Res 2016-077/approving an administrative services agreement with United Healthcare Services, Inc. for the provision of medical, pharmacy, dental, flexible spending accounts (fsa), retiree, online enrollment tool and cobra benefits administration in a tot

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United has arranged with Bank of America to cover any lost funds in excess of the FDIC Insurance for United's self - funded customers. Any City of San Marcos funds recovered from the FDIC and/or Bank of America will be returned to the City of San Marcos. Balance In Account. Customer will maintain a minimum balance in the Bank Account in an amount equal to not less than 6 days of expected Bank Account activity. United will establish this amount based on expected Plan payment obligations, with appropriate adjustments for anticipated non -daily activity (e.g., prescription drug benefits and fee payments) as determined by United. United will determine if circumstances warrant increasing this minimum balance, and will notify Customer if and when the required minimum balance or the amount changes. The required minimum balance is based on Customer's financial condition as assessed by United. In the event United determines, based on reasonable information and belief, that Customer's financial condition has deteriorated or Customer continues to fail to comply with the material financial obligations specified in this Agreement, United may revise the required balance effective five (5) calendar days from the date of notice to Customer. Issuing and Providing Funds for Checks and Non -Draft Payments. Checks and/or non -draft payments will be written on and/or issued from one or more common accounts that are a part of the network of accounts maintained at the Bank for United's self - funded customers. When the checks for Plan benefits are presented to the Bank, the Bank will notify United and United will direct the Bank to either reject the checks or to withdraw funds from the Bank Account to fund the checks that are cashed. Transfers of Funds. Funds will also be withdrawn from the Bank Account when a transfer of funds has been made electronically. United will direct the Bank to withdraw funds from the Bank Account to fund the non -draft payments or expenses as they are issued. Calls for Funds. The withdrawals from the Bank Account are paid for by the balance Customer maintains in the Bank Account. This balance will be drawn down each banking day to satisfy the previous day's liability. Customer will authorize United to initiate Automated Clearing House (ACH) transfers from Customer's own designated funding bank account to the Bank Account for amounts that are due. Every five (5) business day(s), United will notify Customer of the amount due and United will within one business day, ACH, initiate transfers from Customer's own designated funding bank account to the Bank Account. The number of days between transfers and the method of transfer are based on Customer's financial condition as of January 1, 2017 the ( "Effective Date ") as assessed by United, as well as Customer's compliance with material financial obligations. United reserves the right to increase the frequency of such fund transfers and/or change the method of transfer if United determines, based on reasonable information and belief, that Customer's financial condition has deteriorated, or Customer continues to fail to comply with the material financial obligations specified in this Agreement. Underfunding. If Customer does not provide the amounts sufficient to maintain the required minimum balance in the Bank Account, or to cover Bank Account withdrawals: (1) Customer must immediately correct the deficiency and provide prompt notice to United. (2) If United learns of the funding deficiency, United will notify Customer within one business day so Customer can correct the deficiency. (3) United may stop issuing checks and non -draft payments and suspend any of its other services under this Agreement for the period of time Customer does not provide the required funding. (4) If Customer does not correct the funding deficiency within three banking days of United's notice to Customer, United may terminate this Agreement as otherwise set forth in this Agreement, such termination to be effective the first day such funding deficiency began. Customer will pay interest on the amount of underfunding at the standard rate that United charges to its self - funded customers for underfunding of bank accounts in accordance with applicable Texas Law. Stop Payments on Outstanding Checks. At Customer's expense, United may place stop payments on checks if United determines that Customer has insufficient funds in its own designated funding bank account to honor such checks. United will send a search letter to the payee on all checks that have not been cashed within six (6) months. United will automatically stop payment on all checks that have not been cashed within twelve (12) months and provide Customer with reports Customer needs for the purposes of performing escheat. Customer is solely responsible for determining to file and/or filing unclaimed property once notified, or for making unclaimed payee payments directly. Funding After Termination. When this Agreement terminates, the funding method will remain in place for the length of the run -out period. After the run -out period has ended, that funding method will cease and Customer will deposit and maintain in the Bank Account sufficient funds to cover all checks for Plan benefits that have been issued but not cashed. This balance will remain in the Bank Account to fund the outstanding checks and other funding obligations. 12