isolved Benefit Services – Service Agreement
Federal COBRA, USERRA and State Continuation Coverage
Additional Service Agreement

Employer has independently concluded that one or more of its benefit plans that provide health care (“Health Plans”) are subject to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”), as subsequently amended, and/or the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), as subsequently amended and/or certain benefit continuation rights under state law, as subsequently amended. Consequently, Employer is required to perform certain acts in order to comply with these laws. Employer has asked isolved Benefit Services to assist it with satisfying Employer’s obligations under one or more of these laws as set forth in the applicable Service Agreement.

This Additional Service Agreement describes the rights and responsibilities of isolved Benefit Services and Employer with respect to various federal COBRA and/or USERRA and/or state continuation services (for those states listed in the related Service Agreement) provided by isolved Benefit Services with respect to the Health Plans. isolved Benefit Services may provide Employer information relating to compliance with applicable laws, which may include changes or modifications in compliance requirements, best practices recommendations, notification language and actions to take in accord with such laws. This information will be based on isolved Benefit Services’s interpretation as a third party consultant and should not be construed as tax or legal advice. The rights and obligations outlined below apply only to the extent chosen by Employer in the related Service Agreement (including the General Terms and Conditions). This Additional Service Agreement is incorporated into and made a part of the Service Agreement (including the General Terms and Conditions). The effective date of this Additional Service Agreement is the effective date of the Service Agreement or, if later, the Service Date related to the services hereunder. The responsibilities of the Parties set forth in this Additional Service Agreement are in addition to any responsibilities set forth in the Service Agreement (including the General Terms and Conditions). If there is a conflict between this Additional Service Agreement and the Service Agreement (including the General Terms and Conditions), the Service Agreement (including the General Terms and Conditions) controls.

NOTE: Employer should choose one or more of the following available services in the Service Agreement.

A. COBRA Administration Services

• 1. Responsibilities of isolved Benefit Services.
• • a. Notices Required by COBRA: isolved Benefit Services will distribute its standard notices in the following situations where notice is required by COBRA:
  • • i. Initial/General Notice. isolved Benefit Services will send its standard COBRA general notice (“General Notice”) to the last known address of each covered employee and, when required by applicable law, the covered spouse or the covered dependent. Employer shall review the General Notice and isolved Benefit Services is not responsible for any changes or additions made to the notices by Employer. Such General Notice will be distributed to covered employees and/or covered spouses (if enrolling at a different date) as soon as reasonably possible but no later than ten (10) business days after receiving [the required information from Employer or its designee].
    • ii. Qualifying Event Election Notice. isolved Benefit Services will send its standard COBRA election notice (“Election Notice”) to the last known address of each qualified beneficiary entitled to elect federal COBRA continuation coverage. Employer shall review the General Notice and isolved Benefit Services is not responsible for any changes or additions made to the Election Notice. If all Qualified Beneficiaries reside at the same address, isolved Benefit Services may send a single Election Notice and form in accordance with applicable law. An Election Notice will only be sent to Qualified Beneficiaries whose qualifying event occurs after the effective date of the applicable Service Agreement, except as otherwise agreed to by isolved Benefit Services. The Election Notice will be sent to Qualified Beneficiaries as soon as reasonably possible but no later than fourteen (14) calendar days after receiving the required information from Employer, or its designee. isolved Benefit Services will also notify Qualified Beneficiaries of their rights to an extension of COBRA continuation coverage upon proper notification from the qualified beneficiary, Employer or Employer’s designee of an event that will extend coverage under applicable law. isolved Benefit Services may rely on a certificate from the respective Parties that an event permitting an extension of coverage has occurred. Such notice will be sent as soon as reasonably possible but no later than fourteen (14) calendar days after receipt of written notice of such event from a qualified beneficiary, Employer or Employer’s designee.
    • iii. Notice of Unavailability. If isolved Benefit Services receives notice that a qualifying event has occurred, or an event that will extend COBRA coverage has occurred, and the qualified beneficiary is not eligible for COBRA in accordance with records maintained by isolved Benefit Services in the course of performing its duties under the Service Agreement, isolved Benefit Services will send the required notice (“Unavailability Notice”) to the qualified beneficiary’s last known address as soon as possible but no later than fourteen (14) calendar days after receiving notice. The Unavailability Notice will indicate the reasons for ineligibility.
    • iv. Notice of Early Termination. isolved Benefit Services will send a notice to the qualified beneficiary that coverage has terminated before the end of the maximum period of coverage (“Early Termination Notice”). The Early Termination Notice will be sent to the last known address of the qualified beneficiary. The Early Termination Notice will be sent as soon as possible but no later than a reasonable amount of time after COBRA coverage has ended if isolved Benefit Services performs Premium Collection services. If Employer does not select the Premium Collection service, then isolved Benefit Services will send the Early Termination Notice as soon as possible but no later than ten (10) business days after receiving the required information from Employer or its designee.
  • b. Response to Providers. isolved Benefit Services will provide responses to inquiries by providers and/or insurance carriers regarding coverage status of qualified beneficiaries. All responses will be based solely on the original information provided by Employer and subsequently maintained by isolved Benefit Services in accordance with this Additional Service Agreement.
  • c. Government Audits. isolved Benefit Services, or its officer or designated agent, shall also provide records and documentation for any audit held by the Internal Revenue Service, or hearing by any governmental agency or bureau, regarding compliance with COBRA by Employer so as to assist Employer at such hearing in evidencing compliance with COBRA.
  • d. Reporting. isolved Benefit Services will send or make available standard verification reports listing the COBRA notices sent on a periodic basis to Employer (or as directed by Employer in writing).
  • e. USERRA Compliance. Where Employer indicates that a qualifying event is a result of the covered employee’s leave of absence under USERRA, isolved Benefit Services will include verbiage in its Notices to address USERRA.
• 2. Responsibilities of Employer. Employer is responsible for all COBRA administration not set forth in A.1 above, including but not limited to the following:
• • a. Notices Required by COBRA. Employer must report all such information necessary for isolved Benefit Services to provide COBRA notifications for Employer. Employer must report information necessary to complete the General Notice as soon as possible after an individual becomes covered but no later than seventy-five (75) days after the commencement of coverage. Employer shall report all COBRA qualifying events to isolved Benefit Services as soon as possible after the event occurs but no later than thirty (30) days after the event, except where the qualified beneficiary is required to provide notice of a qualifying event.
  • b. Verification. Employer is responsible for reviewing all standard verification reports set forth in A.1 above and reporting any discrepancies promptly to isolved Benefit Services.

B. Premium Collection Services

• 1. Responsibilities of isolved Benefit Services
• • a. Processing Elections. isolved Benefit Services will process the election forms submitted by qualified beneficiaries in accordance with applicable law (COBRA and USERRA) and Employer’s instructions.
  • b. Billing. isolved Benefit Services will notify the qualified beneficiary of the amount due for the initial premium, as determined by Employer, which will be considered due forty-five (45) days after the date the election is made or such longer period per Employer’s instructions. isolved Benefit Services will provide invoices to the qualified beneficiary of the amount due and the due date and the grace date, which will be thirty (30) days from the first day of each coverage period except as otherwise instructed by Employer. isolved Benefit Services will not be responsible for administering the premium payments for any payments due on or prior to the effective date of this Additional Service Agreement. isolved Benefit Services does not accept or process carrier invoices.
  • c. Premium Processing. isolved Benefit Services will consider premiums timely sent if they are received in the offices of isolved Benefit Services or postmarked by the applicable grace date as listed on the premium invoice. Premiums collected by isolved Benefit Services will be deposited into a custodial bank account maintained by isolved Benefit Services. isolved Benefit Services will send to Employer all premiums collected during a month by the 15th business day following the end of the month, reduced by the two percent (2%) administrative fee which isolved Benefit Services will keep as part of its overall administrative fee. isolved Benefit Services will submit premiums to appropriate third parties only upon written instruction from Employer. In addition, isolved Benefit Services will retain any interest earned on such funds while held in an isolved Benefit Services maintained custodial account as an administrative fee. Notwithstanding the above, premiums will not be co-mingled with isolved Benefit Services’s own funds. In the event that a premium payment is rejected due to insufficient funds or the fact the qualified beneficiary has stopped payment, such payment will be construed as nonpayment. If isolved Benefit Services has already sent the premium to the Employer before isolved Benefit Services becomes aware of the rejected payment, Employer shall reimburse isolved Benefit Services the amount of the rejected payment, and the qualified beneficiary’s period of coverage will be adjusted accordingly. Notwithstanding anything to the contrary, isolved Benefit Services will continue to provide this service for qualified beneficiaries whose COBRA period ends after eighteen (18) months as long as their USERRA period continues.
  • d. Reporting. isolved Benefit Services will provide standard verification reports on a periodic basis to Employer (or as directed by Employer in writing).
• 2. Responsibilities of Employer Employer is responsible for all COBRA premium collection duties not set forth above, including but not limited to the following:
• • a. Premium Changes. Employer is responsible for notifying isolved Benefit Services of the applicable premium amounts as well as any other related information that isolved Benefit Services deems necessary (e.g. due dates, etc.) and any changes to the applicable premiums at least thirty (30) days prior to the effective date of such change.
  • b. Vouchering. From time to time, two situations may arise related to vouchering. First, Employer may, in its discretion, decide to make special arrangements for premium payments on behalf of participants (e.g., deductions from severance pay). Second, Qualified Beneficiaries may inadvertently send premium payments to Employer or some other entity, instead of isolved Benefit Services. In either case, the Parties agree to the following procedure:
  • • Employer shall notify isolved Benefit Services immediately of the details of the payment and retain the payment.
    • isolved Benefit Services shall update the qualified beneficiary's COBRA records to properly reflect the inadvertently sent payment, and will issue a voucher for the two (2) percent administrative fee described above.
    • Employer shall pay the voucher for the two (2) percent administrative fee, when invoiced.
  • c. Verification. Employer is responsible for reviewing all standard verification reports set forth in C.1 below and reporting any discrepancies promptly to isolved Benefit Services.

C. COBRA Eligibility Management Services

• 1. Responsibilities of isolved Benefit Services
• • a. Eligibility Notification. There may be instances where Employer desires isolved Benefit Services to interact with one or more vendors regarding communications. In this case, a Vendor is defined as any insurance carrier, enrollment & eligibility service provider or other provider with whom isolved Benefit Services will communicate on behalf of Employer. Where Employer and isolved Benefit Services have confirmed that such communication with Vendor is feasible, isolved Benefit Services will report to Vendor all changes in eligibility and coverage levels related to COBRA qualified beneficiaries who have either previously elected COBRA coverage or failed to elect COBRA coverage. This reporting may be accomplished by a variety of means: the Vendor’s website, e-mail, facsimile or other communication methods.
  • b. Premium Remittance. Where Employer and isolved Benefit Services have confirmed the Vendor’s approval and to the extent legally permissible, isolved Benefit Services will forward all COBRA premiums related to coverage to such Vendor no later than the date that isolved Benefit Services would have sent such premiums to Employer for the Premium Collection Services described in B.1 above.
  • c. Premium Collection. To select Vendor Interface Services, Employer must also have Premium Collection Services with isolved Benefit Services.
  • d. Reporting. isolved Benefit Services will provide standard verification reports on a periodic basis to Employer (or as directed by Employer in writing).
• 2. Responsibilities of Employer Employer is responsible for all other duties not set forth in C.1 above, including but not limited to reviewing all standard verification reports set forth in C.1(d) above and reporting any discrepancies promptly to isolved Benefit Services.

D. State Continuation Administration Services

• 1. Responsibilities of isolved Benefit Services.
• • a. Notices. isolved Benefit Services will distribute standard notices that comply with the state laws listed in this Agreement that govern health insurance continuation.
  • b. Response to Providers. isolved Benefit Services will provide responses to inquiries by providers and/or insurance carriers regarding coverage status of qualified beneficiaries. All responses will be based solely on the original information provided by Employer and subsequently maintained by isolved Benefit Services in accordance with this Additional Service Agreement.
  • c. Government Audits. isolved Benefit Services, or its officer or designated agent, shall also provide records and documentation for any audit held by a state Department of Insurance, or hearing by any governmental agency or bureau, regarding compliance with state continuation laws by Employer so as to assist Employer at such hearing in evidencing compliance with state continuation laws
  • d. Reporting. isolved Benefit Services will send or make available standard verification reports listing the state continuation notices sent on a periodic basis to Employer (or as directed by Employer in writing).
  • e. Premium Collection Services. isolved Benefit Services will perform the following:
  • • i. Processing Elections. isolved Benefit Services will process the election forms submitted by qualified beneficiaries in accordance with applicable state law and Employer’s instructions.
    • ii. Billing. isolved Benefit Services will notify the qualified beneficiary of the amount due for the initial premium, as determined by Employer, which will be considered due in accordance with isolved Benefit Services’s procedures. isolved Benefit Services will provide the qualified beneficiary with invoices notifying the qualified beneficiary of the amount due, the due date and the grace date. isolved Benefit Services will not be responsible for administering the premium payments for any payments due on or prior to the effective date of this Additional Service Agreement.
    • iii. Premium Processing. isolved Benefit Services will consider premiums timely sent if they are received in the offices of isolved Benefit Services or postmarked by the applicable grace date as listed on the premium invoice. Premiums collected by isolved Benefit Services will be deposited into a custodial bank account maintained by isolved Benefit Services. isolved Benefit Services will send to Employer all premiums collected during a month by the 15th business day following the end of the month, reduced by the 2% administrative fee which isolved Benefit Services will keep as part of its overall administrative fee. isolved Benefit Services will submit premiums to appropriate third parties only if feasible and upon written request from Employer. In addition, isolved Benefit Services will retain any interest earned on such funds while held in an isolved Benefit Services maintained custodial account as an administrative fee. Notwithstanding the above, premiums will not be co-mingled with isolved Benefit Services’s own funds. In the event that a premium payment is rejected due to insufficient funds or the fact the qualified beneficiary has stopped payment, such payment will be construed as a non-payment. If isolved Benefit Services has already sent the premium to the Employer before isolved Benefit Services becomes aware of the rejected payment, Employer shall reimburse isolved Benefit Services the amount of the rejected payment, and the qualified beneficiary’s period of coverage will be adjusted accordingly.
• 2. Responsibilities of Employer. Employer is responsible for all other state continuation administration not set forth above, including but not limited to the following:
• • a. Notices Required by State Law. Employer or its designee must report all such information necessary for isolved Benefit Services to provide notifications for Employer. Employer or its designee shall report all qualifying events to isolved Benefit Services as soon as possible after the event occurs but no later than 30 days after the event, except where the qualified beneficiary is required to provide notice of a qualifying event.