LANCASTER-LEBANON PUBLIC SCHOOLS EMPLOYEES' HEALTH CARE COOPERATIVE AMENDED AND RESTATED AGREEMENT

Transcription

1 EXHIBIT A Effective as of LANCASTER-LEBANON PUBLIC SCHOOLS EMPLOYEES' HEALTH CARE COOPERATIVE AMENDED AND RESTATED AGREEMENT { }

2 I N D E X Page ARTICLE I PURPOSE AND DEFINITIONS... 1 ARTICLE II PARTICIPATION AND TERM... 2 ARTICLE III BOARD OF DIRECTORS... 3 ARTICLE IV BENEFIT PLANS... 9 ARTICLE V EHCC, TRUSTEE, AND PROFESSIONAL ADVISORS ARTICLE VI FINANCES OF EHCC ARTICLE VII LIABILITY OF DIRECTORS AND OFFICERS ARTICLE VIII MISCELLANEOUS { } i

3 EHCC AMENDED & RESTATED AGREEMENT Effective as of Each public school entity (hereinafter individually a "Member" and collectively the "Members") which joins in this Agreement, intending to be legally bound, hereby agrees to the following terms and conditions of this Agreement ("Agreement"): ARTICLE I. Purpose and Definitions. 1. Background and Purpose. The Lancaster-Lebanon Public Schools Employees' Health Care Cooperative ("EHCC"), which is established under this Agreement, is a cooperative, voluntary arrangement among the Members pursuant to the Pennsylvania Intergovernmental Cooperation Act, 53 Pa.C.S.A and pursuant to 42 Pa.C.S.A The purpose of EHCC is (a) to investigate, evaluate and provide to the Members advice and recommendations relating to cost effective means and methods of providing health care benefit plans and programs, including (i) cost effective health care delivery systems such as PPOs, HMOs, PHOs and other managed care plans and (ii) cost savings procedures such as "in-network steerage" and comprehensive benefit plan arrangements; (b) to provide to the Members the benefits which can be obtained through the pooling of purchases of health care services; (c) to provide to the Members the benefits which can be obtained through self-insurance and the pooling of self-insurance risks, including the pooling of purchases of excess and aggregate insurance; and (d) to provide through EHCC medical and other health care benefits which Members have agreed to provide to their respective employees. 2. Definitions. In addition to the other capitalized terms as defined in this Agreement, the following terms shall have the following meanings. any Plan. (a) (b) (c) "Annual Payment" shall have the meaning set forth in Article VI. "Covered Person" shall mean any person eligible for benefits under "Member" has the meaning set forth in Article II. (d) "Plan" shall mean an employee benefit plan adopted by any Member as may be altered, modified or amended from time to time. (e) "Plan Administrator" shall mean (with respect to each Plan) the Member adopting such Plan. It is the intent and effect of this Agreement that all rights and duties of the Plan Administrator pertaining to each Plan will, to the extent permitted by applicable law, be delegated to EHCC, Plan Supervisor(s) or Trustee(s). { } 1

4 (f) "Plan Supervisor" shall mean a person appointed from time to time by EHCC to perform the administrative duties pertaining to a Plan. (g) "Professional Advisors" has the meaning as set forth in Article V. Article VI. (h) (i) "Special Approval" shall have the meaning set forth in Article III. "Supplementary Payments" shall have the meaning set forth in (j) "Trustee" shall mean a person appointed from time to time by EHCC to serve as trustee of funds which are deposited with EHCC. ARTICLE II. Participation and Term. 1. Participation. Participation in EHCC shall be limited to organizations and entities in the following public school entitiesclassifications ( Classes ): (a) Class I Members include: (i) Lancaster-Lebanon Intermediate Unit No. 13 ("IU13") and any other Pennsylvania Intermediate Unit (together with IU13, each an IU ) established under Article IX-A of the Pennsylvania School Code of 1949, as amended (the School Code ); (b)ii any public school district included within an IU; and (ciii) any joint school organized under Article XVII or Article XVIII of the Pennsylvania School Code of 1949 in which any public school district described in clause (bii) above participates (including vocational-technical schools). The participants in EHCC are referred to in this Agreement individually as a "Member" and collectively as the "Members." (b) Class II Members include: (i) any Pennsylvania community college created under the authority of Article XIX-A of the School Code; (ii) any higher education institution which is part of the Pennsylvania State System of Higher Education under Article XX-A of the School Code; (iii) any other post-secondary educational institution, college or university authorized, created and governed by a statute of the Pennsylvania General Assembly or owned by the Commonwealth of Pennsylvania; and (iv) any tax-exempt, nonprofit or governmental educational institution or educational organization located within the Commonwealth of Pennsylvania. 2. Initial Members. The initial Members shall be IU13 and those public school districts and joint schoolsother Class I Members which have joined in this Agreement. The entities and organizations within the permitted Classes (as defined above) participating in EHCC are referred to in this Agreement individually as a Member and collectively as the Members. { } 2

5 3. Additional Members. Additional Members shall be admitted to EHCC upon (a) delivery to EHCC of an agreement to be a party to, and to be bound by, this Agreement and (b) Special Approval by the Board of Directors of the admission of the new Member. 4. Term. EHCC shall commence as of July 1, 1995 and shall continue in existence until terminated under the provisions of this Agreement. 5. Continuation of Membership and Withdrawal. (a) So long as EHCC shall continue in existence, any Member (including each initial Member) joining EHCC shall remain a Member, subject to the provisions of this Agreement. A Member may withdraw from EHCC effective as of June 30 of any year, if and so long as the Member gives EHCC both a written notice of its intention to withdraw at least six (6) months prior to the intended withdrawal effective date and a final written withdrawal confirmation at least three (3) months and twenty-one (21) days prior to the intended withdrawal effective date. Any Member who withdraws from EHCC shall be and remain responsible (a) for all amounts due in respect of such Member's Plans and (b) for such Member's portion of all debts and liabilities pertaining to the period during which the Member was a Member in EHCC. If a Member at any time shall not specify to the EHCC any Plan of such Member to be effected or administered through the EHCC, such Member shall be deemed to have withdrawn from the EHCC effective as of June 30 th of the applicable fiscal year or as of such other date as may be specified by the Board of Directors. (b) Any Member that withdraws from EHCC either without giving the notices described in subsection (a) above or without Special Approval of the Board (described in Article III, Section 6(c) below) (an Unauthorized Withdrawal ), shall be liable to EHCC and each of its Members for any and all damages, costs and expenses arising from such Unauthorized Withdrawal. Such damages, costs and expenses shall include (without limitation) reasonable attorneys fees incurred by EHCC in connection with the Unauthorized Withdrawal, the increase (if any) in any insurance premiums charged to EHCC or its Members as a result of the Unauthorized Withdrawal, and one hundred twenty-five percent (125%) of the sum of all administrative, legal, brokerage and other costs and fees that otherwise would have been charged or allocated by EHCC to such Member if it had remained a Member until the time it could have withdrawn with proper notice as permitted under this Agreement. This provision is intended to establish a reasonable measure of liquidated damages and not to impose a penalty for Unauthorized Withdrawal. ARTICLE III. Board of Directors. { } 3

6 1. Powers and Duties. EHCC shall be governed and administered by a Board of Directors (the "Board of Directors" or the "Board"). The Board shall have all of the powers and duties necessary or appropriate to carry out the purposes, functions and objectives of EHCC. 2. Number of Directors and Selection. (a) Each Member shall appoint one (1) Director, subject to the maximum number of Directors to be so appointed, as set forth in subsection 2(c) below (each such Director is also sometimes referred to herein as a Member-Appointed Director ). Each Member may also appoint an alternate to act as a Member-Appointed Director when the such Director it appointed is unable to carry out his or her duties. When appointing a Director (or an alternate), a Member either may appoint specific persons or may designate the holders of specific positions (e.g., Business Manager) as a Director (or alternate), and in the latter case the individual serving in the designated position at any given time shall be an appointeda Member-Appointed Director (or alternate). The Member-Appointed Director (and alternate) shall serve at the pleasure of the Member that appointed him or her and may be removed at any time by the appointing Member with or without cause. In the event of a vacancy for any reason, that Member shall immediately appoint a successor. The failure of a Member to appoint a Director or fill a vacancy or a Director's failure to participate shall not affect the responsibilities or duties of the Member under this Agreement. (b) The exclusive bargaining representatives for the professional employees of each Class I Member, through the PSEA County Coordinating Council for Lancaster County (the PSEA County Coordinating Council ), shall appoint a total number of Directors equal to one-half of the number of Members-Appointed Directors (if there are an odd number of such Members-Appointed Directors, for example eleven Members, there shall be six Directors appointed pursuant to this subparagraphsubsection (b)). Each such Director appointed through the PSEA County Coordinating Council provided in this subsection (b) is also sometimes referred to herein as a PSEA- Appointed Director. The PSEA County Coordinating Council may also appoint alternate(s) to act as a PSEA-Appointed Director when a Director appointed pursuant to this subparagraphsubsection (b) is unable to carry out his or her duties. Each PSEA- Appointed Director (and alternate) shall serve at the pleasure of the PSEA County Coordinating Council and may be removed at any time by the PSEA County Coordinating Council with or without cause. In the event of a vacancy for any reason, the PSEA County Coordinating Council shall immediately appoint a successor. (c) Notwithstanding subsections 2(a) and 2(b) above, the Board of Directors shall consist of a maximum of up to thirty (30) Directors twenty (20) Member-Appointed Directors and ten (10) PSEA-Appointed Directors. To the extent there are more than twenty (20) Members at any time, then the Members, acting as a { } 4

7 group: (i) shall determine who shall be appointed as the Member-Appointed Directors (and alternates), by expressing or presenting to EHCC such appointments in a writing signed by either (A) all of the duly authorized representatives for each of the Members, or (B) the authorized spokesperson or spokesperson for the group of Members who is/are named in a writing previously given to EHCC that conforms to clause (A) above and that has not expired or been terminated or withdrawn; and (ii) shall exercise all other rights of the Members with respect to the Member-Appointed Directors as provided in subsection 2(a) above. In the event the Members, acting as a group hereunder, cannot or do not determine who shall be appointed as the Member-Appointed Directors or exercise any other rights of the Members described in subsection 2(a) above, then IU13 shall determine which twenty (20) of the Members shall instead be entitled to appoint Directors and exercise the other rights of the Members described in subsection 2(a) above, taking into account the desire for approximately proportional representation of both Class I and Class II Members on the Board, until such time as the Members, acting as a group, can and do determine who shall be the Member-Appointed Directors as provided in this subsection (c) or exercise any other applicable rights. For purposes of this subsection (c), the signature of any Member or its representative may be given electronically, in accordance with the standards for electronic signatures under the Pennsylvania Electronic Transactions Act, 73 P.S et seq. (c)(d) The Directors appointed as provided above shall constitute the Board of Directors. Each Director at any meeting of the Board of Directors, or each member of any committee of the Board of Directors, shall have one (1) vote. In the event of any vacancy on the Board of Directors or any committee of the Board, such vacant seat shall not be counted in any determination of a quorum or the number of votes required for Special Approval hereunder. 3. Board Officers. The Board of Directors shall select a Chairman, a Vice Chairman, a Secretary, a Treasurer and any assistant or other officers the Board may desire from time to time, to serve for terms of one (1) fiscal year (unless earlier removed by the Board, with or without cause, by Special Approval). The Chairman and Vice Chairman shall be selected from among the Directors. Officers of the Board shall be permitted to serve successive terms. (a) The Chairman shall be the chief executive officer of EHCC and shall have such powers and duties customarily incident to such office as well as such duties as are set forth in this Agreement and as may be assigned from time to time by the Board. The Chairman shall be a non-voting ex-officio member of all committees of EHCC on which the Chairman does not directly serve. (b) The Vice Chairman shall carry out all duties of the Chairman of the Board during the absence or inability of the Chairman to perform such duties and shall { } 5

8 carry out such other functions as may be assigned from time to time by the Chairman or by the Board. (c) The Secretary (or an Assistant Secretary) shall be responsible for the books and records of EHCC and for taking and circulating minutes of the Board of Directors meetings and shall carry out such other functions as may be assigned from time to time by the Chairman or by the Board. (d) The Treasurer (or an Assistant Treasurer) shall have or provide for the custody of the funds or other property of EHCC, shall deposit all funds of EHCC in such banks or other places of deposit as the Board may from time to time designate, shall whenever so required by the Board render an account showing all transactions and the financial condition of EHCC, and shall carry out such other functions as may be assigned from time to time by the Chairman or by the Board. 4. Board of Directors Meetings. (a) Regular meetings of the Board of Directors shall be held at least semi-annually, or more frequently if the Board so determines. Special meetings of the Board of Directors may be called by the Chairman or Vice Chairman, by any six (6) Directors or by any six (6) Members. The Chairman, or in the Chairman's absence the Vice Chairman, shall give not less than ten (10) days' written notice of regular or special meetings to each Director, which notice shall specify any actions proposed to be taken at the meeting requiring Special Approval and, if a special meeting, all subjects to be covered at the special meeting. Business conducted at special meetings shall be limited to those items specified in the notice. No action requiring Special Approval may be taken at a meeting unless specified in the notice. (b) The time, date and location of regular and special meetings of the Board of Directors shall be determined by the Chairman, or in the Chairman's absence by the Vice Chairman, or by the Directors or Members calling the meeting. In scheduling meetings, there shall be taken into account the fact that many Directors may be employed in situations which would preclude their attending meetings during the working day; and therefore, meetings shall generally be scheduled for 4:00 p.m. or during the evening. Minutes of all regular and special meetings of the Board of Directors shall be sent to all Directors and shall be kept with the records of EHCC. (c) The presence at any duly convened meeting of the Board of a majority of the Directors in office shall constitute a quorum for the transaction of any business of the Board of Directors, and except in matters requiring Special Approval, the approval of a simple majority of a quorum of the Board, or of any committee, shall be sufficient for the Board, or such committee, to take any action. { } 6

9 5. Committees. (a) Executive Committee. The Executive Committee shall consist of eight (8) Directors, four (4) of whom shall be appointed (and may be removed) by the Member-Appointed Directors who were appointed by a Member and four (4) of whom shall be appointed (and may be removed) by the PSEA-Appointed Directors who were appointed through the PSEA County Coordinating Councils. The Executive Committee shall have and exercise all of the powers and authorities of the Board in the day-to-day management of EHCC and shall have such other powers and authority as the Board shall delegate to it; provided, however, that the Executive Committee shall have no power or authority to take any action in any matter requiring Special Approval. Each Officer of the Board selected as provided in Section 3 above, if not already appointed to the Executive Committee, shall be a non-voting ex-officio member of the Executive Committee. (b) Benefit Plan Committee. The Benefit Plan Committee shall consist of eight (8) persons, who need not be Directors, four (4) of whom shall be appointed (and may be removed) by the Member-Appointed Directors who were appointed by a Member and four (4) of whom shall be appointed (and may be removed) by the PSEA-Appointed Directors who were appointed through the PSEA County Coordinating Councils. The Benefit Plan Committee shall provide recommendations to the Board of Directors, Members and PSEA County Coordinating Councils relating to benefit plans and programs. (c) Other Committees. The Board of Directors shall have the power to establish other committees, including standing and ad hoc committees, and may assign to any committee the authority to make recommendations pertaining to any actions which are being considered by the Board. (d) Committee Rules. Each committee of the Board of Directors shall function under the same requirements relating to notice of meetings and rules of procedure as are applicable to meetings of the Board of Directors, including the requirement that the presence of at least a majority of the members of the committee in office shall be necessary to constitute a quorum. 6. Simple and Special Approval. Except as otherwise provided in this Agreement, the approval of a simple majority of a quorum of the Board, or of any committee, at any meeting shall be sufficient for the Board, or such committee, to take any action. A vote greater than a majority of a quorum, as specified below (in each case, "Special Approval"), shall be required to approve the following matters: (a) Directors in office: The following shall require the approval of a majority of all { } 7

10 (i) (ii) (iii) (iv) (v) (vi) a decision to admit any new Member to EHCC; the approval of any Annual Payment formula applicable to all Members; any decision to require Supplementary Payments and the amount thereof; any decision to hire, retain or enter into or renew any agreement with any Plan Supervisor, Trustee or Professional Advisor; any decision to terminate, dismiss or not renew or terminate any agreement with any Plan Supervisor, Trustee or Professional Advisor; and the removal from office of any officer, with or without cause, prior to the expiration of his or her term. (b) Directors in office: The following shall require the approval of two-thirds (2/3) of all (i) (ii) the expulsion of a Member; and a decision to terminate EHCC, or any recommendation to the Members that this Agreement be amended or altered in any way. (c) Unless the withdrawal of a Member is otherwise permitted or required under this Agreement, the voluntary withdrawal of any Member, at any time, shall be permitted with the unanimous approval of the Directors in office. 7. Notice. Whenever notice is required to be given to any person, it may be given to such person, either personally or by regular or electronic mail addressed to such person's address appearing on the books of EHCC or supplied to EHCC for the purpose of notice. If the notice is sent by mail it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail. Such notice shall specify the place, day and hour of the meeting. Whenever any written notice is required, a waiver in writing signed by the person or persons entitled to such notice whether before or after the time stated therein shall be deemed equivalent to the giving of such notice. Neither the business to be transacted nor the purpose of the meeting need be specified in the waiver of notice of such meeting. Attendance of a Director (or a member of a Committee) at any meeting shall constitute a waiver of notice of such meeting except where a Director (or a { } 8

11 member of a Committee) attends a meeting for the purpose of objecting to the transaction of any business because the meeting was not lawfully called or convened. 8. Action by Written Consent. Any action required or permitted to be taken by the Board of Directors, or of any committee, may be taken without a meeting upon the written consent of the Directors (or members of the Committee) that would have been entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all Directors (or members of the Committee) entitled to vote thereon were present and voting. Such consents shall be kept with the records of EHCC. Unless unanimous, the action shall not become effective until after at least five (5) days' written notice of the action has been given to each Director (or committee member) entitled to vote thereon who has not consented thereto. For purposes of this section, the written consent of any Director may be given electronically, in accordance with the standards for electronic signatures under the Pennsylvania Electronic Transactions Act, 73 P.S et seq. 9. Communications Equipment. Members of the Board of Directors or any committee may participate in and act at any meeting of such Board or committee through the use of a conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and participation in the meeting pursuant to this paragraph shall constitute presence in person at the meeting. 10. Compensation. No Director shall receive any salary or other payment from EHCC as compensation for his or her services as a Director. ARTICLE IV. Benefit Plans. In order to carry out the purposes of EHCC, each Member shall specify to EHCC each Plan which shall be effected through EHCC. Except as may be specified by the Member, the following provisions shall apply in connection with each Plan: 1. Assist with Plans. EHCC shall assist each Member as reasonably requested in establishing Plan(s) for the benefit of Covered Persons. 2. Claims Administration Duties. EHCC shall administer and process all claims for benefits under each Plan. Without limiting the generality of the foregoing, and except with respect to Plans which may be for the benefit of a group of Covered Persons who are employed by more than one Member (any such Plans shall be the subject of separate agreement among EHCC and the Members establishing such Plans), EHCC shall: { } 9

12 (a) review claims for benefits, compute benefits payable and authorize (or effect) payment of benefits which are payable, provide an appropriate explanation of benefits, and, where appropriate, deny claims not eligible. (b) communicate with physicians, hospitals and other third party providers of health care services in order to clarify or verify benefits or claims. (c) advise each Member as to payments required to be made by each of them in connection with each Plan and to arrange for an adequate and expedient transfer of funds to effect such payments. (d) provide, or effect, a method to place funds pertaining to each Plan in an account for the Plan or in a common benefit plan account. Contributions of each Member may be deposited (i) in an account for the particular Plan or (ii) in a common benefit plan account for the Plans. Each Plan which has funds in a common benefit plan account shall be the owner of the principal amount of the funds deposited less amounts disbursed therefrom in payment of claims under that Plan, and EHCC shall maintain separate accountings for each Plan identifying the principal balances and disbursements as the same may exist from time to time. All income earned (net of bank check charges and similar charges) on any Plan account shall be credited to the Plan (in the case of a common benefit plan account, income shall be allocated pro rata each month, as if a separate account were maintained for each Plan, based upon the average daily balance of each Plan). (e) provide periodic reports (at least quarter-annually) with respect to each Plan which shall include the following: (i) (ii) (iii) receipts of each Plan; disbursements, itemized by category as shall from time to time be requested, which are made or authorized by EHCC from or pertaining to each Plan; and a statement of the fees due with respect to each Plan. (f) provide, at the expense of each Plan with respect to which an audit is requested by the Plan Administrator, an annual audited report with respect to such Plan within ninety (90) days of the close of each Plan year. (g) maintain reasonable and customary fee guidelines for specific provider services and, where appropriate, limit benefit payments to such amounts. (h) take all reasonable steps to recover any overpayment or erroneous payment including asserting an offset against future benefits under the Plan. { } 10

13 3. Reinsurance Duties. EHCC shall: (a) provide such information as may be necessary or appropriate in order to secure and place reinsurance for each Plan. Each Member shall have final authority to select one of the multiple specific stop-loss levels which are offered by EHCC. The aggregate stop-loss claims liability will be computed for each Member based upon a percentage (e.g. 125%) of expected claims. (b) meet the various requirements of each reinsurance contract as it relates to prompt notification of potential or actual claims and file claims to ensure appropriate reimbursement to each Plan. 4. Plan Services. EHCC shall: (a) prepare draft amendments to each Plan document as required and requested by the Member. (b) provide all materials and documents, including without limitation enrollment materials, questionnaires, summaries for employees, reports, booklets, identification cards, claim forms, descriptive materials, and application and notice forms, as may be necessary or appropriate for the operation of each Plan. Where distribution to employees is required, such materials shall be furnished by EHCC in sufficient quantity for distribution by the Member. 5. COBRA Administration Duties. EHCC shall: (a) notify COBRA eligible persons of their right to continue coverage and the appropriate premium. (b) develop rates annually to charge for COBRA continuation and provide monthly billing coupons to the Member. (c) provide the Member with a listing of COBRA participants. 6. Records; Reporting. EHCC shall: (a) maintain accurate and detailed records and accounts of all transactions of each Plan which shall be available at all reasonable times for inspection or audit by the Member (and its designated representatives) and by any other person or entity to the extent required by law. EHCC shall also provide such other information in its possession as may be necessary to comply with any reporting requirements required under ERISA. { } 11

14 (b) prepare any reports, returns, tax returns, or similar papers required by any governmental authority and pertaining to the operation, administration or management of the Plans. 7. List of Employees. Each Member shall provide EHCC upon request with complete lists of their respective employees who are eligible for benefits from each Plan; shall notify EHCC on a monthly basis of all changes in participation whether by reason of termination, change in classification or otherwise; and shall provide EHCC with any other information requested by EHCC which might affect their respective Plans. 8. Payment. Each Member shall collect the contributions, if any, to be made by the persons who are entitled to benefits pursuant to its Plans; and each Member shall, upon notice from EHCC, pay to the Trustee or as otherwise directed by EHCC any amounts payable pursuant to their respective Plans which they are obligated to pay under the terms of such Plans. If such payments are delinquent for a period of sixty (60) days, the delinquent Member is required to immediately notify all Covered Persons and all health care providers who have not been paid. Such notification shall be in writing and a copy forwarded to EHCC. If the delinquent Member does not provide such notification, EHCC has the right to notify Covered Persons and health care providers of the delinquency of such Member's funding. 9. Employees. Each Member shall assist in the enrollment of Covered Persons in its Plans, cooperate with EHCC with regard to proper settlement of claims, and transmit any inquiries pertaining to any Plan to EHCC. Each Member shall maintain a supply of forms, enrollment cards or other documents as provided by EHCC. Each Member shall distribute or make available such documents to its employee. 10. Delegation. The rights and obligations of EHCC pursuant to this Article IV may be delegated by EHCC to one or more Plan Supervisors, Professional Advisors and/or Trustees. 11. Pooled Self-Insurance Fund. (a) The EHCC may establish or administer a pooled self-insurance fund for the payment of claims under the Members' respective Plans, which arise between the Members' respective deductibles and the applicable reinsurance deductible(s). Such a self-insurance fund must be approved by the Board as part of a program to which Members may, without obligation, choose to participate (a "Self-Insurance Program"). (b) Each Self-Insurance Program shall: (i) specify what categories or types of claims are to be paid from the self-insurance fund and how such claims are to be administered; { } 12

15 (ii) specify eligibility criteria (if any) for participation by Members in the Self-Insurance Program; (iii) specify the term to which Members must commit to the Self- Insurance Program, as a condition to participation, if longer than one (1) year; (iv) permit each Member's appointed Director to the EHCC Board (or other authorized representative if such Member has not appointed a Director to the EHCC Board) to state his or her Member's commitment to participate in the Self- Insurance Program and any renewals thereof; (v) be administered and accounted for on a year-to-year basis; (vi) provide for an allocation method or formula for determining the initial annual and any supplementary payments due from participating Members into the self-insurance fund, as well as for the payment or return to the participating Members of surplus funds (if any); and shall require that each participating Member shall be and remain obligated for any annual and supplementary payments for the period(s) in which the Member participated, regardless of whether that Member continues to participate in the Self-Insurance Program or continues to be a Member of the EHCC and regardless of whether the Self-Insurance Program or the EHCC continues to exist; (vii) permit, with the approval of the Board, the lending of surplus funds from one year of the Self-Insurance Program to another, subject to the obligation of the participating Members in the borrowing year to repay the funds to the lending year or contribute sufficient funds to the borrowing year to repay the amounts borrowed within time limits acceptable to the participating Members in both years or as otherwise required by the Board; and EHCC Board. (viii) provide for such other matters as are deemed relevant by the (c) The Blended Self-Insurance/Specific Premium Program originally adopted for the fiscal year and renewed each year up to the date of this Amended & Restated Agreement is a Self-Insurance Program under this Section 11. ARTICLE V. EHCC, Trustee, and Professional Advisors. 1. Selection. The Board may select and retain one or more Plan Supervisors who shall perform the administrative duties pertaining to each Plan. The Board may also select and retain one or more Trustees who shall exercise such rights, and which shall perform such duties and obligations, as delegated to it by EHCC. The Board also may { } 13

16 select and retain other professional advisors and professional service providers ("Professional Advisors") to assist and advise EHCC (and the Plan Supervisor(s) and the Trustee(s)) in the carrying out of EHCC's functions and duties. Such Professional Advisors may include, without limitation, an insurance broker, a claims administrator, a risk manager, a loss control agent (including loss prevention and safety engineering), an investment advisor, an underwriting advisor, actuaries, accountants, auditors, attorneys and any other individuals, entities or experts as the Board deems appropriate from time to time. 2. Agreements for Services. EHCC may enter into written agreements with any Plan Supervisor, Trustee and any other Professional Advisor. Any agreement between EHCC and any Plan Supervisor, Trustee and any other Professional Advisor shall permit EHCC to terminate its obligations under such agreement at intervals specified in such agreements without any liability to EHCC upon such termination except for services already provided. In lieu of the EHCC providing any of the services described herein, the EHCC may arrange for and recommend that the Members engage, following Board approval, one or more Professional Advisors to provide such services directly to the Members. 3. Fidelity Bonds. EHCC may purchase a bond (or bonds) from time to time in an amount deemed appropriate by the Board, to assure the fidelity of any Director, officer, employee, agent or independent contractor of EHCC. 4. Group Insurance. To the extent EHCC has any employees, EHCC may enter into contracts for policies of group insurance and employee benefits for its employees or EHCC may provide such benefits through self-insurance or any other arrangements. ARTICLE VI. Finances of EHCC. 1. Fiscal Year. The fiscal year of EHCC shall commence on July 1 of each year and end on the succeeding June Annual Payments. (a) The Annual Payments shall be the amount which each Member must pay to fund its share of the anticipated expenditures of EHCC for that fiscal year. The Annual Payments are in addition to amounts due by each Member under Article IV and/or in respect of its Plans. The amount of the Annual Payments of a Member may be based on a formula approved by the Board of Directors upon the recommendation of one or more of its Professional Advisors. The formula used for the determination of Annual Payments may vary from year to year, but shall be applied equally to all Members during such period of time as the formula is utilized. { } 14

17 (b) Annual Payments shall be paid on a monthly, quarterly or semiannual basis as determined by the Board of Directors. 3. Supplementary Payments; Excess and Aggregate Insurance. (a) If the Annual Payments for any fiscal year shall at any time be insufficient to fund the operations and obligations of EHCC with respect to such fiscal year, additional payments ("Supplementary Payments") shall be required to be made by every Member. The amount of any Supplementary Payments due from each Member shall be based upon the same formula as was used to determine the Annual Payment for that year. Each Member (even if withdrawn or expelled or if EHCC shall terminate) shall be responsible for Annual Payments and Supplementary Payments applicable to the fiscal year(s) during which it was a Member of EHCC. (b) The Board shall notify each Member of the amount of Annual Payments and Supplementary Payments and the date(s) when such payment (or payment installments) are due, the first payment date of which shall not be sooner than forty-five (45) days after the date of such notice. The payment of Annual Payments and Supplementary Payments within the time(s) specified by the Board shall be of the essence of this Agreement. Any delinquent payments shall be paid with interest from the date such payment was due at the floating rate of the prime rate as specified in the "Money Rates" (or successor) section of the Wall Street Journal, plus two percent (2%), but such interest rate shall at most equal the highest interest rate allowed by law to be paid by a Member. (c) EHCC may purchase excess and aggregate excess insurance coverage upon such terms and in such amounts as approved by the Board of Directors upon the recommendation of one or more of its Professional Advisors. 4. Investment of EHCCs. All funds and securities of EHCC shall be deposited in the name of the IU13 in such banks, savings and loan associations or other depositories as shall be selected by the Board of Directors; and such funds of EHCC may be invested, as approved by the Board, in accounts, funds or securities which may, by law, be purchased by any of the Members. IU13 will provide, if requested by the Members, an accounting. 5. Audits. Each Member shall be responsible for its own audits. 6. Information. Any Member shall be entitled, upon reasonable request, to receive from EHCC complete information concerning the activities and financial condition of EHCC and its assets, except information which EHCC is required by law or by agreement with any other Member or a third party to keep confidential. Every Member shall cooperate in good faith with EHCC and shall supply to EHCC all { } 15

18 information, documents and materials and shall execute any appropriate instruments and affidavits concerning that Member necessary for EHCC to carry out EHCC's purposes, functions, and objectives. 7. Use of Members' Contributions. No part of the funds paid by any Member to EHCC or in respect of its Plans shall be used for or diverted to purposes other than for the exclusive benefit of Covered Persons and for expenses of administration of EHCC. 8. Expulsion of Members. By Special Approval, the Board of Directors may expel any Member for failure to abide by the terms of this Agreement. If a Member is expelled by the Board of Directors, such expulsion shall be effective as of a date set by the Board of Directors which shall not be earlier than the date such expulsion is approved by the Board. An expelled Member shall not be relieved of any obligations to EHCC relating to the fiscal year(s), or portions thereof, during which it was a Member in EHCC. ARTICLE VII. Liability of Directors and Officers. 1. Liability. No Director (including any officer of the Board) shall be liable for (a) any mistake of judgment or other action made, taken or omitted by him or her in good faith, (b) any action taken or omitted by any agent, employee or independent contractor, (c) any loss incurred through investment of EHCC funds or failure to invest or (d) any action taken or omitted by any other Director (or officer of the Board). 2. Indemnification. EHCC shall indemnify to the fullest extent now or hereafter permitted by law any Director, and any person who is a member of any committee, of EHCC (including any officer of the Board) who was or is made a party to or a witness in (or is threatened to be made a party to or a witness in) any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a Director of EHCC or an officer of the Board or a member of an EHCC committee, against all expenses (including reasonable attorneys' fees and disbursements), judgments, fines (including excise taxes and penalties) and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided that the person seeking indemnification either acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of EHCC or has been successful on the merits or otherwise in defense of such action, suit or proceeding. Indemnification under this Article shall not be made by EHCC in any case where the alleged act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct, recklessness or self-dealing. 3. Expenses. EHCC may, as determined by the Board of Directors from time to time, advance expenses included within the scope of the indemnification described above, pending final disposition of such action, suit or proceeding. The expenses { } 16

19 incurred by such person may be paid by EHCC in advance of the final disposition of such action, suit or proceeding only upon receipt of an undertaking by or on behalf of such person to repay all amounts advanced if it shall ultimately be determined that such person is not entitled to be indemnified by EHCC. 4. Insurance. EHCC may purchase errors and omissions and other liability insurance coverage for the Directors of EHCC, including the officers of the Board. Such insurance shall not limit EHCC's indemnification obligations hereunder. ARTICLE VIII. Miscellaneous. 1. Amendments. This Agreement may be amended or altered only with the unanimous approval of all Members upon the recommendation of the Board of Directors. 2. Termination of EHCC. If the Board of Directors by Special Appeal, or the Members, decide to terminate EHCC, then EHCC shall cease its existence as of the date specified for termination. Under those circumstances, the Board of Directors shall continue to meet on such a schedule and for as long a period as shall be necessary to wind up of the affairs of EHCC. 3. Contractual Obligation. This Agreement shall constitute a contract among the Members of EHCC. The terms of this Agreement may be enforced at law or in equity by EHCC or by any of its Members. This Agreement shall not create, as between any Members, any relationship of surety, indemnification or responsibility for the debts of, or claims against, any Member. 4. Non-Waiver of Immunity. Nothing in this Agreement shall constitute a waiver by any Member or EHCC of any governmental immunities or defenses available or provided by law. It is the intention of the Members that EHCC is a local agency which is entitled to governmental immunity under the Political Subdivision Tort Claims Act, 42 Pa.C.S.A et seq. 5. Confidentiality. All information relating to each Member's employees and to each Covered Person shall be and remain confidential. EHCC, and its officers, Directors, committee members, employees and agents (a) shall regard all information pertaining to each Member's employees and to each Covered Person as confidential and (b) shall not disclose any such information except as required by law or with the prior consent of the employee or Covered Person. 6. Construction. This Agreement shall be construed in accordance with Pennsylvania law (which shall supersede any contrary provision in this Agreement) and consistently with 42 Pa.C.S.A which provides that the carrying forth of the transactions to be effected under this Agreement shall not be construed to be transacting insurance or otherwise subject the Members or EHCC to the provisions of statutes { } 17

20 regulating insurance or insurance companies. Paragraph headings used herein are for ease of reference only and shall not affect the meaning or interpretation hereof. The use herein of any number (whether singular or plural) or any gender (whether masculine, feminine or neuter) shall be deemed to include any other number or any other gender, respectively, as the context indicates is appropriate. The words including and for example as used herein are intended to be exemplary only, and shall not be construed as limiting the word(s) or phrase(s) to which they relate. 7. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be considered an original copy of this Agreement as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. 8. Member Ineligibility. If a final decision of a court of competent jurisdiction ever determines, or if the EHCC s legal counsel renders an opinion, that a particular Member(s), type of Member(s) or Class of Member(s) is not legally permitted to be a Member(s) of the EHCC or any Self-Insurance Program pursuant to this Agreement, then such Member or Members shall be deemed to have withdrawn from the EHCC, or the particular Self-Insurance Program, as applicable, without penalty, and the EHCC, or the particular Self-Insurance Program, as applicable, and this Agreement shall continue in full force and effect with respect to the remaining participating Members. [Signatures appear on next page.] { } 18

21 IN WITNESS WHEREOF, the following Members, intending to be legally bound hereby, have executed this Agreement on the date(s) set forth below. Execution hereof may alternatively be evidenced by a separate document, duly executed, by which the executing party agrees to be a party to and be bound by this Agreement or by a separate signature page which the Member directs to be attached to this Agreement. [Seal] LANCASTER-LEBANON INTERMEDIATE UNIT NO. 13 By: Attest: President/Vice President Secretary/Assistant Secretary Date: [Seal] School District/IU/Entity By: Attest: President/Vice President Secretary/Assistant Secretary Date: [Seal] School District/IU/Entity By: Attest: President/Vice President Secretary/Assistant Secretary Date: { } 19