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Multiyear Health Plan Agreement
This AGREEMENT is made by and between HealthPartners, Inc. a Minnesota nonprofit
corporation (“HealthPartners”) and City of Lakeville (“Client”), together “the Parties”, and is effective
as of January 1, 2017 (“Effective Date”) (“the Agreement”).
RECITALS
WHEREAS, the Parties desire to enter into a mutually beneficial long term relationship which
will bring stability and predictability to the costs of providing high quality health care benefits to the
Client’s employees and dependents, and
WHEREAS, Client has released a request for proposal contemplating a multi-year agreement and
HealthPartners has responded to such request (“Proposal”), and
WHEREAS, in exchange for such a long term relationship, HealthPartners is willing to offer
guaranteed rates to Client and Client is willing to remain contracted with HealthPartners for the term of
the Agreement and
WHEREAS, each Party has independently determined that this Agreement is in its best interests
and each Party is committed to a successful implementation of the terms and conditions expressed in this
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereby agree as follows;
ARTICLE 1
HEALTHPARTNERS DUTIES
1.1 Plan Offering. HealthPartners shall provide for the time period specified (“Plan Years”), the
health plan coverage (“Product” or “Products”) as described in the HealthPartners Proposal of
August 10, 2016 under the terms of this Agreement. In the event a particular Product is no longer
offered, a comparable Product in terms of benefit design will be offered upon renewal with
appropriate actuarial values of any benefit changes applied to the Guaranteed Rates as described
in Section 1.2.
1.2 Guaranteed Rates. HealthPartners guarantees, for the Plan Years described in the Proposal, the
rates for all Products as follows, or the standard HealthPartners renewal calculation for all
Products, whichever is more favorable to Client:
Table 1 Guaranteed Rates
Plan Year Plan Year Plan Year Plan Year Plan Year
2017 2018 2018 2019 2020
$2600-80% HSA Plan
Single $530.69 $578.45 $700.00 $800.00 $900.00
Single+Sp $1143.09 $1245.97 $700.00 $800.00 $900.00
Single+Ch(ren) $1059.33 $1154.67 $700.00 $800.00 $900.00
Family $1396.24 $1521.90 $3000.00 $4000.00 $5000.00
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$2500-80% Ded Plan
Single $575.72 $627.53 $700.00 $800.00 $900.00
Single+Sp $1240.10 $1351.71 $700.00 $800.00 $900.00
Single+Ch(ren) $1149.23 $1252.66 $700.00 $800.00 $900.00
Family $1514.72 $1651.04 $3000.00 $4000.00 $5000.00
$30-100% Copay Plan
Single $768.14 $837.27 $700.00 $800.00 $900.00
Single+Sp $1654.57 $1803.48 $700.00 $800.00 $900.00
Single+Ch(ren) $1533.33 $1671.33 $700.00 $800.00 $900.00
Family $2020.99 $2202.88 $3000.00 $4000.00 $5000.00
1.3 Adjustments. Notwithstanding the above, the following exceptions and adjustments apply to the
Guaranteed Rates described in Section 1.2:
a. The actuarial value of any new or increased premium taxes, industry fees, excise taxes,
research fees, or any other government or regulatory assessments, or other taxes as a result of
any change in law or regulation, including but not limited to, the Affordable Care Act of 2010
or other state or federal health care reform legislation, shall result in a corresponding change
to the Guaranteed Rates. The Guaranteed Rates and the Standard Rates do not include the
excise tax on high cost health plans under section 49801 of the Internal Revenue Code (“the
Cadillac Tax” effective January 1, 2018, deferred until 2020); all amounts due under the
Cadillac Tax are payable by Client in addition to Product rates.
b. The actuarial value of any new or increased eligibility or benefit mandated by law or
regulation or other change to Product features required by law shall result in a corresponding
change to the Guaranteed Rates.
c. Any enrollment change of 10% or more from initial enrollment, whether due to expansion,
merger, acquisition, sale, reduction in force or other reason, may result in a revision to the
Guaranteed Rates, at the sole discretion of HealthPartners.
1.4 Renewals. HealthPartners shall release a standard renewal calculation prior to the end of each
Plan Year.
ARTICLE II
CLIENT DUTIES
2.1 Sole Carrier. Client shall remain directly contracted with HealthPartners on a fully insured basis
as the sole carrier offered to any and all Client employees for any medical benefit offering, during
the term of this Agreement.
2.2 Master Group Contract. This Agreement is subject to all the terms and conditions of the fully
insured Master Group Contract issued separately upon acceptance of the Client’s application for
coverage.
2.3 Contribution and Participation. Client shall:
a. maintain the current employer premium and fund contribution strategy,
b. maintain the current Product offerings,
c. meet the current participation guidelines, and
d. fulfill HealthPartners coverage requirements of the Master Group Contract regarding
Product offerings.
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2.4 Authority. Client represents and warrants that it has full authority under law and its governance
requirements to enter into this Agreement. By executing this Agreement below, Client intends for
HealthPartners to rely on the authority of the signatory to this Agreement to bind the Client to the
terms of this Agreement.
ARTICLE III
TERM, TERMINATION AND BREACH
3.1 Term. This Agreement applies to the Plan Years as shown in Section 1.2, for a total Guaranteed
Rate period of 24 months.
3.2 Early Termination or Breach. In the event Client terminates this Agreement prior to the
completion of the last Plan Year or fails to comply with any of the terms of this Agreement or the
Master Group Contract described in Section 2.3, Client shall pay to HealthPartners the Rate
Differentials as shown in Table 3 (i.e., the difference between the Guaranteed Rates of Table 1
and the Standard Rates of Table 2), times the last month’s enrollment times the number of months
remaining to the completion of the last Plan Year.
Table 2 Standard Rates
Plan Year Plan Year Plan Year Plan Year Plan Year
2017 2018 2018 2019 2020
$2600-80% HSA Plan
Single $573.15 $624.73 $770.00 $880.00 $990.00
Single+Sp $1234.54 $1345.65 $770.00 $880.00 $990.00
Single+Ch(ren) $1144.08 $1247.04 $770.00 $880.00 $990.00
Family $1507.94 $1643.65 $3300.00 $4400.00 $5500.00
$2500-80% Ded Plan
Single $621.78 $677.73 $770.00 $880.00 $990.00
Single+Sp $1339.31 $1459.85 $770.00 $880.00 $990.00
Single+Ch(ren) $1241.17 $1352.87 $770.00 $880.00 $990.00
Family $1635.90 $1783.12 $3300.00 $4400.00 $5500.00
$30-100% Copay Plan
Single $829.59 $904.25 $770.00 $880.00 $990.00
Single+Sp $1786.94 $1947.76 $770.00 $880.00 $990.00
Single+Ch(ren) $1656.00 $1805.04 $770.00 $880.00 $990.00
Family $2182.67 $2379.11 $3300.00 $4400.00 $5500.00
Table 3 Rate Differentials
Plan Year Plan Year Plan Year Plan Year Plan Year
2017 2018 2018 2019 2020
$2600-80% HSA Plan
Single $42.46 $46.28 $70.00 $80.00 $90.00
Single+Sp $91.45 $99.68 $70.00 $80.00 $90.00
Single+Ch(ren) $84.75 $92.37 $70.00 $80.00 $90.00
Family $111.70 $121.75 $300.00 $400.00 $500.00
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$2500-80% Ded Plan
Single $46.06 $50.20 $70.00 $80.00 $90.00
Single+Sp $99.21 $108.14 $70.00 $80.00 $90.00
Single+Ch(ren) $91.94 $100.21 $70.00 $80.00 $90.00
Family $121.18 $132.08 $300.00 $400.00 $500.00
$30-100% Copay Plan
Single $61.45 $66.98 $70.00 $80.00 $90.00
Single+Sp $132.37 $144.28 $70.00 $80.00 $90.00
Single+Ch(ren) $122.67 $133.71 $70.00 $80.00 $90.00
Family $161.68 $176.23 $300.00 $400.00 $500.00
3.3 Group Size. In the event federal or state law requires community rating for groups of a particular
size and Client’s group size falls within such parameters, upon the effective date of such change
as applied to Client, this Agreement will be terminated and appropriate replacement products and
rates will be offered, in accordance with current law.
3.4 Waiver. In the event state or federal law requires the Client to terminate this Agreement,
HealthPartners may waive some or all of the Rate Differentials, in its sole discretion. [variable,
remove if not applicable - Leave for Government Group]
Additionally, HealthPartners shall waive the Rate Differentials in the event:
a. Client informs HealthPartners of its intent to change to a self-insured arrangement and signs
letter agreement stating this intent 180 calendar days prior to the Plan Year renewal, and
b. Client enters into a mutually agreed upon self-insured arrangement with a HealthPartners
affiliate and concludes a signed administrative services agreement at least 120 calendar days
prior to the Plan Year renewal. [variable, remove if not applicable]
ARTICLE IV
THIRD PARTIES
4.1 Client Due Diligence. Client has received advice and counsel from a third party consultant,
which the Client separately selected and retained, as part of its due diligence in the process of
selecting a carrier for the Plan Years covered in this Agreement. Client acknowledges that such
third party consultant is not an agent of HealthPartners and is an independent advisor not selected
by HealthPartners.. [Variable, remove if no broker/consultant on case]
ARTICLE V
MISCELLANEOUS
5.1 Governing Law, Jurisdiction, and Venue: This Agreement shall be governed by and interpreted
under Minnesota law. Any lawsuit arising directly or indirectly out of this Agreement shall be
brought in a court of competent jurisdiction located in the state of Minnesota.
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Accepted and agreed to, with an Effective Date as noted first above:
HealthPartners, Inc.
_______________________________________
Signature Date
Douglas N. Smith
Senior Vice President, Health Solutions, Sales &
Account Service
City of Lakeville
_______________________________________
Signature Date
_______________________________________
Name
Title