exv10w2



 






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.




 









 







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
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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
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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
	 	 






 









 







	 	 	 	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
	 	 






 









 







	(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
	 	 






 









 







	 	 	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
	 	 






 









 







	 	 	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
	 	 






 









 





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
	 	 







 









 







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
	 	 






 









 






          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
	 	 






 









 







	 	•	 	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
	 	 






 









 





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
	 	 






 









 






          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
	 	 






 









 





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
	 	 






 









 






      *** 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
	 	 






 









 






Exhibit B – Additional Services

[RESERVED]




      



					
	MP Services Agreement
	 	33
	 	 






 









 






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
	 	 






 









 






	 
	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
	 	 






 









 






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
	 	 






 









 





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.



      



					
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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
	 	 
	 

	 	 






      



					
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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





      



					
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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





      



					
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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.





      



					
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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.	 	***





      



					
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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





      



					
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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.





      



					
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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





      



					
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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.





      



					
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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.





      



					
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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.





      



					
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