Exhibit 10.2
Minimum Premium Administrative Services Agreement
Amended And Restated Effective January 1, 2005
By And Between
ADMINISTAFF OF TEXAS, INC.
And
UNITED HEALTHCARE INSURANCE COMPANY
Hartford, Connecticut
*** indicates material has been omitted pursuant to a Confidential Treatment
Request filed with the Securities and Exchange Commission. A complete copy of
this agreement has been filed separately with the Securities and Exchange
Commission.

 

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Minimum Premium Administrative Services Agreement
Table of Contents
Section 1: Definitions
Section 2: Performance under the Policies
Section 3: Additional Services
Section 4: Maintenance of Records and Reporting to the Employer
Section 5: Information Access, Audit and Confidentiality
Section 6: Additional Duties of the Employer
Section 7: Disputes and Indemnification
Section 8: Taxes and Assessments
Section 9: Effective Date and Agreement Period
Section 10: Service Fees
Section 11: Termination of Agreement
Section 12: Costs of Collection
Section 13: Assignment
Section 14: Choice of Law
Section 15: Entire Agreement, Amendment and Waiver
Section 16: Notices
Exhibit A Performance Standards
Exhibit B Additional Services [RESERVED]
Exhibit C Reporting by the Company
Exhibit D Third Party Disclosure Agreement
Exhibit E Eligibility Reporting by the Employer
Exhibit F Alternate Vendors
      

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Minimum Premium Administrative Services Agreement
Amended And Restated Effective January 1, 2005
By And Between
ADMINISTAFF OF TEXAS, INC.
And
UNITED HEALTHCARE INSURANCE COMPANY
Hartford, Connecticut
WHEREAS, the Employer is a “professional employer organization” that establishes
co-employment relationships with the employees of its Clients; and
WHEREAS, the Employer has established an employee welfare plan for certain
employees, former employees and their dependents of the Employer; and
WHEREAS, the Employer desires the Company to furnish insurance, as well as
certain administrative services with respect to the Plan; and
WHEREAS, on or about June 25, 2002, the Employer and the Company executed the
Minimum Premium Administrative Services Agreement effective January 1, 2002
(“Original Agreement”), and on or about December 3, 2004, the Employer and the
Company executed an amendment to the Original Agreement; and
WHEREAS, the Employer and the Company now wish to further amend and restate the
Original Agreement, as amended, in its entirety effective January 1, 2005;
NOW THEREFORE, in consideration of the mutual promises contained in the
Agreement, the Employer and the Company agree as follows:
Section 1: Definitions

(a)   “Agreement” means this Minimum Premium Administrative Services Agreement,
Amended and Restated Effective January

      

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    1, 2005, including any attached Exhibits, as amended from time to time.  
(b)   “Check” means the instrument of payment issued by the Company for the
payment of Health Benefits pursuant to the Agreement whether such instrument is
a draft, a check, or an electronic funds transfer or similar instrument.   (c)  
“Claims Account” has the meaning assigned to it in section 1(e) of the MP
Financial Agreement.   (d)   “Client” means any organization that has a client
service agreement or other similar agreement with the Employer.   (e)  
“Company” means United HealthCare Insurance Company.   (f)   “Confidential
Participant Information” has the meaning assigned to it in section 5(a)(i) of
the Agreement.   (g)   “Effective Date” has the meaning assigned to it in
section 9 of the Agreement.   (h)   “Employee” means an employee or former
employee of the Employer or of a member of Employer’s controlled group as
defined in Section 414(b) and (c) of the Internal Revenue Code of 1986, as
amended, which is a participating employer under the Plan who is covered under
the Plan, and a “qualified beneficiary” who is covered under the Plan pursuant
to Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended from time to time (“COBRA”), except that members of a family unit who
elect COBRA coverage as a single family unit shall be considered a single
“Employee.”   (i)   “Employer” means Administaff of Texas, Inc.   (j)   “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time.   (k)   “Health Benefits” or “Benefits” has the meaning assigned to it
under the MP Financial Agreement.

      

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(l)   “Incurred” when referring to Health Benefits means that the Company has
become liable for payment of such Health Benefits under a Policy.   (m)  
“Investment Grade” has the meaning assigned to it under the MP Financial
Agreement.   (n)   “MP Arrangement” means the Minimum Premium Arrangement as
defined in the MP Financial Agreement.   (o)   “MP Financial Agreement” means
the Minimum Premium Financial Agreement between the Employer and the Company, as
amended from time to time.   (p)   “Non-MP Policy” means a group medical
insurance policy or group contract issued by the Company (or another member of
the Company’s controlled group) to the Employer that is identified as a Non-MP
Policy in the MP Financial Agreement. “Non-MP Policies” refers collectively to
two or more such Policies, group contracts or both.   (q)   “Paid” when
referring to Health Benefits, means that a Check for payment of such Health
Benefits has been ***.   (r)   “Participant” means an Employee or his or her
dependent who is covered under the Plan and who has been identified by the
Employer as such pursuant to section 6(a) of the Agreement.   (s)   “Plan” means
the employee health benefit plan maintained by the Employer that is insured by a
Policy, but only to the extent benefits under the employee benefit plan are
subject to the MP Financial Agreement. Any benefits that are insured by a Policy
but not subject to the MP Financial Agreement are excluded from the term “Plan”.
  (t)   “Policy” means a group health insurance policy issued by the Company to
the Employer that is identified as a Policy in the MP Financial Agreement.
“Policies” refers collectively to two or more such policies.   (u)  
“Proprietary Business Information” has the meaning assigned to it in section
5(d)(iii) of the Agreement.

      

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(v)   “Security Deposit” has the meaning assigned to it in the Security Deposit
Agreement.   (w)   “Security Deposit Agreement” means the Security Deposit
Agreement between the Company and the Employer, as amended from time to time.  
(x)   “Scope” has the meaning assigned to it in section 5(b)(i) and 5(c)(i), as
appropriate, of the Agreement.   (y)   “Third Party Disclosure Agreement” is the
agreement attached as Exhibit D of the Agreement.

Section 2: Performance under the Policies

(a)   The Company shall perform each of its duties and obligations under each
Policy in accordance with such Policy’s terms and all applicable laws and
regulations. To the extent that, pursuant to a Policy, the Company is
responsible for the performance of any duty imposed on the Employer and/or the
Plan under applicable laws and regulations, including but not limited to ERISA
and the Health Insurance Portability and Accountability Act, the Company shall
perform such duty in accordance with such laws and regulations.   (b)   The
Employer hereby and under the Policies designates the Company, pursuant to a
procedure set forth in the Plan, as the “fiduciary” as defined by ERISA for the
purpose of (i) reviewing, making decisions on and paying claims for Health
Benefits and (ii) reviewing and making decisions on denials of such Health
Benefits. The Company shall serve as the final review committee under the Plan
to determine for all parties all questions relating to the payment of Health
Benefits and shall have the discretion, authority, and responsibility to
construe and interpret the terms of the Plan and to make factual determinations.
  (c)   The rate of accuracy of Health Benefit payments by the Company under
each Policy and each Non-MP Policy shall be consistent with the accuracy rate
that a reasonably prudent claims administrator would be expected to achieve
under similar circumstances. The amounts payable by the Employer under the
Agreement, the MP Financial Agreement and the Policies

      

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    and Non-MP Policies shall be subject to the modifications specified in the
performance standards set out in Exhibit A.   (d)   The Company shall provide
services to recover Overpayments, as defined below, paid under the Policies and
Plan benefits that were paid under the Policies and are recoverable by the Plan
because payment was or should have been made by a third party (other than in
connection with coordination of benefits, Medicare, or other Overpayments) for
the same expense.

  (i)   The Company engages affiliated and unaffiliated vendors to assist in the
recovery of Overpayments and third party claims made with respect to the
Policies and Non-MP Policies. The fees charged by both affiliated and
unaffiliated vendors are netted against any recoveries. If the fee charged by
any affiliated vendor exceeds *** of the recovery, the Company shall notify the
Employer within 30 calendar days of the effective date of such charge. The
Employer shall not be responsible for the cost of recovering any Overpayments
made by the Company due to the Company’s *** as determined by mutual agreement
of the parties or by a court or other tribunal.     (ii)   The Employer
delegates to the Company the discretion and authority to develop and use
standards and procedures for any recovery under this section, including but not
limited to, whether or not to seek recovery, what steps to take if the Company
decides to seek recovery, and under what circumstances to compromise a claim or
settle for less than the full amount of the claim. The Employer recognizes that
use of these standards and procedures may not result in recovery or in full
recovery for any particular case. The Company will not pursue any recovery if
any applicable law does not permit it, or, if recovery would be impractical. The
Company may choose to initiate litigation to recover payments, but it shall have
no obligation to pursue litigation. If the Company initiates litigation, the
Employer shall cooperate with the Company in the litigation.     (iii)   If the
Agreement terminates, or, if the Company’s recovery services terminate, the
Company may, but is not required to, continue to recover any Overpayments. The
Company shall include Overpayments recoveries in the Termination Review (as
defined in Exhibit A to the MP Financial

      

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      Agreement) in the manner reflected in Exhibit A to the MP Financial
Agreement, and the Company shall otherwise be authorized to retain all
Overpayments recoveries obtained after the Claims Recognition Date (as defined
in the MP Financial Agreement).     (iv)   The Employer will not engage any
entity except the Company to provide these recovery services without the
Company’s prior approval.     (v)   For purposes of the Agreement,
“Overpayments” shall mean payments that exceed the amount payable under a policy
(for example, because of a provider billing error, retroactive or inaccurate
eligibility information, coordination of benefits, Medicare disputes, or missing
information), and other overcharges made by providers, including hospitals,
discovered during the course of a hospital bill audit.

(e)   Claims Incurred prior to termination of any Policy shall be processed in
accordance with such Policy.

Section 3: Additional Services
The Company shall provide to the Employer those additional services identified
in Exhibit B. Fees for those services are specified in the Exhibit.
Section 4: Maintenance of Records and Reporting to the Employer

(a)   The Company will maintain all claims records for the period required by
ERISA. Following termination of the Agreement, the Company will supply the
Employer with historical information in the Company’s possession reasonably
needed by the Employer to administer the Plan. In addition, during the year
following termination, the Employer may request and the Company shall provide,
at its prevailing charge, the following information:

  (i)   As to each Policy and Non-MP Policy that terminates at any date other
than December 31, the following reports for the relevant period of the calendar
year in which such Policy or Non-MP Policy terminates:

      

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  (A)   Year-to-date claims analysis for such year reflecting, for each
Participant, total charges, deductibles, co-insurance and out-of-pocket maximum
charges; and     (B)   Per Participant, year-to-date report regarding relevant
annual benefit maximums.

  (ii)   For each Policy and Non-MP Policy:

  (A)   Per Participant, lifetime maximum report and     (B)   Per Participant,
lifetime maximum report regarding, as applicable, specific medical conditions,
treatments, therapies, services and/or benefits.

(b)   The Company shall make the necessary reporting to the United States
Internal Revenue Service regarding payments that are made by the Company on
behalf of the Plan to health care providers pursuant to the Agreement.   (c)  
The Company shall provide the Employer with information, as required by ERISA,
in a manner that enables the Employer to comply with ERISA’s annual reporting
requirements.   (d)   The Company shall provide to the Employer the reports
identified in Exhibit C to the Agreement.   (e)   The Company receives payments
from prescription drug manufacturers in connection with pharmacy benefit
services provided to its customers, including the Employer. The Company shall
promptly notify the Employer if the average payment per member per month
(determined annually) attributable to the Policies and Non-MP Policies exceeds
by more than *** per member per month the average payment for all of the
Company’s *** business. The Company shall notify the Employer of such excess, if
any, for 2004 by the deadline for the Quarterly Review for the first Quarter of
2005, and annually thereafter.

Section 5: Information Access, Audit and Confidentiality

(a)   Employer’s Access to Information. During the term of the Agreement, if in
order to administer the Plan, the Employer reasonably requests information, for
an auditor or otherwise, that

      

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    the Company has in its possession, the Company will provide access to that
information, if legally permissible, as long as the information relates to the
Company’s services under the Agreement, and the Employer provides (60) sixty
calendar days prior notice of the need for the information.

  (i)   The Employer hereby represents that any request by the Employer for
disclosure of any information that contains personally identifiable information
about a Participant (“Confidential Participant Information”) shall constitute
the Employer’s representation to the Company that the Participant has authorized
disclosure to the Employer or the Employer otherwise has the legal authority to
have access to the information. The Employer must also represent at the time of
the disclosure request that it has a reasonable procedure in place for handling
Confidential Participant Information as required by any then current law.    
(ii)   The Company will provide information only while the Agreement is in
effect, unless the Employer demonstrates that the information is required for
Plan purposes and such disclosure is permitted by law. The Employer shall pay
the Company’s reasonable expenses in providing information after the termination
of the Agreement.     (iii)   The Company will also provide reasonable access to
information to an entity providing services to the Employer, such as an auditor
or other consultant, upon request. Before the Company gives access to
Confidential Participant Information to that entity, that entity will be
required to sign a Third Party Disclosure Agreement, substantially in the form
of Exhibit D.

(b)   Audits by the Employer. During the term of the Agreement, the Employer or
a mutually agreeable entity may audit the Company to determine whether it is
fulfilling its obligations under the Agreement.

  (i)   The Employer shall advise the Company at least sixty (60) calendar days
in advance of its intent to audit. The place, time, type, duration, and
frequency of all audits must be reasonable and agreed to by the Company, which
consent

      

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      shall not be unreasonably withheld. All audits shall be limited to
information relating to the calendar year in which the audit is conducted and/or
the immediately preceding calendar year. With respect to the Company’s
transaction processing services, the audit scope and methodology shall be
consistent with generally acceptable auditing standards, including a
statistically valid random sample or other acceptable audit technique as
reasonably approved by the Company (for purposes of this subsection (b),
“Scope”).     (ii)   The Employer will pay any expenses that the Employer
incurs, and will be charged a reasonable additional fee, determined by the
Company, for more than one audit every twelve (12) months, for any on-site audit
visit that is not completed within five (5) business days, or for sample sizes
exceeding the Scope set forth above. The Employer will incur a reasonable per
claim charge for samples in excess of the Scope, and a $1000 charge for each day
an audit exceeds the five (5) day on-site review limit per year. The additional
fees cover the additional resources, facility fees, and other incremental costs
associated with an audit that exceeds the Scope. The Employer will also pay any
unanticipated reasonable expenses the Company incurs and all expenses incurred
by the Company on any audit initiated after a termination notice is provided but
before the effective date of the termination of the Agreement.     (iii)   The
Employer will provide the Company with a copy of any final audit report.

(c)   Audits by the Company. During the term of the Agreement, the Company may
audit the Employer to determine whether the Employer is fulfilling its
obligations under the Agreement.

  (i)   The Company shall advise the Employer at least sixty (60) calendar days
in advance of its intent to audit. The place, time, type, duration, and
frequency of all audits must be reasonable and agreed to by the Employer, which
consent shall not be unreasonably withheld. All audits shall be limited to
information relating to the calendar year in which the audit is conducted and/or
the immediately preceding calendar year. The audit scope and methodology shall
be

      

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      consistent with generally acceptable auditing standards, including a
statistically valid random sample or other acceptable audit techniques as
reasonably approved by the Employer (for purposes of this subsection (c),
“Scope”). The Company will bear any expenses that it incurs in conducting an
audit. The Company shall provide the Employer with a copy of any final audit
report.     (ii)   The Company shall pay any expenses that the Company incurs,
and will be charged a reasonable additional fee, determined by the Employer, for
more that one audit every twelve (12) months, for any on-site audit visit that
is not completed within five (5) business days, or for sample sizes exceeding
the Scope set forth above. The Company shall incur a $1000 charge for each day
an audit exceeds the five (5) day on-site review limit per year. The Company
shall incur a reasonable per Client charge for samples in access of the Scope.
The additional fees cover the additional resources, facility fees, and other
incremental costs associated with an audit that exceeds the Scope. The Company
will also pay any unanticipated reasonable expenses the Employer incurs and all
expenses incurred by the Employer on any audit initiated after a termination
notice is provided but before the effective date of the termination of the
Agreement.

(d)   Confidentiality. Except as otherwise provided herein or required by law,
Proprietary Business Information and Confidential Participant Information will
be the used solely to administer the Plan or to perform under the Agreement.

  (i)   Except as provided in paragraph (ii) of this subsection (d),
Confidential Participant Information and Proprietary Business Information will
not be disclosed to any person or entity other than either party’s employees,
subcontractors, or representatives needing access to such information to
administer the Plan or perform under the Agreement.     (ii)   The Company or a
related entity may the use Confidential Participant Information for research,
creating comparative databases, statistical analysis, or other studies, provided
that the information is de-identified or the use of the Confidential Participant
Information is otherwise in

      

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      accordance with then current law. The Company will maintain the
confidentiality of such information as it relates to or could be identified with
any individual Participant, provider, the Employer, any Client or the Employer’s
or Client’s business. Such research, databases, analyses, and studies are
considered by the Company to be Proprietary Business Information as defined in
the following clause.     (iii)   “Proprietary Business Information” means
information about the business of the Company or the Employer that is
confidential, proprietary, trade secret or is not readily available to the
general public, or information that has been designated by either of the parties
as confidential or proprietary.

(e)   Publicity. The Company and the Employer acknowledge the important legal
and economic interests each party has in the protection of its respective
trademarks and tradenames, as well as in the accuracy and appropriateness of
information released to the public concerning such party. Accordingly, each
party shall obtain the consent of the other for the use of the other party’s
name as follows:

  (i)   With respect to any media release, advertising campaign and other
similar public announcement by one party referring to the other party (“Media
Release”), the disclosing party shall provide to the other party a Disclosure
Notice (as defined below).

  (A)   An Authorized Person shall provide written objections or written
approval on behalf of the non-disclosing party within 24 hours. For purposes of
this subsection, with respect to the Company, its General Counsel and President,
Small Business Operations, are both Authorized Persons. With respect to the
Employer, the Vice President, Benefits, and the General Counsel are Authorized
Persons. By written notice to the other party, either party may change its
Authorized Persons.     (B)   In no event may a disclosing party publish (or
cause to be published) a Media Release without the prior

      

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      written approval of an Authorized Person of the other party.

  (ii)   With respect to a filing or written communication with a state
department of insurance or department of health, or other similar regulatory
body, by one party referring to the other party (“Special Regulatory Filing”),
the disclosing party shall provide to the other a Disclosure Notice. The
disclosing party may file or publish the Special Regulatory Filing if the other
party does not object in writing within 5 business days of the Disclosure
Notice. In no event may a party file or publish a Special Regulatory Filing if
the other party provides a timely written objection unless the stated objection
has been resolved by the parties or unless required by law or pursuant to a
valid court order.     (iii)   With respect to all other regulatory filings,
public announcements and public disclosures referring to the other party, other
than such releases, announcements, disclosures, employee enrollment and
communication materials as are used on a regular basis in the ordinary course of
a party’s business, (“Other Disclosures”) a disclosing party shall use its best
efforts to provide to the other a Disclosure Notice at least 5 business days in
advance of the proposed announcement or disclosure date of such Other
Disclosure. In no event may a party file or publish Other Disclosures if the
other party provides a timely written objection unless the stated objection has
been resolved by the parties unless required by law or pursuant to a valid court
order.

    “Disclosure Notice” means a written statement identifying and attaching the
relevant portion of the proposed disclosure, indicating the proposed disclosure
date and time, and identifying to whom any objections should be delivered.

Section 6: Additional Duties of the Employer

(a)   The Employer shall provide the following information and reports to the
Company -

  (i)   The Employer will identify to the Company those Employees, dependents
and/or other persons eligible to

      

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      be Participants. In processing claims and providing other services under
the Agreement, the Company will be entitled to rely on the most current
information in its possession regarding Participant eligibility. The Employer
shall report eligibility to the Company as provided in Exhibit E of the
Agreement, and eligibility information will be effective in claims processing as
described in such Exhibit.     (ii)   The Employer shall provide such other
reports to the Company, including but not limited to risk management reports, as
are described in Exhibit E of the Agreement.

(b)   The Employer shall conduct its business with each Client and administer
the Plan to ensure that –

  (i)   each Employee has available no more than one open enrollment period per
calendar year (other than qualifying status change events or otherwise in
accordance with section 125 of the Internal Revenue Code of 1986, as amended)
and the Employer administers the Benefits under the Plan on a calendar year
basis notwithstanding the effective date of the Client’s participation in the
Plan;     (ii)   at least *** of the eligible Employees of the Employer
participate in the Plan (for this purpose, an eligible employee who is covered
as a dependent under such employee’s spouse’s group health coverage is deemed
covered under the Plan), and, as to each Client, no Employee contributes more
than *** of the contribution required for “employee only” coverage; provided
that for so long as at least *** of the total Clients meet this contribution
standard, then Employer may continue or renew service agreements with Clients
under which Employees’ contribution for “employee only” coverage is more than
***; provided further that no new service agreements violative of this
contribution standard shall be executed on or after June 1, 2002.     (iii)  
except as provided in Exhibit F to the Agreement, each Employee is offered
concurrently no more than ***;

      

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  (iv)   except as provided in Exhibit F to the Agreement, the Company shall be
the exclusive provider of health and dental benefits for each Employee;     (v)
  if the Employer terminates coverage for all or substantially all Employees at
a worksite, that termination *** as of the date of notice to the Company of the
termination.

    For purposes of this section (6)(b), “the Plan” shall mean the plan of
benefits provided by the Employer under both the Policies and the Non-MP
Policies.   (c)   Except to the extent that (i) the Agreement specifically
requires the Company to have fiduciary responsibility, or (ii) a Policy imposes
responsibility on the Company for a specific Plan administrative function, the
Employer accepts complete responsibility for the Plan, including its design, and
for compliance with any laws that apply to the Plan.   (d)   The Employer will
provide to Participants the information and documents they need to obtain Health
Benefits within a reasonable period of time after coverage begins. In the event
of the termination of the Agreement, the MP Financial Agreement or the Policy,
the Employer will notify all affected Participants of the termination.   (e)  
Upon the Company’s request, the Employer shall provide to the Company
documentation of the Employer’s current debt rating, if applicable. In addition,
the Employer shall notify the Company immediately upon learning that the
Employer’s debt rating has fallen below Investment Grade.   (f)   The following
provisions govern coverage provided to new Clients obtained by the Employer as a
result of the Employer’s acquisition of, joint venture with, or any similar type
of transaction with another professional employer organization (“New PEO
Clients”).

  (i)   The Employer may not add New PEO Clients to the MP Arrangement or to the
Non-MP Policies without the express written consent of the Company. Within not
more than 30 calendar days following the Company’s receipt of all information
required by the Company to evaluate the

      

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      economic risk associated with the proposed addition of the New PEO
Client(s) to the MP Arrangement as a result of any such acquisition or
transaction, the Company shall inform the Employer of its decision regarding
such proposed addition and, if such addition is approved, any condition(s),
including separate rating for a designated period, which the Company intends to
impose as a condition to such addition.     (ii)   Within a reasonable period of
time not to exceed six (6) months after consummation of the transaction, the
Employer must provide to New PEO Clients coverage under the MP Arrangement or a
Company product that is *** to that which the New PEO Clients ***, but different
and separate from the MP Arrangement, if offered by the Company. In either case,
within such six (6) month period, the Company shall be the *** coverage for such
***.     (iii)   If the Company exercises its right under section 6(f)(i) of the
Minimum Premium Services Agreement to decline the addition to the MP Arrangement
and to the Non-MP Policies of such New PEO Clients, or imposes conditions on
such a proposed addition that are unacceptable to the Employer in its sole
discretion, the exclusivity provisions of section 6(b)(iv) above shall not apply
and the Employer may contract with any other *** New PEO Clients on such terms
as it shall determine.     (iv)   A Client once covered under the MP Arrangement
may not be deemed a New PEO Client or covered under any arrangement exclusively
for New PEO Clients.

Section 7: Disputes and Indemnification

(a)   The Employer agrees to indemnify and hold harmless the Company from any
and all liability, loss, damages, fines, penalties and costs, including but not
limited to, expenses and reasonable attorneys’ fees, which the Company shall
sustain arising out of or in connection with (1) any gross negligence or
material breach of the Agreement on the part of the Employer, (2) any
determination by the Employer regarding the eligibility for coverage under a
Policy or a Non-MP Policy of an Employee or Employee’s dependent, (3) any
direction of the Employer to the

      

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    Company, (4) the offering or termination of the Policies or Non-MP Policies,
or the manner of the offering or termination of the Policies or Non-MP Policies,
to Clients, or (5) the release or use by Employer of any information obtained
from the Company pursuant to section 5(a), unless the parties agree or it is
determined in a final non-appealable decision by a court or regulatory agency
having jurisdiction of the matter that the liability therefore was the direct
consequence of criminal conduct or fraud on the part of the Company or
negligence or a material breach of the Agreement on the part of the Company.  
(b)   The Company agrees to indemnify and hold harmless the Employer and/or the
Plan from any and all liability, loss, damages, fines, penalties and costs,
including but not limited to, expenses and reasonable attorneys’ fees, that the
Employer or Plan shall sustain arising out of or in connection with gross
negligence or material breach of the Agreement on the part of the Company or any
direction of the Company to the Employer, unless the parties agree or it is
determined in a final non-appealable decision by a court or regulatory agency
having jurisdiction of the matter that the liability therefore was the direct
consequence of criminal conduct or fraud on the part of the Employer or
negligence or a material breach of the Agreement by the Employer. The Company
shall not indemnify or hold harmless the Employer or the Plan for any losses
arising out of Overpayments. If Health Benefits are required to be paid pursuant
to any judgment in favor of the plaintiff or a settlement with the plaintiff or
the order of a regulatory agency having jurisdiction of the matter and such
judgment or settlement is final or payable during the term of the Agreement, any
portion of such judgment or settlement attributable to Health Benefits shall be
treated as a claim for Health Benefits at the time that the judgment or
settlement is final and shall be paid by the Company to the same extent as any
other claim for Health Benefits under the provisions of section 5 of the
Agreement and section 2 of the MP Financial Agreement.   (c)   The Company and
the Employer shall promptly advise each other as to matters which come to their
respective attentions involving potential legal actions or regulatory
enforcement activity which involve the Plan or are related to the activities of
either party with respect to the Plan or the Agreement and shall

      

MP Services Agreement   18    

 

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    promptly advise each other of legal actions or administrative proceedings
which have actually commenced.   (d)   In the event that a lawsuit or
administrative proceeding is brought against the Employer or the Plan but not
the Company, the defense and associated costs of such action or proceeding shall
be paid by the Employer, provided that the costs, including attorneys’ fees, of
such defense shall be reimbursed to the Employer or Plan by the Company to the
extent the Employer or the Plan is entitled to indemnification by the Company
under subsection (b) of this section 7. The Company shall cooperate fully with
the Employer in the defense of any such action or proceeding arising out of
matters related to the Agreement. The Employer agrees not to oppose any attempt
made by the Company to intervene in such action or proceeding, provided there is
no conflict of interest between the Company and the Employer or the Plan.   (e)
  In the event that a lawsuit or administrative proceeding is brought against
the Company arising out of the performance of its duties under the Agreement,
the defense of and associated costs of such action or proceeding shall be paid
by the Company, provided that the costs, including reasonable attorneys’ fees,
of such defense shall be reimbursed to the Company by the Employer to the extent
the Company is entitled to indemnification by the Employer under subsection
(a) of this section. The Employer shall cooperate fully with the Company in the
defense of any such action or proceeding arising out of matters related to the
Agreement. The Company agrees not to oppose any attempt made by the Employer to
intervene in such action or proceeding, provided there is no conflict of
interest between the Company and the Employer or the Plan. If the Employer or
the Plan is also named as a party in such action or proceeding, the Employer may
request that the counsel engaged by the Company also provide for the defense of
the Employer and/or the Plan. If there is no conflict of interest between the
Company and the Employer or the Plan, the Company shall take all reasonable
measures to comply with the Employer’s request. If such counsel does not provide
for the Employer’s or Plan’s defense, then the Employer and Plan shall pay for
the defense and associated costs as provided in subsection (d) of this section,
subject to the Employer’s and/or the Plan’s right to reimbursement under such
subsection.

      

MP Services Agreement   19    

 

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Section 8: Taxes and Assessments

(a)   In the event that a state or other jurisdiction, in accordance with
existing or future law, determines that the Company is liable for payment of any
tax, surcharge or assessment (other than taxes based upon net income)
(individually or collectively, “Tax”) with respect to any aspect of the Plan,
the Policies, the Non-MP Policies, the MP Arrangement, or the Agreement, the
Employer agrees to reimburse the Company for the amount of any such Tax, any
interest expense assessed against or incurred by the Company before or after
payment of such Tax, and any other charges, penalties or fines in connection
therewith, including reasonable attorneys’ fees, that the Company may sustain in
connection with the payment of such Tax, provided, however, that the Company
shall have given the Employer prompt notification of the imposition of any such
Tax.

  (i)   Subject to the provisions of section 8(a)(ii), any such amount shall be
due and payable upon written notification by the Company to the Employer,
regardless of whether such notification occurs during the term or following the
termination of the Agreement. The Employer shall indemnify and hold harmless the
Company from any liability, loss, damages, fines, penalties and costs, including
reasonable attorneys fees, which the Company may sustain arising out of or in
connection with any compromise, litigation or appeal by the Employer of any Tax
or any delay in payment of such Tax as a result of such compromise, litigation
or appeal.     (ii)   With respect to any Tax imposed on the Company solely as a
result of the Employer’s status as policyholder or sponsor of the Plan, upon
Employer’s compliance with any bond, security or other legal requirement imposed
on a party contesting such a Tax, the Employer shall have the sole discretion in
determining whether any such Tax shall be paid, compromised, litigated or
appealed and as to all matters of procedure, compromise, defense or appeal of
any other aspects concerning liability for any such Tax, except to the extent
that the Company would thereby be in violation of any applicable law or rule or
would suffer any

      

MP Services Agreement   20    

 

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      injury, loss or liability that would not be fully compensable under
section 8(a).     (iii)   The Employer shall not be obligated to reimburse the
Company for that portion of any premium tax assessed against the Company that
was taken into account by the Company in establishing the Quoted Premium (as
defined in the MP Financial Agreement) under a Policy or the premium under a
Non-MP Policy.

(b)   In the event that a state or other jurisdiction, in accordance with
existing or future law, imposes upon the Company the duty to act as agent for
collection of any Tax imposed on the Plan or the Employer or with respect to any
aspect of the Plan, a Policy, a Non-MP Policy, the MP Financial Agreement, or
the Agreement, the Employer will pay over any such amount to the Company when
requested to do so by the Company, subject to receipt by the Employer from the
Company of prompt notice concerning such matter and exercise by the Employer of
its rights as stated under subsection 8(a) above.

Section 9: Effective Date and Agreement Period
Except as otherwise specifically provided herein, the provisions of the
Agreement shall be effective as of January 1, 2005 (“Effective Date”). The
Agreement shall be in effect for a period of twelve (12) months (“Agreement
Period”) and shall continue automatically for successive Agreement Periods of
twelve (12) months each unless it is discontinued earlier in accordance with
section 11 of the Agreement.
Section 10: Service Fees
The fees for the services provided by the Company under the Agreement are
included in the Monthly Premiums as defined in the MP Financial Agreement and
any fees for any additional services are described in Exhibit B of the
Agreement.
Section 11: Termination of Agreement

(a)   The Agreement shall terminate on the date that the MP Financial Agreement
terminates.

      

MP Services Agreement   21    

 

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(b)   In the event that either party reasonably believes that any state or other
jurisdiction may impose a penalty on it for proceeding with its performance
under the Agreement, such party will promptly advise the other party of such
belief and the basis therefore. In such event the parties agree to cooperate in
good faith to resolve such matter to the satisfaction of both parties. After a
good faith effort by the parties to eliminate the risk of a material penalty
being imposed, if the matter is not resolved to the satisfaction of both
parties, the party upon which such penalty may be imposed may immediately
discontinue the Agreement’s application in such state or jurisdiction by
providing notice to that effect to the other party. In that event, the Agreement
will continue to apply in all other states or jurisdictions.   (c)   Termination
of the Agreement shall not extinguish the rights or liabilities of either party
arising prior to termination.

Section 12: Costs of Collection
The Employer and the Company agree to pay all reasonable costs of collection,
including reasonable attorneys’ fees, of any amounts due the other party under
the Agreement.
Section 13: Assignment
Services to be performed by the Company under the Agreement may be performed by
the Company, by any of its affiliates or by any subcontractor selected by it,
provided that the Company shall not be relieved of any of its obligations
hereunder. Except as set forth in the preceding sentence, neither party may
assign or delegate any of the rights and obligations hereunder to any third
party without the prior written consent of the other party.
Section 14: Choice of Law
The Agreement shall be governed by applicable federal law and, to the extent not
governed by federal law, the laws of the State of Texas.
Section 15: Entire Agreement, Amendment and Waiver

(a)   Upon execution of the Agreement, all prior or contemporaneous letters of
understanding, agreements, requests for proposal,

      

MP Services Agreement   22    

 

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    proposals, representations, statements, negotiations and understandings,
whether oral or written, are hereby terminated and superseded by the Agreement,
the MP Financial Agreement, the Security Deposit Agreement, the Policies and
Non-MP Policies and all riders thereto.   (b)   Any amendments or modifications
to the Agreement must be in writing, and must be signed by the duly authorized
representatives of each party. Each party shall provide to the other a written
certification of the names of those persons duly authorized to execute
amendments or modifications on behalf of the party. Each party shall be entitled
to rely on the other’s certification of authority unless and until it is
modified.   (c)   No term or provision of the Agreement shall be deemed waived
and no breach excused, unless the party claimed to have waived the term or
provision or to have excused the breach does so in a signed writing.   (d)   In
the event of any conflict between the terms and conditions of the Agreement, the
MP Financial Agreement, the Security Deposit Agreement or the Policies or Non-MP
Policies, the following order of precedence shall be followed in resolving the
conflict. The terms of the Security Deposit shall first control, then the MP
Financial Agreement, then the Agreement and lastly the Policies or the Non-MP
Policies, as applicable.   (e)   The parties’ respective rights and obligations
under sections 2(a)-(d), 4(a)-(d), 5(a), 5(d), 7, 8 and 12 of the Agreement
shall survive termination of the Agreement.

Section 16: Notices

(a)   Any notice required to be given under the Agreement shall be given in
writing by sending or delivering such notice to the receiving party (i) by
prepaid registered or certified first class U.S. mail, return receipt requested,
(ii) by overnight express courier with recipient’s signature required, (iii) by
hand delivery with recipient’s signature required, (iv) by facsimile, provided
that the other party has specifically requested that a specifically

      

MP Services Agreement   23    

 

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    designated notice be made by facsimile, or (v) or by any other method by
which the date of receipt by the party entitled to such notice may be
determined. Notice shall be effective when sent.   (b)   Notices to a party
shall be sent or delivered:

To the Company at:
UnitedHealthcare
Small Business Group
5901 Lincoln Drive
Edina, MN 55436
Fax: (952) 992-7155
Attention: President, Small Business Group
With a Copy to:
UnitedHealthcare
Legal Department
5901 Lincoln Drive
Edina, MN 55436
Fax: (952) 992-5180
Attention: General Counsel
And:
UnitedHealthcare
Small Business Group
5901 Lincoln Drive
Edina, MN 55436
Fax: (952) 992-7155
Attention: Vice President, Underwriting
And to the Employer at:
Administaff of Texas, Inc.
19001 Crescent Springs Drive
Kingwood, Texas 77339-3802
Fax: (281) 312-3350
Attention: President
With a Copy to:
      

MP Services Agreement   24    

 

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Administaff of Texas, Inc.
Attention: General Counsel
19001 Crescent Springs Drive
Kingwood, Texas 77339-3802
Fax: (281) 358-6492

(c)   Each party may change the person(s) designated to receive notice on behalf
of the party, or the address or facsimile number to which such notice should be
sent, upon written notice to the other party.

In witness whereof, the undersigned have executed the Agreement effective as of
the Effective Date.

                      ADMINISTAFF OF TEXAS, INC.       UNITED HEALTHCARE        
        INSURANCE COMPANY    
 
                   
By
  /s/ Richard G. Rawson       By   Simeon A. Schindelman    
 
                    Authorized Signature       Authorized Signature    
 
                    Name Richard G. Rawson       Name Simeon A. Schindelman    
 
                    Title President       Title President, Small Business    
 
                    Date 5/27/2005       Date 6/1/2005    

      

MP Services Agreement   25    

 

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Exhibit A — Performance Standards
1. General Description
          a. Performance Standards and Guarantee Period
          Pursuant to section 2(c) of the Agreement, this Exhibit describes the
performance standards applicable to services provided under the Agreement with
respect to medical Policies and Non-MP Policies (“Performance Standard” or
“Performance Standards”). These standards apply to the annual period that begins
on January 1 and ends on December 31 of the same calendar year (“Guarantee
Period”).
          The reports and metrics referenced in this Exhibit are those reports
and metrics utilized by the Company on the Effective Date. From time to time,
the Company may change the reports and metrics that it uses. If so,
substantially similar metrics and reports will be substituted for those set
forth in this Exhibit A. In addition, if a report or metric is changed, the
Company will modify any affected Performance Standard to the extent necessary to
carry out the intent of the parties, provided that the modified Performance
Standard shall be at least as favorable to the Employer as the standard offered
by the Company to other key account customers at the time of the modification.
          b. Premium Credits
          To the extent provided below, the Employer shall be entitled to a
Premium Credit if the Company fails to meet *** or more of the Performance
Standards during a Guarantee Period. The Premium Credit due for a Guarantee
Period shall be applied to premiums due to the Company for the first Arrangement
Month following the Quarterly Review for the fourth Arrangement Quarter of each
year.
          c. Reporting
          The Company shall report to the Employer the Performance Standards
results as part of each Quarterly Review. Performance Standard results will be
summarized and reported for the Guarantee Period as part of the Annual Review.
The amount of Premium Credit due as a result of the Company’s failure to meet
any of the Performance Standards will be determined as part of the Quarterly
Review.
      

MP Services Agreement   26    

 

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          d. Non-Performance by the Company May be Excused
     The Company shall not be required to provide a Premium Credit where the
Company’s failure to meet any Performance Standard is due to fire, embargo,
strike, war, accident, act of god, voluntary or involuntary compliance with any
valid or invalid law or regulation of any governmental agency or authority or
***.
2. Eligibility Loading
     The Company will load eligibility transmissions to the UnitedHealth Group
Eligibility System within *** business days of receipt. A tape load will be
considered to have met this standard if the elapsed time between the date the
tape is received by the Company and the date upon which the tape is loaded to
the eligibility system(s) is *** business days or less. The guarantee applies to
tapes submitted consistent with the format outlined in the UnitedHealth Group
Eligibility Handbook (last updated version June 19, 2001) and is not applicable
to tapes that cannot be loaded due to tape errors or for tapes that require
reformatting of data. Tapes must be received prior to 12:00 noon, Eastern Time,
on the date as determined by scheduled tape delivery dates. Otherwise, written
notification of tape delivery must be provided and receipt confirmed by the
Company. If the tape is received after 12:00 noon, Eastern Time, the period for
completion of the loading under this standard commences the following business
day.
     Failure to load *** of eligibility tapes to the UnitedHealth Group
Eligibility System within *** business days of receipt during the Guarantee
Period will result in a Premium Credit of ***.
3. Customer Reporting
          a. The following set of reports will be available on-line to the
Employer for all Policies and Non-MP Policies administered on the Company’s UNET
system within *** calendar days of the close of each month:

  •   Premium Versus Claims     •   Claim Expenses by Size of Payment     •  
Payments by Benefit Type     •   Health Care Cost Management Summary     •  
Claim Experience     •   Membership by Market

      

MP Services Agreement   27    

 

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  •   Membership by Month     •   Membership with Demographic Factors and
Geographic Factors

          b. The following reports will be available to the Employer for all
Non-MP Policies administered on the Company’s PRIME system (Maryland Small
Business PPO clients) within *** calendar days of the close of each month:

  •   Claim Expenses by Size of Payment     •   Payments by Benefit Type

          c. The Quarterly Review report described in Exhibit A of the Minimum
Premium Financial Agreement will be provided to the Employer within *** calendar
days of the end of the Arrangement Quarter.
          d. Failure to deliver at minimum *** of the total number of reports
identified in this section 3 during the Guarantee Period will result in a
Premium Credit of ***.
4. Claim Operations Performance Standards
     For purposes of this section 4, the term “claim” shall mean a written or
electronic request for payment of a Plan Benefit made by a member or provider.
          a. Time to Pay
     During a Guarantee Period, the Company will process *** of all claims
received by the Company within *** business days of receipt, as evidenced by the
Company’s date stamp. Timeliness will be measured using the “Time to Pay” report
produced by the Company on a monthly basis. The overall Guarantee Period result
is recalculated using the raw data for such period. The “Time to Pay” results
are always rounded to the nearest whole percent.
     For the Agreement, the criteria will be based upon the results of the
Service Center team servicing the Employer.
     A claim will be considered processed when the claim has been completely
reviewed and a payment determination has been made.
     Time to pay is measured the same way regardless of the timing of the
Company’s responses to a claimant.
     Failure to process *** of all claims received within *** business days
during the Guarantee Period will result in a Premium Credit in the
      

MP Services Agreement   28    

 

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maximum amount of ***. Credits against this Performance Standard will be applied
on a gradient as follows:
          *** within *** business days — ***
          *** within *** business days — ***
          *** within *** business days — ***
          *** within *** business days — ***
          *** in more than *** business days — ***
          b. Financial Accuracy
     The Company will maintain a Financial Accuracy rate of not less than ***
for the Guarantee Period. Financial Accuracy is measured by collecting a
statistically significant random sample of claims processed. The sample is
reviewed to determine the percentage of claim dollars processed correctly out of
the total claim dollars submitted for payment. The measurement will be done by
the Company’s standard internal quality assurance program based on a periodic
audit of all claims processed by the Service Center team servicing the Employer.
The overall Guarantee Period result is recalculated using the raw data for such
period.
     Failure to maintain a Financial Accuracy rate of at least *** for the
Guarantee Period will result in a Premium Credit in the maximum amount of ***.
Credits against this Performance Standard will be applied on a gradient as
follows:
      *** paid correctly — ***
      *** paid correctly — ***
      *** paid correctly — ***
      *** paid correctly — ***
      Less than *** paid correctly — ***
      

MP Services Agreement   29    

 

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          c. Procedural Accuracy
     The Company will maintain a Procedural Accuracy rate of not less than ***
for the Guarantee Period. Procedural Accuracy is measured by collecting a
statistically significant random sample of claims processed by the Service
Center team servicing the Employer. The sample is reviewed to determine the
percentage of claims processed without non-financial errors.
     The measurement will be done by the Company’s standard internal quality
assurance program based on a periodic audit of all claims processed by the
Service Center team servicing the Employer. The overall performance period
result is recalculated using the raw data for such period.
     Failure to maintain a Procedural Accuracy rate of at least *** for the
Guarantee Period will result in a Premium Credit in the maximum amount of ***.
Credits against this Performance Standard will be applied on a gradient as
follows:
      *** paid correctly — ***
      *** paid correctly — ***
      *** paid correctly — ***
      *** paid correctly — ***
      Less than *** paid correctly — ***
     d. Items Excluded From Claim Operations Performance Measurements
     With some products (e.g., HMO), financial reimbursement arrangements are
contractually negotiated with providers (physicians, labs, etc.), that budget
the payment they receive for certain services. Periodic payments are made to the
providers in return for their agreement to provide the negotiated services to
network members. Services provided under these arrangements are not processed as
a typical “claim” and, as a result, results from the networks featuring these
arrangements are not included in the performance statistics outlined above.
     The claims that are included in Claim Operations performance categories are
limited to medical claims processed through the UNET claims system(s). Claims
processed through any other system, including claims for other products such as
vision, dental, or pharmacy
      

MP Services Agreement   30    

 

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coverage, are not included in the calculation of the performance measurements
stated above.
5. Member Phone Service Performance Standards
          a. Average Speed to Answer
     This standard applies to the claim team and/or the member service team that
provide service for the Employer’s Employees. The Company will guarantee that
calls will sequence through the Company’s automated telephone call distribution
system and be answered by a customer service representative in *** seconds or
less, on average. The Average Speed to Answer will be measured by the standard
tracking reports produced by the Company’s automated phone system for all the
calls handled by the Service Center team servicing the Employer.
     If the Average Speed to Answer for the Guarantee Period is greater than ***
seconds, a Premium Credit will be due. The maximum amount of the Premium Credit
will be ***. Credits against this performance measure will be applied on a
gradient as follows:
      *** seconds or less — ***
      *** seconds or less — ***
      *** seconds or less — ***
      *** seconds or less — ***
      More than *** seconds to answer — ***
          b. Abandonment Rate
     This standard applies to the claim team(s) and/or the member services
team(s) which provide service for the Employer’s Employees. The Company will
guarantee that calls will sequence through the Company’s automated telephone
call distribution system such that the average abandonment rate will be no
greater than *** percent. The Abandonment Rate results will be measured by the
standard tracking reports produced by the Company’s automated phone system for
all calls handled by the Service Center team servicing the Employer.
     If the Abandonment Rate for the Guarantee Period is greater than *** on
average, for all locations providing member phone service to the Employer’s
Employees, a Premium Credit will be made due. The maximum amount of the credit
will be ***. Credits against this performance measure will be applied on a
gradient as follows:
      *** of calls abandoned — ***
      

MP Services Agreement   31    

 

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      *** of calls abandoned — ***
      *** of calls abandoned — ***
      *** of calls abandoned — ***
      more than *** of calls abandoned — ***
6. Overall Member Satisfaction Performance Standard
          This standard applies to the member service teams that provide HMO,
HMO Substitute, EPO, PPO and Managed Indemnity services for the Employer’s
Employees. The Company will conduct, on *** basis, a Uniprise Customer
Satisfaction Survey. The Overall Satisfaction question used reads:
“Overall, how satisfied are you with the way the Company administers your
medical health insurance plan, such as processing your claim or helping answer
any questions or resolving any problems you may have?”
     If less than *** of the respondents for the Service Center team providing
services for the Employer’s Employees are satisfied overall (i.e., if *** of
respondents do not respond with either completely satisfied, very satisfied or
somewhat satisfied), a Premium Credit of *** will be due.
      

MP Services Agreement   32    

 

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Exhibit B – Additional Services
[RESERVED]
      

MP Services Agreement   33    

 

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Exhibit C — Reporting by the Company
          1. The Company shall provide the Employer on line access to Employer
eServices Customer Reporting (eCR) reports available to its fully insured
customers that are listed below. However, the reports that are listed below may
not be available for all Policies or Non-MP Policies or for all system platforms
(UNET or PRIME) on which the Employer’s Plan is administered. Those reports that
are available on a monthly basis will be updated and available to the Employer
by the 15th of the subsequent month. The Company will review with the Employer
those reports that are available on an other than monthly basis or on a limited
Policy or Non-MP Policy basis or on a limited system platform basis. The eCR
reports are as follows:

 
Premium Versus Claims
Claims Expenses by Size of Payment
Payments by Benefit Type
Detailed Payment Report
Health Care Cost Management Summary
Claim Experience
Claim Lag Study
Inpatient Utilization and Costs by Admission Types
Utilization by Diagnosis Chapters
Managed Pharmacy Plan Performance
Surgical Costs and Utilization by Procedure Chapters
Membership by Market
Membership by Month
Membership with Demographic and Geographic Factors
Distribution of Discounts
Distribution of Ineligible Charges
Distribution of Other Savings
Inpatient Utilization by Diagnosis Chapters
Managed Pharmacy Cost and Utilization by Month
Managed Pharmacy Critical Indicators
Managed Pharmacy – Key Generic Substitution Indicators by Month
Managed Pharmacy – Top Drug Utilization Ranked by Cost &Top Drug Utilization
Ranked by Volume
Managed Pharmacy – Top Therapeutic Class Utilization Ranked by Cost & Top
Therapeutic Class Utilization Ranked Volume
Managed Pharmacy Utilization by Gender and Age
Network Utilization

      

MP Services Agreement   34    

 

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Network Utilization (including Capitation)
Network Utilization by Provider Type
Network Utilization by Provider Type (including Capitation)
Outpatient Utilization by Diagnosis Chapters
Surgical Utilization by Procedure Category and Place of Service
Surgical Utilization by Procedure CPT Codes
Top Hospitals Ranked by Total Net Paid & Top Physicians Ranked by Total Net Paid
Utilization by Age Group
Utilization and Costs by Provider Type
Bill Count by Month
Annual Customer Reporting & Analysis Executive Summary Report

          2. The Company shall provide to the Employer the following monthly
banking system reports in an electronic format by the 15th of the subsequent
month. These reports reflect activity processed through the Claims Account for
the Policies. The reports are as follows:
Summary Report for Daily Transfer Evaluation
Monthly Summary Report of Net Charge Distribution
Detailed Report for Transfer Evaluation
Outstanding Report
          3. The Company shall provide to the Employer the following monthly
detailed claim extracts in an electronic format consistent with the detailed
file layouts previously supplied for the Policies and Non-MP Policies by the
15th of the subsequent month. These claim extracts were modified by the Company
to include the Employer’s Client code and include the following:
CRS Medical Claim Financial Extract
CRS Medical Claim Statistical Extract
CRS Pharmacy Claim Extract
Dental Claim Statistical Extract
      

MP Services Agreement   35    

 

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Exhibit D — Third Party Disclosure Agreement
     This THIRD PARTY DISCLOSURE AGREEMENT (“Agreement”) is entered into by and
between Administaff of Texas, Inc. (“Employer”), [Examiner Name] (“Examiner”)
and United HealthCare Insurance Company for itself and its affiliated companies
(“United HealthCare”). These parties acknowledge and agree as follows:
     Employer and United HealthCare entered into the Minimum Premium
Administrative Services Agreement (“the Agreement”) under which United
HealthCare provides claims administration and other services for Employer’s
employee welfare benefit plan (“Plan”). Employer has retained Examiner to
perform an examination, audit or other evaluation of the files, books, and/or
records of United HealthCare pertaining to the Plan (“Examination”).
     Employer has requested that solely for purposes of the Examination, United
HealthCare disclose to Examiner certain documents, statistical information and
other information which is commercially valuable, confidential, proprietary, or
trade secret (“Proprietary Information”) and also materials which may contain
medical or other individually identifiable information (“Confidential Medical
Information”). Proprietary Information and Confidential Medical Information
shall collectively be referred to in the Agreement as “Confidential
Information”. United HealthCare has agreed to disclose this Confidential
Information subject to the terms of the Agreement.
     The Examination shall take place on the date or date(s) mutually agreed
upon by the parties.
     Confidential Information disclosed by United HealthCare, its agents,
subsidiaries and affiliates, to Examiner in connection with the Examination,
including all copies thereof, shall be used by Examiner only as permitted by the
Agreement. Confidential Information shall not include information: (i) generally
available to the public or generally known in the insurance industry or employee
benefit consulting community prior to or during the time of the Examination
through authorized disclosure; (ii) obtained from a third party who is under no
obligation to United HealthCare not to disclose such information; or
(iii) required to be disclosed by subpoena, or other legal process.
     Use: Examiner shall: (a) not use (deemed to include, but not be limited to,
using, exploiting, duplicating, recreating, modifying, decompiling,
disassembling, reverse engineering, translating, creating derivative works or
disclosing Confidential Information to another
      

MP Services Agreement   36    

 

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person or permitting any other person to do so) Confidential Information except
for purposes of the Examination; (b) limit use of Confidential Information only
to its authorized employees (deemed to include employees as well as individuals
who are agents or independent contractors of Examiner) who have a need to know
for purposes of the Examination; and (c) may release Confidential Information in
response to a subpoena or other legal process to disclose Confidential
Information, after giving United HealthCare reasonable prior notice of such
disclosure.
     At the conclusion of the Examination, Examiner shall either relinquish to
United HealthCare, or destroy (with such destruction to be certified to United
HealthCare), all Confidential Information. If during the course of the
Examination it is discovered that the Agreement has been breached by Examiner
then all Confidential Information shall be relinquished to United HealthCare
upon demand.
     The Agreement binds the parties and their respective successors, assigns,
agents, employers, subsidiaries and affiliates.
     Unauthorized use of Confidential Information by Examiner is a material
breach of the Agreement resulting in irreparable harm to United HealthCare for
which the payment of money damages is inadequate. It is agreed that United
HealthCare, upon adequate proof of unauthorized use, and in addition to any
other remedies at law or in equity that it may have, may immediately obtain
injunctive relief in any court of competent jurisdiction enjoining any
continuing or further breaches and may obtain entry of judgment for injunctive
relief. Examiner consents to said injunctive relief and judgment. Employer and
Examiner agree to indemnify and hold harmless United HealthCare with respect to
any claims and any damages caused by Examiner’s breach of the Agreement.
     The requirement to treat all Confidential Medical Information, as
Confidential Information shall survive the termination of the Agreement. The
requirement to treat all Proprietary Information as Confidential Information
under the Agreement shall remain in full force and effect so long as any
Proprietary Information remains commercially valuable, confidential, proprietary
and/or trade secret, but in no event less than a period of three (3) years from
the date of the Examination.
     Neither the Agreement nor Examiner’s rights or obligations hereunder may be
assigned without United HealthCare’s prior written approval.
      

MP Services Agreement   37    

 

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     General: (a) The Agreement is the entire understanding between the parties
as to the subject matter hereof. (b) No modification to the Agreement shall be
binding upon the parties unless evidenced in writing signed by the party against
whom enforcement is sought. (c) Headings in the Agreement shall not be used to
interpret or construe its provisions. (d) The alleged invalidity of any term
shall not affect the validity of any other terms. (d) The Agreement may be
executed in counterparts.
     The parties have caused their authorized representatives to execute the
Agreement.

     
Administaff of Texas, Inc.
   
 
   
By
   
 
   
            Authorized Signature
     
Print Name
   
 
   
Print Title
   
 
   
Date
   
 
   
 
   
[Examiner Name]
   
 
   
By
   
 
   
            Authorized Signature
     
Print Name
   
 
   
Print Title
   
 
   
Date
   
 
   
 
   
United HealthCare Insurance Company
   
 
   
By
   
 
   
            Authorized Signature
     
Print Name
   
 
   
Print Title
   
 
   
Date
   
 
   

      

MP Services Agreement   38    

 

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Exhibit E — Eligibility Reporting by the Employer
For purposes of this Exhibit E, “Plan” shall include the plan of benefits
provided by the Employer under the Policies and the Non-MP Policies.

1.   The Employer shall provide to the Company an accounting of the number of
Clients participating in the Plan as of January 1, 2002.   2.   The Employer
understands that the Company requires a seven business day period from the date
notification is received by the Company of a Participant’s eligibility or
termination of coverage under the Plan in order to update the UnitedHealth Group
Eligibility System and the subsidiary eligibility systems for pharmacy, dental
and mental health/substance abuse benefits. This seven business day period is
predicated upon such eligibility information being provided by the Employer to
the Company in the format consistent with that outlined in the UnitedHealth
Group Eligibility Handbook (last updated on June 19, 2001). The Employer agrees
to pay the claims of such Participant(s) whose coverage has been terminated to
the extent they would otherwise constitute Health Benefits required to be paid
by the Company if the Company authorized the payment of the claims during this
period, even if such persons are no longer eligible for Plan benefits during
this period.   3.   Effective December 31, 2005, the Company shall not be
required to make retroactive terminations of Participant eligibility (excluding
COBRA Participants) for benefits Incurred under Policies or Non-MP Policies on
dates more than 31 calendar days before the date on which the corrected
information is received by the Company. The Company shall not be required to
make any other retroactive corrections in Participant eligibility for benefits
Incurred under Policies or Non-MP Policies on dates more than 60 calendar days
before the date on which the corrected information is received by the Company.  
4.   In calculating the Quoted Premiums under the Policies and the monthly
premiums under the Non-MP Policies administered on the Company’s UNET system (as
designated in Exhibit B to the Minimum Premium Financial Agreement), the
following rule shall apply. *** shall be due for Employees whose effective date
of coverage is on or before the *** of that month and no premium shall be due
for Employees whose effective date of coverage is

      

MP Services Agreement   39    

 

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    after the *** of that calendar month. *** shall be due for Employees whose
coverage is terminated after the *** of that calendar month, and *** shall be
due for Employees whose coverage is terminated on or before the *** day of that
calendar month.   5.   Monthly premiums for the Non-MP Policies administered on
the Company’s PRIME system (as designated in Exhibit B to the Minimum Premium
Financial Agreement) are calculated by the system on an individual Non-MP Policy
basis using a roster billing process which reflects the amount due for
individual Participants. The calculation of monthly premiums on PRIME uses a ***
rule to determine the premium due for partial month’s coverage as opposed to the
*** of the month rule described in paragraph 4 above.   6.   Risk Management
Reports and Information

  (a)   Commencing with the second quarter of 2005 Quarterly Review meeting
(which is expected to occur on or about August 15, 2005), the Employer shall
supply the following risk management activity reports to the Company on a
quarterly basis at the applicable Quarterly and Annual Review meetings:

  (i)   Reports for *** During the Review Quarter

     
 
  • ***
 
   
 
  • ***
 
   
 
  • ***

  (ii)   Reports for *** as of the End of the Review Quarter

     
 
  • ***
 
   
 
  • ***
 
   
 
  • ***

    (b)   In addition, the parties will cooperate in good faith to establish by
August 15, 2005 an appropriate mechanism

      

MP Services Agreement   40    

 

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      (e.g., a process for Employer reporting) to demonstrate Employer’s
compliance with the *** percent employee contribution limitation for “employee
only” coverage for a New Client in Section 6(b)(ii) of the Agreement.     (c)  
Representatives of the Employer and the Company shall meet no more than one time
in any twelve-month period to allow the Company the opportunity to review and
comment on the Employer’s *** subject to applicable confidentiality provisions
of this Agreement and the MP Financial Agreement. Further, the Employer and the
Company shall cooperate to establish a process under which the Employer will
provide additional information to help the Company better understand the
Employer’s management of new Client accounts.

      

MP Services Agreement   41    

 

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Exhibit F – Alternate Vendors

A.   Except as otherwise set forth in this Exhibit F, the Company shall have the
right to be the exclusive provider of medical and dental coverage for Employees;
provided, however, that execution of an agreement between the Company and the
Employer with respect to the Company’s right to be the exclusive provider of
dental coverage for Employees with respect to certain geographical coverage
areas (“Dental Agreement”) shall cause this Agreement and the MP Financial
Agreement (including any exhibits or appendices to either) to be modified
effective as of the effective date of the Dental Agreement to delete any effect
on or reference to dental benefits, coverage, policies, or exclusivity rights as
to the provision of dental coverage to employees of the Employer, and shall be
interpreted in a manner consistent therewith. For purposes of this Exhibit F,
“Employees” shall include employees of the Employer covered under Non-MP
Policies as well as the Policies.   B.   Exceptions to the Company’s Right to be
Exclusive Provider

  1.   *** The Employer may offer alternate HMO, EPO, or PPO coverage (but not
dental coverage) to Clients in ***.     2.   *** The Employer shall offer to
each Client the following coverage options for Employees at *** worksites:
(i) existing *** coverage options (medical and/or dental) or (ii) coverage
options offered by the Company (medical and/or dental).     3.   CIGNA ***:
CIGNA *** or *** may be offered with, at the option of the Company, the
Company’s ***, in the following markets, provided that each market listed below
shall be treated as a New Market (as defined in section B(7) below) and subject
to the provisions of section B(5)(b) below at such time as the Company shall
offer an ***, *** or the *** Substitute option which is Competitive (as defined
in section B(7) below) in such market.

  a.   ***     b.   ***

      

MP Services Agreement   42    

 

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  c.   ***     d.   ***     e.   ***     f.   ***     g.   ***

  4.   New Markets

  a.   The Employer shall offer the Company’s PPO option in New Markets. Subject
to subsection B.4.b. and Section C of this Exhibit F, if the Employer wishes to
also offer an HMO or EPO option in a New Market, the Employer shall (i) notify
the Company of its plan, and (ii) offer such option exclusively through the
Company’s HMO, EPO or the HMO Substitute, provided that the Company’s product is
Competitive in such New Market at the time of the Employer’s notice to the
Company or becomes Competitive not more than *** months after receipt of the
Employer’s notice to the Company.     b.   If the Employer provides an HMO or
EPO option through a Competing Vendor in a New Market consistent with the
provisions of this Exhibit F, the Company may elect to offer the Company’s PPO
option to Employees along with the Competing Vendor’s HMO or EPO. If the
Company’s PPO option is provided to Employees, the Company may upon *** days
notice to the Employer, cease such offering in the New Market effective on the
January 1 following the notice.

  5.   Removal or Addition of the Company’s HMOs and Other Products

  a.   If at any time an HMO, the HMO Substitute or EPO offered by the Employer
through the Company ceases to be Competitive, the Employer may in its sole
discretion cease offering such product and, in

      

MP Services Agreement   43    

 

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      any case, the respective market in which such product operates shall be
deemed a New Market. In any such case, the Employer shall notify the Company of
its opinion concerning the Competitive status of such product at least ***
months before it ceases offering the product and shall have the burden of
undertaking the steps required to confirm the same in accordance with section
B(7)(b) of this Exhibit F. If the Company’s HMO, the HMO Substitute or EPO
becomes Competitive within *** months after its receipt of the Employer’s
notice, the Employer may not replace it unless and until it is again not
Competitive, in which case a new notice shall be required and a new *** month
corrective period will begin.     b.   If at the time the Company begins to
offer an HMO, the HMO Substitute or EPO option which is Competitive, the
Employer is offering an HMO or EPO option through a Competing Vendor consistent
with the provisions of this Exhibit F, the Employer shall offer each Client in
such New Market coverage options for Employees in such New Market not later than
the *** of such *** consisting of either (i) subject to Section C of this
Exhibit F, the Company’s ***, the *** Substitute or *** and *** options or
(ii) such Competing Vendor’s *** or *** and, at the Competing Vendor’s option,
its ***.     c.   Notwithstanding sections B.1 and B.3.c. of this Exhibit F, the
Employer and the Company shall discuss in detail the circumstances under which
the Company could make available and the Employer could accept new Company
offerings in Boston and California beginning in 2006. In no event shall Employer
be required to include a new Company product in California or Boston that would
reasonably be expected to materially increase Employer’s health plan costs in
that market or adversely impact its arrangements with insurers in that market.

      

MP Services Agreement   44    

 

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  6.   Acquisition by Employer of another Professional Employer Organization:
The Employer’s use of Competing Vendors to provide coverage to New PEO Clients
will not violate the provisions of section 6(b)(iv) of the Agreement or this
Exhibit F if such coverage complies with the provisions of section 6(f) of the
Agreement.     7.   Process for Considering Alternative Vendors in Special
Markets

  a.   The special procedures for alternate vendors described in this section 7
shall apply to the following markets (“Special Markets”):

  i.   ***     ii.   ***     iii.   ***     iv.   ***     v.   ***     vi.   ***
    vii.   ***

  b.   The Employer and the Company shall discuss in detail whether and upon
what terms the offering of vendors other than the Company (“Alternate Vendors”)
in the Special Markets would be a viable alternative to the current approach in
any or all of the Special Markets, including but not limited to, the following:

  i.   pricing, product and other competitive information;     ii.   the
specific advantages expected to be gained from offering an Alternate Vendor;    
iii.   the anticipated process and terms for introducing and offering an
Alternate Vendor’s product, including price, contribution, product

      

MP Services Agreement   45    

 

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      and benefit plan design differences, and employee vs. Client selection
process; and     iv.   whether some combination of different or additional
Company offerings would best serve the Employer,

  c.   Following these discussions, the Employer may offer an Alternate Vendor
in a Special Market without regard to notice and cure provisions of section 5 of
this Exhibit F. Any vendor changes made by the Employer pursuant to this section
shall be memorialized in an amendment to this Exhibit F. Taking into account the
discussions with the Employer, the Company’s existing offerings, and the size
and product distribution of the existing membership in the Special Market, the
Company shall elect one of the following:

  i.   Continue to offer to the Employer an *** option at the Client level. (All
co-employees of a Client would be offered ***);     ii.   Continue to offer to
the Employer an *** option at the employee level, where Clients may elect more
***.     iii.   Discontinue offering any option to the Employer in the Special
Market.

  d.   If the Employer offers one or more Alternate Vendors in a Special Market,
this change in product offering may result in changes in the Monthly Payable
Rate, Quoted Premiums or premiums of Non-MP Policies; provided, however, that
any such rate or premium change for a Special Market would not be effective
before the later of (i) the date the Alternate Vendor’s coverage becomes
effective and (ii) the first of the month following 30 days advance written
notice of such rate or premium change by the Company to the Employer.

      

MP Services Agreement   46    

 

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  e.   The Employer has determined to offer the following Alternate Vendors
pursuant to this paragraph B.7.

  i.   ***.

  C.   Conversion to Alternative Products         As soon as commercially
practicable after ***, the Employer shall begin the process of substituting the
Company’s *** products for the Company *** under which Employees were covered on
***, subject to the Employer’s determination that the proposed provider network
in the applicable geographic area is adequate; provided, however, that
substantially all of the Company *** under which Employees were covered on ***
shall be replaced with the Company’s ***.     D.   Definitions         As used
in this Exhibit F, capitalized terms shall have the meanings assigned to them in
the Minimum Premium Administrative Services Agreement to which this Exhibit F is
attached or, if no meaning is so assigned, the meaning set forth in this section
D of Exhibit F.

  a.   “Competing Vendor” means a vendor of medical coverage products in a
particular geographic market other than the Company.     b.   “Competitive” when
referring to an HMO, the HMO Substitute or an EPO option means that either
(i) the Company and the Employer agree or (ii) an independent consultant chosen
by mutual agreement of the parties has determined, that such product ranks
either *** as compared to competing products of other vendors in the designated
market. In making any determination of the rank of a product in a market, such
consultant shall apply such criteria relating to *** as it shall determine
appropriate. All fees and expenses of any such consultant shall be paid by the
Employer.

      

MP Services Agreement   47    

 

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  c.   “HMO” means a product issued by a licensed “health maintenance
organization” and offered as a network only or lock in product. Any references
in this Exhibit F to the Company’s “HMOs” shall include any HMO issued by the
Company (or another member of the Company’s controlled group).     d.   “New
Market” means a geographic area in which the Employer does not offer an ***
option on January 1, 2002.     e.   “PPO” means any product for network coverage
that is not an HMO, the HMO Substitute or an EPO.     f.   “EPO” means a product
issued by a licensed “insurance company” and offered as a network only or lock
in product.     g.   “HMO Substitute” means the Choice Plus benefit plan (which
includes both in-network and out-of- network benefits) developed and offered to
the Employer by the Company as a substitute for Company’s HMO products in
connection with Section C of this Exhibit F.

      

MP Services Agreement   48