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11-30-2011 HUCMRegular Meeting November 30, 2011 Members present: President Robert Hantge; Vice President Paul Nordin; Secretary Dwight Bordson; Commissioner Donald H. Walser; Commissioner Craig Lenz; Attorney Marc Sebora; General Manager Michael Kumm President Hantge called the meeting to order at 3:00 p.m. The minutes of October 26, 2011 regular meeting, November 10, 2011 special meeting and the summary of closed meeting proceedings for the General Manager's interim performance review sessions held on August 31, 2011 and October 26, 2011 were reviewed. A motion was made by Secretary Bordson, seconded by Vice President Nordin to approve the minutes of October 26, 2011 regular meeting, November 10, 2011 special meeting and the summary of closed meeting proceedings for the General Manager's interim performance review sessions held on August 31, 2011 and October 26, 2011 as written. Motion was unanimously carried. The October 2011 payables were discussed. A motion was made by Commissioner Lenz, seconded by Secretary Bordson to ratify the payment of bills in the amount of $2,926,847.90 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the October 2011 financial statements /budget year -to -date. A motion was made by Vice President Nordin, seconded by Commissioner Walser to approve the financial statements /budget year -to -date. Motion was unanimously carried. President Hantge explained Item 4, Employment Agreement with General Manager was not available for approval. Attorney Sebora presented changes to exempt and non - exempt handbooks, section: administration of personnel policies, explaining the verbiage `or other employment contract' was added to the third paragraph to recognize any future separate employment contract with Hutchinson Utilities Commission personnel. A motion was made by Vice President Nordin, seconded by Commissioner Walser to approve changes to exempt and non - exempt handbooks, section: administration of personnel policies. Motion was unanimously carried. (Changes attached.) Attorney Sebora presented the leave credit in lieu of compensation policy, explaining in 2002 HUC recognized an issue with the Minnesota Governor's salary cap. HUC wants to retain and attract qualified employees therefore requesting the leave credit in lieu of compensation policy be adopted. This policy allows an employee to bank leave hours equal to the portion of salary above the Governor's salary cap. Compensation is then paid out at a capped hourly rate when the employee's employment ends with HUC. A motion was made by Secretary Bordson, seconded by Vice President Nordin to approve leave credit in lieu of compensation policy. Motion was unanimously carried. (Policy attached.) GM Kumm presented the 2012 budget. After discussion, recommended changes and corrections will be made before the December 2011 special meeting. GM Kumm presented policies and requirements booklet, sections: disconnection of residential services by HUC; disconnection of commercial services by HUC; and landlord acknowledgement. No changes were recommended. Jan Sifferath presented changes to exempt and non - exempt handbooks, sections: life insurance; health /dental insurance; disability insurance (exempt only). Recommended changes were made due to current practice and to clean up verbiage. After discussion, a motion was made by Commissioner Lenz, seconded by Secretary Bordson to approve changes to the exempt and non - exempt handbooks, sections: life insurance; health /dental insurance; disability insurance (exempt only). Motion was unanimously carried. (Changes attached.) GM Kumm presented change order No. W -001 to Wartsila contract. GM Kumm explained the change order is due to the downsizing of the tanks from when HUC originally went out for bids on project. After discussion, a motion was made by Vice President Nordin, seconded by Secretary Bordson to approve change order No. W -001 to Wartsila contract. Motion was unanimously carried. (Change order attached.) GM Kumm presented the advertisement for bids for plant 1 building modifications — unit 5. The building modifications are to increase the size of the current opening of the building to accommodate the installation of the new generator. This is part of the original project estimate and is in the 2011 budget. After discussion, a motion was made by Commissioner Lenz, seconded by Secretary Bordson to approve the advertisement for bids for plant 1 building modifications — unit 5. Motion was unanimously carried. (Advertisement for bids attached.) GM Kumm presented the Midwest Dental Benefits Master Administrative Services Agreement for 2012. There is no increase from 2011. After discussion, a motion was made by Vice President Nordin, seconded by Commissioner Lenz to approve Midwest Dental Benefits Master Administrative Services Agreement for 2012. Motion was unanimously carried. (Agreement attached.) Steve Lancaster presented requisition #004634 for conductor from Border States for a total of $27,105. This is for inventory for 2012 projects. These items will be added to the electric long -term agreement. After discussion, a motion was made by Commissioner Walser, seconded by Vice President Nordin to approve requisition #004634 for conductor from Border States for a total of $27,105. Motion was unanimously carried. (Requisition attached.) A motion was made by Vice President Nordin, seconded by Commissioner Lenz to declare the HUC Recognition /Holiday party scheduled for December 16, 2011 as an open meeting. Motion was unanimously carried. Discussion held regarding dates for the HUC /City joint meeting. GM Kumm suggested it be held in March 2012 after the rate study is complete. Division Reports Electric — Steve Lancaster • Switchgear — unit 5 bid specifications in Leader today; bid opening on December 20 at 2:00 p.m. • General Electric doing overhaul on unit 1 • Reviewing applications for mechanic position Natural Gas — John Webster • 2011 work order update • Purchased natural gas today at $4.625 for November 2012 through October 2014 • Working with United Farmers Cooperative on a natural gas transportation agreement Business — Jan Sifferath • HUC conducting a `mini' health fair on December 14 • Medica quoted a 12.5% increase for 2012 health insurance plan due to high claims in 2011. Discussed opportunity to cap 2013 increase. Will distribute Medica insurance information at next commission meeting. Finance — Jared Martig • Received two $5,000 checks from League of Minnesota Cities as property insurance refund for operations maintenance pilot incentive for the last two years. • Working on renewal with League of Minnesota Cities • Update on 3% withholding law Legal Update Nothing to report Unfinished Business • Joint Action Agency, Electronic File Access for Commissioners, City /HUC — Human Resources and Legal Shared Services GM Kumm suggested these items be moved to the HUC 2012 "to do" list. New Business • A motion was made by Commissioner Walser, seconded by Vice President Nordin to schedule a special commission meeting for December 5, 2011 at 9:00 a.m. Motion was unanimously carried. There being no further business, a motion was made by Secretary Bordson, seconded by Vice President Nordin to adjourn the meeting at 4:31 p.m. Motion was unanimously carried. ATTEST: Robert Hantge, President Dwight Bordson, Secretary Regular Meeting November 30, 2011 Members present: President Robert Hantge; Vice President Nordin; Secretary Dwight Bordson; Commissioner Donald H. Walser; Commissioner Craig Lenz; Attorney Marc Sebora; General Manager Michael Kumm President Hantge called the meeting to order at 3:00 p.m. The minutes of October 26, 2011 regular meeting, November 10, 2011 special meeting and the summary of closed meeting proceedings for the General Manager's interim performance review sessions held on August 31, 2011 and October 26, 2011 were reviewed. A motion was made by Secretary Bordson, seconded by Vice President Nordin to approve the minutes of October 26, 2011 regular meeting, November 10, 2011 special meeting and the summary of closed meeting proceedings for the General Manager's interim performance review sessions held on August 31, 2011 and October 26, 2011 as written. Motion was unanimously carried. The October 2011 payables were discussed. A motion was made by Commissioner Lenz, seconded by Secretary Bordson to ratify the payment of bills in the amount of $2,926,847.90 (detailed listing in payables book). Motion was unanimously carried. GM Kumm presented the October 2011 financial statements /budget year -to -date. A motion was made by Vice President Nordin, seconded by Commissioner Walser to approve the financial statements /budget year -to -date. Motion was unanimously carried. President Hantge explained Item 4, Employment Agreement with General Manager was not available for approval. Attorney Sebora presented changes to exempt and non - exempt handbooks, section: administration of personnel policies, explaining the verbiage 'or other employment contract' was added to the third paragraph to recognize any future separate employment contract with Hutchinson Utilities Commission personnel. A motion was made by Vice President Nordin, seconded by Commissioner Walser to approve changes to exempt and non - exempt handbooks, section: administration of personnel policies. Motion was unanimously carried. (Changes attached.) Attorney Sebora presented the leave credit in lieu of compensation policy, explaining in 2002 HUC recognized an issue with the Minnesota Governor's salary cap. HUC wants to retain and attract qualified employees therefore requesting the leave credit in lieu of compensation policy be adopted. This policy allows an employee to bank leave hours equal to the portion of salary above the Governor's salary cap. Compensation is then paid out at a capped hourly rate when the employee's employment ends with HUC. A motion was made by Secretary Bordson, seconded by Vice President Nordin to approve leave credit in lieu of compensation policy. Motion was unanimously carried. (Policy attached.) GM Kumm presented the 2012 budget. After discussion, recommended changes and corrections will be made before the December 2011 special meeting. GM Kumm presented policies and requirements booklet, sections: disconnection of residential services by HUC; disconnection of commercial services by HUC; and landlord acknowledgement. No changes were recommended. Jan Sifferath presented changes to exempt and non - exempt handbooks, sections: life insurance; health /dental insurance; disability insurance (exempt only). Recommended changes were made due to current practice and to clean up verbiage. After discussion, a motion was made by Commissioner Lenz, seconded by Secretary Bordson to approve changes to the exempt and non - exempt handbooks, sections: life insurance; health /dental insurance; disability insurance (exempt only). Motion was unanimously carried. (Changes attached.) GM Kumm presented change order No. W -001 to Wartsila contract. GM Kumm explained the change order is due to the downsizing of the tanks from when HUC originally went out for bids on project. After discussion, a motion was made by Vice President Nordin, seconded by Secretary Bordson to approve change order No. W -001 to Wartsila contract. Motion was unanimously carried. (Change order attached.) GM Kumm presented the advertisement for bids for plant 1 building modifications — unit 5. The building modifications are to increase the size of the current opening of the building to accommodate the installation of the new generator. This is part of the original project estimate and is in the 2011 budget. After discussion, a motion was made by Commissioner Lenz, seconded by Secretary Bordson to approve the advertisement for bids for plant 1 building modifications — unit 5. Motion was unanimously carried. (Advertisement for bids attached.) GM Kumm presented the Midwest Dental Benefits Master Administrative Services Agreement for 2012. There is no increase from 2011. After discussion, a motion was made by Vice President Nordin, seconded by Commissioner Lenz to approve Midwest Dental Benefits Master Administrative Services Agreement for 2012. Motion was unanimously carried. (Agreement attached.) Steve Lancaster presented requisition #004634 for conductor from Border States for a total of $27,105. This is for inventory for 2012 projects. These items will be added to the electric long -term agreement. After discussion, a motion was made by Commissioner Walser, seconded by Vice President Nordin to approve requisition #004634 for conductor from Border States for a total of $27,105. Motion was unanimously carried. (Requisition attached.) A motion was made by Vice President Nordin, seconded by Commissioner Lenz to declare the HUC Recognition /Holiday party scheduled for December 16, 2011 as an open meeting. Motion was unanimously carried. Discussion held regarding dates for the HUC /City joint meeting. GM Kumm suggested it be held in March 2012 after the rate study is complete. Division Reports Electric — Steve Lancaster • Switchgear — unit 5 bid specifications in Leader today; bid opening on December 20 at 2:00 p.m. • General Electric doing overhaul on unit 1 • Reviewing applications for mechanic position Natural Gas — John Webster • 2011 work order update Purchased natural gas today at $4.625 for November 2012 through October 2014 • Working with United Farmers Cooperative on a natural gas transportation agreement Business — Jan Sifferath • HUC conducting a `mini' health fair on December 14 • Medica quoted a 12.5% increase for 2012 health insurance plan due to high claims in 2011. Discussed opportunity to cap 2013 increase. Will distribute Medica insurance information at next commission meeting. Finance — Jared Martig • Received two $5,000 checks from League of Minnesota Cities as property insurance refund for operations maintenance pilot incentive for the last two years. • Working on renewal with League of Minnesota Cities • Update on 3% withholding law Legal Update Nothing to report Unfinished Business • Joint Action Agency, Electronic File Access for Commissioners, City /HUC — Human Resources and Legal Shared Services GM Kumm suggested these items be moved to the HUC 2012 "to do" list. New Business • A motion was made by Commissioner Walser, seconded by Vice President Nordin to schedule a special commission meeting for December 5, 2011 at 9:00 a.m. Motion was unanimously carried. There being no further business, a motion was made by Secretary Bordson, seconded by Vice President Nordin to adjourn the meeting at 4:31 p.m. Motion was unanimously carried. Dwi6fit Bordson, Secretary ATTEST: Ro�e4Hmitge, Resident R4 Morctun' Vice pres�Cte &'+ EXEMPT SECTION 2 — ADMINISTRATION OF PERSONNEL POLICIES The Commission approves personnel policies intending uniform administration of personnel matters of the Utilities. The Commission may supplement, amend and /or rescind the policies to assure that they will remain practical, useful and current. In approving personnel policies, the Commission has made every effort to be as reasonable and practical as possible. Final responsibility for the enforcement of the policies shall rest with the Commission. The Commission however, has delegated to the General Manager the responsibility and authority for the enforcement of all personnel policies. The General Manager, in turn, delegates certain responsibilities and authority to the Staff as deemed advisable in order to carry out the personnel policies. The General Manager, however, remains accountable to the Commission. If the Commission has not clearly delegated its authority in a certain manner, the Commission retains authority to determine the appropriate action. These personnel policies govern all Utilities employees and apply to all cases except where a policy contained herein conflicts with a Union Contract, or other employment contract, or past practice, in which case the Union Contract, or other employment contract, or past practice shall govern. SAVINGS CLAUSE If any provision of this Handbook is declared by proper legislative, administrative or judicial authority to be unlawful, unenforceable or not in accordance with applicable Civil Service rules, or law, all other provisions of this Handbook shall remain in full force and effect for the duration of this Handbook. NON - EXEMPT SECTION 2 — ADMINISTRATION OF PERSONNEL POLICIES The Commission approves personnel policies intending uniform administration of personnel matters of the Utilities. The Commission may supplement, amend and /or rescind the policies to assure that they will remain practical, useful and current. In approving personnel policies, the Commission has made every effort to be as reasonable and practical as possible. Final responsibility for the enforcement of the policies shall rest with the Commission. The Commission however, has delegated to the General Manager the responsibility and authority for the enforcement of all personnel policies. The General Manager, in turn, delegates certain responsibilities and authority to the Staff as deemed advisable in order to carry out the personnel policies. The General Manager, however, remains accountable to the Commission. If the Commission has not clearly delegated its authority in a certain manner, the Commission retains authority to determine the appropriate action. These personnel policies govern all Utilities employees and apply to all cases except where a policy contained herein conflicts with a Union Contract, or other employment contract, or past practice, in which case the Union Contract, or other employment contract, or past practice shall govern. SAVINGS CLAUSE If any provision of this Handbook is declared by proper legislative, administrative or judicial authority to be unlawful, unenforceable or not in accordance with applicable Civil Service rules, or law, all other provisions of this Handbook shall remain in full force and effect for the duration of this Handbook. Adopted November 30, 2011 Hutchinson Utilities Commission PERSONNEL POLICY LEAVE CREDIT IN LIEU OF COMPENSATION Each employee will be paid that portion of the employee's assigned salary that is permitted by law to be paid. An employee whose salary exceeds an amount permitted by law to be paid is entitled to receive leave hours in lieu of that portion of the salary that is not permitted by law to be paid. The amount of leave hours will be calculated utilizing the employee's actual annual rate of pay established pursuant to the applicable compensation policy and plan. The Commission, the General Manager or Department Head is authorized to establish the assigned salary using the provisions of the pay plan established by the Hutchinson Utilities Commission or the applicable collective bargaining agreement. Once an employee's nominal salary has been reached or exceeds the salary cap for his /her position, his/her hourly rate of pay will be the salary cap for the position divided by 2080 hours (the "capped hourly rate "). As the employee will be paid based on a "capped" hourly rate, annual earnings will not match the annual salary cap for the position. Example: Salary cap = $151,866/2080 annual hours = $73.0125 = "capped" hourly rate 26 payrolls = $73.0125X 80 hrs /pay period = $5,841.00 X 26 pay periods = $151,866.00 27 payrolls = $73.0125X 80 hrs /pay period = $5,841.00 X 27 pay periods = $157707.00 When an employee leaves employment with the Hutchinson Utilities Commission, all severance will be paid at the capped hourly rate. Each employee will receive leave credits in lieu of all compensation, which exceeds the salary cap for his /her position, as discussed earlier. Leave hours will be credited at the time the Commission, General Manager, or Department Head establishes the assigned salary for the employee whose salary exceeds the amount permitted by law to be paid. If an employee who has been awarded leave in lieu of compensation pursuant to this policy terminates employment, the employee's leave hours accrual will be prorated accordingly. Leave Credit Computation: Leave hours in lieu of annual salary will be credited for the difference between the nominal hourly rate and the capped hourly rate. The computation formula is: (nominal hourly rate — capped hourly rate) X # of hours employee was paid at the capped rate = x x/capped hourly rate = Leave hours to be credited Example: Nominal salary = $200,000/2080 annual hours = $96.153 = nominal hourly rate Salary cap = $151,866/2080 annual hours = $73.0125 = capped hourly rate 26 payrolls = ($96.153 — 73.0125) X (80 hrs /pay period X 26 pay periods = 2080) = $48134.24/$73.0125 = 659.257 hours 27 payrolls = ($96.153 — 73.0125) X (80 hrs /pay period X 27 pay periods = 2160) = $49,983.48/$73.0125 = 684.581 hours EXEMPT LIFE INSURANCE The Utile HUC provides group term life insurance with accidental death and dismemberment for all full -time employees. HUC also offers voluntary term life insurance for all full -time employees. Information on life insurance is available in through the Business D.visionCustomer/1-11IR Manager. EXEMPT HEALTH /DENTAL INSURANCE The Utilit HUC provide an opportunity for employees to participate in a group health (HSA) /dental insurance program. Employees are eligible for coverage the first of the month following hire date. Contact the Customer /HR Manager for information regarding benefits and participation levels. Contact the Customer /HR Manager for information about continuation of health /dental insurance coverage after leaving. HUC will provide those employees who participate in the high deductible family plan $4,000 annually into the HSA and employees participating in the high deductible single plan will receive $2,000 annually into the HSA. Based on Internal Revenue Service rules, an employee must be an eligible individual to qualify for an HSA including generally having no other health coverage that is not a high deductible health plan. Veterans of the United States armed forces who receive medical benefits from the Veterans Administration (VA) or employees who are enrolled in TRICARE, which is health insurance available to active duty and retired service and reserve members and their dependents, are therefore not eligible to qualify for an HSA. A veteran who receives medical benefits from the Veterans Administration (VA) or employees who are enrolled in TRICARE who participate in the high deductible family plan, but who is not eligible to qualify for an HSA, shall receive $4,000 annually in two equal installments in lieu of said monies being deposited in an HSA. A veteran who receives medical benefits from the Veterans Administration (VA) or employees who are enrolled in TRICARE who participates in the high deductible single plan, but who is not eligible to qualify for an HSA, shall receive $2,000 annually in two equal installments in lieu of said monies being deposited in an HSA. EXEMPT DISABILITY INSURANCE The LIfilot HUC pays the entire cost of a long -term disability insurance policy for all staff employees. Information on disability insurance is available through the Business Customer /HR Manager. NON - EXEMPT LIFE INSURANCE The Utiliti ties HUC provides group term life insurance with accidental death and dismemberment for all full -time employees. HUC also offers voluntary term life insurance for all full -time employees. Information on life insurance is available in through the Bu6iness DivisionCustomer /HR Manager. NON - EXEMPT HEALTH/DENTAL INSURANCE The "� + ili HUC provides an opportunity for employees to participate in a group (HSA) /dental insurance program. Employees are eligible for coverage the first of the month following hire date. Contact the Customer /HR Manager for information regarding benefits and participation levels. Contact the Customer /HR Manager for information about continuation of health /dental insurance coverage after leaving. See Union Contract. Date of Issuance: 20 October 2011 CHANGE ORDER No. W -001 Effective Date: Project: Engine Generator Set (Owner: Hutchinson Utilities Owner's Contract No.: Procurement Commission Wartsila Project: P0803765 Quotation — Q0801707A4R Date of Contract: September 14, 2011 Contractor: Wartsila North America, Inc. Engineer's Project No.: 155503 -002 The Contract Documents are modified as follows upon execution of this Change Order: Description: Delete two (2), 22,500 gallon reagent (Chemical) storage tanks as described in Exhibit A (A 5.2) and Exhibit B (A Attachments (list documents supporting change): None CHANGE IN CONTRACT PRICE: CHANGE IN CONTRACT TEWES: Original Contract Price: riginal Contract Times: ❑ Working days ❑ Calendar ys tial completion (days or date): $8,290,024.00 Rea for final payment (days or date): [Increase] [Decrease] from previously approved Change Orders No. N/A to No. N /A: SN /A Contract Price prior to this Change Order: $8,290,024.00 [lnearease] [Decrease] of this Change Order: $440,000.00 [Increase] [ crease] from previously approved ange Orders No. N/A to No. /A: Substantial comp tion (days): Ready for final pa nt (days): Contract Times prior to this a e Order: Substantial completion (day date): Ready for final payment ys o ate): [Increase] [Decrease f this Change Ord Substantial corn etion (days or date): _ Ready for f payment (days or date): Contract Price incorporating this Change Order: Contract es with all approved Change Orders: 7ady ntial completion (days or date): $7,850,024.00 for final payment (days or date): N/A RVE D — ACCEP > D: ACCEPT ] B By: ' �2L� By: uthorized Signature) Owner (Authorized Signature) actor (Authorized Signature) Date: 20 October 2011 Date: � NOV � o i 1 Date: a5 OC-- 2011 Approved by Funding Agency (if applicable): N/A Date: - -- IIUC EG Set Procurement Page 1 of 1 Advertisement for Bids for "Plant 1 Building Modifications- Unit 5" Hutchinson Utilities Commission Hutchinson, Minnesota Notice is hereby given that the Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota, hereinafter referred to as the Owner, will receive sealed Bids at the Hutchinson Utilities office until 2 p.m. XXXXXX 2012, and will publicly open and read aloud such Bids on the following equipment: "Plant 1 Building Modifications- Unit 5" Proposals shall be properly endorsed and delivered in an envelope marked, "Plant 1 Building Modifications- Unit 5" and shall be addressed to: Hutchinson Utilities Commission, 225 Michigan Street SE, Hutchinson, Minnesota 55350, Attn: Mr. Steve Lancaster Bids shall be supplied in hardcopy format. The name and address of the Bidder shall be clearly indicated on the outside of the package containing the Bid. Bidder shall provide one (1) original (clearly marked as such). All proposals shall be submitted on the Bidder's own letterhead, in facsimile of the Bid Form enclosed within the Specifications, or by utilizing the Bid Forms enclosed with the Specifications by typing the official name of the Bidder at the top of the form. Each Bid shall be accompanied by a Bid Bond, made payable to the Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota, in the amount of five percent (5 %) of the Bid, as a guarantee that the Bidder will enter into the proposed Contract after the Bid has been accepted. The successful Bidder shall furnish a Performance and Payment Bonds within (15) after the award of the contract in an amount equal to one- hundred percent (100 %) of the Contract price. No Bidder may withdraw his Bid or Proposal for a Period of thirty (30) days after date of opening of Bids. At the aforementioned time and place, or at such later time and place as the Owner then may fix, the Owner will act upon Proposals received and with its sole discretion may award Contract for the furnishing of said equipment. Specifications may be obtained by contacting Mr. James Booty, HDR Engineering Inc., 701 Xenia Avenue South, Minneapolis, MN. Telephone number 763 - 591 -5471. It is recommended that all bidders visit the site prior to submitting bid. Arrangements for site visit can be made thru Randy Blake @ 320 - 234 -0551. The Hutchinson Utilities Commission of the City of Hutchinson, Hutchinson, Minnesota reserves the right to reject any and all Bids, or Bid irregularities. By _74/1 - . President Date ATTE ED By Secretary Date / <D MDB MIDWEST DENTAL BENEFITS November 22, 2011 Jan Sifferath Hutchinson Utilities 225 Michigan Street SE Hutchinson, MN 55350 RE: Hutchinson Utilities MDB Group Number 308 Contract Term: January 1, 2012 — December 31, 2012 Dear Jan: Midwest Dental Benefits has been pleased to provide dental benefits to your employees for this past coverage year. We look forward to the renewal of your dental program for the above noted Contract Effective Date. In reviewing Hutchinson Utilities experience for this past year, we have observed the following: • Claims Utilization has performed better than projections and resulted in the plan surplus growing so far in 2011 by 70 %. Based on this information, MDB has determined the budget projections currently established do not need to be adjusted for the next contract year. Using the most recent 12 months of paid claims experience (through August 2011) MDB is projecting paid claims of $44,863 for the 2012 plan year. The paid claim funding rates are adequate to cover the expected claims and may remain the same. Administrative Fee: Current Rates Single $35.35 Renewal Rates Single $35.35 Family $86.40 Family $86.40 The administrative fee is currently $4.80 per employee per month. This was offered as a two year rate guarantee at last year's renewal and will be maintained through December 31, 2012. Contractual Updates As part of its principal administrative responsibilities, MDB must stay on top of new legislative and compliance changes that affect its dental plans. During an extensive review in 2010, MDB determined that revisions were required for its existing contracts and agreements to ensure proper compliance. Revised ASA and BAA — MDB has revised the current Administrative Services Agreement and Business Associates Agreements that are currently enforce. I have included new copies of each for you to review. The changes made were focused on updating definitions of terms and clarifications on processes to reflect compliance requirements. There should be no material change to your current plan or the services MDB provides. Please review and execute. When completed, please return the signature pages along with your signed renewal. I will execute and return a copy to you for your files. Please let me know if you have any questions regarding these revised documents. If you would like to renew your contract with Midwest Dental Benefits for the next contract year, please sign and date below. We thank you for your business and look forward to working with you again for this next contract year. Sincerely, Approved by: XL4'AW1"-- Michael M. Birdman President, Midwest Dental Benefits Dated: / /��'��I cc: Westlund Associates BUSINESS ASSOCIATE AGREEMENT ADDENDUM to the MIDWEST DENTAL BENEFITS, INC. MASTER ADMINISTRATIVE SERVICES AGREEMENT This Business Associate Agreement ("Agreement's is entered into by and between Hutchinson Utilities on behalf of Hutchinson Utilities ("Covered Entity's and Midwest Dental Benefits, Inc. ("Business Associate'. I. Purpose A. Business Associate is contractually obligated to provide certain services related to one or more "covered entities" as that term is defined and regulated under HIPAA. The parties to this Agreement acknowledge that (1) Business Associate is a "business associate" as that term is defined and regulated under the Health Insurance Portability and Accountability Act of 1996, as amended ( "HIPAA'�; and (2) Business Associate provides services to one of more "Covered Entities" as that term is defined and regulated under HIPAA. B. This Agreement is intended to constitute a "business associate" agreement between the Plan, as a Covered Entity, and the Business Associate, as required under the privacy and security provisions of HIPAA, as amended. Effective February 17, 2010, portions of HIPAA apply directly to Business Associate as provided in the Heath Information Technology for Economic and Clinical Health Act ( "HITECH'% part of the American Recovery and Reinvestment Act of 2009 ( "ARRA'�. Business Associate's obligations under this Agreement may be the same as, or in some cases in addition to, Business Associate's own obligations under HIPAA as provided in HITECH. . II. Special Definitions The following definitions are used by this Agreement: A. Agreement - means this Midwest Dental Benefits, Inc. Business Associate Agreement. B. ARRA — means the American Recovery and Reinvestment Act of 2009. C. Breach — means the unauthorized access, use, or disclosure of Protected Health Information regarding a Covered Individual that poses a significant risk of financial, reputational, or other harm to such Covered Individual. Notwithstanding the foregoing, a Breach does not include: (1) any good faith, unintentional acquisition, access, or use of Protected Health Information by an employee or individual acting under the authority of Covered Entity or Business Associate and in the scope of the employment or relationship between the employee or individual and Covered Entity or Business Associate, provided such information is not further acquired, accessed, used, or disclosed by any person; (2) any inadvertent disclosure by an individual who is authorized to access Protected Health Information at Covered Entity's or Business Associate's facility to another similarly situated individual at the same facility, provided such information is not further acquired, accessed, used, or disclosed without authorization by any person; and (3) a disclosure of Protected Health Information in a situation in which Business Associate has a good faith belief that the person(s) to which the unauthorized disclosure was made would not reasonably have been able to retain such information. D. Business Associate - means a person described in 45 C.F.R. Section 160.103 who performs certain functions on behalf of a Covered Entity. E. Business Associate Agreement - means the agreement required under 45 C.F.R. Section 164.314(a)(2) between a Business Associate and a Covered Entity. F. Covered Electronic Transactions - shall have the meaning given to the term "transaction" in 45 C.F.R. Section 160.103. G. Covered Entity - means an entity described in 45 C.F.R. Section 160.103, Including a group health plan. H. Covered Individual - means a person who is eligible for payment of certain services or supplies rendered or sold to the person or the person's eligible dependents under the terms, conditions, limitations, and exclusions of the Plan. I. Data Aggregation - means, with respect to Protected Health Information created or received by Business Associate in its capacity as a business associate (as that term is defined in 45 C.F.R. Section 160,103) of the Plan, the combining of such Protected Health Information by Business Associate with the Protected Health Information received by Business Associate in its capacity as a business associate of another covered entity (as those terms are defined in 45 C.F.R. Section 160.103), to permit data analyses that relate to the health care operations of the respective covered entities. Designated Record Set - means a group of records maintained by or for Covered Entity that is (1) the medical records and billing records about Individuals maintained by or for a covered health care provider, (2) the enrollment, payment, claims adjudication, and case or medical management record systems maintained by or for Covered Entity, or (3) used, in whole or in part, by or for Covered Entity to make decisions about Individuals. As used herein, the term "Record" means any item, collection, or grouping of information that includes Protected Health Information and is maintained, collected, used or disseminated by or for Covered Entity. K. Effective Date - means January 1, 2012 unless specifically note otherwise herein. L. Electronic Health Record - means an electronic record of health - related information regarding an Individual that is created, gathered, managed, and consulted by authorized health care clinicians and their staff. M. Electronic Protected Health Information - shall have the same meaning as the term "electronic protected health information" in 45 C.F.R. 160.103, limited to the information created, received, or transmitted by Business Associate from or on behalf of Covered Entity. N. HHS - means the United States Department of Health and Human Services. O. Including - means "including but not limited to." P. Individual - shall have the same meaning as the term "individual" in 45 C.F.R. Section 160.103 and shall include a person who qualifies as a personal representative in accordance with 45 C.F.R. Section 164.502(g). Q. Limited Data Set - shall have the same meaning as the term "limited data set" in 45 C.F.R. Section 164.514(e)(2). R. Plan - means [the name of plan(s)] or ['organized health care arrangement ", as that term is defined in 45 C.F.R. Section 160.103, consisting of [names of the plans collectively considered the organized health care arrangement] S. Privacy Rule - means the Standards and Privacy of Individually Identifiable Health Information at 45 C.F.R. Part 160 and Part 164, subparts A and E and the privacy provisions of HIPAA, as amended. T. Protected Health Information - shall have the same meaning as the term "protected health information" in 45 C.F.R. 160.103, limited to the information created, received, or transmitted by Business Associate from or on behalf of Covered Entity. Protected Health Information specifically includes Electronic Protected Health Information. U. Provider - means a hospital or professional practitioner duly certified or licensed to provide health care services to Covered Individuals. V. Required By Law - shall have the same meaning as the term "required by law" in 45 C.F.R. Section 164.103. W. Secretary - means the Secretary of the Department of Health and Human Services or his /her designee. X. Security Incident - shall have the same meaning as the term "security incident" in 45 C.F.R. Section 164.304, unless defined differently in Covered Entity's policies and procedures for compliance with the Security Rule, which shall be provided to the Business Associate. Y. Security Rule — means the Security Standards and Implementation Specifications at 45 C.F.R. Part 160 and Part 164, subpart C and the security provisions of HIPAA, as amended. Z. Standards for Electronic Transactions Rule - means the final regulations issued by HHS concerning standard transactions and code sets under the Administrative Simplification provisions of HIPAA, 45 C.F.R. Part 160 and Part 162. AA. Subcontractor — means an agent of a Business Associate described in 45 C.F.R. Section 165.103 to whom the Business Associate provides protected health information that the Business Associate creates, receives, maintains, or transmits on behalf of a Covered Entity. BB. Unsecured Protected Health Information — means Protected Health Information that is not secured through the use of a technology or methodology specified by the Secretary. As of August 24, 2009, Unsecured Protected Health Information includes such information that has not been rendered unusable, unreadable, or indecipherable to unauthorized individuals through: (1) encryption as described in the Secretary's guidance and determined by the National Institute of Standard and Technology to meet the standards described in such guidance, or (2) destruction, in accordance with the procedures identified in the Secretary's guidance, of the media on which the Protected Health Information was stored or recorded. III. Privacy Provisions A. Introduction. Business Associate, on behalf of Covered Entity, performs or assists in the performance of functions and activities that may involve the use, disclosure, receipt and /or creation of Protected Health Information. The "business associate" provisions of the Privacy Rule governing the terms and conditions under which the Business Associate may use or disclose Protected Health Information. In general, Business Associate agrees and intends to act such that (1) Covered Entity can fulfill its responsibilities under HIPAA; and (2) Business Associate can fulfill its contractual obligations under this Agreement. In addition, Business Associate specifically acknowledges its obligation under HITECH to use and disclose Protected Heath Information in accordance with the provisions of this Agreement required by 45 C.F.R. § 164.504(e). B. Permitted Uses and Disclosures by Business Associate. 1. Except as otherwise limited in the Business Associate Agreement, Business Associate may use or disclose Protected Health Information to perform functions, activities, or services for, or on behalf of, Covered Entity pursuant to any services agreement with the Business Associate and as permitted or required by the Business Associate Agreement or as Required by Law. 2. Except as otherwise limited in the Business Associate Agreement, Business Associate may use Protected Health Information for the proper management and administration of its business or to carry out its legal responsibilities. Except as otherwise limited in the Business Associate Agreement, Business Associate may disclose Protected Health Information for the proper management and administration of its business, if: i) the disclosures are Required by Law, or ii) Business Associate obtains reasonable assurances from the person to whom the information is disclosed that the information will be held confidentially and will be used or further disclosed only as Required by Law or for the purpose for which it was disclosed to such person, and the person will notify the Business Associate of any instances of which the person is aware in which the confidentiality of the information has been breached. 4. Except as otherwise limited in the Business Associate Agreement, Business Associate may use Protected Health Information to provide Data Aggregation services to Covered Entity as permitted by 45 C.F.R. Section 164.504(e)(2)(i)(B). Except as otherwise limited in the Business Associate Agreement, Business Associate may use Protected Health Information to report violations of law to appropriate Federal and State authorities, consistent with 45 C.F.R. Section 164.502(j)(1). 6. Effective February 17, 2010, Business Associate will limit the use, disclosure, or request of Protected Health Information, to the extent practicable, to the Limited Data Set or, if needed by Business Associate, to the minimum necessary (as determined by Business Associate) to accomplish the intended purpose of such use, disclosure, or request, except to the extent a broader use, disclosure, or request of Protected Health Information is allowed by the Privacy Rule. The restriction contained in this Paragraph III.B.6. will be effective until such time as the effective date of subsequent guidance issued by the Secretary regarding what constitutes "minimum necessary," at which time Business Associate will take reasonable efforts to limit the use, disclosure, or request of Protected Health Information to the minimum necessary (as defined by such Secretary's guidance) to accomplish the intended purpose of such use, disclosure, or request, except to the extent a broader use, disclosure, or request of Protected Health Information is allowed by the Privacy Rule. 7. Except as otherwise authorized by the Privacy Rule, Business Associate shall not directly or indirectly receive remuneration in exchange for any Protected Health Information of a Covered Individual unless Covered Entity has received a valid authorization from the Covered Individual that includes a specification of whether the Protected Health Information can be further exchanged for remuneration by the entity receiving Protected Health Information of that Covered Individual. This Paragraph III.B.7 shall apply to exchanges of Protected Health Information occurring on or after the date that is six (6) months following the promulgation of final regulations addressing the restriction on the sale of Protected Health Information. 8. Effective February 17, 2010, Business Associate may not use or disclose Protected Health Information regarding a Covered Individual with respect to a communication about a product or service that encourages recipients of the communication to purchase or use the product or service unless the communication is made to the Covered Individual: (i) to describe a health - related product or service (or payment for such product or service) that is provided by, or included in, the Plan, including communications about the entities participating in a health care provider network or health plan network, replacement of, or enhancements to, the Plan, and health - related products or services available only to Covered Individuals that add value to, but are not part of, the Plan; (ii) for treatment of the Covered Individual; or (iii) for case management or care coordination for the Covered Individual, or to direct or recommend alternative treatments, therapies, health care providers, or settings of care to the Covered Individual. Notwithstanding the foregoing, except as allowed by the Privacy Rule, Business Associate may not use or disclose Protected Health Information regarding a Covered Individual with respect to a communication described above if Covered Entity receives direct or indirect payment in exchange for making such communication. C. Limitations on Business Associate's Uses and Disclosures. With respect to Protected Health Information that Business Associate creates or receives on behalf of Covered Entity, Business Associate will not use or further disclose the Protected Health Information other than as permitted or required by this Agreement or as Required by Law. D. Additional Obligations of Business Associate. Except as otherwise specified in the Business Associate Agreement, the provisions of this Paragraph III.D. apply only to Protected Health Information that Business Associate creates or receives on behalf of Covered Entity. Safeguards. Business Associate will use appropriate safeguards to prevent the improper use of, disclosure of, and tampering with Protected Health Information and to reasonably and appropriately protect the confidentiality, integrity, and availability of the Protected Health Information. 2. Reporting and Mitigation. Business Associate will report to Covered Entity any use or disclosure of Protected Health Information of which Business Associate becomes aware, or that is reported to Business Associate by an agent or subcontractor, that is in violation of this Agreement. Such report shall be made within ten (10) business days of its discovery by Business Associate. Business Associate agrees to promptly mitigate, to the extent practicable, any harmful effect that is known to Business Associate of a use or disclosure in violation of this Agreement. This obligation includes, but is not limited to, uses or disclosures that may constitute a Breach. The determination of whether a Breach has occurred, and of the resultant action, shall be the responsibility of Covered Entity. 3. Agreement Breaches by Covered Entity. Effective February 17, 2010, if Business Associate obtains knowledge of a pattern of activity or practice of Covered Entity that constitutes a material breach or violation of Covered Entity's obligations under this Agreement, Business Associate will take reasonable steps to cure such breach or end such violation. If Business Associate cannot successfully cure the breach or end the violation, Business Associate shall terminate the Agreement in accordance with Section VI.B or, if termination of the Agreement is not feasible, report the breach or violation to the Secretary. 4. Agents and Subcontractors. Business Associate will ensure that any agent or subcontractor to whom it provides Protected Health Information received from, or created or received by Business Associate on behalf of, Covered Entity agrees to the same restrictions and conditions that apply by and through the Business Associate Agreement to Business Associate with respect to such information. 5. Access to Protected Health Information. Within fifteen (15) days of a request by Covered Entity for access to Protected Health Information about a Covered Individual, Business Associate shall make available to Covered Entity or, as directed by Covered Entity, a Covered Individual such Protected Health Information contained in a Designated Record Set. If the Business Associate maintains an Electronic Health Record with respect to the Protected Health Information of a Covered Individual, effective February 17, 2010, Business Associate shall make available, within the time period specified above, a copy of such information in electronic format and, if so directed by Covered Entity, will transmit such copy to a third party specified by Covered Entity, including, but not limited to, the Covered Individual. In the event any Covered Individual requests access to Protected Health Information directly from Business Associate, Business Associate shall within five (5) days forward such request to Covered Entity. Any denials of access to the Protected Health Information requested shall be the responsibility of Covered Entity. Amendment of Protected Health Information. Within fifteen (15) days of receipt of a request from Covered Entity or a Covered Individual for the amendment of Protected Health Information or a record regarding a Covered Individual contained in a Designated Record Set, Business Associate shall provide such information to Covered Entity for amendment and incorporate any such amendments in the Protected Health Information as required by 45 C.F.R. Section 164.526. It shall be Covered Entity's responsibility to promptly notify Business Associate of the request for an amendment. Any denials, in whole or in part, of requested amendments shall be done in accordance with 45 C.F.R. Section 164.526 and shall be the responsibility of Covered Entity. 7. Disclosure Accounting. Business Associate agrees to track such disclosures of Protected Health Information and information related to such disclosures as is necessary to enable Covered Entity to respond to a request by a Covered Individual for an accounting of disclosures of Protected Health Information in accordance with 45 C.F.R. Section 164.528. If Business Associate maintains an Electronic Health Record with respect to Covered Individuals, effective as of the applicable date contained in ARRA, Business Associate's obligation hereunder shall include an obligation to track disclosures of Protected Health Information contained in the Electronic Health Record, and information related to such disclosure, for treatment, payment, and health care operations. Within fifteen (15) days of receipt of notice from Covered Entity that it has received a request for an accounting of disclosures of Protected Health Information regarding a Covered Individual, Business Associate shall make available to Covered Entity such information as is in Business Associate's possession and is required for Covered Entity to make the accounting required by 45 C.F.R. Section 164.528 and the ARRA. At a minimum, Business Associate shall provide Covered Entity with the following information: (i) the date of the disclosure; (ii) the name of the entity or person who received the Protected Health Information, and if known, the address of such entity or person; (iii) a brief description of the Protected Health Information disclosed; and, (iv) a brief statement of the purpose of such disclosure which includes an explanation of the basis for such disclosure. Business Associate hereby agrees to implement an appropriate record keeping process to enable it to comply with the requirements of this section and applicable law. It shall be Covered Entity's responsibility to promptly notify Business Associate of the request for an accounting, and to prepare and deliver any such accounting requested. Access to Business Associate's Internal Records. Business Associate shall make its internal practices, books, and records relating to the use and disclosure of Protected Health Information received from, or created or received by Business Associate on behalf of, Covered Entity available to Covered Entity or the Secretary, for the purposes of the Secretary's determining compliance with HIPAA for Covered Entity and /or Business Associate. 9. Electronic Transactions. In the event the Business Associate transmits or receives any Covered Electronic Transaction on behalf of Covered Entity, it shall comply with all applicable provisions of the Standards for Electronic Transactions Rule to the extent Required by Law, and shall ensure that any agents and Subcontractors that assist Business Associate in conducting Covered Electronic Transactions on behalf of Covered Entity agree in writing to comply with the Standards for Electronic Transactions Rule to the extent Required by Law. E. Obligations and Rights of Covered Entity. 1. Notice of Privacy Practices. Covered Entity shall provide Business Associate with the notice of privacy practices that Covered Entity produces in accordance with 45 C.F.R. Section 164.520, as well as any changes to such notice. 2. Requests by Covered Entity. Covered Entity shall not request or direct Business Associate to use or disclose Protected Health Information in any manner that would not be permissible under the Privacy Rule if done by Covered Entity. This includes, but is not limited to, requests or directions for disclosure of Protected Health Information to the Plan sponsor in a capacity other than acting on behalf of the Plan as Covered Entity. To the extent a dispute or difference of opinion exists between the Business Associate and Covered Entity regarding whether a use or disclosure is permissible, Business Associate may disclose the Protected Health Information under objection pursuant to the specific, written direction of Covered Entity. Any disclosures made pursuant to such specific, written direction shall be subject to the indemnification provisions of the Agreement. 3. Changes in Permission. Covered Entity shall notify Business Associate of any changes in, or revocation of, permission by an Individual to use or disclose Protected Health Information, to the extent that such changes may affect Business Associate's use or disclosure of Protected Health Information. 4. Restrictions. Covered Entity shall notify Business Associate of any restriction to the use or disclosure of Protected Health Information to which Covered Entity has agreed in accordance with 45 C.F.R. Section 164.522, to the extent that such restriction may affect Business Associate's use or disclosure of Protected Health Information. Such restrictions include, but are not limited to, a Covered Individual's request not to disclose Protected Health Information for purposes of payment or health care operations where the Protected Health Information relates solely to a health item or service for which the health care provider has been paid in full out -of- pocket by, or on behalf of, the Covered Individual. 5. Agreement Breaches by Business Associate. If Covered Entity obtains knowledge of a pattern of activity or practice of Business Associate that constitutes a material breach or violation of Business Associate's obligations under this Agreement, Covered Entity will take reasonable steps to cure such breach or end such violation. If Covered Entity cannot successfully cure the breach or end the violation, Covered Entity shall terminate the Agreement in accordance with Section VI.B or, if termination of the Agreement is not feasible, report the breach or violation to the Secretary. IV. Electronic Security Provisions A. Introduction. This section applies where Business Associate, on behalf of Covered Entity, performs or assists in the performance of functions and activities that may involve the creation, maintenance, receipt, or transmission of Electronic Protected Health Information. This Section IV along with the other sections of the Business Associate Agreement are (1) intended to meet the requirements of the "business associate" provisions of Security Rule, and (2) govern the terms and conditions under which the Business Associate may create, maintain, receive, and transmit Electronic Protected Health Information on behalf of Covered Entity. In general, Business Associate agrees and intends to act such that (1) Covered Entity can fulfill its responsibilities under HIPAA; (2) Business Associate can fulfill its responsibilities under HIPAA; and (3) Business Associate can fulfill its contractual obligations under the Business Associate Agreement. B. Obligations of Business Associate. In accordance with the Security Rule, Business Associate agrees to: Conduct a security risk assessment (in accordance with 45 C.F.R. Section 164.306(b)(2)) and adopt and implement policies and procedures designed to ensure compliance with the Security Rule and this Agreement including, but not limited to, identifying a security officer and training personnel. 2. Implement administrative, physical and technical safeguards (including written policies and procedures) that reasonably and appropriately protect the confidentiality, integrity, and availability of the Electronic Protected Health Information that Business Associate creates, maintains, receives, or transmits on behalf of Covered Entity; Report to Covered Entity any Security Incident of which Business Associate becomes aware within ten (10) business days of its discovery by the Business Associate; 4. Promptly mitigate, to the extent practicable, any harmful effect of a Security Incident that is known to Business Associate; 5. Ensure that any agent or subcontractor to whom Business Associate provides Electronic Protected Health Information agrees to the same restrictions and conditions that apply under this Section IV to Business Associate, including, but not limited to, implementing reasonable and appropriate safeguards to protect such information; C. Obligations of Covered Entity. Covered Entity shall not request or direct Business Associate to create, maintain, receive, or transmit Electronic Protected Health Information in any manner that would not be permissible under the Security Rule. V. Breach Notification Requirements A. Business Associate Obligations. Effective September 24, 2009, if Business Associate accesses, maintains, retains, modifies, records, stores, destroys, or otherwise holds, uses, or discloses Unsecured Protected Health Information, Business Associate shall notify Covered Entity of a Breach of such information without unreasonable delay, but no later than sixty (60) days following discovery of the Breach. Such notice shall include an identification of each Covered Individual whose Protected Health Information has been, or is reasonably believed by Business Associate to have been, accessed, acquired, or disclosed during such Breach and any other available information needed by Covered Entity to enable it to comply with its notification obligations under the Privacy Rule and Security Rule. For purposes of this Section V, a Breach is deemed to have been discovered by Business Associate upon the first day on which such Breach is known, or by exercising reasonable diligence would have been known, to Business Associate (including any person, other than the individual committing the Breach, that is an employee, officer or agent of Business Associate). VI. Term and Termination A. Term. The Term of this Agreement will begin and become effective on the Effective Date and shall terminate when all of the Protected Health Information created or received by Business Associate on behalf of Covered Entity is destroyed or returned to Covered Entity, or, if it is infeasible to return or destroy Protected Health Information, protections are extended to such information, in accordance with the termination provisions in this Section VI. B. Termination. In the event that a party (the "non- breaching party's discovers and determines that the other party (the "breaching party's materially breached or violated any of its obligations under this Agreement, the non - breaching party will notify the breaching party of such breach in writing and may immediately terminate the Agreement upon notice 'to the breaching parry or may provide the breaching party with an opportunity to take reasonable steps to cure the breach or end the violation, as applicable, within a mutually agreed upon period of time. If the breaching party's attempts to cure the breach or end the violation are unsuccessful within that period, without limiting the rights of the parties under the Agreement, the non - breaching party may immediately terminate the Agreement upon notice to the breaching party. C. Effect of Relationship Termination. 1. Except as provided in paragraphs (b) and /or (c) of this sub - section, upon termination of the Agreement, for any reason, Business Associate shall return or destroy all Protected Health Information created or received by it on behalf of Covered Entity. This provision shall apply to Protected Health Information that is in the possession of Business Associate and /or its Subcontractors or agents. Business Associate will not retain any copies of Protected Health Information. 2. In the event that Business Associate determines that returning or destroying Protected Health Information is infeasible, Business Associate will notify Covered Entity of the conditions that make return or destruction infeasible. Upon mutual agreement of the parties that return or destruction of Protected Health Information is infeasible, Business Associate will extend the protections of this Agreement to such Protected Health Information and limit further uses and disclosures of such Protected Health Information to those purposes that make the return or destruction infeasible, for so long as Business Associate maintains such Protected Health Information. 3. Should Covered Entity notify Business Associate that the information necessary to comply with the recordkeeping requirements under other applicable law includes the Protected Health Information, Business Associate shall return or provide to Covered Entity such information, including Protected Health Information. VII. General Provisions A. Regulatory References. A reference in this Agreement to a section in the Privacy Rule or the Security Rule means the section as in effect or as amended. B. Amendment. The parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for Covered Entity and /or Business Associate to comply with the requirements of the Privacy Rule, the Security Rule, and the Health Insurance Portability and Accountability Act of 1996, Pub. L. No. 104 -191. C. Interpretation. Any ambiguity in this Agreement shall be resolved to permit each party to comply with the Privacy Rule and the Security Rule, if applicable. D. Survival. The respective rights and obligations under this Agreement shall survive the termination of this Agreement and any related agreement, Including a License Agreement or third party services agreement. E. Indemnity. Each party will indemnify, hold harmless, and defend the other party and its affiliates, officers, directors, employees or agents from and against any claim, cause of action, liability, damage, cost or expense, including attorneys' fees and court or proceeding costs, arising out of or in connection with any non - permitted or violating use or disclosure of Protected Health Information or other breach of this Agreement by such party or any subcontractor, agent, person or entity under such party's control. F. No Third Party Beneficiaries. Nothing express or implied in this Agreement is intended to confer, nor shall anything herein confer, upon any person other than the parties hereto, any rights obligations, or liabilities whatsoever. G. Conformance with Law. The parties agree to take such action as is necessary to amend this Agreement from time to time as is necessary for the parties to comply with the requirements of HIPAA as they apply to each party. H. Action. For purposes of this Agreement, whenever action is required by a party to this Agreement, such action must be taken by a person or persons with authority to act on behalf of such party to this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth below. Midwest Dental Benefits, Inc. as Business Associate: This day of , 201_ By: Print Name: Title: Covered Entity: HUTCHINSON UTILITIES This day of /�/ By: on behalf of the Hutchinson Utilities Dental Plan, a Covered Entity. Print Name: ZZ's 8 t-R.V 41A �vP'6c Title: �? za5 ro MIDWEST DENTAL BENEFITS MASTER ADMINISTRATIVE SERVICES AGREEMENT ERISA THIS AGREEMENT, made on this First day of January, 2012, by and between Midwest Dental Benefits, Inc., a Minnesota Corporation ("MDB'D and Hutchinson Utilities, a Minnesota Corporation ("Employer" and "Plan Administrator'. WHEREAS, Employer has established and maintains certain benefit plans (the "Plans' some or all of which are "welfare benefit plans" within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974 ("ERISA'� and some or all of which must comply with the Internal Revenue Code of 1986 (the "Code'; and WHEREAS, Employer and Plan Administrator desire that MDB furnish certain services described in this Administrative Services Agreement, Including Exhibits and Addenda (the "Agreement's in the operation and administration of the Plans; NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, Including the Exhibits and Addenda, if any, attached hereto, Employer, Plan Administrator, and MDB hereby agree as follows: I. Definitions The following definitions shall apply to this Agreement, unless a term is specifically defined differently in an Exhibit or Addendum: A. Addenda or Addendum — means the addenda or an addendum to, and made part of, this Agreement entered into by Employer, Plan Administrator, and MDB related to the particular Administrative Services to be provided by MDB in addition to the Administrative Services required under this Master Administrative Services Agreement. This Agreement includes the following Master Administrative Services Agreement plus the following Addenda: ® Dental Services Addendum ® Business Associate Agreement B. Administrative Services - means those services relating to the establishment, maintenance, and administration of the Plans to be performed by MDB as set forth in this Agreement. C. Agreement - means this Master Administrative Services Agreement, Including any Exhibits and Addenda attached hereto, and any outside agreements specifically incorporated by reference. D. Claims Account — means the bank account established or designated by the Employer as the bank account from which all or a portion of the cost of benefits under the Plan(s) shall be paid. E. Code - means the Internal Revenue Code of 1986 and regulations thereunder, as amended from time to time. F. COBRA - means the Consolidated Omnibus Budget Reconciliation Act of 1985 (as it appears in the Code and ERISA) and regulations thereunder, as amended from time to time. G. Continuation Coverage — means the continuation coverage required under COBRA and /or applicable state laws. H. Covered Individual — means a person properly covered under the Plan to which MDB is providing services, Including a Participant and the spouse and dependents of the Participant covered pursuant to the terms of the Plans. I. Effective Date - means the date upon which this Agreement, once fully executed by all parties, is first effective, January 1, 2012. J. Employer — means Hutchinson Utilities. K. ERISA - means the Employee Retirement Income Security Act of 1974 and regulations thereunder, as amended from time to time. L. Exhibits — means attachments to this Agreement, incorporated into and made part of this Agreement. They do not require specific execution by the parties. M. Fiduciary — means Plan Administrator, Employer (as the Named Fiduciary in the Plans), and any other person who satisfies the definition of "fiduciary" under ERISA. N. Funding Date — means the day of the month identified in Exhibit A on or before which administrative fees are due and payable. 0. HIPAA - means the Health Insurance Portability and Accountability Act of 1996 and regulations thereunder, as amended from time to time. P. Includes or Including — means including but not limited to. Q. MDB — means Midwest Dental Benefits, Inc. (Including all of its authorized representatives), an independent contractor designated to perform certain Administrative Services pursuant to this Agreement with respect to the Plans. R. Named Fiduciary — is a term described in Section 402(a)(1) of ERISA that is applicable to the Plans subject to ERISA and means Employer. S. Participant — means an eligible employee or former employee of Employer participating in a Plan to which MDB provides services in accordance with the terms of such Plan and an employee or former employee of Employer participating in such Plan pursuant to Continuation Coverage. T. Plan or Plans - means the programs or arrangements of benefits established and maintained by Employer with respect to which MDB provides services under the Addenda to this Agreement. U. Plan Administrator — means Employer. V. Summary Plan Description ( "SPD ") - means the written document intended to satisfy Section 104(b)(1) of ERISA. II. Plan Establishment & Maintenance A. Generally. Employer shall establish the Plans. Plan Administrator shall be responsible for the operation and administration of Plans. In accordance with this Agreement, MDB shall provide Administrative Services to Employer and Plan Administrator in connection with the establishment, operation, and administration of the Plans. B. Plan Documentation. Employer and Plan Administrator shall have ultimate responsibility for all aspects of the Plan documentation, Including written plan documents, SPDs, and amendments thereto. Upon request, MDB may provide Employer and Plan Administrator with services related to the initial preparation, periodic revision, and printing of the Plan documentation. The fee for such services (if any) is identified in Exhibit A. Employer and Plan Administrator shall approve all such materials within thirty (30) days following delivery by MDB, unless such deadline is extended by mutual agreement of all parties. Employer's and Plan Administrator's failure to object within such time period (Including any agreed upon extension period) shall constitute approval. Unless Employer, Plan Administrator and MDB mutually agree otherwise, Plan Administrator shall deliver to all Covered Individuals all appropriate and necessary documents and materials, Including the Plan documents, Plan amendments, SPDs, enrollment forms, application forms, and notices, as may be necessary for the operation of the Plans or to satisfy the requirements of state or federal laws and regulations. C. Plan Amendment & Termination. The Plans may be amended or terminated in accordance with the Plans' provisions. If Employer amends a Plan, Employer agrees to notify MDB (1) before the later of the effective date of the amendment or the date of adoption of the amendment, or (2) as soon as administratively feasible. MDB is responsible for providing services related to the amendment only upon its consent. Such consent shall not be unreasonably withheld, but may be conditioned upon Employer's agreement to pay increased administrative fees. The specifics of any increased administrative fees shall be reflected in an Agreement amendment described in Section VIII.A. Upon request of Employer, MDB may provide Employer with services related to preparation of Plan amendments and summaries of material modification. The fee for such services (if any) is identified in Exhibit A. III. MDB Responsibilities A. Capacity of MDB. In fulfilling its duties and obligations under this Agreement, MDB shall act as the administrative agent of the Plan(s). MDB does not intend to be a "named fiduciary," "plan sponsor," or "plan administrator" (as such terms are defined under ERISA, other applicable law, or the Plans) of the Plans or to assume any of the administrative duties or responsibilities commensurate with such designations. Employer shall not hold out MDB to third parties (Including Covered Individuals) that MDB serves in any of the foregoing capacities. In addition, MDB shall not be required to participate in or act in a manner that aids or assists a breach of a Fiduciary's duty (as defined under ERISA). B. Limited Responsibilities. MDB agrees to provide only the Administrative Services specifically described in this Agreement. Any responsibility with respect to establishment, maintenance, and administration of any welfare benefit plan sponsored by the Employer not specifically delegated to MDB herein shall remain the responsibility of Employer and /or Plan Administrator. C. Account Servicing and Employee Communication. MDB shall provide account management services as described in the particular Addendum or Addenda. MDB shall provide general administrative services to assist Covered Individuals with general information about the Plans and answer routine questions from persons concerning coverage status, claims status, complaint administration, and other inquiries related to the Plans. MDB shall provide each Participant with appropriate forms and instructions related to MDB's services hereunder. D. Employee Meetings. Upon request, MDB shall conduct employee meetings with respect to the Plans. The fee for such services (if any) is identified in Exhibit A. E. Assistance in Reporting and Compliance. As described in the particular Addendum or Addenda, MDB shall, based on information it may possess or is provided by Employer, use its best efforts to assist Employer or Plan Administrator in the Employer's or Plan Administrator's preparation of any tax return, report or other document required by any local, state or federal government or agency thereof with respect to the Plan, Including a Form 5500. The ultimate responsibility for the preparation and filing of any such return or report shall be that of Employer or Plan Administrator. F. Assistance with Regulatory Proceedings. With respect to, an Addendum entered between the parties, MDB shall assist Employer and Plan Administrator in any regulatory proceeding or investigation initiated by the IRS or U.S. Department of Labor with respect to the Plan. G. Compliance with Applicable Law. MDB shall comply with applicable federal and state laws and regulations applicable to MDB's responsibilities under this Agreement. Any state specific requirements not otherwise addressed in the Master Administrative Services Agreement shall be addressed in an Addendum and /or Exhibit. H. Additional Duties. MDB shall perform all additional duties as required by and specified in the Addenda and /or Exhibits. No Legal or Accounting Services. MDB, in performing services under the Agreement, is not engaged by Employer or Plan Administrator to render legal or accounting services or advice. Employer and Plan Administrator agree that no opinion of any kind, expressed or implied, is rendered by MDB as to the legal sufficiency or tax qualification of the Plan or any Plan documentation. Employer and Plan Administrator shall be responsible for obtaining legal and accounting advice with respect to the Plan from their own legal or accounting counsel. J. Fidelity Bond. MDB shall maintain a fidelity bond meeting the minimum requirements of ERISA and other applicable law covering any of its agents or representatives, Including its employees, handling funds or other property of the Plans within the meaning of Section 412 of ERISA. K. Prior Administration. If the Plan existed prior to the Effective Date, MDB shall work with Employer to transition administration to MDB. MDB shall have no responsibility to audit or review the prior administration for compliance with the Plan and applicable law. If, in the course of providing Administrative Services to the Plan, MDB discovers an error that occurred prior to the Effective Date, MDB will promptly notify Employer and Plan Administrator of such error. Employer and Plan Administrator shall be solely responsible for determining whether, and in what manner, such error shall be addressed. Upon request, MDB may assist Employer and Plan Administrator with correcting such the error, provided that Employer and Plan Administrator agree to pay any additional fees charged by MDB pursuant to Section IV.E.5. Notwithstanding anything herein to the contrary, MDB shall have no liability for the failure to discover errors in administration of the Plan occurring prior to the Effective Date. IV. Duties of Employer and Plan Administrator A. Eligibility Determination & Information. Employer shall make determinations regarding an employee's eligibility to participate in the Plan(s) (Including the eligibility of any owners of Employer), provide eligible employees with necessary enrollment materials and information regarding the Plan(s), enroll eligible employees into the Plan(s), and respond to all inquiries from employees regarding eligibility for, enrollment in, and the terms and conditions of the Plan(s). B. FMLA Determinations. Employer shall make determinations regarding FMLA Including whether FMLA and /or similar state laws apply. MDB shall not make determinations regarding FMLA, or comparable state laws, but upon request by Employer shall provide assistance in determining the application of FMLA. Furthermore, MDB shall be entitled to rely upon the information provided by Employer and is under no obligation to independently verify such information. C. Continuation Law Compliance. Employer and Plan Administrator shall be solely responsible for compliance with the applicable provisions of COBRA and /or state continuation laws, Including providing qualified beneficiaries covered by the Plans with initial COBRA notices, notices upon a qualifying event, notices of unavailability, termination notices, and other information concerning continuation coverage elections. D. QMCSO Compliance. Plan Administrator shall be responsible for all aspects of compliance with Section 609(a) of ERISA regarding qualified medical child support orders ( "QMCSO "), Including establishing QMCSO procedures and determining whether a medical child support order is "qualified." Plan Administrator shall provide notice to MDB of any Covered Individuals covered under the Plan by virtue of a QMCSO and of any Covered Individuals who cease to be covered under the Plan by virtue of the expiration of a QMCSO. MDB shall be entitled to rely upon the information provided by Plan Administrator pertaining to QMCSOs. E. Calculation & Payment of Administrative Services Fees. In consideration of MDB's performance of the Administrative Services described in this Agreement, Employer and /or Plan Administrator shall pay MDB the applicable administrative fees as described in Exhibit A. Minimum Fees. The minimum monthly fee (if any) described in Exhibit A shall apply if the sum of all monthly administrative fees does not exceed such minimum fee. 2. Fee Increases. Unless specifically provided in this Section IV.E. otherwise or in Exhibit A otherwise, all fees will be fixed for a period of one (1) year. MDB may increase the fees upon the anniversary of this Agreement. MDB shall provide Employer with at least thirty (30) days prior written notice of any such increase. 3. Due Date. Except as otherwise provided in Exhibit A, fees are due and payable on the first Funding Date of the month following the month in which the services were provided. 4. Failure to Pay. Any failure to remit any such fees within ten (10) days of the Funding Date may, at MDB's option, result in MDB's (1) suspension of performance of its services under this Agreement until such time as such fees are paid, or (2) termination of this Agreement. Fees for Additional Services. In the event services that are not part of the normal services, contemplated by this Agreement are required (e.g., changes in applicable law requiring distribution of additional notices), MDB may charge an additional fee commensurate with the additional services provided. MDB will inform Employer of the amount of the additional fee in advance of conducting the additional administrative services. MDB also reserves the right to charge additional fees for repeating, or expanding the scope of, its services due to inaccurate, incomplete, or unusable data supplied by Employer. 6. Material Change in Law. With the exception of changes described in Article VII.C.3., if substantial changes to laws and /or regulations materially affect the rights or responsibilities of any party to this Agreement, the parties to this Agreement agree to enter into negotiations to attempt to adequately respond to such changes. Any such changes must be reflected in a written amendment to this Agreement. If the parties are unable to agree upon an appropriate resolution, a party adversely affected by such changes may terminate this Agreement under Article VII.B. 7. Change in Population. If the number of Covered Individuals changes (increased or decreases) by more than ten percent (10 %), MDB reserves the right to re- calculate the administrative fees for providing services under this Agreement. Any such changes must be reflected in a written amendment to this Agreement. If the parties are unable to agree upon an appropriate resolution, a party adversely affected by such changes may terminate this Agreement under Article VII.B. F. Employee Meetings. Employer shall establish meeting times conducive to the mutual scheduling needs of Employer, its employees, and representatives of MDB if MDB representatives are expected to attend or otherwise be available. Employer shall arrange and provide appropriate and accessible meeting places for all group meetings. Employer shall encourage the participation of all Employer's employees to attend group meetings to include announcement/communication of meeting times and places in accordance with workforce needs. G. HIPAA Portability. Unless specifically described otherwise in an Addendum and /or Exhibit, MDB shall not provide administrative services related to HIPAA portability, Including providing certificates of creditable coverage to Covered Individuals. This does not preclude MDB from providing information to Employer upon request. H. Regulatory Compliance. Employer and Plan Administrator shall be responsible for compliance with applicable laws and regulations pertaining to the Plans. Employer and Plan Administrator shall be responsible for any and all governmental or regulatory charges and taxes resulting from Employer's establishment and operation of the Plans. Employer and Plan Administrator shall be responsible for determining the tax consequences of a Covered Individual's participation in the Plans, if any, and for any tax withholding or reporting related to such participation (e.g., the tax consequences of the participation of individuals deemed to be self - employed under the Code). This provision does not relieve MDB from any statutory or agency requirements placed directly on it as a result of performing services under this Agreement. Plan Design. Employer possesses and exercises ultimate authority and responsibility for the design of the Plan. Plan Interpretation. Unless the Plan(s) provide otherwise, or fail to provide at all, Plan Administrator possesses and exercises ultimate authority and responsibility for determining benefits under the Plan and making decisions regarding eligibility for participation, termination of participation, and payment of benefits. This authority and responsibility Includes final review of claim denials. K. Information. Employer and Plan Administrator (Including a designee) shall comply with all requests for information made by MDB reasonably necessary for MDB to fulfill its duties under this Agreement. MDB has no responsibility to verify the accuracy or completeness of such information. Any documentation received by Employer or Plan Administrator (Including a designee) that should have been provided to MDB shall be promptly forwarded to MDB. Such documentation Includes claim forms. L. Legal Obligations. Employer or Plan Administrator shall possess ultimate responsibility and authority for the operation of the Plans and for their compliance with all applicable laws and regulations pursuant to the provisions of the Plans. V. Records & Information A. Maintenance and Access. MDB and Plan Administrator shall maintain adequate records relating to the terms and operation of the Plans for at least the Plan year to which the records relate and for a ten (10) year period thereafter. Each party shall have access to the records relating to the Plans maintained by the other party during normal business hours and upon reasonable notice and request and subject to applicable laws and regulations. At the conclusion of the period for which records are required to be kept under this provision and prior to any modification, destruction or disposal of any records, MDB shall provide Plan Administrator an opportunity to review the records and obtain copies of any such records. All costs associated with such inspection and copying of records shall be paid by Plan Administrator. B. Record Use. MDB, Employer, and Plan Administrator agree that the medical records, names, addresses, telephone numbers, Social Security numbers and other personal information relating to Covered Individuals, which MDB may obtain as a result of performing administrative services may be collected, maintained and used by MDB and Plan Administrator as necessary to administer the Plans. MDB and Plan Administrator may use Participant specific and individually identifiable information, as necessary to properly administer the Plans, to defend any claim related to the Plans or to the provision of services under this Agreement, or as otherwise may be permitted by state or federal law. All parties agree that such information shall be considered confidential and protected as required under applicable law. C. Use of MDB's Confidential and Proprietary Information. The parties agree that MDB's "services package" is proprietary, including, without limitation, the methodologies, procedures and /or documentation involved in the optimization of employee benefit programs and in achieving of enhanced participation and results. Employer and Plan Administrator agree not to use this information other than for the specific purposes of carrying out the terms of this Agreement, and shall disclose it only to its officers, directors, employees or contractors with a specific need to know. The "services package" is a trademark of MDB and can only be used with prior written permission. Employer and Plan Administrator acknowledge that MDB and /or its agents are the sole copyright owners of all plan documentation, administrative guides and forms, content of MDB's web site, and all other materials provided under the terms of this Agreement and that such materials are proprietary to MDB. MDB grants Employer and Plan Administrator a nonexclusive, nontransferable right to copy such materials, provided such copies are needed for the sole purpose of collecting and reporting information regarding Participants or notifying Participants of information regarding the Plan(s). Other materials provided by MDB shall not be copied or reproduced by Employer or Plan Administrator without MDB's prior written consent. Employer and Plan Administrator covenant and warrant during the term of this Agreement that: (1) they shall utilize any proprietary documents solely for the Plan during the term of this Agreement; (2) they shall not otherwise share, appropriate, use, divulge or exploit any proprietary documents at any time in any way; (3) they shall not alter any proprietary documents except as expressly provided herein or as required by law at any time in any way; (4) MDB has a protected proprietary interest in the proprietary documents; and (5) any violation of these covenants and warranties may cause MDB immediate irreparable harm. D. Transfer of Records. When this Agreement ends, MDB may transfer to Employer, Plan Administrator, and /or any successor administrator those records MDB determines are reasonably necessary to effectuate a smooth transition of administration of the Plans and any other records MDB possesses that relate to the Plans. MDB intends that this transfer of records will satisfy its obligation to maintain such records as described above. MDB shall provide Plan Administrator an opportunity to review the records and obtain copies of any such records in addition to the records MDB has identified as necessary for a smooth transition or otherwise transferred. The details of such transfer Including the means, method and timing, shall be agreed to by the parties. All costs associated with such a record review and transfer shall be paid by Employer and /or Plan Administrator. E. HIPAA Business Associate. MDB acknowledges its role as a business associate of certain Plans for purposes of the privacy and security standards under HIPAA. The business associate contractual requirements are reflected in an Addendum. VI. Indemnification and Limitation of Liability A. Health Care or Treatment. All parties agree MDB is not responsible for the provision of the underlying health care or treatment which may give rise to a reimbursable expense under a Plan. Furthermore, health care providers are not the agents of MDB. The indemnification provisions of this Article do not apply to the portion of any liability, settlement, and related expenses, caused by the acts or omissions of the health care providers with respect to Covered Individuals. B. Claim Processing Errors. MDB shall be liable for the recovery of claim processing errors arising from MDB's performance pursuant to the terms of this Agreement. MDB shall use diligent efforts toward the recovery of such losses. MDB's liability, if any, shall be limited to the amount in excess of the claim amount(s) payable under the terms of the Plan. Notwithstanding the preceding, however, MDB shall not be liable for any such error that is reasonable, made in good faith, and within acceptable industry standards. C. Indemnification by Plan Administrator for Claims Decisions. If Plan Administrator reverses a claim payment decision made by MDB, Plan Administrator shall notify MDB in writing of such decision and shall indemnify, hold harmless, and defend MDB from and against any and all liabilities, losses, damages, claims, lawsuits, causes of action, costs, and expenses MDB may incur because of any such reversal. D. No Guarantee of Benefits. MDB does not assume any responsibility, risk, liability or obligation for the general policy direction of the Plan, the adequacy of funding thereof, or any act or omission or breach of duty by parties other than MDB. MDB is not and shall not be deemed a guarantor with respect to any benefits payable under the Plan. E. Indemnification for Design /Interpretation. MDB is not engaged in the practice of law. The resolution of any legal issues concerning the Plan is the responsibility of Plan Administrator and /or Employer and their legal counsel. Plan Administrator and Employer shall indemnify, hold harmless, and defend MDB from and against any and all liabilities, losses, damages, claims, lawsuits, or causes of action, and any costs and expenses associated therewith (Including any attorneys' fees MDB may incur or be asked to pay), arising, directly or indirectly, out of the design and /or interpretation of the Plan, Including any liability, losses, damages, claims, lawsuits, or causes of action and any costs and expenses associated therewith (Including any attorneys' fees MDB may incur or be asked to pay) arising under any state, federal or local law or regulation. F. General Indemnification by Plan Administrator and Employer. Plan Administrator and Employer shall indemnify, hold harmless, and defend MDB and its directors, trustees, officers, employees, and agents from and against any and all liabilities, losses or damages arising out of any claims, lawsuits, or causes of action, and any costs and expenses associated therewith (Including any attorneys' fees MDB may incur or be asked to pay), which arise, directly or indirectly, from Plan Administrator's or Employer's act or omission to act in its administration of the Plan, Including any liability, losses, damages, claims, lawsuits, or causes of action and any costs and expenses associated therewith (Including any attorneys' fees MDB may incur or be asked to pay) arising under any law. G. Indemnification for Prior Administration. If a party other than MDB previously provided administration or recordkeeping services to the Plan, Plan Administrator and Employer shall indemnify, hold harmless, and defend MDB and its directors, trustees, officers, employees, and agents from and against any and all liabilities, losses or damages arising out of any claims, lawsuits, or causes of action, and any costs and expenses associated therewith (Including any attorneys' fees MDB may incur or be asked to pay), which arise, directly or indirectly, from such prior administration or recordkeeping, Including any liability, losses, damages, claims, lawsuits, or causes of action and any costs and expenses associated therewith (Including any attorneys' fees MDB may incur or be asked to pay) arising under any law. H. MDB's Duty to Indemnify. MDB shall indemnify, hold harmless, and defend Plan Administrator and Employer and their directors, trustees, officers, employees, and agents from and against any and all liabilities, losses or damages arising out of any claims, lawsuits, or causes of action, and any costs and expenses associated therewith (Including any attorneys' fees Plan Administrator and Employer may incur or be asked to pay), which arise, directly or indirectly, from MDB's act or omission to act in its administration of the Plan, Including any liability, losses, damages, claims, lawsuits, or causes of action and any costs and expenses associated therewith (Including any attorneys' fees Plan Administrator and Employer may incur or be asked to pay) arising under any law. I. Limitation of Liability. MDB shall exercise, in the performance of its duties, reasonable care and shall be liable for a loss only when caused by MDB's (or MDB's subcontractors') negligence, gross negligence, fraud, willful misconduct, criminal conduct or a material breach of this Agreement. MDB shall be responsible for direct damages caused by its failure. to satisfy its duties hereunder; provided, however, that MDB shall not be liable for any incidental or consequential damages caused by its failure to satisfy its duties hereunder. MDB shall not be liable for processing that is delayed due to circumstances beyond its reasonable control, Including national, state, or city disaster, acts of God, severe weather, or any other circumstances that would affect MDB or its software or internet systems. Reliance on Data & Direction. Notwithstanding any provision of this Agreement to the contrary, MDB is not responsible or liable for any acts or omissions made pursuant to any direction, consent or other request reasonably believed by MDB to be genuine and from an authorized representative of Employer and Plan Administrator. MDB is not responsible or liable for acts or omissions made in reliance on erroneous data provided by Employer or Plan Administrator to the extent MDB's acts or omissions are attributable to the erroneous data, or for the failure of Employer or Plan Administrator to perform their obligations under this Agreement. VII. Term and Termination A. Term. This Agreement is effective as of the Effective Date and, unless specifically indicated otherwise in Exhibit A, shall continue for a period of one (1) year, terminated earlier pursuant to this Section VII of the Agreement. Upon expiration of the initial term (and each succeeding term), the Agreement shall automatically renew for an additional one (1) year term, unless earlier terminated pursuant to this Section VII of the Agreement. B. Termination. This Agreement may be terminated by either party at the end of a term upon written notice of the intention to terminate given to the other party at least thirty (30) days prior to the end of such term. In addition, this Agreement may be terminated by either party at any time upon sixty (60) days' written notice of the intention to terminate given to the other party. Notwithstanding the foregoing, in the event Employer or Plan Administrator terminates this Agreement pursuant to this Section VII.B. during the initial one (1) year term for reasons other than termination for cause as described in Section VII.C. below, Employer and Plan Administrator shall pay to MDB an early termination fee equal to the per Participant per month fee times the [number of Participants in the highest calendar month during the shorter of (1) the number of calendar months MDB has provided services to the Employer, and (2) the preceding 12 month period.] [average number of Participants per calendar month during the shorter of (1) the number of calendar months MDB has provided services to the Employer, and (2) the preceding 12 month period.] C. Automatic Termination. The Agreement shall automatically terminate upon: 1. The material breach of the terms of this Agreement by any party, Including failure to provide adequate funds to the Claims Account or to remit service fees due MDB, if such material breach is not corrected within ten (10) days of receipt of written notice specifying the nature of the breach to the satisfaction of the non - breaching party, provided that if the material breach relates only to a particular Addendum, at its election, the non - breaching party may choose to terminate only the Addendum that has been breached; 2. The bankruptcy or insolvency of Employer, Plan Administrator, or MDB; or 3. The enactment of any law, promulgation of any regulation or action of any State or Federal agency or authority which makes or declares illegal the continuance of this Agreement or the performance of any of the services of MDB hereunder. D. Post- Termination Obligations. Upon termination of this Agreement, MDB shall cease to act on behalf of Employer and Plan Administrator. Except as otherwise provided in an Addendum, Employer and Plan Administrator shall be solely responsible for the administration of the Plans after the effective date of the termination of the Agreement. MDB reserves the right to notify Covered Individuals that MDB no longer acts on behalf of Employer and Plan Administrator following termination of the Agreement. Notwithstanding the foregoing, MDB may, as mutually agreed upon by Employer, Plan Administrator, and MDB, provide certain administrative services following the termination of this Agreement. Such services shall be provided pursuant to and solely in accordance with a written addendum to this Agreement signed by Employer, Plan Administrator, and MDB. E. Survival. Any provisions of this Agreement that by their terms impose obligations and responsibilities that extend beyond the term of this Agreement, Including Articles V, VI, and VIII shall survive termination of this Agreement. In addition, any Addenda addressing the parties' responsibilities at and after termination shall survive termination of this Agreement. VIII. Miscellaneous A. Agreement Amendment. This Agreement may be amended only by mutual agreement in writing executed by all parties, except that MDB may amend this Agreement to the extent necessary to comply with applicable federal, state, or local laws or regulations. B. Notices. All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and delivered personally, or sent by registered or certified mail or nationally recognized overnight carrier, postage prepaid, or by facsimile transmission, to the address set forth below, or to such other address set forth in a notice given in the manner herein provided. All such notices, requests, information or other communications shall be deemed to have been given (i) when delivered if personally delivered, (ii) three business days after having been placed in the mail, if delivered by registered or certified mail, (iii) the business day after having been placed with a nationally recognized overnight carrier, if delivered by nationally recognized overnight carrier, and (iv) the business day after transmittal by facsimile if transmitted with electronic confirmation of receipt. If to Employer and Plan Administrator: Hutchinson Utilities 225 Michigan Street SE Hutchinson, MN 55350 (320) 587 -4746 If to MDB: Midwest Dental Benefits 1335 Industrial Boulevard, Suite 100 Minneapolis, MN 55413 Phone: 612 - 767 -9100 or 800-836-4098 Fax: 612 - 767 -9200 Upon the occurrence of a change in any of the above address information, each party shall notify the other party(ies) of such change within five (5) business days of the effective date of the change. C. Severability. The provisions of this Agreement are severable. If any provision of this Agreement is held invalid by a court of law or other tribunal, the invalidity of any provision will not affect any other provision of this Agreement. D. No Waiver of Rights. Nothing in this Agreement shall be deemed to limit or abrogate any right or remedy available under law. The failure of any party to insist upon the strict observation or performance of any provision of this Agreement or to exercise any right or remedy shall not impair or waive any such right or remedy. E. Non - Assumption of Liabilities. Unless specifically provided in this Agreement, the parties do not assume the existing or future obligations, liabilities or debts of the other parry. F. Entire Agreement. This Agreement shall supersede and replace any and all other agreements between the parties relating to the same subject matter. This Agreement contains the entire agreement and understanding of the parties relating to the subject matter hereof, except as otherwise provided in this Agreement. G. Governing Law. The Agreement shall be governed by and interpreted in accordance with applicable federal law, Including ERISA. To the extent the federal law does not govern and no Addendum or Exhibit provides otherwise, this Agreement shall be governed by the laws of the State of Minnesota. H. Dispute Resolution. It is expected that any disputes or differences that may arise under this Agreement will be resolved in the usual course of business. If, however, any dispute does arise between MDB, the Plan Sponsor, the Plan Administrator and /or the Plan that relates to or arises from this Agreement, whatever its nature, the parties agree to proceed as follows: Any party may notify the other parties of the matter in dispute and that it wishes to begin the dispute resolution procedure. Within thirty (30) days after notification, a designated executive of MDB, a designated representative of the Plan Sponsor and if appropriate a designated representative of the Plan Administrator shall meet and confer in an effort to resolve the problem. The parties may, if they wish, agree to mediation or other voluntary form of dispute resolution in accordance with procedures to be agreed to by the parties. Unless otherwise agreed, the parties do not waive their right to pursue remedies in a court of law. To the extent permitted by applicable law, all negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement negotiations for purposes of the Federal Rules of Evidence and state rules of evidence. I. Remedies. The parties hereby declare that they cannot measure in money the damages that will accrue to a party hereto because of the other party's failure to perform any obligations under this Agreement (other than the payment of money). Therefore, if any party hereto shall institute any action or proceeding (including one for injunctive relief) to enforce the provisions hereof, any party against whom such action or proceeding is pending hereby waives the claim that the moving party has an adequate remedy at law. The non - moving party shall not urge in any action or preceding the claim or defense that such a remedy at law exists. The preceding provisions shall not limit or otherwise preclude any other remedy at law or in equity available to a non - defaulting party. Independent Contractors. MDB shall be construed to be acting as an independent contractor and not as an employee of Employer or Plan Administrator. MDB, Employer and Plan Administrator shall not have the power or authority to act for or on behalf of, or to bind the other party, except as set forth in this Agreement. K. Third Party Beneficiaries. The obligations of each party to this Agreement shall inure solely to the benefit of the other party(ies). Except as expressly provided in this Agreement, no person or entity is intended to be or shall be construed or deemed to be a third party beneficiary of this Agreement. L. Subcontractors. MDB may hire subcontractors to perform any of the services required of it under this Agreement and to act as its designee for purposes of this Agreement. M. Successors and Assigns. This Agreement shall be binding on any successors, assigns and subcontractors of the parties authorized under this Agreement. N. Audit Rights. The parties agree to cooperate in all reasonable audits. Audit fees shall be payable by the party initiating the audit. Audits shall be conducted using procedures mutually agreed upon by the parties. Results of the audit may be shared with the party being audited at the sole discretion of the party initiating the audit. O. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. P. Construction. The parties represent and warrant that the terms and conditions of this Agreement are the result of negotiations among them and that the construction of this Agreement shall not favor or hurt any party by reason of the extent to which any party or his legal counsel participated in the drafting of this Agreement. Q. Force Majeure. Neither party shall be liable for any delay or failure to perform its obligations under this Agreement arising out of a cause beyond its control or without its fault or negligence. Such causes may Include fires, floods, and natural disasters. IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as of the Effective Date. ALIV116Q4;7 Dated: Bv: Company Representative Hutchinson Utilities MIDWEST DENTAL BENEFITS, INC. Dated: By: Authorized Representative of Midwest Dental Benefits, Inc. Its: PLAN ADMINISTRATOR Dated: By: Authorized Representative Hutchinson Utilities Its: LIST OF EXHIBITS A Administrative Fees & Custom Services EXHIBIT A Administrative Fees & Custom Services Administrative Fees Employer shall be responsible for administrative service fees in accordance with the following schedule: Dental Services Administration Fee Printing Charges Electronic Plan Document SPD Custom Services (if any) $4.80 per Participant per month (PEPM) MDB receives $3.80 pepm for administrative services Broker receives $1.00 pepm for broker services No charge $2.75 per document $2.75 per document Run -Out - Upon termination, client will be able to determine if run -out services are required. MDB will administer 30, 60 or 90 day run -out services as requested. If group elects to receive run -out services, an amount equal to the monthly administrative fees will be charged for each month services are requested. Reports — If custom reports are requested an hourly charge may be implemented. All changes would be negotiated at time of request. EXHIBIT B State Specific Requirements DENTAL SERVICES ADDENDUM to the MIDWEST DENTAL BENEFITS, INC. MASTER ADMINISTRATIVE SERVICES AGREEMENT The purpose of this Addendum is to describe the services, in addition to those services described in the Agreement (collectively referred to as "Administrative Services', to be furnished by MDB with respect to the provision of dental services and vision services in accordance with the written Plan document as established and maintained by Employer. I. Definitions In addition to the definitions contained in the Agreement, which are hereby incorporated herein to the extent not inconsistent herewith, the following definitions shall apply to this Addendum: A. Addendum — means this Dental /Vision Services Addendum to the Agreement. B. Effective Date - means the date upon which this Addendum, once fully executed by all parties, is first effective, January 1, 2012. C. Plan - means the Employer sponsored self- insured benefit program, under Sections 105 and 106 of the Code, through which dental and vision services are provided. II. MDB Responsibilities A. Processing and Payment of Claims. MDB shall process, adjust, and settle claims of Participants received by MDB for benefits under the Plan in accordance with the terms and conditions of the Plan. Where the terms and conditions of the Plan are not clear, MDB reserves the right to request direction from Plan Administrator. Generally, MDB shall serve as claims paying agent for the Plan and shall pay reimbursements via check or direct deposit from the Claims Account generally on a bi- weekly basis. B. Initial and Reconsideration of Benefit Decisions. In processing and determining claims, MDB shall: 1. Make initial benefits determinations and reconsideration of benefits decisions in accordance with the terms and conditions of the Plan; 2. Use MDB's internal guidelines (benefit interpretations) to make initial benefit determinations in a consistent manner; Notify Covered Individuals if a claim is denied, in whole or in part, in accordance with the terms and conditions of the Plan; and 4. Provide to the Plan Administrator, for determination by the Plan Administrator upon final appeal, the complete administrative record with respect to the denied claim. C. Overpayments and Erroneous Payments. Should MDB discover or have brought to its attention an overpayment or otherwise erroneous benefit payment made by it under the Plan in excess of $10.00, MDB shall make a diligent attempt to recover such payment in accordance herewith. MDB will make three (3) written contacts with the recipient of the payment. If the payment has not been recovered within a reasonable time following the third contact, MDB will notify Plan Administrator. Plan Administrator shall then decide whether and in what manner to further pursue repayment of the payment. If Plan Administrator determines to take further action to pursue recovery of the payment, Plan Administrator shall be responsible for all costs incurred in doing so. After the three (3) contacts described herein, MDB shall take no further action to recover the payment unless the parties agree, reflected as a written addendum to the Agreement, on the terms and conditions applicable to such additional services by MDB. D. Participant Statements. MDB shall provide to each Participant participating in the I Plan, an explanation of benefits ( "E06') Including information regarding account balances and claims paid. E. Employer Reports. MDB shall provide to Employer, upon request, the underlying information supporting the information reflected on the invoice. The format and detail shall be provided in a manner mutually agreeable to the parties. F. Claims Audit. MDB shall audit selected claims in accordance with standards audit procedures adopted by MDB. If MDB concludes from its initial audit that a claim filed by, or on behalf of, a Covered Individual may be fraudulent or is otherwise suspect, MDB shall seek approval from the Plan Administrator to contact the Covered Individual and /or otherwise investigate the claim further in accordance with its standard audit, procedures. Such approval shall be obtained before the commencement of any investigation which could involve contact with a Covered Individual. III. Duties of Employer and Plan Administrator A. Participant Information. Employer shall, in a mutually agreed format, provide MDB with a listing of all persons participating in the Plan. Employer shall also provide MDB with prompt written notice of any addition or deletion of Covered Individuals. MDB may rely on the most current information in its possession regarding the participation in paying claims and providing other services under this Agreement. MDB shall make retroactive adjustments, Including enrollment changes, up to a maximum of three (3) calendar months following the date of the change. Adjustments outside this time period may result in additional fees as provided under Section IV.E.S. of the Agreement. B. Claims Account. Employer shall establish an account from which all benefit payments under the Plan are made. All funds provided for the purpose of paying benefits shall be made available by Employer through such account. Employer shall make funds available through the account at a sufficient level to permit payment of benefits due Participants. Employer acknowledges that MDB has no obligation to pay claims for benefits under the Plan from its own assets and MDB shall not advance its own funds if there are not sufficient funds provided by Employer for such payment. C. Review of Reports. Employer or Plan Administrator shall review the monthly accounting provided by MDB and reconcile such accountings with its payroll records. Employer or Plan Administrator shall notify MDB of any discrepancy within ten (10) business days of receipt of the accounting. IV. Term and Termination A. Term. This Addendum is effective as of the Effective Date and shall continue in effect for the term of the Agreement, unless earlier terminated pursuant to Section IV.B. of the Addendum. B. Termination. This Addendum shall terminate effective with the termination of the Agreement. In addition, this Addendum may be terminated or shall terminate, without the termination of the Agreement, as provided in Sections VII.B. and VII.C. of the Agreement. C. Obligations Upon Termination. Employer and Plan Administrator shall be liable for the processing and payment of all eligible benefit claims payable pursuant to the terms of the Plan on or after the date on which this Addendum terminates. MDB may, as mutually agreed upon by Employer, Plan Administrator and MDB, provide certain administrative services following the termination of this Addendum. If not already reflected in Exhibit A, such agreement shall be reflected in a separate written agreement between the parties. IN WITNESS WHEREOF, the parties have executed this Addendum to be effective as of the Effective Date. EMPLOYER By. Company Rep entative Hutchinson Utilities MIDWEST DENTAL BENEFITS, INC. By: Authorized Representative of Midwest Dental Benefits, Inc. 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