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CITY OF NASHUA

Group Name: ¥
Firm ID: 344217 Ant hem
Effective: 07/01/16 agi ea
HleeCross BlveShie!
REFER TO SUMMARY OF BENEFITS ereeney oy os meron areee ate Br
Benefit: ABN260PY Medicat $20 OV, $250/500 Ded 100% Coin $100 ER :
Drug $5/15/35 RETAIL; $5/30/70 MAIL; UNLIMITED:
BNE182PN Medical $20 OV, $250/500 Ded 100% Coin $100 ER
Drug $5/15/35 RETAIL; $5/30/70 MAIL; UNLIMITED
CGHSA16001 Medical $2000 IN & CON 2XAF 100% IN 70/30% CON Coin INN QOP $2060/4000; QON GOP $4n0N/8000
Drug Ded/Coins
Specific NIA Aggregate: NIA Contract Terms: 24/12 (PAID)
Current State * Current
Administration Assessments Counts
ABN260PY
Individual $48.25 $0.02 535
Couple $48.25 $0.05 2
Parent/Child $48.25 $0.05 144
Family $48.25 $0.07 671
BNE182PN
Individuat $48.25 $0.02 64
Couple $48.25 $0.05 30
Parent/Child $48.25 $0.05 2
Family $48.25 $0.06 28
CGHSA16001
Individual $48.25 $0.03 53
Couple $48.25 $0.05 36
Parent/Child $48.25 $0.05 19
Family $48.25 $0.07 126
[Annual Totals $1,113,417 $4,112 1923 |
l PEPM $48.25 $0.05 1923
[ PMPM $20.03 $0.02 4832 |
Renewal State * Current
Administration** Assessments Counts
ABN260PY
Individual $49.40 $2.21 535
Couple $49.40 $4.42 342
Parent/Child $49.40 $4.42 414
Family $48.40 $5.97 571
BNE182PN
Individual $49.40 $2.04 64
Couple $48.40 $4.08 30
Parent/Child $49.40 $4.08 2
Family $49.40 $5.91 28
CGHSA16001
Individual $48.40 £2.39 59
Couple $49.40 $4.79 36
Parent/Child $49.40 $4.79 19
Family $49.40 $6.46 126
[Annual Totals $1,140,037 $98,742 1923 |
[ PEPM $49.40 $4.28 i923
PMPM $20.51 $1.78 4632 I
[Percent 24% |

Advance Deposit

$560,953 Group's current balance on 7/1/2616 will be applied to satisfy this deposit.

* Actual Assessments for the Vaccine Program are assessed on child covered lives (<19 yrs residing in NH) and will appear on the monthly medical ASO bill. The rate is currently $9.95 and is subject to change.

* ASO admin fees will be billed on a PEPM basis. Anthem ASO Administration fee assumes Rx Rebate sharing (with CON) at 100%.

¥ CON agrees to a three year contract, Anthem will guarantee that the Anthem Administration fee increase for years 2 and 3 will be limited to a max/year of 2.5%.
*“The benefits reflected in this quotation have been adjusted to comply with changes required by the Affordable Care Act beginning in 2014.

PEPM

Commissions Admin Fee $ 55,843.92 $2.42
StopLoss $ - $0.00

Total Commissions $ 55,843.92 $2.42

estimated membership while final commissions are based on actual membership.

The above commissions may vary from final commissions because they are based on

Anthem does not include any standard commissions in administrative retention paid by group.
This quote carrles commissions requested by the Producer of Record as follows:

LB

| have read and agreed to the terms and conditions as outlined in the ASO Pricing Assumptions.

Total # of eligible employees:

City of Nashua_D Multi 051016.xlsm

Blended Aligned ASO Rate Sheet

05/10/2016

Group Name: CITY OF NASHUA

Firm 1D: 344217 Anthem.)
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The proposed services, rates and fees are effective from July 1, 2016 through July 1, 2617.

This contract will be issued in New Hampshire.

Our quote assumes that 1923 employees will be enrolling for medical coverage, with an average member to employees ratio of 2.41.
Quoted rates are subject to review of audited financial statements and Dun & Bradstreet reports prior to final sale.

Anthem reserves the right to amend these rates due to any taxes, fees and assessments prescribed by any statutory, regulatory, or other
legal authority, which may bear directly on the financial consequences of this quote.

This proposal expires [60] days from the date of release of this proposal or on the effective date whichever is sooner.

The health benefit plan(s) reflected in this quote is not considered to be grandfathered under the provisions of the Patient Protection
and Affordable Care Act. Nongrandfathered plans are subject to additional provisions under the Patient Protection and Affordable Care
Act that do not apply to grandfathered plans. For further information, please contact your account representative.

This renewal rate includes changes to the standard medical plan to ensure compliance with the requirements of the federal health care
reform legislation for nongrandfathered plans, including 100 percent coverage of in-network preventive care services.

Anthem Blue Cross and Blue Shield reserves the right to revise this proposal under any of the following circumstances:

(1) a change to the Plan benefits initiated by Employer that results in a substantial change in the services to be provided by Anthem Blue
Cross and Blue Shield;

(2) a change in ownership

(3) a change in the total number of Subscribers or Members resulting in either an increase or decrease of [10%] or more of the number of
Subscribers or Members enrolled for coverage on the date the Administrative Services Fee was last modified;

(4) a change in Employer contribution

(5) a change in nature of Employer’s business resulting in a change in its designated Standard Industrial Classification (“SIC”) code; or

(6) a change in applicable law that resuits in an increase in the cost or amount of administrative services from those currently being provided
by Anthem Blue Cross and Blue Shield. The cost for our standard reporting package is included in the proposed ASO fee. Non-standard
reports may be subject to an additional fee depending on the complexity and frequency requested.

Electronic eligibility or tape feeds must be in a format compatible with our systems.

Anthem Blue Cross and Blue Shield’s proposal assumes claims incurred prior to the effective date are not included unless specifically noted.

A change in the contract period will require a recalculation of fees.

The cost of our standard reporting package is included in the proposed ASO fee. Non-standard reports may be subject to an additional
fee depending on the complexity and frequency requested.

Proposed rates are payable by the invoice due date.

Section 1341 of the Affordable Care Act (ACA or health care reform law) provides that a transitional reinsurance program be established in
each State to help stabilize premiums for coverage in the individual market during the vears 2014 through 2016. ACA Reinsurance Fees in
2014 are estimated to be $5.25 per participant per month. This quote or renewal does not include the ACA Reinsurance Fees, since it is
assumed that the employer will remit payment to HHS directly,

Federal law requires group health plans to cover services for mental health care or substance abuse at the same levels as your medical
services. Generally speaking, this means visit limits and the amounts you pay (such as copayments and deductibles) must be the same for
covered services that treat body or mind. This is called “mental health parity.”

For renewals on or after July 1, 2014, we reviewed your plan benefits to make sure they comply with the mental health parity laws. Certain
visit limits will no longer apply to autism services. No other changes are needed.

BlueCard Access fees are included in paid claims amount. The BlueCard Access Fee is charged at a percentage no greater than 4.79% of the

discount subject to a maximum of $2,000 per claim. Access fees vary depending on the specific arrangement in local plan areas. Fora
complete description of these fees, please consult your ASO Agreement.

City of Nashua_D Multi 051016.xlsm 05/10/2016 ASO PRICING ASSUMPTIONS 20f2

SUMMARY OF THE 1996 NEW HAMPSHIRE LIFE AND HEALTH
INSURANCE GUARANTY ASSOCIATION ACT (RSA 408-B)
AND
NOTICE CONCERNING COVERAGE LIMITATIONS AND EXCLUSIONS

Residents of New Hampshire who purchase life insurance, health insurance, and annuities should know that the
insurance companies licensed in New Hampshire to write these types of insurance are members of the New
Hampshire Life and Health Insurance Guaranty Association. The purpose of this Association is to assure that
policyholders will be protected, within limits, in the unlikely event that a member insurer becomes financially unable
to meet its policy obligations. If this should happen, the Association will assess its other member insurance
companies for the money to pay the covered claims of policyholders who live in New Hampshire and, in some cases,
to keep coverage in force. This protection is not a substitute for consumers’ care in selecting companies that are
well-managed and financially stable, The valuable extra protection provided by these insurers through the Guaranty
Association is not unlimited, however, as noted below.

IMPORTANT DISCLAIMER

The New Hampshire Life and Health Insurance Guaranty Association may not provide coverage for this policy. If
coverage is provided, it may be subject to substantial limitations or exclusions, and require continued residency in
New Hampshire. Other conditions may preclude coverage.

Coverage is NOT provided for your policy or any portion of it that is not guaranteed by the insurer or for which you
have assumed the risk, such as a variable contract sold by prospectus.

Insurance companies or their agents are required by law to give or send you this notice. However, insurance
companies and their agents are prohibited by law from using the existence of the Association to induce you to
purchase any kind of insurance policy.

This information is provided by:

New Hampshire Life and Health Insurance Guaranty Association
47 Hall Street, Suite 2
Concord, NH 03301
(603) 226-9114

New Hampshire Department of Insurance
21 South Fruit Street, Suite 14
Concord, NH 03301
(603) 271-2261

(please turn to next page)

Form PA-8857-1 New Hampshire Printed in U.S.A.

SUMMARY:

The 1996 state law that provides for this safety-net coverage is called the New Hampshire Life and Health Insurance
Guaranty Association Act. Below is a brief summary of this law's coverage, exclusions and limits, This summary
does not cover all provisions of the law and it does not in any way change one's rights or obligations under the Act or
the rights or obligations of the Association.

COVERAGE:

Generally, individuals will be protected by the New Hampshire Life and Health Insurance Guaranty Association if
they live in this state and hold a life or health insurance policy or an annuity contract, or if they are insured under a
group insurance contract, issued by a member insurer. The beneficiaries, assignees or payees of insured persons are
protected as well, even if they live in another state.

Coverage provided under this Act may be different from coverage provided prior to 1996, as coverage is determined
by the governing Act in effect on the date that the Association becomes obligated.

EXCLUSIONS FROM COVERAGE:
Persons holding such policies or contracts are NOT protected by this Association if:

they are not residents of the state of New Hampshire, except under certain very specific circumstances;
they are eligible for protection under the laws of another state; or

e their policy was issued by a nonprofit hospital or medical service organization, an HMO, a fraternal benefit
society, a mandatory state pooling plan, a mutual assessment company or any entity that operates on an
assessment basis, an insurance exchange, or any entity similar to any of the above.

The Association also does NOT provide coverage for:

® any policy or portion of a policy or contract not guaranteed by the insurer or under which the risk is borne by the
policy holder or contract holder;

e any policy or contract of reinsurance, unless assumption certificates have been issued;

e interest rate guarantees that exceed certain statutory limitations;

e any plan or program of an employer, association, or similar entity to provide life, health, or annuity benefits to its
employees or members to the extent that the plan or program is self-funded or uninsured, including, but not
limited to, benefits payable by an employer, association, or similar entity;
dividends, experience rating credits, or fees for services in connection with an insurance policy;
any policy or contract issued in this state by an insurer at a time when it was not licensed or authorized to do
business in New Hampshire;

e any unallocated annuity contract issued to an employee benefit plan protected under the federal Pension Benefit
Guaranty Corporation;

e any portion of any unallocated annuity contract which is not issued to or in connection with a specific employee,
union, or association of natural persons benefit plan or a government lottery; or

¢ any portion of a policy or contract to the extent that the required assessments are preempted by federal or state
law.

LIMITS ON AMOUNT OF COVERAGE

The Act also limits the amount the Association is obligated to pay. The Association cannot pay more than what the
insurance company would owe under a policy or contract.

With respect to any one life, the Association will pay a maximum of $300,000 - no matter how many policies and

contracts there were with the same company, even if they provided different types of coverages. Within this overall
$300,000 limit, the Association will not pay more than $100,000 in cash surrender values, $100,000 in health

Form PA-8857-1 New Hampshire Printed in U.S.A.

insurance benefits, $300,000 in long-term care benefits, $100,000 in present value of annuities, or $300,000 in life
insurance death benefits.

With respect to any one contract holder of an unallocated annuity contract, not including a governmental retirement
plan established under Section 401, 403(b) or 457 of the U.S. Internal Revenue Code, the Association will pay a
maximum of $5,000,000 in benefits, irrespective of the number of such contracts held by that contract holder.

ADDITIONAL INFORMATION:

Policyholders should contact the New Hampshire Insurance Department with questions they may have with regard to
concerns about their rights under the Act and procedures for filing a complaint to allege a violation of the Act.

Policyholders may contact the New Hampshire Insurance Department for sources of information about the financial
condition of insurers.

Form PA-8857-1 New Hampshire Printed in U.S.A.

HARVARD PILGRIM HEALTH CARE, INC.

PURCHASER SERVICE AGREEMENT

This Agreement, made effective and entered into this 1° day of July, 2002_(Effective
Date) by and between CITY OF NASHUA (hereinafter referred to as “Purchaser*), and
HARVARD PILGRIM HEALTH CARE, INC., a corporation organized under the laws of the .
Commonwealth of Massachusetts (hereinafter "HPHC"), - -

WHEREAS, Purchaser has adopted one or more self-insured health care plan{s)
(hereafter the "Plan(s)") for eligible employees, retirees, and the dependents thereof under ~
which such persons are enittled to certain health service benefits (hereafter "Covered ,

Services"); ,

WHEREAS, Purchaser desires to purchase certain administrative and provider
contracting services for operation of its Plan from HPHC as set forth below: “4

WHEREAS, HPHC desires to provide such administrative and provider contracting
services for Purchaser’s Plan; and ,

‘ WHEREAS, a copy of the Plan instrument(s) is/are attached hereto as Attachment EL

NOW THEREFORE, in consideration of the promises and mutual covenanis contained
herein the receipt and sufficiency of which are hereby acknowledged, it is hereby agreed by

and between the parties as follows:

|. SERVICES AND COMPENSATION

14 Administrative Services. HPHC shall perform for Purchaser the administrative
services set forth in Attachment A, “Administrative Services" attached hereto and incorporated
herein by reference (hereafter “Services”), for the operation of the Plan. HPHC shall perform
these Services in accordance with the reasonable exercise of its business judgment and all
applicable statutory and regulatory requirements, Purchaser shall at all times retain ultimate
control over the assets and operations of the Plan and final responsibility for the obligations of
the Plan imposed by law. HPHC shall perform the functions described in this Agreement in
accordance with policies, directives, and controlling documents of the Plan.

1.2 Provider Contracting Services. To the extent any Plan provides for use of
contracting providers by Members, then through contractual arrangements (“Provider
Contracting Services"), HPHC shall establish a network of physicians, hospitals and other
health care providers or entities, contracting with such providers for the provision of Covered
Services from health care providers ("Contracting Providers") to Members. A current list of
Contracting Providers will be provided to Purchaser by HPHC from time to time as required,
either in print or electronic media. Purchaser shall compensate Coniracting Providers for
Covered Services in accordance with the Contracting Provider Compensation Provisions
attached hereto as Attachment B, and incorporated herein by reference.

FORM#PSO1 08/17/2002

1.3 Approval of Materials. Purchaser retains the right to review printed materials,
which are distributed by HPHC to Members of Purchaser's Plan. Prior to distribution HPHC
shall provide Purchaser or its Designee sample copies of the printed materials. HPHC shall
distribute such materials to Purchaser’s Members unless Purchaser or its Designee instructs
HPHC to delay or cancel such distribution within a reasonable period of time prior to
distribution. See Attachment A for the provision of non-standard printed materials. This
provision does not apply to patieni/clinician communications or other written n communications

intended for a specific individual.

1.4 Providers as Third Party Beneficiaries. Purchaser acknowledges and agrees
that Contracting Providers shall be intended third party beneficiaries of Purchaser's obligation
to pay such providers under Section 2.2.

1.5 HPHC Compensation. Purchaser shall pay HPHC a monthly fee for the
Services HPHC provides, in the amounts and manner specified in Attachment C, which
atiachment is incorporated herein by reference. It is specifically provided that HPHC may
amend the Service fees payable to HPHC under Attachment C, and HPHC shall use
reasonable efforts to provide advance written notice of such proposed Service fee amendment
to Purchaser at least sixty (60) days prior to an anniversary date of this Agreement. In the
event that HPHC fails to provide notice to Purchaser in a timely manner, HPHC may propose
an amendment to the Service fees payable to HPHC by submitting written notice to Purchaser
which, upon acceptance by Purchaser, shall become effective on the first day of the month
following sixty (60) days written notice, but in no event shall HPHC amend its Service fees
more than one time in each twelve (12) month period without the agreement of both parties. If
Purchaser fails to accept such proposed-amendment as provided above within thirty (30) days
from receipt of notice of HPHC’s proposed Service fee amendment, or if some other Service
fee is not agreed to by both parties, HPHC may terrninate this Agreement upon sixty (60) days

prior written notice.

1.6 Listof Members, Purchaser will provide HPHC with.a list of Members who are
eligible and have elected to receive benefits under the Plan. The list shall include ail
appropriate demographic data required for HPHC to carry out its obligations under this
Agreement. HPHC may rely upon such list in performing its duties hereunder. Purchaser, or
its designee, will notify HPHC of any additions, changes, deletions or modifications to the list of
Members on a monthly, or more frequent, basis. Purchaser may add Members retroactively for
up to 180 days, and may terminate Members retroactively for up to 60 days.

1.7 Eligibility. Purchaser has established the eligibility requirements for
participation of Members in the Plan. Purchaser shall notify HPHC in writing of any changes in
eligibility requirements. If the provisions of any state or federal law or regulation are changed

which aifect the eligibility of or the determination of eligibility of persons participating in this
Plan, Purchaser shall notify HPHC as described above, and HPHC and Purchaser shall make

all changes necessary to accomplish the required change.
1.8 Access to Purchaser Records.

(i) All business and health services records relating to the operation of the
Plan, including but not limited to, all books of account, enrollment records, and general

FORM#PSO1 08/17/2002
2

administrative records shall'be and remain the sole property of Purchaser. In addition, all
information generated under and/or contained in HPHC’s information system pertaining to the
Plan, except for Member identifiable medical records and other privileged information, shall
also be and remain the property of Purchaser. HPHC shall assist in establishing, maintaining
and carrying out procedures for the keeping and preservation of the Plan’s books and reéords,
including providing for the manner and time of their preservation in accordance with ail
applicable laws. HPHC shall use reasonable efforts to protect the confidentiality of the records
of the Pian. In this connection, medical records and other privileged information regarding
Members will not be disclosed by HPHC except (a) with the consent of the Member or of the
Member's parent or guardian if the Member is a minor person, unless otherwise required by
law, (b) pursuant to a court order, (c) if allowed by applicable law, as necessary for the efficient
operation of the Plan, or (d) when required by applicable law. A confidentiality statement
signed by Purchaser and/or its Designee may be required. HPHC’s Confidentiality Guidelines
shall be applicable to this Agreement. See Attachment H incorporated herein by reference.

. (ii) Notwithstanding the foregoing, unless prohibited by law or inconsistent with
National Committee on Quality Assurance (NCQA) standards, HPHC shall make available to
Purchasers Designee, all confidential and non-confidential claims data necessary for the
identification, reporting and adjudication of claims under the requirements of Purchaser's stop-
loss policy, without requiring a court order. All charges for providing such data shail be
specified in Attachment C. Purchaser shail indemnify and hold harmless HPHC from any and
all costs or claims associated with the release of such information (including data released

upon termination as provided herein} to Purchaser.

(iii) Upon termination of this Agreement for any reason, HPHC shall, as soon
as practicable, but no later than ninety (90) days from the date of termination, deliver in usable
form to Purchaser or its Designee appropriate and reasonable claims data pertaining to the
Plan for Purchaser's Members, on electronic media, as mutually agreed upon, in HPHC's
possession. HPHC may charge Purchaser a fee for the preparation and transfer of these
records on electronic media. Data that is collected subsequent to the termination date shall be
delivered to Purchaseror its Designee at thirty (30) day intervals, and the cost of the
preparation and transfer of this information shall be included as a preparation and transfer fee.

HPHC may retain copies of information reasonably necessary for its operation. HPHC shall,
after termination of this Agreement for any reason, continue to provide Purchaser's Designee
in accordance with Sections 1.8 (i), (ii} and (iii), confidential and non-confidential claims data
necessary for the Identification, reporting and adjudication of claims for as long as the terms of
Purchaser's stop-loss policy are applicable to this Agreement and remain in effect. A copy of
Purchaser's stop-loss policy, if applicable to this Agreement, is attached hereto as Attachment

G.

1.9 Cooperation. Purchaser shall cooperate with HPHC in the performance of its
Services hereunder and HPHC shall not be liable for any breach of obligations of this
Agreement caused, in whole or in part, by the lack of cooperation or breach of obligations by
the Purchaser or lack of cooperation by Members. HPHC shall cooperate with Purchaser and
its Designee in providing all data, reports, and other services described in this Agreement,
subject to the terms of this Agreement relating to the provision of Member identifiable
confidential and/or privileged information including medical records. In accordance with
Attachment A, HPHC shail assist as requested and provide such information to Purchaser or
its Designee or to potential stop loss carriers as is necessary to obtain stop loss quotations
and policies. A charge will be made for the provision of any information, however, that Is not
specifically designated in Attachment A as a Covered Service. Purchaser shail assist HPHC,

FORM#PS01 , 05/17/2002
3

as requested, in obiaining executed confidentiality agreements from any entity other than
Purchaser which Purchaser has requested receive any data HPHC deems confidential and/or
privileged. Both parties agree to cooperate with each other as necessary to assure compliance
with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”).

1.10 independent Contractors. Except as otherwise specifically provided herein, the
relationship between Purchaser and HPHC and between HPHC and Contracting Providers is
an independent contractor relationship. Contracting Providers are not employees or agents of
HPHC and neither HPHC nor any employee of HPHC fs an employee or agent of Contracting
Providers of care. HPHC is not an employee or agent of Purchaser and will perform only those
functions for Purchaser as set forth in this Agreement. Neither HPHC nor Purchaser will hoid
HPHC out to third parties as having any authority from Purchaser not granted by this
Agreement. HPHC is not responsible and shall not be liable for any claims which may arise
.from the provision of medical and/or hospital services to Members by Participating Providers.

1.44 Provider-Patient Relationship. Contracting Providers of care maintain the
‘physiciar/ hospital-patient relationship with Members and are solely responsible to Members
for all services they provide.

1.42 Hold Harmless. HPHC agrees to indemnify, defend and hold harmless
Purchaser and its employees, elected officials, agents, contractors, Designee, past and
present, from and against any and all damages, penalties, costs, claims, suits, demands,
causes of action or expenses {including reasonable attorneys’ fees) which may be imposed
upon, or incurred as a result of, or arising from, or in any way connected with, any gross
negligence or wiilful act or omission, fraud or criminal conduct of HPHG, its officers, directors,
employees or agents, past and present. Provided, however, nothing herein makes HPHC
liable for any benefit that would otherwise be payable under the Plan.

Purchaser agrees to indemnify, defend and hold harmless HPHC and their respective
subsidiaries and affiliates; and their respective employees, directors, agents, contractors,
officers, and designees, past and present, from and against any and all damages, penaities,
costs, claims, suit, demands, causes of action or expenses (including reasonable attarneys’
fees) which may be imposed upon, or incurred as a result of, or arising from, or in any way
connected with, any gross negligence or willful act or omission, fraud or criminal conduct of
Purchaser, its officers, directors, employees or agents, past and present.

1.13 Legal Defense. Notwithstanding any provision of this Agreement to the
contrary, the defense, including legal fees and costs, together with the amount of any
judgment, of any legal action arising out of a claim for benefits under the Plan, shall be the
responsibility of the Purchaser, and shall not be an obligation of HPHC. HPHC shall, however,
- cooperate with Purchaser by furnishing such material or information as it has available in

connection with the defense of any such action.

1.14 Expenses, HPHC will not be considered the insurer, guarantor or underwriter of
the liability of the Purchaser to provide Covered Services to Members. Purchaser will be
responsible for all expenses incident to the operation of the Plan or related to the provision of
Covered Services, except as may be specifically assumed by HPHC under this Agreement.
Purchaser shall make funds available to HPHC, for payment of Covered Services, in
accordance with Attachment D, “Funding of Covered Services,” attached hereto and
incorporated by reference.

FORM#PSOt 05/17/2002

1.15 Standard and Character of Performance. HPHC shall use customary and
reasonable care and proper diligence in the performance of Services under this Agreement. It
is understood and agreed by the parties that the term "customary and reasonable care and
proper diligence" does not make HPHC a guarantor of the correctness of all claims payments
and other services performed under this Agreement, but refers to the usual business practice
standards and conduct in such business.

1.16 Incorrect Payments. HPHC agrées to investigate all questionable claims or
payments referred to it by Purchaser, to report to Purchaser the results of such investigation,
and to attempt to collect on behalf of the Purchaser any payments improperly paid. if any
payment is made hereunder to or for an ineligible employee, retiree and/or dependent, or if itis
determined that more or less than the correct amount has been paid by HPHC or that HPHC
has made an incorrect payment because a Contracting Provider has billed the incorrect.
amount, HPHC shall attempt to recover the payment made to or for the ineligible person or the
amount of the overpayment made to or for any eligible person, or will adjust the underpayment,
but HPHC shall not be required to initiate court proceedings to recover any incorrect payment.
If HPHC is unsuccessful in its attempts to recover any improper payment, it shall so notify
Purchaser in order that Purchaser may take such actions as it shall deem appropriate to
collect such amount. Purchaser agrees that HPHC may contract with a third party to seek
recovery and may pay commercially reasonable fees for such service, which will be deducted
from any recovery made on behalf of the Purchaser. In the event the error was a result of
HPHC’s gross negligence or willful misconduct in claims processing and payment, HPHC shall
indemnity Purchaser. If HRHC subcontracts with an independent contracior to pursue recovery
of any overpayments, the independent contractor may retain the percentage of the recovery
that is specified in its contract with HPHC, and HPHC will credit to the Purchaser the balance

of such recovery.

1.17 Reliance on Gommunications. In all matters pertaining to the performance of
Services under this Agreement, HPHC, when it acts in good falih, may rely upon any notice,
resolution, instruction, direction, order, certificate, opinton, letter, telegram or other document
received by it from Purchaser. If the Plan is amended, HPHC shall not be required to act in
accordance with any amendment uniil it receives written notice thereof and until such
amendment is approved by any insurance carrier providing excess, or stop-loss insurance or .

reinsurance on behalf of the Plan.

1.18 Proprietary Information. Purchaser acknowledges that HPHC, in providing
Services under this Agreement, may need to divulge to and provide Purchaser or its Designee
with confidential proprietary plans, programs, formulae, methods and other products and
information ("Proprietary Material") relating to the business services and activities of HPHC or
its contractors, including Proprietary Material developed in the course of providing Services
hereunder. Purchaser agrees that, during the term of the Agreement and thereafter,
Purchaser and its Designee shall consider all information provided by HPHC to Purchaser and
its Designee Proprietary Material unless clearly marked as non-proprietary, and that
Proprietary Material shall remain the property of HPHC or its contractors and Purchaser shall
maintain the confideniiality of such Proprietary Material and shall not use, divulge, furnish or
make accessible such Proprietary Material to anyone other than is necessary for the Plan's

operations.

1.19 Other Obligations. HPHC agrees that it shall perform all Services described in
FORM#PSO1 08/17/2002

5