Joint Purchase Agreement

Municipal Health Group
Agreement for Joint Negotiation
and Purchase of Health Coverage
as Amended on October 4, 2000

Article 1. Authority and Purpose
This Agreement is entered into in accordance with Massachusetts G.L. Chapter 32B, Sections 3, 3A, and 12, to enable the governmental units executing this Agreement as indicated in Article 16 hereof, and any additional governmental units accepted for participation in accordance with Articles 2 and 11 hereof, hereinafter referred to as the “Participating Governmental Units,” to join together in negotiating and purchasing policies authorized under M.G.L. Chapter 32B, Section 3 including health and life insurance, Health Maintenance Organization coverage as authorized by M.G. L. Ch.32B, Section 16, and Administrative Services Only coverage as authorized by M.G.L. Chapter 32B, Section 3A, which may include Preferred Provider Arrangements or other methods of self-funding employee health and life coverage as may be allowed by law. The purpose of this Agreement is to secure the economies of scale and other benefits derived through joint negotiations and purchase as authorized by M.G.L. Chapter 32B, Section 12.

Article 2. Participants
The Participating Governmental Units in this Agreement are the signatories to this Agreement on each page of Article 16. It is understood and agreed that additional governmental participants may be added pursuant to Article 11.

Article 3. Term of Agreement and Participation
This Agreement shall take effect on January 31, 1990 or on the date that three or more governmental units execute the signature-acceptance of the terms of this Agreement as provided in Articles 2 and 16 of this Agreement, whichever occurs later. This agreement shall continue in full force and effect for an indefinite period, subject to amendment as agreed upon in accordance with the terms of Article 11 of this Agreement, so long as three or more governmental units elect to continue participation.

It is understood and agreed that any Participating Governmental Unit may withdraw participation at its discretion. A governmental unit that elects to terminate participation in this Agreement must notify the Minuteman Nashoba Health Group Board (the “Board”) of such intent to withdraw, sixty (60) days prior to the end of the fiscal year, to be effective at the end of the fiscal year.

Notwithstanding any other provisions of this Agreement, each governmental unit maintains its autonomy and responsibility for collective bargaining.

It is also understood and agreed that any Participating Governmental Unit which is sixty (60) days in arrears for the payments due under Article 4 or Article 9 in this Agreement may at the Board’s discretion be terminated from participation in this Agreement and from coverage under any health insurance or other health contracts purchased by the Board. Such termination shall not affect the liability of the governmental unit for all monies due under this Agreement. The Board may, by a majority vote of the Board, take other appropriate action in lieu of termination, to correct payment delinquency.

Article 4. Administration
Administrative authority shall be vested in the Board. The Appropriate Public Authority, as defined in M.G.L. Ch. 32B, Section 2(a), of each Participating Governmental Unit shall appoint one Member of the Board, who shall each have one vote, and one alternate representative who shall assume all of the responsibilities of the Member in the event of the Member’s absence from a meeting of the Board. Said appointments shall be made within thirty (30) days following the execution of this Agreement by the Participating Governmental Unit. The Board Member of each governmental unit shall serve until replaced by the Appropriate Public Authority of the Participating Governmental Unit. It is understood and agreed that the Board Members may rely on the authority of each Board Member to represent the respective Participating Governmental Units, and any vote of any individual Board Member or their alternate representative shall be deemed to be binding upon the Participating Governmental Unit represented by such Board Member or alternate representative. If both the primary Member and alternate representative of a Participating Governmental Unit are absent from three (3) consecutive meetings of the Board, Steering Committee, or Finance Committee, the Chairperson of the Board shall notify the respective Participating Governmental Unit’s Appropriate Public Authority.

It is understood and agreed that the Board shall have full discretion to elect from its membership a Chairman and any other officers that it deems appropriate and may elect to establish any subcommittee for whatever purpose it deems appropriate and consistent with the terms of this Agreement.

A. Steering Committee
It is further understood and agreed that the Board may elect from its membership (both primary and alternate members) a Steering Committee of five (5), seven (7) or nine (9) persons, each representing different Participating Governmental Units, and each having one vote, hereinafter referred to as the Steering Committee. The Steering Committee members shall serve for a term of one year or until removed by the Board, provided that they remain members of the Board. Steering Committee members may be elected for succeeding terms. In the event that a Steering committee member is removed from the Board by the Appropriate Public Authority of the Participating Governmental Unit, the Board may elect a replacement. The Steering Committee shall have whatever authority is granted to it by the Board, including the establishment of advisory sub-committees. Such authority may include the authority to negotiate and contract, subject to final approval by the Board, with health insurance carriers or other health coverage providers, consultants, and any other individuals or organizations deemed to be appropriate by the Steering Committee on behalf of and for the benefit of the Board and each member’s respective Participating Governmental Unit concerning the subject of this Agreement.

The Steering Committee may be empowered to (1) review annual rate renewals, (2) negotiate health coverage renewal contracts, (3) negotiate funding and other financial arrangements, including adoption of an Administrative Services Only financial arrangement on behalf of each Participating Governmental Unit, as authorized by M.G. L. Chapter 32B, Section 3A, and determine level of coverage, and (4) undertake any other matter authorized by M.G.L. 32B which is not specifically reserved to each respective Participating Governmental Unit participant, subject to final approval by the Board. The Board, either directly or acting through its Steering Committee, may establish a central administrative office and employ such personnel or contract for such administrative services as may be necessary to carry out the provisions of M.G.L. Chapter 32B and this Agreement. The Steering Committee shall elect a Chairperson.

It is understood and agreed that where the Board, or the Steering Committee acting on behalf of and with the authorization of the Board, enters into Agreements to secure the services of a central administrative office, a consultant, or administrative personnel, including related expenses and other charges, payment for such services shall be allocated to be paid by the Participating Governmental Units in proportion to the number of the Participating Governmental Unit’s employees and retirees covered by the contracts negotiated and purchased under the authority of this Agreement.

B. Finance Committee

In addition, the Board may elect from its membership (both primary and alternate members) a finance committee of three persons representing three different Participating Governmental Units, hereinafter referred to as the “Finance Committee”. The Finance Committee members shall serve for a term of one year or until removed by the Board, provided that they remain members of the Board. Finance Committee members may be elected for succeeding terms. In the event that a Finance Committee member is removed from the Board by the Appropriate Public Authority of the Participating Governmental Unit, the Board may elect a replacement. The Finance Committee shall have authority to select one or more banks for the deposit of premiums, capitation charges, and other payments required to administer this agreement. The Finance Committee shall also be authorized to invest funds administered by the Board and recommend to the Board and the participating Governmental Units the amounts to be allocated to claims trust funds and other funds and accounts relating directly or indirectly to this Agreement. The Finance Committee shall have such additional authority as may be granted to it by the Board. The Finance Committee shall elect a Chairperson.

Article 5. Quorum

The Board shall adopt a schedule of meeting dates and times for the conduct of ordinary business and shall establish a reasonable procedure for notice to the members of the Board and Appropriate Public Authorities concerning special meetings. The Steering Committee and the Finance Committee shall, in a like manner, establish a procedure for adequate notice to each member for all meetings to be conducted. A quorum of the Board, the Steering Committee, and the Finance Committee following issuance of the required notice shall consist of not less than half of the members of the Board with reference to Board meetings and not less than half of the members of the Steering Committee with reference to the Steering Committee, and not less than half of the members of the Finance Committee with reference to the Finance Committee. A majority of the members in attendance at a duly call meeting at which a quorum is present shall be deemed to be a vote of the Board, the Finance Committee and the Steering Committee respectively, except where a two-thirds vote is required by this Agreement. In the event of a tie vote, the vote shall be deemed to be a negative vote.

The Board and all Committees are subject to the requirements of M.G.L. Chapter 39, Section 23A and B (Open Meeting Law).

Article 6. Organization and Chairperson
The Board, the Steering Committee, and the Finance Committee shall each elect from their respective memberships, by majority vote of the members in attendance at a duly called meeting at which a quorum is present, a Chairperson and a Vice Chairperson to act in the absence of the Chairperson, who shall serve for terms of twelve (12) months, unless replaced prior to termination of such twelve-month period by a vote of respective majorities of the Board, Steering Committee, and Finance Committee members in attendance at a duly called meeting at which a quorum is present. It is understood and agreed that the Chairperson may be elected for succeeding twelve-month terms at the discretion of the Board, the Steering Committee and the Finance Committee, respectively.

The elected Chairperson of the Board may be a candidate for election as Chairperson of the Steering committee if he or she is a member of the Steering Committee, and may be a candidate for election as Chairperson of the Finance Committee if he or she is a member of the Finance Committee. No person, however, shall serve simultaneously as Chairperson of both the Finance Committee and the Steering Committee.

It shall be the duty of the respective chairpersons to call meetings of the Board and the Committees, including designation of the date, place, and time of such meetings, and to perform other duties and functions as delegated by the Board and Committees respectively.

The Board and the Committees of the Board may elect any other officers and committee chairpersons for their respective bodies whom the Board and the Committees respectively deem appropriate, by vote of a majority of members in attendance at a duly called meeting at which a quorum is present. The term of office of any such additional officers or chairpersons shall be determined at the discretion of the Board or Committees respectively.

Article 7. Communication
It shall be the duty of each member of the Board, and in the primary member’s absence, the duty of the alternate member, to communicate all matters relating to the action of the Board to the member’s respective Participating Governmental Unit’s Appropriate Public Authority. Copies of the minutes of the Board, Finance Committee meetings, and Steering Committee meetings shall be sent to each Participating Governmental Unit’s Appropriate Public Authority and Town or District Clerk. In the event that both the primary and alternate members representing a Participating Governmental Unit are absent, it is the duty of the Chairperson, acting directly or through the central administrative office or other designee of the Chairperson, to communicate in writing and in a timely manner to the absent Board member’s respective Participating Governmental Unit’s Appropriate Public Authority and Town or District Clerk any action taken by the Board.

The Chairperson, acting directly or through the central administrative office, shall provide minutes of the Board meetings to all members and to each Appropriate Public Authority. It shall be the duty of the Chairperson of each Committee of the Board to report to the Board through the Chairperson of the Board all actions taken by the Committee. In addition, it shall be the duty of each Committee to report to the Board membership at a duly called meeting of the Board, the actions of the Committee.

Article 8. Calculation of Health Insurance Premiums, Health Maintenance Organization and Administrative Services Only Charges, including Preferred Provider Arrangement Charges
The Board, either directly or through the Steering Committee, shall determine the monthly rates payable by each Participating Governmental Unit with the Advice and recommendations of the consultant/administrator.

The payment calculated by the Board shall be an amount determined to be 100% of the cost of the coverage (including, but not limited to, anticipated incurred claims, retention, risk and trust administration expenses) of the Participating Governmental Unit as established through underwriting and/or actuarial estimates.

It is understood and agreed that notwithstanding the individual experience rating of each Participating Governmental Unit in determining the payment calculation, all refunds (surplus) and deficits shall be dealt with on a proportional and collective basis. In the case of a certified surplus, the Board will determine whether the excess funds will remain in the Board’s trust fund for the purpose of reducing the participants’ future premium cost or be distributed to the Participating Governmental Units in proportion to the number of Participating Governmental Unit’s employees and retirees covered under the contract(s) purchased under the authority of this Agreement at the time surplus was incurred. In the case of a certified deficit, additional revenue will be raised and paid by the Participating Governmental Units in proportion to the number of the Participating Governmental Unit’s employees and retirees covered under the contracts purchased under the authority of this Agreement at the time the deficit was incurred.

If the Board determines that it will deal with a certified surplus (deficit) through reducing (increasing) future premium costs to Participating Governmental Units, the premium(s), which shall be known as “basic premium”, will be determined based on claims experience projected forward, and the amount of reduction (increase) due to application of the surplus (reducing the deficit) will be determined and presented separately (“premium adjustment”). A new Participating Governmental Unit may be assessed the “basic premium(s)” without the premium adjustment.

If the Board determines it will deal with a certified surplus or deficit by direct distribution to or assessment of each Participating Governmental Unit, the determination of a Participating Governmental Unit’s proportionate share of a certified surplus or deficit shall be calculated as follows:

The proportionate share of a Participating Governmental Unit (“PGU”) shall be the sum of the PGU’s subscribers (employees and retirees) participating in the Minuteman Nashoba Health Group (MNHG) plans for each month of the period for which the surplus or deficit has been certified (“PGU subscriber months”) divided by the sum of the total number of subscribers participating in the MNHG plans in aggregate for each month of the period for which the surplus or deficit has been certified (“MNHG subscriber months”) times the amount of the certified surplus or deficit. The proportionate share of a PGU shall be calculated without regard to the specific benefit plan(s) offered by the PG or subscribed to by its eligible members except that the surplus or deficit accounting for the Optional Medicare Extension plan shall be done separately from the commercial plans offered through the MNHG trust fund.

The Board, either directly or indirectly through the Steering Committee, shall determine based upon the advice of the consultant/administrator within six (6) months of the end of the policy year, any certified surplus or deficit, which shall then be dealt with appropriately.

It is further understood that each Participating Governmental Unit shall be responsible for paying all insurance premium, administration, or claims charges which were incurred by the governmental unit or any person insured by the governmental unit prior to the effective date of the Participating Governmental Unit’s coverage under this Agreement. Each governmental unit shall be responsible for paying in full all “run-out” claims charges from cost-plus arrangements which terminate upon the effective date of this coverage. Premium charges for services incurred by a governmental unit prior to the effective date of this coverage but billed to the joint purchase group after the effective date of this Agreement will be billed and paid in full by the Participating Governmental Unit.

Article 9. Payment of Health Insurance Premiums, including Health Maintenance Organization and Administrative Services Only Charges, including Preferred Provider Arrangement Charges
It is understood and agreed that each Participating Governmental Unit shall make an initial payment of an amount which is equivalent to two month’s advance health coverage premium to the central administrative office or other designee of the Board for timely transmittal to the health insurance carrier and, if applicable, to the Health Maintenance Organization, Preferred Provider Arrangement, or other designated payee.

In addition, beginning with the third month each Participating Governmental Unit shall make payment on a monthly basis of the health insurance premium or funding rate for all covered services, and, if applicable, the Health Maintenance Organization capitation charges allocated toeach Participating Governmental Unit. It is further understood and agreed that the central administrative office or other designee of the Board shall determine the appropriate payment due from each Participating Governmental Unit each month, based upon that Unit’s enrollments.

The Board, or Finance Committee if designated by the Board, shall contract with one or more banks to act as depository of payments under this Agreement. Each designated bank shall be required, as a precondition to service as such depository, to act under the direction of the Board or its designee for the benefit of the Participating Governmental Units and the Board and shall provide for periodic reports and statements of accounts as required by the Board or its designee.

The Board shall designate a Certified Public Accounting firm to provide for an annual independent audit of the payments under this Agreement. This report shall be provided to the Board with a copy to the consultant/administrator within eight (8) months of the end of the MNHG’s fiscal year. The Board shall provide one copy to each of the Appropriate Public Authorities of the Participating Governmental Units.

Each Participating Governmental Unit shall receive quarterly reconciliation reports detailing the basis for its payment requirements, and shall be entitled to conduct an independent audit at its own expense by each Participating Governmental Unit.

All payments described in this Agreement shall be due and payable no later than 21 days following receipt of notice or bill from the Board, Steering Committee or the consultant/administrator. Interest at a rate determined by the Board may, at the Board’s discretion, begin to accrue starting on the 22nd day following receipt of notice or bill.

In the event that any such payment is in arrears or in the event that the Board determines that additional funds are required as premium or other charges contemplated by this Agreement, the Board by a two-thirds vote shall be authorized to arrange credit or obtain funds through bank resources, advances, or negotiated financing arrangement with providers of health coverage and other financing arrangements. The Board shall determine the respective payments for interest and other charges allocable to and to be paid by each Participating Governmental Unit.

Article 10. Eligibility Determination
It is understood and agreed that nothing contained in this Agreement shall in any way limit the Appropriate Public Authority of a Participating Governmental Unit to determine that a person is eligible for participation in the Participating Governmental Unit’s health coverage program in accordance with the provisions of M.G.L. Chapter 32B. In addition, all notification of eligibility, and all employee direct billing, including notification to and from affected parties of eligibility rights under M.G.L. Chapter 32B, the Consolidated Omnibus Reconciliation Act of 1985, and any other applicable federal and state statutes, shall be the responsibility of and determined by the Participating Governmental Unit.

Article 11. Amendment Procedure
This Agreement may be amended at any time, provided that at least two-thirds of the Board vote to accept such amendment.

It is understood and agreed that additional governmental unit participants may be added commencing on a date mutually agreed upon, provided that no less than two-thirds of the full Board vote to accept such additional participants. Such additional governmental units will not be responsible for deficits incurred by the Minuteman Nashoba Health Group prior to the date of their affiliation nor will they participate in any dividend distribution, or allocation of any surplus in the clams trust fund accrued by the Minuteman Nashoba Health Group prior to the date of their affiliation.

It is further understood and agreed that any change in the level of coverage implemented following the effective date of this Agreement shall not take effect until approved through the amendment procedure described in this Article 11. Any proposed change to the level of coverage shall take effect on a date designated by the Board, and notice of such proposed change shall be provided to the Appropriate Public Authority of each Participating Governmental Unit by the Board at least sixty (60) days prior to the proposed implementation date of such health contract or contracts.

Article 12. Liability Following Termination of Participation

A. There shall be no liability for premium expense following the effective date of termination of a Participating Governmental Unit’s coverage under a contract purchased through this Agreement, except for (1) the Governmental Unit’s proportionate share of any deficit in the trust fund as of its termination date, (2) open premium expense, or (3) subsequent expense for its covered members continued on the plan after the Governmental Unit’s termination (where such continued coverage is required by law). A deficit payment owed by a withdrawing or terminated Governmental Unit shall be paid by the Governmental Unit within 60 days following written demand for payment.

B. A Participating Governmental Unit’s proportionate share of any deficit in the self-funded
plans shall be the deficiency certified as of May 31st in the fiscal year of withdrawal or termination multiplied by the quotient obtained by dividing the sum of such Participating Governmental Unit’s subscribers in the self-funded plans in each month in the same fiscal year by the sum of subscribers in the self-funded plans of all Participating Governmental Units in each month for the same fiscal year. A withdrawing or terminated Participating Governmental Unit shall not be entitled to any surplus in the trust fund.

Article 13. Participation Requirements

A. Total Participation Requirement. Participating Governmental Units agree to offer to employees all health plans sponsored by the Group. Each year at least sixty (60) days prior to the health plan anniversary date, a Participating Governmental Unit may request the Board to make an exception to this requirement if a particular health plan’s network of providers does not serve the geographical area represented by the Unit or its workforce. A majority vote of the members of the Board present at a duly called meeting at which a quorum is present is required to override the requirement of total participation.

B. Exclusive Participation Requirement. Participating Governmental Units may offer to employees only those health plans sponsored by the Group. Each year at least sixty (60) days prior to the health plan anniversary date, a Participating Governmental Unit may request that the Board make an exception to this requirement by permitting the Unit to offer a plan not sponsored by the Group. A two-thirds (2/3rds) vote of the full Board is required to override the requirement of exclusive participation.

Article 14. Hold Harmless Protection
Each Participating Governmental Unit agrees that as a precondition for entering into this Agreement each representative and alternate designated by the Participating Governmental Unit to service on the Board and any committee established by the Board shall be indemnified and held harmless from personal financial loss and expense, including reasonable legal fees and costs, if any, to the full extent permitted by all applicable statutes, including M.G.L. Chapter 258, Section 8, 9, and 13.

Indemnification shall be provided for liability arising from all activities directly related to the establishment of this Agreement and all related activities arising as a result of such person’s service to the Minuteman Nashoba Health Group Board, commencing on and after the effective date of this Agreement through and including the date which such designated representative terminates his or her position as a member or alternate member to the Board and the Board’s committees.

This hold harmless protection shall include indemnification for any claim, demand, suit, or judgement of any act or omission except for intentional violation of the civil rights of any person arising as a result of such person’s service to the Minuteman Nashoba Health Group Board. This hold harmless status shall include activities relating to such Board participation, including, but not limited to, serving on any related committee, holding an office as a member of the Board or Committee established by the Board, traveling to and from meetings relating to the designees’ service, communications and all other acts related to the appointment as a Board delegate or alternate delegate of the Participating Governmental Unit.

Article 15. Certification of Funds
It is understood and agreed that each Participating Governmental Unit shall provide adequate funds to pay its proportionate share of the joint purchase group health insurance premium and other related expenses approved by the Board in a timely manner. The appropriate public officials shall certify annually upon request to the Board the availability of such funds.

Article 16. Signatories to Agreement
By our signatures, we the undersigned members of the Appropriate Public Authority (M.G.L. Chapter 32B, Section 2(a) members of the______________________ ___________________ governmental unit evidence the acceptance of the terms of this Agreement for Joint Negotiation and Purchase of Health Coverage on behalf of our governmental unit.

We agree to become a Participating Governmental Unit and to appoint a person to represent our governmental unit on the Board described in Article 4 herein and agree to appoint such representative within thirty (30) days following execution of this Agreement. We also agree to appoint an alternate representative to serve on the Board to ensure representation of our governmental unit in the event of incapacity, inability or unwillingness to attend meetings of the Board by our primary representative. It is understood and agreed that such primary representative and alternate representative shall have full authority to represent our governmental unit in accordance with the terms of this Agreement for Joint Negotiation and Purchase of Health Coverage except for the authority specifically reserved to us by this Agreement.

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