place of regular Board meetings.
3. To approve an annual budget for the Consortium, which shall be prepared and
approved prior to October 15th of each year, and determine the annual premium equivalent rates
to be paid by each Participant for each Enrollee classification.in the Plan on the basis of a
community rating methodology filed with and approved by the Superintendent.
4. To audit receipts and disb cements of the Consortium and provide for
independent audits, and periodic financial and operational reports to Participants.
5. To establish a joint fund or funds to finance all Consortium expenditures,
including claims, reserves, surplus, administration, stop-loss insurance and other expenses.
6. To select and approve the benefits provided by the Plan(s) including the plan
document(s), insurance certificate(s), and/or summary plan description(s), a copy of the Plan(s)
effective on the date of this Agreement is incorporated by reference into this Agreement.
7. To annually select a plan cc nsultant(the "Plan Consultant") for the upcoming Plan
Year, prior to October 1 st of each year.
8. To review, consider and acl on any recommendations made by the Plan
Consultant.
9. To establish administrative guidelines for the efficient operation of the Plan.
10. To establish financial regulations for the entry of new Participants into the
Consortium consistent with all applicable legal requirements and this Agreement.
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11. To contract with third parties,which may include one or more Participants, for the
furnishing of all goods and services reasonably needed in the efficient operation and
administration of the Consortium,including, without limitation, accounting services, legal
counsel, contract administration services, consulting servic 7s, purchase of insurances and
actuarial services. Provided, however(a) the charges, fees and other compensation for any
contracted services shall be clearly stated.in written administrative services contracts, as required
in Section 92-a(6) of the General Municipal Law; (b)payment for contracted services shall be
made only after such services are rendered; (c) no Director or any member of such Director's
immediate family shall be an owner, officer, director,part 'er or employee of any contract
administrator retained by the Consortium; and(d) all such agreements shall otherwise comply
with.the requirements of Section 92-a(6)of the General Municipal Law.
12. To purchase stop-loss insurance on behalf o the Consortium and determine each
year the insurance carrier or carriers who are to provide the stop- loss insurance coverage during
the next Plan Year, as required by Section 4707 of the Ins ance Law.
13. To determine and notify each Participant pri r to October 15th of each Plan Year
of the monthly premium equivalent for each enrollee class°fication during the next Plan Year
commencing the following January lst
14. To designate the banks or trust companies in which joint funds, including reserve
funds, are to be deposited and which shall be located in this state, duly chartered under federal
law or the laws of this state and insured by the Federal Deposit osit Insurance Corporation, or any
successor thereto.
15. To designate annually a treasurer(the "Treasurer")who may or may not be a
Director and who shall be the treasurer, or equivalent financial officer, for one of the
Participants. The Treasurer's duties shall be determined by the Chief Fiscal Officer to whom
he/she will report.
16. To designate an Officer,or Director to retain custody of all reports,-statements and
other documents of the Consortium and take minutes of ea h Board meeting which shall be acted
on by the Board at a subsequent meeting.
17. To choose the certified public accountant and the actuary to provide the reports
required by this Agreement and any applicable law.
18. To designate an attorney-in-fact to receive summons or other legal process in any
action, suit or proceeding arising out of any contract, agreement or transaction involving the
Consortium. The Board designates John G. Powers, Esq. a s the Consortium's initial attorney-in-
fact.
19. To take all necessary action to ensure that the Consortium obtains and maintains a
Certificate of Authority in accordance with the Insurance aw.
20. To take all necessary action to ensure the Consortium is operated and
administered in accordance with the law of the State of New York.
21. To take any other action authorized by law d deemed necessary to accomplish
the purposes of this Agreement.
F. EXECUTIVE COMMITTEE.
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1. The Executive Committe of the Consortium shall consist of the Chairperson,the
Vice-Chairperson, and the Chief Fiscal Officer of the Consortium.
2. The Executive Committee may meet at anytime between meetings of the Board,
at the discretion of the Chairperson. The Executive Committee shall make recommendations to
the Board.
3. The Executive Committe shall manage the Consortium between meetings of the
Board, subject to such approval by the Board as may be required by this Agreement.
G. OFFICERS.
1. At the Annual Meeting, the Board shall elect from its Directors a Chairperson,
Vice Chairperson, Chief Fiscal Officer, and Secretary,who shall serve for a term of one (1)year
or until their successors are elected and qualified. Any vacancy in an officer's position shall be
filled at the next meeting of the Board. r
2. Officers of the Consortium and employees of any third party vendor, including
without limitation the officers and employees of any Participant, who assist or participate in the
operation of the Consortium, shall not be deemed employees of the Consortium. Each third
party vendor shall provide for all necess services and materials pursuant to annual contracts
with the Consortium. The officers of the Consortium shall serve without compensation from the
Consortium, but may be reimbursed for reasonable out-of-pocket expenses incurred in
connection with the performance of such officers' duties.
3. Officers shall serve at the pleasure of the Board and may be removed or replaced
upon a two-thirds (2/3) vote of the entire Board. This provision shall not be subject to the
weighted voting alternative set forth in S ction D.
H. CHAIRPERSON; VICE CHAIRPERSON.
1. The Chairperson shall be the chief executive officer of the Consortium.
2. The Chairperson, or in the absence of the Chairperson,the Vice Chairperson,
shall preside at all meetings of the Board.
3. In the absence of the Chairperson,the Vice Chairperson shall perform all duties
related to that office.
I. PLAN ADMINISTRATOR.
The Board, by a two-thirds (2/3)vote of t e entire Board, may annually designate an
administrator and/or insurance company of the Plan (the "Plan Administrator") and the other
provider(s)who are deemed by the Board to be qualified to receive, investigate, and recommend
or make payment of claims,provided that the charges, fees and other compensation for any
contracted.services shall be clearly stated in written administrative services and/or insurance
contracts and payment for such contracte services shall be made only after such services are
rendered or are reasonably expected to be rendered. All such contracts shall conform to the
requirements of Section 92-a(6)of the General Municipal Law.
J. CHIEF FISCAL OFFICER.
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1. The Chief Fiscal Officer shall act as the chi f financial administrator of the
Consortium and disbursing agent for all payments made by the Consortium, and shall have
custody of all monies either received or expended by the Consortium. The Chief Fiscal Officer
shall be a fiscal officer of a Participant. The Chief Fiscal Officer shall receive no remuneration
from the Consortium. The Plan shall reimburse the Partici ant that employs the Chief Fiscal
Officer for reasonable and necessary out-of-pocket expenses incurred by the Chief Fiscal Officer
in connection with the performance of his or her duties that relate to the Consortium.
2. All monies collected by the Chief Fiscal Officer relating to the Consortium, shall
be maintained and administered as a common fund. The C 'elf Fiscal Officer shall,
notwithstanding the provisions of the General Municipal L w,make payment in accordance with
procedures developed by the Board and as deemed accepta le to the Superintendent.
3. The Chief Fiscal Officer shall be bonded foi monies received from the
Participants. The amount of such bond.shall be established annually by the Consortium in such
monies and principal amount as may be required by the Superintendent.
4. All monies collected from the Participants by the Chief Fiscal Officer in
connection with the Consortium shall be deposited in acco dance with the policies of the
Participant which regularly employs the Chief Fiscal Officer and shall be subject to the
provisions of law governing the deposit of municipal funds.
5. The Chief Fiscal Officer may invest moneys not required for immediate
expenditure in the types of investments specified in the Ge eral Municipal Law for temporary
investments or as otherwise expressly permitted by the Superintendent.
6 The Chief Fiscal Officer shall.account fort e Consortium's reserve funds separate
and apart from all other funds of the Consortium, and such accounting shall show:
a. the purpose, source, date and amount of each sum paid into the fund;
b. the interest earned by such funds;
C. capital gains or losses resulting fro the sale of investments of the Plan's
reserve funds;
d. the order,purpose, date and amount of each payment from the reserve
fund; and
e. the assets of the fund, indicating cash balance and schedule of
investments.
7. The Chief Fiscal Officer shall cause to be prepared and shall furnish to the Board,
to participating municipal corporations,to unions which a e the exclusive bargaining
representatives of Enrollees,the Board's consultants, and o the Superintendent:
a. an annual audit, and opinions there o n,by an independent certified public
accountant, of the financial condition, accounting procedures and internal control systems
of the municipal cooperative health benefit plan;
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b. an annual report and quarterly reports describing the Consortium's current
financial status; and
C. an annual indepe dent actuarial opinion on the financial soundness of the
Consortium, including the actuarial soundness of contribution or premium equivalent
rates and reserves, both as paid ' the current Plan Year and projected for the next Plan
Year.
8. Within ninety (90) days�fter the end of each Plan Year, the Chief Fiscal Officer
shall furnish to the Board a detailed rep rt of the operations and condition of the Consortium's
reserve funds.
K. LABOR-MANAGEMENT AIIvISO Y COMMITTEE.
1. There shall be a Labor-Management Advisory Committee (the "Advisory
Committee"), which shall consist of(a) a representative of each collective bargaining unit that is
the exclusive collective bargaining representative of any Enrollee or group of Enrollees covered
by the Plan(s) (the "Union Members"); and(b) a representative of each Participant (the
"Management Members"). Management Members may, but are not required to be, Directors.
2. The Advisory Committee shall review all prospective Board actions in connection
with the benefit structure and design of the Plan(s), and shall develop findings and
recommendations with respect to such matters. The Chair of the Advisory Committee shall
report such findings and recommendatio s to the Board at any regular or special meeting of the
Board. The Committee's findings will be reported to the Board in a timely manner,for
consideration by the Board, in accordance with the timeline described in the Municipal
Cooperative Agreement.
3. The Advisory Committee hall select(a) from among the Union Members, an
individual who shall serve as Chair of the Advisory Committee; and(b) from among the
Management Members, an individual who shall serve as Vice Chair of the Advisory Committee.
The Advisory Committee shall establish its own parliamentary rules and procedures.
4. Each eligible union shall establish such procedures by which its representative to
the Advisory Committee is chosen and such representative shall be designated in writing to the
Chairperson.of the Board and the Chair of the Advisory Committee.
L. PREMIUM CALCULATIONS/PAYMENT.
1. The annual premium equi alent rates shall be established and approved by a
majority of the entire Board. The method used for the development of the premium equivalent
rates may be changed from time to time by the approval of two-thirds (2/3) of the entire Board,
subject to review and approval by the Superintendent. The premium equivalent rates shall
consist of such rates and categories of benefits as is set forth in the Plan[s] that is determined and
approved by the Board consistent with New York law.
2. The Consortium shall maintain reserves and stop-loss insurance to the level and
extent required by the Insurance Law and s directed by the Superinter dent.
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3. Each Participant's monthly premium equivalent,by enrollee classification, shall
be paid by the first day of each calendar month during the Plan Year. A late payment charge of
one percent(1%) of the monthly installment then due will be charged by the Board for any
payment not received by the first of each month, or the next business day when the first falls on a
Saturday, Sunday, legal holiday or day observed as a legalloliday by the Participants.
The Consortium may waive the first penalty once p r Plan Year for each Participant,but
Will strictly enforce the penalty thereafter. A repeated fail e to make timely payments, including
any applicable penalties,may be used by the Board as an adequate justification for the expulsion
of the Participant from the Consortium.
4. The Board shall assess Participants for additional contributions, if actual and
anticipated losses due to benefits paid out, administrative experises, and reserve and surplus
requirements exceed the amount in the joint funds, as set forth in Section B(3) above.
5. The Board, in its sole discretion, may refund amounts in excess of reserves and
surplus, or retain such excess amounts and apply these amounts as an offset to amounts projected
to be paid under the next Plan Year's budget.
M. EMPLOYEE CONTRIBUTIONS.
If any Participant requires an Enrollee's contribution for benefits provided by the Consortium,
the Participant shall collect such contributions at such time and in such amounts as it requires.
However,the failure of a Participant to receive the Enrollee contribution on time shall not
diminish or delay the payment of the Participant's monthly premium equivalent to the
Consortium, as set forth in this Agreement.
N. ADDITIONAL BENEFITS.
Any Participant choosing to provide more benefits, coverages, or enrollment eligibility other
than that provided under the Plan(s), will do so at its sole expense. This Agreement shall not be
deemed to diminish such Participant's benefits, coverages or enrollment eligibility,the additional
benefits and the payment for such additional benefits, shall not be part of the Plan(s) and shall be
administered solely by and at the expense of the Participant.
0. REPORTING.
The Board,through its officers, agents, or delegatees, shall ensure that the follow reports are
prepared and submitted:
I. Annually after the close of the Plan Year, of later than one-hundred twenty (120)
days after the close of the Plan Year,the Board shall file report with the Superintendent
showing the financial condition and affairs of the Conso ium, including an annual independent
financial audit statement and independent actuarial opini�n, as of the end of the preceding plan
year.
2. Annually after the close of the Plan Year, he Board shall have prepared a
statement and independent actuarial opinion on the financial soundness of the Plan, including the
{H1049320.11) 10
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contribution or premium equivalent rate and reserves, both as paid in the current Plan Year and
projected for the next Plan Year.
3. The Board shall file reports with the Superintendent describing the Consortium's
then current financial status within forty five (45) days of the end of each quarter during the Plan
year.
4. The Board shall provide the annual report to all Participants and all unions, which
are the exclusive collective bargaining representatives of Enrollees, which shall be made
available for review to all Enrollees.
5. The Board shall submit to the Superintendent a report describing any material
changes in any information originally provided in the Certificate of Authority. Such reports, in
addition to the reports described above, hall be in such form, and containing such additional
content, as may be required by the Superintendent.
P. WITHDRAWAL OF PARTICIPANT.
l. Withdrawal of a Participant from the Consortium shall be effective only once
annually on the last day of the Plan Year)
2. Notice of intention of a Participant withdraw must be given in writing to the
Chairperson prior to October 3rd of each Plan Year. Failure to give such notice shall
automatically extend the Participant's membership and obligations under the Agreement for
another Plan Year, unless the Board shal consent to an earlier withdrawal by a two-thirds (2/3)
vote.
3. Any withdrawing Participant shall be responsible for its pro rata share of any Plan
deficit that exists on the date of the withdrawal, subject to the provisions of subsection"4" of this
Section. The withdrawing Participant shall be entitled to any pro rata share of surplus that exists
on the date of the withdrawal, subject to t e provisions of subsection"4".of this Section. The
Consortium surplus or deficit shall be based on the sum of actual expenses and the estimated
liability of the Consortium as determined by the Board. These expenses and liabilities will be
determined one (1) year after the end oft e Plan Year in which the Participant last participated.
4. The surplus or deficit shall include recognition and offset of any claims, expenses,
assets and/or penalties incurred at the time of withdrawal, but not yet paid. Such pro rata share
shall be based on the Participant's relative premium contribution to the Consortium as a
percentage of the aggregate premium contributions to the Consortium during the period of
participation. This percentage amount may then be applied to the surplus or deficit which existed
on the date of the Participant's withdrawal from the Consortium. Any pro rata surplus amount
due the Participant shall be paid to the Participant one year after the effective date of the
withdrawal. Any pro rata deficit amounts all be billed to the Participant by the Consortium one
year after the effective date of the withdrawal and shall be due and payable within thirty (30)
days after the date of such bill.
Q. DISSOLUTION; RENEWAL; EXPULSION.
1. The Board at any time, by two-thirds (2/3)vote of the entire Board, may
determine that the Consortium shall be dissolved and terminated. if such determination is made,
the Consortium shall be dissolved ninety ()0) days after written notice to the Participants.
{H 1049320.111 11
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a. Upon determination to dissolve the C onsortium,the Board shall provide
notice of its determination to the Superintendent. The Board shall develop and submit to
the Superintendent for approval a plan for winding- p the Consortium's affairs in an
orderly manner designed to result in timely payment of all benefits.
b. Upon termination of this Agreement or the Consortium, each Participant
shall be responsible for its pro rata share of any de cit or shall be entitled to any pro rata
share of surplus that exists, after the affairs of the Consortium are closed. No part of any
funds of the Consortium shall be subject to the clai s of general creditors of any
Participant until all Consortium benefits and other Consortium obligations have been
satisfied. The Consortium's surplus or deficit shall be based on actual expenses. These
expenses will be determined.one year after the end of the Plan Year in which this
Agreement or the Consortium terminates.
C. Any surplus or deficit shall include recognition of any claims/expenses
incurred at the time of termination,but not yet paid. Such pro rata share shall be based on
each Participant's relative premium contribution to the Plan as a percentage of the
aggregate premium contributions to the Plan during the period of participation. This
percentage amount would then be applied to the s lus or deficit which exists at the time
of termination.
2. The continuation of the Consortium under the terms and conditions of the
Agreement, or any amendments or restatements thereto, s all be subject to Board review on the
fifth(5th) anniversary of the Effective Date and on each filth(5th) anniversary date thereafter
(each a"Review Date").
a. At the annual meeting a year prior t the Review Date,the Board shall
include as an agenda item a reminder of the Partici ants' coming obligation to review the
terms and conditions of the Agreement.
b. During the calendar year preceding Ithe Review Date, each Participant..
shall be responsible for independently conducting review of the terms and conditions of
the Agreement and submitting to the Board of Directors a written resolution containing
any objection to the existing terms and conditions or any proposed modification or
amendment to the existing Agreement, such written resolution shall be submitted to the
Board on or before March lstpreceding the Review Date. Failure to submit any such
resolution shall be deemed as each Participant's a eement and authorization to the
continuation of the Consortium until the next Revi w Date under the existing terms and
conditions of the Agreement.
C. As soon as practicable after March lst,the Board shall circulate to all
Participants copies of all resolutions submitted by e Participants. Subject to Section S
th
hereof, any resolutions relating to the modification, amendment, or objection to the
Agreement submitted prior to each Review Date s'iall be considered and voted on by the
Participants at a special meeting called for such purpose. Such special meeting shall be
held on or before July 1 St preceding the Review D te.
d. Notwithstanding the foregoing or Section S hereof, if at the Annual
Meeting following any scheduled Review Date the Board votes on and approves the
budget and annual assessment for the next year, t'le Participants shall be deemed to have;
f Hl049320.11) 12
DRAFT-1/08/10
approved the continuation of the Consortium'under the existing Agreement until the next
Review Date.
3. The Participants acknow edge that it may be necessary in certain extraordinary
circumstances to expel a Participant fro the Consortium. In the event the Board determines
that:
a. a Participant has acted inconsistently with the provisions of the Agreement
in a way that threatens the financial well-being or legal validity of the Consortium; or
b. a Participant has acted fraudulently or has otherwise acted in bad faith
with regards to the Consortium, or toward any individual Participant concerning matters
relating to the Consortium,the Board may vote to conditionally terminate said
Participant's membership in the Consortium. Upon such a finding by the affirmative vote
of seventy-five percent(75%) of the Participants, the offending Participant shall be given
sixty (60) days to correct or cure he alleged wrongdoing to the satisfaction of the Board.
Upon the expiration of said sixty (60) day period, an absent satisfactory cure, to the
Board may expel the Participant by an affirmative vote of seventy-five percent(75%) of
the Participants (exclusive of the Participant under consideration). This section shall not
be subject to the weighted voting provision provided in Section D. Any liabilities
associated with the Participant's departure from the Consortium under this provision shall
be determined by the procedures set forth in Section P of this Agreement.
R. REPRESENTATIONS AND WARRANTIES OF PARTICIPANTS.
Each Participant by its approval of the to s and conditions of this Agreement hereby represents
and.warrants to each of the other Participants as follows:
l. The Participant understands and acknowledges that its participation in the
Consortium under the terms and conditio s of this Agreement is strictly voluntary and may be
terminated as set forth.herein, at the discr-tion of the Participant,
2. The Participant understands and acknowledges that the duly authorized decisions
of the Board constitute the collective will of each of the Participants as to those matters within
the scope of the Agreement.
3. The Participant understands and acknowledges that the decisions of the Board
made in the best interests of the Consortium may on occasion temporarily disadvantage one or
more of the individual Participants.
4. The Participant represents and warrants that its designated Director or authorized
representative understands the terms and conditions of this Agreement and is suitably
experienced to understand the principles upon which this Consortium operates.
5. The Participant understan s and acknowledges that all Directors, or their
authorized representatives, are responsibl for attending all scheduled meetings. Provided that
the quorum rules are satisfied, non-attendance at any scheduled meeting is deemed acquiescence
by the absent Participant to any duly authorized Board-approved action at the meeting. However,
a Participant that was absent from a meeting will not be presumed to have acquiesced in a
particular action taken at the meeting if, A ithin fifteen (15) calendar days after learning of such
action,the it'articipant delivers written nc t.ce to the Chairperson that it dissents from such action.
{H1049320.11} 13
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The Participant shall also notify the other members of the Board of such dissent. The
Chairperson shall direct the Secretary to file the notice with the minutes of the Board.
6. The Participant understands and acknowledges that, absent bad faith or ftaud, any
Participant's vote approving any Board action renders that Board action immune from later
challenge by that Participant.
S. RECORDS.
The Board shall have the custody of all records and documents, including financial records,
associated with the operation of the Consortium. Each Participant may request records and
documents relative to their participation in the Consortium by providing a written request to the
Chairperson and Chief Fiscal Officer. The Consortium shall respond to each request no later
than thirty (30) days after its receipt thereof, and shall include all information which can be
provided under applicable law.
T. CHANGES TO AGREEMENT.
Any change or amendment to this Agreement shall require the unanimous approval of the
Participants, as authorized by their respective legislative bodies.
U. CONFIDENTIALITY.
Nothing contained in this Agreement shall be construed to waive any right that a covered person
possesses under the Plan with respect to the confidentiality of medical records and that such
rights will only be waived upon the written consent of such covered person.
V. ALTERNATIVE DISPUTE RESOLUTION("ADR").
l. General. The Participants acknowledge and agree that given their budgeting and
fiscal. constraints, it is imperative that any disputes arising Ibut of the operation of the Consortium
be limited and that any disputes which may arise be addressed as quickly as possible.
Accordingly,the Participants agree that the procedures set forth in this Section V are intended to
be the exclusive means through which disputes shall be re olved. The Participants also
acknowledge and agree that by executing this Agreementeach Participant is limiting its right to
seek redress for certain types of disputes as hereinafter provided.
2. Disputes subject to ADR. Any dispute by any Participant arising out of or
relating to a contention that:
a. the Board,the Board's designated agents,ents, or any Participant has failed to
adhere to the terms and conditions of this Agreeme t;
b. the Board,the Board's designated a ents, or any Participant has acted in
bad faith or fraudulently in undertaking any duty o1 action under the Agreement; or
C. any other dispute otherwise arising out of or relating to the terms or
conditions of this Agreement or requiring the interpretation of this Agreement shall be
resolved exclusively through the ADR procedure set forth in paragraph(3)below.
{H1049320.11} 14
DRAFT-2/08/10
3. ADR Procedure. Any dispute subject to ADR, as described in subparagraph (2),
shall be resolved exclusively by the following wing procedure:
a. Board Consideration: Within ninety (90) days of the occurrence of any
dispute, the objecting party(the ('Claimant") shall submit a written notice of the dispute
to the Chairperson specifying in detail the nature of the dispute, the parties claimed to
have been involved,the specific onduct claimed, the basis under the Agreement for the
Participant's objection, the specific injury or damages claimed to have been caused by the
objectionable conduct to the extent then ascertainable, and the requested action or
resolution of the dispute. A dispute shall be deemed to have occurred on the date the
objecting party knew or reasonably should have known of the basis for the dispute.
(i) Within six (60) days of the submission of the written notice, the
Executive Committee sha 1,as necessary, request further information from the
Claimant, collect such of er information from any other interested party or source,
form a recommendation as to whether the Claimant has a valid objection or claim,
and if so,recommend a fair resolution of said claim. During such period, each
party shall provide the of,er with any reasonably requested information within
such party's control. The Executive Committee shall present its recommendation
to the Board in writing, including any underlying facts, conclusions or support
upon which it is based, wi hin such sixty(60) day period.
(ii) Within six (60) days of the submission of the Executive
Committee's recommended resolution of the dispute,the Board shall convene in a
special meeting to consider the dispute and the recommended resolution. The
Claimant and the Executive Committee shall each be entitled to present any
argument or material it de pertinent to the matter before the Board. The Board
shall hold discussion and/or debate as appropriate on the dispute and may
question the Claimant and/or the Executive Committee on their respective
submissions. Pursuant to i�s regular procedures, the Board shall vote on whether
the Claimant has a valid claim, and if so,what the fair resolution should be. The
weighted voting procedure set forth in Section D shall not apply to this provision.
The Board's determination shall be deemed final subject to the Claimant's right to
arbitrate as set forth below.
b. Arbitration. The Claimant may challenge any Board decision under
subparagraph(V)(3)(a)(ii)by filing a demand for arbitration with the American
Arbitration Association within thirty (30) days of the Board's vote(a "Demand"). In the
event a Claimant shall fail to file a Demand within thirty (30) days, the Board's decision
shall automatically be deemed fin 1 and conclusive. In the event the Participant files a
timely Demand, the arbitrator or a bitration panel may consider the claim:
provided however;
(i) in no event ay the arbitrator review any action taken by the
Board that occurred three i3) or more years prior to when the Chairperson
received notice of the claim; and
(ii) in no event ay the arbitrator award damages for any period that
precedes the date the Chai erson received notice of the claim by more than
twenty-four(24)months.
{H1049320.11} 15
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C. The Participants agree that the procedure set forth in this Section V shall
constitute their exclusive remedy for disputes within the scope of this Section.
W. MISCELLANEOUS PROVISIONS.
1. This instrument constitutes the entire Agreement of the Participants with respect
to the subject matter hereof, and contains the sole statement of the operating rules of the
Consortium. This instrument supersedes any previous A Bement,whether oral or written.
2. Each Participant will perform all other acts and execute and deliver all other
documents as may be necessary or appropriate to carry out the intended purposes of this
Agreement.
3. If any article, section, subdivision,paragraph, sentence, clause, phrase, provision
or portion of this Agreement shall for any reason be held r adjudged to be invalid or illegal or
unenforceable by any court of competent jurisdiction, such article, section, subdivision,
paragraph, sentence, clause, phrase,provision or portion so adjudged invalid, illegal or
unenforceable shall be deemed separate, distinct and inde endent and the remainder of this
Agreement shall be and remain in full force and effect and shall not be invalidated or rendered
illegal or unenforceable or otherwise affected by such holding or adjudication.
4. This Agreement shall be governed by and onstrued in accordance with the laws
of the State of New York. Any claims made under Sectio;V(3)(b) except to the extent
otherwise limited therein, shall be governed by New York substantive law.
5. All notices to any party hereunder shall b in writing, signed by the party giving
it, shall be sufficiently given or served if sent by registered or certified mail, return receipt
requested, hand delivery, or overnight courier service addressed to the parties at the address
designated by each party in writing. Notice shall be deemed given when transmitted.
6. . This Agreement maybe executed in two Or more counterparts each of which_
shall be deemed to be an original but all of which shall constitute the same Agreement and shall
become binding upon the undersigned upon delivery to the Chairperson of an executed copy of
this Agreement together with a certified copy of the resolution of the legislative body approving
this Agreement and authorizing its execution.
7. The provisions of Section V shall survive termination of this Agreement,
withdrawal or expulsion of a Participant, and/or dissolution of the Consortium.
8. Article and section headings in this Agreement are included for reference only
and shall not constitute part of this Agreement.
X. APPROVAL,RATIFICATION, AND EXECUTION.
1. As a condition precedent to execution of this Municipal Cooperative Agreement
and membership in the Consortium, each eligible municipal corporation desiring to be
Participant shall obtain legislative approval of the terms and conditions of this Agreement by the
municipality's governing body.
2. Prior to execution of this Agreement by a Participant,the Participant shall provide
the Chairperson with the resolution approving the municipality's participation in this
Consortium and expressly approving the terms and conditions of this Municipal Cooperative
{H1049320,11} 16
DRAFT-2/08/10
Agreement. Each presented resolution shall be attached to and considered a part of this
Agreement.
3, By executing this Agreement, each signatory warrants that he/she has complied
with the approval and ratification requirements herein and is otherwise properly authorized to
bind the participating municipal torpor tion to the terms and conditions of this Agreement.
[Signature Pages Follow]
{H104932011} 17
DRAFT-2/08/1
IN WITNESS WHEREOF,the undersigned has c used this Agreement to be executed
as of the day and year first above written.
CITY OF ITHACA T WN OF ENFIELD
By: By
Mayor Town wn Supervisor
COUNTY OF TOMPKINS T WN OF GROTON
By: By:
Chair of the County Legislature Town Supervisor
TOWN OF CAROLINE T 3WN OF ITHACA
By: By.
Town Supervisor Town Supervisor
TOWN OF DANBY TOWN OF DRYDEN
By: By:
Town Supervisor T wn Supervisor
TOWN OF ULYSSES V ILLAGE OF GROTON
By: -
B
Town Supervisor —
Mayor
VILLAGE OF CAYUGA HEIGHTS VILLAGE OF DRYDEN
By: By: —
Mayor Mayor
VILLAGE OF TRUMANSBURG
By:
Mayor
(H1049320.11) 18
DRAFT-2/08/10
Addendum"A"
Example of Weighted Voting Formula under Section D(2)
If 10 Participants have 500 or fewer enrollees each and 2 Participants have more than 500
enrollees each, under subparagraph"a"the 10 each get 1 vote. Under subparagraph"b"the 2
large Participants get 4 votes each, whic is calculated by taking the total number of votes under
subparagraph"a" [10] subtracting 1, dividing by the number of eligible Participants under
subsection"b" [2], and rounding the result [4.5] down to the nearest whole number [4]. The
Labor Representative shall have 1 vote, espective of the votes available to the Participants.
{H1049320.11} 19