EXHIBIT
10.3


 


CONFIDENTIAL
TREATMENT REQUESTED BY GEVITY HR, INC.


 


HEALTH
CARE BENEFITS CONTRACT


 


BLUE
CROSS AND BLUE SHIELD OF FLORIDA, INC.


HEALTH
OPTIONS, INC.


 


and


 


Gevity HR, Inc.


 


Effective
Date: October 1, 2008 


 

















 


CONFIDENTIAL
TREATMENT REQUESTED BY GEVITY HR, INC.


 


BLUE
CROSS AND BLUE SHIELD OF FLORIDA, INC.


HEALTH
OPTIONS, INC.


HEALTH
CARE BENEFITS CONTRACT


 


TABLE OF
CONTENTS


 


	
  SECTION

  	
  I

  	
  TERMS OF THE AGREEMENT

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  II

  	
  RATE SHEET

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  III

  	
  ADMINISTRATIVE EXPENSE AND
  ANNUAL EXCESS LIABILITY CHARGE

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  IV

  	
  CLAIM LIABILITY CHARGE

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  V

  	
  ANNUAL EXCESS LIABILITY
  COVERAGE

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  VI

  	
  TERMINATION PROVISIONS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  VII

  	
  MODIFICATION OF RATES

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  VIII

  	
  PRODUCTS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  IX

  	
  THE OFFERING OF BCBSF/HOI
  PRODUCTS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  X

  	
  ENROLLMENT

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XI

  	
  ADMINISTRATIVE POLICIES

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XII

  	
  GROUP REPORTING REQUIREMENTS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XIII

  	
  BCBSF/HOI REPORTING
  REQUIREMENTS

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XIV

  	
  RENEWAL

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XV

  	
  COLLATERAL

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XVI

  	
  PERFORMANCE STANDARDS AND
  PERFORMANCE INCENTIVE PLAN

  
	
   

  	
   

  	
   

  
	
  SECTION

  	
  XVII

  	
  GENERAL

  



 


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CONFIDENTIAL
TREATMENT REQUESTED BY GEVITY HR, INC.


 


AGREEMENT
TO PROVIDE


COMPREHENSIVE HEALTH CARE BENEFITS


 


This
is an Agreement (hereinafter “Agreement”) between the Blue Cross and Blue
Shield of Florida Inc.   (hereinafter
referred to as “BCBSF”) and its subsidiary HEALTH OPTIONS, INC., (hereinafter
referred to as “HOI”) located at 4800 Deerwood Campus Parkway, Jacksonville
Florida 32246, hereinafter jointly referred to as “BCBSF/HOI”, and Gevity HR, Inc.
(together with its subsidiaries hereinafter referred to as “Employer/Plan
Sponsor”) and the Gevity Health &
Welfare Plan (the “Plan” and, together with the Employer/Plan Sponsor,
hereinafter jointly referred to as “the Group”) located at9000 Town Center
Parkway, Lakewood Ranch, Florida 34202.


 


WHEREAS,
the Group is a professional employer organization and requests BCBSF/HOI to
provide health insurance and health maintenance organization products
(hereinafter referred to as “the Product Offering”), to employees of its
clients  who have contracted with the
Employer/Plan Sponsor for provision of such products to its employees who
are  co-employed by the Employer/Plan
Sponsor; and


 


WHEREAS,
BCBSF agrees to offer health insurance products to employees of  Employer/Plan Sponsor’s clients who have
contracted with the Employer/Plan Sponsor for provision of such products to its
employees who are  co-employed by the
Employer/Plan Sponsor; and


 


WHEREAS, HOI agrees to
offer health maintenance organization products, and


 


WHEREAS, each of the
parties to this Agreement seeks to set forth, in writing, the terms and
conditions of this Agreement;


 


THEREFORE, the parties
agree as follows:


 


I.              Terms of the
Agreement


 


This
Agreement between the parties is for the period beginning October 1, 2008
(the effective date) and shall end on September 30, 2009 (the termination
date).


 


II.            Rate Sheet


 


The rates, charges, and
maximum amounts applicable to this Agreement are set forth in Exhibit A titled
“Minimum Premium Accounting Agreement Rate Sheet,” which may be modified from
time to time with the mutual consent of the parties and which is hereby
incorporated by reference into and made a part of this Agreement.


 


III.           Administrative Expense
and Annual Excess Liability Charge


 


Approximately 15 days
before the first date of each month, BCBSF/HOI will submit to the Group an
invoice for the amount of estimated administrative expenses (Minimum Premium
Charge and Annual Excess Liability Charge) to be paid during the forthcoming
month.  Such charges shall be equal to
the product of the Minimum Premium Rate and the Annual Excess liability rate,
as set forth in Exhibit A hereto, then in effect multiplied by (times) the
number of Insured’s as determined by BCBSF/HOI (on the renewal exhibit).   The Group agrees to pay the full amount of
the invoice each month by the later of (i) the end of business on the
first calendar day of the month the payment is due to cover (if the first of
the month falls on a non-working day, payment will be made by end of business
on the first working day 


 


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CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


thereafter) or  (ii) 4 business days after the date the
invoice for the amount of estimated administrative expenses is made available
to the Group.  If the payment is not
received by BCBSF/HOI by the later of 
the end of business on the first calendar day of the month (if the first
of the month falls on a non-working day and payment is not made by end of
business on the first working day thereafter) or (ii) 4 business days
after the date the invoice  for the
amount of estimated administrative expenses is made available to the Group, the
payment will be considered past due and subject to a Late Payment Charge in
accordance with this Agreement and Exhibit A.  If after 1 day the invoice amount is not
paid, Corporate Receivables will notify the marketing representative.  The marketing representative will place a
call to the group.  If the invoice amount
is not paid by the 10th day the marketing representative will contact the
group and place the group in suspense. 
If on the 15th day, the invoice is not paid the marketing
representative will generate and send to the Group by certified mail, a
cancellation notification.  BCBSF/HOI has
the right, but not the duty; to notify Insured’s of the Group’s failure to make
such payment and BCBSF/HOI’s intention to terminate this Agreement.


 


Within 120 days following
the close of the contract period BCBSF will prepare an annual administrative
expense and annual excess liability coverage expense settlement.  This settlement will compare actual and
contract period estimated and paid administrative expenses and excess liability
coverage expenses for the same time period. 
The product of monthly enrollment as adjusted for retroactive
enrollments and terminations during the contract period and the minimum premium
rate plus the annual excess liability coverage expense rate will determine actual
expenses in effect during the contract period. 
If actual expenses are greater than the previously estimated amount, the
Group agrees to pay the full amount of the difference within ten (10) calendar
days after receipt of the invoice.  If
the invoice is not paid within 10 days the payment will be considered past due
and subject to a Late Payment Charge in accordance with this Agreement and Exhibit A.  If estimated expenses are greater than
actual, BCBSF will pay the Group the difference at the same time the annual
administrative expense settlement is presented.


 


IV.           Claim Liability Charge


 


A.          1.              Prospective Claim Payment


 


Approximately 15
days before the first date of each month, BCBSF/HOI will submit to the Group an
invoice for the amount of the expected claims 
(“Claim Liability Charge(s)”) to be paid during the forthcoming month
see (Exhibit A).  This claim
liability charge will be adjusted on a quarterly basis through the term of the
Agreement and will be based on an average of monthly paid claims as determined
by BCBSF/HOI for the identified three month periods as follows:


 


	
  Months
  Used in Calculating Prospective Claim Payment

  	
   

  	
  Prospective Claim Payment Effective

  
	
  May, June, July

  	
   

  	
  October,
  November, December

  
	
  August,
  September, October

  	
   

  	
  January, February,
  March

  
	
  November,
  December, January

  	
   

  	
  April, May, June

  
	
  February, March,
  April

  	
   

  	
  July, August,
  September

  



 


The claim
liability charge will be invoiced each month. 
The Group agrees to pay the full amount of the invoice each month by the
the later of (i) the end of business on the first calendar day of the
month the payment is due to cover (if the first of the month falls on a
non-working day, payment will be made by end of business on the first working
day thereafter) or (ii) 4 business days after the date the invoice for the
amount of Claim Liability Charge(s) is made available to the Group.  If the payment is not received by BCBSF/HOI
by the end of business on the first calendar day of the month (if the first of
the month falls on a non-working day and payment is not made by end of business
on the first working day thereafter) or 4 business days after the date the
invoice for the 


 


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CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


amount of Claim
Liability Charge(s) is made available to the Group, the payment will be
considered past due and subject to a Late Payment Charge in accordance with
this Agreement and Exhibit A.  If
after 1 day the invoice amount is not paid, Corporate Receivables will notify
the marketing representative.  The
marketing representative will place a call to the group.  If the invoice amount is not paid by the 10th
day the marketing representative will contact the group and place the group in
suspense.  If on the 15th day,
the invoice is not paid the marketing representative will generate and send to
the Group by certified mail, a cancellation notification.  BCBSF/HOI has the right, but not the duty; to
notify Insured’s of the Group’s failure to make such payment and BCBSF/HOI’s intention
to terminate this Agreement.


 


2.     Actual Claim Settlement:


 


At the end of each
month, BCBSF/HOI will provide to the Group access to a detailed report in Excelä
format of the previous month’s claims and capitation payments (“Claim Liability
Charge(s)”). In the event the actual claims are in excess of the estimated
amount received, BCBSF shall invoice the difference on the next prospective
claim payment invoice.  In the event the
actual claims are less than the estimated claims, BCBSF/HOI shall offset the
next prospective claim payment invoice.


 


B.            1.              The Group will wire transfer the Minimum
Premium charge, Annual Excess Liability charge, Prospective Claim Payment, and
Actual Claim settlement to BCBSF/HOI’s designated bank account as set forth
below Paragraph C of this Section.


 


2.     If funds are not transferred
in accordance with this section, the payment will be considered past due and
will be immediately subject to a Late Payment Charge in accordance with this
Agreement and Exhibit A. 
Additionally, if the Claim Liability Charge is not paid as set forth in Section IV.
A. 2., BCBSF/HOI also has the right to terminate this Agreement as set forth in
Section VI.   Accordingly, BCBSF/HOI
has the right, but not the duty, to notify Insureds of the Group’s failure to
make such payment and BCBSF/HOI’s intention to terminate this Agreement.


 


C.    The Group’s payment of the
Minimum Premium charge, Administrative expense, Annual Excess Liability charge,
Prospective Claim Payment and Actual Claim Settlement to BCBSF/HOI shall be via
a Federal Reserve Bank Transfer directed to [*]


 


V.            Annual Excess Liability
Coverage


 


A.    BCBSF/HOI agrees to provide
Annual Excess Liability Coverage, whereby the maximum annual liability for the
Group is defined as the average number of Insureds for the policy year
multiplied by the Annual Individual Excess Liability Limit as set forth in Exhibit A
which are based on the Group’s maximum annual liability being 115% of expected
claims.  The average number of insureds
for the policy year shall be the sum total of Insureds, as determined by
BCBSF/HOI in accordance with the annual administrative expense and annual
excess liability coverage expense settlement in Section III, divided by
twelve.


 


B.    BCBSF/HOI will be responsible
for any and all Claim Liability Charges incurred by Insureds in excess of the
Group’s maximum annual liability, provided that the claim is covered under the
terms of the Benefit Contracts and is actually incurred during the term of this
Agreement.  Claims incurred by any member
during a period of time when they were covered and whose coverage was later 


 






* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


 


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CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


retroactively
termed will not be covered under the annual excess liability coverage.


 


C.    The Annual Excess Liability
coverage may be changed for each policy year based on BCBSF/HOI renewal
underwriting analysis and mutual consent of BCBSF/HOI and the Group.


 


 


D.    Settlement
Process


 


1.     Settlement will be performed
within 120 days after the end of each policy year.  This settlement will include all claims and
capitation payments liability incurred from October 1, of each year
through September 30, of each year (“Actual Incurred Claims”) and paid
prior to January 1 following that period.


 


2.     If Actual Incurred Claims
exceed the Group’s maximum annual liability for the period as


Calculated in Section V.
A. of this Agreement, BCBSF/HOI will pay a settlement amount equal to such
excess to the Group.


 


3.     If Actual Incurred Claims are
less than or equal to the Group’s maximum annual liability for the period as
calculated in Section V. A. of this Agreement, there will be no settlement
payment due.


 


E.     Example of
Calculation of the Group’s Maximum Annual Liability


 


	
  Plan Type

  	
   

  	
  Avg No. of

  Insureds

  	
   

  	
  Annual Individual

  Excess Liability Limit

  	
   

  	
  Aggregate Liability

  per Plan Type

  	
   

  	
  Group’s

  Maximum

  Annual Liability

  	
   

  
	
  HMO

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  PPO

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  Blue Options

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  



 


Based on the calculations
above, if Actual Incurred Claims exceed [*], BCBSF/HOI will pay a settlement
amount equal to such excess to the Group. 
If Actual Incurred Claims are less than or equal to [*] no settlement
payment shall be due.


 


VI.           Termination
Provisions


 


A.    On any Minimum Premium Charge
due date, the Plan may terminate this Agreement if one or more of the following
conditions exists, but written notice of its intent to do so must be given to
the Group at least ninety  (90) days in
advance.


 


1.     Except
for the public or private sale of common or preferred stock or the
incorporation of the Group’s partnerships which does not result in a material
change in the ownership or legal structure of the Group, there is a material
change in the ownership or legal structure of the Group and the Group has not
sought and received approval from the Plan for such a change, such approval not
to be unreasonably withheld.


 


2.     Except
for the public or private sale of common or preferred stock or the
incorporation of the


 






* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


 


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CONFIDENTIAL TREATMENT REQUESTED
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Group’s partnerships
which does not result in a material change in the ownership or legal structure
of the Group, the Group merges with or is acquired by another legal entity and
the Group has not sought and received approval from the Plan for such a change,
such approval not to be unreasonably withheld.


 


3. The
Group acquires another legal entity with more than [*] client employees in the
state of Florida that are not then covered by a BCBSF/HOI plan, and the Group
has not sought and received approval from BCBSF/HOI to merge such acquired
employees into the Plan, such approval not to be unreasonably withheld. If,
however, BCBSF/HOI does not approve the merger of the acquired employees into
BCBSF/HOI, the acquired legal entity would be in breach of a contractual
commitment if it were to merge the acquired employees into a BCBSF/HOI plan.
The Group will be allowed to continue with the current carrier or provide for
such employees’ healthcare coverage under an alternative carrier plan as
selected by the Group.  This decision
will be reviewed annually with BCBSF/HOI for continuation, as BCBSF/HOI may be
interested in providing the coverage to this population.


 


4. Bankruptcy by the
Group.


 


B.    This Agreement may be
terminated on any Anniversary Date by either party by giving the other party at
least one hundred and eighty (180) calendar days prior written notice of such
termination.


 


C.    If the Group fails to pay to
BCBSF/HOI the Administrative Expense, Annual Excess Liability Charge or the
Claim Liability Charge in accordance with the provisions of Section III
and Section IV respectively, of this Agreement, BCBSF/HOI may terminate
this Agreement at any time with written notice.


 


D.    Upon termination of this
Agreement by either party for any reason, including termination for non-payment
of any charges/fees due under this Agreement, BCBSF/HOI shall continue to
invoice the Group and the Group shall continue to pay to BCBSF/HOI the Claim
Liability Charge, subject to the Annual Excess Liability Coverage limitation,
in accordance with the provisions of Sections IV and V of this Agreement, for a
period of eighteen (18) months immediately following the date this Agreement
terminated.


 


VII.         Modification
of Rates


 


Charges/maximum amounts
for the term of this Agreement will remain in effect, as set forth in Exhibit A,
provided there is no material change to the Product Offering(s), or Group’s new
or renewal underwriting or rating process or factors as determined by
BCBSF/HOI;  In the event there is a
change in the total enrollment of [*] or greater during any [*] period, or a
material change in the Product Offering(s), BCBSF/HOI reserves the right to review and
modify the rates and factors in exhibit A, either up or down, to compensate for
changes in the risk factors.  Any rate
changes shall be mutually agreed to by the Group and BCBSF/HOI.  Notwithstanding the foregoing, upon the
effective date of termination of this Agreement all Minimum Premium Charges and
Annual Excess Liability Charges shall no longer be due.


 


In the event of a rate
modification, the modified rates will be set forth and presented to the Group
on a revised Exhibit A within 45 days. The Group and BCBSF/HOI shall
cooperate with each other in the 


 






* THIS CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


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CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


development and execution
of rate modification communications and effective date for the required rate
change in order to minimize disruption and attrition of the Group’s
clients.  All other provisions of this
Agreement shall remain in effect without modification.


 


VIII.        Products


 


A.    BCBSF/HOI will offer the products set forth in Exhibit B titled “Minimum
Premium Accounting Agreement Product Sheet” to the Group.   Exhibit B is hereby incorporated by
reference into and made a part of this Agreement.  Exhibit B may be modified from time to
time with the mutual consent of the parties.


 


B.    It is specifically
acknowledged that the Benefits Contracts are insured health benefit products
(i.e., not self-insured or administrative services only) and consequentially:


 


1.     Are subject to the laws of
the State of Florida that regulate insurance.


 


2.     Given that each is an
insurance product the benefit of rebates, including but not limited to health
care provider rebates and pharmacy rebates, are exclusively taken into account
in the calculation of the amount of the applicable Minimum Premium Charge.  The Group is therefore not entitled to any
credit for any such rebates beyond such inclusion in the pricing of the Benefit
Contracts.


 


3.     The above referenced products
will be offered to employees of clients of the Group working in Florida. Any
employees of clients of the Group working outside the State of Florida may be
insured through an alternate carrier. Any employees outside the State of
Florida that are employed by a client headquartered in Florida may be insured
through an alternate carrier or may be covered through the BlueCard arrangement
provided no more than [*] of the client’s enrollment is outside the State of
Florida or BCBSF/HOI agrees to provide coverage to such client.   The Benefit Contracts may be amended, changed
or replaced from time to time with the mutual consent of the parties, and are
hereby incorporated by reference into and made a part of this Agreement.


 


C.    BCBSF/HOI and the Group agree
that during the term of this Agreement the Group will offer BCBSF/HOI health
products [*] to employees of its clients working in Florida whose client
employers contract with the Employer/Plan Sponsor for services including
provision of health insurance through the Plan on or after October 1,
2008.  No other health plans will be
offered during the contract period, unless mutually agreed to by both parties.
If, however, during the term of this Agreement BCBSF/HOI’s Provider Networks
are significantly diminished in a particular service area so as to no longer
provide a competitive commercially desirable healthcare option and BCBSF/HOI
cannot provide alternative providers in that particular area or cannot arrange
for quality healthcare provider services, the Group may elect to cover those
specifically affected employees under an alternative carrier plan with the
consent of BCBSF/HOI which will not be unreasonably withheld.


 


IX.           The Offering of
BCBSF/HOI Products


 


A.    The Group will make the
Product Offerings available to its client’s employees (i.e. Employer/Plan
Sponsor’s co-employees) when the applicable client has contracted with the
Employer/Plan Sponsor for services including provision of health insurance
through the Plan in the following manner:


 






* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


 


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CONFIDENTIAL TREATMENT REQUESTED
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1.     The Group will require every
individual client group to offer to its employees working in the State of Florida
the product offerings as defined in Section VIII; provided, however, a
client group may enter into a No Benefits Contract with the Group.


 


2.     The Group will conduct at one
annual enrollment per year or more with the mutual consent of BCBSF/HOI. The annual enrollment will be conducted for a reasonable
period of time and will commence approximately 60-90 days before the annual
coverage period begins.


 


3.     BCBSF/HOI’s marketing
materials including , product designs, network information, and other pertinent
information will be available to the Group to make the selection of the Product
Offerings available to its employees. 
BCBSF/HOI, in consultation with the Group, shall determine the
appropriate quantity of marketing materials to make available to the Group.


 


4.     The Group will ensure that all
of its new clients and make best efforts to ensure that all of its existing
clients (who contract with the Employer/Plan Sponsor for services including
provision of health insurance through the Plan on or after October 1,
2008)  meet [*] participation of eligible
employees after waivers for other coverage. 
In addition, the group will ensure that all new clients and make best
efforts to ensure that all of its existing clients contribute at least [*] of
the lowest cost plan offered.  The Group
will monitor compliance with these requirements on a quarterly basis and, upon
request by BCBSF/HOI, will provide copies of the monitoring reports to
BCBSF/HOI.


 


X.            Enrollment


 


A.    As of the first day of the
term of this Agreement, the Group will have delivered to BCBSF/HOI enrollment
information regarding eligible and properly enrolled members, as defined by the
Benefit Contracts.  BCBSF/HOI shall be
entitled to rely on the information furnished to it by the Group, and the Group
shall hold BCBSF/HOI harmless for any inaccuracy or failure to provide such
information in a timely manner.  The
Group shall deliver to BCBSF/HOI all employee and dependent eligibility status
changes on a weekly basis, or more frequently as mutually agreed by the
parties.


 


The Group shall rely on
the Plan rules to determine timely enrollment for newly eligible
employees. However, occasionally, due to Group error, an enrollment may not be
reported to BCBSF/HOI timely.   BCBSF/HOI
will accept these retroactive additions as determined by the Group.


 


B.    The Group shall notify
BCBSF/HOI of any termination of coverage of an individual within [*] days of
the termination date, whenever possible, however, BCBSF/HOI will accept
retroactive terminations as determined by the Group. The Group shall be liable
for all claims/capitation paid on enrollment(s) that have retroactive
termination dates.  For retroactive
terminations within [*] days BCBSF/HOI will make every reasonable attempt to
recoup claims paid, however, no efforts will be made to recover Pharmacy claims
and claims less than [*] and in those cases where recoveries cannot be
obtained, the Group retains liability for those costs.


 


C.    The Group shall notify
BCBSF/HOI of any retroactive addition or retroactive termination of 






* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


 


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CONFIDENTIAL TREATMENT REQUESTED
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coverage
of an individual within [*] days of the effective date of such addition or
termination.


 


XI.           Administrative Policies


 


A.            Enrollment Methodology


 


The Group’s human
resource staff will enroll each new client group’s employees via the Group’s
Benefit Election Form or other acceptable method (IVR or web application).
On a [*] basis, the Group will present to BCBSF an automated enrollment
file.  Enrollments will be accepted as
submitted from the Group. BCBSF/HOI’s assigned Personal Service Representative
(PSR) will review discrepancy reports produced from the automated enrollment
file and work reports directly with the Group’s assigned staff member to
resolve all enrollment(s) on a timely basis.


 


B.            Identification Cards




Identification cards will be issued by BCBSF/HOI to each member enrolled within
[*][working days of receipt of the completed enrollment information.


 


C.            Terminations




Terminations are removed on the date of termination.  BCBSF/HOI will generate Certificates of
Creditable Coverage (COC) and submit directly to each member at the address on
file for all terminated contracts.


 


D.            HOI Primary Care
Physician Assignment


 


If an HOI member does not
choose a Primary Care Physician (PCP), BCBSF/HOI will assign a PCP based on the
member’s home address.  A letter will be
generated advising the member that a PCP was assigned and offering them the
option to change if they so desire.  The
member may call the customer service number on their identification card to
initiate the change.  When a member
changes their PCP, the effective date of the change is determined by the time
of the month the change is requested.  If
a member requests a change between the 1st and 15th of
the month, the member is eligible to utilize the new PCP the 1st of
the following month.  Changes requested
after the 15th of the month, will be effective the 1st of
the second month following the month the member made the request (Example:  PCP change requested January 20th.  PCP would be effective March 1st.)


 


E.             Eligibility




BCBSF/HOI and the Group have agreed to accept enrollment as determined by the
Group in accordance with the Plan. An eligible employee and/or dependent must
enroll within the initial eligibility period as determined in accordance with
the Plan or wait until the next Annual Enrollment Period unless a qualified
family or employment event occurs under which a member has an additional period
to enroll under a Special Enrollment Period if set forth in the Plan.


 


1.             The Group’s
Benefit Election Form


 


Each employee applying
for coverage must complete a Benefit Election Form or be enrolled through
the Gevity web application.


 


2.             Status Change Form


 






* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


 


10
















 


CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


Any membership change,
i.e., marriage, divorce, addition of newborns, etc., will require completion of
a Status Change form (paper or through the Gevity web application).  The Group will retain adequate documentation
of status change requests for a reasonable period of time in the event
BCBSF/HOI requires copies to respond to an enrollment inquiry. All qualifying
events have a notification timeframe mandated by the Plan.  To the extent allowed by State law, newborns
will be covered back to the date of birth.


 


If changes are not
submitted within the specified time frames, the member must wait until the next
annual enrollment to make changes except under HIPAA requirements for special
enrollment.


 


F.           COBRA


 


The Group has chosen to
administer COBRA on an internal basis. 
COBRA enrollment will be provided to BCBSF/HOI on a weekly basis
directly to the assigned PSR of the Membership/Billing Area.  Unless otherwise stated, the Group will be
responsible for all COBRA administration including notification
requirements.  All previously stated
enrollment guidelines will apply.


 


G.          Overage Dependent Status Verification


 


BCBSF/HOI is responsible for
verifying overage dependent children’s eligibility status on at least an annual
basis.  Any overage dependent who is no
longer eligible will be reported to the Group so coverage can be terminated.


 


H.          Disabled Dependent Verification


 


BCBSF/HOI is responsible for
verifying the disability status of overage dependent children on at least an
annual basis.  Any overage dependent
child who is no longer disabled will be reported to the Group so coverage can
be terminated.


 


I.            Creditable Coverage


 


The Group will report to
BCBSF/HOI the amount of creditable time to be applied to satisfy the
pre-existing condition exclusion limitation for those members providing that
information at time of eligibility.  If
this information is not supplied, BCBSF/HOI will deny the impacted claim.  The denial advises the member that if they
had previous coverage a credit may be applicable and to please contact customer
service.  Once information is received
and reviewed, the claim will be reprocessed and pre-existing condition
limitation updated in their system.  The Group will not track creditable time in
their system.


 


XII.         Group
Reporting Requirements


 


A.            Upon
request, the Group will provide BCBSF/HOI with the necessary reports to ensure
compliance with participation and contribution goals as described in Section IX,
4. above.


 


B.            Upon
request, the Group will provide to BCBSF/HOI the industry classification codes
(SIC) of the enrolled client groups.


 


C.            Upon
request, the Group will provide to BCBSF/HOI enrollment data by county, or
other such 


 


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CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


information
maintained by the Group that may be required to adequately evaluate risk.


 


D.            Upon
request, the Group will provide to BCBSF/HOI, business practice information
related to the following:


 


·      monitoring of participation
levels and contribution levels


·      financial statements


·      benefits administration
process including enrollment, premium remittance and


·      reconciliation and new
client/employee orientation


 


XIII.                        BCBSF/HOI
Reporting Requirements


 


BCBSF/HOI
will provide the Group access to Monthly Paid Claims Reports, Quarterly
Incurred But Not Reported (IBNR) Reports, Annual Account Specific Reporting,
and Ad Hoc reports as requested by the Group and mutually agreed upon by both
parties, to the extent permitted under the federal Privacy Rules of the
Health Insurance Portability and Accountability Act – Administration
Simplification (HIPAA-AS) of 1996.  In
the event the Group executes and provides to BCBSF/HOI a Group Health Plan
Representation of Compliance Letter, such document shall be incorporated into
and made a part of this Agreement.


 


XIV.                       Renewal


 


This
Agreement shall automatically renew/extend for additional one year period(s) on
each Anniversary Date (October 1st) 
at the rates then in effect (the renewal rates), unless either party
notifies the other party of its intent not to extend this Agreement at least
one hundred and eighty (180)  calendar
days prior to the applicable Anniversary Date. 
The renewal rates/charges/maximum amounts/collateral will be negotiated
by the parties and set forth and presented to the Group on a revised Exhibit A.


 


XV.                           Collateral


 


The Group shall provide BCBSF/HOI collateral to secure
Gevity’s payment obligations under this Agreement in the amounts set forth in Exhibit A.   The collateral shall be provided in the form
of an irrevocable letter of credit issued in favor of BCBSF/HOI which shall
automatically increase in accordance with the schedule specified in Exhibit A.   BCBSF/HOI shall be entitled to draw from the
letter of credit only in the event the Group fails to meet its payment
obligations as set forth in Sections III, IV or VII of this Agreement. The form
of letter of credit must be acceptable to BCBSF/HOI.


 


The Group upon 60 days prior written notice to
BCBSF/HOI may replace the outstanding letter of credit with cash collateral
equal to the outstanding letter of credit to be held in an interest-bearing
trust or escrow account in favor of BCBSF/HOI (with interest accruing and
payable to the Group on a quarterly basis). 
If the Group elects to replace the letter of credit in accordance with
the foregoing, the parties will select a trustee bank and enter into a trust
participation agreement (or similar agreement) acceptable to both parties.


 


Following
the termination or expiration of this contract, and provided the Group is
current with respect to its financial obligations to BCBSF/HOI, the collateral
shall be reduced to [*] of its then current value at the end of the third,
sixth and ninth month and fully released at the end of the twelfth month,
exclusive of any known or pending claims, including any potential cases in
litigation.


 






* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


 


12

















 


CONFIDENTIAL TREATMENT REQUESTED
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XVI.                       Performance Standards and Performance
Incentive Plan


 


A.    BCBSF/HOI shall meet the
following Performance Standards and be measured pursuant to BCBSF/HOI ‘s
standard audit procedures:


 


Claim Processing


 


	
  Category

  	
   

  	
  Penalty

  	
   

  	
  Incentive

  
	
  Financial Accuracy

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Payment Accuracy

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Processing Accuracy

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Claims processed within
  30 calendar days

  	
   

  	
  [*]

  	
   

  	
  [*]

  



 


Customer Service


 


	
  Category

  	
   

  	
  Penalty

  	
   

  	
  Incentive

  
	
  Average Hold Time for
  Incoming Calls

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Abandon
  rate

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Closure
  of open inquiries

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  Closure
  of open inquiries

  	
   

  	
  [*]

  	
   

  	
  [*]

  



 


Account Management


 


The Group will be
responsible for creating and maintaining an account management survey questionnaire.  The survey questionnaire to be completed by
The Group will measure account management performance in the areas of product
and service knowledge, professionalism, proactive management, accessibility,
and responsiveness.


 


B.    The Performance Standard
Penalty/Incentive


 


The Performance
Incentive/Penalty will be in effect for Claim Processing and Customer Service
standards only.  Account Management
categories will be monitored, but are not subject to incentive/penalty payments
at this time.  The Group reserves the
right, at a future date, to open discussions with BCBSF to include Account
Management activities, and Eligibility as account specific reporting metrics
become available, in the Penalty/Incentive calculation.


 


1.     BCBSF/HOI
will be subject to a [*] reduction in the Minimum Premium Rates (set forth in Exhibit A)
for the quarter if three of four claims processing performance standards are
below the percentages (set forth above) for the quarter.


 


2.     BCBSF/HOI
will be subject to a [*] reduction in the Minimum Premium Rates (set forth in Exhibit A)
for the quarter if three of four customer service performance standards are
below the percentages (set forth above) for the quarter.


 


3.   BCBSF/HOI will receive a [*]
increase in the Minimum Premium Rates (set forth in Exhibit A) 


 






* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


 


13

















 


CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


for the
quarter if all four of the claims processing performance standards are met or
exceeded for the quarter.


 


4.   BCBSF/HOI will receive a [*]
increase in the Minimum Premium Rates (set forth in Exhibit A) for the
quarter if all four of the customer service performance standards are met or
exceeded for the quarter.


 


5.   BCBSF/HOI’s Operational Units
will report their Performance Standard scores on a monthly basis to BCBSF/HOI’s
Marketing Staff.  Each quarter Marketing
will provide the Group with monthly results and calculate the incentive/penalty
based on quarterly results.


 


6.   Within [*] days following the
close of the contract period BCBSF will prepare an annual Performance Standard
Penalty/Incentive expense settlement based on the quarterly outcomes and present
it to the Group.  If based on the expense
settlement an incentive is due the Group will pay the full amount of the
expense settlement within [*] calendar days after receipt of the invoice.  If based on the expense settlement a penalty
is due BCBSF/HOI will credit the next administrative expense and annual excess
liability charge invoice.


 


C.    Performance Audit


 


The Group has the right
to perform, or have performed by a mutually agreed upon third party, an audit
of BCBSF/HOI’s Operational performance on an annual basis.


 


The focus of the audit
will be the preceding contract year (e.g. audit is in 2009 for 2008 contract
period).  The audit will be limited to a
reasonable number of statistically valid claims not to exceed [*].  Any request for audits outside the above
mentioned will require mutual agreement of the Group and BCBSF/HOI.


 


BCBSF/HOI will [*].


 


BCBSF/HOI requires
reasonable advance notification of at least 60 days prior to the audit.


 


XVII.      General


 


A.            Inconsistencies


 


If the
provisions of this Agreement are, in any way, inconsistent with the provisions
of the Product Offerings, then the provisions of the Agreement shall prevail,
and the other provisions shall be deemed modified but only to the extent
necessary to implement the intent of the parties herein.


 


B.            Survival


 


The
rights and obligations of the parties, as set forth herein, shall survive the
termination of this Agreement to the extent necessary to effectuate the intent
of the parties as expressed herein.


 


C.            Waiver
of Breach


 


The
failure by either party, at any time, to enforce or to require the strict
adherence to any provision of this Agreement shall not be deemed to be a waiver
of such provision or any other 


 






* THIS CONFIDENTIAL
INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.


 


14

















 


CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


provision of this Agreement.


 


D.            Governing Law


 


This
Agreement, and the rights of the parties hereunder, shall be construed
according to the laws of the State of Florida.


 


E.             Severance


 


In the
event any provision of this Agreement is deemed to be invalid or unenforceable,
all other provisions shall remain in full force and effect.


 


F.             Amendment


 


This
Agreement may be amended at any time upon mutual written agreement of both
parties, except that BCBSF/HOI or the Group may make changes necessary to
comply with state and federal laws.  In
the event such changes are necessary, BCBSF/HOI or the Group will provide
appropriate written notice to the other party.


 


G.            Entire Agreement


 


This
Agreement, which includes the Exhibits, Master Policy, Benefit Election Form,
Status Change Form, Member Handbook, True Group Application for coverage, and
the Product Offerings, which are hereby incorporated by reference, constitute
the entire Agreement between the Group and BCBSF/HOI.  Any prior agreements, promises, or
representations, either oral or written, relating to the subject matter of this
Agreement, and not expressly set forth in this Agreement, are of no force or
effect.


 


H.            Notices


 


Any
notice, required or permitted under this Agreement, shall be deemed given if
hand delivered or if mailed by United States mail, or an overnight mail service
(e.g. Federal Express), postage prepaid, to the applicable address as set forth
above or to such other address as a party may designate, in writing, to the
other party.  Such notice shall be deemed
effective as of the date so deposited or delivered.


 


I.              Provider Networks


 


BCBSF/HOI’s
Health Care Provider Networks are subject to change and may be modified at any
time during the term of this Agreement without notice to or the consent of the
Group.


 


J.             Marketing
Fund


 


BCBSF/HOI will
share in the cost of marketing materials up to [*] per plan year.  The Group or the Group’s approved vendor will
submit a detailed invoice to BCBSF/HOI Corporate Accounts for the marketing
materials no later than 30 days following the end of the plan year.


 


K.            Training
and enrollment support


 


BCBSF/HOI will
provide up to [*] training sessions of not more than one half day in length for
the Group’s staff.  In addition BCBSF/HOI
will provide up to [*] on site visits of no more than one half day in length to
provide enrollment support for clients with [*] or more eligible employees.  All training and enrollment support will be
coordinated through the Group’s 
headquarters and mutually agreed to by the Group and BCBSF/HOI.


 






* THIS CONFIDENTIAL INFORMATION HAS BEEN
OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


 


15

















 


CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


IN
WITNESS WHEREOF each of the parties to this Agreement, through their duly
authorized representative, hereby acknowledges that they have read and
understand this Agreement and agree to be bound by its terms.


 


 


	
   

  	
  BLUE
  CROSS AND BLUE SHIELD OF FLORIDA, INC./

  
	
   

  	
  HEALTH
  OPTIONS, INC.

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ Alan Guzzino

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Alan Guzzino

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  9-29-2008

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Gevity
  HR, Inc.

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ Edwin E.
  Hightower, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Edwin E.
  Hightower, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice
  President and Chief Legal Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  10-1-2008

  
	
   

  	
   

  
	
   

  	
  Gevity
  Health & Welfare Plan

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/ Edwin E. Hightower, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Print Name:

  	
  Edwin E.
  Hightower, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Senior Vice
  President and Chief Legal Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  10-1-2008

  
				



 


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CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


EXHIBIT
A


 


MINIMUM
PREMIUM ACCOUNTING AGREEMENT


RATE
SHEET


FOR


GEVITY HR, INC. – GROUP No. 56953


10/1/2008
– 9/30/2009


 


[*THIS
CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION*]  


 


17

















 


CONFIDENTIAL TREATMENT REQUESTED
BY GEVITY HR, INC.


 


EXHIBIT B


 


MINIMUM PREMIUM ACCOUNTING AGREEMENT


PRODUCT SHEET


FOR


GEVITY  HR, INC. – GROUP No. 56953


10/1/2008 – 9/30/2009


 


[*THIS
CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE

SECURITIES AND EXCHANGE COMMISSION*]


 


18